Exhibit 10.4(a)
EXECUTION VERSION
 
 
CREDIT AGREEMENT
among
ENDEAVOUR INTERNATIONAL CORPORATION,
as Holdings
ENDEAVOUR ENERGY UK LIMITED,
as the Borrower,
VARIOUS LENDERS,
and
CYAN PARTNERS, LP,
as Administrative Agent
 
Dated as of August 16, 2010
 
CYAN PARTNERS, LP,
as Sole Arranger and Sole Book Runner
 
 

 

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          CREDIT AGREEMENT, dated as of August 16, 2010, among Endeavour
International Corporation, a Nevada corporation (“Holdings”), Endeavour Energy
UK Limited, a United Kingdom private limited company (the “Borrower”), the
Lenders party hereto from time to time and Cyan Partners, LP, as Administrative
Agent. All capitalized terms used herein and defined in Section 1 are used
herein as therein defined.
WITNESSETH:
          WHEREAS, subject to and upon the terms and conditions set forth
herein, the Lead Arranger has arranged, and the Lenders are willing to make
available to the Borrower, the senior secured term loan facility provided for
herein;
          NOW, THEREFORE, IT IS AGREED:
          SECTION 1. Definitions and Accounting Terms.
          1.01. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
          “2012 Convertible Senior Notes” shall mean Holdings’ 6% Convertible
Senior Notes due 2012 issued pursuant to the 2012 Convertible Senior Notes
Indenture, as in effect on the Funding Date and as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
          “2012 Convertible Senior Notes Indenture” shall mean the indenture
pursuant to which the 2012 Convertible Senior Notes were issued, as in effect on
the Funding Date and as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
          “2014 Convertible Senior Notes” shall mean the Endeavour Energy
Luxembourg S.àr.l.’s 11.5% Guaranteed Convertible Senior Bonds due 2014 issued
pursuant to the 2014 Convertible Senior Notes Trust Deed, as in effect on the
Funding Date and as the same may be amended, modified or supplemented from time
to time in accordance with the terms hereof and thereof.
          “2014 Convertible Senior Notes Trust Deed” shall mean the trust deed
pursuant to which the 2014 Convertible Senior Notes were issued, as in effect on
the Funding Date and as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
          “2014 Senior Subordinated Notes” shall mean Holdings’ 12% Senior
Subordinated Notes due 2014 issued pursuant to the 2014 Senior Subordinated
Notes Agreement, as in effect on the Funding Date and as the same may be
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
          “2014 Senior Subordinated Notes Agreement” shall mean the note
agreement pursuant to which the 2014 Senior Subordinated Notes were issued, as
in effect on the Funding Date and as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
          “2P Reserve Value” shall mean, as of any date determination with
respect to Proved Reserves and Probable Reserves, in each case of Holdings and
its Subsidiaries, the sum of (a) the PV-10

 

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Value of such Proved Reserves as of such date plus (b) the Probable Reserve
Value of such Probable Reserves as of such date.
          “2P Reserves” shall mean the sum of Proved Reserves and Probable
Reserves.
          “Acquired Entity or Business” shall mean either (a) the assets
constituting a business, division or product line of any Person not already a
Subsidiary of Holdings or (b) 100% of the Equity Interests of any such Person,
which Person shall, as a result of the acquisition of such Equity Interests,
become a Wholly-Owned Subsidiary Guarantor (or shall be merged with and into the
Borrower or a Wholly-Owned Subsidiary Guarantor, with the Borrower or the
Wholly-Owned Subsidiary Guarantor being the surviving or continuing Person).
          “Additional Lender” shall have the meaning provided in
Section 2.10(a).
          “Additional Security Documents” shall have the meaning provided in
Section 7.12(a).
          “Adjusted Consolidated Net Income” shall mean, for any period,
Consolidated Net Income for such period plus the sum of the amount of all net
non-cash charges (including, without limitation, depletion, depreciation,
amortization, deferred tax expense and non-cash interest expense and net
non-cash losses which were included in arriving at Consolidated Net Income for
such period), less the amount of all net non-cash gains and non-cash credits
which were included in arriving at Consolidated Net Income for such period.
          “Adjusted Consolidated Working Capital” shall mean, at any time,
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
          “Administrative Agent” shall mean Cyan Partners, LP (or its designee),
in its capacity as Administrative Agent for the Lenders hereunder and under the
other Credit Documents, and shall include any successor to the Administrative
Agent appointed pursuant to Section 10.09.
          “Affiliate” shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors (or
equivalent governing body) of such Person or (b) to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise; provided, however,
that none of the Administrative Agent, any Lender or any of their respective
Affiliates shall be considered an Affiliate of Holdings or any Subsidiary
thereof.
          “Agents” shall mean and include the Administrative Agent and the
Collateral Agent.
          “Aggregate Consideration” shall mean, with respect to any Permitted
Acquisition, the sum (without duplication) of (a) the Fair Market Value of
Holdings Common Stock issued (or to be issued) as consideration in connection
with such Permitted Acquisition (including, without limitation, Holdings Common
Stock which may be required to be issued as earn-out consideration upon the
achievement of certain future performance goals of the respective Acquired
Entity or Business (as determined in good faith by the senior management of
Holdings)), (b) the aggregate amount of all cash paid (or to be paid) by
Holdings or any of its Subsidiaries in connection with such Permitted
Acquisition (including, without limitation, payments of fees and costs and
expenses in connection therewith) and all contingent cash purchase price,
earn-out, non-compete and other similar obligations of Holdings or any of

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its Subsidiaries incurred and reasonably expected to be incurred in connection
therewith (as determined in good faith by Holdings), (c) the aggregate principal
amount of all Indebtedness assumed, incurred, refinanced and/or issued in
connection with such Permitted Acquisition, (d) the aggregate liquidation
preference of all Qualified Preferred Stock of Holdings issued or to be issued
as consideration in connection with such proposed Permitted Acquisition
(including, without limitation, Qualified Preferred Stock of Holdings which may
be required to be issued as earn-out consideration upon the achievement of
certain future performance goals of the respective Acquired Entity or Business
(as determined in good faith by Holdings)) and (e) the Fair Market Value of all
other consideration paid (or to be paid) in connection with such Permitted
Acquisition.
          “Agreement” shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended or renewed from time to time.
          “Approved Stock Exchange” shall have the meaning provided in
Section 7.21(a).
          “Approved Third Party Credit Provider” shall mean, with respect to any
Hedging Agreement or Third Party Letter of Credit, a Person that, at the time
such Hedging Agreement is entered into or such Third Party Letter of Credit is
issued, as the case may be, is (a) the Administrative Agent or any Lender or any
Affiliate of the Administrative Agent or a Lender, (b) any Person whose senior
unsecured long-term debt is rated as Investment Grade or (c) any other Person
that is reasonably acceptable to the Administrative Agent.
          “Asset Sale” shall mean any direct or indirect sale, transfer,
issuance, conveyance, lease (other than operating leases entered into in the
ordinary course of business), assignment or other disposition by Holdings or any
of its Subsidiaries to any Person (including by way of redemption by such
Person) other than to Holdings or a Wholly-Owned Subsidiary Guarantor of any
property or asset (including, without limitation, any capital stock or other
securities of, or Equity Interests in, another Person), but excluding sales of
assets pursuant to Sections 8.02(b), (c), (d), (i), (j), (k), (l), and (m).
          “Assignment and Assumption Agreement” shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit I.
          “Attributable Indebtedness” in respect of a sale-leaseback transaction
shall mean, as at the time of determination, the present value of the total
obligations of the lessee for rental/lease payments during the remaining term of
the lease included in such sale-leaseback transaction (including any period for
which such lease has been extended); provided, however, that if such
sale-leaseback transaction results in a Capitalized Lease Obligation, the amount
of Indebtedness represented thereby shall be determined in accordance with the
definition of Capitalized Lease Obligations.
          “Authorization” shall mean an authorization, consent, permit,
approval, resolution, license, exemption, filing, notarization or registration.
          “Authorized Officer” shall mean, with respect to (a) delivering the
Notice of Borrowing and similar notices, any person or persons that has or have
been authorized by the Board of Directors of Holdings or the Borrower to deliver
such notices pursuant to this Agreement and that has or have appropriate
signature cards on file with the Administrative Agent, (b) delivering financial
information and officer’s certificates (including certificates described in
Section 7.01(d)) pursuant to this Agreement, the chief financial officer, the
treasurer or the principal accounting officer of Holdings or the Borrower, as
applicable and (c) any other matter in connection with this Agreement or any
other Credit Document, any officer (or a person or persons so designated by any
two officers) of Holdings or the Borrower, as applicable.

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          “Bankruptcy Code” shall have the meaning provided in Section 9.05.
          “Board” shall mean the Board of Governors of the Federal Reserve
System of the United States.
          “BNP Cash Collateral Account” shall mean that certain account in the
name of BNP Paribas maintained with Barclays Bank, account number 30004 05658
0000084028H 31, into which cash has been deposited to cash collateralize letters
of credit supporting obligations of Holdings and its Subsidiaries under the Hess
Contracts.
          “Borrower” shall have the meaning provided in the first paragraph of
this Agreement.
          “Borrowing” shall mean the borrowing of a Term Loan from all the
Lenders on the Funding Date.
          “Business” shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate) or the equivalent of the foregoing in any jurisdiction outside of
the United States or any State thereof.
          “Business Day” shall mean for all purposes, any day except Saturday,
Sunday and any day which shall be in New York, New York or London, England, a
legal holiday or a day on which banking institutions are authorized or required
by law or other government action to close.
          “Calculation Period” shall mean, with respect to any Material
Permitted Acquisition, any Material Permitted Business Investment, any Material
Asset Sale or any other event expressly requiring a calculation to be made on a
Pro Forma Basis pursuant to the terms of this Agreement, the Test Period most
recently ended prior to the date of such Material Permitted Acquisition, such
Material Permitted Business Investment, such Material Asset Sale or other event
for which financial statements have been delivered to the Lenders pursuant to
this Agreement.
          “Capital Expenditures” shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with GAAP
(excluding Permitted Acquisitions and Permitted Business Investments whether or
not capitalized in accordance with GAAP) and, without duplication, the amount of
all Capitalized Lease Obligations incurred by such Person.
          “Capitalized Lease Obligations” shall mean, with respect to any
Person, all rental obligations of such Person which, under GAAP, are or will be
required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
          “Cash Equivalents” shall mean, as to any Person, (a) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (b) marketable direct obligations
issued by any state of the United States or any political subdivision of any
such state or any public instrumentality thereof maturing within six months from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or Moody’s,
(c) Dollar-denominated time deposits, certificates of deposit and bankers
acceptances of any Lender or any commercial bank having, or which is the
principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2”
or the equivalent thereof from Moody’s with maturities of not more than six
months from the date of acquisition by such Person, (d) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in

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clause (a) above entered into with any bank meeting the qualifications specified
in clause (c) above, (e) commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody’s and in each case maturing not
more than six months after the date of acquisition by such Person,
(f) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (a) through (e) above
and (g) instruments equivalent to those referred to in clauses (a) through
(f) above denominated in Pounds comparable in credit quality and tenor to those
referred to above and customarily used by companies for cash management purposes
in the United Kingdom to the extent reasonably required in connection with any
business conducted by any Subsidiary organized in such jurisdiction.
          “Cash Interest” shall have the meaning provided in Section 2.06(a).
          “Change in Law” shall have the meaning provided in Section 9.06.
          “Change of Control” shall mean (a) Holdings shall at any time cease to
own (beneficially and of record), directly or indirectly, 100% of the Equity
Interests of the Borrower, (b) any “person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) shall become the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
directly or indirectly, of 45% or more on a fully diluted basis of the economic
or voting interests in Holdings’ capital stock, (c) Continuing Directors shall
at any time cease to constitute a majority of the Board of Directors of Holdings
or (d) a “change of control” or similar event the occurrence of which gives rise
to a mandatory prepayment or redemption, required offer to purchase or an event
of default shall occur as provided in any Permitted Junior Debt (or any
documentation governing same) or any Qualified Preferred Stock (or the
documentation governing the same).
          “Class C Convertible Preferred Stock” means Holdings’ Series C
Preferred Stock with the terms set forth in the Certificate of Designation of
Series C Preferred Stock originally filed with the Nevada Secretary of State on
October 30, 2006.
          “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute and any regulations promulgated
thereunder.
          “Collateral” shall mean all property (whether real or personal,
tangible or intangible) with respect to which any security interests have been
granted (or purported to be granted) pursuant to any Security Document,
including, without limitation, all Collateral under and as defined in each
Security Document.
          “Collateral Agent” shall mean Cyan Partners, LP (or its designee), in
its capacity as Collateral Agent for the Lenders hereunder and under the other
Credit Documents, and shall include any successor to the Collateral Agent
appointed pursuant to Section 10.09.
          “Collective Bargaining Agreements” shall have the meaning provided in
Section 5.05(e).
          “Commitment” shall mean, for each Lender, the commitment of such
Lender to make a Term Loan, in such amount as set forth opposite such Lender’s
name in Schedule 1.01(a) hereto directly below the column entitled “Term Loan
Commitment”, as the same may be (i) terminated pursuant to Section 3.03 or
Section 9 or (ii) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 2.08 or 11.04(b).
          “Commodity Hedging Agreement” shall mean a commodity price risk
management agreement or similar arrangement (including commodity price swap
agreements, forward agreements or

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contracts of sale which provide for prepayment for deferred shipment or delivery
of oil, gas or other commodities).
          “Consolidated Current Assets” shall mean, at any time, the
consolidated current assets (without giving any effect to any movement in the
mark-to-market valuation under Hedging Agreements) of Holdings and its
Subsidiaries at such time.
          “Consolidated Current Liabilities” shall mean, at any time, the
consolidated current liabilities (without giving effect to any movement in the
mark-to-market valuation under Hedging Agreements) of Holdings and its
Subsidiaries at such time, but excluding the current portion of any Indebtedness
under this Agreement and the current portion of any other long-term Indebtedness
which would otherwise be included therein.
          “Consolidated EBITDAX” shall mean, for any period, Consolidated Net
Income for such period (without giving effect to (a) any extraordinary gain or
losses, (b) any non-cash income or non-cash expenses; provided that any such
non-cash expenses that are excluded from the calculation of Consolidated EBITDAX
in any period pursuant to this clause (b) that later become cash expenses in a
subsequent period shall reduce Consolidated EBITDAX in an amount equal to such
cash expense, (c) any gains or losses from sales of assets other than inventory
and Hydrocarbons sold in the ordinary course of business and (d) interest
income) adjusted by adding thereto (in each case to the extent deducted in
determining Consolidated Net Income for such period), without duplication, the
amount of (i) total interest expense (inclusive of amortization of deferred
financing fees and other original issue discount and banking fees, charges and
commissions (e.g., letter of credit fees and commitment fees) of Holdings and
its Subsidiaries determined on a consolidated basis for such period,
(ii) provision for taxes based on income and foreign withholding taxes for
Holdings and its Subsidiaries determined on a consolidated basis for such
period, (iii) all depletion, depreciation and amortization expense of Holdings
and its Subsidiaries determined on a consolidated basis for such period, (iv) in
the case of any period including the fiscal quarters of Holdings ended or ending
June 30, 2010 or September 30, 2010, the amount of all fees and expenses
incurred by Holdings and its Subsidiaries in connection with the entering into
of this Agreement and the other Credit Documents during either such fiscal
quarter, (v) geological and geophysical expense for such period, (vi) all
amounts attributable to impairment of oil and gas properties for such period,
and (vii) consolidated amortization expense or impairment charges of Holdings
and its Subsidiaries recorded in connection with the application of Statement of
Financial Accounting Standard No. 142, “Goodwill and Other Intangibles.” For the
avoidance of doubt, it is understood and agreed that, to the extent any amounts
are excluded from Consolidated Net Income by virtue of the proviso to the
definition thereof contained herein, any add backs to Consolidated Net Income in
determining Consolidated EBITDAX as provided above shall be limited (or denied)
in a fashion consistent with the proviso to the definition of Consolidated Net
Income contained herein. Notwithstanding anything to the contrary contained
above, for purposes of determining Consolidated EBITDAX for Holdings’ fiscal
quarters ended December 31, 2009 and March 31, 2010, Consolidated EBITDAX shall
be calculated in accordance with the definition of Test Period contained herein.
          “Consolidated Indebtedness” shall mean, at any time, the sum of
(without duplication) (a) all Indebtedness of Holdings and its Subsidiaries (on
a consolidated basis) as would be required to be reflected as debt or
Capitalized Lease Obligations on the liability side of a consolidated balance
sheet of Holdings and its Subsidiaries in accordance with GAAP, (b) all
Indebtedness of Holdings or any of its Subsidiaries of the type described in
clauses (b), (g) and (h) of the definition of Indebtedness, and (c) all
Contingent Obligations of Holdings or any of its Subsidiaries in respect of
Indebtedness of any third Person of the type referred to in preceding clauses
(a) and (b); provided that the amount of any Indebtedness in respect of Hedging
Agreements shall be at any time the unrealized net loss position (taking into
account all Hedging Agreements), if any, of Holdings and/or its Subsidiaries
thereunder on a

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marked-to-market basis determined as of the most recently ended fiscal quarter;
provided further, that if at any time when Consolidated Indebtedness is being
determined, the net position across all Holdings’ and its Subsidiaries Hedging
Agreements is positive, Consolidated Indebtedness shall, other than for the
purposes of calculations of Total Leverage Ratio, be reduced by such positive
amount.
          “Consolidated Net Income” shall mean for any period, the net income
(or loss) of Holdings and its Subsidiaries determined on a consolidated basis
for such period (taken as a single accounting period) in accordance with GAAP,
provided that the following items shall be excluded in computing Consolidated
Net Income (without duplication): (i) the net income (or loss) of any Person in
which a Person or Persons other than Holdings and its Wholly-Owned Subsidiaries
has an Equity Interest or Equity Interests to the extent of such Equity
Interests held by Persons other than Holdings and its Wholly-Owned Subsidiaries
in such Person, (ii) except for determinations expressly required to be made on
a Pro Forma Basis, the net income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or all or substantially all of the property or
assets of such Person are acquired by a Subsidiary and (iii) the net income of
any Subsidiary to the extent that the declaration or payment of cash dividends
or similar cash distributions by such Subsidiary of such net income is not at
the time permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Subsidiary.
          “Consolidated Net Indebtedness” shall mean, at any time, the
difference of (a) Consolidated Indebtedness at such time less (b) the average
daily amount of Holdings’ and its Subsidiaries’ Unrestricted cash and
Unrestricted Cash Equivalents during the thirty day period ending on the
respective date on which “Consolidated Net Indebtedness” is determined to the
extent such cash and Cash Equivalents are (i) subject to control agreements
pursuant to which the Administrative Agent has “control” with respect to such
cash and Cash Equivalents within the meaning of Section 8-106 or 9-104 (as
applicable) of the UCC or otherwise subject to a control or similar agreement of
the type delivered pursuant to Section 5.09(g) or (ii) pledged to secure the
repayment of outstanding Consolidated Indebtedness (other than the Obligations).
          “Consolidated Net Secured Indebtedness” shall mean, at any time, the
difference of (a) Consolidated Indebtedness at such time that is secured by a
Lien less (b) the average daily amount of Holdings’ and its Subsidiaries’
Unrestricted cash and Unrestricted Cash Equivalents during the thirty day period
ending on the respective date on which “Consolidated Net Secured Indebtedness”
is determined to the extent such cash and Cash Equivalents are (i) subject to
control agreements pursuant to which the Administrative Agent has “control” with
respect to such cash and Cash Equivalents within the meaning of Section 8-106 or
9-104 (as applicable) of the UCC or otherwise subject to a control or similar
agreement of the type delivered pursuant to Section 5.09(g) or (ii) pledged to
secure the repayment of outstanding Consolidated Indebtedness (other than the
Obligations).
          “Contingent Obligation” shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The

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amount of any Contingent Obligation shall be deemed to be an amount equal to the
lower of (i) the maximum amount of such Contingent Obligation pursuant to the
agreement or instrument under which such Contingent Obligation is created and
(ii) the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
          “Continuing Directors” shall mean the directors of Holdings on the
Funding Date and each other director if such director’s nomination for election
to the Board of Directors is recommended by a majority of the then Continuing
Directors.
          “Credit Documents” shall mean this Agreement, each Note, the
Subsidiaries Guaranty, each Security Document, the Syndication Letter (for the
purposes of Sections 9.01, 9.03 and 11.01 only) and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each joinder,
accession or similar agreement by which any Subsidiary of Holdings becomes party
to the Subsidiaries Guaranty or any Security Document.
          “Credit Party” shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
          “Default” shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
          “Defaulting Lender” shall mean any Lender with respect to which a
Lender Default is in effect.
          “Dividend” shall mean, with respect to any Person, that such Person
has declared or paid a dividend, distribution or returned any equity capital to
its stockholders, partners or members or authorized or made any other
distribution, payment or delivery of property (other than common Equity
Interests of such Person) or cash to its stockholders, partners or members in
their capacity as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock or any other Equity Interests outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock or other Equity Interests), or set aside any funds for any of
the foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock or any other Equity Interests of such Person outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock or other Equity Interests). Without limiting the
foregoing, “Dividends” with respect to any Person shall also include all
payments (other than in the ordinary course of business, consistent with past
practices) made or required to be made by such Person with respect to any stock
appreciation rights, equity incentive or achievement plans or any similar plans
or setting aside of any funds for the foregoing purposes.
          “Dollars” and the sign “$” shall each mean freely transferable lawful
money of the United States.
          “Dutch Pledge Agreement” shall have the meaning provided in
Section 5.09(e).
          “Dutch Sector” shall mean the jurisdiction of The Netherlands commonly
referred to as the Dutch Sector — North Sea.
          “Dutch Subsidiaries” shall mean and include each of Endeavour
International Holding B.V. and Endeavour Energy Netherlands B.V.

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          “Effective Date” shall have the meaning provided in Section 11.10.
          “Eligible Transferee” shall mean and include a commercial bank, an
insurance company, a finance company, a financial institution, any fund that
invests in loans or any other “accredited investor” (as defined in Regulation D
of the Securities Act), but in any event excluding any natural Person, Holdings,
the Borrower and their respective Subsidiaries and Affiliates.
          “Employee Benefit Plans” shall have the meaning provided in
Section 5.05(a).
          “Employment Agreements” shall have the meaning provided in
Section 5.05(d).
          “English Charge Over Shares” shall have the meaning provided in
Section 5.09(d).
          “English Debenture” shall have the meaning provided in
Section 5.09(c).
          “English Security Documents” shall mean and include (i) each English
Charge Over Shares and (ii) each English Debenture.
          “Environmental Law” shall mean any applicable Federal, state, local,
UK or other non-U.S. law (including common law), rule, regulation, ordinance,
code, directive, judgment or order now or hereafter in effect and in each case
as amended, and any binding judicial or administrative interpretation thereof,
relating to the protection of the environment or of human health and safety (to
the extent such health and safety relate to exposure to Hazardous Materials), or
to the presence, Release or threatened Release, or the manufacture, use,
transportation, treatment, storage, disposal or recycling of Hazardous
Materials, or the arrangement for any such activities.
          “EOC” shall mean Endeavour Operating Corporation, a Delaware
corporation.
          “Equity Interests” shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests, participation or other equivalents
of or interest in (however designated and whether or not voting) corporate stock
of such Person, including each class of common stock and preferred stock of such
Person, (ii) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person, and (iii) any
warrants, rights or options to purchase any of the instruments or interests
referred to in the preceding clauses (i) or (ii).
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
          “ERISA Affiliate” shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings and/or any of its Subsidiaries would be
deemed to be a “single employer” within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
          “ERISA Event” shall mean (a) a Reportable Event; (b) the failure of
any Plan to satisfy the minimum funding standards, if any, applicable to that
Plan for a Plan year under Section 412 of the Code or Section 302 of ERISA or a
Plan’s application for a waiver of such minimum funding standards pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA; (c) the arising of a lien
or encumbrance under Section 4068 of ERISA; (d) a determination that any Plan
is, or is expected to be, in at-risk status under Section 430(i) of the Code or
Section 303(i) of ERISA; (e) the incurrence by Holdings, any of its
Subsidiaries, or an ERISA affiliate of material liability (including any
indirect, contingent, or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 4062, 4063, 4064, or 4069 of ERISA or
Section 4971 or 4975 of the Code; (f) the institution of proceedings, or the
occurrence of an event or condition which would reasonably be expected to
constitute grounds for the

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institution of proceedings by the PBGC to terminate or appoint a trustee to
administer any Plan pursuant to Title IV of ERISA; (g) the filing of a notice of
intent to terminate any Plan, if such termination would require material
additional contributions in order to be considered a standard termination within
the meaning of Section 4041(b) of ERISA, the filing under Section 4041(c) of
ERISA of a notice of intent to terminate any Plan or the termination of any Plan
under Section 4041(c) of ERISA; (h) the complete or partial withdrawal of
Holdings, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan that
gives rise to, or is expected to give rise to a liability under Section 4201 of
ERISA, the reorganization or insolvency under Title IV of ERISA of any
Multiemployer Plan, or the receipt by Holdings, any Subsidiary or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from Holdings,
any Subsidiary or any ERISA Affiliate of any notice, that a Multiemployer Plan
is in endangered or critical status under Section 305 of ERISA; or (i) the
knowledge of Holdings of a violation of the applicable requirements of
Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)
of the Code by any fiduciary (as defined in Section 3(21) of ERISA) or
disqualified person (as defined in Section 4975(e)(2) of the Code) with respect
to any Plan for which Holdings or any of its Subsidiaries is reasonably expected
to incur a material liability.
          “Event of Default” shall have the meaning provided in Section 9.
          “Excess Cash Flow” shall mean, for any period, the remainder of
(a) the sum of, without duplication, (i) Adjusted Consolidated Net Income for
such period and (ii) the decrease, if any, in Adjusted Consolidated Working
Capital from the first day to the last day of such period, minus (b) the sum of,
without duplication, (i) the aggregate amount of all Capital Expenditures made
by Holdings and its Subsidiaries during such period (other than Capital
Expenditures to the extent financed with asset sale proceeds, insurance proceeds
or proceeds from sales or issuances of Equity Interests or Indebtedness),
(ii) the aggregate amount of permanent principal payments of Indebtedness for
borrowed money of Holdings and its Subsidiaries and the permanent repayment of
the principal component of Capitalized Lease Obligations of Holdings and its
Subsidiaries during such period (other than (1) repayments made pursuant to the
Refinancing, (2) repayments made with the proceeds of asset sales, insurance
proceeds or proceeds from sales or issuances of Equity Interests or Indebtedness
and (3) payments of Term Loans and/or other Obligations, provided that
repayments of Term Loans shall be deducted in determining Excess Cash Flow to
the extent such repayments were (x) required as a result of a Scheduled
Repayment pursuant to Section 4.02(a) or (y) made as a voluntary prepayment
pursuant to Section 4.01 with internally generated funds), (iii) the increase,
if any, in Adjusted Consolidated Working Capital from the first day to the last
day of such period, (iv) the Aggregate Consideration paid in cash by Holdings or
any of its Subsidiaries in respect of all Permitted Acquisitions and Permitted
Business Investments during such period (other than Permitted Acquisitions and
Permitted Business Investments to the extent financed with asset sale proceeds,
insurance proceeds or proceeds from sales or issuances of Equity Interests or
Indebtedness), (v) the aggregate amount of Dividends paid by Holdings during
such period on Class C Convertible Preferred Stock in accordance with
Section 8.03(f), (vi) the aggregate amount of any non-cash charges incurred in a
prior period which are paid in cash in such period, and (vii) the aggregate
amount of any cash gains on Material Asset Sales during such period.
          “Excess Cash Payment Date” shall mean the date occurring 90 days after
the last day of each fiscal year of Holdings (commencing with the fiscal year of
Holdings ending December 31, 2011).
          “Excess Cash Payment Period” shall mean the immediately preceding
fiscal year of Holdings.
          “Exchange Act” shall mean the Securities Exchange Act of 1934, and the
rules and regulations promulgated thereunder.

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          “Exchange Rate” shall mean, on any day, with respect to any currency
other than Dollars, the noon buying rate in New York City for such currency on
such date for cable transfers as certified for customs purposes by the Federal
Reserve Bank of New York.
          “Existing Credit Agreements” shall mean (i) that certain $225,000,000
Secured Revolving Loan and Letter of Credit Facility Agreement, dated
October 30, 2006, among Holdings, BNP Paribas as Mandated Lead Arranger, Agent,
Security Trustee and Fronting Bank (as each such term is defined therein), The
Governor and Company of the Bank of Scotland, as Mandated Lead Arranger, Account
Bank and Technical Bank (as each such term is defined therein) and the other
lenders thereto (as amended through and including the Funding Date) and
(ii) that certain $25,000,000 Junior Facility Agreement, dated January 22, 2008,
among Holdings, Bank of Scotland Plc as Mandated Lead Arranger, Technical Bank,
Original Lender and Agent (as each such term is defined therein) and BNP Paribas
as Security Trustee (as amended through and including the Funding Date).
          “Existing Indebtedness” shall have the meaning provided in
Section 5.06(c).
          “Existing Indebtedness Agreements” shall have the meaning provided in
Section 5.05(h).
          “Fair Market Value” shall mean, with respect to any asset (including
any Equity Interests of any Person), the price at which a willing buyer, not an
Affiliate of the seller, and a willing seller who does not have to sell, would
agree to purchase and sell such asset, as determined in good faith by the Board
of Directors of Holdings or other governing body or, pursuant to a specific
delegation of authority by such Board of Directors or governing body, a
designated senior executive officer, of Holdings, or the Subsidiary of Holdings
selling such asset.
          “Federal Funds Rate” shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
          “Fees” shall mean all amounts payable pursuant to or referred to in
Section 3.01.
          “Funding Date” shall mean the date occurring on or after the Effective
Date on which the incurrence of Term Loans occurs.
          “GAAP” shall mean generally accepted accounting principles in the
United States as in effect from time to time; provided that determinations in
accordance with GAAP for purposes of Section 8, including defined terms as used
therein, are subject (to the extent provided therein) to Section 11.07(a).
          “Governmental Authority” shall mean the government of the United
Kingdom, the United States, the European Union and any other nation or any
political subdivision thereof, whether state, provincial or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
          “Guaranteed Creditors” shall mean and include each of the
Administrative Agent, the Collateral Agent, the Lenders and each Approved Third
Party Credit Provider to the extent such party constitutes a Secured Creditor
under the Security Documents.

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          “Guaranteed Obligations” shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and all Terms Loans made to, the
Borrower under this Agreement and all the other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), indebtedness and liabilities (including,
without limitation, indemnities, fees and interest (including any interest
accruing after the commencement of any bankruptcy, insolvency, receivership or
similar proceeding at the rate provided for herein, whether or not such interest
is an allowed claim in any such proceeding) thereon) of the Borrower to the
Lenders, the Administrative Agent and the Collateral Agent now existing or
hereafter incurred under, arising out of or in connection with this Agreement
and each other Credit Document to which the Borrower is a party and the due
performance and compliance by the Borrower with all the terms, conditions and
agreements contained in the Credit Agreement and in each such other Credit
Document and (ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided for herein, whether or
not such interest is an allowed claim in any such proceeding) of the Borrower or
any Guarantor owing under any Hedging Agreement or reimbursement agreement
related to any Third Party Letter of Credit in each case entered into with, or
issued or provided by, an Approved Third Party Credit Provider to the extent
such Approved Third Party Credit Provider is a party to the Intercreditor
Agreement, whether now in existence or hereafter arising, and the due
performance and compliance with all terms, conditions and agreements contained
therein.
          “Guarantor” shall mean each of Holdings and each Subsidiary Guarantor.
          “Guaranty” shall mean each of the Holdings Guaranty and the
Subsidiaries Guaranty.
          “Hazardous Materials” shall mean any waste or other substance that is
listed, defined, designated or classified as, or otherwise regulated as,
hazardous or toxic or a pollutant or contaminant under or pursuant to any
Environmental Law, including any petroleum, Hydrocarbons and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials.
          “Hedging Agreement” shall mean any Commodity Hedging Agreement,
Interest Rate Hedging Agreement or foreign currency exchange agreement or other
currency exchange rate hedging agreement.
          “Hess Contracts” shall mean three Abandonment and Security Agreements
between Hess Limited and the Borrower relating to the IVRR/Rob Roy/Hamish, Renee
Area A and Rubie Area A assets each dated October 26, 2006.
          “Holdings” shall have the meaning provided in the first paragraph of
this Agreement.
          “Holdings Common Stock” shall have the meaning provided in
Section 6.13.
          “Holdings Guaranty” shall mean the guaranty of Holdings pursuant to
Section 12.
          “Hydrocarbon Interests” shall mean all rights, titles, interests and
estates now owned or hereafter acquired in and to oil and gas leases, leasehold
interests and licenses, oil, gas and mineral leases, leasehold interests and
licenses, or other liquid or gaseous hydrocarbon licenses, leases, fee mineral
interests, term mineral interests, subleases, farm-outs, royalties, overriding
royalty and royalty interests, non-consent interests arising out of or pursuant
to Oil and Gas Contracts, net profit interests, net revenue interests, oil
payments, production payments, production payment interests and similar
interests and

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estates, including all reserved or residual interest of whatever nature and all
reversionary or carried interests relating to any of the foregoing.
          “Hydrocarbons” shall mean oil, gas, casinghead gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons, all products directly or
indirectly refined, separated, settled and dehydrated therefrom, including
kerosene, liquefied petroleum gas, refined lubricating oils, diesel fuel, drip
gasoline, natural gasoline, helium, sulfur and all other minerals.
          “Immaterial Subsidiary” shall mean any Subsidiary that did not, as of
the last day of the most recently ended Test Period, have assets with a book
value in excess of 2.5% of the consolidated total assets of Holdings and its
Subsidiaries; provided that if at any time the aggregate amount of consolidated
total assets attributable to Immaterial Subsidiaries would otherwise exceed 5%
of the consolidated total assets of Holdings and it Subsidiaries, then
Subsidiaries that would otherwise constitute Immaterial Subsidiaries pursuant to
this definition (without giving effect to this proviso) shall be deemed not to
constitute Immaterial Subsidiaries to the extent necessary so that the
percentage limitation in this proviso is not exceeded. For purposes of
calculations of the book value of assets of a Subsidiary pursuant to this
definition, (i) the value of the loan evidenced by that certain revolving loan
facility agreement dated January 23, 2008 (as amended, supplemented or modified
from time to time) between Endeavour International Holding B.V. and Endeavour
Energy Luxembourg S.a.r.l., (ii) during the period from the Funding Date until
January 1, 2011, the value of the intercompany loan in the amount of $23,500,000
between Endeavour North Sea Limited and Endeavour Energy UK Limited, and
(iii) the value of other loans and receivables in an aggregate amount not in
excess of $5,000,000 owed to such Subsidiary by Holdings or any other Subsidiary
of Holdings, in each case shall be disregarded.
          “Incremental Amendment” shall have the meaning provided in
Section 2.10(a).
          “Incremental Term Loans” shall have the meaning provided in
Section 2.10(a).
          “Indebtedness” shall mean, as to any Person, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (b) the maximum amount available to be
drawn or paid under all letters of credit, bankers’ acceptances, bank
guaranties, surety and appeal bonds and similar obligations issued for the
account of such Person and all unpaid drawings and unreimbursed payments in
respect of such letters of credit, bankers’ acceptances, bank guaranties, surety
and appeal bonds and similar obligations, (c) all indebtedness of the types
described in clause (a), (b), (d), (e), (f), (g), (h) or (i) of this definition
secured by any Lien on any property owned by such Person, whether or not such
indebtedness has been assumed by such Person (provided that, if the Person has
not assumed or otherwise become liable in respect of such indebtedness, such
indebtedness shall be deemed to be in an amount equal to the Fair Market Value
of the property to which such Lien relates), (d) all Capitalized Lease
Obligations of such Person, (e) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (f) all Contingent
Obligations of such Person (other than Contingent Obligations of a Credit Party
in respect of contractual obligations of another Credit Party arising in the
ordinary course of business and not otherwise constituting Indebtedness), (g)
all obligations under any Hedging Agreement, (h) all Off-Balance Sheet
Liabilities of such Person and (i) all Attributable Indebtedness of such Person.
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 directly 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 provide that such Person is not liable
therefor. Notwithstanding the foregoing, Indebtedness shall not include trade
payables, accrued expenses and deferred tax and other credits incurred by any
Person in accordance with customary practices and in the ordinary course of
business of such Person.

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          “Indemnified Person” shall have the meaning provided in Section 11.01.
          “Independent Engineering Firm” shall mean Netherland, Sewell &
Associates, Inc. and/or one or more independent engineering firms selected by
the Borrower and reasonably acceptable to the Administrative Agent.
          “Intercompany Loans” shall have the meaning provided in
Section 8.05(h).
          “Intercompany Note” shall mean a promissory note evidencing
Intercompany Loans, duly executed and delivered substantially in the form of
Exhibit J (or such other form as shall be satisfactory to the Administrative
Agent in its sole discretion).
          “Intercreditor Agreement” shall mean an intercreditor agreement, duly
executed and delivered by the Administrative Agent, the Collateral Agent and one
or more Approved Third Party Credit Providers, in form and substance
satisfactory to the Administrative Agent in its sole discretion and providing,
inter alia, (i) that after application to all reasonable costs and expenses
incurred by the Collateral Agent in connection with the Intercreditor Agreement
and enforcement or otherwise under any Security Document, the first $25,000,000
of proceeds from the enforcement of Collateral shall be applied to discharge
obligations owed under Hedging Agreements with Approved Third Party Credit
Providers that have entered into the Intercreditor Agreement and reimbursement
agreements with respect to Third Party Letters of Credit issued by Approved
Third Party Credit Providers that have entered into the Intercreditor Agreement,
and (ii) until all Obligations have been satisfied in full, the Collateral Agent
(acting on the instructions of the Required Lenders) will have the sole power to
exercise remedies against the Collateral and to foreclose upon and dispose of
Collateral.
          “Interest Payment Date” shall mean the last Business Day of each
December, March, June and September occurring after the Funding Date, commencing
with December 31, 2010.
          “Interest Rate Hedging Agreement” shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement or other
interest rate protection agreement, interest rate hedging arrangement or other
similar arrangement or arrangement.
          “Investment Grade” shall mean a rating of BBB- or higher (with a
stable outlook) by S&P and Baa3 or higher (with a stable outlook) by Moody’s.
          “Investments” shall have the meaning provided in Section 8.05.
          “Junior Financing” shall mean each of (a) the 2012 Convertible Senior
Notes, (b) the 2014 Convertible Senior Notes, (c) the 2014 Senior Subordinated
Notes and (d) Permitted Junior Debt.
          “Junior Lien Obligations” shall mean Permitted Junior Debt that is
intended to have a Lien on the Collateral that ranks junior to the Lien of the
Secured Creditors securing the Obligations.
          “Lead Arranger” shall mean Cyan Partners, LP, in its capacity as Sole
Lead Arranger and Sole Book Runner, and any successor thereto.
          “Leaseholds” of any Person shall mean all the right, title and
interest of such Person as lessee, sublessee or licensee in, to and under
leases, subleases or licenses of land, improvements and/or fixtures.
          “Lender” shall mean each financial institution listed on
Schedule 1.01(a) hereto, as well as any Person that becomes a “Lender” hereunder
pursuant to Section 2.08 or 11.04(b).

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          “Lender Default” shall mean (a) the wrongful refusal or the failure of
a Lender to make available its portion of the Borrowing made on the Funding Date
or (b) a Lender having notified in writing the Borrower and/or the
Administrative Agent that such Lender does not intend to comply with its
obligations under Section 2.01 or Section 2.03.
          “Lien” shall mean any mortgage, pledge, hypothecation, assignment for
security, deposit arrangement, encumbrance (other than any ordinary course
encumbrance not securing any obligations of any Person), lien (statutory or
other), preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
          “Management Agreements” shall have the meaning provided in
Section 5.05(c).
          “Margin Stock” shall have the meaning provided in Regulation U.
          “Material Adverse Effect” shall mean (a) a material adverse effect on
the business, property or financial condition of Holdings and its Subsidiaries
taken as a whole or (b) a material adverse effect (i) on the rights or remedies
of the Lenders, the Administrative Agent or the Collateral Agent hereunder or
under any other Credit Document, (ii) on the ability of any Credit Party to
perform its obligations to the Lenders, the Administrative Agent or the
Collateral Agent hereunder or under any other Credit Document or (iii) on a
material portion of the Collateral.
          “Material Asset Sale” shall mean any Asset Sale or series of related
Assets Sales (i.e., separate assets being sold, transferred or otherwise
disposed of as part of an identifiable group of assets and within a reasonably
limited time period) where the aggregate consideration therefor is equal to, or
in excess of, $5,000,000 and shall, subject to the aforementioned dollar
limitation, include any such Asset Sale or Asset Sales of any Subsidiary or any
Oil and Gas Properties.
          “Material Permitted Acquisition” shall mean any Permitted Acquisition
where the Consolidated EBITDAX attributable to the Acquired Entity or Business
(as determined on a basis consistent with the definition of Consolidated EBITDAX
with any necessary reference changes) for the Test Period most recently ended
prior to the date of such Permitted Acquisition for which financial statements
have been delivered to the Lenders pursuant to this Agreement exceeds 5% of
Consolidated EBITDAX (calculated without giving effect to such Permitted
Acquisition) for such Test Period.
          “Material Permitted Business Investment” shall mean any Permitted
Business Investment where the Consolidated EBITDAX attributable to the assets
acquired pursuant to such Permitted Business Investment (as determined on a
basis consistent with the definition of Consolidated EBITDAX with any necessary
reference changes) for the Test Period most recently ended prior to the date of
such Permitted Business Investment for which financial statements have been
delivered to the Lenders pursuant to this Agreement exceeds 5% of Consolidated
EBITDAX (calculated without giving effect to such Permitted Business Investment)
for such Test Period.
          “Maturity Date” shall mean August 16, 2013; provided that, if on
October 14, 2011 there remains outstanding 2012 Convertible Senior Notes and
2014 Convertible Senior Notes in an aggregate principal amount in excess of
$13,399,500, then the Maturity Date shall instead be October 14, 2011; provided,
further, (a) the 2014 Convertible Senior Notes shall be deemed not to be
outstanding for the purposes of this definition in the event that the 2014
Convertible Senior Notes Trust Deed has been amended or modified (including by
means of a waiver) such that after giving effect thereto the holders of the 2014
Convertible Senior Notes do not have any so-called “put” or similar rights with
respect to the 2014 Convertible Senior Notes that may be exercised at any time
prior to November 16, 2013, and (b) the

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2012 Convertible Senior Notes shall not be deemed to be outstanding pursuant to
this definition in the event that the 2012 Convertible Senior Notes Indenture
has been amended or modified (including by means of a waiver) to extend the
maturity date of the 2012 Convertible Senior Notes to a date no earlier than
November 16, 2013.
          “Moody’s” shall mean Moody’s Investors Service, Inc.
          “Mortgage” shall mean a mortgage, leasehold mortgage, deed of trust,
leasehold deed of trust, deed to secure debt, leasehold deed to secure debt,
debenture or similar security instrument.
          “Mortgaged Property” shall mean any U.S. Oil and Gas Property or other
Real Property owned or leased by Holdings or any of its Subsidiaries which is
encumbered (or required to be encumbered) by a Mortgage pursuant to the terms of
this Agreement or any Additional Security Document.
          “Multiemployer Plan” shall mean any multiemployer plan as defined in
Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is an
obligation to contribute of) Holdings, any of its Subsidiaries and/or any ERISA
Affiliate, and each such plan for the five-year period immediately following the
latest date on which Holdings, any of its Subsidiaries and/or an ERISA Affiliate
contributed to or had an obligation to contribute to such plan.
          “NAIC” shall mean the National Association of Insurance Commissioners.
          “Net Cash Proceeds” shall mean, the gross cash proceeds (including any
cash received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received) received from such
event, net of reasonable transaction costs (including, as applicable, any
underwriting, brokerage or other customary commissions and reasonable legal,
advisory and other fees and expenses associated therewith) received from any
such event.
          “Net Insurance Proceeds” shall mean, with respect to any Recovery
Event, the cash proceeds received by the respective Person in connection with
such Recovery Event (net of (a) reasonable costs and taxes incurred in
connection with such Recovery Event and (b) required payments of any
Indebtedness (other than Indebtedness secured pursuant to the Security
Documents) which is secured by the respective assets the subject of such
Recovery Event).
          “Net Sale Proceeds” shall mean for any sale or other disposition of
assets, the gross cash proceeds (including any cash received by way of deferred
payment pursuant to a promissory note, receivable or otherwise, but only as and
when received) received from such sale or other disposition of assets, net of
(a) reasonable transaction costs (including, without limitation, any
underwriting, brokerage or other customary selling commissions, reasonable
legal, advisory and other fees and expenses (including title and recording
expenses), associated therewith and sales, VAT and transfer taxes arising
therefrom), (b) payments of unassumed liabilities relating to the assets sold or
otherwise disposed of at the time of, or within 30 days after, the date of such
sale or other disposition, (c) the amount of such gross cash proceeds required
to be used to permanently repay any Indebtedness (other than Indebtedness
secured pursuant to the Security Documents), which is secured by the respective
assets which were sold or otherwise disposed of, and (d) the estimated net
marginal increase in income, franchise or similar taxes which will be payable by
Holdings’ consolidated group or any Subsidiary of Holdings with respect to the
tax year of Holdings in which the sale or other disposition occurs as a result
of such sale or other disposition (or, without duplication, which will be
payable by Holdings’ consolidated group or any Subsidiary of Holdings in the tax
year of Holdings in which cash proceeds in respect of such sale or other
disposition are received by way of deferred payment pursuant to a promissory
note, receivable or otherwise); provided, however, that such gross proceeds
shall not include any portion of such gross cash

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proceeds which Holdings determines in good faith should be reserved for
post-closing adjustments (to the extent Holdings delivers to the Lenders a
certificate signed by an Authorized Officer as to such determination), it being
understood and agreed that on the day that all such post-closing adjustments
have been determined (which shall not be later than six months following the
date of the respective asset sale), the amount (if any) by which the reserved
amount in respect of such sale or disposition exceeds the actual post-closing
adjustments payable by Holdings or any of its Subsidiaries shall constitute Net
Sale Proceeds on such date received by Holdings and/or any of its Subsidiaries
from such sale or other disposition.
          “Non-Compete Agreements” shall have the meaning provided in
Section 5.05(g).
          “Non-Defaulting Lender” shall mean and include each Lender, other than
a Defaulting Lender.
          “Non-Guarantor Subsidiary” shall mean each Subsidiary of Holdings
(other than the Borrower) that is not a Subsidiary Guarantor.
          “Non-U.S. Pension Plan” shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States by Holdings or any one or more of its
Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States, which plan, fund or other
similar program provides, or results in, retirement income, a deferral of income
in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
          “Non-U.S. Subsidiary” shall mean, as to any Person, any Subsidiary of
such Person that is not a U.S. Subsidiary of such Person.
          “Non-Wholly-Owned Subsidiary” shall mean, as to any Person, each
Subsidiary of such Person which is not a Wholly-Owned Subsidiary of such Person.
          “North Sea” shall mean, collectively, the Dutch Sector, the UK Sector
and surrounding areas of the North Sea, including, without limitation, any such
areas in Scottish or Norwegian waters.
          “Note” shall have the meaning provided in Section 2.04(a).
          “Notice of Borrowing” shall have the meaning provided in
Section 2.02(a).
          “Notice Office” shall mean, for credit and operational notices, the
office of the Administrative Agent located at 399 Park Avenue, 39th Floor, New
York, New York, 10022 Attention: Divya Gopal, Telephone No.: (212) 380-5864,
Telecopier No.: (212) 380-5871, or such other office or person as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
          “Obligations” shall mean all amounts owing to the Administrative
Agent, the Collateral Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document, including, without limitation, all
amounts in respect of any principal, interest (including (a) any PIK Interest
and (b) any interest accruing subsequent to the filing of a petition in
bankruptcy, reorganization or similar proceeding at the rate provided for in
this Agreement or the respective other Credit Document, whether or not such
interest is an allowed claim under any such proceeding or under applicable
state, federal or foreign law), penalties, fees, expenses, indemnifications,
reimbursements, damages and other liabilities, and guarantees of the foregoing
amounts.
          “Off-Balance Sheet Liabilities” of any Person shall mean (a) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (b) any liability

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of such Person under any sale and leaseback transactions that does not create a
liability on the balance sheet of such Person, (c) any obligation under a
Synthetic Lease or (d) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person.
          “Oil and Gas Business” shall mean (a) the acquisition, exploration,
exploitation, development, operation and disposition of interests in Oil and Gas
Properties and Hydrocarbons; (b) the gathering, treating, refining, processing,
storage, marketing, distribution, selling and transporting of any production
from such interests or properties; and (c) any business directly relating to or
arising directly from exploration for, or development, production, treatment,
processing, storage or selling of, Hydrocarbons, or that is or necessary or
desirable to facilitate the activities described in this definition.
          “Oil and Gas Contracts” shall mean all contracts, agreements,
operating agreements, farm-out or farm-in agreements, sharing agreements,
mineral purchase agreements, contracts for the purchase, exchange,
transportation, processing or sale of Hydrocarbons, rights-of-way, easements,
surface leases, subleases, equipment leases, permits, franchises, licenses,
pooling or unitization agreements, and unit or pooling designations and orders
now or hereafter affecting any of the Oil and Gas Properties (or related oil and
gas gathering assets) or Hydrocarbon Interests of Holdings and each of its
Subsidiaries, or which are useful or appropriate in drilling for, producing,
treating, handling, storing, transporting, or marketing oil, gas or other
minerals produced from any of the Oil and Gas Properties of Holdings and each of
its Subsidiaries, as any such contracts and agreements as they may be amended,
restated, modified, substituted or supplemented from time to time.
          “Oil and Gas Properties” shall mean (a) Hydrocarbon Interests; (b) the
properties now or hereafter pooled or unitized with Hydrocarbon Interests;
(c) all currently existing or future rights arising under (i) unitization
agreements, orders or other arrangements, (ii) pooling orders, agreements or
other arrangements and (iii) declarations of pooled units and the units created
thereby (including all units created under orders, regulations and rules of any
Governmental Authority having jurisdiction) which may affect all or any portion
of the Hydrocarbon Interests; (d) all pipelines, gathering lines, compression
facilities, tanks and processing plants; (e) all interests held in royalty
trusts whether currently existing or hereafter created; (f) all Hydrocarbons in
and under and which may be produced, saved, processed or attributable to the
Hydrocarbon Interests, the lands covered thereby and all Hydrocarbons in
pipelines, gathering lines, tanks and processing plants and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; (g) all tenements, hereditaments, appurtenances,
interests and properties in any way appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests, and all rights, titles, interests and
estates described or referred to above (including (i) any and all Real Property,
now owned or hereafter acquired, leased or subleased or otherwise used or held
for use in connection with the operating, working or development of any such
Hydrocarbon Interests or property and (ii) any and all surface leases,
subleases, rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the
foregoing); (h) all production units, drilling and spacing units (and the
properties covered thereby) which may affect all or any portion of the other Oil
and Gas Properties and any units created by agreement or designation or under
orders, regulations, rules or other official acts of any Governmental Authority
having jurisdiction; and (i) all operating agreements, contracts and other
agreements, including production sharing contracts and agreements, which relate
to any of the Hydrocarbon Interests or the production, sale, purchase, exchange
or processing of Hydrocarbons from or attributable to such Hydrocarbon
Interests.
          “Outer Continental Shelf” shall have the meaning ascribed to such term
in the Outer Continental Shelf Lands Act, 43 U.S.C. 1331, et seq.
          “Patriot Act” shall have the meaning provided in Section 11.17.

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          “Payment Office” shall mean the office of the Administrative Agent
located at 399 Park Avenue, 39th Floor, New York, New York 10022 or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
          “PBGC” shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
          “PDP” shall mean Proved Developed Reserves that are categorized as
producing in accordance with the petroleum reserves definitions promulgated by
the Society of Petroleum Engineers (SPE) Inc. (or any generally recognized
successor) as in effect at the time in question.
          “PDP Coverage Ratio” shall mean, on any date of determination, the
ratio of (a) PV-10 Value (determined by substituting the phrase “from PDP
production on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties”
for the phrase “from Proved Reserves on Holdings’ and each of its Subsidiaries’
Oil and Gas Properties” appearing in the second line of the definition thereof)
on such date to (b) Consolidated Net Secured Indebtedness on such date.
          “Permitted Acquisition” shall mean the acquisition by a Qualified
Credit Party of an Acquired Entity or Business; provided that (in each case)
(a) the consideration paid or to be paid by the Qualified Credit Party consists
solely of cash, Holdings Common Stock, Qualified Preferred Stock of Holdings,
the issuance or incurrence of Indebtedness otherwise permitted by Section 8.04
and the assumption/acquisition of any Indebtedness (calculated at face value)
which is permitted to remain outstanding in accordance with the requirements of
Section 8.04, (b) in the case of the acquisition of 100% of the Equity Interests
of any Acquired Entity or Business (including by way of merger), such Acquired
Entity or Business shall own no Equity Interests of any other Person (either
directly or indirectly) unless either (i) such Acquired Entity or Business owns
100% of the Equity Interests of such other Person or (ii) if such Acquired
Entity or Business owns Equity Interests in any other Person which is a
Non-Wholly-Owned Subsidiary of such Acquired Entity or Business, (A) such
Acquired Entity or Business shall not have been created or established in
contemplation of, or for purposes of, the respective Permitted Acquisition,
(B) any such Non-Wholly-Owned Subsidiary of the Acquired Entity or Business
shall have been a Non-Wholly-Owned Subsidiary of such Acquired Entity or
Business prior to the date of the respective Permitted Acquisition and shall not
have been created or established in contemplation thereof and (C) such Acquired
Entity or Business and/or its Wholly-Owned Subsidiaries own at least 90% of the
total value of all the assets owned by such Acquired Entity or Business and its
Subsidiaries (for purposes of such determination, excluding the value of the
Equity Interests of Non-Wholly-Owned Subsidiaries held by such Acquired Entity
or Business and its Wholly-Owned Subsidiaries), (c) all of the business,
division or product line acquired pursuant to the respective Permitted
Acquisition, or the business of the Person acquired pursuant to the respective
Permitted Acquisition and its Subsidiaries taken as a whole, is in the United
States, the United Kingdom or the North Sea, (d) the Acquired Entity or Business
acquired pursuant to the respective Permitted Acquisition is in a business
permitted by Section 8.14 and (e) all requirements of Sections 7.17, 8.02 and
8.15 applicable to Permitted Acquisitions are satisfied. For the avoidance of
doubt, a Permitted Business Investment shall not constitute a Permitted
Acquisition.
          “Permitted Business Investments” shall mean investments of a nature
that is or shall have become customary in, the Oil and Gas Business as a means
of actively exploiting, exploring for, acquiring, developing, producing,
processing, gathering, marketing, storing, treating, selling or transporting oil
and gas through agreements, transactions, interests or arrangements (including
those that permit a person to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of Oil and Gas Business jointly with third
parties), including the entry into or acquisition of operating agreements,
working interests, licenses, royalty interests, mineral leases, processing
agreements, farm-out and farm-in agreements, division

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orders, contracts for the sale, transportation or exchange of oil or natural
gas, unitization and pooling declarations and agreements and area of mutual
interest agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests, and investments and
expenditures in connection therewith (with the amount thereof measured at the
time initially made); provided that neither Permitted Acquisitions nor other
investments in Equity Interests of a Person shall constitute Permitted Business
Investments.
          “Permitted Junior Debt” shall mean any Indebtedness of Holdings or any
of its Subsidiaries in the form of unsecured or second lien loans or notes;
provided that in any event, unless the Required Lenders otherwise expressly
consent in writing prior to the issuance thereof:
     (a) except as provided in clause (f) below, no such Indebtedness shall be
secured by any asset of Holdings or any of its Subsidiaries;
     (b) no such Indebtedness shall be guaranteed by any Person other than a
Credit Party;
     (c) no such Indebtedness shall be subject to scheduled amortization or have
a final maturity, in either case prior to the date occurring 91 days following
the Maturity Date (for this purpose without regard to any proviso contained
therein);
     (d) any “asset sale” mandatory prepayment provision or offer to prepay
covenant included in the agreement, indenture or other instrument governing such
Indebtedness shall provide that Holdings, the Borrower or the respective
Subsidiary shall be permitted to repay Obligations under this Agreement before
prepaying or offering to prepay such Indebtedness;
     (e) any “change of control” covenant included in the indenture governing
any such Indebtedness that takes the form of notes issued pursuant to an
indenture shall provide that, before the mailing of any required “notice of
redemption” in connection therewith, Holdings shall covenant to (i) obtain the
consent of the Required Lenders or (ii) pay the Obligations in full in cash;
     (f) in the case of any such Indebtedness that is secured (i) such
Indebtedness is secured by only assets comprising Collateral (as defined in the
Security Documents) on a second-lien basis relative to the Liens on such
Collateral securing the Obligations of the Credit Parties, and not secured by
any property or assets of Holdings or any of it Subsidiaries other than the
Collateral (as defined in the Security Documents), (ii) such Indebtedness (and
the Liens securing the same) are permitted by the terms of the Permitted Junior
Debt Intercreditor Agreement (to the extent the Permitted Junior Debt
Intercreditor Agreement is in effect), (iii) the security agreements relating to
such Indebtedness are substantially the same as the Security Documents (with
such differences as are reasonably satisfactory to the Collateral Agent) and
(iv) a Permitted Junior Debt Representative acting on behalf of the holders of
such Indebtedness shall have become party to a Permitted Junior Debt
Intercreditor Agreement; provided that if such Indebtedness is the initial
incurrence of Permitted Junior Debt by Holdings or any of its Subsidiaries that
is secured by assets of Holdings or any of its Subsidiaries, then Holdings, the
Borrower, its applicable Subsidiaries, the Administrative Agent, the Collateral
Agent and the Permitted Junior Debt Representative for such Indebtedness shall
have executed and delivered the Permitted Junior Debt Intercreditor Agreement;

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     (g) the representations and warranties, covenants, and events of defaults
shall be no more onerous in any material respect than the related provisions
contained in this Agreement; provided that (i) (A) in the case of any such
Indebtedness that takes the form of notes issued pursuant to an indenture, the
“default to other indebtedness” event of default contained in the indenture
governing such indebtedness shall provide for “cross-acceleration” rather than a
“cross-default” and (B) in the case of any other such Indebtedness, any
cross-default to the Obligations contained in any agreement evidencing such
Indebtedness shall be limited to a cross-payment default and shall be subject to
a grace period reasonably acceptable to the Administrative Agent and (ii) in the
event that any agreement evidencing such Indebtedness contains financial
maintenance covenants, except as may otherwise be agreed to by the
Administrative Agent, such financial maintenance covenants shall be limited to
those set forth in Sections 8.07 through 8.10, inclusive, of this Agreement
(with the financial definitions contained therein to be at least as favorable to
the comparable definitions used in this Agreement) and shall be set back from
the ratios set forth in Sections 8.07 through 8.10, inclusive, by at least 20%;
and
     (h) the aggregate outstanding principal amount of all Permitted Junior Debt
shall not at any time exceed $100,000,000; provided that the aggregate
outstanding principal amount of all Permitted Junior Debt that is secured by a
Lien on all or any portion of the assets of Holdings or its Subsidiaries shall
not at any time exceed $50,000,000.
The incurrence of Permitted Junior Debt shall be deemed to be a representation
and warranty by Holdings, the Borrower and each of its Subsidiaries that all
conditions thereto have been satisfied in all material respects and that same is
permitted in accordance with the terms of this Agreement, which representation
and warranty shall be deemed to be a representation and warranty for all
purposes hereunder. For the avoidance of doubt, neither Existing Indebtedness
nor Refinancing Debt incurred pursuant to Section 8.04(b) shall be considered to
be “Permitted Junior Debt”.
          “Permitted Junior Debt Intercreditor Agreement” shall mean an
agreement by and among the Collateral Agent and a Permitted Junior Debt
Representative for the holders of Junior Lien Obligations and acknowledged by
the Borrower and the Guarantors that are obligors in respect of such Junior Lien
Obligations providing for the subordination of the Liens securing such Junior
Lien Obligations to the Liens securing the Obligations on terms reasonably
determined by the Administrative Agent to be customary for intercreditor
agreements governing intercreditor matters between similar first lien financings
and second lien financings; provided that the terms of such intercreditor
agreement shall be no less favorable to the Lenders with respect to the specific
matters set forth below than the following: (a) notwithstanding the time, order
or method of grant, creation, attachment or perfection of any Liens securing the
Obligations and any Liens securing the Junior Lien Obligations (for purposes of
this definition, such Liens the “Junior Liens”), the Liens securing the
Obligations shall rank senior to any Junior Lien on the Collateral, (b) no
holder of any Junior Lien Obligation shall contest the validity or
enforceability of the Liens securing the Obligations, (c) until the payment and
discharge in full of all Obligations under this Agreement and, unless otherwise
agreed to by the respective Approved Third Party Credit Provider, all
obligations under all Hedging Agreements and reimbursement agreements related to
Third Party Letters of Credit in each case entered into with, or issued or
provided by, an Approved Third Party Credit Provider that is a party to the
Intercreditor Agreement and the termination of all such Third Party Letters of
Credit outstanding, the Collateral Agent will have the sole power to exercise
remedies against the Collateral (subject to the right of the holders of the
Junior Lien Obligations to take customary (as determined by the Administrative
Agent) protective measures with respect to the Junior Liens) and to foreclose
upon and dispose of the Collateral, (d) upon any private or public sale of
Collateral taken in connection with the exercise of remedies by the Collateral
Agent which results in the release of Liens securing the Obligations, the Junior
Lien on such item of Collateral will be automatically released, (e) in

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connection with any enforcement action with respect to the Collateral or any
insolvency or liquidation proceeding involving Holdings, the Borrower or any
Guarantor, all proceeds of Collateral will first be applied to the repayment of
all Obligations under this Agreement and, unless otherwise agreed to by the
respective Approved Third Party Credit Providers, obligations under Hedging
Agreements and reimbursement agreements related to Third Party Letters of Credit
in each case entered into with, or issued or provided by, Approved Third Party
Credit Providers that are a party to the Intercreditor Agreement prior to being
applied to the obligations secured by such Junior Liens, (f) if any holder of an
obligation secured by Junior Liens receives any proceeds of Collateral in
contravention of the foregoing, such proceeds will be turned over to the
Collateral Agent, (g) no holder of any obligation secured by Junior Lien may,
without the consent of the Lenders (i) seek relief from the automatic stay with
respect to any Collateral, (ii) object to any sale of any Collateral in any
insolvency or liquidation proceeding which has been consented to by the
Collateral Agent (provided that the Junior Liens attach to the proceeds of such
sale with the priority set forth in the Permitted Junior Debt Intercreditor
Agreement) or (iii) object to any claim of any Lenders or any Approved Third
Party Credit Provider to post-petition interest, fees or expenses on account of
the Liens securing the Obligations or obligations under Hedging Agreements and
reimbursement agreements related to Third Party Letters of Credit in each case
entered into with, or issued or provided by, Approved Third Party Credit
Providers that are a party to the Intercreditor Agreement and (h) no holder of
obligations secured by Junior Liens shall support any plan or reorganization in
connection with any insolvency or liquidation proceeding that is in
contravention of the Permitted Junior Debt Intercreditor Agreement without the
consent of the Required Lenders and the holders of a majority of the outstanding
obligations under Hedging Agreements and reimbursement agreements related to
Third Party Letters of Credit, in each case entered into with, or issued or
provided by, Approved Third Party Credit Providers that are a party to the
Intercreditor Agreement.
          “Permitted Junior Debt Representative” shall mean, with respect to any
Permitted Junior Debt that is secured on a second lien basis, the trustee,
administrative agent, collateral agent, security agent, security trustee or
similar agent under the indenture, collateral trust agreement or other agreement
pursuant to which such Permitted Junior Debt is issued, incurred or otherwise
obtained and each of their successors in such capacities.
          “Permitted Liens” shall have the meaning provided in Section 8.01.
          “Person” shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any Governmental Authority.
          “PIK Interest” shall have the meaning provided in Section 2.06(b).
          “Plan” shall mean any pension plan as defined in Section 3(2) of
ERISA, other than a Multiemployer Plan, which is maintained or contributed to by
(or to which there is an obligation to contribute of) Holdings, any of its
Subsidiaries or an ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which Holdings, any of its Subsidiaries
or any ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
          “Preferred Equity Interests” of any Person shall mean any Equity
Interests of such Person that have preferential rights to any other Equity
Interests with respect to dividends or redemptions or upon liquidation, and
shall include any Qualified Preferred Stock.
          “Pro Forma Basis” shall mean, in connection with any calculation of
compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (a) the incurrence of any
Indebtedness (other than revolving Indebtedness, except to the extent same is
incurred to refinance other outstanding Indebtedness, to finance a Permitted
Acquisition or a Permitted Business Investment) after the first day of the
relevant Calculation Period or Test Period, as the case may

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be, as if such Indebtedness had been incurred (and the proceeds thereof applied)
on the first day of such Test Period or Calculation Period, as the case may be,
(b) the permanent repayment of any Indebtedness (other than revolving
Indebtedness, except to the extent accompanied by a corresponding voluntary
permanent commitment reduction) after the first day of the relevant Test Period
or Calculation Period, as the case may be, as if such Indebtedness had been
retired or repaid on the first day of such Test Period or Calculation Period, as
the case may be, and (c) any Material Permitted Acquisition, any Material
Permitted Business Investment or any Material Asset Sale then being consummated
as well as any other Material Permitted Acquisition, any other Material
Permitted Business Investment or any other Material Asset Sale if consummated
after the first day of the relevant Test Period or Calculation Period, as the
case may be, and on or prior to the date of such calculation, with the following
rules to apply in connection therewith:
     (i) all Indebtedness (A) (other than revolving Indebtedness, except to the
extent same is incurred to refinance other outstanding Indebtedness or to
finance a Permitted Acquisition or a Permitted Business Investment) incurred or
issued after the first day of the relevant Test Period or Calculation Period
(whether incurred to finance a Permitted Acquisition or a Permitted Business
Investment, to refinance Indebtedness or otherwise) shall be deemed to have been
incurred or issued (and the proceeds thereof applied) on the first day of such
Test Period or Calculation Period, as the case may be, and remain outstanding
through the date of determination and (B) (other than revolving Indebtedness,
except to the extent accompanied by a corresponding voluntary permanent
commitment reduction) permanently retired or redeemed after the first day of the
relevant Test Period or Calculation Period, as the case may be, shall be deemed
to have been retired or redeemed on the first day of such Test Period or
Calculation Period, as the case may be, and remain retired through the date of
determination;
     (ii) all Indebtedness assumed to be outstanding pursuant to preceding
clause (i) shall be deemed to have borne interest at (A) the rate applicable
thereto, in the case of fixed rate indebtedness, or (B) the rates which would
have been applicable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness (although interest
expense with respect to any Indebtedness for periods while same was actually
outstanding during the respective period shall be calculated using the actual
rates applicable thereto while same was actually outstanding); provided that all
Indebtedness (whether actually outstanding or deemed outstanding) bearing
interest at a floating rate of interest shall be tested on the basis of the
rates applicable at the time the determination is made pursuant to said
provisions; and
     (iii) in making any determination of Consolidated EBITDAX on a Pro Forma
Basis, pro forma effect shall be given to any Material Permitted Acquisition,
any Material Permitted Business Investment, or any Material Asset Sale if
effected during the respective Calculation Period or Test Period (or, except for
the purposes of determining quarterly compliance with Sections 8.08 through 8.10
pursuant to the terms thereof, thereafter and on or prior to the date of the
respective calculation) as if same had occurred on the first day of the
respective Calculation Period or Test Period, as the case may be, and taking
into account factually supportable and identifiable cost savings and expenses
which would otherwise be accounted for as an adjustment pursuant to Article 11
of Regulation S-X under the Securities Act, as if such cost savings or expenses
were realized on the first day of the respective period.
          “Probable Reserve Value” shall mean, as of any date of determination,
50% of the present value of future cash flow from Probable Reserves on Holdings’
and each of its Subsidiaries’ Oil and Gas Properties as set forth in the most
recent Reserve Report delivered pursuant to Section 7.01(d), utilizing (a) in
the case of any Oil and Gas Properties located in the United States or any of
its territories

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or possessions (including U.S. Federal waters in the Gulf of Mexico), the
Three-Year Strip Price for crude oil (WTI Cushing) and natural gas (Henry Hub),
quoted on the New York Mercantile Exchange (or its successor), (b) in the case
of any Oil and Gas Properties located in the North Sea, the Three-Year Strip
Price for crude oil (North Sea Brent) and natural gas (UK National Balancing
Point), in each case quoted on the International Petroleum Exchange (or its
successor) and (c) in the case of any Oil and Gas Properties located in any
other jurisdiction, the Three-Year Strip Price for crude oil and natural gas, in
each case quoted on any commodities exchange or other price quotation source
generally recognized in the oil and gas industry in such jurisdiction and
reasonably acceptable to the Administrative Agent, in the case of each of
clauses (a), (b) and (c), as of the date as of which the information set forth
in such Reserve Report is provided (as adjusted for basis differentials) and
utilizing a 10% discount rate. For purposes of calculating Probable Reserve
Value, any future cash flow calculations set forth in any Reserve Report and
made in any currency other than Dollars shall be converted into Dollars based on
the Exchange Rate on the date as of which the information set forth in such
Reserve Report is provided.
          “Probable Reserves” shall mean the estimated quantities of crude oil,
condensate, natural gas and natural gas liquids that geological and engineering
data suggests are more likely than not to be recoverable with presently
available technology at an economically viable cost (as determined in accordance
with the guidelines of the Society of Petroleum Engineers).
          “Project Documents” shall mean and include in relation to each Oil and
Gas Property of Holdings or any of its Subsidiaries (a) each joint operating
agreement and/or unitization and unit operating agreement relating thereto, each
agreement relating to the development thereof or the transportation, processing
and/or storage of production therefrom and each agreement for the sale or
marketing of production therefrom and each other major agreement relating to
such Oil and Gas Property and/or Hydrocarbons produced therefrom, (b) each
Authorization required for the lawful exploitation, development, or operation of
such Oil and Gas Property or the production, transportation or sale of
Hydrocarbons therefrom (and including, without limitation, any Hydrocarbons
production license), (c) any development plan approved by any relevant operating
committee and/or any Governmental Authority relating to that Oil and Gas
Property and (d) any other document designated as such by the Administrative
Agent acting reasonably.
          “Projections” shall mean the projections that were prepared by or on
behalf of the Borrower in connection with the Transaction and this Agreement and
delivered to the Administrative Agent and the Lenders prior to the Funding Date.
          “Protected Party” shall mean any Agent or Lender which is or will be
subject to any liability, or required to make any payment, for or on account of
Tax in relation to a sum received or receivable (or any sum deemed for the
purposes of Tax to be received or receivable) under a Credit Document.
          “Proved Developed Reserves” shall mean oil and gas reserves that can
be expected to be recovered through existing wells with existing equipment and
operating methods.
          “Proved Reserves” shall mean the estimated quantities of crude oil,
condensate, natural gas and natural gas liquids that geological and engineering
data demonstrates with reasonable certainty to be recoverable in future years
from known reservoirs under existing economic and operating conditions (i.e.,
prices and costs as of the date the estimate is made).
          “PV-10 Value” shall mean, as of any date of determination, the present
value of future cash flows from Proved Reserves on Holdings’ and each of its
Subsidiaries’ Oil and Gas Properties as set forth in the most recent Reserve
Report delivered pursuant to Section 7.01(d), utilizing (a) in the case of any
Oil and Gas Properties located in the United States or any of its territories or
possessions (including

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U.S. Federal waters in the Gulf of Mexico), the Three-Year Strip Price for crude
oil (WTI Cushing) and natural gas (Henry Hub), quoted on the New York Mercantile
Exchange (or its successor), (b) in the case of any Oil and Gas Properties
located in the North Sea, the Three-Year Strip Price for crude oil (North Sea
Brent) and natural gas (UK National Balancing Point), in each case quoted on the
International Petroleum Exchange (or its successor) and (c) in the case of any
Oil and Gas Properties located in any other jurisdiction, the Three-Year Strip
Price for crude oil and natural gas, in each case quoted on any commodities
exchange or other price quotation source generally recognized in the oil and gas
industry in such jurisdiction and reasonably acceptable to the Administrative
Agent, in the case of each of clauses (a), (b) and (c), as of the date as of
which the information set forth in such Reserve Report is provided (as adjusted
for basis differentials) and utilizing a 10% discount rate. For purposes of
calculating PV-10 Value, any future cash flow calculations set forth in any
Reserve Report and made in any currency other than Dollars shall be converted
into Dollars based on the Exchange Rate on the date as of which the information
set forth in such Reserve Report is provided.
          “Qualified Credit Party” shall mean Holdings, the Borrower and each
Wholly-Owned Subsidiary Guarantor that is organized under the laws of the United
States or any State thereof or the laws of England and Wales.
          “Qualified Preferred Stock” shall mean any Preferred Equity Interests
of Holdings so long as the terms of any such Preferred Equity Interests (a) do
not contain any mandatory put, redemption, repayment, sinking fund or other
similar provision prior to February 16, 2014, (b) do not require the cash
payment of dividends or distributions that would otherwise be prohibited by the
terms of this Agreement or any other agreement or contract of Holdings or any of
its Subsidiaries, (c) do not contain any covenants (other than periodic
reporting requirements) and (d) do not grant the holders thereof any voting
rights except for (i) voting rights required to be granted to such holders under
applicable law and (ii) limited customary voting rights on fundamental matters
such as mergers, consolidations, sales of all or substantially all of the assets
of Holdings or liquidations involving Holdings.
          “Real Property” of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
          “Recovery Event” shall mean the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable
(a) by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of Holdings or any of its
Subsidiaries or (b) under any policy of insurance maintained by any of them.
          “Refinancing” shall mean the refinancing transactions described in
Section 5.06.
          “Refinancing Debt” shall have the meaning provided in Section 8.04(b).
          “Register” shall have the meaning provided in Section 11.15.
          “Regulation D” shall mean Regulation D of the Board as from time to
time in effect and any successor to all or a portion thereof establishing
reserve requirements.
          “Regulation T” shall mean Regulation T of the Board as from time to
time in effect and any successor to all or a portion thereof.
          “Regulation U” shall mean Regulation U of the Board as from time to
time in effect and any successor to all or a portion thereof.

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          “Regulation X” shall mean Regulation X of the Board as from time to
time in effect and any successor to all or a portion thereof.
          “Release” shall mean actively or passively disposing, discharging,
injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping,
emptying, pouring, seeping or migrating into or upon any land or water or air,
or otherwise entering into the environment.
          “Relevant Reinvestment Period” shall mean, with respect to any Asset
Sale or Recovery Event, the earlier of the dates referred to in clauses (a) and
(b) below occurring after the receipt of Net Sale Proceeds or Net Insurance
Proceeds by Holdings or any of its Subsidiaries, as the case may be, from such
Asset Sale or Recovery Event: (a) 360 days following the receipt of such Net
Sale Proceeds or Net Insurance Proceeds, as the case may be, and (b) the date
upon which Holdings or the relevant Subsidiary determines not to reinvest such
Net Sale Proceeds or Net Insurance Proceeds, as the case may be, from the
respective Asset Sale or Recovery Event, as the case may be.
          “Replaced Lender” shall have the meaning provided in Section 2.08.
          “Replacement Lender” shall have the meaning provided in Section 2.08.
          “Reportable Event” shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under PBGC
Regulations promulgated under Section 4043 of ERISA.
          “Required Lenders” shall mean, at any time, Non-Defaulting Lenders the
sum of whose outstanding Term Loans (or, if determined prior to the Funding
Date, Commitments) at such time represents at least a majority of the sum of all
outstanding Term Loans (or, if determined prior to the Funding Date, the Total
Commitment) of Non-Defaulting Lenders.
          “Reserve Coverage Ratio” shall mean, on any date of determination, the
ratio of (a) the sum of (i) PV-10 Value on such date and (ii) Probable Reserve
Value on such date to (b) Consolidated Net Secured Indebtedness on such date.
          “Reserve Report” shall mean (a) each annual reserve report prepared by
Holdings and audited by an Independent Engineering Firm, in form and detail
consistent with the Reserve Report delivered pursuant to Section 5.13 or
otherwise reasonably acceptable to the Administrative Agent and (b) each interim
reserve report prepared by Holdings, in form and detail reasonably acceptable to
the Administrative Agent (it being understood and agreed that Holdings will
prepare each such interim reserve report based on the most recent annual Reserve
Report, as adjusted for actual production, operating costs, capital costs and
net additions of Proved Reserves and Probable Reserves during the calendar
months of the respective year specified therein), in each case with respect to
Oil and Gas Properties of Holdings and each of its Subsidiaries as of
(i) December 31 of the year immediately preceding the year in which such report
is delivered pursuant to Section 7.01(d), in the case of an annual reserve
report or (ii) June 30 of the year in which such report is delivered pursuant to
Section 7.01(d) (or such other date specified therein in the event Holdings has
elected to deliver additional reserve reports pursuant to Section 7.01(d)), in
the case of semi-annual or additional reserve reports. Each Reserve Report
prepared by Holdings shall be certified by the chief engineering officer of
Holdings as being accurate in all material respects.
          “Restricted” shall mean, when referring to cash or Cash Equivalents of
Holdings or any of its Subsidiaries, that such cash or Cash Equivalents
(a) appears (or would be required to appear) as “restricted” on a consolidated
balance sheet of Holdings or any such Subsidiary (unless such appearance is
related to the Credit Documents or Liens created thereunder), (b) are subject to
any Lien in favor of any

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Person other than (i) the Collateral Agent for the benefit of the Secured
Creditors and (ii) holders of Liens permitted under Section 8.01(o), or (c) are
not otherwise generally available for use by Holdings or such Subsidiary;
provided that cash or Cash Equivalents of Holdings and its Subsidiaries that
have been pledged to secure the repayment of outstanding Consolidated
Indebtedness (other than the Obligations) shall be deemed not to be Restricted
for the purposes of this Agreement.
          “Returns” shall have the meaning provided in Section 6.09.
          “S&P” shall mean Standard & Poor’s Ratings Services, a division of
McGraw-Hill, Inc.
          “Scheduled Repayment” shall have the meaning provided in
Section 4.02(a).
          “Scheduled Repayment Date” shall have the meaning provided in
Section 4.02(a).
          “Scottish Security” shall have the meaning provided in
Section 5.09(f).
          “SEC” means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its principal functions.
          “Secured Creditors” shall have the meaning assigned that term in the
respective Security Documents.
          “Securities Act” shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
          “Security Document” shall mean and include each of the U.S. Security
Agreement, each Mortgage, the English Security Documents, the Dutch Pledge
Agreement and the Scottish Security, after the execution and delivery thereof,
each Additional Security Document and any other related document, agreement or
grant pursuant to which Holdings or any of its Subsidiaries grants, perfects or
continues a security interest in favor of the Collateral Agent for the benefit
of the Secured Creditors.
          “Shareholders’ Agreements” shall have the meaning provided in
Section 5.05(b).
          “Subsidiaries Guaranty” shall have the meaning provided in
Section 5.09(a).
          “Subsidiary” shall mean, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting 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) is at the time owned by such Person and/or one or
more Subsidiaries of such Person or (b) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time. Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
Holdings.
          “Subsidiary Guarantor” shall mean each Subsidiary of Holdings whether
existing on the Effective Date or established, created or acquired after the
Effective Date, that has executed and delivered the Subsidiaries Guaranty or has
otherwise become a party thereto by means of the execution and delivery of a
joinder, accession or similar agreement (in form and substance satisfactory to
the Administrative Agent) by such Subsidiary unless and until such time as the
respective Subsidiary is released from all of its obligations under the
Subsidiaries Guaranty in accordance with the terms and provisions thereof. The
Subsidiary Guarantors on the Effective Date are listed on Schedule 1.01(b).

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          “Syndication Date” shall mean the earlier of (a) the date on which the
Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication (and the resultant addition of Persons as
Lenders pursuant to Section 11.04(b)) has been completed and (b) December 16,
2010.
          “Syndication Letter” shall mean that certain Syndication Letter, dated
the date hereof, among Holdings, the Borrower and Cyan Partners, LP.
          “Synthetic Lease” shall mean a lease transaction under which the
parties intend that (a) the lease will be treated as an “operating lease” by the
lessee and (b) the lessee will be entitled to various tax and other benefits
ordinarily available to owners (as opposed to lessees) of like property.
          “Tax” shall mean any tax, levy impost, duty fee, assessment or other
charge or withholding of a similar nature (including any penalty or interest
payable in connection with any failure to pay or any delay in paying any of the
same).
          “Tax Credit” shall mean a credit against, relief or remission for, or
repayment of any Tax.
          “Tax Deduction” shall mean a deduction or withholding for or on
account of Tax from a payment under a Credit Document.
          “Tax Payment” shall mean either the increase in a payment made by a
Credit Party to a Lender or Agent under Section 4.04(a) or a payment under
Section 4.04(b).
          “Tax Refund” shall mean a refund of any Tax Deduction.
          “Tax Sharing Agreements” shall have the meaning provided in
Section 5.05(f).
          “Term Loan” shall mean have the meaning provided in Section 2.01.
          “Test Period” shall mean each period of four consecutive fiscal
quarters of Holdings then last ended, in each case taken as one accounting
period; provided that for any Test Period that includes fiscal quarters
occurring prior to the Funding Date, the rules set forth in the succeeding
sentences shall apply. If the respective Test Period (a) includes the fiscal
quarter of Holdings ended December 31, 2009, Consolidated EBITDAX for such
fiscal quarter shall be deemed to be $18,140,000, and (b) includes the fiscal
quarter of Holdings ended March 31, 2010, Consolidated EBITDAX for such fiscal
quarter shall be deemed to be $9,720,000; provided that Consolidated EBITDAX for
the foregoing periods shall be increased or decreased (as applicable) in
accordance with the definition of Pro Forma Basis by the amount of Consolidated
EBITDAX for such period attributable to (i) any Acquired Entity or Business
acquired pursuant to a Material Permitted Acquisition or Oil and Gas Properties
acquired pursuant to Material Permitted Business Investments and (ii) any Person
or assets disposed of pursuant to any Material Asset Sale, in each case
consummated on or prior to December 31, 2010. Such attributable Consolidated
EBITDAX shall be determined on a basis consistent with the definition of
Consolidated EBITDAX with any necessary reference changes.
          “Third Party Letter of Credit” shall mean a letter of credit issued by
an Approved Third Party Credit Provider for the account of Holdings or any of
its Subsidiaries in support of obligations permitted by this Agreement.
          “Three-Year Strip Price” shall mean, as of any date of determination,
(a) for the 36-month period commencing with the month immediately following the
month in which the date of determination occurs, the monthly futures contract
prices for crude oil and natural gas for the 36

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succeeding months as quoted on the applicable commodities exchange or other
price quotation source as contemplated in the definitions of “PV-10 Value” and
“Probable Reserve Value” and (b) for periods after such 36-month period, the
average of such quoted prices for the period from and including the 25th month
in such 36-month period through the 36th month in such period.
          “Total Commitment” shall mean, at any time, the sum of the Commitments
of each of the Lenders at such time.
          “Total Leverage Ratio” shall mean, on any date of determination, the
ratio of (a) Consolidated Net Indebtedness on such date (calculated exclusive of
any Indebtedness of Holdings or any of its Subsidiaries of the type described in
clause (g) of the definition of Indebtedness) to (b) Consolidated EBITDAX for
the Test Period most recently ended on or prior to such date; provided that for
purposes of any calculation of the Total Leverage Ratio pursuant to this
Agreement, Consolidated EBITDAX shall be determined on a Pro Forma Basis in
accordance with the definition thereof.
          “Transaction” shall mean, collectively, (a) the occurrence of the
Funding Date, (b) the consummation of the Refinancing, (c) the execution,
delivery and performance by each Credit Party of the Credit Documents to which
it is a party, (d) the incurrence of Term Loans on the Funding Date and the use
of proceeds thereof, and (e) the payment of all fees and expenses in connection
with the foregoing.
          “Treaty” has the meaning provided in the definition of Treaty State
appearing herein.
          “Treaty Lender” shall mean a Lender which:
     (a) is treated as a resident of a Treaty State for the purposes of the
Treaty;
     (b) does not carry on a business in the jurisdiction of the Borrower
through a permanent establishment with which that Lender’s participation in the
Loan is effectively connected;
     (c) meets all other conditions in the relevant Treaty for full exemption
from Tax imposed by the jurisdiction of incorporation of the relevant Credit
Party on interest, except that for this purpose it shall be assumed that the
following are satisfied:
     (i) any condition which relates (expressly or by implication) to there not
being a special relationship between the Borrower and a Lender or between both
of them and another person, or to the amounts or terms of any Term Loan or the
Credit Documents; and
     (ii) any necessary procedural formalities.
          “Treaty State” shall mean a jurisdiction having a double taxation
agreement (a “Treaty”) with the United Kingdom which makes provision for full
exemption from tax imposed by the United Kingdom on interest.
          “UCC” shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
          “UK Sector” shall mean the jurisdiction of United Kingdom commonly
referred to as the UK Sector — North Sea.

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          “Unfunded Current Liability” of any Plan subject to Title IV of ERISA
shall mean the amount, if any, by which the value of the accumulated plan
benefits under such Plan determined on a plan termination basis in accordance
with actuarial assumptions at such time consistent with those prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds the Fair Market Value of all
plan assets allocable to such liabilities under Title IV of ERISA (excluding any
accrued but unpaid contributions), but only to the extent such excess could
reasonably be expected to result in material liability to Holdings or a
Subsidiary.
          “United Kingdom” and “UK” shall mean each of England, Wales, Northern
Ireland and Scotland, as the case may be, and shall include the U.K. Sector —
North Sea.
          “United States” and “U.S.” shall each mean the United States of
America and any of its territories or possessions (including U.S. Federal waters
in the Gulf of Mexico).
          “Unrestricted” shall mean, when referring to cash or Cash Equivalents
of Holdings or any of its Subsidiaries, that such cash or Cash Equivalents are
not Restricted; provided that cash on deposit in the BNP Cash Collateral Account
shall be deemed to be Unrestricted cash of Holdings and its Subsidiaries.
          “U.S. Credit Party” shall mean each Credit Party incorporated under
the laws of the United States or any state thereof.
          “U.S. Oil and Gas Properties” shall mean the Oil and Gas Properties of
Holdings and its U.S. Subsidiaries located in the United States.
          “U.S. Security Agreement” shall have the meaning set forth in
Section 5.09(b).
          “U.S. Subsidiary” of any Person shall mean any Subsidiary of such
Person incorporated or organized in the United States or any State or territory
thereof of the District or Columbia.
          “VAT” shall mean value added tax as provided for in the UK’s Value
Added Tax Act 1994 and any other tax of a similar nature in any jurisdiction.
          “Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any
corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (b) any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such
Person has a 100% equity interest at such time (other than, in the case of a
Non-U.S. Subsidiary of Holdings, with respect to the preceding clauses (a) and
(b), directors’ qualifying shares and/or other nominal amounts of shares
required to be held by Persons other than Holdings and its Subsidiaries under
applicable law).
          “Wholly-Owned Subsidiary Guarantor” shall mean, any Wholly-Owned
Subsidiary of Holdings which is a Subsidiary Guarantor.
          “Wholly-Owned U.S. Subsidiary” shall mean, as to any Person, any U.S.
Subsidiary of such Person that is a Wholly-Owned Subsidiary.
          SECTION 2. Amount and Terms of Credit.
          2.01. The Commitments. Subject to and upon the terms and conditions
set forth herein, each Lender severally agrees to make a term loan (each, a
“Term Loan” and, collectively, the “Term Loans”) to the Borrower, which such
Term Loans (i) shall be made pursuant to a single drawing

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on the Funding Date, (ii) shall be denominated in Dollars and (iii) shall be
made by each Lender in the aggregate principal amount which does not exceed the
Commitment of such Lender on the Funding Date. All references herein to a “Term
Loan” or “Term Loans”, to “principal” or the “principal amount” of any Term Loan
or Term Loans and other terms of like import shall mean 100% of the Total
Commitment (immediately prior to the incurrence of Term Loans on the Funding
Date) Term Loans incurred by the Borrower on the Funding Date plus PIK Interest
that is added to outstanding principal of Term Loans pursuant to Section 2.06
minus repayments and prepayments of Term Loans pursuant to this Agreement. Once
repaid, Terms Loans may not be reborrowed.
          2.02. Notice of Borrowing. (a) When the Borrower desires to incur Term
Loans on the Funding Date, the Borrower shall give the Administrative Agent at
the Notice Office at least one Business Day’s prior notice thereof; provided
that any such notice shall be deemed to have been given on a certain day only if
given before 11:00 A.M. (New York City time) on such day. Such notice (the
“Notice of Borrowing”), shall be irrevocable and shall be in writing, or by
telephone promptly confirmed in writing, in the form of Exhibit A, appropriately
completed to specify: (i) the aggregate principal amount of the Term Loans to be
incurred pursuant to such Borrowing and (ii) the date of such Borrowing (which
shall be a Business Day). The Administrative Agent shall promptly give each
Lender notice of such proposed Borrowing, of such Lender’s proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
          (b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing or prepayment of Term
Loans, the Administrative Agent may act without liability upon the basis of
telephonic notice of such Borrowing or prepayment, as the case may be, believed
by the Administrative Agent in good faith to be from an Authorized Officer of
the Borrower, prior to receipt of written confirmation. In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent’s record of
the terms of such telephonic notice of the Borrowing or prepayment of Term
Loans, as the case may be, absent manifest error.
          2.03. Disbursement of Funds. No later than 1:00 P.M. (New York City
time) on the date specified in the Notice of Borrowing, each Lender will make
available its pro rata portion (determined in accordance with Section 2.05) of
the Borrowing requested to be made on such date. All such amounts will be made
available in Dollars and in immediately available funds at the Payment Office,
and the Administrative Agent will make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Lenders. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
such Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender’s portion of the Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date and the Administrative Agent
may (but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent
also shall be entitled to recover on demand from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Lender, the overnight Federal Funds Rate for the first three days and at
the interest rate otherwise applicable to the Term Loans for each day thereafter
and (ii) if recovered from the Borrower, the rate of interest applicable to the
Term Loans, as determined pursuant to Section 2.06. Nothing in this Section

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2.03 shall be deemed to relieve any Lender from its obligation to make Term
Loans hereunder or to prejudice any rights which the Borrower may have against
any Lender as a result of any failure by such Lender to make Term Loans
hereunder.
          2.04. Notes. (a) The Borrower’s obligation to pay the principal of,
and interest on, the Term Loans made by each Lender shall be stated in the
Register maintained by the Administrative Agent pursuant to Section 11.15 and
shall also be stated in a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B, with blanks appropriately
completed in conformity herewith (each, a “Note” and, collectively, the
“Notes”).
          (b) Each Lender will note on its internal records the amount of Term
Loans made by it (as well as any increase thereto as a result of the payment of
PIK Interest) and each payment in respect thereof and prior to any transfer of
any of its Notes will endorse on the reverse side thereof the outstanding
principal amount thereof. Failure to make any such notation or any error in such
notation shall not affect the Borrower’s obligations in respect of such Term
Loans. Although under no obligation to do so, any Lender may, following an
increase in the outstanding principal amount of its Term Loans as a result of
payment of PIK Interest, request for a replacement Note in an aggregate
principal amount which reflects such increase or increases (although any failure
of a Lender to request such replacement Note shall in no event affect the
Borrower’s obligation to pay the entire principal amount of the Term Loans of
such Lender).
          (c) Notwithstanding anything to the contrary contained above in this
Section 2.04, no failure of any Lender to obtain, maintain or produce a Note
shall affect, or in any manner impair, the obligations of the Borrower to pay
the Term Loans (and all related Obligations) incurred by the Borrower which
would otherwise be stated therein in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to any Credit Document. Any Lender which does not have a Note
shall in no event be required to make the notations otherwise described in
preceding clause (b). At any time when any Lender becomes a party to this
Agreement, the Borrower shall promptly execute and deliver to the respective
Lender a Note in an amount equal to the aggregate principal amount of the Term
Loans made or held by such Lender.
          2.05. Pro Rata Borrowings. The Borrowing of Term Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Term Loans hereunder and
that each Lender shall be obligated to make the Term Loans provided to be made
by it hereunder, regardless of the failure of any other Lender to make its Term
Loans hereunder.
          2.06. Interest. (a) The Borrower agrees to pay cash interest (“Cash
Interest”) in respect of the unpaid principal amount of the Term Loans from the
date of Borrowing thereof until the maturity thereof (whether by acceleration or
otherwise), at a rate per annum equal to 12%.
          (b) In addition to the payment of Cash Interest pursuant to preceding
clause (a), the Borrower shall pay additional interest on the Term Loans at a
rate per annum equal to 3.0% “in kind”, with the amount of interest accruing
pursuant to this clause (b) being added to the outstanding principal amount of
the Term Loans on each Interest Payment Date; provided that in the event the
Borrower provides written notice thereof to the Administrative Agent prior to
11:00 A.M. (New York City time) at least two Business Days prior to the relevant
Interest Payment Date, the Borrower may pay in cash interest accrued pursuant to
this clause (b) that is payable on such Interest Payment Date. Such paid-in-kind
interest (“PIK Interest”) shall be deemed paid, and the principal amount of the
Term Loans as so increased shall be deemed “Term Loans” hereunder and under the
other Credit Documents for all purposes and shall thereafter accrue interest in
accordance with the terms of this Agreement.

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          (c) (i) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Term Loan and (ii) all other overdue amounts payable
hereunder and under any other Credit Document shall bear interest at a rate per
annum equal to 17%. Interest that accrues under this Section 2.06(c) shall be
payable on demand.
          (d) Accrued (and theretofore unpaid) interest on Term Loans shall be
payable (i) quarterly in arrears on each Interest Payment Date, (ii) on the date
of any repayment or prepayment (on the amount repaid or prepaid) and (iii) at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
          2.07. Change of Lending Office. Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 2.09 or 4.04
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Term Loans affected by such event;
provided that such designation is made on such terms that such Lender and its
lending office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
such Section. Nothing in this Section 2.07 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Section 2.09
or 4.04.
          2.08. Replacement of Lenders. (a) If any Lender becomes a Defaulting
Lender, (b) upon the occurrence of any event giving rise to the operation of
Section 2.09 or 4.04 with respect to any Lender which results in such Lender
charging to the Borrower increased costs in excess of those being generally
charged by the other Lenders or (c) in the case of a refusal by a Lender to
consent to a proposed change, waiver, discharge or termination with respect to
this Agreement which has been approved by the Required Lenders as (and to the
extent) provided in Section 11.12(b), the Borrower shall have the right, in
accordance with Section 11.04(b), if no Default or Event of Default then exists
or would exist after giving effect to such replacement, to replace such Lender
(the “Replaced Lender”) with one or more other Eligible Transferees, none of
whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the “Replacement Lender”) and each of which shall be reasonably
acceptable to the Administrative Agent; provided that:
     (i) at the time of any replacement pursuant to this Section 2.08, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to
said Section 11.04(b) to be paid by the Borrower) pursuant to which the
Replacement Lender shall acquire all of the Commitments (if any) and outstanding
Term Loans of the Replaced Lender and, in connection therewith, shall pay to the
Replaced Lender in respect thereof an amount equal to the principal of, and all
accrued and unpaid interest on, all outstanding Term Loans of the respective
Replaced Lender; and
     (ii) all obligations of the Borrower then owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement.
Upon receipt by the Replaced Lender of all amounts required to be paid to it
pursuant to this Section 2.08, the Administrative Agent shall be entitled (but
not obligated) and authorized to execute an Assignment and Assumption Agreement
on behalf of such Replaced Lender, and any such Assignment and Assumption
Agreement so executed by the Administrative Agent and the Replacement Lender
shall be effective for purposes of this Section 2.08 and Section 11.04. Upon the
execution of the respective Assignment and Assumption Agreement, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Administrative Agent pursuant to Section 11.15 and
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, the

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Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 2.09,
4.04, 10.06, 11.01 and 11.06), which shall survive as to such Replaced Lender.
          2.09. Capital Adequacy. If any Lender determines that after the
Effective Date the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by the NAIC or any Governmental
Authority, central bank or comparable agency, will have the effect of increasing
the amount of capital required or expected to be maintained by such Lender or
any corporation controlling such Lender based on the existence of such Lender’s
Commitment hereunder or its obligations hereunder, then the Borrower agrees to
pay to such Lender, upon its written demand therefor, such additional amounts as
shall be required to compensate such Lender or such other corporation for the
increased cost to such Lender or such other corporation or the reduction in the
rate of return to such Lender or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Lender will
act reasonably and in good faith and will use averaging and attribution methods
which are reasonable; provided that such Lender’s determination of compensation
owing under this Section 2.09 shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 2.09, will
give prompt written notice thereof to the Borrower, which notice shall show in
reasonable detail the basis for calculation of such additional amounts.
          2.10. Incremental Term Loans. The Borrower may at any time or from
time to time after the Syndication Date (or earlier if approved by the
Administrative Agent), by notice to the Administrative Agent (whereupon the
Administrative Agent shall promptly deliver a copy to each of the Lenders),
request one or more incremental term loans be made hereunder (the “Incremental
Term Loans”); provided that (i) both at the time of any such request and upon
the effectiveness of any Incremental Amendment referred to below, no Default or
Event of Default shall exist and at the time that any such Incremental Term Loan
is made (and after giving effect thereto) no Default or Event of Default shall
exist and (ii) Holdings shall be in compliance with the covenants set forth in
Sections 8.08 through 8.10 determined on a Pro Forma Basis as of the date of the
most recently ended Test Period (or, if no Test Period cited in such sections
has passed, the covenants in Sections 8.08 through 8.10 for the first Test
Period cited in such Sections shall be satisfied as of the last four quarters
ended), in each case, as if such Incremental Term Loans had been outstanding on
the last day of such fiscal quarter of Holdings for testing compliance
therewith. Each Incremental Term Loan shall be in an aggregate principal amount
that is not less than $5,000,000. Notwithstanding anything to the contrary
herein, the aggregate principal amount of the Incremental Term Loans shall not
exceed $10,000,000. The Incremental Term Loans shall have the same terms and
conditions applicable to the Term Loans. Each notice from the Borrower pursuant
to this Section 2.10 shall set forth the requested amount of the relevant
Incremental Term Loans. Incremental Term Loans may be made by any existing
Lender (but no existing Lender will have any obligation to make a portion of any
Incremental Term Loan) or by any other bank or other financial institution that
is an Eligible Transferee (any such other bank or other financial institution
being called an “Additional Lender”); provided that the Administrative Agent
shall have consented (not to be unreasonably withheld, conditioned or delayed)
to such Additional Lender’s making such Incremental Term Loans. Commitments in
respect of Incremental Term Loans shall be provided pursuant to an amendment (an
“Incremental Amendment”) to this Agreement and, as appropriate, the other Credit
Documents, executed by Holdings, the Borrower, each Lender agreeing to provide
such commitments, if any, each Additional Lender, if any, and the Administrative
Agent. The Incremental Amendment may, with the consent of Holdings, the Borrower
and the Administrative Agent, but without the consent of any other Credit Party,
the Collateral Agent or Lenders, effect such amendments to this Agreement and
the

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other Credit Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent and the Borrower, to effect the provisions
of this Section 2.10. The Borrower may use the proceeds of the Incremental Term
Loans for any purpose not prohibited by this Agreement. No Lender shall be
obligated to provide any Incremental Term Loans, unless it so agrees.
          SECTION 3. Fees; Reductions of Commitment.
          3.01. Fees. (a) The Borrower agrees to pay to the Administrative Agent
such fees as may have been, or are hereafter, agreed to in writing from time to
time by Holdings, or any of its Subsidiaries and the Administrative Agent.
          (b) Voluntary prepayments or repayments of principal of Term Loans
pursuant to Sections 4.01 and all repayments of principal of Term Loans required
pursuant to Section 9 as a result of the acceleration thereof, will be subject
to payment to the Administrative Agent, for the ratable account of each Lender
with outstanding Term Loans, of a fee as follows: (i) if made during the period
from and including August 16, 2011 to and including August 15, 2012, an amount
equal to 3.0% of the aggregate principal amount of such prepayment or repayment
and (ii) if made during the period from and including August 16, 2012 to and
including August 15, 2013, an amount equal to 1.0% of the aggregate principal
amount of such prepayment or repayment. Such fees shall be due and payable upon
the date of any voluntary prepayment or the due date of such required repayment,
as the case may be.
          3.02. Voluntary Termination or Reduction of Commitments. Upon at least
three Business Day’s prior written notice to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), the Borrower shall have the right, at any time or from
time to time prior to the Funding Date, without premium or penalty to terminate
the Total Commitment in whole, or reduce it in part, pursuant to this
Section 3.02, in an integral multiple of $1,000,000 in the case of partial
reductions to the Total Commitment; provided that each such reduction shall
apply proportionately to permanently reduce the Commitment of each Lender.
          3.03. Mandatory Reduction of Commitments. (a) The Total Commitment
(and the Commitment of each Lender) shall terminate in its entirety at 5:00 p.m.
on August 21, 2010 unless the Funding Date shall have occurred on or prior to
such time.
          (b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Commitment (and the Commitment of each Lender)
shall terminate in its entirety on the Funding Date (after giving effect to the
incurrence of Term Loans on such date).
          SECTION 4. Prepayments; Payments; Taxes.
          4.01. Voluntary Prepayments. The Borrower shall not be permitted to
make any voluntary prepayments of Term Loans prior to August 16, 2011. The
Borrower shall have the right to prepay the Term Loans, without premium or
penalty (except as provided in Section 3.01(b)), in whole or in part at any time
and from time to time on or after August 16, 2011 (but not before such date) on
the following terms and conditions: (i) the Borrower shall give the
Administrative Agent prior to 12:00 Noon (New York City time) at the Notice
Office at least three Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Term Loans, which notice
shall specify the amount of such prepayment and which notice the Administrative
Agent shall, promptly transmit to each of the Lenders; (ii) each partial
prepayment of Term Loans pursuant to this Section 4.01 shall be in an aggregate
principal amount of at least $1,000,000 (or such lesser amount as is acceptable
to the Administrative Agent); (iii) each prepayment of Term Loans pursuant to
this Section 4.01 shall be applied pro rata among such Term Loans; (iv) each
prepayment of Term Loans pursuant to this Section 4.01 shall reduce the then
remaining Scheduled Repayments on a pro rata basis (based on the then

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remaining principal amount of each such Scheduled Repayments after giving effect
to all prior reductions thereto); and (v) at the time of any such prepayment of
Term Loans, the Borrower shall pay to the Administrative Agent the applicable
fee required under Section 3.01(b). No voluntary prepayments of Term Loans shall
be permitted except in accordance with this Section 4.01.
          4.02. Mandatory Repayments. (a) In addition to any other mandatory
repayments pursuant to this Section 4.02, on the last Business Day of each
fiscal quarter ending on each date set forth below and on the Maturity Date
(each, a “Scheduled Repayment Date”), the Borrower shall be required to repay
that principal amount of Term Loans, to the extent then outstanding, as is set
forth opposite each such date below (each such repayment, as the same may be
reduced as provided in Section 4.01 or 4.02(g), a “Scheduled Repayment”):

          Fiscal Quarter Ending   Amount
December 31, 2010
  $ 375,000  
March 31, 2011
  $ 375,000  
June 30, 2011
  $ 375,000  
September 30, 2011
  $ 375,000  
December 31, 2011
  $ 375,000  
March 31, 2012
  $ 375,000  
June 30, 2012
  $ 375,000  
September 30, 2012
  $ 375,000  
December 31, 2012
  $ 375,000  
March 31, 2013
  $ 375,000  
June 30, 2013
  $ 375,000  
Maturity Date
  $145,875,000 (plus amounts attributable to PIK Interest added to outstanding
principal of Term Loans pursuant to this Agreement)

          (b) In addition to any other mandatory repayments pursuant to this
Section 4.02, within five Business Days following each date on or after the
Funding Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any capital contribution or any sale or issuance of its Equity
Interests (other than (i) issuances of Equity Interests to Holdings or any of
its Subsidiaries to the extent made by any Subsidiary of Holdings, (ii) any
capital contributions to any Subsidiary of Holdings to the extent made by
Holdings or any of its Subsidiaries, (iii) sales or issuances of Holdings Common
Stock to employees, officers and/or directors of Holdings and its Subsidiaries
(including as a result of the exercise of any options with respect thereto) and
(iv) proceeds from capital contributions to, or the issuance of Equity Interests
of, Holdings to finance Permitted Acquisitions, Permitted Business Investments,
Capital Expenditures, the repayment of outstanding Indebtedness of Holdings and
its Subsidiaries or operating and development expenses), an amount equal to 100%
of the Net Cash Proceeds of such capital contribution or sale or issuance of
Equity Interests shall be applied as a mandatory repayment in accordance with
the requirements of Sections 4.02(g) and (h).
          (c) In addition to any other mandatory repayments pursuant to this
Section 4.02, within five Business Days following each date on or after the
Funding Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any issuance or incurrence by Holdings or any of its Subsidiaries
of Indebtedness (other than Indebtedness permitted to be incurred pursuant to
Section 8.04),

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an amount equal to 100% of the Net Cash Proceeds of the respective issuance or
incurrence of Indebtedness shall be applied as a mandatory repayment in
accordance with the requirements of Sections 4.02(g) and (h).
          (d) In addition to any other mandatory repayments pursuant to this
Section 4.02, within five Business Days following each date on or after the
Funding Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any Material Asset Sale, an amount equal to 100% of the Net Sale
Proceeds therefrom shall be applied as a mandatory repayment in accordance with
the requirements of Sections 4.02(g) and (h); provided, however, that such Net
Sale Proceeds shall not be required to be so applied so long as no Default or
Event of Default then exists and the Borrower delivers a certificate (which
certificate shall set forth the estimates of the Net Sale Proceeds to be so
expended) to the Administrative Agent within five Business Days following
receipt of such Net Sale Proceeds stating that such Net Sale Proceeds shall be
used to purchase assets (including pursuant to Permitted Acquisitions and
Permitted Business Investments, but excluding working capital) used or to be
used in the businesses permitted pursuant to Section 8.14 or to make Capital
Expenditures, in each case within the Relevant Reinvestment Period, and provided
further, that if all or any portion of such Net Sale Proceeds not required to be
so applied as provided above in this Section 4.02(d) are not so reinvested
within such Relevant Reinvestment Period, such remaining portion shall be
applied on the last day of such Relevant Reinvestment Period as otherwise
provided above in this Section 4.02(d) without regard to the preceding proviso.
          (e) In addition to any other mandatory repayments pursuant to this
Section 4.02, within five Business Days following each date on or after the
Funding Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any Recovery Event, an amount equal to 100% of the Net Insurance
Proceeds from such Recovery Event shall be applied as a mandatory repayment in
accordance with the requirements of Sections 4.02(g) and (h); provided, however,
that such Net Insurance Proceeds shall not be required to be so applied so long
as no Default or Event of Default then exists and the Borrower has delivered a
certificate to the Administrative Agent within five Business Days following
receipt of such Net Insurance Proceeds stating that such Net Insurance Proceeds
shall be used to replace or restore any properties or assets in respect of which
such Net Insurance Proceeds were paid, to purchase assets used or to be used in
the business permitted pursuant to Section 8.14 or to make Capital Expenditures,
in each case within the Relevant Reinvestment Period (which certificate shall
set forth the estimates of the Net Insurance Proceeds to be so expended), and
provided further, that if all or any portion of such Net Insurance Proceeds not
required to be so applied pursuant to the preceding proviso are not so used
within the Relevant Reinvestment Period, such remaining portion shall be applied
on the last day of such Relevant Reinvestment Period as provided above in this
Section 4.02(e) without regard to the immediately preceding proviso.
          (f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of the
Excess Cash Flow for the related Excess Cash Payment Period shall be applied as
a mandatory repayment in accordance with the requirements of Sections 4.02(g)
and (h).
          (g) Each amount required to be applied pursuant to Sections 4.02(b),
(c), (d), (e) and (f) in accordance with this Section 4.02(g) shall be applied
to repay the outstanding principal amount of the Term Loans, with such repayment
of Term Loans to be applied to reduce the then remaining Scheduled Repayments on
a pro rata basis (based upon the then remaining principal amounts of such
Scheduled Repayments after giving effect to all prior reductions thereto).
          (h) Each repayment of any Term Loans made pursuant to
Sections 4.02(a), (b), (c), (d), (e) and (f) shall be applied pro rata among the
Lenders holding such Term Loans.

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          (i) In addition to any other mandatory repayments pursuant to this
Section 4.02, all then outstanding Term Loans shall be repaid in full on the
Maturity Date.
          4.03. Method and Place of Payment. All payments of principal and Cash
Interest under this Agreement and under any Note shall be made to the
Administrative Agent for the account of the Lender or Lenders entitled thereto
not later than 12:00 Noon (New York City time) on the date when due and shall be
made in Dollars in immediately available funds at the Payment Office. Whenever
any payment to be made hereunder or under any Note shall be stated to be due on
a day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.
          4.04. Tax Gross-Up and Indemnities
          (a) Tax gross-up.
          (i) Each Credit Party shall make all payments to be made by it without
any Tax Deduction, unless a Tax Deduction is required by law.
          (ii) the Borrower shall promptly upon becoming aware that a Credit
Party must make a Tax Deduction (or that there is any change in the rate or the
basis of a Tax Deduction) notify the Administrative Agent accordingly.
          (iii) If a Tax Deduction is required by law to be made by a Credit
Party, the amount of the payment due from that Credit Party shall be increased
to an amount which (after making any Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been required.
          (iv) If a Credit Party is required to make a Tax Deduction, that
Credit Party shall make that Tax Deduction and any payment required in
connection with that Tax Deduction within the time allowed and in the minimum
amount required by law.
          (v) Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Credit Party making that Tax
Deduction shall deliver to the Administrative Agent for the Lender entitled to
the payment a statement under section 975 of the U.K.’s Income Tax Act 2007
evidence reasonably satisfactory to that Lender that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to the relevant taxing
authority.
          (vi) A Treaty Lender (to the extent it is legally entitled to), and
each Credit Party which makes a payment to which that Treaty Lender is entitled,
shall co-operate in completing any procedural formalities necessary for that
Credit Party to obtain authorization to make that payment without a Tax
Deduction.
          (vii) Any Lender, if requested by the Borrower or the Administrative
Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to United States backup withholding or information reporting
requirements.
          (b) Tax indemnity.
          (i) the Borrower shall (within ten Business Days of demand by the
Administrative Agent) pay to a Protected Party an amount equal to the loss,
liability or cost which that Protected Party

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determines will be or has been suffered for or on account of Tax by that
Protected Party in respect of a Credit Document.
          (ii) Paragraph (i) above shall not apply:
          (A) with respect to any Tax assessed on a Lender or Agent:
     (1) under the law of the jurisdiction in which that Lender or Agent is
incorporated or, if different, the jurisdiction (or jurisdictions) in which that
Lender or Agent is treated as resident for tax purposes; or
     (2) under the law of the jurisdiction in which that Lender’s lending office
is located in respect of amounts received or receivable in that jurisdiction,
     if that Tax is imposed on or calculated by reference to the net income
received or receivable (but not any sum deemed to be received or receivable) by
that Agent or Lender; or
          (B) to the extent a loss, liability or cost:
     (1) is compensated for by an increased payment under Section 4.04(a); or
     (2) would have been compensated for by an increased payment under Section
4.04(a) but was not so compensated solely because one of the exclusions in
paragraph (iv) of Section 4.04(a) applied.
(C) to the extent such loss, liability or cost arises after the Effective Date
solely as a result of a voluntary act by the relevant Lender.
          (iii) A Protected Party making, or intending to make a claim under
paragraph (a) above shall promptly notify the Administrative Agent of the event
which will give, or has given, rise to the claim, following which the
Administrative Agent shall notify the Borrower.
          (iv) A Protected Party shall, on receiving a payment from a Credit
Party under this Section 4.04(b), notify the Administrative Agent.
          (c) Tax Refund. If a Credit Party makes a Tax Payment and the relevant
Lender or Agent determines that:
          (i) a Tax Refund is attributable either to an increased payment of
which that Tax Payment forms part, or to that Tax Payment; and
          (ii) that Lender or Agent has obtained, utilized and retained that Tax
Refund,
the Lender or Agent shall pay an amount to the Credit Party which that Lender or
Agent reasonably determines will leave it (after that payment) in the same
after-Tax position as it would have been in had the Tax Payment not been
required to be made by the Credit Party. Notwithstanding any provision in this
Agreement or any other Credit Document, nothing in this Section 4.04 shall
require a Lender or the Administrative Agent to disclose any confidential
information to any Credit Party (including, without limitation, its tax returns
or its calculations).
          (d) Stamp Taxes. The Borrower shall pay and, within three Business
Days of demand, indemnify each Lender and each Agent against any cost, loss or
liability that Lender or any

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Agent incurs in relation to all stamp duty, registration and other similar Taxes
payable in respect of any Credit Document.
          (e) VAT.
          (i) All amounts set out, or expressed in a Credit Document to be
payable by any Credit Party to a Lender or Agent which (in whole or in part)
constitute the consideration for a supply or supplies for VAT purposes shall be
deemed to be exclusive of any VAT which is chargeable on such supply or
supplies, and accordingly, subject to paragraph (ii) below, if VAT is or becomes
chargeable on any supply made by any Lender or Agent to any Credit Party under a
Credit Document, that Credit Party shall pay to the Lender or Agent (in addition
to and at the same time as paying any other consideration for such supply) an
amount equal to the amount of such VAT (and such Lender or Agent shall promptly
provide an appropriate VAT invoice to such Credit Party).
          (ii) If VAT is or becomes chargeable on any supply made by any Lender
or Agent (the “Supplier”) to any other Lender or Agent (the “Recipient”) under a
Credit Document, and any Credit Party other than the Recipient (the “Subject
Party”) is required by the terms of any Credit Document to pay an amount equal
to the consideration for such supply to the Supplier (rather than being required
to reimburse the Recipient in respect of that consideration), such Credit Party
shall also pay to the Supplier (in addition to and at the same time as paying
such amount) an amount equal to the amount of such VAT. The Recipient will
promptly pay to the Subject Party an amount equal to any credit or repayment
obtained by the Recipient from the relevant tax authority which the Recipient
reasonably determines in respect of such VAT.
          (iii) Where a Credit Document requires any Credit Party to reimburse
or indemnify a Lender or Agent for any cost or expense, the Credit Party shall
reimburse or indemnify (as the case may be) such Lender or Agent for the full
amount of such cost or expense, including such part thereof as represents VAT,
save to the extent that such Lender or Agent reasonably determines that it is
entitled to credit or repayment in respect of such VAT from the relevant tax
authority.
          (iv) Any reference in this Section 4.04(e) to any Credit Party shall,
at any time when such Credit Party is treated as a member of a group for VAT
purposes, include (where appropriate and unless the context otherwise requires)
a reference to the representative member of such group at such time (the term
“representative member” to have the same meaning as in the Value Added Tax Act
1994).
          (f) For the purposes of this Section 4.04, any reference to a U.K.
statutory provision includes a reference to that provision as modified or
replaced from time to time after the Effective Date.
          SECTION 5. Conditions Precedent to the Funding Date. The obligation of
each Lender to make Term Loans on the Funding Date is subject at the time of the
making of such Term Loans to the satisfaction of the following conditions:
          5.01. Effective Date; Notes. On or prior to the Funding Date, (a) the
Effective Date shall have occurred as provided in Section 11.10 and (b) there
shall have been delivered to the Administrative Agent for the account of each of
the Lenders the appropriate Notes executed by the Borrower, in the amount,
maturity and as otherwise provided herein.
          5.02. Officer’s Certificate. On the Funding Date, the Administrative
Agent shall have received a certificate, dated the Funding Date and signed on
behalf of the Borrower by the Chairman of the Board, the Chief Executive
Officer, any Director, the President or any Vice President of the Borrower,
certifying on behalf of the Borrower that all of the conditions in Sections 5.06
through 5.08, inclusive, and 5.16 have been satisfied on such date.

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          5.03. Opinions of Counsel. On the Funding Date, the Administrative
Agent shall have received (a) from Vinson & Elkins LLP, special New York and
Texas counsel to the Credit Parties, an opinion addressed to the Administrative
Agent, the Collateral Agent and each of the Lenders and dated the Funding Date
covering the matters set forth in Exhibit C-1 and such other matters incident to
the transactions contemplated herein as the Administrative Agent may reasonably
request, (b) from Woodburn and Wedge, special Nevada counsel to Holdings, an
opinion addressed to the Administrative Agent, the Collateral Agent and each of
the Lenders and dated the Funding Date covering the matters set forth in
Exhibit C-2 and such other matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request, (c) from Nauta
Dutilh, special Dutch counsel to the Agents, an opinion addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated the
Funding Date covering the matters set forth in Exhibit C-3 and such other
matters incident to the transactions contemplated herein as the Administrative
Agent shall reasonably request, (d) from White & Case LLP, special English
counsel to the Agents, an opinion addressed to the Administrative Agent, the
Collateral Agent and each of the Lenders and dated the Funding Date covering the
matters set forth in Exhibit C-4 and such other matters incident to the
transactions contemplated herein as the Administrative Agent shall reasonably
request, and (e) from local counsel in each state in which a Mortgaged Property
designated as such in Schedule 6.12(b) is located, an opinion in form and
substance satisfactory to the Administrative Agent addressed to the
Administrative Agent, the Collateral Agent and each of the Lenders and dated the
Funding Date covering such matters incident to the transactions contemplated
herein as the Administrative Agent may reasonably request.
          5.04. Company Documents; Proceedings; etc. (a) On the Funding Date,
the Administrative Agent shall have received a certificate from each Credit
Party, dated the Funding Date, signed by the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, any Managing Director, any
Director, any Manager or the General Partner of such Credit Party and attested
to by another officer of such Credit Party, in the form of Exhibit D-1, D-2 or
D-3 (as appropriate given the jurisdiction of organization of such Credit Party)
with appropriate insertions, together with copies of the certificate or articles
of incorporation, by-laws, deed of incorporation, up-to-date trade register
excerpt (or other equivalent organizational documents), as applicable, of such
Credit Party and the resolutions and, as applicable, shareholder consents of
such Credit Party referred to in such certificate, and each of the foregoing
shall be in form and substance acceptable to the Administrative Agent.
          (b) On or prior to the Funding Date, the Administrative Agent shall
have received all records of Business proceedings, governmental approvals, good
standing certificates and bring-down telegrams or facsimiles, if any, which the
Administrative Agent reasonably may have requested such documents and papers
where appropriate to be certified by proper Business or Governmental
Authorities.
          5.05. Employee Benefit Plans; Shareholders’ Agreements; Management
Agreements; Employment Agreements; Collective Bargaining Agreements; Tax Sharing
Agreements; Existing Indebtedness Agreements; Project Documents. On or prior to
the Funding Date, there shall have been made available to the Administrative
Agent true and correct copies of the following documents:
     (a) all Plans (and for each Plan that is required to file an annual report
on Internal Revenue Service Form 5500-series, a copy of the most recent such
report (including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information), and for each Plan that is a “single-employer plan”
as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial
valuation therefor) and any other “employee benefit plans” as defined in
Section 3(3) of ERISA, and any other material agreements, plans or arrangements,
sponsored, maintained, or

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contributed to by (or to which there is an obligation to contribute of)
Holdings, any of its Subsidiaries, or any ERISA Affiliate for the benefit of
current or former employees of Holdings or any of its Subsidiaries or any ERISA
Affiliate (provided that the foregoing shall apply in the case of any
Multiemployer Plan, only to the extent that any document described herein is in
the possession of Holdings, and/or any ERISA Affiliate or is reasonably
available thereto from the sponsor or trustee of any such plan) (collectively,
the “Employee Benefit Plans”);
     (b) all agreements entered into by Holdings or any of its Subsidiaries
governing the terms and relative rights of its Equity Interests and any
agreements entered into by its shareholders relating to any such entity with
respect to its Equity Interests (collectively, the “Shareholders’ Agreements”);
     (c) all material agreements with members of, or with respect to, the
management of Holdings or any of its Subsidiaries other than employee agreements
not addressing the management of Holdings and its Subsidiaries (collectively,
the “Management Agreements”);
     (d) all material employment agreements entered into by Holdings or any of
its Subsidiaries and in effect on the Funding Date (collectively, the
“Employment Agreements”);
     (e) all collective bargaining agreements applying or relating to any
employee of Holdings or any of any of its Subsidiaries (collectively, the
“Collective Bargaining Agreements”);
     (f) all tax sharing, tax allocation and other similar agreements entered
into by Holdings or any of its Subsidiaries (collectively, the “Tax Sharing
Agreements”);
     (g) all non-compete agreements entered into by Holdings or any of its
Subsidiaries which restrict the activities of Holdings or any of its
Subsidiaries (collectively, the “Non-Compete Agreements”);
     (h) all agreements evidencing or relating to any individual item of
Indebtedness of Holdings or any of its Subsidiaries in a principal amount in
excess of $5,000,000 which is to remain outstanding after giving effect to the
Funding Date (the “Existing Indebtedness Agreements”); and
     (i) all Project Documents.
all of which Employee Benefit Plans, Shareholders’ Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Tax Sharing
Agreements, Non-Compete Agreements, Existing Indebtedness Agreements and Project
Documents shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall be in full force and effect on the Funding Date
(except Plans that are not currently in effect but to which Holdings, any of its
Subsidiaries, or any ERISA Affiliates contributed (or had an obligation to
contribute) during the five-year period preceding the Funding Date).
Notwithstanding anything to the contrary contained above in this Section 5.05,
the requirements with respect to the delivery (and certification) of agreements
and documents described in this Section 5.05 shall be deemed satisfied to the
extent such agreements and documents have been publicly filed by Holdings with
the SEC.
          5.06. Consummation of the Refinancing. (a) On the Funding Date
(contemporaneously with the making of the Term Loans on such date), all
Indebtedness of Holdings and its Subsidiaries under the Existing Credit
Agreements and all documentation related thereto shall have

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been repaid in full, together with all fees and other amounts owing thereon, all
commitments thereunder shall have been terminated and all letters of credit
issued pursuant thereto shall have been terminated or cash collateralized in a
manner satisfactory to the Administrative Agent.
          (b) On the Funding Date (contemporaneously with the making of Term
Loans on such date), all security interests in respect of, and Liens securing,
the Indebtedness under the Existing Credit Agreements created pursuant to the
security documentation relating thereto shall have been terminated and released,
and the Collateral Agent shall have received all such releases as may have been
requested by the Collateral Agent, which releases shall be in form and substance
satisfactory to the Collateral Agent. Without limiting the foregoing, there
shall have been delivered to the Collateral Agent (i) proper termination or
discharge of debt statements and/or forms (Form UCC-3 or the appropriate
equivalent in each relevant jurisdiction) for filing under the UCC or equivalent
statute or regulation of each relevant jurisdiction where a financing statement
or application for registration (Form UCC-1 or the appropriate equivalent in
each relevant jurisdiction) was filed with respect to Holdings or any of its
Subsidiaries in connection with the security interests created with respect to
the Existing Credit Agreements, (ii) terminations, releases or reassignments of
any security interest in, or Lien on, any patents, trademarks, copyrights, or
similar interests of Holdings or any of its Subsidiaries on which filings have
been made and (iii) terminations of all mortgages, leasehold mortgages,
hypothecs, charges, pledges, assignments, deeds of trust or equivalent local
security or Liens created with respect to property of Holdings or any of its
Subsidiaries, in each case, to secure the obligations under the Existing Credit
Agreements, all of which shall be in form and substance satisfactory to the
Administrative Agent.
          (c) On the Funding Date and after giving effect to the consummation of
the Transaction, Holdings and its Subsidiaries shall have no outstanding
Preferred Equity Interests or Indebtedness, except for (i) Indebtedness pursuant
to or in respect of the Credit Documents and (ii) certain other indebtedness and
Preferred Equity Interests existing on the Effective Date as listed on
Schedule 6.20 hereto (with the Indebtedness described in this sub-clause
(ii) being herein called the “Existing Indebtedness”). On and as of the Funding
Date, all of the Existing Indebtedness shall remain outstanding after giving
effect to the Transaction without any breach, required repayment, required offer
to purchase, default, event of default or termination rights existing thereunder
or arising as a result of the Transaction.
          (d) The Administrative Agent shall have received evidence in form,
scope and substance satisfactory to it that the matters set forth in this
Section 5.06 have been satisfied on the Funding Date, including, without
limitation, acceptable payoff letters and releases, terminations and such other
documents as the Administrative Agent may reasonably request, each in form and
substance reasonably satisfactory to the Administrative Agent.
          5.07. Adverse Change, Approvals. (a) Since December 31, 2009, nothing
shall have occurred (and neither the Administrative Agent nor any Lender shall
have become aware of any facts or conditions not previously known) which has
had, or could reasonably be expected to have, a Material Adverse Effect.
          (b) On or prior to the Funding Date, all necessary governmental
(domestic and foreign) and material third party approvals and/or consents in
connection with the Transaction, the other transactions contemplated hereby and
the granting of Liens under the Credit Documents shall have been obtained and
remain in effect, and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transactions, the other transactions contemplated by the
Credit Documents or otherwise referred to herein or therein. On the Funding
Date, there shall not exist any judgment, order, injunction or other restraint
issued or filed or a hearing seeking

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injunctive relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the Transactions.
          5.08. Litigation. On the Funding Date, there shall be no actions,
suits or proceedings pending or threatened (a) with respect to the Transaction,
this Agreement or any other Credit Documents or (b) which has had, or could
reasonably be expected to have, a Material Adverse Effect.
          5.09. Guaranties and Security Documents. On the Funding Date:
          (a) each Subsidiary Guarantor shall have duly authorized, executed and
delivered a Subsidiaries Guaranty in the form of Exhibit E (as amended,
modified, restated and/or supplemented from time to time, the “Subsidiaries
Guaranty”);
          (b) each Credit Party party thereto shall have duly authorized,
executed and delivered a U.S. Security Agreement in the form of Exhibit F-1 (as
amended, modified, restated and/or supplemented from time to time, the “U.S.
Security Agreement”) and, in connection therewith, the Credit Parties shall have
delivered to the Collateral Agent:
     (i) all of the Collateral consisting of certificated securities and
promissory notes, if any, referred to therein and then owned by such Credit
Party, (x) endorsed in blank in the case of any such promissory notes and
(y) together with executed and undated endorsements for transfer in the case of
any such certificated securities;
     (ii) proper financing statements (Form UCC-1 or the equivalent) fully
executed or authorized for filing under the UCC or other appropriate filing
offices of each jurisdiction as may be necessary or, in the reasonable opinion
of the Collateral Agent, desirable, to perfect the security interests purported
to be created by the U.S. Security Agreement;
     (iii) copies of requests for information or copies (Form UCC-11), or
equivalent reports as of a recent date, listing all effective financing
statements that name any Credit Party as debtor and that are filed where each
Credit Party is organized and, to the extent requested by the Collateral Agent,
in such other jurisdictions in which Collateral is located on the Funding Date,
together with copies of such other financing statements that name Holdings or
any of its Subsidiaries as debtor (none of which shall cover any of the
Collateral except (x) to the extent evidencing Permitted Liens or (y) those in
respect of which the Collateral Agent shall have received termination statements
(Form UCC-3) or such other termination statements as shall be required by local
law fully executed or authorized for filing);
     (iv) evidence of the completion (or arrangements therefor satisfactory to
the Collateral Agent) of all other recordings and filings of, or with respect
to, and all action necessary in connection with, the U.S. Security Agreement as
may be necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect and protect the security interests intended to be created
by the U.S. Security Agreement; and
     (v) evidence that all other actions necessary or, in the reasonable opinion
of the Collateral Agent, desirable to perfect and protect the security interests
purported to be created by the U.S. Security Agreement have been taken;
          (c) each Credit Party party thereto shall have duly authorized,
executed and delivered a English Debenture in the form of Exhibit F-2 (as
amended, modified, restated and/or supplemented from time to time the “English
Debenture”) and, in connection therewith, the Credit Parties shall have
delivered to the Collateral Agent:

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     (i) copies of lien searches with respect to the each such Credit Party;
     (ii) evidence of the completion (or arrangements therefor satisfactory to
the Collateral Agent) of all other recordings and filings of, or with respect
to, and all action necessary in connection with, the English Debenture as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect and protect the security interests intended to be created by the English
Debenture; and
     (iii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the English Debenture have been taken;
          (d) each Credit Party party thereto shall have duly authorized,
executed and delivered a English Charge Over Shares in the form of Exhibit F-3
(as amended, modified, restated and/or supplemented from time to time, the
“English Charge Over Shares”) and, in connection therewith, such Credit Parties
shall have delivered to the Collateral Agent:
     (i) all of the Collateral consisting of certificated securities referred to
therein and then owned by such Credit Party, together with executed and undated
endorsements for transfer in the case of any such certificated securities;
     (ii) evidence of the completion (or arrangements therefor satisfactory to
the Collateral Agent) of all other recordings and filings of, or with respect
to, and all action necessary in connection with, the English Charge Over Shares
as may be necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect and protect the security interests intended to be created
by the English Charge Over Shares; and
     (iii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the English Charge Over Shares have been
taken;
          (e) each Credit Party party thereto shall have duly authorized,
executed and delivered a Dutch Pledge Agreement in the form of Exhibit F-4 (as
amended, modified, restated and/or supplemented from time to time, the “Dutch
Pledge Agreement”) and, in connection therewith, such Credit Parties shall have
delivered to the Collateral Agent:
     (i) all of the Collateral consisting of certificated securities and
promissory notes, if any, referred to therein and then owned by such Credit
Party, (x) endorsed in blank in the case of any such promissory notes and
(y) together with executed and undated endorsements for transfer in the case of
any such certificated securities;
     (ii) evidence of the completion (or arrangements therefor satisfactory to
the Collateral Agent) of all other recordings and filings of, or with respect
to, and all action necessary in connection with, the Dutch Pledge Agreement as
may be necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect and protect the security interests intended to be created
by the Dutch Pledge Agreement; and
     (iii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Dutch Pledge Agreement have been taken;

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          (f) each Credit Party party thereto shall have duly authorized,
executed and delivered a Scottish Security in the form of Exhibit F-5 (as
amended, modified or supplemented from time to time, the “Scottish Security”)
and in connection therewith, such Credit Parties shall have delivered to the
Collateral Agent;
     (i) evidence of the completion (or arrangements therefor satisfactory to
the Collateral Agent) of all other recordings and filings of, or with respect
to, and all action necessary in connection with, the Scottish Security as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect and protect the security interests intended to be created by the
Scottish Security; and
     (ii) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Scottish Security have been taken;
          (g) the Administrative Agent shall have received control agreements
duly executed by each applicable Credit Party, the applicable bank and the
Collateral Agent with respect to each deposit or similar account of each Credit
Party set forth on Schedule 5.09(g), such control agreements in form and
substance reasonably satisfactory to the Collateral Agent; and
          (h) each applicable Credit Party shall have delivered to the
Collateral Agent:
     (i) fully executed counterparts of Mortgages and corresponding UCC fixture
filings, in form and substance reasonably satisfactory to the Collateral Agent,
which Mortgages and UCC fixture filings shall cover each Oil and Gas Property
owned or leased by Holdings or any of its Subsidiaries and designated as a
“Mortgaged Property” on Schedule 6.12(b) hereto, together with evidence that
counterparts of such Mortgages and UCC fixture filings have been delivered to
the title insurance company insuring the Lien of such Mortgage for recording;
     (ii) a description of each such Mortgaged Property; and
     (iii) evidence reasonably satisfactory to the Collateral Agent that the
Mortgages together with the other Security Documents when duly filed, registered
and/or recorded will create first priority/perfected Liens on the Mortgaged
Properties.
          5.10. [Reserved].
          5.11. Financial Statements; Pro Forma Balance Sheet; Projections
etc(a) . On or prior to the Funding Date, the Administrative Agent shall have
received true and correct copies of the historical financial statements, the pro
forma financial statements and the Projections referred to in Sections 6.05(a),
(b) and (e), which historical financial statements, pro forma financial
statements and Projections shall be in form and substance satisfactory to the
Administrative Agent and the Required Lenders.
          5.12. Solvency Certificate; Insurance Certificates. On the Funding
Date, the Administrative Agent shall have received:
     (i) a solvency certificate from the chief financial officer of Holdings in
the form of Exhibit G; and
     (ii) certificates of insurance complying with the requirements of
Section 7.03 for the business and properties of Holdings and its Subsidiaries,
in form and substance reasonably satisfactory to the Administrative Agent and
naming the Collateral Agent as an additional insured

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and/or as loss payee, as applicable, and stating that such insurance shall not
be canceled without at least 30 days’ prior written notice by the insurer to the
Collateral Agent.
          5.13. Reserve Report; Qualifications. The Administrative Agent shall
have received prior to the Funding Date an annual Reserve Report (as described
in the definition of such term) for the fiscal year ended December 31, 2009.
          5.14. Fees, etc. On the Funding Date, the Borrower shall have paid to
the Administrative Agent (and its relevant affiliates) and the Collateral Agent
all costs, fees and expenses (including, without limitation, legal fees and
expenses) and other compensation contemplated hereby payable to the
Administrative Agent (and/or its relevant affiliates) and the Collateral Agent
to the extent then due.
          5.15. Syndication Letter. On or prior to the Funding Date, the
Borrower shall have executed and delivered the Syndication Letter, which shall
be in form and substance satisfactory to the Administrative Agent, and the
Syndication Letter shall be in full force and effect.
          5.16. No Default; Representations and Warranties. On the Funding Date,
(a) there shall exist no Default or Event of Default and (b) all representations
and warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on such date (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
          5.17. Notice of Borrowing. Prior to the Funding Date, the
Administrative Agent shall have received the Notice of Borrowing meeting the
requirements of Section 2.02(a).
          5.18. Patriot Act; Know Your Customer. Prior to the Funding Date, the
Lenders shall have received from the Credit Parties, to the extent requested by
the Lenders or the Administrative Agent, all documentation and other information
required by regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act.
          5.19. Service of Process. On or prior to the Funding Date, the
Administrative Agent shall have received evidence satisfactory to it that
(a) each Credit Party has appointed CT Corporation as agent for service of
process as contemplated in Section 11.18(a) and (b) CT Corporation has accepted
its appointment.
          5.20. U.K. Service of Process. On or prior to the Funding Date, the
Administrative Agent shall have received evidence satisfactory to it that
(a) each Credit Party that is not incorporated in England and Wales and that has
executed, or will on the Funding Date execute, any Credit Document governed by
the laws of England and Wales has irrevocably appointed the Borrower as agent
for service of process as contemplated in Section 11.18(b) and (b) the Borrower
has accepted its appointment.
          In determining the satisfaction of the conditions specified in this
Section 5, (a) to the extent any item is required to be satisfactory to any
Lender, such item shall be deemed satisfactory to each Lender unless such Lender
has notified the Administrative Agent in writing prior to the occurrence of the
Funding Date that the respective item or matter does not meet its satisfaction
and (b) in determining whether any Lender is aware of any fact, condition or
event that has occurred and which would reasonably be expected to have a
Material Adverse Effect or a material adverse effect of the type described in
Section 5.07, each Lender which has not notified the Administrative Agent in
writing prior to the occurrence of the Funding Date of such fact, condition or
event shall be deemed not to be aware of any such fact, condition or event on
the Funding Date. Upon the Administrative Agent’s good faith

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determination that the conditions specified in this Section 5 have been met
(after giving effect to the preceding sentence), then the Funding Date shall
have been deemed to have occurred, regardless of any subsequent determination
that one or more of the conditions thereto had not been met (although the
occurrence of the Funding Date shall not release the Borrower from any liability
for failure to satisfy one or more of the applicable conditions contained in
this Section 5).
          SECTION 6. Representations, Warranties and Agreements. In order to
induce the Lenders to enter into this Agreement and to make Term Loans, the
Borrower makes the following representations, warranties and agreements, in each
case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Term Loans on the Funding Date being deemed to constitute a representation and
warranty that the matters specified in this Section 6 are true and correct in
all material respects on and as of the Funding Date (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date).
          6.01. Company Status. Each of Holdings and each of its Subsidiaries
(a) is a duly organized and validly existing Business in good standing (or, in
the case of any Non-U.S. Subsidiary of Holdings, the applicable equivalent of
“good standing” to the extent that such concept exists in such Non-U.S.
Subsidiary’s jurisdiction of organization) under the laws of the jurisdiction of
its organization, (b) has the Business power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (c) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified or authorized which,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. No certifications by any Governmental Authority
are required for operation of the business of Holdings and its Subsidiaries that
are not in place, except for such certifications or agreements, the absence of
which could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
          6.02. Power and Authority. Each Credit Party has the Business power
and authority to execute, deliver and perform the terms and provisions of each
of the Credit Documents to which it is party and has taken all necessary
Business action to authorize the execution, delivery and performance by it of
each of such Credit Documents. Each Credit Party has duly executed and delivered
each of the Credit Documents to which it is party, and each of such Credit
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
          6.03. No Violation. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (a) will contravene any provision
of any law, statute, rule or regulation or any order, writ, injunction or decree
of any court or Governmental Authority, (b) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of any Credit Party or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which any Credit Party or any of its Subsidiaries is
a party or by which it or any its property or assets is bound or to which it may
be subject, or (c) will violate any provision of the certificate or articles of
incorporation, certificate of formation,

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limited liability company agreement or by-laws (or equivalent constitutional,
organizational and/or formation documents), as applicable, of any Credit Party
or any of its Subsidiaries.
          6.04. Approvals. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with (except (a) for
those that have otherwise been obtained or made on or prior to the Funding Date
and which remain in full force and effect on the Funding Date and, (b) filings
which are necessary to perfect the security interests created or intended to be
created under the Security Documents, which filings will be made within ten days
following the Funding Date), or exemption by, any Governmental Authority is
required to be obtained or made by, or on behalf of, any Credit Party to
authorize, or is required to be obtained or made by, or on behalf of, any Credit
Party in connection with, (i) the execution, delivery and performance of any
Credit Document or (ii) the legality, validity, binding effect or enforceability
of any such Credit Document.
          6.05. Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections. (a) (i) The audited consolidated balance sheet of
Holdings at December 31, 2007, December 31, 2008 and December 31, 2009 and the
related consolidated statements of income and cash flows and changes in
shareholders’ equity of Holdings for the fiscal years of Holdings ended on such
dates, in each case furnished to the Lenders prior to the Funding Date, present
fairly in all material respects the consolidated financial position of Holdings
at the date of said financial statements and the results for the respective
periods covered thereby and (ii) the unaudited consolidated balance sheet of
Holdings at June 30, 2010 and the related consolidated statements of income and
cash flows and changes in shareholders’ equity of Holdings for the six-month
period ended on such date, furnished to the Lenders prior to the Funding Date,
present fairly in all material respects the consolidated financial position of
Holdings at the date of said financial statements and the results for the
respective periods covered thereby, subject to normal year-end adjustments. All
such financial statements have been prepared in accordance with GAAP
consistently applied except to the extent provided in the notes to said
financial statements (and except for the absence of footnotes in interim
financial statements).
          (b) (i) The pro forma consolidated balance sheet of Holdings as at
June 30, 2010 (after giving effect to the Transaction) and (ii) the pro forma
income statement of Holdings for the six-month period ended June 30, 2010 (after
giving effect to the Transaction and the financing therefor), copies of which
have been furnished to the Lenders prior to the Funding Date, present good faith
estimates of the pro forma consolidated financial position of Holdings as of
such date and the consolidated results of operations of Holdings for such
six-month period, as the case may be.
          (c) On and as of the Funding Date, and after giving effect to the
Transaction and to all Indebtedness being incurred or assumed and Term Loans
created by the Credit Parties in connection therewith on such date, (i) the sum
of the fair value of the assets, at a fair valuation, of the Credit Parties and
their Subsidiaries (taken as a whole) will exceed their debts (taken as a
whole), (ii) the sum of the present fair salable value of the assets of the
Credit Parties and their Subsidiaries (taken as a whole) will exceed their debts
(taken as a whole), (iii) the Credit Parties and their Subsidiaries (taken as a
whole) have not incurred and do not intend to incur, and do not believe that
they will incur, debts beyond their ability to pay such debts as such debts
mature, and (iv) the Credit Parties and their Subsidiaries (taken as a whole)
will have sufficient capital with which to conduct their businesses. For
purposes of this Section 6.05(c), “debt” means any liability on a claim, and
“claim” means (A) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (B) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the

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light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
          (d) Except as disclosed in the financial statements delivered pursuant
to Section 6.05(a), and except for the Indebtedness incurred and/or outstanding
under this Agreement, there were as of the Funding Date no liabilities or
obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. As of the Funding Date, neither
Holdings nor the Borrower knows of any basis for the assertion against it or any
of its Subsidiaries of any liability or obligation of any nature whatsoever that
is not disclosed in such financial statements delivered pursuant to
Section 6.05(a) or (b) or referred to in the immediately preceding sentence
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
          (e) The Projections delivered to the Administrative Agent and the
Lenders prior to the Funding Date have been prepared in good faith and are based
on assumptions believed to be reasonable at the time made, and as of the Funding
Date, and there are no statements or conclusions in the Projections which are
based upon or include information known to the Borrower to be misleading in any
material respect or which fail to take into account material information known
to Holdings or the Borrower regarding the matters reported therein. On the
Funding Date, each of Holdings and the Borrower believes that the Projections
are reasonable and attainable, it being recognized by the Lenders, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by the Projections may
differ materially from the projected results.
          (f) After giving effect to the Transaction, since December 31, 2009,
nothing has occurred that has had, or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
          6.06. Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of Holdings or the Borrower, threatened (a) with respect to
the Transaction or any Credit Document or (b) that has had, or could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.
          6.07. True and Complete Disclosure. All factual information (taken as
a whole) furnished by or on behalf of Holdings or the Borrower to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of Holdings or the Borrower in writing to
the Administrative Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided, it
being understood and agreed that for purposes of this Section 6.07, such factual
information shall not include the Projections or any pro forma financial
information.
          6.08. Use of Proceeds; Margin Regulations. (a) All proceeds of the
Term Loans shall be used (i) to fund the Refinancing, (ii) to pay fees and
expenses incurred in connection with the Transaction and (iii) for Holdings’ and
its Subsidiaries general corporate purposes, including without limitation, to
cash collateralize letters of credit issued for the account of Holdings or any
of its Subsidiaries and to fund Capital Expenditures.

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          (b) No part of the proceeds of any Term Loan will be used to purchase
or carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Term Loan nor the use of
the proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, U or X.
          6.09. Tax Returns and Payments. Each of Holdings and each of its
Subsidiaries has timely filed or caused to be timely filed with the appropriate
taxing authority all Federal, state and material local returns, statements,
forms and reports for taxes (the “Returns”) required to be filed by, or with
respect to the income, properties or operations of, Holdings and/or any of its
Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of Holdings and its Subsidiaries, as applicable, for the
periods covered thereby. Each of Holdings and each of its Subsidiaries has paid
all taxes and assessments payable by it which have become due, other than
(a) those that are being contested in good faith and adequately disclosed and
for which adequate reserves have been established in accordance with GAAP and
(b) immaterial amounts of taxes or assessments that Holdings and its
Subsidiaries are not aware are due; provided that upon Holdings or such
Subsidiary becoming aware that such taxes and assessments are due, such Person
shall promptly pay all such taxes and assessments, together with any interest
and additional charges thereon. There is no action, suit, proceeding,
investigation, audit or claim now pending or, to the knowledge of Holdings or
the Borrower, threatened (in writing) by any authority regarding any taxes
relating to Holdings or any of its Subsidiaries. As of the Funding Date, neither
Holdings nor any of its Subsidiaries has entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Holdings or any of
its Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of Holdings or any of its Subsidiaries not to be
subject to the normally applicable statute of limitations. Neither Holdings nor
any of its Subsidiaries has incurred, nor will any of them incur, any material
tax liability in connection with the Transaction or any other transactions
contemplated hereby (it being understood that the representation contained in
this sentence does not cover any future tax liabilities of Holdings or any of
its Subsidiaries arising as a result of the operation of their businesses in the
ordinary course of business) or any tax liability resulting from indemnification
(or yield protection provisions) under this Agreement).
          6.10. Compliance with ERISA. (a) Schedule 6.10(a) hereto sets forth
each Plan as of the date of this Agreement. Each Plan (and each related trust,
insurance contract or fund) is in substantial compliance with its terms and with
all applicable laws, including without limitation ERISA and the Code; each Plan
(and each related trust, if any) which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (or has submitted, or is within the remedial amendment
period for submitting, an application for a determination letter with the
Internal Revenue Service, and is awaiting receipt of a response) to the effect
that it meets the requirements of Sections 401(a) and 501(a) of the Code or is
comprised of a master or prototype plan that has received a favorable opinion
letter from the Internal Revenue Service; or a volume submitter plan that has
received a favorable advisory letter from the Internal Revenue Service; no
Reportable Event has occurred; no Employee Benefit Plan is a Multiemployer Plan;
no Plan has an Unfunded Current Liability that could reasonably be expected to
result in a material liability; no ERISA Event has occurred, or is reasonably
expected to occur, with respect to any Plan; all contributions required to be
made with respect to a Plan have been timely made or have been reflected on the
most recent consolidated balance sheet filed prior to the date hereof or accrued
in the accounting records of Holdings and its Subsidiaries; no action, suit,
proceeding, hearing, or audit or investigation by a Governmental Authority with
respect to the administration, operation or the investment of assets of any Plan
(other than routine claims and appeals for benefits) is pending, expected or
threatened that is reasonably expected to result in a material liability to
Holdings or any of its Subsidiaries; no Multiemployer Plan that is subject to
Section 412 of the Code or Section 302 of ERISA has applied for or received an
extension of any amortization period, within the meaning of Section 431(d) of
the Code or Section 304(d) of ERISA; Holdings, any of its Subsidiaries

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and any ERISA Affiliate have not withdrawn as a substantial employer so as to
become subject to the provisions of Section 4063 of ERISA or ceased making
contributions to any Plan subject to Section 4064(a) of ERISA that has
terminated and to which it made contributions at any time within the five Plan
years preceding the date of termination; none of Holdings, any of its
Subsidiaries or any ERISA Affiliate have incurred or reasonably expect to incur
any liability to the PBGC except for any liability for premiums due in the
ordinary course or other liability which could not reasonably be expected to
result in material liability, and no lien imposed under the Code or ERISA on the
assets of Holdings or any of its Subsidiaries or any ERISA Affiliate exists or
is expected to arise on account of any Plan; none of Holdings, any of its
Subsidiaries or any ERISA Affiliate has incurred, or is expected to incur, any
liability under Section 4069 or 4212(c) of ERISA; each Employee Benefit Plan
that is a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) has at all times been operated in compliance
with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code, except to the extent that any non-compliance with any such
provisions could not reasonably be expected to result in a material liability to
Holdings or any of its Subsidiaries; each Employee Benefit Plain that is group
health plan (as defined in 45 Code of Federal Regulations Section 160.103) has
at all times been operated in compliance with the provisions of the Health
Insurance Portability and Accountability Act of 1996 and the regulations
promulgated thereunder, except to the extent that any non-compliance with such
provisions and regulations could not reasonably be expected to result in a
material liability to Holdings or any of its Subsidiaries; no lien imposed under
the Code or ERISA on the assets of Holdings, any of its Subsidiaries or any
ERISA Affiliate exists or is expected to arise on account of any Plan; and
Holdings and its Subsidiaries may amend any Plan sponsored by any of them (other
than a defined benefit plan) to cease contributions thereunder and may terminate
any Plan sponsored by any of them without, in each case, incurring any material
liability (other than ordinary administrative termination costs that are
immaterial in nature);
          Subject to Section 6.10(b), each Non-U.S. Pension Plan has been
maintained in substantial compliance with its terms and with the requirements of
any and all applicable laws, statutes, rules, regulations and orders and has
been maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Non-U.S.
Pension Plan have been timely made. Neither Holdings nor any of its Subsidiaries
has incurred any obligation in connection with the termination of, or withdrawal
from, any Non-U.S. Pension Plan (other than a defined contribution plan). The
present value of the accrued benefit liabilities (whether or not vested) under
each Non-U.S. Pension Plan (other than a Non-U.S. Pension Plan that (i) is not
required to be funded under applicable law or (ii) is a defined contribution
plan), determined as of the end of Holdings’ most recently ended fiscal year on
the basis of actuarial assumptions, each of which is reasonable, did not exceed
the current value of the assets of such Non-U.S. Pension Plan allocable to such
benefit liabilities by an amount that could reasonably be expected to have a
Material Adverse Effect.
          (b) Without limiting the effect of preceding clause (a), neither
Holdings nor any of its Subsidiaries is or has at any time been, within the
United Kingdom, an employer (for the purposes of sections 38 to 51 of the United
Kingdom’s Pensions Act 2004) of an occupational pension scheme which is not a
money purchase scheme (both terms as defined in the United Kingdom’s Pension
Schemes Act 1993) or has at any time been “connected” with or an “associate” of
(as those terms are used in sections 38 and 43 of the United Kingdom’s Pensions
Act 2004) such an employer.
          6.11. Security Documents. (a) The provisions of each Security Document
(other than the Mortgages which are addressed in Section 6.11(b)) are effective
to create in favor of the Collateral Agent for the benefit of the Secured
Creditors a legal, valid and enforceable security interest of the type that it
purports to create in all right, title and interest of the Credit Parties in the
Collateral described therein, and the Collateral Agent, for the benefit of the
Secured Creditors, has (or upon filing of UCC financing statements and other
required filings registrations or notices or taking of possession or control

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(which shall occur within 10 days following the Funding Date) will have) a fully
perfected security interest in all right, title and interest in all of the
Collateral described therein, subject to no other Liens other than Permitted
Liens; provided that (i) the Borrower shall not be deemed to represent pursuant
to the foregoing that the U.S. Security Agreement creates a legal, valid and
enforceable security interest in (1) the Equity Interests of Endeavour Energy
Luxembourg S.a.r.l. or of Endeavour Energy New Ventures I, Ltd. or (2) any
Collateral (as defined in the U.S. Security Agreement) granted by any Grantor
(as defined in the U.S. Security Agreement) that is not organized under the laws
of the United States or any state thereof (other than Equity Interests held by
any such Grantor in any Person that is organized under the laws of the United
States or any state thereof), and (ii) no steps have been taken in order to
perfect any such security interest in the Equity Interests referred to in clause
(i)(1) above or the Collateral referred to in clause (i)(2) (other than Equity
Interests held by any such Grantor in any Person that is organized under the
laws of the United States or any state thereof), in each case granted pursuant
to the U.S. Security Agreement. The recordation of (i) the grant of security
interest in U.S. Patents and (ii) the grant of security interest in U.S.
Trademarks in the respective form attached to the U.S. Security Agreement, in
each case in the United States Patent and Trademark Office, together with
filings on Form UCC-1 made pursuant to the U.S. Security Agreement, will create,
to the extent as may be perfected by such filings and recordation, a perfected
security interest in the United States trademarks and patents covered by the
U.S. Security Agreement, and the recordation of the grant of security interest
in U.S. Copyrights in the form attached to the U.S. Security Agreement with the
United States Copyright Office, together with filings on Form UCC-1 made
pursuant to the U.S. Security Agreement, will create, to the extent as may be
perfected by such filings and recordation, a perfected security interest in the
United States copyrights covered by the U.S. Security Agreement.
          (b) Upon filing or recording, as applicable, with the appropriate
recording office, each Mortgage shall create, as security for the obligations
purported to be secured thereby, a valid and enforceable perfected first
priority security interest in and mortgage lien on the respective Mortgaged
Property in favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the Secured Creditors,
subject to no other Liens other than Permitted Liens.
          6.12. Properties. (a) All Real Property (other than Oil and Gas
Properties) leased by Holdings or any of its Subsidiaries as of the Funding
Date, and the nature of the interest therein, is set forth in Schedule 6.12(a)
hereto. Each of Holdings and each of its Subsidiaries has a valid and
indefeasible leasehold interest in the material properties set forth in Schedule
6.12(a) free and clear of all Liens other than Permitted Liens. As of the
Funding Date, none of Holdings or any of its Subsidiaries owns any Real Property
other than Oil and Gas Properties.
          (b) All Oil and Gas Properties owned or leased by Holdings or any of
its Subsidiaries as of the Funding Date (other than Oil and Gas Properties which
(i) are not developed, (ii) have no reserves or (iii) in which none of Holdings
or any of its Subsidiaries have any material working interests) are reflected in
the Reserve Report as of December 31, 2009 or are otherwise set forth in
Schedule 6.12(b).
          (c) Each of Holdings and each of its Subsidiaries, as applicable, has
good and defensible (from the perspective of a reasonably prudent investor in
the Oil and Gas Business) title to all of the Oil and Gas Properties included in
the most recent Reserve Report delivered pursuant to Section 5.13 or 7.01(d), as
the case may be, free from all Liens, claims and title imperfections, except for
(i) such imperfections of title as do not in the aggregate detract from the
value thereof to, or the use thereof in, the business of Holdings and its
Subsidiaries in any material respect, (ii) Oil and Gas Properties disposed of
since the date of the most recent Reserve Report as permitted by Section 8.02,
and (iii) Liens expressly permitted by Section 8.01. The quantum and nature of
the interest of Holdings and each of its Subsidiaries in and to the Oil and Gas
Properties as set forth in each Reserve Report includes or will

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include the entire interest of Holdings and each of its Subsidiaries in such Oil
and Gas Properties as of the date of such Reserve Report and are or will be
complete and accurate in all material respects as of the date of such Reserve
Report; and there are no “back-in” or “reversionary” interests held by third
parties which could reduce the interest (working, net revenue or otherwise) of
Holdings and its Subsidiaries in such Oil and Gas Properties in any material
respect, except as expressly set forth or given effect to in such Reserve
Report. Except for obligations to contribute a proportionate share of the costs
of defaulting or non-consenting co-owners or as otherwise expressly set forth in
the most recent Reserve Report, neither Holdings nor any Subsidiary is obligated
to bear any percentage share of the costs and expenses relating to the drilling,
development and production of the Oil and Gas Properties in excess of its
working interests.
          (d) Holdings and each of its Subsidiaries has complied with all
obligations under all licenses, leases, subleases and term mineral interests in
their respective Oil and Gas Properties and all such licenses, leases, subleases
and term mineral interests are valid, subsisting and in full force and effect,
and neither Holdings nor any of its Subsidiaries has knowledge that a default
exists under any of the terms or provisions, express or implied, of any of such
licenses, leases, subleases or interests or under any agreement to which the
same are subject, except to the extent any inaccuracy in the foregoing could not
reasonably be expected to result in a Material Adverse Effect. All of the Oil
and Gas Contracts and obligations of Holdings and each of its Subsidiaries that
relate to the Oil and Gas Properties are in full force and effect and constitute
legal, valid and binding obligations of Holdings and its Subsidiaries party
thereto, except to the extent any inaccuracy in the foregoing could not
reasonably be expected to result in a Material Adverse Effect. None of Holdings
or any of its Subsidiaries or, to the knowledge of Holdings or its Subsidiaries,
any other party to any licenses, leases, subleases or term mineral interests in
the Oil and Gas Properties or any Oil and Gas Contract (i) is in breach of or
default, or with the lapse of time or the giving of notice, or both, would be in
breach or default, with respect to any obligations thereunder, whether express
or implied, except such that could not reasonably be expected to result in a
Material Adverse Effect or (ii) has given or threatened to give notice of any
default under or inquiry into any possible default under, or action to alter,
terminate, rescind or procure a judicial reformation of, any licenses or lease
in the Oil and Gas Properties or any Oil and Gas Contract. Holdings and each of
its Subsidiaries enjoys peaceful and undisturbed possession under all such
licenses, leases, subleases and term mineral interests.
          (e) Holdings and each of its Subsidiaries has complied with all
obligations under all Authorizations, and to the best knowledge of Holdings and
the Borrower, no steps have been taken for the revocation, variation or refusal
of any Authorization, except to the extent any non-compliance with such
obligations or any such revocation, variation or refusal could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
          6.13. Capitalization. On and as of the Funding Date, (a) the
authorized capital stock of Holdings consists of (i) 450,000,000 shares of
common stock $.001 par value per share (such authorized shares of common stock,
together with any subsequently authorized shares of common stock of Holdings,
“Holdings Common Stock”) and (ii) 10,000,000 shares of preferred stock $.001 par
value and (b) the authorized capital stock of the Borrower consists of 10,000
ordinary shares of common stock, £0.10 par value per ordinary share. The
outstanding Equity Interests of each Credit Party have been duly authorized and
validly issued (to the extent applicable) and have been issued free of
preemptive rights and each Person listed on Schedule 6.13 hereto as of the
Funding Date owns beneficially and of record all of the Equity Interests it is
listed as owning free and clear of any Liens (other than Permitted Liens). As of
the Funding Date, except as set forth or Schedule 6.13, no Credit Party has
outstanding any securities convertible into or exchangeable for its respective
Equity Interests or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance

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(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its Equity Interests or any equity-related appreciation
or similar rights.
          6.14. Subsidiaries. On and as of the Funding Date, Holdings has no
Subsidiaries other than those Subsidiaries listed on Schedule 6.14 hereto.
Schedule 6.14 sets forth, as of the Funding Date, the percentage ownership
(direct and indirect) of Holdings in each class of capital stock or other Equity
Interests of each of its Subsidiaries and also identifies the direct owner
thereof. All outstanding shares of Equity Interests of each Subsidiary of
Holdings have been duly and validly issued, are fully paid and non-assessable
and have been issued free of preemptive rights. Other than as set forth on
Schedule 6.14, no Subsidiary of Holdings has outstanding any securities
convertible into or exchangeable for its Equity Interests or outstanding any
right to subscribe for or to purchase, or any options or warrants for the
purchase of, or any agreement providing for the issuance (contingent or
otherwise) of or any calls, commitments or claims of any character relating to,
its Equity Interests or any appreciation or similar rights. On the Funding Date,
100% of the Equity Interests of each Credit Party are owned directly or
indirectly by Holdings.
          6.15. Compliance with Statutes, etc. (a) Each of Holdings and each of
its Subsidiaries is qualified under and is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
and has obtained all required Authorizations from, all Governmental Authorities
in respect of the conduct of its business and the ownership of its property
(including statutes, regulations, orders and restrictions applicable to the Oil
and Gas Business and applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls, except such statutes,
regulations, orders and restrictions that are expressly addressed in
Section 6.17), except such non-compliances as could not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
          (b) Each of Holdings and each of its Subsidiaries is in compliance
with all bonding requirements for the ownership and operation of its Oil and Gas
Properties.
          6.16. Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.
          6.17. Environmental Matters. Except as could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect:
(a) each of Holdings and each of its Subsidiaries is in compliance with all
applicable Environmental Laws and, with respect to its current operations, has
obtained and is in compliance with all permits required of it under
Environmental Law, and there are no proceedings pending or, to the knowledge of
Holdings or the Borrower, threatened to revoke or rescind any such permit;
(b) there are no claims, proceedings, investigations or notices of violation
pending or, to the knowledge of Holdings or the Borrower, threatened against
Holdings or any of its Subsidiaries under any Environmental Law; (c) no Lien,
other than a Permitted Lien, has been recorded or, to the knowledge of Holdings
or the Borrower, threatened under any Environmental Law with respect to any Real
Property currently owned by Holdings or any of its Subsidiaries; (d) neither
Holdings nor any of its Subsidiaries has contracted to assume or accept
responsibility for any liability of any non-affiliated Person under any
Environmental Law; and (e) there are no facts, circumstances, conditions or
occurrences with respect to the past or present business or operations of
Holdings, any of its Subsidiaries or any of their respective predecessors, or
any Real Property or facility at any time owned, leased or operated by Holdings,
any of its Subsidiaries or any of their respective predecessors, that could be
reasonably expected to give rise to any claim, proceeding, investigation, action
or liability of or against Holdings or any of its Subsidiaries under any
Environmental Law.

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          6.18. Employment and Labor Relations. (a) Neither Holdings nor any of
its Subsidiaries is engaged in any unfair labor practice that could reasonably
be expected, either individually or in the aggregate, to have a Material Adverse
Effect. There is (a) no unfair labor practice complaint pending against Holdings
or any of its Subsidiaries or, to the knowledge of Holdings or the Borrower,
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against Holdings or any of its Subsidiaries
or, to the knowledge of Holdings or the Borrower, threatened (in writing)
against any of them, (b) no strike, labor dispute, slowdown or stoppage pending
against Holdings or any of its Subsidiaries or, to the knowledge of Holdings or
the Borrower, threatened (in writing) against Holdings or any of its
Subsidiaries, (c) no union representation question exists with respect to the
employees of Holdings or any of its Subsidiaries, (d) no legal actions,
lawsuits, arbitrations, administrative or other proceedings, charges,
complaints, investigations, inspections, audits or notices of violations or
possible violations are pending or, to the knowledge of Holdings or the
Borrower, threatened against Holdings or any of its Subsidiaries by or on behalf
of, or otherwise involving, any current or former employee, any person alleging
to be a current or former employee, any applicant for employment, or any class
of the foregoing, or any Governmental Authority, that involve the labor or
employment relations and practices of Holdings or any of its Subsidiaries,
including but not limited to claims of employment discrimination and (e) no
violation of the Fair Labor Standards Act or any other applicable federal, state
or foreign wage and hour laws, except (with respect to any matter specified in
clauses (a) — (e) above, either individually or in the aggregate) such as could
not reasonably be expected to have a Material Adverse Effect.
          (b) Neither Holdings nor any of its of their Subsidiaries is, within
the United Kingdom, engaged in any unfair or unlawful employment practice that
could reasonably be expected, either individually or in the aggregate, to have a
Material Adverse Effect. There is within the United Kingdom (i) no unfair or
discriminatory employment practice complaint or investigation pending against
Holdings or any of its of their Subsidiaries or, to the knowledge of Holdings or
the Borrower, threatened against any of them, before the United Kingdom’s
Equality and Human Rights Commission or Health and Safety Executive or any other
bodies with similar functions in relation to any person engaged as a worker or
afforded the status of a worker (under any laws applicable within the United
Kingdom), and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against Holdings or the Borrower
or any of either of their Subsidiaries or, to the knowledge or Holdings or the
Borrower, threatened (in writing) against any of them, (ii) no strike or other
employee relations dispute pending against Holdings or any of its Subsidiaries
or, to the knowledge of Holdings or the Borrower, threatened (in writing)
against any of them, (iii) no disagreement pending against Holdings or any of
its Subsidiaries or, to the knowledge of Holdings or the Borrower, threatened
(in writing) against any of them in respect of the relations of any of them with
any trade union, works council, special negotiating body, staff association or
any other body representing individuals afforded the status of workers (under
any laws applicable within the United Kingdom), (iv) no legal actions, lawsuits,
arbitrations, administrative or other proceedings, charges, complaints,
investigations, inspections, audits or notices of violations or possible
violations are pending or, to the knowledge of Holdings or the Borrower,
threatened against Holdings or any of its Subsidiaries by or on behalf of, or
otherwise involving, any current or former employee, any person alleging to be a
current or former employee, any applicant for employment or any other individual
claiming the status of, or protection afforded to, a worker (under any laws
applicable within the United Kingdom), or any Governmental Authority, that
involve the employment relations and practices of Holdings or any of its
Subsidiaries, including but not limited to claims of employment discrimination,
victimization or harassment on any irrational, perverse or prohibited bases,
accidents or injuries, breach of contract or unfair dismissal or any claims
under the United Kingdom’s Working Time Regulations 1998, National Minimum Wage
Act 1998, Data Protection Act 1998, Equal Pay Act 1970, Sex Discrimination Act
1975, Race Relations Act 1976, Disability Discrimination Act 1995, Employment
Equality (Sexual Orientation) Regulations 2003,

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Employment Equality (Age) Regulations 2006 or Employment Equality (Religion and
Belief) Regulations 2003, (v) no complaint of non-compliance by Holdings or any
of its Subsidiaries with any provisions of the Treaty of Rome, European Union
directives or other directly applicable European Union laws, statutes,
regulations, codes of conduct, collective agreements, terms and conditions of
employment, orders, declarations and awards relevant to any individual afforded
the status of a worker, except (with respect to any matter specified in clauses
(i) — (v) above, either individually or in the aggregate) such as could not
reasonably be expected to have a Material Adverse Effect.
          6.19. Intellectual Property, etc. Each of Holdings and each of its
Subsidiaries owns or has the right to use all the patents, trademarks, permits,
domain names, service marks, trade names, copyrights, licenses, franchises,
inventions, trade secrets, proprietary information and know-how of any type,
whether or not written (including, but not limited to, rights in computer
programs and databases) and formulas, or rights with respect to the foregoing,
and has obtained assignments of all leases, licenses and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to own or have
which, as the case may be, could reasonably be expected, either individually or
in the aggregate, to have a Material Adverse Effect.
          6.20. Indebtedness. Schedule 6.20 hereto sets forth a list of all
Indebtedness (including Contingent Obligations) of Holdings and its Subsidiaries
as of the Funding Date and which is to remain outstanding after giving effect to
the Transaction (excluding the Obligations) in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any Person
that directly or indirectly guarantees such debt.
          6.21. Insurance. Schedule 6.21 hereto sets forth a listing of all
insurance maintained by Holdings and its Subsidiaries as of the Funding Date,
with the amounts insured (and any deductibles) set forth therein.
          6.22. Holding Company. Holdings is a holding company and does not
(a) have any material liabilities (other than (i) liabilities arising under the
Credit Documents, any Class C Convertible Preferred Stock and any Junior
Financing, (ii) other liabilities which are permitted by this Agreement and are
incurred in connection with the financing and operation of Holdings’ and its
Subsidiaries’ businesses and (iii) taxes and other liabilities arising under
applicable law) or (b) own any material assets or engage in any operations or
business (other than (i) its direct or indirect ownership of its Subsidiaries
and (ii) Investments permitted under Section 8.05.
          6.23. Immaterial Subsidiaries. On the Funding Date, each of Endeavour
Energy Luxembourg S.àr.l., Endeavour Energy New Ventures I, Ltd. and Endeavour
Energy North Sea Limited is an Immaterial Subsidiary.
          SECTION 7. Affirmative Covenants. Each of Holdings and the Borrower
hereby covenants and agrees that on and after the Funding Date and until the
Term Loans and Notes (in each case together with interest thereon), Fees and all
other Obligations (other than indemnities described in Section 11.13 which are
not then due and payable) incurred hereunder and thereunder, are paid in full:
          7.01. Information Covenants. The Borrower will furnish to the
Administrative Agent and each Lender:
     (a) Monthly Reports. Within 30 days after the end of each fiscal month of
Holdings, the consolidated balance sheet of Holdings as at the end of such
fiscal month and the related consolidated statements of income and statement of
cash flows for such fiscal month and for the elapsed portion of the fiscal year
ended with the last day of such fiscal month, in each case (i) setting forth
comparative figures for the corresponding fiscal month in the prior fiscal year
and

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comparable forecast figures for such fiscal month as set forth in the respective
forecast delivered pursuant to Section 7.01(f) and (ii) in the form prepared for
Holdings’ and its Subsidiaries’ monthly internal management reporting package.
     (b) Quarterly Financial Statements. Within 45 days after the close of each
quarterly accounting period in each fiscal year of Holdings, (i) the
consolidated balance sheet of Holdings as at the end of such quarterly
accounting period and the related consolidated statements of income and retained
earnings and statement of cash flows for such quarterly accounting period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, in each case setting forth comparative figures for
all such financial information for the corresponding quarterly accounting period
in the prior fiscal year, and (ii) management’s discussion and analysis of the
important operational and financial developments during such quarterly
accounting period. All of the foregoing financial statements shall be certified
by an Authorized Officer of Holdings that they fairly present in all material
respects in accordance with GAAP the consolidated financial condition of
Holdings as of the dates indicated and the consolidated results of operations
for the periods indicated, subject to normal year-end audit adjustments and the
absence of footnotes.
     (c) Annual Financial Statements. Within 90 days after the close of each
fiscal year of Holdings, (i) the consolidated balance sheet of Holdings as at
the end of such fiscal year and the related consolidated statements of income
and retained earnings and statement of cash flows for such fiscal year, setting
forth comparative figures for the preceding fiscal year, and certified by KPMG
LLP or another independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent, accompanied by an
opinion of such accounting firm (which opinion shall be without a “going
concern” or like qualification or exception and without any qualification or
exception as to scope of audit) and (ii) management’s discussion and analysis of
the important operational and financial developments during such fiscal year.
     (d) Reserve Report. Prior to or concurrently with any delivery of financial
statements under clause (c) of this Section 7.01 and, solely as to each quarter
ending on June 30, under clause (b) of this Section 7.01 (or more frequently at
the Borrower’s option) (1) a Reserve Report (which shall be (i) an annual
Reserve Report (as described in the definition of such term) in the case of a
Reserve Report delivered in connection with annual financial statements or
(ii) a semi-annual Reserve Report (as so described) in the case of a Reserve
Report delivered in connection with quarterly financial statements for the
fiscal quarter ended June 30) setting forth, among other things, (x) the Oil and
Gas Properties owned by Holdings and each of its Subsidiaries and covered by
such Reserve Report, (y) the Proved Reserves and Probable Reserves attributable
to such Oil and Gas Properties and (z) a projection of the rate of production
and cash flows of such Proved Reserves and Probable Reserves as of the date as
of which the information set forth in such Reserve Report is provided, all in
accordance with the guidelines published by the SEC (but utilizing the pricing
parameters set forth in the definition of the term PV-10 Value (and, in the case
of an annual Reserve Report, in addition to such pricing parameters those
specified in such SEC guidelines) and utilizing such operating cost and other
assumptions as proposed by the Borrower and (2) a certificate of an Authorized
Officer showing any additions to or deletions from the Oil and Gas Properties
made by Holdings and each of its Subsidiaries and in Proved Reserves and
Probable Reserves attributable to such Oil and Gas Properties since the date of
the most recently delivered previous Reserve Report.

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     (e) Management Letters. Promptly after Holdings’ or any of its
Subsidiaries’ receipt thereof, a copy of any “management letter” received from
its certified public accountants and management’s response thereto.
     (f) Forecasts. No later than the 15th day after the end of each fiscal year
of Holdings, a forecast in form satisfactory to the Administrative Agent
(including forecasted statements of income, cash flow statement and balance
sheets for Holdings and its Subsidiaries on a consolidated basis) for each of
the twelve months of each succeeding fiscal year through the Maturity Date, in
each case setting forth, with appropriate discussion, the principal assumptions
upon which such budget is based.
     (g) Compliance Certificate. At the time of the delivery of the financial
statements provided for in Sections 7.01(b) and (c), a compliance certificate
from the chief financial officer of Holdings in the form of Exhibit H certifying
on behalf of Holdings that, to such officer’s knowledge after due inquiry, no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall (i) set forth in reasonable detail the
calculations required to establish whether Holdings and its Subsidiaries were in
compliance with the provisions of Sections 4.02(b), 4.02(c), 4.02(d), 4.02(e),
4.02(f), 8.01(w), 8.02(e), 8.02(f), 8.02(n), 8.02(o), 8.04(i)(x), 8.04(m), 8.07,
8.08, 8.09 and 8.10 at the end of such fiscal quarter or year, as the case may
be, (ii) if delivered with the financial statements required by Section 7.01(c),
set forth in reasonable detail the amount of (and the calculations required to
establish the amount of) Excess Cash Flow for the respective Excess Cash Flow
Payment Period and the amount of any required payment under Section 4.02(f) in
respect of such Excess Cash Flow Payment Period, (iii) certify that there have
been no changes to Schedule VI of the U.S. Security Agreement, in each case
since the Funding Date or, if later, since the date of the most recent
certificate delivered pursuant to this Section 7.01(g), or if there have been
any such changes, a list in reasonable detail of such changes (but, in each case
with respect to this clause (iii), only to the extent that such changes are
required to be reported to the Collateral Agent pursuant to the terms of the
U.S. Security Agreement) and whether Holdings and the other Credit Parties have
otherwise taken all actions required to be taken by them pursuant to the U.S.
Security Agreement in connection with any such changes and (iv) notify the
Administrative Agent of the acquisition by it or any of the Subsidiaries of any
Oil and Gas Property or Real Property (or any interest in any Oil and Gas
Property or Real Property) having a value in excess of $5,000,000.
     (h) Notice of Default, Litigation and Material Adverse Effect. Promptly,
and in any event within three Business Days after any officer of Holdings or any
of its Subsidiaries obtains knowledge thereof, notice of (A) the occurrence of
any event which constitutes a Default or an Event of Default, (B) any litigation
or governmental investigation or proceeding pending against Holdings or any of
its Subsidiaries (x) which, either individually or in the aggregate, has had, or
could reasonably be expected to have, a Material Adverse Effect or (y) with
respect to any Credit Documents or (C) any other event, change or circumstance
that has had, or could reasonably be expected to have, a Material Adverse
Effect.
     (i) Other Reports and Filings. Promptly after the filing or delivery
thereof, copies of all financial information, proxy materials and reports, if
any, which Holdings or any of its Subsidiaries shall (i) publicly file with the
SEC or (ii) deliver to holders (or any trustee, agent or other representative
therefor) of any Qualified Preferred Stock, any Junior Financing or any other
material Indebtedness, in each case pursuant to the terms of the documentation
governing the same.

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     (j) Environmental Matters. Promptly after any officer of Holdings or any of
its Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters, but only to the extent that such environmental
matters, either individually or when aggregated with all other such
environmental matters, could reasonably be expected to have a Material Adverse
Effect:
     (i) any pending or threatened claim, proceeding, investigation or notice of
violation issued under or pursuant to any Environmental Law against Holdings or
any of its Subsidiaries or any Real Property, facility or Oil and Gas Property
owned, leased or operated by Holdings or any of its Subsidiaries;
     (ii) any condition or occurrence on or arising from any Real Property,
facility or Oil and Gas Property owned, leased or operated by Holdings or any of
its Subsidiaries that could reasonably be expected to form the basis of an
claim, proceeding, investigation, action or notice of violation against Holdings
or any of its Subsidiaries or any such Real Property or facility under any
Environmental Law;
     (iii) issuance under any Environmental Law of any liens or restrictions on
the ownership, lease, occupancy, use or transferability by Holdings or any of
its Subsidiaries of any Real Property, facility or Oil and Gas Property owned,
operated or leased by Holdings or any of its Subsidiaries; and
     (iv) the taking of any removal or remedial action as required by any
Environmental Law or any Governmental Authority in response to the actual or
alleged presence, Release or threatened Release of any Hazardous Material on any
Real Property, facility or Oil and Gas Property owned, leased, used or operated
by Holdings or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings’
or such Subsidiary’s response thereto.
     (k) Landlord and Storage Agreements. Promptly after execution thereof,
copies of all future material agreements between a Credit Party and any
landlord, warehouseman, processor, shipper, bailee or other Person that owns any
premises at which any Collateral may be kept or that otherwise may possess or
handle any Collateral.
     (l) Other Information. From time to time, such other information or
documents (financial or otherwise, and including without limitation Project
Documents and amendments thereto) with respect to Holdings or any of its
Subsidiaries as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request.
Notwithstanding the foregoing, the obligations in clauses (b), (c) and (i) of
this Section 7.01 may be satisfied with respect to financial information (or, in
the case of such clause (i), other information) of Holdings and the Subsidiaries
by filing Holdings’ Form l0-K or 10-Q, as applicable (or, in the case of such
clause (i), such other applicable filing), with the SEC or by making such
information available on Holdings’ or the Borrower’s website, in each case to
the extent the Borrower has notified the Administrative Agent and the Lenders of
such filing or that such information is available on such website; provided that
to the extent such information is in lieu of information required to be provided
under Section 7.01(c), Holdings separately delivers to the Administrative Agent
a report and opinion of KPMG LLP or any other independent certified public
accounting firm of nationally recognized standing acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance
with

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generally accepted auditing standards and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception as
to the scope of such audit.
          7.02. Books, Records and Inspections; Annual Meetings. (a) Holdings
will, and will cause each of its Subsidiaries to, keep proper books of record
and accounts in which full, true and correct entries in conformity with GAAP and
all requirements of law shall be made of all dealings and transactions in
relation to its business and activities. Holdings will, and will cause each of
its Subsidiaries to, permit officers and designated representatives of the
Administrative Agent (i) to visit and inspect, under guidance of officers of
Holdings or such Subsidiary, any of the properties of Holdings or such
Subsidiary and (ii) to examine the books of account of Holdings or such
Subsidiary and discuss the affairs, finances and accounts of Holdings or such
Subsidiary with, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable prior notice and at such reasonable
times and intervals and to such reasonable extent as the Administrative Agent
may reasonably request.
          (b) At the request of the Administrative Agent, Holdings will within
120 days after the close of each fiscal year of Holdings, hold a meeting (which
may be by conference call or teleconference), at a time and place selected by
Holdings and reasonably acceptable to the Administrative Agent, with all of the
Lenders that choose to participate, to review the financial results of the
previous fiscal year and the financial condition of Holdings and its
Subsidiaries and the budgets presented for the current fiscal year of Holdings
and its Subsidiaries.
          7.03. Maintenance of Property; Insurance. (a) Holdings will, and will
cause each of its Subsidiaries to, (i) keep all property necessary to the
business of Holdings and its Subsidiaries in good working order and condition,
ordinary wear and tear excepted and subject to the occurrence of casualty
events, (ii) maintain with financially sound and reputable insurance companies
insurance on all such property and against all such risks as is consistent and
in accordance with industry practice for companies similarly situated owning
similar properties and engaged in similar businesses as Holdings and its
Subsidiaries, and (iii) furnish to the Administrative Agent, upon its request
therefor, full information as to the insurance carried. Such insurance shall
include physical damage insurance on all real and personal property, including,
without limitation, on Oil and Gas Properties (whether now owned or hereafter
acquired) on an all risk basis. The provisions of this Section 7.03 shall be
deemed supplemental to, but not duplicative of, the provisions of any Security
Documents that require the maintenance of insurance.
          (b) Holdings will, and will cause each of its Subsidiaries to, at all
times keep its property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by Holdings and/or such
Subsidiaries) (i) shall be endorsed to the Collateral Agent’s satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and/or additional insured), (ii) shall state
that such insurance policies shall not be canceled without at least 30 days’
prior written notice thereof by the respective insurer to the Collateral Agent,
(iii) shall provide that the respective insurers irrevocably waive any and all
rights of subrogation with respect to the Collateral Agent and the other Secured
Creditors, and (iv) shall be deposited with the Collateral Agent.
          (c) If Holdings or any of its Subsidiaries shall fail to maintain
insurance in accordance with this Section 7.03, or if Holdings or any of its
Subsidiaries shall fail to so endorse and deposit all policies or certificates
with respect thereto, the Administrative Agent shall have the right (but shall
be under no obligation) to procure such insurance, and Holdings and the Borrower
jointly and severally agree to reimburse the Administrative Agent for all costs
and expenses of procuring such insurance.
          7.04. Existence; Franchises; Oil and Gas Properties. (a) Holdings
will, and will cause each of its Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force

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and effect its existence and its material rights, franchises, licenses, permits,
copyrights, trademarks and patents and pay all royalties when due; provided,
however, that nothing in this Section 7.04 shall prevent (a) sales of assets and
other transactions by Holdings or any of its Subsidiaries in accordance with
Section 8.02 or (b) the withdrawal by Holdings or any of its Subsidiaries of its
qualification as a Business in any jurisdiction other than the United States or
any State thereof or the United Kingdom if such withdrawal could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
          (b) Holdings will, and will cause each of its Subsidiaries to,
(i) comply in all material respects with the terms and provisions of all oil and
gas leases and licenses relating to the Oil and Gas Properties of Holdings and
each of its Subsidiaries and all contracts and agreements relating thereto or to
the production and sale of Hydrocarbons therefrom; provided that Holdings and
its Subsidiaries shall have the right to abandon Oil and Gas Properties in the
exercise of Holdings’ or such Subsidiaries’ reasonable judgment, in each case in
compliance with the relevant Oil and Gas Contracts governing such Oil and Gas
Properties, and (ii) with respect to any such Oil and Gas Properties or oil and
gas gathering assets that are operated by operators other than Holdings or any
of its Subsidiary, use all commercially reasonable efforts to enforce in a
manner consistent with industry practice the operator’s contractual obligations
to maintain, develop, and operate such Oil and Gas Properties and oil and gas
gathering assets in accordance with the applicable operating agreements.
          7.05. Compliance with Statutes, etc. (a) Holdings will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls other than such statutes,
regulations, orders and restrictions that are expressly addressed in
Section 7.06), except such non-compliances as could not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
          (b) Holdings shall, and shall cause each of its Subsidiaries to,
maintain and comply with the terms and conditions of any material Authorization
required under any law or regulation (including Environmental Law) (i) to enable
it to perform its obligations and/or exercise its rights under, or the validity
or enforceability of, each Credit Document and Project Document and (ii) to
enable it to conduct the Oil and Gas Business in which has an interest except,
in the case of preceding clause (ii) only, such failure to maintain or
non-compliance as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
          7.06. Compliance with Environmental Laws. (a) Holdings will comply,
and will cause each of its Subsidiaries to comply, with all Environmental Laws
and permits applicable to, or required by, the ownership, lease or operation of
Real Property, facilities and Oil and Gas Property now or hereafter owned,
leased or operated by Holdings or any of its Subsidiaries, except such
noncompliances as could not, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, and will promptly pay or cause to
be paid all costs and expenses for which Holdings or its Subsidiaries are
legally obligated that are incurred in connection with such compliance, and will
keep or cause to be kept all such Real Property, facilities and Oil and Gas
Properties free and clear of any Liens imposed pursuant to such Environmental
Laws. Holdings and its Subsidiaries will generate, use, treat, store, Release
and dispose of, and will cause the generation, use, treatment, storage, Release
and disposal of Hazardous Materials on any Real Property, facilities or Oil and
Gas Properties now or hereafter owned, leased or operated by Holdings or any of
its Subsidiaries, and transport or cause the transportation of Hazardous
Materials to or from any such Real Property, facilities or Oil and Gas
Properties in compliance with all applicable Environmental Laws, except for such
Hazardous Materials generated, used, treated, stored, Released and disposed of
at any such Real Properties, facilities or Oil and

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Gas Properties in connection with or arising out of the business or operations
of Holdings or any of its Subsidiaries as would not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
          (b) Upon (i) the receipt by the Administrative Agent or any Lender of
any notice from the Borrower of the type described in Section 7.01(j), (ii) a
reasonable determination that Holdings or any of its Subsidiaries are not in
compliance with Section 7.06(a) or (iii) the exercise by the Administrative
Agent or the Lenders of any of the remedies pursuant to the penultimate
paragraph of Section 9, each of Holdings and the Borrower will (in each case)
collectively, or if either Holdings or the Borrower so desire, individually,
provide, upon the request of the Administrative Agent at the sole expense of
Holdings and the Borrower, as applicable, an environmental site assessment
report concerning any Real Property or facilities owned, leased or operated by
Holdings or any of its Subsidiaries, prepared by an environmental consulting
firm reasonably acceptable to by the Administrative Agent, indicating, as the
circumstances may dictate, the presence or absence of Hazardous Materials and
the potential cost of any removal or remedial action in connection with such
Hazardous Materials on such Real Property or facilities. If either Holdings or
the Borrower fails to provide the same within 30 days after such request was
made, the Administrative Agent may order the same, the cost of which shall be
borne by the non-responsive Credit Party; and each of Holdings and the Borrower
shall grant and hereby grants to the Administrative Agent and the Lenders and
their respective agents access to such Real Property and specifically grant the
Administrative Agent and the Lenders an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment at any
reasonable time upon reasonable notice to Holdings and the Borrower, all at the
sole expense of each of Holdings and the Borrower.
          7.07. ERISA. (a) As soon as reasonably practicable and, in any event,
within ten (10) days after Holdings, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
Holdings will deliver to each of the Lenders a certificate of any Authorized
Officer of Holdings setting forth the full details as to such occurrence and the
action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given or filed by Holdings, such Subsidiary, the Plan administrator or such
ERISA Affiliate to or with the PBGC or any other Governmental Authority, or a
Plan participant with respect thereto, and any notices received by Holdings,
such Subsidiary or ERISA Affiliate from the PBGC or any other Governmental
Authority, or a Plan participant with respect thereto: an ERISA Event (except to
the extent that Holdings has previously delivered to the Lenders a certificate
and notices (if any) concerning such event pursuant to the next clause hereof);
a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA becoming subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with
respect to such Plan within the following 30 days (except to the extent that a
waiver to the advance reporting requirement of PBGC Regulation Section 4043.61
applies with respect to such event); a failure of Holdings, any of its
Subsidiaries, or an ERISA Affiliate to timely make any contribution required to
be made with respect to a Plan or Non-U.S. Pension Plan; the existence of
potential withdrawal liability under Section 4201 of ERISA if Holdings, any of
its Subsidiaries and any ERISA Affiliate were to withdraw completely from any
and all Multiemployer Plans if such withdrawal is reasonably expected to occur
and such liability could reasonably be expected to result in a material
liability; the adoption of, or the commencement of contributions to, any Plan
subject to Section 412 of the Code by Holdings, any of its Subsidiaries or any
ERISA Affiliate; the adoption of any amendment to a Plan subject to Section 412
of the Code that results in a material increase in the contribution obligations
of Holdings, any of its Subsidiaries or any ERISA Affiliate; a Plan has an
Unfunded Current Liability that could reasonably be expected to result in a
material liability; with respect to group health plans (as defined in
Section 607(1) of ERISA, or Section 4980B(g)(2) of the Code), a

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violation of the provisions of Part 6 of subtitle B of Title 1 of ERISA and
Section 4980B of the Code that is reasonably expected to result in a material
liability to Holdings or any of its Subsidiaries; with respect to group health
plans (as defined in 45 Code of Federal Regulations Section 160.103), a
violation of the Health Insurance Portability and Accountability Act of 1996 and
the regulations promulgated thereunder that could reasonably be expected to
result in a material liability to Holdings or any of its Subsidiaries; or the
incurrence of any material liability by Holdings or any of its Subsidiaries
pursuant to any portion of an employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA). Holdings will
deliver to each of the Lenders (i) a copy of each funding waiver request filed
with the Internal Revenue Service or any other Governmental Authority with
respect to any Plan pursuant to Section 412(d) of the Code or Section 302(c) of
ERISA and all communications received by Holdings, any of its Subsidiaries or
any ERISA Affiliate from the Internal Revenue Service or any other Governmental
Authority regarding such funding waiver request, (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA and (iii) a complete copy of the
annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the U.S. Department of
Labor. In addition to any certificates or notices delivered to the Lenders
pursuant to the first sentence of this Section 7.07(a), copies of annual reports
and any records, documents or other information required to be furnished to the
PBGC or any other Governmental Authority, and any material notices received by
Holdings or any of its Subsidiaries or any ERISA Affiliate, with respect to any
Plan or Non-U.S. Plan, shall be delivered to the Lenders no later than ten
(10) days after the date such annual reports have been filed or such records,
documents and/or information have been furnished to the PBGC or other
Governmental Authority or such notice has been received by Holdings, any of its
Subsidiaries, or any ERISA Affiliate, as applicable.
          (b) If, at any time after the date of this Agreement, Holdings or any
of its Subsidiaries or any ERISA Affiliate maintains, or contributes to (or
incurs an obligation to contribute to), a pension plan as defined in
Section 3(2) of ERISA that is subject to Section 412 of the Code or Section 302
or Title IV of ERISA (including, without limitation, a Multiemployer Plan) which
is not set forth in Schedule 6.10(a) hereto as may be updated from time to time,
then Holdings shall deliver to the Agent an updated Schedule 6.10(a) as soon as
reasonably practicable and, in any event, within ten (10) days after Holdings,
such Subsidiary or such ERISA Affiliate first maintains, or contributes to (or
incurs an obligation to contribute to), such pension plan. Such updated
Schedule 6.10(a) shall supersede and replace the existing Schedule 6.10(a).
          (c) Holdings and each of its applicable Subsidiaries shall ensure that
all Non-U.S. Plans administered by it or to which it contributes obtains or
retains (as applicable) registered status under and as required by applicable
law and is administered in a timely manner in all respects in compliance with
all applicable laws, except where the failure to do any of the foregoing, either
individually or in the aggregate, would not be reasonably likely to result in a
Material Adverse Effect.
          (d) Holdings and its Subsidiaries shall ensure that none of Holdings
or any of its Subsidiaries is or has at any time been, within the United
Kingdom, an employer (for the purposes of sections 38 through 51 of the United
Kingdom’s Pensions Act 2004) of an occupational pension scheme which is not a
money purchase scheme (both terms as defined in the United Kingdom’s Pension
Schemes Act 1993) or “connected” with or an “associate” of (as those terms are
used in sections 38 or 43 of the United Kingdom’s Pensions Act 2004) such an
employer.
          7.08. End of Fiscal Years; Fiscal Quarters. Holdings will cause
(a) its and each of its Subsidiaries’ fiscal years to end on December 31 of each
calendar year and (b) its and each of its

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Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and
December 31; provided that nothing in this Section 7.08 shall prohibit any
Subsidiary of Holdings from maintaining a tax year that does not end on
December 31.
          7.09. Performance of Obligations. Holdings will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, loan agreement or credit agreement and
each other agreement, contract or instrument by which it is bound, except such
non-performances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
          7.10. Payment of Taxes. Holdings will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, would become a Lien or charge
upon any properties of Holdings or any of its Subsidiaries not otherwise
permitted under Section 8.01(a); provided that neither Holdings nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
          7.11. Use of Proceeds. The Borrower will use the proceeds of the Term
Loans only as provided in Section 6.08.
          7.12. Additional Security; Further Assurances; etc. (a) Holdings will,
and will cause each other Credit Party to, grant to the Collateral Agent for the
benefit of the Secured Creditors security interests and Mortgages in such assets
and Real Property of Holdings and such other Credit Party (including, without
limitation, Oil and Gas Properties and other properties of Holdings and such
other Credit Party acquired subsequent to the Funding Date) as are not covered
by the original Security Documents and as may be reasonably requested from time
to time by the Administrative Agent or the Required Lenders (collectively, the
“Additional Security Documents”). All such security interests and Mortgages
shall be granted pursuant to documentation satisfactory in form and substance to
the Collateral Agent and shall constitute valid and enforceable perfected
security interests, hypothecations and Mortgages superior to and prior to the
rights of all third Persons and enforceable against third parties and subject to
no other Liens except for Permitted Liens. The Additional Security Documents or
instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Security Documents and all taxes, fees and other
charges payable in connection therewith shall have been paid in full. It is
understood and agreed that, notwithstanding anything to the contrary above in
this clause (a), neither Holdings nor any of its Subsidiaries will be required
pursuant to this clause (a) to (i) grant a security interest in or mortgage on
any Oil and Gas Property that would not otherwise be required under
Section 7.12(g), (ii) grant a security interest in or mortgage on any leased
Real Property that is not an Oil and Gas Property or (iii) grant a security
interest in or mortgage on any owned Real Property that is not an Oil and Gas
Property unless (x) any such item of Real Property individually has a Fair
Market Value of at least $2,500,000 or (y) the aggregate Fair Market Value of
such Real Property that would otherwise be excluded from the requirements of
this clause (a) would exceed $10,000,000.
          (b) Holdings will, and will cause each of the other Credit Parties to,
at the expense of Holdings and the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports, landlord lien waivers, collateral access agreements,
bailee agreements, control agreements and other assurances or instruments and
take such further steps relating to the Collateral covered by any of

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the Security Documents as the Collateral Agent may reasonably require.
Furthermore, Holdings will, and will cause the other Credit Parties to, deliver
to the Collateral Agent such opinions of counsel, title insurance and other
related documents as may be reasonably requested by the Collateral Agent to
assure itself that this Section 7.12 has been complied with.
          (c) Holdings will cause each Non-Guarantor Subsidiary that ceases to
be an Immaterial Subsidiary to execute and deliver all Security Documents (in
such form as may be appropriate, as determined by the Administrative Agent, in
light of the jurisdiction of organization of such Subsidiary and the location of
assets owned by such Subsidiary) and all other relevant documentation (including
opinions of counsel as of the type described in Section 5) as such Subsidiary
would have had to deliver if such Subsidiary were a Credit Party on the Funding
Date.
          (d) If the Administrative Agent or the Required Lenders reasonably
determine that they are required by law or regulation to have appraisals
prepared in respect of any Real Property of Holdings and the other Credit
Parties constituting Collateral, Holdings and the Borrower will, at their own
expense, provide to the Administrative Agent appraisals which satisfy the
applicable requirements of the Real Estate Appraisal Reform Amendments of the
Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended,
and which shall otherwise be in form and substance satisfactory to the
Administrative Agent.
          (e) Each of Holdings and the Borrower agree that each action required
by clauses (a) through (d) of this Section 7.12 shall be completed as soon as
possible, but in no event later than 60 days after such action is requested to
be taken by the Administrative Agent or the Required Lenders; provided that, in
no event will Holdings or any of its Subsidiaries be required to take any
action, other than using its commercially reasonable efforts, to obtain consents
from third parties with respect to its compliance with this Section 7.12.
          (f) Within 90 days after Funding Date, furnish the Administrative
Agent with title information reasonably satisfactory to the Administrative Agent
showing good and defensible (from the perspective of a reasonably prudent
investor in the Oil and Gas Business) title, subject only to Permitted Liens, to
U.S. Oil and Gas Properties representing in the aggregate not less than 85% of
2P Reserve Value of Holdings’ and its Subsidiaries’ U.S. Oil and Gas Properties
as of December 31, 2009, and within 60 days after the making of a request
therefor by the Administrative Agent, furnish such title information or Oil and
Gas Contracts as may be necessary to achieve title information coverage with
respect to Oil and Gas Properties representing in the aggregate not less than
85% of 2P Reserve Value as set forth in the Reserve Report most recently
delivered pursuant to Section 7.01(d) prior to the making of such request.
          (g) Regularly monitor engineering data covering all Oil and Gas
Properties of Holdings and each of its Subsidiaries and mortgage or cause to be
mortgaged such of the same to the Collateral Agent on behalf of the Secured
Creditors pursuant to a Mortgage to the extent necessary to ensure that the
Obligations shall at all times be secured by first priority perfected Liens and
security interests in (i) each Oil and Gas Property having an individual value
of $5,000,000 or more (on a contribution to 2P Reserve Value basis) and (ii) Oil
and Gas Properties in the aggregate representing not less than 85% of the
aggregate 2P Reserve Value attributable to all Oil and Gas Properties, in each
case based on the 2P Reserve Value reflected in the most recent Reserve Report.
          7.13. Ownership of Subsidiaries; etc. Except pursuant to a Permitted
Acquisition consummated in accordance with the terms hereof, Holdings will, and
will cause each of its Subsidiaries to, own, directly or indirectly, 100% of the
Equity Interests of each of their Subsidiaries (other than, in the case of a
Non-U.S. Subsidiary of Holdings, directors’ qualifying shares and/or other
nominal amounts of shares required to be held by local nationals, in each case
to the extent required by applicable law).

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          7.14. Qualified Preferred Stock. Holdings will pay all Dividends on
its Qualified Preferred Stock (other than Class C Convertible Preferred Stock)
solely through the issuance of additional shares of such Qualified Preferred
Stock (but not in cash); provided that in lieu of issuing additional units of
such Qualified Preferred Stock as Dividends, Holdings may increase the
liquidation preference of the units of the Qualified Preferred Stock in respect
of which Dividends have accrued.
          7.15. Maintenance of Company Separateness. Holdings will, and will
cause each of its Subsidiaries to, satisfy customary Business formalities,
including the holding of regular Board of Directors’ and members’ meetings or
action by managers or members without a meeting and the maintenance of Business
records. Neither Holdings nor any other Credit Party shall make any payment to a
creditor of any Non-Guarantor Subsidiary in respect of any liability of any
Non-Guarantor Subsidiary, and no bank account of any Non-Guarantor Subsidiary
shall be commingled with any bank account of Holdings or any other Credit Party.
Any financial statements distributed to any creditors of any Non-Guarantor
Subsidiary shall clearly establish or indicate the corporate separateness of
such Non-Guarantor Subsidiary from Holdings and its other Subsidiaries. Finally,
neither Holdings nor any of its Subsidiaries shall take any action, or conduct
its affairs in a manner, which is likely to result in the Business existence of
Holdings, any other Credit Party or any Non-Guarantor Subsidiaries being
ignored, or in the assets and liabilities of Holdings or any other Credit Party
being substantively consolidated with those of any other such Person or any
Non-Guarantor Subsidiary in a bankruptcy, reorganization or other insolvency
proceeding.
          7.16. Board Information Rights. Holdings and (if applicable) the
Borrower shall (i) give the Administrative Agent notice of all meetings and
activities of the Board of Directors of each of Holdings and (if applicable) the
Borrower at the same time as furnished to the directors of Holdings and (if
applicable) the Borrower, (ii) provide the Administrative Agent all notices,
documents and information furnished to the directors of Holdings and (if
applicable) the Borrower, whether at or in connection with a meeting, an action
by written consent or otherwise, at the same time furnished to such directors,
(iii) provide the Administrative Agent copies of the minutes of all such
meetings at the time such minutes are furnished to the members of the applicable
Board of Directors and (iv) furnish to the Administrative Agent, at the same
time such information is delivered to the Board of Directors of Holdings,
comparable figures with respect to annual financial statements delivered
pursuant to Section 7.01(c) as set forth in the respective forecast delivered
pursuant to Section 7.01(f). Notwithstanding any other provision of this
Section 7.16, Holdings and the Borrower shall be entitled to withhold
information from the Administrative Agent delivered to such Board of Directors
prior to any meeting of such Board of Directors if Holdings or the Borrower, as
the case may be, reasonably believes, at the recommendation of counsel, there is
a reasonable likelihood that the receipt of such information by Administrative
Agent would create a conflict of interest for in respect of the Term Loans or,
if privileged, would reasonably be expected to effectively waive the
attorney/client privilege of Holdings or the Borrower with respect thereto.
Holdings and the Borrower will, promptly following request therefor, cause the
Chief Executive Officer and/or the Chief Financial Officer (as determined by the
Administrative Agent) of each of Holdings and the Borrower to meet
(telephonically, or at the Administrative Agent’s option, in person) with
representatives of the Administrative Agent to review and discuss any documents
or other information delivered to the Administrative Agent pursuant to this
Section 7.16.
          7.17. Permitted Acquisitions. (a) Subject to the provisions of this
Section 7.17 and the requirements contained in the definition of Permitted
Acquisition, the Qualified Credit Parties may from time to time effect Permitted
Acquisitions, so long as (in each case except to the extent the Required Lenders
otherwise specifically agree in writing in the case of a specific Permitted
Acquisition): (i) no Default or Event of Default shall have occurred and be
continuing at the time of the consummation of the proposed Permitted Acquisition
or immediately after giving effect thereto; (ii) the Borrower shall have given
to the Administrative Agent and the Lenders at least 10 Business Days’ prior
written notice of any

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Permitted Acquisition (or such shorter period of time as may be reasonably
acceptable to the Administrative Agent), which notice shall describe in
reasonable detail the principal terms and conditions of such Permitted
Acquisition; (iii) drafts of the definitive documentation for each such
Permitted Acquisition shall have been delivered to the Administrative Agent at
least five Business Days’ prior to the consummation thereof (with subsequent
drafts to be delivered to the Administrative Agent as and when such drafts
become available to the Borrower); (iv) in the case of any Material Permitted
Acquisition, calculations are made by the Borrower with respect to the financial
covenant contained in Sections 8.08 through 8.10, inclusive, for the respective
Calculation Period on a Pro Forma Basis as if the respective Material Permitted
Acquisition (as well as all other Material Permitted Acquisitions theretofore
consummated after the first day of such Calculation Period) had occurred on the
first day of such Calculation Period, and such calculations shall show that such
financial covenants would have been complied with as of the last day of such
Calculation Period; (v) in the case of any Material Permitted Acquisition, based
on good faith projections prepared by the Borrower for the period from the date
of the consummation of the respective Material Permitted Acquisition to the date
which is one year thereafter, the level of financial performance measured by the
financial covenants set forth in Sections 8.08 through 8.10, inclusive, shall be
better than or equal to such level as would be required to provide that no
Default or Event of Default would exist under the financial covenants contained
in such Sections 8.08 through 8.10, inclusive, as compliance with such financial
covenants would be required through the date which is one year from the date of
the consummation of the respective Material Permitted Acquisition; (vi) all
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of such Permitted Acquisition (both before and after giving effect
thereto), unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date; (vii) such Permitted Acquisition is permitted
under, and is consummated in accordance with, Section 8.02(n), (o) or (p); and
(viii) the Borrower shall have delivered to the Administrative Agent and each
Lender a certificate executed by an Authorized Officer of the Borrower,
certifying to the best of such officer’s knowledge, compliance with the
requirements of preceding clauses (i) through (vii), inclusive, and containing
the calculations (in reasonable detail) required by preceding clauses (iv),
(v) and (vii).
          (b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, or the acquisition of capital stock or other
Equity Interest of any Person, the capital stock or other Equity Interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to (and to the
extent required by) the applicable Security Document.
          (c) The Borrower will cause each Subsidiary which is formed to effect,
or is acquired pursuant to, a Permitted Acquisition to comply with, and to
execute and deliver all of the documentation as and to the extent required by,
Sections 7.12 and 8.15, to the reasonable satisfaction of the Administrative
Agent.
          (d) The consummation of each Permitted Acquisition shall be deemed to
be a representation and warranty by each of Holdings and the Borrower that the
certifications pursuant to this Section 7.17 are true and correct and that all
conditions thereto have been satisfied and that same is permitted in accordance
with the terms of this Agreement, which representation and warranty shall be
deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 6 and 9.
          7.18. Commodity Hedging Agreements. From and after the 90th day
following the Funding Date, Holdings and its Subsidiaries will maintain in
effect Commodity Hedging Agreements with one or more Approved Third Party Credit
Providers that establish minimum prices in accordance

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with the Borrower’s hedging policies as in effect on the Funding Date or in
accordance with generally accepted business practice on a volume of Hydrocarbons
equal to not less than (i) 50% of the projected PDP production (measured as of
each date of delivery to the Administrative Agent of the Reserve Reports and
certificates required by Section 7.01(d)) from the Oil and Gas Properties of
Holdings and its Subsidiaries for the succeeding twelve calendar months and
(ii) 35% of such projected PDP production for the twelve calendar month period
subsequent to the calendar month period referred to in preceding clause (i). It
is understood and agreed that Reserve Reports reflect projected production on an
annual basis, and the Borrower shall be permitted to determine projected
production on a monthly basis for purposes of this Section 7.18 by prorating
annual production reflected in such Reserve Reports over the months covered
thereby or using such other method as the Borrower deems reasonable.
          7.19. Project Documents, etc. Each Credit Party shall (i) ensure that
none of its rights under or in respect of any Project Document are at any time
cancelled, terminated, suspended or limited if the same would be reasonably
likely to result in a Material Adverse Effect, (ii) not agree to any waiver,
amendment, termination or cancellation of any Project Document if the same would
be reasonably likely to result in Material Adverse Effect, (iii) duly and
properly perform, in all material respects, its obligations under the Project
Documents (except to the extent, if any, that such performance is inconsistent
with its obligation under the Credit Documents or any such failure to perform as
could not, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect), (iv) exercise its rights, under and in respect
of the Project Documents consistently with its obligations under the Credit
Documents and (v) not enter into any Project Document which would be reasonably
likely to result in a Material Adverse Effect.
          7.20. Oil and Gas Properties. Each Credit Party shall (i) exercise
such votes and other rights as it may have under the Project Documents with a
view to ensuring (so far as able) that each Oil and Gas Property in which
Holding or any of its Subsidiaries has an interest is at all times exploited and
operated in a reasonable and prudent manner and in accordance with good industry
practice, all applicable laws and regulations and the provisions of the Project
Documents, (ii) not concur in, and shall vote against, any proposal or decision
to abandon all or any material part of any of Oil and Gas Properties in which
Holdings or any of its Subsidiaries has an interest unless the Administrative
Agent has granted its prior written consent, (iii) not exercise its rights on
any operating or similar committee in a manner that would be materially
prejudicial to the interests of any Credit Party, the Administrative Agent or
the Lenders and (iv) maintain full and proper technical and financial records in
relation to each Oil and Gas Property in which Holdings or any of its
Subsidiaries has an interest and ensure (so far as it is able) that the
Administrative Agent (and/or any person nominated by it) is afforded reasonable
access to each Oil and Gas Property in which it has an interest and all such
records during normal business hours on reasonable notice.
          7.21. Listing of the Notes. (a) The Borrower shall (i) cause the Notes
(including any Notes issued in connection with the payment of PIK Interest) to
be admitted for listing on either the Cayman Island Stock Exchange or Channel
Island Stock Exchange (either such Exchange, an “Approved Stock Exchange”) prior
to December 31, 2010, in either case in accordance with the listing rules
promulgated by the respective Approved Stock Exchange and applicable law,
(ii) cause the Notes to continue to be listed on an Approved Stock Exchange at
all times from and after December 31, 2010 and (iii) comply with all obligations
required pursuant to the respective Approved Stock Exchange relating to the
continued listing of the Notes on such Approved Stock Exchange.
          (b) Promptly following receipt thereof by the Borrower, the Borrower
shall deliver to the Administrative Agent copies of all financial information,
reports, documents or other materials filed with an Approved Stock Exchange.

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          SECTION 8. Negative Covenants. Each of Holdings and the Borrower
hereby covenants and agrees that on and after the Funding Date and until the
Term Loans and Notes (in each case, together with interest thereon), Fees and
all other Obligations (other than any indemnities described in Section 11.13
which are not then due and payable) incurred hereunder and thereunder, are paid
in full:
          8.01. Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute; provided that the
provisions of this Section 8.01 shall not prevent the creation, incurrence,
assumption or existence of the following (Liens described below are herein
referred to as “Permitted Liens”):
     (a) inchoate Liens for taxes, assessments or governmental charges or levies
not yet due or Liens for taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP;
     (b) Liens in respect of property or assets of Holdings or any of its
Subsidiaries imposed by law or which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as operators’,
vendors’, carriers’, warehousemen’s, materialmen’s, repairmen’s, suppliers’,
workers’, construction and mechanics’ liens and other similar Liens arising in
the ordinary course of business, and (i) which do not in the aggregate
materially detract from the value of Holdings’ or such Subsidiary’s property or
assets or materially impair the use thereof in the operation of the business of
Holdings or such Subsidiary or (ii) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien;
     (c) Liens in existence on the Funding Date which are listed, and the
property subject thereto described, in Schedule 8.01(c) hereto, plus renewals,
replacements and extensions of such Liens; provided that (i) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does not
increase from that amount outstanding at the time of any such renewal,
replacement or extension and (ii) any such renewal, replacement or extension
does not encumber any additional assets or properties of Holdings or any of its
Subsidiaries;
     (d) Liens created by or pursuant to this Agreement and the Security
Documents;
     (e) (i) licenses, sublicenses, leases or subleases granted by Holdings or
any of its Subsidiaries to other Persons not materially interfering with the
conduct of the business of Holdings or any of its Subsidiaries and (ii) any
interest or title of a lessor, sublessor or licensor under any lease or license
agreement permitted by this Agreement to which Holdings or any of its
Subsidiaries is a party;
     (f) Liens upon assets of Holdings or any of its Subsidiaries subject to
Capitalized Lease Obligations to the extent such Capitalized Lease Obligations
are permitted by Section 8.04(d); provided that (i) such Liens only serve to
secure the payment of Indebtedness arising under such Capitalized Lease
Obligation and (ii) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of Holdings or
any of its Subsidiaries;

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     (g) Liens placed upon equipment or machinery acquired after the Funding
Date and used in the ordinary course of business of Holdings or any of its
Subsidiaries and placed at the time of the acquisition thereof by Holdings or
such Subsidiary or within 90 days thereafter to secure Indebtedness incurred to
pay all or a portion of the purchase price thereof or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of any such
equipment or machinery or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided that (i) the Indebtedness
secured by such Liens is permitted by Section 8.04(d) and (ii) in all events,
the Lien encumbering the equipment or machinery so acquired does not encumber
any other asset of Holdings or such Subsidiary;
     (h) easements, rights-of-way, restrictions, encroachments and other similar
charges or encumbrances, and minor title deficiencies, in each case not securing
Indebtedness and not materially interfering with the conduct of the business of
Holdings or any of its Subsidiaries;
     (i) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into in the ordinary course of business;
     (j) Liens arising out of the existence of judgments or awards in respect of
which Holdings or any of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review and in respect of which there shall have been
secured a subsisting stay of execution pending such appeal or proceedings;
provided that the aggregate amount of all cash and the Fair Market Value of all
other property subject to such Liens does not exceed $7,500,000 at any time
outstanding;
     (k) statutory and common law landlords’ liens under leases to which
Holdings or any of its Subsidiaries is a party;
     (l) Liens (other than Liens imposed under ERISA) incurred in the ordinary
course of business in connection with workers compensation claims, unemployment
insurance and social security benefits and Liens securing the performance of
bids, tenders, leases and contracts in the ordinary course of business,
statutory obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business and consistent with
past practice (exclusive of obligations in respect of the payment for borrowed
money);
     (m) Liens arising out of any conditional sale, title retention, consignment
or other similar arrangements for the sale of goods entered into by Holdings or
any of its Subsidiaries in the ordinary course of business to the extent such
Liens do not attach to any assets other than the goods subject to such
arrangements;
     (n) Liens (i) incurred in the ordinary course of business in connection
with the purchase, processing or shipping of goods or assets (or the related
assets and proceeds thereof), which Liens are in favor of the seller or shipper
of such goods or assets and only attach to such goods or assets, and (ii) in
favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods;
     (o) bankers’ Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by Holdings or any of its Subsidiaries, in each case granted
in the ordinary course of business in favor of the bank or banks with which such
accounts are maintained, securing amounts owing to such bank or banks with
respect to cash management and operating account arrangements;

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     (p) Liens on insurance proceeds securing the payment of financed insurance
premiums;
     (q) Liens arising in the ordinary course of business under rig deposits,
operating agreements, joint venture agreements, partnership agreements, oil and
gas leases, Oil and Gas Contracts, overriding royalty agreements, farm-out and
farm-in agreements, division orders, contracts for the sale, transportation or
exchange of oil or natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements, marketing agreements, processing
agreements, net profits agreements, development agreements, gas balancing or
deferred production agreements, injection, repressuring and recycling
agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements and other agreements that are customary in the
Oil and Gas Business; provided, that (i) the amount of any obligations secured
thereby that are delinquent, that are not diligently contested in good faith and
for which adequate reserves are not maintained by Holdings, the Borrower or the
applicable Subsidiary, as the case may be, do not exceed, at any time
outstanding, the amount owing by Holdings, the Borrower or such Subsidiary, as
applicable, for two months’ billed operating expenses or other expenditures
attributable to such Person’s interest in the property covered thereby, (ii) the
obligations secured thereby do not constitute obligations in respect of borrowed
money and (iii) any such Liens referred to in this clause (q) do not materially
impair the use of the property affected by such Liens or the purposes for which
such property is held by Holdings or such Subsidiary or materially impair the
value of such property;
     (r) Liens reserved in leases or licenses of Oil and Gas Properties and in
Oil and Gas Contracts for royalties, bonus or rental payments and for compliance
with the terms of such leases, provided, that the amount of any obligations
secured thereby that are delinquent, that are not diligently contested in good
faith and for which adequate reserves are not maintained by Holdings, the
Borrower or the applicable Subsidiary, as the case may be, do not exceed, at any
time outstanding, the amount owing by Holdings, the Borrower or such Subsidiary,
as applicable, for two months’ payments as due thereunder;
     (s) Liens securing Permitted Junior Debt (subject to the limitations set
forth in the definition of such term); provided that the Permitted Junior Debt
Notes Representative in respect of such Permitted Junior Debt and the Collateral
Agent shall have executed and delivered the Permitted Junior Debt Intercreditor
Agreement;
     (t) Liens on pipeline or pipeline facilities that arise under operation of
law;
     (u) Liens not securing any obligation arising from UCC financing statements
(and similar filings) filed inadvertently or with malicious intent, which the
Borrower diligently seeks to remove and terminate (or causes to be removed or
terminated) promptly upon, and in any event no later than 120 days following,
its discovery of same;
     (v) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of Holdings in existence
at the time such Subsidiary is acquired pursuant to a Permitted Acquisition;
provided that (a) any Indebtedness that is secured by such Liens is permitted to
exist under Section 8.04(g), and (b) such Liens are not incurred in connection
with, or in contemplation or anticipation of, such Permitted Acquisition and do
not attach to any other asset of Holdings or any of its Subsidiaries; and
     (w) Liens arising from deposits of cash or Cash Equivalents to secure
obligations under the Hess Contracts (or letters of credit supporting such
obligations) or other obligations permitted under Section 8.04(i) so long as the
aggregate amount of such cash and Cash

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Equivalents so deposited does not exceed $32,234,880 (it being understood and
agreed that the initial utilization of this basket with respect to cash and Cash
Equivalents securing letters of credit supporting obligations under the Hess
Contracts shall be deemed to have been made on the Effective Date).
In connection with the granting of Liens of the type described in clauses (c),
(f), (g), (i), (q), (r) and (v) of this Section 8.01 by the Borrower of any of
its Subsidiaries, the Collateral Agent shall, to the extent requested by (and at
the expense of) the Borrower, execute appropriate lien releases or lien
subordination agreements in favor of the holder or holders of such Liens, in
each case in form and substance satisfactory to the Collateral Agent and solely
with respect to the item or items of equipment or other assets subject to such
Liens.
          8.02. Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any partnership, joint venture, or
transaction of merger or consolidation, or convey, sell, lease, assign or
otherwise dispose of all or any part of its property or assets, or enter into
any sale-leaseback transactions, or purchase or otherwise acquire (in one or a
series of related transactions) any part of the property or assets (including
Oil and Gas Properties) but excluding purchases or other acquisitions of
Hydrocarbons and other inventory, materials and equipment in the ordinary course
of business) of any Person, except that:
     (a) Capital Expenditures shall be permitted to the extent not in violation
of Section 8.07;
     (b) Holdings and its Subsidiaries may sell Hydrocarbons and other inventory
in the ordinary course of business;
     (c) Holdings and its Subsidiaries may liquidate or otherwise dispose of
obsolete, uneconomic or worn-out property in the ordinary course of business;
     (d) (i) Investments may be made to the extent permitted by Section 8.05,
(ii) Liens may be granted to the extent permitted by Section 8.01 and
(iii) Dividends may be made to the extent permitted by Section 8.03;
     (e) Holdings and its Subsidiaries may sell assets (other than the capital
stock or other Equity Interests of the Borrower or of any other Wholly-Owned
Subsidiary, unless all of the capital stock or other Equity Interests of such
Wholly-Owned Subsidiary (other than the Borrower) are sold in accordance with
this clause (e)), so long as (i) no Default or Event of Default then exists or
would result therefrom, (ii) each such sale is in an arm’s-length transaction
and Holdings or the respective Subsidiary receives at least Fair Market Value,
(iii) the consideration received by Holdings or such Subsidiary consists of at
least 90% cash and is paid at the time of the closing of such sale (iv) the Net
Sale Proceeds therefrom are applied and/or reinvested as (and to the extent)
required by Section 4.02(d) and (v) the aggregate amount of the cash and
non-cash proceeds received from all assets sold pursuant to this clause
(e) shall not exceed $25,000,000 in any fiscal year of Holdings (for this
purpose, using the Fair Market Value of property other than cash);
     (f) Holdings and its Subsidiaries may sell, in one or more transactions, up
to 50% of the 2P Reserves located in the North Sea listed in Holdings’ Reserve
Report delivered pursuant to Section 5.13 so long as (i) no Default or Event of
Default then exists or would result therefrom, (ii) each such sale is in an
arm’s-length transaction and Holdings or the respective Subsidiary receives at
least Fair Market Value, (iii) the consideration received by Holdings or

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such Subsidiary consists of at least 90% cash and is paid at the time of the
closing of such sale and (iv) the Net Sale Proceeds therefore are applied and/or
reinvested as (and to the extent) required by Section 4.02(d);
     (g) Holdings and its Subsidiaries may dispose of Oil and Gas Properties and
acquire Oil and Gas Properties in contemporaneous exchanges; provided that
(i) such acquired Oil and Gas Properties have a comparable or higher value as
reasonably determined by Holdings, (ii) the only consideration paid for such
acquisition is the Oil and Gas Property disposed of in connection with such
acquisition or other consideration independently permitted under any other
clause of this Section 8.02 and (iii) if the Fair Market Value of the Oil and
Gas Properties to be disposed exceeds $50,000,000, Holdings shall obtain a
resolution of its Board of Directors approving such exchange and deliver such
resolutions to the Administrative Agent;
     (h) Holdings and its Subsidiaries may lease (as lessee) or license (as
licensee) real or personal property other than Oil and Gas Properties, so long
as any such lease or license does not create a Capitalized Lease Obligation
except to the extent permitted by Section 8.04(d);
     (i) Holdings and its Subsidiaries may sell or discount, in each case
without recourse and in the ordinary course of business, accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof and not as part of any financing transaction;
     (j) Holdings and its Subsidiaries may grant licenses, sublicenses, leases
or subleases to other Persons not materially interfering with the conduct of the
business of Holdings or any of its Subsidiaries, in each case so long as no such
grant otherwise affects the Collateral Agent’s security interest in the asset or
property subject thereto;
     (k) Holdings and its Subsidiaries may convey, sell or otherwise transfer
all or any part of its business, properties and assets to Holdings or any
Subsidiary of Holdings, so long as (i) any security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets so transferred shall remain in full force and
effect and perfected (to at least the same extent as in effect immediately prior
to such transfer) and all actions required to maintain said perfected status
have been taken and (ii) any such business, property and assets conveyed, sold
or otherwise transferred pursuant to this clause (k) by (A) a Credit Party are
conveyed, sold or otherwise transferred to another Credit Party and (B) a
Qualified Credit Party are conveyed, sold or otherwise transferred to another
Qualified Credit Party;
     (l) Holdings and its Subsidiaries may merge or consolidate with and into,
or be dissolved or liquidated into, Holdings or any other Subsidiary of
Holdings, so long as (i) in the case of any such merger, consolidation,
dissolution or liquidation involving a Credit Party, a Credit Party is the
surviving or continuing entity of any such merger, consolidation, dissolution or
liquidation, (ii) in the case of any such merger, consolidation, dissolution or
liquidation involving a Qualified Credit Party, a Qualified Credit Party is the
surviving or continuing entity of any such merger, consolidation, dissolution or
liquidation, (iii) in the case of any such merger, consolidation, dissolution or
liquidation involving the Borrower, the Borrower is the surviving or continuing
entity of any such merger, consolidation, dissolution or liquidation, and (iv)
any security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of Holdings
or such Subsidiary shall remain in full force and effect and perfected (to at
least the same extent as in effect immediately prior to such merger,
consolidation, dissolution or liquidation) and all actions required to maintain
said perfected status have been taken;

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     (m) each of Holdings and its Subsidiaries may liquidate or otherwise
dispose of Cash Equivalents in the ordinary course of business, in each case for
cash at Fair Market Value;
     (n) Holding and its Subsidiaries may make Permitted Business Investments
and consummate Permitted Acquisitions pursuant to this clause (n) so long as the
sum of the aggregate amount paid in respect of such Permitted Business
Investments and the Aggregate Consideration paid in respect of Permitted
Acquisitions, in each case made pursuant to this clause (n), when added to the
aggregate amount of Capital Expenditures made pursuant to Section 8.07(e), does
not exceed $50,000,000;
     (o) Holding and its Subsidiaries may make Permitted Business Investments
and consummate Permitted Acquisitions pursuant to this clause (o); provided that
the aggregate consideration paid in connection with such Permitted Business
Investments plus the Aggregate Consideration paid in connection with such
Permitted Acquisitions, in each case made pursuant to this clause (o), in any
fiscal year does not exceed 5% of 2P Reserve Value based on the most recently
delivered annual Reserve Report;
     (p) Holdings and its Subsidiaries may make Permitted Business Investments
and consummate Permitted Acquisitions pursuant to this clause (p) with Net Sale
Proceeds from Asset Sales made in accordance with Section 8.02(e) and (f);
     (q) Holdings and its Subsidiaries may enter into contractual joint venture
arrangements with third parties pursuant to Oil and Gas Contracts; provided that
such arrangements do not result in, or constitute the formation of, a Business
in which Holdings or any of its Subsidiaries acquire Equity Interests not
otherwise permitted by Section 8.05; and
     (r) Holdings and its Subsidiaries may dispose of Hydrocarbon Interests in
exchange for a commitment of the transferee to bear a disproportionate share of
the costs attributable to the Oil and Gas Properties to which such Hydrocarbon
Interests relate.
To the extent the Required Lenders waive the provisions of this Section 8.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 8.02 (other than to Holdings or a Subsidiary thereof),
such Collateral shall be sold free and clear of the Liens created by the
Security Documents, and the Administrative Agent and the Collateral Agent shall
execute appropriate releases in order to effect the foregoing to the extent
requested by (and at the expense of) the Borrower. For the avoidance of doubt,
Holdings’ and its Subsidiaries’ use of cash and Cash Equivalents to acquire
assets in accordance with this Section 8.02 shall not constitute a conveyance,
sale, lease or other disposition of property or assets that is subject to the
restrictions set forth in this Section 8.02.
          8.03. Dividends. Holdings will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
     (a) any Subsidiary of Holdings may authorize, declare and pay cash
Dividends to Holdings or to any Wholly-Owned Subsidiary of Holdings;
     (b) any Non-Wholly-Owned Subsidiary of Holdings may authorize, declare and
pay cash Dividends to its shareholders, members or partners generally, so long
as Holdings or its respective Subsidiary which owns the Equity Interest in the
Subsidiary paying such Dividends receives at least its proportionate share
thereof (based upon its relative holding of the Equity Interest in the
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of Equity Interests of such
Subsidiary);

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     (c) any Subsidiary may authorize, declare and pay non-cash Dividends to
Holdings or any other Subsidiary of Holdings so long as, after giving effect
thereto, (i) any property or asset which is the subject of any Dividend made
pursuant to this clause (c) (A) by any Credit Party is owned by another Credit
Party and (B) by any Qualified Credit Party is owned by another Qualified Credit
Party, and (ii) any security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
property or assets which are the subject of such Dividend shall remain in full
force and effect and perfected (to at least the same extent as in effect
immediately prior to such Dividend) and all actions required to maintain said
perfected status have been taken;
     (d) Holdings may redeem, repurchase or otherwise acquire for value,
outstanding shares of Holdings Common Stock (or options or warrants to purchases
Holdings Common Stock) following the death, disability or termination of
employment of officers, directors or employees of Holdings or any of its
Subsidiaries or following the vesting of restricted stock options of Holdings’
employees in order to fund any Taxes due upon such vesting; provided that
(i) the only consideration paid by Holdings in respect of such redemptions,
purchases or other acquisitions shall be cash, (ii) at the time of any purchase
or payment permitted to be made pursuant to this Section 8.03(d), no Default or
Event of Default shall then exist or result therefrom and (iii) the amount of
all such redemptions, repurchases or other acquisitions shall not exceed (A)
$2,500,000 in any fiscal year of Holdings or (B) $5,000,000 in the aggregate;
     (e) Holdings, may pay regularly scheduled Dividends on its Qualified
Preferred Stock pursuant to the terms thereof solely through the issuance of
additional units of such Qualified Preferred Stock (but not in cash); provided
that in lieu of issuing additional units of such Qualified Preferred Stock as
Dividends, Holdings may increase the liquidation preference of the units of
Qualified Preferred Stock in respect of which such Dividends have accrued; and
     (f) Holdings may pay regularly scheduled cash Dividends on all outstanding
shares of its Class C Convertible Preferred Stock.
          8.04. Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness,
except:
     (a) Indebtedness incurred pursuant to this Agreement and the other Credit
Documents;
     (b) Existing Indebtedness outstanding on the Funding Date and listed on
Schedule 6.20 hereto (as reduced by any repayments of principal thereof), plus
extensions, renewals or refinancings thereof (“Refinancing Debt”); provided that
(i) the aggregate principal amount of the Indebtedness to be extended, renewed
or refinanced (“Refinanced Debt”) does not increase from that amount outstanding
at the time of any such extension, renewal or refinancing, (ii) the weighted
average life to maturity of such Refinancing Debt is greater than or equal to
that of the related Refinanced Debt, (iii) the final stated maturity of such
Refinancing Debt shall be no earlier than the maturity date applicable to the
related Refinanced Debt, and (iv) no Refinancing Debt shall have greater
security than the related Refinanced Debt;
     (c) Indebtedness of Holdings or any of its Subsidiaries under Hedging
Agreements so long as the entering into of such Hedging Agreements are bona fide
hedging activities and are not for speculative purposes;
     (d) Indebtedness of Holdings or any of its Subsidiaries evidenced by
Capitalized Lease Obligations (to the extent permitted pursuant to Section 8.07)
and purchase money

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Indebtedness described in Section 8.01(g); provided that in no event shall the
sum of the aggregate principal amount of all Capitalized Lease Obligations and
purchase money Indebtedness permitted by this clause (d) exceed $5,000,000 at
any time outstanding;
     (e) Indebtedness constituting Intercompany Loans to the extent permitted by
Section 8.05(h);
     (f) Indebtedness consisting of guaranties by the Qualified Credit Parties
of each other’s Indebtedness and lease and other contractual obligations
permitted under this Agreement;
     (g) Indebtedness of a Qualified Credit Party acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a Permitted
Acquisition of an asset securing such Indebtedness); provided that (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition and (ii) such Indebtedness does not
constitute debt for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (ii);
     (h) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business, so long as such Indebtedness is extinguished within four
Business Days of the incurrence thereof;
     (i) Indebtedness of Holdings or any of its Subsidiaries with respect to
(A) Third Party Letters of Credit or (B) performance bonds, surety bonds, appeal
bonds or customs bonds, or obligations in respect of letters of credit posted in
lieu of, or to secure, any such bonds, required in the ordinary course of
business or in connection with the enforcement of rights or claims of Holdings
or such Subsidiary or in connection with judgments that do not result in a
Default or an Event of Default; provided that (x) the aggregate outstanding
amount of all such Third Party Letters of Credit, performance bonds, surety
bonds, appeal bonds, customs bonds and letters of credit issued in lieu of any
such bonds permitted by this clause (i) shall not at any time exceed $60,000,000
and (y) all Indebtedness under this clause (i) shall be unsecured, except as
permitted under Section 8.01(w) and for security granted pursuant to the
Security Documents in respect of no more than $25,000,000 of outstanding
obligations under Hedging Agreements entered into with and Third Party Letters
of Credit issued by Approved Third Party Credit Providers that are party to the
Intercreditor Agreement;
     (j) Indebtedness of Holdings or any of its Subsidiaries which may be deemed
to exist in connection with agreements providing for indemnification, purchase
price adjustments and similar obligations in connection with the acquisition or
disposition of assets in accordance with the requirements of this Agreement, so
long as any such obligations are those of the Person making the respective
acquisition or sale, and are not guaranteed by any other Person except as
permitted by Section 8.04(f);
     (k) Indebtedness consisting of the financing of insurance premiums;
     (l) Permitted Junior Debt; and
     (m) so long as no Default or Event of Default then exists or would result
therefrom, additional Indebtedness of Holdings or any of its Subsidiaries in an
aggregate principal amount not to exceed $10,000,000 at any time outstanding.

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          8.05. Advances, Investments and Loans. Holdings will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other Equity Interest in, or make any capital contribution
to, any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents
(each of the foregoing an “Investment” and, collectively, “Investments”),
except:
     (a) Holdings and its Subsidiaries may acquire and hold accounts receivables
owing to any of them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms of
Holdings or such Subsidiary;
     (b) Subject to the limitations set forth in Section 8.05(h) and (i),
Holdings and its Subsidiaries may acquire and hold cash and Cash Equivalents;
     (c) Holdings and its Subsidiaries may hold the Investments held by them on
the Funding Date and described on Schedule 8.05(c) hereto; provided that any
additional Investments made with respect thereto shall be permitted only if
permitted under the other provisions of this Section 8.05;
     (d) Holdings and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
     (e) Holdings and its Subsidiaries may make loans and advances to their
officers, employees and consultants for moving, relocation and travel expenses
and other similar expenditures, in each case in the ordinary course of business
in an aggregate amount not to exceed $2,500,000 at any time (determined without
regard to any write-downs or write-offs of such loans and advances);
     (f) Holdings and its Subsidiaries may acquire and hold obligations of their
officers, employees and consultants in connection with such officers’,
employees’ and consultants’ acquisition of shares of Holdings Common Stock (so
long as no cash is actually advanced by Holdings or any of its Subsidiaries in
connection with the acquisition of such obligations);
     (g) Holdings and its Subsidiaries may enter into Hedging Agreements to the
extent permitted by Section 8.04(c);
     (h) Holdings or any of its Subsidiaries may make intercompany loans and
advances to Holdings or any other Subsidiary of Holdings (“Intercompany Loans”);
provided that (A) other than (x) loans and advances to any Subsidiary that is
not a Credit Party (including any Immaterial Subsidiary that is not a Credit
Party) in an aggregate outstanding amount that does not, when added to the
aggregate amount of Investments outstanding pursuant to Section 8.05(i)(C)(x),
exceed $1,000,000 at any time and (y) loans and advances to the Dutch
Subsidiaries pursuant to Holdings’ tax planning and cash management policies
consistent with past practice (so long as within one Business Day following
receipt by any Dutch Subsidiary of the proceeds of such loans and advances, the
same are contributed, loaned or advanced to a Qualified Credit Party to the
extent that the aggregate amount of cash and Cash Equivalents held by all the
Dutch Subsidiaries would otherwise exceed $2,500,000), any such Intercompany
Loans made by a Credit Party shall be made to another Credit Party and any such
Intercompany Loan made by a Qualified Credit Party shall be made to another
Qualified Credit Party, (B) to the

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extent any such Intercompany Loan made by a Credit Party is evidenced by a note
issued on or after the Funding Date, such note shall be evidenced by an
Intercompany Note which shall be pledged to the Collateral Agent pursuant to the
applicable Security Documents, (C) each Intercompany Loan made to a Credit Party
by any Subsidiary of Holdings that is not a Credit Party shall be subject to the
subordination provisions reasonably acceptable to the Administrative Agent and
(D) any Intercompany Loans made to any Credit Party or any Qualified Credit
Party pursuant to this clause (h) shall cease to be permitted by this clause
(h) if such Credit Party or such Qualified Credit Party ceases to constitute a
Credit Party or a Qualified Credit Party, as the case may be;
     (i) Holdings or any of its Subsidiaries may make capital contributions to,
or acquire Equity Interests of, any other Subsidiary of Holdings; provided that
(A) any security interest granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in any assets so
contributed shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such contribution) and all actions
required to maintain said perfected status have been taken, (B) to the extent
such acquired Equity Interests are issued to a Credit Party the same are pledged
to the Collateral Agent pursuant to the respective Security Documents, (C) other
than (x) cash contributions to, or acquisitions of Equity Interests of, any
Subsidiary that is not a Credit Party (including any Immaterial Subsidiary that
is not a Credit Party) in an aggregate outstanding amount (calculated as of the
date of such contributions or acquisitions, net any returns) that does not, when
added to the aggregate amount of Intercompany Loans outstanding pursuant to
Section 8.05(h)(A)(x), exceed $1,000,000 and (y) cash contributions to the Dutch
Subsidiaries pursuant to Holdings’ tax planning and cash management policies
consistent with past practice (so long as within one Business Day following
receipt by any Dutch Subsidiary of the proceeds of such cash contributions, the
same are contributed, loaned or advanced to a Qualified Credit Party to the
extent that the aggregate amount of cash and Cash Equivalents held by all the
Dutch Subsidiaries would otherwise exceed $2,500,000), any such cash
contributions (or acquisitions of Equity Interests) made by a Credit Party shall
be made to (or shall be Equity Interests of) another Credit Party and any such
cash contributions (or acquisitions of Equity Interests) made by a Qualified
Credit Party shall be made to (or shall be Equity Interests of) another
Qualified Credit Party, (D) any Investment made in or to any Credit Party or any
Qualified Credit Party pursuant to this clause (i) shall cease to be permitted
hereunder if such Credit Party ceases to constitute a Credit Party or such
Qualified Credit Party ceases to constitute a Qualified Credit Party, as the
case may be;
     (j) Holdings and its Subsidiaries may own the Equity Interests of their
respective Subsidiaries created or acquired in accordance with the terms of this
Agreement (so long as all amounts invested in such Subsidiaries are
independently justified under another provision of this Section 8.05);
     (k) Contingent Obligations permitted by Section 8.04, to the extent
constituting Investments, shall be permitted;
     (l) Holdings or any of its Subsidiaries may acquire and hold non-cash
consideration issued by the purchaser of assets in connection with a sale of
such assets to the extent permitted by Sections 8.02(e) and 8.02(f); and
     (m) Permitted Acquisitions shall be permitted in accordance with the
requirements of Section 7.17.
          8.06. Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions with any Affiliate of Holdings

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or any of its Subsidiaries, other than in the ordinary course of business and on
terms and conditions substantially as favorable to Holdings or such Subsidiary
as would reasonably be obtained by Holdings or such Subsidiary at that time in a
comparable arm’s-length transaction with a Person other than an Affiliate,
except that the following in any event shall be permitted:
     (a) Dividends may be paid to the extent provided in Section 8.03;
     (b) loans may be made and other transactions may be entered into by
Holdings and its Subsidiaries to the extent permitted by Sections 8.02, 8.04 and
8.05;
     (c) customary fees, indemnities and reimbursements may be paid to
non-officer directors or managers of Holdings and its Subsidiaries;
     (d) Holding may issue Holdings Common Stock and Qualified Preferred Stock
(and options, warrants and rights with respect thereto);
     (e) Holdings and its Subsidiaries may enter into, and may make payments
under, employment agreements, employee benefits plans, stock compensation plans,
indemnification provisions and other similar compensatory arrangements with
officers, employees, managers and directors of Holdings and its Subsidiaries in
the ordinary course of business; and
     (f) Subsidiaries of Holdings may pay management fees, licensing fees and
similar fees to Holdings or to any Qualified Credit Party.
          8.07. Capital Expenditures. (a) Holdings will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that
(i) during the period from the Funding Date through and including December 31,
2010, Holdings and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of all such Capital Expenditures does not exceed $70,000,000
and (ii) during any fiscal year of Holdings set forth below (taken as one
accounting period), Holdings and its Subsidiaries may make Capital Expenditures
so long as the aggregate amount of all such Capital Expenditures does not exceed
in any fiscal year of Holdings set forth below the amount set forth opposite
such fiscal year below:

          Fiscal Year Ending   Amount
December 31, 2011
  $ 200,000,000  
December 31, 2012
  $ 350,000,000  
December 31, 2013
  $ 175,000,000  

          (b) In addition to the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by Holdings and its Subsidiaries
pursuant to clause (a) above in any fiscal year of Holdings is greater than the
amount of Capital Expenditures actually made by Holdings and its Subsidiaries
during such fiscal year, such excess may be carried forward and utilized to make
Capital Expenditures in the immediately succeeding fiscal year (with any such
carried forward amounts being deemed utilized first for the purposes of
determining utilization of the amount of Capital Expenditures permitted under
Section 8.07(a) in such succeeding fiscal year); provided that no amounts once
carried forward pursuant to this Section 8.07(b) may be carried forward to any
fiscal year of Holdings thereafter; provided further, that for any fiscal year
of Holdings, the aggregate amount of Capital Expenditures that would otherwise
be permitted in such fiscal year pursuant to Section 8.07(a) and (b) may be
increased by an amount not to exceed 100% of the scheduled amount permitted for
the next succeeding fiscal year (the “CapEx Pull-Forward Amount”). The actual
CapEx Pull-Forward Amount in respect of any such

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fiscal year shall reduce, on a dollar-for-dollar basis, the amount of Capital
Expenditures pursuant to Section 8.07(a) that are permitted to be made in the
immediately succeeding fiscal year.
          (c) In addition to the foregoing, Holdings and its Subsidiaries may
make additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under Section 8.07(a) or (b)) with the amount of
Net Sale Proceeds received by Holdings or any of its Subsidiaries from any Asset
Sale so long as such Net Sale Proceeds are reinvested within the Relevant
Reinvestment Period, but only to the extent that such Net Sale Proceeds are not
otherwise required to be applied as a mandatory repayment pursuant to
Section 4.02(d).
          (d) In addition to the foregoing, Holdings and its Subsidiaries may
make additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under Section 8.07(a) or (b)) with the amount of
Net Insurance Proceeds received by Holdings or any of its Subsidiaries from any
Recovery Event so long as such Net Insurance Proceeds are reinvested within the
Relevant Reinvestment Period, but only to the extent that such Net Insurance
Proceeds are not otherwise required to be applied as a mandatory repayment
pursuant to Section 4.02(e).
          (e) In addition to the foregoing, Holdings and its Subsidiaries may
make additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under Section 8.07(a) or (b)) so long as the
amount aggregate amount of such Capital Expenditures, when added to the
Aggregate Consideration paid in respect of all Permitted Acquisitions
consummated pursuant to Section 8.02(n) and the aggregate amount of Permitted
Business Investments made pursuant to Section 8.02(n), does not exceed
$50,000,000.
          8.08. Maximum Total Leverage Ratio. Holdings will not permit the Total
Leverage Ratio for any Test Period ending on the last day of any fiscal quarter
of Holdings set forth below to be greater than the ratio set forth opposite such
fiscal quarter below:

          Fiscal Quarter Ending   Ratio  
September 30, 2010
    7.85:1.00  
December 31, 2010
    7.85:1.00  
March 31, 2011
    7.00:1.00  
June 30, 2011
    6.50:1.00  
September 30, 2011
    5.75:1.00  
December 31, 2011
    5.00:1.00  
March 31, 2012
    4.25:1.00  
June 30, 2012
    3.75:1.00  
September 30, 2012
    3.25:1.00  
December 31, 2012 and each fiscal quarter thereafter
    3.00:1.00  

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          8.09. Minimum EBITDAX. Holdings will not permit Consolidated EBITDAX
for any Test Period ending on the last day of any fiscal quarter of Holdings set
forth below to be less than the amount set forth opposite such fiscal quarter
below:

          Fiscal Quarter Ending   Amount  
September 30, 2010
  $ 45,000,000  
December 31, 2010
  $ 50,000,000  
March 31, 2011
  $ 55,0000,00  
June 30, 2011
  $ 60,000,000  
September 30, 2011
  $ 70,000,000  
December 31, 2011
  $ 90,000,000  
March 31, 2012
  $ 100,000,000  
June 30, 2012
  $ 120,000,000  
September 30, 2012
  $ 140,000,000  
December 31, 2012
  $ 180,000,000  
March 31, 2013
  $ 200,000,000  
June 30, 2013
  $ 200,000,000  

          8.10. Minimum Asset Coverage Ratios. (a) Holdings will not permit the
Reserve Coverage Ratio as of the last day of any fiscal quarter of Holdings
ending after the Funding Date to be less than 3.00:1.00.
          (b) Holdings will not permit the PDP Coverage Ratio as of the last day
of any fiscal quarter ending (i) after the Funding Date and on or prior to
September 30, 2011, to be less than 0.25:1.00 and (ii) after September 30, 2011,
to be less than 0.50:1.00.
          8.11. Limitations on Prepayments of Junior Financing; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements, etc.
Holdings will not, and will not permit any of its Subsidiaries to:
     (a) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption, repurchase or acquisition for value of,
or any prepayment or redemption as a result of any asset sale, change of control
or similar required “repurchase” event of (including, in each case without
limitation, by way of depositing with the trustee with respect thereto or any
other Person money or securities before due for the purpose of paying when due),
any Junior Financing; provided that (i) the 2012 Convertible Senior Notes, the
2014 Convertible Senior Notes and the 2014 Senior Subordinated Notes may be
prepaid, redeemed or acquired (A) in accordance with Section 8.04(b) or (B) with
Net Cash Proceeds of Permitted Junior Debt or issuances of common Equity
Interests or Qualified Preferred Stock and (ii) Permitted Junior Debt may,
subject to the provisions of the definition thereof, be prepaid, redeemed or
acquired with Net

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Cash Proceeds from subsequent issuances of Permitted Junior Debt, common Equity
Interests or Qualified Preferred Stock;
     (b) amend or modify, or permit the amendment or modification of, any
provision of any Junior Financing (or any documentation evidencing same) in any
manner that is adverse to the interests of the Lenders in any material respect
without the prior written consent of the Administrative Agent;
     (c) designate any Indebtedness (or related interest obligations) as
“Designated Senior Debt” or similar term except for the Obligations;
     (d) amend, modify or change its certificate or articles of organization
(including, without limitation, by the filing or modification of any certificate
or articles of designation), certificate of formation, limited liability company
agreement or by-laws (or the equivalent organizational documents), as
applicable, or any agreement entered into by it with respect to its capital
stock or other Equity Interests (including any Qualified Preferred Stock), or
enter into any new agreement with respect to its capital stock or other Equity
Interests, unless such amendment, modification, change or other action
contemplated by this clause (d) could not reasonably be expected to be adverse
to the interests of the Lenders in any material respect and the terms of any
such amendment, modification, change or other action will not violate any of the
other provisions of this Agreement or any other Credit Document; or
     (e) amend, modify or change any provision of (i) any Management Agreement
unless such amendment, modification or change could not reasonably be expected
to be adverse to the interests of the Lenders in any material respect (although
no amendment, modification or change may be made to any monetary term thereof)
or (ii) any Tax Sharing Agreement or enter into any new tax sharing agreement,
tax allocation agreement or similar agreement unless such amendment,
modification, change or entering into any such new tax sharing agreement could
not reasonably be expected to be adverse to the interests of the Lenders in any
material respect (although no amendment, modification or change may be made to
any monetary term thereof).
          8.12. Limitation on Certain Restrictions on Subsidiaries. Holdings
will not permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (a) pay dividends or make
any other distributions on its capital stock or any other Equity Interest or
participation in its profits owned by Holdings or any of its Subsidiaries, or
pay any Indebtedness owed to Holdings or any of its Subsidiaries, (b) make loans
or advances to Holdings or any of its Subsidiaries or (c) transfer any of its
properties or assets to Holdings or any of its Subsidiaries, except for such
encumbrances or restrictions existing on the Funding Date and set forth on
Schedule 8.12 and such other encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) any agreement evidencing any Permitted Junior Debt; provided
that such encumbrances and restrictions in agreements evidencing Permitted
Junior Debt are on customary and market terms for similar financings and in any
event are no more onerous to Holdings and its Subsidiaries than those
encumbrances and restrictions contained in this Agreement and the other Loan
Documents, but only if such negative pledge or restriction expressly permits
Liens for the benefit of the Administrative Agent and/or the Collateral Agent
and the Lenders with respect to the credit facilities established hereunder and
the Obligations under the Credit Documents on a senior basis, (iv) customary
provisions restricting subletting or assignment of any lease governing any
leasehold interest of Holdings or any of its Subsidiaries, (v) customary
provisions restricting assignment of any licensing agreement (in which Holdings
or any of its Subsidiaries is the licensee), Oil and Gas Contracts or other
contract entered into by Holdings or any of its Subsidiaries in the ordinary
course of business, (vi) restrictions on the transfer of any asset pending the
close of the sale of such asset, (vii) restrictions on the transfer of any asset
subject to a Lien permitted by Section 8.01(c),

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(f), (g), (p) and (w), (viii) customary provisions restricting assignment of any
agreement entered into in the ordinary course of business, and (ix) any
agreement in effect at the time a Person becomes a Subsidiary, so long as such
agreement was not entered into in contemplation of such Person becoming a
Subsidiary.
          8.13. Limitation on Issuance of Equity Interests. (a) Holdings will
not, and will not permit any of its Subsidiaries to, issue (i) any Preferred
Equity Interests other than issuance by Holdings of Qualified Preferred Stock
pursuant to clause (c) below or (ii) any redeemable common stock or other
redeemable common Equity Interests other than redeemable common stock or other
redeemable common Equity Interests that is or are redeemable at the sole option
of Holdings or such Subsidiary, as the case may be.
          (b) Holdings will not permit any of its Subsidiaries to issue any
capital stock or other Equity Interests (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock or other Equity Interests, except (i) for transfers and
replacements of then outstanding shares of capital stock or other Equity
Interests, (ii) for stock splits, stock dividends and other issuances which do
not decrease the percentage ownership of Holdings or any of its Subsidiaries in
any class of the capital stock or other Equity Interests of such Subsidiary,
(iii) in the case of Non U.S. Subsidiaries of Holdings, to qualifying directors
to the extent required by applicable law and for other nominal share issuances
to Persons other than Holdings and its Subsidiaries to the extent required under
applicable law and (iv) for issuances by Subsidiaries of Holdings which are
newly created or acquired in accordance with the terms of this Agreement.
          (c) Holdings may from time to time (i) issue Qualified Preferred
Stock, so long as (x) no Default or Event of Default shall exist at the time of
any such issuance or immediately after giving effect thereto, and (y) with
respect to each issuance of Qualified Preferred Stock, the gross cash proceeds
therefrom (or in the case of Qualified Preferred Stock directly issued by
Holdings as consideration for Permitted Acquisitions, the Fair Market Value of
the assets received therefor) shall be at least equal to 100% of the liquidation
preference thereof at the time of issuance and (ii) issue additional units of
Qualified Preferred Stock to pay in kind regularly scheduled Dividends on
Qualified Preferred Stock theretofore issued in compliance with this
Section 8.13(c).
          8.14. Business. (a) Holdings will not, and will not permit any of its
Subsidiaries to, engage directly or indirectly in any business other than the
Oil and Gas Business.
          (b) Notwithstanding the foregoing or anything else in this Agreement
to the contrary, Holdings will not (i) have any material liabilities other than
(A) liabilities arising under the Credit Documents, any Class C Convertible
Preferred Stock and any Junior Financing, (B) other liabilities which are
permitted by this Agreement and are incurred in connection with the financing
and operation of Holdings’ and its Subsidiaries’ businesses, and (C) taxes and
other liabilities arising under any applicable law or (ii) own any material
assets or engage in any operations or business (other than (A) its direct or
indirect ownership of its Subsidiaries and (B) investments permitted under
Section 8.05).
          8.15. Limitation on Creation of Subsidiaries. (a) Holdings will not,
and will not permit any of its Subsidiaries to, establish, create or acquire
after the Funding Date any Subsidiary (other than Non-Wholly-Owned Subsidiaries
permitted to be acquired in accordance with the requirements of
Section 8.15(b)); provided that Holdings and its Wholly-Owned Subsidiaries shall
be permitted to establish, create and, to the extent permitted by this
Agreement, acquire Wholly-Owned Subsidiaries, so long as, in each case, (i) at
least 10 days’ prior written notice thereof is given to the Administrative Agent
(or such shorter period of time as is acceptable to the Administrative Agent in
any given case), (ii) the capital stock or other Equity Interests of such new
Wholly-Owned Subsidiary are promptly pledged pursuant to, and to the extent
required by, this Agreement and the applicable Security Documents and the

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certificates, if any, representing such stock or other Equity Interests,
together with stock or other appropriate powers duly executed in blank, are
delivered to the Collateral Agent and (iii) each such new Wholly-Owned
Subsidiary becomes a party to the applicable Security Documents and, to the
extent requested by the Administrative Agent or the Required Lenders, takes all
actions required pursuant to Section 7.12. In addition, each new Wholly-Owned
Subsidiary that is required to execute any Credit Document shall execute and
deliver, or cause to be executed and delivered, all other relevant documentation
(including opinions of counsel) of the type described in Section 5 as such new
Wholly-Owned Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Funding Date.
          (b) In addition to Subsidiaries of Holdings created pursuant to
preceding clause (a), Holdings and its Wholly-Owned Subsidiaries may acquire
Non-Wholly-Owned Subsidiaries after the Funding Date as a result of Permitted
Acquisitions (subject to the limitations contained in the definition thereof);
provided that (i) all of the capital stock or other Equity Interests of each
such Non-Wholly-Owned Subsidiary shall be pledged by any Credit Party which owns
same as, and to the extent, required by the applicable Security Documents, and
(ii) each such Non-Wholly-Owned Subsidiary shall take the actions specified in
Section 8.15(a) to the same extent that such Non-Wholly Owned Subsidiary would
have been required to take if it were a Wholly-Owned Subsidiary of Holdings.
          8.16. Limitation on Commodity Hedging. Holdings will not and will not
permit any of its Subsidiaries to enter into any Commodity Hedge Agreement if,
after giving effect thereto the total volume of Hydrocarbons to be hedged under
Commodity Hedging Agreements would exceed, at the time of entering into any
Commodity Hedge Agreement, 90% of the projected 2P production from the Oil and
Gas Properties of Holdings and each of its Subsidiaries for the period during
which such Commodity Hedging Agreement is in effect.
          8.17. Elections. Without the prior written consent of the Required
Lenders and the Administrative Agent, Holdings will not, and will not permit any
of its Subsidiaries to, make any election for U.S. federal income tax purposes
that causes the Indebtedness of the Borrower to be treated as the Indebtedness
of a “U.S. person” (as such term is defined under Section 7701(a)(30) of the
Code) for U.S. federal income tax purposes.
          SECTION 9. Events of Default.
          Upon the occurrence of any of the following specified events (each, an
“Event of Default”):
          9.01. Payments. The Borrower shall (a) default in the payment when due
of any principal of any Term Loan or any Note, or (b) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Term Loan or any Note or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
          9.02. Representations, etc. Any representation, warranty or statement
made or deemed made by any Credit Party herein or in any other Credit Document
or in any certificate delivered to the Administrative Agent or any Lender
pursuant hereto or thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
          9.03. Covenants. Holdings or any of its Subsidiaries shall (a) default
in the due performance or observance by it of any term, covenant or agreement
contained in Section 7.01(b), 7.01(c), 7.01(g)(i) and (ii), 7.03 (other than
clause (a)(i) thereof), 7.04 (with respect to the Borrower only), 7.11, 7.13,
7.17 or Section 8 or (b) default in the due performance or observance by it of
any other term, covenant or agreement contained in this Agreement (other than
those set forth in Sections 9.01 and

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9.02) and such default shall continue unremedied for a period of 30 days
following the earlier of (i) Holdings’ or the Borrower’s actual knowledge of
such default and (ii) written notice from the Administrative Agent or the
Required Lenders specifying such default; or
          9.04. Default Under Other Agreements. (a) Holdings or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in an instrument
or agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (b) any Indebtedness (other than the
Obligations) of Holdings or any of its Subsidiaries shall be declared to be (or
shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof;
provided that, it shall not be a Default or an Event of Default under this
Section 9.04 unless the aggregate principal amount of all Indebtedness as
described in preceding clauses (a) and (b) is at least $7,500,000; or
          9.05. Bankruptcy, etc. Holdings or any of its Subsidiaries (other than
any Immaterial Subsidiary) shall commence a voluntary case concerning itself
under Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an
involuntary case is commenced against Holdings or any of its Subsidiaries (other
than any Immaterial Subsidiary), and the petition is not controverted within
10 days, or is not dismissed within 60 days after the filing thereof; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of Holdings or any of its
Subsidiaries (other than any Immaterial Subsidiary), to operate all or any
substantial portion of the business of Holdings or any of its Subsidiaries
(other than any Immaterial Subsidiary), or Holdings or any of its Subsidiaries
(other than any Immaterial Subsidiary) commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings or any of its Subsidiaries (other than
any Immaterial Subsidiary), or there is commenced against Holdings or any of its
Subsidiaries (other than any Immaterial Subsidiary) any such proceeding which
remains undismissed for a period of 60 days after the filing thereof, or
Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Holdings or any of its
Subsidiaries (other than any Immaterial Subsidiary) makes a general assignment
for the benefit of creditors; or any Business action is taken by Holdings or any
of its Subsidiaries (other than any Immaterial Subsidiary) for the purpose of
effecting any of the foregoing; or
          9.06. ERISA. (a) An ERISA Event shall have occurred, a contributing
sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title
IV of ERISA shall be subject to the advance reporting requirement of PBGC
Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and
an event described in Subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur with respect to
such Plan within the following 30 days (except to the extent that a waiver to
the advance reporting requirement of PBGC Regulation 4043.61 applies with
respect to such event); any Plan shall have an Unfunded Current Liability; there
is or arises any potential withdrawal liability under Section 4201 of ERISA, if
Holdings, any of its Subsidiaries, or any ERISA Affiliate were to withdraw
completely from any and all Multiemployer Plans; a contribution required to be
made by Holdings, any of its Subsidiaries or any ERISA Affiliate with respect to
a Plan or Non-U.S. Plan has not been timely made, Holdings, any of its
Subsidiaries or any ERISA Affiliate has incurred or is likely to incur any
liability on account of a group health plan (as defined in Section 607(1)

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of ERISA, Section 4980B(g)(2) of the Code or 45 Code of Federal Regulations
Section 160.103) under Section 4980B of the Code and/or the Health Insurance
Portability and Accountability Act of 1996; or Holdings or any of its
Subsidiaries has incurred or is likely to incur liabilities pursuant to any
portion of any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA); any applicable law, rule or
regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
Governmental Authority (a “Change in Law”), or, as a result of a Change in Law,
an event occurs following a Change in Law, with respect to or otherwise
affecting any Plan; (b) there shall result from any of the events set forth in
(a) above the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability described in (a) or (b) above, either
individually or in the aggregate, in the opinion of the Required Lenders has
had, or could reasonably be expected to have, a Material Adverse Effect; or
          9.07. Security Documents. Any of the Security Documents shall cease to
be in full force and effect, or shall cease to give the Collateral Agent for the
benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral (other than any
immaterial portion thereof), in favor of the Collateral Agent, subject to no
other Liens (except Permitted Liens), or any Credit Party shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any such Security Document and such default
shall continue beyond the period of grace, if any, specifically applicable
thereto pursuant to the terms of such Security Document; or
          9.08. Guaranties. Any Guaranty or any provision thereof shall cease to
be in full force or effect as to any Guarantor (except as a result of a release
of any Guarantor in accordance with the terms thereof), or any Guarantor or any
Person acting for or on behalf of such Guarantor shall deny or disaffirm such
Guarantor’s obligations under the Guaranty to which it is a party or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Guaranty to which it is a party; or
          9.09. Judgments. One or more judgments or decrees shall be entered
against Holdings or any Subsidiary of Holdings involving in the aggregate for
Holdings and its Subsidiaries a liability (to the extent not paid or not covered
by a reputable and solvent insurance company pursuant to which the insurer has
accepted liability therefor in writing) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments equals or exceeds $7,500,000; or
          9.10. Nationalization. All or any part of the interest of Holdings or
any of its Subsidiaries in any Oil and Gas Property (or any Hydrocarbons or
revenues or other monies arising in respect of it) is (a) nationalized,
expropriated, compulsorily acquired or seized by any Governmental Authority, or
(b) any such Governmental Authority takes, or officially announces it will take,
any step with a view to any of the foregoing and in either case such action is
reasonably likely to result in a Material Adverse Effect; or
          9.11. Project Documents. (a) All or any part of any Project Document
is not, or ceases to be, a legal, valid and binding obligations of any Person
party thereto in any circumstance which is reasonably likely to have a Material
Adverse Effect, (b) any party to any Project Document defaults under such
Project Document in the circumstances which are reasonably likely to result in a
Material Adverse Effect or (c) all or any part of any Project Document is
suspended, terminated or revoked in circumstances which are reasonably likely to
result in a Material Adverse Effect; or

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          9.12. Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section 9.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses
(a) and (b) below, shall occur automatically without the giving of any such
notice): (a) declare the Total Commitment terminated, whereupon all Commitments
of each Lender shall forthwith terminate immediately without any other notice of
any kind; (b) declare the principal of and any accrued interest in respect of
all Term Loans and the Notes and all Obligations owing hereunder and thereunder
to be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Credit Party; and (c) enforce, as Collateral Agent, all of
the Liens and security interests created pursuant to the Security Documents.
After the exercise of remedies provided for in immediately preceding paragraph,
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order (to the fullest extent permitted by
mandatory provisions of applicable law):
     First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but
including legal, consultant fees and other out-of-pocket expenses payable under
Section 11.01) payable to the Administrative Agent, the Collateral Agent or the
Lead Arranger in its capacity as such;
     Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including reasonable attorneys’ and consultants’ fees and disbursements
payable under Section 11.01), ratably among them in proportion to the amounts
described in this clause Second payable to them;
     Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Term Loans, ratably among the Lenders in proportion
to the respective amounts described in this clause Third payable to them;
     Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Term Loans ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them;
     Fifth, to the payment of all other Obligations that are due and payable to
the Administrative Agent, Collateral Agent and the other Lenders on such date,
ratably based upon the respective aggregate amounts of all such Obligations
owing to the Administrative Agent, Collateral Agent and the other Lenders on
such date; and
     Last, the balance, if any, after all of the Obligations have been paid in
full, to the Borrower or other Credit Party as otherwise required by applicable
law.
          SECTION 10. The Administrative Agent.
          10.01. Appointment. The Lenders hereby irrevocably designate and
appoint Cyan Partners, LP, as Administrative Agent (for purposes of this
Section 10 and Section 11.01, the term “Administrative Agent” also shall include
Cyan Partners, LP, in its capacity as Collateral Agent pursuant to the Security
Documents) to act as specified herein and in the other Credit Documents. Each
Lender

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hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize the Administrative Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder by or through its officers, directors, agents, employees or
affiliates.
          10.02. Nature of Duties. (a) The Administrative Agent in its capacity
as such shall have no duties or responsibilities except those expressly set
forth in this Agreement and in the other Credit Documents. Neither the
Administrative Agent in its capacity as such nor any of its officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by it or them hereunder or under any other Credit Document or in connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and
non-appealable decision). The duties of the Administrative Agent shall be
mechanical and administrative in nature; the Administrative Agent shall not have
by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Lender or the holder of any Note; and nothing in
this Agreement or in any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
          (b) Notwithstanding any other provision of this Agreement or any
provision of any other Credit Document, the Lead Arranger is named as such for
recognition purposes only, and in its capacity as such shall have no powers,
duties, responsibilities or liabilities with respect to this Agreement or the
other Credit Documents or the transactions contemplated hereby and thereby; it
being understood and agreed that the Lead Arranger shall be entitled to all
indemnification and reimbursement rights in favor of the Administrative Agent
as, and to the extent, provided for under Sections 10.06 and 11.01. Without
limitation of the foregoing, the Lead Arranger shall not, solely by reason of
this Agreement or any other Credit Documents, have any fiduciary relationship in
respect of any Lender or any other Person.
          10.03. Lack of Reliance on the Administrative Agent. Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (a) its own independent investigation of the financial condition and
affairs of Holdings and its Subsidiaries in connection with the making and the
continuance of the Term Loans and the taking or not taking of any action in
connection herewith and (b) its own appraisal of the creditworthiness of
Holdings and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Term Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of Holdings or any of its Subsidiaries or the existence or
possible existence of any Default or Event of Default.

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          10.04. Certain Rights of the Agents. If any Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, such Agent shall be entitled to refrain from such act or taking such
action unless and until such Agent shall have received instructions from the
Required Lenders; and such Agent shall not incur liability to any Lender by
reason of so refraining. Without limiting the foregoing, neither any Lender nor
the holder of any Note shall have any right of action whatsoever against such
Agent as a result of such Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Lenders.
          10.05. Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
          10.06. Indemnification. To the extent the Administrative Agent (or any
affiliate, officer, director, employee, representative, agent, sub-agent or
advisor thereof (each, a “Related Party”)) is not reimbursed and indemnified by
the Borrower, the Lenders will reimburse and indemnify the Administrative Agent
(and any such Related Party) in proportion to their respective “percentage” as
used in determining the Required Lenders (determined as if there were no
Defaulting Lenders) for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by the Administrative Agent (or any such Related Party) in
performing its duties hereunder or under any other Credit Document or in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that (a) the unreimbursed expense or indemnified loss was incurred by
or asserted against the Administrative Agent in its capacity as such (or any
Related Party acting for the Administrative Agent in connection with such
capacity) and (b) no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent’s (or
such affiliates’ thereof) gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable decision).
          10.07. Each Agent in its Individual Capacity. With respect to its
obligation to make Term Loans under this Agreement, each Agent shall have the
rights and powers specified herein for a “Lender” and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term “Lender,” “Required Lenders,” “holders of Notes” or any similar
terms shall, unless the context clearly indicates otherwise, include such Agent
in its individual capacity. Each Agent and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, investment
banking, trust or other business with, or provide debt financing, equity capital
or other services (including financial advisory services) to any Credit Party or
any Affiliate of any Credit Party (or any Person engaged in a similar business
with any Credit Party or any Affiliate thereof) as if they were not performing
the duties specified herein, and may accept fees and other consideration from
any Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Lenders.
          10.08. Holders. Any Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Administrative Agent. Any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
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the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or endorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
          10.09. Resignation by the Administrative Agent. (a) The Administrative
Agent may resign from the performance of all of its respective functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days’ prior written notice to the Lenders and, unless a Default or
an Event of Default then exists, the Borrower. Any such resignation by an
Administrative Agent hereunder shall also constitute its resignation as the
Collateral Agent, and upon the effectiveness of such resignation of an
Administrative Agent in accordance with this Section 10.09 the resigning
Administrative Agent shall no longer be required to discharge any duties of the
“Collateral Agent” under the Security Documents. Such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
          (b) Upon any such notice of resignation by the Administrative Agent,
the Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower, which acceptance shall not be unreasonably withheld or delayed
(provided that the Borrower’s approval shall not be required if an Event of
Default then exists).
          (c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed, provided that the Borrower’s consent shall not be required if an Event
of Default then exists), shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided above.
          (d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent’s
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
          (e) Upon a resignation of the Administrative Agent (and the Collateral
Agent) pursuant to this Section 10.09, the Administrative Agent (and the
Collateral Agent) shall remain indemnified to the extent provided in this
Agreement and the other Credit Documents and the provisions of this Section 10
(and the analogous provisions of the other Credit Documents) shall continue in
effect for the benefit of the Administrative Agent (and the Collateral Agent)
for all of its actions and inactions while serving as the Administrative Agent
(and the Collateral Agent).
          10.10. Collateral Matters. (a) Each Lender authorizes and directs the
Collateral Agent to enter into the Subsidiaries Guaranty and Security Documents
for the benefit of the Lenders and the other Secured Creditors. Each Lender
hereby agrees, and each holder of any Note by the acceptance thereof will be
deemed to agree, that, except as otherwise set forth herein, any action taken by
the Required Lenders in accordance with the provisions of this Agreement or the
Security Documents, and the exercise by the Required Lenders of the powers set
forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders. The
Collateral Agent is hereby authorized on behalf of all of the Lenders, without
the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any
Collateral or Security Documents which may be necessary to perfect and maintain
perfected the security interest in and liens upon the Collateral granted
pursuant to the Security Documents.

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          (b) The Lenders hereby authorize the Collateral Agent, at its option
and in its discretion, to release any Lien granted to or held by the Collateral
Agent upon any Collateral (i) upon termination of the Total Commitment and
payment and satisfaction of all of the Obligations (other than inchoate
indemnification obligations) at any time arising under or in respect of this
Agreement or the Credit Documents or the transactions contemplated hereby or
thereby, (ii) constituting property being sold or otherwise disposed of (to
Persons other than Holdings and its Subsidiaries) upon the sale or other
disposition thereof in compliance with Section 8.02, (iii) if approved,
authorized or ratified in writing by the Required Lenders (or all of the Lenders
hereunder, to the extent required by Section 11.12) or (iv) as otherwise may be
expressly provided in the relevant Security Documents. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Collateral Agent’s authority to release particular types or items of Collateral
pursuant to this Section 10.10.
          (c) The Collateral Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or is owned
by any Credit Party or is cared for, protected or insured or that the Liens
granted to the Collateral Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Collateral Agent
in this Section 10.10 or in any of the Security Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Collateral Agent’s own interest
in the Collateral as one of the Lenders and that the Collateral Agent shall have
no duty or liability whatsoever to the Lenders, except for its gross negligence
or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).
          10.11. Delivery of Information. The Administrative Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from any Credit Party, any Subsidiary thereof, the Required
Lenders, any Lender or any other Person under or in connection with this
Agreement or any other Credit Document except (a) as specifically provided in
this Agreement or any other Credit Document and (b) as specifically requested
from time to time in writing by any Lender with respect to a specific document,
instrument, notice or other written communication received by and in the
possession of the Administrative Agent at the time of receipt of such request
and then only in accordance with such specific request.
          SECTION 11. Miscellaneous.
          11.01. Payment of Expenses, etc. (a) The Borrower hereby agrees to:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP and the Administrative Agent’s other counsel and consultants) in
connection with the preparation, execution, delivery and administration of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any amendment, waiver or consent relating
hereto or thereto, of the Administrative Agent and its Affiliates in connection
with its or their syndication efforts with respect to this Agreement and of the
Administrative Agent and, after the occurrence of an Event of Default, each of
the Lenders in connection with the enforcement of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a “work-out” or
pursuant to any insolvency or bankruptcy proceedings (including, in each case
without limitation, the reasonable fees and disbursements of counsel and
consultants for the Administrative Agent and, after the occurrence of an Event
of Default, counsel for

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each of the Lenders); (ii) pay and hold the Administrative Agent and each of the
Lenders harmless from and against any and all present and future stamp, excise
and other similar documentary taxes with respect to the foregoing matters and
save the Administrative Agent and each of the Lenders harmless from and against
any and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to the Administrative Agent or such
Lender) to pay such taxes; and (iii) indemnify the Administrative Agent and each
Lender, and each of their respective officers, directors, employees,
representatives, agents, affiliates, trustees and investment advisors (each, an
“Indemnified Person”) from and hold each of them harmless against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys’ and consultants’ fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (x) any
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto and whether or not such investigation,
litigation or other proceeding is brought by or on behalf of any Credit Party)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of the proceeds of any Term Loans hereunder or the
consummation of the Transaction or any other transactions contemplated herein or
in any other Credit Document or the syndication of this Agreement or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (y) the actual or alleged presence of Hazardous Materials
in the air, surface water or groundwater or on the surface or subsurface of any
Real Property at any time owned, leased, used by or operated by Holdings or any
of its Subsidiaries or any of their respective predecessors (but with respect to
formerly owned, leased, used or operated Real Properties, only to the extent
arising from the acts or omissions of Holdings or any of its Subsidiaries), the
generation, storage, transportation, handling or disposal of Hazardous Materials
by Holdings or any of its Subsidiaries or any of their respective predecessors
at any location, whether or not owned, leased, used by or operated by Holdings
or any of its Subsidiaries, the non-compliance by Holdings or any of its
Subsidiaries with any Environmental Law (including applicable permits
thereunder) applicable to any Real Property, or any claim under any
Environmental Law asserted against Holdings, any of its Subsidiaries or any of
their respective predecessors or any Real Property at any time owned, leased,
used by or operated by such entity, including, in each case, without limitation,
the reasonable fees and disbursements of counsel and other consultants incurred
in connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the
Indemnified Person to be indemnified (as determined by a court of competent
jurisdiction in a final and non-appealable decision)). To the extent that the
undertaking to indemnify, pay or hold harmless the Administrative Agent or any
Lender set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Holdings shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
          (b) To the full extent permitted by applicable law, each of Holdings
and the Borrower shall not assert, and hereby waives, any claim against any
Indemnified Person, on any theory of liability, for special, indirect,
consequential or incidental damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Credit Document, any other agreement or instrument contemplated hereby or
thereby, the transactions contemplated hereby or thereby or any Loan or the use
of the proceeds thereof. No Indemnified Person shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Credit Documents or the transactions contemplated hereby or thereby, except to
the extent the liability of such Indemnified Person results from such
Indemnified Person’s gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision).

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          11.02. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent and each Lender is hereby authorized at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to any Credit Party or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by the Administrative Agent or such Lender or any Affiliate, branch or
agency thereof (including, without limitation, by branches and agencies of the
Administrative Agent or such Lender or Affiliate wherever located) to or for the
credit or the account of Holdings or any of its Subsidiaries against and on
account of the Obligations and liabilities of the Credit Parties to the
Administrative Agent or such Lender under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations purchased by such Lender pursuant to Section 11.04(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not the
Administrative Agent or such Lender shall have made any demand hereunder and
although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
          11.03. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telecopier or cable communication) and mailed,
telegraphed, telecopied, cabled or delivered: if to the Borrower, to Endeavour
Energy UK Limited, 114 St. Martin’s Lane, London WC2N 4BE, England, Attention:
J. Michael Kirksey, Facsimile: 44 20 7451 2351, with a copy to Endeavour
International Corporation, 1001 Fannin, Suite 1600, Houston, Texas 77002,
Attention: J. Michael Kirksey, Facsimile: (713) 307-8794, if to any Credit Party
(other than the Borrower), c/o Endeavour International Corporation, 1001 Fannin,
Suite 1600, Houston, Texas 77002, Attention: J. Michael Kirksey, Facsimile:
(713) 307-8794, if to any Lender, at its address specified on Schedule 11.03
hereto; and if to the Administrative Agent, at the Notice Office; or, as to any
Credit Party or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties hereto and, as
to each Lender, at such other address as shall be designated by such Lender in a
written notice to the Borrower and the Administrative Agent. All such notices
and communications shall, when mailed, telegraphed, telecopied, or cabled or
sent by overnight courier, be effective when deposited in the mails, delivered
to the telegraph company, cable company or overnight courier, as the case may
be, or sent by telecopier, except that notices and communications to the
Administrative Agent, and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
          11.04. Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, that neither Holdings nor the Borrower may assign or transfer any of
its rights, obligations or interest hereunder without the prior written consent
of the Lenders and, provided further, that, although any Lender may transfer,
assign or grant participations in its rights hereunder, such Lender shall remain
a “Lender” for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitment or any related Obligations hereunder except as
provided in Sections 2.08 and 11.04(b)) and the transferee, assignee or
participant, as the case may be, shall not constitute a “Lender” hereunder and,
provided further, that no Lender shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Term Loan or Note
in which such participant is participating, or reduce the rate or extend the
time of payment of interest or Fees thereon (except in connection with a waiver
of applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the

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Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment (or the available portion
thereof) or Term Loan shall be permitted without the consent of any participant
if the participant’s participation is not increased as a result thereof),
(ii) consent to the assignment or transfer by Holdings or the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Term Loans
hereunder in which such participant is participating. In the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant’s rights against such Lender
in respect of such participation to be those set forth in the agreement executed
by such Lender in favor of the participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.
          (b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments have
terminated, outstanding Obligations) hereunder to (i) (A) its parent company
and/or any affiliate of such Lender which is at least 50% owned by such Lender
or its parent company or (B) to one or more other Lenders or any affiliate of
any such other Lender which is at least 50% owned by such other Lender or its
parent company (provided that any fund that invests in loans and is managed or
advised by the same investment advisor of another fund which is a Lender (or by
an Affiliate of such investment advisor) shall be treated as an affiliate of
such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the
case of any Lender that is a fund that invests in loans, any other fund that
invests in loans and is managed or advised by the same investment advisor of any
Lender or by an Affiliate of such investment advisor; provided that, in no event
shall any assignment of Commitments or Term Loans pursuant to this clause (x) be
made to Holdings, the Borrower or any of their respective Subsidiaries or
Affiliates, or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Lender or assigning Lenders, of
such Commitment and related outstanding Obligations (or, if the Commitment has
terminated, outstanding Obligations) hereunder to one or more Eligible
Transferees (treating any fund that invests in loans and any other fund that
invests in loans and is managed or advised by the same investment advisor of
such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided that
(i) at such time, Schedule 1.01(b) shall be deemed modified to reflect the
Commitments and/or outstanding Term Loans, as the case may be, of such new
Lender and of the existing Lenders, (ii) upon the surrender of the relevant
Notes by the assigning Lender (or, upon such assigning Lender’s indemnifying the
Borrower for any lost Note pursuant to a customary indemnification agreement)
new Notes will be issued, at the Borrower’s expense, to such new Lender and to
the assigning Lender, such new Notes to be in conformity with the requirements
of Section 2.04 (with appropriate modifications) to the extent needed to reflect
the revised Commitments and/or outstanding Term Loans, as the case may be,
(iii) the consent of the Administrative Agent and after the Syndication Date, so
long as no Default or Event of Default then exists, the Borrower, shall be
required in connection with any such assignment pursuant to clause (y) above
(such consent, in any case, not to be unreasonably withheld, delayed or
conditioned); provided that the Borrower shall be deemed to have consented to
any such assignment unless it shall object thereto by written notice to the
Administrative Agent within 5 Business Days after having received notice
thereof, (iv) the Administrative Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (v) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Register
pursuant to Section 11.15. To the extent of any assignment pursuant to this
Section 11.04(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitment and outstanding Term Loans. To
the extent that an assignment of all or any portion of a Lender’s Commitment and
related outstanding Obligations pursuant to Section 2.08 or this
Section 11.04(b), would, at the time of such assignment, result in increased
costs

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under Section 2.09 from those being charged by the respective assigning Lender
prior to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
          (c) Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Term Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with prior notification to the Administrative Agent (but without the consent of
the Administrative Agent or the Borrower), any Lender which is a fund may pledge
all or any portion of its Term Loans and Notes to its trustee or to a collateral
agent or financial institution providing credit or credit support to such Lender
in support of its obligations to such trustee, such collateral agent or such
financial institution, as the case may be. No pledge pursuant to this clause
(c) shall release the transferor Lender from any of its obligations hereunder.
          (d) Any Lender which assigns all of its Commitments and/or Term Loans
hereunder in accordance with Section 11.04(b) shall cease to constitute a
“Lender” hereunder, except with respect to indemnification provisions under this
Agreement (including, without limitation, Sections 2.09, 4.04, 10.06, 11.01 and
11.06), which shall survive as to such assigning Lender.
          11.05. No Waiver; Remedies Cumulative. No failure or delay on the part
of the Administrative Agent, the Collateral Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower or any other Credit Party and the
Administrative Agent, the Collateral Agent or any Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent, the Collateral Agent
or any Lender would otherwise have. No notice to or demand on any Credit Party
in any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Administrative Agent, the Collateral Agent or any Lender to any other or
further action in any circumstances without notice or demand.
          11.06. Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, the Administrative Agent shall distribute such payment to the Lenders
entitled thereto (other than any Lender that has consented in writing to waive
its pro rata share of any such payment) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment was
received.
          (b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker’s lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Term Loans, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all the Lenders in such amount;
provided that if

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all or any portion of such excess amount is thereafter recovered from such
Lenders, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
          (c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 11.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
          11.07. Calculations; Computations. (a) All accounting determinations
under this Agreement and all financial statements to be furnished to the Lenders
pursuant hereto shall be made and prepared in accordance with GAAP consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by Holdings to the Lenders);
provided that, (i) except as otherwise specifically provided herein, all
computations and all definitions (including accounting terms) used in
determining compliance with Sections 8.07 through 8.10, inclusive, shall utilize
GAAP and policies in conformity with those used to prepare the audited financial
statements of Holdings and its Subsidiaries referred to in Section 6.05(a) for
the fiscal year ended December 31, 2009 and (ii) to the extent expressly
provided herein, certain calculations shall be made on a Pro Forma Basis.
Holdings, the Borrower and the Administrative Agent, on behalf of the Lenders,
agree that in the event of any material change in GAAP (any such change, for the
purpose of this Section 11.07, an “Accounting Change”) that occurs after the
date of this Agreement, then following the written request of either the
Borrower or the Administrative Agent, the Borrower and the Administrative Agent
shall enter into good faith negotiations in order to amend such provisions of
this Agreement so as to equitably reflect any such Accounting Change with the
desired result that the criteria for evaluating the financial condition of
Holdings and its Subsidiaries shall be the same after such Accounting Change as
if such Accounting Change had not been made, and until such time as such an
amendment shall have been executed and delivered by Holdings, the Borrower and
Required Lenders, (a) all financial covenants, standards and terms in this
Agreement shall be calculated and/or construed as if such Accounting Change had
not been made, and (b) the Borrower shall prepare footnotes to each certificate
and the financial statements required to be delivered pursuant to
Sections 7.01(a), (b), (c), and (g) hereunder that show the differences between
the financial statements delivered (which reflect such Accounting Change) and
the basis for calculating financial covenant compliance (without reflecting such
Accounting Change).
          (b) All computations of interest and Fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
          (c) For purposes of any computation determining compliance with any
incurrence or expenditure tests set forth in Sections 7 and/or 8 or with
Dollar-based basket levels appearing in Sections 4.01 or 4.02 or any definitions
contained in Section 1.01, any amounts so incurred, expended or utilized (to the
extent incurred, expended or utilized in a currency other than Dollars) shall be
converted into Dollars on the basis of the Exchange Rates as in effect on the
date of such incurrence, expenditure or utilization under any provision of any
such Section or definition that has an aggregate Dollar limitation provided for
therein (and to the extent the respective incurrence, expenditure or utilization
test regulates the aggregate amount outstanding at any time and it is expressed
in terms of Dollars, all outstanding amounts originally incurred or spent in
currencies other than Dollars shall be converted into Dollars on the basis of
the Exchange Rates as in effect on the date of any new incurrence, expenditure
or utilization made under any provision of any such Section that regulates the
Dollar amount outstanding at any time).
          11.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE RELEVANT SECURITY DOCUMENT BE

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CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT (EXCEPT THAT, (X) IN
THE CASE OF ANY MORTGAGE OR OTHER SECURITY DOCUMENT, PROCEEDINGS MAY ALSO BE
BROUGHT BY THE ADMINISTRATIVE AGENT OR COLLATERAL AGENT IN THE STATE IN WHICH
THE RESPECTIVE MORTGAGED PROPERTY OR COLLATERAL IS LOCATED OR ANY OTHER RELEVANT
JURISDICTION AND (Y) IN THE CASE OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR
PROCEEDINGS WITH RESPECT TO ANY CREDIT PARTY, ACTIONS OR PROCEEDINGS RELATED TO
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS MAY BE BROUGHT IN SUCH COURT
HOLDING SUCH BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS) MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT,
EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER HOLDINGS OR THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN
ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER. EACH OF HOLDINGS AND THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HOLDINGS OR
THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 11.03 AND, IN THE CASE OF
SERVICE OF PROCESS TO THE BORROWER, AS PROVIDED IN SECTION 11.18, IN EACH CASE
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF HOLDINGS
AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY
NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER
JURISDICTION.
          (b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES (TO
THE FULLEST EXTENT PERMITTED BY LAW) ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY
SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

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          (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
          11.09. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent. Delivery of an executed counterpart hereof by facsimile or
electronic transmission shall be as effective as delivery of any original
executed counterpart hereof.
          11.10. Effectiveness. This Agreement shall become effective on the
date (the “Effective Date”) on which Holdings, the Borrower, the Administrative
Agent and each of the Lenders shall have signed a copy of this Agreement
(whether the same or different copies) and shall have delivered the same to the
Administrative Agent at the Notice Office or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written telex or facsimile transmission notice (actually received) that the same
has been signed and mailed to it. The Administrative Agent will give the
Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.
          11.11. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
          11.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party hereto or thereto and
the Required Lenders (although additional parties may be added to (and schedules
and annexes may be modified to reflect such additions), and Subsidiaries of the
Borrower may be released from, the Security Documents in accordance with the
provisions hereof and thereof without the consent of the other Credit Parties
party thereto or the Required Lenders), provided that no such change, waiver,
discharge or termination shall, without the consent of each Lender (other than a
Defaulting Lender) (with Obligations being directly affected in the case of
following clause (i)), (i) extend the final scheduled maturity of any Term Loan
or Note, or reduce the rate or extend the time of payment of interest or Fees
thereon (except in connection with the waiver of applicability of any
post-default increase in interest rates), or reduce (or forgive) the principal
amount thereof, (ii) release all or substantially all of the Collateral (except
as expressly provided in the Credit Documents) under all the Security Documents,
(iii) amend, modify or waive any provision of this Section 11.12(a) (except for
technical amendments with respect to additional extensions of credit pursuant to
this Agreement which afford the protections to such additional extensions of
credit of the type provided to the Commitments and the Term Loans on the
Effective Date), (iv) release the Holdings Guaranty or release all or
substantially all of the aggregate value of the Subsidiaries Guaranties,
(v) reduce the “majority” voting threshold specified in the definition of
Required Lenders (it being understood that, with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially the same
basis as the extensions of Commitments and/or Term Loans are included on the
Effective Date) or (vi) consent to the assignment or transfer by Holdings or the
Borrower of any of its rights and obligations under this Agreement; provided
further, that no such change, waiver, discharge or termination shall (1)
increase the Commitment of any Lender over the amount thereof then in effect
without the consent of such Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Lender, and that an increase in the available

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portion of the Commitment of any Lender shall not constitute an increase of the
Commitment of such Lender), (2) without the consent of the Administrative Agent,
amend, modify or waive any provision of Section 10 or any other provision of
this Agreement or any other Credit Document as same relates to the rights or
obligations of the Administrative Agent or (3) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent.
          (b) If, in connection with any proposed change, waiver, discharge or
termination of or to any of the provisions of this Agreement as contemplated by
clauses (i) through (vi), inclusive, of the first proviso to Section 11.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described below, to replace each
such non-consenting Lender or Lenders with one or more Replacement Lenders
pursuant to Section 2.08 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided further, that the Borrower shall not have the right to
replace a Lender or repay its Term Loans solely as a result of the exercise of
such Lender’s rights (and the withholding of any required consent by such
Lender) pursuant to the second proviso to Section 11.12(a).
          (c) Holdings, the Borrower and the Administrative Agent may, without
the input or consent of the Lenders, effect technical amendments to this
Agreement and the other Credit Documents as may be necessary or appropriate in
the reasonable opinion of the Borrower and the Administrative Agent to effect
the provisions of Section 2.10.
          11.13. Survival. All indemnities set forth herein including, without
limitation, in Sections 2.09, 4.04, 10.06 and 11.01 shall survive the execution,
delivery and termination of this Agreement and the Notes and the making and
repayment of the Obligations.
          11.14. Domicile of Term Loans. Each Lender may transfer and carry its
Term Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Term Loans pursuant to this Section 11.14 would, at
the time of such transfer, result in increased costs under Section 2.09 or 4.04,
from those being charged by the respective Lender prior to such transfer, then
the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective transfer
to the extent otherwise required under any such Section).
          11.15. Register. The Borrower hereby designates the Administrative
Agent to serve as its agent, solely for purposes of this Section 11.15, to
maintain a register (the “Register”) on which it will record the Commitments
from time to time of each of the Lenders, the Term Loans made by each of the
Lenders (including any increases to the principal amounts thereof as a result of
payment of PIK Interest) and each repayment in respect of the principal amount
of the Term Loans of each Lender. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower’s obligations in
respect of such Term Loans. With respect to any Lender, the transfer of the
Commitment of such Lender and the rights to the principal of, and interest on,
any Term Loan made pursuant to such Commitment shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Commitment and Term Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitment
and Term Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and Term Loans shall be
recorded by the Administrative Agent on the Register only upon the acceptance by
the Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 11.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or

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part of a Term Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Term Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Lender and/or the new Lender. The Borrower
agrees to indemnify the Administrative Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 11.15.
          11.16. Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 11.16, each Lender agrees that it will not disclose without the
prior consent of the Borrower (other than to its employees, auditors, advisors
or counsel or to another Lender if such Lender or such Lender’s holding or
parent company in its sole discretion determines that any such party should have
access to such information, provided such Persons shall be subject to the
provisions of this Section 11.16 to the same extent as such Lender) any
information with respect to Holdings or any of its Subsidiaries which is now or
in the future furnished pursuant to this Agreement or any other Credit Document,
provided that any Lender may disclose any such information (i) as has become
generally available to the public other than by virtue of a breach of this
Section 11.16(a) by the respective Lender, (ii) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (iii) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Lender or to
comply with a request by a Governmental Authority, (v) to the Administrative
Agent or the Collateral Agent, (vi) to any direct or indirect contractual
counterparty in any swap, hedge or similar agreement (or to any such contractual
counterparty’s professional advisor), so long as such contractual counterparty
(or such professional advisor) agrees to be bound by the provisions of this
Section 11.16, (vii) in connection with the enforcement of remedies pursuant to
this Agreement and the other Credit Documents, (viii) to any prospective or
actual transferee, pledgee or participant in connection with any contemplated
transfer, pledge or participation of any of the Notes or Commitments or any
interest therein by such Lender; provided that such prospective transferee,
pledgee or participant agrees to be bound by the confidentiality provisions
contained in this Section 11.16, (ix) to (A) any bank or financial institution
and (B) S&P, Moody’s, Fitch Ratings and/or other ratings agencies, as such
Lender deems necessary or appropriate in connection with such Lender’s obtaining
financing; provided, however, that such financial institution or ratings agency
shall be informed of the confidentiality of such information and (x) to its
investors or potential investors as such Lender reasonably deems necessary or
appropriate; provided, however, that such investors or potential investors shall
be informed of the confidentiality of such information.
          (b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Lender may share with any of its Affiliates, and such Affiliates may
share with such Lender, any information related to Holdings or any of its
Subsidiaries (including, without limitation, any non-public customer information
regarding the creditworthiness of Holdings and its Subsidiaries), provided such
Persons shall be subject to the provisions of this Section 11.16 to the same
extent as such Lender.
          (c) Notwithstanding anything to the contrary contained in this
Section, each of Holdings and the Borrower hereby agrees that the Administrative
Agent and its Affiliates may publicize its services in connection with this
Agreement and the other Credit Documents and the transactions contemplated
herein and therein, including, without limitation, through granting interviews
with and providing information to the financial press and other media and by
publicizing such services on its web-site or other electronic medium; provided,
however, that the Administrative Agent and its Affiliates shall not publicize as
contemplated above in this clause (c) until the earlier to occur of (i) the 5th
day following the Funding Date and (ii) such date as when Holdings shall have
publicly announced the

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consummation of the Transaction. In addition, each of Holdings and the Borrower
hereby authorizes the Administrative Agent to place a customary “tombstone”
advertisement regarding this Agreement and the transactions contemplated herein
related hereto in publications of its choice at the Borrower’s expense.
          11.17. Patriot Act. Each Lender subject to the USA PATRIOT ACT (Title
111 of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”)
hereby notifies Holdings and the Borrower that pursuant to the requirements of
the Patriot Act, it is required to obtain, verify and record information that
identifies Holdings, the Borrower and the other Credit Parties and other
information that will allow such Lender to identify Holdings, the Borrower and
the other Credit Parties in accordance with the Patriot Act.
          11.18. Process Agent. (a) Each Credit Party hereby irrevocably and
unconditionally appoints CT Corporation with an office on the date hereof at 111
Eighth Avenue, New York, New York 10011, and its successors hereunder (the
“Process Agent”), as its agent to receive on behalf of such Credit Party and its
property all writs, claims, process, and summonses in any action or proceeding
brought against such Credit Party in the State of New York. Such service may be
made by mailing or delivering a copy of such process to any Credit Party in care
of the Process Agent at the address specified above for the Process Agent, and
such Credit Party irrevocably authorizes and directs the Process Agent to accept
such service on its behalf. Failure by the Process Agent to give notice to the
applicable Credit Party, or failure of the applicable Credit Party, to receive
notice of such service of process shall not impair or affect the validity of
such service on the Process Agent or any such Credit Party, or of any judgment
based thereon. Each Credit Party covenants and agrees that it shall take any and
all reasonable action, including the execution and filing of any and all
documents that may be necessary to continue the designation of the Process Agent
above in full force and effect, and to cause the Process Agent to act as such.
Each Credit Party hereto further covenants and agrees to maintain at all times
an agent with offices in New York City to act as its Process Agent. Nothing
herein shall in any way be deemed to limit the ability to serve any such writs,
process or summonses in any other manner permitted by applicable law.
          (b) Each Credit Party that is not incorporated in England and Wales
and that has executed, or will on the Funding Date execute, any Credit Document
governed by the law of England and Wales irrevocably and unconditionally
appoints the Borrower, with an office on the date hereof at 114 St. Martin’s
Lane, London WC2N 4BE, England, and its successors hereunder (the “UK Process
Agent”), as its agent to receive on behalf of such Credit Party and its property
all writs, claims, process, and summonses in any action or proceeding brought
against such Credit Party in England and Wales. Such service may be made by
mailing or delivering a copy of such process to any Credit Party in care of the
U.K. Process Agent at the address specified above for the U.K. Process Agent,
and such Credit Party irrevocably authorizes and directs the UK Process Agent to
accept such service on its behalf. Failure by the UK Process Agent to give
notice to such Credit Party, or failure of such Credit Party, to receive notice
of such service of process shall not impair or affect the validity of such
service on the UK Process Agent or any such Credit Party, or of any judgment
based thereon. Each such Credit Party covenants and agrees that it shall take
any and all reasonable action, including the execution and filing of any and all
documents that may be necessary to continue the designation of the U.K. Process
Agent above in full force and effect, and to cause the U.K. Process Agent to act
as such. Each such Credit Party hereto further covenants and agrees to maintain
at all times an agent with offices in England to act as its UK Process Agent.
Nothing herein shall in any way be deemed to limit the ability to serve any such
writs, process or summonses in any other manner permitted by applicable law. If
any person appointed as an agent for service of process pursuant to Section 5.20
is unable for any reason to act as agent for service of process, Holdings (on
behalf of all such Credit Parties) shall immediately (and in any event within
five days of such event taking place) appoint another agent on terms acceptable
to the Administrative Agent. In the event that Holdings fails to appoint such
agent on terms acceptable to the Administrative Agent, the Administrative Agent
shall have the right to appoint an agent on process.

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          11.19. Judgment Currency. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Credit
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given. The obligation of the
Credit Parties in respect of any such sum due from it to the Administrative
Agent or the Lenders hereunder or under the other Credit Documents shall,
notwithstanding any judgment in a currency (the “Judgment Currency”) other than
that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the “Agreement Currency”), be discharged only to
the extent that on the Business Day following receipt by the Administrative
Agent of any sum adjudged to be so due in the Judgment Currency, the
Administrative Agent may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Administrative Agent from the Credit Parties in the Agreement Currency, the
Credit Parties agree, jointly and severally, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
Person to whom such obligation was owing against such loss.
          11.20. Maximum Lawful Rate. Notwithstanding anything to the contrary
contained in any Credit Document, the interest paid or agreed to be paid under
the Credit Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans, or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
          11.21. INTERCREDITOR AGREEMENT. (a) EACH LENDER PARTY HERETO HEREBY
AUTHORIZES THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT TO EXECUTE AND
DELIVER THE INTERCREDITOR AGREEMENT AND UPON THE REQUEST OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT EACH AGREE TO EXECUTE AND DELIVER
THE INTERCREDITOR AGREEMENT PROVIDED SUCH AGREEMENT IS IN FORM AND SUBSTANCE TO
SATISFACTORY TO EACH SUCH AGENT AND EACH LENDER PARTY UNDERSTANDS, ACKNOWLEDGES
AND AGREES THAT AT ALL TIMES FOLLOWING THE EXECUTION AND DELIVERY OF THE
INTERCREDITOR AGREEMENT SUCH LENDER (AND EACH OF ITS SUCCESSORS AND ASSIGNS)
SHALL BE BOUND BY THE TERMS THEREOF.
          (b) EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW
OF THE INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NO
AGENT OR ANY OF AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE
SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR
AGREEMENT.
          SECTION 12. Holdings Guaranty.
          12.01. Guaranty. In order to induce the Administrative Agent, the
Collateral Agent and the Lenders to enter into this Agreement and to extend
credit hereunder, and to induce the other Guaranteed Creditors to enter into
Hedging Agreements and in recognition of the direct benefits to be

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received by Holdings from the proceeds of the Term Loans and the entering into
of such Hedging Agreements, Holdings hereby agrees with the Guaranteed Creditors
as follows: Holdings hereby unconditionally and irrevocably guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, acceleration or otherwise, of any and all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any or
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors
becomes due and payable hereunder, Holdings, unconditionally and irrevocably,
promises to pay such indebtedness to the Administrative Agent and/or the other
Guaranteed Creditors, or order, on demand, together with any and all expenses
which may be incurred by the Administrative Agent and the other Guaranteed
Creditors in collecting any of the Guaranteed Obligations. If claim is ever made
upon any Guaranteed Creditor for repayment or recovery of any amount or amounts
received in payment or on account of any of the Guaranteed Obligations and any
of the aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Holdings Guaranty or other
instrument evidencing any liability of the Borrower, and Holdings shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
          12.02. Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Guaranteed Creditors whether or not due or payable by the Borrower upon
the occurrence of any of the events specified in Section 9.05, and irrevocably
and unconditionally promises to pay such indebtedness to the Guaranteed
Creditors, or order, on demand, in lawful money of the United States.
          12.03. Nature of Liability. The liability of Holdings hereunder is
primary, absolute and unconditional, exclusive and independent of any security
for or other guaranty of the Guaranteed Obligations, whether executed by any
other guarantor or by any other party, and the liability of Holdings hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any payment
made to any Guaranteed Creditor on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, or (f) any action or
inaction by the Guaranteed Creditors as contemplated in Section 12.05, or
(g) any invalidity, irregularity or enforceability of all or any part of the
Guaranteed Obligations or of any security therefor.
          12.04. Independent Obligation. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings
waives, to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.

104

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          12.05. Authorization. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
     (i) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
Guaranteed Obligations (including any increase or decrease in the principal
amount thereof or the rate of interest or fees thereon), any security therefor,
or any liability incurred directly or indirectly in respect thereof, and this
Holdings Guaranty shall apply to the Guaranteed Obligations as so changed,
extended, renewed or altered;
     (ii) take and hold security for the payment of the Guaranteed Obligations
and sell, exchange, release, impair, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset there
against;
     (iii) exercise or refrain from exercising any rights against the Borrower,
any other Credit Party or others or otherwise act or refrain from acting;
     (iv) release or substitute any one or more endorsers, guarantors, the
Borrower, other Credit Parties or other obligors;
     (v) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower to its creditors other than the Guaranteed Creditors;
     (vi) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors regardless
of what liability or liabilities of the Borrower remain unpaid;
     (vii) consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Credit Document, any Hedging Agreement or any
of the instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document, any
Hedging Agreement or any of such other instruments or agreements; and/or
     (viii) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Holdings Guaranty.
          12.06. Reliance. It is not necessary for any Guaranteed Creditor to
inquire into the capacity or powers of Holdings or any of its Subsidiaries or
the officers, directors, partners or agents acting or purporting to act on their
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
          12.07. Subordination. Any indebtedness of the Borrower now or
hereafter owing to Holdings is hereby subordinated to the Guaranteed Obligations
owing to the Guaranteed Creditors; and if the Administrative Agent so requests
at a time when an Event of Default exists, all such indebtedness of the Borrower
to Holdings shall be collected, enforced and received by Holdings for the
benefit of the Guaranteed Creditors and be paid over to the Administrative Agent
on behalf of the Guaranteed Creditors

105

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on account of the Guaranteed Obligations to the Guaranteed Creditors, but
without affecting or impairing in any manner the liability of Holdings under the
other provisions of this Holdings Guaranty. Prior to the transfer by Holdings of
any note or negotiable instrument evidencing any such indebtedness of the
Borrower to Holdings, Holdings shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination. Without limiting
the generality of the foregoing, Holdings hereby agrees with the Guaranteed
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Holdings Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash.
          12.08. Waiver. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor’s power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment of the Guaranteed Obligations to the extent of such
payment, based on or arising out of the disability of the Borrower, Holdings,
any other guarantor or any other party, or the validity, legality or
unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other
than payment of the Guaranteed Obligations to the extent of such payment. The
Guaranteed Creditors may, at their election, foreclose on any security held by
the Administrative Agent, the Collateral Agent or any other Guaranteed Creditor
by one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Guaranteed Creditors
may have against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of Holdings hereunder except to
the extent the Guaranteed Obligations have been paid. Holdings waives any
defense arising out of any such election by the Guaranteed Creditors, even
though such election operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of Holdings against the Borrower or any
other party or any security.
          (b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Holdings
Guaranty, notices making any claim or demand in Holdings, and notices of the
existence, creation or incurring of new or additional Guaranteed Obligations,
and promptness in commencing suit against any party. Holdings assumes all
responsibility for being and keeping itself informed of the Borrower’s financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which Holdings assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any of the other Guaranteed Creditors shall have any
duty to advise Holdings of information known to them regarding such
circumstances or risks.
          (c) Holdings waives any defense (i) based on any lack of authority of
the officers, directors, partners, or agents purporting to act on behalf any of
its Subsidiaries or any principal of any of its Subsidiaries or any defect in
the formation of any of its Subsidiaries or any principal thereof, (ii) based on
the application by the Borrower of the proceeds of the Term Loans for purposes
other than the purposes represented by the Borrower to the Lenders, (iii) based
on any statute or rule of law that provides that the obligation of a surety must
be neither larger in amount nor in any other respects more burdensome than that
of a principal, (iv) based on a Lender’s election, in any proceeding instituted
under the Bankruptcy Code, of the application of Section 1111 subdivision (b)(2)
of the Bankruptcy Code or any successor statute and (v) any borrowing or any
grant of security interest under Section 364 of the Bankruptcy Code.

106

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          12.09. Payments. All payments made by Holdings pursuant to this
Section 12 shall be made in Dollars and will be made without setoff,
counterclaim or other defense, and shall be subject to the provisions of
Sections 4.03 and 4.04.
          12.10. Maximum Liability. It is the desire and intent of Holdings and
the Guaranteed Creditors that this Holdings Guaranty shall be enforced against
Holdings to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. If, however, and to
the extent that, the obligations of Holdings under this Holdings Guaranty shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of Holdings’ obligations
under this Holdings Guaranty shall be deemed to be reduced and Holdings shall
pay the maximum amount of the Guaranteed Obligations which would be permissible
under applicable law.
* * *

107

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     IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.

            ENDEAVOUR INTERNATIONAL CORPORATION
      By:   /s/ J. Michael Kirksey         Name:           Title:          
ENDEAVOUR ENERGY UK LIMITED
      By:   /s/ J. Michael Kirksey         Name:           Title:      

 

--------------------------------------------------------------------------------

 

         

            CYAN PARTNERS, LP,
Individually and as Administrative Agent
      By:   /s/ Jonathan Tunis         Name:   Jonathan Tunis        Title:  
Authorized Signatory   

 

--------------------------------------------------------------------------------

 

         

            CYRUS OPPORTUNITIES FUND II, L.P.,
As Lender

By: CYRUS CAPITAL PARNTERS L.P.,
As Investment Manager
      By:   /s/ David A. Milich         Name:   David A. Milich        Title:  
COO   

 

--------------------------------------------------------------------------------

 

         

            CYRUS EUROPE FUND, L.P., As Lender

By: CYRUS CAPITAL PARNTERS L.P.,
As Investment Manager
      By:   /s/ David A. Milich         Name:   David A. Milich        Title:  
COO   

 

--------------------------------------------------------------------------------

 

         

            CRESCENT I, L.P., As Lender

By: CYRUS CAPITAL PARNTERS L.P.,
As Investment Manager
      By:   /s/ David A. Milich         Name:   David A. Milich        Title:  
COO   

 

--------------------------------------------------------------------------------

 

            CYR FUND, L.P., As Lender

By: CYRUS CAPITAL PARNTERS L.P.,
As Investment Manager
      By:   /s/ David A. Milich         Name:   David A. Milich        Title:  
COO   

 

--------------------------------------------------------------------------------

 

         

            CYRUS CAPITAL PARNTERS L.P., as Lender
      By:   /s/ Brennan McCaw         Name:   Brennan McCaw        Title:   CFO 
 

 

--------------------------------------------------------------------------------

 

         

            MTP ENERGY INFRASTRUCTURE
FIANNCE MASTER FUND, LTD., as Lender

By: MTP Energy Management LLC, its
Investment Manager

By: Magnetar Financial LLC, its
Managing Member
      By:   /s/ Doug Litowitz         Name:   Doug Litowitz        Title:  
Counsel   

 

--------------------------------------------------------------------------------

 

         

            TRIANGLE PEAK PARTNERS PRIVATE
EQUITY, L.P., as Lender

By: Triangle Peak Partners Private Equity
GP, LLC, its General Partner
      By:   /s/ Dain F. DeGroff         Name:   Dain F. DeGroff        Title:  
Managing Member   

 

--------------------------------------------------------------------------------

 

         

            Helios Corporate LLC, as Lender
      By:   /s/ Brett Cohen         Name:   Brett Cohen        Title:  
Authorized Signatory   

 

--------------------------------------------------------------------------------

 

         

            THE ROTHSCHILD FOUNDATION
EUROPE, as Lender
      By:   /s/ Rothschild         Name:   Lord Rothschild OM GME       
Title:   Chairman              By:   /s/ Adam Bennett         Name:   Adam
Bennett        Title:   Authorized Signatory   

 

--------------------------------------------------------------------------------

 

         

            DODER TRUST LIMITED (as Trustee for
the Jader Trust No 4), as Lender
      By:           Name:           Title:   Authorized Signatory             
By:   /s/ Judith Benevides         Name:   Judith Benevides        Title:  
Authorized Signatory   

 

--------------------------------------------------------------------------------

 

         

            DODER TRUST LIMITED (as Trustee for
the Bat Hanadiv No 3), as Lender
      By:           Name:           Title:   Authorized Signatory             
By:   /s/ Judith Benevides         Name:   Judith Benevides        Title:  
Authorized Signatory   

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                      Page
 
           
SECTION 1.
  Definitions and Accounting Terms     1  
 
           
1.01.
  Defined Terms     1  
 
           
SECTION 2.
  Amount and Terms of Credit     30  
 
           
2.01.
  The Commitments     30  
2.02.
  Notice of Borrowing     31  
2.03.
  Disbursement of Funds     31  
2.04.
  Notes     32  
2.05.
  Pro Rata Borrowings     32  
2.06.
  Interest     32  
2.07.
  Change of Lending Office     33  
2.08.
  Replacement of Lenders     33  
2.09.
  Capital Adequacy     34  
2.10.
  Incremental Term Loans     34  
 
           
SECTION 3.
  Fees; Reductions of Commitment     35  
 
           
3.01.
  Fees     35  
3.02.
  Voluntary Termination or Reduction of Commitments     35  
3.03.
  Mandatory Reduction of Commitments     35  
 
           
SECTION 4.
  Prepayments; Payments; Taxes     35  
 
           
4.01.
  Voluntary Prepayments     35  
4.02.
  Mandatory Repayments     36  
4.03.
  Method and Place of Payment     38  
4.04.
  Tax Gross-Up and Indemnities     38  
 
           
SECTION 5.
  Conditions Precedent to the Funding Date     40  
 
           
5.01.
  Effective Date; Notes     40  
5.02.
  Officer’s Certificate     40  
5.03.
  Opinions of Counsel     41  
5.04.
  Company Documents; Proceedings; etc.     41  
5.05.
  Employee Benefit Plans; Shareholders’ Agreements; Management Agreements;
Employment Agreements; Collective Bargaining Agreements; Tax Sharing Agreements;
Existing Indebtedness Agreements; Project Documents     41  
5.06.
  Consummation of the Refinancing     42  
5.07.
  Adverse Change, Approvals     43  
5.08.
  Litigation     44  
5.09.
  Guaranties and Security Documents     44  
5.10.
  [Reserved]     46  
5.11.
  Financial Statements; Pro Forma Balance Sheet; Projections etc.     46  
5.12.
  Solvency Certificate; Insurance Certificates     46  
5.13.
  Reserve Report; Qualifications     47  
5.14.
  Fees, etc.     47  
5.15.
  Syndication Letter     47  

(i) 

--------------------------------------------------------------------------------

 

                      Page
 
           
5.16.
  No Default; Representations and Warranties     47  
5.17.
  Notice of Borrowing     47  
5.18.
  Patriot Act; Know Your Customer     47  
5.19.
  Service of Process     47  
5.20.
  U.K. Service of Process     47  
 
           
SECTION 6.
  Representations, Warranties and Agreements     48  
 
           
6.01.
  Company Status     48  
6.02.
  Power and Authority     48  
6.03.
  No Violation     48  
6.04.
  Approvals     49  
6.05.
  Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections     49  
6.06.
  Litigation     50  
6.07.
  True and Complete Disclosure     50  
6.08.
  Use of Proceeds; Margin Regulations     50  
6.09.
  Tax Returns and Payments     51  
6.10.
  Compliance with ERISA     51  
6.11.
  Security Documents     52  
6.12.
  Properties     53  
6.13.
  Capitalization     54  
6.14.
  Subsidiaries     55  
6.15.
  Compliance with Statutes, etc.     55  
6.16.
  Investment Company Act     55  
6.17.
  Environmental Matters     55  
6.18.
  Employment and Labor Relations     56  
6.19.
  Intellectual Property, etc.     57  
6.20.
  Indebtedness     57  
6.21.
  Insurance     57  
6.22.
  Holding Company     57  
6.23.
  Immaterial Subsidiaries     57  
 
           
SECTION 7.
  Affirmative Covenants     57  
 
           
7.01.
  Information Covenants     57  
7.02.
  Books, Records and Inspections; Annual Meetings     61  
7.03.
  Maintenance of Property; Insurance     61  
7.04.
  Existence; Franchises; Oil and Gas Properties     61  
7.05.
  Compliance with Statutes, etc.     62  
7.06.
  Compliance with Environmental Laws     62  
7.07.
  ERISA     63  
7.08.
  End of Fiscal Years; Fiscal Quarters     64  
7.09.
  Performance of Obligations     65  
7.10.
  Payment of Taxes     65  
7.11.
  Use of Proceeds     65  
7.12.
  Additional Security; Further Assurances; etc.     65  
7.13.
  Ownership of Subsidiaries; etc.     66  
7.14.
  Qualified Preferred Stock     67  
7.15.
  Maintenance of Company Separateness     67  
7.16.
  Board Information Rights     67  
7.17.
  Permitted Acquisitions     67  
7.18.
  Commodity Hedging Agreements     68  
7.19.
  Project Documents, etc.     69  
7.20.
  Oil and Gas Properties     69  

(ii) 

--------------------------------------------------------------------------------

 

                      Page
 
           
7.21.
  Listing of the Notes     69  
 
           
SECTION 8.
  Negative Covenants     70  
 
           
8.01.
  Liens     70  
8.02.
  Consolidation, Merger, Purchase or Sale of Assets, etc.     73  
8.03.
  Dividends     75  
8.04.
  Indebtedness     76  
8.05.
  Advances, Investments and Loans     78  
8.06.
  Transactions with Affiliates     79  
8.07.
  Capital Expenditures     80  
8.08.
  Maximum Total Leverage Ratio     81  
8.09.
  Minimum EBITDAX     82  
8.10.
  Minimum Asset Coverage Ratios     82  
8.11.
  Limitations on Prepayments of Junior Financing; Modifications of Certificate
of Incorporation, By-Laws and Certain Other Agreements, etc.     82  
8.12.
  Limitation on Certain Restrictions on Subsidiaries     83  
8.13.
  Limitation on Issuance of Equity Interests     84  
8.14.
  Business     84  
8.15.
  Limitation on Creation of Subsidiaries     84  
8.16.
  Limitation on Commodity Hedging     85  
8.17.
  Elections     85  
 
           
SECTION 9.
  Events of Default     85  
 
           
9.01.
  Payments     85  
9.02.
  Representations, etc.     85  
9.03.
  Covenants     85  
9.04.
  Default Under Other Agreements     86  
9.05.
  Bankruptcy, etc.     86  
9.06.
  ERISA     86  
9.07.
  Security Documents     87  
9.08.
  Guaranties     87  
9.09.
  Judgments     87  
9.10.
  Nationalization     87  
9.11.
  Project Documents     87  
9.12.
  Change of Control     88  
 
           
SECTION 10.
  The Administrative Agent     88  
 
           
10.01.
  Appointment     88  
10.02.
  Nature of Duties     89  
10.03.
  Lack of Reliance on the Administrative Agent     89  
10.04.
  Certain Rights of the Agents     90  
10.05.
  Reliance     90  
10.06.
  Indemnification     90  
10.07.
  Each Agent in its Individual Capacity     90  
10.08.
  Holders     90  
10.09.
  Resignation by the Administrative Agent     91  
10.10.
  Collateral Matters     91  
10.11.
  Delivery of Information     92  
 
           
SECTION 11.
  Miscellaneous     92  
 
           
11.01.
  Payment of Expenses, etc.     92  

(iii) 

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                      Page
 
           
11.02.
  Right of Setoff     94  
11.03.
  Notices     94  
11.04.
  Benefit of Agreement; Assignments; Participations     94  
11.05.
  No Waiver; Remedies Cumulative     96  
11.06.
  Payments Pro Rata     96  
11.07.
  Calculations; Computations     97  
11.08.
  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL     97
 
11.09.
  Counterparts     99  
11.10.
  Effectiveness     99  
11.11.
  Headings Descriptive     99  
11.12.
  Amendment or Waiver; etc.     99  
11.13.
  Survival     100  
11.14.
  Domicile of Term Loans     100  
11.15.
  Register     100  
11.16.
  Confidentiality     101  
11.17.
  Patriot Act     102  
11.18.
  Process Agent     102  
11.19.
  Judgment Currency     103  
11.20.
  Maximum Lawful Rate     103  
11.21.
  INTERCREDITOR AGREEMENT     103  
 
           
SECTION 12.
  Holdings Guaranty     103  
 
           
12.01.
  Guaranty     103  
12.02.
  Bankruptcy     104  
12.03.
  Nature of Liability     104  
12.04.
  Independent Obligation     104  
12.05.
  Authorization     105  
12.06.
  Reliance     105  
12.07.
  Subordination     105  
12.08.
  Waiver     106  
12.09.
  Payments     107  
12.10.
  Maximum Liability     107  

(iv) 

--------------------------------------------------------------------------------

 

     
SCHEDULE 1.01(a)
  Commitments
SCHEDULE 1.01(b)
  Subsidiary Guarantors
SCHEDULE 5.09(g)
  Accounts
SCHEDULE 6.10(a)
  Plans
SCHEDULE 6.12(a)
  Leased Real Property (other than Oil and Gas Properties)
SCHEDULE 6.12(b)
  Oil and Gas Properties
SCHEDULE 6.13
  Capitalization
SCHEDULE 6.14
  Subsidiaries
SCHEDULE 6.20
  Existing Indebtedness
SCHEDULE 6.21
  Insurance
SCHEDULE 8.01(b)
  Existing Liens
SCHEDULE 8.05(c)
  Existing Investments
SCHEDULE 8.12
  Existing Encumbrances or Restrictions
SCHEDULE 11.03
  Lender Addresses
 
   
EXHIBIT A
  Form of Notice of Borrowing
EXHIBIT B
  Form of Note
EXHIBIT C-1
  Opinion of Vinson & Elkins LLP, Special New York and Texas Counsel to the
Credit Parties
EXHIBIT C-2
  Opinion of Woodburn and Wedge, Special Nevada Counsel to the Credit Parties
EXHIBIT C-3
  Opinion of Nauta Dutilh, Special Dutch Counsel to the Agents
EXHIBIT C-4
  Opinion of White & Case LLP, Special English Counsel to the Agents
EXHIBIT D-1
  Form of Officer’s Certificate (U.S.)
EXHIBIT D-2
  Form of Officer’s Certificate (English)
EXHIBIT D-3
  Form of Officer’s Certificate (Dutch)
EXHIBIT E
  Form of Subsidiaries Guaranty
EXHIBIT F-1
  Form of U.S. Security Agreement
EXHIBIT F-2
  Form of English Debenture
EXHIBIT F-3
  Form of English Charge Over Shares
EXHIBIT F-4
  Form of Dutch Pledge Agreement
EXHIBIT F-5
  Form of Scottish Security
EXHIBIT G
  Form of Solvency Certificate
EXHIBIT H
  Form of Compliance Certificate
EXHIBIT I
  Form of Assignment and Assumption Agreement
EXHIBIT J
  Form of Intercompany Note

(v) 

--------------------------------------------------------------------------------

 

Schedule 1.01(a)
Commitments

          Lender   Term Loan Commitment  
CYRUS OPPORTUNITIES FUND II, L.P.
  $ 18,050,000  
CYRUS EUROPE FUND, L.P.
  $ 950,000  
CRESCENT 1, L.P.
  $ 38,000,000  
CYR FUND, L.P.
  $ 37,500,000  
CYRUS CAPITAL PARTNERS, L.P.
  $ 500,000  
MTP ENERGY INFRASTRUCTURE FINANCE MASTER FUND, LTD.
  $ 11,500,000  
TRIANGLE PEAK PARTNERS PRIVATE EQUITY, LP
  $ 3,500,000  
HELIOS CORPORATE LLC
  $ 20,000,000  
THE ROTHSCHILD FOUNDATION EUROPE
  $ 2,000,000  
DODER TRUST LIMITED (AS TRUSTEE FOR THE JADER TRUST NO 4)
  $ 9,000,000  
DODER TRUST LIMITED (AS TRUSTEE FOR THE BAT HANADIV FOUNDATION NO 3)
  $ 9,000,000  
 
       
 
     
TOTAL:
  $ 150,000,000  

 

--------------------------------------------------------------------------------

 

Schedule 1.01(b)
Subsidiary Guarantors

1)   Endeavour Energy North Sea LLC (Delaware)   2)   Endeavour Energy North
Sea, L.P. (Delaware)   3)   Endeavour Operating Corporation (Delaware)   4)  
Endeavour International Holding B.V. (Netherlands)   5)   Endeavour Energy
Netherlands B.V. (Netherlands)   6)   Endeavour Energy New Ventures Inc.
(Delaware)   7)   END Management Company (Delaware)

 

--------------------------------------------------------------------------------

 

Schedule 5.09(g)
Accounts
Deposit Accounts

                      Credit Party   Sort Code   Bank Account Number  
Designation   Location of Account
Endeavour Energy UK
Limited
  JPMorgan Chase Bank, N.A., London Branch 60-92-42     35047501     UK
Operations in GBP   Bournemouth, England
 
                   
Endeavour Energy UK
Limited
  JPMorgan Chase Bank, N.A., London Branch 60-92-42     35047502     UK
Operations in USD   Bournemouth, England
 
                   
Endeavour Operating
Corporation
  JPMorgan Chase Bank, N.A.     179910996265     Operating Account   Houston,
Texas
 
                   
Endeavour Operating
Corporation
  JPMorgan Chase Bank, N.A.     825-874-035     Demand Deposit
Account   Houston, Texas
 
                   

 

--------------------------------------------------------------------------------

 

Schedule 6.10(a)
Plans
None.

 

--------------------------------------------------------------------------------

 

Schedule 6.12(a)
Leased Real Property
Leased Real Property of the Credit Parties

  1.   14,514 sq. ft. of rentable area on Floor 16 of the First City Tower
Building, 1001 Fannin Street, Houston, Texas 77002, leased through December 1,
2010;     2.   The fourth, fifth, and ground floors of the building known as 114
St Martin’s Lane, London, WC2N 4BE, England, leased through December 12, 2012;  
  3.   3 Queens Gate, Aberdeen, AB15 5YL, Scotland, leased through June 11,
2013; and     4.   5,025 sq. ft. of rentable area at 1125 17th Street,
Suite 1525, Denver, Colorado 80202, leased through December 31, 2011.

 

--------------------------------------------------------------------------------

 

SCHEDULE
6.12(b)
Oil and Gas
Properties
Endeavour International Corporation
List of Properties
Source: December 31, 2009 Reserve Report (Strip Pricing)
Plus January 2010 reserve adds

              Property Name            
UK:
           
Alba
          *
Bacchus
          *
Bittern
          *
Columbus
          *
Cygnus
          *
Enoch
          *
Goldeneye
          *
IVRRH
          *
Renee
          *
Rochelle
          *
Rubie
          *
 
           
US:
           
 
           
Austin 21 #1
  De Soto   Louisiana   *
Batchelor 3-1H
  Red River   Louisiana   *
Bazer, M L 20 #1D
  De Soto   Louisiana   *
Bazer, M L 20 #1D PNP
  De Soto   Louisiana   *
Bonomo Investment Co LLC 35 #1
  Caddo   Louisiana   *
Chiggero ETAL 14 #1-H
  Caddo   Louisiana   *
Davis 15 #1
  Red River   Louisiana   *
Desoto LP 17 #1
  De Soto   Louisiana   *
Dixie Farm 11-1H
  Red River   Louisiana   * 1
Fielder, Cyrus 15 #1
  Caddo   Louisiana   *
Fortson 3 #2
  De Soto   Louisiana   *
Indigo Minerals 3-1H
  Red River   Louisiana   *
International Paper 21 #1
  De Soto   Louisiana   *

 

--------------------------------------------------------------------------------

 

SCHEDULE
6.12(b)
Oil and Gas
Properties
Endeavour International Corporation
List of Properties
Source: December 31, 2009 Reserve Report (Strip Pricing)
Plus January 2010 reserve adds

              Property Name            
Johnson, A S ET AL 10 #1
  De Soto   Louisiana   *
Jones, G C 22 #1
  De Soto   Louisiana   *
Jones, G C 22 #2
  De Soto   Louisiana   *
Jones, G C 23 #3
  De Soto   Louisiana   *
Little 11 #1
  Red River & Bienville   Louisiana   *
Madison, Clarence 2 #1
  Red River   Louisiana   *
Marks, Roy Est 10 #1
  Red River   Louisiana   *
McCoy 23 #1
  De Soto   Louisiana   *
Metcalf HNSVL 14 #5H
  Caddo   Louisiana   *
Russell, Mary 3 #1
  Red River   Louisiana   *
Smith, Lillie22 #1
  De Soto   Louisiana   *
Tracy 3 #1
  De Soto   Louisiana   *
Moore Cowbell
  Lea   New Mexico    
Lucky Penny
  Lea   New Mexico    
Pardee & Curtain Lumber Co. C-4
  Cameron   Pennsylvania   * 1
Pardee & Curtain Lumber Co. C-5
  Cameron   Pennsylvania   * 1
Pardee & Curtain Lumber Co. C-7H
  Cameron   Pennsylvania   * 1
Pardee & Curtain Lumber Co. C-9H
  Cameron   Pennsylvania   * 1
Pardee & Curtain Lumber Co. C-10-H
  Cameron   Pennsylvania   * 1
Cochran 1 (Garwood)
  Colorado   Texas   *
Cochran 2 (Garwood)
  Colorado   Texas   *
Cochran 3 (Garwood)
  Colorado   Texas   *
Cochran 4 (Garwood)
  Colorado   Texas   *
Cochran 5 (Garwood)
  Colorado   Texas   *
Cochran 6 (Garwood)
  Colorado   Texas   *
Tuttle #6H — 6 Stages
  Gregg   Texas   *
Tuttle #8H — 6 Stages
  Gregg   Texas   *
Tuttle AJ Gas Unit #5
  Gregg   Texas   *
Tuttle, A J #7H
  Gregg   Texas   *
Williams #3
  Gregg   Texas   *
Armour Runnels 1
  Matagorda   Texas    

 

--------------------------------------------------------------------------------

 

SCHEDULE
6.12(b)
Oil and Gas
Properties
Endeavour International Corporation
List of Properties
Source: December 31, 2009 Reserve Report (Strip Pricing)
Plus January 2010 reserve adds
 

*   Mortgaged property   1   Acquired after December 31, 2009

 

--------------------------------------------------------------------------------

 

Schedule 6.13
Capitalization
Part I: Equity Ownership of Subsidiaries

                                                  Class of Equity   Par    
Number of     Certificate     Percentage of   Owner   Issuer   Interest   Value
    Shares     Number     outstanding shares  
Endeavour
  Endeavour Operating                                    
International
  Corporation                                    
Corporation
      Common   $ 0.001       100       2       100  
 
                                       
Endeavour Operating
  Endeavour                              
Corporation
  International                                    
 
  Holding B.V.   Ordinary   € 100       180     Uncertificated     100  
 
                                       
Endeavour Operating
  Endeavour Energy                                    
Corporation
  New Ventures Inc.   Common   $ 0.01       1,000       1        100   
 
                                       
Endeavour Operating
  END Management                                    
Corporation
  Company   Common   $  0.01       1,000       1        100  
 
                                       
Endeavour Operating
  Endeavour Energy                              
Corporation
  New Ventures I,                                    
 
  Ltd.   Ordinary   $  1.00       1      Uncertificated     100  
 
                                       
Endeavour
  Endeavour Energy   Limited Partnership                          
International
  North Sea, L.P.   Interest                                
Holding B.V.
            N/A       N/A     Uncertificated     99.9  
 
                                       
Endeavour
  Endeavour Energy                              
International
  Netherlands B.V.                                    
Holding B.V.
      Ordinary   € 100       180     Uncertificated     100  
 
                                       
Endeavour
  Endeavour Energy                              
International
  Luxembourg S.a.r.l.                                    
Holding B.V.
      Ordinary     N/A       500     Uncertificated     100  

 

--------------------------------------------------------------------------------

 

                                                  Class of Equity   Par    
Number of     Certificate     Percentage of   Owner   Issuer   Interest   Value
    Shares     Number     outstanding shares  
Endeavour Energy UK
  Endeavour North Sea                                    
Limited
  Limited   Ordinary   ₤ 1       44,250,002       5       100  
 
                                       
Endeavour Energy
  Endeavour Energy                                    
Netherlands B.V.
  North Sea LLC   Membership Interest     N/A       N/A     Uncertificated    
100  
 
                                       
Endeavour Energy
  Endeavour Energy   General Partnership                                
North Sea LLC
  North Sea, L.P.   Interest     N/A       N/A     Uncertificated     0.1  
 
                                       
Endeavour Energy
  Endeavour Energy UK                                    
North Sea, L.P.
  Limited   Ordinary   ₤ 0.10       1,200     8, 9, and 10     100  

 

--------------------------------------------------------------------------------

 

Schedule 6.13
Part II: Convertible Securities
The Credit Parties have issued the following securities that are convertible
into Equity Interests:

  1)   6.00% Convertible Senior Notes due 2012, issued by Endeavour
International Corporation;     2)   11.50% Convertible Bonds due 2014, issued by
Endeavour Energy Luxembourg S.a.r.l. and guaranteed by Endeavour International
Corporation;     3)   Series C Preferred Stock, issued by Endeavour
International Corporation with the terms set forth in the Certificate of
Designation of Series C Preferred Stock originally filed with the Nevada
Secretary of State on October 30, 2006;     4)   Warrant No. 2003-3 for Trident
Growth Fund, L.P. to purchase 150,000 shares of Common Stock in Endeavour
International Corporation, as amended to expire April 30, 2012 by the First
Amendment thereto, with 40,000 warrants currently outstanding thereunder; and  
  5)   Warrant No. 2002-1 for Trident Growth Fund, L.P. to purchase 150,000
shares of Common Stock in Endeavour International Corporation expiring April 30,
2012, as amended to date, with 50,000 warrants currently outstanding thereunder.

 

--------------------------------------------------------------------------------

 

Schedule 6.13
Part III: Options

              Options currently   Plan Name   Outstanding  
Endeavour International Corporation 2004 Incentive Plan, as amended
    745,700  
Endeavour International Corporation 2007 Stock Incentive Plan
    2,001,055  
Nonstatutory Stock Option Agreement between Endeavour International Corporation
and Carl D. Grenz, dated November 3, 2008 (one-year)
    50,000  
Nonstatutory Stock Option Agreement between Endeavour International Corporation
and Carl D. Grenz, dated November 3, 2008 (three-year)
    200,000  
Nonstatutory Stock Option Agreement between Endeavour International Corporation
and J. Michael Kirksey, dated September 26, 2007
    400,000  
Nonstatutory Stock Option Agreement between Endeavour International Corporation
and John G. Williams, dated October 1, 2007
    200,000  
Total
    3,596,755  

 

--------------------------------------------------------------------------------

 

Schedule 6.14
Subsidiaries
This Schedule 6.14 incorporates the relevant portions of the Credit Parties’
response to Schedule 6.13.

 

--------------------------------------------------------------------------------

 

Schedule 6.20
Existing Indebtedness
Holdings has Indebtedness pursuant to its 6.00% Convertible Senior Notes due
2012, in a principal amount of $81,250,000.
Holdings also has Indebtedness pursuant to its 12.00% Senior Subordinated Notes
due 2014, in a principal amount of $50,373,000, which Indebtedness is guaranteed
by all U.S. Subsidiaries of Holdings.
Endeavour Energy Luxembourg S.a.r.l. has Indebtedness pursuant to its 11.50%
Convertible Bonds due 2014, in a principal amount of $51,271,000, which
Indebtedness is guaranteed by Holdings.
Series C Preferred Stock, issued by Holdings, with the terms set forth in the
Certificate of Designation of Series C Preferred Stock originally filed with the
Nevada Secretary of State on October 30, 2006, as amended.
The Credit Parties have the following outstanding Letters of Credit:

          Title   Amount   Borrower
Standby Letter of Credit (BNP Paribas)
  £11,900,000   Endeavour Energy UK Limited
Standby Letter of Credit (BNP Paribas)
  £6,600,000   Endeavour Energy UK Limited
Standby Letter of Credit (BNP Paribas)
  £2,100,000   Endeavour Energy UK Limited

This Schedule 6.20 incorporates all Intercompany Loans as specified on
Schedule 8.05(c), Part II.

 

--------------------------------------------------------------------------------

 

Schedule 6.21
(GRAPHIC) [h77219h7721903.gif]

LIMITS GRAPHIC Limits Graphic I            HartfordLI:ydi InsuranceCo | St Paul
Surplus Lines Insurance Company I            Lloyd’s of Landau A Other Campania;
| Aviva In;uranca L~E Ltd            The National In;uranca and GuaranTee
Corporation LTd Navi =2Tor; In;iiranjce Co. ACE Group            V2 ir=::L:y L:
= jr=^:a ?: Deductible USA Sffht Per Occurrence Ex-re;; Liability Landan iSOJEO
Landan Computer EquipmenT £150 ? 100,500 EP? Houston Denver J3J0K CampuTer &
Media (IK Ph JIM PerOccurrence General LiatiliTy JoKEadiEvEnt JlCKOttilciE UK
ilOJJ Employer;’ Liability ttll PnblicLiabiliTy and Products Liability £250K
Money ilOOE Office Praperty i“J0K Office Property (Aberdeen) £ Various
Sub-IimiT; NIL Section; IA £ IE-Onshore* Offshore Property (Platforms &
Pipelines) As per Values Declared JSilJ Section IC* ID Crude Oil-Cares
H.5MCiudeOil HMKCaigi Section n Contra] af Well USA 320JJ PerOccurrence except
JjOJJ far La; Animas and Pi dm Wells Care, Custody’s Contra] iiMPerOcc H.5M
H5fJKCCfiC Section II Cantra] af V. el] UK Sector af the North Sea 5125JJ Per
Occnnence OPOL 5120JJ Care, Custody fc Contra] J2 5JJ J1.5V SI V OPOL
ji5cf.;;s-; Section m Liabilities UE Sector af the North Sea J125JJ Anyone
Occnrrence J.150K Section IV War i Terrorism Values & Limits is Section LE.IH,
*V PaSacticL Section V Business Interruption Galdeneye Oil&C-as As per Volume; &
Values Declared Indemnity Period: 0 Day; 4: Dayt 51-DU Eice;; DiO il-DU Excess
DiO 310M Primary Direcrars And Officers : a H50KB1 J5MKB2 All Limits &
Deductible expressed in 100% unless specified otherwise.

 

--------------------------------------------------------------------------------

 

Coverage Summary

                          Policy Period   Policy No.   Coverage   Limits/Amounts
  Carrier   11/01/09-10   61SBARS0904   Property   Business Personal Property  
Hartford Lloyds Insurance
 
          $ 100,500     Replacement Cost   Company (Direct)         Houston/
Denver   Personal Property of Others    
 
          $ 189,500     Replacement Cost                 Money and Securities  
 
 
          $ 10,000     Inside the Premises    
 
          $ 5,000     Outside the Premises                 Computers and Media  
 
 
          $ 350,000     12 Hour Waiting Period, $250 Deductible                
Deductibles:    
 
          $ 1,000     Per Occurrence    
 
                       
11/01/09-10
  MU05540661   USA - General Liability   $ 2,000,000     General Aggregate   St.
Paul Surplus Lines
 
          $ 1,000,000     Products-Completed Operations Aggregate Limit  
Insurance Company (through
 
          $ 1,000,000     Personal and Advertising Injury Limit   J.H. Blades)
 
          $ 1,000,000     Each Occurrence Limit    
 
          $ 100,000     Damage To Premises Rented To You Limit (Any One Premise)
   
 
          $ 5,000     Medical Expenses Limit (Any One Person)                
Deductibles:    
 
          $ 5,000     Each Event    
 
          $ 10,000     Each Offshore Event    
 
          $ 5,000     Each Event Products-Completed Operations    
 
          $ 10,000     Each Offshore Event Products-Completed Operations    
 
          $ 0     Medical Expense (Each Person)    
 
          $ 5,000     Personal and Advertising Injury (Each Person)    
 
                       
11/01/09-10
  MU05578407   USA - Umbrella Liability   $ 9,000,000     General Aggregate  
St. Paul Surplus Lines
 
          $ 9,000,000     Products-Completed Operations Aggregate Limit  
Insurance Company (through
 
          $ 9,000,000     Personal and Advertising Injury Limit   J.H. Blades)
 
          $ 9,000,000     Each Occurrence Limit                 Deductibles:    
 
          $ 10,000     Deductible (SIR)    
 
                       
11/01/09-10
  24233801 ENP   London Computer   £ 258,360     Computer and ancillary
equipment (London) including Portable Equipment Value £20,000   Aviva Insurance
UK Ltd (GA) (through Castle Cairn
 
          £ 90,380     Computer and ancillary equipment (Aberdeen) including
Portable Equipment Value £20,000   Insurance Brokers Ltd.)
 
                        11/01/09-10   GLA/003897736   London Office Package  
Property Section:   NIG Insurance (through
 
          £ 100,000     Office Contents (excluding computers)   Castle Cairn
Insurance
 
          £ 50,000     Aberdeen Contents (excluding computers)   Brokers Ltd.)
 
          £ 10,000     Documents    
 
          £ 5,000     Goods in Transit    
 
          £ 5,000     Exhibitions in UK    
 
          £ 1,000     Replacement Locks    
 
          £ 500     Personal effects (per person)    
 
          £ 5,000     Pictures, Works of Art, etc (£500 AOI)    
 
          £ 5,000     Computer system records    
 
          £ 5,000     Loss of Metered Water                 Business
Interruption Section:    
 
          £ 250,000     Loss of Revenue and Increased Costs of Working    
 
          £ 5,000     Book Debts    
 
          12 Months   Indemnity Period                 Money Section:    
 
          £ 250,000     Loss of Money due to Crossed cheques    
 
          £ 250     Money Out of Safe out of Business Hours    
 
          £ 1,500     Money In Safe out of Business Hours    
 
          £ 500     Money in the Private Dwelling of Partners, Directors or
Employees    

 

--------------------------------------------------------------------------------

 

Coverage Summary

                          Policy Period   Policy No.   Coverage   Limits/Amounts
  Carrier
 
          £ 5,000     Money Any other loss    
 
          £10,000/£100pw Personal Injury following robbery or holdup            
    Legal Liability for injury to persons or damage to third party property:    
 
          £ 10,000,000     Injury to Employees    
 
          £ 2,000,000     Injury to the public and damage to property          
      Commercial Legal Expenses Section:    
 
          £ 50,000     Limit per Insured Incident    
 
          £ 50,000     Annual Limit for Compesation Awards    
 
                        11/01/09-10   BM0901674   Energy Package   Section 1 (A)
& (B) — Onshore & Offshore Property (Platform and Pipelines)

$71,770,250 FI value, as per worksheets attached to policy, any one accident or
occurrence sub-limited to $7,500,000 any one accident or occurrence in respect
of data reacquisition, reconstruction or reconstitution costs.   Lloyds of
London & Other Companies(through JLT Agnew Higgins)
 
                                    Plus additional 25% each item separately in
respect of Sue and Labour expense, General Average and Salvage Charges, Removal
of Wreck/Debris and Expediting Expense but not exceeding 50% in all.    
 
                                    Section 1 (C) & (D) — Crude Oil / Cargo,    
 
                       
 
          $ 8,500,000     each section any one shipment / location.    
 
                                    Section 2 — Operators Extra Expense    
 
                                    In respect of the UK Sector of the North
Sea:    
 
                       
 
          $ 125,000,000     Combined Single Limit any one accident or
occurrence.    
 
                       
 
          $ 2,500,000     Sub-limit of any one accident or occurrence in respect
of Care, Custody & Control.    
 
                       
 
          $ 120,000,000     any one occurrence in respect of OPOL.    
 
                                    In respect of Wells scheduled in the USA:  
 
 
                                    $20,000,000 Combined Single Limit any one
accident or occurrence in respect of all Wells except Exploratory and
Development Drilling Wells with dry hole cost in excess of $8,000,000 (100%) or
Total Measured Depth of more than 17,500 feet where the Combined Single Limit is
increase to    
 
                                    $30,000,000 any one accident or occurrence,
as scheduled. Any additional onshore wells in excess of 17,500’ TMD(100%) or AFE
in excess of $8,000,000 (100%) to be agreed prior to spud. Slip Leader and
Agreement Parties.    
 
                       
 
          $ 2,500,000     Sub-limit of any one accident or occurrence in respect
of Care, Custody and Control.    
 
                                    Section 3 — Liabilities    
 
                                    In respect of the UK Sector of the North
Sea:    
 
                       
 
          $125,000,000 any one accident or occurrence combined single limit over
sub-section A (onshore) and sub-section B (offshore).    
 
                                    Section 4 — War and Terrorism    
 
                                    Values and limits as Sections 1, 2, 3 and 5
   
 
                                    Section 5 — Loss of Production Income    
 
                                    For limits and indemnity period as scheduled
in respect of the Insured’s interest in Goldeneye fields including coverage in
respect of dependency premises as schedule attached.

Indemnity Period: 730 days.    

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Coverage Summary

                      Policy Period   Policy No.   Coverage   Limits/Amounts  
Carrier
11/01/09-10
  BM0901674   Energy Package (Cont’d)   Deductibles (100%):

Section 1 (A) & (B) & (C)- Onshore & Offshore Property (Platform and Pipelines &
Oil in Store)

$1,500,000 any one accident or occurrence except on Increased Value / Total Loss
Only which shall be nil.

$100,000 any one accident or occurrence in respect of Data Reacquisition,
Reconstruction or Reconstitution Costs.

Section 1 (D) — Cargo (Excluding Oil in Store)

$100,000 any one accident or occurrence any location/shipment but 0.5% of values
any one accident or occurrence in respect of shortage.

Section 2 — Operator’s Extra Expense — (Excess)

Offshore:

$1,500,000 Combined Single Excess any one accident or occurrence.
$150,000 any one accident or occurrence in respect of Care, Custody and Control.

Subject to Offshore Pollution Liability Association (OPOL) stepdown as is
necessary for OPOL excess / deductible not to exceed $1,000,000 (or currency
equivalent) any one accident or occurrence.

Onshore:

$250,000 Combined Single Excess any one accident or occurrence.
$50,000 any one accident or occurrence in respect of Care, Custody and Control.

Section 3 — Liabilities — (Excess)

$150,000 any one accident or occurrence offshore and onshore, except:
Sub-section B (offshore) only, where an excess in respect of Charterers
Liability of $50,000 any one accident or occurrence event shall apply, except
that cargo claims shall be subject to a single of $12,500 each single voyage.

Underlying amounts nil, but subject to minimum underlyings of $5,000,000 (or to
be agred Slip Leader) in respect of statutory Employers Liability / Automobile
Liability / non-owned Aviation Liability.

Section 4 — War and Terrorism

As applicable to Sections 1, 2, 3 and 5, all offshore only.

Section 5 — Loss of Production Income — (Excess)

45 days waiting period any one occurrence.

In the event of an accident or occurrence involving more than one Section
(excluding Sections 3 & 5), then only the single highest deductible to apply.

Nil deductible to apply in respect of Constructive / Actual Total Losses,
General Average / Salvage Charges and War, except for Sections 3 & 5 where above
deductibles to apply.

 

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Coverage Summary

                  Policy Period   Policy No.   Coverage   Limits/Amounts  
Carrier
2/26/10-11
  34-MGU-10-A20905   Primary Directors & Officers   $10,000,000 Annual Aggregate
Deductibles:
$500,000       Per loss for Securities Claims/ $250,000 per loss All other
claims, except zero for non imdemnifiable claims   US Specialty Insurance Co.
 
               
2/26/10-11
  NY10DO2211753NV   Excess Directors & Officers   $10,000,000 Annual Aggregate
Excess of:
$10,000,000 Per Loss   Navigators Insurance Co.
 
               
2/26/10-11
  DOXG235497002   Excess Directors & Officers – Broad Form Side A   $10,000,000
Annual Aggregate
Excess of:
$20,000,000 Per Loss   ACE

 

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Named Insureds

      Named Insureds   Description of Operations
Endeavour International Corporation
  Public Holding Company
 
   
Endeavor Operating Corporation
  Holding Company
 
   
Endeavour Energy UK Limited
  Acquiring, exploring for and developing of natural gas and oil properties
 
   
Endeavour Energy New Ventures Inc.
  New Ventures Holding Company
 
   
Endeavour Energy New Ventures I, Ltd
  Inactive New Ventures Company
 
   
Endeavour Energy North Sea L.P.
  Investment Holding Partnership
 
   
Endeavour Energy North Sea LLC
  General Partner of the LP
 
   
END Management Company
  Payroll management company
 
   
Endeavour International Holding B.V.
  Holding Company
 
   
Endeavour Energy Netherlands B.V.
  Acquiring, exploring for and developing of natural gas and oil properties
 
   
Endeavour North Sea Limited
  Acquiring, exploring for and developing of natural gas and oil properties
 
   
Endeavour Energy Luxembourg S.a.r.l.
  Financing Company

And/or subsidiary, associated, affiliated companies or owned and controlled
companies, as now or hereafter constituted, including principals, officers,
directors, stockholders and employees of all Named Insureds while acting within
the scope of their duties as such and as their interests may appear.

 

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Schedule 8.01(c)
Existing Liens

                      Secured Party   Debtor   File Number   File Date  
Location of Filing   Collateral Dell Financial
Services L.L.C.   Endeavour
International
Corporation   2010013574-3   05/28/2010   Secretary of State
of Nevada   Computer Equipment                       Independent
Television News
Limited   Endeavour Energy UK
Limited   525752/13   06/20/2005   Companies House UK   Funds in Secured
Party’s deposit
account specifically
designated to secure
rent owing to landlord
pursuant to London
office
lease1

 

1   Original amount in account was £35,000 together with £6,125 in addition in
respect of VAT.

 

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Schedule 8.05(c)
Existing Investments
Part I: Shares in Subsidiaries
This Schedule 8.05(c), Part I incorporates relevant information from Credit
Parties’ response to Schedule 6.13, Part I.

 

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Schedule 8.05(c)
Part II: Intercompany Debt

1)   Revolving Loan Facility Agreement dated as of October 31, 2006 between
Endeavour International Holding B.V., as borrower, and Endeavour Operating
Corporation, as lender, as amended, with an aggregate principal amount
outstanding of $99,000,068.00.   2)   Revolving Loan Facility Agreement dated as
of October 31, 2006 between Endeavour International Holding B.V., as lender, and
Endeavour Energy UK Limited, as borrower, with an aggregate principal amount
outstanding of $5,072,839.92.   3)   Revolving Loan Facility dated as of
January 23, 2008 between Endeavour Energy Luxembourg S.a.r.l., as lender, and
Endeavour International Holding B.V., as borrower, as amended, with an aggregate
principal amount outstanding of $52,257,728.98.   4)   $23,500,000 owing from
Endeavour Energy UK Limited to Endeavour North Sea Limited.

 

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Schedule 8.05(c)
Part III: Other Investment Property

              Grantor   Sort Code   Bank Account Number   Designation
Endeavour Operating Corporation
  JPMorgan Chase Bank, N.A.   619034-0829*   Prime Money Market
Securities Account
Endeavour International Holding B.V.
  12-27-14   36401001*   EUR Proceeds Account
Endeavour International Holding B.V.
  12-27-14   34601U5D01*   USD Proceeds Account
Endeavour International Holding B.V.
  12-27-14   34601USD02*   USD Cash Collateral Account
Endeavour International Holding B.V.
  12-27-14   06221716*   GBP Cash Collateral Account
Endeavour Energy UK Limited
  12-27-14   34602USD01*   USD Proceeds Account
Endeavour Energy UK Limited
  12-27-14   06221724*   GBP Proceeds Account
Endeavour Energy UK Limited
  12-27-14   34602USD02*   USD Cash Collateral Account
Endeavour Energy UK Limited
  12-27-14   06221732*   GBP Cash Collateral Account
Endeavour Energy UK Limited
  BNP Paribas   34337J   Cash collateral account pledged to BNP Paribas to
secure the Letters of Credit listed on Schedule 6.20
Endeavour North Sea Limited
  12-27-14   34604USD01*   USD Proceeds Account
Endeavour North Sea Limited
  12-27-14   06221791*   GBP Proceeds Account
Endeavour North Sea Limited
  12-27-14   34604USD02*   USD Cash Collateral Account
Endeavour North Sea Limited
  12-27-14   06221804*   GBP Cash Collateral Account
Endeavour International Holding B.V.
  JPMorgan Chase Bank, N.A.   0657-017001   Operations in USD (account
located in the
Netherlands)
Endeavour International Holding B.V.
  JPMorgan Chase Bank, N.A.   0657-783919   Operations in EUR (account
located in the
Netherlands)
Endeavour Energy Netherlands B.V.
  JPMorgan Chase Bank, N.A.   0657-017101   Operations in USD (account
located in the
Netherlands)
Endeavour Energy Netherlands B.V.
  JPMorgan Chase Bank, N.A.   0657-803898   Operations in EUR (account
located in the
Netherlands)

This Schedule 8.05(c): Part III incorporates all Deposit Accounts set forth on
Schedule 5.09(g).
 

*   Accounts to be closed following Refinancing.

 

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Schedule 8.12
Existing Encumbrances or Restrictions
The Trust Deed related to the 11.50% Convertible Bonds due 2014, issued by
Endeavour Energy Luxembourg S.a.r.l. and guaranteed by Endeavour International
Corporation states that if any moneys become payable by the guarantor under its
guarantee, the issuer will not (except in the event of the liquidation or
bankruptcy of the issuer), so long as any moneys remain unpaid, pay any moneys
for the time being due from the issuer to the guarantor.

 

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Schedule 11.03
Lender Addresses

      Lender   Address
CYRUS OPPORTUNITIES FUND II, L.P.
  c/o Cyan Partners, LP
 
  399 Park Avenue, 39th Floor
 
  New York, NY 10022
 
   
CYRUS EUROPE FUND, L.P.
  c/o Cyan Partners, LP
 
  399 Park Avenue, 39th Floor
 
  New York, NY 10022
 
   
CRESCENT 1, L.P.
  c/o Cyan Partners, LP
 
  399 Park Avenue, 39th Floor
 
  New York, NY 10022
 
   
CYR FUND, L.P.
  c/o Cyan Partners, LP
 
  399 Park Avenue, 39th Floor
 
  New York, NY 10022
 
   
CYRUS CAPITAL PARTNERS, L.P.
  c/o Cyan Partners, LP
 
  399 Park Avenue, 39th Floor
 
  New York, NY 10022
 
   
MTP ENERGY INFRASTRUCTURE FINANCE MASTER
  c/o Magnetar Financial LLC
FUND, LTD.
  1603 Orrington Avenue, 13th Floor
 
  Evanston, IL 60201
 
   
TRIANGLE PEAK PARTNERS PRIVATE EQUITY, LP
  Carmel Plaza, Suite 305
 
  P.O. Box 3788
 
  Carmel, CA 93921
 
   
HELIOS CORPORATE LLC
  400 Madison Avenue
 
  Suite 8D
 
  New York, NY 10017
 
   
THE ROTHSCHILD FOUNDATION EUROPE
  32-33 St. James’s Place
 
  London SW1A 1NR
 
  United Kingdom
 
   
DODER TRUST LIMITED (as Trustee for the
  c/o Carter Ledyard & Milburn
Jader Trust No 4)
  2 Wall Street
 
  New York, NY 10005

 

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      Lender   Address
DODER TRUST LIMITED (as Trustee for The
  Argyle House
Bat Hanadiv Foundation No 3)
  41a Cedar Avenue
 
  Hamilton HM12
 
  Bermuda

 

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EXHIBIT A
FORM OF NOTICE OF BORROWING
[Date]
Cyan Partners, LP, as Administrative Agent (the “Administrative Agent”) for the
Lenders party to the Credit Agreement referred to below
399 Park Avenue, 39th Floor
New York, New York 10022
Attention: Divya Gopal
Ladies and Gentlemen:
          The undersigned, Endeavour Energy UK Limited (the “Borrower”), refers
to the Credit Agreement, dated as of August 16, 2010 (as amended, restated,
modified and/or supplemented from time to time, the “Credit Agreement”, the
capitalized terms defined therein being used herein as therein defined), among
Endeavour International Corporation, the Borrower, the lenders party thereto
(each, a “Lender” and collectively, the “Lenders”), and you, as Administrative
Agent for such Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.02(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the “Proposed Borrowing”) as
required by Section 2.02(a) of the Credit Agreement:
          (i) The Business Day of the Proposed Borrowing is                     
___, ___.1
          (ii) The aggregate principal amount of the Proposed Borrowing is
$                    .
          The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
     (A) the representations and warranties contained in the Credit Agreement
and in the other Credit Documents are and will be true and correct in all
material respects, before and immediately after giving effect to the Proposed
Borrowing, as though made on such date, unless stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date; and
     (B) no Default or Event of Default has occurred and is continuing, or would
immediately result from such Proposed Borrowing.
 

1   Shall be a Business Day at least one Business Day, after the date hereof,
provided that (in each case) any such notice shall be deemed to have been given
on a certain day only if given before 11:00 A.M. (New York City time) on such
day.

 

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            Very truly yours,

ENDEAVOUR ENERGY UK LIMITED
      By:           Name:           Title:      

 

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EXHIBIT B
FORM OF NOTE

$                       New York, New York

                     __, ___
          FOR VALUE RECEIVED, ENDEAVOUR ENERGY UK LIMITED, a company
incorporated in England and Wales (the “Borrower”), hereby promises to pay to
[                                        ] or its successors and registered
assigns (the “Lender”), in lawful money of the United States of America in
immediately available funds, at the Payment Office (as defined in the Credit
Agreement referred to below) initially located at 399 Park Avenue, 39th Floor,
New York, New York 10022, on the Maturity Date (as defined in the Credit
Agreement) the principal sum of                      DOLLARS
($                    ) or, if less, the unpaid principal amount of all Term
Loans (as defined in the Credit Agreement) made by the Lender pursuant to the
Credit Agreement, payable at such times and in such amounts as are specified in
the Credit Agreement.
          The Borrower also promises to pay interest on the unpaid principal
amount of each Term Loan made by the Lender in like money at said office from
the date hereof until paid at the rate and at the times provided in Section 2.06
of the Credit Agreement.
          This Note is one of the Notes referred to in the Credit Agreement,
dated as of August 16, 2010, among Endeavour International Corporation, the
Borrower, the lenders party thereto from time to time (including the Lender),
and Cyan Partners, LP, as Administrative Agent for such Lenders (as amended,
restated, modified and/or supplemented from time to time, the “Credit
Agreement”) and is entitled to the benefits of the Credit Agreement and of the
other Credit Documents (as defined in the Credit Agreement). This Note is
secured by the Security Documents (as defined in the Credit Agreement). As
provided in the Credit Agreement, this Note is subject to voluntary prepayment
and mandatory repayment prior to the Maturity Date, in whole or in part.
          In case an Event of Default (as defined in the Credit Agreement) shall
occur and be continuing, the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect provided in
the Credit Agreement.
          The Borrower hereby waives (to the extent permitted by applicable law)
presentment, demand, protest or notice of any kind in connection with this Note.

 

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Exhibit B
Page 2
          THIS TERM NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PRINCIPLES.

            ENDEAVOUR ENERGY UK LIMITED
      By:           Name:           Title:      

9

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(VINSON & ELKINS LOGO) [h77219h7721901.gif]
EXHIBIT C-1
August 16, 2010
Each of the Addressees Listed in
the Attached Schedule I

     Re:   Credit Facility for Endeavour Energy UK Limited

Ladies and Gentlemen:
     (a) We have acted as counsel to Endeavour International Corporation, a
Nevada corporation (“Holdings”), in connection with the transactions
contemplated by the Opinion Documents (as such term is defined below). This
opinion letter is furnished to you pursuant to Section 5.03(a) of the Agreement
(as defined below). Unless otherwise defined in the body of this opinion letter,
capitalized terms used herein shall have the meanings assigned to such terms in
the Agreement. Other terms that are defined in the Uniform Commercial Code as in
effect in the State of New York (the “NY UCC”) have the same meaning when used
herein unless otherwise indicated by the context in which such terms are so
used. In addition, as used herein:
     (b) the term “Opinion Parties” means, collectively, (i) Endeavour Operating
Corporation, a Delaware corporation (“EOC”); (ii) Endeavour Energy New Ventures
Inc., a Delaware corporation (“New Ventures”); (iii) END Management Company, a
Delaware corporation (“END Management”); (iv) Endeavour Energy North Sea, L.P.,
a Delaware limited partnership (“Endeavour North Sea L.P.”); and (v) Endeavour
Energy North Sea LLC, a Delaware limited liability company (“Endeavour North Sea
LLC”);
     (c) the term “U.S. Credit Parties” means, collectively, the Opinion Parties
and Holdings;
     (d) the term “Credit Parties” means, collectively, the U.S. Credit Parties
and the following entities: (i) Endeavour Energy UK Limited, an England and
Wales corporation (“Borrower”); (ii) Endeavour International Holding B.V., a
Netherlands private limited liability company (“Holding B.V.”); (iii) Endeavour
Energy Netherlands B.V., a Netherlands private limited liability company
(“Netherlands B.V.”); (iv) Endeavour Energy Luxembourg S.ÀR.L., a private
limited liability

     
Vinson & Elkins LLP Attorneys at Law
  First City Tower, 1001 Fannin Street, Suite 2500
Abu Dhabi Austin Beijing Dallas Dubai Hong Kong Houston
  Houston, TX 77002-6760
London Moscow New York Palo Alto Shanghai Tokyo Washington
  Tel +1.713.758.2222 Fax +1.713.758.2346 www.velaw.com

 

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      (V&E LOGO) [h77219h7721902.gif]   August 16, 2010    Page 2

company organized under the laws of Luxembourg (“Endeavour Luxembourg”); (v)
Endeavour North Sea Limited, a private limited company incorporated in England
and Wales (“Endeavour North Sea Limited”); and (vi) Endeavour Energy New
Ventures I, Ltd., a Bermuda exempted company (“Endeavour Berumda”).
     In rendering the opinions set forth below, we have reviewed an execution
copy of the following documents and instruments:
     (i) the Credit Agreement (the “Agreement”) dated as of August 16, 2010 (the
“Closing Date”), among Holdings, Borrower, the Lenders party thereto and Cyan
Partners, LP, as administrative agent for the Lenders (the “Administrative
Agent”).;
     (ii) the U.S. Security Agreement, dated as of the Closing Date (the “U.S.
Security Agreement”), among Holdings, EOC, New Ventures, END Management,
Endeavour North Sea L.P., Endeavour North Sea LLC, Holding B.V., Netherlands
B.V. (with the foregoing entities collectively referred to herein as the
“Grantors”), and Cyan Partners, LP, in its capacity as the Collateral Agent (the
“Collateral Agent”);
     (iii) the Subsidiaries Guaranty, dated as of the Closing Date, among EOC,
Holding B.V., Netherlands B.V., Endeavour North Sea L.P., Endeavour North Sea
LLC, END Management, and New Ventures (as guarantors) in favor of the
Administrative Agent;
     (iv) the Deed of Trust, Assignment of Production, Security Agreement,
Fixture Filing and Financing Statement dated as of the Closing Date (the “Gregg
County Deed of Trust”), by EOC in favor of (A) Philip D. Weller, as trustee for
the benefit of the Collateral Agent and (B) the Collateral Agent, as beneficiary
for the benefit of itself and the Secured Creditors (as therein defined), which
Gregg County Deed of Trust is to be recorded in Gregg County, Texas;
     (v) the Deed of Trust, Assignment of Production, Security Agreement,
Fixture Filing and Financing Statement dated as of the Closing Date (the
“Colorado County Deed of Trust” and, together with the Gregg County Deed of
Trust, the “Texas Deeds of Trust”), by EOC in favor of (A) Philip D. Weller, as
trustee for the benefit of the Collateral Agent and (B) the Collateral Agent, as
beneficiary for the benefit of itself and the Secured

 

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Creditors (as therein defined), which Colorado County Deed of Trust is to be
recorded in Colorado County, Texas;
     (vi) the Subordination Agreement dated as of the Closing Date, among
Endeavour Luxembourg, Holding B.V. and the Administrative Agent;
     (vii) the Subordination Agreement dated as of the Closing Date, among the
Borrower, Holding B.V. and the Administrative Agent;
     (viii) the Subordination Agreement dated as of the Closing Date, among
Endeavour North Sea Limited, the Borrower and the Administrative Agent;
     (ix) the Uncertificated Security Control Agreement dated as of the Closing
Date, among EOC, Endeavour North Sea LLC, Holding B.V., Netherlands B.V.,
Endeavour North Sea L.P., New Ventures, Endeavour Bermuda, and the Collateral
Agent;
     (x) the Amended and Restated Blocked Account Control Agreement (“Shifting
Control”) dated as of the Closing Date (the “Deposit Account Control
Agreement”), by and among EOC, the Collateral Agent and JPMorgan Chase Bank,
N.A., as the Depositary (the “Depositary”), which relates to the deposit account
or deposit accounts therein identified (collectively, whether one or more, the
“Deposit Accounts”);
     (xi) Open-End Mortgage, Assignment of Production, Security Agreement,
Fixture Filing, As-Extracted Collateral Filing and Financing Statement, dated as
of the Closing Date (the “Pennsylvania Mortgage”), by EOC in favor of the
Collateral Agent for the benefit of itself and the Secured Creditors (as therein
defined);
     (xii) Mortgage, Assignment of Production and Rents, Security Agreement,
Fixture Filing, and Financing Statement, dated as of the Closing Date (the
“Louisiana Mortgage”), by EOC in favor of the Collateral Agent for the benefit
of itself and the Secured Creditors (as therein defined);
     (xiii) Charge Over Shares dated as of the Closing Date (the “Share
Charge”), between Endeavour North Sea L.P. and the Collateral Agent;

 

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     (xiv) Agreement and Deed of Pledge of Shares dated as of the Closing Date
(the “Dutch Pledge” and, together with the Pennsylvania Mortgage, the Louisiana
Mortgage and the Share Charge, the “Designated Documents”), among EOC, Holdings
B.V., and Cyan Partners, LP, as the pledgee;
     (xv) each of the agreements listed on Schedule II hereto (the “Applicable
Contracts”);
     (xvi) each Opinion Party’s constitutive documents and resolutions listed on
Schedule III hereto (the “Organizational Documents”);
     (xvii) unfiled copies of the UCC-1 Financing Statements listed on Part A of
Schedule IV hereto (the “Financing Statements”), which Financing Statements
relate to the Article 9 Collateral (as defined in paragraph 9 below);
     (xviii) unfiled copies of the UCC-1 Financing Statements listed on Part B
Schedule IV hereto (the “Fixture Financing Statements”), which financing
statements relate to the fixtures described therein; and
     (xix) unfiled copies of the UCC-1 Financing Statements listed on Part C
Schedule IV hereto (the “As-Extracted Collateral Financing Statements”), which
financing statements relate to the as-extracted collateral described therein.
     The documents listed in clause (i) through (x) above are referred to herein
as the “Opinion Documents”. Additionally, in rendering the opinions set forth
below, we have reviewed such other records, certificates and documents as we
have deemed appropriate for the purposes of such opinions. As to any facts
material to our opinion, we have made no independent investigation of such facts
and have relied, to the extent that we deem such reliance proper, upon
statements of public officials and officers or other representatives of the
Credit Parties and on the representations and warranties relating to factual
matters set forth in the Opinion Documents.
     In rendering the opinions expressed below, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, and the conformity
to authentic original documents of all documents submitted to us as copies,
which assumptions we have not independently verified. In addition, with your
permission and without independent investigation, we have made the following
assumptions:

 

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     (i) Each party to the Opinion Documents and the Designated Documents other
than the Opinion Parties (each such party other than the Opinion Parties, a
“Transaction Party”) is a corporation, partnership, limited liability company or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization;
     (ii) Each Transaction Party has full power and authority (corporate,
partnership, limited liability company or otherwise) to execute, deliver and
perform its obligations under the Opinion Documents and the Designated Documents
to which it is a party;
     (iii) Each Opinion Document and each Designated Document has been duly
executed and delivered by each Transaction Party that is a party thereto;
     (iv) The execution, delivery and performance by each Transaction Party of
the Opinion Documents and the Designated Documents to which it is a party have
been duly authorized by all necessary entity action (corporate, partnership,
limited liability company or otherwise) and do not contravene the constituent
documents of such Transaction Party;
     (v) The execution, delivery and performance by each Transaction Party and
each Opinion Party of the Opinion Documents and the Designated Documents to
which it is a party do not conflict with or result in the breach of any document
or instrument binding on it (except that we have not made such assumption with
respect to the Organizational Documents or Applicable Contracts, to the extent
of our opinion in paragraphs 5 and 6(b) below);
     (vi) The execution, delivery and performance by each Transaction Party and
each Opinion Party of the Opinion Documents and the Designated Documents to
which it is a party do not contravene any provision of any law, rule,
regulation, order, validation, writ, judgment, injunction, decree, determination
or award applicable to any of them (except that we have not made such assumption
with respect to Applicable Laws (as defined in paragraph 6 below) applicable to
each Credit Party, to the extent of our opinion in paragraph 6(a) below);
     (vii) No authorization, approval, consent, order, validation, license,
franchise, permit or other action by, and no notice to or filing, recording or
registration with, any Governmental Authority or any other third party is

 

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required for the due execution, delivery and performance by each Transaction
Party and each Opinion Party of the Opinion Documents and the Designated
Documents to which it is a party that has not been duly obtained or made and
that is not in full force and effect (except that we have not made such
assumption with respect to Governmental Approvals (as defined in paragraph 8
below) required to be obtained or taken by each Credit Party as to which we
express our opinion in paragraph 8 below);
     (viii) The Opinion Documents and the Designated Documents constitute the
valid, binding and enforceable obligations of each party thereto (other than the
Credit Parties to the extent of our opinions in paragraphs 3 and 4 below); and
     (ix) The laws of any jurisdiction other than the laws that are the subject
of this opinion letter do not affect the opinions rendered herein or the terms
of the Opinion Documents and the Designated Documents.
     With respect to certain of the foregoing matters, please refer to the other
opinions of counsel being rendered in connection with the Opinion Documents and
the Designated Documents.
     Based upon the foregoing, and subject to the assumptions, qualifications,
exceptions and limitations set forth herein, it is our opinion that:

  1.   Each Opinion Party is a corporation, limited liability company or limited
partnership (as the case may be) validly existing and in good standing under the
laws of the State of Delaware. Each Opinion Party is duly qualified to do
business in, and is in good standing as a foreign entity under the laws of, the
State or States set forth opposite such Opinion Party’s name on Schedule V
hereto.     2.   Each Opinion Party has the corporate, limited liability company
or limited partnership power and authority (as the case may be) to execute and
deliver each Opinion Document and each Designated Document to which it is a
party and to perform its obligations thereunder. The execution and delivery by
each Opinion Party of each Opinion Document and each Designated Document to
which it is a party and the performance by such Opinion Party of its obligations
thereunder have been duly authorized by all requisite corporate, limited
liability company or limited partnership action (as the case may be) on the part
of such Opinion Party.

 

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  3.   Each Opinion Document and each Designated Document to which any Opinion
Party is a party has been duly executed and delivered by such Opinion Party.    
4.   Under the laws of the State of New York, each Opinion Document (other than
the Texas Deeds of Trust) to which any Credit Party is a party constitutes the
valid and binding obligation of such Credit Party enforceable against such
Credit Party in accordance with its terms.     5.   Under the laws of the State
of Texas, each Texas Deed of Trust constitutes the valid and binding obligation
of EOC enforceable against EOC in accordance with its terms under the laws of
the State of Texas.     6.   The execution and delivery by each Opinion Party of
each Opinion Document and each Designated Document to which it is a party do
not, and the performance by such Opinion Party of its obligations thereunder
will not, violate such Opinion Party’s Organizational Documents.     7.   The
execution and delivery by each Credit Party of each Opinion Document and each
Designated Document to which it is a party do not, and the performance by such
Credit Party of its obligations thereunder will not: (a) result in any violation
by the Credit Party of any Applicable Law (as defined below); (b) breach or
result in a default under any Applicable Contract; or (c) result in the creation
or imposition of any lien on any properties of the Credit Party pursuant to any
Applicable Contract, other than as may be contemplated by the Opinion Documents
and the Designated Documents.

“Applicable Laws” means, collectively, (a) with respect to the Opinion Parties,
the General Corporation Law of the State of Delaware (the “Delaware Corporation
Law”), the Limited Liability Company Act of the State of Delaware (the “Delaware
LLC Act”), the Revised Uniform Limited Partnership Act of the State of Delaware
(the “Delaware LP Act”, collectively the “Delaware Statutes”) (all as published
in the Corporation Service Company compilation entitled Delaware Laws Governing
Business Entities (Spring 2010 Edition)), and (b) with respect to the Credit
Parties, those laws of the States of New York and Texas and the United States of
America and the rules and regulations adopted thereunder that, in our
experience, are normally applicable to transactions of the type contemplated by
the Opinion Documents. Furthermore, the term “Applicable Laws” does not include,
and we express no opinion with regard to (i) any state or federal laws, rules or
regulations relating to: (A) pollution or protection of the environment;
(B) zoning, land use, building or

 

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construction; (C) occupational, safety and health or other similar matters;
(D) labor and employee rights and benefits, including, without limitation, the
Employee Retirement Income Security Act of 1974, as amended; (E) the regulation
of utilities, including without limitation, the Federal Power Act, the Public
Utility Holding Company Act of 2005 and the Public Utility Regulatory Policies
Act of 1978, as amended; (F) antitrust and trade regulation; (G) tax; (H) except
as specifically set forth in paragraphs 17 and 18 below, securities, including
without limitation, the Investment Company Act of 1940, as amended; (I) corrupt
practices, including, without limitation, the Foreign Corrupt Practices Act of
1977; (J) copyrights, patents and trademarks; and (K) communication,
telecommunication or similar matters; and (ii) any laws, rules or regulations of
any county, municipality or similar political subdivision or any agency or
instrumentality thereof.

  8.   No Governmental Approval (as defined below) that has not been obtained or
taken and is not in full force and effect, is required to be obtained or taken
by any Credit Party to authorize, or is required in connection with, the
execution and delivery by such Credit Party of each Opinion Document and each
Designated Document to which it is a party or the performance by such Credit
Party of its obligations thereunder, the grant of security interests by such
Credit Party under such Opinion Documents and Designated Documents, or the
legality, validity, binding effect or enforceability of any such Opinion
Document or Designated Document as against such Credit Party, except: (a) the
filing of the Financing Statements in the filing offices set forth in paragraph
10 below; (b) the recording of the Texas Deeds of Trust and the filing of the
Fixture Financing Statements and the As-Extracted Collateral Financing
Statements in the Applicable Counties (as defined in paragraph 13 below); and
(c) Governmental Approvals not required to consummate the transactions occurring
on the date hereof but required to be obtained or made after the date of this
opinion letter to enable such Credit Party to comply with requirements of
Applicable Law including those required to maintain existence and good standing
of such Credit Party.

“Governmental Approvals” means any consent, approval, license or authorization
of, or filing, recording or registration with, any Governmental Authority
pursuant to any Applicable Laws (as defined in paragraph 6 above).

  9.   Under the laws of the State of New York, the provisions of the U.S.
Security Agreement are effective to create in favor of the Collateral Agent to
secure the Secured Obligations (as defined therein), a valid security interest
in all of each

 

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      Credit Party’s right, title and interest in and to that portion of the
Collateral (as defined therein) in which a security interest may be created
under Article 9 of the NY UCC without giving effect to the laws referred to in
Section 9-201 thereof (the “Article 9 Collateral”).

  10.   To the extent that the filing of a financing statement can be effective
to perfect a security interest in the Article 9 Collateral of each Opinion Party
under the Uniform Commercial Code as in effect in the State of Delaware (the
“Delaware UCC”), the security interest in favor of the Collateral Agent in that
portion of the Article 9 Collateral described in the Financing Statements will
be perfected upon the proper filing of the Financing Statements in office of the
Secretary of State of the State of Delaware. The Financing Statements are in
proper form for filing with the Secretary of State of the State of Delaware
under the Delaware UCC.     11.   Under the laws of the State of New York, with
respect to that portion of the Article 9 Collateral consisting of the Deposit
Account, the provisions of the Deposit Account Control Agreement are effective
to perfect the security interest of the Collateral Agent therein by “control”
(within the meaning of Section 9-104 of the NY UCC).     12.   Under the laws of
the State of New York, with respect to that portion of the Article 9 Collateral
consisting of Certificated Securities (within the meaning of Section 8-102 of
the NY UCC, herein referred to as the “Certificated Securities”), upon the
Collateral Agent taking possession in the State of New York of certificates
evidencing such Certificated Securities which are in registered form, issued or
indorsed in the name of the Collateral Agent or in blank by an effective
indorsement or accompanied by undated stock powers with respect thereto duly
indorsed in blank by an effective endorsement, the security interest of the
Collateral Agent therein is perfected by “control” (within the meaning of
Section 8-106 of the NY UCC) to the extent that the NY UCC is applicable
thereto.     13.   Under the laws of the State of Texas, each Texas Deed of
Trust is in proper form for recording in the real property records of the county
or counties in which the Trust Property (as defined the applicable Texas Deed of
Trust, herein referred to as the “Trust Property”) therein described is located
(the “Applicable Counties”) in order to create, and each Texas Deed of Trust is
effective to create, valid and enforceable liens, security interests and/or

 

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      assignments of the interest of EOC in the portion of the applicable Trust
Property described therein that constitutes interests in real property
(including fixtures, timber to be cut and as-extracted collateral) in favor of
the Administrative Agent and the Collateral Agent to secure the payment and
performance of the Secured Obligations (as therein defined). Recording of each
Texas Deed of Trust in the real property records of each relevant Applicable
County will impart constructive notice to third parties of the contents of each
Texas Deed of Trust, including the liens against the portion of the Trust
Property therein described that constitutes interests in real property
(including fixtures, timber to be cut and as-extracted collateral) created by
such Texas Deed of Trust. Additionally, each Texas Deed of Trust, when recorded
in the real property records of each relevant Applicable County, is sufficient
to serve as a financing statement under the Uniform Commercial Code as in effect
in the State of Texas (the “Texas UCC”) as to the portions of the Trust Property
described therein comprising fixtures and as-extracted collateral.

  14.   Under the Texas UCC, each of the Fixture Financing Statements and the
As-Extracted Collateral Financing Statements are in proper form for filing in
the real property records of each relevant Applicable County.     15.   Except
for nominal filing or recording fees, no taxes or other charges, including
without limitation, mortgage recording taxes, intangible or documentary stamp
taxes, transfer taxes or similar charges, will be required to be paid in
connection with (a) the execution and delivery of the Texas Deeds of Trust, and
(b) the filing and recording of the Texas Deeds of Trust, the Fixture Financing
Statements and the As-Extracted Collateral Financing Statements.     16.  
Section 51.002 of the Texas Property Code provides, inter alia, that a sale of
real property under the power of sale conferred by a deed of trust must be a
public sale at auction held between 10:00 a.m. and 4:00 p.m. of the first
Tuesday of a month and that the sale must take place at the county courthouse in
the county in which the land is located or, if the property is located in more
than one county, the sale may be made at the courthouse in any county in which
the property is located. Section 51.003 of the Texas Property Code provides,
inter alia, that (a) if the price at which real property is sold at a
foreclosure sale under Section 51.002 of the Texas Property Code is less than
the unpaid balance of the indebtedness secured by the real property, resulting

 

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      in a deficiency, then any person against whom recovery of such deficiency
is sought may request that the court in which the deficiency action is pending
determine the fair market value of such real property as of the date of the
foreclosure sale, and (b) if the court determines that the fair market value is
greater than the sale price of the real property at the foreclosure sale, then
the persons against whom recovery of the deficiency is sought are entitled to an
offset against the deficiency by the amount by which the fair market value (less
the amount of any claim, indebtedness, or obligation of any kind that is secured
by a lien or encumbrance on the real property that was not extinguished by the
foreclosure), exceeds the sale price at the foreclosure sale. Non-judicial
foreclosure under the Texas Deeds of Trust, in and of itself, will not under the
laws of the State of Texas restrict or impair the Collateral Agent’s rights or
remedies with respect to the foreclosure or enforcement of any other security
interests or liens created by the Texas Deeds of Trust to the extent of any
deficiency remaining after the proper application of proceeds of the foreclosure
sale thereunder, subject to the provisions of Sections 51.002 through 51.005 of
the Texas Property Code. The laws of the State of Texas do not require a
lienholder to elect, prior to an exercise of remedies, to pursue its remedies
against either liens in real property or personal property, if such lienholder
holds enforceable perfected security interests and liens on both real and
personal property of a debtor.

  17.   No Credit Party is an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.     18.   Assuming that each Credit
Party will comply with the provisions of the Agreement relating to the use of
proceeds, the execution and delivery of the Agreement by such Credit Party and
the making of the Term Loans thereunder and the application of the proceeds
thereof does not violate Regulation U or X of the Board of Governors of the
Federal Reserve System.     19.   We call to your attention the fact that the
Opinion Documents (other than the Texas Deeds of Trust) select the internal laws
of the State of New York as the governing law. It is our opinion that a federal
or state court sitting in Texas and applying Texas choice-of-law statutes and
principles would honor the parties’ choice of the internal laws of the State of
New York as the law applicable to the Opinion Documents (other than the Texas
Deeds of Trust) to the extent set forth in such Opinion Documents.

 

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     In rendering the foregoing opinions, we have also assumed, with your
permission, and without independent investigation on our part, the following:
     A. With respect to our opinions set forth in paragraphs 9 through 14 above,
we have assumed that each Opinion Party has, or has the power to transfer,
rights in the properties in which it is purporting to grant a security interest
sufficient for attachment of such security interest within the meaning of
Section 9-203 of the NY UCC and Section 9.203 of the Texas UCC.
     B. With respect to our opinions set forth in paragraphs 9 through 14 above,
we have assumed that the Collateral Agent has acquired its interests in the
Article 9 Collateral and the Trust Property for value within the meaning of
Section 9-203 of the NY UCC and Section 9.203 of the Texas UCC.
     C. With respect to our opinions set forth in paragraphs 9 through 14 above,
we have assumed the descriptions of collateral contained in or attached as
schedules to, the U.S. Security Agreement, the Texas Deeds of Trust, the
Financing Statements, the Fixture Financing Statements and the As-Extracted
Collateral Financing Statements sufficiently describe (for the purposes of the
attachment and perfection of security interests) the collateral intended to be
covered thereby.
     D. With respect to our opinion set forth in paragraph 10 above, we have
relied on the Organizational Documents as the basis for determining that (i) the
correct legal name of each Opinion Party is as set forth on the Financing
Statements, and (ii) each Opinion Party is solely organized under the laws of
the State of Delaware.
     E. With respect to our opinion set forth in paragraph 11, we have assumed
that (i) the Depositary is a “bank” within the meaning of Section 9-102(a)(8) of
the NY UCC;(ii) the Depositary shall hold and maintain each Deposit Account as a
“deposit account” (within the meaning of Section 9-102(a)(29) of the NY UCC);
(iii) the agreement between EOC and the Depositary pertaining to the Deposit
Account specifies that it is governed by the law of the State of New York; and
(iv) the Depositary will comply with its obligations under the Deposit Account
Control Agreement.
     F. With respect to our opinion set forth in paragraph 12 above, we have
assumed that the certificates evidencing the Certificated Securities will at all
times be held by the Collateral Agent in the State of New York.

 

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     The opinions set forth above are subject to the following qualifications
and exceptions:
     (a) The opinions in paragraphs 0 through 2 and 5 above are limited in all
respects to the Delaware Statutes. The opinions in paragraph 0 above to the
extent they relate to the existence and good standing of Opinion Parties in the
State of Delaware are based solely on the certificates listed on Schedule V
hereto. The opinions in paragraph 0 above to the extent they relate to the due
qualification of the Opinion Parties to do business in, and standing of the
Opinion Parties as foreign entities under the laws of, the State or States set
forth on Schedule V hereto are based solely on the certificates listed on
Schedule V hereto.
     (b) The enforceability of each Opinion Document and the provisions thereof
may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other laws now or hereafter in effect relating to or affecting
enforcement of creditors’ rights generally and by general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether such enforcement is considered in
a proceeding in equity or at law.
     (c) With respect to our opinions set forth in paragraphs 3 and 4 above, we
express no opinion with respect to the validity or enforceability of the
following provisions to the extent that they are contained in the Opinion
Documents: (i) provisions purporting to release, exculpate, hold harmless, or
exempt any person or entity from, or to require indemnification or contribution
of or by any person or entity for, liability for any matter to the extent that
the same are inconsistent with applicable law (including case law) or with
public policy; (ii) provisions purporting to waive, subordinate or not give
effect to rights to notice, demands, legal defenses or other rights or benefits
that cannot be waived, subordinated or rendered ineffective under applicable
law; (iii) provisions purporting to provide remedies inconsistent with
applicable law; (iv) provisions purporting to render void and of no effect any
transfers of the Credit Parties’ rights in any collateral in violation of the
terms of the Opinion Documents; (v) other than with respect to our opinions set
forth in paragraphs 9 through 14

 

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above, provisions relating to the creation, attachment, perfection or
enforceability of any security interest; (vi) provisions relating to powers of
attorney, severability or set-offs; (vii) provisions stating that a guarantee
will not be affected by a modification of the obligation guaranteed in cases in
which that modification materially changes the nature or amount of such
obligation; (viii) provisions that limit the obligation of a guarantor,
co-borrower or co-obligor (or provide for any rights of contribution as against
another guarantor or, co-borrower or co-obligor or any other party) based upon
the potential unenforceability, invalidity, or voidability of a guarantee or
joint obligation under any applicable law, including, without limitation, any
state or federal fraudulent transfer or fraudulent conveyance laws;
(ix) provisions restricting access to courts or purporting to affect the
jurisdiction or venue of courts (other than the courts of the State of New York
with respect to Opinion Documents governed by the laws of the State of New
York); (x) provisions setting out methods for service of process; (xi)
provisions purporting to exclude all conflicts-of-law rules; (xii) provisions
pursuant to which a party agrees that a judgment rendered by a court or other
tribunal in one jurisdiction may be enforced in any other jurisdiction;
(xiii) provisions providing that decisions by a party are conclusive or may be
made in its sole discretion; (xiv) provisions providing for liquidated damages
or any “make whole”, “yield maintenance” or “premium amount” to the extent that
they may be deemed a penalty; (xv) provisions granting to the Collateral Agent
cash proceeds of rent, income, revenues, issues or profits from the Trust
Property unless the Collateral Agent is in lawful possession of the Trust
Property or has secured by final order the appointment of a receiver therefor or
has taken such action judicially deemed to be the equivalent thereof;
(xvi) provisions of an Opinion Document that require any Credit Party to
indemnify any other party to such Opinion Document against loss in obtaining the
currency due under such Opinion Document from a court judgment in another
currency; or (xvii) the provisions of Section 11.20 of the Credit Agreement.
Additionally, with respect to our opinions set forth in paragraphs 3 and 4
above, such opinions are subject to possible judicial action giving effect to
governmental actions or foreign laws affecting creditors’ rights. Our opinions
are based solely on our reading of the Opinion Documents. We note that
enforceability of the Opinion Documents may be affected by the parties’ course
of dealing,

 

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or by waivers, modifications or amendments (whether made in writing, orally, or
by course of conduct), and we express no opinion on the effect of the foregoing
on the enforceability of the Opinion Documents.
     (d) Insofar as our opinion set forth in paragraph 3 above relates to the
enforceability under New York law of the provisions of the Opinion Documents
(other than the Texas Deeds of Trust) choosing New York law as the governing law
thereof, such opinion is rendered solely in reliance upon the Act of July 19,
1984, ch. 421, 1984 McKinney’s Sess. Law of N.Y. 1406 (codified at N.Y. Gen.
Oblig. Law §§5-1401 (McKinney 1989)) (the “Act”) and is subject to the
qualifications that such enforceability (i) as specified in the Act, does not
apply to the extent provided to the contrary in subsection two of Section 1-105
of the NY UCC, (ii) may be limited by public policy considerations of any
jurisdiction in which enforcement of such provisions is sought, and (iii) is
subject to any U.S. Constitutional requirement under the Full Faith and Credit
Clause or the Due Process Clause thereof or the exercise of any applicable
judicial discretion in favor of another jurisdiction.
     (e) As to our opinion set forth in paragraph 19 above as to the
enforceability under Texas law of the provisions of the Opinion Documents (other
than the Texas Deeds of Trust) choosing New York law as the governing law
thereof, such opinion is rendered solely in reliance upon Title 9, Chapter 271
of the Texas Business and Commerce Code (“Chapter 271”), which applies to
transactions in which a party pays or receives, or is obligated to pay or
entitled to receive, consideration in excess of $1,000,000, and is subject to
the qualifications that such enforceability (i) as specified in Chapter 271,
does not apply to an issue that another Texas statute (such as Section 1.301(b)
of the Texas UCC), or a federal statute, provides is governed by the law of a
particular jurisdiction, (ii) may be limited by public policy considerations of
any jurisdiction in which enforcement of such provisions is sought, and (iii) is
subject to any U.S. Constitutional requirement under the Full Faith and Credit
Clause or the Due Process Clause thereof or the exercise of any applicable
judicial discretion in favor of another jurisdiction. In rendering our opinion
in paragraph 19 above, with your permission and without independent
investigation,

 

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we have assumed that either the Administrative Agent or one of the Lenders has
its place of business or, if it has more than one place of business, its chief
executive office or an office from which it has conducted a substantial part of
the negotiations relating to the transaction evidenced by the Opinion Documents,
in the State of New York.
     Our opinion in paragraph 6(a) above states, among other things, that the
execution and delivery by each Credit Party of each Opinion Document to which it
is a party do not, and the performance of its obligations thereunder will not,
result in any violation by such Credit Party of any Applicable Law, which
Applicable Law includes, among other things, certain laws, rules and regulations
of the State of Texas. We note that such opinion in paragraph 6(a) as to those
Opinion Documents governed by New York law is based, in part, upon Chapter 271,
which is discussed in the preceding paragraph. To the extent that, in rendering
such opinion in paragraph 6(a) as to the Opinion Documents governed by New York
law, we have relied upon Chapter 271, such opinion in paragraph 6(a) is also
subject to the qualifications set forth in the immediately preceding paragraph.
     (f) Certain of the remedial provisions with respect to the Article 9
Collateral and the Trust Property (including waivers with respect to the
exercise of remedies against the collateral) contained in the U.S. Security
Agreement and in each Texas Deed of Trust may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the validity of the
U.S. Security Agreement or either Texas Deed of Trust, in each case taken as a
whole, and the U.S. Security Agreement and each Texas Deed of Trust, in each
case taken as a whole, together with applicable law, contains adequate
provisions for the practical realization of the benefits intended to be provided
thereby (it being understood that we express no opinion as to the adequacy of
such provisions to the extent it is necessary to seek execution or enforcement
of rights or remedies under the laws of any jurisdiction outside the State of
New York or, in the case of each Texas Deed of Trust, outside of the State of
Texas). Additionally, we note that the remedies under the U.S. Security
Agreement to sell or offer for sale the Article 9 Collateral are subject to
compliance with applicable state and federal securities laws.

 

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     (g) In the case of property which becomes Article 9 Collateral after the
date hereof, our opinion in paragraph 9 above, as to the creation and validity
of the security interests therein described, is subject to the effect of
Section 552 of the Federal Bankruptcy Code, which limits the extent to which
property acquired by a debtor after the commencement of a case under the Federal
Bankruptcy Code may be subject to such security interest arising from a security
agreement entered into by the debtor before the commencement of such case.
     (h) We express no opinion as to Article 9 Collateral or Trust Property that
is subject to a state statute or a statute, regulation or treaty of the United
States referred to in Section 9-311(a) of the NY UCC or the Delaware UCC or in
Section 9.311(a) of the Texas UCC.
     (i) With respect to our opinions set forth in paragraphs 9 and 10 above, we
express no opinion as to Article 9 Collateral consisting of commercial tort
claims.
     (j) With respect to our opinion in paragraph 10 above, we express no
opinion as to the perfection of a security interest in any items of collateral
that are or are to become fixtures, as-extracted collateral or timber to be cut.
     (k) Other than the filing of the Financing Statements in the filing offices
set forth in our opinion in paragraph 10 above, we express no opinion as to any
other actions (including any filings or registrations) that may be necessary
under any applicable law in connection with perfection of a security interest in
Article 9 Collateral consisting of patents, trademarks, copyrights or other
intellectual property rights.
     (l) With respect to our opinions set forth in paragraphs 9 through 14
above, (i) we express no opinion as to the priority of any security interest,
and (ii) we express no opinion as to the perfection of any lien or security
interest granted in the Opinion Documents by Holdings.
     (m) We express no opinion herein regarding the enforceability of any
provision in an Opinion Document that purports to prohibit, restrict or
condition the assignment of any Credit Party’s

 

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rights or obligations under such Opinion Document to the extent that such
restriction on assignability is governed by Sections 9-406 through 9-409 of the
NY UCC.
     (n) With respect to our opinions set forth in paragraphs 9 through 14
above, the attachment and perfection of the Collateral Agent’s and the
Administrative Agent’s security interest in proceeds is limited to the extent
set forth in Section 9-315 of the NY UCC, the Delaware UCC or the Texas UCC.
     (o) We express no opinion as to any actions that may be required to be
taken periodically under the NY UCC, the Delaware UCC, the Texas UCC or under
any other applicable law in order for the effectiveness of the Financing
Statements, the Fixture Financing Statements, the As-Extracted Collateral
Financing Statements or perfection of any security interest to be maintained.
     (p) We express no opinion with respect to the legality, validity, binding
nature or enforceability of any of the provisions of each Texas Deed of Trust
purporting to cover any property which becomes property of EOC after the date
hereof, unless such property is specifically identified in such Texas Deed of
Trust and the parties can be shown to have anticipated, on the date of execution
of such Texas Deed of Trust, the acquisition of such property. In addition, each
Texas Deed of Trust will not secure any portion of the obligations described
therein to the extent that such obligations were not reasonably within the
contemplation of the parties at the time they entered into each Texas Deed of
Trust. We express no opinion as to provisions of either Texas Deed of Trust as
they may relate to property other than the Trust Property located in the State
of Texas.
     (q) We have made no examination of, and express no opinion with respect to,
the accuracy and completeness of the description of any portion of the Trust
Property. We have assumed, without investigation, the accuracy and completeness
under applicable law of the descriptions of all of the Trust Property. We have
also assumed that EOC has good title to the Trust Property and the power to
grant the liens and security interests intended to be granted therein.

 

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     (r) We bring to your attention that Section 16.035 of the Texas Civil
Practice and Remedies Code provides a four-year statute of limitations to
enforce liens on real property created by a mortgage or deed of trust; the
four-year statute begins to run on the maturity date of the indebtedness secured
thereby. Therefore, if the maturity of the Secured Obligations is extended, an
instrument should be filed, prior to the expiration of such four-year period, in
the real property records of the Office of the County Clerk of each Applicable
County where the property subject to each Texas Deed of Trust is located
referring to such Texas Deed of Trust and giving notice of such extension. We
further note that the obligations of EOC under each Texas Deed of Trust may be
limited by the provisions of Sections 51.003 through 51.005 of the Texas
Property Code relating to limitations on deficiencies following any foreclosure.
     (s) With respect to the equity securities and other investment property
that is subject to the security interests granted under the U.S. Security
Agreement, we note that certain of such equity securities and other investment
property has been issued by entities that are organized under the laws of
foreign jurisdictions outside of the United States, and we express no opinion as
to the effect of the laws of such foreign jurisdictions on the opinions herein
stated. Our opinions with respect to the security interests of the Collateral
Agent in any such equity securities and other investment property is limited in
all respect to the NY UCC, and we note that the laws of the jurisdiction of an
issuer of pledged securities may affect, among other things, whether the
securities are characterized as certificated securities, the exercise of
remedies with respect to such securities and the exercise of voting or other
rights with respect to such securities
     (t) In rendering the opinions expressed in paragraphs 6(b) and 6(c) above:
(i) we have not reviewed, and express no opinion with respect to, documents
other than the Applicable Contracts, irrespective of whether they secure,
support or otherwise relate to or are referred to in the Applicable Contracts or
might under certain circumstances result in an event of default or require early
payment under any of the Applicable Contracts; (ii) we have made no examination
of, and express no opinion with respect to, any financial, accounting or similar
covenant or provision contained in the Applicable Contracts to the

 

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extent that any such covenant or provision would require a determination as to
any financial or accounting matters; (iii) we express no opinion as to any
breach of any confidentiality provision contained in any Applicable Contract
caused by any Opinion Document or any Credit Party’s actions pursuant thereto or
in contemplation thereof; and (iv) our opinions in paragraphs 6(b) and 6(c)
above are limited to the laws of the State of New York regardless of the law
that governs the Applicable Contracts. In every case, we have assumed that a
court would enforce the Applicable Contracts as written and we have limited our
opinion to matters readily ascertainable from the face of the Applicable
Contracts.
     We express no opinion as to the laws of any jurisdiction other than:
(i) Applicable Laws; and (ii) with respect to our opinion set forth in paragraph
10 above, the Delaware UCC. As to our opinions set forth herein regarding the
Delaware Statutes and Article 9 of the Delaware UCC, we have based such opinions
solely on our review of the generally available compilations of the Delaware
Statutes and of Article 9 of the Delaware UCC as in effect on the date hereof,
and we have not reviewed any other laws of the State of Delaware or retained or
relied on any opinion or advice of Delaware counsel.
     This opinion has been prepared in accordance with the customary practice of
lawyers who regularly give and lawyers who regularly advise recipients regarding
opinions of this kind.
     This opinion letter is rendered as of the date set forth above. We
expressly disclaim any obligation to update this letter after such date.
     This opinion letter is given solely for your benefit and the benefit of the
Lenders in connection with the transactions contemplated by the Opinion
Documents and may not be furnished to, or relied upon by, any other person or
for any other purpose without our prior written consent. Notwithstanding the
foregoing, at your request, we hereby consent to:

  (i)   reliance hereon by any future assignee of the Lenders’ interests in the
loans under the Agreement pursuant to an assignment that is made and consented
to in accordance with the express provisions of Section 11.04 of the Agreement,
and     (ii)   your furnishing to, but not reliance upon in any manner by,
(A) your legal counsel and independent auditors who need to know such
information and are informed of the confidential nature of this opinion, (B) any
regulatory

 

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      authority having jurisdiction over you upon the request or demand of such
regulatory authority, (C) any Person to the extent required pursuant to the
order of any court or administrative agency or in any pending legal or
administrative proceeding or as otherwise required by applicable law or
compulsory legal process, provided that you take reasonable steps to procure
that such Person maintains the confidentiality of this opinion, (D) any Person
that subsequently becomes the Administrative Agent or Collateral Agent in
accordance with Section 10.09 of the Agreement, (E) any Person that proposes to
become a Lender under the Agreement, and (F) any Person that proposes to become
or becomes a Secured Creditor under a Secured Hedging Agreement or Secured
Reimbursement Agreement (each, as defined in the U.S. Security Agreement), in
each case, in compliance with the requirements of the Agreement and the U.S.
Security Agreement,

in each case on the condition and understanding that (a) this letter speaks only
as of the date hereof, (b) we have no responsibility or obligation to update
this letter, to consider its applicability or correctness to any person other
than its addressee(s), or to take into account changes in law, facts or any
other developments of which we may later become aware, and (c) any such reliance
by a future assignee must be actual and reasonable under the circumstances
existing at the time of assignment, including any changes in law, facts or any
other developments known to or reasonably knowable by the assignee at such time.
Very truly yours,
VINSON & ELKINS LLP

 

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SCHEDULE I TO OPINION LETTER
Addressees
Cyan Partners, LP, as the Administrative Agent and as the Collateral Agent
Each Lender that is a party to the
Agreement as of the date hereof

 

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SCHEDULE II TO OPINION LETTER
Applicable Contracts

1.   Trust Deed, dated January 24, 2008, between Endeavour Energy Luxembourg
S.a.r.l., Endeavour International Corporation, and BNY Corporate Trustee
Services Limited, Constituting U.S. $40,000,000 11.5% Guaranteed Convertible
Bonds due 2014;   2.   Note Agreement, dated November 17, 2009, relating to 12%
Senior Subordinated Notes due 2014 issued by Endeavour International
Corporation, between Endeavour International Corporation, the guarantors party
thereto, and the initial noteholders party thereto, as amended by the Amendment
to the Note Agreement dated as of March 10, 2010; and   3.   Indenture, dated
January 20, 2005, relating to 6.00% Convertible Senior Notes due 2012 issued by
Endeavour International Corporation, between Endeavour International Corporation
and Wells Fargo Bank, National Association, as trustee.

 

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SCHEDULE III TO OPINION LETTER
Organizational Documents
Endeavour Operating Corporation

  1.   Certificate of Incorporation of Endeavour Operating Corporation, and all
amendments thereto, as certified by the Secretary of State of Delaware;     2.  
Certificate of Merger, merging NSNV, Inc., a Texas corporation, with and into
CSOR Acquisition Corp., under the name of Endeavour Operating Corporation, a
Delaware corporation, as certified by the Secretary of State of Delaware;     3.
  Bylaws of Endeavour Operating Corporation, and all amendments thereto,
certified as being true and correct by an officer of Endeavour Operating
Corporation; and     4.   Resolutions adopted by written consent of the Board of
Directors of Endeavour Operating Corporation.

Endeavour Energy New Ventures Inc.

  1.   Certificate of Amendment of Certificate of Incorporation of END Operating
Management Company, a Delaware corporation, changing the name of such
corporation to Endeavour Energy New Ventures Inc., as certified by the Secretary
of State of Delaware;     2.   Certificate of Incorporation of END Operating
Management Company, as certified by the Secretary of State of Delaware;     3.  
Bylaws of Endeavour Energy New Ventures Inc. (formerly, END Operating Management
Company), and all amendments thereto, certified as being true and correct by an
officer of Endeavour Energy New Ventures Inc.; and     4.   Resolutions adopted
by written consent of the Board of Directors of Endeavour Energy New Ventures
Inc.

END Management Company

  1.   Certificate of Incorporation of END Management Company, and all
amendments thereto, as certified by the Secretary of State of Delaware;     2.  
Bylaws of END Management Company, and all amendments thereto, certified as being
true and correct by an officer of END Management Company; and     3.  
Resolutions adopted by written consent of the Board of Directors of END
Management Company.

Endeavour Energy North Sea, L.P.

  1.   Certificate of Limited Partnership of Endeavour Energy North Sea, L.P.,
and all amendments thereto, as certified by the Secretary of State of Delaware;
    2.   Agreement of Limited Partnership of Endeavour Energy North Sea, L.P.,
and all amendments thereto, certified as being true and correct by an officer of
Endeavour Energy North Sea LLC, as general partner of Endeavour Energy North
Sea, L.P.; and

 

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  3.   Resolutions adopted by written consent of the Board of Managers of
Endeavour Energy North Sea LLC, as general partner of Endeavour Energy North
Sea, L.P., as certified by an officer of Endeavour Energy North Sea LLC.

Endeavour Energy North Sea LLC

  1.   Certificate of Formation of Endeavour Energy North Sea LLC, and all
amendments thereto, as certified by the Secretary of State of Delaware;     2.  
Limited Liability Company Agreement of Endeavour Energy North Sea LLC, and all
amendments thereto, certified as being true and correct by an officer of
Endeavour Energy North Sea LLC; and     3.   Resolutions adopted by written
consent of the Board of Managers of Endeavour Energy North Sea LLC.

 

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SCHEDULE IV TO OPINION LETTER
Financing Statements, Fixture Financing Statements and
As-Extracted Collateral Financing Statements
Part A. Financing Statements
The following financing statements on form UCC-1, which (a) name the Person
listed below as debtor and the Collateral Agent as secured party for the benefit
of the Lenders, (b) cover the Article 9 Collateral (as defined in paragraph 9 of
the foregoing opinion), and (c) are to be filed in the office listed opposite
the name of such debtor:

      Name of Debtor   Filing Office
Endeavour Operating Corporation
  Delaware
 
   
Endeavour Energy New Ventures Inc.
  Delaware
 
   
END Management Company
  Delaware
 
   
Endeavour Energy North Sea, L.P.
  Delaware
 
   
Endeavour Energy North Sea LLC
  Delaware

Part B. Fixture Financing Statements
The following financing statements on form UCC-1, which (a) name the Person
listed below as debtor and the Collateral Agent as secured party for the benefit
of the Lenders, (b) cover the fixtures therein described, and (c) are to be
filed in the office listed opposite the name of such debtor:

      Name of Debtor   Filing Office
Endeavour Operating Corporation
  Real Property Records of the Office of the County Clerk of Colorado County,
Texas
 
   
Endeavour Operating Corporation
  Real Property Records the Office of the County Clerk of Gregg County, Texas

 

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Part C. As-Extracted Collateral Financing Statements
The following financing statements on form UCC-1, which (a) name the Person
listed below as debtor and the Collateral Agent as secured party for the benefit
of the Lenders, (b) cover the as-extracted collateral therein described, and
(c) are to be filed in the office listed opposite the name of such debtor:

      Name of Debtor   Filing Office
Endeavour Operating Corporation
  Real Property Records of the Office of the County Clerk of Colorado County,
Texas
 
   
Endeavour Operating Corporation
  Real Property Records of the Office of the County Clerk of Gregg County, Texas

 

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SCHEDULE V TO OPINION LETTER
Existence, Foreign Qualification, and Good Standing Certificates
Foreign Qualification

      Opinion Party   State(s)
Endeavour Operating Corporation
  Alabama
 
  Louisiana
 
  Montana
 
  New Mexico
 
  Pennsylvania
 
  Texas

Foreign Qualification Certificates

1.   Certificate of foreign qualification of Endeavour Operating Corporation, as
issued on July 20, 2010 by the Secretary of State of Alabama;   2.   Certificate
of foreign qualification of Endeavour Operating Corporation, as issued on
July 19, 2010 by the Secretary of State of Louisiana;   3.   Certificate of
Authorization of Endeavour Operating Corporation, as issued on July 19, 2010 by
the Secretary of State of Montana;   4.   Certificate of Good Standing and
Compliance of Endeavour Operating Corporation, as issued on July 19, 2010 by the
Secretary of State of New Mexico;   5.   Certificate of qualification of
Endeavour Operating Corporation, as issued on July 20, 2010 by the Acting
Secretary of the Commonwealth of Pennsylvania;   6.   Certificate of Fact of
Endeavour Operating Corporation, as issued on July 19, 2010 by the Secretary of
State of Texas; and   7.   Certificate of Account Status of Endeavour Operating
Corporation, as issued on July 21, 2010 by the Texas Comptroller of Public
Accounts.

Existence/Good Standing Certificates

1.   Certificate of Existence of Endeavour Operating Corporation, as issued on
August 13, 2010 by the Secretary of State of Delaware;   2.   Certificate of
Existence of Endeavour Energy New Ventures Inc., as issued on August 13, 2010 by
the Secretary of State of Delaware;   3.   Certificate of Existence of END
Management Company, as issued on August 13, 2010 by the Secretary of State of
Delaware;

 

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4.   Certificate of Existence of Endeavour Energy North Sea, L.P., as issued on
August 13, 2010 by the Secretary of State of Delaware; and   5.   Certificate of
Existence of Endeavour Energy North Sea LLC, as issued on August 13, 2010 by the
Secretary of State of Delaware.

 

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EXHIBIT C-2
August 16, 2010
Cyan Partners, LP
399 Park Avenue, 39th Floor
New York, NY 10022
Re: Endeavour International Corporation, a Nevada corporation.
Ladies and Gentlemen:
     We have acted as special Nevada counsel to Endeavour International
Corporation, a Nevada corporation (the “Company”), in connection with the Credit
Agreement, dated as of August 16, 2010 (the “Credit Agreement”), by and among
the Company, Endeavour Energy UK Limited, as the Borrower, the various lenders
from time to time party to the Credit Agreement and Cyan Partners, LP, as
Administrative Agent. This opinion is being furnished with respect to the
Company pursuant to Section 5.03 of the Credit Agreement. All capitalized terms
used in this letter without definition have the meanings assigned to them in the
Credit Agreement.
     In connection with the opinions set forth herein, we have examined executed
originals or copies certified or otherwise identified to our satisfaction, each
of which is dated the date hereof unless otherwise noted:

  A.   the Credit Agreement;     B.   the U.S. Security Agreement (and together
with the Credit Agreement, the “Transaction Documents.”);     C.   Articles of
Incorporation of the Company, as amended (the “Articles of Incorporation”);    
D.   Bylaws of the Company, as currently in effect (the “Bylaws”);     E.  
Resolutions of the Board of Directors of the Company dated August 16, 2010,
regarding the Transaction Documents;     F.   Certificate of Existence for the
Company dated August 13, 2010, issued by the Secretary of State of Nevada
confirming the corporate existence and good standing of the Company as a Nevada
corporation; and

 

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August 16, 2010
Page 2

  G.   A UCC-1 Financing Statement naming the Company as debtor and the Agent,
in its capacity as Collateral Agent, as the secured party, for filing in the
office of the Nevada Secretary of State (the “Financing Statement”) pursuant to
Article 9 of Nevada’s Uniform Commercial Code (the “NV UCC’).

     In connection with the opinions set forth herein, we have relied on the
certificates of officers of the Company, certificates of public officials and
such other documents, records, public filings and information as we have deemed
necessary or appropriate and as to matters of fact upon the representations and
warranties set forth in the Transaction Documents. We have assumed that all
signatures are genuine; that all documents submitted to us as originals are
authentic; that all documents submitted to us as copies conform to the
originals; and that the facts stated in all such documents are true and correct.
In rendering this opinion, we have not made any independent investigation as to
accuracy or completeness of any facts or representations, warranties, data or
other information, whether written or oral, that may have been made by or on
behalf of the parties, except as specifically set forth herein. We have further
assumed that the Credit Agreement is the valid and binding obligation of the
Lenders.
     We note that the Transaction Documents provide that they shall be governed
by and construed in accordance with the laws of the State of New York.
Therefore, we assume that the Transaction Documents are each enforceable under
the laws of the State of New York.
     Based upon the foregoing and subject to the qualifications set forth
hereinafter, we are of the opinion that:
     1. The Company is duly incorporated and validly existing as a corporation
in good standing under the laws of the State of Nevada. The Company has
corporate power and corporate authority to enter into the Transaction Documents,
to perform its obligations thereunder and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party. The
Company has the corporate power and authority to own its property and assets and
to transact the business in which it is engaged as described in the Company’s
Form 10-K filed with the Securities and Exchange Commission on March 16, 2010.
     2. The execution and delivery of the Transaction Documents by the Company
and the performance by the Company of its obligations thereunder have been duly
authorized by all necessary corporate action on the part of the Company.
     3. To the extent that Nevada law governs such issues, each of the
Transaction Documents has been duly and validly executed and delivered by the
Company.
     4. The execution, delivery and performance of the Transaction Documents,
the consummation of the transactions contemplated therein and the performance by
the Company of its obligations thereunder do not and will not result in any
violation of the provisions of the Articles of Incorporation or Bylaws of the
Company or any statute, rule or regulation of the State of Nevada.

 

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August 16, 2010
Page 3
     5. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Nevada court or Nevada
governmental authority or agency, is necessary or required in connection with
the due authorization, execution and delivery by the Company of the Transaction
Documents, the performance by the Company of its obligations thereunder or the
consummation by the Company of the transactions contemplated thereby, except
(i) such as those which have already been obtained or made, (ii) the filing of
the Financing Statement in the filing office set forth in paragraph 6 hereof and
(iii) other authorizations, approvals, consents, registrations and filings
required under federal and state securities laws, as to which we offer no
opinion.
     6. To the extent that the filing of a financing statement can be effective
under the NV UCC to perfect a security interest in the Collateral, as defined in
the U.S. Security Agreement, the security interest in favor of the Agent in the
Collateral described in the Financing Statement will be perfected upon the
filing of the Financing Statement in the office of the Secretary of State of the
State of Nevada.
     The opinions and other matters in this letter are qualified in their
entirety and subject to the following additional assumptions, qualification and
limitations:
     I. Our opinions expressed in paragraph 6, above, are subject to the
following additional assumptions, qualifications and limitations:
          i. We assume that the security interest in the Collateral granted to
the Collateral Agent in the U.S. Security Agreement has attached under the
applicable Uniform Commercial Code. We express no opinion with respect to the
perfection of a security interest in or transfer of any Collateral with respect
to which a security interest or transfer cannot be perfected by the filing of a
financing statement pursuant Section 104.9311 of the NV UCC. The generic
description of the Collateral set forth in the Financing Statement as “all
assets of the Debtor” is permissible under the NV UCC; however, upon filing of
the Financing Statement in the office of the Nevada Secretary of State,
perfection of the Agent’s security interest by such filing will only occur as to
those items and types of Collateral described in the U.S. Security Agreement in
which a security interest may be perfected by filing in the office of the Nevada
Secretary of State.
          ii. We express no opinion as to the priority of any security interest
created, or purported to be created, by any of the Transaction Documents.
          iii. We call to your attention that Section 552 of the United States
Bankruptcy Code limits the extent to which property acquired by a debtor after
the commencement of a case under the United States Bankruptcy Code may be
subject to a security interest arising from a security agreement entered into by
such debtor before the commencement of such case.
          iv. We express no opinion as to any actions that may be required to be
taken periodically under the NV UCC or other applicable law in order for the
effectiveness of the Financing Statement, or the validity or perfection of any
security interest, to be maintained. We

 

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August 16, 2010
Page 4
note that a financing statement filed in the State of Nevada is generally
effective for a period of five years from the date of filing. However, Nevada
Revised Statutes Section 104.9515 requires the filing of continuation statements
within the period of six months before the expiration of five years from the
date of the filing of the original financing statement or the filing of any
continuation statements in order to maintain the effectiveness of the financing
statement. Upon lapse of the five year period and without the proper filing of a
continuation statement the security interest becomes unperfected (unless the
security interest is perfected without filing) and any priority is lost.
          v. We do not express any opinion with respect to the perfection of a
security interest in the Collateral or the proceeds thereof that constitutes
cash or cash equivalents, except to the extent that they constitute proceeds
under Nevada Revised Statutes Section 104.9315, during any period of time when
they are not held by the Lender or its agent.
          vi. Perfection of a security interest in proceeds of any Collateral
may be limited as provided in Nevada Revised Statutes Section 104.9315.
          vii. We call to your attention that the security interest of the Agent
in any of the Collateral which constitutes accounts under the NV UCC may be
subject to the rights of account debtors claims and defenses of such account
debtors and the terms of agreements with such account debtors.
          viii. The rights of the Company to assign any Collateral consisting of
claims against any government or governmental agency (including, without
limitation, the United States of America or any state thereof or any agency or
department thereof or of any state) may be limited by the Federal Assignment of
Claims Act or similar state or local statute.
          ix. We call to your attention (i) that perfection of any security
interest in the Collateral by filing will lapse (x) four months after the
Company changes its location to another jurisdiction or (y) one year after the
Company transfers such of the Collateral to a person who thereby becomes a
debtor under the U.S. Security Agreement and who is located in another
jurisdiction, unless, in either case, appropriate steps are taken to perfect
such security interest in such other jurisdiction before the expiration of such
four-month or one-year period, as applicable.
          x. If the Company changes its name so as to make the Financing
Statement filed against it seriously misleading, then perfection will lapse as
to any of the Collateral acquired by such party more than four months after such
change unless a new appropriate financing statement indicating the new name of
the Company is properly filed before the expiration of such four-month period.
     II. The foregoing opinions are limited to the matters expressly set forth
herein and no opinion may be implied or inferred beyond the matters expressly
stated. We disclaim any obligation to update this letter for events occurring
after the date of this letter, or as a result of knowledge acquired by us after
that date, including changes in any of the statutory or decisional

 

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August 16, 2010
Page 5
law after the date of this letter. We are members of the bar of the State of
Nevada. We express no opinion as to the effect and application of any United
States federal law, rule or regulation or any securities or blue-sky laws of any
state, including the State of Nevada. We are not opining on, and assume no
responsibility as to the applicability to or the effect on any of the matters
covered herein of the laws of any other jurisdiction other than the laws of
Nevada as presently in effect.
     The opinions rendered herein are for the sole benefit of, and may only be
relied upon by the addressees and any Person that subsequently becomes a Lender
in accordance with Section 11.04(b) of the Credit Agreement as if it were
addressed to such Person and delivered on the date hereof, and the opinions
herein expressed are not to be used, circulated or otherwise referred to in
connection with any transaction other than those contemplated by the Transaction
Documents, provided that the law firm of Vinson & Elkins LLP may rely upon and
refer to this opinion in connection with the opinion to be rendered by them
pursuant to Section 5.03 of the Credit Agreement, provided further, that this
opinion may be furnished by you to, but may not be relied upon in any manner by,
(1) your legal counsel and independent auditors who need to know such
information and are informed of the confidential nature of this opinion, (2) any
regulatory authority having jurisdiction over you upon the request or demand of
such regulatory authority, (3) any Person to the extent required pursuant to the
order of any court or administrative agency or in any pending legal or
administrative proceeding or as otherwise required by applicable law or
compulsory legal process, provided that you take reasonable steps to procure
that such Person maintains the confidentiality of this opinion, (4) any Person
that subsequently becomes the Administrative Agent or Collateral Agent in
accordance with Section 10.09 of the Credit Agreement, (5) any Person that
proposes to become a Lender under the Credit Agreement, and (6) any Person that
proposes to become or becomes a Secured Creditor under a Secured Hedging
Agreement or Secured Reimbursement Agreement (each as defined in the U.S.
Security Agreement), in each case, in compliance with the requirements of the
Credit Agreement and the U.S. Security Agreement.

            Very truly yours,

WOODBURN and WEDGE
      By:   /s/ Gregg P. Barnard       Gregg P. Barnard             

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
EXHIBIT C-3
London, 16 August 2010
Cyan Partners, LP
399 Park Avenue, 39th Floor
New York, New York
United States of America 10022
Ladies and Gentlemen:
This opinion letter is rendered to you at your request in connection with the
Opinion Documents.
Capitalised terms used in this opinion letter have the meanings set forth in
Exhibit A. The section headings used in this opinion letter are for convenience
of reference only and are not to affect its construction or to be taken into
consideration in its interpretation.
This opinion letter is addressed solely to you. It may only be relied upon by
you (which hereafter for the purpose of this opinion letter also includes any
person authorised to rely upon this opinion letter, pursuant to trus paragraph)
in connection with the Opinion Documents. This opinion letter is strictly
limited to the matters stated in it and may not be read as extending by
implication to any matters not specifically referred to in it. Nothing in this
opinion letter should be taken as expressing an opinion in respect of any
representations or warranties, or other information, contained in the Opinion
Documents or any other document reviewed in connection with this opinion letter.
This opinion letter may not be relied upon by any other person, other than any
person, not otherwise an addressee of this letter, who becomes a Lender as
defined in the Credit Agreement (as defined below) during the primary
syndication of the facilities therein, and without our prior written consent,
its contents may not be disclosed by you for any purpose, other than (on a
non-reliance basis) to any persons:

(i)   who are your professional advisers, regulatory authorities, or as and to
the extent required by law or court order;

Nauta Dutilh UK is a partnership under Netherlands law of NautaDutilh UK B.Y.
and NautaDutilh London B.V., which have been recorded in the commercial register
under number 24375834 and 24264677 respectively. The professionals practising at
NautaDutilh UK consist of lawyers and tax advisers. They are admitted to
practise in the Netherlands and do not practise or provide legal advice on
English law. A list of their names will be provided upon request All services
and other work are carried out subject to the general conditions of NautaDutilh
N.V., which apply mutatis mutandis to our relationship with third parties
relying on statements of NautaDutilh N.V. and NautaDutilh UK respectively. These
general conditions include, among other provisions, a

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
limitation of liability clause and have been filed with the Rotterdam Court of
First Instance. They can be consulted at www.nauradulilh.com and will be
provided free of charge upon request.

 

--------------------------------------------------------------------------------

 

      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
        2
        London, 16 August 2010

(ii)   not otherwise an addressee of this opinion letter, who (x) become a
Lender in accordance with the Credit Agreement, other than during the primary
syndication of the facilities therein, or (y) are potential transferees or
assignees of any Lender;   (iii)   becoming Administrative Agent (as defined in
the Credit Agreement) or Collateral Agent (as defined in the Credit Agreement)
in accordance with section 10.09 of the Credit Agreement; or   (iv)   proposing
to become or becoming a Secured Creditor (as defined in the Security Agreement)
under a Secured Hedging Agreement (as defined in the Security Agreement) or a
Secured Reimbursement Agreement (as defined in the Security Agreement) in
accordance with the requirements of the Credit Agreement and the Security
Agreement.

In rendering the opinions expressed in this opinion letter, we have exclusively
reviewed and relied upon the Opinion Documents and the Corporate Documents and
we have assumed that the Opinion Documents have been entered into for bona fide
commercial reasons. We have not investigated or verified any factual matter
disclosed to us in the course of our review.
This opinion letter sets out our opinion on certain matters of the laws with
general applicability of the Netherlands, and, insofar as they are directly
applicable in the Netherlands, of the European Union, as at today’s date and as
presently interpreted under published authoritative case law of the Netherlands
courts, the European General Court and the European Court of Justice. We do not
express any opinion on Netherlands or European competition law, tax law or
regulatory law. No undertaking is assumed on our part to revise, update or amend
this opinion letter in connection with or to notify or inform you of, any
developments and/or changes of Netherlands law subsequent to today’s date. We do
not purport to opine on the consequences of amendments to the Opinion Documents
subsequent to the date of this opinion letter.
The opinions expressed in this opinion letter are to be construed and
interpreted in accordance with Netherlands law. This opinion letter may only be
relied upon by you, and our willingness to render this opinion letter is based,
on the condition that you accept (i) that the legal relationship between
yourselves (which for the purpose of this opinion letter also includes any
person authorised to rely upon this opinion letter pursuant to the preceding
paragraphs) and NautaDutilh UK is governed by Netherlands law and (ii) that any
issues of interpretation or liability arising out of or in connection with this
opinion letter are submitted to the exclusive jurisdiction of the competent
courts at Rotterdam, the Netherlands.

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
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        3
        London, 16 August 2010
In this opinion letter, legal concepts are expressed in English terms. The
Netherlands legal concepts concerned may not be identical in meaning to the
concepts described by the English tenns as they exist under the law of other
jurisdictions. In the event of a conflict or inconsistency, the relevant
expression shall be deemed to refer only to the Netherlands legal concepts
described by the English terms.
For the purposes of this opinion letter, we have assumed that:

a.   all documents reviewed by us as originals are complete and authentic and
the signatures on these documents are the genuine signatures of the persons
purported to have signed them, all documents reviewed by us as drafts of
documents or as fax, photo or electronic copies of originals are in conformity
with the executed originals and these originals are complete and authentic and
the signatures on them are the genuine signatures of the persons purported to
have signed them;   b.   no defects attach to the incorporation of any
Netherlands Company (aan haar totstandkoming geen gebreken k/even) and each Deed
of Incorporation has been executed on the basis of a valid declaration of no
objection (verklaring van geen bezwaar) by or on behalf of a civil law notary
(notaris), who had the power and authority to execute each such deed, and the
Articles of Association of each Netherlands Company comply with Netherlands law
(vo/doen aan de eisen der wet);

c. (i) no regulations (reglement) have been adopted by any corporate body of any
Netherlands Company and (ii) the Articles of Association of each Netherlands
Company are its articles of association currently in force. The Extracts support
item (ii) of this assumption;
d. none of the Netherlands Companies has (i) been dissolved (ontbonden),
(ii) ceased to exist pursuant to a merger (jusie) or a division (splitsing),
(iii) had its assets placed under administration (onder bewind gestelcf),
(iv) been declared bankrupt (jailliet verk/aard) or granted a suspension of
payments (surseance van betaling verleencf) or (v) been made subject to similar
proceedings in any jurisdiction or otherwise been limited in its power to
dispose of its assets. The Extracts and our inquiries of today with the
Bankruptcy Clerk’s Office support the items (i) through (iv) of this assumption.
However, this information does not constitute conclusive evidence that the
events set out in items (i) through (iv) have not occurred;

e.   no works council (ondernemingsraacf) has been established or is in the
process of being established with respect to the business of any Netherlands

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

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        4
        London, 16 August 2010
Company;
f. the resolutions recorded in the Resolutions are in full force and effect, and
the factual statements made and the confirmations given in the Resolutions are
complete and correct;
g. each Power of Attorney (i) is in full force and effect, and (ii) validly
authorises the person or persons purported to be granted power of attorney, to
represent and bind the relevant Netherlands Company vis-avis the other parties
to the Opinion Documents with regard to the transactions contemplated by and for
the purposes stated in the Opinion Documents under any applicable law other than
Netherlands law;
h. each of the parties to the Opinion Documents other than the Netherlands
Companies has:

(i)   been duly incorporated or formed and is validly existing as a legal entity
under the laws of its incorporation and, insofar as relevant under the laws of
its incorporation, is in good standing;   (ii)   the requisite power (corporate
and otherwise) to enter into the Opinion Documents and to perform its
obligations thereunder;   (iii)   taken all necessary corporate action in
connection with the entering into the Opinion Documents; and   (iv)   validly
signed each Opinion Document (other than the Deeds of Pledge of Shares) and
validly signed the powers of attorney in respect of its entering into the Deeds
of Pledge of Shares;

i.   each of the parties to the Opinion Documents other than the Netherlands
Companies complies with the requirements under Netherlands law, or any foreign
law applicable to it, for the execution by it of the Opinion Documents to which
it is a party and the performance by it of its obligations thereunder;   j.  
under any applicable law (other than, in relation to each Netherlands Company,
Netherlands law) (i) each Opinion Document constitutes the legal, valid and
binding obligations of the persons expressed to be a party thereto, enforceable
against them in accordance with their terms and (ii) the choice of law clause
and the jurisdiction clause contained in each Opinion Document constitutes a
legal. valid and binding choice of law and submission to jurisdiction;   k.   at
each Relevant Moment, each relevant pledgor had full title to (was

 

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        London, 16 August 2010

    rechthebbende) and had the full power to dispose of and encumber (was
beschikkingsbeyoegd) the relevant Collateral;

l.   at the time of foreclosure of a security right created by the Netherlands
Security Document, the corresponding Secured Obligations are sufficiently
identifiable (voldoellde bepaalbaar) within the meaning of Article 3:231(2) NCC;
  m.   the obligations of the Credit Parties (as defined in the Guaranty) under
clause 2 (Parallel Debt) of the Guaranty constitute under any applicable law,
other than Netherlands law, the obligations of those Credit Parties to the
Pledgee and, albeit for the benefit of the Lenders (as defined in the Credit
Agreement), not obligations held by the Pledgee on their behalf;   n.   none of
the opinions stated in this opinion letter will be affected by any foreign law;
  o.   all terms and conditions set forth in the Opinion Documents as well as
each of the transactions relating thereto are at arm’s length; and   p.   the
assets of none of the entities the interests in which serve as security under
the Opinion Documents or any of their subsidiaries consist or have consisted,
directly or indirectly, on a consolidated basis, for 70% or more, of real estate
situated in the Netherlands.

Based upon and subject to the foregoing and subject to the qualifications set
forth in this opinion letter and to any matters, documents or events not
disclosed to us, we express the following opinions:
     Corporate Status

1.   Each Netherlands Company has been duly incorporated and is validly existing
as a besloten vennootschap met beperkte aansprakelijkheid (private company with
limited liability).

     Corporate Power

2.   Each Netherlands Company has the corporate power to enter into the Opinion
Documents and to perform its obligations thereunder. None of The Netherlands
Companies violates any provision of its Articles of Association by entering into
the Opinion Documents to which it is expressed to be a party or by performing
its obligations thereunder.

     Corporate Action

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

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        6
        London, 16 August 2010

3.   Each Netherlands Company has taken all corporate action required by its
Articles of Association and Netherlands law in connection with entering into the
Opinion Documents to which it is expressed to be a party and the performance of
its obligations thereunder.       Valid Signing   4.   Each of the Opinion
Documents (other than the Deeds of Pledge of Shares) has been validly signed on
behalf of each Netherlands Company which is a party thereto.   5.   Each Deed of
Pledge of Shares has been validly executed by A.H. Geeriing, civil law notary in
Rotterdam, the Netherlands.       Choice of Law   6.   The Netherlands courts
will recognise the choice of the law of the State of New York to govern the
Foreign Finance Documents.       Enforceability of contractual obligations   7.
  The contractual obligations of the Netherlands Companies under the Foreign
Finance Documents are enforceable against them in the Netherlands in accordance
with their tenns.   8.   The contractual obligations of the Netherlands
Companies under the Deeds of Pledge of Shares constitute the legal, valid, and
binding obligations of the Netherlands Companies, enforceable against them in
the Netherlands in accordance with their terms.       Deeds of Pledge of Shares
  9.   On each Relevant Moment:

  a. in relation to each Deed of Pledge of Shares, such Deed of Pledge of Shares
creates a valid pledge (pandrecht) on the Collateral then in existence and
purported to be pledged thereby; and     b. in relation to Future Collateral,
each Deed of Pledge of Shares will create a valid pledge on the Future
Collateral then acquired by the relevant Pledgor and purported to be pledged
thereby,     as security for the relevant Secured Obligations, to the extent
these Secured Obligations consist of monetary payment obligations
(verbintenissen tot betaling van een geldsom) in favour of the Pledgee, which
pledge is or will be, as the case may be, enforceable in the Netherlands in
accordance with the terms of the Deeds of Pledge of

 

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        7
        London, 16 August 2010

    Shares, the NCCP and the other applicable provisions of Netherlands law.    
  No Authorisations, Consents or Approvals

10.   No authorisation, consent, approval, license or order from or notice to or
filing with any regulatory or other authority or governmental body of the
Netherlands is required by any Netherlands Company in connection with its
entering into the Opinion Documents or the performance of its obligations
thereunder, which, if not obtained or made, would affect the enforceability of
the Opinion Documents against it in the Netherlands.       Jurisdiction   11.  
The submission by each Netherlands Company in the Foreign Finance Documents to
the jurisdiction of the courts of the State of New York and the courts of the
United States for the Southern District of New York, whether located in the City
of New York or in the County of New York, will be recognised by the Netherlands
courts.       Enforcement of Judgments   12.   There is no enforcement treaty
between the Netherlands and the United States of America and/or the State of New
York. Therefore, a judgment of the courts of the State of New York or the courts
of the United States for the Southern District of New York, in each case whether
located in the City of New York or in the County of New York (each such judgment
hereinafter: a “New York Judgment” and such courts hereinafter: the “New York
Courts”) cannot be enforced in the Netherlands. In order to obtain a judgment
that can be enforced in the Netherlands against a Netherlands Company, the
dispute will have to be re-litigated before the competent Netherlands court.
This court will have discretion to attach such weight to a New York Judgment as
it deems appropriate. Given the submission by each Netherlands Company to the
jurisdiction of the New York Courts, the Netherlands courts can be expected to
give conclusive effect to a final and enforceable New York Judgment without
re-examination or relitigation of the substantive matters adjudicated upon. This
would require (i) proper service of process to have been given, (ii) the
proceedings before such court to have complied with principles of proper
procedure (behoorlijke rechtspleging), and (iii) such judgment not being
contrary to the public policy of the Netherlands.       No withholding tax   13.
  All payments made by the Netherlands Companies to the Pledgee under

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

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        8
        London, 16 August 2010

    the Opinion Documents in their capacity of guarantor or pledgor, may be made
free of withholding or deduction of, for or on account of any taxes of whatever
nature imposed, levied, withheld or assessed by the Netherlands or any political
subdivision or taxing authority thereof or therein.       No stamp duties   14.
  No Netherlands registration tax, stamp duty or any other similar documentary
tax or duty, other than court fees, will be payable in the Netherlands by the
Pledgee in respect of or in connection with the signing and/or enforcement by
legal proceedings (including the enforcement of any foreign judgement in the
courts of the Netherlands) of the Opinion Documents or the performance by the
Netherlands Companies of their obligations thereunder.

The opinions expressed above are subject to the following qualifications:

A.   As Netherlands lawyers we are not qualified or able to assess the true
meaning and purport of the tenns of the Foreign Finance Documents under the
applicable law and the obligations of the parties to the Foreign Finance
Documents and we have made no investigation of that meaning and purport. Our
review of the Foreign Finance Documents and of any other documents subject or
expressed to be subject to any Jaw other than Netherlands law has therefore been
limited to the terms of these documents as they appear to us on their face.   B.
  The information contained in the Extracts and in the Shareholders’ Registers
does not constitute conclusive evidence of the facts reflected in them.   C.  
Pursuant to Article 2:7 NCC, any transaction entered into by a legal entity may
be nullified by the legal entity itself or its liquidator in bankruptcy
proceedings (curator) if the objects of that entity were transgressed by the
transaction and the other party to the transaction knew or should have known
this without independent investigation (wist oj zonder eigen onderzoek moest
we/en). The Netherlands Supreme Court (Hoge Raad der Nederlanden) has ruled that
in determining whether the objects of a legal entity are transgressed, not only
the description of the objects in that legal entity’s articles of association
(statu/en) is decisive, but all (relevant) circumstances must be taken into
account, in particular whether the interests of the legal entity were served by
the transaction.

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

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        9
        London, 16 August 2010

D.   A power of attorney or mandate granted by any Netherlands Company,
including but not limited to the appointment of an agent for service of process
(to the extent that it can be considered a power of attorney):

  a. can only be made irrevocable to the extent that its object is the
performance of legal acts in the interests of the attorney or a third party. The
competent Netherlands courts may at the request of the principal cancel the
irrevocable quality of the power of attorney for compelling reasons; and      
b. will terminate in the event of a bankruptcy and become ineffective upon the
suspension of payments of the principal or, unless otherwise provided, the
attorney.

E.   Netherlands courts may. despite any generally recognized choice of law
clause contained in the Foreign Finance Documents (a) apply overriding mandatory
provisions of the Netherlands and other jurisdictions, (b) refuse application of
provisions of other jurisdictions which are manifestly incompatible with the
public policy (nordre public”) of the Netherlands or the European Union, and
(c) have regard to the law of the country where the performance of the agreement
takes place.   F.   The words “enforceable in accordance with their terms” as
used in the opinion expressed in paragraph 7 mean that if a party to the Foreign
Finance Documents brings an action (een rechtsvordering instellen) against a
Netherlands Company before a competent Netherlands court seeking enforcement of
the Foreign Finance Documents, such court will address the issue and, if
appropriate, provide some remedy subject to the terms of the Foreign Finance
Documents, the law applicable pursuant to a choice of law clause contained in
the Foreign Finance Documents and any other applicable law and with due
observance of the provisions of the NCCP.   G.   The opinions expressed in
paragraph 8 and 9 should be read in the understanding that:

    a. the Deeds of Pledge of Shares may not be specifically enforceable in all
circumstances; and       b. should be read in the understanding that the
interpretation by the courts of the Netherlands of an agreement may depend on
the meaning each of the parties in the given circumstances was entitled to
attach to the tenns thereof and on the parties’ reasonable

 

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       10
        London, 16 August 2010

    expectations in that respect.   H.   The opinions expressed in this opinion
letter may be limited or affected by:       a. any applicable bankruptcy,
insolvency, reorganisation, moratorium or other similar laws or procedures now
or hereinafter in effect, relating to or affecting the enforcement or protection
of creditors’ rights generally;       b. the provisions of fraudulent preference
and fraudulent conveyance (Actio Pauliana) and similar rights available to
liquidators in bankruptcy proceedings or creditors in other jurisdictions;      
c. claims based on tort (onrechtmatige daad); and       d. sanctions and
measures implemented or effective in the Netherlands under the Sanctions Act
1977 (Sanctiewet 1977), or European Union Regulations.       e. with respect to
the Deeds of Pledge of Shares, the rules of force majeure (niet toerekenbare
tekortkoming), reasonableness and fairness (redelijkhejd en billijkheid),
suspension (opschorting), dissolution (ontbinding), unforeseen circumstances
(onvoorziene omstandigheden) and vitiated consent (i.e. duress (bedreiging»,
fraud (bedrog), abuse of circumstances (misbruik van omstandigheden) and error
(dwaling») or a difference of intention (wil) and declaration (verklaring),
set-off (verrekening), and other defences afforded by Netherlands law to
obligors generally.   I.   No opinion is expressed as to the validity or
enforceability of any security right, assignment or transfer purported or
intended to be vested by or pursuant to any Foreign Finance Document or with
respect to any consents, approvals, licenses, orders, notices, or filings
necessary to ensure the validity or enforceability of any security right,
assignment or transfer purported or intended to be vested by or pursuant to any
Foreign Finance Document.   J.   Netherlands courts may, notwithstanding any
provision to the contrary in any Opinion Document, assume jurisdiction if a
plaintiff:       a. seeks provisional measures in preliminary relief proceedings
(kort geding) as provided for in Article 254 NCCP et seq.;       b. files a
request for the levy of a pre-trial attachment (conservatoir beslag) as provided
for in Article 700 NCCP et seq.

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

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       11
       London, 16 August 2010

K.   In relation to the contractual obligations under the Deeds of Pledge of
Shares, notwithstanding anything to the contrary provided in the Deeds of Pledge
of Shares, any contractual obligation may be amended orally or by consent of the
parties thereto.   L.   In relation to the security rights created by the Deeds
of Pledge of Shares:       a. A pledge on Future Collateral will not come into
existence if such Future Collateral comes into existence or is acquired by the
relevant pledgor on or after the day on which the pledgor has been declared
bankrupt, been granted a preliminary suspension of payments (voorlopige
surseance van betaling) or suspension of payments (surseance van betating) under
the Bankruptcy Code.       b. A court may suspend enforcement of security rights
against a pledgor which has been declared bankrupt, is granted a preliminary
suspension of payments or suspension of payments under the Bankruptcy Code for a
period not exceeding four months.       c. A liquidator in bankruptcy
proceedings (curator) with respect to a pledgor may (i) require the holder of
any security right granted by that pledgor to enforce that security right within
a reasonable period and if the holder of the security right fails to do so, the
liquidator may demand the surrender of and sell the relevant collateral, without
prejudice to the security holder’s rights to the sale proceeds, subject to a pro
rata contribution to the costs made by the liquidator for the purpose of
completion of the bankruptcy proceedings, or (ii) cause the release of the
relevant collateral against payment of the secured obligations and the
enforcement expenses of the holder of the security right, if any.       d. The
opinions expressed in paragraph 9 may be limited or affected by any prior
attachments levied on, or any prior limited rights (beperkte rechten) created
over, the Collateral and the Future Collateral.       e. With respect to the
opinions expressed in paragraph 9 relating to the pledges on shares purported to
be created by the Deeds of Pledge of Shares the following should be noted:      
i. when foreclosing on a pledge on shares in a besloten vennoolschap met
beperkte aansprakelijkheid (private company with limited liability) the share
transfer restrictions included in the articles of association of that company,
and the FSA will have to be observed; and       ii. although in our view a
pledge on shares which are yet to be acquired by a pledgor can be created in
advance, there is no statutory law or case law confirming this.

 

--------------------------------------------------------------------------------

 

      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
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        12
        London, 16 August 2010

    f. No opinion is expressed herein on the priority of pledges created or to
be created under the Deeds of Pledge of Shares. We note that no registers exist
in the Netherlands from which such information can be conclusively obtained;  
M.   With respect to any trust created under the Opinion Documents it should be
noted that the concept of a “trust” does not exist under Netherlands law. The
Netherlands have, however, ratified the Hague Trust Convention and,
consequently, it is to be expected that such trust shall be recognized by the
Netherlands courts in accordance with and subject to the limitations of the
Hague Trust Convention, provided that (i) such trust is a “trust” within the
meaning of Article 2 of the Hague Trust Convention and is otherwise in
accordance with the requirements for recognition of trusts under such treaty,
(ii) such trust is validly created and existing under the law of the state under
which it is purportedly created, and (iii) the court requested to recognise such
trust does not find that the elements of such trust have a closer connection
with a jurisdiction in which the concept of a trust does not exist. With respect
to any provision pursuant to which any of the Netherlands Companies shall hold
monies on trust, it should be noted that any monies held by any of the
Netherlands Companies pursuant to any such provision will form part of the
relevant Netherlands Company’s estate and may therefore be the subject of
recourse action by any creditor of the relevant Netherlands Company.

Yours faithfully,
Nauta Dutilh UK
Arjan J.J. Pors

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

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        13
        London, 16 August 2010
EXHIBIT A
LIST OF
DEFINITIONS

         
“Articles of Association”
  a.   in relation to Endeavour Energy Netherlands B. V”’ its articles of
association as they read after the execution of a deed of amendment dated 26
July 2010, which, according to the relevant Extract, was the last amendment to
this Netherlands Company’s articles of association; and  
 
  b.   in relation to Endeavour International Holding B.V., its articles of
association as they read after the execution of a eed of amendment dated 26
July 2010, which, according to the relevant Extract, was the last amendment to
this Netherlands Company’s articles of association.
 
       
“Bankruptcy Clerk’s Office”
  (i)   the online central insolvency register (Centraal Insolventie Register)
held by the Council for the Administration of Justice (Raad voor de
Rechtspraak);  
 
  (ii)   the online EU Insolvency Register (Centraal lnsolventie Register-EU
Registraties) held by the Council for the Administration of Justice (Raad voor
de Rechtspraak); and  
 
  (iii)   the Amsterdam court bankruptcy clerk’s office
 
        “Bankruptcy Code”   the Netherlands Bankruptcy Code (Faillissementswet)
 
        “Collateral”   the Shares as defined in the Deeds of Pledge of Shares
 
        “Commercial Register”   the Amsterdam Chamber of Commerce Commercial
Register (handelsregister gehouden

 

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       14
        London, 16 August 2010

              has the meaning ascribed thereto in the has the
 
        “Corporate Documents”   meaning ascribed thereto in the Guaranty
 
       
“Credit Agreement”
  a.   In relation to Endeavour Energy Netherlands BV., its deed of
incorporation (akte van oprichting), dated 27 June 2005; and  
“Deeds of Incorporation”
  b.   in relation to Endeavour International Holding BV., its deed of
incorporation (akte van oprichting), dated 27 June 2005
 
        “Deeds of Pledge of Shares”   the documents referred to under B.I and
B.2 in Exhibit B
 
        “Exhibit”   an exhibit to this opinion letter
 
        “Extract”   in relation to each Netherlands Company, an extract from the
relevant Commercial Register, dated the date of this opinion letter with respect
to each such Netherlands Company
 
        “Foreign Finance Documents”   The documents referred to under A in
Exhibit B
 
        “FSA”   the Netherlands Financial Supervision Act (Wet op hetjinancieeJ
toezicht)
 
        “Future Collateral”   any Collateral purported to be pledged by the
Deeds of Pledge of Shares which will be acquired by the relevant pledgor on a
future date (toekomstige goederen) after the Relevant Moment in relation to such
deeds
 
        “Guaranty”   a New York law guaranty agreement, dated 16 August, between
the Netherlands Companies, Cyan Partners, LP and the other parties named as a
party in that agreement
 
        “NCC”   the Netherlands Civil Code (Burger/ijk
 
       
door de Kamer van Koophandel en Fabrieken)
       

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
     15
     London, 16 August 2010

              Wetboek)
 
        “NCCP”   the Netherlands Code of Civil Procedure (Wethoek van
Burgerlijke Rechtsvordering)
 
        “the Netherlands”   the Kingdom of the Netherlands, excluding Aruba and
the Netherlands Antilles
 
        “Netherlands Companies”   Endeavour Energy Netherlands B. V. and
Endeavour International Holding B. V.
 
        “Opinion Documents”   the documents listed in Exhibit B
 
        “Parallel Debt”   has the meaning ascribed thereto in the Deeds of
Pledge of Shares
 
        “Pledgee”   Cyan Partners, LP, a lintited partnership organised and
existing under the laws of the State of Delaware, United States of America,
having its registered office at 399 Park A venue, New York, NY, United States of
America 10022
 
        “Power of Attorney”   the Share Pledge Powers of Attorney and the
Resolutions Powers of Attorney together
 
        “Relevant Moment”   the moment of:
 
  i.   in relation to the Deeds of Pledge of Shares, the execution (passeren) of
that deed by a competent civil-law notary;  
 
  ii.   in relation to Future Collateral, after the moment referred to under
(i) above at which moment the relevant Pledgor acquires that Future Collateral.
 
        “Resolutions”   in relation to each Netherlands Company, the document or
documents containing the resolutions of its managing board (bestuur), dated 30
July 2010 and the resolutions of its general meeting of shareholders (algemene
vergadering van aandeelhouders), dated 29 July 2010

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
       16
        London, 16 August 2010

          “Resolutions Powers of Attorney”   the Shareholders’ Register relating
to each of the Netherlands Companies the shares of which are pledged under the
relevant Deeds of Pledge of Shares
 
       
“Secured Obligations”
       
 
       
“Security Agreement”
       
 
       
“Share Pledge Powers of Attorney”
       
 
       
“Shareholders’ Register”
       
 
       
the powers of attorney and the appointments contained in the Resolutions in
respect of the entering into the transactions contemplated by the Opinion
Documents
       
 
       
the Secured Obligations as defined in each of the Deeds of Pledge of Shares
       
 
       
a New York law governed security agreement, dated 16 August 2010 between,
amongst others, Cyan Partners, LP, as Collateral Agent and the Netherlands
Companies
       
 
       
the powers of attorney granted by the Netherlands Companies in respect of
entering into the relevant Deeds of Pledge of Shares
       
 
       

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
       17
        London, 16 August 2010
EXHIBIT B
LIST OF
OPINION DOCUMENTS
A. FOREIGN FINANCE DOCUMENTS

1.   a copy of the signed Guaranty.   2.   a copy of the signed Security
Agreement.

B. DEEDS OF PLEDGE OF SHARES

1.   a copy of the executed deed of pledge of shares in the capital of Endeavour
Energy Netherlands B.V.   2.   a copy of the executed deed of pledge of shares
in the capital of Endeavour International Holding B.V.

 

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      ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS   NautaDutilh          

Bowman House
29 Wilson Street
London EC2M 2SJ
T +44 20 7786 9100
F +44 20 7588 6888
Amsterdam
Brussels
London
Luxembourg
New York,
Rotterdam
      
       18
        London, 16 August 2010
EXHIBIT C
LIST OF
CORPORATE DOCUMENTS

1.   a copy of each Deed of Incorporation;   2.   a copy of the Articles of
Association;   3.   a copy of each Extract;   4.   a copy of the Resolutions;  
5.   a copy of each Power of Attorney; and   6.   a copy of each Shareholders’
Register.

 

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EXHIBIT C-4

     
White & Case llp
       Tel +44 (0)20 7532 1000
5 Old Broad Street
       Fax +44 (0)20 7532 1001
London EC2N 10W
  www.whitecase.com

16 August 2010
Cyan Partners, LP on its own behalf, in its capacity as administrative agent
(the “Agent”) under the Credit Agreement (as defined below) and the collateral
agent (the “Collateral Agent”) under the Credit Agreement (as defined below) and
each of the Lenders party to the Credit Agreement on or prior to the Syndication
Date (as defined in the Credit Agreement)
Dear Sirs

1.   We have acted as English legal advisers to the Agent and the Collateral
Agent in connection with:

  (a)   a credit agreement (the “Credit Agreement”) dated as of the date of this
opinion between Endeavour Energy UK Limited as borrower (the “Borrower”),
Endeavour International Corporation as holdings (“Holdings”) and Cyan Partners,
LP as sole arranger, sole book runner, administrative agent and collateral agent
and certain financial and other institutions as lenders;     (b)   a debenture
dated as of the date of this opinion between the Borrower and the Collateral
Agent (the “EEUK Debenture”);     (c)   a share charge dated as of the date of
this opinion between the Borrower and the Collateral Agent in respect of the
shares held by the Borrower in Endeavour North Sea Limited (the “EEUK Share
Charge”); and     (d)   a share charge dated as of the date of this opinion
between Endeavour Energy North Sea L.P. (“EENS LP”) and the Collateral Agent in
respect of the shares held by EENS LP in the Borrower (the “EENS Share Charge”
and together with the EEUK Share Charge the “Share Charges”).

2.   Unless otherwise defined in this opinion, terms defined in the Credit
Agreement shall have the same meaning in this opinion.

3.   In this opinion:

(a) “Companies Act” means the Companies Act 2006 including any statutory
modification or re-enactment thereof for the time being in force together with
any orders or regulations made or issued under or by virtue of the Companies
Act.
A limited liability partnership registered in England & Wales under number
OC324340. Regulated by the Solicitors Regulation Authority. The term partner is
used to refer to a member of this partnership or an employee of equivalent
standing and qualifications, a list of whom is available at the registered
office address above.
ABU DHABI ALMATY ANKARA BEIJING BERLIN BRATISLAVA BRUSSELS BUCHAREST BUDAPEST
DOHA DUSSELDORF FRANKFURT GENEVA HAMBURG HELSINKI HONG KONG ISTANBUL
JOHANNESBURG LONDON LOS ANGELES MEXICO CITY MIAMI MOSCOW MUNICH NEW YORK PALO
ALTO PARIS PRAGUE RIYADH SAO PAULO SHANGHAI SINGAPORE STOCKHOLM TOKYO WARSAW
WASHINGTON, DC

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  (b)   “English Finance Documents” means the EEUK Debenture, EEUK Share Charge
and EENS Share Charge.     (c)   “Finance Documents” means the English Finance
Documents and the Foreign Finance Documents.     (d)   “Foreign Finance
Documents” means:

  (i)   the Credit Agreement;     (ii)   a bond and floating charge dated as of
or about the date of this opinion granted by the Borrower in favour of the
Collateral Agent (the “Bond and Floating Charge”);     (iii)   an assignation of
security dated as of or about the date of this opinion granted by the Borrower
in favour of the Collateral Agent (the “Assignation of Security”);     (iv)   a
subordination agreement dated as of or about the date of this opinion between
the Borrower and Endeavour North Sea Limited in respect of the receivable held
by Endeavour North Sea Limited;     (v)   a subordination agreement dated as of
or about the date of this opinion between Endeavour International Holding RV.
and the Borrower in respect of the receivable held by Endeavour International
Holding RV. (each subordination agreement described in paragraph (iv) and (v),
being a “Subordination Agreement” and together, the “Subordination Agreements”);
    (vi)   notes dated as of or about the date of this opinion issued by the
Borrower in favour of:

  (A)   Crescent 1, L.P.;     (B)   Cyr Fund, L.P.;     (C)   Cyrus Capital
Partners, L.P.;     (D)   Cyrus Europe Fund, L.P.;     (E)   Cyrus Opportunities
Fund II, L.P.;     (F)   Doder Trust Limited (as Trustee for The Bat Hanadiv
Foundation No 3);     (G)   Doder Trust Limited (as Trustee for the lader Trust
No 4);     (H)   Helios Corporate LLC;     (I)   MTP Energy Infrastructure
Finance Master Fund Ltd;

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  (J)   The Rothschild Foundation Europe; and     (K)   Triangle Peak Partners
Private Equity, L.P.,

each issued pursuant to the terms of the Credit Agreement (each note described
in paragraphs (A) to (K) above being a “Note” and together, the “Notes”).

  (e)   “Insolvency Act” means the Insolvency Act 1986 (as amended).

(f) “US Security Agreement” means a security agreement governed by New York law
entered into as of or about the date of this opinion between, inter alios,
Endeavour International Corporation and the Collateral Agent.

4.   In giving this opinion we express no opinion as to the effect or
requirements of any law other than English law as it would be applied by an
English court on the date of this opinion.   5.   For the purposes of this
opinion we have examined copies of and relied upon the following documents:

  (a)   an executed copy of the Credit Agreement;     (b)   an executed copy of
the EEUK Debenture;     (c)   an executed copy of each Share Charge;     (d)  
an executed copy of the Bond and Floating Charge;     (e)   an executed copy of
the Assignation of Security;     (f)   an executed copy of each Subordination
Agreement;     (g)   an executed copy of each Note;     (h)   a certified copy
of the Memorandum and Articles of Association of the Borrower;     (i)   a
certified copy of the minutes of the meeting of the board of directors of the
Borrower held on 3 August 2010 at which a resolution was passed approving the
transactions contemplated by the Finance Documents and approving the terms and
authorizing the execution of each of the Finance Documents to which the Borrower
is a party;     (j)   a certified copy of the written resolution of the
shareholder of the Borrower passed on 3 August 2010, inter alia, amending the
Borrower’s Articles of Association;     (k)   a certified copy of a power of
attorney dated 3 August 2010 and authorizing J Michael Kirksey and Catherine
Stubbs to, inter alia, execute and deliver the

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      English Finance Documents, the Assignation of Security and the Bond and
Floating Charge; and     (1)   with your consent and without independent
verification of its contents, a legal opinion of Vinson & Elkins LLP dated 16
August 2010 as to matters relating to Delaware law (the “Delaware Legal
Opinion”).

6.   The resolutions referred to in paragraphs (i) and G) of Clause 5 are
referred to in this opinion as the “Resolutions”.   7.   On 23 July 2010 we
carried out a full search of the Companies House online database in respect of
each of EENS LP and the Borrower. At 09: 16 a.m. today we carried out a search
of the filing history page of the Companies House online database in respect of
each of EENS LP and the Borrower. At 10:00 a.m. today we made a telephone
enquiry of the Central Index section for Company Searches and Winding Up
Petitions in relation to the Borrower. The searches and enquiries referred to
above revealed that no order, petition or resolution for winding up, no interim
or [mal administration order and no notice of the appointment of a receiver,
administrative receiver or administrator, had been filed at that time with
respect to the Borrower. Our enquiries revealed that EENS LP does not appear on
the register maintained pursuant to the Overseas Companies Regulations 2009.  
8.   Except as referred to above we have not examined any other document or made
any other search or enquiry for the purposes of this opinion.   9.   On the
assumptions set out in Appendix A and subject to the qualifications set out in
Appendix B, we are of the opinion that:

  (a)   the Borrower is a company incorporated with limited liability under the
laws of England and Wales with the corporate power to enter into and perform its
obligations under the Finance Documents to which it is a party;     (b)   all
corporate action required authorizing the Borrower’s entry into and performance
of its obligations under the Finance Documents to which it is a party has been
duly taken;     (c)   the obligations expressed to be assumed by each of EENS LP
and the Borrower in the English Finance Documents to which it is a party
constitute its valid, legally binding and enforceable obligations;     (d)  
there is no requirement under English law for the consent or authorization of,
or the filing, recording or enrolment of any documents with any court or other
authority in England and Wales to be obtained or made in order to ensure the
legality, validity, enforceability or admissibility in evidence of the English
Finance Documents;

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  (e)   no stamp duty or similar tax is payable in the United Kingdom in respect
of the execution or delivery of the English Finance Documents; and     (f)   the
English Finance Documents are effective to create valid security interests in
favour of the Collateral Agent.

This opinion is given for the sole benefit of the Agent and the Collateral Agent
on their own behalf and the Lenders party to the Credit Agreement on or prior to
the Syndication Date (each an “Addressee”) and may not be relied upon by any
other person, nor quoted or referred to in any public document or filed with any
governmental agency, without our prior written consent except it may be
disclosed but not relied upon in any manner to: (a) an Addressee’s legal counsel
and independent auditors who need to know such information and are informed of
the confidential nature of this opinion; (b) any regulatory authority having
jurisdiction over an Addressee upon the request or demand of such regulatory
authority; (c) any Person to the extent required pursuant to the order of any
court or administrative agency or in any pending legal or administrative
proceeding or as otherwise required by applicable law or compulsory legal
process, provided that each Addressee takes reasonable steps to procure that
such Person maintains the confidentiality of this opinion; (d) any Person that
subsequently becomes an “Administrative Agent” or “Collateral Agent” in
accordance with Section 10.09 of the Credit Agreement; (e) any Person that
proposes to become a Lender under the Credit Agreement; and (f) any person that
proposes to become or becomes a Secured Creditor under a Secured Hedging
Agreement (as defined under the US Security Agreement) or Secured Reimbursement
Agreement (as defined in the US Security Agreement), in each case, in compliance
with the requirements of the Credit Agreement, in each case.
Yours faithfully,
White & Case LLP

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APPENDIX A

1.   The Delaware Legal Opinion is correct in all respects and nothing is
omitted from the Delaware Legal Opinion which would cause us to alter or omit
anything contained in this opinion.   2.   EENS LP is (and, on the date of its
execution of the English Finance Documents to which it is a party, was) duly
incorporated, validly subsisting and (where the concept has a legal meaning) in
good standing under the laws of its jurisdiction of incorporation or
organization.   3.   EENS LP has (and, on the date of its execution of the
English Finance Documents, had) the capacity and corporate or other power and
authority to execute and deliver, and perform its obligations and exercise its
rights under, the English Finance Documents to which it is a party.   4.   EENS
LP has (a) validly authorized the execution and delivery of, and performance of
its obligations under, each of the English Finance Documents to which it is a
party and the transactions and matters contemplated thereby, (b) validly
executed (where applicable, as a deed) and unconditionally delivered each such
English Finance Document, and (c) not violated and will not violate, by virtue
of its execution, delivery or performance of such English Finance Documents, its
constitutional documents.   5.   No law of any jurisdiction other than England
and Wales would render the execution and delivery of the English Finance
Documents by any party thereto, the performance of its obligations thereunder or
the consummation of the transactions contemplated thereby, illegal or
ineffective, and insofar as any obligation under the English Finance Documents
is to be performed or enforced in, or is otherwise subject to the laws of, any
jurisdiction other than England and Wales, their performance or enforcement will
not be illegal or ineffective by virtue of the laws of that jurisdiction; and
none of the opinions expressed herein would be affected by any such law
(including public policy).   6.   All steps (including, without limitation, the
obtaining of the necessary consents, licenses, approvals and authorizations, the
making of the necessary filings, registrations and notifications and the payment
of any stamp duties or documentary taxes) required under the laws of any
jurisdiction other than England and Wales as may be applicable to the parties to
any of the English Finance Documents or to their performance or enforcement in
any such jurisdiction, have been duly obtained, carried out or complied with (as
applicable) by the relevant parties.   7.   All signatures, stamps and seals are
genuine, all documents submitted to us as originals are authentic and complete
and all deeds and counterparts were executed in single physical form.   8.   All
documents or extracts of documents submitted to us as copies or received by
facsimile transmissions or in other electronic forms conform to the originals
and that the original documents of which such copies or facsimiles or in other
electronic forms have been supplied to us were authentic and complete.

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9.   Any document examined by us in an unexecuted form will be or has been
executed in the same form and that no amendments (whether oral, in writing or by
conduct of the parties) have been made to any of the documents since they were
examined by us.   10.   Neither the Borrower nor EENS LP has passed a resolution
for its voluntary winding up, no petition has been presented or order made by a
court for the winding-up, dissolution or administration of the Borrower or EENS
LP and no receiver, trustee, administrator or similar officer has been appointed
in relation to the Borrower or EENS LP or any of their respective assets.   11.
  The Resolutions were duly passed at properly convened and conducted board and
shareholder meetings (as the case may be) and are in full force and effect and
all statements of fact therein are true and accurate and all opinions therein
are made following careful consideration and are based on reasonable grounds.  
12.   Each of the parties to the English Finance Documents, other than the
Borrower, has duly executed and delivered the English Finance Documents to which
it is a party and has thereby assumed valid, legally binding and enforceable
obligations.   13.   The English Finance Documents constitute the entire
agreement between the parties thereto and there are no other arrangements
between any of the parties to the English Finance Documents which modify or
supersede any of the terms of the English Finance Documents.   14.   In granting
to the Collateral Agent a charge over its assets, each of EENS LP and the
Borrower is able to dispose of its assets with full title guarantee in
accordance with the provisions of the Law of Property (Miscellaneous Provisions)
Act 1994 as varied by the terms of the relevant English Finance Documents.   15.
  With respect to each security interest created by the English Finance
Documents over the relevant property of each of EENS LP and the Borrower,
neither the Collateral Agent nor the other Secured Creditors (under and as
defined therein) had notice at the time such security interest was created of
(a) the existence of or any option to acquire any other security interest over
such property or (b) any prohibition or restriction relating to the transfer,
assignment or execution of such security interest by EENS LP or the Borrower of
the relevant English Finance Document or the creation under the relevant English
Finance Documents of security interests over such property.   16.   There are no
matters capable of being disclosed by a search or enquiry of the Central Index
section for Company Searches and Winding Up Petitions or at the relevant
Companies Registry which have not been disclosed by the searches and enquiries
referred to in this opinion and the information provided to us in response to
those searches and enquiries was accurate and complete — such a search or
enquiry cannot conclusively disclose whether or not an order, petition or
resolution for winding up, an interim or final administration order or a notice
of the appointment of a receiver, administrative receiver or administrator has
been made.   17.   The Borrower has its centre of main interests (as such term
is described in Article 3(1) of Council Regulation (EC) No. 1346/2000 of 29
May 2000 on Insolvency Proceedings), in England and Wales.

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18.   The property and assets expressed to be assigned or charged by the English
Finance Documents are capable of being assigned or charged, each of EENS LP and
the Borrower is entitled to and has all requisite capacity, authority and power
to assign, charge or otherwise encumber such property and assets and all matters
have been complied with under all relevant laws (other than English law) as may
be necessary in relation to the creation of the security expressed to be created
by the English Finance Documents, its perfection and enforceability, including
the delivery of notices of charge and assignment in the form set out in the
relevant English Finance Document.   19.   EENS LP does not have a UK
establishment within the meaning of the Overseas Companies Regulations 2009.

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APPENDIX B

1.   The term “enforceable” as used in this opinion means that obligations
assumed by each of EENS LP and the Borrower under the English Finance Documents
are of the type which English courts enforce and not that those obligations will
necessarily be enforced by an English court.

2.   The enforceability of the English Finance Documents and the rights and
obligations of the parties thereto may be affected by the law relating to
bankruptcy, insolvency, liquidation, administration, reorganization,
reconstruction or otherwise affecting creditors’ rights generally. For example,
enforcement of security interests under the English Finance Documents may be
limited by the operation of Sections 238 (transactions at an undervalue), 239
(preferences), 245 (avoidance of certain floating charges) and 423 to 425
(transactions defrauding creditors) of the Insolvency Act.

3.   The manner and extent to which the English Finance Documents are
enforceable may be affected by the way in which the English courts exercise
their inherent discretion. For example:

  (a)   equitable remedies, such as an order for specific performance or the
issue of an injunction, are available at the discretion of the court and may not
be granted where the court is of the view that damages would be an adequate
alternative;     (b)   the enforcement of an indemnity for the costs of
litigation, such as that contained in Clause 11.2 (Indemnity) of the EEUK
Debenture and Clause 8.2 (Indemnity) of the Share Charges is subject to the
discretion of the court as to whether and to what extent a party to proceedings
should be compensated for such costs;     (c)   English courts have been
prepared to render judgments for a monetary amount in foreign currencies but
such a judgment may be converted into sterling for enforcement purposes -there
is no authority as to whether or not an English court would enforce the currency
indemnity contained in Clause 11.19 (Judgment Currency) of the Credit Agreement
(incorporated under Clause 1.7(a) (Incorporation) of the EEUK Debenture, Clause
1.8(a) (Incorporation) of the EEUK Share Charge and 1.9(a) (Incorporation) of
the EENS LP Share Charge);     (d)   the enforcement of a provision such as
Clause 23 (Partial Invalidity) of the EEUK Debenture and Clause 19 (Partial
Invalidity) of the Share Charges which provides that an illegal, invalid or
unenforceable term may be severed from the other provisions of the EEUK
Debenture or Share Charge (as applicable) without affecting the enforceability
of those other provisions, is a matter for the discretion of the court and
depends on the nature of the illegality, invalidity or unenforceability in
question;     (e)   any disposition of a company’s property (which may include
the grant of security) made after the presentation of a winding-up petition
against the company will be void unless the court orders otherwise; and

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  (f)   provisions which purport to give a right to foreclose to a person in
whose favour a security interest is created may not be enforceable without the
prior approval of the court.

4.   The manner and extent to which the English Finance Documents are
enforceable may be affected by principles of English law preventing the
enforcement of certain terms. For example:

  (a)   the indemnity contained in Clause 11.2 (Indemnity) of the EEUK Debenture
and Clause 8.2 (Indemnity) of the Share Charges may be void under Section 117 of
the Stamp Act 1891 in respect of stamp duties payable in the United Kingdom; and
    (b)   where obligations are to be performed in a jurisdiction outside
England, such obligations may not be enforceable under English law if their
performance would be illegal or contrary to public policy under the laws of that
jurisdiction.

5.   The manner and extent to which the English Finance Documents are
enforceable may be affected by the implication of contractual terms by the
English courts or by an arbitral tribunal applying English law. For example:

  (a)   a person who is vested with a discretion may be required to exercise
that discretion honestly and in good faith for the purposes for which it was
conferred and not capriciously, arbitrarily or unreasonably; and     (b)   any
provision in the English Finance Documents stating that an Opinion, calculation
or certification is to be conclusive and binding may be subject to the
requirement that such opinion, calculation or certification is made or given
honestly, reasonably and in good faith.

6.   The manner and extent to which the English Finance Documents are
enforceable may be affected by provisions of English law applicable to the
vitiation, modification or discharge of contracts. For example:

  (a)   enforcement of the English Finance Documents may be limited by the
provisions of English law applicable to contracts which are held to have been
frustrated by events happening after their execution; and     (b)   it is likely
that an English court or an arbitral tribunal applying English law would hold
that a judgment on an English Finance Document, given in an English court or
elsewhere, supersedes the terms of such English Finance Document; and     (c)  
notwithstanding a provision such as Clause 11.12 (Amendment or Waiver, etc) of
the Credit Agreement (incorporated under Clause 1.7(a) (Incorporation) of the
EEUK Debenture, Clause 1.8(a) (Incorporation) of the EEUK Share Charge and
1.9(a) (Incorporation) of the EENS LP Share Charge) any term of an agreement may
be varied, amended or discharged by the parties thereto by a further agreement
which may be effected orally, in writing or by a course of dealing.

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7.   Claims under the English Finance Documents may become subject to a defense
of set-off or satisfaction of a counterclaim or become time barred under
applicable limitation acts.

8.   Rights under the English Finance Documents may be held to have been
suspended, impaired or waived by representation, conduct or delay.

9.   Unless the prescribed particulars of the registrable charges created by the
English Finance Documents (other than the EENS Share Charge), together with a
signed copy of the relevant English Finance Document, are delivered for
registration under Section 860 of the Companies Act within the time period
specified in Section 870 of the Companies Act, such charges will be void as
against a liquidator, administrator or creditor of the Borrower.

10.   The encumbrances created by the Borrower over the petroleum production
licenses set out in Schedule 2 of the EEUK Debenture are subject to the
requirements of the Open Permission (Creation of Security Rights over Licenses)
granted by the Secretary of State for Trade and Industry (the “Secretary of
State”) on 19 March 2004 which requires among other things, notice to be given
to the Secretary of State of such encumbrances.

11.   We do not express any opinion as to the priority of any of the security
interests created by the English Finance Documents, as to whether the property
or rights comprised in such security are or may become subject to any equities
or subject to any rights or interests of any person ranking now or in the future
in priority to such security or as to whether such property or rights could be
transferred to any other person free of such security.

12.   The fact that the parties have chosen English law as the governing law of
the English Finance Documents may not, where other elements relevant to any
transactions governed by the English Finance Documents are at the time of the
choice connected with another country, prejudice the application by the English
courts of the rules of the law of that country which cannot be derogated from by
contract.

13.   We do not express any opinion as to the efficacy of the English Finance
Documents in relation to any assets which may be situated outside England and
Wales.

14.   Certain of the charges which are expressed to be created in the English
Finance Documents as fixed charges may in fact take effect as floating charges
if their effect is that EENS LP or the Borrower (as applicable) is free to deal
with the charged property in the course of its business without the consent of
the chargee.

15.   We express no opinion on the binding effect of the choice of law
provisions in the English Finance Documents in so far as they relate to
non-contractual obligations arising out of or in connection with the English
Finance Documents.

16.   The ability to appoint an administrator pursuant to the terms of the EEUK
Debenture is dependent on whether the whole or substantially the whole of the
assets of the Borrower are subject to the security contained in the EEUK
Debenture. If at the date the issue arises any assets (including but not limited
to the four gas sales agreements

11

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    specifically excluded from security created under the EEUK Debenture) are
excluded from the EEUK Debenture which represent a significant proportion of the
Borrower’s assets, this may adversely affect the power of the Collateral Agent
to appoint an administrator. We note that there is no English case law which
gives any guidance on what constitutes “substantially the whole” of the
company’s assets and it is a mixed question of fact and law to be determined at
the time of any proposed administrator’s appointment.

12

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EXHIBIT D-1
FORM OF OFFICERS’ CERTIFICATE
     I, the undersigned, [Chairman of the Board/Chief Executive
Officer/President/Vice President] of [Name of Credit Party], a [corporation]
[limited partnership] [limited liability company] [organized and existing under
the laws of the State of [______]] (the “Company”), do hereby certify as of the
date hereof, solely in my capacity as an officer of the Company and not in my
individual capacity, on behalf of the Company, that:
     1. This Certificate is furnished pursuant to the Credit Agreement, dated as
of [insert closing date], 2010, among [the Company,] [Endeavour International
Corporation] [Endeavour Energy UK Limited], the lenders party thereto from time
to time, and Cyan Partners, LP, as Administrative Agent (such Credit Agreement,
as in effect on the date of this Certificate, being herein called the “Credit
Agreement”). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
     2. The named individuals listed on Annex A hereto are duly elected or
appointed officers of the Company, and each individual holds the office of the
Company set forth opposite such individual’s name. The signature written
opposite the name and title of each such officer is such officer’s genuine
signature.
     3. Attached hereto as Annex B is a certified copy of the [Certificate of
Incorporation of the Company] [Certificate of Partnership of the Company]
[Certificate of Formation of the Company], as filed in the Office of the
Secretary of State of the State of ______ on _________ __, ____, together with
all amendments thereto adopted through the date hereof.
     4. Attached hereto as Annex C is a [true and correct copy of the By-Laws of
the Company which were duly adopted and are in full force and effect on the date
hereof] [true and correct copy of the [Partnership Agreement of the Company]
[Limited Liability Company Agreement of the Company] which was duly adopted and
is in full force and effect on the date hereof, together with all amendments
thereto adopted through the date hereof.
     5. Attached hereto as Annex D is a true and correct copy of resolutions
which were duly adopted on _________ __, ____ [by unanimous written consent of
the Board of Directors of the Company] [by a meeting of the Board of Directors
of the Company at which a quorum was present and acting throughout], and said
resolutions have not been rescinded, amended or modified. Except as attached
hereto as Annex D, no resolutions have been adopted by the Board of Directors of
the Company which deal with the execution, delivery or performance of any of the
Documents to which the Company[, as the general partner of the Company,] [, as
the managing member of the Company,] is a party.
     [6. On the date hereof, all of the conditions set forth in Section 5.06,
5.07, 5.08 and 5.16 of the Credit Agreement have been satisfied.]
     [6.][7.] On the date hereof, the representations and warranties contained
in the Credit Documents to which the Company is a party are true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date

 

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Exhibit D-1
Page 2
hereof, both before and immediately after giving effect to the incurrence of
Term Loans on the date hereof, unless stated to relate to a specific earlier
date, in which case such representations and warranties were true and correct in
all material respects as of such earlier date.
     [7.][8.] On the date hereof, no Default or Event of Default has occurred
and is continuing or would immediately result from the incurrence of Term Loans
on the date hereof.
     [8.][9.] There is no pending proceeding for the dissolution or liquidation
of the Company or, to the knowledge of the undersigned, threatening its
existence.

 

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     IN WITNESS WHEREOF, I have hereunto set my hand this __ day of _______,
___.

                  [NAME OF CREDIT PARTY]    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    

 

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Exhibit D-1
Page 4
     I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify, on the date hereof, solely in my capacity as an officer of the
Company and not in my individual capacity, on behalf of the Company, that:
     1. [Name of Person making above certifications] is the duly elected and
qualified [Chairman/Vice-Chairman/President/Vice-President/Director] of the
Company and the signature above is [his] [her] genuine signature.
     2. [The certification made by [name of Person making above certifications]
on behalf of the Company in Items 2, 3, 4, 5 and [8.][9.] is true and correct.]1
     IN WITNESS WHEREOF, I have hereunto set my hand this __ day of ______, ___.

                  [NAME OF CREDIT PARTY]    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    

 

1   Include if the Officer signing the Officer’s Certificate is also listed in
the incumbency.

 

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ANNEX A

          Name2   Office   Signature
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       

 

2   Include name, office and signature of each officer who will sign any Credit
Document on behalf of the Company, including the officer who will sign the
certification at the end of this Certificate or related documentation.

 

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Exhibit D-2
To Credit Agreement
OFFICERS’ CERTIFICATE
          I, the undersigned, Director of Endeavour Energy UK Limited, a limited
company incorporated under the laws of England and Wales with company registered
number 05030838 (the “Company”), do hereby certify as of the date hereof, solely
in my capacity as an officer of the Company and not in my individual capacity,
on behalf of the Company, that:
          1. This Certificate is furnished pursuant to the credit agreement,
dated as of                                         , 2010, among the Company,
Endeavour International Corporation, the lenders party thereto from time to
time, and Cyan Partners, LP, as Administrative Agent (such credit agreement, as
in effect on the date of this Certificate, being herein called the “Credit
Agreement”). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
          2. The named individuals listed on Annex A hereto are duly elected or
appointed officers of the Company, being duly authorised by the Company to
deliver this Certificate and each holds the office of the Company set forth
opposite such individual’s name. The signature written opposite the name and
title of each such officer is such officer’s genuine signature.
          3. Attached hereto as Annex B is a true, complete and up-to-date copy
of the Certificate of Incorporation of the Company and any Certificate of
Incorporation on Change of Name of the Company.
          4. Attached hereto as Annex C is a true and correct copy of the
constitutional documents of the Company, consisting of its Memorandum and
Articles of Association which were duly adopted and are in full force and effect
on the date hereof, together with all amendments thereto adopted through the
date hereof.
          5. Attached hereto as Annex D is a true and correct copy of
resolutions which were duly adopted on                      ___, ___ by a
meeting of the Board of Directors of the Company at which a quorum was present
and acting throughout (which resolutions have not been rescinded, amended or
modified), and which approve the execution, delivery and performance of each of
the Credit Documents to which the Company is a party and all transactions
contemplated thereby. Except as attached hereto as Annex D, no resolutions have
been adopted by the Board of Directors of the Company which deal with the
execution, delivery or performance of any of the Documents to which the Company
is a party.
          6. Attached hereto as Annex E is a true and correct copy of
resolutions which were duly adopted on                      ___, ___ by the
shareholder of the Company (which resolutions have not been rescinded, amended
or modified), authorising the potential conflict of directors’ interest
resulting from the transactions contemplated by the Credit Agreement.
          7. Attached hereto as Annex F is a copy of a power of attorney which
is correct, complete and in full force and effect on the date hereof (which
power of attorney has not been rescinded, amended or modified).

 

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Page 2
          8. On the date hereof, all of the conditions set forth in
Section 5.06, 5.07, 5.08 and 5.16 of the Credit Agreement have been satisfied.
          9. On the date hereof, the representations and warranties contained in
the Credit Documents to which the Company is a party are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on the date hereof, both before and immediately after
giving effect to the incurrence of Term Loans on the date hereof, unless stated
to relate to a specific earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date.
          10. On the date hereof, no Default or Event of Default has occurred
and is continuing or would immediately result from the incurrence of Term Loans
on the date hereof.
          11. There is no pending proceeding for the dissolution or liquidation
of the Company or, to the knowledge of the undersigned, threatening its
existence.
          12. I have examined the terms of all relevant agreements to which the
Company is a party and the constitutional documents of the Company (“Relevant
Documents”), and we can confirm to you that entry into the Credit Documents to
which the Company is a party and drawing and/or guaranteeing of all amounts
capable of being drawn under the Credit Documents to which the Company is a
party, taking into account, when aggregated with, any other Indebtedness of the
Company, (a) will be within the corporate powers of the Company, and (b) does
not and will not cause to be exceeded any limit or restriction on any of the
powers of the Company (whether contained in any Relevant Documents or otherwise)
or the right or ability of the directors of the Company to exercise such powers.

 

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
                    , 2010.

            ENDEAVOUR ENERGY UK LIMITED
      By:           Name:   Robert Fitzpatrick        Title:   Director   

 

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Page 4
          I, the undersigned, Director of the Company, do hereby certify, on the
date hereof, solely in my capacity as an officer of the Company and not in my
individual capacity, on behalf of the Company, that:
          1. Robert Fitzpatrick is a duly elected and qualified Director of the
Company and the signature above is his genuine signature.
          2. The certification made by Robert Fitzpatrick on behalf of the
Company in Items 2, 3, 4, 5, 7 , 10 and 11 is true and correct.
          IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
                    , 2010.

              ENDEAVOUR ENERGY UK LIMITED
      By:           Name:   James William Munns        Title:   Director   

 

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Page 5
ANNEX A

          Name   Office   Signature  
James William Munns
 
  Director
 
   
 
       
Robert Fitzpatrick
 
  Director
 
   
 
       
Mike Kirksey
 
  Authorised Signatory
 
   

 

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Page 6
ANNEX B
Certificate of Incorporation and any Certificate of Incorporation on Change of
Name

 

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Page 7
ANNEX C
Memorandum and Articles of Association

 

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Page 8
ANNEX D
Board resolution

 

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Page 9
ANNEX E
Shareholder resolution

 

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Page 10
ANNEX F
Power of Attorney

 

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EXHIBIT D-3
OFFICERS’ CERTIFICATE
ENDEAVOUR ENERGY NETHERLANDS B.V.
          I, the undersigned, Managing Director (statutair bestuurder) of
Endeavour Energy Netherlands B.V., a private company with limited liability
(besloten vennoostchap met beperkte aansprakelijkheid) incorporated under the
laws of the Netherlands registered with the Trade Register (Handelsregister) of
the Chamber of Commerce (Kamer van Koophandel en Fabrieken) under file number
34229296 (the “Company”), do hereby certify as of the date hereof, solely in my
capacity as a managing director (bestuurder) of the Company and not in my
individual capacity, on behalf of the Company, that:
          1. This Certificate is a certificate as referred to in Section 5.04 of
the Credit Agreement, dated as of ___  August, 2010, among inter alia the
Company, Endeavour International Corporation, Endeavour Energy UK Limited, the
lenders party thereto from time to time, and Cyan Partners, LP, as
Administrative Agent (such Credit Agreement, as in effect on the date of this
Certificate, being herein called the “Credit Agreement”). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
          2. The named individuals listed on Annex A hereto are duly elected or
appointed officers of the Company, and each holds the office of the Company set
forth opposite such individual’s name. The signature written opposite the name
and title of each such officer is such officer’s genuine signature.
          3. The utilising or guaranteeing or securing, as appropriate, of the
Total Commitment would not cause any borrowing, guaranteeing, security or
similar limit binding on the Company to be exceeded.
          4. Attached hereto as Annex B is a true and complete copy of the Deed
of Incorporation of the Company, as filed with the Trade Register
(Handelsregister) of the Chamber of Commerce (Kamer van Koophandel en
Fabrieken).
          5. Attached hereto as Annex C is a true, complete and up to date copy
of the Articles of Association of the Company , as filed with the Trade Register
(Handelsregister) of the Chamber of Commerce (Kamer van Koophandel en
Fabrieken).
          6. Attached hereto as Annex D is a true and correct copy of
resolutions which were duly adopted on 30 July, 2010 by unanimous written
consent of the managing board (bestuur) of the Company, and said resolutions
have not been rescinded, amended or modified. Except as attached hereto as Annex
D, no resolutions have been adopted by the managing board (bestuur) of the
Company which deal with the execution, delivery or performance of any of the
Credit Documents to which the Company is a party.

 

--------------------------------------------------------------------------------

 

Exhibit E-3
Page 2
          7. Attached hereto as Annex E is a true and correct copy of
resolutions which were duly adopted on 30 July, 2010 by unanimous written
consent of the general meeting of shareholders (algemene vergadering van
aandeelhouders) of the Company, and said resolutions have not been rescinded,
amended or modified. Except as attached hereto as Annex E, no resolutions have
been adopted by the general meeting of shareholders (algemene vergadering van
aandeelhouders) of the Company which deal with the execution, delivery or
performance of any of the Credit Documents to which the Company is a party.
          8. Attached hereto as Annex F is a true, complete and up to date copy
of an extract from the Trade Register (Handelsregister) of the Chamber of
Commerce (Kamer van Koophandel en Fabrieken) pertaining to the Company.
          9. On the date hereof, the representations and warranties contained in
the Credit Agreement and in the other Credit Documents to which the Company is a
party are true and correct in all material respects with respect to the Company,
with the same effect as though such representations and warranties had been made
on the date hereof, both before and immediately after giving effect to the
incurrence of Term Loans on the date hereof, unless stated to relate to a
specific earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date.
          10. On the date hereof, no Default or Event of Default has occurred
and is continuing or would immediately result from the incurrence of Term Loans
on the date hereof.
          11. There is no pending proceeding for the dissolution or liquidation
of the Company or, to the knowledge of the undersigned, threatening its
existence.
          12. I have examined the terms of all relevant agreements to which the
Company is a party and the constitutional documents of the Company (“Relevant
Documents”), and we can confirm to you that entry into the Credit Documents to
which the Company is a party and drawing and/or guaranteeing of all amounts
capable of being drawn under the Credit Documents to which the Company is a
party, taking into account, when aggregated with, any other Indebtedness of the
Company, (a) will be within the corporate powers of the Company, and (b) does
not and will not cause to be exceeded any limit or restriction on any of the
powers of the Company (whether contained in any Relevant Documents or otherwise)
or the right or ability of the directors of the Company to exercise such powers.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, I have hereunto set my hand this                      day of
August, 2010.

            ENDEAVOUR ENERGY NETHERLANDS B.V.
      By:           Name:   J.M. Kirksey        Title:   managing director A   

 

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Exhibit E-3
Page 4
          I, the undersigned, managing director (statutair bestuurder) of the
Company, do hereby certify, on the date hereof, solely in my capacity as a
managing director of the Company and not in my individual capacity, on behalf of
the Company, that:
          1. Mr. Jerrel Michael Kirksey is a duly elected and qualified managing
director (statutair bestuurder) of the Company and the signature above is his
genuine signature.
          2. The certification made by Mr. Jerrel Michael Kirksey on behalf of
the Company in Items 2, 3, 4, 5, 6, 7, 8, 9 and 11 is true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ___  day of August, 2010.

            ENDEAVOUR ENERGY NETHERLANDS B.V.
      By:           Name:   F.J.C. Lucassen        Title:   managing director B

 

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Exhibit E-3
Page 5
ANNEX A

          Name   Office   Signature   Mr. Franciscus Jacobus
Joannes Lucassen   Managing director B       Mr. Jerrel Michael Kirksey  
Managing director A

 

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Exhibit E
SUBSIDIARIES GUARANTY
          SUBSIDIARIES GUARANTY (as amended, modified, restated and/or
supplemented from time to time, this “Guaranty”), dated as of August 16, 2010,
made by and among each of the undersigned guarantors (each, a “Guarantor” and,
together with any other entity that becomes a guarantor hereunder pursuant to
Section 23 hereof, collectively, the “Guarantors”) in favor of Cyan Partners,
LP, as Administrative Agent (together with any successor administrative agent,
the “Administrative Agent”), for the benefit of the Secured Creditors (as
defined below). Except as otherwise defined herein, all capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H
:
          WHEREAS, Endeavour International Corporation (“Holdings”), Endeavour
Energy UK Limited (the “Borrower”), the lenders from time to time party thereto
(the “Lenders”) and the Administrative Agent, have entered into a Credit
Agreement, dated as of August 16, 2010 (as amended, modified, restated and/or
supplemented from time to time, the “Credit Agreement”), providing for the
making of Term Loans to the Borrower, all as contemplated therein (the Lenders,
the Administrative Agent and the Collateral Agent are herein called the “Lender
Creditors”);
          WHEREAS, the Borrower and/or one or more of its Subsidiaries or parent
companies may at any time and from time to time enter into one or more Hedging
Agreements with one or more Approved Third Party Credit Providers, each such
Hedging Agreement with an Approved Third Party Credit Provider that is party to
the Intercreditor Agreement, a “Secured Hedging Agreement”);
          WHEREAS, the Borrower and/or one or more of its Subsidiaries or parent
companies may at any time and from time to time have one or more Third Party
Letters of Credit issued for the account of such entity and, in connection
therewith, enter into agreements with respect to such Person’s obligations to
reimburse Approved Third Party Credit Providers for amounts funded under Third
Party Letters of Credit issued by such Approved Third Party Credit Providers
(any such reimbursement agreement with respect to Third Party Letters of Credit
issued by an Approved Third Party Credit Provider that is party to the
Intercreditor Agreement, a “Secured Reimbursement Agreement” and each Approved
Third Party Credit Provider referred to in this recital and the immediately
preceding recital together with the Lender Creditors, the “Secured Creditors”);
          WHEREAS, each Guarantor is a direct or indirect Subsidiary of
Holdings, which is the indirect parent company of the Borrower;
          WHEREAS, it is a condition precedent to the making of Term Loans to
the Borrower under the Credit Agreement, to the entering into of Hedging
Agreements by Approved

 

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Third Party Credit Providers from time to time and to the issuance of Third
Party Letters of Credit by Approved Third Party Credit Providers that each
Guarantor shall have executed and delivered to the Administrative Agent this
Guaranty; and
          WHEREAS, each Guarantor will obtain benefits from the incurrence of
Term Loans by the Borrower under the Credit Agreement, the entering into by
Holdings and/or one or more of its Subsidiaries of Secured Hedging Agreements
with Approved Third Party Credit Providers from time to time and the issuance of
Third Party Letters of Credit by Approved Third Party Credit Providers and,
accordingly, desires to execute this Guaranty in order to satisfy the condition
described in the preceding paragraph and to induce the Lenders to make Term
Loans to the Borrower and the Approved Third Party Credit Providers to enter
into Secured Hedging Agreements and issue Third Party Letters of Credit;
          WHEREAS, “Corresponding Obligations” shall, in respect of a Guarantor,
mean any obligation of such Guarantor to pay an amount to the Lenders, the
Agents or any other Secured Creditor (or any one of them), whether for
principal, interest, fees, costs, any overdraft or otherwise and whether present
or future (a) under or in connection with the Secured Debt Agreements (as
defined below), including the Guaranteed Obligations, other than any obligation
arising under or in connection with the Parallel Debt and (b) any other
indebtedness of such Guarantor as the Lenders (or the Collateral Agent on their
behalf) and the Borrower may agree from time to time.
          WHEREAS, “Parallel Debt” shall mean the Parallel Debt as defined in
Section 2 of this Guaranty.
          NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Administrative Agent for the benefit of the Secured Creditors
and hereby covenants and agrees with each other Guarantor and the Administrative
Agent for the benefit of the Secured Creditors as follows:
          1. GUARANTY. (a) Each Guarantor, jointly and severally, irrevocably
and unconditionally guarantees as a primary obligor and not merely as surety:
     (i) to the Lender Creditors the full and prompt payment when due (whether
at the stated maturity, by required prepayment, acceleration or otherwise) of
(x) the principal of, premium, if any, and interest (including PIK Interest) on
the Notes issued by, and the Term Loans made to, the Borrower under the Credit
Agreement, and (y) all other obligations (including, without limitation,
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness owing by the
Borrower to the Lender Creditors under each Credit Document to which the
Borrower is a party (including, without limitation, indemnities, fees and
interest (including PIK Interest) thereon (including, without limitation, any
interest (including PIK Interest) accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the Credit

2

--------------------------------------------------------------------------------

 

Agreement, whether or not such interest is an allowed claim in any such
proceeding)), whether now existing or hereafter incurred under, arising out of
or in connection with each such Credit Document and the due performance and
compliance by the Borrower with all of the terms, conditions, covenants and
agreements contained in all such Credit Documents (all such principal, premium,
interest, liabilities, indebtedness and obligations under this clause (i),
except to the extent consisting of obligations or liabilities with respect to
Secured Hedging Agreements or Secured Reimbursement Agreements, being herein
collectively called the “Credit Document Obligations”);
     (ii) to each Approved Third Party Credit Provider the full and prompt
payment when due (whether at the stated maturity, by required prepayment,
acceleration or otherwise) of all obligations (including, without limitation,
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness (including,
without limitation, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the respective Secured Hedging Agreements, whether or not such interest
is an allowed claim in any such proceeding) owing by the Borrower and each other
Guaranteed Party to the Approved Third Party Creditor Providers under any
Secured Hedging Agreements to which the Borrower or any other Guaranteed Party
is a party, whether now in existence or hereafter arising, and the due
performance and compliance by the Borrower and each such other Guaranteed Party
with all of the terms, conditions, covenants and agreements contained therein
(all such obligations, liabilities and indebtedness being herein collectively
called the “Secured Hedge Obligations”); and
     (iii) to each Approved Third Party Credit Provider the full and prompt
payment when due (whether at the stated maturity, by required prepayment,
acceleration or otherwise) of all obligations (including, without limitation,
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness (including,
without limitation, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the respective Secured Reimbursement Agreements, whether or not such
interest is an allowed claim in any such proceeding) owing by the Borrower and
each other Guaranteed Party to the Approved Third Party Creditor Providers under
any Secured Reimbursement Agreements to which the Borrower or any other
Guaranteed Party is a party, whether now in existence or hereafter arising, and
the due performance and compliance by the Borrower and each such other
Guaranteed Party with all of the terms, conditions, covenants and agreements
contained therein (all such obligations, liabilities and indebtedness being
herein collectively called the “Secured Reimbursement Obligations”, together
with the Secured Hedge Obligations are herein collectively called the “Other
Obligations” and the Other Obligations together with the Credit Document
Obligations are herein collectively called the “Guaranteed Obligations”).

3

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          Notwithstanding anything to the contrary contained herein or in any
other Credit Document, the aggregate amount of Other Obligations to be included
within the Guaranteed Obligations pursuant to this Guaranty shall not at any
time exceed $25,000,000 (the “Other Obligations Cap”). No amount of Other
Obligations in excess of the Other Obligations Cap shall receive the benefit of
this Guaranty and in no event shall any proceeds received upon collection from
or other realization upon this Guaranty be applied to the Other Obligations in
an amount in excess of the Other Obligations Cap.
          As used herein, the term “Guaranteed Party” shall mean the Borrower
and each other Subsidiary of Holdings party to any Secured Hedging Agreement or
any Secured Reimbursement Agreement. Each Guarantor understands, agrees and
confirms that the Secured Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against such Guarantor without proceeding
against any other Guarantor, the Borrower or any other Guaranteed Party, or
against any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations. This Guaranty is a
guaranty of prompt payment and not of collection; provided that notwithstanding
anything in this Guaranty to the contrary, in no event will any Guarantor be
responsible for specific performance of any Guaranteed Obligation then due if
the performance of such Guaranteed Obligation is specific to a Credit Party and
it would be impossible or reasonably impracticable after using all reasonable
efforts for such other Guarantor to perform the Guaranteed Obligation.
          (b) Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations whether or not due or payable by the Borrower or any
other Guaranteed Party upon the occurrence in respect of the Borrower or any
other Guaranteed Party of any of the events specified in Section 9.05 of the
Credit Agreement, and unconditionally and irrevocably, jointly and severally,
promises to pay such Guaranteed Obligations to the Secured Creditors, or order,
on demand.
          2. PARALLEL DEBT
          (a) In respect of ensuring the validity and enforceability of any
Security Document governed by the law of the Netherlands, each Guarantor which
is a party to any Security Document governed by the laws of the Netherlands
hereby irrevocably and unconditionally undertakes to pay to the Collateral Agent
amounts equal to the amounts payable by it in respect of its Corresponding
Obligations as they may exist from time to time, which undertaking the
Collateral Agent hereby accepts. Each payment undertaking of a Guarantor to the
Collateral Agent under this Clause 2 is hereinafter to be referred to as a
“Parallel Debt”. Each Parallel Debt will be payable in the currency or
currencies of the relevant Corresponding Obligation and will become due and
payable as and when the Corresponding Obligation to which it corresponds becomes
due and payable.
          (b) Each of the parties to this Guaranty hereby acknowledges that (i)
each Parallel Debt constitutes an undertaking, obligation and liability of the
relevant Guarantor to the Collateral Agent which is separate and independent
from, and without prejudice to, the Corresponding Obligation to which it
corresponds; and (ii) each Parallel Debt represents the Collateral Agent’s own
separate and independent claim to receive payment of such Parallel Debt

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from the relevant Guarantor; provided, that the total amount that may become due
on a Parallel Debt of a Credit Party shall never exceed the total amount which
may become due under all of the Corresponding Obligations of such Credit Party
to all the Secured Creditors.
          (c) To the extent the Collateral Agent irrevocably receives any amount
in payment or recovery of a Parallel Debt of a Guarantor, the Collateral Agent
shall distribute such amount among the Lenders who are creditors of the
Corresponding Obligations of that Guarantor in accordance with the terms of this
Guaranty, as if such amount were received by the Collateral Agent in payment or
recovery of the Corresponding Obligation to which it corresponds.
          (d) The Collateral Agent, on behalf of itself and on behalf of each
Secured Creditor hereby confirms and accepts that to the extent the Collateral
Agent irrevocably receives any amount in payment of a Parallel Debt from a
Guarantor, the Collateral Agent shall distribute such amount among the Secured
Creditors as if such amount were received by the Collateral Agent in payment of
the Corresponding Obligation to which that Parallel Debt corresponds.
          (e) The total amount due by the relevant Guarantor pursuant to a
Parallel Debt shall be decreased to the extent that (i) the relevant Guarantor
shall have paid any amount to one or more of the Secured Creditors to reduce the
relevant Guarantor’s outstanding Corresponding Obligations or (ii) any of the
Secured Creditors otherwise receives any amount in payment of such Corresponding
Obligations (other than by virtue of clause (f) hereafter).
          (f) To the extent that the relevant Guarantor shall have paid any
amount to the Collateral Agent under a Parallel Debt or the Collateral Agent
otherwise received monies in payment of a Parallel Debt, the total amount due
and payable under the Corresponding Obligations shall be decreased by such
amount.
          (g) If any payment of the Corresponding Obligations by the relevant
Guarantor (or otherwise on its behalf) is subsequently avoided or reduced in
whole or in part by virtue of any provisions or enactments relating to
bankruptcy or liquidation of the relevant Guarantor or similar laws of general
application relating to the obligations of the relevant Guarantor, the liability
of the relevant Guarantor shall continue as if the payment, avoidance or
reduction in whole or in part had not occurred and the relevant Secured Creditor
shall be entitled to receive an amount from the relevant Guarantor, as if the
avoidance or reduction in whole or in part had not occurred.
          3. LIABILITY OF GUARANTORS ABSOLUTE. The liability of each Guarantor
hereunder is primary, absolute, joint and several, and unconditional and is
exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower or any other Guaranteed Party whether executed by
such Guarantor, any other Guarantor, any other guarantor or by any other party,
and the liability of each Guarantor hereunder shall not be affected or impaired
by any circumstance or occurrence whatsoever, including, without limitation:
(a) any direction as to application of payment by the Borrower, any other
Guaranteed Party or any other party, (b) any other continuing or other guaranty,
undertaking or maximum liability of a Guarantor or of any other party as to the
Guaranteed Obligations, (c) any payment

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on or in reduction of any such other guaranty or undertaking (other than any
payment applied in satisfaction of the Guaranteed Obligations), (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower or any other Guaranteed Party, (e) the failure of the Guarantor to
receive any benefit from or as a result of its execution, delivery and
performance of this Guaranty, (f) any payment made to any Secured Creditor on
the indebtedness which any Secured Creditor repays the Borrower or any other
Guaranteed Party pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding, (g) any action or inaction by the Secured
Creditors as contemplated in Section 5 hereof, (h) any invalidity, rescission,
irregularity or unenforceability of all or any part of the Guaranteed
Obligations or of any security therefore and (i) any legal or equity defenses,
including suretyship defenses.
          4. OBLIGATIONS OF GUARANTORS INDEPENDENT. The obligations of each
Guarantor hereunder are independent of the obligations of any other Guarantor,
any other guarantor, the Borrower or any other Guaranteed Party, and a separate
action or actions may be brought and prosecuted against each Guarantor whether
or not action is brought against any other Guarantor, any other guarantor, the
Borrower or any other Guaranteed Party and whether or not any other Guarantor,
any other guarantor, the Borrower or any other Guaranteed Party be joined in any
such action or actions. Each Guarantor waives (to the fullest extent permitted
by applicable law) the benefits of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
any other Guaranteed Party or other circumstance which operates to toll any
statute of limitations as to the Borrower or such other Guaranteed Party shall
operate to toll the statute of limitations as to each Guarantor.
          5. WAIVERS BY GUARANTORS. (a) Each Guarantor hereby waives (to the
fullest extent permitted by applicable law) notice of acceptance of this
Guaranty and notice of the existence, creation or incurrence of any new or
additional liability to which it may apply, and waives promptness, diligence,
presentment, demand of payment, demand for performance, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Secured Creditor against, and any other
notice to, any party liable thereon (including such Guarantor, any other
Guarantor, any other guarantor, the Borrower or any other Guaranteed Party) and
each Guarantor further hereby waives any and all notice of the creation,
renewal, extension or accrual of any of the Guaranteed Obligations and notice or
proof of reliance by any Secured Creditor upon this Guaranty, and the Guaranteed
Obligations shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended, modified, supplemented or waived, in
reliance upon this Guaranty.
          (b) Each Guarantor waives any right to require the Secured Creditors
to: (i) proceed against the Borrower, any other Guaranteed Party, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party;
(ii) proceed against or exhaust any security held from the Borrower, any other
Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed
Obligations or any other party; or (iii) pursue any other remedy in the Secured
Creditors’ power whatsoever. Each Guarantor waives any defense based on or
arising out of any defense of the Borrower, any other Guaranteed Party, any
other Guarantor, any other guarantor of the Guaranteed Obligations or any other
party other than payment of the

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Guaranteed Obligations to the extent of such payment, including, without
limitation, any defense based on or arising out of the disability of the
Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower or any other Guaranteed Party other
than payment of the Guaranteed Obligations to the extent of such payment. The
Secured Creditors may, at their election, foreclose on any collateral serving as
security held by the Administrative Agent, the Collateral Agent or the other
Secured Creditors by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against the Borrower, any other Guaranteed Party or
any other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid. Each Guarantor waives any defense arising out of any
such election by the Secured Creditors, even though such election operates to
impair or extinguish any right of reimbursement, contribution, indemnification
or subrogation or other right or remedy of such Guarantor against the Borrower,
any other Guaranteed Party, any other guarantor of the Guaranteed Obligations or
any other party or any security.
          (c) Each Guarantor has knowledge and assumes all responsibility for
being and keeping itself informed of the Borrower’s, each other Guaranteed
Party’s and each other Guarantor’s financial condition, affairs and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and has adequate means to obtain from the
Borrower, each other Guaranteed Party and each other Guarantor on an ongoing
basis information relating thereto and the Borrower’s, each other Guaranteed
Party’s and each other Guarantor’s ability to pay and perform its respective
Guaranteed Obligations, and agrees to assume the responsibility for keeping, and
to keep, so informed for so long as this Guaranty is in effect. Each Guarantor
acknowledges and agrees that (x) the Secured Creditors shall have no obligation
to investigate the financial condition or affairs of the Borrower, any other
Guaranteed Party or any other Guarantor for the benefit of such Guarantor nor to
advise such Guarantor of any fact respecting, or any change in, the financial
condition, assets or affairs of the Borrower, any other Guaranteed Party or any
other Guarantor that might become known to any Secured Creditor at any time,
whether or not such Secured Creditor knows or believes or has reason to know or
believe that any such fact or change is unknown to such Guarantor, or might (or
does) increase the risk of such Guarantor as guarantor hereunder, or might (or
would) affect the willingness of such Guarantor to continue as a guarantor of
the Guaranteed Obligations hereunder and (y) the Secured Creditors shall have no
duty to advise any Guarantor of information known to them regarding any of the
aforementioned circumstances or risks.
          (d) Each Guarantor hereby acknowledges and agrees that no Secured
Creditor nor any other Person shall be under any obligation (a) to marshal any
assets in favor of such Guarantor or in payment of any or all of the liabilities
of any Guaranteed Party under the Credit Documents or the obligation of such
Guarantor hereunder or (b) to pursue any other remedy that such Guarantor may or
may not be able to pursue itself any right to which such Guarantor hereby
waives.

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          (e) Each Guarantor warrants and agrees that each of the waivers set
forth in Section 3 and in this Section 4 is made with full knowledge of its
significance and consequences and that if any of such waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the maximum extent permitted by applicable law.
          6. RIGHTS OF SECURED CREDITORS. Subject to Section 4, any Secured
Creditor may (except as shall be required by applicable statute and cannot be
waived) at any time and from time to time without the consent of, or notice to,
any Guarantor, without incurring responsibility to such Guarantor, without
impairing or releasing the obligations or liabilities of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
     (a) change the manner, place or terms of payment of, and/or change,
increase or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including, without limitation, any increase
or decrease in the rate of interest thereon or the principal amount thereof),
any security therefor, or any liability incurred directly or indirectly in
respect thereof, and the guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, increased, accelerated, renewed or altered;
     (b) take and hold security for the payment of the Guaranteed Obligations
and sell, exchange, release, surrender, impair, realize upon or otherwise deal
with in any manner and in any order any property or other collateral by
whomsoever at any time pledged or mortgaged to secure, or howsoever securing,
the Guaranteed Obligations or any liabilities (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
     (c) exercise or refrain from exercising any rights against the Borrower,
any other Guaranteed Party, any other Credit Party, any Subsidiary thereof, any
other guarantor of the Borrower or others or otherwise act or refrain from
acting;
     (d) release or substitute any one or more endorsers, Guarantors, other
guarantors, the Borrower, any other Guaranteed Party or other obligors;
     (e) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower or any other Guaranteed Party to creditors of the Borrower or such
other Guaranteed Party other than the Secured Creditors;
     (f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower or any other Guaranteed Party to the
Secured Creditors regardless of what liabilities of the Borrower or such other
Guaranteed Party remain unpaid;

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     (g) consent to or waive any breach of, or any act, omission or default
under, any of the Secured Hedging Agreements, the Secured Reimbursement
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the Secured
Hedging Agreements, the Secured Reimbursement Agreements, the Credit Documents
or any of such other instruments or agreements;
     (h) act or fail to act in any manner which may deprive such Guarantor of
its right to subrogation against the Borrower or any other Guaranteed Party to
recover full indemnity for any payments made pursuant to this Guaranty; and/or
     (i) take any other action or omit to take any other action which would,
under otherwise applicable principles of common law, give rise to a legal or
equitable discharge of such Guarantor from its liabilities under this Guaranty
(including, without limitation, any action or omission whatsoever that might
otherwise vary the risk of such Guarantor or constitute a legal or equitable
defense to or discharge of the liabilities of a guarantor or surety or that
might otherwise limit recourse against such Guarantor).
          No invalidity, illegality, irregularity or unenforceability of all or
any part of the Guaranteed Obligations, the Credit Documents, the Secured
Hedging Agreements, the Secured Reimbursement Agreements or any other agreement
or instrument relating to the Guaranteed Obligations or of any security or
guarantee therefor shall affect, impair or be a defense to this Guaranty, and
this Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or guarantor except
payment of the Guaranteed Obligations to the extent of such payment.
          7. CONTINUING GUARANTY. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Secured Creditor in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which any Secured Creditor would
otherwise have. No notice to or demand on any Guarantor in any case shall
entitle such Guarantor to any other further notice or demand in similar or other
circumstances or constitute a waiver of the rights of any Secured Creditor to
any other or further action in any circumstances without notice or demand. It is
not necessary for any Secured Creditor to inquire into the capacity or powers of
the Borrower or any other Guaranteed Party or the officers, directors, partners
or agents acting or purporting to act on its or their behalf, and any
indebtedness made or created under this Guaranty, the other Credit Documents,
the Secured Hedging Agreements or the Secured Reimbursement Agreements (being
collectively the “Secured Debt Agreements”) in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.

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          8. SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS. Any indebtedness
of the Borrower or any other Guaranteed Party now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower or such
other Guaranteed Party to the Secured Creditors, and such indebtedness of the
Borrower or such other Guaranteed Party to any Guarantor, if the Administrative
Agent or the Collateral Agent, after an Event of Default has occurred and is
continuing, so requests, shall be collected, enforced and received by such
Guarantor as trustee for the Secured Creditors and be paid over to the Secured
Creditors on account of the indebtedness of the Borrower or such other
Guaranteed Party to the Secured Creditors, but without affecting or impairing in
any manner the liability of such Guarantor under the other provisions of this
Guaranty except to the extent that Guaranteed Obligations have been paid. Prior
to the transfer by any Guarantor of any note or negotiable instrument evidencing
any indebtedness of the Borrower or any other Guaranteed Party to such
Guarantor, such Guarantor shall mark such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under
Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash; provided, that if any
amount shall be paid to such Guarantor on account of such subrogation rights at
any time prior to the irrevocable payment in full in cash of all the Guaranteed
Obligations, such amount shall be held in trust for the benefit of the Secured
Creditors and shall forthwith be paid to the Secured Creditors to be credited
and applied upon the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Documents or, if the Credit Documents do
not provide for the application of such amount, to be held by the Secured
Creditors as collateral security for any Guaranteed Obligations thereafter
existing.
          9. GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT OR COLLATERAL AGENT.
Notwithstanding anything to the contrary contained elsewhere in this Guaranty,
the Secured Creditors agree (by their acceptance of the benefits of this
Guaranty) that this Guaranty may be enforced only by the action of the
Administrative Agent or the Collateral Agent, in each case acting upon the
instructions of the Required Lenders (or, after the date on which all Credit
Document Obligations have been paid in full, the holders of at least a majority
of the outstanding Other Obligations) and that no other Secured Creditor shall
have any right individually to seek to enforce or to enforce this Guaranty or to
realize upon the security to be granted by the Security Documents, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent or, after all the Credit Document
Obligations have been paid in full, by the holders of at least a majority of the
outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Guaranty and the Security Documents.
The Secured Creditors further agree that this Guaranty may not be enforced
against any director, officer, employee, partner, member or stockholder of any
Guarantor (except to the extent such partner, member or stockholder is also a
Guarantor hereunder). It is understood and agreed that the agreement in this
Section 9 is among and solely for the benefit of, and binding upon, the Secured
Creditors and that, if the Required Lenders (or, after the date on which all
Credit Document Obligations have been paid in full, the holders of at least a
majority of the outstanding Other Obligations) so agree (without requiring the
consent of any Guarantor), this Guaranty may be directly enforced by any Secured
Creditor.

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          10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS. In order
to induce the Lenders to make Term Loans to the Borrower pursuant to the Credit
Agreement, and in order to induce the Approved Third Party Credit Providers to
execute, deliver and perform the Secured Hedging Agreements to which they are a
party and to issue Approved Third Party Letters of Credit, each Guarantor
represents, warrants and covenants that:
     (a) such Guarantor (i) is a duly organized and validly existing Business in
good standing under the laws of the jurisdiction of its organization, (ii) has
the Business, power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and
(iii) is duly qualified and is authorized to do business and, to the extent
applicable, is in good standing in each jurisdiction where the nature of its
business requires such qualification, authorization and good standing, except
for failures to be so qualified which, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect;
     (b) such Guarantor has the Business power and authority to execute, deliver
and perform the terms and provisions of this Guaranty and each other Secured
Debt Agreement to which it is a party and has taken all necessary Business
action to authorize the execution, delivery and performance by it of this
Guaranty and each such other Secured Debt Agreement;
     (c) such Guarantor has duly executed and delivered this Guaranty and each
other Secured Debt Agreement to which it is a party, and this Guaranty and each
such other Secured Debt Agreement constitutes the legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms, except to
the extent that the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors’ rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law);
     (d) neither the execution, delivery or performance by such Guarantor of
this Guaranty or any other Secured Debt Agreement to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof, will
(i) contravene any provision of any applicable law, statute, rule or regulation
or any applicable order, writ, injunction or decree of any court or Governmental
Authority, (ii) conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement, or any
other material agreement, contract or instrument to which such Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) violate any provision of the
certificate or articles of incorporation, by-laws, partnership agreement or
limited liability company agreement (or equivalent organizational documents), as
the case may be, of such Guarantor or any of its Subsidiaries;

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     (e) no order, consent, approval, license, authorization or validation of,
or filing, recording or registration with (except as have been obtained or made
prior to the date when required and which remain in full force and effect), or
exemption by, any Governmental Authority is required to authorize, or is
required in connection with, (i) the execution, delivery and performance by such
Guarantor of this Guaranty or any other Secured Debt Agreement to which such
Guarantor is a party or (ii) the legality, validity, binding effect or
enforceability of this Guaranty or any other Secured Debt Agreement to which
such Guarantor is a party;
     (f) there are no actions, suits or proceedings pending or, to such
Guarantor’s knowledge, threatened (i) with respect to this Guaranty or any other
Secured Debt Agreement to which such Guarantor is a party or (ii) with respect
to such Guarantor or any of its Subsidiaries that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
     (g) until the termination of the Total Commitment, all Secured Hedging
Agreements and all Secured Reimbursement Agreements and until such time as no
Note remains outstanding and all Guaranteed Obligations have been paid in full
(other than indemnities described in Section 11.01 of the Credit Agreement and
analogous provisions in the Security Documents which are not then due and
payable), such Guarantor will comply, and will cause each of its Subsidiaries to
comply, with all of the applicable provisions, covenants and agreements
contained in Sections 7 and 8 of the Credit Agreement, and will take, or will
refrain from taking, as the case may be, all actions that are necessary to be
taken or not taken so that no violation of any provision, covenant or agreement
contained in Sections 7 and 8 of the Credit Agreement, and so that no Default or
Event of Default, is caused by the actions of such Guarantor or any of its
Subsidiaries; and
     (h) an executed copy of each of the Credit Documents and each other Secured
Debt Agreement has been made available to a senior officer of such Guarantor and
such officer is familiar with the contents thereof.
          11. EXPENSES. The Guarantors hereby jointly and severally agree to pay
all reasonable out-of-pocket costs and expenses of the Collateral Agent, the
Administrative Agent and each other Secured Creditor in connection with the
enforcement of this Guaranty and the protection of the Secured Creditors’ rights
hereunder and any amendment, waiver or consent relating hereto (including, in
each case, without limitation, the reasonable fees and disbursements of counsel
employed by the Collateral Agent, the Administrative Agent and each other
Secured Creditor).
          12. BENEFIT AND BINDING EFFECT. This Guaranty shall be binding upon
each Guarantor and its successors and assigns and shall inure to the benefit of
the Secured Creditors and their successors and assigns.
          13. AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated except with the written
consent of

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each Guarantor directly affected thereby (it being understood that the addition
or release of any Guarantor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Guarantor other than the Guarantor so
added or released) and with the written consent of either (x) the Required
Lenders (or, to the extent required by Section 11.12 of the Credit Agreement,
with the written consent of each Lender) at all times prior to the time at which
all Credit Document Obligations have been paid in full or (y) the holders of at
least a majority of the outstanding Other Obligations at all times after the
time at which all Credit Document Obligations have been paid in full.
          14. SET OFF. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any “Event of Default” as defined in the Credit Agreement and
any payment default under any Secured Hedging Agreement or any Secured
Reimbursement Agreement continuing after any applicable grace period), each
Secured Creditor is hereby authorized, at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of such Guarantor, against and on
account of the obligations and liabilities of such Guarantor to such Secured
Creditor under this Guaranty, irrespective of whether or not such Secured
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. Each Secured Creditor (by its acceptance of the benefits hereof)
acknowledges and agrees that the provisions of this Section 13 are subject to
the sharing provisions set forth in Section 11.06 of the Credit Agreement.
          15. NOTICE . Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
courier service and all such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by courier, be effective
when deposited in the mails, delivered to the telegraph company, cable company
or overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Administrative Agent or any Guarantor
shall not be effective until received by the Administrative Agent or such
Guarantor, as the case may be. All notices and other communications shall be in
writing and addressed to such party at (i) in the case of any Lender Creditor,
as provided in the Credit Agreement, (ii) in the case of any Guarantor, c/o
Endeavour International Corporation, 1001 Fannin, Suite 1600, Houston, Texas
77022, Attention J. Michael Kirksey, Telephone No.: (713) 307-8788, Telecopier
No.: (713) 307-8794, and (iii) in the case of any Approved Third Party Credit
Provider, at such address as such Secured Creditor shall have specified in
writing to the Guarantors; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.
          16. REINSTATEMENT. If any claim is ever made upon any Secured Creditor
for repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or order
of any court or administrative body having

13

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jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including, without limitation, the Borrower or any other Guaranteed Party),
then and in such event each Guarantor agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon such Guarantor,
notwithstanding any revocation hereof or the cancellation of any Note, any
Secured Hedging Agreement, any Secured Reimbursement Agreement or any other
instrument evidencing any liability of the Borrower or any other Guaranteed
Party, and such Guarantor shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
          17. CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL
BY JURY. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES). Any legal action or proceeding with respect to this Guaranty or
any other Credit Document to which any Guarantor is a party may be brought in
the courts of the State of New York or of the United States of America for the
Southern District of New York, in each case located within the City of New York,
and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts. Each
Guarantor hereby further irrevocably waives any claim that any such courts lack
personal jurisdiction over such Guarantor, and agrees not to plead or claim, in
any legal action or proceeding with respect to this Guaranty or any other Credit
Document to which such Guarantor is a party brought in any of the aforesaid
courts, that any such court lacks personal jurisdiction over such Guarantor.
Each Guarantor further irrevocably consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to each
Guarantor at its address set forth in Section 15, such service to become
effective 30 Business Days after such mailing. Each Guarantor hereby irrevocably
waives any objection to such service of process out of the aforementioned courts
and further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced with the aforementioned courts hereunder or under any other
Credit Document to which such Guarantor is a party that such service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
any of the Secured Creditors to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against each Guarantor
in any other jurisdiction.
          (b) Each Guarantor hereby irrevocably waives (to the fullest extent
permitted by applicable law) any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Guaranty or any other Credit Document to which
such Guarantor is a party brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that such action or proceeding brought in any such court has been
brought in an inconvenient forum.

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          (c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
          18. RELEASE OF LIABILITY OF GUARANTOR UPON SALE OR DISSOLUTION. In the
event that all of the capital stock or other equity interests of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.02 of the Credit Agreement (or such sale, other
disposition or liquidation has been approved in writing by the Required Lenders
(or all the Lenders if required by Section 11.12 of the Credit Agreement)) and
the proceeds of such sale, disposition or liquidation are applied in accordance
with the provisions of the Credit Agreement, to the extent applicable, such
Guarantor shall, upon consummation of such sale or other disposition (except to
the extent that such sale or disposition is to Holdings or another Subsidiary
thereof), be released from this Guaranty automatically and without further
action and this Guaranty shall, as to each such Guarantor or Guarantors,
terminate, and have no further force or effect (it being understood and agreed
that the sale of one or more Persons that own, directly or indirectly, all of
the capital stock or other equity interests of any Guarantor shall be deemed to
be a sale of such Guarantor for the purposes of this Section 17).
          19. CONTRIBUTION. At any time a payment in respect of the Guaranteed
Obligations is made under this Guaranty, the right of contribution of each
Guarantor against each other Guarantor shall be determined as provided in the
immediately following sentence, with the right of contribution of each Guarantor
to be revised and restated as of each date on which a payment (a “Relevant
Payment”) is made on the Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results in the aggregate
payments made by such Guarantor in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment exceeding such Guarantor’s
Contribution Percentage (as defined below) of the aggregate payments made by all
Guarantors in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor’s Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate
Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor’s right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of each computation; provided that no
Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full in cash and the Total Commitment
have been terminated, it being expressly recognized and agreed by all parties
hereto that any Guarantor’s right of contribution arising pursuant to this
Section 18 against any other Guarantor

15

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shall be expressly junior and subordinate to such other Guarantor’s obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 18: (i) each
Guarantor’s “Contribution Percentage” shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by
(y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the “Adjusted Net
Worth” of each Guarantor shall mean the greater of (x) the Net Worth (as defined
below) of such Guarantor and (y) zero; and (iii) the “Net Worth” of each
Guarantor shall mean the amount by which the fair saleable value of such
Guarantor’s assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty) or any
guaranteed obligations arising under any guaranty of subordinated indebtedness
of Holdings or any of its Subsidiaries (“Subordinated Indebtedness”) on such
date. Notwithstanding anything to the contrary contained above, any Guarantor
that is released from this Guaranty pursuant to Section 17 hereof shall
thereafter have no contribution obligations, or rights, pursuant to this
Section 18, and at the time of any such release, if the released Guarantor had
an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be deemed
reduced to $0, and the contribution rights and obligations of the remaining
Guarantors shall be recalculated on the respective date of release (as otherwise
provided above) based on the payments made hereunder by the remaining
Guarantors. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 18, each Guarantor who makes any
payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in
full in cash. Each of the Guarantors recognizes and acknowledges that the rights
to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor has the
right to waive its contribution right against any Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.
          20. LIMITATION ON GUARANTEED OBLIGATIONS. Each Guarantor and each
Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby
confirms that it is its intention that this Guaranty not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Code, the Uniform
Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the
foregoing intention, each Guarantor and each Secured Creditor (by its acceptance
of the benefits of this Guaranty) hereby irrevocably agrees that the Guaranteed
Obligations guaranteed by such Guarantor shall be limited to such amount as
will, after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of such Guarantor that are relevant under such laws and
after giving effect to any rights to contribution pursuant to any agreement
providing for an equitable contribution among such Guarantor and the other
Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of
such maximum amount not constituting a fraudulent transfer or conveyance. This
Guaranty does not apply to any Guarantor organized under the laws of the
Netherlands to the extent that such Guarantor’s entry into this Guaranty would
violate Sections 2:98c or 2:207c of the Dutch Civil Code.
          21. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so

16

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executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
          22. PAYMENTS. All payments made by any Guarantor hereunder will be
made without setoff, counterclaim or other defense, and shall be made in
immediately available funds at the Payment Office on the same basis as payments
are made by the Borrower under Sections 4.03 of the Credit Agreement.
          23. ADDITIONAL GUARANTORS. It is understood and agreed that any
Subsidiary of Holdings that is required to execute a counterpart of this
Guaranty after the date hereof pursuant to the Credit Agreement shall become a
Guarantor hereunder by (x) executing and delivering a counterpart hereof to the
Administrative Agent or executing a joinder agreement and delivering same to the
Administrative Agent, in each case as may be requested by (and in form and
substance satisfactory to) the Administrative Agent and (y) taking all actions
as specified in this Guaranty as would have been taken by such Guarantor had it
been an original party to this Guaranty, in each case with all documents and
actions required to be taken above to be taken to the reasonable satisfaction of
the Administrative Agent.
          24. HEADINGS DESCRIPTIVE. The headings of the several Sections of this
Guaranty are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Guaranty.
          25. JUDGMENT CURRENCY. If, for the purposes of obtaining judgment in
any court, it is necessary to convert a sum due hereunder or any other Secured
Debt Agreement in one currency into another currency, the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given. The
obligation of any Guarantor in respect of any such sum due from it to the
Administrative Agent or any other Secured Creditor hereunder or under the other
Secured Debt Agreements shall, notwithstanding any judgment in a currency (the
“Judgment Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of the Secured Debt Agreements (the
“Agreement Currency”), be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent of any sum adjudged to be so due
in the Judgment Currency, the Administrative Agent may in accordance with normal
banking procedures purchase the Agreement Currency with the Judgment Currency.
If the amount of the Agreement Currency so purchased is less than the sum
originally due to the Administrative Agent or any other secured creditor from
the Guarantors in the Agreement Currency, the Guarantors agree, jointly and
severally, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or such other Secured Creditor to whom such
obligation was owing against such loss.
* * *

17

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.

            ENDEAVOUR OPERATING CORPORATION,
    as a Guarantor
      By:           Name:           Title:           ENDEAVOUR INTERNATIONAL
HOLDING B.V.,
with its corporate seat in Amsterdam, the Netherlands
    as a Guarantor
      By:           Name:           Title:           ENDEAVOUR ENERGY
NETHERLANDS B.V.,
with its corporate seat in Amsterdam, the Netherlands
    as a Guarantor
      By:           Name:           Title:           ENDEAVOUR ENERGY NORTH SEA
L.P.,
    as a Guarantor
      By:           Name:           Title:      

18

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            ENDEAVOUR ENERGY NORTH SEA LLC,
    as a Guarantor
      By:           Name:           Title:           END MANAGEMENT COMPANY
    as a Guarantor
      By:           Name:           Title:           END ENERGY NEW VENTURES
INC.
    as a Guarantor
      By:           Name:           Title:        

          Accepted and Agreed to:

CYAN PARTNERS, LP,
as Administrative Agent and Collateral Agent
    By:         Name:         Title:      

19

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1. GUARANTY
    2  
2. PARALLEL DEBT
    4  
3. LIABILITY OF GUARANTORS ABSOLUTE
    5  
4. OBLIGATIONS OF GUARANTORS INDEPENDENT
    6  
5. WAIVERS BY GUARANTORS
    6  
6. RIGHTS OF SECURED CREDITORS
    8  
7. CONTINUING GUARANTY
    9  
8. SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS
    10  
9. GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT OR COLLATERAL AGENT
    10  
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS
    11  
11. EXPENSES
    12  
12. BENEFIT AND BINDING EFFECT
    12  
13. AMENDMENTS; WAIVERS
    12  
14. SET OFF
    13  
15. NOTICE
    13  
16. REINSTATEMENT
    13  
17. CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL BY JURY
    14  
18. RELEASE OF LIABILITY OF GUARANTOR UPON SALE OR DISSOLUTION
    15  
19. CONTRIBUTION
    15  
20. LIMITATION ON GUARANTEED OBLIGATIONS
    16  
21. COUNTERPARTS
    16  
22. PAYMENTS
    17  
23. ADDITIONAL GUARANTORS
    17  
24. HEADINGS DESCRIPTIVE
    17  
25. JUDGMENT CURRENCY
    17  

 

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Exhibit F-1
EXECUTION VERSION
     
 
 
U.S. SECURITY AGREEMENT
Dated as of August 16, 2010
From
The Grantors referred to herein
as Grantors
to
Cyan Partners, LP
as Collateral Agent
     
 
 

 

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Table of Contents

              Page
Section 1. Grant of Security
    2  
Section 2. Security for Obligations
    7  
Section 3. Grantors Remain Liable
    8  
Section 4. Delivery and Control of Security Collateral
    9  
Section 5. Maintaining the Account Collateral
    9  
Section 6. Representations and Warranties
    10  
Section 7. Further Assurances
    12  
Section 8. Post-Closing Changes; Collections on Assigned Agreements, Receivables
and Related Contracts
    13  
Section 9. As to Intellectual Property Collateral
    14  
Section 10. Voting Rights; Dividends; Etc.
    16  
Section 11. As to the Assigned Agreements
    18  
Section 12. As to Letter-of-Credit Rights
    18  
Section 13. Commercial Tort Claims
    18  
Section 14. Transfers and Other Liens; Additional Shares
    18  
Section 15. Collateral Agent Appointed Attorney in Fact
    18  
Section 16. Collateral Agent May Perform
    19  
Section 17. The Collateral Agent’s Duties
    19  
Section 18. Remedies
    20  
Section 19. Indemnity and Expenses
    22  
Section 20. Amendments; Waivers; Additional Grantors; Etc.
    23  
Section 21. Notices, Etc.
    23  
Section 22. Continuing Security Interest; Assignments under the Credit
Agreements
    24  
Section 23. Release; Termination
    24  
Section 24. Security Interest Absolute
    25  
Section 25. Execution in Counterparts
    26  
Section 26. Governing Law
    26  

          SCHEDULES    
 
       
Schedule I
  —   Investment Property
Schedule II
  —   Pledged Accounts
Schedule III
  —   [Reserved]
Schedule IV
  —   Intellectual Property
Schedule V
  —   Commercial Tort Claims
Schedule VI
  —   Location, Chief Executive Office, Type of Organization, Jurisdiction of
 
      Organization and Organizational Identification Number
Schedule VII
  —   Changes in Name, Location, Etc.
Schedule VIII
  —   Locations of Equipment and Inventory

          EXHIBITS    
 
       
Exhibit A
  —   Form of Consent and Agreement
Exhibit B
  —   Form of Intellectual Property Security Agreement

(i)

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Table of Contents
(continued)

                  Page
Exhibit C
  -   Form of Intellectual Property Security Agreement Supplement
Exhibit D
  -   Form of Security Agreement Supplement

(ii)

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U.S. SECURITY AGREEMENT
          U.S. SECURITY AGREEMENT dated August 16, 2010 (this “Agreement”) made
by the persons listed on the signature pages hereof (such persons so listed
being, collectively, the “Grantors”), to Cyan Partners, LP as collateral agent
(together with any successor collateral agent appointed pursuant to Clause 10.09
of the Credit Agreement (hereinafter defined), the “Collateral Agent”) for the
Secured Creditors (as defined below).
PRELIMINARY STATEMENTS
          1. WHEREAS, Endeavour International Corporation, a Delaware
corporation, Endeavour Energy UK Limited, a United Kingdom private limited
company, Cyan Partners, LP, as sole lead arranger, sole book runner and
Administrative Agent, and the lenders from time to time party thereto (the
“Lenders”) have entered into a Credit Agreement, dated as of August 16, 2010,
(said agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the “Credit
Agreement” and the Lenders, the Administrative Agent, the Collateral Agent, and
each other Agent being the “Lender Creditors”).
          2. The Grantors may at any time and from time to time enter into one
or more Hedging Agreements with one or more Approved Third Party Credit
Providers (each such Hedging Agreement with an Approved Third Party Credit
Provider that is a party to the Intercreditor Agreement, a “Secured Hedging
Agreement”).
          3. Each Grantor may at any time or from time to time have one or more
Third Party Letters of Credit issued for the account of such Grantor and, in
connection therewith, enter into agreements with respect to such Grantor’s
obligations to reimburse Approved Third Party Credit Providers for amounts
funded under Third Party Letters of Credit issued by such Approved Third Party
Credit Providers (any such reimbursement agreement with respect to Third Party
Letters of Credit issued by an Approved Third Party Credit Provider that is
party to the Intercreditor Agreement, a “Secured Reimbursement Agreement” and
each Approved Third Party Credit Provider referred to in Recital 2 and this
Recital 3 together with the Lender Creditors, the “Secured Creditors”).
          4. Pursuant to the Guaranties, Holdings and each Subsidiary Guarantor
has guaranteed to the Secured Creditors the payment when due of all Secured
Obligations.
          5. Each Grantor is the owner of the shares of stock or other Equity
Interests (the “Initial Pledged Equity”) set forth opposite such Grantor’s name
on and as otherwise described in Part I of Schedule I hereto and issued by the
Persons named therein.
          6. Each Grantor is the owner of the deposit accounts (the “Pledged
Deposit Accounts”) set forth opposite such Grantor’s name on Schedule II hereto.
          7. It is a condition precedent to the making of Term Loans pursuant to
the Credit Agreement, the entering into of Hedging Agreements by Approved Third
Party Credit Providers from time to time and the issuance of Third Party Letters
of Credit by Approved Third Party Credit Providers from time to time, that the
Grantors shall have granted the security

 

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interest contemplated by this Agreement. Each Grantor will derive substantial
direct and indirect benefit from the transactions contemplated by the Credit
Documents, the Secured Hedging Agreements and the Secured Reimbursement
Agreements (collectively, the “Secured Debt Agreements”).
          8. Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as defined in the Credit Agreement. Further, unless
otherwise defined in this Agreement or in the Credit Agreement, terms defined in
Article 8 or 9 of the UCC (as defined below) are used in this Agreement as such
terms are defined in such Article 8 or 9. “UCC” means the Uniform Commercial
Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non perfection or the priority of the
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, “UCC” means the
Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions hereof relating to such perfection,
effect of perfection or non perfection or priority.
          NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Term Loans and the Approved Third Party Credit
Providers to enter into Hedging Agreements and to issue Third Party Letters of
Credit, the undersigned hereby agree with the Collateral Agent, for the benefit
of the Lenders and the Secured Creditors:
          Section 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the benefit of the Secured Creditors a security interest
in all such Grantor’s right, title and interest in and to the following, in each
case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):
     (a) all equipment in all of its forms, including, without limitation, all
machinery, tools, motor vehicles, vessels, aircraft, furniture and fixtures, and
all parts thereof and all accessions thereto, including, without limitation,
computer programs and supporting information that constitute equipment within
the meaning of the UCC (any and all such property being the “Equipment”);
     (b) all inventory in all of its forms, including, without limitation,
(i) all raw materials, work in process, finished goods and materials used or
consumed in the manufacture, production, preparation or shipping thereof,
(ii) goods in which such Grantor has an interest in mass or a joint or other
interest or right of any kind (including, without limitation, goods in which
such Grantor has an interest or right as consignee) and (iii) goods that are
returned to or repossessed or stopped in transit by such Grantor, and all
accessions thereto and products thereof and documents therefor, including,
without limitation, computer programs and supporting information that constitute
inventory within the meaning of the UCC (any and all such property being the
“Inventory”);
     (c) all accounts (including, without limitation, health-care-insurance
receivables), chattel paper (including, without limitation, tangible chattel
paper and electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation,

-2-

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payment intangibles) and other obligations of any kind, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of
services and whether or not earned by performance, and all rights now or
hereafter existing in and to all supporting obligations and in and to all
security agreements, mortgages, Liens, leases, letters of credit and other
contracts securing or otherwise relating to the foregoing property (any and all
of such accounts, chattel paper, instruments, deposit accounts, letter-of-credit
rights, general intangibles and other obligations, to the extent not referred to
in clause (d), (e) or (f) below, being the “Receivables,” and any and all such
supporting obligations, security agreements, mortgages, Liens, leases, letters
of credit and other contracts being the “Related Contracts”);
     (d) the following (the “Security Collateral”):
     (i) the Initial Pledged Equity and the certificates, if any, representing
the Initial Pledged Equity, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all warrants, rights or options issued thereon or with
respect thereto;
     (ii) all additional shares of stock and other Equity Interests in which
such Grantor shall from time to time acquire any interest in any manner (such
shares and other Equity Interests, together with the Initial Pledged Equity,
being the “Pledged Equity”), and the certificates, if any, representing such
additional shares or other Equity Interests, and all dividends, distributions,
return of capital, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares or other Equity Interests and all warrants, rights or
options issued thereon or with respect thereto;
     (iii) all indebtedness from time to time owed to such Grantor (all such
indebtedness owed to the Grantors, including any indebtedness owed to the
Grantors as of the date hereof, collectively being the “Pledged Debt”) and the
instruments, if any, evidencing such indebtedness, and all interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness; and
     (iv) all other investment property (including, without limitation, all
(A) securities, whether certificated or uncertificated, (B) security
entitlements, (C) securities accounts, (D) commodity contracts and (E) commodity
accounts) in which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the certificates or
instruments, if any, representing or evidencing such investment property, and
all dividends, distributions, return of capital, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in

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exchange for any or all of such investment property and all warrants, rights or
options issued thereon or with respect thereto;
     (e) all contract rights of each Grantor including, without limitation, each
Hedging Agreement, to which such Grantor is now or may hereafter become a party,
in each case as such agreements may be amended, amended and restated,
supplemented or otherwise modified from time to time (collectively, the
“Assigned Agreements”), including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all such
Collateral being the “Agreement Collateral”);
(f) the following (collectively, the “Account Collateral”):
     (i) the Pledged Deposit Accounts and all funds and financial assets from
time to time credited thereto (including, without limitation, all cash and Cash
Equivalents and all certificates and instruments, if any, from time to time
representing or evidencing the Pledged Deposit Accounts);
     (ii) all promissory notes, certificates of deposit, checks and other
instruments from time to time delivered to or otherwise possessed by the
Collateral Agent for or on behalf of such Grantor in substitution for or in
addition to any or all of the then existing Account Collateral; and
     (iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Account
Collateral;
(g) the following (collectively, the “Intellectual Property Collateral”):
     (i) all patents, patent applications, utility models and statutory
invention registrations, all inventions claimed or disclosed therein and all
improvements thereto (“Patents”);
     (ii) all trademarks, service marks, domain names, trade dress, logos,
designs, slogans, trade names, business names, corporate names and other source
identifiers, whether registered or unregistered (provided that no security
interest shall be granted in United States intent-to-use trademark applications
to the extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law), together, in
each case, with the goodwill symbolized thereby (“Trademarks”);

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     (iii) all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);
     (iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data
files), firmware and documentation and materials relating thereto, together with
any and all maintenance rights, service rights, programming rights, hosting
rights, test rights, improvement rights, renewal rights and indemnification
rights and any substitutions, replacements, improvements, error corrections,
updates and new versions of any of the foregoing (“Computer Software”);
     (v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and
data, including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information (collectively, “Trade Secrets”), and
all other intellectual, industrial and intangible property of any type,
including, without limitation, industrial designs and mask works;
     (vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications
for registration set forth in Schedule IV hereto, together with all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations thereof;
     (vii) all tangible embodiments of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
     (viii) all agreements, permits, consents, orders and franchises relating to
the license, development, use or disclosure of any of the foregoing to which
such Grantor, now or hereafter, is a party or a beneficiary, including, without
limitation, the agreements set forth in Schedule IV hereto (“IP Agreements”);
and
     (ix) any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages,
but in any event excluding any intellectual property component of any undivided
interest of any Grantor in a joint operating agreement, the terms of which
preclude the granting of a separate security interest in such intellectual
property component;
     (h) to the extent that such commercial tort claims may lawfully be pledged
or assigned under the laws of any relevant jurisdiction, the commercial tort
claims described

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in Schedule V hereto (together with any commercial tort claims as to which the
Grantors have complied with the requirements of Section 13, the “Commercial Tort
Claims Collateral”);
     (i) all books and records (including, without limitation, customer lists,
credit files, printouts and other computer output materials and records) of such
Grantor pertaining to any of the Collateral;
     (j) all general intangibles; and
     (k) all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting obligations
relating to, any and all of the Collateral (including, without limitation,
proceeds, collateral and supporting obligations that constitute property of the
types described in clauses (a) through (j) of this Section 1), and, to the
extent not otherwise included, all (A) payments under insurance (whether or not
the Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral, and (B) cash.
Notwithstanding the foregoing, the Collateral shall not include: (a) any
Grantor’s right, title or interest in any permit, lease, license, contract or
other agreement, to which such Grantor is a party to the extent, but only to the
extent, that the creation by such Grantor of any lien or encumbrance thereon,
would, under the terms of such permit, lease, license, contract or other
agreement constitute or result in (i) the abandonment, invalidation, or
unenforceability of any such right, title or interest of such Grantor therein or
(ii) a breach or termination pursuant to the terms thereof, or a default under
such permit, lease, license, contract or other agreement (other than to the
extent that any such term would be rendered unenforceable or otherwise deemed
ineffective by the UCC (including Sections 9-406, 9-407, 9-408 and 9-409
thereof) of any relevant jurisdiction or any other legal or regulatory
requirement or principle of equity; provided that (A) immediately upon the
ineffectiveness, lapse or termination of any such terms, the Collateral shall
include, and such Grantor shall be deemed to have granted a security interest
in, all such rights, title and interests as if such provision had never been in
effect and (B) to the extent that any such permit, lease, license, contract or
other agreement would otherwise constitute Collateral (but for the provisions of
this paragraph), all proceeds resulting from the sale or disposition by any
Grantor of any rights, title or interests of such Grantor under such permit,
lease, license contract or other agreement shall constitute Collateral; (b) any
Equipment owned by any Grantor that is subject to a purchase money lien or a
Capitalized Lease Obligation if the contract or other agreement in which such
lien or encumbrance is granted (or the documentation providing for such
Capitalized Lease Obligation) prohibits or requires the consent of any person
other than such Grantor as a condition to the creation of any other lien or
encumbrance on such equipment for so long as such encumbrance is not removed,
terminated, or rendered unenforceable or otherwise deemed ineffective by the UCC
(including Section 9-406, 9-407, 9-408 and 9-409 of the UCC) of any relevant
jurisdiction or any other legal or regulatory requirement or principle of
equity; (c) any letter-of-credit rights solely to the extent any Grantor is
required by applicable law to apply the proceeds of a drawing of such letter of
credit for a specified purpose; and (d) any monies, checks, securities or other
items on deposit or otherwise held in deposit accounts or trust accounts
specifically and exclusively used for payroll, payroll

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taxes, deferred compensation and other employee wage and benefit payments to or
for the benefit of any Grantor’s employees (collectively, the “Excluded
Property”). It is acknowledged and agreed that the Excluded Property shall not
constitute Collateral hereunder until such time as such property or assets shall
no longer constitute Excluded Property.
          Section 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment and performance of the following
(collectively, the “Secured Obligations”):
     (a) the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, PIK Interest
(including, without limitation, all interest (including PIK Interest) that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganization or similar proceeding of such
Grantor at the rate provided for in the respective documentation, whether or not
a claim for post-petition interest is allowed in any such proceeding), fees,
costs and indemnities) of such Grantor to the Lenders, whether now existing or
hereafter incurred under, arising out of, or in connection with, each Credit
Document to which such Grantor is a party (including, without limitation, all
such obligations, liabilities and indebtedness of such Grantor under the
Guaranty to which it is a party) and the due performance and compliance by such
Grantor with all of the terms, conditions and agreements contained in each such
Credit Document;
     (b) the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of such Grantor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by such Grantor to the Approved Third
Party Credit Providers under any Secured Hedging Agreement, whether now in
existence or hereafter arising (including, without limitation, all obligations,
liabilities and indebtedness of such Grantor under any Guaranty in respect of
the Secured Hedging Agreements), and the due performance and compliance by such
Grantor with all of the terms, conditions and agreements contained in each such
Secured Hedging Agreement;
     (c) the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of such Grantor at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by such Grantor to the Approved Third
Party Credit Providers under any Secured Reimbursement Agreement, whether now in
existence or hereafter arising (including, without limitation, all obligations,
liabilities and indebtedness of such Grantor under any Guaranty in respect of
the Secured Reimbursement Agreements), and the due

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performance and compliance by such Grantor with all of the terms, conditions and
agreements contained in each such Secured Reimbursement Agreement;
     (d) any and all sums advanced by the Collateral Agent in order to preserve
the Collateral or preserve its security interest in the Collateral;
     (e) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of such Grantor referred to in clauses
(a), (b) and (c) above, after an Event of Default shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Collateral Agent of its rights hereunder, together with
reasonable attorneys’ fees and court costs;
     (f) all amounts paid by any Indemnified Party (as hereinafter defined) as
to which such Indemnified Party has the right to reimbursement under Section 19
of this Agreement; and
     (g) all amounts owing to any Agent pursuant to any of the Credit Documents
in its capacity as such;
it being acknowledged and agreed that the Secured Obligations shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.
Without limiting the generality of the foregoing, this Agreement secures, as to
each Grantor, the payment of all amounts that constitute part of the Secured
Obligations and would be owed by such Grantor to any Secured Creditor under the
Secured Debt Agreements but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Credit Party.
          Notwithstanding anything to the contrary contained herein or in any
other Credit Document, the aggregate amount of Secured Obligations of the type
described in clauses (b) and (c) of this Section 2 (collectively, the “Secured
Third Party Credit Obligations”) secured by the Collateral pursuant to this
Agreement and the Collateral (as defined under the respective Security
Documents) pursuant to the other Security Documents shall not at any time exceed
$25,000,000 (the “Secured Third Party Credit Obligations Cap”). No amount of
Secured Third Party Credit Obligations in excess of the Secured Third Party
Credit Obligations Cap shall receive the benefit of the security interests
granted pursuant to this Agreement and in no event shall any proceeds received
upon the sale of, collection from, or other realization upon all or any part of
the Collateral (as defined in this Agreement and the other Security Documents)
be applied to the Secured Third Party Credit Obligations in an amount in excess
of the Secured Third Party Credit Obligations Cap.
          Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of the rights hereunder shall not release any Grantor from

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any of its duties or obligations under the contracts and agreements included in
the Collateral and (c) no Secured Creditor shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement or any other Credit Document, nor shall any Secured
Creditor be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
          Section 4. Delivery and Control of Security Collateral. (a) All
certificates or instruments representing or evidencing Security Collateral shall
be delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing Security Collateral for certificates or instruments of smaller or
larger denominations.
          (b) With respect to any Security Collateral that constitutes an
uncertificated security, the relevant Grantor will cause the issuer thereof
either (i) to register the Collateral Agent as the registered owner of such
security or (ii) to agree with such Grantor and the Collateral Agent that such
issuer will comply with instructions with respect to such security originated by
the Collateral Agent without further consent of such Grantor, such agreement to
be in form and substance satisfactory to the Collateral Agent (such agreement
being an “Uncertificated Security Control Agreement”).
          (c) With respect to any Security Collateral that constitutes a
security entitlement as to which the Collateral Agent is not the securities
intermediary, the relevant Grantor will at all times following the 15th Business
Day after the Funding Date cause the securities intermediary with respect to
such securities account or security entitlement either (i) to identify in its
records the Collateral Agent as the entitlement holder thereof or (ii) to agree
with such Grantor and the Collateral Agent that such securities intermediary
will comply with entitlement orders originated by the Collateral Agent without
further consent of such Grantor, such agreement to be in form and substance
satisfactory to the Collateral Agent (a “Securities Account Control Agreement”
or “Securities/Deposit Account Control Agreement,” respectively).
          (d) The Collateral Agent shall have the right, at any time in its
discretion and without notice to any Grantor, to transfer to or to register in
the name of the Collateral Agent or any of its nominees any or all of the
Security Collateral, subject only to the revocable rights specified in
Section 10(a).
          (e) Upon the request of the Collateral Agent, each Grantor will notify
each issuer of Security Collateral granted by it hereunder that such Security
Collateral is subject to the security interest granted hereunder.
          Section 5. Maintaining the Account Collateral. So long as any Term
Loans or any other Secured Obligations shall remain unpaid or any Secured
Hedging Agreement or Secured Reimbursement Agreement shall be in effect:
     (i) Each Grantor will maintain deposit accounts only with the Collateral
Agent or with a bank (a “Pledged Account Bank”) that has agreed with such
Grantor and

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the Collateral Agent to comply with instructions originated by the Collateral
Agent directing the disposition of funds in such deposit account without the
further consent of such Grantor, such agreement to be in form and substance
satisfactory to the Collateral Agent (a “Deposit Account Control Agreement”);
provided, however, this Section 5(i) shall not apply to deposit accounts
(i) with an aggregate balance of no more than $100,000 at any time or
(ii) operated solely as a payroll account;
     (ii) Each Grantor will (A) promptly instruct each Person obligated at any
time to make any payment to such Grantor for any reason (an “Obligor”) to make
such payment to a Pledged Deposit Account, and (B) deposit in a Pledged Deposit
Account, at the end of each Business Day, all proceeds of Collateral and all
other cash of such Grantor in excess of $100,000 in the aggregate; provided,
however, this Section 5(ii) shall not apply with respect to the Dutch
Subsidiaries with respect to any of their deposit accounts;
     (iii) Each Grantor agrees that it shall not close any Pledged Deposit
Account or terminate any Deposit Account Control Agreement, in each case without
the prior written consent of the Collateral Agent; and
     (iv) The Collateral Agent may, at any time and without notice to, or
consent from, the Grantor, transfer, or direct the transfer of, funds from the
Pledged Deposit Accounts to satisfy the Grantor’s obligations under the Credit
Documents; provided, that the Collateral Agent may only exercise any such rights
if an Event of Default shall have occurred and be continuing.
          Section 6. Representations and Warranties. Each Grantor represents and
warrants as follows:
     (a) Such Grantor’s exact legal name, location, chief executive office, type
of organization, jurisdiction of organization and organizational identification
number is set forth in Schedule VI hereto. Such Grantor has no trade names other
than as listed on Schedule IV hereto. Within the five years preceding the date
hereof, such Grantor has not changed its name, location, chief executive office,
type of organization, jurisdiction of organization or organizational
identification number from those set forth in Schedule VI hereto except as set
forth in Schedule VII hereto.
     (b) Such Grantor is the legal and beneficial owner of the Collateral
granted or purported to be granted by it free and clear of any Lien, claim,
option or right of others, except for the security interest created under this
Agreement or permitted under the Credit Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of such
Collateral or listing such Grantor or any trade name of such Grantor as debtor
is on file in any recording office, except such as may have been filed in favor
of the Collateral Agent relating to the Credit Documents or as otherwise
permitted under the Credit Agreement.
     (c) All of the Equipment and Inventory of such Grantor are located at the
places specified therefor in Schedule VIII hereto or at another location as to
which such

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Grantor has complied with the requirements of Section 8(a). Such Grantor has
exclusive possession and control of its Equipment and Inventory, other than
Inventory stored at any leased premises or warehouse for which a landlord’s or
warehouseman’s agreement, in form and substance satisfactory to the Collateral
Agent, is in effect.
     (d) None of the Receivables or Agreement Collateral is evidenced by a
promissory note or other instrument that has not been delivered to the
Collateral Agent.
     (e) If such Grantor is an issuer of Security Collateral, such Grantor
confirms that it has received notice of the security interest granted hereunder.
     (f) The Pledged Equity pledged by such Grantor hereunder has been duly
authorized and validly issued and is fully paid and non assessable. The Pledged
Debt pledged by such Grantor hereunder has been duly authorized, authenticated
or issued and delivered, is the legal, valid and binding obligation of the
issuers thereof, is evidenced by one or more promissory notes (which promissory
notes have been delivered to the Collateral Agent) and is not in default.
     (g) The Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule I hereto. The Initial Pledged Debt constitutes all of the
outstanding indebtedness owed to such Grantor by the issuers thereof and is
outstanding in the principal amount indicated on Schedule I hereto.
     (h) Such Grantor has no deposit accounts, other than (i) the Pledged
Deposit Accounts listed on Schedule II hereto, (ii) the additional Pledged
Deposit Accounts as to which such Grantor has complied with the applicable
requirements of Section 5 and (iii) the deposit accounts of the Dutch
Subsidiaries.
     (i) This Agreement creates in favor of the Collateral Agent for the benefit
of the Secured Creditors a valid security interest in the Collateral granted by
such Grantor, securing the payment of the Secured Obligations; all filings and
other actions (including, without limitation, (A) actions necessary to obtain
control of Collateral as provided in Sections 9-104, 9-106 and 9-107 of the UCC
and (B) actions necessary to perfect the Collateral Agent’s security interest
with respect to Collateral, as required by the Collateral Agent) to perfect the
security interest in the Collateral granted by such Grantor have been duly made
or taken, or to the extent such actions have not been completed as of the date
hereof, will be duly made or taken promptly following the execution and delivery
hereof, and in any event within two Business Days of the date hereof; and such
security interest is (or will be upon the completion of such actions not yet
completed) first priority; provided, that (i) no Grantor shall be deemed to
represent pursuant to the foregoing that this Agreement creates a valid security
interest in (1) any Pledged Equity Interests of any Person that is not organized
under the laws of the United States or any state thereof or (2) any Collateral
granted by any Grantor that is not organized under the laws of the United States
or any state thereof (other than Equity Interests held by any such Grantor in
any Person that is organized under the laws of the United States or any state
thereof), and (ii) no steps have been taken in order to perfect any such
security

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interest in the Pledged Equity Interests referred to in clause (i)(1) above or
the Collateral referred to in clause (i)(2) above (other than Equity Interests
held by any such Grantor in any Person that is organized under the laws of the
United States or any state thereof).
     (j) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the grant by such Grantor of the security interest
granted hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) the perfection or maintenance of the security
interest created hereunder (including the first priority nature of such security
interest), except for the filing of financing and continuation statements under
the UCC, which financing statements have either been filed or will be filed
promptly (and in any event within two Business Days after the execution and
delivery of this Agreement), the other actions required by the Collateral Agent
as referred to in clause (i) above and the actions described in Section 4 with
respect to the Security Collateral, which actions have been taken, or will be
taken promptly after the execution and delivery of this Agreement, or (iii) the
exercise by the Collateral Agent of its voting or other rights provided for in
this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Security Collateral by laws affecting the offering and sale of
securities generally; provided, that the Collateral Agent acknowledges and
agrees that no Grantor is making (or will be deemed to have made) the foregoing
representations with respect to (1) any Pledged Equity Interests of any Person
that is not organized under the laws of the United States or any state thereof
or (2) any Collateral granted by any Grantor that is not organized under the
laws of the United States or any state thereof (other than Equity Interests held
by any such Grantor in any Person that is organized under the laws of the United
States or any state thereof).
     (k) As of the date hereof, the aggregate fair market value of all
Intellectual Property Collateral of the Credit Parties is less than $100,000.
          Section 7. Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by such Grantor
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will promptly with
respect to Collateral of such Grantor: (i) if any such Collateral shall be
evidenced by a promissory note or other instrument or chattel paper, deliver and
pledge to the Collateral Agent hereunder such note or instrument or chattel
paper duly indorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Collateral Agent;
(ii) file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Collateral Agent may reasonably request, in order to perfect and preserve the
security interest granted or purported to be granted by such Grantor hereunder;
and (iii) deliver to the Collateral Agent evidence that all other actions that
the Collateral Agent

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may deem reasonably necessary or desirable in order to perfect and protect the
security interest granted or purported to be granted by such Grantor under this
Agreement has been taken.
          (b) Each Grantor hereby authorizes the Collateral Agent to file one or
more financing or continuation statements, and amendments thereto, including,
without limitation, one or more financing statements indicating that such
financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, regardless of whether any particular asset
described in such financing statements falls within the scope of the UCC or the
granting clause of this Agreement. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law.
Each Grantor ratifies its authorization for the Collateral Agent to have filed
such financing statements, continuation statements or amendments filed prior to
the date hereof.
          (c) Each Grantor will furnish to the Collateral Agent from time to
time statements and schedules further identifying and describing the Collateral
of such Grantor subject to this Agreement and such other reports in connection
with such Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
          (d) Each Grantor will furnish to the Collateral Agent, at any time
upon the reasonable request of the Collateral Agent, an opinion of counsel, from
outside counsel reasonably satisfactory to the Collateral Agent, to the effect
that all financing or continuation statements have been filed, and all other
action has been taken to perfect continuously from the date hereof the security
interest granted hereunder; provided, that no Grantor shall be required pursuant
to this Section 7(d) to deliver opinions with respect to the perfection of any
such security interest in (i) the Pledged Equity Interests of any Person that is
not organized under the laws of the United States or any state thereof or
(ii) any Collateral granted by any Grantor that is not organized under the laws
of the United State or any state thereof (other than Equity Interests held by
such Grantor in any Person that is organized under the laws of the United States
or any state thereof).
          Section 8. Post-Closing Changes; Collections on Assigned Agreements,
Receivables and Related Contracts. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
or location, except that any such changes shall be permitted (so long as not in
violation of the applicable requirements of the Secured Debt Agreements and so
long as same do not involve (x) a registered organization ceasing to constitute
same or (y) such Grantor changing its jurisdiction of organization or location
from the United States or a State thereof to a jurisdiction of organization or
location, as the case may be, outside the United States or a State thereof) if
(i) it shall have given to the Collateral Agent not less than 15 days’ prior
written notice of each change to the information listed on Schedule VI (as
adjusted for any subsequent changes thereto previously made in accordance with
this sentence), together with a supplement to Schedule VI which shall correct
all information contained therein for such Grantor, and (ii) in connection with
such change or changes, it shall have taken all action reasonably requested by
the Collateral Agent to maintain the security interests of the Collateral Agent
in the Collateral intended to be granted hereby at all times fully perfected and
in full force and effect. In addition, to the extent that such Grantor does not
have an organizational identification number and later obtains one, such Grantor
shall promptly thereafter notify the Collateral Agent of such organizational
identification number and

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shall take all actions reasonably satisfactory to the Collateral Agent to the
extent necessary to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby fully perfected and in full force
and effect.
          (b) Except as otherwise provided in this subsection (b), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, such Grantor may take such action as such
Grantor or the Collateral Agent may deem necessary or advisable to enforce
collection of the Assigned Agreements, Receivables and Related Contracts;
provided, however, that the Collateral Agent shall have the right at any time
following the occurrence of an Event of Default, and upon written notice to such
Grantor of its intention to do so, to notify the Obligors under any Assigned
Agreements, Receivables and Related Contracts of the assignment of such Assigned
Agreements, Receivables and Related Contracts to the Collateral Agent and to
direct such Obligors to make payment of all amounts due or to become due to such
Grantor thereunder directly to the Collateral Agent and, upon such notification
and at the expense of such Grantor, to enforce collection of any such Assigned
Agreements, Receivables and Related Contracts, to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done, and to otherwise exercise all rights with respect to
such Assigned Agreements, Receivables and Related Contracts, including, without
limitation, those set forth set forth in Section 9-607 of the UCC. After receipt
by any Grantor of the notice from the Collateral Agent referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including,
without limitation, instruments) received by such Grantor in respect of the
Assigned Agreements, Receivables and Related Contracts of such Grantor shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent in the same form as so received (with any necessary
endorsement) to be deposited in a cash collateral account and applied as
provided in Section 18(b) and (ii) such Grantor will not adjust, settle or
compromise the amount or payment of any Receivable or amount due on any Assigned
Agreement or Related Contract, release wholly or partly any Obligor thereof or
allow any credit or discount thereon. No Grantor will permit or consent to the
subordination of its right to payment under any of the Assigned Agreements,
Receivables and Related Contracts to any other indebtedness or obligations of
the Obligor thereof.
          Section 9. As to Intellectual Property Collateral. Each Grantor hereby
agrees that, if at any time, and from time to time, the aggregate fair market
value of the Intellectual Property Collateral of all the Credit Parties shall
exceed $100,000, then the Grantors shall:
     (a) With respect to each item of its Intellectual Property Collateral, each
Grantor agrees to take, at its expense, all necessary steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other Governmental Authority, to (i) maintain the validity and
enforceability of such Intellectual Property Collateral and maintain such
Intellectual Property Collateral in full force and effect, and (ii) pursue the
registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such Intellectual
Property Collateral of such Grantor, including, without limitation, the payment
of required fees and taxes, the filing of responses to office actions issued by
the U.S. Patent and Trademark Office, the U.S. Copyright Office or other
governmental

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authorities, the filing of applications for renewal or extension, the filing of
affidavits under Section 8 and 15 of the U.S. Trademark Act, the filing of
divisional, continuation, continuation-in-part, reissue and renewal applications
or extensions, the payment of maintenance fees and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written consent of
the Collateral Agent, discontinue use of or otherwise abandon any Intellectual
Property Collateral, or abandon any right to file an application for patent,
trademark, or copyright, unless such Grantor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual Property
Collateral is no longer desirable in the conduct of such Grantor’s business and
that the loss thereof would not be reasonably likely to have a Material Adverse
Effect, in which case, such Grantor will give prompt notice of any such
abandonment to the Collateral Agent.
     (b) Each Grantor agrees promptly to notify the Collateral Agent if such
Grantor becomes aware (i) that any item of the Intellectual Property Collateral
may have become abandoned, placed in the public domain, invalid or
unenforceable, or of any adverse determination or development regarding such
Grantor’s ownership of any of the Intellectual Property Collateral or its right
to register the same or to keep and maintain and enforce the same, or (ii) of
any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the U.S. Patent and
Trademark Office or any court) regarding any item of the Intellectual Property
Collateral.
     (c) In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral is being infringed or misappropriated by a
third party, such Grantor shall promptly notify the Collateral Agent and shall
take such actions, at its expense, as such Grantor or the Collateral Agent deems
reasonable and appropriate under the circumstances to protect or enforce such
Intellectual Property Collateral, including, without limitation, suing for
infringement or misappropriation and for an injunction against such infringement
or misappropriation.
     (d) Each Grantor shall use proper statutory notice in connection with its
use of each item of its Intellectual Property Collateral. No Grantor shall do or
permit any act or knowingly omit to do any act whereby any of its Intellectual
Property Collateral may lapse or become invalid or unenforceable or placed in
the public domain.
     (e) Each Grantor shall take all steps which it or the Collateral Agent
deems reasonable and appropriate under the circumstances to preserve and protect
each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.
     (f) Each Grantor agrees that, should it obtain an ownership interest in any
item of the type set forth in Section 1(g) (excluding any intellectual property
component of any undivided interest of any Grantor in a joint operating
agreement, the terms of

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which preclude the granting of a separate security interest in such intellectual
property component; except to the extent any such terms are rendered ineffective
by Sections 9-406, 9-407, 9-408 or 9-409 of the UCC) that is not on the date
hereof a part of the Intellectual Property Collateral, and such acquisition
shall cause the total aggregate value of the Intellectual Property Collateral to
exceed $100,000 (“After-Acquired Intellectual Property”), then (i) the
provisions of this Agreement shall automatically apply thereto, (ii) any such
After-Acquired Intellectual Property and, in the case of trademarks, the
goodwill symbolized thereby, shall automatically become part of the Intellectual
Property Collateral subject to the terms and conditions of this Agreement with
respect thereto and (iii) in the case of the first such ownership interest
obtained in After-Acquired Intellectual Property, within ten business days
following the date on which each such Grantor obtains such ownership interest
each such Grantor shall execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit B hereto or otherwise in form and
substance satisfactory to the Collateral Agent (an “Intellectual Property
Security Agreement”), for recording the security interest granted hereunder to
the Collateral Agent in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
Governmental Authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.
     (g) If, at the end of each fiscal quarter of each Grantor following the
execution of the Intellectual Property Security Agreement, the acquisition of
After-Acquired Intellectual Property shall have caused the total aggregate value
of the Intellectual Property Collateral to exceed $100,000, such Grantor shall
give prompt written notice to the Collateral Agent identifying any additional
After-Acquired Intellectual Property acquired during such fiscal quarter, and
such Grantor shall execute and deliver to the Collateral Agent with such written
notice, or otherwise authenticate, an agreement substantially in the form of
Exhibit C hereto or otherwise in form and substance satisfactory to the
Collateral Agent (an “IP Security Agreement Supplement”) covering such
After-Acquired Intellectual Property, which IP Security Agreement Supplement
shall be recorded with the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.
          Section 10. Voting Rights; Dividends; Etc. (a) So long as no Default
or Event of Default shall have occurred and be continuing:
     (i) Each Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of such Grantor or any
part thereof for any purpose; provided however, that such Grantor will not
exercise or refrain from exercising any such right if such action would have a
material adverse effect on the value of the Security Collateral or any part
thereof or of the rights of the Secured Creditors therein.
     (ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if

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and to the extent that the payment thereof is not otherwise prohibited by the
terms of the Credit Documents; provided, however, that any and all
     (A) dividends, interest and other distributions paid or payable other than
in cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Security
Collateral,
     (B) dividends and other distributions paid or payable in cash in respect of
any Security Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid in surplus; and
     (C) cash paid, payable or otherwise distributed in respect of principal of,
or in redemption of, or in exchange for, any Security Collateral,
that in each case are not otherwise expressly permitted to be retained by such
Grantor pursuant to the terms of the Credit Agreement shall be, and shall be
forthwith delivered to the Collateral Agent to hold as, Security Collateral and
shall, if received by such Grantor, be received in trust for the benefit of the
Collateral Agent, be segregated from the other property or funds of such Grantor
and be forthwith delivered to the Collateral Agent as Security Collateral in the
same form as so received (with any necessary indorsement).
     (iii) The Collateral Agent will execute and deliver (or cause to be
executed and delivered) to each Grantor all such proxies and other instruments
as such Grantor may reasonably request for the purpose of enabling such Grantor
to exercise the voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends or interest payments that it
is authorized to receive and retain pursuant to paragraph (ii) above.
          (b) Upon the occurrence and during the continuance of a Default or
Event of Default:
     (i) All rights of each Grantor (A) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 10(a)(i) shall, upon notice to such Grantor by the
Collateral Agent, cease and (B) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain
pursuant to Section 10(a)(ii) shall automatically cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.
     (ii) All dividends, interest and other distributions that are received by
any Grantor contrary to the provisions of paragraph (i) of this Section 10(b)
shall be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent as Security Collateral in the same form as so received
(with any necessary indorsement).

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          Section 11. As to the Assigned Agreements. (a) Each Grantor hereby
consents on its behalf and on behalf of its Subsidiaries to the assignment and
pledge to the Collateral Agent for benefit of the Secured Creditors of each
Assigned Agreement to which it is a party by any other Grantor hereunder.
          (b) Each Grantor agrees, and has effectively so instructed each other
party to each Assigned Agreement to which it is a party, that all payments due
or to become due under or in connection with such Assigned Agreement will be
made directly to a Pledged Deposit Account.
          (c) All moneys received or collected pursuant to subsection (b) above
and not deposited directly into a Pledged Deposit Account shall be applied as
provided in Section 18(b).
          Section 12. As to Letter-of-Credit Rights. Upon the occurrence of a
Default or Event of Default, each Grantor will, promptly upon request by the
Collateral Agent, (i) notify (and such Grantor hereby authorizes the Collateral
Agent to notify) the issuer and each nominated person with respect to each of
the Related Contracts consisting of letters of credit that the proceeds thereof
have been assigned to the Collateral Agent hereunder and any payments due or to
become due in respect thereof are to be made directly to the Collateral Agent or
its designee and (ii) arrange for the Collateral Agent to become the transferee
beneficiary of letter of credit.
          Section 13. Commercial Tort Claims. Each Grantor will promptly give
notice to the Collateral Agent of any material commercial tort claim capable of
lawfully being pledged or assigned that may arise after the date hereof and will
immediately execute or otherwise authenticate a supplement to this Agreement,
and otherwise take all necessary action, to subject such commercial tort claim
to the first priority security interest created under this Agreement.
          Section 14. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the Secured Debt Agreements, or (ii) create or
suffer to exist any Lien upon or with respect to any of the Collateral of such
Grantor except for the pledge, assignment and security interest created under
the Credit Agreement and Liens permitted under the Credit Agreement.
          (b) Each Grantor agrees that it will (i) cause each issuer of the
Pledged Equity pledged by such Grantor not to issue any Equity Interests or
other securities in addition to or in substitution for the Pledged Equity issued
by such issuer, except to such Grantor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
Equity Interests or other securities.
          Section 15. Collateral Agent Appointed Attorney in Fact. Following the
occurrence and during the continuance of a Default or Event of Default, each
Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s attorney
in fact, with full authority in the place and stead of such Grantor and in the
name of such Grantor or otherwise, from time to time in the Collateral Agent’s
discretion, to take any action and to execute any instrument that

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the Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation:
     (a) to obtain and adjust insurance required to be paid to the Collateral
Agent pursuant to this Agreement,
     (b) to ask for, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,
     (c) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and
     (d) to file any claims or take any action or institute any proceedings that
the Collateral Agent may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Collateral Agent with
respect to any of the Collateral.
          Section 16. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, but without
any obligation to do so and without notice, itself perform, or cause performance
of, such agreement, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by such Grantor under Section 19.
          Section 17. The Collateral Agent’s Duties. (a) The powers conferred on
the Collateral Agent hereunder are solely to protect the Secured Creditors’
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not any Secured Creditor
has or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
          (b) Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time, when the Collateral Agent deems it to be
necessary, appoint one or more subagents (each a “Subagent”) for the Collateral
Agent hereunder with respect to all or any part of the Collateral. In the event
that the Collateral Agent so appoints any Subagent with respect to any
Collateral, (i) the assignment and pledge of such Collateral and the security
interest granted in such Collateral by each Grantor hereunder shall be deemed
for purposes of this Agreement to have been made to such Subagent, in addition
to the Collateral Agent, for the benefit of the Secured Creditors, as security
for the Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,

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powers, privileges, interests and remedies of the Collateral Agent hereunder
with respect to such Collateral, and (iii) the term “Collateral Agent,” when
used herein in relation to any rights, powers, privileges, interests and
remedies of the Collateral Agent with respect to such Collateral, shall include
such Subagent; provided, however, that no such Subagent shall be authorized to
take any action with respect to any such Collateral unless and except to the
extent expressly authorized in writing by the Collateral Agent.
          Section 18. Remedies.
          If any Event of Default shall have occurred and be continuing:
     (a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may:
(i) require each Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Collateral Agent forthwith, assemble all or part
of the Collateral as directed by the Collateral Agent and make it available to
the Collateral Agent at a place and time to be designated by the Collateral
Agent that is reasonably convenient to both parties; (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent’s offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may deem commercially reasonable; (iii) occupy any
premises owned or leased by any of the Grantors where the Collateral or any part
thereof is assembled or located for a reasonable period in order to effectuate
its rights and remedies hereunder or under law, without obligation to such
Grantor in respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any
and all rights of such Grantor to demand or otherwise require payment of any
amount under, or performance of any provision of, the Assigned Agreements, the
Receivables, the Related Contracts and the other Collateral, (B) withdraw, or
cause or direct the withdrawal, of all funds with respect to the Account
Collateral and (C) exercise all other rights and remedies with respect to the
Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section 9-607 of
the UCC. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ notice to such Grantor of the time and place
of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
     (b) Any cash held by or on behalf of the Collateral Agent and all cash
proceeds received by or on behalf of the Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Collateral Agent, be held by the Collateral Agent
as collateral for, and/or

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then or at any time thereafter applied in whole or in part by the Collateral
Agent for the benefit of the Secured Creditors against, all or any part of the
Secured Obligations, in the manner set forth in the last sentence of Section 9
of the Credit Agreement (in the case the Intercreditor Agreement is not in
effect) or as otherwise provided in the Intercreditor Agreement (in the case the
Intercreditor Agreement is in effect). Any surplus of such cash or cash proceeds
held by or on the behalf of the Collateral Agent and remaining after payment in
full of all the Secured Obligations shall be paid over to the applicable Grantor
or to whomsoever may be lawfully entitled to receive such surplus.
     (c) All payments received by any Grantor under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent
in the same form as so received (with any necessary endorsement).
     (d) The Collateral Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Account Collateral or in any other deposit account.
     (e) The Collateral Agent may send to each bank, securities intermediary or
issuer party to any Deposit Account Control Agreement, Securities/Deposit
Account Control Agreement, Securities Account Control Agreement or
Uncertificated Security Control Agreement a “Notice of Exclusive Control” (or
similar term) as defined in and under such Agreement.
     (f) In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill symbolized by any
Trademarks subject to such sale or other disposition shall be included therein,
and such Grantor shall supply to the Collateral Agent or its designee such
Grantor’s know-how and expertise, and documents and things relating to any
Intellectual Property Collateral subject to such sale or other disposition, and
such Grantor’s customer lists and other records and documents relating to such
Intellectual Property Collateral and to the manufacture, distribution,
advertising and sale of products and services of such Grantor.
     (g) If the Collateral Agent shall determine to exercise its right to sell
all or any of the Security Collateral of any Grantor pursuant to this
Section 18, each Grantor agrees that, upon request of the Collateral Agent, such
Grantor will, at its own expense:
     (i) execute and deliver, and cause each issuer of such Security Collateral
contemplated to be sold and the directors and officers thereof to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts and things, as may be necessary or, in the opinion of the Collateral
Agent, advisable to register such Security Collateral under the provisions of
the Securities Act of 1933 (as amended from time to time, the “Securities Act”),
to cause the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by

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law to be furnished and to make all amendments and supplements thereto and to
the related prospectus that, in the opinion of the Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto;
     (ii) use its best efforts to qualify the Security Collateral under the
state securities or “Blue Sky” laws and to obtain all necessary governmental
approvals for the sale of such Security Collateral, as requested by the
Collateral Agent;
     (iii) cause each such issuer of such Security Collateral to make available
to its security holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act;
     (iv) provide the Collateral Agent with such other information and
projections as may be necessary or, in the opinion of the Collateral Agent,
advisable to enable the Collateral Agent to effect the sale of such Security
Collateral; and
     (v) do or cause to be done all such other acts and things as may be
necessary to make such sale of such Security Collateral or any part thereof
valid and binding and in compliance with applicable law.
     (h) The Collateral Agent is authorized, in connection with any sale of the
Security Collateral pursuant to this Section 18, to deliver or otherwise
disclose to any prospective purchaser of the Security Collateral: (i) any
registration statement or prospectus, and all supplements and amendments
thereto, prepared pursuant to subsection (g)(i) above; (ii) any information and
projections provided to it pursuant to subsection (g)(iv) above; and (iii) any
other information in its possession relating to such Security Collateral.
     (i) Each Grantor acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Secured Creditors by reason of the
failure by such Grantor to perform any of the covenants contained in subsection
(g) above and, consequently, agrees that, if such Grantor shall fail to perform
any of such covenants, it will pay, as liquidated damages and not as a penalty,
an amount equal to the value of the Security Collateral on the date the
Collateral Agent shall demand compliance with subsection (g) above.
          Section 19. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless each Secured Creditor and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified Party”) from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in

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a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.
          (b) Each Grantor will upon demand pay to the Collateral Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Creditors hereunder or (iv) the failure by
such Grantor to perform or observe any of the provisions hereof.
          Section 20. Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment, modification or waiver of any provision of this Agreement, and no
consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by each Grantor
directly affected thereby (it being understood that the addition or release of
any Grantor hereunder shall not constitute a amendment, modification, waiver or
consent affecting any Grantor other than the Grantor so added or released) the
Collateral Agent (with the written consent of Required Secured Creditors), and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
          (b) For the purpose of this Agreement, “Required Secured Creditors”
shall mean (i) at any time when any Secured Obligations of the type described in
Section 2(a) are outstanding, the Required Lenders (or, to the extent provided
in Section 11.12 of the Credit Agreement, each of the Lenders) and (ii) at any
time after all of the Secured Obligations of the type described in Section 2(a)
have been paid in full, the holders of a majority of the Secured Third Party
Credit Obligations. No failure on the part of the Collateral Agent or any other
Secured Creditor to exercise, and no delay in exercising any right hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right.
          (c) Upon the execution and delivery by any Person of a security
agreement supplement in substantially the form of Exhibit D hereto (each a
“Security Agreement Supplement”), such Person shall be referred to as an
“Additional Grantor” and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Credit Documents to “Grantor” shall
also mean and be a reference to such Additional Grantor, each reference in this
Agreement and the other Credit Documents to the “Collateral” shall also mean and
be a reference to the Collateral granted by such Additional Grantor and each
reference in this Agreement to a Schedule shall also mean and be a reference to
the schedules attached to such Security Agreement Supplement.
          Section 21. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopier or
telex communication), addressed as follows: (a) in the case of any Grantor, c/o
Endeavour International Corporation, 1001 Fannin, Suite 1600, Houston, Texas
77002, Attention: J. Michael Kirksey, Telephone No.: (713) 307-8788, Telecopier
No.: (713) 307-8794, (b) in the case of the Collateral Agent, 399

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Park Avenue, 39th Floor, New York, New York 10022, Attention: Divya Gopal,
Telephone No.: (212) 380-5864, Telecopier No.: (212) 380-5871, (c) in the case
of any Lender, at such address as such Lender shall have specified in the Credit
Agreement and (d) in the case of any Approved Third Party Credit Provider, at
such address as such Approved Third Party Credit Provider shall have specified
in writing to each Grantor and the Collateral Agent; or, as to any party hereto,
at such other address as shall be designated by such party in a written notice
to the other parties hereto. All such notices and other communications shall,
when mailed, telegraphed, telecopied, telexed, or otherwise delivered, be
effective when deposited in the mails, delivered to the telegraph company,
telecopied, confirmed by telex answerback, sent by electronic mail and confirmed
in writing, or otherwise delivered (or confirmed by a signed receipt),
respectively, addressed as aforesaid; except that notices and other
communications to the Collateral Agent shall not be effective until received by
the Collateral Agent. Delivery by telecopier of an executed counterpart of any
amendment, modification or waiver of any provision of, or any consent with
respect to, this Agreement or of any Security Agreement Supplement or Schedule
hereto shall be effective as delivery of an original executed counterpart
thereof.
          Section 22. Continuing Security Interest; Assignments under the Credit
Agreements. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the later of
(i) the payment in full in cash (it being understood for the purposes of this
Agreement that receipt of Collateral pursuant to a credit bid shall be regarded
as cash) of the Secured Obligations and (ii) the termination or expiration of
all Secured Hedging Agreements and Secured Reimbursement Agreements (or such
earlier date as any Approved Third Party Credit Provider(s) shall have received
in the aggregate an amount equal to the Secured Third Party Credit Obligations
Cap in respect of the Secured Third Party Credit Obligations), (b) be binding
upon each Grantor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the
Secured Creditors and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Lenders may
assign or otherwise transfer all or any portion of its rights and obligations
under the Credit Agreement (including, without limitation, all or any portion of
its Commitment, the Term Loans owing to it and the Note or Notes) to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lenders herein or otherwise, in each
case as provided in Section 11.04 of the Credit Agreement.
          Section 23. Release; Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral of any Grantor effected in
accordance with the terms of the Secured Debt Agreements, then the security
interest hereunder shall be released, and the Collateral Agent will, at such
Grantor’s reasonable request and at such Grantor’s sole expense, take all steps
necessary to evidence such release; provided, however, that at the time of such
request and such release no Default or Event of Default shall have occurred and
be continuing.
          (b) Upon the later of (i) the payment in full in cash of the Secured
Obligations, and (ii) the termination or expiration of all Secured Hedging
Agreements and Secured Reimbursement Agreements (or such earlier date as any
Approved Third Party Credit Provider(s) shall have received in the aggregate an
amount equal to the Secured Third Party Credit Obligations Cap in respect of
Secured Third Party Credit Obligations), the pledge and security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
the

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applicable Grantor. Upon any such termination, the Collateral Agent will, at the
applicable Grantor’s expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination.
          Section 24. Security Interest Absolute. The Obligations of each
Grantor under this Agreement are independent of the Secured Obligations or any
other Obligations of any other Credit Party under or in respect of the Credit
Documents, and a separate action or actions may be brought and prosecuted
against each Grantor to enforce this Agreement, irrespective of whether any
action is brought against such Grantor or any other Credit Party or whether such
Grantor or any other Credit Party is joined in any such action or actions. All
rights of the Collateral Agent and the other Secured Creditors and the pledge,
assignment and security interest hereunder, and all obligations of each Grantor
hereunder, shall be irrevocable, absolute and unconditional irrespective of, and
each Grantor hereby irrevocably waives (to the maximum extent permitted by
applicable law) any defenses it may now have or may hereafter acquire in any way
relating to, any or all of the following:
     (a) any lack of validity or enforceability of any Credit Document or any
other agreement or instrument relating thereto;
     (b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations or any other Obligations of any
other Credit Party under or in respect of the Credit Documents or any other
amendment or waiver of or any consent to any departure from any Credit Document,
including, without limitation, any increase in the Secured Obligations resulting
from the extension of additional credit to any Credit Party or any of its
Subsidiaries or otherwise;
     (c) any taking, exchange, release or non perfection of any Collateral or
any other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Obligations;
     (d) any manner of application of any Collateral or any other collateral, or
proceeds thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Secured Obligations or any other Obligations of any other Credit
Party under or in respect of the Credit Documents or any other assets of any
Credit Party or any of its Subsidiaries;
     (e) any change, restructuring or termination of the corporate structure or
existence of any Credit Party or any of its Subsidiaries;
     (f) any failure of any Secured Creditor to disclose to any Credit Party any
information relating to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities or prospects of
any other Credit Party now or hereafter known to such Secured Creditor (each
Grantor waiving any duty on the part of the Secured Creditors to disclose such
information);
     (g) the failure of any other Person to execute this Agreement or any other
Security Instrument, guaranty or agreement or the release or reduction of
liability of any Grantor or other grantor or surety with respect to the Secured
Obligations; or

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     (h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Secured Creditor that might otherwise constitute a defense available to, or a
discharge of, such Grantor or any other Grantor or a third party grantor of a
security interest.
          This Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by any Secured Creditor or by any other
Person upon the insolvency, bankruptcy or reorganization of any Credit Party or
otherwise, all as though such payment had not been made.
          Section 25. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
          Section 26. Governing Law; Submission to Jurisdiction; Venue; Waiver
of Jury Trial.
               THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT (EXCEPT THAT, IN THE CASE OF
ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH RESPECT TO ANY GRANTOR,
ACTIONS OR PROCEEDINGS RELATED TO THIS AGREEMENT MAY BE BROUGHT IN SUCH COURT
HOLDING SUCH BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS) MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
GRANTOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH GRANTOR, AND AGREES NOT TO PLEAD OR CLAIM, IN
ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT TO WHICH SUCH GRANTOR
IS A PARTY BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH GRANTOR. EACH GRANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH GRANTOR AT ITS ADDRESS SET FORTH IN
SCHEDULE VI, AND, IN THE CASE OF SERVICE OF PROCESS TO ANY OF THE DUTCH
SUBSIDIARIES IN THEIR RESPECTIVE CAPACITIES AS “GRANTORS” HEREUNDER, AS PROVIDED
IN SECTION 11.18 OF THE CREDIT AGREEMENT, IN EACH CASE SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH

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MAILING. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
PROCESS OUT OF THE AFOREMENTIONED COURTS AND FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED WITH THE
AFOREMENTIONED COURTS HEREUNDER THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID
OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR
ANY SECURED CREDITOR TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GRANTOR IN ANY
OTHER JURISDICTION.
          EACH GRANTOR HEREBY IRREVOCABLY WAIVES (TO THE FULLEST EXTENT
PERMITTED BY LAW) ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN THE
IMMEDIATELY PRECEDING PARAGRAPH ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
          EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[SIGNATURES APPEAR ON FOLLOWING PAGE]

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          IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

            ENDEAVOUR INTERNATIONAL CORPORATION
      By:           Name:           Title:      

 

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            ENDEAVOUR OPERATING CORPORATION
      By:           Name:           Title:        

 

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            ENDEAVOUR ENERGY NORTH SEA LLC
      By:           Name:           Title:      

 

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            ENDEAVOUR ENERGY NORTH SEA, L.P.
      By:   Endeavour Energy North Sea LLC, its         general partner         
            By:           Name:           Title:      

 

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            ENDEAVOUR ENERGY NEW VENTURES INC.
      By:           Name:           Title:      

 

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            END MANAGEMENT COMPANY
      By:           Name:           Title:      

 

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            ENDEAVOUR INTERNATIONAL HOLDING
B.V., with its corporate seat in Amsterdam, the
Netherlands
      By:           Name:           Title:      

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            ENDEAVOUR ENERGY NETHERLANDS
B.V., with its corporate seat in Amsterdam, the
Netherlands
      By:           Name:           Title:        

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            Acknowledged and agreed as of the date hereof:

CYAN PARTNERS, LP
      By:           Name:           Title:        

 

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SCHEDULE I
INVESTMENT PROPERTY
Part I
Initial Pledged Equity

                                                  Class of Equity   Par   Number
of   Certificate   Percentage of Grantor   Issuer   Interest   Value   Shares  
Number   outstanding shares
Endeavour
International
Corporation
  Endeavour Operating
Corporation   Common   $ 0.001       100       2       100  
 
                                       
Endeavour Operating
Corporation
  Endeavour Energy New Ventures Inc.   Common   $ 0.01       1,000       1      
100  
 
                                       
Endeavour Operating
Corporation
  END Management
Company   Common   $ 0.01       1,000       1       100  
 
                                       
Endeavour Energy
North Sea LLC
  Endeavour Energy North Sea, L.P.   General Partnership
Interest     N/A       N/A     Un-certificated     0.1  
 
                                       
Endeavour International Holding B.V.
  Endeavour Energy North Sea, L.P.   Limited Partnership
Interest     N/A       N/A     Un-certificated     99.9  
 
                                       
Endeavour Energy Netherlands B.V.
  Endeavour Energy
North Sea, LLC   Membership Interest     N/A       N/A     Un-certificated    
100  
 
                                       
Endeavour Operating
Corporation
  Endeavour Energy New Ventures I, Ltd.   Ordinary   $ 1.00       1    
Un-certificated     100  
 
                                       
Endeavour International Holding B.V.
  Endeavour Energy Luxembourg S.à r.l.   Ordinary     N/A       500    
Un-certificated     100  

 

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Schedule I
Page 2
Part II
Pledged Debt

1.   Revolving Loan Facility Agreement dated as of October 31, 2006 between
Endeavour International Holding B.V., as the borrower, and Endeavour Operating
Corporation, as the lender, as amended, with an aggregate principal amount
outstanding of $99,000,068.00   2.   Revolving Loan Facility Agreement dated as
of October 31, 2006 between Endeavour International Holding B.V., as lender, and
Endeavour Energy UK Limited, as borrower, with an aggregate principal amount
outstanding of $5,072,839.92.

 

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Schedule I
Page 3
Part III
Other Investment Property
     This Schedule I Part III incorporates all Pledged Deposit Accounts as set
out in Schedule II.

 

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SCHEDULE II
Pledged Deposit Accounts

                  Grantor   Sort Code   Bank Account Number   Designation
Endeavour Operating Corporation
  JPMorgan Chase Bank, N.A     179910996265     Operating Account
Endeavour Operating Corporation
  JPMorgan Chase Bank, N.A     825-874-035     Demand Deposit Account

 

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SCHEDULE III
[INTENTIONALLY LEFT BLANK.]

 

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SCHEDULE IV
INTELLECTUAL PROPERTY
NONE.

 

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SCHEDULE V
COMMERCIAL TORT CLAIMS
NONE.

 

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SCHEDULE VI
LEGAL NAME, LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION, JURISDICTION
OF
ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER

                      Grantor’s Legal       Chief Executive   Type of  
Jurisdiction of   Organizational Name   Location   Office   Organization  
Organization   I.D. No.
Endeavour
International
Corporation
  Nevada   1001 Fannin Street,   Corporation   Nevada   NV20001178064      
Suite 1600,                   Houston, Texas                   77002      
 
                   
Endeavour
Operating
Corporation
  Houston   1001 Fannin Street,   Corporation   Delaware   3737839       Suite
1600,                   Houston, Texas                 77002      
 
                   
Endeavour Energy
New Ventures Inc.
  Houston   1001 Fannin Street,   Corporation   Delaware   3900636       Suite
1600,                   Houston, Texas                 77002      
 
                   
END Management
Company
  Houston   1001 Fannin Street,   Corporation   Delaware   3900274       Suite
1600,                   Houston, Texas                 77002      
 
                   
Endeavour Energy
North Sea LLC
  Houston   1001 Fannin Street,   Limited Liability   Delaware   4621624    
Suite 1600 Houston,   Company             Texas 77002      
 
                   
Endeavour Energy
North Sea, L.P.
  Houston   1001 Fannin Street,   Limited Partnership   Delaware   4591023      
Suite 1600 Houston,                 Texas 77002      
 
                   
Endeavour
International
Holding B.V.
  Amsterdam   Teleportboulevard   Private company with   Netherlands   34229293
      140, 1043 EJ   limited liability               Amsterdam, The   under the
laws of             Netherlands   the Netherlands    
 
                   
Endeavour Energy
Netherlands B.V.
  Amsterdam   Teleportboulevard   Private company with   Netherlands   34229296
      140, 1043 EJ   limited liability               Amsterdam, The   under the
laws of             Netherlands   the Netherlands    

 

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SCHEDULE VII
CHANGES IN NAME, LOCATION ETC.

1.   ENDEAVOUR OPERATING CORPORATION       Change of name from CSOR Acquisition
Corp. on 26 February 2004       Change of address from 1000 Main Street,
Suite 3300, Houston, Texas, 77002 on or about 15 February 2008   2.   ENDEAVOUR
INTERNATIONAL CORPORATION       Change of name from Continental Southern
Resources, Inc. on 27 February 2004       Change of address from 1000 Main
Street, Suite 3300, Houston, Texas, 77002 on or about 15 February 2008   3.  
ENDEAVOUR ENERGY NORTH SEA LLC       None   4.   ENDEAVOUR ENERGY NORTH SEA,
L.P.       None   5.   ENDEAVOUR ENERGY NEW VENTURES INC.       Change of Name
from END Operating Management Company on August 20, 2008       Change of address
from 1000 Main Street, Suite 3300, Houston, Texas, 77002 on or about 15
February 2008   6.   END MANAGEMENT COMPANY       Change of address from 1000
Main Street, Suite 3300, Houston, Texas, 77002 on or about 15 February 2008   7.
  ENDEAVOUR INTERNATIONAL HOLDING B.V.       None   8.   ENDEAVOUR ENERGY
NETHERLANDS B.V.       None

 

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SCHEDULE VIII
LOCATIONS OF EQUIPMENT AND INVENTORY
ENDEAVOUR INTERNATIONAL CORPORATION

     
Locations of Equipment
  N/A
Locations of Inventory
  N/A
Leased Real Property
  14,514 sq. ft. of rentable area on Floor 16 of the First City Tower Building,
1001 Fannin Street, Houston, Texas 77002, leased through December 1, 2010;

ENDEAVOUR OPERATING CORPORATION

     
Locations of Equipment
  Alabama, Louisiana, Montana, New Mexico, Pennsylvania and Texas.
Locations of Inventory
  Alabama, Louisiana, Montana, New Mexico, Pennsylvania and Texas.
Leased Real Property
  5,025 sq. ft. of rentable area at 1125 17th Street, Suite 1525, Denver,
Colorado 80202, leased through December 31, 2011.

ENDEAVOUR ENERGY NORTH SEA LLC

     
Locations of Equipment
  N/A
Locations of Inventory
  N/A

ENDEAVOUR ENERGY NORTH SEA, L.P.

     
Locations of Equipment
  N/A
Locations of Inventory
  N/A

ENDEAVOUR ENERGY NEW VENTURES INC.

     
Locations of Equipment
  N/A
Locations of Inventory
  N/A

END MANAGEMENT COMPANY

     
Locations of Equipment
  N/A
Locations of Inventory
  N/A

 

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EXHIBIT A
to
THE SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
          The undersigned hereby (a) acknowledges notice of, and consents to the
terms and provisions of, the Security Agreement dated as of August 16, 2010 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement”; the terms defined therein being used herein as
therein defined) from                                          (the “Grantor”)
and certain other grantors from time to time party thereto to Cyan Partners, LP,
as Collateral Agent, for the Secured Creditors, (b) consents in all respects to
the pledge and assignment to the Collateral Agent of all of the Grantor’s right,
title and interest in, to and under the Assigned Agreement (as defined below)
pursuant to the Security Agreement, (c) acknowledges that the Grantor has
provided it with notice of the right of the Collateral Agent in the exercise of
its rights and remedies under the Security Agreement to make all demands, give
all notices, take all actions and exercise all rights of the Grantor under the
Assigned Agreement, and (d) agrees with the Collateral Agent that:
     (1) A true copy of the agreement between the undersigned and the Grantor
dated                             ,                     (the “Assigned
Agreement”), including, without limitation, all amendments, modifications,
restatements and supplements is attached hereto as Schedule 1. The Assigned
Agreement is in full force and effect, and the undersigned is not aware of any
default under the Assigned Agreement or any event that would give any party the
right to terminate or rescind the Assigned Agreement. No prepayments have been
made of any amounts to become due under the Assigned Agreement.
     (2) The undersigned will make all payments to be made by it under or in
connection with the Assigned Agreement directly to a Pledged Deposit Account or
otherwise in accordance with the instructions of the Collateral Agent.
     (3) All payments referred to in paragraph 2 above shall be made by the
undersigned irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set off and shall be final, and the undersigned will not
seek to recover from any Secured Creditor for any reason any such payment once
made.
     (4) The Collateral Agent or its designee shall be entitled to exercise any
and all rights and remedies of the Grantor under the Assigned Agreement in
accordance with the terms of the Security Agreement, and the undersigned shall
comply in all respects with such exercise.
     (5) The undersigned will not, without the prior written consent of the
Collateral Agent, (i) cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof, or (ii) amend, amend and
restate, supplement or otherwise modify the Assigned Agreement, except, in each
case, to the extent otherwise permitted under the Credit Agreement referred to
in the Security Agreement.

 

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     (6) In the event of a default by the Grantor in the performance of any of
its obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement which
would immediately or with the passage of any applicable grace period or the
giving of notice, or both, enable the undersigned to terminate or suspend its
obligations under the Assigned Agreement, the undersigned shall not terminate
the Assigned Agreement until it first gives the Collateral Agent written notice
of the default and permits the Collateral Agent to cure the default within a
period of 60 days after the later of (i) notice of default having been given to
the Collateral Agent by the undersigned and (ii) the expiration of the
applicable cure period provided in the Assigned Agreement for the Grantor to
cure the default.
     (7) The undersigned shall deliver to the Collateral Agent, concurrently
with the delivery thereof to the Grantor, a copy of each notice, request or
demand given by the undersigned pursuant to the Assigned Agreement.
     (8) Except as specifically provided in this Consent and Agreement, neither
the Collateral Agent nor any other Secured Creditor shall have any liability or
obligation under the Assigned Agreement as a result of this Consent and
Agreement, the Security Agreement or otherwise.
     (9) Upon the enforcement of the Security Agreement by the Collateral Agent
and the transfer of the Assigned Agreement to a transferee, the undersigned will
recognize the transferee as the counterparty to the Assigned Agreement in the
place and stead of the Grantor.
          In order to induce the Lenders to make Terms Loans, the Approved Third
Party Credit Providers to enter into Hedging Agreements with one or more
Grantors from time to time and the Approved Third Party Credit Providers to
provide Third Party Letters of Credit for the account of one or more Grantors
from time to time, the undersigned repeats and reaffirms for the benefit of the
Secured Creditors the representations and warranties made by it in the Assigned
Agreement.
          This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Secured
Creditors and their successors, transferees and assigns. This Consent and
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
[SIGNATURES ON FOLLOWING PAGE]

 

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          IN WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.
          Dated:                             , 20[       ]

            [NAME OF OBLIGOR]
      By:           Name:           Title:        

 

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EXHIBIT B
to
THE SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
          This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “IP Security
Agreement”) dated          , 2010, is made by the Persons listed on the
signature pages hereof (collectively, the “Grantors”) in favor of Cyan Partners,
LP as Collateral Agent (as defined in the Security Agreement referred to below)
for the Secured Creditors (as defined in the Security Agreement referred to
below).
          WHEREAS, Endeavour International Corporation, a Delaware corporation
and Endeavour Energy UK Limited, a United Kingdom private limited company, have
entered into a Credit Agreement dated as of August 16, 2010 (said agreement, as
it may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, being the “Credit Agreement”) with the lenders party
thereto from time to time (the “Lenders”) and the Cyan Partners, LP, as
Administrative Agent.
          WHEREAS, as a condition precedent to the making of Terms Loans by the
Lenders under the Credit Agreement, the entry into Hedging Agreement by the
Approved Third Party Credit Providers from time to time and the issuance by the
Approved Third Party Credit Providers of Third Party Letters of Credit for the
account of one or more Grantors from time to time, each Grantor has executed and
delivered that certain Security Agreement dated August 16, 2010 made by the
Grantors to the Collateral Agent (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “Security Agreement”). Terms
defined in the Security Agreement and not otherwise defined herein are used
herein as defined in the Security Agreement.
          WHEREAS, under the terms of the Security Agreement, the Grantors have
granted to the Collateral Agent, for the benefit of the Secured Creditors, a
security interest in, among other property, certain intellectual property of the
Grantors, and have agreed therein to execute this IP Security Agreement for
recording with the U.S. Patent and Trademark Office, the United States Copyright
Office and other governmental authorities within ten Business Days following the
acquisition of any After-Acquired Intellectual Property.
          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees as follows:
          SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent for the benefit of the Secured Creditors a security interest in
all of such Grantor’s right, title and interest in and to the following (the
“Collateral”):
     (i) the patents and patent applications set forth in Schedule A hereto (the
“Patents”);

 

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     (ii) the trademark and service mark registrations and applications set
forth in Schedule B hereto (provided that no security interest shall be granted
in United States intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together with the goodwill
symbolized thereby (the “Trademarks”);
     (iii) all copyrights, whether registered or unregistered, now owned or
hereafter acquired by such Grantor, including, without limitation, the copyright
registrations and applications and exclusive copyright licenses set forth in
Schedule C hereto (the “Copyrights”);
     (iv) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing, all rights in
the foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
     (v) any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or breach
with respect to any of the foregoing, with the right, but not the obligation, to
sue for and collect, or otherwise recover, such damages; and
     (vi) any and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the Collateral of or arising from any of
the foregoing.
          SECTION 2. Security for Obligations. The grant of a security interest
in, the Collateral by each Grantor under this IP Security Agreement secures the
payment of all Secured Obligations of such Grantor now or hereafter existing,
whether direct or indirect, absolute or contingent, and whether for principal,
interest, premiums, penalties, fees, indemnifications, contract causes of
action, costs, expenses or otherwise. Without limiting the generality of the
foregoing, this IP Security Agreement secures, as to each Grantor, the payment
of all amounts that constitute part of the Secured Obligations and that would be
owed by such Grantor to any Secured Creditor under the Secured Debt Agreements
but for the fact that such Secured Obligations are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Credit Party.
          SECTION 3. Recordation. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner for Patents and the Commissioner for
Trademarks and any other applicable government officer record this IP Security
Agreement.
          SECTION 4. Execution in Counterparts. This IP Security Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
          SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has
been entered into in conjunction with the provisions of the Security Agreement.
Each Grantor

 

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does hereby acknowledge and confirm that the grant of the security interest
hereunder to, and the rights and remedies of, the Collateral Agent with respect
to the Collateral are more fully set forth in the Security Agreement, the terms
and provisions of which are incorporated herein by reference as if fully set
forth herein.
          SECTION 6. Governing Law. This IP Security Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
[Signatures on following page]

 

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          IN WITNESS WHEREOF, each Grantor has caused this IP Security Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

            [NAME OF GRANTOR]
      By:           Name:           Title:           Address for Notices:
                     

 

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EXHIBIT C
to
THE SECURITY AGREEMENT
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT
          This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this “IP
Security Agreement Supplement”) dated                             , 20
[       ], is made by the Person listed on the signature page hereof (the
“Grantor”) in favor of Cyan Partners, LP, as Collateral Agent (such term used
herein as defined in the Security Agreement referred to below); for the Secured
Creditors (used herein as defined in the Security Agreement referred to below).
          WHEREAS, Endeavour International Corporation, a Delaware corporation
and Endeavour Energy UK Limited, a United Kingdom private limited company, have
entered into a Credit Agreement dated as of August 16, 2010 (said agreement, as
it may hereafter be amended, amended and restated, supplemented or otherwise
modified from time to time, being the “Credit Agreement”) with certain lenders
(the “Lenders”) and the Cyan Partners, LP, as Administrative Agent.
          WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons have executed and delivered that certain Security Agreement dated
August 16, 2010 made by the Grantor and such other Persons to the Collateral
Agent (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Security Agreement”) and that certain Intellectual Property
Security Agreement dated as of              , 20 [___] (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “IP Security
Agreement”). Terms defined in the Security Agreement and not otherwise defined
herein are used herein as defined in the Security Agreement.
          WHEREAS, under the terms of the Security Agreement, the Grantor has
granted to the Collateral Agent, for the benefit of the Secured Creditors, a
security interest in the Additional Collateral (as defined in Section 1 below)
of the Grantor and has agreed to execute this IP Security Agreement Supplement
for recording with the U.S. Patent and Trademark Office, the United States
Copyright Office and other governmental authorities.
          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:
          SECTION 1. Grant of Security. The Grantor hereby grants to the
Collateral Agent, for the benefit of the Secured Creditors, a security interest
in all of the Grantor’s right, title and interest in and to the following (the
“Additional Collateral”):
     (i) the patents and patent applications set forth in Schedule A hereto (the
“Patents”);
     (ii) the trademark and service mark registrations and applications set
forth in Schedule B hereto (provided that no security interest shall be granted
in United States intent-to-use trademark applications to the extent that, and
solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability

 

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of such intent-to-use trademark applications under applicable federal law),
together with the goodwill symbolized thereby (the “Trademarks”);
     (iii) the copyright registrations and applications and exclusive copyright
licenses set forth in Schedule C hereto (the “Copyrights”);
     (iv) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the foregoing, all rights in
the foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
     (v) all any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation, violation, misuse
or breach with respect to any of the foregoing, with the right, but not the
obligation, to sue for and collect, or otherwise recover, such damages; and
     (vi) any and all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and supporting
obligations relating to, any and all of the foregoing or arising from any of the
foregoing.
          SECTION 2. Security for Obligations. The grant of a security interest
in the Additional Collateral by the Grantor under this IP Security Agreement
Supplement secures the payment of all Secured Obligations of the Grantor now or
hereafter existing, whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, penalties, fees, indemnifications,
contract causes of action, costs, expenses or otherwise. Without limiting the
generality of the foregoing, this IP Security Agreement Supplement and the IP
Security Agreement secures the payment of all amounts that constitute part of
the Secured Obligations and that would be owed by the undersigned to any Secured
Creditor under the Secured Debt Agreements but for the fact that such Secured
Obligations are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Credit Party
          SECTION 3. Recordation. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner for Patents and the Commissioner for
Trademarks and any other applicable government officer to record this IP
Security Agreement Supplement.
          SECTION 4. Grants, Rights and Remedies. This IP Security Agreement
Supplement has been entered into in conjunction with the provisions of the
Security Agreement. The Grantor does hereby acknowledge and confirm that the
grant of the security interest hereunder to, and the rights and remedies of, the
Collateral Agent with respect to the Additional Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated herein by reference as if fully set forth herein.
          SECTION 6. Governing Law. This IP Security Agreement Supplement shall
be governed by, and construed in accordance with, the laws of the State of New
York.

 

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          IN WITNESS WHEREOF, the Grantor has caused this IP Security Agreement
Supplement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

            [NAME OF GRANTOR]
      By:           Name:           Title:           Address for Notices:
                     

 

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EXHIBIT D
to
THE SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
[DATE]
Cyan Partners, LP, as Collateral Agent for
the Secured Creditors
399 Park Avenue, 39th Floor
New York, New York 10022
Attn: Divya Gopal
ENDEAVOUR INTERNATIONAL CORPORATION
Ladies and Gentlemen:
          Reference is made to the Credit Agreement dated as of August 16, 2010
(said agreement, as it may hereafter be amended, amended and restated,
supplemented or otherwise modified from time to time, being the “Credit
Agreement”) among Endeavour International Corporation, a Delaware corporation,
Endeavour Energy UK Limited, a United Kingdom private limited company, various
lenders from time to time party thereto (the “Lenders”) and Cyan Partners, LP,
as Administrative Agent.
          Further reference is made to the U.S. Security Agreement, dated
August 16, 2010, made by the Grantors party thereto in favor of the Collateral
Agent for the benefit of the Secured Creditors (used herein as defined in such
security agreement; such security agreement, as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”).
Terms defined in the Security Agreement and not otherwise defined herein are
used herein as defined in the Security Agreement.
          SECTION 1. Grant of Security. The undersigned hereby grants to the
Collateral Agent, for the benefit of the Secured Creditors, a security interest
in all of its right, title and interest in and to the following, in each case
whether now owned or hereafter acquired by the undersigned, wherever located and
whether now or hereafter existing or arising (collectively, the undersigned’s
“Collateral”): all Equipment, Inventory, Receivables, Related Contracts,
Security Collateral (including, without limitation, the shares of stock and
other Equity Interests set forth on Part I of Schedule I hereto, the
indebtedness set forth on Part II of Schedule I hereto and the securities and
securities/deposit accounts set forth on Schedule II hereto), Agreement
Collateral, Account Collateral (including, without limitation, the deposit
accounts set forth on Schedule IV hereto), Intellectual Property Collateral,
Commercial Tort Claims Collateral (including, without limitation, the commercial
tort claims described in Schedule V hereto), all books and records (including,
without limitation, customer lists, credit files, printouts and other computer
output materials and records) of the undersigned pertaining to any of the
undersigned’s Collateral, and all proceeds of, collateral for, income, royalties
and other payments now or hereafter due and payable with respect to, and
supporting obligations relating to, any and all of the undersigned’s Collateral
(including, without limitation, proceeds, collateral and supporting obligations
that

 

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constitute property of the types described in this Section 1) and, to the extent
not otherwise included, all (A) payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral, and (B) cash. Notwithstanding the foregoing,
the Collateral shall not include any Excluded Property until such time as any
property or assets shall no longer constitute Excluded Property.
          SECTION 2. Security for Obligations. The grant of a security interest
in, the Collateral by the undersigned under this Security Agreement Supplement
and the Security Agreement secures the payment of all Secured Obligations of the
undersigned now or hereafter existing, whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise.
Without limiting the generality of the foregoing, this Security Agreement
Supplement and the Security Agreement secures the payment of all amounts that
constitute part of the Secured Obligations and that would be owed by the
undersigned to any Secured Creditor under the Secured Debt Agreements but for
the fact that such Secured Obligations are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
any Credit Party.
          SECTION 3. Representations and Warranties. (a) The undersigned’s exact
legal name, location, chief executive office, type of organization, jurisdiction
of organization and organizational identification number is set forth in
Schedule VI hereto. The undersigned has no trade names other than as listed on
Schedule IV hereto. Within the five years preceding the date hereof, the
undersigned has not changed its name, location, chief executive office, type of
organization, jurisdiction of organization or organizational identification
number from those set forth in Schedule VI hereto except as set forth in
Schedule VII hereto.
          (b) All of the Equipment of the undersigned is located at the places
specified therefor in Schedule VIII hereto. Within the five years preceding the
date hereof, the undersigned has not changed the location of its Equipment
except as set forth in Schedule VII hereto.
          (c) The undersigned is not a beneficiary or assignee under any letter
of credit, other than the letters of credit described in Schedule IX hereto.
          (d) The undersigned hereby makes each other representation and
warranty set forth in Section 6 of the Security Agreement with respect to itself
and the Collateral granted by it.
          SECTION 4. Obligations Under the Security Agreement. The undersigned
hereby agrees, as of the date first above written, to be bound as a Grantor by
all of the terms and provisions of the Security Agreement to the same extent as
each of the other Grantors. The undersigned further agrees, as of the date first
above written, that each reference in the Security Agreement to an “Additional
Grantor” or a “Grantor” shall also mean and be a reference to the undersigned,
that each reference to the “Collateral” or any part thereof shall also mean and
be a reference to the undersigned’s Collateral or part thereof, as the case may
be, and that each

 

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reference in the Security Agreement to a Schedule shall also mean and be a
reference to the schedules attached hereto.
          SECTION 6. Governing Law. This Security Agreement Supplement shall be
governed by, and construed in accordance with, the laws of the State of New
York.1

            Very truly yours,

[NAME OF ADDITIONAL GRANTOR]
      By:           Name:           Title:           Address for Notices:
                     

 

1   If the Additional Grantor is not concurrently executing a guaranty or other
Credit Document containing provisions relating to submission to jurisdiction and
jury trial waiver, add the relevant provisions of Section 11.08 of the Credit
Agreement.

 

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            Acknowledged and agreed as of the date hereof:

CYAN PARTNERS, LP
      By:           Name:           Title:        

            Address for Notices:
   

 

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Exhibit F-2

     
(WHITE & CASE) [h77219q7550702.gif]
  EXECUTION COPY

 
Dated ____ August 2010
DEBENTURE
between
ENDEAVOUR ENERGY UK LIMITED
as the Company
and
CYAN PARTNERS, LP
as Collateral Agent
 
White & Case LLP
5 Old Broad Street
London EC2N 1DW

 

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TABLE OF CONTENTS

              Page
1. DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS
    2  
2. COVENANTS TO PAY
    7  
3. SECURITY
    9  
4. FLOATING CHARGE
    10  
5. FURTHER ASSURANCE
    13  
6. UNDERTAKINGS WITH RESPECT TO THE CHARGED ASSETS
    13  
7. FURTHER UNDERTAKINGS
    14  
8. ACCOUNTS AND RECEIPTS
    15  
9. THE COLLATERAL AGENT
    17  
10. RIGHTS OF THE COLLATERAL AGENT
    26  
11. EXONERATION
    28  
12. APPOINTMENT OF RECEIVER OR ADMINISTRATOR
    28  
13. RECEIVER’S POWERS
    29  
14. PROTECTION OF PURCHASERS
    30  
15. POWER OF ATTORNEY AND DELEGATION
    30  
16. APPLICATION OF MONIES RECEIVED UNDER THIS DEBENTURE
    31  
17. RELEASE OF SECURITY
    32  
18. POWER OF SEVERANCE
    32  
19. NEW ACCOUNTS
    32  
20. MISCELLANEOUS
    33  
21. NOTICES
    36  
22. CERTIFICATES AND DETERMINATIONS
    38  
23. PARTIAL INVALIDITY
    38  
24. COUNTERPARTS
    38  
25. THIRD PARTIES
    38  
26. GOVERNING LAW
    38  
27. ENFORCEMENT
    39  
SCHEDULE 1 FORM OF NOTICES
    40  
SCHEDULE 2 PROJECT AGREEMENTS
    44  

(i)

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THIS DEBENTURE is made on ___August 2010
BETWEEN:

(1)   ENDEAVOUR ENERGY UK LIMITED (a company registered in England and Wales
with registration number 5030838) whose registered office is at 33rd Floor, City
Point, One Ropemaker St, London EC2Y 9UE (the “Company”); and

(2)   CYAN PARTNERS, LP as agent and trustee for itself and each of the other
Secured Creditors (the “Collateral Agent”).

IT IS AGREED as follows:

1.   DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS   1.1   Definitions

  (a)   Terms defined in the Credit Agreement shall, unless otherwise defined in
this Debenture or unless a contrary intention appears, bear the same meaning
when used in this Debenture and the following terms shall have the following
meanings:         “Account” means any account now or in the future opened or
maintained by the Company with a bank or other financial institution (and any
replacement account or subdivision or subaccount of that account), together with
all amounts from time to time standing to the credit of, or accrued or accruing
on, such account and any monies, proceeds or income paid or payable in respect
of such account.         “Administrator” means a person appointed under
Schedule B1 to the Insolvency Act 1986 to manage the Company’s affairs, business
and property.         “Assigned Account” means any Account designated in writing
as an Assigned Account by the Collateral Agent in accordance with Clause 8.3
(Accounts after Security becomes Enforceable).         “BP” means BP Exploration
Operating Company Limited.         “Charges” means Security from time to time
created or expressed to be created pursuant to this Debenture.         “Charged
Assets” means the assets mortgaged, charged or assigned pursuant to Clauses 3
(Security) and 4.1 (Creation of floating charge).         “Collateral Account”
means any Account that may from time to time be opened by the Company with the
Collateral Agent pursuant to Clause 8.1(a)(ii) (Accounts General).        
“Confidentiality Undertaking” means a confidentiality undertaking substantially
in a form from time to time recommended by the Loan Market Association or in any
other form agreed between the Company and the Administrative Agent.

2

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      “Credit Agreement” means the term loan credit agreement dated on or about
the date of this Debenture between (among others) the Company and the
Administrative Agent (as amended, modified, restated or supplemented from time
to time).         “Delegate” means a delegate or sub-delegate appointed directly
or indirectly pursuant to Clause 15.3 (General delegation).         “Enforcement
Date” means the date on which a notice is issued by the Administrative Agent to
the Borrower under section 9 (Events of Default) of the Credit Agreement upon
the occurrence of an Event of Default which is continuing.         “Enoch PLTPA”
means the Enoch pipeline liquids transportation and processing agreement dated
24 February 2006 and made between, among others, the Company and BP.        
“Group” means Endeavour International Corporation and its Subsidiaries for the
time being.         “Indemnified Party” has the meaning given to it in the U.S.
Security Agreement.         “Insolvency Event” has the meaning given to such
term in Clause 9.20(a) (Insolvency Events).         “Insurances” means any
insurances that are required to be maintained by, or on behalf of, any Credit
Party in respect of the Oil and Gas Properties and/or any activities related
thereto, in each case pursuant to the Credit Agreement.         “LPA” means the
Law of Property Act 1925.         “Party” means a party to this Debenture.      
  “Project Agreements” means each of the contracts, agreements and documents
listed in Schedule 2 (Project Agreements) together with all Related Property
Rights and all documents which are supplemental to, or are expressed to be
collateral with, or are entered into pursuant to or in connection with, any such
contracts, agreements and documents.         “Receiver” means any person
appointed by the Collateral Agent to be a receiver or receiver and manager or
administrative receiver of any property subject to the Security created by this
Debenture or any part thereof.         “Related Property Rights” means, in
relation to any property or asset:

  (a)   the proceeds of sale and/or other realisation of that property or asset
(or any part thereof or interest therein);     (b)   all Security, options,
agreements, rights, easements, benefits, indemnities, guarantees, warranties or
covenants for title held by the Company in respect of such property or asset;
and

3

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  (c)   all the Company’s rights under any lease, licence or agreement for
lease, sale or use in respect of such property or asset.

      “Secured Creditors” has the meaning given to it in the U.S. Security
Agreement.         “Secured Hedging Agreement” has the meaning given to it in
the U.S. Security Agreement.         “Secured Liabilities” has the meaning given
to it in Clause 2 (Covenants to Pay).         “Secured Reimbursement Agreement”
has the meaning given to it in the U.S. Security Agreement.         “Security”
means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar
effect.         “Security Period” means the period from the date of this
Debenture until the date on which the Collateral Agent has determined that all
of the Secured Liabilities (whether actual or contingent) have been irrevocably
and unconditionally paid and discharged in full and no further Secured
Liabilities are capable of being outstanding.     (b)   Unless a contrary
intention appears, words defined in the Companies Act 2006 have the same
meanings in this Debenture.

1.2   Construction       Unless a contrary indication appears, any reference in
this Debenture to:

  (a)   the “Collateral Agent”, a “Secured Creditor”, a “Credit Party” or the
“Company” shall be construed so as to include its successors in title, permitted
assigns and permitted transferees;     (b)   “assets” includes present and
future properties, revenues and rights of every description;     (c)  
“indebtedness” includes any obligation (whether incurred as principal or as
surety) for the payment or repayment of money, whether present or future, actual
or contingent;     (d)   a “person” includes any individual, firm, company,
corporation, government, state or agency of a state or any association, trust,
joint venture, consortium or partnership (whether or not having separate legal
personality) or two or more of the foregoing;     (e)   a “regulation” includes
any regulation, rule, official directive, request or guideline (whether or not
having the force of law but, if not having the force of law, being of a kind
that is normally complied with by those to whom it is addressed) of any
governmental, intergovernmental or supranational body,

4

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      agency, department or regulatory, self-regulatory or other authority or
organisation;     (f)   a “guarantee” includes any form of indemnity or other
assurance against financial loss (including any obligation to pay, purchase or
provide funds for the purchase of any liability) and the verb “to guarantee”
shall be construed accordingly;     (g)   a provision of law is a reference to
that provision as amended or re-enacted;     (h)   any matter “including”
specific instances or examples of such matter shall be construed without
limitation to the generality of that matter (and references to “include” shall
be construed accordingly);     (i)   a “modification” includes an amendment,
supplement, novation, re-enactment, restatement, variation, extension,
replacement, modification or waiver or the giving of any waiver, release,
consent having the same commercial effect of any of the foregoing (and “modify”
shall be construed accordingly);     (j)   the “winding-up”, “dissolution” or
“administration” of a person shall be construed so as to include any equivalent
or analogous proceedings under the law of the jurisdiction in which such person
is incorporated or established, or any jurisdiction in which such person carries
on business including the seeking of liquidation, winding-up, reorganisation,
dissolution, administration, arrangement, adjustment, protection or relief of
debtors; and     (k)   the words “other”, “or otherwise” and “whatsoever” shall
not be construed eiusdem generis or be construed as any limitation upon the
generality of any preceding words or matters specifically referred to.

1.3   Implied covenants for title       The obligations of the Company under
this Debenture shall be in addition to the covenants for title deemed to be
included in this Debenture by virtue of Part I of the Law of Property
(Miscellaneous Provisions) Act 1994.   1.4   Effect as a Deed       This
Debenture is intended to take effect as a deed notwithstanding that the
Collateral Agent may have executed it under hand only.   1.5   Law of Property
(Miscellaneous Provisions) Act 1989       To the extent necessary for any
agreement for the disposition of the Charged Assets in this Debenture to be a
valid agreement under Section 2(1) of the Law of Property (Miscellaneous
Provisions) Act 1989, the terms of the other Credit Documents are incorporated
into this Debenture.

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1.6   Intercreditor Agreement

  (a)   Upon execution of the Intercreditor Agreement, this Debenture will be
subject to the terms of the Intercreditor Agreement.     (b)   In the event of
any inconsistency between a provision of this Debenture and a provision of the
Intercreditor Agreement, the provision of the Intercreditor Agreement will
prevail.

1.7   Incorporation

  (a)   Without prejudice to the application of any other provisions of the
Credit Agreement to this Debenture (by reason of this Debenture being a Credit
Document for the purposes of the Credit Agreement), sections 4.04 (Tax Gross-Up
and Indemnities), 11.02 (Right of Setoff), 11.05 (No Waiver; Remedies
Cumulative), 11.07 (Calculations; Computations) 11.09 (Counterparts), 11.12
(Amendment or Waiver; etc.) and 11.19 (Judgment Currency) of the Credit
Agreement shall apply to this Debenture, mutatis mutandis, as if the same had
been set out in full herein with references in such clauses to:

  (i)   any “Credit Party” or “Borrower” being construed, if the context so
requires, as references to the Company (as defined herein);     (ii)   the
“Agreement” being construed as references to this Debenture;     (iii)   the
“parties” or “party” being construed as references to the Parties or, as the
case may be, a Party to this Debenture;     (iv)   the “Credit Documents” being
construed as (a) including this Debenture or (b) if the context so requires, as
references specifically to this Debenture; and     (v)   in the context of
section 4.04 (Tax Gross-Up and Indemnities) of the Credit Agreement, the
“Administrative Agent” or a “Lender” being, if the context so requires,
construed, in each case, as references to the Collateral Agent and, in the
context of section 11.01(a)(ii) (Payment of Expenses, etc.) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being construed, in each
case, as references to each Secured Creditor, Receiver (as defined herein),
attorney, manager, agent or other person as may be appointed by the Collateral
Agent under this Debenture; and

  (b)   a reference to “Secured Liabilities” includes any liabilities which
would be treated as such but for the liquidation or dissolution or similar event
affecting the Company.

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2.   COVENANTS TO PAY   2.1   Covenant to pay Secured Liabilities

  (a)   The Company covenants that it shall promptly on demand pay to the
Secured Creditors, in accordance with the Credit Documents:

  (i)   the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, PIK Interest
(including, without limitation, all interest (including PIK Interest) that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganisation or similar proceeding of the
Company at the rate provided for in the respective documentation, whether or not
a claim for post-petition interest is allowed in any such proceeding), fees,
costs and indemnities) of the Company to the Lenders, whether now existing or
incurred after the date of this Debenture under, arising out of, or in
connection with, each Credit Document to which the Company is a party and the
due performance and compliance by the Company with all of the terms, conditions
and agreements contained in each such Credit Document;     (ii)   the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by the Company to the Approved Third
Party Credit Providers under any Secured Hedging Agreement, whether now in
existence or arising after the date of this Debenture, and the due performance
and compliance by the Company with all of the terms, conditions and agreements
contained in each such Secured Hedging Agreement;     (iii)   the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by the Company to the Approved Third
Party Credit Providers under any Secured Reimbursement Agreement, whether now in
existence or arising after the date of this Debenture (including, without
limitation, all obligations, liabilities and indebtedness of the Company under
any Guaranty in respect of the Secured Reimbursement Agreements), and the due
performance and compliance by the Company with all of the

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      terms, conditions and agreements contained in each such Secured
Reimbursement Agreement;     (iv)   any and all sums advanced by the Collateral
Agent in order to preserve the Collateral or preserve its security interest in
the Collateral;     (v)   in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of the Company
referred to in paragraphs (i), (ii) and (iii) above, on and from the Enforcement
Date, the reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realising on the Collateral, or of any
exercise by the Collateral Agent of its rights under this Debenture, together
with reasonable attorneys’ fees and court costs;     (vi)   all amounts paid by
any Indemnified Party as to which such Indemnified Party has the right to
reimbursement under this Debenture; and     (vii)   all amounts owing to any
Agent pursuant to any of the Credit Documents in its capacity as such,

      it being acknowledged and agreed that the “Secured Liabilities” shall
include extensions of credit of the types described above, whether outstanding
on the date of this Debenture or extended from time to time after the date of
this Debenture.     (b)   Notwithstanding anything to the contrary contained in
this Debenture or any other Credit Document, the aggregate amount of Secured
Liabilities of the type described in paragraphs (ii) and (iii) of Clause 2.1(a)
(collectively, the “Secured Third Party Credit Obligations”) secured by the
Collateral shall not at any time exceed $25,000,000 (the “Secured Third Party
Credit Obligations Cap”). No amount of Secured Third Party Credit Obligations in
excess of the Secured Third Party Credit Obligations Cap shall receive the
benefit of the security interests created under this Debenture and in no event
shall any proceeds received upon the sale of, collection from, or other
realisation upon all or any part of the Collateral be applied to the Secured
Third Party Credit Obligations in any amount in excess of the Secured Third
Party Credit Obligations Cap.

2.2   Potential invalidity       Neither the covenant to pay in Clause 2.1
(Covenant to pay Secured Liabilities), nor the Security created by this
Debenture shall extend to or include any liability or sum which would, but for
this Clause 2.2, cause such covenant, obligation or Security to be unlawful
under any applicable law.

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3.   SECURITY   3.1   General

  (a)   All the Security created under this Debenture:

  (i)   is created in favour of the Collateral Agent; and     (ii)   is security
for the payment of all the Secured Liabilities.

  (b)   If the Company is not entitled to grant any Security over its rights
and/or interests under any document without the consent of a party to that
document:

  (i)   the Company must notify the Collateral Agent as soon as it becomes aware
of the same;     (ii)   the Security constituted under this Debenture will
include and extend to all amounts which the Company may receive, or has
received, under that document but shall, until the date on which the relevant
consent is obtained by the Company, not extend to and exclude the document
itself and its rights and/or interests under such document;     (iii)   unless
the Collateral Agent otherwise requires, the Company must use reasonable
endeavours to obtain the consent of the relevant party to enable the Company to
grant Security over that document under this Debenture; and     (iv)   on and
from the date on which such consent is obtained, the Security constituted under
this Debenture shall extend to and include that document.

  (c)   The Collateral Agent holds the benefit of this Debenture on trust for
the Secured Creditors.

3.2   Creation of fixed charge       To the extent that such charge is capable
of being effective, taking into account the provisions of Clause 8.2 (Book and
Other Debts after Security becomes Enforceable) of this Debenture, the Company
charges to the Collateral Agent by way of fixed charge with full title guarantee
and as a continuing security for the payment and discharge of the Secured
Liabilities all of the Company’s right to and title and interest from time to
time in each Collateral Account, including all amounts from time to time
standing to the credit of, or accrued or accruing on, such Collateral Accounts
and any monies, proceeds or income paid or payable on such Collateral Accounts.

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3.3   Assignments       Subject to Clause 3.1(b) (General), the Company assigns
absolutely (subject to a proviso for re-assignment at the end of the Security
Period) to the Collateral Agent with full title guarantee as a continuing
security for the payment and discharge of the Secured Liabilities all of the
Company’s rights to and title and interest from time to time in:

  (a)   the Project Agreements; and     (b)   any present or future Insurances,
together with all Related Property Rights in respect thereof.

4.   FLOATING CHARGE   4.1   Creation of floating charge

  (a)   The Company charges to the Collateral Agent by way of floating charge
with full title guarantee and as a continuing security for the payment and
discharge of the Secured Liabilities all of the Company’s rights to and title
and interest from time to time in the whole of its property, assets (including,
without limitation, any Account), rights and revenues, whatsoever and
wheresoever, present and future, other than any assets validly and effectively
charged or assigned (whether at law or in equity) pursuant to Clauses 3.2
(Creation of fixed charge) or 3.3 (Assignments).     (b)   Except as otherwise
agreed in writing by the Collateral Agent the floating charge hereby created
ranks in priority to any Security which shall subsequently be created or
permitted to arise by the Company or any Security created by a Receiver
appointed under the Debenture and is a qualifying floating charge for the
purposes of paragraph 14 of Schedule B1 to the Insolvency Act 1986.     (c)  
Without prejudice to Clause 4.1(a), the Collateral Agent reserves any rights it
may have to appoint an administrative receiver on and following the Enforcement
Date in accordance with Sections 72B to H (inclusive) of the Insolvency Act
1986.

4.2   Automatic crystallisation of floating charge       Notwithstanding
anything express or implied in this Debenture, and without prejudice to any law
which may have similar effect, if:

  (a)   the Company creates or attempts to create any Security over all or any
of the Charged Assets (save as permitted by section 8.01 (Liens) of the Credit
Agreement) without the prior consent of the Collateral Agent;     (b)   any
person levies or attempts to levy any distress, execution or other process
against any of the Charged Assets;     (c)   a resolution is passed or a
petition is presented for the winding-up or administration in relation to the
Company which is not discharged within

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      14 days (in the case of a winding-up petition) or 5 days (in the case for
an administration order) or in any event before such petition is heard or an
order is made for the winding up, dissolution, administration or other
reorganisation of the Company; or     (d)   an Administrator or Receiver is
appointed in respect of the Company or any step intended to result in such
appointment is taken pursuant to paragraphs 15 or 26 of Schedule B1 of the
Insolvency Act in respect of the Company,

    then the floating charge created by Clause 4.1 (Creation of floating charge)
will automatically (with immediate effect and without notice) be converted into
a fixed charge as regards all of the assets subject to the floating charge.  
4.3   Crystallisation on notice of floating charge       Notwithstanding
anything express or implied in this Debenture, the Collateral Agent may at any
time:

  (a)   on or after the Enforcement Date;     (b)   if it considers in good
faith that any of the Charged Assets are in danger of being seized or sold as a
result of any legal process, or are otherwise in jeopardy; or     (c)   if it
reasonably believes that steps likely or intended to lead to the presentation of
a petition for the administration or winding up of or the appointment of an
Administrator in respect of the Company are being, or have been, taken,

    by giving notice in writing to that effect to the Company, convert the
floating charge created by Clause 4.1 (Creation of floating charge) into a fixed
charge as regards any assets specified in such notice. The conversion shall take
effect immediately upon the giving of the notice.   4.4   Fixed and Floating
Security       If for any reason any Security in respect of any asset created or
purported to be created pursuant to this Clause 4 as a fixed charge or
assignment does not, or ceases to, take effect as a fixed charge or assignment,
then it shall take effect as a floating charge in respect of such asset. However
it is the intent of the Parties that the Security over other Charged Assets
shall remain unaffected.   4.5   Retention of Documents       The Collateral
Agent shall be entitled to continue to retain any document delivered to it under
this Debenture relating to a Charged Asset until the Charges over such Charged
Asset are released in accordance with this Debenture. If, for any reason, it
ceases to hold any such document before such time, it may by notice to the
Company require that the relevant document be redelivered to it and the Company
shall immediately comply with that requirement or procure that it is complied
with.

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4.6   Project Agreements

  (a)   The Security created by this Debenture in relation to each Project
Agreement shall, to the extent required by that Project Agreement, in each case
as that agreement may have been subsequently assigned, transferred or novated,
be:

  (i)   without prejudice to the provisions of that Project Agreement;     (ii)
  subordinated to the express rights specified under that Project Agreement of
the parties thereto from time to time (other than the Company); and     (iii)  
subject to the liabilities and obligations of the Company relating to the
interest of the Company in and under that Project Agreement,

      provided that, nothing in this Clause 4.6 shall (i) release the Company
from any obligations to fulfil any requisite condition in connection therewith
or (ii) (subject to Clause 4.6(b) below) impose on the Collateral Agent or any
Receiver or Administrator appointed by it an obligation to perform any of the
obligations of the Company under any Project Agreement or to procure the
performance of the Company of any such obligation.     (b)   The Company and the
Collateral Agent acknowledge that:

  (i)   in the event of the Collateral Agent exercising any rights created under
this Debenture in respect of the Enoch PLTPA, the Collateral Agent will continue
to fulfil the obligations of the Company under the Enoch PLTPA; and     (ii)  
notwithstanding Clause 25 (Third Parties) of this Debenture, BP may rely on the
undertaking given by the Collateral Agent under Clause 4.6(b)(i) above.

4.7   Gas sales agreements

      This Debenture shall not create any Security over the Company’s interest
in any of the following agreements:

  (a)   the agreement between Deminex UK Rob Roy Limited and British Gas plc for
Sale and Purchase of Natural Gas from the Rob Roy and Ivanhoe Fields dated 31
May 1989;     (b)   the agreement between PICT Petroleum plc and British Gas plc
for Sale and Purchase of Natural Gas from the Rob Roy and Ivanhoe Fields dated
31 May 1989;     (c)   the agreement between Kerr-Mcgee Oil (UK) plc and British
Gas plc for the Sale and Purchase of Natural Gas from the Rob Roy and Ivanhoe
Fields dated 31 May 1989; and     (d)   the Enoch Field Gas Sales Agreement
dated 17 January 2006,

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      in each case as such agreements may be assigned, amended, modified,
supplemented or novated from time to time.

5.   FURTHER ASSURANCE

    The Company shall at its own expense promptly upon request by the Collateral
Agent execute (in such form as the Collateral Agent may reasonably require) such
documents (including assignments, transfers, mortgages, charges, notices and
instructions) in favour of the Collateral Agent or its nominees and do all such
assurances and things as the Collateral Agent may reasonably require for:

  (a)   perfecting and/or protecting (by registration or in any other way) the
Security created or intended to be created by this Debenture;     (b)  
conferring upon the Collateral Agent such Security as it may require over the
assets of the Company outside of England and Wales which if in England or Wales
would form part of or be intended to form part of the Charged Assets;     (c)  
facilitating the realisation of all or any part of the Charged Assets; and/or  
  (d)   for exercising all powers, authorities and discretions conferred on the
Collateral Agent or any Receiver pursuant to this Debenture or by law.

6.   UNDERTAKINGS WITH RESPECT TO THE CHARGED ASSETS       The Company
undertakes to the Collateral Agent with respect to the Charged Assets that it
shall:   6.1   Negative pledge       except as permitted by section 8.01 (Liens)
of the Credit Agreement:

  (a)   not create or allow to exist any Security on, over, or affecting, any of
its assets; and     (b)   procure that no member of the Group creates or allows
to exist any Security on, over, or affecting, any of its assets;

6.2   Disposals       except as permitted by section 8.02 (Consolidation,
Merger, Purchase or Sale of Assets, etc.) of the Credit Agreement not, either in
a single transaction or in a series of transactions and whether related or not,
dispose of the Charged Assets or any part of them;   6.3   Subsequent charge    
  subject to Clause 6.1 (Negative pledge), procure that any Security created by
the Company after the date of this Debenture (otherwise than in favour of the
Collateral Agent) shall be expressed to be subject to this Debenture;

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6.4   Supplemental Debenture       at any time, promptly upon request on or
after the Enforcement Date, execute over all or any of the Charged Assets a
charge by way of legal mortgage or legal sub-mortgage or legal assignment, as
the case may be, in favour of the Collateral Agent in such form as the
Collateral Agent shall reasonably require;   6.5   Prejudicial Action       not
do or cause or permit to be done anything which may in any way reduce,
jeopardise or otherwise prejudice the value to the Collateral Agent of the
Charged Assets; and   6.6   Consents and Other Necessary Action       take all
such action as is available to it and is reasonably necessary for the purpose of
creating, perfecting or maintaining the Security created or intended to be
created pursuant to this Debenture which shall include, without limitation,
using reasonable endeavours to obtain any necessary consent (in form and content
satisfactory to the Collateral Agent, acting reasonably) to enable its assets to
be charged or assigned pursuant to this Debenture. Immediately upon obtaining
any necessary consent the asset concerned shall become subject to the Security
created by this Debenture. The Company shall promptly deliver a copy of each
consent to the Collateral Agent.   7.   FURTHER UNDERTAKINGS   7.1   Deposit of
title documents       Upon request, the Company shall deposit with the
Collateral Agent the deeds and documents of title, or evidencing title, relating
to the Charged Assets including any policies of insurance.   7.2   Calls      
The Company shall not, without the consent of the Collateral Agent, acquire any
shares or other securities unless they are fully paid.   7.3   Notices of charge
and/or assignment

  (a)   The Company shall deliver to the Collateral Agent and serve on any
relevant person (a “Relevant Counterparty”) as required by the Collateral Agent:

  (i)   notices of assignment in respect of any of the assets assigned pursuant
to this Debenture and listed in Schedule 2 (Project Agreements), and shall use
its reasonable endeavours to procure that each such notice is acknowledged by
that Relevant Counterparty; and     (ii)   notice of charge in respect of any of
the assets charged pursuant to this Debenture and shall use its reasonable
endeavours to procure that each notice is acknowledged by that Relevant
Counterparty.

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  (b)   The notices of charge and/or assignment and/or acknowledgement referred
to in Clause 7.3(a) shall be in a form substantially similar to that contained
in Schedule 1 (Form of Notices) hereto or such other form as the Collateral
Agent may reasonably require.

7.4   Further Assignments       The Company shall, if requested by any of the
Collateral Agent, the Administrative Agent or the Required Lenders (in each
case, acting reasonably), promptly execute any document (including any
Additional Security Document) and do all such acts as the Collateral Agent, the
Administrative Agent or the Required Lenders may reasonably require:

  (a)   for the purposes of granting security over:

  (i)   any Insurances;     (ii)   any Hedging Agreement to which the Company is
a party, together with all Related Property Rights in respect thereof;     (iii)
  any Project Agreement (including the Company’s interest in any joint operating
agreement or other similar agreement which relates to the Petroleum Production
Licence P.1731 dated 15 June 2010); or     (iv)   otherwise, to give effect to
section 7.12 (Additional Security; Further Assurances; etc.) of the Credit
Agreement,

      unless such Security has been granted under an existing Security Document;
and     (b)   to record the interests of the Collateral Agent in any registers
relating to registered intellectual property rights.

8.   ACCOUNTS AND RECEIPTS   8.1   Accounts General

  (a)   The Company will:

  (i)   deliver to the Collateral Agent on the date of this Debenture details of
each of its Accounts (and, if any change in such detail (including any renewal
or redesignation of any such Account) occurs after the date of this Debenture or
any new Account is opened, details of such change or new Account on the date of
such change or opening); and     (ii)   open such new Collateral Accounts, as
the Collateral Agent shall require (at any time on or after the Enforcement
Date) for the purposes of Clause 8.2 (Book and Other Debts after Security
Becomes Enforceable).

  (b)   Without prejudice and in addition to Clauses 6.1 (Negative Pledge) and
6.2 (Disposals):

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  (i)   the benefit of each Account shall not be capable of assignment or charge
in whole or in part (save pursuant to this Debenture); and     (ii)   the
Company agrees that it will not assign (whether by way of sale or mortgage),
charge or otherwise seek to deal with or dispose of all or any part of any
Collateral Account without the prior written consent of the Collateral Agent (in
its capacity as Collateral Agent under this Debenture).

  (c)   The Company shall, subject to Clause 8.3 (Accounts after Security
becomes Enforceable) and any restrictions in the Credit Documents preventing or
regulating withdrawal of the same, be entitled to withdraw any credit amount
from the Accounts (other than a Collateral Account).

8.2   Book and Other Debts after Security becomes Enforceable       If and to
the extent that the Collateral Agent so specifies, at any time on or after the
Enforcement Date, the Company shall pay the proceeds of payment or realisation
of such of the Company’s assets comprising temporary and other investments, book
and other debts, royalties, fees and income of like nature or other monies
received by the Company as the Collateral Agent may require into such Collateral
Account(s) as the Collateral Agent may from time to time specify and pending
such payment shall hold all such receipts on trust for the Collateral Agent.  
8.3   Accounts after Security becomes Enforceable

  (a)   Upon the Security becoming enforceable, the Collateral Agent shall be
deemed to have designated in writing all Accounts as Assigned Accounts and at
any time thereafter, the Collateral Agent may:

  (i)   in relation to such new Assigned Accounts, require the Company to, and
the Company shall immediately on request, serve a notice of assignment (in a
form substantially similar to that contained in Schedule 1 (Form of Notices)
hereto or such other form as the Collateral Agent may reasonably require) on
each bank or other financial institution with which any such Account is
maintained and the Company shall comply with its obligation under Clause 7.3
(Notices of charge and/or assignment) to obtain an acknowledgement of each such
notice of assignment; and     (ii)   exercise from time to time, all rights,
powers and remedies of the Company in relation to any or all of its Accounts,
including to demand and receive all and any monies standing to the credit of any
such Accounts; and

  (b)   On and from the Enforcement Date, the Company shall not be entitled to
be paid, withdraw or otherwise transfer any credit amount from the Accounts.

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9.   THE COLLATERAL AGENT   9.1   The Collateral Agent

  (a)   The powers conferred upon the Collateral Agent by the Credit Documents
shall be in addition to any powers which may from time to time be vested in
trustees by the general law.     (b)   If there is any conflict between the
provisions of this Debenture and any Security Documents with regard to
instructions to or the matters affecting the Collateral Agent, this Debenture
will prevail.

9.2   Trust

  (a)   The Collateral Agent shall hold the benefit of the Credit Documents in
its capacity as Collateral Agent on trust for (to the extent such benefits are
capable of being secured in their favour) the Secured Creditors. Save as
expressly specified in any Credit Document, the Collateral Agent:

  (i)   shall not be liable to any Party for any breach by any other Party of
any Credit Document;     (ii)   shall have only those duties which are expressly
specified in the Credit Documents;     (iii)   will apply all payments and other
benefits received by it under the Credit Documents in accordance with:

  (A)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and     (B)   following execution of the
Intercreditor Agreement, the relevant provision in the Intercreditor Agreement
relating to application of proceeds received under the Credit Documents; and

  (iv)   shall exercise its rights, powers and duties under the Security
Documents and/or this Debenture for the benefit of the Secured Creditors.

  (b)   Section 1 of the Trustee Act 2000 shall not apply to any function of the
Collateral Agent under or in connection with the Credit Documents provided that
nothing in this Debenture shall exempt the Collateral Agent from any liability
for gross negligence or wilful misconduct (as determined by a court of competent
jurisdiction in a final non-appealable decision).     (c)   Save as set out in
Clause 9.2(a), the Collateral Agent’s duties under the Credit Documents are of a
mechanical and administrative nature. Nothing in the Credit Documents shall
constitute a partnership between any Party and the Collateral Agent.

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  (d)   The perpetuity period for the security trust established in relation to
the Credit Documents shall be one hundred and twenty five years from the date of
this Debenture.

9.3   Additional trustees

  (a)   The Collateral Agent may appoint and pay any person established or
resident in any jurisdiction (whether a trust corporation or not) to act as a
separate trustee, custodian or nominee on any terms in relation to any assets of
the trust as the Collateral Agent may determine including for the purpose of
depositing with a custodian this Debenture or any document relating to the trust
created under this Debenture and the Collateral Agent will not be responsible
for any loss, liability, expense, demand, cost, claim or proceedings incurred by
reason of the misconduct, omission or wilful default on the part of any person
appointed by it under this Debenture or be bound to supervise the proceedings or
acts of any person.     (b)   Any such additional trustee, custodian or nominee
shall have such trusts, powers, obligations, authorities and discretions (not
exceeding those conferred on the Collateral Agent by the Credit Documents) and
remuneration as shall be conferred or imposed by the instrument of appointment.
The Collateral Agent shall have power in like manner to remove any such person.
The Company shall indemnify such additional trustee, custodian or nominee as
though it were the Collateral Agent in accordance with Clause 9.4 (Remuneration
and indemnity). The Collateral Agent shall not be under any obligation to
supervise the proceedings or acts of any such delegate or sub-delegate or be in
any way responsible for any liability incurred by reason of any misconduct or
default on the part of any such delegate or sub-delegate.

9.4   Remuneration and indemnity

  (a)   For the benefit of the Collateral Agent, nothing in this Clause 9 (The
Collateral Agent) shall prejudice any right of indemnity by law given to
trustees. Any indemnity provided pursuant to this Clause 9 shall be in addition
to and without prejudice to any other indemnity provided either in the Credit
Agreement or any other Credit Document.     (b)   The Company agrees to
indemnify, on demand, the Collateral Agent and any receiver, attorney, agent or
other person appointed by the Collateral Agent in accordance with the Credit
Documents for any and all claims, liabilities, costs, fees, charges, losses and
expenses which may be incurred by or asserted against the Collateral Agent or
any such person in any way relating to or arising out of:

  (i)   its execution or purported execution of any of its trusts, powers,
authorities and discretions under the Credit Documents;     (ii)   performing
its duties and functions in such capacity; or     (iii)   any action taken or
omitted by the Collateral Agent or any such person under the Credit Documents,

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      except to the extent arising directly from the Collateral Agent’s or any
such person’s gross negligence or wilful misconduct (in each case as determined
by a court of competent jurisdiction in a final and non-appealable decision).  
  (c)   The Collateral Agent may indemnify itself and each other person referred
to in Clause 9.4(b) out of the assets over which Security is granted pursuant to
the Security Documents against all such claims, liabilities, costs, fees,
charges, losses and expenses referred to in Clause 9.4(b).     (d)   The
Collateral Agent shall be entitled to such remuneration as it may agree from
time to time with the Company.     (e)   Without prejudice to Clause 9.4(b),
each Secured Creditor shall (in proportion to its share of the debt owed by the
Borrower under the Credit Agreement) indemnify the Collateral Agent, within
three Business Days of demand, against any cost, loss or liability incurred by
the Collateral Agent (otherwise than by reason of the Collateral Agent’s gross
negligence or wilful misconduct, in each case as determined by a court of
competent jurisdiction in a final and non-appealable decision) in acting as
Collateral Agent under or in connection with the Credit Documents (unless the
Collateral Agent has been reimbursed for the same by any Credit Party). The
Credit Parties shall forthwith on demand reimburse each Secured Creditor for any
payments made by it under this Clause 9.4(e).

9.5   Exclusion of liability

  (a)   Without limiting Clause 9.5(b), the Collateral Agent will not be liable
for any action taken by it under or in connection with any Credit Document,
unless directly caused by its gross negligence or wilful misconduct (in each
case as determined by a court of competent jurisdiction in a final and
non-appealable decision).     (b)   No Party (other than the Collateral Agent)
may take any proceedings against any officer, employee or agent of the
Collateral Agent in respect of any claim it might have against the Collateral
Agent or in respect of any act or omission of any kind by that officer, employee
or agent in relation to any Credit Document and any officer, employee or agent
of the Collateral Agent may rely on this Clause.     (c)   The Collateral Agent
will not be liable for any delay (or any related consequences) in crediting an
account with an amount required under the Credit Documents to be paid by the
Collateral Agent if the Collateral Agent has taken all necessary steps as soon
as reasonably practicable to comply with the regulations or operating procedures
of any recognised clearing or settlement system used by the Collateral Agent for
that purpose.     (d)   Nothing in this Debenture shall oblige the Collateral
Agent to carry out any “know your customer” or other checks in relation to any
person on behalf of any Secured Creditor and each Secured Creditor confirms to
the Collateral Agent that it is solely responsible for any such checks that it
is required to

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      carry out and that it may not rely on any statement in relation to such
checks made by the Collateral Agent.

9.6   Instructions

  (a)   Unless a contrary indication appears in the Credit Documents, the
Collateral Agent shall (A) exercise any right, power, authority or discretion
vested in it as Collateral Agent in accordance with any instructions given to it
by the Required Lenders (or, if so instructed by the Required Lenders, refrain
from exercising any right, power, authority or discretion vested in it as
Collateral Agent) and (B) not be liable for any act (or omission) if it acts (or
refrains from taking any action) in accordance with an instruction of the
Required Lenders. This Clause 9.6 shall not require the Collateral Agent to act
in accordance with the instructions of the Required Lenders or any person in
respect of those powers, authorities and discretions granted to the Collateral
Agent pursuant to Clauses 9.3 (Additional trustees), 9.4 (Remuneration and
indemnity), 9.14(a), 9.14(c), 9.14(d) (Collateral Agent’s functions) and 9.15
(Legal restrictions and confidentiality).     (b)   Unless a contrary indication
appears in the Credit Documents, any instructions given by the Required Lenders,
shall be binding on all the Secured Creditors.     (c)   The Collateral Agent
may refrain from acting in accordance with the instructions of the Required
Lenders until it has received such security as it may require for any cost, loss
or liability (together with any associated value added tax) which it may incur
in complying with the instructions.     (d)   In the absence of instructions
from the Required Lenders, the Collateral Agent may act (or refrain from taking
action) as it considers to be in the best interests of the Secured Creditors.  
  (e)   The Collateral Agent is not authorised to act on behalf of a Secured
Creditor (without first obtaining that Secured Creditor’s consent) in any legal
or arbitration proceedings relating to any Credit Document.

9.7   Rights and discretions of the Collateral Agent

  (a)   The Collateral Agent may rely on:

  (i)   any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and     (ii)   any statement made by a
director, authorised signatory or employee of any person regarding any matters
which may reasonably be assumed to be within his knowledge or within his power
to verify.

  (b)   The Collateral Agent may assume (unless it has received notice to the
contrary in its capacity as Collateral Agent) that:

  (i)   no Default or Event of Default has occurred (unless it has actual
knowledge of such Default or Event of Default);

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  (ii)   any right, power, authority or discretion vested in any Party or the
Required Lenders has not been exercised; and     (iii)   any notice or request
made by the Company is made on behalf of and with the consent and knowledge of
all the Credit Parties.

  (c)   The Collateral Agent may engage, pay for and rely on the advice or
services of any lawyers, accountants, surveyors or other experts.     (d)   The
Collateral Agent may act in relation to the Credit Documents through its
personnel and agents.

9.8   Information

  (a)   The Collateral Agent has no duty (in the absence of a specific provision
in any Credit Document) to provide any Party with any credit or other
information relating to the business, assets or financial condition of any
Credit Party or any other person whenever coming into its possession.     (b)  
Except where a Credit Document specifically provides otherwise, the Collateral
Agent is not obliged to check the adequacy, accuracy or completeness of any
document it forwards to another Party.     (c)   The Collateral Agent shall not
be liable or responsible to any other Secured Creditor for the adequacy,
accuracy and/or completeness of any information (whether oral or written)
supplied by the Collateral Agent, a Credit Party or any other person given in or
in connection with any Credit Document or the Information Memorandum.

9.9   Responsibility for documentation       The Collateral Agent shall not be
liable or responsible:

  (a)   for the legality, validity, effectiveness, adequacy or enforceability of
any Credit Document or any other agreement, arrangement or document entered
into, made or executed in anticipation of or in connection with any Credit
Document;

  (b)   for any failure to give notice to any third party or to register, file
or record (or any defect in such registration, filing or recording) any Security
created pursuant to any Security Document, or effect, procure the registration
of or otherwise protect the floating charge or any other such Security created
by or pursuant to the Security Documents under the Land Registration Act 1925 or
any other registration laws in England or any other jurisdiction;     (c)   to
obtain any licence, consent or other authority for the creation of any such
Security;     (d)   for any failure, omission, or defect in perfecting or
protecting the Security constituted by the Security Documents, either in England
and Wales or in any other jurisdiction; or

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  (e)   for the financial condition of any Credit Party.

9.10   Title       The Collateral Agent may accept without enquiry such title as
any Credit Party may have to the property over which Security is intended to be
created by any Security Document.   9.11   Investments       All moneys which
are received by the Collateral Agent in its capacity as trustee or otherwise may
be invested in the name of or under the control of the Collateral Agent in any
investment for the time being authorised by English law for the investment by
trustees of trust money or in any other investments which may be selected by the
Collateral Agent. Additionally, the same may be placed on deposit in the name of
or under the control of the Collateral Agent at such bank or institution
(including the Collateral Agent) and upon such terms as the Collateral Agent may
think fit.   9.12   Tax       The Collateral Agent shall have no responsibility
whatsoever to any Secured Creditor as regards any deficiency which might arise
because the Collateral Agent is subject to any Taxes or withholding from any
payment made by it under the Credit Documents.   9.13   Receivers’ indemnity    
  In no circumstances shall the Collateral Agent itself be obliged to give an
indemnity to any receiver who requires an indemnity as a condition of
appointment.   9.14   Collateral Agent’s functions

  (a)   The Collateral Agent shall:

  (i)   not be under any obligation to hold any title deeds, Credit Documents or
any other documents in connection with the assets charged by any Security
Document in its own possession or to take any steps to protect or preserve the
same (and the Collateral Agent may permit the Credit Parties to retain any title
deeds and other documents if it considers such course of action to be
appropriate);     (ii)   without prejudice to Clause 9.14(a)(i), be at liberty
to hold the Credit Documents and any other documents relating thereto or to
deposit them in any part of the world with any bank or company whose business
includes undertaking the safe custody of documents or firm of lawyers considered
by the Collateral Agent to be of good repute and the Collateral Agent shall not
be responsible for or be required to insure against any liability incurred in
connection with any such holding or deposit and may pay all sums required to be
paid on account of or in respect of any such deposit;     (iii)   not be bound
to give notice to any person of the execution of any documents comprised or
referred to in the Credit Documents or of any

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      other matter in any way relating to the Credit Documents or to take any
steps to ascertain whether any default under any Credit Document has happened or
whether any Party has breached any of its obligations under any Credit Document
or whether any right, power, discretion or remedy has or may become exercisable
by the Collateral Agent and the Collateral Agent shall be entitled to assume
that no such default has happened and that each Party is observing and
performing all its obligations under any Credit Document and that no such right,
power, discretion or remedy has or may become exercisable;     (iv)   as soon as
reasonably practicable following receipt of the same, notify the Administrative
Agent of any request received by it to exercise any power, authority or
discretion under this Debenture or any Credit Document or to form any opinion;  
  (v)   promptly provide the Administrative Agent with copies of any notice
received by it from any Party (i) describing the occurrence of any Default and
(ii) stating that the circumstance described is a Default (so defined); and    
(vi)   be entitled to treat each Secured Creditor as a Secured Creditor entitled
to payments under the Credit Agreement unless it has received not less than five
Business Days’ prior notice from that Secured Creditor to the contrary in
accordance with the terms of this Debenture.

  (b)   Any consent or approval given by the Collateral Agent for the purposes
of the Credit Documents may be given on such terms and subject to such
conditions (if any) as the Collateral Agent thinks fit.     (c)   Any trustee of
any Security Document being a lawyer, accountant, broker or other person engaged
in any profession or business shall be entitled to charge and be paid all usual
professional and other charges for business transacted and acts done by him or
his firm in connection with the trusts of the Security Documents and also his
reasonable charges in addition to disbursements for all other work and business
done and all time spent by him or his firm in connection with matters arising in
connection with his trusteeship.     (d)   The Collateral Agent may in the
conduct of the trusts instead of acting personally employ and pay an agent
(whether being a lawyer or other professional person) to transact or conduct, or
concur in transacting or conducting, any business and to do, or concur in doing,
all acts required to be done in connection with the Credit Documents. The
Collateral Agent shall not be in any way responsible for any liability incurred
by reason of any misconduct or default on the part of any such agent or be bound
to supervise the proceedings or acts of any such agent.

9.15   Legal restrictions and confidentiality

  (a)   Notwithstanding any other provision of any Credit Document to the
contrary, the Collateral Agent is not obliged to do or omit to do anything if it
would or

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      might in its reasonable opinion constitute a breach of any law or
regulation or a breach of a fiduciary duty or duty of confidentiality.     (b)  
The relevant division or department through which the Collateral Agent acts
shall be treated as a separate entity from any other of the Collateral Agent’s
divisions or departments.     (c)   If information is received by another
division or department of the Collateral Agent, it may be treated as
confidential to that relevant division or department and the Collateral Agent
shall not be deemed to have notice of it.

9.16   Credit appraisal by the Secured Creditors       Without affecting the
responsibility of any Credit Party for information supplied by it or on its
behalf in connection with any Credit Document, each Secured Creditor confirms to
the Collateral Agent that it has been, and will continue to be, solely
responsible for making its own independent appraisal and investigation of all
risks arising under or in connection with any Credit Document including but not
limited to:

  (a)   the financial condition, status and nature of each Credit Party and each
other member of the Group;     (b)   the legality, validity, effectiveness,
adequacy or enforceability of any Credit Document and any other agreement,
arrangement or document entered into, made or executed in anticipation of, under
or in connection with any Credit Document;     (c)   whether that Secured
Creditor has recourse, and the nature and extent of that recourse, against any
Party or any of its respective assets under or in connection with any Credit
Document, the transactions contemplated by the Credit Documents or any other
agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Credit Document; and     (d)  
the adequacy, accuracy and/or completeness of any other information provided by
the Collateral Agent, any other Party or by any other person under or in
connection with any Credit Document, the transactions contemplated by the Credit
Documents or any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Credit Document.

9.17   Business with the Group       The Collateral Agent may accept deposits
from, lend money to and generally engage in any kind of banking or other
business with any Credit Party or any member of the Group or any Non-Recourse
Subsidiary.   9.18   Enforcement       The Secured Creditors shall not have any
independent power to enforce any of the Security Documents or to exercise any
rights, discretions or powers to grant any consents or releases under or
pursuant to the Security Documents or otherwise have

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    direct recourse to the Security constituted by any of the Security Documents
except through the Collateral Agent. 9.19   Release of Security       The
Collateral Agent may release any Security over any asset the subject of the
Security Documents in accordance with the terms of any such Security Document or
if:

  (a)   the asset is disposed of in compliance with the Credit Documents; or    
(b)   the asset is disposed of by any Receiver or other person in accordance
with the powers granted under the Security Documents.

9.20   Insolvency Events

  (a)   For the purposes of this Debenture, “Insolvency Event” means any the
circumstances or events described in section 9.05 (Bankruptcy, etc.) of the
Credit Agreement or any other circumstance or event analogous to any of the
foregoing.     (b)   If any Insolvency Event occurs in relation to any Credit
Party, the Collateral Agent may, and is irrevocably authorised on behalf of the
Secured Creditors, subject to the terms of the Credit Documents, to:

  (i)   claim, enforce and prove for the debt owed by, or any other claims
against, that Credit Party;     (ii)   (subject to Clause 9.20(e)) exercise all
powers of convening meetings, voting and representation in respect of the debt
owed by that Credit Party and each Secured Creditor shall provide all forms of
proxy and of representation which may be required for such purposes;     (iii)  
file claims and proofs, give receipts and take all such proceedings and do all
such things as the Collateral Agent sees fit to recover the debt owed by, or any
other claims against, that Credit Party; and     (iv)   receive all
distributions on or account of the debt owed by, or any other claims against,
that Credit Party for application in accordance with:

  (A)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and     (B)   following execution of the
Intercreditor Agreement, the relevant provision in the Intercreditor Agreement
relating to application of proceeds received under the Credit Documents.

  (c)   If and to the extent that the Collateral Agent is not entitled to claim,
enforce, prove, file claims or proofs, or take proceedings for the recovery of
any debt owed by the relevant Credit Party, the relevant Secured Creditor(s) to
whom such debt is owed shall do so in good time as reasonably requested by the
Collateral Agent.

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  (d)   Save to the extent that it has been requested by the Collateral Agent
under Clause 9.20(c) to take such action, no Secured Creditor may take any of
the actions referred to in Clause 9.20(b) without the Collateral Agent’s prior
consent.     (e)   Nothing in this Clause 9.20 (Insolvency events) shall limit
the rights of the Lenders to convene meetings, to exercise their voting rights
and to issue instructions to the Collateral Agent, under the Credit Agreement
and/or this Debenture.     (f)   If any Insolvency Event occurs in relation to
any Credit Party, the trustee in bankruptcy, liquidator, assignee or other
person distributing the assets of that Credit Party or their proceeds shall be
directed to pay distributions on the debt direct to the Collateral Agent for
application in accordance with:

  (i)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and

  (ii)   following execution of the Intercreditor Agreement, the relevant
provision in the Intercreditor Agreement relating to application of proceeds
received under the Credit Documents.

10.   RIGHTS OF THE COLLATERAL AGENT   10.1   Enforcement       At any time on
or after the Enforcement Date, the Security created pursuant to this Debenture
shall be immediately enforceable and the Collateral Agent may in its absolute
discretion and without notice to the Company or the prior authorisation of any
court:

  (a)   enforce all or any part of the Security created by this Debenture and
take possession of or dispose of all or any of the Charged Assets in each case
at such times and upon such terms as it sees fit; and     (b)   whether or not
it has appointed a Receiver, exercise all of the powers, authorities and
discretions:

  (i)   conferred from time to time on mortgagees by the LPA (as varied or
extended by this Debenture) or by law; and     (ii)   granted to a Receiver by
this Debenture or by law.

10.2   Restrictions on consolidation of mortgages       Section 93 of the LPA
shall not apply to this Debenture or to any sale made under it. The Collateral
Agent shall have the right to consolidate all or any of the Security created by
or pursuant to this Debenture with any other Security in existence at any time.
Such power may be exercised by the Collateral Agent at any time following the
Enforcement Date.

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10.3   Restrictions on exercise of power of sale       Section 103 of the LPA
shall not apply to this Debenture and the power of sale arising under the LPA
shall arise on the execution of this Debenture (and the Secured Liabilities
shall be deemed to have become due and payable for that purpose). The power of
sale and other powers conferred by Section 101 of the LPA as varied or extended
by this Debenture and those powers conferred (expressly or by reference) on a
Receiver shall be immediately exercisable by the Collateral Agent at any time on
or after the Enforcement Date.   10.4   Leasing powers       The restrictions
contained in Sections 99 to 100 of the LPA shall not apply to restrict the
rights of the Collateral Agent or any Receiver under this Debenture. The
statutory powers of leasing may be exercised by the Collateral Agent or any
Receiver upon and following the Enforcement Date and the Collateral Agent and
any Receiver may make any lease or agreement for lease and/or accept any
surrenders of leases and/or grant options on such terms as it sees fit without
the need to comply with the aforementioned restrictions.   10.5   No prior
notice needed       The powers of the Collateral Agent set out in Clauses 10.2
(Restrictions on consolidation of mortgages) to 10.4 (Leasing powers) may be
exercised by the Collateral Agent without prior notice to the Company.   10.6  
Right of appropriation

  (a)   Without prejudice to the other provisions of this Debenture, to the
extent that any of the Charged Assets constitute “financial collateral”, and
this Debenture and the obligations of the Company hereunder constitute a
“security financial collateral agreement” (in each case as defined in, and for
the purposes of, the Financial Collateral Arrangements (No. 2) Regulations 2003
(SI 2003/3226) (the “Regulations”), the Collateral Agent shall at any time on
and after the Enforcement Date have the right to appropriate all or any part of
those Charged Assets in or towards discharge of the Secured Liabilities. For
this purpose, the parties agree that the value of any such Charged Assets so
appropriated shall be the market price of such Charged Assets at the time the
right of appropriation is exercised as determined by the Collateral Agent by
reference to such method or source of valuation as the Collateral Agent may
select, including by independent valuation. The Parties agree that the methods
or sources of valuation provided for in this Clause 10.6 (Right of
appropriation) or selected by the Collateral Agent in accordance with this
Clause 10.6 (Right of appropriation) shall constitute a commercially reasonable
method of valuation for the purposes of the Regulations.     (b)   The
Collateral Agent shall notify the Company as soon as reasonably practicable of
the exercise of its rights of appropriation as regards such of the Charged
Assets as are specified in such notice.

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11.   EXONERATION   11.1   Exoneration       No Secured Creditor shall, nor
shall any Receiver, by reason of it or the Receiver entering into possession of
the Charged Assets or any part thereof, be liable to account as mortgagee in
possession or be liable for any loss or realisation or for any default or
omission for which a mortgagee in possession might be liable. Every Receiver
duly appointed by the Collateral Agent under this Debenture shall for all
purposes be deemed to be in the same position as a receiver duly appointed by a
mortgagee under the LPA save to the extent that the provisions of that Act are
varied by or are inconsistent with the provisions of this Debenture when the
provisions of this Debenture shall prevail and every such Receiver and the
Collateral Agent shall in any event be entitled to all the rights, powers,
privileges and immunities conferred by the LPA on mortgagees and receivers duly
appointed under the LPA.   11.2   Indemnity       The Collateral Agent and every
Receiver, attorney, delegate, manager, agent or other person appointed by the
Collateral Agent hereunder shall be entitled to be indemnified out of the
Charged Assets or any part thereof in respect of all liabilities and expenses
incurred by it or him in the execution of any of the powers, authorities or
discretions vested in it or him pursuant to this Debenture and against all
actions, proceedings, costs, claims and demands in respect of any matter or
thing done or omitted in any way relating to the Charged Assets or any part of
them other than such liabilities, expenses, actions, proceedings, costs, claims
or demands incurred or suffered as a result of the fraud or gross negligence (in
each case as determined by a court of competent jurisdiction in a final and
non-appealable decision) of the Collateral Agent or any Receiver, attorney,
delegate, manager, agent or other person appointed by the Collateral Agent. The
Collateral Agent and any such Receiver may retain and pay all sums in respect of
which it is indemnified out of any monies received by it under the powers
conferred by this Debenture.   12.   APPOINTMENT OF RECEIVER OR ADMINISTRATOR  
12.1   Appointment

  (a)   At any time on or after the Enforcement Date, or at the request of the
Company or its directors, the Collateral Agent may, without prior notice to the
Company, in writing (under seal, by deed or otherwise under hand) appoint:

  (i)   a Receiver in respect of the Charged Assets or any part thereof and may
in like manner from time to time (and insofar as it is lawfully able to do)
remove any Receiver and appoint another in his stead; or     (ii)   one or more
persons to be an Administrator in accordance with paragraph 14 of Schedule B1 to
the Insolvency Act 1986.

  (b)   Nothing in Clause 13.1 (Powers) shall restrict the exercise by any
Secured Creditor of any one or more rights of a Secured Creditor under
Schedule B1 to the Insolvency Act 1986 and the rules thereunder or at common
law.

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12.2   More than one receiver       Where more than one Receiver is appointed,
each joint Receiver shall have the power to act severally, independently of any
other joint Receiver, except to the extent that the Collateral Agent may specify
to the contrary in the appointment.   12.3   Receiver as agent       A Receiver
shall be the agent of the Company which shall be solely responsible for his acts
or defaults and for his remuneration. No Receiver shall at any time act as agent
of any Secured Creditor.   12.4   Receiver’s remuneration       Subject to
section 36 of the Insolvency Act 1986, a Receiver shall be entitled to
remuneration for his services at a rate to be determined by the Collateral Agent
from time to time (and without being limited to any maximum rate specified by
any statute or statutory instrument). The Collateral Agent may direct payment of
such remuneration out of moneys accruing to the Receiver but the Company alone
shall be liable for the payment of such remuneration and for all other costs,
charges and expenses of the Receiver.   12.5   Actions of the Administrator    
  Save as provided for in statute or as otherwise agreed in writing by the
Collateral Agent, the Secured Creditors shall have no liability for the acts or
omissions of an Administrator.   13.   RECEIVER’S POWERS   13.1   Powers       A
Receiver shall have (and be entitled to exercise) in relation to the Charged
Assets over which he is appointed the following powers (as the same may be
varied or extended by the provisions of this Debenture):

  (a)   all of the powers of a receiver or an administrative receiver set out in
Schedule 1 to the Insolvency Act 1986 (whether or not the Receiver is an
administrative receiver);     (b)   all of the powers conferred from time to
time on receivers, mortgagors and mortgagees in possession by the LPA or any
applicable law;     (c)   all the powers and rights of a legal and beneficial
owner and the power to do or omit to do anything which the Company itself could
do or omit to do; and     (d)   the power to do all things which, in the opinion
of the Receiver, are incidental to any of the powers, functions, authorities or
discretions conferred or vested in the Receiver pursuant to this Debenture or
upon receivers by statute or law generally (including, without limitation, the
bringing or defending of proceedings in the name of, or on behalf of, the
Company, the collection and/or realisation of Charged Assets in such manner and
on such terms as the

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      Receiver sees fit; and the execution of documents in the name of the
Company (whether under hand, or by way of deed or by utilisation of the company
seal of the Company)).

13.2   Powers may be restricted       The powers granted to a Receiver pursuant
to this Debenture may be restricted by the instrument (signed by the Collateral
Agent) appointing him but they shall not be restricted by any winding-up or
dissolution of the Company.   14.   PROTECTION OF PURCHASERS   14.1   Absence of
enquiry       No person or persons dealing with the Collateral Agent or any
Receiver shall be concerned to enquire whether any event has happened upon which
any of the powers in this Debenture are or may be exercisable or otherwise as to
the propriety or regularity of any exercise of such powers or of any act
purporting or intended to be an exercise of such powers or whether any amount
remains secured by this Debenture or whether the Secured Liabilities have become
payable or as to the application of any money paid to the Collateral Agent or
any Receiver, Administrator or Delegate. All the protections to purchasers and
persons dealing with receivers contained in sections 104, 107 and 109(4) of the
LPA shall apply to any person purchasing from or dealing with the Collateral
Agent or any such Receiver.   14.2   Receipt: conclusive discharge       The
receipt of the Collateral Agent or any Receiver shall be a conclusive discharge
to any purchaser of the Charged Assets.   15.   POWER OF ATTORNEY AND DELEGATION
  15.1   Power of Attorney: General       The Company hereby irrevocably and by
way of security appoints the Collateral Agent and any Receiver and any Delegate
severally to be its attorney in its name and on its behalf and as its act and
deed:

  (a)   to execute and deliver any documents or instruments which the Collateral
Agent or such Receiver may require for perfecting the title of the Collateral
Agent to the Charged Assets or for vesting the same in the Collateral Agent, its
nominee or any purchaser,     (b)   to sign, execute, seal and deliver and
otherwise perfect any further security document which the Company is required to
enter into pursuant to this Debenture; and     (c)   otherwise generally to
sign, seal, execute and deliver all deeds, assurances, agreements and documents
and to do all acts and things which (i) may be required for the full exercise of
all or any of the powers conferred on the Collateral Agent or any Receiver under
this Debenture; (ii) the Company is required to do pursuant to this Debenture;
or (iii) may be deemed expedient by

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      the Collateral Agent or a Receiver in connection with (A) any
preservation, disposition, realisation or getting in by the Collateral Agent or
such Receiver of the Charged Assets or any part thereof or (B) any other
exercise of any other power under this Debenture.

    The Collateral Agent confirms that it will only exercise the rights set out
in Clause 15.1 following the occurrence of a Default or Event of Default under
the Credit Documents.   15.2   Power of Attorney: Ratification       The Company
ratifies and confirms and agrees to ratify and confirm all acts and things which
any attorney mentioned in this Clause 15 (Power of attorney and delegation) does
or purports to do in exercise of the powers granted by this Clause. All moneys
expended by any such attorney shall be deemed to be expenses incurred by the
Collateral Agent under this Debenture.   15.3   General delegation

  (a)   The Collateral Agent and any Receiver (acting in good faith) shall have
full power to delegate the powers, authorities and discretions conferred on it
or him by this Debenture (including the power of attorney) on such terms and
conditions as it or he shall see fit which shall not preclude exercise of those
powers, authorities or discretions by it or him or any revocation of the
delegation or any subsequent delegation.     (b)   Any such delegation may be
made upon such terms, consistent with the terms of the Credit Documents
(including power to sub-delegate) as the Collateral Agent may think fit.     (c)
  Save in the case of gross negligence or wilful misconduct (in each case as
determined by a court of competent jurisdiction in a final and non-appealable
decision) by the Collateral Agent in the exercise of its right to delegate, the
Collateral Agent shall not be in any way liable to the Company or any other
person for any losses, liabilities or expenses arising from any act, default,
omission or misconduct on the part of any Delegate.

16.   APPLICATION OF MONIES RECEIVED UNDER THIS DEBENTURE   16.1   Order of
application       Any monies received under the powers hereby conferred shall,
subject to the repayment of any claims or debts having priority to this
Debenture, be applied for the purposes and in the order of priority provided for
in:

  (a)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and     (b)   following execution of the
Intercreditor Agreement, the relevant provision in the Intercreditor Agreement
relating to application of proceeds received under the Credit Documents.

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16.2   Suspense account       The Collateral Agent may credit any monies
received under this Debenture to an interest-bearing suspense account for so
long and in such manner as the Collateral Agent may from time to time determine
and the Receiver may retain the same for such period as he and the Collateral
Agent consider appropriate.   17.   RELEASE OF SECURITY   17.1   Release      
The Collateral Agent shall, at the request and cost of the Company, execute or
procure the execution by its nominee of any documents (in each case in a form
acceptable to the Collateral Agent, acting reasonably) and do all such deeds,
acts and things as are necessary to release the Charged Assets from the Security
created by or in accordance with this Debenture and/or to reassign the Charged
Assets at the end of the Security Period.   17.2   Avoidance of payments

  (a)   No amount paid, repaid or credited to a Secured Creditor shall be deemed
to have been irrevocably paid if the Collateral Agent (acting reasonably)
considers that the payment or credit of such amount is capable of being avoided
or reduced because of any laws applicable on bankruptcy, insolvency, liquidation
or any similar laws.     (b)   If any amount paid, repaid or credited to a
Secured Creditor is avoided or reduced because of any laws applicable on
bankruptcy, insolvency, liquidation or any similar laws then any release,
discharge or settlement between that Secured Creditor and the Company shall be
deemed not to have occurred and the Secured Creditors shall be entitled to
enforce this Debenture subsequently as if such release, discharge or settlement
had not occurred and any such payment had not been made. The Company shall on
demand indemnify the Collateral Agent against any funding or other cost, loss,
liability or expense incurred by the Collateral Agent as a result of the
Collateral Agent being required for any reason to refund all or part of any
amount received by it in respect of any of the Secured Liabilities.

18.   POWER OF SEVERANCE       In the exercise of the powers conferred by this
Debenture, the Collateral Agent or any Receiver may sever and sell plant,
machinery or other fixtures separately from the property to which they may be
annexed and the Collateral Agent or any Receiver may apportion any rent or other
amount without the consent of the Company.   19.   NEW ACCOUNTS       If a
Secured Creditor receives notice of any subsequent charge or other interest
affecting any part of the Charged Assets it may, without prejudice to its rights
under this Debenture, open a fresh account or accounts with the Company and
continue any existing account in the name of the Company and may appropriate to
any such fresh account any monies paid in, received or realised for the credit
of the Company after

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    that time without being under any obligation to apply the same or any part
of them in discharge of any of the Secured Liabilities. If a Secured Creditor
fails to open a fresh account it will be deemed to have done so with the effect
that any monies received or realised after that time will not reduce the Secured
Liabilities at the time when that Secured Creditor received notice.

20.   MISCELLANEOUS   20.1   The Company       This Debenture shall be binding
on the successors and assigns of the Company.   20.2   Assignment and transfer  
    The Company may not assign or transfer any of its rights or obligations
under this Debenture without the prior consent of each Lender. The Collateral
Agent may assign and transfer all or any part of its rights and obligations
under this Debenture to any replacement Collateral Agent appointed pursuant to
the terms of the Credit Agreement.   20.3   Disclosure       The Collateral
Agent may disclose to any of its Affiliates and any other person:

  (a)   which is one of its professional advisers;     (b)   to (or through)
whom a Secured Creditor assigns or transfers (or may potentially assign or
transfer) all or any of its rights and obligations under this Debenture and/or
the Credit Agreement;     (c)   which is a Receiver, prospective Receiver or
Administrator;     (d)   (together with professional advisers) who may have an
interest in the benefits arising under this Debenture;     (e)   to whom, and to
the extent that, information is required to be disclosed by any applicable law
or regulation; or     (f)   any other person not expressly referred to in
sub-paragraphs (a) to (e) above but otherwise described in section 11.16
(Confidentiality) of the Credit Agreement,

    any information about the Company, the Credit Documents or this Debenture as
the Collateral Agent shall consider appropriate if, in relation to Clause
20.3(b), the person to whom the information is to be given has entered into a
Confidentiality Undertaking.   20.4   Property       This Debenture is and will
remain the property of the Collateral Agent.

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20.5   Continuing Security

  (a)   This Debenture shall be a continuing security and shall not be
discharged by any intermediate payment or satisfaction of the whole or any part
of the Secured Liabilities.     (b)   If any purported obligation or liability
of any Credit Party to the Secured Creditors which if valid would have been the
subject of any obligation or charge created by this Debenture is or becomes
unenforceable, invalid or illegal on any ground whatsoever whether or not known
to any Secured Creditor, the Company shall nevertheless be liable in respect of
that purported obligation or liability as if the same were fully valid and
enforceable and the Company was the principal debtor in respect thereof. The
Company hereby agrees to keep Secured Creditors fully indemnified against all
damages, losses, costs and expenses arising from any failure of any Credit Party
to carry out any such purported obligation or liability.

20.6   Waiver of defences       The obligations of the Company under this
Debenture will not be affected by an act, omission, matter or thing (other than
a release of this Debenture in writing pursuant to Clause 17 (Release of
Security)) which would reduce, release or prejudice any of its obligations
(without limitation and whether or not known to it or any Secured Creditor)
including:

  (a)   any time, waiver or consent granted to, or composition with, the
Company, any Credit Party or any other person;     (b)   the release of any
Credit Party or any other person under the terms of any composition or
arrangement with any creditor of any person;     (c)   the taking, variation,
compromise, exchange, renewal or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or security over assets of, the Company,
any Credit Party or any person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or any failure to
realise the full value of any security;     (d)   any incapacity or lack of
power, authority or legal personality of or dissolution or change in the members
or status of any person;     (e)   any amendment (however fundamental) or
replacement of a Credit Document or any other document or security;     (f)  
any unenforceability, illegality or invalidity of any obligation of any person
under any Credit Documents or any other document or security; or     (g)   any
insolvency or similar proceedings.     (h)   Any Secured Creditor disclosing to
the Company any information relating to the business, assets, financial
condition or prospects of any other Credit Party

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      now or hereafter known to such Secured Creditor (the Company waiving any
duty on the part of the Secured Creditors to discuss such information);   (i)  
the existence of any claim, set-off or other right which the Company may at any
time have against the Collateral Agent or any other person; or     (j)   the
making or absence of any demand for payment of any Secured Liabilities or other
obligations on the Company or any other person, whether by the Collateral Agent
or any other person.

20.7   Non competition

  (a)   Until the expiry of the Security Period and unless the Collateral Agent
otherwise directs, the Company will not exercise any rights which it may have by
reason of performance by it of its obligations under this Debenture:

  (i)   to be indemnified by any Credit Party (including any rights it may have
by way of subrogation);     (ii)   to claim any contribution from any guarantor
of any Credit Party of the obligations under the Credit Documents;     (iii)  
to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any right of the Collateral Agent or any of the other Secured
Creditors under any Credit Documents or of any other guarantee or security taken
pursuant to, or in connection with, the Credit Documents;     (iv)   to claim,
rank, prove or vote as a creditor of any Credit Party or its estate in
competition with the Collateral Agent or any of the other Secured Creditors;
and/or     (v)   to receive, claim or have the benefit of any payment,
distribution or security from or on account of any Credit Party, or exercise any
right of set-off against any Credit Party.

  (b)   The Company shall hold on trust for and immediately pay or transfer to
the Collateral Agent any payment or distribution or benefit of security received
by it contrary to this Clause 20.7.

20.8   Additional Security       This Debenture shall be in addition to and not
be affected by any other Security or guarantee now or hereafter held by a
Secured Creditor for all or any part of the Secured Liabilities nor shall any
such other Security or guarantee of liability to a Secured Creditor of or by any
person not a Party be in any way impaired or discharged by this Debenture nor
shall this Debenture in any way impair or discharge such other Security or
guarantee.

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20.9   Variation of Security       This Debenture shall not in any way be
affected or prejudiced by any Secured Creditor now or hereafter dealing with,
exchanging, releasing, varying or abstaining from perfecting or enforcing any
Security or guarantee referred to in Clause 20.8 (Additional Security) above or
any rights which any Secured Creditor may now or hereafter have or giving time
for payment or granting any indulgence or compounding with any person
whatsoever.   20.10   Enforcement of other Security       No Secured Creditor
shall be obliged to enforce any other Security it may hold for, or exercise any
other rights it may have in relation to, the Secured Liabilities before
enforcing any of its rights under this Debenture.   20.11   Redemption of prior
Security       The Collateral Agent may redeem or take a transfer of any prior
Security over the Charged Assets and may agree the accounts of prior
encumbrancers. An agreed account shall be conclusive and binding on the Company.
Any amount paid in connection with such redemption or transfer (including
expenses) shall be paid on demand by the Company to the Collateral Agent and
until such payment shall form part of the Secured Liabilities.   20.12   Custody
      The Collateral Agent shall be entitled to keep all certificates and
documents of title relating to the Charged Assets in safe custody at any of its
branches or otherwise provide for their safe custody by third parties and shall
not be responsible for any loss or damage occurring to or in respect thereof
unless such loss or damage shall be caused by its own gross negligence or wilful
default.   20.13   Costs and expense       Save to the extent that the same has
been recovered pursuant to section 11.01 (Payment of expenses, etc.) of the
Credit Agreement, the Company shall, within three Business Days of demand, pay
to the Collateral Agent, any Receiver, attorney, manager, agent or other person
appointed by the Collateral Agent under this Debenture the amount of all costs
and expenses (including legal fees) incurred by that Collateral Agent, Receiver,
attorney, manager, agent or other person (as the case may be) in connection with
(i) the perfection, preservation, enforcement or attempted enforcement, of the
Security created by or contemplated by this Debenture and/or (ii) the exercise
of any rights under this Debenture.   21.   NOTICES   21.1   Communications in
writing       Any communication to be made under or in connection with this
Debenture shall be made in writing and, unless otherwise stated, may be made by
fax or letter.

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21.2   Addresses       The address and fax number (and the department or
officer, if any, for whose attention the communication is to be made) of the
Company and the Collateral Agent for any communication or document to be made or
delivered under or in connection with this Debenture is that identified with its
name below:

             
Company
       
 
       
Address:
  Endeavour Energy UK Limited    
 
  114 St. Martin’s Lane    
 
  London WC2N 4BE    
 
  England    
 
       
For the Attention of:
  Mike Kirksey    
 
       
Fax Number:
  +44 207 451 2352    
 
       
Email:
  Mike.Kirksey@endeavourcorp.com    
 
       
With a copy to:
  Endeavour International Corporation    
 
  1001 Fannin Street, Suite 1600    
 
  Houston, Texas 77002    
 
  United States of America    
 
       
For the Attention of:
  Mike Kirksey / Cathy Stubbs    
 
       
Fax Number:
  +1 713 307 8794    
 
       
Email:
  Mike.Kirksey@endeavourcorp.com /    
 
  Cathy.Stubbs@endeavourcorp.com    
 
       
Collateral Agent
       
 
       
Address:
  Cyan Partners, LP    
 
  399 Park Avenue    
 
  39th Floor    
 
  New York 10022    
 
  United States of America    
 
       
Fax Number:
  +1 212 380 5871    
 
       
For the Attention of:
  Divya Gopal

  or any substitute address, fax number or department or officer as the Company
may notify to the Collateral Agent or, as the case may be, the Collateral Agent
may notify to the Company, in each case by not less than five Business Days’
notice.   21.3   Delivery

  (a)   Any communication or document made or delivered by one person to another
under or in connection with this Debenture will only be effective:

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  (i)   if by way of fax, when received in legible form; or     (ii)   if by way
of letter, when it has been left at the relevant address or five Business Days
after being deposited in the post postage prepaid in an envelope addressed to it
at that address,

      and, if a particular department or officer is specified as part of its
address details provided under Clause 21.2 (Addresses), if addressed to that
department or officer.     (b)   Any communication or document to be made or
delivered to the Collateral Agent will be effective only when actually received
by it and then only if it is expressly marked for the attention of the
department or officer identified with the Collateral Agent’s name in Clause 21.2
(Addresses) (or any substitute department or officer as it shall specify for
this purpose).

22.   CERTIFICATES AND DETERMINATIONS       Any certificate or determination by
the Collateral Agent of a rate or amount under this Debenture is, in the absence
of manifest error, conclusive evidence of the matters to which it relates.   23.
  PARTIAL INVALIDITY       If, at any time, any provision of this Debenture is
or becomes illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision under
the law of any other jurisdiction will in any way be affected or impaired.   24.
  COUNTERPARTS       This Debenture may be executed in any number of
counterparts, and this has the same effect as if the signatures on the
counterparts were on a single copy of this Debenture.   25.   THIRD PARTIES    
  Save as expressly stated in this Debenture, a person who is not a Party to
this Debenture has no right under the Contracts (Rights of Third Parties) Act
1999 to enforce or to enjoy the benefit of any term of this Debenture.   26.  
GOVERNING LAW       This Debenture and any dispute or claim arising out of or in
connection with it or its subject matter, existence, negotiation, validity,
termination or enforceability (including any non-contractual disputes or claims)
shall be governed by and construed in accordance with English law.

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27.   ENFORCEMENT   27.1   Jurisdiction

  (a)   The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Debenture (including a dispute
regarding the existence, validity or termination of this Debenture or any
non-contractual obligation arising out of or in connection with this Debenture)
(a “Dispute”).     (b)   The Parties agree that the courts of England are the
most appropriate and convenient courts to settle Disputes and accordingly no
Party will argue to the contrary.     (c)   This Clause 27.1 (Jurisdiction) is
for the benefit of the Secured Creditors only. As a result, no Secured Creditor
shall be prevented from taking proceedings relating to a Dispute in any other
courts with jurisdiction. To the extent allowed by law, the Secured Creditors
may take concurrent proceedings in any number of jurisdictions.

27.2   Waiver of immunity       The Company irrevocably and unconditionally:

  (a)   agrees not to claim any immunity from proceedings brought by a Secured
Creditor against it in relation to a Credit Document and to ensure that no such
claim is made on its behalf;     (b)   consents generally to the giving of any
relief or the issue of any process in connection with those proceedings; and    
(c)   waives all rights of immunity in respect of it or its assets.

IN WITNESS whereof this Debenture has been duly executed and delivered as a Deed
on the date first above written.

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SCHEDULE 1
FORM OF NOTICES
[Headed notepaper of the Company]
BY REGISTERED MAIL
To: [relevant counterparty]
Dated [•]
Dear Sirs
Notice of [Assignment]/[Charge]
We hereby give you notice that by a debenture dated [•] August 2010 (the
“Debenture”) [and a Scots law Assignation of Security dated [•] August 2010 (the
“Assignation”)/a Scots law Bond and Floating Charge dated [•] August 2010 (the
“Charge”)] made between ourselves (the “Company”) and Cyan Partners, LP (the
“Collateral Agent”) all of our rights to and title and interest from time to
time in the property described in the Annex to this notice ([“Assigned
Property”]/[“Charged Property”]) was [assigned]/[charged] by us to the
Collateral Agent in accordance with the provisions of the relevant agreements.
On behalf of the Collateral Agent, we hereby irrevocably instruct and authorise
you:

1.   [on written request from the Collateral Agent to make all payments due to
us in respect of the [Assigned Property]/[Charged Property] to the Collateral
Agent instead at [details] unless and until the Collateral Agent notifies you
otherwise];   2.   to disclose to the Collateral Agent such information
regarding the [Assigned Property]/[Charged Property] as it may from time to time
reasonably request and to send copies of all notices relating to the Assigned
Property to the Collateral Agent; and   3.   to pay all proceeds payable under
the insurance policies described in the Annexure to this notice into [Insurance
Account details to be inserted]1.

Would you please acknowledge receipt of this Notice by returning to us the copy
of this Notice duly signed by your authorised signatory.
Your acknowledgement will be deemed to confirm in favour of the Collateral Agent
that you:

1.   have not received any other notice of the interest of any third party
relating to the [Assigned Property]/[Charged Property];   2.   are not aware of
any dispute between ourselves and yourselves relating to the [Assigned
Property]/[Charged Property]; and

 

1   Delete if not applicable.

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3.   shall not raise any set off, defence or counter claim against the
Collateral Agent in respect of any payments now or in future expressed to be
payable under the [Assigned Property]/[Charged Property].

This Notice is, to the extent that it relates to any requirement for notice
under the [Assignation]/[Charge], governed by the laws of Scotland and any
dispute or claim arising out of or in connection with it and/or the
[Assignation]/[Charge] or its subject matter, existence, negotiation, validity,
termination or enforceability (including any non-contractual disputes or claims)
shall be governed by and construed in accordance with the laws of Scotland.
This Notice is, to the extent that it relates to any requirement for notice
under the Debenture, governed by English law and any dispute or claim arising
out of or in connection with it and/or the Debenture or its subject matter,
existence, negotiation, validity, termination or enforceability (including any
non-contractual disputes or claims) shall be governed by and construed in
accordance with English law.

          Yours faithfully
        for and on behalf of    Endeavour Energy UK Limited   

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Annex
Description of [Assigned Property]/[Charged Property]
[description]

42

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[On copy of Notice]
To: [Collateral Agent] and [the Company]
Dated [•]
Dear Sirs
Notice of [Assignment]/[Charge]
We acknowledge receipt of the enclosed Notice of [Assignment]/[Charge].

          Yours faithfully
        duly authorised signatory for and on    behalf of [relevant
counterparty]   

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SCHEDULE 2
PROJECT AGREEMENTS

1.   The joint operating agreement for P.592 Block 20/4b dated 2 September 1999;
  2.   The Goldeneye unitisation and unit operating agreement dated 15
March 2002;   3.   The joint operating agreement for P.361 Block 29/1b dated 23
November 1988;   4.   The Triton joint facilities operating agreement dated 14
April 2000;   5.   The Bittern unitisation and unit operating agreement dated 23
January 2002;   6.   The joint operating agreement for P.213 Block 16/26a (Area
A — “Alba Field Area”) dated 10 October 1990;   7.   The joint operating
agreement for P.218 and P.588 Blocks 15/21f and 15/21b dated 13 August 1987 (as
it applies to the Ivanhoe Area, the Rob Roy Area and the Hamish Area by virtue
of a Supplemental Agreement dated 31 December 1987);   8.   The joint operating
agreement for P.226 Block 15/27 dated 21 January 1998 as it applies in the
manner of a separate contract to Area A — “Renee” (as described in the agreement
entitled “Amendment to the Joint Operating Agreement for United Kingdom
Petroleum Production Licence P.226 for Block 15/27” dated 25 February 2000 (the
“Amendment Agreement”));   9.   The joint operating agreement for P.226 Block
15/27 dated 21 January 1998 (as amended under the terms of the Amendment
Agreement) as it applies in the manner of a separate contract to Area Beta —
“Rochelle” (as defined in an agreement dated 23 December 2009 entitled
“Amendment to the Joint Operating Agreements for United Kingdom Petroleum
Production Licence P.226 for Block 15/27 Area B and United Kingdom Petroleum
Production Licence P.226 for Block 15/27 Area C” under which Areas B and C (each
as defined in the Amendment Agreement) were merged and a new Area Beta was
created);   10.   The joint operating agreement for P.339 Block 15/28b (“Rubie
Field Area”) dated 26 January 1999;   11.   The joint operating agreement for
P.219 Block 16/13a & 16/13e — “Enoch” dated 7 March 1986;   12.   The Enoch
unitisation and unit operating agreement dated 1 July 2005;   13.   The Enoch PL
Transport and Processing Agreement dated 24 February 2006;   14.   The joint
operating agreement for P.1055 Blocks 44/11a and 44/12a “Cygnus” dated 23
September 2004;   15.   The joint operating agreement for P.1314 Block 23/16f —
“Columbus” dated 27 September 2006;

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16.   The joint operating agreement for P.255 Block 22/06a North — “Bacchus”
dated 15 September 2006;   17.   The Petroleum Production Licence P.592 dated 3
June 1987;   18.   The Petroleum Production Licence P.361 dated 16
December 1980;   19.   The Petroleum Production Licence P.213 dated 15
March 1972;   20.   The Petroleum Production Licence P.218 dated 15 March 1972;
  21.   The Petroleum Production Licence P.588 dated 3 June 1987;   22.   The
Petroleum Production Licence P.226 dated 15 March 1972;   23.   The Petroleum
Production Licence P.339 dated 16 December 1980;   24.   The Petroleum
Production Licence P.219 dated 15 March 1972;   25.   The Petroleum Production
Licence P.1055 dated 26 July 2002;   26.   The Petroleum Production Licence
P.1314 dated 22 December 2005;   27.   The Petroleum Production Licence P.255
dated 30 November 1977;   28.   The Petroleum Production Licence P.1731 dated 15
June 2010;   29.   Any licence which is issued in substitution or replacement of
any of the licences referred to in paragraphs 17 to 28 above; and   30.   Any
other agreements to which the Company is a party that are drafted in terms
whereby any Security created under this Debenture is expressly subordinated to
the rights of the counterparties to such agreements.

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SIGNED AS A DEED
    )        
for and on behalf of
    )        
ENDEAVOUR ENERGY UK LIMITED
    )     ENDEAVOUR ENERGY UK LIMITED by  
acting by
    )        
of 1001 Fannin Street, Suite 1600, Houston,
    )        
Texas 77002, United States of America
    )        
in the exercise of a power of attorney
    )        
dated 3 August 2010 granted by
    )        
 
             
ENDEAVOUR ENERGY UK LIMITED
    )        
 
             
In the presence of:
             
 
             
Signature of witness
             
 
             
 
             
 
             
Name of witness
             
 
             
(in BLOCK CAPITALS)
             
 
             
 
             
 
             
Address of Witness
             
 
             
 
             
 
             
 
             
 
             
SIGNED by
    )        
 
    )        
for and on behalf of
    )        
CYAN PARTNERS, LP
    )        

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Exhibit F-3

      (WHITE & CASE LOGO) [h77219q7550702.gif] EXECUTION COPY      
 
   

Dated ____ August 2010
CHARGE OVER SHARES
between
ENDEAVOUR ENERGY UK LIMITED
as the Company
and
CYAN PARTNERS, LP
as Collateral Agent
 
White & Case LLP
5 Old Broad Street
London EC2N 1DW

 

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TABLE OF CONTENTS

                      Page  
1.
  DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS     1  
 
           
2.
  COVENANTS TO PAY     5  
 
           
3.
  SECURITY     5  
 
           
4.
  FURTHER ASSURANCE     5  
 
           
5.
  UNDERTAKINGS WITH RESPECT TO THE SECURITIES     6  
 
           
6.
  FURTHER UNDERTAKINGS     7  
 
           
7.
  RIGHTS OF THE COLLATERAL AGENT     10  
 
           
8.
  EXONERATION     11  
 
           
9.
  APPOINTMENT OF RECEIVER     12  
 
           
10.
  RECEIVER’S POWERS     12  
 
           
11.
  PROTECTION OF PURCHASERS     13  
 
           
12.
  POWER OF ATTORNEY AND DELEGATION     13  
 
           
13.
  APPLICATION OF MONIES RECEIVED UNDER THIS DEED     14  
 
           
14.
  RELEASE OF SECURITY     15  
 
           
15.
  NEW ACCOUNTS     15  
 
           
16.
  MISCELLANEOUS     16  
 
           
17.
  NOTICES     19  
 
           
18.
  CERTIFICATES AND DETERMINATIONS     21  
 
           
19.
  PARTIAL INVALIDITY     21  
 
           
20.
  COUNTERPARTS     21  
 
           
21.
  THIRD PARTIES     21  
 
           
22.
  GOVERNING LAW     21  
 
           
23.
  ENFORCEMENT     21  

(i)

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THIS DEED is made on ___ August 2010
BETWEEN:

(1)   ENDEAVOUR ENERGY UK LIMITED (a company registered in England and Wales
with registration number 5030838) whose registered office is at 33rd Floor, City
Point, One Ropemaker St, London EC2Y 9UE (the “Company”); and   (2)   CYAN
PARTNERS, LP as agent and trustee for itself and each of the other Secured
Creditors (the “Collateral Agent”).

IT IS AGREED as follows:

1.   DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS   1.1   Definitions

  (a)   Terms defined in the Credit Agreement shall, unless otherwise defined in
this Deed or unless a contrary intention appears, bear the same meaning when
used in this Deed and the following terms shall have the following meanings:    
    “Confidentiality Undertaking” has the meaning given to such term in the
Debenture.         “Credit Agreement” means the term loan credit agreement dated
on or about the date of this Deed between (among others) the Company and the
Administrative Agent (as amended, modified, restated or supplemented from time
to time).         “Debenture” means the debenture dated on or about the date of
this Deed between Endeavour Energy UK Limited and the Collateral Agent.        
“Enforcement Date” means the date on which a notice is issued by the
Administrative Agent to the Borrower under section 9 (Events of Default) of the
Credit Agreement upon the occurrence of an Event of Default which is continuing.
        “Group” has the meaning given to it in the Debenture.         “LPA”
means the Law of Property Act 1925.         “Receiver” means any person
appointed by the Collateral Agent to be a receiver or receiver and manager or
administrative receiver of any property subject to the Security created by this
Deed or any part thereof.         “Related Property Rights” means, in relation
to any property or asset:

  (a)   the proceeds of sale and/or other realisation of that property or asset
(or any part thereof or interest therein);

 

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  (b)   all Security, options, agreements, rights, benefits, indemnities,
guarantees, warranties or covenants for title held by the Company in respect of
such property or asset; and     (c)   all the Company’s rights under any
agreement in respect of such property or asset.

      “Related Securities Rights” means all allotments, rights, benefits and
advantages (including all voting rights) whatsoever at any time accruing,
offered or arising in respect of or incidental to the Securities and all money
or property accruing or offered at any time by way of conversion, redemption,
bonus, preference, option, dividend, distribution, interest or otherwise in
respect of the Securities.         “Secured Creditors” has the meaning given to
it in the U.S. Security Agreement.         “Secured Liabilities” has the meaning
given to it in the Debenture (except that references to “this Debenture” shall
be construed as references to “this Deed”).         “Securities” means all of
the Company’s right, title, benefit and interest in all stocks, shares, bonds,
notes, warrants and other securities of any kind whatsoever now or in the future
legally or beneficially owned by the Company in Endeavour North Sea Limited
whether in bearer or registered form and all Related Securities Rights whether
the same are held directly by or to the order of the Company or by any trustee,
fiduciary, clearance system, custody system or custodian on its behalf or
whether the same have been delivered to or to the order of the Collateral Agent
or its nominee including all Related Securities Rights, all Related Property
Rights and all rights against any such trustee, fiduciary, clearance system or
other person holding such to the order of the Company.         “Security” means
a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having similar
effect.         “Security Period” means the period from the date of this Deed
until the date on which the Collateral Agent has determined that all of the
Secured Liabilities (whether actual or contingent) have been irrevocably and
unconditionally paid and discharged in full and no further Secured Liabilities
are capable of being outstanding.     (b)   Unless a contrary intention appears,
words defined in the Companies Act 2006 have the same meanings in this Deed.

1.2   Construction       Unless a contrary indication appears, any reference in
this Deed to:

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  (a)   the “Collateral Agent”, a “Secured Creditor”, a “Credit Party” or the
“Company” shall be construed so as to include its successors in title, permitted
assigns and permitted transferees;     (b)   “assets” includes present and
future properties, revenues and rights of every description;     (c)   a
“person” includes any individual, firm, company, corporation, government, state
or agency of a state or any association, trust, joint venture, consortium or
partnership (whether or not having separate legal personality) or two or more of
the foregoing;     (d)   a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law but, if
not having the force of law, being of a kind that is normally complied with by
those to whom it is addressed) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;     (e)   a “guarantee” includes any form of
indemnity or other assurance against financial loss (including any obligation to
pay, purchase or provide funds for the purchase of any liability) and the verb
“to guarantee” shall be construed accordingly;     (f)   a provision of law is a
reference to that provision as amended or re-enacted;     (g)   any matter
“including” specific instances or examples of such matter shall be construed
without limitation to the generality of that matter (and references to “include”
shall be construed accordingly);     (h)   a “modification” includes an
amendment, supplement, novation, re-enactment, restatement, variation,
extension, replacement, modification or waiver or the giving of any waiver,
release, consent having the same commercial effect of any of the foregoing (and
“modify” shall be construed accordingly);     (i)   the “winding-up”,
“dissolution” or “administration” of a person shall be construed so as to
include any equivalent or analogous proceedings under the law of the
jurisdiction in which such person is incorporated or established, or any
jurisdiction in which such person carries on business including the seeking of
liquidation, winding-up, reorganisation, dissolution, administration,
arrangement, adjustment, protection or relief of debtors; and     (j)   the
words “other”, “or otherwise” and “whatsoever” shall not be construed eiusdem
generis or be construed as any limitation upon the generality of any preceding
words or matters specifically referred to.

1.3   Implied covenants for title       The obligations of the Company under
this Deed shall be in addition to the covenants for title deemed to be included
in this Deed by virtue of Part I of the Law of Property (Miscellaneous
Provisions) Act 1994.

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1.4   Effect as a Deed       This Deed is intended to take effect as a deed
notwithstanding that the Collateral Agent may have executed it under hand only.
  1.5   Law of Property (Miscellaneous Provisions) Act 1989       To the extent
necessary for any agreement for the disposition of the Securities in this Deed
to be a valid agreement under Section 2(1) of the Law of Property (Miscellaneous
Provisions) Act 1989, the terms of the other Credit Documents are incorporated
into this Deed.   1.6   Security trust provisions       The Company agrees that
the terms of clause 9 (Appointment of the Collateral Agent) of the Debenture are
incorporated into this Deed as if those terms were set out in full in this Deed.
  1.7   Intercreditor Agreement

  (a)   Upon execution of the Intercreditor Agreement, this Deed will be subject
to the terms of the Intercreditor Agreement.     (b)   In the event of any
inconsistency between a provision of this Deed and a provision of the
Intercreditor Agreement, the provision of the Intercreditor Agreement will
prevail.

1.8   Incorporation

  (a)   Without prejudice to the application of any other provisions of the
Credit Agreement to this Deed (by reason of this Deed being a Credit Document
for the purposes of the Credit Agreement), sections 4.04 (Tax Gross-Up and
Indemnities), 11.02 (Right of Setoff), 11.05 (No Waiver; Remedies Cumulative),
11.07 (Calculations; Computations), 11.09 (Counterparts), 11.12 (Amendment or
Waiver; etc.) and 11.19 (Judgment Currency) of the Credit Agreement shall apply
to this Deed, mutatis mutandis, as if the same had been set out in full herein
with references in such clauses to:

  (i)   any “Credit Party” or “Borrower” being construed, if the context so
requires, as references to the Company (as defined herein);     (ii)   the
“Agreement” being construed as references to this Deed;     (iii)   the
“parties” or “party” being construed as references to the parties or, as the
case may be, a Party to this Deed;     (iv)   the “Credit Documents” being
construed as (a) including this Deed or (b) if the context so requires, as
references specifically to this Deed; and     (v)   in the context of section
4.04 (Tax Gross-Up and Indemnities) of the Credit Agreement, the “Administrative
Agent” or a “Lender” being,

4

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      if the context so requires, construed, in each case, as references to the
Collateral Agent and, in the context of section 11.01(a)(ii) (Payment of
Expenses, etc.) of the Credit Agreement, the “Administrative Agent” or a
“Lender” being construed, in each case, as references to each Secured Creditor,
Receiver (as defined herein), attorney, manager, agent or other person as may be
appointed by the Collateral Agent under this Deed; and

  (b)   A reference to “Secured Liabilities” includes any liabilities which
would be treated as such but for the liquidation of, or dissolution of, or
similar event affecting the Company.

2.   COVENANTS TO PAY   2.1   Covenant to pay Secured Liabilities       The
Company covenants that it shall promptly on demand pay and discharge the Secured
Liabilities in accordance with the Credit Documents.   2.2   Potential
invalidity       Neither the covenant to pay in Clause 2.1 (Covenant to pay
Secured Liabilities), nor the Security created by this Deed shall extend to or
include any liability or sum which would, but for this Clause 2.2, cause such
covenant, obligation or security to be unlawful under any applicable law.   3.  
SECURITY       The Company hereby charges to the Collateral Agent by way of
first fixed charge with full title guarantee and as a continuing security for
the payment and discharge of the Secured Liabilities all of the Company’s rights
to and title and interest from time to time in all Securities.   4.   FURTHER
ASSURANCE       The Company shall at its own expense promptly upon request by
the Collateral Agent execute (in such form as the Collateral Agent may
reasonably require) such documents (including assignments, transfers, mortgages,
charges, notices and instructions) in favour of the Collateral Agent or its
nominees and do all such assurances and things as the Collateral Agent may
reasonably require for:

  (a)   perfecting and/or protecting (by registration or in any other way) the
Security created or intended to be created by this Deed;     (b)   conferring
upon the Collateral Agent such Security as it may require over the assets of the
Company outside of England and Wales which if in England or Wales would form
part of or be intended to form part of the Securities;     (c)   facilitating
the realisation of all or any part of the Securities; and     (d)   for
exercising all powers, authorities and discretions conferred on the Collateral
Agent or any Receiver pursuant to this Deed or by law.

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5.   UNDERTAKINGS WITH RESPECT TO THE SECURITIES       The Company undertakes to
the Collateral Agent with respect to the Securities that it shall:   5.1  
Negative Pledge       except as permitted by section 8.01 (Liens) of the Credit
Agreement:

  (a)   not create or allow to exist any Security on, over, or affecting, any of
its assets; and     (b)   procure that no member of the Group creates or allows
to exist any Security on, over, or affecting, any of its assets;

5.2   Disposals       except as permitted by section 8.02 (Consolidation,
Merger, Purchase or Sale of Assets, etc.) of the Credit Agreement not, either in
a single transaction or in a series of transactions and whether related or not,
dispose of the Securities or any part of them;   5.3   Prejudicial action      
not do or cause or permit to be done anything which may in any way depreciate,
jeopardise or otherwise prejudice the value to the Collateral Agent of the
Securities;   5.4   Consents and other necessary action       take all such
action as is available to it and is reasonably necessary for the purpose of
creating, perfecting or maintaining the Security created or intended to be
created pursuant to this Deed which shall include, without limitation, using
reasonable endeavours to obtain any necessary consent (in form and content
satisfactory to the Collateral Agent, acting reasonably) to enable all or any of
the Securities to be mortgaged or charged pursuant to this Deed. Immediately
upon obtaining any necessary consent the asset concerned shall become subject to
the Security created by this Deed. The Company shall promptly deliver a copy of
each consent to the Collateral Agent;   5.5   Communications       promptly
deliver to the Collateral Agent a copy of every circular, notice, resolution,
minutes or other documents received by it in connection with the Securities; and
  5.6   Nominees       not appoint and has not appointed any nominee to exercise
or enjoy all or any of its rights in relation to the Securities.

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6.   FURTHER UNDERTAKINGS   6.1   Deposit of title documents       The Company
shall (i) immediately upon the execution of this Deed and (ii) within three (3)
Business Days of the date of issuance by Endeavour North Sea Limited of any
additional Securities deposit with the Collateral Agent or its nominee:

  (a)   all stock and share certificates and documents of, or evidencing, title
or the right to title relating to the Securities;     (b)   duly stamped stock
transfer forms or other instruments of transfer duly completed to the Collateral
Agent’s satisfaction; and     (c)   such other documents as the Collateral Agent
may require from time to time for the purpose of perfecting its title to the
Securities or for the purpose of vesting the same in itself, its nominee or any
purchaser or presenting the same for registration at any time.

6.2   Registration of transfers       The Company shall procure that, as and
when required by the Collateral Agent following the Enforcement Date, all
Securities which are in registered form are duly registered in the name of the
Collateral Agent or its nominee once a transfer relating to those Securities is
presented for that purpose.   6.3   Information       The Company undertakes
that it shall, promptly following receipt, deliver to the Collateral Agent a
copy of every document received by it or its nominees in connection with any of
the Securities or any issuer of those Securities.   6.4   Calls

  (a)   The Company shall duly and promptly pay all calls, instalments or other
payments which may be due and payable in respect of the Securities and, for the
avoidance of doubt, no Secured Creditor shall incur any liability in respect of
any amounts due from the Company in respect of the Securities.     (b)   If the
Company fails to comply with 6.4(a) above the Collateral Agent may pay the calls
or other payments on behalf of the Company. The Company must promptly on request
from the Collateral Agent reimburse the Collateral Agent for any such payment.

6.5   Dividends

  (a)   Before the Enforcement Date, the Company shall be entitled to receive
all declared cash dividends or other monies which may be paid or payable in
respect of the Securities.     (b)   On and after the Enforcement Date, the
Collateral Agent (or its nominee) shall be entitled to complete all instruments
of transfer in relation to the Securities

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      of the Company on behalf of the Company in favour of itself or such other
person it shall elect and otherwise have any Securities registered in its name
or in the name of its nominees and receive all dividends or other monies which
may be paid or payable in respect of the Securities. The Company shall, to the
extent that such dividends or other monies have not been paid directly to the
Collateral Agent (or its nominee), take all steps as may be required to ensure
that such dividends or other monies are paid to the Collateral Agent (or its
nominee). In any event, any such dividends or other monies received by the
Company shall, on and after the Enforcement Date, be held on trust by the
Company for the Collateral Agent (or its nominee) and shall be paid to the
Collateral Agent (or its nominee).

6.6   Voting Rights and other matters

  (a)   Prior to the Enforcement Date and save as otherwise provided in this
Clause 6.6, the Company shall exercise all voting rights in respect of the
Securities provided that the Company shall not exercise such voting rights in
any manner which, in the reasonable opinion of the Collateral Agent, may
prejudice the interest of the Secured Creditors in the Securities or in breach
of any Credit Documents and may prejudice the value of, or the ability of the
Collateral Agent to realise, the Security over the Securities created pursuant
to this Deed.     (b)   The Company shall not, without the prior written consent
of the Collateral Agent, permit or agree to any variation of the rights
attaching to or conferred by any of the Securities, participate in any rights
issue, elect to receive or vote in favour of receiving any dividends or other
distributions other than in the form of cash or participate in any vote
concerning a members voluntary winding-up or a compromise or arrangement
pursuant to sections 895-901 of the Companies Act 2006.     (c)   At any time on
or after the Enforcement Date the Collateral Agent may in such manner and on
such terms as it sees fit (in the name of the Company or otherwise and without
the need for further consent from the Company):

  (i)   exercise (or refrain from exercising) any voting rights in respect of
the Securities or, as the case may be, require the Company to exercise (or
refrain from exercising) any such voting rights in such manner as it considers
fit (including all powers given to trustees under Part II of the Trustee Act
2000) in which event, the Company shall comply with all such directions of the
Collateral Agent; and/or     (ii)   complete all instruments of transfer in
relation to the Security of the Company on behalf of the Company in favour of
itself or such other person as it shall select and otherwise have any Security
registered in its name or the name of its nominee; and/or     (iii)   apply all
dividends and other monies arising from the Securities in accordance with Clause
13 (Application of monies received under this Deed); and/or

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  (iv)   without prejudice to any other provision of this Deed, transfer the
Securities into the name of a nominee or transferee of the Collateral Agent as
the Collateral Agent may require; and/or     (v)   exercise (or refrain from
exercising) all or any of the powers and rights conferred upon or exercisable by
the legal or beneficial owner of the Securities or as the case may be, require
the Company to exercise (or refrain from exercising) all or any such powers and
rights in such manner as it considers fit in which event, the Company shall
comply with all such directions of the Collateral Agent.

  (d)   After the Enforcement Date, the Company shall:

  (i)   comply or procure the compliance, with any directions of the Collateral
Agent in respect of the exercise of any rights and powers exercisable in
relation to such Security; and     (ii)   if the Collateral Agent so requests,
promptly deliver to the Collateral Agent a form of proxy or authority (in each
case, in such form as the Collateral Agent shall reasonably require) appointing
such person as the Collateral Agent shall elect to be the proxy of the Company
or otherwise enabling such person as the Collateral Agent shall select to
exercise such voting rights and other rights and powers as shall be specified
(whether generally or specifically) in the relevant notice.

6.7   Redemption       The Company will not redeem or take any step to redeem
any redeemable Securities save to the extent that such redemption would not
breach the terms of the Credit Documents.   6.8   Liability of Collateral Agent
      The Company agrees with the Collateral Agent that neither the Collateral
Agent nor its nominee will have any liability for:

  (a)   failing to present any coupon or other document relating to any of the
Securities;     (b)   accepting or failing to accept any offer relating to any
of the Securities;     (c)   failing to attend or vote at any meetings relating
to the Securities;     (d)   failing to notify the Company of any matters
mentioned in this Clause 6.8 or of any communication received by the Collateral
Agent in relation to the Securities; or     (e)   any loss arising out of or in
connection with the exercise or non-exercise of any rights or powers attaching
or accruing to the Securities or which may be exercised by the Collateral Agent
or any nominee for the Collateral Agent under this Deed (whether or not on sale
or other realisation of the Securities a

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      better price could have or might have been obtained by either deferring or
advancing the date of sale or realisation or otherwise).

7.   RIGHTS OF THE COLLATERAL AGENT   7.1   Enforcement       At any time on or
after the Enforcement Date the Security created pursuant to this Deed shall be
immediately enforceable and the Collateral Agent may in its absolute discretion
and without notice to the Company or the prior authorisation of any court:

  (a)   enforce all or any part of the Security created by this Deed and take
possession of or dispose of all or any of the Securities in each case at such
times and upon such terms as it sees fit; and     (b)   whether or not it has
appointed a Receiver, exercise all of the powers, authorities and discretions:

  (i)   conferred from time to time on mortgagees by the LPA (as varied or
extended by this Deed) or by law; and     (ii)   granted to a Receiver by this
Deed or by law.

7.2   Restrictions on consolidation of mortgages       Section 93 of the LPA
shall not apply to this Deed or to any sale made under it. The Collateral Agent
shall have the right to consolidate all or any of the Security created by or
pursuant to this Deed with any other Security in existence at any time. Such
power may be exercised by the Collateral Agent at any time on or after the
Enforcement Date.   7.3   Restrictions on exercise of power of sale      
Section 103 of the LPA shall not apply to this Deed and the power of sale
arising under the LPA shall arise on the date of this Deed (and the Secured
Liabilities shall be deemed to have become due and payable for that purpose).
The power of sale and other powers conferred by Section 101 of the LPA as varied
or extended by this Deed and those powers conferred (expressly or by reference)
on a Receiver shall be immediately exercisable by the Collateral Agent at any
time on or after the Enforcement Date.   7.4   No prior notice needed       The
powers of the Collateral Agent set out in Clauses 7.2 (Restrictions on
consolidation of mortgages) and 7.3 (Restrictions on exercise of power of sale)
above may be exercised by the Collateral Agent without prior notice to the
Company.   7.5   Right of appropriation

  (a)   Without prejudice to the other provisions of this Deed, to the extent
that any of the Securities constitute “financial collateral”, and this Deed and
the obligations of the Company hereunder constitute a “security financial

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      collateral agreement” (in each case as defined in, and for the purposes
of, the Financial Collateral Arrangements (No.2) Regulations 2003 (SI 2003/3226)
(the “Regulations”), the Collateral Agent shall at any time on and after the
Enforcement Date have the right to appropriate all or any part of those
Securities in or towards discharge of the Secured Liabilities. For this purpose,
the parties agree that the value of any such Securities so appropriated shall be
the market price of such Securities at the time the right of appropriation is
exercised as determined by the Collateral Agent by reference to such method or
source of valuation as the Collateral Agent may select, including by independent
valuation. The parties agree that the methods or sources of valuation provided
for in this Clause 7.5 (Right of appropriation) or selected by the Collateral
Agent in accordance with this Clause 7.5 (Right of appropriation) shall
constitute a commercially reasonable method of valuation for the purposes of the
Regulations.     (b)   The Collateral Agent shall notify the Company as soon as
reasonably practicable of the exercise of its rights of appropriation as regards
such of the Securities as are specified in such notice.

8.   EXONERATION   8.1   Exoneration       No Secured Creditor shall, nor shall
any Receiver, by reason of it or the Receiver entering into possession of the
Securities or any part thereof, be liable to account as mortgagee in possession
or be liable for any loss or realisation or for any default or omission for
which a mortgagee in possession might be liable; but every Receiver duly
appointed by the Collateral Agent under this Deed shall for all purposes be
deemed to be in the same position as a receiver duly appointed by a mortgagee
under the LPA save to the extent that the provisions of that Act are varied by
or are inconsistent with the provisions of this Deed when the provisions hereof
shall prevail and every such Receiver and the Collateral Agent shall in any
event be entitled to all the rights, powers, privileges and immunities conferred
by the Act on mortgagees and receivers duly appointed under the LPA.   8.2  
Indemnity       The Collateral Agent and every Receiver, attorney, delegate,
manager, agent or other person appointed by the Collateral Agent hereunder shall
be entitled to be indemnified out of the Securities or any part thereof in
respect of all liabilities and expenses incurred by it or him in the execution
of any of the powers, authorities or discretions vested in it or him pursuant to
this Deed and against all actions, proceedings, costs, claims and demands in
respect of any matter or thing done or omitted in any way relating to the
Securities or any part of them other than such liabilities, expenses, actions,
proceedings, costs, claims or demands incurred or suffered as a result of the
fraud or gross negligence of the Collateral Agent or any Receiver, attorney,
delegate, manager, agent or other person appointed by the Collateral Agent. The
Collateral Agent and any such Receiver may retain and pay all sums in respect of
which it is indemnified out of any monies received under the powers conferred by
this Deed.

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9.   APPOINTMENT OF RECEIVER   9.1   Appointment       At any time on or after
the Enforcement Date or at the request of the Company, the Collateral Agent may,
without prior notice to the Company, in writing (under seal, by deed or
otherwise under hand) appoint a Receiver in respect of the Securities or any
part thereof and may in like manner from time to time (and insofar as it is
lawfully able to do) remove any Receiver and appoint another in his stead.   9.2
  More than one Receiver       Where more than one Receiver is appointed, each
joint Receiver shall have the power to act severally, independently of any other
joint Receiver, except to the extent that the Collateral Agent may specify to
the contrary in the appointment.   9.3   Receiver as agent       A Receiver
shall be the agent of the Company which shall be solely responsible for his acts
or defaults and for his remuneration. No Receiver shall at any time act as agent
of any Secured Creditor.   9.4   Receiver’s remuneration       Subject to
section 36 of the Insolvency Act 1986, a Receiver shall be entitled to
remuneration for his services at a rate to be determined by the Collateral Agent
from time to time (and without being limited to any maximum rate specified by
any statute or statutory instrument). The Collateral Agent may direct payment of
such remuneration out of moneys accruing to the Receiver but the Company alone
shall be liable for the payment of such remuneration and for all other costs,
charges and expenses of the Receiver.   10.   RECEIVER’S POWERS   10.1   Powers
      A Receiver shall have (and be entitled to exercise) in relation to the
Securities over which he is appointed the following powers (as the same may be
varied or extended by the provisions of this Deed):

  (a)   all of the powers of a receiver or an administrative receiver set out in
Schedule 1 to the Insolvency Act 1986 (whether or not the Receiver is an
administrative receiver);     (b)   all of the powers conferred from time to
time on receivers, mortgagors and mortgagees in possession by the LPA or any
applicable law;     (c)   all the powers and rights of a legal and beneficial
owner and the power to do or omit to do anything which the Company itself could
do or omit to do; and     (d)   the power to do all things which, in the opinion
of the Receiver, are incidental to any of the powers, functions, authorities or
discretions conferred or vested

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      in the Receiver pursuant to this Deed or upon receivers by statute or law
generally (including, without limitation, the bringing or defending of
proceedings in the name of, or on behalf of, the Company; the collection and/or
realisation of Securities in such manner and on such terms as the Receiver sees
fit; and the execution of documents in the name of the Company (whether under
hand, or by way of deed or by utilisation of the company seal of the Company)).

10.2   Powers may be Restricted       The powers granted to a Receiver pursuant
to this Deed may be restricted by the instrument (signed by the Collateral
Agent) appointing him but they shall not be restricted by any winding-up or
dissolution of the Company.   11.   PROTECTION OF PURCHASERS   11.1   Absence of
enquiry       No person or persons dealing with the Collateral Agent or any
Receiver appointed by it shall be concerned to enquire whether any event has
happened upon which any of the powers in this Deed are or may be exercisable or
otherwise as to the propriety or regularity of any exercise of such powers or of
any act purporting or intended to be an exercise of such powers or whether any
amount remains secured by this Deed or whether the Secured Liabilities have
become payable or as to the application of any money paid to the Collateral
Agent or any Receiver. All the protections to purchasers and persons dealing
with receivers contained in sections 104, 107 and 109(4) of the LPA shall apply
to any person purchasing from or dealing with the Collateral Agent or any such
Receiver.   11.2   Receipt: conclusive discharge       The receipt of the
Collateral Agent or any Receiver shall be a conclusive discharge to any
purchaser of the Securities.   12.   POWER OF ATTORNEY AND DELEGATION   12.1  
Power of attorney: general       The Company hereby irrevocably and by way of
security appoints the Collateral Agent and any Receiver severally to be its
attorney in its name and on its behalf and as its act and deed:

  (a)   to execute and deliver any documents or instruments which the Collateral
Agent or such Receiver may require for perfecting the title of the Collateral
Agent to the Securities or for vesting the same in the Collateral Agent, its
nominee or any purchaser;     (b)   to sign, execute, seal and deliver and
otherwise perfect any further security document which the Company is required to
enter into pursuant to this Deed; and

13

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  (c)   otherwise generally to sign, seal, execute and deliver all deeds,
assurances, agreements and documents and to do all acts and things which (a) may
be required for the full exercise of all or any of the powers conferred on the
Collateral Agent or any Receiver under this Deed; or (b) the Company is required
to do pursuant to this Deed or (c) may be deemed expedient by the Collateral
Agent or a Receiver in connection with (i) any preservation, disposition,
realisation or getting in by the Collateral Agent or such Receiver of the
Securities or any part thereof or (ii) any other exercise of any other power
under this Deed.         The Collateral Agent confirms that it will only
exercise the rights set out in Clause 12.1 following the occurrence of a Default
or Event of Default under the Credit Documents.

12.2   Power of attorney: ratification       The Company ratifies and confirms
and agrees to ratify and confirm all acts and things which any attorney
mentioned in this Clause 12 (Power of attorney and delegation) shall do or
purport to do in exercise of the powers granted by this Clause. All monies
expended by any such attorney shall be deemed to be expenses incurred by the
Collateral Agent under this Deed.   12.3   General delegation

  (a)   The Collateral Agent and any Receiver (acting in good faith) shall have
full power to delegate the powers, authorities and discretions conferred on it
or him by this Deed (including the power of attorney) on such terms and
conditions as it or he shall see fit which shall not preclude exercise of those
powers, authorities or discretions by it or him or any revocation of the
delegation or any subsequent delegation.     (b)   Any such delegation may be
made upon such terms, consistent with the terms of the Credit Documents
(including power to sub-delegate) as the Collateral Agent may think fit.     (c)
  Save in the case of gross negligence or wilful misconduct by the Collateral
Agent (in each case as determined by a court of competent jurisdiction in a
final and non-appealable decision) in the exercise of its right to delegate, the
Collateral Agent shall not be in any way liable to the Company or any other
person for any losses, liabilities or expenses arising from any act, default,
omission or misconduct on the part of any such delegate or sub delegate.

13.   APPLICATION OF MONIES RECEIVED UNDER THIS DEED   13.1   Order of
application       Any monies received under the powers hereby conferred shall,
subject to the repayment of any claims having priority to this Deed, be applied
for the purposes and in the order of priority provided for in:

  (a)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and

14

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  (b)   following execution of the Intercreditor Agreement, the relevant
provision in the Intercreditor Agreement relating to application of proceeds
received under the Credit Documents.

13.2   Suspense account       The Collateral Agent may credit any monies
received under this Deed to an interest bearing suspense account for so long and
in such manner as the Collateral Agent may from time to time determine and the
Receiver may retain the same for such period as he and the Collateral Agent
consider appropriate.   14.   RELEASE OF SECURITY   14.1   Release       The
Collateral Agent shall, at the request and cost of the Company, execute or
procure the execution by its nominee of any documents (in each case in a form
acceptable to the Collateral Agent) and do all such deeds, acts and things as
are necessary to release the Securities from the Security created by or in
accordance with this Deed at the end of the Security Period.   14.2   Avoidance
of payments

  (a)   No amount paid, repaid or credited to a Secured Creditor shall be deemed
to have been irrevocably paid if the Collateral Agent (acting reasonably)
considers that the payment or credit of such amount is capable of being avoided
or reduced by virtue of any laws applicable on bankruptcy, insolvency,
liquidation or similar laws.     (b)   If any amount paid, repaid or credited to
a Secured Creditor is avoided or reduced by virtue of any laws applicable on
bankruptcy, insolvency, liquidation or similar laws then any release, discharge
or settlement between that Secured Creditor and the Company shall be deemed not
to have occurred and the Secured Creditors shall be entitled to enforce this
Deed subsequently as if such release, discharge or settlement had not occurred
and any such payment had not been made. The Company shall on demand indemnify
the Collateral Agent against any funding or other cost, loss, liability or
expense incurred by the Collateral Agent as a result of the Collateral Agent
being required for any reason to refund all or part of any amount received by it
in respect of any of the Secured Liabilities.

15.   NEW ACCOUNTS       If a Secured Creditor receives notice of any subsequent
charge or other interest affecting any part of the Securities it may, without
prejudice to its rights under this Deed, open a fresh account or fresh accounts
with the Company and continue any existing account in the name of the Company
and may appropriate to any such fresh account any monies thereafter paid in,
received or realised for the credit of the Company without being under any
obligation to apply the same or any part of them in discharge of any of the
Secured Liabilities. If a Secured Creditor shall fail to open such a fresh
account it shall be deemed to have done so with the effect that the said

15

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    monies shall not operate to reduce the Secured Liabilities at the time when
that Secured Creditor received notice.   16.   MISCELLANEOUS   16.1   The
Company       This Deed shall be binding on the successors and assigns of the
Company.   16.2   Assignment and transfer       The Company may not assign or
transfer any of its rights or obligations under this Deed without the prior
consent of each Lender. The Collateral Agent may assign and transfer all or any
part of its rights and obligations under this Deed to a replacement collateral
agent appointed pursuant to the terms of the Credit Agreement.   16.3  
Disclosure       The Collateral Agent may disclose to any of its Affiliates and
any other person:

  (a)   which is one of its professional advisers;     (b)   to (or through)
whom a Secured Creditor assigns or transfers (or may potentially assign or
transfer) all or any of its rights and obligations under this Deed and/or the
Credit Agreement;     (c)   which is a Receiver or prospective Receiver;     (d)
  (together with professional advisers) who may have an interest in the benefits
arising under this Deed;     (e)   to whom, and to the extent that, information
is required to be disclosed by any applicable law or regulation; or     (f)  
any other person not expressly referred to in sub-paragraphs (a) to (e) above
but otherwise described in section 11.16 (Confidentiality) of the Credit
Agreement,

    any information about the Company, the Credit Documents or this Deed as the
Collateral Agent shall consider appropriate if, in relation to Clause 16.3(b),
the person to whom the information is to be given has entered into a
Confidentiality Undertaking.

16.4   Property       This Deed is and will remain the property of the
Collateral Agent.   16.5   Continuing Security

  (a)   This Deed shall be a continuing security and shall not be discharged by
any intermediate payment or satisfaction of the whole or any part of the Secured
Liabilities.

16

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  (b)   If any purported obligation or liability of any Credit Party to the
Secured Creditors which if valid would have been the subject of any obligation
or charge created by this Deed is or becomes unenforceable, invalid or illegal
on any ground whatsoever whether or not known to any Secured Creditor, the
Company shall nevertheless be liable in respect of that purported obligation or
liability as if the same were fully valid and enforceable and the Company was
the principal debtor in respect thereof. The Company hereby agrees to keep the
Secured Creditors fully indemnified against all damages, losses, costs and
expenses arising from any failure of any Credit Party to carry out any such
purported obligation or liability.

16.6   Waiver of defences       The obligations of the Company under this Deed
will not be affected by an act, omission, matter or thing which, but for this
Clause 16.6, would reduce, release or prejudice any of its obligations under
this Deed (without limitation and whether or not known to any Secured Creditor)
including:

  (a)   any time, waiver or consent granted to, or composition with, the
Company, any Credit Party or other person;     (b)   the release of any Credit
Party or any other person under the terms of any composition or arrangement with
any creditor of any person;     (c)   the taking, variation, compromise,
exchange, renewal or release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, the Company, any Credit
Party or any other person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or any failure to
realise the full value of any security;     (d)   any incapacity or lack of
power, authority or legal personality of or dissolution or change in the members
or status of the Company, any Credit Party or any other person;     (e)   any
amendment (however fundamental) or replacement of any Credit Documents or any
other document or security;     (f)   any unenforceability, illegality or
invalidity of any obligation of any person under any Credit Documents or any
other document or security;     (g)   any insolvency or similar proceedings;    
(h)   any Secured Creditor disclosing to the Company any information relating to
the business, assets, financial condition or prospects of any other Credit Party
now or hereafter known to such Secured Creditor (the Company waiving any duty on
the part of the Secured Creditors to discuss such information);     (i)   the
existence of any claim, set-off or other right which the Company may at any time
have against the Collateral Agent or any other person; or

17

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  (j)   the making or absence of any demand for payment of any Secured
Liabilities or other obligations on the Company or any other person, whether by
the Collateral Agent or any other person.

16.7   Non-competition

  (a)   Until the Security Period has ended and unless the Collateral Agent
otherwise directs, the Company will not exercise any rights which it may have by
reason of performance by it of its obligations under this Deed:

  (i)   to be indemnified by any Credit Party (including any rights it may have
by way of subrogation);     (ii)   to claim any contribution from any guarantor
of any Credit Party of the obligations under the Credit Documents;     (iii)  
to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any right of the Collateral Agent or any of the other Secured
Creditors under any Credit Documents or of any other guarantee or security taken
pursuant to, or in connection with, the Credit Documents;     (iv)   to claim,
rank, prove or vote as a creditor of any Credit Party or its estate in
competition with the Collateral Agent or any of the other Secured Creditors;
and/or     (v)   receive, claim or have the benefit of any payment, distribution
or security from or on account of any Credit Party, or exercise any right of
set-off against any Credit Party.

  (b)   The Company shall hold on trust for and immediately pay or transfer to
the Collateral Agent any payment or distribution or benefit of security received
by it contrary to this Clause 16.7.

16.8   Additional Security       This Deed shall be in addition to and not be
affected by any other Security or guarantee now or hereafter held by any Secured
Creditor for all or any part of the Secured Liabilities nor shall any such other
Security or guarantee of liability to any Secured Creditor of or by any person
not a Party be in any way impaired or discharged by this Deed nor shall this
Deed in any way impair or discharge such other Security or guarantee.   16.9  
Variation of Security       This Deed shall not in any way be affected or
prejudiced by any Secured Creditor now or hereafter dealing with, exchanging,
releasing, varying or abstaining from perfecting or enforcing any security or
guarantee referred to in Clause 16.8 (Additional Security) above or any rights
which any Secured Creditor may now or hereafter have or giving time for payment
or granting any indulgence or compounding with any person whatsoever.

18

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16.10   Enforcement of other Security       No Secured Creditor shall be obliged
to enforce any other Security it may hold for, or exercise any other rights it
may have in relation to, the Secured Liabilities before enforcing any of its
rights under this Deed.   16.11   Perpetuity Period       If applicable, the
perpetuity period under the rule against perpetuities shall be 125 years from
the date of this Deed.   16.12   Redemption of Prior Security       The
Collateral Agent may redeem or take a transfer of any prior Security over the
Securities and may agree the accounts of prior encumbrancers. Such agreed
accounts shall be conclusive and binding on the Company. Any amount paid in
connection with such redemption or transfer (including expenses) shall be paid
on demand by the Company to the Collateral Agent and until such payment shall
form part of the Secured Liabilities.   16.13   Custody       The Collateral
Agent shall be entitled to keep all certificates and documents of title relating
to the Charged Assets in safe custody at any of its branches or otherwise
provide for their safe custody by third parties and shall not be responsible for
any loss or damage occurring to or in respect thereof unless such loss or damage
shall be caused by its own gross negligence or wilful default (in each case as
determined by a court of competent jurisdiction in a final and non-appealable
decision).   16.14   Costs and expense       Save to the extent that the same
has been recovered pursuant to section 11.01 (Payment of expenses, etc.) of the
Credit Agreement, the Company shall, within three Business Days of demand, pay
to the Collateral Agent, any Receiver, attorney, manager, agent or other person
appointed by the Collateral Agent under this Deed the amount of all costs and
expenses (including legal fees) incurred by that Collateral Agent, Receiver,
attorney, manager, agent or other person (as the case may be) in connection with
(i) the perfection, preservation, enforcement or attempted enforcement, of the
Security created by or contemplated by this Deed and/or (ii) the exercise of any
rights under this Deed.   17.   NOTICES   17.1   Communications in writing      
Any communication to be made under or in connection with this Deed shall be made
in writing and, unless otherwise stated, may be made by fax or letter.   17.2  
Addresses       The address and fax number (and the department or officer, if
any, for whose attention the communication is to be made) of the Company and the
Collateral Agent for any

19

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    communication or document to be made or delivered under or in connection
with this Deed is that identified with its name below:       Company

         
 
  Address:   Endeavour Energy UK Limited
 
      114 St. Martin’s Lane
 
      London WC2N 4BE
 
      England
 
       
 
  For the Attention of:   Mike Kirksey
 
       
 
  Fax Number:   +44 207 451 2352
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com
 
       
 
  With a copy to:   Endeavour International Corporation
 
      1001 Fannin Street, Suite 1600
 
      Houston, Texas 77002
 
      United States of America
 
       
 
  For the Attention of:   Mike Kirksey / Cathy Stubbs
 
       
 
  Fax Number:   +1 713 307 8794
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com /
 
      Cathy.Stubbs@endeavourcorp.com
 
       
 
  Collateral Agent    
 
       
 
  Address:   Cyan Partners, LP
 
      399 Park Avenue
 
      39th Floor
 
      New York 10022
 
      United States of America
 
       
 
  Fax Number:   +1 212 380 5871
 
       
 
  For the Attention of:   Divya Gopal

    or any substitute address, fax number or department or officer as the
Company may notify to the Collateral Agent or, as the case may be, the
Collateral Agent may notify to the Company, in each case by not less than five
Business Days’ notice.   17.3   Delivery

  (a)   Any communication or document made or delivered by one person to another
under or in connection with this Deed will only be effective:

  (i)   if by way of fax, when received in legible form; or

20

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  (ii)   if by way of letter, when it has been left at the relevant address or
five Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that address,

      and, if a particular department or officer is specified as part of its
address details provided under Clause 17.2 (Addresses), if addressed to that
department or officer.     (b)   Any communication or document to be made or
delivered to the Collateral Agent will be effective only when actually received
by it and then only if it is expressly marked for the attention of the
department or officer identified with the Collateral Agent’s name in Clause 17.2
(Addresses) (or any substitute department or officer as it shall specify for
this purpose).

18.   CERTIFICATES AND DETERMINATIONS       Any certificate or determination by
the Collateral Agent of a rate or amount under this Deed is, in the absence of
manifest error, conclusive evidence of the matters to which it relates.   19.  
PARTIAL INVALIDITY       If, at any time, any provision of this Deed is or
becomes illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision under
the law of any other jurisdiction will in any way be affected or impaired.   20.
  COUNTERPARTS       This Deed may be executed in any number of counterparts,
and this has the same effect as if the signatures on the counterparts were on a
single copy of this Deed.   21.   THIRD PARTIES       Save as expressly stated
in this Deed, a person who is not a Party to this Deed has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit
of any term of this Deed.   22.   GOVERNING LAW       This Deed and any dispute
or claim arising out of or in connection with it or its subject matter,
existence, negotiation, validity, termination or enforceability (including any
non-contractual disputes or claims) shall be governed by and construed in
accordance with English law.   23.   ENFORCEMENT   23.1   Jurisdiction

  (a)   The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Deed (including a dispute regarding
the

21

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      existence, validity or termination of this Deed or any non-contractual
obligation arising out of or in connection with this Deed) (a “Dispute”).    
(b)   The Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to the
contrary.     (c)   This Clause 23.1 (Jurisdiction) is for the benefit of the
Secured Creditors only. As a result, no Secured Creditor shall be prevented from
taking proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Secured Creditors may take concurrent
proceedings in any number of jurisdictions.

23.2   Waiver of immunity       The Company irrevocably and unconditionally:

  (a)   agrees not to claim any immunity from proceedings brought by a Secured
Creditor against it in relation to a Credit Document and to ensure that no such
claim is made on its behalf;     (b)   consents generally to the giving of any
relief or the issue of any process in connection with those proceedings; and    
(c)   waives all rights of immunity in respect of it or its assets.

IN WITNESS whereof this Deed has been duly executed as a deed on the date first
above written.

22

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SIGNED AS A DEED
)          
for and on behalf of
)           ENDEAVOUR ENERGY UK LIMITED   )     ENDEAVOUR ENERGY UK LIMITED by
acting by
)          
of 1001 Fannin Street, Suite 1600, Houston,
)          
Texas 77002, United States of America
)          
in the exercise of a power of attorney
)          
dated 3 August 2010 granted by
)    
 
   
ENDEAVOUR ENERGY UK LIMITED
)          
 
           

               
In the presence of:
             
 
             
Signature of witness
             
 
           
 
             
 
             
 
             
Name of witness
             
 
             
(in BLOCK CAPITALS)
             
 
           
 
             
 
             
 
             
Address of Witness
             
 
           
 
             
 
             
 
             
 
             

             
SIGNED by
  )          
 
  )          
for and on behalf of
  )          
CYAN PARTNERS, LP
  )          

23

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(WHITE LOGO) [h77219q7550702.gif]   EXECUTION COPY

 
Dated ____ August 2010
CHARGE OVER SHARES
between
ENDEAVOUR ENERGY NORTH SEA, L.P.
as the Company
and
CYAN PARTNERS, LP
as Collateral Agent
 
White & Case LLP
5 Old Broad Street
London EC2N 1DW

 

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TABLE OF CONTENTS

              Page  
1. DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS
    1  
2. SECURITY
    5  
3. REPRESENTATION
    5  
4. FURTHER ASSURANCE
    5  
5. UNDERTAKINGS WITH RESPECT TO THE SECURITIES
    6  
6. FURTHER UNDERTAKINGS
    7  
7. RIGHTS OF THE COLLATERAL AGENT
    10  
8. EXONERATION
    11  
9. APPOINTMENT OF RECEIVER
    12  
10. RECEIVER’S POWERS
    12  
11. PROTECTION OF PURCHASERS
    13  
12. POWER OF ATTORNEY AND DELEGATION
    13  
13. APPLICATION OF MONIES RECEIVED UNDER THIS DEED
    14  
14. RELEASE OF SECURITY
    15  
15. NEW ACCOUNTS
    15  
16. MISCELLANEOUS
    16  
17. NOTICES
    19  
18. CERTIFICATES AND DETERMINATIONS
    21  
19. PARTIAL INVALIDITY
    21  
20. COUNTERPARTS
    21  
21. THIRD PARTIES
    21  
22. GOVERNING LAW
    21  
23. ENFORCEMENT
    21  

(i)

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THIS DEED is made on ___ August 2010
BETWEEN:

(1)   ENDEAVOUR ENERGY NORTH SEA, L.P. (a company incorporated in the state of
Delaware, USA with registration number 4591023) whose registered office is at
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801,
United States of America (the “Company”); and   (2)   CYAN PARTNERS, LP as agent
and trustee for itself and each of the other Secured Creditors (the “Collateral
Agent”).

IT IS AGREED as follows:

1.   DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS   1.1   Definitions

  (a)   Terms defined in the Credit Agreement shall, unless otherwise defined in
this Deed or unless a contrary intention appears, bear the same meaning when
used in this Deed and the following terms shall have the following meanings:    
    “Borrower” means Endeavour Energy UK Limited, a wholly-owned subsidiary of
the Company.         “Confidentiality Undertaking” has the meaning given to such
term in the Debenture.         “Credit Agreement” means the term loan credit
agreement dated on or about the date of this Deed between (among others) the
Borrower and the Administrative Agent (as amended, modified, restated or
supplemented from time to time).         “Debenture” means the debenture dated
on or about the date of this Deed between the Borrower and the Collateral Agent.
        “Enforcement Date” means the date on which a notice is issued by the
Administrative Agent to the Borrower under section 9 (Events of Default) of the
Credit Agreement upon the occurrence of an Event of Default which is continuing.
        “Group” has the meaning given to it in the Debenture.         “LPA”
means the Law of Property Act 1925.         “Receiver” means any person
appointed by the Collateral Agent to be a receiver or receiver and manager or
administrative receiver of any property subject to the Security created by this
Deed or any part thereof.         “Related Property Rights” means, in relation
to any property or asset:

 

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  (a)   the proceeds of sale and/or other realisation of that property or asset
(or any part thereof or interest therein);     (b)   all Security, options,
agreements, rights, benefits, indemnities, guarantees, warranties or covenants
for title held by the Company in respect of such property or asset; and     (c)
  all the Company’s rights under any agreement in respect of such property or
asset.

    “Related Securities Rights” means all allotments, rights, benefits and
advantages (including all voting rights) whatsoever at any time accruing,
offered or arising in respect of or incidental to the Securities and all money
or property accruing or offered at any time by way of conversion, redemption,
bonus, preference, option, dividend, distribution, interest or otherwise in
respect of the Securities.       “Secured Creditors” has the meaning given to it
in the U.S. Security Agreement.       “Secured Liabilities” has the meaning
given to it in the Debenture (except that references to “this Debenture” shall
be construed as references to “this Deed”).       “Securities” means all of the
Company’s right, title, benefit and interest in all stocks, shares, bonds,
notes, warrants and other securities of any kind whatsoever now or in the future
legally or beneficially owned by the Company in the Borrower whether in bearer
or registered form and all Related Securities Rights whether the same are held
directly by or to the order of the Company or by any trustee, fiduciary,
clearance system, custody system or custodian on its behalf or whether the same
have been delivered to or to the order of the Collateral Agent or its nominee
including all Related Securities Rights, all Related Property Rights and all
rights against any such trustee, fiduciary, clearance system or other person
holding such to the order of the Company.       “Security” means a mortgage,
charge, pledge, lien or other security interest securing any obligation of any
person or any other agreement or arrangement having similar effect.      
“Security Period” means the period from the date of this Deed until the date on
which the Collateral Agent has determined that all of the Secured Liabilities
(whether actual or contingent) have been irrevocably and unconditionally paid
and discharged in full and no further Secured Liabilities are capable of being
outstanding.

    (b)   Unless a contrary intention appears, words defined in the Companies
Act 2006 have the same meanings in this Deed.

1.2   Construction       Unless a contrary indication appears, any reference in
this Deed to:

2

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  (a)   the “Collateral Agent”, a “Secured Creditor”, a “Credit Party” or the
“Company” shall be construed so as to include its successors in title, permitted
assigns and permitted transferees;     (b)   “assets” includes present and
future properties, revenues and rights of every description;     (c)   a
“person” includes any individual, firm, company, corporation, government, state
or agency of a state or any association, trust, joint venture, consortium or
partnership (whether or not having separate legal personality) or two or more of
the foregoing;     (d)   a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law but, if
not having the force of law, being of a kind that is normally complied with by
those to whom it is addressed) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;     (e)   a “guarantee” includes any form of
indemnity or other assurance against financial loss (including any obligation to
pay, purchase or provide funds for the purchase of any liability) and the verb
“to guarantee” shall be construed accordingly;     (f)   a provision of law is a
reference to that provision as amended or re-enacted;     (g)   any matter
“including” specific instances or examples of such matter shall be construed
without limitation to the generality of that matter (and references to “include”
shall be construed accordingly);     (h)   a “modification” includes an
amendment, supplement, novation, re-enactment, restatement, variation,
extension, replacement, modification or waiver or the giving of any waiver,
release, consent having the same commercial effect of any of the foregoing (and
“modify” shall be construed accordingly);     (i)   the “winding-up”,
“dissolution” or “administration” of a person shall be construed so as to
include any equivalent or analogous proceedings under the law of the
jurisdiction in which such person is incorporated or established, or any
jurisdiction in which such person carries on business including the seeking of
liquidation, winding-up, reorganisation, dissolution, administration,
arrangement, adjustment, protection or relief of debtors; and     (j)   the
words “other”, “or otherwise” and “whatsoever” shall not be construed eiusdem
generis or be construed as any limitation upon the generality of any preceding
words or matters specifically referred to.

1.3   Implied covenants for title       The obligations of the Company under
this Deed shall be in addition to the covenants for title deemed to be included
in this Deed by virtue of Part I of the Law of Property (Miscellaneous
Provisions) Act 1994.

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1.4   Effect as a Deed       This Deed is intended to take effect as a deed
notwithstanding that the Collateral Agent may have executed it under hand only.
  1.5   Law of Property (Miscellaneous Provisions) Act 1989       To the extent
necessary for any agreement for the disposition of the Securities in this Deed
to be a valid agreement under Section 2(1) of the Law of Property (Miscellaneous
Provisions) Act 1989, the terms of the other Credit Documents are incorporated
into this Deed.   1.6   Security trust provisions       The Company agrees that
the terms of clause 9 (Appointment of the Collateral Agent) of the Debenture are
incorporated into this Deed as if those terms were set out in full in this Deed.
    1.7   Potential Invalidity       The Security created by this Deed shall not
extend to nor include any liability or sum which would, but for this Deed, cause
any covenant, obligation or security to be unlawful under any applicable law.  
1.8   Intercreditor Agreement

  (a)   Upon execution of the Intercreditor Agreement, this Deed will be subject
to the terms of the Intercreditor Agreement.     (b)   In the event of any
inconsistency between a provision of this Deed and a provision of the
Intercreditor Agreement, the provision of the Intercreditor Agreement will
prevail.

1.9   Incorporation

  (a)   Without prejudice to the application of any other provisions of the
Credit Agreement to this Deed (by reason of this Deed being a Credit Document
for the purposes of the Credit Agreement), sections 4.04 (Tax Gross-Up and
Indemnities), 11.02 (Right of Setoff), 11.05 (No Waiver; Remedies Cumulative),
11.07 (Calculations; Computations), 11.09 (Counterparts), 11.12 (Amendment or
Waiver; etc.) and 11.19 (Judgment Currency) of the Credit Agreement shall apply
to this Deed, mutatis mutandis, as if the same had been set out in full herein
with references in such clauses to:

  (i)   any “Credit Party” or “Borrower” being construed, if the context so
requires, as references to the Company (as defined herein);     (ii)   the
“Agreement” being construed as references to this Deed;     (iii)   the
“parties” or “party” being construed as references to the parties or, as the
case may be, a Party to this Deed;

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  (iv)   the “Credit Documents” being construed as (a) including this Deed or
(b) if the context so requires, as references specifically to this Deed; and    
(v)   in the context of section 4.04 (Tax Gross-Up and Indemnities) of the
Credit Agreement, the “Administrative Agent” or a “Lender” being, if the context
so requires, construed, in each case, as references to the Collateral Agent and,
in the context of section 11.01(a)(ii) (Payment of Expenses, etc.) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being construed, in each
case, as references to each Secured Creditor, Receiver (as defined herein),
attorney, manager, agent or other person as may be appointed by the Collateral
Agent under this Deed; and

  (b)   A reference to “Secured Liabilities” includes any liabilities which
would be treated as such but for the liquidation of, or dissolution of, or
similar event affecting the Borrower.

2.   SECURITY       The Company hereby charges to the Collateral Agent by way of
first fixed charge with full title guarantee and as a continuing security for
the payment and discharge of the Secured Liabilities all of the Company’s rights
to and title and interest from time to time in all Securities.   3.  
REPRESENTATION       The Company has not registered one or more “establishments”
(as that term is defined in Part 1 of the Overseas Companies Regulations 2009)
with the Registrar of Companies (whether under its name of incorporation or
under any other name) or, if the Company has so registered, it has provided to
the Collateral Agent sufficient details to enable an accurate search against the
Company to be undertaken by the Administrative Agent at the Companies Registry.
  4.   FURTHER ASSURANCE       The Company shall at its own expense promptly
upon request by the Collateral Agent execute (in such form as the Collateral
Agent may reasonably require) such documents (including assignments, transfers,
mortgages, charges, notices and instructions) in favour of the Collateral Agent
or its nominees and do all such assurances and things as the Collateral Agent
may reasonably require for:

  (a)   perfecting and/or protecting (by registration or in any other way) the
Security created or intended to be created by this Deed;     (b)   conferring
upon the Collateral Agent such Security as it may require over the assets of the
Company outside of England and Wales which if in England or Wales would form
part of or be intended to form part of the Securities;     (c)   facilitating
the realisation of all or any part of the Securities; and

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  (d)   for exercising all powers, authorities and discretions conferred on the
Collateral Agent or any Receiver pursuant to this Deed or by law.

5.   UNDERTAKINGS WITH RESPECT TO THE SECURITIES       The Company undertakes to
the Collateral Agent with respect to the Securities that it shall:   5.1  
Negative Pledge       except as permitted by section 8.01 (Liens) of the Credit
Agreement:

  (a)   not create or allow to exist any Security on, over, or affecting, any of
its assets; and     (b)   procure that no member of the Group creates or allows
to exist any Security on, over, or affecting, any of its assets;

5.2   Disposals       except as permitted by section 8.02 (Consolidation,
Merger, Purchase or Sale of Assets, etc.) of the Credit Agreement not, either in
a single transaction or in a series of transactions and whether related or not,
dispose of the Securities or any part of them;   5.3   Prejudicial action      
not do or cause or permit to be done anything which may in any way depreciate,
jeopardise or otherwise prejudice the value to the Collateral Agent of the
Securities;   5.4   Consents and other necessary action       take all such
action as is available to it and is reasonably necessary for the purpose of
creating, perfecting or maintaining the Security created or intended to be
created pursuant to this Deed which shall include, without limitation, using
reasonable endeavours to obtain any necessary consent (in form and content
satisfactory to the Collateral Agent, acting reasonably) to enable all or any of
the Securities to be mortgaged or charged pursuant to this Deed. Immediately
upon obtaining any necessary consent the asset concerned shall become subject to
the Security created by this Deed. The Company shall promptly deliver a copy of
each consent to the Collateral Agent;   5.5   Communications       promptly
deliver to the Collateral Agent a copy of every circular, notice, resolution,
minutes or other documents received by it in connection with the Securities; and
  5.6   Nominees       not appoint and has not appointed any nominee to exercise
or enjoy all or any of its rights in relation to the Securities.

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6.   FURTHER UNDERTAKINGS   6.1   Deposit of title documents       The Company
shall (i) immediately upon the execution of this Deed and (ii) within three (3)
Business Days of the date of issuance by the Borrower of any additional
Securities deposit with the Collateral Agent or its nominee:

  (a)   all stock and share certificates and documents of, or evidencing, title
or the right to title relating to the Securities;     (b)   duly stamped stock
transfer forms or other instruments of transfer duly completed to the Collateral
Agent’s satisfaction; and     (c)   such other documents as the Collateral Agent
may require from time to time for the purpose of perfecting its title to the
Securities or for the purpose of vesting the same in itself, its nominee or any
purchaser or presenting the same for registration at any time.

6.2   Registration of transfers       The Company shall procure that, as and
when required by the Collateral Agent following the Enforcement Date, all
Securities which are in registered form are duly registered in the name of the
Collateral Agent or its nominee once a transfer relating to those Securities is
presented for that purpose.   6.3   Information       The Company undertakes
that it shall, promptly following receipt, deliver to the Collateral Agent a
copy of every document received by it or its nominees in connection with any of
the Securities or any issuer of those Securities.   6.4   Calls

  (a)   The Company shall duly and promptly pay all calls, instalments or other
payments which may be due and payable in respect of the Securities and, for the
avoidance of doubt, no Secured Creditor shall incur any liability in respect of
any amounts due from the Company in respect of the Securities.     (b)   If the
Company fails to comply with 6.4(a) above the Collateral Agent may pay the calls
or other payments on behalf of the Company. The Company must promptly on request
from the Collateral Agent reimburse the Collateral Agent for any such payment.

6.5   Dividends

  (a)   Before the Enforcement Date, the Company shall be entitled to receive
all declared cash dividends or other monies which may be paid or payable in
respect of the Securities.     (b)   On and after the Enforcement Date, the
Collateral Agent (or its nominee) shall be entitled to complete all instruments
of transfer in relation to the Securities

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      of the Company on behalf of the Company in favour of itself or such other
person it shall elect and otherwise have any Securities registered in its name
or in the name of its nominees and receive all dividends or other monies which
may be paid or payable in respect of the Securities. The Company shall, to the
extent that such dividends or other monies have not been paid directly to the
Collateral Agent (or its nominee), take all steps as may be required to ensure
that such dividends or other monies are paid to the Collateral Agent (or its
nominee). In any event, any such dividends or other monies received by the
Company shall, on and after the Enforcement Date, be held on trust by the
Company for the Collateral Agent (or its nominee) and shall be paid to the
Collateral Agent (or its nominee).

6.6   Voting Rights and other matters

  (a)   Prior to the Enforcement Date and save as otherwise provided in this
Clause 6.6, the Company shall exercise all voting rights in respect of the
Securities provided that the Company shall not exercise such voting rights in
any manner which, in the reasonable opinion of the Collateral Agent, may
prejudice the interest of the Secured Creditors in the Securities or in breach
of any Credit Documents and may prejudice the value of, or the ability of the
Collateral Agent to realise, the Security over the Securities created pursuant
to this Deed.     (b)   The Company shall not, without the prior written consent
of the Collateral Agent, permit or agree to any variation of the rights
attaching to or conferred by any of the Securities, participate in any rights
issue, elect to receive or vote in favour of receiving any dividends or other
distributions other than in the form of cash or participate in any vote
concerning a members voluntary winding-up or a compromise or arrangement
pursuant to sections 895-901 of the Companies Act 2006.     (c)   At any time on
or after the Enforcement Date the Collateral Agent may in such manner and on
such terms as it sees fit (in the name of the Company or otherwise and without
the need for further consent from the Company):

  (i)   exercise (or refrain from exercising) any voting rights in respect of
the Securities or, as the case may be, require the Company to exercise (or
refrain from exercising) any such voting rights in such manner as it considers
fit (including all powers given to trustees under Part II of the Trustee Act
2000) in which event, the Company shall comply with all such directions of the
Collateral Agent; and/or     (ii)   complete all instruments of transfer in
relation to the Security of the Company on behalf of the Company in favour of
itself or such other person as it shall select and otherwise have any Security
registered in its name or the name of its nominee; and/or     (iii)   apply all
dividends and other monies arising from the Securities in accordance with Clause
13 (Application of monies received under this Deed); and/or

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  (iv)   without prejudice to any other provision of this Deed, transfer the
Securities into the name of a nominee or transferee of the Collateral Agent as
the Collateral Agent may require; and/or     (v)   exercise (or refrain from
exercising) all or any of the powers and rights conferred upon or exercisable by
the legal or beneficial owner of the Securities or as the case may be, require
the Company to exercise (or refrain from exercising) all or any such powers and
rights in such manner as it considers fit in which event, the Company shall
comply with all such directions of the Collateral Agent.

  (d)   After the Enforcement Date, the Company shall:

  (i)   comply or procure the compliance, with any directions of the Collateral
Agent in respect of the exercise of any rights and powers exercisable in
relation to such Security; and     (ii)   if the Collateral Agent so requests,
promptly deliver to the Collateral Agent a form of proxy or authority (in each
case, in such form as the Collateral Agent shall reasonably require) appointing
such person as the Collateral Agent shall elect to be the proxy of the Company
or otherwise enabling such person as the Collateral Agent shall select to
exercise such voting rights and other rights and powers as shall be specified
(whether generally or specifically) in the relevant notice.

6.7   Redemption       The Company will not redeem or take any step to redeem
any redeemable Securities save to the extent that such redemption would not
breach the terms of the Credit Documents.   6.8   Liability of Collateral Agent
      The Company agrees with the Collateral Agent that neither the Collateral
Agent nor its nominee will have any liability for:

  (a)   failing to present any coupon or other document relating to any of the
Securities;     (b)   accepting or failing to accept any offer relating to any
of the Securities;     (c)   failing to attend or vote at any meetings relating
to the Securities;     (d)   failing to notify the Company of any matters
mentioned in this Clause 6.8 or of any communication received by the Collateral
Agent in relation to the Securities; or     (e)   any loss arising out of or in
connection with the exercise or non-exercise of any rights or powers attaching
or accruing to the Securities or which may be exercised by the Collateral Agent
or any nominee for the Collateral Agent under this Deed (whether or not on sale
or other realisation of the Securities a

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      better price could have or might have been obtained by either deferring or
advancing the date of sale or realisation or otherwise).

7.   RIGHTS OF THE COLLATERAL AGENT   7.1   Enforcement       At any time on or
after the Enforcement Date the Security created pursuant to this Deed shall be
immediately enforceable and the Collateral Agent may in its absolute discretion
and without notice to the Company or the prior authorisation of any court:

  (a)   enforce all or any part of the Security created by this Deed and take
possession of or dispose of all or any of the Securities in each case at such
times and upon such terms as it sees fit; and     (b)   whether or not it has
appointed a Receiver, exercise all of the powers, authorities and discretions:

  (i)   conferred from time to time on mortgagees by the LPA (as varied or
extended by this Deed) or by law; and     (ii)   granted to a Receiver by this
Deed or by law.

7.2   Restrictions on consolidation of mortgages       Section 93 of the LPA
shall not apply to this Deed or to any sale made under it. The Collateral Agent
shall have the right to consolidate all or any of the Security created by or
pursuant to this Deed with any other Security in existence at any time. Such
power may be exercised by the Collateral Agent at any time on or after the
Enforcement Date.   7.3   Restrictions on exercise of power of sale      
Section 103 of the LPA shall not apply to this Deed and the power of sale
arising under the LPA shall arise on the date of this Deed (and the Secured
Liabilities shall be deemed to have become due and payable for that purpose).
The power of sale and other powers conferred by Section 101 of the LPA as varied
or extended by this Deed and those powers conferred (expressly or by reference)
on a Receiver shall be immediately exercisable by the Collateral Agent at any
time on or after the Enforcement Date.   7.4   No prior notice needed       The
powers of the Collateral Agent set out in Clauses 7.2 (Restrictions on
consolidation of mortgages) and 7.3 (Restrictions on exercise of power of sale)
above may be exercised by the Collateral Agent without prior notice to the
Company.   7.5   Right of appropriation

  (a)   Without prejudice to the other provisions of this Deed, to the extent
that any of the Securities constitute “financial collateral”, and this Deed and
the obligations of the Company hereunder constitute a “security financial

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      collateral agreement” (in each case as defined in, and for the purposes
of, the Financial Collateral Arrangements (No.2) Regulations 2003 (SI 2003/3226)
(the “Regulations”), the Collateral Agent shall at any time on and after the
Enforcement Date have the right to appropriate all or any part of those
Securities in or towards discharge of the Secured Liabilities. For this purpose,
the parties agree that the value of any such Securities so appropriated shall be
the market price of such Securities at the time the right of appropriation is
exercised as determined by the Collateral Agent by reference to such method or
source of valuation as the Collateral Agent may select, including by independent
valuation. The parties agree that the methods or sources of valuation provided
for in this Clause 7.5 (Right of appropriation) or selected by the Collateral
Agent in accordance with this Clause 7.5 (Right of appropriation) shall
constitute a commercially reasonable method of valuation for the purposes of the
Regulations.     (b)   The Collateral Agent shall notify the Company as soon as
reasonably practicable of the exercise of its rights of appropriation as regards
such of the Securities as are specified in such notice.

8.   EXONERATION   8.1   Exoneration       No Secured Creditor shall, nor shall
any Receiver, by reason of it or the Receiver entering into possession of the
Securities or any part thereof, be liable to account as mortgagee in possession
or be liable for any loss or realisation or for any default or omission for
which a mortgagee in possession might be liable; but every Receiver duly
appointed by the Collateral Agent under this Deed shall for all purposes be
deemed to be in the same position as a receiver duly appointed by a mortgagee
under the LPA save to the extent that the provisions of that Act are varied by
or are inconsistent with the provisions of this Deed when the provisions hereof
shall prevail and every such Receiver and the Collateral Agent shall in any
event be entitled to all the rights, powers, privileges and immunities conferred
by the Act on mortgagees and receivers duly appointed under the LPA.   8.2  
Indemnity       The Collateral Agent and every Receiver, attorney, delegate,
manager, agent or other person appointed by the Collateral Agent hereunder shall
be entitled to be indemnified out of the Securities or any part thereof in
respect of all liabilities and expenses incurred by it or him in the execution
of any of the powers, authorities or discretions vested in it or him pursuant to
this Deed and against all actions, proceedings, costs, claims and demands in
respect of any matter or thing done or omitted in any way relating to the
Securities or any part of them other than such liabilities, expenses, actions,
proceedings, costs, claims or demands incurred or suffered as a result of the
fraud or gross negligence of the Collateral Agent or any Receiver, attorney,
delegate, manager, agent or other person appointed by the Collateral Agent. The
Collateral Agent and any such Receiver may retain and pay all sums in respect of
which it is indemnified out of any monies received under the powers conferred by
this Deed.

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9.   APPOINTMENT OF RECEIVER   9.1   Appointment       At any time on or after
the Enforcement Date or at the request of the Company, the Collateral Agent may,
without prior notice to the Company, in writing (under seal, by deed or
otherwise under hand) appoint a Receiver in respect of the Securities or any
part thereof and may in like manner from time to time (and insofar as it is
lawfully able to do) remove any Receiver and appoint another in his stead.   9.2
  More than one Receiver       Where more than one Receiver is appointed, each
joint Receiver shall have the power to act severally, independently of any other
joint Receiver, except to the extent that the Collateral Agent may specify to
the contrary in the appointment.   9.3   Receiver as agent       A Receiver
shall be the agent of the Company which shall be solely responsible for his acts
or defaults and for his remuneration. No Receiver shall at any time act as agent
of any Secured Creditor.   9.4   Receiver’s remuneration       Subject to
section 36 of the Insolvency Act 1986, a Receiver shall be entitled to
remuneration for his services at a rate to be determined by the Collateral Agent
from time to time (and without being limited to any maximum rate specified by
any statute or statutory instrument). The Collateral Agent may direct payment of
such remuneration out of moneys accruing to the Receiver but the Company alone
shall be liable for the payment of such remuneration and for all other costs,
charges and expenses of the Receiver.   10.   RECEIVER’S POWERS   10.1   Powers
      A Receiver shall have (and be entitled to exercise) in relation to the
Securities over which he is appointed the following powers (as the same may be
varied or extended by the provisions of this Deed):

  (a)   all of the powers of a receiver or an administrative receiver set out in
Schedule 1 to the Insolvency Act 1986 (whether or not the Receiver is an
administrative receiver);     (b)   all of the powers conferred from time to
time on receivers, mortgagors and mortgagees in possession by the LPA or any
applicable law;     (c)   all the powers and rights of a legal and beneficial
owner and the power to do or omit to do anything which the Company itself could
do or omit to do; and     (d)   the power to do all things which, in the opinion
of the Receiver, are incidental to any of the powers, functions, authorities or
discretions conferred or vested

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      in the Receiver pursuant to this Deed or upon receivers by statute or law
generally (including, without limitation, the bringing or defending of
proceedings in the name of, or on behalf of, the Company; the collection and/or
realisation of Securities in such manner and on such terms as the Receiver sees
fit; and the execution of documents in the name of the Company (whether under
hand, or by way of deed or by utilisation of the company seal of the Company)).

10.2   Powers may be Restricted       The powers granted to a Receiver pursuant
to this Deed may be restricted by the instrument (signed by the Collateral
Agent) appointing him but they shall not be restricted by any winding-up or
dissolution of the Company.   11.   PROTECTION OF PURCHASERS   11.1   Absence of
enquiry       No person or persons dealing with the Collateral Agent or any
Receiver appointed by it shall be concerned to enquire whether any event has
happened upon which any of the powers in this Deed are or may be exercisable or
otherwise as to the propriety or regularity of any exercise of such powers or of
any act purporting or intended to be an exercise of such powers or whether any
amount remains secured by this Deed or whether the Secured Liabilities have
become payable or as to the application of any money paid to the Collateral
Agent or any Receiver. All the protections to purchasers and persons dealing
with receivers contained in sections 104, 107 and 109(4) of the LPA shall apply
to any person purchasing from or dealing with the Collateral Agent or any such
Receiver.   11.2   Receipt: conclusive discharge       The receipt of the
Collateral Agent or any Receiver shall be a conclusive discharge to any
purchaser of the Securities.   12.   POWER OF ATTORNEY AND DELEGATION   12.1  
Power of attorney: general       The Company hereby irrevocably and by way of
security appoints the Collateral Agent and any Receiver severally to be its
attorney in its name and on its behalf and as its act and deed:

  (a)   to execute and deliver any documents or instruments which the Collateral
Agent or such Receiver may require for perfecting the title of the Collateral
Agent to the Securities or for vesting the same in the Collateral Agent, its
nominee or any purchaser;     (b)   to sign, execute, seal and deliver and
otherwise perfect any further security document which the Company is required to
enter into pursuant to this Deed; and

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  (c)   otherwise generally to sign, seal, execute and deliver all deeds,
assurances, agreements and documents and to do all acts and things which (a) may
be required for the full exercise of all or any of the powers conferred on the
Collateral Agent or any Receiver under this Deed; or (b) the Company is required
to do pursuant to this Deed or (c) may be deemed expedient by the Collateral
Agent or a Receiver in connection with (i) any preservation, disposition,
realisation or getting in by the Collateral Agent or such Receiver of the
Securities or any part thereof or (ii) any other exercise of any other power
under this Deed.

    The Collateral Agent confirms that it will only exercise the rights set out
in Clause 12.1 following the occurrence of a Default or Event of Default under
the Credit Documents.   12.2   Power of attorney: ratification       The Company
ratifies and confirms and agrees to ratify and confirm all acts and things which
any attorney mentioned in this Clause 12 (Power of attorney and delegation)
shall do or purport to do in exercise of the powers granted by this Clause. All
monies expended by any such attorney shall be deemed to be expenses incurred by
the Collateral Agent under this Deed.   12.3   General delegation

  (a)   The Collateral Agent and any Receiver (acting in good faith) shall have
full power to delegate the powers, authorities and discretions conferred on it
or him by this Deed (including the power of attorney) on such terms and
conditions as it or he shall see fit which shall not preclude exercise of those
powers, authorities or discretions by it or him or any revocation of the
delegation or any subsequent delegation.     (b)   Any such delegation may be
made upon such terms, consistent with the terms of the Credit Documents
(including power to sub-delegate) as the Collateral Agent may think fit.     (c)
  Save in the case of gross negligence or wilful misconduct by the Collateral
Agent (in each case as determined by a court of competent jurisdiction in a
final and non-appealable decision) in the exercise of its right to delegate, the
Collateral Agent shall not be in any way liable to the Company or any other
person for any losses, liabilities or expenses arising from any act, default,
omission or misconduct on the part of any such delegate or sub delegate.

13.   APPLICATION OF MONIES RECEIVED UNDER THIS DEED   13.1   Order of
application       Any monies received under the powers hereby conferred shall,
subject to the repayment of any claims having priority to this Deed, be applied
for the purposes and in the order of priority provided for in:

  (a)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and

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  (b)   following execution of the Intercreditor Agreement, the relevant
provision in the Intercreditor Agreement relating to application of proceeds
received under the Credit Documents.

13.2   Suspense account       The Collateral Agent may credit any monies
received under this Deed to an interest bearing suspense account for so long and
in such manner as the Collateral Agent may from time to time determine and the
Receiver may retain the same for such period as he and the Collateral Agent
consider appropriate.   14.   RELEASE OF SECURITY   14.1   Release       The
Collateral Agent shall, at the request and cost of the Company, execute or
procure the execution by its nominee of any documents (in each case in a form
acceptable to the Collateral Agent) and do all such deeds, acts and things as
are necessary to release the Securities from the Security created by or in
accordance with this Deed at the end of the Security Period.   14.2   Avoidance
of payments

  (a)   No amount paid, repaid or credited to a Secured Creditor shall be deemed
to have been irrevocably paid if the Collateral Agent (acting reasonably)
considers that the payment or credit of such amount is capable of being avoided
or reduced by virtue of any laws applicable on bankruptcy, insolvency,
liquidation or similar laws.     (b)   If any amount paid, repaid or credited to
a Secured Creditor is avoided or reduced by virtue of any laws applicable on
bankruptcy, insolvency, liquidation or similar laws then any release, discharge
or settlement between that Secured Creditor and the Company shall be deemed not
to have occurred and the Secured Creditors shall be entitled to enforce this
Deed subsequently as if such release, discharge or settlement had not occurred
and any such payment had not been made. The Company shall on demand indemnify
the Collateral Agent against any funding or other cost, loss, liability or
expense incurred by the Collateral Agent as a result of the Collateral Agent
being required for any reason to refund all or part of any amount received by it
in respect of any of the Secured Liabilities.

15.   NEW ACCOUNTS       If a Secured Creditor receives notice of any subsequent
charge or other interest affecting any part of the Securities it may, without
prejudice to its rights under this Deed, open a fresh account or fresh accounts
with the Company and continue any existing account in the name of the Company
and may appropriate to any such fresh account any monies thereafter paid in,
received or realised for the credit of the Company without being under any
obligation to apply the same or any part of them in discharge of any of the
Secured Liabilities. If a Secured Creditor shall fail to open such a fresh
account it shall be deemed to have done so with the effect that the said

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    monies shall not operate to reduce the Secured Liabilities at the time when
that Secured Creditor received notice.   16.   MISCELLANEOUS   16.1   The
Company       This Deed shall be binding on the successors and assigns of the
Company.   16.2   Assignment and transfer       The Company may not assign or
transfer any of its rights or obligations under this Deed without the prior
consent of each Lender. The Collateral Agent may assign and transfer all or any
part of its rights and obligations under this Deed to a replacement collateral
agent appointed pursuant to the terms of the Credit Agreement.   16.3  
Disclosure       The Collateral Agent may disclose to any of its Affiliates and
any other person:

  (a)   which is one of its professional advisers;     (b)   to (or through)
whom a Secured Creditor assigns or transfers (or may potentially assign or
transfer) all or any of its rights and obligations under this Deed and/or the
Credit Agreement;     (c)   which is a Receiver or prospective Receiver;     (d)
  (together with professional advisers) who may have an interest in the benefits
arising under this Deed;     (e)   to whom, and to the extent that, information
is required to be disclosed by any applicable law or regulation; or     (f)  
any other person not expressly referred to in sub-paragraphs (a) to (e) above
but otherwise described in section 11.16 (Confidentiality) of the Credit
Agreement,

    any information about the Company, the Credit Documents or this Deed as the
Collateral Agent shall consider appropriate if, in relation to Clause 16.3(b),
the person to whom the information is to be given has entered into a
Confidentiality Undertaking.   16.4   Property       This Deed is and will
remain the property of the Collateral Agent.   16.5   Continuing Security

  (a)   This Deed shall be a continuing security and shall not be discharged by
any intermediate payment or satisfaction of the whole or any part of the Secured
Liabilities.

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  (b)   If any purported obligation or liability of any Credit Party to the
Secured Creditors which if valid would have been the subject of any obligation
or charge created by this Deed is or becomes unenforceable, invalid or illegal
on any ground whatsoever whether or not known to any Secured Creditor, the
Company shall nevertheless be liable in respect of that purported obligation or
liability as if the same were fully valid and enforceable and the Company was
the principal debtor in respect thereof. The Company hereby agrees to keep the
Secured Creditors fully indemnified against all damages, losses, costs and
expenses arising from any failure of any Credit Party to carry out any such
purported obligation or liability.

16.6   Waiver of defences       The obligations of the Company under this Deed
will not be affected by an act, omission, matter or thing which, but for this
Clause 16.6, would reduce, release or prejudice any of its obligations under
this Deed (without limitation and whether or not known to any Secured Creditor)
including:

  (a)   any time, waiver or consent granted to, or composition with, the
Company, any Credit Party or other person;     (b)   the release of any Credit
Party or any other person under the terms of any composition or arrangement with
any creditor of any person;     (c)   the taking, variation, compromise,
exchange, renewal or release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, the Company, any Credit
Party or any other person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or any failure to
realise the full value of any security;     (d)   any incapacity or lack of
power, authority or legal personality of or dissolution or change in the members
or status of the Company, any Credit Party or any other person;     (e)   any
amendment (however fundamental) or replacement of any Credit Documents or any
other document or security;     (f)   any unenforceability, illegality or
invalidity of any obligation of any person under any Credit Documents or any
other document or security;     (g)   any insolvency or similar proceedings;    
(h)   any Secured Creditor disclosing to the Company any information relating to
the business, assets, financial condition or prospects of any other Credit Party
now or hereafter known to such Secured Creditor (the Company waiving any duty on
the part of the Secured Creditors to discuss such information);     (i)   the
existence of any claim, set-off or other right which the Company may at any time
have against the Collateral Agent or any other person; or

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  (j)   the making or absence of any demand for payment of any Secured
Liabilities or other obligations on the Company or any other person, whether by
the Collateral Agent or any other person.

16.7   Non-competition

  (a)   Until the Security Period has ended and unless the Collateral Agent
otherwise directs, the Company will not exercise any rights which it may have by
reason of performance by it of its obligations under this Deed:

  (i)   to be indemnified by any Credit Party (including any rights it may have
by way of subrogation);     (ii)   to claim any contribution from any guarantor
of any Credit Party of the obligations under the Credit Documents;     (iii)  
to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any right of the Collateral Agent or any of the other Secured
Creditors under any Credit Documents or of any other guarantee or security taken
pursuant to, or in connection with, the Credit Documents;     (iv)   to claim,
rank, prove or vote as a creditor of any Credit Party or its estate in
competition with the Collateral Agent or any of the other Secured Creditors;
and/or     (v)   receive, claim or have the benefit of any payment, distribution
or security from or on account of any Credit Party, or exercise any right of
set-off against any Credit Party.

  (b)   The Company shall hold on trust for and immediately pay or transfer to
the Collateral Agent any payment or distribution or benefit of security received
by it contrary to this Clause 16.7.

16.8   Additional Security       This Deed shall be in addition to and not be
affected by any other Security or guarantee now or hereafter held by any Secured
Creditor for all or any part of the Secured Liabilities nor shall any such other
Security or guarantee of liability to any Secured Creditor of or by any person
not a Party be in any way impaired or discharged by this Deed nor shall this
Deed in any way impair or discharge such other Security or guarantee.   16.9  
Variation of Security       This Deed shall not in any way be affected or
prejudiced by any Secured Creditor now or hereafter dealing with, exchanging,
releasing, varying or abstaining from perfecting or enforcing any security or
guarantee referred to in Clause 16.8 (Additional Security) above or any rights
which any Secured Creditor may now or hereafter have or giving time for payment
or granting any indulgence or compounding with any person whatsoever.

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16.10   Enforcement of other Security       No Secured Creditor shall be obliged
to enforce any other Security it may hold for, or exercise any other rights it
may have in relation to, the Secured Liabilities before enforcing any of its
rights under this Deed.   16.11   Perpetuity Period       If applicable, the
perpetuity period under the rule against perpetuities shall be 125 years from
the date of this Deed.   16.12   Redemption of Prior Security       The
Collateral Agent may redeem or take a transfer of any prior Security over the
Securities and may agree the accounts of prior encumbrancers. Such agreed
accounts shall be conclusive and binding on the Company. Any amount paid in
connection with such redemption or transfer (including expenses) shall be paid
on demand by the Company to the Collateral Agent and until such payment shall
form part of the Secured Liabilities.   16.13   Custody       The Collateral
Agent shall be entitled to keep all certificates and documents of title relating
to the Charged Assets in safe custody at any of its branches or otherwise
provide for their safe custody by third parties and shall not be responsible for
any loss or damage occurring to or in respect thereof unless such loss or damage
shall be caused by its own gross negligence or wilful default (in each case as
determined by a court of competent jurisdiction in a final and non-appealable
decision).   16.14   Costs and expense       Save to the extent that the same
has been recovered pursuant to section 11.01 (Payment of expenses, etc.) of the
Credit Agreement, the Company shall, within three Business Days of demand, pay
to the Collateral Agent, any Receiver, attorney, manager, agent or other person
appointed by the Collateral Agent under this Deed the amount of all costs and
expenses (including legal fees) incurred by that Collateral Agent, Receiver,
attorney, manager, agent or other person (as the case may be) in connection with
(i) the perfection, preservation, enforcement or attempted enforcement, of the
Security created by or contemplated by this Deed and/or (ii) the exercise of any
rights under this Deed.   17.   NOTICES   17.1   Communications in writing      
Any communication to be made under or in connection with this Deed shall be made
in writing and, unless otherwise stated, may be made by fax or letter.   17.2  
Addresses       The address and fax number (and the department or officer, if
any, for whose attention the communication is to be made) of the Company and the
Collateral Agent for any

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    communication or document to be made or delivered under or in connection
with this Deed is that identified with its name below:

         
 
  Company    
 
       
 
  Address:   Endeavour Energy North Sea, L.P.
 
      c/o Corporation Trust Company
 
      1209 Orange Street
 
      Wilmington
 
      Delaware 19801
 
      United States of America
 
       
 
  For the Attention of:    Mike Kirksey
 
       
 
  With a copy to:   Endeavour Energy North Sea, L.P.
 
      c/o Endeavour International Corporation
 
      1001 Fannin Street, Suite 1600
 
      Houston, Texas 77002
 
      United States of America
 
       
 
  For the Attention of:   Mike Kirksey / Cathy Stubbs
 
       
 
  Fax Number:   +1 713 307 8794
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com /
 
      Cathy.Stubbs@endeavourcorp.com
 
       
 
  Collateral Agent    
 
       
 
  Address:   Cyan Partners, LP
 
      399 Park Avenue
 
      39th Floor
 
      New York 10022
 
      United States of America
 
       
 
  Fax Number:   +1 212 380 5871
 
       
 
  For the Attention of:   Divya Gopal

    or any substitute address, fax number or department or officer as the
Company may notify to the Collateral Agent or, as the case may be, the
Collateral Agent may notify to the Company, in each case by not less than five
Business Days’ notice.   17.3   Delivery

  (a)   Any communication or document made or delivered by one person to another
under or in connection with this Deed will only be effective:

  (i)   if by way of fax, when received in legible form; or

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  (ii)   if by way of letter, when it has been left at the relevant address or
five Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that address,

      and, if a particular department or officer is specified as part of its
address details provided under Clause 17.2 (Addresses), if addressed to that
department or officer.     (b)   Any communication or document to be made or
delivered to the Collateral Agent will be effective only when actually received
by it and then only if it is expressly marked for the attention of the
department or officer identified with the Collateral Agent’s name in Clause 17.2
(Addresses) (or any substitute department or officer as it shall specify for
this purpose).

18.   CERTIFICATES AND DETERMINATIONS       Any certificate or determination by
the Collateral Agent of a rate or amount under this Deed is, in the absence of
manifest error, conclusive evidence of the matters to which it relates.   19.  
PARTIAL INVALIDITY       If, at any time, any provision of this Deed is or
becomes illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of such provision under
the law of any other jurisdiction will in any way be affected or impaired.   20.
  COUNTERPARTS       This Deed may be executed in any number of counterparts,
and this has the same effect as if the signatures on the counterparts were on a
single copy of this Deed.   21.   THIRD PARTIES       Save as expressly stated
in this Deed, a person who is not a Party to this Deed has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit
of any term of this Deed.   22.   GOVERNING LAW       This Deed and any dispute
or claim arising out of or in connection with it or its subject matter,
existence, negotiation, validity, termination or enforceability (including any
non-contractual disputes or claims) shall be governed by and construed in
accordance with English law.   23.   ENFORCEMENT   23.1   Jurisdiction

  (a)   The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Deed (including a dispute regarding
the

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      existence, validity or termination of this Deed or any non-contractual
obligation arising out of or in connection with this Deed) (a “Dispute”).    
(b)   The Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue to the
contrary.     (c)   This Clause 23.1 (Jurisdiction) is for the benefit of the
Secured Creditors only. As a result, no Secured Creditor shall be prevented from
taking proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Secured Creditors may take concurrent
proceedings in any number of jurisdictions.

23.2   Waiver of immunity       The Company irrevocably and unconditionally:

  (a)   agrees not to claim any immunity from proceedings brought by a Secured
Creditor against it in relation to a Credit Document and to ensure that no such
claim is made on its behalf;     (b)   consents generally to the giving of any
relief or the issue of any process in connection with those proceedings; and    
(c)   waives all rights of immunity in respect of it or its assets.

IN WITNESS whereof this Deed has been duly executed as a deed on the date first
above written.

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SIGNED AS A DEED by
        )  
ENDEAVOUR ENERGY NORTH SEA, L.P.
        )  
acting by
        )   Endeavour Energy North Sea LLC, as sole general     )  
partner
        )  
 
        )  
In the presence of:
        )  
 
        )  
 
           
Signature of witness
           
 
           
 
           
 
           
 
           
Name of witness
           
 
           
(in BLOCK CAPITALS)
           
 
           
 
           
 
           
 
           
Address of witness
           
 
           
 
           
 
           
 
           
 
           
 
           
 
           
SIGNED by
        )  
 
        )  
for and on behalf of
        )  
CYAN PARTNERS, LP
        )  
 
        )  
 
        )  

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Exhibit F-4
EG/JJK
Deed of pledge of shares
Endeavour International Holding B.V.
On this, the sixteenth day of August two thousand and ten, appeared before me,
Albert Hendrik Geerling, civil law notary at Rotterdam, the Netherlands:

1.   Jan Joris van Kampen, employed at the offices of me, civil law notary,
located at 3014 DA Rotterdam, the Netherlands, Weena 750, born in Amsterdam, the
Netherlands, on the nineteenth day of January nineteen hundred eighty-three, and
acting for the purpose of this deed as the holder of a written power of attorney
from:

  a.   Endeavour Operating Corporation a company incorporated and existing under
the laws of the State of Delaware, United States of America, having its
registered office at 1000 Main Street, Suite 3300, Houston, Texas, 77002, United
States of America which company is hereinafter referred to as: the ‘Pledgor’;  
  b.   Endeavour International Holding B.V. a company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid), having its corporate
seat at Amsterdam, the Netherlands (address: 1043 EJ Amsterdam, the Netherlands
Teleportboulevard 140, Trade Register number 34229293), which company is
hereinafter referred to as: the ‘Company’; and

2.   Jesler Jan Hartman Kok, born at Groningen, the Netherlands on the
twenty-sixth day of November nineteen hundred eighty, residing at 3031 SK
Rotterdam, the Netherlands, Brussestraat 18c, holder of Dutch passport number
NK5917452, acting for the purpose of this deed as the holder of a written power
of attorney from Cyan Partners, LP, a company organised and existing under the
laws of the State of Delaware, United States of America having its registered
office at 399 Park Avenue, New York, New York, United States of America 10022,
which company is hereinafter referred to as: the ‘Pledgee’.

Powers of attorney
The powers of attorney are evidenced by three (3) private deeds, which will be
attached to this deed.
The persons appearing, acting in their capacities as mentioned above, declared
as follows:

A.   on the sixteenth day of August two thousand and ten, inter alios, the
Pledgee (as Administrative Agent, Sole Arranger and Sole Book Runner), Endeavour
Energy UK Limited as Borrower, and Endeavour International Corporation as
Holdings, entered into a one hundred and sixty million American dollars (USD
160,000,000) term loan facility agreement (the ‘Credit Agreement’);   B.   on
the sixteenth day of August two thousand and ten, inter alios, the Pledgee, the
Pledgor and the Company entered into a guarantee agreement pursuant to which
inter alios each of the Pledgor and the Company guarantees any and all
obligations to pay an amount of money (verplichtingen tot voldoening van een
geldsom), whether present or future, actual or contingent, that may at any time
be owing by a Credit Party (as defined in the Credit Agreement) to the Secured

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    Creditors (as defined in the Credit Agreement) under or pursuant to the
Credit Documents (as defined in the Credit Agreement) (the “Subsidiary
Guaranty”);

C.   the Present Shares (as defined below) were acquired by the Pledgor by
virtue of the deed of incorporation of the Company, executed on the
twenty-seventh of June two thousand and five before M.P. Bongard, civil-law
notary in Amsterdam;   D.   the Pledgor has agreed to execute this present deed
of pledge of shares (the “Deed”) as security for the payment when due of the
Secured Obligations (as defined below);   E.   it is envisaged that the Existing
Security (as defined below) will be terminated pursuant to a letter of
termination of rights of pledge to be issued and signed by or on behalf of BNP
Paribas S.A. and to be signed for acknowledgement and receipt by — inter alios -
the Pledgor and the Company;   F.   it has been agreed that the voting rights
attaching to the Shares (as defined below) will be vested in the Pledgee subject
to the suspensive conditions (opschortende voorwaarden) set out in Clause 3
(Rights in respect of the Voting Rights) of this Deed;   G.   the articles of
association of the Company permit the creation of a right of pledge on the
shares in its capital and the vesting of voting rights attaching to such shares
in the Pledgee;   H.   the general meeting of shareholders of the Company has
resolved to give the legally required approval for the creation of the right of
pledge, including the vesting of the voting rights attaching to the Shares (as
defined below) in the Pledgee, as evidenced by resolutions of the general
meeting of shareholders of the Company dated twenty nine July two thousand ten.

Consequently, the persons appearing declared:
It is hereby agreed as follows:

1.   Definitions and interpretation   1.1   All capitalized terms used in this
Deed including the recitals, and not otherwise defined herein shall have the
meaning assigned to them in the Credit Agreement.   1.2   a. Headings are for
convenience of reference only.

  b.   Where the context so permits, the singular includes the plural and vice
versa.     c.   Save where the contrary is indicated, any reference in this Deed
to the parties or a party to this Deed shall be construed so as to include its
or their respective successors, transferees and assigns from time to time and
any successor of such a successor, transferee or assign in accordance with their
respective interests.     d.   A ‘clause’ shall, subject to any indication to
the contrary, be construed as a reference to a clause of this Deed.

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  e.   References to the Credit Agreement, the (other) Credit Documents, this
Deed, or any other agreement or document shall, where applicable, be deemed to
be references to such Credit Agreement, the (other) Credit Documents, this Deed,
or any other agreement or document as the same may have been, or may from time
to time be, extended, prolonged, amended, restated, supplemented, renewed or
novated, as persons may accede thereto as a party or withdraw therefrom as a
party in part or in whole or be released thereunder in part or in whole, and as
facilities and financial services are or may from time to time be granted,
extended, prolonged, increased, reduced, cancelled, withdrawn, amended,
restated, supplemented, renewed or novated there under.     f.   A statute or
statutory provision shall be construed as a reference to such statute or
statutory provision as the same may have been, or may from time to time be,
amended or re-enacted and all instruments, orders, plans, regulations, by-laws,
permissions and directions at any time made there under.     g.   References to
the Dutch Civil Code are references to het Nederlands Burgerlijk Wetboek,
references to the Dutch Bankruptcy Act are references to de Nederlandse
Faillissementswet.

1.3   In this Deed the following words and expressions shall have the following
meaning:

  •   ‘Collateral’ means (i) the Shares and (ii) the Rights;     •   ‘Conditions
Precedent’ means each of the following conditions precedent (opschortende
voorwaarden): (i) the termination of the Existing Security, (ii) the occurrence
of an Event of Default, and (iii) the issuance of a Voting Rights Notice;     •
  ‘Default Notice’ means a notice in writing to be issued by the Pledgee to the
Pledgor and the Company upon or after the occurrence of an Event of Default;    
•   ‘Enforcement Event’ means the issuance of a Default Notice following an
Event of Default which also constitutes a default (verzuim) in the fulfillment
of the Secured Obligations within the meaning of Article 3:248 of the Dutch
Civil Code;     •   ‘Existing Security’ means the rights of pledge and all other
security interests created or purported to be created under or pursuant to:

  (a)   a notarial deed of first ranking pledge over the Present Shares dated
first of November two thousand six executed before H.B.H. Kraak, civil law
notary at Amsterdam between the Pledgor as pledgor, BNP Paribas S.A. as pledgee
and the Company as the company;     (b)   a notarial deed of second ranking
pledge over the Present Shares

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      dated seven March two thousand eight executed before P.H.N. Quist, civil
law notary at Amsterdam between the Pledgor as pledgor, BNP Paribas S.A. as
pledgee and the Company as the company; and

  (c)   a notarial deed of third ranking pledge over the Present Shares dated
eight February two thousand ten executed before P.H.N. Quist, civil law notary
at Amsterdam between the Pledgor as pledgor, BNP Paribas S.A. as pledgee and the
Company as the company;

  •   ‘Future Rights’ means any and all Rights in respect of Future Shares;    
•   ‘Future Shares’ means all shares in the capital of the Company which the
Pledgor may hold at any time, which may be issued to or acquired by the Pledgor
after the date of this Deed;     •   ‘Intercreditor Agreement’ has the meaning
ascribed thereto in the Credit Agreement;     •   ‘Parallel Debt’ has the
meaning ascribed thereto in clause 2 (Parallel Debt) of the Subsidiary Guaranty;
    •   ‘Parallel Obligations’ means the obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor to the Pledgee
arising from the Parallel Debt;     •   ‘Present Shares’ means one hundred
percent (100%) of the registered and paid-up shares in the issued capital of the
Company, being one hundred eighty (180) shares, each with a nominal value of one
hundred Euro (EUR 100.-), numbered 1 to 180 inclusive;     •   ‘Principal
Obligations’ means any and all obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor under or pursuant
to the Credit Documents (whether now existing or hereafter created or arising)
together with all monies and liabilities payable or to be discharged by the
Pledgor pursuant to the terms of this Deed, other than obligations to pay an
amount of money (verplichtingen tot voldoening van een geldsom) under the
Parallel Obligations;     •   ‘Rights’ means any and all rights to or under
dividends, other distributions, proceeds, options, warrants, claim rights and
other similar rights, other than shares in the capital of the Company, currently
existing or in the future arising or received with respect to or out of the
Shares but excluding the Voting Rights;     •   ‘Rights of Pledge’ means each of
the rights of pledge created under this Deed;     •   ‘Secured Obligations’
means collectively the Parallel Obligations and the Principal Obligations to the
extent owing to the Pledgee;     •   ‘Security Period’ means the period
beginning on the date hereof and

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      ending on the earliest date upon which (a) all Secured Obligations have
been irrevocably paid and discharged, or have ceased to exist, and (b) all
Rights of Pledge have been released and discharged by the Pledgee in accordance
with clause 8.2 below;

  •   ‘Shares’ means the Present Shares and the Future Shares;     •   ‘Voting
Rights’ means the voting rights attached to the Shares;     •   ‘Voting Rights
Notice’ means a notice in writing by the Pledgee to the Pledgor and the Company
that it wishes to exercise the Voting Rights.

2.   Pledge of the Shares and the other Collateral   2.1   The Pledgor hereby
agrees with the Pledgee and hereby undertakes that the Pledgor shall grant to
the Pledgee the rights of pledge purported to be granted under or pursuant to
this Deed.   2.2   As security for the payment and discharge in full, when due
(whether at stated maturity, by acceleration or otherwise), of the Secured
Obligations, the Pledgor hereby grants, to the Pledgee a right of pledge
(pandrecht), on the Present Shares and, to the extent legally possible hereby
grants in advance (verpandt bij voorbaat) to the Pledgee a right of pledge on
the Future Shares, and the Pledgee hereby accepts such rights of pledge.      
To the extent no valid pledge on the Future Shares is created by this Deed, the
Pledgor irrevocably and unconditionally undertakes to pledge to the Pledgee the
Future Shares immediately after the Pledgor has acquired such shares.   2.3  
Subject to clause 3.2 with respect to dividends and other distributions, the
Pledgor, to the extent such pledge is not included in the Rights of Pledge in
respect of the Shares, and to the fullest extent possible as permitted by
applicable law, hereby pledges the Rights in favor of the Pledgee as security
for the full and prompt payment and discharge of its Secured Obligations and the
Pledgee accepts such pledge.       To the extent no valid pledge on the Rights
is created hereunder, the Pledgor, irrevocably and unconditionally undertakes,
immediately on demand by the Pledgee, to pledge in favor of the Pledgee and to
assign to the Pledgee the Rights subject to clause 3.2. under the same terms and
the same conditions as set forth in this Deed.   2.4   The Pledgor irrevocably
and unconditionally undertakes to take such action (including the execution of
documents to be made up in form and substance satisfactory to the Pledgee) as
and when the Pledgee deems necessary in its reasonable opinion from time to time
to create, perfect and maintain a valid and enforceable right of pledge in favor
of the Pledgee with respect to the Collateral (and thereupon the Collateral
shall become subject to a right of pledge as provided in this Deed).   2.5   The
Pledgor hereby grants to the Pledgee an irrevocable and non-exclusive power of
attorney (without obligation) to pledge to the Pledgee the Future Shares
immediately after the Pledgor has acquired such shares.

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    This power of attorney includes the right of substitution.

2.6   Each of the Rights of Pledge is one and indivisible (één en ondeelbaar).
Partial fulfillment of the Secured Obligations shall not extinguish the Rights
of Pledge proportionally.   2.7   The Rights of Pledge include all accessory
rights (afhankelijke rechten) and all ancillary rights (nevenrechten) attached
to the Collateral.   2.8   The Company is hereby notified of the Rights of
Pledge created by this Deed.   3.   Rights in respect of the Voting Rights   3.1
  The Voting Rights are hereby vested in the Pledgee within the meaning of
article 2:198 paragraph 3 of the Dutch Civil Code, subject to the Conditions
Precedent being satisfied. Therefore, provided that the Conditions Precedent
have not been satisfied, the Pledgor shall remain entitled and authorized to
exercise the Voting Rights, provided that the Pledgor may not exercise the
Voting Rights in any manner which could be prejudicial to any of the Secured
Creditors. As long as the Conditions Precedent have not been satisfied, the
Pledgee shall not have the rights which are granted to the holders of depositary
receipts issued for shares with the cooperation of a company.   3.2   Upon the
Conditions Precedent having been satisfied:

  i.   the Pledgee shall be fully entitled, to the exclusion of the Pledgor, to
exercise the Voting Rights pertaining to the Shares;     ii.   in the event
Dutch company law prevents the Voting Rights to return to the Pledgor when the
respective Event of Default has been cured or waived by the Pledgee, the Pledgee
shall at the request of the Pledgor (not to be unreasonably withheld or delayed)
give a power of attorney to the Pledgor to exercise the Voting Rights for as
long as no new Voting Rights Notice has been issued.         For the duration of
such power of attorney clauses 3.2 (i) is not applicable.         Upon a new
Voting Rights Notice being issued, the power of attorney shall automatically
terminate.         The Pledgor may not exercise the Voting Rights in any manner
which could be prejudicial to any of the Secured Creditors.

4.   Dividends and other distributions upon issuance of Default Notice   4.1  
Subject to Clause 4.2 of this Deed and subject to the suspensive condition
(opschortende voorwaarde)of the termination of the Existing Security the Pledgee
shall be entitled to receive, retain and utilize any and all dividends and other
distributions received in cash or other payment of money in respect of the
Collateral.   4.2   The Pledgee grants permission to the Pledgor, within the
meaning of article 3:246 paragraph 4 of the Dutch Civil Code to receive, retain
and utilize any and all dividends and other distributions received in cash or
other payment of

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    money in respect of the Collateral until such permission has been withdrawn
by means of a Default Notice issued by the Pledgee.

4.3   Upon the Default Notice being issued:

  i.   all rights of the Pledgor to receive dividends and other distributions
pursuant to the Rights shall automatically cease, and thereupon the Pledgee
shall have the sole right to receive and hold as collateral such dividends and
other distributions and such dividends or other distributions must be paid
directly to the Pledgee or as it may direct;     ii.   the Pledgee shall be
entitled to collect any repayment on the Shares (terugbetaling op aandelen) and
all liquidation proceeds, if any, which are to be distributed in respect of the
Shares upon dissolution and liquidation of the Company or otherwise;     iii.  
all payments which are received by the Pledgor contrary to the provisions- of
this clause 4 shall be received on behalf of and for the benefit of the Pledgee,
shall be segregated from the other assets of the Pledgor and shall be
immediately paid over or delivered (with any necessary endorsements) to the
Pledgee or its authorized designee or as the Pledgee may otherwise direct as
collateral in the exact form as received, to be held by the Pledgee as
collateral and as further collateral security for the Secured Obligations. This
is without prejudice to any right the Pledgee may have against the person who
made the payment.

5. Representations and warranties

    The Pledgor represents and warrants that the following is true and correct
on the date of this Deed and each time any Future Shares and/or Future Rights
will be pledged to the Pledgee:

  i.   the Present Shares are and each Future Share will be, fully paid-up and
the Collateral is free and clear of any lien, charge, encumbrance with any
restricted rights (beperkte rechten), attachment (beslag), or any other right or
security interest whatsoever, other than: (i) those created under this Deed,
(ii) the Existing Security and (iii) and any encumbrances permitted under the
Credit Documents;     ii.   the Pledgor holds full and exclusive title to the
Collateral and is authorized (beschikkingsbevoegd) to create a right of pledge
thereover;     iii.   the Pledgor acquired the Present Shares by incorporation
of the Company, executed by deed on the twenty-seventh of June two thousand and
five before M.P. Bongard, civil-law notary in Amsterdam;     iv.   no depositary
receipts (certificaten van aandelen) have been issued for the Present Shares or
will be issued for the Future Shares with the concurrence of the Company; and  
  v.   all information provided by the Pledgor with regard to this deed is
correct and complete.

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6 Undertakings

6.1   Except to the extent permitted pursuant to the Credit Documents, the
Pledgor undertakes not to waive without the prior written consent of the Pledgee
(not to be unreasonably withheld or delayed), any accessory rights (afhankelijke
rechten) or ancillary rights (nevenrechten) attached to the Collateral and in
general not to perform any acts which result or could result in a material
reduction of the value of the Shares.   6.2   Except to the extent permitted
pursuant to the Credit Documents, the Pledgor shall not, without the prior
written consent of the Pledgee (not to be unreasonably withheld or delayed),
transfer or further pledge or otherwise encumber any of the Shares or agree to a
court settlement or an out-of-court settlement (gerechtelijk or
buitengerechtelijk akkoord) in respect of the Shares.   6.3   The Pledgor shall,
at the Pledgee’s first request, provide in the English language the Pledgee all
information and supporting documentation relating to the Collateral and allow
the Pledgee to inspect its administrative records during office hours, all of
the foregoing to the extent required by the Pledgee (acting reasonably) for the
purpose of this Deed. The Pledgor shall forthwith inform the Pledgee of any
attachment (beslag) over any part of the Collateral.       The pledgor shall:

  i.   send the Pledgee a copy of the relevant attachment or seizure
documentation as well as all other documents required under applicable law for
challenging the attachment or seizure (if and to the extent possible);     ii.  
notify the third party or the court process server acting on behalf of such
third party in writing of the Pledgee’s interest over the Collateral; and    
iii.   take such measures as may reasonably be required to protect the Pledgee’s
interest over the Collateral.

6.4   The Pledgor covenants for the benefit of the Pledgee throughout the
Security Period to co-operate with the Pledgee in the collection and recovery of
the Collateral and to render all reasonable assistance as may be required
pursuant to any exchange regulations and/or foreign statutory rules or other
rules, including the taking of any legal action that the Pledgee may deem
necessary in connection therewith after the issuance of a Default Notice to it.
  6.5   In addition and without prejudice to the obligations of the Pledgor
pursuant to clauses 6.3 and 6.4 above, the Pledgor shall notify the Pledgee
promptly of any event or circumstance which could reasonably be of importance to
the Pledgee with a view to the preservation and exercise of the Pledgee’s rights
under or pursuant to this Deed.

7 Enforcement and power of attorney

7.1   Without prejudice to any other right or remedy available to the Pledgee,
following the occurrence of an Enforcement Event the Pledgee shall be empowered,
at its discretion, to immediately enforce the Rights of Pledge against the

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    Pledgor without any (further) notice of default being required and the
Pledgee may immediately exercise in respect of any and all of the Shares any and
all of its rights and powers set out in this Deed (subject to restrictions
following from mandatory provisions of law) irrespective of whether the Pledgee
or any of the Secured Creditors shall have proceeded against or claimed payment
from any party liable for any of the Secured Obligations.

  7.2   Upon the occurrence of an Event of Default, the Pledgee shall be
entitled to sell or procure the sale of the Collateral forthwith, all to the
extent permitted by applicable laws.         To the fullest extent permitted by
law, the Pledgor waives (which waiver the Pledgee hereby accepts) any right it
may have (i) pursuant to section 3:234 Dutch Civil Code to demand, in the event
that the Pledgee enforces the Rights of Pledge, that the Pledgee shall also
enforce any of the security interests (zekerheidsrechten) granted by any of the
Credit Partys and (ii) of requiring the Pledgee to firstly proceed against or
claim payment from any person or entity or enforce any guarantee or security
granted by any other person or entity before enforcing the Rights of Pledge
and/or any other rights under this Deed.     7.3   The Pledgor will not be
entitled to request the summary proceedings judge (voorzieningenrechter) of the
district court to order that the Collateral shall be sold in a manner deviating
from the provision of section 3:250 Dutch Civil Code.     7.4   In the event
that the Pledgee forecloses or intends to foreclose the Rights of Pledge, it
will not be obliged to give notice (thereof) (as provided in section 3:249 and
section 3:252 Dutch Civil Code) to the Pledgor or any person having the benefit
of an encumbrance on Collateral comprised in such Rights of Pledge (save as may
be otherwise provided in the Credit Documents).     7.5   The Pledgee shall
apply the proceeds of the Collateral and the foreclosure of the Rights of Pledge
or any of them in satisfaction of the Secured Obligations, in each case in
accordance with the Credit Agreement, the Intercreditor Agreement and in
accordance with applicable provisions of Dutch law.     7.6   In addition to the
undertakings contained in clause 2.4 above, the Pledgor shall at any time, upon
written request of the Pledgee after the issuance of a Default Notice to the
Pledgor, execute and cause to be filed, at such Pledgor’s expense, such
documents and instruments, and do such other acts and things, as the Pledgee may
reasonably deem desirable in obtaining the full benefits of this Deed (including
the protection and preservation of its rights) and of the rights and powers
granted hereunder or granted to a pledgee under the laws of the Netherlands.    
7.7   The Pledgor hereby grants to the Pledgee (and any of its delegates) an
irrevocable power of attorney (the ‘Power of Attorney’) in accordance with
section 3:74 (1) Dutch Civil Code to, following the issuance of a Default Notice
to it, perform all acts and execute all documents in order to perfect or
implement

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      this Deed on its behalf, and to take all actions which are necessary for
the Pledgee (and any of its delegates) to create, maintain, protect, preserve
and exercise its rights under this Deed (acting reasonably). The parties agree
that section 3:68 (Selbsteintritt) Dutch Civil Code will not apply and to the
extent necessary, the Pledgor hereby waives any rights it may have under section
3:68 Dutch Civil Code, which waiver the Pledgee hereby accepts.

8   Termination   8.1   The Pledgee is entitled to terminate by notice
(opzeggen) in whole or in part any Right of Pledge on all or part of the
Collateral and the contractual arrangements set forth herein.       Notice of
termination must be given in writing by the Pledgee to the Pledgor.   8.2   The
Rights of Pledge or any of them shall terminate by operation of law when all
Secured Obligations have been unconditionally and irrevocably paid and
discharged in full and all obligations under the Credit Documents have
terminated.       At the request of the Pledgor, the Pledgee shall confirm such
termination in writing and will execute all documents reasonably requested by
the Pledgor in relation thereto (at the expense of the Pledgor).   9.  
Assignment and information   9.1   Subject to the relevant provisions of the
Credit Documents, the Pledgee (but not, for the avoidance of doubt, the Pledgor)
shall be entitled to assign and/or transfer all or part of its rights and
obligations under this Deed to any assignee and/or transferee.   9.2   The
Pledgor hereby in advance gives its irrevocable consent to (geeft toestemming
bij voorbaat) within the meaning of section 6:156 Dutch Civil Code and hereby in
advance irrevocably co-operates with (verleent bij voorbaat mede-werking aan),
within the meaning of sections 6:159 and 6:156 Dutch Civil Code, any such
assignment and/or transfer executed in accordance with the relevant provisions
of the Credit Documents, including by means of an assumption of debt
(schuldoverneming) or transfer of agreement (contracts-overneming), as the case
may be, hereunder.   9.3   If the Pledgee assigns and transfers its rights or
obligations and the relevant transferee is subrogated in the rights of the
Pledgee (in de rechten van de pandhouder treedt) in respect of the Rights of
Pledge, the Pledgor must promptly ensure that the conditional transfer of voting
rights to that person will be effected in accordance with section 2:198
(3) Dutch Civil Code.   9.4   The Pledgee shall be entitled to impart any
information concerning the Pledgor to any successor or proposed successor,
subject to any confidentiality provision of the Credit Agreement.   10.  
Records of Pledgee       Subject to proof to the contrary, the records of the
Pledgee shall be conclusive

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    evidence (dwingend bewijs) of the existence and amount of the Secured
Obligations, subject to and in accordance with the terms of the Credit Documents
and this Deed.

11.   Costs       Subject to any provision to the contrary herein, all costs
reasonably incurred in connection with the creation of the Rights of Pledge and
the performance by the parties of their rights and obligations under this Deed
shall be for the account of the persons or entities designated in or pursuant to
the Credit Agreement and shall be settled in accordance therewith.   12.  
Notices       Any notices and other communications under or in connection with
this Deed shall be given in accordance with clause 11.03 of the Credit
Agreement.   13.   Suspension of rights and indemnity   13.1   Throughout the
Security Period, the Pledgor shall not:

  i.   receive, claim or have the benefit of any payment, distribution or
security from or on account of any Credit Party under any indemnity or otherwise
or exercise its rights of defense, suspension, retention, set off or counter
claim as against any Credit Party;     ii.   take recourse (verhaal) or take any
other step to enforce any right against any Borrower or Guarantor or their
respective assets; and     iii.   claim or vote in competition with the Pledgee
or any of the other Secured Creditors in the bankruptcy, suspension of payment
or liquidation or analogous circumstance of any Credit Part,

    except in each case, in such manner and upon such terms as the Pledgee,
acting reasonably, may require.       Subject to the condition precedent
(opschortende voorwaarde) that the Pledgee exercises its rights to enforce the
Rights of Pledge in accordance with Clause 7 of this Deed, the Pledgor hereby
waives in advance any rights it may have as set out under (i), (ii) and
(iii) above, which waiver is hereby accepted by the Pledgee.       Any payment,
distribution or security received by the Pledgor contrary to the provisions of
this Deed shall be received and held by the Pledgor as custodian (bewaarnemer)
for the benefit of the Pledgee and the other Secured Creditors and shall,
pending payment or transfer to the Pledgee, to the extent legally possible, be
segregated from the other assets of the Pledgor and shall be forthwith paid over
or transferred to the Pledgee.       If notwithstanding the above the Pledgor
exercises any right of defense, suspension, retention, set off or counter claim
in respect of any amount, it shall forthwith pay an amount equal to such amount
to the Pledgee.   13.2   The Pledgee shall not be liable to the Pledgor under or
pursuant to the Credit Documents whatsoever except for its willful misconduct
(opzet) or gross negligence (grove schuld).

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14.   Limitation, waiver       The Pledgor waives, to the fullest extent
permitted by law, its right (i) to dissolve this Deed, pursuant to section 6:265
Dutch Civil Code or on any other ground or (ii) to avoid this Deed, including
but not limited to error (dwaling), which waiver the Pledgee hereby accepts.  
15.   Security interest absolute       All rights of the Pledgee, the Rights of
Pledge and all obligations of the Pledgor hereunder shall be absolute and
unconditional irrespective of:

  i.   any change in the time, manner or place of payment of the Secured
Obligations or any change of or amendment to the Credit Documents and any other
document related thereto, or any other agreement or instrument relating to any
of them; or     ii.   any exchange, release or non perfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any other collateral for the Secured Obligations.

16.   Amendment of this Deed       This Deed may only be amended by a written
agreement between the Pledgor and the Pledgee (with the consent of the other
Secured Creditors under the Credit Documents), to the extent required by Dutch
law, executed before a Dutch civil-law notary.   17.   Governing law and
jurisdiction       This Deed shall be governed by and construed in accordance
with the laws of the Netherlands.       The Pledgor consents to the exclusive
jurisdiction of the courts of Amsterdam, the Netherlands.       The Pledgor
hereby waives any objection that it may now or hereafter have to the
jurisdiction of such courts, which waiver the Pledgee hereby accepts.       This
clause is for the benefit of the Pledgee only and shall not limit its right to
bring proceedings against the Pledgor in connection with this Deed or the Credit
Documents in any other court of competent jurisdiction or concurrently in more
than one jurisdiction.   18.   Severability of provisions   18.1   Any provision
of this Deed which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.   18.2   The parties hereto agree that they will negotiate in good
faith to replace any provision hereof held invalid, illegal or unenforceable as
set out in clause 18.1 above with a valid provision which is as similar as
possible in substance to the invalid, illegal or unenforceable provision.

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  19.   Remedies and prevalence   19.1   The rights and remedies of the Pledgee
herein, and the obligations, representations and warranties of the Pledgor
herein, are cumulative and are not exclusive of any rights or remedies of the
Pledgee, or obligations, representations or warranties of the Pledgor, conferred
or imposed by law or the Credit Documents.   19.2   To the extent there is a
conflict between the provisions of the Credit Documents and this Deed, the
provisions of the Credit Documents shall prevail (but only to the extent that
the validity and enforceability of the pledges created or purported to be
created pursuant this Deed and the powers of attorney given pursuant this Deed
are not affected as a consequence).   20.   Final Provisions   20.1   With due
observance of article 20 of the articles of association of the Company, the
Pledgor, having given the members of the Management Board of the Company the
opportunity to cast their advisory votes, as holder of all of the shares in the
share capital of the Company herewith resolves, without holding a meeting of
shareholders, to approve this Deed including, without limitation, the Rights of
Pledge and the transfer of the Voting Rights on the Shares subject to the
Conditions Precedent having been satisfied.   20.2   The person appearing
referred to under 1 above, acting as representative of the Company, declared
that the Company has always accepted as valid the transfer by which the Pledgor
acquired the Present Shares and all previous transfers of the Present Shares,
that the Company acknowledges the right of pledge created by this Deed on the
Present Shares, and that the Company will cause the right of pledge on the
Present Shares to be recorded in its shareholders register without delay.
Furthermore, the person appearing referred to under A above, acting as
representative of the Company, declared that the Company acknowledges the right
of pledge created by this Deed on the Future Shares and undertakes to enter such
right of pledge in its shareholders register without delay as soon as the
Pledgor becomes the holder of the Future Shares.   20.3   The Pledgor, the
Pledgee and the Company are aware of the fact that the undersigned civil law
notary works with NautaDutilh N.V., the firm that has advised the Pledgee in
this transaction. With reference to the Code of Conduct (Verordening beroeps- en
gedragsregels) of the Royal Notarial Professional organisation (Koninklijke
Notariële Beroepsorganisatie KNB), the parties to this Deed herewith explicitly
agree that he executes this Deed.

CONCLUSION
The persons appearing are known to me, civil law notary.
This deed was executed in Rotterdam on the date mentioned in its heading.
After I, civil law notary, had conveyed and explained the contents of the deed
in substance to the persons appearing, they declared that they had taken note of
the contents of the deed, were in agreement with the contents and did not wish
them to be read out in full. Following a partial reading, the deed was signed by
the persons appearing and

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by me, civil law notary at eleven hundred hours.
J.J. van Kampen
J.J. Hartman Kok
A.H. Geerling, civil law notary
ISSUED AS A TRUE COPY
by me, Albert Hendrik Geerling, civil law notary at
Rotterdam, on this the sixteenth day of August two
thousand and ten.

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EG/JJK
Deed of pledge of shares
Endeavour Energy Netherlands B.V.
On this, the sixteenth day of August two thousand and ten, appeared before me,
Albert Hendrik Geerling, civil law notary at Rotterdam, the Netherlands:

1.   Jan Joris van Kampen, employed at the offices of me, civil law notary,
located at 3014 DA Rotterdam, the Netherlands, Weena 750, born in Amsterdam, the
Netherlands, on the nineteenth day of January nineteen hundred eighty-three, and
acting for the purpose of this deed as the holder of a written power of attorney
from:

  a.   Endeavour International Holding B.V. a company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid), having its corporate
seat at Amsterdam, the Netherlands (address: 1043 EJ Amsterdam, the Netherlands,
Teleportboulevard 140, Trade Register number 34229293),

      which company is hereinafter referred to as: the ‘Pledgor’

  b.   Endeavour Energy Netherlands B.V. a company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid), having its corporate
seat at Amsterdam, the Netherlands (address: 1043 EJ Amsterdam, the Netherlands,
Teleportboulevard 140, Trade Register number 34229296),

      which company is hereinafter referred to as: the ‘Company’; and

2.   Jesler Jan Hartman Kok, born at Groningen, the Netherlands on the
twenty-sixth day of November nineteen hundred eighty, residing at Brussestraat
18c, 3031 SK Rotterdam, the Netherlands, holder of Dutch passport number
NK5917452, acting for the purpose of this deed as the holder of a written power
of attorney from Cyan Partners, LP, a company organised and existing under the
laws of the State of Delaware, United States of America having its registered
office at 399 Park Avenue, New York, New York, United States of America 10022,

    which company is hereinafter referred to as: the ‘Pledgee’.

Powers of attorney
The powers of attorney are evidenced by three (3) private deeds, which will be
attached to this deed.
The persons appearing, acting in their capacities as mentioned above, declared
as follows:

A.   on the sixteenth day of August two thousand and ten, inter alios, the
Pledgee (as Administrative Agent, Sole Arranger and Sole Book Runner), Endeavour
Energy UK Limited as Borrower, and Endeavour International Corporation as
Holdings, entered into a one hundred and sixty million American dollars (USD
160,000,000) term loan facility agreement (the ‘Credit Agreement’);   B.   on
the sixteenth day of August two thousand and ten, inter alios, the Pledgee, the
Pledgor and the Company entered into a guarantee agreement pursuant to which
inter alios each of the Pledgor and the Company guarantees any and all
obligations to pay an amount of money (verplichtingen tot voldoening van een

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    geldsom), whether present or future, actual or contingent, that may at any
time be owing by a Credit Party (as defined in the Credit Agreement) to the
Secured Creditors (as defined in the Credit Agreement) under or pursuant to the
Credit Documents (as defined in the Credit Agreement) (the “Subsidiary
Guaranty”);

C.   the Present Shares (as defined below) were acquired by the Pledgor by
virtue of the deed of incorporation of the Company, executed on the
twenty-seventh of June two thousand and five before M.P. Bongard, civil-law
notary in Amsterdam;   D.   the Pledgor has agreed to execute this present deed
of pledge of shares (the “Deed”) as security for the payment when due of the
Secured Obligations (as defined below);   E.   it is envisaged that the Existing
Security (as defined below) will be terminated pursuant to a letter of
termination of rights of pledge to be issued and signed by or on behalf of BNP
Paribas S.A. and to be signed for acknowledgement and receipt by — inter alios -
the Pledgor and the Company;   F.   it has been agreed that the voting rights
attaching to the Shares (as defined below) will be vested in the Pledgee subject
to the suspensive conditions (opschortende voorwaarden) set out in Clause 3
(Rights in respect of the Voting Rights) of this Deed;   G.   the articles of
association of the Company permit the creation of a right of pledge on the
 shares in its capital and the vesting of voting rights attaching to such shares
in the Pledgee;   H.   the general meeting of shareholders of the Company has
resolved to give the legally required approval for the creation of the right of
pledge, including the vesting of the voting rights attaching to the Shares (as
defined below) in the Pledgee, as evidenced by resolutions of the general
meeting of shareholders of the Company dated thirty July two thousand ten.

Consequently, the persons appearing declared:
It is hereby agreed as follows:

1. Definitions and interpretation   1.1 All capitalized terms used in this Deed
including the recitals, and not otherwise defined herein shall have the meaning
assigned to them in the Credit Agreement.   1.2 a.    Headings are for
convenience of reference only.

  b.   Where the context so permits, the singular includes the plural and vice
versa.     c.   Save where the contrary is indicated, any reference in this Deed
to the parties or a party to this Deed shall be construed so as to include its
or their respective successors, transferees and assigns from time to time and
any successor of such a successor, transferee or assign in accordance with their
respective interests.

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  d.   A ‘clause’ shall, subject to any indication to the contrary, be construed
as a reference to a clause of this Deed.     e.   References to the Credit
Agreement, the (other) Credit Documents, this Deed, or any other agreement or
document shall, where applicable, be deemed to be references to such Credit
Agreement, the (other) Credit Documents, this Deed, or any other agreement or
document as the same may have been, or may from time to time be, extended,
prolonged, amended, restated, supplemented, renewed or novated, as persons may
accede thereto as a party or withdraw therefrom as a party in part or in whole
or be released thereunder in part or in whole, and as facilities and financial
services are or may from time to time be granted, extended, prolonged,
increased, reduced, cancelled, withdrawn, amended, restated, supplemented,
renewed or novated there under.     f.   A statute or statutory provision shall
be construed as a reference to such statute or statutory provision as the same
may have been, or may from time to time be, amended or re-enacted and all
instruments, orders, plans, regulations, by-laws, permissions and directions at
any time made there under.     g.   References to the Dutch Civil Code are
references to het Nederlands Burgerlijk Wetboek, references to the Dutch
Bankruptcy Act are references to de Nederlandse Faillissementswet.

1.3   In this Deed the following words and expressions shall have the following
meaning:

  •   ‘Collateral’ means (i) the Shares and (ii) the Rights;     •   ‘Conditions
Precedent’ means each of the following conditions precedent (opschortende
voorwaarden): (i) the termination of the Existing Security, (ii) the occurrence
of an Event of Default, and (iii) the issuance of a Voting Rights Notice;     •
  ‘Default Notice’ means a notice in writing to be issued by the Pledgee to the
Pledgor and the Company upon or after the occurrence of an Event of Default;    
•   ‘Enforcement Event’ means the issuance of a Default Notice following an
Event of Default which also constitutes a default (verzuim) in the fulfillment
of the Secured Obligations within the meaning of Article 3:248 of the Dutch
Civil Code;     •   ‘Existing Security’ means the rights of pledge and all other
security interests created or purported to be created under or pursuant to:

  (a)   a notarial deed of first ranking pledge over the Present Shares dated
first of November two thousand six executed before H.B.H. Kraak, civil law
notary at Amsterdam between the Pledgor as pledgor, BNP Paribas S.A. as pledgee
and the Company as the company;

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  (b)   a notarial deed of second ranking pledge over the Present Shares dated
seven March two thousand eight executed before P.H.N. Quist, civil law notary at
Amsterdam between the Pledgor as pledgor, BNP Paribas S.A. as pledgee and the
Company as the company; and     (c)   a notarial deed of third ranking pledge
over the Present Shares dated eight February two thousand ten executed before
P.H.N. Quist, civil law notary at Amsterdam between the Pledgor as pledgor, BNP
Paribas S.A. as pledgee and the Company as the company;

  •   ‘Future Rights’ means any and all Rights in respect of Future Shares;    
•   ‘Future Shares’ means all shares in the capital of the Company which the
Pledgor may hold at any time, which may be issued to or acquired by the Pledgor
after the date of this Deed;     •   ‘Intercreditor Agreement’ has the meaning
ascribed thereto in the Credit Agreement;     •   ‘Parallel Debt’ has the
meaning ascribed thereto in clause 2 (Parallel Debt) of the Subsidiary Guaranty;
    •   ‘Parallel Obligations’ means the obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor to the Pledgee
arising from the Parallel Debt;     •   ‘Present Shares’ means one hundred
percent (100%) of the registered and paid-up  shares in the issued capital of
the Company, being one hundred eighty (180) shares, each with a nominal value of
one hundred Euro (EUR 100.-), numbered 1 to 180 inclusive;     •   ‘Principal
Obligations’ means any and all obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor under or pursuant
to the Credit Documents (whether now existing or hereafter created or arising)
together with all monies and liabilities payable or to be discharged by the
Pledgor pursuant to the terms of this Deed, other than obligations to pay an
amount of money (verplichtingen tot voldoening van een geldsom) under the
Parallel Obligations;     •   ‘Rights’ means any and all rights to or under
dividends, other distributions, proceeds, options, warrants, claim rights and
other similar rights, other than shares in the capital of the Company, currently
existing or in the future arising or received with respect to or out of the
Shares but excluding the Voting Rights;     •   ‘Rights of Pledge’ means each of
the rights of pledge created under this Deed;     •   ‘Secured Obligations’
means collectively the Parallel Obligations and the Principal Obligations to the
extent owing to the Pledgee;

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  •   ‘Security Period’ means the period beginning on the date hereof and ending
on the earliest date upon which (a) all Secured Obligations have been
irrevocably paid and discharged, or have ceased to exist, and (b) all Rights of
Pledge have been released and discharged by the Pledgee in accordance with
clause 8.2 below;     •   ‘Shares’ means the Present Shares and the Future
Shares;     •   ‘Voting Rights’ means the voting rights attached to the Shares;
    •   ‘Voting Rights Notice’ means a notice in writing by the Pledgee to the
Pledgor and the Company that it wishes to exercise the Voting Rights.

2.   Pledge of the Shares and the other Collateral   2.1   The Pledgor hereby
agrees with the Pledgee and hereby undertakes that the Pledgor shall grant to
the Pledgee the rights of pledge purported to be granted under or pursuant to
this Deed.   2.2   As security for the payment and discharge in full, when due
(whether at stated maturity, by acceleration or otherwise), of the Secured
Obligations, the Pledgor hereby grants, to the Pledgee a right of pledge
(pandrecht), on the Present Shares and, to the extent legally possible hereby
grants in advance (verpandt bij voorbaat) to the Pledgee a right of pledge on
the Future Shares, and the Pledgee hereby accepts such rights of pledge.      
To the extent no valid pledge on the Future Shares is created by this Deed, the
Pledgor irrevocably and unconditionally undertakes to pledge to the Pledgee the
Future Shares immediately after the Pledgor has acquired such shares.   2.3  
Subject to clause 3.2 with respect to dividends and other distributions, the
Pledgor, to the extent such pledge is not included in the Rights of Pledge in
respect of the Shares, and to the fullest extent possible as permitted by
applicable law, hereby pledges the Rights in favor of the Pledgee as security
for the full and prompt payment and discharge of its Secured Obligations and the
Pledgee accepts such pledge.       To the extent no valid pledge on the Rights
is created hereunder, the Pledgor, irrevocably and unconditionally undertakes,
immediately on demand by the Pledgee, to pledge in favor of the Pledgee and to
assign to the Pledgee the Rights subject to clause 3.2. under the same terms and
the same conditions as set forth in this Deed.   2.4   The Pledgor irrevocably
and unconditionally undertakes to take such action (including the execution of
documents to be made up in form and substance satisfactory to the Pledgee) as
and when the Pledgee deems necessary in its reasonable opinion from time to time
to create, perfect and maintain a valid and enforceable right of pledge in favor
of the Pledgee with respect to the Collateral (and thereupon the Collateral
shall become subject to a right of pledge as provided in this Deed).

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2.5   The Pledgor hereby grants to the Pledgee an irrevocable and non-exclusive
power of attorney (without obligation) to pledge to the Pledgee the Future
Shares immediately after the Pledgor has acquired such shares. This power of
attorney includes the right of substitution.   2.6   Each of the Rights of
Pledge is one and indivisible (één en ondeelbaar). Partial fulfillment of the
Secured Obligations shall not extinguish the Rights of Pledge proportionally.  
2.7   The Rights of Pledge include all accessory rights (afhankelijke rechten)
and all ancillary rights (nevenrechten) attached to the Collateral.   2.8   The
Company is hereby notified of the Rights of Pledge created by this Deed.   3.  
Rights in respect of the Voting Rights   3.1   The Voting Rights are hereby
vested in the Pledgee within the meaning of article 2:198 paragraph 3 of the
Dutch Civil Code, subject to the Conditions Precedent being satisfied.      
Therefore, provided that the Conditions Precedent have not been satisfied, the
Pledgor shall remain entitled and authorized to exercise the Voting Rights,
provided that the Pledgor may not exercise the Voting Rights in any manner which
could be prejudicial to any of the Secured Creditors.       As long as the
Conditions Precedent have not been satisfied, the Pledgee shall not have the
rights which are granted to the holders of depositary receipts issued for shares
with the cooperation of a company.   3.2   Upon the Conditions Precedent having
been satisfied:

  i.   the Pledgee shall be fully entitled, to the exclusion of the Pledgor, to
exercise the Voting Rights pertaining to the Shares;     ii.   in the event
Dutch company law prevents the Voting Rights to return to the Pledgor when the
respective Event of Default has been cured or waived by the Pledgee, the Pledgee
shall at the request of the Pledgor (not to be unreasonably withheld or delayed)
give a power of attorney to the Pledgor to exercise the Voting Rights for as
long as no new Voting Rights Notice has been issued.         For the duration of
such power of attorney clauses 3.2 (i) is not applicable.         Upon a new
Voting Rights Notice being issued, the power of attorney shall automatically
terminate.         The Pledgor may not exercise the Voting Rights in any manner
which could be prejudicial to any of the Secured Creditors.

4.   Dividends and other distributions upon issuance of Default Notice   4.1  
Subject to Clause 4.2 of this Deed and subject to the suspensive condition
(opschortende voorwaarde) of termination of the Existing Security the Pledgee
shall be entitled to receive, retain and utilize any and all dividends and other
distributions received in cash or other payment of money in respect of the
Collateral.

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  4.2   The Pledgee grants permission to the Pledgor, within the meaning of
article 3:246 paragraph 4 of the Dutch Civil Code to receive, retain and utilize
any and all dividends and other distributions received in cash or other payment
of money in respect of the Collateral until such permission has been withdrawn
by means of a Default Notice issued by the Pledgee.   4.3   Upon the Default
Notice being issued:

  i.   all rights of the Pledgor to receive dividends and other distributions
pursuant to the Rights shall automatically cease, and thereupon the Pledgee
shall have the sole right to receive and hold as collateral such dividends and
other distributions and such dividends or other distributions must be paid
directly to the Pledgee or as it may direct;     ii.   the Pledgee shall be
entitled to collect any repayment on the Shares (terugbetaling op aandelen) and
all liquidation proceeds, if any, which are to be distributed in respect of the
Shares upon dissolution and liquidation of the Company or otherwise;     iii.  
all payments which are received by the Pledgor contrary to the provisions- of
this clause 4 shall be received on behalf of and for the benefit of the Pledgee,
shall be segregated from the other assets of the Pledgor and shall be
immediately paid over or delivered (with any necessary endorsements) to the
Pledgee or its authorized designee or as the Pledgee may otherwise direct as
collateral in the exact form as received, to be held by the Pledgee as
collateral and as further collateral security for the Secured Obligations. This
is without prejudice to any right the Pledgee may have against the person who
made the payment.

5.   Representations and warranties

    The Pledgor represents and warrants that the following is true and correct
on the date of this Deed and each time any Future Shares and/or Future Rights
will be pledged to the Pledgee:

  i.   the Present Shares are and each Future Share will be, fully paid-up and
the Collateral is free and clear of any lien, charge, encumbrance with any
restricted rights (beperkte rechten), attachment (beslag), or any other right or
security interest whatsoever, other than: (i) those created under this Deed,
(ii) the Existing Security and (iii) any encumbrances permitted under the Credit
Documents;     ii.   the Pledgor holds full and exclusive title to the
Collateral and is authorized (beschikkingsbevoegd) to create a right of pledge
thereover;     iii.   the Pledgor acquired the Present Shares by incorporation
of the Company, executed by deed on the twenty-seventh of June two thousand and
five before M.P. Bongard, civil-law notary in Amsterdam;     iv.   no depositary
receipts (certificaten van aandelen) have been issued for the Present Shares or
will be issued for the Future Shares with the concurrence of the Company; and  
  v.   all information provided by the Pledgor with regard to this deed is
correct and complete.

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6.   Undertakings

6.1   Except to the extent permitted pursuant to the Credit Documents, the
Pledgor undertakes not to waive without the prior written consent of the Pledgee
(not to be unreasonably withheld or delayed), any accessory rights (afhankelijke
rechten) or ancillary rights (nevenrechten) attached to the Collateral and in
general not to perform any acts which result or could result in a material
reduction of the value of the Shares.   6.2   Except to the extent permitted
pursuant to the Credit Documents, the Pledgor shall not, without the prior
written consent of the Pledgee (not to be unreasonably withheld or delayed),
transfer or further pledge or otherwise encumber any of the Shares or agree to a
court settlement or an out-of-court settlement (gerechtelijk or
buitengerechtelijk akkoord) in respect of the Shares.   6.3   The Pledgor shall,
at the Pledgee’s first request, provide in the English language the Pledgee all
information and supporting documentation relating to the Collateral and allow
the Pledgee to inspect its administrative records during office hours, all of
the foregoing to the extent required by the Pledgee (acting reasonably) for the
purpose of this Deed.       The Pledgor shall forthwith inform the Pledgee of
any attachment (beslag) over any part of the Collateral.       The pledgor
shall:

  i.   send the Pledgee a copy of the relevant attachment or seizure
documentation as well as all other documents required under applicable law for
challenging the attachment or seizure (if and to the extent possible);     ii.  
notify the third party or the court process server acting on behalf of such
third party in writing of the Pledgee’s interest over the Collateral; and    
iii.   take such measures as may reasonably be required to protect the Pledgee’s
interest over the Collateral.

6.4   The Pledgor covenants for the benefit of the Pledgee throughout the
Security Period to co-operate with the Pledgee in the collection and recovery of
the Collateral and to render all reasonable assistance as may be required
pursuant to any exchange regulations and/or foreign statutory rules or other
rules, including the taking of any legal action that the Pledgee may deem
necessary in connection therewith after the issuance of a Default Notice to it.
  6.5   In addition and without prejudice to the obligations of the Pledgor
pursuant to clauses 6.3 and 6.4 above, the Pledgor shall notify the Pledgee
promptly of any event or circumstance which could reasonably be of importance to
the Pledgee with a view to the preservation and exercise of the Pledgee’s rights
under or pursuant to this Deed.

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  7.   Enforcement and power of attorney   7.1   Without prejudice to any other
right or remedy available to the Pledgee, following the occurrence of an
Enforcement Event the Pledgee shall be empowered, at its discretion, to
immediately enforce the Rights of Pledge against the Pledgor without any
(further) notice of default being required and the Pledgee may immediately
exercise in respect of any and all of the Shares any and all of its rights and
powers set out in this Deed (subject to restrictions following from mandatory
provisions of law) irrespective of whether the Pledgee or any of the Secured
Creditors shall have proceeded against or claimed payment from any party liable
for any of the Secured Obligations.

7.2   Upon the occurrence of an Event of Default, the Pledgee shall be entitled
to sell or procure the sale of the Collateral forthwith, all to the extent
permitted by applicable laws.       To the fullest extent permitted by law, the
Pledgor waives (which waiver the Pledgee hereby accepts) any right it may have
(i) pursuant to section 3:234 Dutch Civil Code to demand, in the event that the
Pledgee enforces the Rights of Pledge, that the Pledgee shall also enforce any
of the security interests (zekerheidsrechten) granted by any of the Credit
Partys and (ii) of requiring the Pledgee to firstly proceed against or claim
payment from any person or entity or enforce any guarantee or security granted
by any other person or entity before enforcing the Rights of Pledge and/or any
other rights under this Deed.   7.3   The Pledgor will not be entitled to
request the summary proceedings judge (voorzieningenrechter) of the district
court to order that the Collateral shall be sold in a manner deviating from the
provision of section 3:250 Dutch Civil Code.   7.4   In the event that the
Pledgee forecloses or intends to foreclose the Rights of Pledge, it will not be
obliged to give notice (thereof) (as provided in section 3:249 and section 3:252
Dutch Civil Code) to the Pledgor or any person having the benefit of an
encumbrance on Collateral comprised in such Rights of Pledge (save as may be
otherwise provided in the Credit Documents).   7.5   The Pledgee shall apply the
proceeds of the Collateral and the foreclosure of the Rights of Pledge or any of
them in satisfaction of the Secured Obligations, in each case in accordance with
the Credit Agreement, the Intercreditor Agreement and in accordance with
applicable provisions of Dutch law.   7.6   In addition to the undertakings
contained in clause 2.4 above, the Pledgor shall at any time, upon written
request of the Pledgee after the issuance of a Default Notice to the Pledgor,
execute and cause to be filed, at such Pledgor’s expense, such documents and
instruments, and do such other acts and things, as the Pledgee may reasonably
deem desirable in obtaining the full benefits of this Deed (including the
protection and preservation of its rights) and of the rights and powers granted
hereunder or granted to a pledgee under the laws of the Netherlands.   7.7   The
Pledgor hereby grants to the Pledgee (and any of its delegates) an irrevocable
power of attorney (the ‘Power of Attorney’) in accordance with section

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    3:74 (1) Dutch Civil Code to, following the issuance of a Default Notice to
it, perform all acts and execute all documents in order to perfect or implement
this Deed on its behalf, and to take all actions which are necessary for the
Pledgee (and any of its delegates) to create, maintain, protect, preserve and
exercise its rights under this Deed (acting reasonably).       The parties agree
that section 3:68 (Selbsteintritt) Dutch Civil Code will not apply and to the
extent necessary, the Pledgor hereby waives any rights it may have under section
3:68 Dutch Civil Code, which waiver the Pledgee hereby accepts.

8.   Termination   8.1   The Pledgee is entitled to terminate by notice
(opzeggen) in whole or in part any Right of Pledge on all or part of the
Collateral and the contractual arrangements set forth herein.       Notice of
termination must be given in writing by the Pledgee to the Pledgor.   8.2   The
Rights of Pledge or any of them shall terminate by operation of law when all
Secured Obligations have been unconditionally and irrevocably paid and
discharged in full and all obligations under the Credit Documents have
terminated.       At the request of the Pledgor, the Pledgee shall confirm such
termination in writing and will execute all documents reasonably requested by
the Pledgor in relation thereto (at the expense of the Pledgor).   9.  
Assignment and information   9.1   Subject to the relevant provisions of the
Credit Documents, the Pledgee (but not, for the avoidance of doubt, the Pledgor)
shall be entitled to assign and/or transfer all or part of its rights and
obligations under this Deed to any assignee and/or transferee.   9.2   The
Pledgor hereby in advance gives its irrevocable consent to (geeft toestemming
bij voorbaat) within the meaning of section 6:156 Dutch Civil Code and hereby in
advance irrevocably co-operates with (verleent bij voorbaat mede-werking aan),
within the meaning of sections 6:159 and 6:156 Dutch Civil Code, any such
assignment and/or transfer executed in accordance with the relevant provisions
of the Credit Documents, including by means of an assumption of debt
(schuldoverneming) or transfer of agreement (contracts-overneming), as the case
may be, hereunder.   9.3   If the Pledgee assigns and transfers its rights or
obligations and the relevant transferee is subrogated in the rights of the
Pledgee (in de rechten van de pandhouder treedt) in respect of the Rights of
Pledge, the Pledgor must promptly ensure that the conditional transfer of voting
rights to that person will be effected in accordance with section 2:198
(3) Dutch Civil Code.   9.4   The Pledgee shall be entitled to impart any
information concerning the Pledgor to any successor or proposed successor,
subject to any confidentiality provision of the Credit Agreement.

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10.   Records of Pledgee       Subject to proof to the contrary, the records of
the Pledgee shall be conclusive evidence (dwingend bewijs) of the existence and
amount of the Secured Obligations, subject to and in accordance with the terms
of the Credit Documents and this Deed.   11.   Costs       Subject to any
provision to the contrary herein, all costs reasonably incurred in connection
with the creation of the Rights of Pledge and the performance by the parties of
their rights and obligations under this Deed shall be for the account of the
persons or entities designated in or pursuant to the Credit Agreement and shall
be settled in accordance therewith.   12.   Notices       Any notices and other
communications under or in connection with this Deed shall be given in
accordance with clause 11.03 of the Credit Agreement.   13.   Suspension of
rights and indemnity   13.1   Throughout the Security Period, the Pledgor shall
not:

  i.   receive, claim or have the benefit of any payment, distribution or
security from or on account of any Credit Party under any indemnity or otherwise
or exercise its rights of defense, suspension, retention, set off or counter
claim as against any Credit Party;     ii.   take recourse (verhaal) or take any
other step to enforce any right against any Borrower or Guarantor or their
respective assets; and     iii.   claim or vote in competition with the Pledgee
or any of the other Secured Creditors in the bankruptcy, suspension of payment
or liquidation or analogous circumstance of any Credit Part,

    except in each case, in such manner and upon such terms as the Pledgee,
acting reasonably, may require.       Subject to the condition precedent
(opschortende voorwaarde) that the Pledgee exercises its rights to enforce the
Rights of Pledge in accordance with Clause 7 of this Deed, the Pledgor hereby
waives in advance any rights it may have as set out under (i), (ii) and
(iii) above, which waiver is hereby accepted by the Pledgee.       Any payment,
distribution or security received by the Pledgor contrary to the provisions of
this Deed shall be received and held by the Pledgor as custodian (bewaarnemer)
for the benefit of the Pledgee and the other Secured Creditors and shall,
pending payment or transfer to the Pledgee, to the extent legally possible, be
segregated from the other assets of the Pledgor and shall be forthwith paid over
or transferred to the Pledgee.       If notwithstanding the above the Pledgor
exercises any right of defense, suspension, retention, set off or counter claim
in respect of any amount, it shall forthwith pay an amount equal to such amount
to the Pledgee.

13.2   The Pledgee shall not be liable to the Pledgor under or pursuant to the
Credit Documents whatsoever except for its willful misconduct (opzet) or gross
negligence (grove schuld).

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14.   Limitation, waiver       The Pledgor waives, to the fullest extent
permitted by law, its right (i) to dissolve this Deed, pursuant to section 6:265
Dutch Civil Code or on any other ground or (ii) to avoid this Deed, including
but not limited to error (dwaling), which waiver the Pledgee hereby accepts.  
15.   Security interest absolute       All rights of the Pledgee, the Rights of
Pledge and all obligations of the Pledgor hereunder shall be absolute and
unconditional irrespective of:

  i.   any change in the time, manner or place of payment of the Secured
Obligations or any change of or amendment to the Credit Documents and any other
document related thereto, or any other agreement or instrument relating to any
of them; or     ii.   any exchange, release or non perfection of any other
collateral, or any release or amendment or waiver of or consent to any departure
from any other collateral for the Secured Obligations.

16.   Amendment of this Deed       This Deed may only be amended by a written
agreement between the Pledgor and the Pledgee (with the consent of the other
Secured Creditors under the Credit Documents), to the extent required by Dutch
law, executed before a Dutch civil-law notary.   17.   Governing law and
jurisdiction       This Deed shall be governed by and construed in accordance
with the laws of the Netherlands.       The Pledgor consents to the exclusive
jurisdiction of the courts of Amsterdam, the Netherlands.       The Pledgor
hereby waives any objection that it may now or hereafter have to the
jurisdiction of such courts, which waiver the Pledgee hereby accepts.       This
clause is for the benefit of the Pledgee only and shall not limit its right to
bring proceedings against the Pledgor in connection with this Deed or the Credit
Documents in any other court of competent jurisdiction or concurrently in more
than one jurisdiction.   18.   Severability of provisions   18.1   Any provision
of this Deed which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.   18.2   The parties hereto agree that they will negotiate in good
faith to replace any provision hereof held invalid, illegal or unenforceable as
set out in clause 18.1 above with a valid provision which is as similar as
possible in substance to the invalid, illegal or unenforceable provision.

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19.   Remedies and prevalence   19.1   The rights and remedies of the Pledgee
herein, and the obligations, representations and warranties of the Pledgor
herein, are cumulative and are not exclusive of any rights or remedies of the
Pledgee, or obligations, representations or warranties of the Pledgor, conferred
or imposed by law or the Credit Documents.   19.2   To the extent there is a
conflict between the provisions of the Credit Documents and this Deed, the
provisions of the Credit Documents shall prevail (but only to the extent that
the validity and enforceability of the pledges created or purported to be
created pursuant this Deed and the powers of attorney given pursuant this Deed
are not affected as a consequence).   20.   Final Provisions   20.1   With due
observance of article 20 of the articles of association of the Company, the
Pledgor, having given the members of the Management Board of the Company the
opportunity to cast their advisory votes, as holder of all of the shares in the
share capital of the Company herewith resolves, without holding a meeting of
shareholders, to approve this Deed including, without limitation, the Rights of
Pledge and the transfer of the Voting Rights on the Shares subject to the
Conditions Precedent having been satisfied.   20.2   The person appearing
referred to under 1 above, acting as representative of the Company, declared
that the Company has always accepted as valid the transfer by which the Pledgor
acquired the Present Shares and all previous transfers of the Present Shares,
that the Company acknowledges the right of pledge created by this Deed on the
Present Shares, and that the Company will cause the right of pledge on the
Present Shares to be recorded in its shareholders register without delay.
Furthermore, the person appearing referred to under A above, acting as
representative of the Company, declared that the Company acknowledges the right
of pledge created by this Deed on the Future Shares and undertakes to enter such
right of pledge in its shareholders register without delay as soon as the
Pledgor becomes the holder of the Future Shares.   20.3   The Pledgor, the
Pledgee and the Company are aware of the fact that the undersigned civil law
notary works with NautaDutilh N.V., the firm that has advised the Pledgee in
this transaction. With reference to the Code of Conduct (Verordening beroeps- en
gedragsregels) of the Royal Notarial Professional organisation (Koninklijke
Notariële Beroepsorganisatie KNB), the parties to this Deed herewith explicitly
agree that he executes this Deed.

CONCLUSION
The persons appearing are known to me, civil law notary.
This deed was executed in Rotterdam on the date mentioned in its heading.
After I, civil law notary, had conveyed and explained the contents of the deed
in substance to the persons appearing, they declared that they had taken note of
the contents of the deed, were in agreement with the contents and did not wish
them to be read out

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in full. Following a partial reading, the deed was signed by the persons
appearing and by me, civil law notary at eleven hundred hours and five minutes.
J.J. van Kampen
J.J. Hartman Kok
A.H. Geerling, civil law notary
ISSUED AS A TRUE COPY
by me, Albert Hendrik Geerling, civil law notary at Rotterdam,
on this the sixteenth day of August two thousand and ten.

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Exhibit F-5
To Credit Agreement
THIS ASSIGNATION IN SECURITY is made
BETWEEN:

(1)   ENDEAVOUR ENERGY UK LIMITED (a company registered in England and Wales
with registration number 5030838) whose registered office is at 33rd Floor, City
Point, One Ropemaker St, London EC2Y 9UE (the “Company”); and   (2)   CYAN
PARTNERS, LP (as agent and trustee for itself and each of the other Secured
Creditors (as defined below)) (the “Collateral Agent”).

WHEREAS:

    The Board of Directors of the Company is satisfied that the giving of the
security contained or provided for in this Assignation is likely to promote the
success of the Company for the benefit of its members as a whole and that its
execution and delivery and the exercise of the rights and performance of its
obligations under this Assignation would not contravene any provision of its
constitution and its Board have passed a resolution to that effect.

NOW IT IS AGREED as follows:

1.   Definitions and Interpretation       Specific Definitions   1.1   Terms
defined in the Credit Agreement (as defined below) shall, unless otherwise
defined in this Assignation, have the same meanings when used in this
Assignation and, in addition, the following words and expressions shall have the
following meanings:       “Agreements”: means the joint operating agreements,
unitisation and unit operating agreements, joint facilities and transportation
and processing agreements set out in Part B of Schedule 1 (Agreements) as the
same may have been, or may from time to time be, restated, varied, amended,
supplemented, substituted, novated or assigned, together with all documents
which are supplemental to, or are expressed to be collateral with, or are
entered into pursuant to or in connection with, any such agreements.      
“Assignation”: means this instrument and all its provisions.       “Assigned
Rights”: means the Company’s whole right, title, interest and benefit in and to
(but not any of the obligations under) the Project Agreements, together with:

  (a)   all the rights and benefits now or in the future arising under,
pertaining to or deriving from the Project Agreements;     (b)   all monies,
debts and liabilities which now are or have been or at any time hereafter shall
or may be or become due, owing or incurred to the Company under or in connection
with the Project Agreements;     (c)   the proceeds of any claims, awards,
decrees and judgments which may at any time be receivable or received by the
Company in respect of the Project Agreements;     (d)   the right of the Company
to rescind or otherwise terminate the Project Agreements.     (e)   the right to
make demands under, or compel or require performance of, any Project Agreement
or otherwise exercise all rights, remedies and discretions arising under or

1

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Exhibit F-5
To Credit Agreement

      in connection with any Project Agreement or available at law or in equity
or otherwise;     (f)   all other rights, interests and benefits whatsoever
accruing to or for the benefit of the Company arising under or in connection
with any Project Agreement;     (g)   the proceeds of sale and/or other
realisation of that property or asset (or any part thereof or interest therein);
    (h)   all Security, options, agreements, rights, easements, benefits,
indemnities, guarantees or warranties in respect of such property or asset; and
    (i)   all rights under any lease, licence or agreement for lease, sale or
use in respect of such property or asset.

    “BP”: means BP Exploration Operating Company Limited.       “Business Day”:
shall mean for all purposes, any day except Saturday, Sunday and any day which
shall be in New York, London or Aberdeen, a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close.       “Credit Agreement”: means the term loan credit agreement
dated on or about the date of this Assignation between (among others) the
Company and the Administrative Agent.       “Credit Party”: shall have the
meaning given to it in the Credit Agreement.       “Delegate”: means any person
appointed by the Collateral Agent pursuant to Clause 9.2 to 9.4 (Delegation) and
any person appointed as attorney of the Collateral Agent and/or any Delegate.  
    “Enforcement Date”: means the date on which a notice is issued by the
Administrative Agent to the Borrower under section 9 (Events of Default) of the
Credit Agreement upon the occurrence of an Event of Default which is continuing.
      “Enoch PLTPA”: means the Enoch pipeline liquids transportation and
processing agreement dated 24 February 2006 and made between, among others, the
Company and BP.       “Group”: means Endeavour International Corporation and its
Subsidiaries for the time being.       “Indemnified Party”: shall have the
meaning given to it in the U.S. Security Agreement.       “Licences”: means the
rights under the licences detailed in Part A of Schedule 1 (Licences).      
“Open Permission”: means the Open Permission (Creation Of Security Rights Over
Licences) granted by the Secretary of State on 19 March 2004.       “Project
Agreements”: means the Agreements and the Licenses.       “Secretary of State”:
means the Secretary of State for Energy and Climate Change of Her Majesty’s
Government of the United Kingdom and any successor in relevant function in
relation to the Licences.       “Secured Creditors”: shall have the meaning
given to it in the U.S. Security Agreement.       “Secured Hedging Agreement”:
shall have the meaning given to it in the U.S. Security Agreement.

2

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Exhibit F-5
To Credit Agreement

    “Secured Liabilities”: shall have the meaning given to it in Clause 2
(Covenant to pay Secured Liabilities) below.       “Secured Reimbursement
Agreement”: shall have the meaning given to it in the U.S. Security Agreement.  
    “Security”: means a mortgage, charge, pledge, lien or other security
interest securing any obligation of any person or any other agreement or
arrangement having a similar effect.       “Security Period”: means the period
beginning on the date of this Assignation and ending on the date on which the
Collateral Agent has determined that all of the Secured Liabilities (whether
actual or contingent) have been unconditionally and irrevocably paid and
discharged in full and no further Secured Liabilities are capable of being
outstanding.       “Tax”: any tax, levy, impost, duty or other charge or
withholding of a similar nature (including any penalty or interest payable in
connection with any failure to pay or any delay in paying any of the same).    
  General Definitions

1.2   Any reference in this Assignation to:

  1.2.1   the “Collateral Agent”, the “Company”, any “Secured Creditor”, any
“Credit Party” or any other person shall be construed so as to include its
successors in title, permitted assignees and permitted transferees and, in the
case of the Collateral Agent, shall include any person for the time being
appointed as additional collateral agent pursuant to the Credit Agreement;    
1.2.2   “assets” includes present and future properties, revenues and rights of
every description;     1.2.3   “indebtedness” includes any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;     1.2.4   a “person” includes
any individual, firm, company, corporation, government, state or agency of a
state or any association, trust, joint venture, consortium or partnership
(whether or not having separate legal personality);     1.2.5   a “regulation”
includes any regulation, rule, official directive, request or guideline (whether
or not having the force of law) of any governmental, intergovernmental or
supranational body, agency, department or of any regulatory, self-regulatory or
other authority or organisation;     1.2.6   a “fixed security” is to be
construed in accordance with the terms of Section 47 of the Bankruptcy and
Diligence etc. (Scotland) Act 2007;     1.2.7   “without limitation” shall
include a reference to without prejudice to the generality of the foregoing;    
1.2.8   “attachment” shall include, without limitation, land attachment, interim
attachment, money attachment and residual attachment;     1.2.9   “Secured
Liabilities” includes any liabilities which would be treated as such but for the
liquidation or dissolution or similar event affecting the Company; and

3

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Exhibit F-5
To Credit Agreement

  1.2.10   a provision of law is a reference to that provision as amended or
re-enacted.

    Construction   1.3   Clause and Schedule headings are for ease of reference
only.   1.4   Any reference in this Assignation to any asset shall be construed
so as to include:

  1.4.1   the benefit of any covenants for title and warrandice given or entered
into by any predecessor in title of the Company in respect of that asset and all
other rights, benefits, claims, contracts, warranties, remedies, security or
indemnities in respect of that asset; and     1.4.2   the proceeds of sale of
any part of that asset and any other moneys paid or payable in respect of or in
connection with that asset.

1.5   Any reference in this Assignation to any Credit Document or any other
agreement or other document shall be construed as a reference to that Credit
Document or that other agreement or document as the same may have been, or may
from time to time be, restated, varied, amended, supplemented, substituted,
novated or assigned, whether or not as a result of any of the same:

  1.5.1   there is an increase or decrease in any facility made available under
that Credit Document or other agreement or document or an increase or decrease
in the period for which any facility is available or in which it is repayable;  
  1.5.2   any additional, further or substituted facility to or for such
facility is provided;     1.5.3   any rate of interest, commission or fees or
relevant purpose is changed;     1.5.4   the identity of the parties is changed;
    1.5.5   the identity of the providers of any security is changed;     1.5.6
  there is an increased or additional liability on the part of any person; or  
  1.5.7   a new agreement is effectively created or deemed to be created.

1.6   Any reference in this Assignation to “this Assignation” shall be deemed to
be a reference to this Assignation as a whole and not limited to the particular
Clause, Schedule or provision in which the relevant reference appears and to
this Assignation as amended, novated, assigned, supplemented, extended or
restated from time to time and any reference in this Assignation to a “Clause”
or a “Schedule” is, unless otherwise provided, a reference to a Clause or a
Schedule of this Assignation.   1.7   Unless the context otherwise requires,
words denoting the singular number only shall include the plural and vice versa.
  1.8   Where any provision of this Assignation is stated to include one or more
things, that shall be by way of example or for the avoidance of doubt only and
shall not limit the generality of that provision.   1.9   Any change in the
constitution of the Collateral Agent or its absorption of or amalgamation with
any other person or the acquisition of all or part of its undertaking by any
other person shall not in any way prejudice or affect its rights under this
Assignation.

4

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Exhibit F-5
To Credit Agreement

1.10   Any reference in this Assignation to the liquidation, administration,
insolvency, bankruptcy, judicial factory or other similar incapacity of any body
corporate shall be construed to include the equivalent proceeding or occurrence
in any other jurisdiction.   1.11   This Assignation is a Credit Document for
the purposes of the Credit Agreement.       Intercreditor Agreement   1.12  
Following execution of the Intercreditor Agreement, this Assignation will be
subject to the terms of the Intercreditor Agreement.   1.13   In the event of
any inconsistency between a provision of this Assignation and a provision of the
Intercreditor Agreement, the provision of the Intercreditor Agreement will
prevail.       Incorporation   1.14   Without prejudice to the application of
any other provisions of the Credit Agreement to this Assignation (by reason of
this Assignation being a Credit Document for the purposes of the Credit
Agreement), sections 4.04 (Tax Gross-Up and Indemnities), 11.02 (Right of
Setoff), 11.05 (No Waiver; Remedies Cumulative), 11.07 (Calculations;
Computations), 11.12 (Amendment or Waiver, etc.) and 11.19 (Judgment Currency)
of the Credit Agreement shall apply to this Assignation, mutatis mutandis, as if
the same had been set out herein with references in such clauses to:

  1.14.1   any “Credit Party” or “Borrower” being construed, (A) if the context
so requires, as references to the Company (as defined herein) or (B) if the
context so requires, including the Company (as defined herein);     1.14.2   the
“Agreement” being construed as references to this Assignation;     1.14.3   the
“parties” or “party” being construed as references to the Parties or, as the
case may be, a Party to this Assignation;     1.14.4   the “Credit Documents”
being construed as (a) including this Assignation; or (b) if the context so
requires, as references specifically to this Assignation; and     1.14.5   in
the context of section 4.04 (Tax Gross-Up and Indemnities) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being, if the context so
requires, construed, in each case, as references to the Collateral Agent and, in
the context of section 11.01(a)(ii) (Payment of Expenses, etc.) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being construed, in each
case, as references to each Secured Creditor, Delegate (as defined herein),
attorney, manager, agent or other person as may be appointed by the Collateral
Agent under this Assignation; and     1.14.6   in the context of section 11.07
and 11.12, references to particular sections are references to sections in the
Credit Agreement.

2.   Covenant to Pay       Covenant to pay Secured Liabilities   2.1   The
Company covenants that it shall promptly on demand pay to the Secured Creditors,
in accordance with the Credit Documents:

5

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Exhibit F-5
To Credit Agreement

  2.1.1   the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, PIK Interest
(including, without limitation, all interest (including PIK Interest) that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganisation or similar proceeding of the
Company at the rate provided for in the respective documentation, whether or not
a claim for post-petition interest is allowed in any such proceeding), fees,
costs and indemnities) of the Company to the Lenders, whether now existing or
incurred after the date of this Assignation under, arising out of, or in
connection with, each Credit Document to which the Company is a party and the
due performance and compliance by the Company with all of the terms, conditions
and agreements contained in each such Credit Document;     2.1.2   the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by the Company to the Approved Third
Party Credit Providers under any Secured Hedging Agreement, whether now in
existence or arising after the date of this Assignation and the due performance
and compliance by the Company with all of the terms, conditions and agreements
contained in each such Secured Hedging Agreement;     2.1.3   the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by the Company to the Approved Third
Party Credit Providers under any Secured Reimbursement Agreement, whether now in
existence or arising after the date of this Assignation (including, without
limitation, all obligations, liabilities and indebtedness of the Company under
any Guaranty in respect of the Secured Reimbursement Agreements), and the due
performance and compliance by the Company with all of the terms, conditions and
agreements contained in each such Secured Reimbursement Agreement;     2.1.4  
any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;     2.1.5   in
the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of the Company referred to in
paragraphs 2.1.1, 2.1.2 and 2.1.3 above, on and after the Enforcement Date, the
reasonable expenses of retaking, holding, preparing for sale or lease, selling
or otherwise disposing of or realising on the Collateral, or of any exercise by
the Collateral Agent of its rights under this Assignation, together with
reasonable attorneys’ fees and court costs;     2.1.6   all amounts paid by any
Indemnified Party as to which such Indemnified Party has the right to
reimbursement under this Assignation; and     2.1.7   all amounts owing to any
Agent pursuant to any of the Credit Documents in its capacity as such,

6

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Exhibit F-5
To Credit Agreement

    it being acknowledged and agreed that the “Secured Liabilities” shall
include extensions of credit of the types described above, whether outstanding
on the date of this Assignation or extended from time to time after the date of
this Assignation.

2.2   Notwithstanding anything to the contrary contained in this Assignation or
any other Credit Document, the aggregate amount of Secured Liabilities of the
type described in paragraphs 2.1.2 and 2.1.3 of Clause 2.1 (collectively, the
“Secured Third Party Credit Obligations”) secured by the Collateral shall not at
any time exceed $25,000,000 (the “Secured Third Party Credit Obligations Cap”).
No amount of Secured Third Party Credit Obligations in excess of the Secured
Third Party Credit Obligations Cap shall receive the benefit of the security
interests created under this Assignation and in no event shall any proceeds
received upon the sale of, collection from, or other realisation upon all or any
part of the Collateral be applied to the Secured Third Party Credit Obligations
in any amount in excess of the Secured Third Party Credit Obligations Cap.      
Potential invalidity   2.3   Neither the covenant to pay in Clause 2.1 (Covenant
to pay Secured Liabilities), nor the Security created by this Assignation shall
extend to or include any liability or sum which would, but for this Clause 2.3,
cause such covenant, obligation or Security to be unlawful under any applicable
law.   3.   Grant of Security   3.1   The Company, as a continuing security for
the payment, performance and discharge of all the Secured Liabilities, hereby
assigns to the Collateral Agent (as agent and trustee for itself and each of the
other Secured Creditors) the Assigned Rights.   4.   Perfection of Security    
  Notices of Assignation   4.1   The Company agrees that the Collateral Agent
and any of their respective agents may give notice of the relevant provisions of
this Assignation to the Secretary of State.   4.2   The Company shall join the
Collateral Agent in giving a notice of assignation in the form set out in Part 1
of Schedule 2 (Form of Notice) or in such other form as the Collateral Agent may
reasonably require, duly signed by or on behalf of the Company, within 5
Business Days to each person who is a party to an Agreement (as required by the
Collateral Agent) and shall use all reasonable endeavours to procure that each
person on whom any such notice is served promptly provides to the Collateral
Agent a duly signed acknowledgement of that notice in the form set out in Part 2
of Schedule 2 (Form of Acknowledgement) or in such other form as the Collateral
Agent may reasonably require.       Deposit of Documents   4.3   The Company
shall, promptly upon the request of the Collateral Agent from time to time,
deliver to the Collateral Agent a copy of each Project Agreement as is then in
effect and all such other documents relating to the Assigned Rights as the
Collateral Agent may reasonably require.

7

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Exhibit F-5
To Credit Agreement

5.   Further Assurance       Further Assurance   5.1   The Company shall
promptly do all such acts and execute all such documents (including assignments,
assignations, transfers, mortgages, charges, notices and instructions) as the
Collateral Agent may reasonably specify (and in such form as the Collateral
Agent may reasonably require in favour of the Collateral Agent or its
nominee(s)) to:

  5.1.1   perfect the security created or intended to be created in respect of
the Assigned Rights (which may include the execution by the Company of a
mortgage, charge, assignation, assignment or other Security over all or any of
the assets forming part of, or which are intended to form part of, the Assigned
Rights);     5.1.2   confer on the Collateral Agent Security over any assets of
the Company located in any jurisdiction equivalent or similar to the security
intended to be created by, or pursuant to, this Assignation;     5.1.3  
facilitate the exercise of any rights, powers and remedies of the Collateral
Agent or any Delegate provided by or pursuant to this Assignation or by law;    
5.1.4   facilitate the realisation of the assets which form part of, or are
intended to form part of, the Assigned Rights;     5.1.5   assign any Assigned
Rights; and/or     5.1.6   create fixed security over any heritable, freehold,
commonhold or leasehold properties or other properties capable of being charged
by way of fixed security.

    Necessary Action   5.2   The Company shall take all such action as is
available to it (including making all filings and registrations) as may be
necessary for the purpose of the creation, perfection, protection or maintenance
of any security created or intended to be created in favour of the Collateral
Agent by or pursuant to this Assignation.   6.   Undertakings       General  
6.1   The undertakings in this Clause 7 remain in force from the date of this
Assignation for so long as any amount is outstanding under this Assignation.    
  Negative Pledge   6.2   The Company undertakes to the Collateral Agent that it
shall (except as permitted by section 8.01 (Liens) of the Credit Agreement):

  (a)   not create or allow to exist any Security on, over, or affecting, any of
its assets; and     (b)   procure that no member of the Group creates or allows
to exist any Security on, over, or affecting, any of its assets.

8

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Exhibit F-5
To Credit Agreement

    Restriction on Disposals   6.3   The Company undertakes to the Collateral
Agent that it shall (except as permitted by section 8.02 (Consolidation, Merger,
Purchase or Sale of Assets, etc.) of the Credit Agreement) not, either in a
single transaction or in a series of transactions and whether related or not,
dispose of the Assigned Rights or any part of them.       Project Agreements  
6.4   The security created by, or pursuant to, this Assignation in relation to
each Assigned Right shall, to the extent required by the terms of that Assigned
Right, in each case as that agreement may have been subsequently assigned,
transferred or novated, be:

  (a)   without prejudice to the provisions of that Assigned Right;     (b)  
subordinated to the express rights specified under that Assigned Right of the
parties thereto from time to time (other than the Company); and     (c)  
subject to the liabilities and obligations of the Company relating to the
interest of the Company in and under that Assigned Right,

    provided that, nothing in this Clause 6.4 shall (i) release the Company from
any obligations to fulfil any requisite condition in connection therewith or
(ii) (subject to Clause 6.5 below) impose on the Collateral Agent or other party
appointed by it an obligation to perform any of the obligations of the Company
under any Assigned Right or to procure the performance of the Company of any
such obligation.   6.5   The Company and the Collateral Agent acknowledge that:

  (a)   in the event of the Collateral Agent exercising any rights created under
this Assignation in respect of the Enoch PLTPA, the Collateral Agent will
continue to fulfil the obligations of the Company under the Enoch PLTPA; and    
(b)   BP may rely on the undertaking given by the Collateral Agent under Clause
(a) above.

    Prejudicial Action   6.6   The Company will not do or cause or permit to be
done anything, which may in any way reduce, jeopardise or otherwise prejudice
the value to the Collateral Agent of the Assigned Rights.   7.   The Assigned
Rights       Liability of Company   7.1   The Company undertakes and agrees with
the Collateral Agent that, notwithstanding the assignation contained in Clause 3
(Grant of Security), it shall remain liable to observe and perform all of the
obligations assumed by it under or in connection with the Project Agreements and
the Collateral Agent (without prejudice to Clause 6.5 above) shall not have or
incur any obligation or liability under or in connection with the Project
Agreements by reason of that assignation contained in Clause 3 (Grant of
Security).

9

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Exhibit F-5
To Credit Agreement

    Exercise of Rights and Powers   7.2   At any time on or after the
Enforcement Date, the Collateral Agent shall be entitled to exercise, without
notice to the Company or prior authorisation of any court, at any time or times
and in such manner as the Collateral Agent shall think fit all or any of the
rights, powers and remedies held by it as assignee of the Assigned Rights and
(without limitation) to:

  7.2.1   collect, demand and receive or recover by legal process all or any
moneys payable under or in connection with the Project Agreements or for the
time being comprised in the Assigned Rights and on payment to give an effectual
discharge for them;     7.2.2   exercise all such other rights, powers and
remedies as the Company is then entitled to exercise in relation to the Assigned
Rights (or might, but for the terms of this Assignation, exercise) to the
exclusion of the Company (and the Company shall exercise all such rights, powers
and remedies in accordance with the instructions of the Collateral Agent);    
7.2.3   do all such acts, deeds, documents and things as the Collateral Agent
may consider necessary or proper in relation to any of the rights, powers and
remedies referred to above;     7.2.4   to exercise and do all such rights and
things as the Collateral Agent would be entitled to exercise and do if it were
the absolute owner of the Assigned Rights and if the Collateral Agent had been a
party to the Project Agreements instead of the Company including, without
prejudice to the generality of the foregoing, to terminate any or all of the
Project Agreements and any other Assigned Rights, sell (at any time and without
the Collateral Agent being under any obligation to have regard for what effect
the time of sale might have on the realisation price), dispose of and/or take
possession of all or any Assigned Rights;     7.2.5   to apply any monies,
dividends to creditors, share of profits, interest or other payments which may
be received or receivable by the Collateral Agent or by any nominee in respect
of the Assigned Rights as though they were proceeds of sale;     7.2.6   to
settle, adjust, refer to arbitration or any other dispute resolution procedure,
compromise and/or arrange any claims, accounts, disputes, questions and demands
with or by any person relating in any way to the Assigned Rights;     7.2.7   to
bring, prosecute, enforce, defend and abandon actions, suits and proceedings in
relation to the Assigned Rights;     7.2.8   to redeem any security (whether or
not having priority to the security created by or pursuant to this Assignation)
over any Assigned Rights and to settle the accounts of the holders of any such
security; and     7.2.9   to do all such other acts and things it may consider
necessary or expedient for the realisation of the Assigned Rights or incidental
to the exercise of any of the rights conferred on the Collateral Agent under or
by virtue of this Assignation and to concur in the doing of anything which the
Collateral Agent has the right to do and to do any such thing jointly with any
other person.

7.3   Neither the Collateral Agent nor their nominee(s) shall be under any duty
to the Company or any other person to make any enquiry into the nature or
sufficiency of any payment received by it in respect of the Assigned Rights or
the adequacy of performance by any person party to any

10

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Exhibit F-5
To Credit Agreement

    Project Agreement of any of its obligations under or in connection with that
Project Agreement or to present or file or make any claim, take any action or do
any other act or thing for the purpose of collecting and/or enforcing the
payment of any amount to which it may be entitled in respect of the Assigned
Rights or to enforce any other rights, title, interests or claims assigned under
this Assignation or to which the Collateral Agent may at any time be entitled
pursuant to this Assignation.   7.4   The Collateral Agent shall not in any
circumstances, either by reason of any dealing with the Assigned Rights or any
part of the Assigned Rights or for any other reason whatsoever be liable to
account to the Company for anything except in respect of the Assigned Rights own
actual receipts or be liable to the Company for any loss or damage arising from
any realisation by the Collateral Agent of the Assigned Rights or any part of
the Assigned Rights or from any act, default or omission of the Collateral Agent
in relation to the Assigned Rights or any part of the Assigned Rights or from
any exercise or non-exercise by the Collateral Agent of any power, authority or
discretion conferred upon it in relation to the Assigned Rights or any part of
the Assigned Rights by or pursuant to this Assignation or otherwise by any
applicable law.   8.   Enforcement of Security       When Security becomes
Enforceable   8.1   At any time on or after the Enforcement Date, the security
created by, or pursuant to, this Assignation shall become immediately
enforceable and the Collateral Agent may, without notice to the Company or prior
authorisation from any court, in its absolute discretion enforce all or any part
of that security at the times, in the manner and on the terms it thinks fit and,
to the extent permitted by law, take possession of and hold or dispose of all or
any part of the Assigned Rights and exercise the rights and powers conferred by
law and those referred to in Clause 7.2.       Right of Appropriation   8.2  
Without prejudice to the other provisions of this Assignation, to the extent
that any of the Assigned Rights constitute “financial collateral”, and this
Assignation and the obligations of the Company hereunder constitute a “security
financial collateral arrangement” (in each case as defined in, and for the
purposes of, the Financial Collateral Arrangements (No. 2) Regulations 2003 (SI
2003/3226) (the “Regulations”), the Collateral Agent shall at any time on or
after the Enforcement Date have the right to appropriate all or any part of the
Assigned Rights in or towards discharge of the Secured Liabilities. For this
purpose, the parties agree that the value of any such Assigned Rights so
appropriated shall be the market price of such Assigned Rights at the time the
right of appropriation is exercised as determined by the Collateral Agent by
reference to such method or source of valuation as the Collateral Agent may
select, including by independent valuation. For this purpose, the parties agree
that the methods or sources of valuation provided for in this Clause 8.2 (Right
of appropriation) or selected by the Collateral Agent in accordance with this
Clause 8.2 (Right of appropriation) shall constitute a commercially reasonable
method of valuation for the purposes of the Regulations.   8.3   The Collateral
Agent shall notify the Company as soon as reasonably practicable of the exercise
of its rights of appropriation as regards such of the Assigned Rights as are
specified in such notice.       Redemption of Prior Security   8.4   At any time
on or after the Enforcement Date, the Collateral Agent may:

11

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Exhibit F-5
To Credit Agreement

  8.4.1   redeem any prior Security over any Assigned Rights; or     8.4.2  
procure the transfer of that Security to the Collateral Agent; or     8.4.3  
settle and pass the accounts of the person or persons entitled to such Security
(and any accounts so settled and passed shall be conclusive and binding on the
Company).

8.5   All principal moneys, interest, costs, charges and expenses of and
incidental to any such redemption or transfer shall be paid by the Company to
the Collateral Agent and every Delegate on demand and shall be secured by this
Assignation.   9.   Discretions and Delegation       Discretion   9.1   Any
liberty or power which may be exercised or any determination which may be made
under this Assignation by the Collateral Agent or any Delegate may be exercised
or made in its absolute and unfettered discretion without any obligation to give
reasons.       Delegation   9.2   The Collateral Agent may delegate (either
generally or specifically) by power of attorney or in any other manner to any
person any right, power, authority or discretion conferred on it by this
Assignation (including the power of attorney).   9.3   Any such delegation may
be made upon such terms and conditions (including the power to sub-delegate) as
the Collateral Agent (as the case may be) shall think fit.   9.4   The
Collateral Agent shall be in any way liable or responsible to the Company for
any loss or liability arising from any act, default, omission or misconduct on
the part of any Delegate.   10.   Power of Attorney       Appointment and Powers
  10.1   The Company hereby irrevocably and by way of security appoints the
Collateral Agent and any Delegate severally to be its attorney in its name and
on its behalf and as its act and deed:

  10.1.1   to execute and deliver any documents or instruments which the
Collateral Agent may require for perfecting the title of the Collateral Agent to
the Charged Property or for vesting the same in the Collateral Agent, its
nominee or any purchaser,     10.1.2   to sign, execute, seal and deliver and
otherwise perfect any further security document which the Company is required to
enter into pursuant to this Assignation; and security created by, or pursuant
to, this Assignation; and     10.1.3   otherwise generally to sign, seal,
execute and deliver all deeds, assurances, agreements and documents and to do
all acts and things which (i) may be required for the full exercise of all or
any of the powers conferred on the Collateral Agent under this Assignation;
(ii) the Company is required to do pursuant to this Assignation; or (iii) may be
deemed expedient by the Collateral Agent in connection with (A) any
preservation, disposition, realisation or getting in by the Collateral Agent of
the Assigned Rights or any part thereof or (B) any other exercise of any other
power under this Assignation.

12

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Exhibit F-5
To Credit Agreement

    The Collateral Agent confirms that it will only exercise the rights set out
in this Clause 10.1 following the occurrence of a Default or Event of Default
under the Credit Documents.       Ratification   10.2   The Company ratifies and
confirms and agrees to ratify and confirm all acts and things which any attorney
mentioned in this Clause 10 (Power of Attorney) does or purports to do in
exercise of the powers granted by this Clause 10. All moneys expended by any
such attorney shall be deemed to be expenses incurred by the Collateral Agent
under this Assignation.   11.   Protection of Purchasers       Consideration  
11.1   The receipt of the Collateral Agent or any Delegate shall be a conclusive
discharge to a purchaser and, in making any sale or other disposal of any of the
Assigned Rights (including a disposal by a Delegate to any subsidiary of the
Company) or in making any acquisition in the exercise of their respective
powers, the Collateral Agent and every Delegate may do so for such
consideration, in such manner and on such terms as it or he thinks fit.      
Protection of Third Parties   11.2   No person (including a purchaser) dealing
with the Collateral Agent or any Delegate shall be bound to enquire:

  11.2.1   whether the Secured Liabilities have become payable; or     11.2.2  
whether any power which the Collateral Agent or any Delegate is purporting to
exercise has arisen or become exercisable; or     11.2.3   whether any money
remains due under the Credit Documents; or     11.2.4   how any money paid to
the Collateral Agent or to any Delegate is to be applied,

    or shall be concerned with any propriety, regularity or purpose on the part
of the Collateral Agent or any Delegate in such dealings or in the exercise of
any such power.   12.   Application of Proceeds       Order of Application  
12.1   Any monies received under the powers hereby conferred shall, subject to
the repayment of any claims or debts having priority to this Assignation, be
applied for the purposes and in the order of priority provided for in:

  (a)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and     (b)   following execution of the
Intercreditor Agreement, the relevant provision in the Intercreditor Agreement
relating to application of proceeds received under the Credit Documents.

13

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Exhibit F-5
To Credit Agreement

    Suspense account   12.2   The Collateral Agent may credit any monies
received under this Assignation to an interest bearing suspense account for so
long and in such manner as the Collateral Agent may from time to time determine.
  13.   No Liability as Creditor nor Mortgagee in Possession   13.1   Neither
the Collateral Agent nor any Delegate shall in any circumstances (either by
reason of entering into or taking possession of any Assigned Rights or for any
other reason and whether as creditor, heritable creditor or mortgagee in
possession or on any other basis) be liable to account to the Company for
anything, except actual receipts, or be liable to the Company for any costs,
charges, losses, liabilities or expenses arising from the realisation of any
Assigned Rights or from any act, default or omission of the Collateral Agent,
any Delegate or any of their respective officers, agents or employees in
relation to the Assigned Rights or from any exercise or purported exercise or
non-exercise by the Collateral Agent or any Delegate of any power, authority or
discretion provided by or pursuant to this Assignation or by law or for any
other loss of any nature whatsoever in connection with the Assigned Rights or
the Credit Documents.   14.   Effectiveness of Security       Continuing
Security   14.1   The security created by, or pursuant to, this Assignation
shall remain in full force and effect as a continuing security for the Secured
Liabilities, unless and until discharged by the Collateral Agent, and will
extend to the ultimate balance of all the Secured Liabilities, regardless of any
intermediate payment or discharge in whole or in part.       Cumulative Rights  
14.2   The security created by, or pursuant to, this Assignation and all rights,
powers and remedies of the Collateral Agent provided by or pursuant to this
Assignation or by law shall be cumulative, in addition to and independent of any
other Security now or subsequently held by the Collateral Agent or any other
Secured Creditor for the Secured Liabilities or any other obligations or any
rights, powers and remedies provided by law. No prior Security held by the
Collateral Agent (whether in its capacity as agent and trustee or otherwise) or
any of the other Secured Creditors over the whole or any part of the Assigned
Rights shall be superseded by, supersede or merge into, the security created by,
or pursuant to, this Assignation.       Reinstatement   14.3   If any discharge,
release or arrangement (whether in respect of the obligations of a Credit Party
or any Security for those obligations or otherwise) is made by the Collateral
Agent or any other Secured Creditor in whole or in part on the faith of any
payment, Security or other disposition which is avoided or must be restored in
insolvency, liquidation, administration or otherwise, without limitation, then
the liability of the Company under, the security created by, or pursuant to,
this Assignation will continue or be reinstated as if the discharge, release or
arrangement had not occurred.   14.4   The Collateral Agent may concede or
compromise any claim that any payment or any discharge is liable to avoidance,
restoration or reduction.

14

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Exhibit F-5
To Credit Agreement

    Waiver of Defences   14.5   Neither the obligations of the Company under
this Assignation nor the security created by, or pursuant to, this Assignation
nor the rights, powers and remedies of the Collateral Agent provided by or
pursuant to this Assignation or by law will be affected by an act, omission,
matter or thing which, but for this Clause 14.5, would reduce, release or
prejudice any of its obligations under this Assignation, any of that security or
any of those rights, powers and remedies (without limitation and whether or not
known to it or the Collateral Agent or any other Secured Creditor) including:

  14.5.1   any time, waiver or consent granted to, or composition with any
Credit Party or any other person;     14.5.2   the release of any person under
the terms of any composition or arrangement with any creditor of any person;    
14.5.3   the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against, or
Security over assets of any Credit Party, or any other person or any
non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full value of any
Security;     14.5.4   any incapacity or lack of power, authority or legal
personality of, or dissolution or change in the members or status of any Credit
Party , or any other person;     14.5.5   any variation, amendment, novation,
supplement, extension (whether of maturity or otherwise), substitution,
restatement (in each case, however fundamental and of whatsoever nature and
whether or not more onerous) or replacement of any Credit Document or any other
document or Security including without limitation any change in the purpose of,
any extension of or any increase in, any facility or the addition of any new
facility under any Credit Document or other document or Security;     14.5.6  
any unenforceability, illegality or invalidity of any obligation of any other
person under any Credit Document or any other document or Security; or    
14.5.7   any insolvency or similar proceedings.

    Guarantor Intent   14.6   Without prejudice to the generality of Clause 14.5
(Waiver of Defences), the Company expressly confirms that it intends that the
security created by, or pursuant to, this Assignation shall extend from time to
time to any (however fundamental) variation, increase, extension or addition of
or to any facility or amount made available under any of the Credit Documents
and/or any of the Credit Documents including, without limitation, any of the
same which are for the purposes of or in connection with any of the following:
business acquisitions of any nature; increasing working capital; enabling
investor distributions to be made; carrying out restructurings; refinancing
existing facilities; refinancing any other indebtedness; making facilities
available to new borrowers; and/or any other variation or extension of the
purposes for which any such facility or amount might be made available from time
to time, together with any fees, costs and/or expenses associated with any of
the foregoing.

15

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Exhibit F-5
To Credit Agreement

    Immediate Recourse   14.7   The Company waives any right it may have of
first requiring the Collateral Agent or any other Secured Creditor to proceed
against or enforce any other rights or Security or claim payment from any person
or file any proof or claim in any insolvency, administration, winding up or
liquidation proceedings relating to any person before claiming from it under
this Assignation. This waiver applies irrespective of any law or any provision
of any Credit Document to the contrary.       Appropriations   14.8   Until all
the Secured Liabilities which may be or become payable by the Company under or
in connection with this Assignation have been irrevocably paid, performed and
discharged in full, the Collateral Agent may:

  14.8.1   without affecting the liability of the Company under this
Assignation:

  (a)   refrain from applying or enforcing any other moneys, Security or rights
held or received by it in respect of the Secured Liabilities; or     (b)   apply
and enforce the same in such manner and order as it sees fit (whether against
the Secured Liabilities or otherwise) and the Company shall not be entitled to
direct the appropriation of any such moneys, Security or rights or to enjoy the
benefit of the same; and/or

  14.8.2   hold in a suspense account any moneys received from the Company or on
account of the Company’s liability in respect of the Secured Liabilities.
Amounts standing to the credit of any such suspense account shall bear interest
at a rate considered by the Collateral Agent to be a fair market rate.

    Deferral of Company’s Rights   14.9   Until the Secured Liabilities, and all
amounts which may be or become due and payable in respect of the Secured
Liabilities, have been irrevocably paid, performed or discharged in full and
unless the Collateral Agent otherwise directs, the Company shall not exercise
any rights which it may have by reason of performance by it of its obligations
under this Assignation or by reason of any amount being payable to:

  14.9.1   be indemnified by a Credit Party;     14.9.2   claim any contribution
from any other guarantor of any Credit Party’s obligations under the Credit
Documents;     14.9.3   take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Collateral Agent and/or any of
the other Secured Creditors under the Credit Documents or of any other Security
taken pursuant to, or in connection with, the Credit Documents by the Collateral
Agent or any other Secured Creditor;     14.9.4   to bring legal or other
proceedings for an order requiring a Credit Party to make any payment, or
perform any obligation, in respect of which the Company has given a guarantee,
undertaking or indemnity;     14.9.5   exercise any right of set-off against any
Credit Party; and/or

16

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Exhibit F-5
To Credit Agreement

  14.9.6   claim or prove as a creditor of any Credit Party or in its estate in
competition with any Secured Creditor.

14.10   The rights of the Collateral Agent and/or any of the other Secured
Creditors under Clause 14.9 above shall be free from any right of quasi-retainer
or other rule or principle of fund ascertainment arising either at law or in
equity.   14.11   If the Company receives any benefit, payment or distribution
in relation to any rights referred to in Clause 14.9 above, it shall hold that
benefit, payment or distribution to the extent necessary to enable all the
Secured Liabilities, and all amounts which may be or become due and payable in
respect of the Secured Liabilities, to be repaid in full on trust for the
Collateral Agent (as agent and trustee for itself and each of the other Secured
Creditors) and shall promptly pay or transfer the same to the Collateral Agent
or as the Collateral Agent may direct for application in accordance with Clause
12 (Application of Proceeds).       No Security held by Company   14.12   The
Company shall not take or receive any Security from a Credit Party or any other
person in connection with its liability under this Assignation. However, if any
such Security is so taken or received by the Company:

  14.12.1   the Company undertakes to hold it on trust for the Collateral Agent
(as agent and trustee for itself and each of the other Secured Creditors),
together with all moneys at any time received or held in respect of such
Security, for application in or towards payment and discharge of the Secured
Liabilities; and     14.12.2   on demand by the Collateral Agent, the Company
shall promptly transfer, assign or pay to the Collateral Agent all Security and
all moneys from time to time held on trust by it under this Clause 14.12.

15.   Certificates and Determinations   15.1   Any certificate or determination
by the Collateral Agent of a rate or amount under this Assignation is, in the
absence of manifest error, conclusive evidence of the matters to which it
relates.   16.   Partial Invalidity   16.1   If, at any time, any provision of
this Assignation or becomes illegal, invalid or unenforceable in any respect
under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Assignation nor the legality,
validity or enforceability of such provision under the law of any other
jurisdiction will in any way be affected or impaired and, if any part of the
security created, or intended to be created, by this Assignation is invalid,
unenforceable or ineffective for any reason, that shall not affect or impair any
other part of the security.   17.   Remedies and Waivers   17.1   No failure to
exercise, nor any delay in exercising, on the part of the Collateral Agent, any
right, remedy or power under this Assignation shall operate as a waiver, nor
shall any single or partial exercise of any right, remedy or power prevent any
further or other exercise or the exercise of any other right, remedy or power.
The rights, remedies and powers provided in this Assignation are cumulative and
are in addition to, not exclusive of, any rights, remedies or powers provided by
law.

17

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Exhibit F-5
To Credit Agreement

17.2   Any amendment, waiver or consent by the Collateral Agent under this
Assignation must be in writing and may be given subject to any conditions
thought fit by the Collateral Agent. Any waiver or consent shall be effective
only in the instance and for the purpose for which it is given.   18.   Notices
      Communications in writing   18.1   Any communication to be made under or
in connection with this Assignation shall be made in writing and, unless
otherwise stated, may be made by fax or letter.       Addresses   18.2   The
address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of the Company and the Collateral
Agent for any communication or document to be made or delivered under or in
connection with this Assignation is that identified with its name below:

         
 
  Company    
 
       
 
  Address:   Endeavour Energy UK Limited
 
      114 St. Martin’s Lane
 
      London
 
      WC2N 4BE
 
      England
 
       
 
  For the Attentionof:   Mike Kirksey
 
       
 
  Fax Number:   +44 207 451 2352
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com
 
       
 
  With a copy to:   Endeavour International Corporation
 
      1001 Fannin Street, Suite 1600
 
      Houston
 
      Texas 77002
 
      United States of America
 
       
 
  For the Attention of:   Mike Kirksey / Cathy Stubbs
 
       
 
  Fax Number:   +1 713 307 8794
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com /
 
      Cathy.Stubbs@endeavourcorp.com
 
       
 
  Collateral Agent    
 
       
 
  Address:   Cyan Partners, LP
 
      399 Park Avenue
 
      39th Floor
 
      New York
 
      10022 United States of America

18

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Exhibit F-5
To Credit Agreement

         
 
  Fax Number:   +1 212 380 5871
 
       
 
  For the Attention of:   Divya Gopal

    or any substitute address, fax number or department or officer as the
Company may notify to the Collateral Agent or, as the case may be, the
Collateral Agent may notify to the Company, in each case by not less than five
Business Days’ notice.       Delivery   18.3   Any communication or document
made or delivered by one person to another under or in connection with this
Assignation will only be effective:

  18.3.1   if by way of fax, when received in legible form; or     18.3.2   if
by way of letter, when it has been left at the relevant address or five Business
Days after being deposited in the post postage prepaid in an envelope addressed
to it at that address,

    and, if a particular department or officer is specified as part of its
address details provided under Clause 18.2 (Addresses), if addressed to that
department or officer.       Any communication or document to be made or
delivered to the Collateral Agent will be effective only when actually received
by it and then only if it is expressly marked for the attention of the
department or officer identified with the Collateral Agent’s name in Clause 18.2
(Addresses) (or any substitute department or officer as it shall specify for
this purpose).   19.   Assignation   19.1   The Company may not assign or
transfer any of its rights or obligations under this Assignation without the
prior consent of each Lender. The Collateral Agent may assign and transfer all
or any part of its rights and obligations under this Assignation to any
replacement Collateral Agent appointed pursuant to the terms of the Credit
Agreement.   20.   Releases   20.1   Upon the expiry of the Security Period (but
not otherwise) and subject to Clauses 14.3 and 14.4 (Reinstatement), the
Collateral Agent shall, at the request and cost of the Company, take whatever
action is necessary to release the Assigned Rights of from the security created
by, or pursuant to, this Assignation.   21.   Consent to Registration   21.1  
The Company consents to the registration of this Assignation and each
certificate referred to in Clause 15 (Certificates and Determinations) for
preservation and execution.   22.   Governing Law   22.1   This Assignation and
any non-contractual obligations arising out of or in connection with it are
governed by the law of Scotland.

19

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Exhibit F-5
To Credit Agreement

23.   Enforcement       Jurisdiction   23.1   The courts of Scotland have
exclusive jurisdiction to settle any dispute arising out of or in connection
with this Assignation (including a dispute relating to the existence, validity
or termination of this Assignation or any non-contractual obligation arising out
of or in connection with this Assignation) (a “Dispute”).   23.2   The Company
agrees that the courts of Scotland are the most appropriate and convenient
courts to settle Disputes and accordingly it will not argue to the contrary or
take proceedings relating to a Dispute in any other courts.   23.3   Clauses
23.1 and 23.2 above are for the benefit of the Collateral Agent only. As a
result, the Collateral Agent shall not be prevented from taking proceedings
relating to a Dispute in any other courts with jurisdiction. To the extent
allowed by law, the Collateral Agent may take concurrent proceedings in any
number of jurisdictions.   23.4   Without prejudice to Clauses 23.1 and 23.2
above, the Company further agrees that proceedings relating to a Dispute may be
brought in the courts of Scotland and England and irrevocably submits to the
jurisdiction of such courts.   23.5   The Company irrevocably waives any right
it may have to the trial by jury in any proceedings relating to a Dispute.

20

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Exhibit F-5
To Credit Agreement

    Waiver of Immunity   23.6   To the extent that the Company may in any
jurisdiction claim for itself or its assets immunity from suit, execution,
attachment (whether in aid of execution, before judgment or otherwise) or other
legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not claimed), the
Company irrevocably agrees not to claim and irrevocably waives such immunity to
the fullest extent permitted by the laws of that jurisdiction.

IN WITNESS WHEREOF: this Assignation consisting of this and the preceding twenty
(20) pages and the two Schedules annexed are executed as follows:
THE COMPANY

     
SUBSCRIBED FOR and ON BEHALF OF
   
 
   
ENDEAVOUR ENERGY UK LIMITED
acting by of 1001 Fannin Street, Suite 1600, Houston, Texas 77002, United States
of America in the exercise of a power of attorney dated 3 August 2010 granted by
Endeavour Energy UK Limited in the presence of:
  Duly Authorised Attorney

     
Witness signature:
   
 
   
 
   
Witness name:
   
 
   
 
   
Witness address:
   
 
   
 
   
 
   
 
   
 
   
Place of Signing:
   
 
   
 
   
Date of Signing:
   
 
   

THE COLLATERAL AGENT

         
SUBSCRIBED FOR and ON BEHALF OF
  )    
 
     
CYAN PARTNERS, LP (as agent and trustee for
  )   (Authorised Signatory)
itself and each of the other Secured Creditors) by its
  )    
attorney in the presence of:
  )    

     
Witness signature:
   
 
   
 
   
 
   
Witness name:
   
 
   
 
   
Witness address:
   
 
   
 
   
 
   
 
   
 
   
Place of Signing:
   
 
   
 
   
Date of Signing:
   
 
   

21

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Exhibit F-5
To Credit Agreement
Schedule 1
This is the Schedule 1 referred to in the foregoing Assignation by Endeavour
Energy UK Limited in
favour of Cyan Partners, LP (as agent and trustee for itself and each of the
other Secured
Creditors) dated           August 2010
Part A
Licences

1.   The Petroleum Production Licence P.592 dated 3 June 1987;   2.   The
Petroleum Production Licence P.361 dated 16 December 1980;   3.   The Petroleum
Production Licence P.213 dated 15 March 1972;   4.   The Petroleum Production
Licence P.218 dated 15 March 1972;   5.   The Petroleum Production Licence P.588
dated 3 June 1987;   6.   The Petroleum Production Licence P.226 dated 15
March 1972;   7.   The Petroleum Production Licence P.339 dated 16
December 1980;   8.   The Petroleum Production Licence P.219 dated 15
March 1972;   9.   The Petroleum Production Licence P.1314 dated 22
December 2005; and   10.   The Petroleum Production Licence P.255 dated 30
November 1977.

Part B
Agreements

1.   The joint operating agreement for P.592 Block 20/4b dated 2 September 1999;
  2.   The Goldeneye unitisation and unit operating agreement dated 15
March 2002;   3.   The joint operating agreement for P.361 Block 29/1b dated 23
November 1988;   4.   The Triton joint facilities operating agreement dated 14
April 2000;   5.   The Bittern unitisation and unit operating agreement dated 23
January 2002;   6.   The joint operating agreement for P.213 Block 16/26a (Area
A — “Alba Field Area”) dated 10 October 1990;   7.   The joint operating
agreement for P.218 and P.588 Blocks 15/21f and 15/21b dated 13 August 1987 (as
it applies to the Ivanhoe Area, the Rob Roy Area and the Hamish Area by virtue
of a Supplemental Agreement dated 31 December 1987);   8.   The joint operating
agreement for P.226 Block 15/27 dated 21 January 1998 as it applies in the
manner of a separate contract to Area A — “Renee” (as described in the agreement
entitled “Amendment to the Joint Operating Agreement for United Kingdom
Petroleum Production Licence P.226 for Block 15/27” dated 25 February 2000 (the
“Amendment Agreement”));

22

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Exhibit F-5
To Credit Agreement

9.   The joint operating agreement for P.226 Block 15/27 dated 21 January 1998
(as amended under the terms of the Amendment Agreement) as it applies in the
manner of a separate contract to Area Beta — “Rochelle” (as defined in an
agreement dated 23 December 2009 entitled “Amendment to the Joint Operating
Agreements for United Kingdom Petroleum Production Licence P.226 for Block 15/27
Area B and United Kingdom Petroleum Production Licence P.226 for Block 15/27
Area C” under which Areas B and C (each as defined in the Amendment Agreement)
were merged and a new Area Beta was created);   10.   The joint operating
agreement for P.339 Block 15/28b (“Rubie Field Area”) dated 26 January 1999;  
11.   The joint operating agreement for P.219 Block 16/13a & 16/13e — “Enoch”
dated 7 March 1986;   12.   The Enoch unitisation and unit operating agreement
dated 1 July 2005;   13.   The Enoch PL Transport and Processing Agreement dated
24 February 2006;   14.   The joint operating agreement for P.1314 Block 23/16f
— “Columbus” dated 27 September 2006; and   15.   The joint operating agreement
for P.255 Block 22/06a North — “Bacchus” dated 15 September 2006.

23

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Exhibit F-5
To Credit Agreement

Schedule 2
This is the Schedule 2 referred to in the foregoing Assignation by Endeavour
Energy UK Limited in
favour of Cyan Partners, LP (as agent and trustee for itself and each of the
other Secured
Creditors) dated           August 2010
Part 1 — Form of Notice
[Headed notepaper of Endeavour Energy UK Limited]
BY REGISTERED MAIL
To: [relevant counterparty]
Dated [•]
Dear Sirs
Notice of Assignment
We hereby give you notice that by an English law debenture dated [•] August 2010
(the “Debenture”) and a Scots law Assignation of Security dated [•] August 2010
(the “Assignation”) made between ourselves (the “Company”) and Cyan Partners, LP
(the “Collateral Agent”) all of our rights to and title and interest from time
to time in the property described in the Annex to this notice (the “Assigned
Property”) were assigned by us to the Collateral Agent in accordance with the
provisions of the relevant agreements.
On behalf of the Collateral Agent, we hereby irrevocably instruct and authorise
you:

1.   on written request from the Collateral Agent to make all payments due to us
in respect of the Assigned Property to the Collateral Agent instead at [details]
unless and until the Collateral Agent notifies you otherwise; and   2.   to
disclose to the Collateral Agent such information regarding the Assigned
Property as it may from time to time reasonably request and to send copies of
all notices relating to the Assigned Property to the Collateral Agent.

Would you please acknowledge receipt of this Notice by returning to us the copy
of this Notice duly signed by your authorised signatory.
Your acknowledgement will be deemed to confirm in favour of the Collateral Agent
that you:

1.   have not received any other notice of the interest of any third party
relating to the Assigned Property;   2.   are not aware of any dispute between
ourselves and yourselves relating to the Assigned Property; and   3.   shall not
raise any set off, defence or counter claim against the Collateral Agent in
respect of any payments now or in future expressed to be payable under the
Assigned Property.

This Notice is, to the extent that it relates to any requirement for notice
under the Assignation, governed by the laws of Scotland and any dispute or claim
arising out of or in connection with it and/or the

24

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Exhibit F-5
To Credit Agreement
Assignation or its subject matter, existence, negotiation, validity,
termination, or enforceability (including any non-contractual disputes or
claims) shall be governed by and construed in accordance with the laws of
Scotland.
This Notice is, to the extent that it relates to any requirement for notice
under the Debenture, governed by English law and any dispute or claim arising
out of or in connection with it and/or the Debenture or its subject matter,
existence, negotiation, validity, termination, or enforceability (including any
non-contractual disputes or claims) shall be governed by and construed in
accordance with English law.
Yours faithfully
 
for and on behalf of
Endeavour Energy UK Limited
Part 2 — Form of Acknowledgement

To:    Cyan Partners, LP Park Avenue, 39th Floor, New York, New York, 10022
(Attention: Divya Gopal)       Endeavour Energy UK Limited, 33rd Floor, City
Point, One Ropemaker St, London EC2Y 9UE

Dated [•]
Description of Assigned Property
Dear Sirs
Notice of Assignment
We acknowledge receipt of the enclosed Notice of Assignment.
Yours faithfully
 
duly authorised signatory for and on
behalf of [relevant counterparty]

25

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Dated           August 2010

 
ENDEAVOUR ENERGY UK LIMITED
AND
CYAN PARTNERS, LP
(as agent and trustee for itself and each of the other Secured Creditors)
 
ASSIGNATION IN SECURITY
 
CMS Cameron McKenna LLP
6 Queens Road
Aberdeen
AB15 4ZT
T +44(0)1224 622 002
F +44(0)1224 622 066
Ref: ANFR/MAMC/FRFO/042158.00013

 

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Exhibit F-5
To Credit Agreement
Table of Contents

              1.  
Definitions and Interpretation
    1   2.  
Covenant to Pay
    5   3.  
Grant of Security
    7   4.  
Perfection of Security
    7   5.  
Further Assurance
    8   6.  
Undertakings
    8   7.  
The Assigned Rights
    9   8.  
Enforcement of Security
    11   9.  
Discretions and Delegation
    12   10.  
Power of Attorney
    12   11.  
Protection of Purchasers
    13   12.  
Application of Proceeds
    13   13.  
No Liability as Creditor nor Mortgagee in Possession
    14   14.  
Effectiveness of Security
    14   15.  
Certificates and Determinations
    17   16.  
Partial Invalidity
    17   17.  
Remedies and Waivers
    17   18.  
Notices
    18   19.  
Assignation
    19   20.  
Releases
    19   21.  
Consent to Registration
    19   22.  
Governing Law
    19   23.  
Enforcement
    20  

 

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THIS BOND AND FLOATING CHARGE by:

(1)   ENDEAVOUR ENERGY UK LIMITED (a company registered in England and Wales
with registration number 5030838) whose registered office is at 33rd Floor, City
Point, One Ropemaker St, London EC2Y 9UE (the “Company”); in favour of   (2)  
CYAN PARTNERS, LP (as agent and trustee for itself and each of the other Secured
Creditors (as defined below)) (the “Collateral Agent”).

WHEREAS:

    The Board of Directors of the Company is satisfied that the giving of the
security contained or provided for in this Charge is likely to promote the
success of the Company for the benefit of its members as a whole and that its
execution and delivery and the exercise of the rights and performance of its
obligations under this Charge would not contravene any provision of its
constitution and its Board have passed a resolution to that effect.

NOW IT IS AGREED as follows:

1.   Definitions and Interpretation       Definitions   1.1   Terms defined in
the Credit Agreement (as defined below) shall, unless otherwise defined in this
Charge or unless a contrary intention appears, bear the same meanings when used
in this Charge and the following terms shall have the following meanings:      
“Business Day”: shall mean for all purposes, any day except Saturday, Sunday and
any day which shall be in New York, London or Aberdeen, a legal holiday or a day
on which banking institutions are authorized or required by law or other
government action to close.       “Charge”: means this instrument and all its
provisions.       “Charged Property”: means the whole of the Properties
(including uncalled capital) which is or may be from time to time comprised in
the Properties and undertaking of the Company.       “Credit Agreement”: means
the term loan credit agreement dated on or about the date of this Charge between
(among others) the Company and the Administrative Agent.       “Credit Party”:
shall have the meaning given to it in the Credit Agreement.       “Delegate”:
means any person appointed by the Collateral Agent or any Receiver pursuant to
Clause 9.2 to 9.4 (Delegation) and any person appointed as attorney of the
Collateral Agent and/or any Receiver or Delegate.       “Enforcement Date”:
means the date on which a notice is issued by the Administrative Agent to the
Borrower under section 9 (Events of Default) of the Credit Agreement upon the
occurrence of an Event of Default which is continuing.       “Group”: means
Endeavour International Corporation and its Subsidiaries for the time being.    
  “Indemnified Party”: shall have the meaning given to it in the U.S. Security
Agreement.       “Premises”: means all buildings and erections from time to time
situated on or forming part of any Properties.

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    “Properties”: means the heritable, freehold, commonhold or leasehold
property of the Company and any other real estate interest of the Company and
references to any “Properties” shall include references to the whole or any part
or parts of them.       “Receiver”: means a receiver, receiver and manager or
administrative receiver of the whole or any part or parts of the Charged
Property.       “Secured Creditors”: shall have the meaning given to it in the
U.S. Security Agreement.       “Secured Hedging Agreement”: shall have the
meaning given to it in the U.S. Security Agreement.       “Secured Liabilities”:
shall have the meaning given to it in Clause 2 (Covenant to pay Secured
Liabilities) below.       “Secured Reimbursement Agreement”: shall have the
meaning given to it in the U.S. Security Agreement.       “Security”: means a
mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar
effect.       “Security Period”: means the period beginning on the date of this
Charge and ending on the date on which the Collateral Agent has determined that
all of the Secured Liabilities (whether actual or contingent) have been
unconditionally and irrevocably paid and discharged in full and no further
Secured Liabilities are capable of being outstanding.       “Tax”: any tax,
levy, impost, duty or other charge or withholding of a similar nature (including
any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same).       General Definitions   1.2   Any
reference in this Charge to:

  1.2.1   the “Collateral Agent”, the “Company”, any “Secured Creditor”, any
“Credit Party” or any other person shall be construed so as to include its
successors in title, permitted assignees and permitted transferees and, in the
case of the Collateral Agent, shall include any person for the time being
appointed as additional security agent pursuant to the Credit Agreement;    
1.2.2   “assets” includes present and future properties, revenues and rights of
every description;     1.2.3   “indebtedness” includes any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;     1.2.4   a “person” includes
any individual, firm, company, corporation, government, state or agency of a
state or any association, trust, joint venture, consortium or partnership
(whether or not having separate legal personality);     1.2.5   a “regulation”
includes any regulation, rule, official directive, request or guideline (whether
or not having the force of law) of any governmental, intergovernmental or
supranational body, agency, department or of any regulatory, self-regulatory or
other authority or organisation;     1.2.6   a “fixed security” is to be
construed in accordance with the terms of Section 47 of the Bankruptcy and
Diligence etc. (Scotland) Act 2007;

2

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  1.2.7   “without limitation” shall include a reference to without prejudice to
the generality of the foregoing;     1.2.8   “attachment” shall include, without
limitation, land attachment, interim attachment, money attachment and residual
attachment;     1.2.9   “Secured Liabilities” includes any liabilities which
would be treated as such but for the liquidation or dissolution or similar event
affecting the Company; and     1.2.10   a provision of law is a reference to
that provision as amended or re-enacted.

    Construction   1.3   Clause and Schedule headings are for ease of reference
only.   1.4   Any reference in this Charge to any asset shall be construed so as
to include:

  1.4.1   the benefit of any covenants for title and warrandice given or entered
into by any predecessor in title of the Company in respect of that asset and all
other rights, benefits, claims, contracts, warranties, remedies, security or
indemnities in respect of that asset;     1.4.2   the proceeds of sale of any
part of that asset and any other moneys paid or payable in respect of or in
connection with that asset; and     1.4.3   in respect of any Properties, all
Premises and all fixtures and fittings (including trade fixtures and fittings
and tenants’ fixtures and fittings) from time to time in or on those Properties.

1.5   Any reference in this Charge to any Credit Document or any other agreement
or other document shall be construed as a reference to that Credit Document or
that other agreement or document as the same may have been, or may from time to
time be, restated, varied, amended, supplemented, substituted, novated or
assigned, whether or not as a result of any of the same:

  1.5.1   there is an increase or decrease in any facility made available under
that Credit Document or other agreement or document or an increase or decrease
in the period for which any facility is available or in which it is repayable;  
  1.5.2   any additional, further or substituted facility to or for such
facility is provided;     1.5.3   any rate of interest, commission or fees or
relevant purpose is changed;     1.5.4   the identity of the parties is changed;
    1.5.5   the identity of the providers of any security is changed;     1.5.6
  there is an increased or additional liability on the part of any person; or  
  1.5.7   a new agreement is effectively created or deemed to be created.

1.6   Any reference in this Charge to “this Charge” shall be deemed to be a
reference to this Charge as a whole and not limited to the particular Clause,
Schedule or provision in which the relevant reference appears and to this Charge
as amended, novated, assigned, supplemented, extended or restated from time to
time and any reference in this Charge to a “Clause” or a “Schedule” is, unless
otherwise provided, a reference to a Clause or a Schedule of this Charge.   1.7
  Unless the context otherwise requires, words denoting the singular number only
shall include the plural and vice versa.

3

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1.8   Where any provision of this Charge is stated to include one or more
things, that shall be by way of example or for the avoidance of doubt only and
shall not limit the generality of that provision.   1.9   Any change in the
constitution of the Collateral Agent or its absorption of or amalgamation with
any other person or the acquisition of all or part of its undertaking by any
other person shall not in any way prejudice or affect its rights under this
Charge.   1.10   Any reference in this Charge to the liquidation,
administration, insolvency, bankruptcy, judicial factory or other similar
incapacity of any body corporate shall be construed to include the equivalent
proceeding or occurrence in any other jurisdiction.   1.11   This Charge is a
Credit Document for the purposes of the Credit Agreement.

Intercreditor Agreement

1.12   Following execution of the Intercreditor Agreement, this Charge will be
subject to the terms of the Intercreditor Agreement.   1.13   In the event of
any inconsistency between a provision of this Charge and a provision of the
Intercreditor Agreement, the provision of the Intercreditor Agreement will
prevail.

Incorporation

1.14   Without prejudice to the application of any other provisions of the
Credit Agreement to this Charge (by reason of this Charge being a Credit
Document for the purposes of the Credit Agreement), sections 4.04 (Tax Gross-Up
and Indemnities), 11.02 (Right of Setoff), 11.05 (No Waiver; Remedies
Cumulative), 11.07 (Calculations; Computations), 11.12 (Amendment or Waiver,
etc.) and 11.19 (Judgment Currency) of the Credit Agreement shall apply to this
Charge, mutatis mutandis, as if the same had been set out herein with references
in such clauses to:

  1.14.1   any “Credit Party” or “Borrower” being construed, (A) if the context
so requires, as references to the Company (as defined herein) or (B) if the
context so requires, including the Company (as defined herein);     1.14.2   the
“Agreement” being construed as references to this Charge;     1.14.3   the
“parties” or “party” being construed as references to the Parties or, as the
case may be, a Party to this Charge;     1.14.4   the “Credit Documents” being
construed as (a) including this Charge; or (b) if the context so requires, as
references specifically to this Charge; and     1.14.5   in the context of
section 4.04 (Tax Gross-Up and Indemnities) of the Credit Agreement, the
“Administrative Agent” or a “Lender” being, if the context so requires,
construed, in each case, as references to the Collateral Agent and, in the
context of section 11.01(a)(ii) (Payment of Expenses, etc.) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being construed, in each
case, as references to each Secured Creditor, Receiver (as defined herein),
Delegate (as defined herein), attorney, manager, agent or other person as may be
appointed by the Collateral Agent under this Charge; and     1.14.6   in the
context of section 11.07 and 11.12, references to particular sections are
references to sections in the Credit Agreement.

4

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2.   Covenant to Pay       Covenant to pay Secured Liabilities   2.1   The
Company covenants that it shall promptly on demand pay to the Secured Creditors,
in accordance with the Credit Documents:

  2.1.1   the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, PIK Interest
(including, without limitation, all interest (including PIK Interest) that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganisation or similar proceeding of the
Company at the rate provided for in the respective documentation, whether or not
a claim for post-petition interest is allowed in any such proceeding), fees,
costs and indemnities) of the Company to the Lenders, whether now existing or
incurred after the date of this Charge under, arising out of, or in connection
with, each Credit Document to which the Company is a party and the due
performance and compliance by the Company with all of the terms, conditions and
agreements contained in each such Credit Document;     2.1.2   the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by the Company to the Approved Third
Party Credit Providers under any Secured Hedging Agreement, whether now in
existence or arising after the date of this Charge and the due performance and
compliance by the Company with all of the terms, conditions and agreements
contained in each such Secured Hedging Agreement;     2.1.3   the full and
prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in
the respective documentation, whether or not a claim for post-petition interest
is allowed in any such proceeding) owing by the Company to the Approved Third
Party Credit Providers under any Secured Reimbursement Agreement, whether now in
existence or arising after the date of this Charge (including, without
limitation, all obligations, liabilities and indebtedness of the Company under
any Guaranty in respect of the Secured Reimbursement Agreements), and the due
performance and compliance by the Company with all of the terms, conditions and
agreements contained in each such Secured Reimbursement Agreement;     2.1.4  
any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;     2.1.5   in
the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of the Company referred to in
paragraphs 2.1.1, 2.1.2 and 2.1.3 above, on and after the Enforcement Date, the
reasonable expenses of retaking, holding, preparing for sale or lease, selling
or otherwise disposing of or realising on the Collateral, or of any exercise by
the Collateral Agent of its rights under this Charge, together with reasonable
attorneys’ fees and court costs;     2.1.6   all amounts paid by any Indemnified
Party as to which such Indemnified Party has the right to reimbursement under
this Charge; and

5

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  2.1.7   all amounts owing to any Agent pursuant to any of the Credit Documents
in its capacity as such,         it being acknowledged and agreed that the
“Secured Liabilities” shall include extensions of credit of the types described
above, whether outstanding on the date of this Charge or extended from time to
time after the date of this Charge.

2.2   Notwithstanding anything to the contrary contained in this Charge or any
other Credit Document, the aggregate amount of Secured Liabilities of the type
described in paragraphs 2.1.2 and 2.1.3 of Clause 2.1 (collectively, the
“Secured Third Party Credit Obligations”) secured by the Collateral shall not at
any time exceed $25,000,000 (the “Secured Third Party Credit Obligations Cap”).
No amount of Secured Third Party Credit Obligations in excess of the Secured
Third Party Credit Obligations Cap shall receive the benefit of the security
interests created under this Charge and in no event shall any proceeds received
upon the sale of, collection from, or other realisation upon all or any part of
the Collateral be applied to the Secured Third Party Credit Obligations in any
amount in excess of the Secured Third Party Credit Obligations Cap.      
Potential invalidity   2.3   Neither the covenant to pay in Clause 2.1 (Covenant
to pay Secured Liabilities), nor the Security created by this Charge shall
extend to or include any liability or sum which would, but for this Clause 2.3,
cause such covenant, obligation or Security to be unlawful under any applicable
law.   3.   Floating Charge       Creation of Floating Charge   3.1   The
Company, as a continuing security for the payment, performance and discharge of
all the Secured Liabilities, grants in favour of the Collateral Agent (as agent
and trustee for itself and each of the other Secured Creditors) a floating
charge over the Charged Property.       Qualifying Floating Charge   3.2   The
provisions of paragraph 14 of Schedule B1 to the Insolvency Act 1986 shall apply
to the floating charge created pursuant to Clause 3.1 (Creation of Floating
Charge).   4.   Further Assurance       Further Assurance   4.1   The Company
shall promptly do all such acts and execute all such documents (including
assignments, assignations, transfers, mortgages, charges, notices and
instructions) as the Collateral Agent or any Receiver may reasonably specify
(and in such form as the Collateral Agent or any Receiver may reasonably require
in favour of the Collateral Agent or its nominee(s)) to:

  4.1.1   perfect the floating charge created or intended to be created in
respect of the Charged Property (which may include the execution by the Company
of a mortgage, charge, assignation, assignment or other Security over all or any
of the assets forming part of, or which are intended to form part of, the
Charged Property);     4.1.2   confer on the Collateral Agent Security over any
Properties and assets of the Company located in any jurisdiction equivalent or
similar to the security intended to be created by or pursuant to this Charge;

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  4.1.3   facilitate the exercise of any rights, powers and remedies of the
Collateral Agent or any Receiver or Delegate provided by or pursuant to this
Charge or by law;     4.1.4   facilitate the realisation of the assets which
form part of, or are intended to form part of, the Charged Property; and /or    
4.1.5   create fixed security over any heritable, freehold, commonhold or
leasehold property and any other assets capable of being charged by way of fixed
security.

    Necessary Action   4.2   The Company shall take all such action as is
available to it (including making all filings and registrations) as may be
necessary for the purpose of the creation, perfection, protection or maintenance
of any security created or intended to be created in favour of the Collateral
Agent by or pursuant to this Charge.   5.   Undertakings       General   5.1  
The undertakings in this Clause 5 remain in force from the date of this Charge
for so long as any amount is outstanding under this Charge.       Negative
Pledge   5.2   The Company undertakes to the Collateral Agent that it shall
(except as permitted by section 8.01 (Liens) of the Credit Agreement):

  (a)   not create or allow to exist any Security on, over, or affecting, any of
its assets; and     (b)   procure that no member of the Group creates or allows
to exist any Security on, over, or affecting, any of its assets.

    Restriction on Disposals   5.3   The Company undertakes to the Collateral
Agent that it shall (except as permitted by section 8.02 (Consolidation, Merger,
Purchase or Sale of Assets, etc.) of the Credit Agreement) not, either in a
single transaction or in a series of transactions and whether related or not,
dispose of the Charged Property or any part of them.       Prejudicial Action  
5.4   The Company will not do or cause or permit to be done anything, which may
in any way reduce, jeopardise or otherwise prejudice the value to the Collateral
Agent of the Charged Property.   6.   Enforcement of Security       When
Security becomes Enforceable   6.1   At any time on or after the Enforcement
Date, the floating charge created by this Charge shall become immediately
enforceable and the Collateral Agent may, without notice to the Company or prior
authorisation from any court, in its absolute discretion enforce all or any part
of that security at the times, in the manner and on the terms it thinks fit and,
to the extent permitted by law, take possession of and hold or dispose of all or
any part of the Charged Property.

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    Right of Appropriation   6.2   Without prejudice to the other provisions of
this Charge, to the extent that any of the Charged Property constitutes
“financial collateral”, and this Charge and the obligations of the Company
hereunder constitute a “security financial collateral arrangement” (in each case
as defined in, and for the purposes of, the Financial Collateral Arrangements
(No. 2) Regulations 2003 (SI 2003/3226) (the “Regulations”), the Collateral
Agent shall at any time on or after the Enforcement Date have the right to
appropriate all or any part of the Charged Property in or towards discharge of
the Secured Liabilities. For this purpose, the parties agree that the value of
any such Charged Assets so appropriated shall be the market price of such
Charged Property at the time the right of appropriation is exercised as
determined by the Collateral Agent by reference to such method or source of
valuation as the Collateral Agent may select, including by independent
valuation. For this purpose, the parties agree that the methods or sources of
valuation provided for in this Clause 6.2 (Right of appropriation) or selected
by the Collateral Agent in accordance with this Clause 6.2 (Right of
appropriation) shall constitute a commercially reasonable method of valuation
for the purposes of the Regulations.   6.3   The Collateral Agent shall notify
the Company as soon as reasonably practicable of the exercise of its rights of
appropriation as regards such of the Charged Property as are specified in such
notice.       Redemption of Prior Security   6.4   At any time on or after the
Enforcement Date, the Collateral Agent or any Receiver may:

  6.4.1   redeem any prior Security over any Charged Property; or     6.4.2  
procure the transfer of that Security to the Collateral Agent; or     6.4.3  
settle and pass the accounts of the person or persons entitled to such Security
(and any accounts so settled and passed shall be conclusive and binding on the
Company).

6.5   All principal moneys, interest, costs, charges and expenses of and
incidental to any such redemption or transfer shall be paid by the Company to
the Collateral Agent and every Receiver on demand and shall be secured by this
Charge.   7.   Appointment of Receiver and Administrator       Appointment   7.1
  At any time on or after the Enforcement Date or if an application is presented
for the making of an administration order in relation to the Company or any
person who is entitled to do so gives written notice of its intention to appoint
an administrator of the Company or files such a notice with the court or if the
Company or it’s directors so requests the Collateral Agent in writing or if a
petition is made for the appointment of a judicial factor to the Company (in
which case, in each such case, the floating charge created by this Charge shall
become immediately enforceable), the Collateral Agent may without prior notice
to the Company:

  7.1.1   appoint any one or more persons to be a Receiver of the whole or any
part or parts of the Charged Property; or     7.1.2   appoint one or more
persons to be an administrator of the Company,

    in each case in accordance with and to the extent permitted by applicable
laws.

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    Removal   7.2   The Collateral Agent may by writing under its hand (or by an
application to the court where required by law):

  7.2.1   remove any Receiver appointed by it; and     7.2.2   may, whenever it
deems it expedient, appoint any one or more persons to be a new Receiver in the
place of or in addition to any Receiver.

    Statutory Powers of Appointment   7.3   The powers of appointment of a
Receiver created by this Charge shall be in addition to all statutory and other
powers of appointment of the Collateral Agent and such powers shall be and
remain exercisable from time to time by the Collateral Agent in respect of any
part or parts of the Charged Property.       Capacity of Receiver   7.4   Each
Receiver shall be deemed to be the agent of the Company for all purposes. The
Company alone shall be responsible for a Receiver’s contracts, engagements,
acts, omissions, defaults and losses and for liabilities incurred by him.   7.5
  The agency of each Receiver shall continue until the Company goes into
liquidation and after that the Receiver shall act as principal and shall not
become the agent of the Collateral Agent.   7.6   If there is more than one
Receiver holding office at the same time, each Receiver shall (unless the
document appointing him states otherwise) be entitled to act (and to exercise
all of the powers conferred on a Receiver under this Charge and by statute)
individually or together with any other person appointed or substituted as
Receiver.       Remuneration of Receiver   7.7   Subject to section 58 of the
Insolvency Act 1986, the Collateral Agent may fix the remuneration of any
Receiver appointed by it without any restriction and the remuneration of the
Receiver shall be a debt secured by this Charge, which shall be due and payable
immediately upon its being paid by the Collateral Agent.   8.   Powers of
Receiver       General   8.1   Each Receiver has, and is entitled to exercise
(to the extent permitted by law), all of the rights, powers and discretions set
out below in this Clause 8 in addition to those conferred by law.   8.2  
Without prejudice to the generality of this Clause 8, each Receiver shall have
all the rights, powers and discretions of a receiver under schedule 2 to the
Insolvency Act 1986.       Specific Powers   8.3   Each Receiver shall have (to
the extent permitted by law) the following powers:

  8.3.1   power to purchase or acquire land and purchase, acquire or grant any
interest in or right over land as he thinks fit;     8.3.2   power to take
immediate possession of, get in and collect any Charged Property;     8.3.3  
power to carry on the business of the Company as he thinks fit;

9

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  8.3.4   power (but without any obligation to do so) to:

  (a)   make and effect all repairs, alterations, additions and insurances and
do all other acts which the Company might do in the ordinary conduct of its
business as well for the protection as for the improvement of the Charged
Property;     (b)   commence or complete any building operations on the Charged
Property;     (c)   apply for and maintain any planning permission, building
regulation approval or any other permission, consent or licence in respect of
the Charged Property; and     (d)   negotiate for compensation with any
authority which may intend to acquire or be in the process of acquiring all or
any part of the Charged Property and make objections to any order for the
acquisition of all or any part of the Charged Property and represent the Company
at any enquiry to be held to consider such objections or otherwise relating to
any such acquisition,

      in each case as he thinks fit;     8.3.5   power to appoint and discharge
managers, officers, agents, advisers, accountants, servants, workmen,
contractors, surveyors, architects, lawyers and others for the purposes of this
Charge upon such terms as to remuneration or otherwise as he thinks fit and
power to discharge any such persons appointed by the Company (and the costs
incurred by any Receiver in carrying out such acts or doing such things shall be
reimbursed to that Receiver by the Company on demand and until so reimbursed
shall carry such interest as shall reasonably be determined by the Receiver from
the date of payment by the Receiver until reimbursed (after as well as before
any judgment));     8.3.6   power to raise and borrow money either unsecured or
(with the prior consent of the Collateral Agent) on the security of any Charged
Property either in priority to the floating charge created by this Charge or
otherwise and generally on any terms and for whatever purpose he thinks fit;    
8.3.7   power to sell, exchange, convert into money and realise any Charged
Property by public auction or private contract and generally in any manner and
on any terms as he thinks fit;     8.3.8   power to sever and sell separately
any fixtures from the properties containing them without the consent of the
Company;     8.3.9   power to let any Charged Property for any term and at any
rent (with or without a premium) as he thinks fit and power to accept a
surrender of any lease or tenancy of any Charged Property on any terms which he
thinks fit (including the payment of money to a lessee or tenant on a
surrender);     8.3.10   power to settle, adjust, refer to arbitration,
compromise and arrange any claims, accounts, disputes, questions and demands
with or by any person who is or claims to be a creditor of the Company or
relating in any way to any Charged Property;     8.3.11   power to bring,
prosecute, enforce, defend and abandon all actions, suits and proceedings in
relation to any Charged Property or in relation to the Company which may seem to
him to be expedient;     8.3.12   power to give valid receipts for all moneys
and execute all assurances and things which may be proper or desirable for
realising any Charged Property;

10

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  8.3.13   power to form a subsidiary of the Company and transfer to that
subsidiary any Charged Property;     8.3.14   power to do all such acts as may
seem to him to be necessary or desirable in order to initiate or continue any
development of any Charged Property and for these purposes to appoint and to
enter into such contracts with such building and engineering contractors or
other contractors and professional advisers as he may think fit;     8.3.15  
power to call any meeting of the members or directors of the Company in order to
consider such resolutions or other business as he thinks fit;     8.3.16   power
to exercise in relation to any Charged Property all the powers and rights which
he would be capable of exercising if he were the absolute beneficial owner of
the same;     8.3.17   power to do all other acts and things which he may
consider desirable or necessary for realising any Charged Property or incidental
or conducive to any of the rights, powers or discretions conferred on a Receiver
under or by virtue of this Charge; and     8.3.18   power to exercise any of the
above powers in the name of or on behalf of the Company or in his own name and,
in each case, at the cost of the Company.

    Collateral Agent’s Powers   8.4   To the fullest extent permitted by law,
any right, power or discretion created by this Charge (either expressly or
impliedly) upon a Receiver may after the floating charge created by this Charge
has become enforceable be exercised by the Collateral Agent in relation to any
Charged Property, irrespective of whether or not it has taken possession of any
Charged Property and without first appointing a Receiver or notwithstanding the
appointment of a Receiver.   9.   Discretions and Delegation       Discretion  
9.1   Any liberty or power which may be exercised or any determination which may
be made under this Charge by the Collateral Agent or any Receiver may be
exercised or made in its absolute and unfettered discretion without any
obligation to give reasons.       Delegation   9.2   Each of the Collateral
Agent and any Receiver may delegate (either generally or specifically) by power
of attorney or in any other manner to any person any right, power, authority or
discretion conferred on it by this Charge (including the power of attorney).  
9.3   Any such delegation may be made upon such terms and conditions (including
the power to sub-delegate) as the Collateral Agent or any Receiver (as the case
may be) shall think fit.   9.4   Neither the Collateral Agent nor any Receiver
shall be in any way liable or responsible to the Company for any loss or
liability arising from any act, default, omission or misconduct on the part of
any Delegate.   10.   Power of Attorney       Appointment and Powers   10.1  
The Company hereby irrevocably and by way of security appoints the Collateral
Agent and any Receiver and any Delegate severally to be its attorney in its name
and on its behalf and as its act and deed:

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  10.1.1   to execute and deliver any documents or instruments which the
Collateral Agent or such Receiver may require for perfecting the title of the
Collateral Agent to the Charged Property or for vesting the same in the
Collateral Agent, its nominee or any purchaser,     10.1.2   to sign, execute,
seal and deliver and otherwise perfect any further security document which the
Company is required to enter into pursuant to this Charge; and     10.1.3  
otherwise generally to sign, seal, execute and deliver all deeds, assurances,
agreements and documents and to do all acts and things which (i) may be required
for the full exercise of all or any of the powers conferred on the Collateral
Agent or any Receiver under this Charge; (ii) the Company is required to do
pursuant to this Charge; or (iii) may be deemed expedient by the Collateral
Agent or a Receiver in connection with (A) any preservation, disposition,
realisation or getting in by the Collateral Agent or such Receiver of the
Charged Property or any part thereof or (B) any other exercise of any other
power under this Charge.

    The Collateral Agent confirms that it will only exercise the rights set out
in this Clause 10.1 following the occurrence of a Default or Event of Default
under the Credit Documents.       Ratification   10.2   The Company ratifies and
confirms and agrees to ratify and confirm all acts and things which any attorney
mentioned in this Clause 10 (Power of Attorney) does or purports to do in
exercise of the powers granted by this Clause 10. All moneys expended by any
such attorney shall be deemed to be expenses incurred by the Collateral Agent
under this Charge.   11.   Protection of Purchasers       Consideration   11.1  
The receipt of the Collateral Agent or any Receiver or Delegate shall be a
conclusive discharge to a purchaser and, in making any sale or other disposal of
any of the Charged Property (including a disposal by a Receiver or Delegate to
any subsidiary of the Company) or in making any acquisition in the exercise of
their respective powers, the Collateral Agent, every Receiver and every Delegate
may do so for such consideration, in such manner and on such terms as it or he
thinks fit.       Protection of Third Parties   11.2   No person (including a
purchaser) dealing with the Collateral Agent, any Receiver or any Delegate shall
be bound to enquire:

  11.2.1   whether the Secured Liabilities have become payable; or     11.2.2  
whether any power which the Collateral Agent or any Receiver or Delegate is
purporting to exercise has arisen or become exercisable; or     11.2.3   whether
any money remains due under the Credit Documents; or     11.2.4   how any money
paid to the Collateral Agent or to any Receiver or Delegate is to be applied,

    or shall be concerned with any propriety, regularity or purpose on the part
of the Collateral Agent or any Receiver or Delegate in such dealings or in the
exercise of any such power.

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12.   Application of Proceeds       Order of Application   12.1   Any monies
received under the powers hereby conferred shall, subject to the repayment of
any claims or debts having priority to this Charge, be applied for the purposes
and in the order of priority provided for in:

  (a)   prior to execution of the Intercreditor Agreement, section 9 (Events of
Default) of the Credit Agreement; and     (b)   following execution of the
Intercreditor Agreement, the relevant provision in the Intercreditor Agreement
relating to application of proceeds received under the Credit Documents.

    Suspense account   12.2   The Collateral Agent may credit any monies
received under this Charge to an interest bearing suspense account for so long
and in such manner as the Collateral Agent may from time to time determine and
any Receiver may retain the same for such period as he and the Collateral Agent
consider appropriate.   13.   No Liability as Creditor nor Mortgagee in
Possession   13.1   Neither the Collateral Agent nor any Receiver or Delegate
shall in any circumstances (either by reason of entering into or taking
possession of any Charged Property or for any other reason and whether as
creditor, heritable creditor or mortgagee in possession or on any other basis)
be liable to account to the Company for anything, except actual receipts, or be
liable to the Company for any costs, charges, losses, liabilities or expenses
arising from the realisation of any Charged Property or from any act, default or
omission of the Collateral Agent, any Receiver, any Delegate or any of their
respective officers, agents or employees in relation to the Charged Property or
from any exercise or purported exercise or non-exercise by the Collateral Agent
or any Receiver or Delegate of any power, authority or discretion provided by or
pursuant to this Charge or by law or for any other loss of any nature whatsoever
in connection with the Charged Property or the Credit Documents.   13.2   If the
Collateral Agent, any Receiver or any Delegate enters into or takes possession
of the Charged Property, it or he may to the extent permitted by law, at any
time relinquish possession.   14.   Effectiveness of Security       Continuing
Security   14.1   The floating charge created by this Charge shall remain in
full force and effect as a continuing security for the Secured Liabilities,
unless and until discharged by the Collateral Agent, and will extend to the
ultimate balance of all the Secured Liabilities, regardless of any intermediate
payment or discharge in whole or in part.       Cumulative Rights   14.2   The
floating charge created by this Charge and all rights, powers and remedies of
the Collateral Agent provided by or pursuant to this Charge or by law shall be
cumulative, in addition to and independent of any other Security now or
subsequently held by the Collateral Agent or any other Secured Creditor for the
Secured Liabilities or any other obligations or any rights, powers and remedies
provided by law. No prior Security held by the Collateral Agent (whether in its
capacity as agent and trustee or otherwise) or any of the other Secured
Creditors over the whole or any part of the Charged Property shall be superseded
by, supersede or merge into, the floating charge created by this Charge.

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    Reinstatement   14.3   If any discharge, release or arrangement (whether in
respect of the obligations of a Credit Party or any Security for those
obligations or otherwise) is made by the Collateral Agent or any other Secured
Creditor in whole or in part on the faith of any payment, Security or other
disposition which is avoided or must be restored in insolvency, liquidation,
administration or otherwise, without limitation, then the liability of the
Company under, the floating charge created by this Charge will continue or be
reinstated as if the discharge, release or arrangement had not occurred.   14.4
  The Collateral Agent may concede or compromise any claim that any payment or
any discharge is liable to avoidance, restoration or reduction.       Waiver of
Defences   14.5   Neither the obligations of the Company under this Charge nor
the floating charge created by this Charge nor the rights, powers and remedies
of the Collateral Agent provided by or pursuant to this Charge or by law will be
affected by an act, omission, matter or thing which, but for this Clause 14.5,
would reduce, release or prejudice any of its obligations under this Charge, any
of that security or any of those rights, powers and remedies (without limitation
and whether or not known to it or the Collateral Agent or any other Secured
Creditor) including:

  14.5.1   any time, waiver or consent granted to, or composition with any
Credit Party or any other person;     14.5.2   the release of any person under
the terms of any composition or arrangement with any creditor of any person;    
14.5.3   the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against, or
Security over assets of any Credit Party, or any other person or any
non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full value of any
Security;     14.5.4   any incapacity or lack of power, authority or legal
personality of, or dissolution or change in the members or status of any Credit
Party , or any other person;     14.5.5   any variation, amendment, novation,
supplement, extension (whether of maturity or otherwise), substitution,
restatement (in each case, however fundamental and of whatsoever nature and
whether or not more onerous) or replacement of any Credit Document or any other
document or Security including without limitation any change in the purpose of,
any extension of or any increase in, any facility or the addition of any new
facility under any Credit Document or other document or Security;     14.5.6  
any unenforceability, illegality or invalidity of any obligation of any other
person under any Credit Document or any other document or Security; or    
14.5.7   any insolvency or similar proceedings.

    Guarantor Intent   14.6   Without prejudice to the generality of Clause 14.5
(Waiver of Defences), the Company expressly confirms that it intends that the
floating charge created by this Charge shall extend from time to time to any
(however fundamental) variation, increase, extension or addition of or to any
facility or amount made available under any of the Credit Documents and/or any
of the Credit Documents including, without limitation, any of the same which are
for the purposes of or in connection with any of the following: business
acquisitions of any nature; increasing working capital; enabling investor
distributions to be made; carrying out restructurings;

14

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    refinancing existing facilities; refinancing any other indebtedness; making
facilities available to new borrowers; and/or any other variation or extension
of the purposes for which any such facility or amount might be made available
from time to time, together with any fees, costs and/or expenses associated with
any of the foregoing.       Immediate Recourse   14.7   The Company waives any
right it may have of first requiring the Collateral Agent or any other Secured
Creditor to proceed against or enforce any other rights or Security or claim
payment from any person or file any proof or claim in any insolvency,
administration, winding up or liquidation proceedings relating to any person
before claiming from it under this Charge. This waiver applies irrespective of
any law or any provision of any Credit Document to the contrary.      
Appropriations   14.8   Until all the Secured Liabilities which may be or become
payable by the Company under or in connection with this Charge have been
irrevocably paid, performed and discharged in full, the Collateral Agent may:

  14.8.1   without affecting the liability of the Company under this Charge:

  (a)   refrain from applying or enforcing any other moneys, Security or rights
held or received by it in respect of the Secured Liabilities; or     (b)   apply
and enforce the same in such manner and order as it sees fit (whether against
the Secured Liabilities or otherwise) and the Company shall not be entitled to
direct the appropriation of any such moneys, Security or rights or to enjoy the
benefit of the same; and/or

  14.8.2   hold in a suspense account any moneys received from the Company or on
account of the Company’s liability in respect of the Secured Liabilities.
Amounts standing to the credit of any such suspense account shall bear interest
at a rate considered by the Collateral Agent to be a fair market rate.

    Deferral of Company’s Rights   14.9   Until the Secured Liabilities, and all
amounts which may be or become due and payable in respect of the Secured
Liabilities, have been irrevocably paid, performed or discharged in full and
unless the Collateral Agent otherwise directs, the Company shall not exercise
any rights which it may have by reason of performance by it of its obligations
under this Charge or by reason of any amount being payable to:

  14.9.1   be indemnified by an Credit Party;     14.9.2   claim any
contribution from any other guarantor of any Credit Party’s obligations under
the Credit Documents;     14.9.3   take the benefit (in whole or in part and
whether by way of subrogation or otherwise) of any rights of the Collateral
Agent and/or any of the other Secured Creditors under the Credit Documents or of
any other Security taken pursuant to, or in connection with, the Credit
Documents by the Collateral Agent or any other Secured Creditor;     14.9.4   to
bring legal or other proceedings for an order requiring an Credit Party to make
any payment, or perform any obligation, in respect of which the Company has
given a guarantee, undertaking or indemnity;     14.9.5   exercise any right of
set-off against any Credit Party; and/or

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  14.9.6   claim or prove as a creditor of any Credit Party or in its estate in
competition with any Secured Creditor.

14.10   The rights of the Collateral Agent and/or any of the other Secured
Creditors under Clause 14.9 above shall be free from any right of quasi-retainer
or other rule or principle of fund ascertainment arising either at law or in
equity.   14.11   If the Company receives any benefit, payment or distribution
in relation to any rights referred to in Clause 14.9 above, it shall hold that
benefit, payment or distribution to the extent necessary to enable all the
Secured Liabilities, and all amounts which may be or become due and payable in
respect of the Secured Liabilities, to be repaid in full on trust for the
Collateral Agent (as agent and trustee for itself and each of the other Secured
Creditors) and shall promptly pay or transfer the same to the Collateral Agent
or as the Collateral Agent may direct for application in accordance with Clause
12 (Application of Proceeds).       No Security held by Company   14.12   The
Company shall not take or receive any Security from a Credit Party or any other
person in connection with its liability under this Charge. However, if any such
Security is so taken or received by the Company:

  14.12.1   the Company undertakes to hold it on trust for the Collateral Agent
(as agent and trustee for itself and each of the other Secured Creditors),
together with all moneys at any time received or held in respect of such
Security, for application in or towards payment and discharge of the Secured
Liabilities; and     14.12.2   on demand by the Collateral Agent, the Company
shall promptly transfer, assign or pay to the Collateral Agent all Security and
all moneys from time to time held on trust by it under this Clause 14.12.

15.   Certificates and Determinations   15.1   Any certificate or determination
by the Collateral Agent of a rate or amount under this Charge is, in the absence
of manifest error, conclusive evidence of the matters to which it relates.   16.
  Partial Invalidity   16.1   If, at any time, any provision of this Charge is
or becomes illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Charge nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be affected or
impaired and, if any part of the floating charge created, or intended to be
created, by this Charge is invalid, unenforceable or ineffective for any reason,
that shall not affect or impair any other part of the security.   17.   Remedies
and Waivers   17.1   No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent, any right, remedy or power under this Charge shall
operate as a waiver, nor shall any single or partial exercise of any right,
remedy or power prevent any further or other exercise or the exercise of any
other right, remedy or power. The rights, remedies and powers provided in this
Charge are cumulative and are in addition to, not exclusive of, any rights,
remedies or powers provided by law.   17.2   Any amendment, waiver or consent by
the Collateral Agent under this Charge must be in writing and may be given
subject to any conditions thought fit by the Collateral Agent. Any waiver or
consent shall be effective only in the instance and for the purpose for which it
is given.

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18.   Notices       Communications in writing   18.1   Any communication to be
made under or in connection with this Charge shall be made in writing and,
unless otherwise stated, may be made by fax or letter.       Addresses   18.2  
The address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of the Company and the Collateral
Agent for any communication or document to be made or delivered under or in
connection with this Charge is that identified with its name below:

         
 
  Company    
 
       
 
  Address:   Endeavour Energy UK Limited
 
       114 St. Martin’s Lane
 
      London
 
      WC2N 4BE
 
      England
 
       
 
  For the Attention of:   Mike Kirksey
 
       
 
  Fax Number:    +44 207 451 2352
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com
 
       
 
  With a copy to:   Endeavour International Corporation
 
       1001 Fannin Street, Suite 1600
 
      Houston
 
      Texas 77002
 
      United States of America
 
       
 
  For the Attention of:   Mike Kirksey / Cathy Stubbs
 
       
 
  Fax Number:    +1 713 307 8794
 
       
 
  Email:   Mike.Kirksey@endeavourcorp.com /
 
      Cathy.Stubbs@endeavourcorp.com
 
       
 
  Collateral Agent    
 
       
 
  Address:   Cyan Partners, LP
 
       399 Park Avenue
 
       39th Floor
 
      New York
 
       10022
 
      United States of America
 
       
 
  Fax Number:    +1 212 380 5871
 
       
 
  For the Attention of:   Divya Gopal

    or any substitute address, fax number or department or officer as the
Company may notify to the Collateral Agent or, as the case may be, the
Collateral Agent may notify to the Company, in each case by not less than five
Business Days notice.

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    Delivery   18.3   Any communication or document made or delivered by one
person to another under or in connection with this Charge will only be
effective:

  18.3.1   if by way of fax, when received in legible form; or     18.3.2   if
by way of letter, when it has been left at the relevant address or five Business
Days after being deposited in the post postage prepaid in an envelope addressed
to it at that address,

    and, if a particular department or officer is specified as part of its
address details provided under Clause 18.2 (Addresses), if addressed to that
department or officer.   18.4   Any communication or document to be made or
delivered to the Collateral Agent will be effective only when actually received
by it and then only if it is expressly marked for the attention of the
department or officer identified with the Collateral Agent’s name in Clause 18.2
(Addresses) (or any substitute department or officer as it shall specify for
this purpose).   19.   Assignation   19.1   The Company may not assign or
transfer any of its rights or obligations under this Charge without the prior
consent of each Lender. The Collateral Agent may assign and transfer all or any
part of its rights and obligations under this Charge to any replacement
Collateral Agent appointed pursuant to the terms of the Credit Agreement.   20.
  Releases   20.1   Upon the expiry of the Security Period (but not otherwise)
and subject to Clauses 14.3 and 14.4 (Reinstatement), the Collateral Agent
shall, at the request and cost of the Company, take whatever action is necessary
to release the Charged Property of from the floating charge created by this
Charge.   21.   Consent to Registration   21.1   The Company consents to the
registration of this Charge and each certificate referred to in Clause 15
(Certificates and Determinations) for preservation and execution.   22.  
Governing Law   22.1   This Charge and any non-contractual obligations arising
out of or in connection with it are governed by the law of Scotland.   23.  
Enforcement       Jurisdiction   23.1   The courts of Scotland have exclusive
jurisdiction to settle any dispute arising out of or in connection with this
Charge (including a dispute relating to the existence, validity or termination
of this Charge or any non-contractual obligation arising out of or in connection
with this Charge) (a “Dispute”).   23.2   The Company agrees that the courts of
Scotland are the most appropriate and convenient courts to settle Disputes and
accordingly it will not argue to the contrary or take proceedings relating to a
Dispute in any other courts.   23.3   Clauses 23.1 and 23.2 above are for the
benefit of the Collateral Agent only. As a result, the Collateral Agent shall
not be prevented from taking proceedings relating to a Dispute in any

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    other courts with jurisdiction. To the extent allowed by law, the Collateral
Agent may take concurrent proceedings in any number of jurisdictions.   23.4  
Without prejudice to Clauses 23.1 and 23.2 above, the Company further agrees
that proceedings relating to a Dispute may be brought in the courts of Scotland
and England and irrevocably submits to the jurisdiction of such courts.   23.5  
The Company irrevocably waives any right it may have to the trial by jury in any
proceedings relating to a Dispute.   23.6   Waiver of Immunity   23.7   To the
extent that the Company may in any jurisdiction claim for itself or its assets
immunity from suit, execution, attachment (whether in aid of execution, before
judgment or otherwise) or other legal process and to the extent that in any such
jurisdiction there may be attributed to itself or its assets such immunity
(whether or not claimed), the Company irrevocably agrees not to claim and
irrevocably waives such immunity to the fullest extent permitted by the laws of
that jurisdiction.

IN WITNESS WHEREOF: this Charge consisting of this and the preceding eighteen
(18) pages are executed as follows:
THE COMPANY

     
SUBSCRIBED FOR and ON BEHALF OF
 
 
ENDEAVOUR ENERGY UK LIMITED
  Duly Authorised Attorney
acting by of 1001 Fannin Street, Suite 1600, Houston, Texas 77002, United States
of America in the exercise of a power of attorney dated 3 August 2010 granted by
Endeavour Energy UK Limited in the presence of:
   

         
Witness signature:
       
 
 
 
   
 
       
Witness name:
       
 
 
 
   
 
       
Witness address:
       
 
 
 
   
 
       
Place of Signing:
       
 
 
 
   
 
       
Date of Signing:
       

THE COLLATERAL AGENT

                 
SUBSCRIBED FOR and ON BEHALF OF
    )          
CYAN PARTNERS, LP (as agent and trustee for
    )     (Authorised Signatory)    
itself and each of the other Secured Creditors) by its
    )          
attorney in the presence of:
    )          

         
Witness signature:
       
 
 
 
   
 
       
Witness name:
       
 
 
 
   
 
       
Witness address:
       
 
 
 
   
 
       
Place of Signing:
       
 
 
 
   
 
       
Date of Signing:
       
 
 
 
   

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Dated            August 2010
ENDEAVOUR ENERGY UK LIMITED
AND
CYAN PARTNERS, LP
(as agent and trustee for itself and each of the other Secured Creditors)
 
BOND AND FLOATING CHARGE
 
CMS Cameron McKenna LLP
6 Queens Road
Aberdeen
AB15 4ZT
T +44(0)1224 622 002
F +44(0)1224 622 066
Ref: ANFR/MAMC/FRFO/042158.00013

 

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Table of Contents

         
1. Definitions and Interpretation
    1  
2. Covenant to Pay
    5  
3. Floating Charge
    6  
4. Further Assurance
    6  
5. Undertakings
    7  
6. Enforcement of Security
    7  
7. Appointment of Receiver and Administrator
    8  
8. Powers of Receiver
    9  
9. Discretions and Delegation
    11  
10. Power of Attorney
    11  
11. Protection of Purchasers
    12  
12. Application of Proceeds
    13  
13. No Liability as Creditor nor Mortgagee in Possession
    13  
14. Effectiveness of Security
    13  
15. Certificates and Determinations
    16  
16. Partial Invalidity
    16  
17. Remedies and Waivers
    16  
18. Notices
    17  
19. Assignation
    18  
20. Releases
    18  
21. Consent to Registration
    18  
22. Governing Law
    18  
23. Enforcement
    18  

 

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EXHIBIT G
FORM OF SOLVENCY CERTIFICATE
To the Administrative Agent and each of the Lenders party to the Credit
Agreement referred to below:
          I, the undersigned, the Chief Financial Officer of Endeavour
International Corporation (“Holdings”), a Nevada Corporation, in that capacity
only and not in my individual capacity, do hereby certify as of the date hereof
that:
          1. This Certificate is furnished to Cyan Partners, LP, as
Administrative Agent (the “Administrative Agent”), and the Lenders pursuant to
Section 5.12(i) of the Credit Agreement, dated as of August 16, 2010 among
Holdings, Endeavour Energy UK Limited (the “Borrower”), the lenders from time to
time party thereto (each, a “Lender” and, collectively, the “Lenders”), and the
Administrative Agent (the “Credit Agreement”). Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
          2. For purposes of this Certificate, the terms below shall have the
following definitions:

  (a)   “Fair Value”         The amount at which the assets (both tangible and
intangible), in their entirety, of each of the Borrower (on a stand-alone basis)
and Holdings and its Subsidiaries (taken as a whole), as the case may be, would
change hands between a willing buyer and a willing seller, within a commercially
reasonable period of time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act.     (b)   “Present Fair
Salable Value”         The amount that could be obtained by an independent
willing seller from an independent willing buyer if the assets of each of the
Borrower (on a stand-alone basis) and Holdings and its Subsidiaries (taken as a
whole), as the case may be, are sold with reasonable promptness in an
arm’s-length transaction under present conditions for the sale of comparable
business enterprises.     (c)   “New Financing”         All Indebtedness
incurred or assumed or to be incurred by Holdings and its Subsidiaries in
connection with the Transaction (including Indebtedness under the Credit
Documents and all other financings contemplated by the other Credit Documents),
in each case after giving effect to the Transaction and the incurrence of all
financings, redemptions and repayments in connection therewith.

 

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Exhibit G
Page 2

  (d)   “Stated Liabilities”         The recorded liabilities (including
contingent liabilities that would be recorded in accordance with GAAP) of each
of the Borrower (on a stand-alone basis) and Holdings and its Subsidiaries
(taken as a whole), as the case may be, as of the date hereof after giving
effect to the consummation of the Transaction (which, for purposes of this
Certificate, shall include the retirement and repayment on the Effective Date of
indebtedness in respect of Refinancing with the proceeds of the New Financing),
determined in accordance with GAAP consistently applied, together with the
amount of the New Financing.     (e)   “Identified Contingent Liabilities”      
  The reasonably estimated maximum amount of liabilities reasonably likely to
result from pending litigation, asserted claims and assessments, guaranties,
uninsured risks and other contingent liabilities (other than such contingent
liabilities included within the term “Stated Liabilities”) of each of the
Borrower (on a stand-alone basis) and Holdings and its Subsidiaries (taken as a
whole), as the case may be, after giving effect to the Transaction (including
all fees and expenses related thereto but exclusive of such contingent
liabilities to the extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and reasonably estimated magnitude by
responsible officers of Holdings and its Subsidiaries or that have been
identified as such by an officer of Holdings or any of its Subsidiaries,
determined in accordance with GAAP.     (f)   “will be able to pay its or their
respective Stated Liabilities and Identified Contingent Liabilities as they
mature or otherwise become payable”         Each of the Borrower (on a
stand-alone basis) and Holdings and its Subsidiaries (taken as a whole), as the
case may be, will have sufficient assets and cash flow to pay its or their
respective Stated Liabilities and Identified Contingent Liabilities as those
liabilities mature or otherwise become payable.     (g)   “does or do not have
Unreasonably Small Capital”         Each of the Borrower (on a stand-alone
basis), the Borrower and its Subsidiaries (taken as a whole) and Holdings and
its Subsidiaries (taken as a whole), as the case may be, after giving effect to
the consummation of the Transaction and the incurrence of all Indebtedness
(including the Term Loans) and Liens by such Person or such group of Persons, as
the case may be, in connection therewith, is or are a going concern and has or
have sufficient capital to ensure that it or they will continue to be and remain
a going concern (as such term is determined in accordance with GAAP) after
giving due consideration to the prevailing practice in the industry or
industries in which it or they are engaged or are to engage.

          3. For purposes of this Certificate, I, or officers of Holdings and/or
its Subsidiaries under my direction and supervision, have performed the
following procedures as of and for the periods set forth below.

  (a)   Reviewed the financial statements (including the pro forma financial
statements) referred to in Sections 6.05(a) and (b) of the Credit Agreement.

 

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Exhibit G
Page 3

  (b)   Made (or caused to be made under my direction and supervision) such
examination or investigation as is reasonably necessary to enable me to express
an informed opinion as to the matters referred to in this Certificate.     (c)  
Reviewed to my satisfaction the Credit Documents and the respective Schedules
and Exhibits thereto.

          4. Based on and subject to the foregoing, I hereby certify on behalf
of Holdings that, on and as of the date hereof and after giving effect to the
consummation of the Transaction and the related financing transactions
(including the incurrence of the New Financing), it is my opinion that (i) the
Fair Value and Present Fair Salable Value of the assets of each of the Borrower
(on a stand-alone basis) and Holdings and its Subsidiaries (taken as a whole),
as the case may be, exceed its or their respective Stated Liabilities and
Identified Contingent Liabilities; (ii) each of the Borrower (on a stand-alone
basis) and Holdings and its Subsidiaries (taken as a whole), as the case may be,
do not have Unreasonably Small Capital; and (iii) each of the Borrower (on a
stand-alone basis) and Holdings and its Subsidiaries (taken as a whole), as the
case may be, intends to and believes that it will be able to pay its or their
respective Stated Liabilities and Identified Contingent Liabilities as they
mature or otherwise become payable.
          5. Holdings and the Borrower do not intend, in consummating the
transactions contemplated by the New Financing, to delay, hinder, or defraud
either present or future creditors.
          IN WITNESS WHEREOF, the undersigned has set his hand this ___ day of
August, 2010.

            ENDEAVOUR INTERNATIONAL
CORPORATION
      By:           Name:           Title:   Chief Financial Officer   

 

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EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
          This Compliance Certificate is delivered to you pursuant to
Section 7.01(g) of the Credit Agreement, dated as of August 16, 2010, among
Endeavour International Corporation (“Holdings”), Endeavour Energy UK Limited,
the lenders party thereto from time to time, and Cyan Partners, LP, as
Administrative Agent (as amended, restated, modified and/or supplemented from
time to time, the “Credit Agreement”). Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined.
     1. I am the duly elected, qualified and acting chief financial officer of
Holdings.
     2. I have reviewed and am familiar with the contents of this Compliance
Certificate. I am providing this Compliance Certificate solely in my capacity as
the chief financial officer of Holdings. The matters set forth herein are true
to the best of my knowledge in my capacity as chief financial officer of
Holdings after due inquiry.
     3. I have reviewed the terms of the Credit Agreement and the other Credit
Documents and have made or caused to be made under my supervision a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries for the accounting period from [                    , ___] and
ending on [                    , ___] (the “Test Period”) and covered by the
financial statements [attached hereto as ANNEX 1 / available on the website of
Holdings] (the “Financial Statements”). Such review did not disclose the
existence during or at the end of the accounting period covered by the Financial
Statements, and I have no knowledge of the existence, as of the date of this
Compliance Certificate, of any condition or event which constitutes a Default or
an Event of Default [, except as set forth below].
     4. Attached hereto as ANNEX 2 are the computations showing (in reasonable
detail) compliance with the covenants specified therein.
     5. Attached hereto as ANNEX 3 is the information required to establish
compliance with Sections 4.02(b), 4.02(c), 4.02(d) and 4.02(e) of the Credit
Agreement for the Test Period ending on [_______, ___].
     [6. Attached hereto as ANNEX 4 is the information required to establish
compliance with Section 4.02(f) of the Credit Agreement for the Test Period
ending on [                    , ___].]2
     7. [I hereby certify that there have been no changes to Schedule VI of the
U.S. Security Agreement in each case since the Funding Date, or if later, since
the date of the most recent certificate delivered pursuant to Section 7.01(g) of
the Credit Agreement.][Attached hereto as ANNEX 5 is a list in reasonable detail
of any changes to Schedule VI of the U.S. Security Agreement to the extent
required to be reported to the Collateral Agent under the terms of the U.S.
Security Agreement and confirmation that Holdings and/or the other Credit
Parties have taken all actions necessary under the terms of the U.S. Security
Agreement in relation to such changes, or if not, details of what actions remain
required to be taken.]
 

2   Insert for Compliance Certificate in respect of fiscal year end only.

 

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ANNEX 2
Page 1
     8. Attached hereto at ANNEX 6 is a list of all acquisitions by Holdings or
any of its Subsidiaries of any Oil and Gas Property or Real Property (or any
interest in any Oil and Gas Property or Real Property) having a value in excess
of $5,000,000.

 

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Exhibit H
Page 2
          IN WITNESS WHEREOF, I have executed this Compliance Certificate this
___ day of _____.

            ENDEAVOUR INTERNATIONAL
CORPORATION
      By:           Name:           Title:      

 

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ANNEX 1
          [Applicable Financial Statements To Be Attached If Not Otherwise Made
Available On The Website Of Holdings]

 

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ANNEX 2
          The information described herein is as of                     ,      3
(the “Computation Date”) and (a) in the case of items B(ii), B(iii) [, D(i)(a)]4
and D(i)(e) below, pertains to the period from the Funding Date through the last
day of the Test Period ending on [                    ,      ] and (b) in the
case of items B(i), B(v), [D(i)(a),]5 D(ii), D(iii), D(iv) and D(v) below,
pertains to the Test Period ending on [                    ,      ].

I.   Negative and Financial Covenants   A.   Liens (Section 8.01(w))

  (i)   The aggregate amount of deposits of cash or Cash Equivalents to secure
obligations under the Hess Contracts (or letters of credit supporting such
obligations) or other obligations permitted under Section 8.04(i) subject to
Liens permitted pursuant to Section 8.01(w) is $                    .

B.   Consolidation, Merger, Purchase or Sale of Assets (Section 8.02)

  (i)   The aggregate amount of cash and non-cash proceeds received during the
year-to-date period ending on the Computation Date from all assets sold pursuant
to Section 8.02(e) is $                    6, using the Fair Market Value of
property other than cash.     (ii)   [Holdings and its Subsidiaries have sold
[     ]% of the 2P Reserves located in the North Sea (as determined by reference
to the 2P Reserves listed in Holdings’ December 31, 2009 Reserve Report) in
accordance with Section 8.02(f).] OR [Neither Holdings nor any of its
Subsidiaries have sold any of the 2P Reserves located in the North Sea pursuant
to Section 8.02(f).]     (iii)   Pursuant to Section 8.02(n), Holdings and its
Subsidiaries have paid an aggregate amount equal to $                    7 in
respect of (1) Permitted Business Investments made, (2) Permitted Acquisitions
consummated and (3) Capital Expenditures made pursuant to Section 8.07(e).

 

3   Insert the last day of the respective fiscal quarter or year covered by the
financial statements which are required to be accompanied with this Compliance
Certificate.   4   Reference to this item to be included for each Compliance
Certificate delivered with respect to a Test Period ending on or prior to
December 31, 2010, and to be deleted for each Compliance Certificate delivered
with respect to a Test Period ending after December 31, 2010.   5   Reference to
this item to be deleted for each Compliance Certificate delivered with respect
to a Test Period ending on or prior to December 31, 2010, and to be included for
each Compliance Certificate delivered with respect to a Test Period ending after
December 31, 2010.   6   Amount may not exceed $25,000,000 in any fiscal year of
Holdings.   7   Amount may not exceed $50,000,000.

 

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ANNEX 2
Page 2

  (iv)   Pursuant to Section 8.02(o), Holdings and its Subsidiaries have paid an
aggregate amount of consideration during the year-to-date period ending on the
Computation Date equal to $                    8 in connection with (1)
Permitted Business Investments made and (2) Permitted Acquisitions consummated.

C.   Indebtedness (Section 8.04)

  (i)   Pursuant to Section 8.04(i)(x), Holdings and its Subsidiaries have
Indebtedness with respect to (1) Third Party Letters of Credit and
(2) performance bonds, surety bonds, appeal bonds or customs bonds, or
obligations in respect of letters of credit posted in lieu of, or to secure, any
such bonds, required in the ordinary course of business or in connection with
the enforcement of rights or claims of Holdings or such Subsidiary or in
connection with judgments that do not result in a Default or an Event of Default
in an aggregate amount outstanding of $                    9.     (ii)  
Pursuant to Section 8.04(m), Holdings and its Subsidiaries have additional
Indebtedness in an aggregate principal amount outstanding of $_________10.

D.   Financial Covenants

  (i)   Capital Expenditures (Section 8.07)

  a.   The aggregate amount of all Capital Expenditures made by Holdings and its
Subsidiaries during the year-to-date period ending on the Computation Date
pursuant to Section 8.07(a) and Section 8.07(b) is $                    11.    
b.   [Holdings and its Subsidiaries have made Capital Expenditures with Net Sale
Proceeds received by Holdings or any of its Subsidiaries from any Asset Sale in
the amount of $                     pursuant to Section 8.07(c).] OR [Neither
Holdings nor any of its Subsidiaries have made any Capital Expenditures with Net
Sale Proceeds from any Asset Sale pursuant to Section 8.07(c).]     c.  
[Holdings and its Subsidiaries have made Capital Expenditures with Net Insurance
Proceeds received by Holdings or any of its Subsidiaries from any Recovery Event
in the amount of $                     pursuant to Section 8.07(d).] OR

 

8   Amount may not exceed 5% of 2P Reserve Value in any fiscal year based on
most recently delivered Reserve Report.   9   Amount may not exceed $60,000,000
at any time.   10   Amount may not exceed $10,000,000 at any time.   11  
Subject to Section 8.07(b), amount may not exceed (1) $70,000,000 for period
from Funding Date through and including December 31, 2010, (2) $200,000,000 for
fiscal year ending December 31, 2011, (3) $350,000,000 for fiscal year ending
December 31, 2012 and (4) $175,000,000 for fiscal year ending December 31, 2013.
Additional calculations may be attached to demonstrate compliance for amounts in
excess of the foregoing thresholds pursuant to Section 8.07(b).

 

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ANNEX 2
Page 3
[Neither Holdings nor any of its Subsidiaries have made any Capital Expenditures
with Net Insurance Proceeds from any Recovery Event pursuant to
Section 8.07(d).]

  d.   Pursuant to Section 8.07(e), Holdings and its Subsidiaries have paid an
aggregate amount equal to $                    12 in respect of (1) Permitted
Business Investments made pursuant to Section 8.02(n), (2) Permitted
Acquisitions consummated pursuant to Section 8.02(n) and (3) Capital
Expenditures made.

  (ii)   Total Leverage Ratio (Section 8.08) (as of the last day of the Test
Period)

  a.   Consolidated Net Indebtedness13 as at the Computation Date $             
  b.   Consolidated EBITDAX14 for the Test Period ended on the Computation Date
$                 c.   Ratio of line a. to line b. [         ]:1.00      d.  
Level required pursuant to Section 8.08 [         ]:1.00 

  (iii)   Minimum EBITDAX (Section 8.09) (as of the last day of the Test Period)

  a.   Consolidated EBITDAX for the Test Period $                 b.   Minimum
amount required pursuant to Section 8.09 $            

  (iv)   Reserve Coverage Ratio (Section 8.10(a))

  a.   Sum of the PV-10 Value and the Probable Reserve Value, in each case as at
the Computation Date $                 b.   Consolidated Net Secured
Indebtedness15 on the Computation Date $            

 

12   Amount may not exceed $50,000,000.   13   To be determined excluding
Indebtedness of Holdings or any of its Subsidiaries of the type described in
clause (g) of the definition of Indebtedness in the Credit Agreement. Attach
hereto in reasonable detail the calculations required to arrive at Consolidated
Net Indebtedness.   14   To be determined on a Pro Forma Basis in accordance
with the definition of “Pro Forma Basis” contained in the Credit Agreement.
Attach hereto in reasonable detail the calculations required to arrive at
Consolidated EBITDAX.

 

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ANNEX 2
Page 4

  c.   Ratio of line a. to b. [         ]:1.00      d.   Level required pursuant
to Section 8.10(a) 3.00:1.00 

  (v)   PDP Coverage Ratio (Section 8.10(b))

  a.   PV-10 Value16 as at the Computation Date $                 b.  
Consolidated Net Secured Indebtedness as at the Computation Date $              
  c.   Ratio of line a. to b. [         ]:1.00      d.   Level required pursuant
to Section 8.10(b) [         ]:1.00 

 

(...continued)   15   Attach hereto in reasonable detail the calculations
required to arrive at Consolidated Net Secured Indebtedness.   16   To be
determined by substituting the phrase “from PDP production on Holdings’ and each
of its Subsidiaries’ Oil and Gas Properties” for the phrase “from Proved
Reserves on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties”
appearing in the second line of the definition thereof in the Credit Agreement.

 

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ANNEX 3
          1. [During the Test Period ended on the Computation Date, neither
Holdings nor any of its Subsidiaries has received any Net Cash Proceeds which
would require a mandatory repayment pursuant to Section 4.02(b) of the Credit
Agreement.]17
          2. [During such Test Period ended on the Computation Date, neither the
Holdings nor any of its Subsidiaries has received any Net Cash Proceeds which
would require a mandatory repayment pursuant to Section 4.02(c) of the Credit
Agreement.]18
          3. [During such Test Period ended on the Computation Date, neither the
Holdings nor any of its Subsidiaries has received any Net Sale Proceeds which
would require a mandatory repayment pursuant to Section 4.02(d) of the Credit
Agreement.]19
          4. [During such Test Period ended on the Computation Date, neither the
Holdings nor any of its Subsidiaries has received any Net Insurance Proceeds
from a Recovery Event which would require a mandatory repayment pursuant to
Section 4.02(e) of the Credit Agreement.]20
 

17   If Holdings or any of its Subsidiaries has received such Net Cash Proceeds,
the certificate should describe the amounts and dates of the receipt thereof, as
well as the amounts and dates of the required mandatory repayments pursuant to
Section 4.02(b), together with the certification that such payments have in fact
been made.   18   If Holdings or any of its Subsidiaries has received any Net
Cash Proceeds, the certificate should describe same and state the date of each
receipt thereof as well as the amounts and dates of the required mandatory
repayments pursuant to Section 4.02(c), together with the certification that
such payments have in fact been made.   19   If Holdings or any of its
Subsidiaries has received any Net Sale Proceeds, the certificate should describe
same and state the date of each receipt thereof and the amount of Net Sale
Proceeds received on each such date, together with sufficient information as to
mandatory repayments and/or reinvestments thereof to determine compliance with
Section 4.02(d) of the Credit Agreement, together with a statement that Holdings
is in compliance with the requirements of said Section 4.02(d).   20   If
Holdings or any of its Subsidiaries has received any Net Insurance Proceeds, the
certificate should describe same and state the date of each receipt thereof and
the amount of Net Insurance Proceeds received on each such date, together with
sufficient information as to mandatory repayments and/or reinvestments thereof
to determine compliance with Section 4.02(e) of the Credit Agreement, together
with a statement that Holdings is in compliance with the requirements of said
Section 4.02(e).

 

--------------------------------------------------------------------------------

 

ANNEX 4
          The amount of Excess Cash Flow for the fiscal year ended on the
Computation Date was $                     and the amount of the payment
required pursuant to Section 4.02(f) of the Credit Agreement for such fiscal
year was $                    .21
 

21   Include for Compliance Certificates delivered in respect of fiscal year end
only (commencing with the fiscal year ending closest to December 31, 2010).
Attached hereto in reasonable detail the calculations required to establish
Excess Cash Flow, together with sufficient information as to related mandatory
repayments thereof to determine compliance with Section 4.02(f) of the Credit
Agreement, together with a statement that Holdings is in compliance with the
requirements of said Section 4.02(f).

 

--------------------------------------------------------------------------------

 

ANNEX 5
[Changes to Schedule VI of the U.S. Security Agreement]

 

--------------------------------------------------------------------------------

 

ANNEX 6
     [Acquisitions of Oil and Gas Property or Real Property (or any interest in
any Oil and Gas Property or Real Property) having a value in excess of
$5,000,000]

 

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EXHIBIT 1
FORM OF ASSIGNMENT
AND
ASSUMPTION AGREEMENT1
          This Assignment and Assumption Agreement (this “Assignment”) is dated
as of [                    ] and is entered into by and between [the][each]
Assignor identified in item [1][2] below ([the] [each, an] “Assignor”) and [the]
[each] Assignee identified in item 2 below ([the] [each, an] “Assignee”). [It is
understood and agreed that the rights and obligations of such [Assignees][and
Assignors] hereunder are several and not joint.] Capitalized terms used herein
but not defined herein shall have the meanings given to them in the Credit
Agreement identified below (as amended, restated, supplemented and/or otherwise
modified from time to time, the “Credit Agreement”). The Standard Terms and
Conditions for Assignment and Assumption Agreement set forth in Annex 1 hereto
(the “Standard Terms and Conditions”) are hereby agreed to and incorporated
herein by reference and made a part of this Assignment as if set forth herein in
full.
          For an agreed consideration, [the][each] Assignor hereby irrevocably
sells and assigns to [the] [each] Assignee, and [the] [each] Assignee hereby
irrevocably purchases and assumes from [the][each] Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated
below, the interest in and to all of [the][each] Assignor’s rights and
obligations under the Credit Agreement and any other documents or instruments
delivered pursuant thereto that represents the amount and percentage interest
identified below of all of the [respective] Assignor’s outstanding rights and
obligations identified below ([the] [each, an] “Assigned Interest”). [Each]
[Such] sale and assignment is without recourse to [the][any] Assignor and,
except as expressly provided in this Assignment, without representation or
warranty by [the][any] Assignor.

         
[1.
  Assignor:                                                               
 
       
2.
  Assignee:                                                               ]2
 
       
[1][3].
  Credit Agreement:   Credit Agreement, dated as of August 16, 2010, among
Endeavour International Corporation (“Holdings”), Endeavour Energy UK Limited
(the “Borrower”), the Lenders party thereto from time to time, and Cyan
Partners, LP, as Administrative Agent.
 
       
[2.
  Assigned Interest:3    

 

1   This Form of Assignment and Assumption Agreement should be used by Lenders
for an assignment to a single Assignee or to funds managed by the same or
related investment managers.   2   If the form is used for a single Assignor and
Assignee, items 1 and 2 should list the Assignor and the Assignee, respectively.
In the case of an assignment to funds managed by the same or related investment
managers, or an assignment by multiple Assignors, the Assignors and the
Assignee(s) should be listed in the table under bracketed item 2 below.   3  
Insert this chart if this Form of Assignment and Assumption Agreement is being
used for assignments to funds managed by the same or related investment managers
or for an assignment by multiple Assignors. Insert additional rows as needed.

 

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Exhibit I
Page 2

                      Aggregate Amount of Term Loans   Assignor   Assignee   for
all Lenders   Amount of Term Loans Assigned
 
           
[Name of Assignor]
  [Name of Assignee]                                              
 
           
[Name of Assignor]
  [Name of Assignee]                                              

 

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Exhibit I
Page 3

[4. Assigned Interest:4

      Aggregate Amount of Term Loans     for all Lenders   Amount of Term Loans
Assigned
 
   
$                    
  $                    

Effective Date                     ,      ,      .

              Assignor[s] Information       Assignee[s] Information    
 
           
Payment Instructions:
                         Payment Instructions:                       
 
                                                 
 
                                                 
 
                                                 
 
  Reference:            Reference:     
 
           
Notice Instructions:
                         Notice Instructions:                       
 
                                                 
 
                                                 
 
                                                 
 
  Reference:            Reference:     

 

4   Insert this chart if this Form of Assignment and Assumption Agreement is
being used by a single Assignor for an assignment to a single Assignee.

 

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Exhibit I
Page 4
The terms set forth in this Assignment are hereby agreed to:

                  ASSIGNOR   ASSIGNEE     [NAME OF ASSIGNOR]   [NAME OF
ASSIGNEE]5    
 
               
By:
      By:        
 
               
 
  Name:       Name:    
 
  Title:       Title:    

 

5   Add additional signature blocks, as needed, if this Form of Assignment and
Assumption Agreement is being used by funds managed by the same or related
investment managers.

 

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Exhibit I
Page 5

          [Consented to and]6 Accepted:
CYAN PARTNERS, LP,
as Administrative Agent
      By:           Name:           Title:           [ENDEAVOUR ENERGY UK
LIMITED,
as Borrower
      By:           Name:           Title:]7          

 

6   Insert only if assignment is being made to an Eligible Transferee pursuant
to Section 11.04(b)(y) of the Credit Agreement. Consent of the Administrative
Agent shall not be unreasonably withheld, delayed or conditioned.   7   Insert
only if (i) no Event of Default or Default under the Credit Agreement is then in
existence, (ii) the assignment is being made to an Eligible Transferee pursuant
to 11.04(b)(y) of the Credit Agreement and (iii) assignment is not being made
before the Syndication Date. Consent of the Borrower shall not be unreasonably
withheld, delayed or conditioned.

 

--------------------------------------------------------------------------------

 

ANNEX I
TO
EXHIBIT I
ENDEAVOUR ENERGY UK LIMITED
CREDIT AGREEMENT
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
AND ASSUMPTION AGREEMENT
          1. Representations and Warranties.
          1.1. Assignor. [The] [Each] Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of [the] [its] Assigned Interest, (ii)
[the] [its] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with any Credit Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Credit Document or any other instrument or document delivered pursuant
thereto (other than this Assignment) or any collateral thereunder, (iii) the
financial condition of Holdings, any of its Subsidiaries or affiliates or any
other Person obligated in respect of any Credit Document or (iv) the performance
or observance by Holdings, any of its Subsidiaries or affiliates or any other
Person of any of their respective obligations under any Credit Document.
1.2. Assignee. [The] [Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) confirms that it is
(A) a Lender, (B) a parent company and/or an affiliate of [the][each] Assignor
which is at least 50% owned by [the][each] Assignor or its parent company, (C) a
fund that invests in bank loans and is managed by the same investment advisor as
a Lender, by an affiliate of such investment advisor or by a Lender or (D) an
Eligible Transferee under Section 11.04(b)(y) of the Credit Agreement;
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement and, to the extent of [the][its] Assigned Interest, shall
have the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase [the][its]
Assigned Interest on the basis of which it has made such analysis and decision
and (v) if it is organized under the laws of a jurisdiction outside the United
States, it has attached to this Assignment any tax documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by it; (b) agrees that it will, independently and without reliance
upon the Administrative Agent, [the][each] Assignor, or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (c) appoints and authorizes the Administrative Agent
and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and the other Credit Documents
as are delegated to or otherwise conferred upon the Administrative Agent or the
Collateral Agent, as the case may be, by the terms thereof, together with such
powers as are reasonably incidental thereto and (d) agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender.

 

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Annex I
to Exhibit I
Page 2
          2. Payment. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of [the] [each] Assigned Interest
(including payments of principal, interest, fees, commissions and other amounts)
to [the][each] Assignor for amounts which have accrued to but excluding the
Effective Date and to [the] [each] Assignee for amounts which have accrued from
and after the Effective Date.
          3. Effect of Assignment. Upon the delivery of a fully executed
original hereof to the Administrative Agent, as of the Effective Date and the
recordation of this Assignment by the Administrative Agent on the Register
pursuant to Section 11.15 of the Credit Agreement, (i) [the][each] Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) [the][each] Assignor shall, to the extent
provided in this Assignment, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
          4. General Provisions. This Assignment shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. This Assignment may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment by telecopy shall be
effective as delivery of a manually executed counterpart of the Assignment. THIS
ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5.1401
OF THE GENERAL OBLIGATIONS LAW).
* * *

 

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EXHIBIT J
FORM OF INTERCOMPANY NOTE
[This Note, and the obligations of each Payor (as defined below) hereunder,
shall be subordinate and junior in right of payment to all Senior Indebtedness
(as defined in Section 1.07 of Annex A hereto) on the terms and conditions set
forth in Annex A hereto, which Annex A is herein incorporated by reference and
made a part hereof as if set forth herein in its entirety. Annex A shall not be
amended, modified or supplemented without the written consent of the Required
Lenders (as defined in the Credit Agreement referred to below) (or, after such
Credit Agreement has been terminated, the other holders holding a majority of
the outstanding other Senior Indebtedness)]
New York, New York
                          ,      
          FOR VALUE RECEIVED, each of the undersigned, to the extent a borrower
from time to time from any other entity listed on the signature page hereto
(each, in such capacity, a “Payor”), hereby promises to pay on demand to the
order of such other entity listed below (each, in such capacity, a “Payee”), in
lawful money of the [United States of America] in immediately available funds,
at such location as a Payee shall from time to time designate, the unpaid
principal amount of all loans and advances made by such Payee to such Payor.
          Each Payor also promises to pay interest on the unpaid principal
amount hereof in like money at said location from the date hereof until paid at
such rate per annum as shall be agreed upon from time to time by such Payor and
the respective Payee.
          This Note is an Intercompany Note referred to in the Credit Agreement
dated as of August 16, 2010, among Endeavour International Corporation,
Endeavour Energy UK Limited, the lenders party thereto from time to time, and
Cyan Partners, LP, as Administrative Agent for such Lenders (as amended,
restated, modified and/or supplemented from time to time, the “Credit
Agreement”) and shall be pledged pursuant to the applicable Security Documents
(as defined in the Credit Agreement). The Payor hereby acknowledges and agrees
that the Collateral Agent (as defined in the Credit Agreement) may, pursuant to
such Security Documents as in effect from time to time, exercise all rights
provided therein with respect to this Note.
          Each Payee is hereby authorized (but shall not be required) to record
all loans and advances made by it to any Payor (all of which shall be evidenced
by this Note), and all repayments or prepayments thereof, in its books and
records, such books and records constituting prima facie evidence of the
accuracy of the information contained therein.
          All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
          Each Payor hereby waives (to the extent permitted by applicable law)
presentment, demand, protest or notice of any kind in connection with this Note.

 

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Exhibit J
Page 2
          THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.

            [NAME OF EACH CREDIT PARTY],
as Payor
      By:           Name:           Title:        

          Pay to the order of
                          [NAME OF EACH CREDIT PARTY],
as Payee
      By:           Name:           Title:        

 

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ANNEX A
TO
INTERCOMPANY NOTE
          Section 1.01. Subordination of Liabilities. Each entity that is a
“Payor” under the promissory note (the “Note”) to which this Annex A is attached
(each, a “Payor”), for itself, its successors and assigns, covenants and agrees,
and each “Payee” under the Note (each, a “Payee”) by its acceptance thereof
likewise covenants and agrees, that the payment of the principal of, and
interest on, and all other amounts owing in respect of, the Note (the
“Subordinated Indebtedness”) is hereby expressly subordinated, to the extent and
in the manner hereinafter set forth, to the prior payment in full in cash of all
Senior Indebtedness (as defined in Section 1.07 of this Annex A). The provisions
of this Annex A shall constitute a continuing offer to all persons or other
entities who, in reliance upon such provisions, become holders of, or continue
to hold, Senior Indebtedness, and such provisions are made for the benefit of
the holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such, and they
and/or each of them may proceed to enforce such provisions.
          Section 1.02. No Payor to Make Payments with Respect to Subordinated
Indebtedness in Certain Circumstances. (a) Upon the maturity of any Senior
Indebtedness (including, without limitation, interest thereon or fees or any
other amounts owing in respect thereof), whether at stated maturity, by
acceleration or otherwise, all Obligations (as defined in the Credit Agreement)
due and owing in respect thereof (other than unasserted contingent
indemnification Obligations) shall first be paid in full in cash before any
payment of any kind or character (whether in cash, property, securities or
otherwise) is made on account of the Subordinated Indebtedness and no Payor nor
any person or other entity on its behalf may make any payment of Subordinated
Indebtedness, or acquire any Subordinated Indebtedness for cash, property or
securities until all Senior Indebtedness has been paid in full in cash if any
Default or Event of Default (each as defined below) is then in existence or
would result therefrom. Each Payee hereby agrees that, so long as any Default or
Event of Default in respect of any Senior Indebtedness has occurred and is
continuing, it will not ask, demand, sue for, or otherwise take, accept or
receive, any amounts owing in respect of the Note. As used herein, the terms
“Default” and “Event of Default” shall mean any Default or Event of Default (or
any similar term), respectively, under and as defined in, the relevant
documentation governing any Senior Indebtedness and in any event shall include
any payment default with respect to any Senior Indebtedness.
          (b) In the event that, notwithstanding the provisions of the preceding
subsection (a) of this Section 1.02, any payment shall be made on account of the
Subordinated Indebtedness at a time when payment is not permitted by the terms
of the Note or by said subsection (a), such payment shall be held by the
respective Payee that received such payment, in trust for the benefit of, and
shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness or their representative or representatives under the agreements
pursuant to which the Senior Indebtedness may have been issued, as their
respective interests may appear, for application pro rata to the payment of all
Senior Indebtedness (after giving effect to the relative priorities of such
Senior Indebtedness pursuant to the terms thereof or otherwise) remaining unpaid
to the extent necessary to pay all such Senior Indebtedness in full in cash in
accordance with the terms of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness. Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if such notice is not given, each
Payor shall give the respective Payee prompt written notice of any maturity of
Senior Indebtedness after which such Senior Indebtedness remains unsatisfied.
          Section 1.03. Subordination to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of each Payor.
(a) Upon any distribution of assets of any Payor upon any total or partial
dissolution, winding up, liquidation or reorganization of such Payor (whether in
bank-

 

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Annex A
Page 2
ruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors, marshalling of assets or otherwise and whether voluntary
or involuntary):
     (i) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including, without
limitation, post-petition interest at the rate provided in the documentation
with respect to the Senior Indebtedness, whether or not such post-petition
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding) before any Payee is entitled to receive any payment of any kind or
character on account of the Subordinated Indebtedness;
     (ii) any payment or distribution of assets of any Payor of any kind or
character, whether in cash, property or securities, to which any Payee would be
entitled except for the provisions of this Annex A, shall be paid by the
liquidating trustee or agent or other person or entity making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of Senior Indebtedness or
their representative or representatives under the agreements pursuant to which
the Senior Indebtedness may have been issued, to the extent necessary to make
payment in full in cash of all Senior Indebtedness remaining unpaid (after
giving effect to the relative priorities of such Senior Indebtedness pursuant to
the terms thereof or otherwise), after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness; and
     (iii) in the event that, notwithstanding the foregoing provisions of this
Section 1.03, any payment or distribution of assets of any Payor of any kind or
character, whether in cash, property or securities, shall be received by the any
Payee on account of Subordinated Indebtedness before all Senior Indebtedness is
paid in full in cash, such payment or distribution shall be received and held in
trust for and shall forthwith be paid over to the holders of the Senior
Indebtedness (after giving effect to the relative priorities of such Senior
Indebtedness pursuant to the terms thereof or otherwise) remaining unpaid or
their representative or representatives under the agreements pursuant to which
the Senior Indebtedness may have been issued, for application to the payment of
such Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full in cash, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness.
          (b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of any Payor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment has not occurred.
          (c) If any Payee does not file a proper claim or proof of debt in the
form required in any proceeding or other action referred to in the introductory
paragraph of this Section 1.03 prior to 30 days before the expiration of the
time to file such claim or claims, then any of the holders of the Senior
Indebtedness or their representative is hereby authorized to file an appropriate
claim for and on behalf of such Payee.
          (d) Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if such notice is not given, each
Payor shall give prompt written notice to

 

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Annex A
Page 3
the respective Payee under the Note of any dissolution, winding up, liquidation
or reorganization of such Payor (whether in bankruptcy, insolvency or
receivership proceedings or upon assignment for the benefit of creditors or
otherwise).
          Section 1.04. Subrogation. Subject to the prior payment in full in
cash of all Senior Indebtedness, each Payee shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
assets of the respective Payor applicable to the Senior Indebtedness until all
amounts owing on the Note shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of such Payor or by or on behalf of the such Payee
by virtue of this Annex A which otherwise would have been made to such Payee
shall, as between such Payor, its creditors other than the holders of Senior
Indebtedness, and such Payee, be deemed to be payment by such Payor to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Annex A are and are intended solely for the purpose of defining the
relative rights of such Payee, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
          Section 1.05. Obligation of each Payor Unconditional. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between each Payor and the respective Payee, the obligation of such Payor, which
is absolute and unconditional, to pay to such Payee the principal of and
interest on the Note as and when the same shall become due and payable in
accordance with the terms of this Note, or is intended to or shall affect the
relative rights of such Payee and creditors of such Payor, other than the
holders of the Senior Indebtedness, nor shall anything herein or therein, except
as expressly provided herein, prevent such Payee from exercising all remedies
otherwise permitted by applicable law, subject to the rights, if any, under this
Annex A of the holders of Senior Indebtedness in respect of cash, property, or
securities of such Payor received upon the exercise of any such remedy. Upon any
distribution of assets of any Payor referred to in this Annex A, the respective
Payee shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to such Payee, for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
such Payor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Annex A.
          Section 1.06. Subordination Rights Not Impaired by Acts or Omissions
of any Payor or Holders of Senior Indebtedness. No right of any present or
future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Payor or by any act or failure to act by any
Payee, or by any noncompliance by any Payor with the terms and provisions of the
Note, regardless of any knowledge thereof with which any Payee may have or be
otherwise charged. The holders of the Senior Indebtedness may, without in any
way affecting the obligations of the Payee with respect thereto, at any time or
from time to time and in their absolute discretion, change the manner, place or
terms of payment of, change or extend the time of payment of, or renew, or alter
or increase the amount of, any Senior Indebtedness, or amend, modify or
supplement any agreement or instrument governing or evidencing such Senior
Indebtedness or any other document referred to therein, or exercise or refrain
from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder and the release
of any collateral securing such Senior Indebtedness, all without notice to or
assent from the holder of the Note.
          Section 1.07. Senior Indebtedness. The term “Senior Indebtedness”
shall mean all Obligations (as such term is defined in the Credit Agreement) of
each Payor under, or in respect of the

 

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Annex A
Page 4
Credit Agreement and each other Credit Document (as defined in the Credit
Agreement) to which such Payor is a party, and any renewal, extension,
restatement, refinancing or refunding of any thereof.
          Section 1.08. Miscellaneous. If, at any time, all or part of any
payment with respect to Senior Indebtedness theretofore made by any Payor or any
other Person or entity is rescinded or must otherwise be returned by the holders
of Senior Indebtedness for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of such Payor or such other Person
or entity), the subordination provisions set forth herein shall continue to be
effective or be reinstated, as the case may be, all as though such payment had
not been made.