Exhibit 10.1

Execution Version

ENDEAVOUR INTERNATIONAL CORPORATION

$350,000,000 12%

First Priority Notes due 2018

and

$150,000,000

12% Second Priority Notes due 2018

Purchase Agreement

February 13, 2012

Citigroup Global Markets Inc.

As Representative of the Initial Purchasers

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

Endeavour International Corporation, a Nevada corporation (the “Company”),
proposes (i) to issue and sell to the several parties named in Schedule I hereto
(the “Initial Purchasers”), for whom you (the “Representative”) are acting as
representative, $350,000,000 principal amount of its 12% first priority notes
due 2018 (the “First Priority Notes”) and (ii) to issue and sell to you
$150,000,000 principal amount of its 12% second priority notes due 2018 (the
“Second Priority Notes,” and together with the First Priority Notes, the
“Securities”). The First Priority Notes are to be issued under an indenture (the
“First Priority Indenture”) to be dated as of the Closing Date, among the
Company, the guarantors listed in Schedule IV hereto (the “Guarantors”), and
Wells Fargo Bank, National Association, as trustee (the “First Priority
Trustee”), and will be jointly, severally and unconditionally guaranteed by each
of the Guarantors (the “First Priority Guarantees”). The Second Priority Notes
are to be issued under an indenture (the “Second Priority Indenture,” and
together with the First Priority Indenture, the “Indentures,” and each an
“Indenture”) to be dated as of the Closing Date, among the Company, the
guarantors listed in Schedule IV hereto (the “Guarantors”), and Wilmington
Trust, National Association, as trustee (the “Second Priority Trustee,” and
together with the First Priority Trustee, the “Trustees”), and will be jointly,
severally and unconditionally guaranteed by each of the Guarantors (the “Second
Priority Guarantees,” and together with the First Priority Guarantees, the
“Guarantees”). The Company and the Guarantors are hereinafter referred to
collectively as the “Endeavour Parties.” Certain terms used herein are defined
in Section 22 hereof.

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The sale of the Securities and the Guarantees to the Initial Purchasers will be
made without registration of the Securities or the Guarantees under the Act in
reliance upon exemptions from the registration requirements of the Act.

The Securities are being issued (i) to fund the acquisition (the “Acquisition”)
of assets (the “COP Assets”) pursuant to the Sale and Purchase Agreement (the
“COP Purchase Agreement”) between ConocoPhillips (U.K.) Limited, ConocoPhillips
Petroleum Limited, ConocoPhillips (U.K.) Lambda Limited and Endeavour Energy
U.K. Limited (“EEUK”), dated as of December 23, 2011 and (ii) to repay
outstanding borrowings under EEUK’s secured 15.0% senior term loan due 2013. In
connection with the Acquisition, the Company executed a deed of guarantee and
indemnity dated as of December 23, 2011 (the “Deed of Guarantee”) guaranteeing
EEUK’s obligations under the COP Purchase Agreement. The Deed of Guarantee and
the COP Purchase Agreement are referred to herein as the “Acquisition
Agreements.”

On or prior to the Closing Date, the Company, Endeavour Operating Corporation,
the Representative and the Trustees will execute an escrow agreement (the
“Escrow Agreement”), in the form and substance to be agreed with Wells Fargo
Bank, National Association, as escrow agent (the “Escrow Agent”) and
satisfactory to the Representative, which shall conform in all material respects
with the description thereof included in the Disclosure Package, and will direct
the deposit into an escrow account (the “Escrow Account”) with the Escrow Agent,
of the aggregate purchase price of the Securities under Section 2. The Escrow
Agreement shall provide that the escrowed funds shall only be released and paid
out pursuant to the terms of the Escrow Agreement, including, but not limited
to, the consummation of the Acquisition and the execution and delivery of the
Security Documents (as defined below) by the Company and each of its domestic
subsidiaries party thereto, together with the satisfaction of the other
conditions set forth in the Escrow Agreement (such date of release, the “Escrow
Release Date”).

On the Escrow Release Date, Endeavour Operating Corporation will execute and
deliver (a) a first priority Pledge and Security Agreement, (b) a second
priority Pledge and Security Agreement, (c) a Dutch law first priority deed of
pledge and (d) a Dutch law second priority deed of pledge (collectively, the
“Security Documents”), pursuant to which the Company and its domestic
subsidiaries party to such agreements will grant a first-priority lien on
(1) 65% of the voting capital stock and 100% of the non-voting capital stock of
Endeavour International Holding B.V. and of any first-tier foreign subsidiaries
(as further described therein) it may thereafter acquire and (2) all
intercompany indebtedness owing by any of the Company’s foreign subsidiaries to
the Company or any of its domestic subsidiaries.

Each of the First Priority Notes and the Second Priority Notes and the
respective Guarantees of each such series will have the benefit of a
registration rights agreement (the “Registration Rights Agreements”) to be dated
as of the Closing Date (as defined below), among the Company, the Guarantors and
the relevant Initial Purchasers, pursuant to which the Company will agree to
file with the Commission (i) a registration statement under the Act relating to
another series of debt securities of the Company and the guarantees of the
Guarantors under the applicable Indenture, each respectively with terms
substantially identical to the Securities (the “Exchange Securities”) and the
Guarantees (the “Exchange Guarantees”) to be offered in exchange for each of the
First Priority Notes and the Second Priority Notes and the respective

 

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Guarantees of each such series and (ii) to the extent required by the applicable
Registration Rights Agreement, a shelf registration statement pursuant to Rule
415 of the Act relating to the resale by certain holders of the First Priority
Notes or the Second Priority Notes and the respective Guarantees of each such
series, and in each case, to use commercially reasonable efforts to cause such
registration statements to be declared effective.

In connection with the sale of the Securities and the Guarantees, the Company
has prepared a preliminary offering memorandum, dated January 31, 2012 (as
amended or supplemented at the date thereof, including any and all exhibits
thereto and any information incorporated by reference therein, the “Preliminary
Memorandum”), a supplement to the Preliminary Memorandum dated February 13, 2012
in the form of Schedule II (the “Preliminary Supplement”) and a pricing
supplement dated February 13, 2011, in the form of Schedule III (the “Pricing
Supplement,” and together with the Preliminary Memorandum and the Preliminary
Supplement, the “Disclosure Package”) and a final offering memorandum, dated
February 13, 2012 (as amended or supplemented at the Execution Time, including
any and all exhibits thereto, the “Final Memorandum”). Each of the Preliminary
Memorandum and the Final Memorandum sets forth certain information concerning
the Company, the Securities and the Guarantees. The Company hereby confirms that
it has authorized the use of the Disclosure Package, the Preliminary Memorandum
and the Final Memorandum, and any amendment or supplement thereto, in connection
with the offer and sale of the Securities and the Guarantees by the Initial
Purchasers. Unless stated to the contrary, any references herein to the terms
“amend,” “amendment” or “supplement” with respect to the Disclosure Package, the
Preliminary Memorandum and the Final Memorandum shall be deemed to refer to and
include any information filed under the Exchange Act subsequent to the Execution
Time that is incorporated by reference therein, and all references herein to the
terms “Disclosure Package” and “Final Memorandum” shall be deemed to mean and
include all information filed under the Exchange Act prior to the Execution Time
and incorporated by reference in the Disclosure Package or the Final Memorandum
(collectively, the “Incorporated Documents”).

1. Representations and Warranties. Each of the Endeavour Parties, jointly and
severally, represents and warrants to, and agrees with, each Initial Purchaser
as set forth below in this Section 1.

(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. As of its date and on the Closing Date,
the Final Memorandum did not and will not (and any amendment or supplement
thereto, at the date thereof and at the Closing Date will not) contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes
no representation or warranty as to the information contained in or omitted from
the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial Purchasers
through the Representative specifically for inclusion therein, it being
understood and agreed that the only such information furnished by or on behalf
of any Initial Purchaser consists of the information described as such in
Section 8(b) hereof.

 

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(b) (i) The Disclosure Package, as of the Execution Time and (ii) any road show,
when taken together as a whole with the Disclosure Package, does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the foregoing based upon and in conformity with
written information furnished to the Company by any Initial Purchaser through
the Representative specifically for use therein, it being understood and agreed
that the only such information furnished by or on behalf of any Initial
Purchaser consists of the information described as such in Section 8(b) hereof.

(c) None of the Company, its Affiliates or any person acting on its or their
behalf (other than the Initial Purchasers) has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy, any security under
circumstances that would require the registration of the Securities or the
Guarantees under the Act.

(d) None of the Company, its Affiliates or any person acting on its or their
behalf (other than the Initial Purchasers) has: (i) engaged in any form of
general solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Securities or the Guarantees or
(ii) engaged in any directed selling efforts (within the meaning of Regulation
S) with respect to the Securities or the Guarantees; and each of the Company,
its Affiliates and each person acting on its or their behalf has complied with
the offering restrictions requirement of Regulation S.

(e) The Securities and the Guarantees satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.

(f) Subject to compliance by the Initial Purchasers with their representations
and warranties contained herein, no registration under the Act of the Securities
and the Guarantees or qualification of the Indentures under the Trust Indenture
Act is required for the offer and sale of the Securities and the Guarantees to
or by the Initial Purchasers in the manner contemplated herein, in the
Disclosure Package and the Final Memorandum.

(g) Neither the Company nor any of its Subsidiaries is, and after giving effect
to the offering and sale of the Securities and the Guarantees and the
application of the proceeds thereof as described in the Disclosure Package and
the Final Memorandum will be, an “investment company” as defined in the
Investment Company Act.

(h) The Company has not paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as
contemplated in this Agreement).

(i) Each of the Company and its Subsidiaries has been duly formed and is validly
existing in good standing under the laws of the jurisdiction in which it is
chartered or organized with full power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business as described
in the Disclosure Package and the Final Memorandum, and is duly qualified to do
business and is in good standing under the laws of each jurisdiction which
requires such qualification, except for such jurisdictions where the failure to
so qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Effect (as defined below).

 

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(j) All the outstanding shares of capital stock (or corresponding equity
interest) of the Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Disclosure Package and the Final Memorandum and
except as arise under or pursuant to the credit agreement dated August 16, 2010
between the Company, Endeavour Energy UK Limited, Cyan Partners, LP and various
lenders listed therein (the “Credit Agreement”) or the letter of credit facility
agreement dated July 25, 2011 between the Company and Commonwealth Bank of
Australia (the “Letter of Credit Agreement”), all outstanding shares of capital
stock (or corresponding equity interest) of the Subsidiaries are owned by the
Company either directly or through wholly owned Subsidiaries free and clear of
any perfected security interest or any other security interests, claims, liens
or encumbrances.

(k) All the outstanding shares of capital stock (or corresponding equity
interest) of Endeavour International Holding B.V. have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except as arise
under or pursuant to the Credit Agreement or the Letter of Credit Agreement, all
outstanding shares of capital stock (or corresponding equity interest) of
Endeavour International Holding B.V. are owned by Endeavour Operating
Corporation free and clear of any perfected security interest or any other
security interests, claims, liens or encumbrances.

(l) Each of the Securities, the Guarantees, the Indentures, the Escrow Agreement
and the Registration Rights Agreements conforms in all material respects to the
description thereof contained in each of the Disclosure Package and the Final
Memorandum. The descriptions of statutes, legal, governmental and regulatory
proceedings and contracts and other documents insofar as such descriptions
summarize legal matters, agreements, documents or proceedings discussed therein,
are accurate and fair descriptions of such legal matters, agreements, documents
or proceedings in all material respects.

(m) This Agreement has been duly authorized, executed and delivered by each of
the Endeavour Parties.

(n) Each of the Indentures has been duly authorized by each of the Endeavour
Parties and, assuming due authorization, execution and delivery thereof by the
applicable Trustee, when executed and delivered by each of the Endeavour
Parties, will constitute a legal, valid and binding instrument enforceable
against each of the Endeavour Parties in accordance with its terms (subject, as
to the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’ rights generally from
time to time in effect and to general principles of equity).

(o) The Acquisition Agreements have been duly and validly authorized by the
Company and EEUK, as applicable, and are legal, valid and binding agreements of
EEUK and of the Company, enforceable against them in accordance with their terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors’ rights
generally from time to time in effect and to general principles of equity).

 

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(p) Each of the Registration Rights Agreements has been duly and validly
authorized by each of the Endeavour Parties and, assuming due authorization,
execution and delivery thereof by each of the other parties thereto, will
constitute a legal, valid and binding agreement enforceable against each of the
Endeavour Parties in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors’ rights generally from time to time in effect and
to general principles of equity).

(q) The Securities have been duly authorized by the Company, and, when executed
and authenticated in accordance with the provisions of the applicable Indenture
and delivered to and paid for by the Initial Purchasers, will have been duly
executed and delivered by the Company and will constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors’ rights generally from time to time in effect and to general
principles of equity), and will be entitled to the benefits of the applicable
Indenture; and the Guarantees have been duly authorized by each of the
Guarantors and, when the Securities have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the applicable
Indenture and paid for by the Initial Purchasers, will constitute the legal,
valid and binding obligations of each of the Guarantors, enforceable against
each of the Guarantors in accordance with their terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors’ rights generally from time to time
in effect and to general principles of equity), and will be entitled to the
benefits of the applicable Indenture.

(r) The Exchange Securities have been duly authorized by the Company, and will,
when issued, executed and authenticated in accordance with the provisions of the
applicable Indenture and as contemplated by the applicable Registration Rights
Agreement in exchange for the Securities, will be duly and validly issued and
outstanding and will constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors’ rights
generally from time to time in effect and to general principles of equity), and
will be entitled to the benefits of the applicable Indenture; and the Exchange
Guarantees have been duly authorized by each of the Guarantors and, when the
Exchange Securities have been duly executed, authenticated, issued and delivered
in accordance with the provisions of the applicable Indenture and as
contemplated in the applicable Registration Rights Agreement, will constitute
the legal, valid and binding obligations of each of the Guarantors, enforceable
against each of the Guarantors in accordance with their terms (subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’ rights generally from
time to time in effect and to general principles of equity), and will be
entitled to the benefits of the applicable Indenture.

 

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(s) The Escrow Agreement has been duly authorized by the Company and by
Endeavour Operating Corporation, and when executed and delivered by the Company
and by Endeavour Operating Corporation, and assuming due authorization,
execution and delivery thereof by the other parties thereto, will constitute a
legal, valid and binding agreement enforceable against the Company and against
Endeavour Operating Corporation in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors’ rights generally from time to time
in effect and to general principles of equity).

(t) The Security Documents have been duly authorized by Endeavour Operating
Corporation on the terms disclosed in the Disclosure Package and the Final
Memorandum. When the Security Documents are executed and delivered by Endeavour
Operating Corporation, and assuming due authorization, execution and delivery
thereof by the other parties thereto, the Security Documents will, from and
after the Escrow Release Date, constitute legal, valid and binding agreements
enforceable against Endeavour Operating Corporation in accordance with their
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors’ rights
generally from time to time in effect and to general principles of equity).

(u) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions
contemplated herein, in the Indentures, in the Registration Rights Agreements,
in the Security Documents (on the terms disclosed in the Disclosure Package and
the Final Memorandum) or in the Escrow Agreement, except such as may be required
under the blue sky laws of any jurisdiction in which the Securities and the
Guarantees are offered and sold or under the Exchange Act, such appropriate
filings of Uniform Commercial Code (“UCC”) financing statements and, in the case
of each Registration Rights Agreement, such as will be obtained under the Act
and the Trust Indenture Act.

(v) None of the execution and delivery of this Agreement, the Registration
Rights Agreements, the Indentures, the Security Documents (on the terms
disclosed in the Disclosure Package and the Final Memorandum) or the Escrow
Agreement, the issuance and sale of the Securities and the Guarantees, the
consummation of any other of the transactions contemplated in this Agreement,
the Registration Rights Agreements, the Escrow Agreement or the Indentures, the
application of the proceeds therefrom as set forth in the Disclosure Package or
the fulfillment of the terms hereof or thereof will conflict with, require any
other consent under, result in a breach or violation of, or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its Subsidiaries (except for liens required by the terms of the Escrow Agreement
or the Security Documents) pursuant to (i) the organizational documents of the
Company or any of its Subsidiaries, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the Company or
any of its Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its Subsidiaries or any of its or
their properties, except, with respect to clauses (ii) and (iii) only, for such
defaults or violations as would not, individually or in the aggregate, result in
a Material Adverse Effect and except for such as have been obtained.

 

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(w) The consolidated historical financial statements and schedules of the
Company and its consolidated Subsidiaries and the combined revenues and direct
operating expenses of the COP Assets included in the Disclosure Package and the
Final Memorandum present fairly the financial condition, results of operations
and cash flows of the Company and the results of operations of the COP Assets as
of the dates and for the periods indicated, comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). All pro forma financial statements or data included or
incorporated by reference in the Disclosure Package and the Final Memorandum
comply in all material respects with the requirements of the Act and the
Exchange Act, and the assumptions used in the preparation of such pro forma
financial statements and data are reasonable, the pro forma adjustments used
therein are appropriate to give effect to the transactions or circumstances
described therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and data. The
selected financial data set forth under the captions “Summary Historical
Consolidated Financial Data” in the Preliminary Memorandum and the Final
Memorandum fairly present, on the basis stated in the Preliminary Memorandum and
the Final Memorandum, the information included therein. The other financial,
reserve and statistical data contained in the Preliminary Memorandum and the
Final Memorandum (and any amendment or supplement thereto) are accurately and
fairly presented and prepared on a basis consistent with the financial
statements and books and records of the Company and its Subsidiaries.

(x) As of September 30, 2011, the Company had or would have had, on the
consolidated historical and as adjusted basis as indicated in the Disclosure
Package and the Final Memorandum, a capitalization as set forth therein under
the heading “Capitalization.”

(y) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property is pending or, to the best knowledge of
the Endeavour Parties, threatened that could reasonably be expected to (A) have
a material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business or (B) prevent or materially interfere with the ability of the
Endeavour Parties to perform their respective obligations under this Agreement,
the Indentures, the Acquisition Agreements, the Escrow Agreement or the
Registration Rights Agreements or consummate any of the transactions
contemplated hereby or thereby (the occurrence of any such effect or any such
prevention or interference or any such result described in the foregoing clauses
(A) and (B) being herein referred to as a “Material Adverse Effect”), except as
set forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto).

(z) Each of the Company and its Subsidiaries owns or leases all such properties
as are necessary to the conduct of its operations as presently conducted or to
be conducted on the Closing Date.

 

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(aa) Neither the Company nor any Subsidiary is in violation or default of
(i) any provision of its organizational documents, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such Subsidiary or any of its
properties, as applicable, except, with respect to clauses (ii) and (iii) only,
for such defaults or violations as would not, individually or in the aggregate,
result in a Material Adverse Effect.

(bb) KPMG LLP, who has certified certain financial statements of the Company and
its consolidated Subsidiaries and delivered their report with respect to the
audited consolidated financial statements and schedules included in the
Disclosure Package and the Final Memorandum, are independent public accountants
with respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.

(cc) Ernst & Young LLP, who has audited the combined statements of revenues and
direct operating expenses for the year ended December 31, 2011 with respect to
the COP Assets included in the Disclosure Package and the Final Memorandum, are
independent auditors with respect to the COP Assets under Rule 101 of the
American Institute of Certified Public Accountants’ Code of Professional Conduct
and its interpretations.

(dd) Each of the Company and its Subsidiaries has filed all tax returns that are
required to be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a Material Adverse Effect and except
as set forth in or contemplated in the Disclosure Package and the Final
Memorandum (exclusive of any amendment or supplement thereto)) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect, except as set forth
in or contemplated in the Disclosure Package and the Final Memorandum (exclusive
of any amendment or supplement thereto).

(ee) No labor problem or dispute with the employees of the Company or any of its
Subsidiaries exists, or to the best knowledge of the Endeavour Parties, is
threatened or imminent, and the Endeavour Parties are not aware of any existing
or imminent labor disturbance by the employees of any of the Company’s or its
Subsidiaries’ principal suppliers, contractors or customers, that would have a
Material Adverse Effect, except as set forth in or contemplated in the
Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

(ff) Netherland, Sewell & Associates, Inc., who issued a report with respect to
the Company’s oil and natural gas reserves as of December 31, 2011, 2010 and
2009 and with respect to the oil and natural gas reserves of the COP Assets as
of December 31, 2011 and who has delivered the letter referred to in
Section 6(h) hereof, was, as of the date of such report, and is, as of the date
hereof, an independent petroleum engineer with respect to the Company.

 

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(gg) The estimates of net proved oil and gas reserves of the Company as of
December 31, 2011, 2010 and 2009 and of the COP Assets as of December 31, 2011
(the “proved reserve estimates”) and the estimates of net proved plus probable
oil and gas reserves of the Company and of the properties to be acquired in the
Acquisition as of December 31, 2011 (the “2P reserve estimates”) contained in
the Disclosure Package and the Final Memorandum were prepared by or audited by
Netherland, Sewell & Associates, Inc.; the proved reserve estimates and the 2P
reserve estimates of the Company and of the COP Assets as of December 31, 2011
included in the Disclosure Package and the Final Memorandum fairly reflect, in
all material respects, the oil and gas reserves of the Company and of the COP
Assets as of the dates indicated therein and are in accordance with the
Commission guidelines applicable thereto applied on a consistent basis
throughout the periods involved.

(hh) The organizational documents of the Company and each of its Subsidiaries
have been duly authorized, executed and delivered by the Company or such
Subsidiary, as the case may be, and are enforceable against the respective
parties thereto in accordance with their terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors’ rights generally from time to time in effect, to
general principles of equity and public policy, applicable law relating to
fiduciary duties and indemnification and contribution and an implied covenant of
good faith and fair dealing).

(ii) The Company and each of its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged; all
policies of insurance insuring the Company or any of its Subsidiaries or their
respective businesses, assets, employees, officers and directors are in full
force and effect; the Company and its Subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and there are
no claims by the Company or any such Subsidiary under any such policy or
instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause; neither the Company nor any such
Subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any of its Subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect except as set forth in or contemplated in the Disclosure Package
and the Final Memorandum (exclusive of any amendment or supplement thereto).

(jj) No Subsidiary is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such
Subsidiary’s capital stock (or corresponding equity interest), from repaying to
the Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary’s property or assets to the Company or any
other Subsidiary of the Company, except as described in or contemplated by the
Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

 

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(kk) The Company and its Subsidiaries possess all licenses, certificates,
permits and other authorizations issued by all applicable authorities necessary
to conduct their respective businesses, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).

(ll) The Company and each of its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company and the Subsidiaries’ internal controls
over financial reporting are effective and the Endeavour Parties are not aware
of any material weakness in their internal control over financial reporting.

(mm) The Company and its Subsidiaries maintain “disclosure controls and
procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act);
such disclosure controls and procedures are effective.

(nn) None of the Endeavour Parties has taken, directly or indirectly, any action
designed to or that would constitute or that could reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities and the Guarantees.

(oo) Since September 30, 2011, none of the Company or any of its Subsidiaries
has sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, investigation, order or
decree, otherwise than as set forth or contemplated in the Disclosure Package
and the Final Memorandum. Except as disclosed in the Disclosure Package and the
Final Memorandum (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Disclosure Package
and the Final Memorandum (or any amendment or supplement thereto), (i) none of
the Company or any of its Subsidiaries has incurred any liability or obligation,
indirect, direct or contingent, or entered into any transactions, not in the
ordinary course of business, that, individually or in the aggregate, is material
to the Company and its Subsidiaries, taken as a whole, (ii) there has not been
any material change in the capitalization or material increase in the short-term
debt or long-term debt of the Company or any of its Subsidiaries and (iii) there
has not been any material adverse change, or any development involving,
individually or in the aggregate, a prospective material adverse change in or
affecting the general affairs, condition (financial or other), business,
prospects, assets or results of operations of the Company and its Subsidiaries.

(pp) The Company and its Subsidiaries are (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants

 

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or contaminants (“Environmental Laws”), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have not
received notice of any actual or potential liability under any Environmental
Law, except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto). Except as set forth in the
Disclosure Package and the Final Memorandum, neither the Company nor any of the
Subsidiaries has been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended.

(qq) In the ordinary course of its business, the Company periodically reviews
the effect of Environmental Laws on the business, operations and properties of
the Company and its Subsidiaries, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect, except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum (exclusive of
any amendment or supplement thereto).

(rr) None of the following events has occurred or exists: (i) a failure to
fulfill the obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and the regulations and published interpretations
thereunder with respect to a Plan, determined without regard to any waiver of
such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the
Pension Benefit Guaranty Corporation or any other federal or state governmental
agency or any foreign regulatory agency with respect to the employment or
compensation of employees by any of the Company or any of its Subsidiaries that
could have a Material Adverse Effect; (iii) any breach of any contractual
obligation, or any violation of law or applicable qualification standards, with
respect to the employment or compensation of employees by the Company or any of
its Subsidiaries that could have a Material Adverse Effect. None of the
following events has occurred or is reasonably likely to occur: (i) a material
increase in the aggregate amount of contributions required to be made to all
Plans in the current fiscal year of the Company and its Subsidiaries compared to
the amount of such contributions made in the most recently completed fiscal year
of the Company and its Subsidiaries; (ii) a material increase in the
“accumulated post-retirement benefit obligations” (within the meaning of
Statement of Financial Accounting Standards 106) of the Company and its
Subsidiaries compared to the amount of such obligations in the most recently
completed fiscal year of the Company and its Subsidiaries; (iii) any event or
condition giving rise to a liability under Title IV of ERISA that could have a
Material Adverse Effect; or (iv) the filing of a claim by one or more employees
or former employees of the Company or any of its Subsidiaries related to their
employment that could have a Material Adverse Effect. For purposes of this
paragraph, the term “Plan” means a plan (within the meaning of Section 3(3) of
ERISA) subject to Title IV of ERISA with respect to which the Company or any of
its Subsidiaries may have any liability.

 

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(ss) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including
Section 402 relating to loans and Sections 302 and 906 relating to
certifications.

(tt) Neither the Company nor any of its Subsidiaries nor, to the knowledge of
the Endeavour Parties, any director, officer, agent, employee or Affiliate of
the Company or any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA; and the Company, its
Subsidiaries and, to the knowledge of the Endeavour Parties, its Affiliates,
have conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance therewith.

(uu) The operations of the Company and its Subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements and the money laundering statutes and the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Endeavour Parties,
threatened.

(vv) Neither the Company nor any of its Subsidiaries nor, to the knowledge of
the Endeavour Parties, any director, officer, agent, employee or Affiliate of
the Company or any of its Subsidiaries is currently subject to any sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering of the Securities and the Guarantees, or lend,
contribute or otherwise make available such proceeds to any Subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.

(ww) The Subsidiaries, after excluding Endeavour Operating Corporation, a
Delaware corporation (“Endeavour Operating”), and EEUK, did not, individually or
in aggregate, account for more than 10% of the consolidated net income of the
Company and its Subsidiaries for the year ended December 31, 2010.

 

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(xx) The interactive data in eXtensbile Business Reporting Language included or
incorporated by reference in the Final Memorandum and the Disclosure Package
fairly presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

Any certificate signed by any officer of the Company or any Guarantor and
delivered to the Representative or counsel for the Initial Purchasers in
connection with the offering of the Securities and the Guarantees shall be
deemed a representation and warranty by the Company or such Guarantor, as the
case may be, as to matters covered thereby, to each Initial Purchaser.

2. Purchase and Sale. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company agrees to sell
to each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 93.6% of the
principal amount thereof, plus accrued interest, if any, from February 13, 2012
to the Closing Date, the principal amount of First Priority Notes set forth
opposite such Initial Purchaser’s name in Schedule I hereto. Subject to the
terms and conditions and in reliance upon the representations and warranties
herein set forth, the Company agrees to sell to the Representative, and the
Representative agrees to purchase from the Company, at a purchase price of 93.6%
of the principal amount thereof, plus accrued interest, if any, from
February 13, 2012 to the Closing Date, the Second Priority Notes.

3. Delivery and Payment. Delivery of and payment for the Securities and the
Guarantees shall be made at 10:00 a.m., New York City time, on February 23,
2012, or at such time on such later date not more than three Business Days after
the foregoing date as the Representative shall designate, which date and time
may be postponed by agreement between the Representative and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities and the Guarantees being herein called the “Closing Date”). Delivery
of the Securities and the Guarantees shall be made to Representative for the
respective accounts of the several Initial Purchasers against payment by the
several Initial Purchasers through the Representative of the purchase price
thereof to or upon the order of the Company by wire transfer payable in same-day
funds to the Escrow Account. Delivery of the Securities and the Guarantees shall
be made by delivery of one or more certificates in global form representing the
Securities at such location as Citigroup shall reasonably designate at least one
Business Day in advance of the Closing Date. The global certificates
representing the Securities shall be registered in such names and in such
denominations as Citigroup may request not less than two Business Days in
advance of the Closing Date. The Company agrees to have the Securities available
for inspection, checking and packaging by the Representative or counsel for the
Representative at One Shell Plaza, 910 Louisiana, Houston, Texas 77002, not
later than 5:00 PM on the Business Day prior to the Closing Date.

4. Offering by Initial Purchasers. (a) Each Initial Purchaser acknowledges that
the Securities and the Guarantees have not been and will not be registered under
the Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons, except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Act.

 

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(b) Each Initial Purchaser, severally and not jointly, represents and warrants
to and agrees with the Company that:

(i) it has not offered or sold, and will not offer or sell, any Securities or
Guarantees within the United States or to, or for the account or benefit of,
U.S. persons (x) as part of their distribution at any time or (y) otherwise
until 40 days after the later of the commencement of the offering and the date
of the closing of the offering except:

 

  (A) to those it reasonably believes to be “qualified institutional buyers” (as
defined in Rule 144A under the Act) or

 

  (B) in accordance with Rule 903 of Regulation S;

(ii) neither it nor any person acting on its behalf has made or will make offers
or sales of the Securities in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation D) in the
United States;

(iii) in connection with each sale pursuant to Section 4(b)(i)(A), it has taken
or will take reasonable steps to ensure that the purchaser of such Securities is
aware that such sale may be made in reliance on Rule 144A;

(iv) neither it, nor any of its Affiliates nor any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Securities;

(v) it is an “accredited investor” (as defined in Rule 501(a) of Regulation D);

(vi) it has complied and will comply with the offering restrictions requirement
of Regulation S;

(vii) at or prior to the confirmation of sale of Securities (other than a sale
of Securities pursuant to Section 4(b)(i)(A) of this Agreement), it shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the distribution
compliance period (within the meaning of Regulation S) a confirmation or notice
to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the “Act”) and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the date of closing of the
offering, except in either case in accordance with Regulation S or Rule 144A
under the Act. Terms used in this paragraph have the meanings given to them by
Regulation S.”

 

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5. Agreements. Each of the Endeavour Parties, jointly and severally, agrees with
each Initial Purchaser that:

(a) The Company will furnish to each Initial Purchaser and to counsel for the
Initial Purchasers, without charge, prior to the completion of the distribution
of the Securities by the Initial Purchasers (as determined by the Initial
Purchasers), as many copies of the Preliminary Memorandum and the Final
Memorandum and any amendments and supplements thereto as they may reasonably
request.

(b) The Company will prepare a final term sheet, containing solely a description
of final terms of the Securities and the Guarantees and the offering thereof, in
the form approved by you and attached as Schedule III hereto.

(c) The Company will not amend or supplement the Disclosure Package or the Final
Memorandum, other than by filing documents under the Exchange Act that are
incorporated by reference therein, without the prior written consent of the
Representative; provided, however, that prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined by the
Representative), the Company will not file any document under the Exchange Act
that is incorporated by reference in the Disclosure Package or the Final
Memorandum unless, prior to such proposed filing, the Company has furnished the
Representative with a copy of such document for their review and the
Representative has not reasonably objected to the filing of such document. The
Company will promptly advise the Representative when any document filed under
the Exchange Act that is incorporated by reference in the Disclosure Package or
the Final Memorandum shall have been filed with the Commission.

(d) If at any time prior to the completion of the distribution of the Securities
by the Initial Purchasers (as determined by the Representative), any event
occurs as a result of which the Disclosure Package or the Final Memorandum, as
then amended or supplemented, would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made or the
circumstances then prevailing, not misleading, or if it should be necessary to
amend or supplement the Disclosure Package or the Final Memorandum to comply
with applicable law, the Company will promptly (i) notify the Representative of
any such event; (ii) subject to the requirements of Section 5(c), prepare an
amendment or supplement that will correct such statement or omission or effect
such compliance; and (iii) supply any supplemented or amended Disclosure Package
or Final Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as they may reasonably
request.

(e) Without the prior written consent of the Representative, the Company has not
given and will not give to any prospective purchaser of the Securities any
written information concerning the offering of the Securities other than
materials contained in the Disclosure Package, the Final Memorandum or any other
offering materials prepared by the Representative.

(f) The Company will arrange, if necessary, for the qualification of the
Securities and the Guarantees for sale by the Initial Purchasers under the laws
of such jurisdictions as the Representative may designate and will maintain such
qualifications in effect so long as required

 

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for the sale of the Securities and the Guarantees; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Securities and the Guarantees, in any jurisdiction where it is not
now so subject. The Company will promptly advise the Representative of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Securities and the Guarantees for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.

(g) During the period from the Closing Date until one year after the Closing
Date, without the prior written consent of the Representative, the Company will
not, and will not permit any of its Affiliates to, resell any of the Securities
which constitute “restricted securities” under Rule 144 under the Act that have
been reacquired by any of them, other than a transaction registered under the
Act.

(h) None of the Company, its Affiliates, or any person acting on its or their
behalf will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would require the
registration of the Securities or the Guarantees under the Act.

(i) None of the Company, its Affiliates, or any person acting on its or their
behalf will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities; and each of them will comply with
the offering restrictions requirement of Regulation S.

(j) None of the Company, its Affiliates, or any person acting on its or their
behalf will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States.

(k) For so long as any of the Securities are outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Act, the Company,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act or it is not exempt from such reporting
requirements pursuant to and in compliance with Rule 12g3-2(b) under the
Exchange Act, will provide to each holder of such restricted securities and to
each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Act. This
covenant is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such restricted
securities.

(l) The Company will cooperate with the Representative and use commercially
reasonable efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.

(m) Each of the Securities will bear the legend contained in “Transfer
Restrictions” in the Preliminary Memorandum and the Final Memorandum for the
time period and upon the other terms stated therein.

 

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(n) The Company will not for a period of 90 days following the Execution Time
without the prior written consent of the Representative offer, sell, contract to
sell, pledge, otherwise dispose of, enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any Affiliate of the Company or any person in
privity with the Company or any Affiliate of the Company), directly or
indirectly, or announce the offering, of any debt securities issued or
guaranteed by the Company (other than the Securities and the Guarantees).

(o) None of the Endeavour Parties will take, directly or indirectly, any action
designed to, or that would constitute or that could reasonably be expected to,
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.

(p) The Endeavour Parties will apply the net proceeds from the sale of the
Securities and the Guarantees in the manner described in each of the Disclosure
Package and the Final Memorandum under the heading “Use of Proceeds.”

(q) The Company agrees to pay the costs and expenses relating to the following
matters: (i) the preparation of the Indentures and the Registration Rights
Agreements and the issuance of the Securities and the Guarantees and the fees of
the Trustees and the Escrow Agent (including related fees and expenses of any
counsel to the Trustees or counsel to the Escrow Agent); (ii) the preparation,
printing or reproduction of the Preliminary Memorandum and the Final Memorandum
and each amendment or supplement to either of them; (iii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Preliminary Memorandum and the
Final Memorandum, and all amendments or supplements to either of them, as may,
in each case, be reasonably requested for use in connection with the offering
and sale of the Securities and the Guarantees; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities and the
Guarantees; (v) any stamp or transfer taxes in connection with the original
issuance and sale of the Securities and the Guarantees; (vi) the printing (or
reproduction) and delivery of this Agreement, any blue sky memorandum and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities and the Guarantees; (vii) any
registration or qualification of the Securities and the Guarantees for offer and
sale under the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for the Initial
Purchasers relating to such registration and qualification); (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of
the Securities and the Guarantees; (ix) the fees and expenses of the Company’s
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company; (x) the rating of the Securities and the Exchange
Securities; (xi) the performance of the Endeavour Parties’ obligations under the
Registration Rights Agreements; (xii) all expenses and application fees incurred
in connection with the approval of the Securities for book-entry transfer by
DTC; (xiii) all costs and expenses in connection with the creation and
perfection of liens contemplated by the Escrow Agreement (including without
limitation, filing and recording fees, search fees and taxes); and (ix) all
other costs and expenses incident to the performance by the Endeavour Parties of
their obligations hereunder.

 

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6. Conditions to the Obligations of the Initial Purchasers. The obligations of
the Initial Purchasers to purchase the Securities and the Guarantees shall be
subject to the accuracy of the representations and warranties of the Endeavour
Parties contained herein at the Execution Time and the Closing Date (except to
the extent such representations and warranties expressly relate to a specific
earlier date (in which case such representations and warranties shall be true
and correct as of such specified earlier date)), to the accuracy of the
statements of the Endeavour Parties made in any certificates pursuant to the
provisions hereof, to the performance by the Endeavour Parties of their
obligations hereunder and to the following additional conditions:

(a) The Company shall have requested and caused Vinson & Elkins LLP, counsel for
the Endeavour Parties, to furnish to the Representative its opinion, dated the
Closing Date, and addressed to the Representative, to the effect that:

(i) assuming (i) the accuracy of the representations and warranties of the
Endeavour Parties and the Initial Purchasers set forth in this Agreement,
(ii) the due performance by the Endeavour Parties and the Initial Purchasers of
the covenants and agreements set forth in this Agreement, (iii) the compliance
by the Initial Purchasers with the offering and transfer procedures and
restrictions described in the Disclosure Package, and (iv) that each of the
Initial Purchasers is an “accredited investor” as defined in Rule 501(a)(1)
under the Securities Act, (a) the offer, sale and delivery of the Securities and
the Guarantees to the Initial Purchasers by the Endeavour Parties and (b) the
initial resale of the Securities and the Guarantees by the Initial Purchasers,
each in the manner contemplated by this Agreement and the Disclosure Package and
the Final Memorandum, do not require registration under the Securities Act;
provided, however, that such counsel need not express any opinion as to any
subsequent reoffer or resale of any of the Securities; and the Indentures do not
require qualification under the Trust Indenture Act;

(ii) (a) each of the Guarantors is validly existing in good standing under the
laws of the jurisdiction in which it is chartered or organized, (b) each of the
Guarantors has full corporate power and authority to own or lease its
properties, as the case may be, and conduct its business as described in the
Disclosure Package and the Final Memorandum, and (c) each of the Endeavour
Parties is in good standing under the laws of the jurisdictions set forth on
Schedule V;

(iii) to the knowledge of such counsel, (A) there is no pending or threatened
action, suit or proceeding by or before any court or governmental agency,
authority or body to which the Company or any of its Subsidiaries is a party or
to which any of their respective properties are subject, of a character required
to be disclosed in the Incorporated Documents which is not disclosed in the
Incorporated Documents as required, and (B) there is no contract or other
document of a character required to be described in the Incorporated Documents
or to be filed as an exhibit thereto, which is not described or filed as
required; and the section of the Disclosure Package and the Final Memorandum
entitled “Certain United States Federal Income Tax Consequences,” insofar as it
purports

 

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to constitute a summary of United States federal tax law and regulations or
legal conclusions with respect thereto, constitutes an accurate summary of the
matters described therein in all material respects, subject to the assumptions
and qualifications set forth therein; and the statements contained or
incorporated by reference in the Disclosure Package and the Final Memorandum
under the captions, “Business—Environmental Matters and Regulation” and
“Business—Regulations,” insofar as they refer to statements of law or legal
conclusions, accurately describe, in all material respects, the statutes and
regulations addressed thereby;

(iv) the statements in the Disclosure Package and the Final Memorandum under the
captions “Description of the Notes” and “Description of Other Indebtedness,”
insofar as they purport to constitute summaries of the documents, including the
Securities and the Guarantees, described therein, are accurate in all material
respects;

(v) none of the Endeavour Parties is and, after giving effect to the offering
and sale of the Securities and the Guarantees and the application of the
proceeds therefrom as described in the Disclosure Package and the Final
Memorandum, will be, required to register as an “investment company” as defined
in the Investment Company Act;

(vi) no consent, approval, authorization, filing with or order of any United
States court or governmental agency or body is required in connection with the
transactions contemplated herein, in the Indentures, in the Escrow Agreement or
in the Registration Rights Agreements, except (x) such as may be required under
the Securities Act, the Trust Indenture Act or the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities
and the Guarantees by the Initial Purchasers in the manner contemplated in this
Agreement, the Disclosure Package and the Final Memorandum; (y) the filing of
appropriate UCC financing statements in the office of the Secretary of State of
the State of Delaware or (z) such other approvals (specified in such opinion) as
have been obtained;

(vii) none of the execution and delivery of the Indentures, the Registration
Rights Agreements, the Escrow Agreement or this Agreement, the issuance and sale
of the Securities and the Guarantees, nor the consummation of any other of the
transactions contemplated herein or therein, nor the fulfillment of the terms
hereof or thereof will conflict with, or result in a breach, or violation of,
any of the terms or provisions of, or constitute a default under (A), any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
filed or incorporated by reference as an exhibit to the Incorporated Documents
(such documents collectively, the “Applicable Contracts”), or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries (except for liens contemplated
by the terms of the Escrow Agreement or the Security Documents) pursuant to any
Applicable Contract, (B)

 

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any federal or Texas state law, regulation or rule, the Delaware General
Corporation Law, or, to our knowledge and without having investigated
governmental records or court dockets, any decree, judgment or order applicable
to the Company or its Subsidiaries or (C) the organizational documents of the
Guarantors, except, in the case of clauses (A) and (B) above, for any such
conflict, breach, violation, default, lien, charge or encumbrance that would
not, individually or in the aggregate, have a Material Adverse Effect or with
respect to which consents have been obtained. With respect to clause (B) above,
such counsel need express no opinion as to the application of any state
securities or blue sky laws or federal or state antifraud laws, rules or
regulations;

(viii) this Agreement has been duly authorized, executed and delivered by each
of the Guarantors;

(ix) the Escrow Agreement has been duly authorized, executed and delivered by
Endeavour Operating Corporation, and assuming due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding instrument enforceable against Endeavour Operating Corporation in
accordance with its terms (subject to the Enforceability Exceptions);

(x) the Registration Rights Agreements have been duly authorized, executed and
delivered by each of the Guarantors, and assuming due authorization, execution
and delivery thereof by the other parties thereto, constitutes a legal, valid
and binding instrument enforceable against each of the Endeavour Parties in
accordance with its terms (subject to the Enforceability Exceptions);

(xi) the Indentures have been duly authorized, executed and delivered by each of
the Guarantors, and assuming due authorization, execution and delivery thereof
by the Company and the applicable Trustee, constitute legal, valid and binding
instruments enforceable against each of the Endeavour Parties in accordance with
their terms (subject to the Enforceability Exceptions);

(xii) the Securities, when executed and authenticated in accordance with the
provisions of the applicable Indentures and delivered to and paid for by the
Initial Purchasers under this Agreement, will constitute legal, valid and
binding obligations, enforceable against the Company in accordance with their
terms (subject to the Enforceability Exceptions), and will be entitled to the
benefits of the applicable Indenture;

(xiii) the Guarantees have been duly authorized by each of the Guarantors and,
when each global certificate representing the Securities has been duly executed,
authenticated, issued and delivered as provided in the applicable Indenture and
paid for as provided in this Agreement, the Guarantees will be valid and legally
binding obligations of each of the Guarantors, enforceable against each of the
Guarantors in accordance with their terms (subject to the Enforceability
Exceptions), and will be entitled to the benefits of the applicable Indenture;

 

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(xiv) the Exchange Securities, when duly executed, authenticated, issued and
delivered as contemplated by the applicable Registration Rights Agreement and
the applicable Indenture, will be duly and validly issued and outstanding and
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms (subject to the
Enforceability Exceptions), and will be entitled to the benefits of the
applicable Indenture; and

(xv) the Exchange Guarantees have been duly authorized by each of the Guarantors
and, when each global certificate representing the Exchange Securities has been
duly executed, authenticated, issued and delivered as provided in the applicable
Registration Rights Agreement and the applicable Indenture, the Exchange
Guarantees will be valid and legally binding obligations of each of the
Guarantors, enforceable against each of the Guarantors in accordance with their
terms (subject to the Enforceability Exceptions), and will be entitled to the
benefits of the applicable Indenture.

In addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Company, the independent public
accountants of the Company, the independent reserve engineers, the
Representative and counsel for the Initial Purchasers, at which the contents of
the Disclosure Package and the Final Memorandum and related matters were
discussed, and although such counsel has not independently verified, is not
passing upon, and is not assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in, the Disclosure Package
and the Final Memorandum (except as specifically described in the opinions in
paragraph (iii) and (iv) of the foregoing opinion), based on the foregoing no
facts have come to the attention of such counsel that lead such counsel to
believe that:

 

  1. the Disclosure Package, as of the Execution Time, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or

 

  2. the Final Memorandum, as of its date and on the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;

it being understood that such counsel expresses no statement or belief with
respect to (i) the financial statements and related schedules, including the
notes thereto and independent registered public accountants’ reports thereon,
included or incorporated by reference in the Disclosure Package or the Final
Memorandum, (ii) any other financial data or accounting data, information
pertaining to oil and natural gas reserves and future net revenues data or
statistical information derived from financial information included or
incorporated by reference in or omitted from the Disclosure Package or the Final
Memorandum, or (iii) any representations and warranties and other statements of
fact included in the exhibits to the Incorporated Documents.

 

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Such counsel need not express any opinion as to the enforceability of any
provisions relating to: (a) any failure to comply with requirements concerning
notices, relating to delay or omission to enforce rights or remedies or
purporting to waive or affect rights, claims, defenses or other benefits to the
extent that any of the same cannot be waived or so affected under applicable
law; (b) indemnities or exculpation from liability to the extent prohibited by
federal or state laws and the public policies underlying those laws or that
might require indemnification for, or exculpation from liability on account of,
gross negligence, willful misconduct, unlawful acts, fraud or illegality of an
indemnified or exculpated party; (c) requirements that all amendments, waivers
and terminations be in writing or the disregard of any course of dealing between
the parties; (d) default interest, liquidated damages and other penalty
provisions; (e) the avoidance of the effect of any fraudulent transfer,
fraudulent conveyance laws or similar provisions of applicable law by limiting
the amount of the Guarantor’s obligation under the Indentures or the Guarantees;
or (f) applicable bankruptcy, insolvency, moratorium, fraudulent transfer or
similar laws affecting the enforcement of creditors’ rights generally and
equitable principles and implied covenants of good faith and fair dealing
relating to enforceability (clauses (a) through (f) collectively, the
“Enforceability Exceptions”).

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the States of New York or
Texas, the Delaware General Corporation Law and federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Initial Purchasers and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible officers
of the Endeavour Parties and public officials. References to the Final
Memorandum in this paragraph (b) shall also include any supplements thereto at
the Closing Date. Such counsel may limit its opinions to the laws of the States
of New York and Texas, the Delaware General Corporation Law and federal laws of
the United States, to the extent specifically referred to herein.

(b) The Representative shall have received the opinion of Woodburn and Wedge,
opining as to the law of Nevada, addressed to the Representative and dated the
Closing Date, to the effect that:

(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, with the
corporate power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described in the Disclosure
Package and the Final Memorandum;

 

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(ii) each of this Agreement, the Registration Rights Agreements, the Escrow
Agreement and the Indentures has been duly authorized, executed and delivered by
the Company;

(iii) the Securities and the Exchange Securities have been duly authorized by
the Company;

(iv) no consent, approval, authorization, filing with or order of any Nevada
court or Nevada governmental agency or body is required in connection with the
transactions contemplated herein, in the Indentures, in the Escrow Agreement or
in the Registration Rights Agreements, except such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities and the Guarantees by the Initial Purchasers in
the manner contemplated in this Agreement, the Disclosure Package and the Final
Memorandum (as to which Woodburn and Wedge shall not offer any opinion) and such
other approvals as have been obtained; and

(v) none of the execution and delivery of the Indentures, the Escrow Agreement,
the Registration Rights Agreements or this Agreement, the issuance and sale of
the Securities and the Guarantees, nor the consummation of any other of the
transactions contemplated herein, in the Indenture, in the Escrow Agreement or
in the Registration Rights Agreements, nor the fulfillment of the terms hereof
or thereof will conflict with, result in a breach or violation of, or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
pursuant to, (i) the organizational documents of the Company or (ii) any Nevada
statute, law, rule, regulation, or to the knowledge of Woodburn and Wedge, any
judgment, order or decree applicable to the Company of any Nevada court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its properties.

In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Nevada, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. References to the Disclosure Package and Final
Memorandum in this paragraph (b) shall also include any amendments or
supplements thereto at the Closing Date. Additionally, the opinions expressed by
such counsel may be limited to the laws of the State of Nevada.

(c) The Representative shall have received from Baker Botts L.L.P., counsel for
the Initial Purchasers, such opinion or opinions, dated the Closing Date and
addressed to the Representative, with respect to the issuance and sale of the
Securities and the Guarantees, the Indentures, the Registration Rights
Agreements, the Escrow Agreement, the Disclosure Package, the Final Memorandum
(as amended or supplemented at the Closing Date) and other related matters as
the Representative may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.

 

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(d) The Company shall have furnished to the Representative certificates of each
of the Endeavour Parties, signed by (x) the Chairman of the Board or the
President and (y) the principal financial or accounting officer of each of the
Endeavour Parties, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Disclosure Package and the Final
Memorandum and any supplements or amendments thereto, as well as each electronic
road show used in connection with the offering of the Securities, and this
Agreement and that:

(i) the representations and warranties of the Endeavour Parties in this
Agreement are true and correct on and as of the Closing Date with the same
effect as if made on the Closing Date (except to the extent such representations
and warranties expressly relate to a specific earlier date (in which case such
representations and warranties shall be true and correct as of such specified
earlier date)), and the Endeavour Parties have complied with all the agreements
and satisfied all the conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date; and

(ii) since the date of the most recent financial statements included in the
Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto).

(e) On the date hereof, the Initial Purchasers shall have received from KPMG
LLP, independent registered public accounting firm for the Company, a “comfort
letter” dated the date hereof addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representative, covering the financial
information in the Disclosure Package and other customary matters. In addition,
on the Closing Date, the Initial Purchasers shall have received from such
accountants, a “bring-down comfort letter” dated the Closing Date addressed to
the Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, in the form of the “comfort letter” delivered on the date
hereof, except that (i) it shall cover the financial information in the Final
Memorandum and any amendment or supplement thereto and (ii) procedures shall be
brought down to a date no more than 3 days prior to the Closing Date.

(f) On the date hereof, the Initial Purchasers and Citigroup Global Markets
Limited shall have received from Ernst & Young LLP, independent auditors for the
COP Assets, a “comfort letter” dated the date hereof addressed to the Initial
Purchasers and Citigroup Global Markets Limited, in form and substance
reasonably satisfactory to the Representative, covering the financial
information with respect to the COP Assets in the Disclosure Package and other
customary matters. In addition, on the Closing Date, the Initial Purchasers
shall have received from such accountants, a “bring-down comfort letter” dated
the Closing Date addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, in the form of the “comfort
letter” delivered on the date hereof, except that it shall cover the financial
information in the Final Memorandum and any amendment or supplement thereto.

 

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(g) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Disclosure Package (exclusive of any amendment or
supplement thereto) and the Final Memorandum (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of this
Section 6; or (ii) any Material Adverse Effect, the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representative, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated in
the Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

(h) Subsequent to the Execution Time, there shall not have been any decrease in
the rating of any of the Company’s debt securities by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 3(a)(2) under
the Exchange Act) or any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.

(i) Netherland, Sewell & Associates, Inc. shall have delivered to you at the
Closing Date, a letter in form and substance reasonably satisfactory to you,
stating, as of the date hereof and as of the Closing Date the conclusions and
findings of such firm with respect to the oil and gas reserves of the Company
and its Subsidiaries.

(j) The Company, Endeavour Operating Corporation and the Trustees shall have
executed and delivered the Escrow Agreement in form and substance reasonably
satisfactory to the Representative, and the Initial Purchasers shall have
received executed copies thereof.

(k) The Endeavour Parties shall have executed and delivered the Indentures, in
form and substance reasonably satisfactory to the Initial Purchasers, and the
Initial Purchasers shall have received executed copies thereof.

(l) The Endeavour Parties shall have executed and delivered the Registration
Rights Agreements, in form and substance reasonably satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received executed copies
thereof.

(m) The Securities shall be eligible for clearance and settlement through DTC.

(n) Prior to the Closing Date, the Company shall have furnished to the
Representative such further information, certificates and documents as the
Representative may reasonably request.

If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representative and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representative. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.

 

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The documents required to be delivered by this Section 6 will be delivered at
the office of counsel for the Initial Purchasers, at One Shell Plaza, 910
Louisiana, Houston, Texas 77002 at 9:00 a.m., Houston time, on the Closing Date.

7. Reimbursement of Expenses. If the sale of the Securities and the Guarantees
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers severally through the Representative on demand for all expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities and the Guarantees.

8. Indemnification and Contribution. (a) Each of the Endeavour Parties, jointly
and severally, agrees to indemnify and hold harmless each Initial Purchaser, the
directors, officers, employees, Affiliates and agents of each Initial Purchaser
and each person who controls any Initial Purchaser within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other U.S. federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities or actions in respect thereof arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Disclosure Package, the Final Memorandum, any Issuer
Written Information or any other written information used by or on behalf of the
Endeavour Parties in connection with the offer or sale of the Securities and the
Guarantees (including, without limitation, any road show used in connection with
the offer or sale of the Securities and the Guarantees), or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Endeavour
Parties will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum, the Disclosure Package, the Final Memorandum or such
other written information, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Initial Purchaser through the Representative
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability that the Endeavour Parties may otherwise have.

(b) Each Initial Purchaser severally, and not jointly, agrees to indemnify and
hold harmless the Endeavour Parties, each of their directors, each of their
officers, and each person who controls the Endeavour Parties within the meaning
of either the Act or the Exchange Act, to the same extent as the foregoing
indemnity to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representative specifically for
inclusion in the Preliminary

 

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Memorandum, the Disclosure Package or the Final Memorandum (or in any amendment
or supplement thereto). This indemnity agreement will be in addition to any
liability that any Initial Purchaser may otherwise have. The Company
acknowledges that (i) the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities and (ii) under the heading “Plan
of Distribution,” (A) the sentences related to concessions, and (B) the
sentences related to stabilization, syndicate covering transactions and penalty
bids in the Preliminary Memorandum and the Final Memorandum constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum, the Disclosure Package or the Final
Memorandum or in any amendment or supplement thereto.

(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel, retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party in writing to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.

(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Endeavour Parties and the Initial Purchasers severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in

 

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connection with investigating or defending any loss, claim, damage, liability or
action) (collectively “Losses”) to which any of the Endeavour Parties and one or
more of the Initial Purchasers may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Endeavour Parties
on the one hand and by the Initial Purchasers on the other from the offering of
the Securities; provided, however, that in no case shall any Initial Purchaser
be responsible for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by such Initial Purchaser hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Endeavour Parties and the Initial Purchasers severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Endeavour Parties on the
one hand and the Initial Purchasers on the other in connection with the
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by the Endeavour Parties
shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by the Company, and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions. Relative fault shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Initial Purchasers on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Endeavour Parties and the Initial Purchasers agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation that does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person who controls an Initial Purchaser within the meaning of
either the Act or the Exchange Act and each director, officer, employee,
Affiliate and agent of an Initial Purchaser shall have the same rights to
contribution as such Initial Purchaser, and each person who controls any of the
Endeavour Parties within the meaning of either the Act or the Exchange Act and
each officer and director of the Endeavour Parties shall have the same rights to
contribution as the Endeavour Parties, subject in each case to the applicable
terms and conditions of this paragraph (d).

9. Default by an Initial Purchaser. If any one or more Initial Purchasers shall
fail to purchase and pay for any of the First Priority Notes agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
First Priority Notes set forth opposite their names in Schedule I hereto bears
to the aggregate principal amount of First Priority Notes set forth opposite the
names of all the remaining Initial Purchasers) the First Priority Notes which
the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; provided, however, that in the event that the aggregate principal
amount of First Priority Notes which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of First Priority Notes set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the First Priority Notes, and if
such nondefaulting Initial Purchasers do not purchase all the First Priority
Notes, this Agreement will

 

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terminate without liability to any nondefaulting Initial Purchaser or any of the
Endeavour Parties. In the event of a default by any Initial Purchaser as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representative shall determine in order
that the required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Initial Purchaser of its liability, if any, to the Endeavour
Parties or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.

10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representative, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company’s common stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by U.S. federal or New York State authorities;
or (iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representative, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated in the
Disclosure Package and the Final Memorandum (exclusive of any amendment or
supplement thereto).

11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Endeavour
Parties or their officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the
Endeavour Parties or any of the indemnified persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.

12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Representative, will be mailed, delivered or
telefaxed to the Citigroup General Counsel (fax no.: (212) 816-7912) and
confirmed to Citigroup at 388 Greenwich Street, New York, New York 10013,
Attention: General Counsel; or, if sent to any of the Endeavour Parties, will be
mailed, delivered or telefaxed to J. Michael Kirksey (fax no.: (813) 307-8794)
and confirmed to it at 811 Main Street, Suite 2100, Houston, TX 77002,
Attention: Chief Financial Officer.

13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the indemnified persons
referred to in Section 8 hereof and their respective successors, and no other
person will have any right or obligation hereunder.

14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Endeavour Parties and the
Initial Purchasers, or any of them, with respect to the subject matter hereof.

 

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15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.

16. Jurisdiction. Each of the Endeavour Parties hereby agrees that any suit,
action or proceeding against the Endeavour Parties brought by any Initial
Purchaser, the directors, officers, employees and agents of any Initial
Purchaser, or by any person who controls any Initial Purchaser, arising out of
or based upon this Agreement or the transactions contemplated hereby may be
instituted in any State or U.S. federal court in The City of New York and County
of New York, and waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding.

17. Waiver of Jury Trial. Each of the Endeavour Parties hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.

18. No Fiduciary Duty. Each of the Endeavour Parties hereby acknowledges that
(a) the purchase and sale of the Securities pursuant to this Agreement is an
arm’s-length commercial transaction between the Endeavour Parties, on the one
hand, and the Initial Purchasers and any Affiliate through which it may be
acting, on the other, (b) the Initial Purchasers are acting as principal and not
as an agent or fiduciary of the Endeavour Parties and (c) the Company’s
engagement of the Initial Purchasers in connection with the offering and the
process leading up to the offering is as independent contractors and not in any
other capacity. Furthermore, each of the Endeavour Parties agrees that it is
solely responsible for making its own judgments in connection with the offering
(irrespective of whether any of the Initial Purchasers has advised or is
currently advising any of the Endeavour Parties on related or other matters).
Each of the Endeavour Parties agrees that they will not claim that the Initial
Purchasers have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Endeavour Parties, in connection with
such transaction or the process leading thereto.

19. Waiver of Tax Confidentiality. Notwithstanding anything herein to the
contrary, purchasers of the Securities (and each employee, representative or
other agent of a purchaser) may disclose to any and all persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of any
transaction contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are provided to the purchasers of the
Securities relating to such U.S. tax treatment and U.S. tax structure, other
than any information for which nondisclosure is reasonably necessary in order to
comply with applicable securities laws.

20. Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same agreement.

21. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.

 

31

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22. Definitions. The terms that follow, when used in this Agreement, shall have
the meanings indicated.

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

“Affiliate” shall have the meaning specified in Rule 501(b) of Regulation D.

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in The City of New York or Houston, Texas.

“Citigroup” shall mean Citigroup Global Markets Inc.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Commission” shall mean the Securities and Exchange Commission.

“Disclosure Package” shall mean collectively (i) the Preliminary Memorandum, as
amended or supplemented at the Execution Time, (ii) the Preliminary Supplement,
as amended or supplemented at the Execution Time, (iii) the final term sheet
prepared pursuant to Section 5(b) hereto and in the form attached as Schedule
III hereto and (iii) any Issuer Written Information.

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

“Execution Time” shall mean 4:00 p.m., New York City time, on February 13, 2012.

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.

“Issuer Written Information” shall mean any writings in addition to the
Preliminary Memorandum that the parties expressly agree in writing to treat as
part of the Disclosure Package.

“Regulation D” shall mean Regulation D under the Act.

“Regulation S” shall mean Regulation S under the Act.

“Regulation S-X” shall mean Regulation S-X under the Act.

“Subsidiaries” shall mean the subsidiaries of the Company set forth on Exhibit
21.1 to the Company’s Annual Report on Form 10-K for the year ended December 31,
2010.

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission promulgated thereunder.

 

32

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Initial Purchasers.

 

Very truly yours, ENDEAVOUR INTERNATIONAL CORPORATION By:   /s/ Cathy Stubbs
Name:   Cathy Stubbs Title:   Senior Vice President, Finance ENDEAVOUR OPERATING
CORPORATION By:   /s/ Cathy Stubbs Name:   Cathy Stubbs Title:   Senior Vice
President, Finance

ENDEAVOUR ENERGY NEW VENTURES, INC.

By:   /s/ Cathy Stubbs Name:   Cathy Stubbs Title:   Senior Vice President,
Finance END MANAGEMENT COMPANY By:   /s/ Cathy Stubbs Name:   Cathy Stubbs
Title:   Senior Vice President, Finance

[Signature Page to Purchase Agreement]

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

The foregoing Agreement is hereby

confirmed and accepted as of the

date first above written.

Citigroup Global Markets Inc.

For itself and the other several

Initial Purchasers named in

Schedule I to the foregoing Agreement.

 

CITIGROUP GLOBAL MARKETS INC. By:   /s/ Christopher Abbate Name:   Christopher
Abbate Title:   Managing Director

[Signature Page to Purchase Agreement]

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

SCHEDULE I

 

Initial Purchasers

   Principal
Amount of First
Priority Notes to
be Purchased  

Citigroup Global Markets Inc.

   $ 280,000,000   

BNP Paribas Securities Corp.

   $ 21,000,000   

FBR Capital Markets & Co.

   $ 12,250,000   

Global Hunter Securities, LLC

   $ 12,250,000   

Imperial Capital, LLC

   $ 12,250,000   

Wunderlich Securities, Inc.

   $ 12,250,000   

Total

   $ 350,000,000      

 

 

 

 

 

Schedule I

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

SCHEDULE II

 

 

Schedule II

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

SCHEDULE III

Endeavour International Corporation

12% First Priority Notes due 2018

12% Second Priority Notes due 2018

February 13, 2012

Pricing Supplement dated February 13, 2012 to the Preliminary Offering
Memorandum dated January 31, 2012 of Endeavour International Corporation and its
Preliminary Supplement dated February 13, 2012. This Pricing Supplement is
qualified in its entirety by reference to the Preliminary Offering Memorandum as
modified by the Preliminary Supplement. The information in this Pricing
Supplement supplements the Preliminary Offering Memorandum as modified by the
Preliminary Supplement and supersedes the information in the Preliminary
Offering Memorandum as modified by the Preliminary Supplement to the extent it
is inconsistent with the information in the Preliminary Offering Memorandum as
modified by the Preliminary Supplement. Capitalized terms used in this Pricing
Supplement but not defined herein have the meanings given to them in the
Preliminary Offering Memorandum as modified by the Preliminary Supplement.

 

Issuer:

   Endeavour International Corporation (the “Company”)

Guarantees:

   Existing and future domestic subsidiaries of the Company

Security Description:

  

12% First Priority Notes due 2018

12% Second Priority Notes due 2018

Aggregate Principal Amount Offered:

  

$350,000,000 First Priority Notes

$150,000,000 Second Priority Notes

Maturity:

  

March 1, 2018 First Priority Notes

June 1, 2018 Second Priority Notes

Coupon:

  

12.000% First Priority Notes

12.000% Second Priority Notes

Offering Prices:

  

96% First Priority Notes

96% Second Priority Notes

Yield to Maturity:

  

12.975% First Priority Notes

12.954% Second Priority Notes

Spread to Benchmark Treasury:

  

1159 bps First Priority Notes

1157 bps Second Priority Notes

Benchmark Treasury:

   1.25% due January 31, 2019

Gross Proceeds:

  

$336,000,000 First Priority Notes

$144,000,000 Second Priority Notes

Net Proceeds (before expenses):

  

$327,600,000 First Priority Notes

$140,400,000 Second Priority Notes

Interest Payment Dates:

   March 1 and September 1, beginning September 1, 2012 and at final maturity of
the Second Priority Notes

Record Dates:

   February 15 and August 15 of each year

 

Schedule III

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

Change of Control:

   Upon the occurrence of a “change of control” the Company must offer to
repurchase the notes at 101% of the principal amount of the notes, plus accrued
and unpaid interest to the date of repurchase.

Optional Redemption:

  

Beginning on March 1, 2015, the Company may redeem some or all of the notes at
the redemption prices listed in the table below, together with any accrued and
unpaid interest on the notes to the date of redemption.

 

Year                                                                     
Percentage

2015                                                                      
106.000%

2016                                                                      
103.000%

2017                                                                      
100.000%

Optional Redemption with Equity Proceeds

   In addition, at any time prior to March 1, 2015, the Company may redeem up to
35% of the notes of each series from the proceeds of certain sales of its equity
securities at 112.00% of the principal amount, plus accrued and unpaid interest,
if any, to the date of redemption, if at least 65% of the aggregate principal
amount of the notes issued under the applicable indenture remains outstanding
after such redemption and the redemption occurs within 180 days after the date
of the closing of such equity offering.

Redemption at Make-Whole Premium

  

Prior to March 1, 2015, the Company may redeem some or all of the notes at a
price equal to the sum of the principal amount thereof, plus the Make Whole
Premium at the redemption date, together with any accrued and unpaid interest to
the date of redemption.

 

“Make Whole Premium” means, with respect to a note at any time, the greater of
(1) 1.0% of the principal amount of such note and (2) the excess, if any, of (a)
the present value at such time of (i) the redemption price of such note at March
1, 2015 (such redemption price being set forth in the table appearing under the
caption “— Optional Redemption”), plus (ii) any required interest payments due
on such note through March 1, 2015 (except for currently accrued and unpaid
interest), computed using a discount rate equal to the Treasury Rate at such
time plus 50 basis points, discounted to the redemption date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months), over (b) the
principal amount of such note.

 

“Treasury Rate” means, as of any redemption date, the weekly average yield to
maturity as of such redemption date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) which has become publicly available at least two
Business Days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to March 1, 2015; provided,
however, that if such period is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the Company
shall obtain the Treasury Rate by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from the redemption date to March 1, 2015 is less than one year, the weekly
average yield on

 

Schedule III

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

   actually traded United States Treasury securities adjusted to a constant
maturity of one year shall be used. The Company will (a) calculate the Treasury
Rate on the second Business Day preceding the applicable redemption date and (b)
on or prior to such redemption date file with the trustee an officers’
certificate setting forth the Make Whole Premium and the Treasury Rate and
showing the calculation of each in reasonable detail.

Trade Date:

   February 13, 2012

Settlement Date:

   February 23, 2012 (T+7)

Distribution:

   Rule 144A and Regulation S with registration rights.

CUSIP/ISIN Numbers:

  

First Priority Notes:

Reg S: U29175 AA1/USU29175AA17

144A: 29259G AB7/US29259GAB77

 

Second Priority Notes:

Reg S: U29175 AB9/USU29175AB99

144A: 29259G AD3/US29259GAD34

Initial Purchasers:

  

First Priority Notes:

Citigroup Global Markets Inc.

BNP Paribas Securities Corp.

FBR Capital Markets & Co.

Global Hunter Securities, LLC

Imperial Capital, LLC

Wunderlich Securities, Inc.

 

Second Priority Notes:

Citigroup Global Markets Inc.

This Pricing Supplement is strictly confidential and has been prepared by the
Issuer solely for use in connection with the proposed offering of the securities
described in the Preliminary Offering Memorandum. This Pricing Supplement is
personal to each offeree and does not constitute an offer to any other person or
the public generally to subscribe for or otherwise acquire the securities.
Please refer to the Preliminary Offering Memorandum, as modified by the
Preliminary Supplement and this Pricing Supplement, for a complete description
of the securities.

The securities have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and are being offered only to (1) “qualified
institutional buyers” as defined in Rule 144A under the Securities Act and
(2) outside the United States to non-U.S. persons in compliance with Regulation
S under the Securities Act, and this communication is only being distributed to
such persons.

This communication is not an offer to sell the securities and it is not a
solicitation of an offer to buy the securities in any jurisdiction to any person
to whom it is unlawful to make such offer or solicitation in such jurisdiction.

Any disclaimer or other notice that may appear below is not applicable to this
communication and should be disregarded. Such disclaimer or notice was
automatically generated as a result of this communication being sent by
Bloomberg or another email system.

 

Schedule III

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

SCHEDULE IV

GUARANTORS

Endeavour Operating Corporation

Endeavour Energy New Ventures, Inc.

END Management Company

 

Schedule IV

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

SCHEDULE V

FOREIGN QUALIFICATIONS

 

    

Good Standing

Endeavour International Corporation    Texas Endeavour Operating Corporation   

Alabama

Louisiana

Montana

New Mexico

Pennsylvania

Texas

Endeavour Energy New Ventures, Inc.    Texas END Management Company    None
Endeavour Energy UK    None

 

Schedule V