exv10w4wa






Exhibit
10.4(a)




EXECUTION VERSION




 

 








CREDIT AGREEMENT




among



ENDEAVOUR INTERNATIONAL CORPORATION,

as Holdings



ENDEAVOUR ENERGY UK LIMITED,

as the Borrower,



VARIOUS LENDERS,



and



CYAN PARTNERS, LP,

as Administrative Agent


 





Dated as of August 16, 2010


 





CYAN PARTNERS, LP,

as Sole Arranger and Sole Book Runner




 

 






 









 












          CREDIT AGREEMENT, dated as of August 16, 2010, among Endeavour International Corporation, a
Nevada corporation (“Holdings”), Endeavour Energy UK Limited, a United Kingdom private
limited company (the “Borrower”), the Lenders party hereto from time to time and Cyan
Partners, LP, as Administrative Agent. All capitalized terms used herein and defined in Section 1
are used herein as therein defined.



WITNESSETH:




          WHEREAS, subject to and upon the terms and conditions set forth herein, the Lead Arranger has
arranged, and the Lenders are willing to make available to the Borrower, the senior secured term
loan facility provided for herein;



          NOW, THEREFORE, IT IS AGREED:



          SECTION 1. Definitions and Accounting Terms.



          1.01. Defined Terms. As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular and plural forms of
the terms defined):



          “2012 Convertible Senior Notes” shall mean Holdings’ 6% Convertible Senior Notes due
2012 issued pursuant to the 2012 Convertible Senior Notes Indenture, as in effect on the Funding
Date and as the same may be amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof.



          “2012 Convertible Senior Notes Indenture” shall mean the indenture pursuant to which
the 2012 Convertible Senior Notes were issued, as in effect on the Funding Date and as the same may
be amended, modified or supplemented from time to time in accordance with the terms hereof and
thereof.



          “2014 Convertible Senior Notes” shall mean the Endeavour Energy Luxembourg S.àr.l.’s
11.5% Guaranteed Convertible Senior Bonds due 2014 issued pursuant to the 2014 Convertible Senior
Notes Trust Deed, as in effect on the Funding Date and as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.



          “2014 Convertible Senior Notes Trust Deed” shall mean the trust deed pursuant to which
the 2014 Convertible Senior Notes were issued, as in effect on the Funding Date and as the same may
be amended, modified or supplemented from time to time in accordance with the terms hereof and
thereof.



          “2014 Senior Subordinated Notes” shall mean Holdings’ 12% Senior Subordinated Notes
due 2014 issued pursuant to the 2014 Senior Subordinated Notes Agreement, as in effect on the
Funding Date and as the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.



          “2014 Senior Subordinated Notes Agreement” shall mean the note agreement pursuant to
which the 2014 Senior Subordinated Notes were issued, as in effect on the Funding Date and as the
same may be amended, modified or supplemented from time to time in accordance with the terms hereof
and thereof.



          “2P Reserve Value” shall mean, as of any date determination with respect to Proved
Reserves and Probable Reserves, in each case of Holdings and its Subsidiaries, the sum of (a) the
PV-10



 









 







Value of such Proved Reserves as of such date plus (b) the Probable Reserve Value of such
Probable Reserves as of such date.



          “2P Reserves” shall mean the sum of Proved Reserves and Probable Reserves.



          “Acquired Entity or Business” shall mean either (a) the assets constituting a
business, division or product line of any Person not already a Subsidiary of Holdings or (b) 100%
of the Equity Interests of any such Person, which Person shall, as a result of the acquisition of
such Equity Interests, become a Wholly-Owned Subsidiary Guarantor (or shall be merged with and into
the Borrower or a Wholly-Owned Subsidiary Guarantor, with the Borrower or the Wholly-Owned
Subsidiary Guarantor being the surviving or continuing Person).



          “Additional Lender” shall have the meaning provided in Section 2.10(a).



          “Additional Security Documents” shall have the meaning provided in Section 7.12(a).



          “Adjusted Consolidated Net Income” shall mean, for any period, Consolidated Net Income
for such period plus the sum of the amount of all net non-cash charges (including, without
limitation, depletion, depreciation, amortization, deferred tax expense and non-cash interest
expense and net non-cash losses which were included in arriving at Consolidated Net Income for such
period), less the amount of all net non-cash gains and non-cash credits which were included
in arriving at Consolidated Net Income for such period.



          “Adjusted Consolidated Working Capital” shall mean, at any time, Consolidated Current
Assets (but excluding therefrom all cash and Cash Equivalents) less Consolidated Current
Liabilities at such time.



          “Administrative Agent” shall mean Cyan Partners, LP (or its designee), in its capacity
as Administrative Agent for the Lenders hereunder and under the other Credit Documents, and shall
include any successor to the Administrative Agent appointed pursuant to Section 10.09.



          “Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling (including, but not limited to, all directors and officers of such Person),
controlled by, or under direct or indirect common control with, such Person. A Person shall be
deemed to control another Person if such Person possesses, directly or indirectly, the power (a) to
vote 10% or more of the securities having ordinary voting power for the election of directors (or
equivalent governing body) of such Person or (b) to direct or cause the direction of the management
and policies of such other Person, whether through the ownership of voting securities, by contract
or otherwise; provided, however, that none of the Administrative Agent, any Lender
or any of their respective Affiliates shall be considered an Affiliate of Holdings or any
Subsidiary thereof.



          “Agents” shall mean and include the Administrative Agent and the Collateral Agent.



          “Aggregate Consideration” shall mean, with respect to any Permitted Acquisition, the
sum (without duplication) of (a) the Fair Market Value of Holdings Common Stock issued (or to be
issued) as consideration in connection with such Permitted Acquisition (including, without
limitation, Holdings Common Stock which may be required to be issued as earn-out consideration upon the
achievement of certain future performance goals of the respective Acquired Entity or Business (as
determined in good faith by the senior management of Holdings)), (b) the aggregate amount of all
cash paid (or to be paid) by Holdings or any of its Subsidiaries in connection with such Permitted
Acquisition (including, without limitation, payments of fees and costs and expenses in connection
therewith) and all contingent cash purchase price, earn-out, non-compete and other similar
obligations of Holdings or any of



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its Subsidiaries incurred and reasonably expected to be incurred
in connection therewith (as determined in good faith by Holdings), (c) the aggregate principal
amount of all Indebtedness assumed, incurred, refinanced and/or issued in connection with such
Permitted Acquisition, (d) the aggregate liquidation preference of all Qualified Preferred Stock of
Holdings issued or to be issued as consideration in connection with such proposed Permitted
Acquisition (including, without limitation, Qualified Preferred Stock of Holdings which may be
required to be issued as earn-out consideration upon the achievement of certain future performance
goals of the respective Acquired Entity or Business (as determined in good faith by Holdings)) and
(e) the Fair Market Value of all other consideration paid (or to be paid) in connection with such
Permitted Acquisition.



          “Agreement” shall mean this Credit Agreement, as modified, supplemented, amended,
restated (including any amendment and restatement hereof), extended or renewed from time to time.



          “Approved Stock Exchange” shall have the meaning provided in Section 7.21(a).



          “Approved Third Party Credit Provider” shall mean, with respect to any Hedging
Agreement or Third Party Letter of Credit, a Person that, at the time such Hedging Agreement is
entered into or such Third Party Letter of Credit is issued, as the case may be, is (a) the
Administrative Agent or any Lender or any Affiliate of the Administrative Agent or a Lender, (b)
any Person whose senior unsecured long-term debt is rated as Investment Grade or (c) any other
Person that is reasonably acceptable to the Administrative Agent.



          “Asset Sale” shall mean any direct or indirect sale, transfer, issuance, conveyance,
lease (other than operating leases entered into in the ordinary course of business), assignment or
other disposition by Holdings or any of its Subsidiaries to any Person (including by way of
redemption by such Person) other than to Holdings or a Wholly-Owned Subsidiary Guarantor of any
property or asset (including, without limitation, any capital stock or other securities of, or
Equity Interests in, another Person), but excluding sales of assets pursuant to Sections 8.02(b),
(c), (d), (i), (j), (k), (l), and (m).



          “Assignment and Assumption Agreement” shall mean an Assignment and Assumption
Agreement substantially in the form of Exhibit I.



          “Attributable Indebtedness” in respect of a sale-leaseback transaction shall mean, as
at the time of determination, the present value of the total obligations of the lessee for
rental/lease payments during the remaining term of the lease included in such sale-leaseback
transaction (including any period for which such lease has been extended); provided,
however, that if such sale-leaseback transaction results in a Capitalized Lease Obligation,
the amount of Indebtedness represented thereby shall be determined in accordance with the
definition of Capitalized Lease Obligations.



          “Authorization” shall mean an authorization, consent, permit, approval, resolution,
license, exemption, filing, notarization or registration.



          “Authorized Officer” shall mean, with respect to (a) delivering the Notice of
Borrowing and similar notices, any person or persons that has or have been authorized by the Board
of Directors of Holdings or the Borrower to deliver such notices pursuant to this Agreement and
that has or have
appropriate signature cards on file with the Administrative Agent, (b) delivering financial
information and officer’s certificates (including certificates described in Section 7.01(d))
pursuant to this Agreement, the chief financial officer, the treasurer or the principal accounting
officer of Holdings or the Borrower, as applicable and (c) any other matter in connection with this
Agreement or any other Credit Document, any officer (or a person or persons so designated by any
two officers) of Holdings or the Borrower, as applicable.



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          “Bankruptcy Code” shall have the meaning provided in Section 9.05.



          “Board” shall mean the Board of Governors of the Federal Reserve System of the United
States.



          “BNP Cash Collateral Account” shall mean that certain account in the name of BNP
Paribas maintained with Barclays Bank, account number 30004 05658 0000084028H 31, into which cash
has been deposited to cash collateralize letters of credit supporting obligations of Holdings and
its Subsidiaries under the Hess Contracts.



          “Borrower” shall have the meaning provided in the first paragraph of this Agreement.



          “Borrowing” shall mean the borrowing of a Term Loan from all the Lenders on the
Funding Date.



          “Business” shall mean any corporation, limited liability company, partnership or other
business entity (or the adjectival form thereof, where appropriate) or the equivalent of the
foregoing in any jurisdiction outside of the United States or any State thereof.



          “Business Day” shall mean for all purposes, any day except Saturday, Sunday and any
day which shall be in New York, New York or London, England, a legal holiday or a day on which
banking institutions are authorized or required by law or other government action to close.



          “Calculation Period” shall mean, with respect to any Material Permitted Acquisition,
any Material Permitted Business Investment, any Material Asset Sale or any other event expressly
requiring a calculation to be made on a Pro Forma Basis pursuant to the terms of this Agreement,
the Test Period most recently ended prior to the date of such Material Permitted Acquisition, such
Material Permitted Business Investment, such Material Asset Sale or other event for which financial
statements have been delivered to the Lenders pursuant to this Agreement.



          “Capital Expenditures” shall mean, with respect to any Person, all expenditures by
such Person which should be capitalized in accordance with GAAP (excluding Permitted Acquisitions
and Permitted Business Investments whether or not capitalized in accordance with GAAP) and, without
duplication, the amount of all Capitalized Lease Obligations incurred by such Person.



          “Capitalized Lease Obligations” shall mean, with respect to any Person, all rental
obligations of such Person which, under GAAP, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as indebtedness in
accordance with such principles.



          “Cash Equivalents” shall mean, as to any Person, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than six months from the date of acquisition, (b) marketable
direct obligations issued by any state of the United
States or any political subdivision of any such state or any public instrumentality thereof
maturing within six months from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P or Moody’s, (c) Dollar-denominated
time deposits, certificates of deposit and bankers acceptances of any Lender or any commercial bank
having, or which is the principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent
thereof from Moody’s with maturities of not more than six months from the date of acquisition by
such Person, (d) repurchase obligations with a term of not more than seven days for underlying
securities of the types described in



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clause (a) above entered into with any bank meeting the
qualifications specified in clause (c) above, (e) commercial paper issued by any Person
incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody’s and in each case maturing not more than six months after
the date of acquisition by such Person, (f) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (a) through (e) above
and (g) instruments equivalent to those referred to in clauses (a) through (f) above denominated in
Pounds comparable in credit quality and tenor to those referred to above and customarily used by
companies for cash management purposes in the United Kingdom to the extent reasonably required in
connection with any business conducted by any Subsidiary organized in such jurisdiction.



          “Cash Interest” shall have the meaning provided in Section 2.06(a).



          “Change in Law” shall have the meaning provided in Section 9.06.



          “Change of Control” shall mean (a) Holdings shall at any time cease to own
(beneficially and of record), directly or indirectly, 100% of the Equity Interests of the Borrower,
(b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of 45% or more on a fully diluted basis of the economic or
voting interests in Holdings’ capital stock, (c) Continuing Directors shall at any time cease to
constitute a majority of the Board of Directors of Holdings or (d) a “change of control” or similar
event the occurrence of which gives rise to a mandatory prepayment or redemption, required offer to
purchase or an event of default shall occur as provided in any Permitted Junior Debt (or any
documentation governing same) or any Qualified Preferred Stock (or the documentation governing the
same).



          “Class C Convertible Preferred Stock” means Holdings’ Series C Preferred Stock with
the terms set forth in the Certificate of Designation of Series C Preferred Stock originally filed
with the Nevada Secretary of State on October 30, 2006.



          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any successor statute and any regulations promulgated thereunder.



          “Collateral” shall mean all property (whether real or personal, tangible or
intangible) with respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all Collateral under and
as defined in each Security Document.



          “Collateral Agent” shall mean Cyan Partners, LP (or its designee), in its capacity as
Collateral Agent for the Lenders hereunder and under the other Credit Documents, and shall include
any successor to the Collateral Agent appointed pursuant to Section 10.09.



          “Collective Bargaining Agreements” shall have the meaning provided in Section 5.05(e).



          “Commitment” shall mean, for each Lender, the commitment of such Lender to make a Term
Loan, in such amount as set forth opposite such Lender’s name in Schedule 1.01(a) hereto directly
below the column entitled “Term Loan Commitment”, as the same may be (i) terminated pursuant to
Section 3.03 or Section 9 or (ii) adjusted from time to time as a result of assignments to or from
such Lender pursuant to Section 2.08 or 11.04(b).



          “Commodity Hedging Agreement” shall mean a commodity price risk management agreement
or similar arrangement (including commodity price swap agreements, forward agreements or



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contracts of sale which provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities).



          “Consolidated Current Assets” shall mean, at any time, the consolidated current assets
(without giving any effect to any movement in the mark-to-market valuation under Hedging
Agreements) of Holdings and its Subsidiaries at such time.



          “Consolidated Current Liabilities” shall mean, at any time, the consolidated current
liabilities (without giving effect to any movement in the mark-to-market valuation under Hedging
Agreements) of Holdings and its Subsidiaries at such time, but excluding the current portion of any
Indebtedness under this Agreement and the current portion of any other long-term Indebtedness which
would otherwise be included therein.



          “Consolidated EBITDAX” shall mean, for any period, Consolidated Net Income for such
period (without giving effect to (a) any extraordinary gain or losses, (b) any non-cash income or
non-cash expenses; provided that any such non-cash expenses that are excluded from the
calculation of Consolidated EBITDAX in any period pursuant to this clause (b) that later become
cash expenses in a subsequent period shall reduce Consolidated EBITDAX in an amount equal to such
cash expense, (c) any gains or losses from sales of assets other than inventory and Hydrocarbons
sold in the ordinary course of business and (d) interest income) adjusted by adding thereto (in
each case to the extent deducted in determining Consolidated Net Income for such period), without
duplication, the amount of (i) total interest expense (inclusive of amortization of deferred
financing fees and other original issue discount and banking fees, charges and commissions
(e.g., letter of credit fees and commitment fees) of Holdings and its Subsidiaries
determined on a consolidated basis for such period, (ii) provision for taxes based on income and
foreign withholding taxes for Holdings and its Subsidiaries determined on a consolidated basis for
such period, (iii) all depletion, depreciation and amortization expense of Holdings and its
Subsidiaries determined on a consolidated basis for such period, (iv) in the case of any period
including the fiscal quarters of Holdings ended or ending June 30, 2010 or September 30, 2010, the
amount of all fees and expenses incurred by Holdings and its Subsidiaries in connection with the
entering into of this Agreement and the other Credit Documents during either such fiscal quarter,
(v) geological and geophysical expense for such period, (vi) all amounts attributable to impairment
of oil and gas properties for such period, and (vii) consolidated amortization expense or
impairment charges of Holdings and its Subsidiaries recorded in connection with the application of
Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangibles.” For the
avoidance of doubt, it is understood and agreed that, to the extent any amounts are excluded from
Consolidated Net Income by virtue of the proviso to the definition thereof contained herein, any
add backs to Consolidated Net Income in determining Consolidated EBITDAX as provided above shall be
limited (or denied) in a fashion consistent with the proviso to the definition of Consolidated Net
Income contained herein. Notwithstanding anything to the contrary contained above, for purposes of
determining Consolidated EBITDAX for Holdings’ fiscal quarters ended December 31, 2009 and March
31, 2010, Consolidated EBITDAX shall be calculated in accordance with the definition of Test Period
contained herein.



          “Consolidated Indebtedness” shall mean, at any time, the sum of (without duplication)
(a) all Indebtedness of Holdings and its Subsidiaries (on a consolidated basis) as would be
required to be reflected as debt or Capitalized Lease Obligations on the liability side of a
consolidated balance sheet of Holdings and its Subsidiaries in accordance with GAAP, (b) all
Indebtedness of Holdings or any of its Subsidiaries of the type described in clauses (b), (g) and
(h) of the definition of Indebtedness, and (c) all Contingent Obligations of Holdings or any of its
Subsidiaries in respect of Indebtedness of any third Person of the type referred to in preceding
clauses (a) and (b); provided that the amount of any Indebtedness in respect of Hedging
Agreements shall be at any time the unrealized net loss position (taking into account all Hedging
Agreements), if any, of Holdings and/or its Subsidiaries thereunder on a



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marked-to-market basis
determined as of the most recently ended fiscal quarter; provided further, that if
at any time when Consolidated Indebtedness is being determined, the net position across all
Holdings’ and its Subsidiaries Hedging Agreements is positive, Consolidated Indebtedness shall,
other than for the purposes of calculations of Total Leverage Ratio, be reduced by such positive
amount.



          “Consolidated Net Income” shall mean for any period, the net income (or loss) of
Holdings and its Subsidiaries determined on a consolidated basis for such period (taken as a single
accounting period) in accordance with GAAP, provided that the following items shall be
excluded in computing Consolidated Net Income (without duplication): (i) the net income (or loss)
of any Person in which a Person or Persons other than Holdings and its Wholly-Owned Subsidiaries
has an Equity Interest or Equity Interests to the extent of such Equity Interests held by Persons
other than Holdings and its Wholly-Owned Subsidiaries in such Person, (ii) except for
determinations expressly required to be made on a Pro Forma Basis, the net income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary or all or substantially all of the
property or assets of such Person are acquired by a Subsidiary and (iii) the net income of any
Subsidiary to the extent that the declaration or payment of cash dividends or similar cash
distributions by such Subsidiary of such net income is not at the time permitted by the operation
of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary.



          “Consolidated Net Indebtedness” shall mean, at any time, the difference of (a)
Consolidated Indebtedness at such time less (b) the average daily amount of Holdings’ and
its Subsidiaries’ Unrestricted cash and Unrestricted Cash Equivalents during the thirty day period
ending on the respective date on which “Consolidated Net Indebtedness” is determined to the extent
such cash and Cash Equivalents are (i) subject to control agreements pursuant to which the
Administrative Agent has “control” with respect to such cash and Cash Equivalents within the
meaning of Section 8-106 or 9-104 (as applicable) of the UCC or otherwise subject to a control or
similar agreement of the type delivered pursuant to Section 5.09(g) or (ii) pledged to secure the
repayment of outstanding Consolidated Indebtedness (other than the Obligations).



          “Consolidated Net Secured Indebtedness” shall mean, at any time, the difference of (a)
Consolidated Indebtedness at such time that is secured by a Lien less (b) the average daily
amount of Holdings’ and its Subsidiaries’ Unrestricted cash and Unrestricted Cash Equivalents
during the thirty day period ending on the respective date on which “Consolidated Net Secured
Indebtedness” is determined to the extent such cash and Cash Equivalents are (i) subject to control
agreements pursuant to which the Administrative Agent has “control” with respect to such cash and
Cash Equivalents within the meaning of Section 8-106 or 9-104 (as applicable) of the UCC or
otherwise subject to a control or similar agreement of the type delivered pursuant to Section
5.09(g) or (ii) pledged to secure the repayment of outstanding Consolidated Indebtedness (other
than the Obligations).



          “Contingent Obligation” shall mean, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations
(“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of such primary obligation
or (d) otherwise to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary course of business.
The



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amount of any Contingent Obligation shall be deemed to be an amount equal to the lower of (i)
the maximum amount of such Contingent Obligation pursuant to the agreement or instrument under
which such Contingent Obligation is created and (ii) the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person
is required to perform thereunder) as determined by such Person in good faith.



          “Continuing Directors” shall mean the directors of Holdings on the Funding Date and
each other director if such director’s nomination for election to the Board of Directors is
recommended by a majority of the then Continuing Directors.



          “Credit Documents” shall mean this Agreement, each Note, the Subsidiaries Guaranty,
each Security Document, the Syndication Letter (for the purposes of Sections 9.01, 9.03 and 11.01
only) and, after the execution and delivery thereof pursuant to the terms of this Agreement, each
joinder, accession or similar agreement by which any Subsidiary of Holdings becomes party to the
Subsidiaries Guaranty or any Security Document.



          “Credit Party” shall mean Holdings, the Borrower and each Subsidiary Guarantor.



          “Default” shall mean any event, act or condition which with notice or lapse of time,
or both, would constitute an Event of Default.



          “Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in
effect.



          “Dividend” shall mean, with respect to any Person, that such Person has declared or
paid a dividend, distribution or returned any equity capital to its stockholders, partners or
members or authorized or made any other distribution, payment or delivery of property (other than
common Equity Interests of such Person) or cash to its stockholders, partners or members in their
capacity as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly,
for a consideration any shares of any class of its capital stock or any other Equity Interests
outstanding on or after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock or other Equity Interests), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise
acquire for consideration any shares of any class of the capital stock or any other Equity
Interests of such Person outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock or other Equity Interests). Without
limiting the foregoing, “Dividends” with respect to any Person shall also include all payments
(other than in the ordinary course of business, consistent with past practices) made or required to
be made by such Person with respect to any stock appreciation rights, equity incentive or
achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.



          “Dollars” and the sign “$” shall each mean freely transferable lawful money of
the United States.



          “Dutch Pledge Agreement” shall have the meaning provided in Section 5.09(e).



          “Dutch Sector” shall mean the jurisdiction of The Netherlands commonly referred to as
the Dutch Sector — North Sea.



          “Dutch Subsidiaries” shall mean and include each of Endeavour International Holding
B.V. and Endeavour Energy Netherlands B.V.



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          “Effective Date” shall have the meaning provided in Section 11.10.



          “Eligible Transferee” shall mean and include a commercial bank, an insurance company,
a finance company, a financial institution, any fund that invests in loans or any other “accredited
investor” (as defined in Regulation D of the Securities Act), but in any event excluding any
natural Person, Holdings, the Borrower and their respective Subsidiaries and Affiliates.



          “Employee Benefit Plans” shall have the meaning provided in Section 5.05(a).



          “Employment Agreements” shall have the meaning provided in Section 5.05(d).



          “English Charge Over Shares” shall have the meaning provided in Section 5.09(d).



          “English Debenture” shall have the meaning provided in Section 5.09(c).



          “English Security Documents” shall mean and include (i) each English Charge Over
Shares and (ii) each English Debenture.



          “Environmental Law” shall mean any applicable Federal, state, local, UK or other
non-U.S. law (including common law), rule, regulation, ordinance, code, directive, judgment or
order now or hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, relating to the protection of the environment or of human
health and safety (to the extent such health and safety relate to exposure to Hazardous Materials),
or to the presence, Release or threatened Release, or the manufacture, use, transportation,
treatment, storage, disposal or recycling of Hazardous Materials, or the arrangement for any such
activities.



          “EOC” shall mean Endeavour Operating Corporation, a Delaware corporation.



          “Equity Interests” shall mean (i) with respect to any Person that is a corporation,
any and all shares, interests, participation or other equivalents of or interest in (however
designated and whether or not voting) corporate stock of such Person, including each class of
common stock and preferred stock of such Person, (ii) with respect to any Person that is not a
corporation, any and all partnership, membership or other equity interests of such Person, and
(iii) any warrants, rights or options to purchase any of the instruments or interests referred to
in the preceding clauses (i) or (ii).



          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.



          “ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) which
together with Holdings and/or any of its Subsidiaries would be deemed to be a “single employer”
within the meaning of Section 414(b), (c), (m) or (o) of the Code.



          “ERISA Event” shall mean (a) a Reportable Event; (b) the failure of any Plan to
satisfy the minimum funding standards, if any, applicable to that Plan for a Plan year under
Section 412 of the Code or Section 302 of ERISA or a Plan’s application for a waiver of such
minimum funding standards pursuant to Section 412(c) of the Code or Section 302(c) of ERISA; (c)
the arising of a lien or encumbrance under Section 4068 of ERISA; (d) a determination that any Plan
is, or is expected to be, in at-risk status under Section 430(i) of the Code or Section 303(i) of
ERISA; (e) the incurrence by Holdings, any of its Subsidiaries, or an ERISA affiliate of material
liability (including any indirect, contingent, or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 4062, 4063, 4064, or 4069 of ERISA or Section 4971 or 4975
of the Code; (f) the institution of proceedings, or the occurrence of an event or condition which
would reasonably be expected to constitute grounds for the



9









 







institution of proceedings by the PBGC
to terminate or appoint a trustee to administer any Plan pursuant to Title IV of ERISA; (g) the
filing of a notice of intent to terminate any Plan, if such termination would require material
additional contributions in order to be considered a standard termination within the meaning of
Section 4041(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan under Section 4041(c) of ERISA; (h) the complete
or partial withdrawal of Holdings, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan
that gives rise to, or is expected to give rise to a liability under Section 4201 of ERISA, the
reorganization or insolvency under Title IV of ERISA of any Multiemployer Plan, or the receipt by
Holdings, any Subsidiary or any ERISA Affiliate of any notice, or the receipt by any Multiemployer
Plan from Holdings, any Subsidiary or any ERISA Affiliate of any notice, that a Multiemployer Plan
is in endangered or critical status under Section 305 of ERISA; or (i) the knowledge of Holdings of
a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit
rule under Section 401(a) of the Code by any fiduciary (as defined in Section 3(21) of ERISA) or
disqualified person (as defined in Section 4975(e)(2) of the Code) with respect to any Plan for
which Holdings or any of its Subsidiaries is reasonably expected to incur a material liability.



          “Event of Default” shall have the meaning provided in Section 9.



          “Excess Cash Flow” shall mean, for any period, the remainder of (a) the sum of,
without duplication, (i) Adjusted Consolidated Net Income for such period and (ii) the decrease, if
any, in Adjusted Consolidated Working Capital from the first day to the last day of such period,
minus (b) the sum of, without duplication, (i) the aggregate amount of all Capital
Expenditures made by Holdings and its Subsidiaries during such period (other than Capital
Expenditures to the extent financed with asset sale proceeds, insurance proceeds or proceeds from
sales or issuances of Equity Interests or Indebtedness), (ii) the aggregate amount of permanent
principal payments of Indebtedness for borrowed money of Holdings and its Subsidiaries and the
permanent repayment of the principal component of Capitalized Lease Obligations of Holdings and its
Subsidiaries during such period (other than (1) repayments made pursuant to the Refinancing, (2)
repayments made with the proceeds of asset sales, insurance proceeds or proceeds from sales or
issuances of Equity Interests or Indebtedness and (3) payments of Term Loans and/or other
Obligations, provided that repayments of Term Loans shall be deducted in determining Excess
Cash Flow to the extent such repayments were (x) required as a result of a Scheduled Repayment
pursuant to Section 4.02(a) or (y) made as a voluntary prepayment pursuant to Section 4.01 with
internally generated funds), (iii) the increase, if any, in Adjusted Consolidated Working Capital
from the first day to the last day of such period, (iv) the Aggregate Consideration paid in cash by
Holdings or any of its Subsidiaries in respect of all Permitted Acquisitions and Permitted Business
Investments during such period (other than Permitted Acquisitions and Permitted Business
Investments to the extent financed with asset sale
proceeds, insurance proceeds or proceeds from sales or issuances of Equity Interests or
Indebtedness), (v) the aggregate amount of Dividends paid by Holdings during such period on Class C
Convertible Preferred Stock in accordance with Section 8.03(f), (vi) the aggregate amount of any
non-cash charges incurred in a prior period which are paid in cash in such period, and (vii) the
aggregate amount of any cash gains on Material Asset Sales during such period.



          “Excess Cash Payment Date” shall mean the date occurring 90 days after the last day of
each fiscal year of Holdings (commencing with the fiscal year of Holdings ending December 31,
2011).



          “Excess Cash Payment Period” shall mean the immediately preceding fiscal year of
Holdings.



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



10









 





          “Exchange Rate” shall mean, on any day, with respect to any currency other than
Dollars, the noon buying rate in New York City for such currency on such date for cable transfers
as certified for customs purposes by the Federal Reserve Bank of New York.



          “Existing Credit Agreements” shall mean (i) that certain $225,000,000 Secured
Revolving Loan and Letter of Credit Facility Agreement, dated October 30, 2006, among Holdings, BNP
Paribas as Mandated Lead Arranger, Agent, Security Trustee and Fronting Bank (as each such term is
defined therein), The Governor and Company of the Bank of Scotland, as Mandated Lead Arranger,
Account Bank and Technical Bank (as each such term is defined therein) and the other lenders
thereto (as amended through and including the Funding Date) and (ii) that certain $25,000,000
Junior Facility Agreement, dated January 22, 2008, among Holdings, Bank of Scotland Plc as Mandated
Lead Arranger, Technical Bank, Original Lender and Agent (as each such term is defined therein) and
BNP Paribas as Security Trustee (as amended through and including the Funding Date).



          “Existing Indebtedness” shall have the meaning provided in Section 5.06(c).



          “Existing Indebtedness Agreements” shall have the meaning provided in Section 5.05(h).



          “Fair Market Value” shall mean, with respect to any asset (including any Equity
Interests of any Person), the price at which a willing buyer, not an Affiliate of the seller, and a
willing seller who does not have to sell, would agree to purchase and sell such asset, as
determined in good faith by the Board of Directors of Holdings or other governing body or, pursuant
to a specific delegation of authority by such Board of Directors or governing body, a designated
senior executive officer, of Holdings, or the Subsidiary of Holdings selling such asset.



          “Federal Funds Rate” shall mean, for any period, a fluctuating interest rate equal for
each day during such period to the weighted average of the rates on overnight Federal Funds
transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal Funds brokers of recognized standing selected by the
Administrative Agent.



          “Fees” shall mean all amounts payable pursuant to or referred to in Section 3.01.



          “Funding Date” shall mean the date occurring on or after the Effective Date on which
the incurrence of Term Loans occurs.



          “GAAP” shall mean generally accepted accounting principles in the United States as in
effect from time to time; provided that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the extent provided therein)
to Section 11.07(a).



          “Governmental Authority” shall mean the government of the United Kingdom, the United
States, the European Union and any other nation or any political subdivision thereof, whether
state, provincial or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.



          “Guaranteed Creditors” shall mean and include each of the Administrative Agent, the
Collateral Agent, the Lenders and each Approved Third Party Credit Provider to the extent such
party constitutes a Secured Creditor under the Security Documents.



11









 





          “Guaranteed Obligations” shall mean (i) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of the principal and interest on each Note
issued by, and all Terms Loans made to, the Borrower under this Agreement and all the other
obligations (including obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), indebtedness and liabilities (including, without limitation,
indemnities, fees and interest (including any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided for herein, whether
or not such interest is an allowed claim in any such proceeding) thereon) of the Borrower to the
Lenders, the Administrative Agent and the Collateral Agent now existing or hereafter incurred
under, arising out of or in connection with this Agreement and each other Credit Document to which
the Borrower is a party and the due performance and compliance by the Borrower with all the terms,
conditions and agreements contained in the Credit Agreement and in each such other Credit Document
and (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness (including
any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar
proceeding at the rate provided for herein, whether or not such interest is an allowed claim in any
such proceeding) of the Borrower or any Guarantor owing under any Hedging Agreement or
reimbursement agreement related to any Third Party Letter of Credit in each case entered into with,
or issued or provided by, an Approved Third Party Credit Provider to the extent such Approved Third
Party Credit Provider is a party to the Intercreditor Agreement, whether now in existence or
hereafter arising, and the due performance and compliance with all terms, conditions and agreements
contained therein.



          “Guarantor” shall mean each of Holdings and each Subsidiary Guarantor.



          “Guaranty” shall mean each of the Holdings Guaranty and the Subsidiaries Guaranty.



          “Hazardous Materials” shall mean any waste or other substance that is listed, defined,
designated or classified as, or otherwise regulated as, hazardous or toxic or a pollutant or
contaminant under or pursuant to any Environmental Law, including any petroleum, Hydrocarbons and
all derivatives thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials.



          “Hedging Agreement” shall mean any Commodity Hedging Agreement, Interest Rate Hedging
Agreement or foreign currency exchange agreement or other currency exchange rate hedging agreement.



          “Hess Contracts” shall mean three Abandonment and Security Agreements between Hess
Limited and the Borrower relating to the IVRR/Rob Roy/Hamish, Renee Area A and Rubie Area A assets
each dated October 26, 2006.



          “Holdings” shall have the meaning provided in the first paragraph of this Agreement.



          “Holdings Common Stock” shall have the meaning provided in Section 6.13.



          “Holdings Guaranty” shall mean the guaranty of Holdings pursuant to Section 12.



          “Hydrocarbon Interests” shall mean all rights, titles, interests and estates now owned
or hereafter acquired in and to oil and gas leases, leasehold interests and licenses, oil, gas and
mineral leases, leasehold interests and licenses, or other liquid or gaseous hydrocarbon licenses,
leases, fee mineral interests, term mineral interests, subleases, farm-outs, royalties, overriding
royalty and royalty interests, non-consent interests arising out of or pursuant to Oil and Gas
Contracts, net profit interests, net revenue interests, oil payments, production payments,
production payment interests and similar interests and



12









 







estates, including all reserved or residual
interest of whatever nature and all reversionary or carried interests relating to any of the
foregoing.



          “Hydrocarbons” shall mean oil, gas, casinghead gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons, all products directly or indirectly refined, separated, settled
and dehydrated therefrom, including kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.



          “Immaterial Subsidiary” shall mean any Subsidiary that did not, as of the last day of
the most recently ended Test Period, have assets with a book value in excess of 2.5% of the
consolidated total assets of Holdings and its Subsidiaries; provided that if at any time
the aggregate amount of consolidated total assets attributable to Immaterial Subsidiaries would
otherwise exceed 5% of the consolidated total assets of Holdings and it Subsidiaries, then
Subsidiaries that would otherwise constitute Immaterial Subsidiaries pursuant to this definition
(without giving effect to this proviso) shall be deemed not to constitute Immaterial Subsidiaries
to the extent necessary so that the percentage limitation in this proviso is not exceeded. For
purposes of calculations of the book value of assets of a Subsidiary pursuant to this definition,
(i) the value of the loan evidenced by that certain revolving loan facility agreement dated January
23, 2008 (as amended, supplemented or modified from time to time) between Endeavour International
Holding B.V. and Endeavour Energy Luxembourg S.a.r.l., (ii) during the period from the Funding Date
until January 1, 2011, the value of the intercompany loan in the amount of $23,500,000 between
Endeavour North Sea Limited and Endeavour Energy UK Limited, and (iii) the value of other loans and
receivables in an aggregate amount not in excess of $5,000,000 owed to such Subsidiary by Holdings
or any other Subsidiary of Holdings, in each case shall be disregarded.



          “Incremental Amendment” shall have the meaning provided in Section 2.10(a).



          “Incremental Term Loans” shall have the meaning provided in Section 2.10(a).



          “Indebtedness” shall mean, as to any Person, without duplication, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property or services, (b)
the maximum amount available to be drawn or paid under all letters of credit, bankers’ acceptances,
bank guaranties, surety and appeal bonds and similar obligations issued for the account of such
Person and all unpaid drawings and unreimbursed payments in respect of such letters of credit,
bankers’ acceptances, bank guaranties, surety and appeal bonds and similar obligations, (c) all
indebtedness of the types described in clause (a), (b), (d), (e), (f), (g), (h) or (i) of this
definition secured by any Lien on any property owned by such Person, whether or not such
indebtedness has been assumed by such Person (provided that, if the Person has not assumed
or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be
in an amount equal to the Fair Market Value of the property to which such Lien relates), (d) all
Capitalized Lease Obligations of such Person, (e) all obligations of such Person to pay a specified
purchase price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (f) all Contingent Obligations of such Person (other than
Contingent Obligations of a Credit Party in respect of contractual obligations of another Credit
Party arising in the ordinary course of business and not otherwise constituting Indebtedness), (g)
all obligations under any Hedging Agreement, (h) all Off-Balance Sheet Liabilities of such Person
and (i) all Attributable Indebtedness of such Person. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is directly liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the extent the terms of
such Indebtedness provide that such Person is not liable therefor. Notwithstanding the foregoing,
Indebtedness shall not include trade payables, accrued expenses and deferred tax and other credits
incurred by any Person in accordance with customary practices and in the ordinary course of
business of such Person.



13









 





          “Indemnified Person” shall have the meaning provided in Section 11.01.



          “Independent Engineering Firm” shall mean Netherland, Sewell & Associates, Inc. and/or
one or more independent engineering firms selected by the Borrower and reasonably acceptable to the
Administrative Agent.



          “Intercompany Loans” shall have the meaning provided in Section 8.05(h).



          “Intercompany Note” shall mean a promissory note evidencing Intercompany Loans, duly
executed and delivered substantially in the form of Exhibit J (or such other form as shall be
satisfactory to the Administrative Agent in its sole discretion).



          “Intercreditor Agreement” shall mean an intercreditor agreement, duly executed and
delivered by the Administrative Agent, the Collateral Agent and one or more Approved Third Party
Credit Providers, in form and substance satisfactory to the Administrative Agent in its sole
discretion and providing, inter alia, (i) that after application to all reasonable
costs and expenses incurred by the Collateral Agent in connection with the Intercreditor Agreement
and enforcement or otherwise under any Security Document, the first $25,000,000 of proceeds from
the enforcement of Collateral shall be applied to discharge obligations owed under Hedging
Agreements with Approved Third Party Credit Providers that have entered into the Intercreditor
Agreement and reimbursement agreements with respect to Third Party Letters of Credit issued by
Approved Third Party Credit Providers that have entered into the Intercreditor Agreement, and (ii)
until all Obligations have been satisfied in full, the Collateral Agent (acting on the instructions
of the Required Lenders) will have the sole power to exercise remedies against the Collateral and
to foreclose upon and dispose of Collateral.



          “Interest Payment Date” shall mean the last Business Day of each December, March, June
and September occurring after the Funding Date, commencing with December 31, 2010.



          “Interest Rate Hedging Agreement” shall mean any interest rate swap agreement,
interest rate cap agreement, interest collar agreement or other interest rate protection agreement,
interest rate hedging arrangement or other similar arrangement or arrangement.



          “Investment Grade” shall mean a rating of BBB- or higher (with a stable outlook) by
S&P and Baa3 or higher (with a stable outlook) by Moody’s.



          “Investments” shall have the meaning provided in Section 8.05.



          “Junior Financing” shall mean each of (a) the 2012 Convertible Senior Notes, (b) the
2014 Convertible Senior Notes, (c) the 2014 Senior Subordinated Notes and (d) Permitted Junior
Debt.



          “Junior Lien Obligations” shall mean Permitted Junior Debt that is intended to have a
Lien on the Collateral that ranks junior to the Lien of the Secured Creditors securing the
Obligations.



          “Lead Arranger” shall mean Cyan Partners, LP, in its capacity as Sole Lead Arranger
and Sole Book Runner, and any successor thereto.



          “Leaseholds” of any Person shall mean all the right, title and interest of such Person
as lessee, sublessee or licensee in, to and under leases, subleases or licenses of land,
improvements and/or fixtures.



          “Lender” shall mean each financial institution listed on Schedule 1.01(a) hereto, as
well as any Person that becomes a “Lender” hereunder pursuant to Section 2.08 or 11.04(b).



14









 





          “Lender Default” shall mean (a) the wrongful refusal or the failure of a Lender to
make available its portion of the Borrowing made on the Funding Date or (b) a Lender having
notified in writing the Borrower and/or the Administrative Agent that such Lender does not intend
to comply with its obligations under Section 2.01 or Section 2.03.



          “Lien” shall mean any mortgage, pledge, hypothecation, assignment for security,
deposit arrangement, encumbrance (other than any ordinary course encumbrance not securing any
obligations of any Person), lien (statutory or other), preference, priority or other security
agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or
other title retention agreement, any financing or similar statement or notice filed under the UCC
or any other similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).



          “Management Agreements” shall have the meaning provided in Section 5.05(c).



          “Margin Stock” shall have the meaning provided in Regulation U.



          “Material Adverse Effect” shall mean (a) a material adverse effect on the business,
property or financial condition of Holdings and its Subsidiaries taken as a whole or (b) a material
adverse effect (i) on the rights or remedies of the Lenders, the Administrative Agent or the
Collateral Agent hereunder or under any other Credit Document, (ii) on the ability of any Credit
Party to perform its obligations to the Lenders, the Administrative Agent or the Collateral Agent
hereunder or under any other Credit Document or (iii) on a material portion of the Collateral.



          “Material Asset Sale” shall mean any Asset Sale or series of related Assets Sales
(i.e., separate assets being sold, transferred or otherwise disposed of as part of an
identifiable group of assets and within a reasonably limited time period) where the aggregate
consideration therefor is equal to, or in
excess of, $5,000,000 and shall, subject to the aforementioned dollar limitation, include any
such Asset Sale or Asset Sales of any Subsidiary or any Oil and Gas Properties.



          “Material Permitted Acquisition” shall mean any Permitted Acquisition where the
Consolidated EBITDAX attributable to the Acquired Entity or Business (as determined on a basis
consistent with the definition of Consolidated EBITDAX with any necessary reference changes) for
the Test Period most recently ended prior to the date of such Permitted Acquisition for which
financial statements have been delivered to the Lenders pursuant to this Agreement exceeds 5% of
Consolidated EBITDAX (calculated without giving effect to such Permitted Acquisition) for such Test
Period.



          “Material Permitted Business Investment” shall mean any Permitted Business Investment
where the Consolidated EBITDAX attributable to the assets acquired pursuant to such Permitted
Business Investment (as determined on a basis consistent with the definition of Consolidated
EBITDAX with any necessary reference changes) for the Test Period most recently ended prior to the
date of such Permitted Business Investment for which financial statements have been delivered to
the Lenders pursuant to this Agreement exceeds 5% of Consolidated EBITDAX (calculated without
giving effect to such Permitted Business Investment) for such Test Period.



          “Maturity Date” shall mean August 16, 2013; provided that, if on October 14,
2011 there remains outstanding 2012 Convertible Senior Notes and 2014 Convertible Senior Notes in
an aggregate principal amount in excess of $13,399,500, then the Maturity Date shall instead be
October 14, 2011; provided, further, (a) the 2014 Convertible Senior Notes shall be
deemed not to be outstanding for the purposes of this definition in the event that the 2014
Convertible Senior Notes Trust Deed has been amended or modified (including by means of a waiver)
such that after giving effect thereto the holders of the 2014 Convertible Senior Notes do not have
any so-called “put” or similar rights with respect to the 2014 Convertible Senior Notes that may be
exercised at any time prior to November 16, 2013, and (b) the



15









 







2012 Convertible Senior Notes shall
not be deemed to be outstanding pursuant to this definition in the event that the 2012 Convertible
Senior Notes Indenture has been amended or modified (including by means of a waiver) to extend the
maturity date of the 2012 Convertible Senior Notes to a date no earlier than November 16, 2013.



          “Moody’s” shall mean Moody’s Investors Service, Inc.



          “Mortgage” shall mean a mortgage, leasehold mortgage, deed of trust, leasehold deed of
trust, deed to secure debt, leasehold deed to secure debt, debenture or similar security
instrument.



          “Mortgaged Property” shall mean any U.S. Oil and Gas Property or other Real Property
owned or leased by Holdings or any of its Subsidiaries which is encumbered (or required to be
encumbered) by a Mortgage pursuant to the terms of this Agreement or any Additional Security
Document.



          “Multiemployer Plan” shall mean any multiemployer plan as defined in Section
4001(a)(3) of ERISA, which is contributed to by (or to which there is an obligation to contribute
of) Holdings, any of its Subsidiaries and/or any ERISA Affiliate, and each such plan for the
five-year period immediately following the latest date on which Holdings, any of its Subsidiaries
and/or an ERISA Affiliate contributed to or had an obligation to contribute to such plan.



          “NAIC” shall mean the National Association of Insurance Commissioners.



          “Net Cash Proceeds” shall mean, the gross cash proceeds (including any cash received
by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and
when received) received from such event, net of reasonable transaction costs (including, as
applicable, any underwriting, brokerage or other customary commissions and reasonable legal,
advisory and other fees and expenses associated therewith) received from any such event.



          “Net Insurance Proceeds” shall mean, with respect to any Recovery Event, the cash
proceeds received by the respective Person in connection with such Recovery Event (net of (a)
reasonable costs and taxes incurred in connection with such Recovery Event and (b) required
payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents)
which is secured by the respective assets the subject of such Recovery Event).



          “Net Sale Proceeds” shall mean for any sale or other disposition of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such sale or other
disposition of assets, net of (a) reasonable transaction costs (including, without limitation, any
underwriting, brokerage or other customary selling commissions, reasonable legal, advisory and
other fees and expenses (including title and recording expenses), associated therewith and sales,
VAT and transfer taxes arising therefrom), (b) payments of unassumed liabilities relating to the
assets sold or otherwise disposed of at the time of, or within 30 days after, the date of such sale
or other disposition, (c) the amount of such gross cash
proceeds required to be used to permanently
repay any Indebtedness (other than Indebtedness secured pursuant to the Security Documents), which
is secured by the respective assets which were sold or otherwise disposed of, and (d) the estimated
net marginal increase in income, franchise or similar taxes which will be payable by Holdings’
consolidated group or any Subsidiary of Holdings with respect to the tax year of Holdings in which
the sale or other disposition occurs as a result of such sale or other disposition (or, without
duplication, which will be payable by Holdings’ consolidated group or any Subsidiary of Holdings in
the tax year of Holdings in which cash proceeds in respect of such sale or other disposition are
received by way of deferred payment pursuant to a promissory note, receivable or otherwise);
provided, however, that such gross proceeds shall not include any portion of such
gross cash



16









 







proceeds which Holdings determines in good faith should be reserved for post-closing
adjustments (to the extent Holdings delivers to the Lenders a certificate signed by an Authorized
Officer as to such determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined (which shall not be later than six months following
the date of the respective asset sale), the amount (if any) by which the reserved amount in respect
of such sale or disposition exceeds the actual post-closing adjustments payable by Holdings or any
of its Subsidiaries shall constitute Net Sale Proceeds on such date received by Holdings and/or any
of its Subsidiaries from such sale or other disposition.



          “Non-Compete Agreements” shall have the meaning provided in Section 5.05(g).



          “Non-Defaulting Lender” shall mean and include each Lender, other than a Defaulting
Lender.



          “Non-Guarantor Subsidiary” shall mean each Subsidiary of Holdings (other than the
Borrower) that is not a Subsidiary Guarantor.



          “Non-U.S. Pension Plan” shall mean any plan, fund (including, without limitation, any
superannuation fund) or other similar program established or maintained outside the United States
by Holdings or any one or more of its Subsidiaries primarily for the benefit of employees of
Holdings or such Subsidiaries residing outside the United States, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which plan is not subject to
ERISA or the Code.



          “Non-U.S. Subsidiary” shall mean, as to any Person, any Subsidiary of such Person that
is not a U.S. Subsidiary of such Person.



          “Non-Wholly-Owned Subsidiary” shall mean, as to any Person, each Subsidiary of such
Person which is not a Wholly-Owned Subsidiary of such Person.



          “North Sea” shall mean, collectively, the Dutch Sector, the UK Sector and surrounding
areas of the North Sea, including, without limitation, any such areas in Scottish or Norwegian
waters.



          “Note” shall have the meaning provided in Section 2.04(a).



          “Notice of Borrowing” shall have the meaning provided in Section 2.02(a).



          “Notice Office” shall mean, for credit and operational notices, the office of the
Administrative Agent located at 399 Park Avenue, 39th Floor, New York, New York, 10022 Attention:
Divya Gopal, Telephone No.: (212) 380-5864, Telecopier No.: (212) 380-5871, or such other office
or person as the Administrative Agent may hereafter designate in writing as such to the other
parties hereto.



          “Obligations” shall mean all amounts owing to the Administrative Agent, the Collateral
Agent or any Lender pursuant to the terms of this Agreement or any other Credit Document,
including, without limitation, all amounts in respect of any principal, interest (including (a) any
PIK Interest and (b) any interest accruing subsequent to the filing of a petition in bankruptcy,
reorganization or similar proceeding at the rate provided for in this Agreement or the respective
other Credit Document, whether or not such interest is an allowed claim under any such proceeding
or under applicable state, federal or foreign law), penalties, fees, expenses, indemnifications,
reimbursements, damages and other liabilities, and guarantees of the foregoing amounts.



          “Off-Balance Sheet Liabilities” of any Person shall mean (a) any repurchase obligation
or liability of such Person with respect to accounts or notes receivable sold by such Person, (b)
any liability



17









 







of such Person under any sale and leaseback transactions that does not create a
liability on the balance sheet of such Person, (c) any obligation under a Synthetic Lease or (d)
any obligation arising with respect to any other transaction which is the functional equivalent of
or takes the place of borrowing but which does not constitute a liability on the balance sheet of
such Person.



          “Oil and Gas Business” shall mean (a) the acquisition, exploration, exploitation,
development, operation and disposition of interests in Oil and Gas Properties and Hydrocarbons; (b)
the gathering, treating, refining, processing, storage, marketing, distribution, selling and
transporting of any production from such interests or properties; and (c) any business directly
relating to or arising directly from exploration for, or development, production, treatment,
processing, storage or selling of, Hydrocarbons, or that is or necessary or desirable to facilitate
the activities described in this definition.



          “Oil and Gas Contracts” shall mean all contracts, agreements, operating agreements,
farm-out or farm-in agreements, sharing agreements, mineral purchase agreements, contracts for the
purchase, exchange, transportation, processing or sale of Hydrocarbons, rights-of-way, easements,
surface leases, subleases, equipment leases, permits, franchises, licenses, pooling or unitization
agreements, and unit or pooling designations and orders now or hereafter affecting any of the Oil
and Gas Properties (or related oil and gas gathering assets) or Hydrocarbon Interests of Holdings
and each of its Subsidiaries, or which are useful or appropriate in drilling for, producing,
treating, handling, storing, transporting, or marketing oil, gas or other minerals produced from
any of the Oil and Gas Properties of Holdings and each of its Subsidiaries, as any such contracts
and agreements as they may be amended, restated, modified, substituted or supplemented from time to
time.



          “Oil and Gas Properties” shall mean (a) Hydrocarbon Interests; (b) the properties now
or hereafter pooled or unitized with Hydrocarbon Interests; (c) all currently existing or future
rights arising under (i) unitization agreements, orders or other arrangements, (ii) pooling orders,
agreements or other arrangements and (iii) declarations of pooled units and the units created
thereby (including all units created under orders, regulations and rules of any Governmental
Authority having jurisdiction) which may affect all or any portion of the Hydrocarbon Interests;
(d) all pipelines, gathering lines, compression facilities, tanks and processing plants; (e) all
interests held in royalty trusts whether currently existing or hereafter created; (f) all
Hydrocarbons in and under and which may be produced, saved, processed or attributable to the
Hydrocarbon Interests, the lands covered thereby and all Hydrocarbons in pipelines, gathering
lines, tanks and processing plants and all rents, issues, profits, proceeds, products, revenues and
other incomes from or attributable to the Hydrocarbon Interests; (g) all tenements, hereditaments,
appurtenances, interests and properties in any way appertaining, belonging, affixed or incidental
to the Hydrocarbon Interests, and all rights, titles, interests and estates described or referred
to above (including (i) any and all Real Property, now owned or hereafter acquired, leased or
subleased or otherwise used or held for use in connection with the operating, working or
development of any such Hydrocarbon Interests or property and (ii) any and all surface leases,
subleases, rights-of-way, easements and servitudes together with all additions, substitutions,
replacements, accessions and attachments to any and all of the foregoing); (h) all production
units, drilling and spacing units (and the properties covered thereby) which may affect all or any
portion of the other Oil and Gas Properties and any units created by agreement or designation or
under orders, regulations, rules or other official acts of any Governmental Authority having
jurisdiction; and (i) all operating agreements, contracts and other agreements, including
production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or
the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such
Hydrocarbon Interests.



          “Outer Continental Shelf” shall have the meaning ascribed to such term in the Outer
Continental Shelf Lands Act, 43 U.S.C. 1331, et seq.



          “Patriot Act” shall have the meaning provided in Section 11.17.



18









 





          “Payment Office” shall mean the office of the Administrative Agent located at 399 Park
Avenue, 39th Floor, New York, New York 10022 or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.



          “PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.



          “PDP” shall mean Proved Developed Reserves that are categorized as producing in
accordance with the petroleum reserves definitions promulgated by the Society of Petroleum
Engineers (SPE) Inc. (or any generally recognized successor) as in effect at the time in question.



          “PDP Coverage Ratio” shall mean, on any date of determination, the ratio of (a) PV-10
Value (determined by substituting the phrase “from PDP production on Holdings’ and each of its
Subsidiaries’ Oil and Gas Properties” for the phrase “from Proved Reserves on Holdings’ and each of
its Subsidiaries’ Oil and Gas Properties” appearing in the second line of the definition thereof)
on such date to (b) Consolidated Net Secured Indebtedness on such date.



          “Permitted Acquisition” shall mean the acquisition by a Qualified Credit Party of an
Acquired Entity or Business; provided that (in each case) (a) the consideration paid or to
be paid by the Qualified Credit Party consists solely of cash, Holdings Common Stock, Qualified
Preferred Stock of Holdings, the issuance or incurrence of Indebtedness otherwise permitted by
Section 8.04 and the
assumption/acquisition of any Indebtedness (calculated at face value) which is permitted to
remain outstanding in accordance with the requirements of Section 8.04, (b) in the case of the
acquisition of 100% of the Equity Interests of any Acquired Entity or Business (including by way of
merger), such Acquired Entity or Business shall own no Equity Interests of any other Person (either
directly or indirectly) unless either (i) such Acquired Entity or Business owns 100% of the Equity
Interests of such other Person or (ii) if such Acquired Entity or Business owns Equity Interests in
any other Person which is a Non-Wholly-Owned Subsidiary of such Acquired Entity or Business, (A)
such Acquired Entity or Business shall not have been created or established in contemplation of, or
for purposes of, the respective Permitted Acquisition, (B) any such Non-Wholly-Owned Subsidiary of
the Acquired Entity or Business shall have been a Non-Wholly-Owned Subsidiary of such Acquired
Entity or Business prior to the date of the respective Permitted Acquisition and shall not have
been created or established in contemplation thereof and (C) such Acquired Entity or Business
and/or its Wholly-Owned Subsidiaries own at least 90% of the total value of all the assets owned by
such Acquired Entity or Business and its Subsidiaries (for purposes of such determination,
excluding the value of the Equity Interests of Non-Wholly-Owned Subsidiaries held by such Acquired
Entity or Business and its Wholly-Owned Subsidiaries), (c) all of the business, division or product
line acquired pursuant to the respective Permitted Acquisition, or the business of the Person
acquired pursuant to the respective Permitted Acquisition and its Subsidiaries taken as a whole, is
in the United States, the United Kingdom or the North Sea, (d) the Acquired Entity or Business
acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section
8.14 and (e) all requirements of Sections 7.17, 8.02 and 8.15 applicable to Permitted Acquisitions
are satisfied. For the avoidance of doubt, a Permitted Business Investment shall not constitute a
Permitted Acquisition.



          “Permitted Business Investments” shall mean investments of a nature that is or shall
have become customary in, the Oil and Gas Business as a means of actively exploiting, exploring
for, acquiring, developing, producing, processing, gathering, marketing, storing, treating, selling
or transporting oil and gas through agreements, transactions, interests or arrangements (including
those that permit a person to share risks or costs, comply with regulatory requirements regarding
local ownership or satisfy other objectives customarily achieved through the conduct of Oil and Gas
Business jointly with third parties), including the entry into or acquisition of operating
agreements, working interests, licenses, royalty interests, mineral leases, processing agreements,
farm-out and farm-in agreements, division



19









 







orders, contracts for the sale, transportation or
exchange of oil or natural gas, unitization and pooling declarations and agreements and area of
mutual interest agreements, production sharing agreements or other similar or customary agreements,
transactions, properties, interests, and investments and expenditures in connection therewith (with
the amount thereof measured at the time initially made); provided that neither Permitted
Acquisitions nor other investments in Equity Interests of a Person shall constitute Permitted
Business Investments.



          “Permitted Junior Debt” shall mean any Indebtedness of Holdings or any of its
Subsidiaries in the form of unsecured or second lien loans or notes; provided that in any
event, unless the Required Lenders otherwise expressly consent in writing prior to the issuance
thereof:




     (a) except as provided in clause (f) below, no such Indebtedness shall be secured by
any asset of Holdings or any of its Subsidiaries;




     (b) no such Indebtedness shall be guaranteed by any Person other than a
Credit Party;




     (c) no such Indebtedness shall be subject to scheduled amortization or
have a final maturity, in either case prior to the date occurring 91 days following the
Maturity Date (for this purpose without regard to any proviso contained therein);




     (d) any “asset sale” mandatory prepayment provision or offer to prepay
covenant included in the agreement, indenture or other instrument governing such
Indebtedness shall provide that Holdings, the Borrower or the respective Subsidiary shall
be permitted to repay Obligations under this Agreement before prepaying or offering to
prepay such Indebtedness;




     (e) any “change of control” covenant included in the indenture governing any such
Indebtedness that takes the form of notes issued pursuant to an indenture shall
provide that, before the mailing of any required “notice of redemption” in
connection therewith, Holdings shall covenant to (i) obtain the consent of the Required
Lenders or (ii) pay the Obligations in full in cash;




     (f) in the case of any such Indebtedness that is secured (i) such Indebtedness is
secured by only assets comprising Collateral (as defined in the Security Documents) on a
second-lien basis relative to the Liens on such Collateral securing the Obligations of the
Credit Parties, and not secured by any property or assets of Holdings or any of it
Subsidiaries other than the Collateral (as defined in the Security Documents), (ii) such
Indebtedness (and the Liens securing the same) are permitted by the terms of the Permitted
Junior Debt Intercreditor Agreement (to the extent the Permitted Junior Debt Intercreditor
Agreement is in effect), (iii) the security agreements relating to such Indebtedness are
substantially the same as the Security Documents (with such differences as are reasonably
satisfactory to the Collateral Agent) and (iv) a Permitted Junior Debt Representative
acting on behalf of the holders of such Indebtedness shall have become party to a Permitted
Junior Debt Intercreditor Agreement; provided that if such Indebtedness is the
initial incurrence of Permitted Junior Debt by Holdings or any of its Subsidiaries that is
secured by assets of Holdings or any of its Subsidiaries, then Holdings, the Borrower, its
applicable Subsidiaries, the Administrative Agent, the Collateral Agent and the Permitted
Junior Debt Representative for such Indebtedness shall have executed and delivered the
Permitted Junior Debt Intercreditor Agreement;




20











 






     (g) the representations and warranties, covenants, and events of defaults
shall be no more onerous in any material respect than the related provisions contained in
this Agreement; provided that (i) (A) in the case of any such Indebtedness that
takes the form of notes issued pursuant to an indenture, the “default to other
indebtedness” event of default contained in the indenture governing such indebtedness shall
provide for “cross-acceleration” rather than a “cross-default” and (B) in the case of any
other such Indebtedness, any cross-default to the Obligations contained in any agreement
evidencing such Indebtedness shall be limited to a cross-payment default and shall be
subject to a grace period reasonably acceptable to the Administrative Agent and (ii) in the
event that any agreement evidencing such Indebtedness contains financial maintenance
covenants, except as may otherwise be agreed to by the Administrative Agent, such financial
maintenance covenants shall be limited to those set forth in Sections 8.07 through 8.10,
inclusive, of this Agreement (with the financial definitions contained therein to be at
least as favorable to the comparable definitions used in this Agreement) and shall be set
back from the ratios set forth in Sections 8.07 through 8.10, inclusive, by at least 20%;
and




     (h) the aggregate outstanding principal amount of all Permitted Junior Debt
shall not at any time exceed $100,000,000; provided that the aggregate outstanding
principal amount of all Permitted Junior Debt that is secured by a Lien on all or any
portion of the assets of Holdings or its Subsidiaries shall not at any time exceed
$50,000,000.


The incurrence of Permitted Junior Debt shall be deemed to be a representation and warranty by
Holdings, the Borrower and each of its Subsidiaries that all conditions thereto have been satisfied
in all material respects and that same is permitted in accordance with the terms of this Agreement,
which representation and warranty shall be deemed to be a representation and warranty for all
purposes hereunder. For the avoidance of doubt, neither Existing Indebtedness nor Refinancing Debt
incurred pursuant to Section 8.04(b) shall be considered to be “Permitted Junior Debt”.




          “Permitted Junior Debt Intercreditor Agreement” shall mean an agreement by and among
the Collateral Agent and a Permitted Junior Debt Representative for the holders of Junior Lien
Obligations and acknowledged by the Borrower and the Guarantors that are obligors in respect of
such Junior Lien Obligations providing for the subordination of the Liens securing such Junior Lien
Obligations to the Liens securing the Obligations on terms reasonably determined by the
Administrative Agent to be customary for intercreditor agreements governing intercreditor matters
between similar first lien financings and second lien financings; provided that the terms
of such intercreditor agreement shall be no less favorable to the Lenders with respect to the
specific matters set forth below than the following: (a) notwithstanding the time, order or method
of grant, creation, attachment or perfection of any Liens securing the Obligations and any Liens
securing the Junior Lien Obligations (for purposes of this definition, such Liens the “Junior
Liens”), the Liens securing the Obligations shall rank senior to any Junior Lien on the
Collateral, (b) no holder of any Junior Lien Obligation shall contest the validity or
enforceability of the Liens securing the Obligations, (c) until the payment and discharge in full
of all Obligations under this Agreement and, unless otherwise agreed to by the respective Approved
Third Party Credit Provider, all obligations under all Hedging Agreements and reimbursement
agreements related to Third Party Letters of Credit in each case entered into with, or issued or
provided by, an Approved Third Party Credit Provider that is a party to the Intercreditor Agreement
and the termination of all such Third Party Letters of Credit outstanding, the Collateral Agent
will have the sole power to exercise remedies against the Collateral (subject to the right of the
holders of the Junior Lien Obligations to take customary
(as determined by the Administrative Agent) protective measures with respect to the Junior
Liens) and to foreclose upon and dispose of the Collateral, (d) upon any private or public sale of
Collateral taken in connection with the exercise of remedies by the Collateral Agent which results
in the release of Liens securing the Obligations, the Junior Lien on such item of Collateral will
be automatically released, (e) in



21









 






connection with any enforcement action with respect to the
Collateral or any insolvency or liquidation proceeding involving Holdings, the Borrower or any
Guarantor, all proceeds of Collateral will first be applied to the repayment of all Obligations
under this Agreement and, unless otherwise agreed to by the respective Approved Third Party Credit
Providers, obligations under Hedging Agreements and reimbursement agreements related to Third Party
Letters of Credit in each case entered into with, or issued or provided by, Approved Third Party
Credit Providers that are a party to the Intercreditor Agreement prior to being applied to the
obligations secured by such Junior Liens, (f) if any holder of an obligation secured by Junior
Liens receives any proceeds of Collateral in contravention of the foregoing, such proceeds will be
turned over to the Collateral Agent, (g) no holder of any obligation secured by Junior Lien may,
without the consent of the Lenders (i) seek relief from the automatic stay with respect to any
Collateral, (ii) object to any sale of any Collateral in any insolvency or liquidation proceeding
which has been consented to by the Collateral Agent (provided that the Junior Liens attach
to the proceeds of such sale with the priority set forth in the Permitted Junior Debt Intercreditor
Agreement) or (iii) object to any claim of any Lenders or any Approved Third Party Credit Provider
to post-petition interest, fees or expenses on account of the Liens securing the Obligations or
obligations under Hedging Agreements and reimbursement agreements related to Third Party Letters of
Credit in each case entered into with, or issued or provided by, Approved Third Party Credit
Providers that are a party to the Intercreditor Agreement and (h) no holder of obligations secured
by Junior Liens shall support any plan or reorganization in connection with any insolvency or
liquidation proceeding that is in contravention of the Permitted Junior Debt Intercreditor
Agreement without the consent of the Required Lenders and the holders of a majority of the
outstanding obligations under Hedging Agreements and reimbursement agreements related to Third
Party Letters of Credit, in each case entered into with, or issued or provided by, Approved Third
Party Credit Providers that are a party to the Intercreditor Agreement.




          “Permitted Junior Debt Representative” shall mean, with respect to any Permitted
Junior Debt that is secured on a second lien basis, the trustee, administrative agent, collateral
agent, security agent, security trustee or similar agent under the indenture, collateral trust
agreement or other agreement pursuant to which such Permitted Junior Debt is issued, incurred or
otherwise obtained and each of their successors in such capacities.




          “Permitted Liens” shall have the meaning provided in Section 8.01.




          “Person” shall mean any individual, partnership, joint venture, firm, corporation,
association, limited liability company, trust or other enterprise or any Governmental Authority.




          “PIK Interest” shall have the meaning provided in Section 2.06(b).




          “Plan” shall mean any pension plan as defined in Section 3(2) of ERISA, other than a
Multiemployer Plan, which is maintained or contributed to by (or to which there is an obligation to
contribute of) Holdings, any of its Subsidiaries or an ERISA Affiliate, and each such plan for the
five-year period immediately following the latest date on which Holdings, any of its Subsidiaries
or any ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.




          “Preferred Equity Interests” of any Person shall mean any Equity Interests of such
Person that have preferential rights to any other Equity Interests with respect to dividends or
redemptions or upon liquidation, and shall include any Qualified Preferred Stock.




          “Pro Forma Basis” shall mean, in connection with any calculation of compliance with
any financial covenant or financial term, the calculation thereof after giving effect on a pro
forma basis to (a) the incurrence of any Indebtedness (other than revolving Indebtedness, except to
the extent same is incurred to refinance other outstanding Indebtedness, to finance a Permitted
Acquisition or a Permitted Business Investment) after the first day of the relevant Calculation
Period or Test Period, as the case may



22









 






be, as if such Indebtedness had been incurred (and the
proceeds thereof applied) on the first day of such Test Period or Calculation Period, as the case
may be, (b) the permanent repayment of any Indebtedness (other than revolving Indebtedness, except
to the extent accompanied by a corresponding voluntary permanent commitment reduction) after the
first day of the relevant Test Period or Calculation Period, as the case may be, as if such
Indebtedness had been retired or repaid on the first day of such Test Period or Calculation Period,
as the case may be, and (c) any Material Permitted Acquisition, any Material Permitted Business
Investment or any Material Asset Sale then being consummated as well as any other Material
Permitted Acquisition, any other Material Permitted Business Investment or any other Material Asset
Sale if consummated after the first day of the relevant Test Period or Calculation Period, as the
case may be, and on or prior to the date of such calculation, with the following rules to apply in
connection therewith:





     (i) all Indebtedness (A) (other than revolving Indebtedness, except to the extent same
is incurred to refinance other outstanding Indebtedness or to finance a Permitted
Acquisition or a Permitted Business Investment) incurred or issued after the first day of
the relevant Test Period or Calculation Period (whether incurred to finance a Permitted
Acquisition or a Permitted Business Investment, to refinance Indebtedness or otherwise)
shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the
first day of such Test Period or Calculation Period, as the case may be, and remain
outstanding through the date of determination and (B) (other than revolving Indebtedness,
except to the extent accompanied by a corresponding voluntary permanent commitment
reduction) permanently retired or redeemed after the first day of the relevant Test Period
or Calculation Period, as the case may be, shall be deemed to have been retired or redeemed
on the first day of such Test Period or Calculation Period, as the case may be, and remain
retired through the date of determination;




     (ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall
be deemed to have borne interest at (A) the rate applicable thereto, in the case of fixed
rate indebtedness, or (B) the rates which would have been applicable thereto during the
respective period when same was deemed outstanding, in the case of floating rate
Indebtedness (although interest expense with respect to any Indebtedness for periods while
same was actually outstanding during the respective period shall be calculated using the
actual rates applicable thereto while same was actually outstanding); provided that
all Indebtedness (whether actually outstanding or deemed outstanding) bearing interest at a
floating rate of interest shall be tested on the basis of the rates applicable at the time
the determination is made pursuant to said provisions; and




     (iii) in making any determination of Consolidated EBITDAX on a Pro Forma Basis, pro
forma effect shall be given to any Material Permitted Acquisition, any Material Permitted
Business Investment, or any Material Asset Sale if effected during the respective
Calculation Period or Test Period (or, except for the purposes of determining quarterly
compliance with Sections 8.08 through 8.10 pursuant to the terms thereof, thereafter and on
or prior to the date of the respective calculation) as if same had occurred on the first day
of the respective Calculation Period or Test Period, as the case may be, and taking into
account factually supportable and identifiable cost savings and expenses which would
otherwise be accounted for as an adjustment
pursuant to Article 11 of Regulation S-X under the Securities Act, as if such cost
savings or expenses were realized on the first day of the respective period.



          “Probable Reserve Value” shall mean, as of any date of determination, 50% of the
present value of future cash flow from Probable Reserves on Holdings’ and each of its Subsidiaries’
Oil and Gas Properties as set forth in the most recent Reserve Report delivered pursuant to Section
7.01(d), utilizing (a) in the case of any Oil and Gas Properties located in the United States or
any of its territories




23









 







or possessions (including U.S. Federal waters in the Gulf of Mexico), the
Three-Year Strip Price for crude oil (WTI Cushing) and natural gas (Henry Hub), quoted on the New
York Mercantile Exchange (or its successor), (b) in the case of any Oil and Gas Properties located
in the North Sea, the Three-Year Strip Price for crude oil (North Sea Brent) and natural gas (UK
National Balancing Point), in each case quoted on the International Petroleum Exchange (or its
successor) and (c) in the case of any Oil and Gas Properties located in any other jurisdiction, the
Three-Year Strip Price for crude oil and natural gas, in each case quoted on any commodities
exchange or other price quotation source generally recognized in the oil and gas industry in such
jurisdiction and reasonably acceptable to the Administrative Agent, in the case of each of clauses
(a), (b) and (c), as of the date as of which the information set forth in such Reserve Report is
provided (as adjusted for basis differentials) and utilizing a 10% discount rate. For purposes of
calculating Probable Reserve Value, any future cash flow calculations set forth in any Reserve
Report and made in any currency other than Dollars shall be converted into Dollars based on the
Exchange Rate on the date as of which the information set forth in such Reserve Report is provided.




          “Probable Reserves” shall mean the estimated quantities of crude oil, condensate,
natural gas and natural gas liquids that geological and engineering data suggests are more likely
than not to be recoverable with presently available technology at an economically viable cost (as
determined in accordance with the guidelines of the Society of Petroleum Engineers).




          “Project Documents” shall mean and include in relation to each Oil and Gas Property of
Holdings or any of its Subsidiaries (a) each joint operating agreement and/or unitization and unit
operating agreement relating thereto, each agreement relating to the development thereof or the
transportation, processing and/or storage of production therefrom and each agreement for the sale
or marketing of production therefrom and each other major agreement relating to such Oil and Gas
Property and/or Hydrocarbons produced therefrom, (b) each Authorization required for the lawful
exploitation, development, or operation of such Oil and Gas Property or the production,
transportation or sale of Hydrocarbons therefrom (and including, without limitation, any
Hydrocarbons production license), (c) any development plan approved by any relevant operating
committee and/or any Governmental Authority relating to that Oil and Gas Property and (d) any other
document designated as such by the Administrative Agent acting reasonably.




          “Projections” shall mean the projections that were prepared by or on behalf of the
Borrower in connection with the Transaction and this Agreement and delivered to the Administrative
Agent and the Lenders prior to the Funding Date.




          “Protected Party” shall mean any Agent or Lender which is or will be subject to any
liability, or required to make any payment, for or on account of Tax in relation to a sum received
or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a
Credit Document.




          “Proved Developed Reserves” shall mean oil and gas reserves that can be expected to be
recovered through existing wells with existing equipment and operating methods.




          “Proved Reserves” shall mean the estimated quantities of crude oil, condensate,
natural gas and natural gas liquids that geological and engineering data demonstrates with
reasonable certainty to be recoverable in future years from known reservoirs under existing
economic and operating conditions (i.e., prices and costs as of the date the estimate is made).




          “PV-10 Value” shall mean, as of any date of determination, the present value of future
cash flows from Proved Reserves on Holdings’ and each of its Subsidiaries’ Oil and Gas Properties
as set forth in the most recent Reserve Report delivered pursuant to Section 7.01(d), utilizing (a)
in the case of any Oil and Gas Properties located in the United States or any of its territories or
possessions (including




24









 







U.S. Federal waters in the Gulf of Mexico), the Three-Year Strip Price for
crude oil (WTI Cushing) and natural gas (Henry Hub), quoted on the New York Mercantile Exchange (or
its successor), (b) in the case of any Oil and Gas Properties located in the North Sea, the
Three-Year Strip Price for crude oil (North Sea Brent) and natural gas (UK National Balancing
Point), in each case quoted on the International Petroleum Exchange (or its successor) and (c) in
the case of any Oil and Gas Properties located in any other jurisdiction, the Three-Year Strip
Price for crude oil and natural gas, in each case quoted on any commodities exchange or other price
quotation source generally recognized in the oil and gas industry in such jurisdiction and
reasonably acceptable to the Administrative Agent, in the case of each of clauses (a), (b) and (c),
as of the date as of which the information set forth in such Reserve Report is provided (as
adjusted for basis differentials) and utilizing a 10% discount rate. For purposes of calculating
PV-10 Value, any future cash flow calculations set forth in any Reserve Report and made in any
currency other than Dollars shall be converted into Dollars based on the Exchange Rate on the date
as of which the information set forth in such Reserve Report is provided.




          “Qualified Credit Party” shall mean Holdings, the Borrower and each Wholly-Owned
Subsidiary Guarantor that is organized under the laws of the United States or any State thereof or
the laws of England and Wales.




          “Qualified Preferred Stock” shall mean any Preferred Equity Interests of Holdings so
long as the terms of any such Preferred Equity Interests (a) do not contain any mandatory put,
redemption, repayment, sinking fund or other similar provision prior to February 16, 2014, (b) do
not require the cash payment of dividends or distributions that would otherwise be prohibited by
the terms of this Agreement or any other agreement or contract of Holdings or any of its
Subsidiaries, (c) do not contain any covenants (other than periodic reporting requirements) and (d)
do not grant the holders thereof any voting rights except for (i) voting rights required to be
granted to such holders under applicable law and (ii) limited customary voting rights on
fundamental matters such as mergers, consolidations, sales of all or substantially all of the
assets of Holdings or liquidations involving Holdings.




          “Real Property” of any Person shall mean all the right, title and interest of such
Person in and to land, improvements and fixtures, including Leaseholds.




          “Recovery Event” shall mean the receipt by Holdings or any of its Subsidiaries of any
cash insurance proceeds or condemnation awards payable (a) by reason of theft, loss, physical
destruction, damage, taking or any other similar event with respect to any property or assets of
Holdings or any of its Subsidiaries or (b) under any policy of insurance maintained by any of them.




          “Refinancing” shall mean the refinancing transactions described in Section 5.06.




          “Refinancing Debt” shall have the meaning provided in Section 8.04(b).




          “Register” shall have the meaning provided in Section 11.15.




          “Regulation D” shall mean Regulation D of the Board as from time to time in effect and
any successor to all or a portion thereof establishing reserve requirements.




          “Regulation T” shall mean Regulation T of the Board as from time to time in effect and
any successor to all or a portion thereof.




          “Regulation U” shall mean Regulation U of the Board as from time to time in effect and
any successor to all or a portion thereof.




25









 








          “Regulation X” shall mean Regulation X of the Board as from time to time in effect and
any successor to all or a portion thereof.




          “Release” shall mean actively or passively disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping or
migrating into or upon any land or water or air, or otherwise entering into the environment.




          “Relevant Reinvestment Period” shall mean, with respect to any Asset Sale or Recovery
Event, the earlier of the dates referred to in clauses (a) and (b) below occurring after the
receipt of Net Sale Proceeds or Net Insurance Proceeds by Holdings or any of its Subsidiaries, as
the case may be, from such Asset Sale or Recovery Event: (a) 360 days following the receipt of
such Net Sale Proceeds or Net Insurance Proceeds, as the case may be, and (b) the date upon which
Holdings or the relevant Subsidiary determines not to reinvest such Net Sale Proceeds or Net
Insurance Proceeds, as the case may be, from the respective Asset Sale or Recovery Event, as the
case may be.




          “Replaced Lender” shall have the meaning provided in Section 2.08.




          “Replacement Lender” shall have the meaning provided in Section 2.08.




          “Reportable Event” shall mean an event described in Section 4043(c) of ERISA with
respect to a Plan that is subject to Title IV of ERISA other than those events as to which the
30-day notice period is waived under PBGC Regulations promulgated under Section 4043 of ERISA.




          “Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose
outstanding Term Loans (or, if determined prior to the Funding Date, Commitments) at such time
represents at least a majority of the sum of all outstanding Term Loans (or, if determined prior to
the Funding Date, the Total Commitment) of Non-Defaulting Lenders.




          “Reserve Coverage Ratio” shall mean, on any date of determination, the ratio of (a)
the sum of (i) PV-10 Value on such date and (ii) Probable Reserve Value on such date to (b)
Consolidated Net Secured Indebtedness on such date.




          “Reserve Report” shall mean (a) each annual reserve report prepared by Holdings and
audited by an Independent Engineering Firm, in form and detail consistent with the Reserve Report
delivered pursuant to Section 5.13 or otherwise reasonably acceptable to the Administrative Agent
and (b) each interim reserve report prepared by Holdings, in form and detail reasonably acceptable
to the Administrative Agent (it being understood and agreed that Holdings will prepare each such
interim reserve report based on the most recent annual Reserve Report, as adjusted for actual
production, operating costs, capital costs and net additions of Proved Reserves and Probable
Reserves during the calendar months of the respective year specified therein), in each case with
respect to Oil and Gas Properties of Holdings and each of its Subsidiaries as of (i) December 31 of
the year immediately preceding the year in which such report is delivered pursuant to Section
7.01(d), in the case of an annual
reserve report or (ii) June 30 of the year in which such report is delivered pursuant to
Section 7.01(d) (or such other date specified therein in the event Holdings has elected to deliver
additional reserve reports pursuant to Section 7.01(d)), in the case of semi-annual or additional
reserve reports. Each Reserve Report prepared by Holdings shall be certified by the chief
engineering officer of Holdings as being accurate in all material respects.




          “Restricted” shall mean, when referring to cash or Cash Equivalents of Holdings or any
of its Subsidiaries, that such cash or Cash Equivalents (a) appears (or would be required to
appear) as “restricted” on a consolidated balance sheet of Holdings or any such Subsidiary (unless
such appearance is related to the Credit Documents or Liens created thereunder), (b) are subject to
any Lien in favor of any



26









 






Person other than (i) the Collateral Agent for the benefit of the Secured
Creditors and (ii) holders of Liens permitted under Section 8.01(o), or (c) are not otherwise
generally available for use by Holdings or such Subsidiary; provided that cash or Cash
Equivalents of Holdings and its Subsidiaries that have been pledged to secure the repayment of
outstanding Consolidated Indebtedness (other than the Obligations) shall be deemed not to be
Restricted for the purposes of this Agreement.




          “Returns” shall have the meaning provided in Section 6.09.




          “S&P” shall mean Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.




          “Scheduled Repayment” shall have the meaning provided in Section 4.02(a).




          “Scheduled Repayment Date” shall have the meaning provided in Section 4.02(a).




          “Scottish Security” shall have the meaning provided in Section 5.09(f).




          “SEC” means the Securities and Exchange Commission or any Governmental Authority
succeeding to any of its principal functions.




          “Secured Creditors” shall have the meaning assigned that term in the respective
Security Documents.




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




          “Security Document” shall mean and include each of the U.S. Security Agreement, each
Mortgage, the English Security Documents, the Dutch Pledge Agreement and the Scottish Security,
after the execution and delivery thereof, each Additional Security Document and any other related
document, agreement or grant pursuant to which Holdings or any of its Subsidiaries grants, perfects
or continues a security interest in favor of the Collateral Agent for the benefit of the Secured
Creditors.




          “Shareholders’ Agreements” shall have the meaning provided in Section 5.05(b).




          “Subsidiaries Guaranty” shall have the meaning provided in Section 5.09(a).




          “Subsidiary” shall mean, as to any Person, (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power to elect a majority
of the directors of such corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person
or (b) any partnership, limited liability company, association, joint venture or other entity in
which such Person
and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the
time. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of Holdings.




          “Subsidiary Guarantor” shall mean each Subsidiary of Holdings whether existing on the
Effective Date or established, created or acquired after the Effective Date, that has executed and
delivered the Subsidiaries Guaranty or has otherwise become a party thereto by means of the
execution and delivery of a joinder, accession or similar agreement (in form and substance
satisfactory to the Administrative Agent) by such Subsidiary unless and until such time as the
respective Subsidiary is released from all of its obligations under the Subsidiaries Guaranty in
accordance with the terms and provisions thereof. The Subsidiary Guarantors on the Effective Date
are listed on Schedule 1.01(b).




27









 








          “Syndication Date” shall mean the earlier of (a) the date on which the Administrative
Agent determines in its sole discretion (and notifies the Borrower) that the primary syndication
(and the resultant addition of Persons as Lenders pursuant to Section 11.04(b)) has been completed
and (b) December 16, 2010.




          “Syndication Letter” shall mean that certain Syndication Letter, dated the date
hereof, among Holdings, the Borrower and Cyan Partners, LP.




          “Synthetic Lease” shall mean a lease transaction under which the parties intend that
(a) the lease will be treated as an “operating lease” by the lessee and (b) the lessee will be
entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees)
of like property.




          “Tax” shall mean any tax, levy impost, duty fee, assessment or other charge or
withholding of a similar nature (including any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same).




          “Tax Credit” shall mean a credit against, relief or remission for, or repayment of any
Tax.




          “Tax Deduction” shall mean a deduction or withholding for or on account of Tax from a
payment under a Credit Document.




          “Tax Payment” shall mean either the increase in a payment made by a Credit Party to a
Lender or Agent under Section 4.04(a) or a payment under Section 4.04(b).




          “Tax Refund” shall mean a refund of any Tax Deduction.




          “Tax Sharing Agreements” shall have the meaning provided in Section 5.05(f).




          “Term Loan” shall mean have the meaning provided in Section 2.01.




          “Test Period” shall mean each period of four consecutive fiscal quarters of Holdings
then last ended, in each case taken as one accounting period; provided that for any Test
Period that includes fiscal quarters occurring prior to the Funding Date, the rules set forth in
the succeeding sentences shall apply. If the respective Test Period (a) includes the fiscal
quarter of Holdings ended December 31, 2009, Consolidated EBITDAX for such fiscal quarter shall be
deemed to be $18,140,000, and (b) includes the fiscal quarter of Holdings ended March 31, 2010,
Consolidated EBITDAX for such fiscal quarter shall be deemed to be $9,720,000; provided
that Consolidated EBITDAX for the foregoing periods shall be increased or decreased (as applicable)
in accordance with the definition of Pro Forma Basis by the amount of Consolidated EBITDAX for such
period attributable to (i) any Acquired Entity or Business acquired
pursuant to a Material Permitted Acquisition or Oil and Gas Properties acquired pursuant to
Material Permitted Business Investments and (ii) any Person or assets disposed of pursuant to any
Material Asset Sale, in each case consummated on or prior to December 31, 2010. Such attributable
Consolidated EBITDAX shall be determined on a basis consistent with the definition of Consolidated
EBITDAX with any necessary reference changes.




          “Third Party Letter of Credit” shall mean a letter of credit issued by an Approved
Third Party Credit Provider for the account of Holdings or any of its Subsidiaries in support of
obligations permitted by this Agreement.




          “Three-Year Strip Price” shall mean, as of any date of determination, (a) for the
36-month period commencing with the month immediately following the month in which the date of
determination occurs, the monthly futures contract prices for crude oil and natural gas for the 36



28









 






succeeding months as quoted on the applicable commodities exchange or other price quotation source
as contemplated in the definitions of “PV-10 Value” and “Probable Reserve Value” and (b) for
periods after such 36-month period, the average of such quoted prices for the period from and
including the 25th month in such 36-month period through the 36th month in such period.




          “Total Commitment” shall mean, at any time, the sum of the Commitments of each of the
Lenders at such time.




          “Total Leverage Ratio” shall mean, on any date of determination, the ratio of (a)
Consolidated Net Indebtedness on such date (calculated exclusive of any Indebtedness of Holdings or
any of its Subsidiaries of the type described in clause (g) of the definition of Indebtedness) to
(b) Consolidated EBITDAX for the Test Period most recently ended on or prior to such date;
provided that for purposes of any calculation of the Total Leverage Ratio pursuant to this
Agreement, Consolidated EBITDAX shall be determined on a Pro Forma Basis in accordance with the
definition thereof.




          “Transaction” shall mean, collectively, (a) the occurrence of the Funding Date, (b)
the consummation of the Refinancing, (c) the execution, delivery and performance by each Credit
Party of the Credit Documents to which it is a party, (d) the incurrence of Term Loans on the
Funding Date and the use of proceeds thereof, and (e) the payment of all fees and expenses in
connection with the foregoing.




          “Treaty” has the meaning provided in the definition of Treaty State appearing herein.




          “Treaty Lender” shall mean a Lender which:





     (a) is treated as a resident of a Treaty State for the purposes of the Treaty;




     (b) does not carry on a business in the jurisdiction of the Borrower through a
permanent establishment with which that Lender’s participation in the Loan is effectively
connected;




     (c) meets all other conditions in the relevant Treaty for full exemption from Tax
imposed by the jurisdiction of incorporation of the relevant Credit Party on interest,
except that for this purpose it shall be assumed that the following are satisfied:




     (i) any condition which relates (expressly or by implication) to there not
being a special relationship between the Borrower and a Lender or between both of
them and another person, or to the amounts or terms of any Term Loan or the Credit
Documents; and




     (ii) any necessary procedural formalities.



          “Treaty State” shall mean a jurisdiction having a double taxation agreement (a
“Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed
by the United Kingdom on interest.




          “UCC” shall mean the Uniform Commercial Code as from time to time in effect in the
relevant jurisdiction.




          “UK Sector” shall mean the jurisdiction of United Kingdom commonly referred to as the
UK Sector — North Sea.




29









 








          “Unfunded Current Liability” of any Plan subject to Title IV of ERISA shall mean the
amount, if any, by which the value of the accumulated plan benefits under such Plan determined on a
plan termination basis in accordance with actuarial assumptions at such time consistent with those
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the Fair Market Value of all
plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), but only to the extent such excess could reasonably be expected to result in
material liability to Holdings or a Subsidiary.




          “United Kingdom” and “UK” shall mean each of England, Wales, Northern Ireland
and Scotland, as the case may be, and shall include the U.K. Sector — North Sea.




          “United States” and “U.S.” shall each mean the United States of America and
any of its territories or possessions (including U.S. Federal waters in the Gulf of Mexico).




          “Unrestricted” shall mean, when referring to cash or Cash Equivalents of Holdings or
any of its Subsidiaries, that such cash or Cash Equivalents are not Restricted; provided
that cash on deposit in the BNP Cash Collateral Account shall be deemed to be Unrestricted cash of
Holdings and its Subsidiaries.




          “U.S. Credit Party” shall mean each Credit Party incorporated under the laws of the
United States or any state thereof.




          “U.S. Oil and Gas Properties” shall mean the Oil and Gas Properties of Holdings and
its U.S. Subsidiaries located in the United States.




          “U.S. Security Agreement” shall have the meaning set forth in Section 5.09(b).




          “U.S. Subsidiary” of any Person shall mean any Subsidiary of such Person incorporated
or organized in the United States or any State or territory thereof of the District or Columbia.




          “VAT” shall mean value added tax as provided for in the UK’s Value Added Tax Act 1994
and any other tax of a similar nature in any jurisdiction.




          “Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100% of
whose capital stock is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (b) any partnership, limited liability company, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such
Person has a 100% equity interest at such time (other than, in the case of a Non-U.S. Subsidiary of
Holdings, with respect to the
preceding clauses (a) and (b), directors’ qualifying shares and/or other nominal amounts of
shares required to be held by Persons other than Holdings and its Subsidiaries under applicable
law).




          “Wholly-Owned Subsidiary Guarantor” shall mean, any Wholly-Owned Subsidiary of
Holdings which is a Subsidiary Guarantor.




          “Wholly-Owned U.S. Subsidiary” shall mean, as to any Person, any U.S. Subsidiary of
such Person that is a Wholly-Owned Subsidiary.




          SECTION 2. Amount and Terms of Credit.




          2.01. The Commitments. Subject to and upon the terms and conditions set forth herein,
each Lender severally agrees to make a term loan (each, a “Term Loan” and, collectively,
the “Term Loans”) to the Borrower, which such Term Loans (i) shall be made pursuant to a
single drawing




30









 







on the Funding Date, (ii) shall be denominated in Dollars and (iii) shall be made by
each Lender in the aggregate principal amount which does not exceed the Commitment of such Lender
on the Funding Date. All references herein to a “Term Loan” or “Term Loans”, to “principal” or the
“principal amount” of any Term Loan or Term Loans and other terms of like import shall mean 100% of
the Total Commitment (immediately prior to the incurrence of Term Loans on the Funding Date) Term
Loans incurred by the Borrower on the Funding Date plus PIK Interest that is added to
outstanding principal of Term Loans pursuant to Section 2.06 minus repayments and
prepayments of Term Loans pursuant to this Agreement. Once repaid, Terms Loans may not be
reborrowed.




          2.02. Notice of Borrowing. (a) When the Borrower desires to incur Term Loans on the
Funding Date, the Borrower shall give the Administrative Agent at the Notice Office at least one
Business Day’s prior notice thereof; provided that any such notice shall be deemed to have
been given on a certain day only if given before 11:00 A.M. (New York City time) on such day. Such
notice (the “Notice of Borrowing”), shall be irrevocable and shall be in writing, or by
telephone promptly confirmed in writing, in the form of Exhibit A, appropriately completed to
specify: (i) the aggregate principal amount of the Term Loans to be incurred pursuant to such
Borrowing and (ii) the date of such Borrowing (which shall be a Business Day). The Administrative
Agent shall promptly give each Lender notice of such proposed Borrowing, of such Lender’s
proportionate share thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.




          (b) Without in any way limiting the obligation of the Borrower to confirm in writing any
telephonic notice of any Borrowing or prepayment of Term Loans, the Administrative Agent may act
without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case
may be, believed by the Administrative Agent in good faith to be from an Authorized Officer of the
Borrower, prior to receipt of written confirmation. In each such case, the Borrower hereby waives
the right to dispute the Administrative Agent’s record of the terms of such telephonic notice of
the Borrowing or prepayment of Term Loans, as the case may be, absent manifest error.




          2.03. Disbursement of Funds. No later than 1:00 P.M. (New York City time) on the date
specified in the Notice of Borrowing, each Lender will make available its pro rata
portion (determined in accordance with Section 2.05) of the Borrowing requested to be made on such
date. All such amounts will be made available in Dollars and in immediately available funds at the
Payment Office, and the Administrative Agent will make available to the Borrower at the Payment
Office the aggregate of the amounts so made available by the Lenders. Unless the Administrative
Agent shall have been notified by any Lender prior to the date of such Borrowing that such Lender
does not intend to make available to the Administrative Agent such Lender’s portion of the
Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made
such amount available to the
Administrative Agent on such date and the Administrative Agent may (but shall not be obligated
to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Administrative Agent by such Lender,
the Administrative Agent shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative
Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the
Borrower shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent also shall be entitled to recover on demand from such Lender or the Borrower,
as the case may be, interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the Borrower until the date
such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to
(i) if recovered from such Lender, the overnight Federal Funds Rate for the first three days and at
the interest rate otherwise applicable to the Term Loans for each day thereafter and (ii) if
recovered from the Borrower, the rate of interest applicable to the Term Loans, as determined
pursuant to Section 2.06. Nothing in this Section



31









 






2.03 shall be deemed to relieve any Lender from
its obligation to make Term Loans hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any failure by such Lender to make Term Loans hereunder.




          2.04. Notes. (a) The Borrower’s obligation to pay the principal of, and interest on,
the Term Loans made by each Lender shall be stated in the Register maintained by the Administrative
Agent pursuant to Section 11.15 and shall also be stated in a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B, with blanks appropriately
completed in conformity herewith (each, a “Note” and, collectively, the “Notes”).




          (b) Each Lender will note on its internal records the amount of Term Loans made by it (as
well as any increase thereto as a result of the payment of PIK Interest) and each payment in
respect thereof and prior to any transfer of any of its Notes will endorse on the reverse side
thereof the outstanding principal amount thereof. Failure to make any such notation or any error
in such notation shall not affect the Borrower’s obligations in respect of such Term Loans.
Although under no obligation to do so, any Lender may, following an increase in the outstanding
principal amount of its Term Loans as a result of payment of PIK Interest, request for a
replacement Note in an aggregate principal amount which reflects such increase or increases
(although any failure of a Lender to request such replacement Note shall in no event affect the
Borrower’s obligation to pay the entire principal amount of the Term Loans of such Lender).




          (c) Notwithstanding anything to the contrary contained above in this Section 2.04, no failure
of any Lender to obtain, maintain or produce a Note shall affect, or in any manner impair, the
obligations of the Borrower to pay the Term Loans (and all related Obligations) incurred by the
Borrower which would otherwise be stated therein in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant
to any Credit Document. Any Lender which does not have a Note shall in no event be required to
make the notations otherwise described in preceding clause (b). At any time when any Lender
becomes a party to this Agreement, the Borrower shall promptly execute and deliver to the
respective Lender a Note in an amount equal to the aggregate principal amount of the Term Loans
made or held by such Lender.




          2.05. Pro Rata Borrowings. The Borrowing of Term Loans under this Agreement shall be
incurred from the Lenders pro rata on the basis of their Commitments. It is
understood that no Lender shall be responsible for any default by any other Lender of its
obligation to make Term Loans hereunder and that each Lender shall be obligated to make the Term
Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make
its Term Loans hereunder.




          2.06. Interest. (a) The Borrower agrees to pay cash interest (“Cash
Interest”) in respect of the unpaid principal amount of the Term Loans from the date of
Borrowing thereof until the maturity thereof (whether by acceleration or otherwise), at a rate per
annum equal to 12%.




          (b) In addition to the payment of Cash Interest pursuant to preceding clause (a), the
Borrower shall pay additional interest on the Term Loans at a rate per annum equal to 3.0% “in
kind”, with the amount of interest accruing pursuant to this clause (b) being added to the
outstanding principal amount of the Term Loans on each Interest Payment Date; provided
that in the event the Borrower provides written notice thereof to the Administrative Agent prior
to 11:00 A.M. (New York City time) at least two Business Days prior to the relevant Interest
Payment Date, the Borrower may pay in cash interest accrued pursuant to this clause (b) that is
payable on such Interest Payment Date. Such paid-in-kind interest (“PIK Interest”) shall
be deemed paid, and the principal amount of the Term Loans as so increased shall be deemed “Term
Loans” hereunder and under the other Credit Documents for all purposes and shall thereafter accrue
interest in accordance with the terms of this Agreement.




32









 








          (c) (i) Overdue principal and, to the extent permitted by law, overdue interest in respect of
each Term Loan and (ii) all other overdue amounts payable hereunder and under any other Credit
Document shall bear interest at a rate per annum equal to 17%. Interest that accrues under this
Section 2.06(c) shall be payable on demand.




          (d) Accrued (and theretofore unpaid) interest on Term Loans shall be payable (i) quarterly in
arrears on each Interest Payment Date, (ii) on the date of any repayment or prepayment (on the
amount repaid or prepaid) and (iii) at maturity (whether by acceleration or otherwise) and, after
such maturity, on demand.




          2.07. Change of Lending Office. Each Lender agrees that on the occurrence of any
event giving rise to the operation of Section 2.09 or 4.04 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such
Lender) to designate another lending office for any Term Loans affected by such event;
provided that such designation is made on such terms that such Lender and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing in this Section
2.07 shall affect or postpone any of the obligations of the Borrower or the right of any Lender
provided in Section 2.09 or 4.04.




          2.08. Replacement of Lenders. (a) If any Lender becomes a Defaulting Lender, (b) upon
the occurrence of any event giving rise to the operation of Section 2.09 or 4.04 with respect to
any Lender which results in such Lender charging to the Borrower increased costs in excess of those
being generally charged by the other Lenders or (c) in the case of a refusal by a Lender to consent
to a proposed change, waiver, discharge or termination with respect to this Agreement which has
been approved by the Required Lenders as (and to the extent) provided in Section 11.12(b), the
Borrower shall have the right, in accordance with Section 11.04(b), if no Default or Event of
Default then exists or would exist after giving effect to such replacement, to replace such Lender
(the “Replaced Lender”) with one or more other Eligible Transferees, none of whom shall
constitute a Defaulting Lender at the time of such replacement (collectively, the “Replacement
Lender”) and each of which shall be reasonably acceptable to the Administrative Agent;
provided that:





     (i) at the time of any replacement pursuant to this Section 2.08, the Replacement
Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section
11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to be paid by the
Borrower) pursuant to which the Replacement Lender shall acquire all of the Commitments (if
any) and outstanding Term Loans of the Replaced Lender and, in connection therewith, shall
pay to the Replaced Lender in respect thereof an amount equal to the principal of, and all
accrued and unpaid interest on, all outstanding Term Loans of the respective Replaced
Lender; and




     (ii) all obligations of the Borrower then owing to the Replaced Lender (other than
those specifically described in clause (i) above in respect of which the assignment purchase
price has been, or is concurrently being, paid) shall be paid in full to such Replaced
Lender concurrently with such replacement.


Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this
Section 2.08, the Administrative Agent shall be entitled (but not obligated) and authorized to
execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such
Assignment and Assumption Agreement so executed by the Administrative Agent and the Replacement
Lender shall be effective for purposes of this Section 2.08 and Section 11.04. Upon the execution
of the respective Assignment and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above, recordation of the assignment on the Register by the Administrative
Agent pursuant to Section 11.15 and delivery to the Replacement Lender of the appropriate Note or
Notes executed by the Borrower, the


33









 






 Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation, Sections 2.09,
4.04, 10.06, 11.01 and 11.06), which shall survive as to such Replaced Lender.




          2.09. Capital Adequacy. If any Lender determines that after the Effective Date the
introduction of or any change in any applicable law or governmental rule, regulation, order,
guideline, directive or request (whether or not having the force of law) concerning capital
adequacy, or any change in interpretation or administration thereof by the NAIC or any Governmental
Authority, central bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Lender or any corporation controlling such
Lender based on the existence of such Lender’s Commitment hereunder or its obligations hereunder,
then the Borrower agrees to pay to such Lender, upon its written demand therefor, such additional
amounts as shall be required to compensate such Lender or such other corporation for the increased
cost to such Lender or such other corporation or the reduction in the rate of return to such Lender
or such other corporation as a result of such increase of capital. In determining such additional
amounts, each Lender will act reasonably and in good faith and will use averaging and attribution
methods which are reasonable; provided that such Lender’s determination of compensation
owing under this Section 2.09 shall, absent manifest error, be final and conclusive and binding on
all the parties hereto. Each Lender, upon determining that any additional amounts will be payable
pursuant to this Section 2.09, will give prompt written notice thereof to the Borrower, which
notice shall show in reasonable detail the basis for calculation of such additional amounts.




          2.10. Incremental Term Loans. The Borrower may at any time or from time to time
after the Syndication Date (or earlier if approved by the Administrative Agent), by notice to the
Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of
the Lenders), request one or more incremental term loans be made hereunder (the “Incremental
Term Loans”); provided that (i) both at the time of any such request and upon the
effectiveness of any Incremental Amendment referred to below, no Default or Event of Default shall
exist and at the time that
any such Incremental Term Loan is made (and after giving effect thereto) no Default or Event
of Default shall exist and (ii) Holdings shall be in compliance with the covenants set forth in
Sections 8.08 through 8.10 determined on a Pro Forma Basis as of the date of the most recently
ended Test Period (or, if no Test Period cited in such sections has passed, the covenants in
Sections 8.08 through 8.10 for the first Test Period cited in such Sections shall be satisfied as
of the last four quarters ended), in each case, as if such Incremental Term Loans had been
outstanding on the last day of such fiscal quarter of Holdings for testing compliance therewith.
Each Incremental Term Loan shall be in an aggregate principal amount that is not less than
$5,000,000. Notwithstanding anything to the contrary herein, the aggregate principal amount of the
Incremental Term Loans shall not exceed $10,000,000. The Incremental Term Loans shall have the
same terms and conditions applicable to the Term Loans. Each notice from the Borrower pursuant to
this Section 2.10 shall set forth the requested amount of the relevant Incremental Term Loans.
Incremental Term Loans may be made by any existing Lender (but no existing Lender will have any
obligation to make a portion of any Incremental Term Loan) or by any other bank or other financial
institution that is an Eligible Transferee (any such other bank or other financial institution
being called an “Additional Lender”); provided that the Administrative Agent shall
have consented (not to be unreasonably withheld, conditioned or delayed) to such Additional
Lender’s making such Incremental Term Loans. Commitments in respect of Incremental Term Loans shall
be provided pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as
appropriate, the other Credit Documents, executed by Holdings, the Borrower, each Lender agreeing
to provide such commitments, if any, each Additional Lender, if any, and the Administrative Agent.
The Incremental Amendment may, with the consent of Holdings, the Borrower and the Administrative
Agent, but without the consent of any other Credit Party, the Collateral Agent or Lenders, effect
such amendments to this Agreement and the



34









 






other Credit Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the
provisions of this Section 2.10. The Borrower may use the proceeds of the Incremental Term Loans
for any purpose not prohibited by this Agreement. No Lender shall be obligated to provide any
Incremental Term Loans, unless it so agrees.




          SECTION 3. Fees; Reductions of Commitment.




          3.01. Fees. (a) The Borrower agrees to pay to the Administrative Agent such fees as
may have been, or are hereafter, agreed to in writing from time to time by Holdings, or any of its
Subsidiaries and the Administrative Agent.




          (b) Voluntary prepayments or repayments of principal of Term Loans pursuant to Sections 4.01
and all repayments of principal of Term Loans required pursuant to Section 9 as a result of the
acceleration thereof, will be subject to payment to the Administrative Agent, for the ratable
account of each Lender with outstanding Term Loans, of a fee as follows: (i) if made during the
period from and including August 16, 2011 to and including August 15, 2012, an amount equal to
3.0% of the aggregate principal amount of such prepayment or repayment and (ii) if made during the
period from and including August 16, 2012 to and including August 15, 2013, an amount equal to
1.0% of the aggregate principal amount of such prepayment or repayment. Such fees shall be due
and payable upon the date of any voluntary prepayment or the due date of such required repayment,
as the case may be.




          3.02. Voluntary Termination or Reduction of Commitments. Upon at least three Business
Day’s prior written notice to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the
right, at any time or from time to time prior to the Funding Date, without premium or penalty to
terminate the Total Commitment in whole, or reduce it in part, pursuant to this Section 3.02, in an
integral multiple of $1,000,000 in the case of partial reductions to the Total Commitment;
provided that each such reduction shall apply proportionately to permanently reduce the
Commitment of each Lender.




          3.03. Mandatory Reduction of Commitments. (a) The Total Commitment (and the
Commitment of each Lender) shall terminate in its entirety at 5:00 p.m. on August 21, 2010 unless
the Funding Date shall have occurred on or prior to such time.




          (b) In addition to any other mandatory commitment reductions pursuant to this Section 3.03,
the Total Commitment (and the Commitment of each Lender) shall terminate in its entirety on the
Funding Date (after giving effect to the incurrence of Term Loans on such date).




          SECTION 4. Prepayments; Payments; Taxes.




          4.01. Voluntary Prepayments. The Borrower shall not be permitted to make any
voluntary prepayments of Term Loans prior to August 16, 2011. The Borrower shall have the right to
prepay the Term Loans, without premium or penalty (except as provided in Section 3.01(b)), in whole
or in part at any time and from time to time on or after August 16, 2011 (but not before such date)
on the following terms and conditions: (i) the Borrower shall give the Administrative Agent prior
to 12:00 Noon (New York City time) at the Notice Office at least three Business Days’ prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to prepay Term Loans,
which notice shall specify the amount of such prepayment and which notice the Administrative Agent
shall, promptly transmit to each of the Lenders; (ii) each partial prepayment of Term Loans
pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $1,000,000 (or
such lesser amount as is acceptable to the Administrative Agent); (iii) each prepayment of Term
Loans pursuant to this Section 4.01 shall be applied pro rata among such Term Loans; (iv) each
prepayment of Term Loans pursuant to this Section 4.01 shall reduce the then remaining Scheduled
Repayments on a pro rata basis (based on the then



35









 






remaining principal amount of
each such Scheduled Repayments after giving effect to all prior reductions thereto); and (v) at the
time of any such prepayment of Term Loans, the Borrower shall pay to the Administrative Agent the
applicable fee required under Section 3.01(b). No voluntary prepayments of Term Loans shall be
permitted except in accordance with this Section 4.01.




          4.02. Mandatory Repayments. (a) In addition to any other mandatory repayments
pursuant to this Section 4.02, on the last Business Day of each fiscal quarter ending on each date
set forth below and on the Maturity Date (each, a “Scheduled Repayment Date”), the Borrower
shall be required to repay that principal amount of Term Loans, to the extent then outstanding, as
is set forth opposite each such date below (each such repayment, as the same may be reduced as
provided in Section 4.01 or 4.02(g), a “Scheduled Repayment”):




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






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




          (c) In addition to any other mandatory repayments pursuant to this Section 4.02, within five
Business Days following each date on or after the Funding Date upon which Holdings or any of its
Subsidiaries receives any cash proceeds from any issuance or incurrence by Holdings or any of its
Subsidiaries of Indebtedness (other than Indebtedness permitted to be incurred pursuant to Section
8.04),



36









 






an amount equal to 100% of the Net Cash Proceeds of the respective issuance or incurrence
of Indebtedness shall be applied as a mandatory repayment in accordance with the requirements of
Sections 4.02(g) and (h).




          (d) In addition to any other mandatory repayments pursuant to this Section 4.02, within five
Business Days following each date on or after the Funding Date upon which Holdings or any of its
Subsidiaries receives any cash proceeds from any Material Asset Sale, an amount equal to 100% of
the Net Sale Proceeds therefrom shall be applied as a mandatory repayment in accordance with the
requirements of Sections 4.02(g) and (h); provided, however, that such Net Sale
Proceeds shall not be required to be so applied so long as no Default or Event of Default then
exists and the Borrower delivers a certificate (which certificate shall set forth the estimates of
the Net Sale Proceeds to be so expended) to the Administrative Agent within five Business Days
following receipt of such Net Sale Proceeds stating that such Net Sale Proceeds shall be used to
purchase assets (including pursuant to Permitted Acquisitions and Permitted Business Investments,
but excluding working capital) used or to be used in the businesses permitted pursuant to Section
8.14 or to make Capital Expenditures, in each case within the Relevant Reinvestment Period, and
provided further, that if all or any portion of such Net Sale Proceeds not
required to be so applied as provided above in this Section 4.02(d) are not so reinvested within
such Relevant Reinvestment Period, such remaining portion shall be applied on the last day of such
Relevant Reinvestment Period as otherwise provided above in this Section 4.02(d) without regard to
the preceding proviso.




          (e) In addition to any other mandatory repayments pursuant to this Section 4.02, within five
Business Days following each date on or after the Funding Date upon which Holdings or any of its
Subsidiaries receives any cash proceeds from any Recovery Event, an amount equal to 100% of the
Net Insurance Proceeds from such Recovery Event shall be applied as a mandatory repayment in
accordance with the requirements of Sections 4.02(g) and (h); provided, however,
that such Net
Insurance Proceeds shall not be required to be so applied so long as no Default or Event of
Default then exists and the Borrower has delivered a certificate to the Administrative Agent
within five Business Days following receipt of such Net Insurance Proceeds stating that such Net
Insurance Proceeds shall be used to replace or restore any properties or assets in respect of
which such Net Insurance Proceeds were paid, to purchase assets used or to be used in the business
permitted pursuant to Section 8.14 or to make Capital Expenditures, in each case within the
Relevant Reinvestment Period (which certificate shall set forth the estimates of the Net Insurance
Proceeds to be so expended), and provided further, that if all or any portion of
such Net Insurance Proceeds not required to be so applied pursuant to the preceding proviso are
not so used within the Relevant Reinvestment Period, such remaining portion shall be applied on
the last day of such Relevant Reinvestment Period as provided above in this Section 4.02(e)
without regard to the immediately preceding proviso.




          (f) In addition to any other mandatory repayments pursuant to this Section 4.02, on each
Excess Cash Payment Date, an amount equal to 50% of the Excess Cash Flow for the related Excess
Cash Payment Period shall be applied as a mandatory repayment in accordance with the requirements
of Sections 4.02(g) and (h).




          (g) Each amount required to be applied pursuant to Sections 4.02(b), (c), (d), (e) and (f) in
accordance with this Section 4.02(g) shall be applied to repay the outstanding principal amount of
the Term Loans, with such repayment of Term Loans to be applied to reduce the then remaining
Scheduled Repayments on a pro rata basis (based upon the then remaining principal
amounts of such Scheduled Repayments after giving effect to all prior reductions thereto).




          (h) Each repayment of any Term Loans made pursuant to Sections 4.02(a), (b), (c), (d), (e)
and (f) shall be applied pro rata among the Lenders holding such Term Loans.




37









 








          (i) In addition to any other mandatory repayments pursuant to this Section 4.02, all then
outstanding Term Loans shall be repaid in full on the Maturity Date.




          4.03. Method and Place of Payment. All payments of principal and Cash Interest under
this Agreement and under any Note shall be made to the Administrative Agent for the account of the
Lender or Lenders entitled thereto not later than 12:00 Noon (New York City time) on the date when
due and shall be made in Dollars in immediately available funds at the Payment Office. Whenever
any payment to be made hereunder or under any Note shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable at the applicable rate during such
extension.




          4.04. Tax Gross-Up and Indemnities




          (a) Tax gross-up.




          (i) Each Credit Party shall make all payments to be made by it without any Tax Deduction,
unless a Tax Deduction is required by law.




          (ii) the Borrower shall promptly upon becoming aware that a Credit Party must make a Tax
Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the
Administrative Agent accordingly.




          (iii) If a Tax Deduction is required by law to be made by a Credit Party, the amount of the
payment due from that Credit Party shall be increased to an amount which (after making any Tax
Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction
had been required.




          (iv) If a Credit Party is required to make a Tax Deduction, that Credit Party shall make that
Tax Deduction and any payment required in connection with that Tax Deduction within the time
allowed and in the minimum amount required by law.




          (v) Within thirty days of making either a Tax Deduction or any payment required in connection
with that Tax Deduction, the Credit Party making that Tax Deduction shall deliver to the
Administrative Agent for the Lender entitled to the payment a statement under section 975 of the
U.K.’s Income Tax Act 2007 evidence reasonably satisfactory to that Lender that the Tax Deduction
has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.




          (vi) A Treaty Lender (to the extent it is legally entitled to), and each Credit Party which
makes a payment to which that Treaty Lender is entitled, shall co-operate in completing any
procedural formalities necessary for that Credit Party to obtain authorization to make that payment
without a Tax Deduction.




          (vii) Any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether
or not such Lender is subject to United States backup withholding or information reporting
requirements.




          (b) Tax indemnity.




          (i) the Borrower shall (within ten Business Days of demand by the Administrative Agent) pay to
a Protected Party an amount equal to the loss, liability or cost which that Protected Party



38









 






determines will be or has been suffered for or on account of Tax by that Protected Party in respect
of a Credit Document.




          (ii) Paragraph (i) above shall not apply:




          (A) with respect to any Tax assessed on a Lender or Agent:





     (1) under the law of the jurisdiction in which that Lender or Agent is
incorporated or, if different, the jurisdiction (or jurisdictions) in which that
Lender or Agent is treated as resident for tax purposes; or




     (2) under the law of the jurisdiction in which that Lender’s lending office is
located in respect of amounts received or receivable in that jurisdiction,




     if that Tax is imposed on or calculated by reference to the net income received or
receivable (but not any sum deemed to be received or receivable) by that Agent or Lender; or



          (B) to the extent a loss, liability or cost:





     (1) is compensated for by an increased payment under Section 4.04(a); or




     (2) would have been compensated for by an increased payment under Section
4.04(a) but was not so compensated solely because one of the exclusions in paragraph
(iv) of Section 4.04(a) applied.




(C) to the extent such loss, liability or cost arises after the Effective Date solely as a
result of a voluntary act by the relevant Lender.



          (iii) A Protected Party making, or intending to make a claim under paragraph (a) above shall
promptly notify the Administrative Agent of the event which will give, or has given, rise to the
claim, following which the Administrative Agent shall notify the Borrower.




          (iv) A Protected Party shall, on receiving a payment from a Credit Party under this Section
4.04(b), notify the Administrative Agent.




          (c) Tax Refund. If a Credit Party makes a Tax Payment and the relevant Lender or
Agent determines that:




          (i) a Tax Refund is attributable either to an increased payment of which that Tax Payment
forms part, or to that Tax Payment; and




          (ii) that Lender or Agent has obtained, utilized and retained that Tax Refund,




the Lender or Agent shall pay an amount to the Credit Party which that Lender or Agent reasonably
determines will leave it (after that payment) in the same after-Tax position as it would have been
in had the Tax Payment not been required to be made by the Credit Party. Notwithstanding any
provision in this Agreement or any other Credit Document, nothing in this Section 4.04 shall
require a Lender or the Administrative Agent to disclose any confidential information to any Credit
Party (including, without limitation, its tax returns or its calculations).




          (d) Stamp Taxes. The Borrower shall pay and, within three Business Days of demand,
indemnify each Lender and each Agent against any cost, loss or liability that Lender or any




39









 







Agent
incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of
any Credit Document.




          (e) VAT.




          (i) All amounts set out, or expressed in a Credit Document to be payable by any Credit Party
to a Lender or Agent which (in whole or in part) constitute the consideration for a supply or
supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such
supply or supplies, and accordingly, subject to paragraph (ii) below, if VAT is or becomes
chargeable on any supply made by any Lender or Agent to any Credit Party under a Credit Document,
that Credit Party shall pay to the Lender or Agent (in addition to and at the same time as paying
any other consideration for such supply) an amount equal to the amount of such VAT (and such Lender
or Agent shall promptly provide an appropriate VAT invoice to such Credit Party).




          (ii) If VAT is or becomes chargeable on any supply made by any Lender or Agent (the
“Supplier”) to any other Lender or Agent (the “Recipient”) under a Credit Document, and any Credit
Party other than the Recipient (the “Subject Party”) is required by the terms of any Credit
Document to pay an amount equal to the consideration for such supply to the Supplier (rather than
being required to reimburse the Recipient in respect of that consideration), such Credit Party
shall also pay to the Supplier (in addition to and at the same time as paying such amount) an
amount equal to the amount of such VAT.
The Recipient will promptly pay to the Subject Party an amount equal to any credit or
repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably
determines in respect of such VAT.




          (iii) Where a Credit Document requires any Credit Party to reimburse or indemnify a Lender or
Agent for any cost or expense, the Credit Party shall reimburse or indemnify (as the case may be)
such Lender or Agent for the full amount of such cost or expense, including such part thereof as
represents VAT, save to the extent that such Lender or Agent reasonably determines that it is
entitled to credit or repayment in respect of such VAT from the relevant tax authority.




          (iv) Any reference in this Section 4.04(e) to any Credit Party shall, at any time when such
Credit Party is treated as a member of a group for VAT purposes, include (where appropriate and
unless the context otherwise requires) a reference to the representative member of such group at
such time (the term “representative member” to have the same meaning as in the Value Added Tax Act
1994).




          (f) For the purposes of this Section 4.04, any reference to a U.K. statutory provision
includes a reference to that provision as modified or replaced from time to time after the
Effective Date.




          SECTION 5. Conditions Precedent to the Funding Date. The obligation of each Lender to
make Term Loans on the Funding Date is subject at the time of the making of such Term Loans to the
satisfaction of the following conditions:




          5.01. Effective Date; Notes. On or prior to the Funding Date, (a) the Effective Date
shall have occurred as provided in Section 11.10 and (b) there shall have been delivered to the
Administrative Agent for the account of each of the Lenders the appropriate Notes executed by the
Borrower, in the amount, maturity and as otherwise provided herein.




          5.02. Officer’s Certificate. On the Funding Date, the Administrative Agent shall have
received a certificate, dated the Funding Date and signed on behalf of the Borrower by the Chairman
of the Board, the Chief Executive Officer, any Director, the President or any Vice President of the
Borrower, certifying on behalf of the Borrower that all of the conditions in Sections 5.06 through
5.08, inclusive, and 5.16 have been satisfied on such date.





40











 





          5.03. Opinions of Counsel. On the Funding Date, the Administrative Agent shall
have received (a) from Vinson & Elkins LLP, special New York and Texas counsel to the Credit
Parties, an opinion addressed to the Administrative Agent, the Collateral Agent and each of the
Lenders and dated the Funding Date covering the matters set forth in Exhibit C-1 and such other
matters incident to the transactions contemplated herein as the Administrative Agent may reasonably
request, (b) from Woodburn and Wedge, special Nevada counsel to Holdings, an opinion addressed to
the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Funding Date
covering the matters set forth in Exhibit C-2 and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request, (c) from Nauta Dutilh,
special Dutch counsel to the Agents, an opinion addressed to the Administrative Agent, the
Collateral Agent and each of the Lenders and dated the Funding Date covering the matters set forth
in Exhibit C-3 and such other matters incident to the transactions contemplated herein as the
Administrative Agent shall reasonably request, (d) from White & Case LLP, special English counsel
to the Agents, an opinion addressed to the Administrative Agent, the Collateral Agent and each of
the Lenders and dated the Funding Date covering the matters set forth in Exhibit C-4 and such other
matters incident to the transactions contemplated herein as the Administrative Agent shall
reasonably request, and (e) from local counsel in each state in which a Mortgaged Property
designated as such in Schedule 6.12(b) is located, an opinion in form and substance satisfactory to
the Administrative Agent addressed to the Administrative Agent, the Collateral Agent and each of
the Lenders and dated the Funding Date covering such matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request.



          5.04. Company Documents; Proceedings; etc. (a) On the Funding Date, the
Administrative Agent shall have received a certificate from each Credit Party, dated the Funding
Date, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, any Managing Director, any Director, any Manager or the General Partner of such Credit
Party and attested to by another officer of such Credit Party, in the form of Exhibit D-1, D-2 or
D-3 (as appropriate given the jurisdiction of organization of such Credit Party) with appropriate
insertions, together with copies of the certificate or articles of incorporation, by-laws, deed of
incorporation, up-to-date trade register excerpt (or other equivalent organizational documents), as
applicable, of such Credit Party and the resolutions and, as applicable, shareholder consents of
such Credit Party referred to in such certificate, and each of the foregoing shall be in form and
substance acceptable to the Administrative Agent.



          (b) On or prior to the Funding Date, the Administrative Agent shall have received all records
of Business proceedings, governmental approvals, good standing certificates and bring-down
telegrams or facsimiles, if any, which the Administrative Agent reasonably may have requested such
documents and papers where appropriate to be certified by proper Business or Governmental
Authorities.



          5.05. Employee Benefit Plans; Shareholders’ Agreements; Management Agreements; Employment
Agreements; Collective Bargaining Agreements; Tax Sharing Agreements; Existing Indebtedness
Agreements; Project Documents. On or prior to the Funding Date, there shall have been made
available to the Administrative Agent true and correct copies of the following documents:




     (a) all Plans (and for each Plan that is required to file an annual report on Internal
Revenue Service Form 5500-series, a copy of the most recent such report (including, to the
extent required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and for each Plan that is
a “single-employer plan” as defined in Section 4001(a)(15) of ERISA, the most recently
prepared actuarial valuation therefor) and any other “employee benefit plans” as defined in
Section 3(3) of ERISA, and any other material agreements, plans or arrangements, sponsored,
maintained, or



41









 







contributed to by (or to which there is an obligation to contribute of)
Holdings, any of its Subsidiaries, or any ERISA Affiliate for the benefit of current or
former employees of Holdings or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any Multiemployer Plan, only
to the extent that any document described herein is in the possession of Holdings, and/or
any ERISA Affiliate or is reasonably available thereto from the sponsor or trustee of any
such plan) (collectively, the “Employee Benefit Plans”);




     (b) all agreements entered into by Holdings or any of its Subsidiaries governing the
terms and relative rights of its Equity Interests and any agreements entered into by its
shareholders relating to any such entity with respect to its Equity Interests (collectively,
the “Shareholders’ Agreements”);




     (c) all material agreements with members of, or with respect to, the management of
Holdings or any of its Subsidiaries other than employee agreements not addressing the
management of Holdings and its Subsidiaries (collectively, the “Management
Agreements”);




     (d) all material employment agreements entered into by Holdings or any of its
Subsidiaries and in effect on the Funding Date (collectively, the “Employment
Agreements”);




     (e) all collective bargaining agreements applying or relating to any employee of
Holdings or any of any of its Subsidiaries (collectively, the “Collective Bargaining
Agreements”);




     (f) all tax sharing, tax allocation and other similar agreements entered into by
Holdings or any of its Subsidiaries (collectively, the “Tax Sharing Agreements”);




     (g) all non-compete agreements entered into by Holdings or any of its Subsidiaries
which restrict the activities of Holdings or any of its Subsidiaries (collectively, the
“Non-Compete Agreements”);




     (h) all agreements evidencing or relating to any individual item of Indebtedness of
Holdings or any of its Subsidiaries in a principal amount in excess of $5,000,000 which is
to remain outstanding after giving effect to the Funding Date (the “Existing
Indebtedness Agreements”); and




     (i) all Project Documents.


all of which Employee Benefit Plans, Shareholders’ Agreements, Management Agreements, Employment
Agreements, Collective Bargaining Agreements, Tax Sharing Agreements, Non-Compete Agreements,
Existing Indebtedness Agreements and Project Documents shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall be in full force and effect on the Funding Date
(except Plans that are not currently in effect but to which Holdings, any of its Subsidiaries, or
any ERISA Affiliates contributed (or had an obligation to contribute) during the five-year period
preceding the Funding Date).



Notwithstanding anything to the contrary contained above in this Section 5.05, the requirements
with respect to the delivery (and certification) of agreements and documents described in this
Section 5.05 shall be deemed satisfied to the extent such agreements and documents have been
publicly filed by Holdings with the SEC.




          5.06. Consummation of the Refinancing. (a) On the Funding Date (contemporaneously
with the making of the Term Loans on such date), all Indebtedness of Holdings and its Subsidiaries
under the Existing Credit Agreements and all documentation related thereto shall have



42









 







been repaid in full, together with all fees and other amounts owing thereon, all commitments thereunder shall
have been terminated and all letters of credit issued pursuant thereto shall have been terminated
or cash collateralized in a manner satisfactory to the Administrative Agent.



          (b) On the Funding Date (contemporaneously with the making of Term Loans on such date), all
security interests in respect of, and Liens securing, the Indebtedness under the Existing Credit
Agreements created pursuant to the security documentation relating thereto shall have been
terminated and released, and the Collateral Agent shall have received all such releases as may
have been requested by the Collateral Agent, which releases shall be in form and substance
satisfactory to the Collateral Agent. Without limiting the foregoing, there shall have been
delivered to the Collateral Agent (i) proper termination or discharge of debt statements and/or
forms (Form UCC-3 or the appropriate equivalent in each relevant jurisdiction) for filing under
the UCC or equivalent statute or regulation of each relevant jurisdiction where a financing
statement or application for registration (Form UCC-1 or the appropriate equivalent in each
relevant jurisdiction) was filed with respect to Holdings or any of its Subsidiaries in connection
with the security interests created with respect to the Existing Credit Agreements, (ii)
terminations, releases or reassignments of any security interest in, or Lien on, any patents,
trademarks, copyrights, or similar interests of Holdings or any of its Subsidiaries on which
filings have been made and (iii) terminations of all mortgages, leasehold mortgages, hypothecs,
charges, pledges, assignments, deeds of trust or equivalent local security or Liens created with
respect to property of Holdings or any of its Subsidiaries, in each case, to secure the
obligations under the Existing Credit Agreements, all of which shall be in form and substance
satisfactory to the Administrative Agent.



          (c) On the Funding Date and after giving effect to the consummation of the Transaction,
Holdings and its Subsidiaries shall have no outstanding Preferred Equity Interests or
Indebtedness, except for (i) Indebtedness pursuant to or in respect of the Credit Documents and
(ii) certain other indebtedness and Preferred Equity Interests existing on the Effective Date as
listed on Schedule 6.20 hereto (with the Indebtedness described in this sub-clause (ii) being
herein called the “Existing Indebtedness”). On and as of the Funding Date, all of the
Existing Indebtedness shall remain outstanding after giving effect to the Transaction without any
breach, required repayment, required offer to purchase, default, event of default or termination
rights existing thereunder or arising as a result of the Transaction.



          (d) The Administrative Agent shall have received evidence in form, scope and substance
satisfactory to it that the matters set forth in this Section 5.06 have been satisfied on the
Funding Date, including, without limitation, acceptable payoff letters and releases, terminations
and such other documents as the Administrative Agent may reasonably request, each in form and
substance reasonably satisfactory to the Administrative Agent.



          5.07. Adverse Change, Approvals. (a) Since December 31, 2009, nothing shall have occurred (and neither the Administrative
Agent nor any Lender shall have become aware of any facts or conditions not previously known) which
has had, or could reasonably be expected to have, a Material Adverse Effect.



          (b) On or prior to the Funding Date, all necessary governmental (domestic and foreign) and
material third party approvals and/or consents in connection with the Transaction, the other
transactions contemplated hereby and the granting of Liens under the Credit Documents shall have
been obtained and remain in effect, and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority which restrains, prevents
or imposes materially adverse conditions upon the consummation of the Transactions, the other
transactions contemplated by the Credit Documents or otherwise referred to herein or therein. On
the Funding Date, there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking



43









 







injunctive relief or other restraint pending or notified prohibiting
or imposing materially adverse conditions upon the Transactions.



          5.08. Litigation. On the Funding Date, there shall be no actions, suits or
proceedings pending or threatened (a) with respect to the Transaction, this Agreement or any other
Credit Documents or (b) which has had, or could reasonably be expected to have, a Material Adverse
Effect.



          5.09. Guaranties and Security Documents. On the Funding Date:



          (a) each Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit E (as amended, modified, restated and/or supplemented
from time to time, the “Subsidiaries Guaranty”);



          (b) each Credit Party party thereto shall have duly authorized, executed and delivered a U.S.
Security Agreement in the form of Exhibit F-1 (as amended, modified, restated and/or supplemented
from time to time, the “U.S. Security Agreement”) and, in connection therewith, the Credit
Parties shall have delivered to the Collateral Agent:




     (i) all of the Collateral consisting of certificated securities and promissory notes,
if any, referred to therein and then owned by such Credit Party, (x) endorsed in blank in
the case of any such promissory notes and (y) together with executed and undated
endorsements for transfer in the case of any such certificated securities;




     (ii) proper financing statements (Form UCC-1 or the equivalent) fully executed or
authorized for filing under the UCC or other appropriate filing offices of each jurisdiction
as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the U.S. Security Agreement;




     (iii) copies of requests for information or copies (Form UCC-11), or equivalent reports
as of a recent date, listing all effective financing statements that name any Credit Party
as debtor and that are filed where each Credit Party is organized and, to the extent
requested by the Collateral Agent, in such other jurisdictions in which Collateral is
located on the Funding Date, together with copies of such other financing statements that
name Holdings or any of its Subsidiaries as debtor (none of which shall cover any of the
Collateral except (x) to the extent evidencing Permitted Liens or (y) those in respect of
which the Collateral Agent shall have
received termination statements (Form UCC-3) or such other termination statements as
shall be required by local law fully executed or authorized for filing);




     (iv) evidence of the completion (or arrangements therefor satisfactory to the
Collateral Agent) of all other recordings and filings of, or with respect to, and all action
necessary in connection with, the U.S. Security Agreement as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security
interests intended to be created by the U.S. Security Agreement; and




     (v) evidence that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect and protect the security interests purported to be
created by the U.S. Security Agreement have been taken;



          (c) each Credit Party party thereto shall have duly authorized, executed and delivered a
English Debenture in the form of Exhibit F-2 (as amended, modified, restated and/or supplemented
from time to time the “English Debenture”) and, in connection therewith, the Credit
Parties shall have delivered to the Collateral Agent:



44









 






     (i) copies of lien searches with respect to the each such Credit Party;




     (ii) evidence of the completion (or arrangements therefor satisfactory to the
Collateral Agent) of all other recordings and filings of, or with respect to, and all action
necessary in connection with, the English Debenture as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security
interests intended to be created by the English Debenture; and




     (iii) evidence that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect and protect the security interests purported to be
created by the English Debenture have been taken;



          (d) each Credit Party party thereto shall have duly authorized, executed and delivered a
English Charge Over Shares in the form of Exhibit F-3 (as amended, modified, restated and/or
supplemented from time to time, the “English Charge Over Shares”) and, in connection
therewith, such Credit Parties shall have delivered to the Collateral Agent:




     (i) all of the Collateral consisting of certificated securities referred to therein and
then owned by such Credit Party, together with executed and undated endorsements for
transfer in the case of any such certificated securities;




     (ii) evidence of the completion (or arrangements therefor satisfactory to the
Collateral Agent) of all other recordings and filings of, or with respect to, and all action
necessary in connection with, the English Charge Over Shares as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security
interests intended to be created by the English Charge Over Shares; and




     (iii) evidence that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect and protect the security interests purported to be
created by the English Charge Over Shares have been taken;



          (e) each Credit Party party thereto shall have duly authorized, executed and delivered a
Dutch Pledge Agreement in the form of Exhibit F-4 (as amended, modified, restated and/or
supplemented from time to time, the “Dutch Pledge Agreement”) and, in connection
therewith, such Credit Parties shall have delivered to the Collateral Agent:




     (i) all of the Collateral consisting of certificated securities and promissory notes,
if any, referred to therein and then owned by such Credit Party, (x) endorsed in blank in
the case of any such promissory notes and (y) together with executed and undated
endorsements for transfer in the case of any such certificated securities;




     (ii) evidence of the completion (or arrangements therefor satisfactory to the
Collateral Agent) of all other recordings and filings of, or with respect to, and all action
necessary in connection with, the Dutch Pledge Agreement as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect and protect the security
interests intended to be created by the Dutch Pledge Agreement; and




     (iii) evidence that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect and protect the security interests purported to be
created by the Dutch Pledge Agreement have been taken;



45









 





          (f) each Credit Party party thereto shall have duly authorized, executed and delivered a
Scottish Security in the form of Exhibit F-5 (as amended, modified or supplemented from time to
time, the “Scottish Security”) and in connection therewith, such Credit Parties shall have
delivered to the Collateral Agent;




     (i) evidence of the completion (or arrangements therefor satisfactory to the Collateral
Agent) of all other recordings and filings of, or with respect to, and all action necessary
in connection with, the Scottish Security as may be necessary or, in the reasonable opinion
of the Collateral Agent, desirable, to perfect and protect the security interests intended
to be created by the Scottish Security; and




     (ii) evidence that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect and protect the security interests purported to be
created by the Scottish Security have been taken;



          (g) the Administrative Agent shall have received control agreements duly executed by each
applicable Credit Party, the applicable bank and the Collateral Agent with respect to each deposit
or similar account of each Credit Party set forth on Schedule 5.09(g), such control agreements in
form and substance reasonably satisfactory to the Collateral Agent; and



          (h) each applicable Credit Party shall have delivered to the Collateral Agent:




     (i) fully executed counterparts of Mortgages and corresponding UCC fixture filings, in
form and substance reasonably satisfactory to the Collateral Agent, which Mortgages and UCC
fixture filings shall cover each Oil and Gas Property owned or leased by Holdings or any of
its Subsidiaries and designated as a “Mortgaged Property” on Schedule 6.12(b) hereto,
together with evidence that counterparts of such Mortgages and UCC fixture filings have been
delivered to the title insurance company insuring the Lien of such Mortgage for recording;




     (ii) a description of each such Mortgaged Property; and




     (iii) evidence reasonably satisfactory to the Collateral Agent that the Mortgages
together with the other Security Documents when duly filed, registered and/or recorded will
create first priority/perfected Liens on the Mortgaged Properties.



          5.10. [Reserved].



          5.11. Financial Statements; Pro Forma Balance Sheet; Projections etc(a) . On or
prior to the Funding Date, the Administrative Agent shall have received true and correct copies of
the historical financial statements, the pro forma financial statements and the Projections
referred to in Sections 6.05(a), (b) and (e), which historical financial statements, pro forma
financial statements and Projections shall be in form and substance satisfactory to the
Administrative Agent and the Required Lenders.



          5.12. Solvency Certificate; Insurance Certificates. On the Funding Date, the
Administrative Agent shall have received:




     (i) a solvency certificate from the chief financial officer of Holdings in the form of
Exhibit G; and




     (ii) certificates of insurance complying with the requirements of Section 7.03 for the
business and properties of Holdings and its Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent and naming the Collateral Agent as an additional
insured



46









 







and/or as loss payee, as applicable, and stating that such insurance shall not be
canceled without at least 30 days’ prior written notice by the insurer to the Collateral
Agent.



          5.13. Reserve Report; Qualifications. The Administrative Agent shall have received
prior to the Funding Date an annual Reserve Report (as described in the definition of such term)
for the fiscal year ended December 31, 2009.



          5.14. Fees, etc. On the Funding Date, the Borrower shall have paid to the
Administrative Agent (and its relevant affiliates) and the Collateral Agent all costs, fees and
expenses (including, without limitation, legal fees and expenses) and other compensation
contemplated hereby payable to the Administrative Agent (and/or its relevant affiliates) and the
Collateral Agent to the extent then due.



          5.15. Syndication Letter. On or prior to the Funding Date, the Borrower shall have
executed and delivered the Syndication Letter, which shall be in form and substance satisfactory to
the Administrative Agent, and the Syndication Letter shall be in full force and effect.



          5.16. No Default; Representations and Warranties. On the Funding Date, (a) there
shall exist no Default or Event of Default and (b) all representations and warranties contained
herein and in the other Credit Documents shall be true and correct in all material respects with
the same effect as though such representations and warranties had been made on such date (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in all material
respects only as of such specified date).



          5.17. Notice of Borrowing. Prior to the Funding Date, the Administrative Agent shall
have received the Notice of Borrowing meeting the requirements of Section 2.02(a).



          5.18. Patriot Act; Know Your Customer. Prior to the Funding Date, the Lenders shall
have received from the Credit Parties, to the extent requested by the Lenders or the Administrative
Agent, all documentation and other information required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including the Patriot Act.



          5.19. Service of Process. On or prior to the Funding Date, the Administrative Agent
shall have received evidence satisfactory to it that (a) each Credit Party has appointed CT
Corporation as agent for service of process as contemplated in Section 11.18(a) and (b) CT
Corporation has accepted its appointment.



          5.20. U.K. Service of Process. On or prior to the Funding Date, the Administrative
Agent shall have received evidence satisfactory to it that (a) each Credit Party that is not
incorporated in England and Wales and that has executed, or will on the Funding Date execute, any
Credit Document governed by the laws of England and Wales has irrevocably appointed the Borrower as
agent for service of process as contemplated in Section 11.18(b) and (b) the Borrower has accepted
its appointment.



          In determining the satisfaction of the conditions specified in this Section 5, (a) to the
extent any item is required to be satisfactory to any Lender, such item shall be deemed
satisfactory to each Lender unless such Lender has notified the Administrative Agent in writing
prior to the occurrence of the Funding Date that the respective item or matter does not meet its
satisfaction and (b) in determining whether any Lender is aware of any fact, condition or event
that has occurred and which would reasonably be expected to have a Material Adverse Effect or a
material adverse effect of the type described in Section 5.07, each Lender which has not notified
the Administrative Agent in writing prior to the occurrence of the Funding Date of such fact,
condition or event shall be deemed not to be aware of any such fact, condition or event on the
Funding Date. Upon the Administrative Agent’s good faith



47









 







determination that the conditions
specified in this Section 5 have been met (after giving effect to the preceding sentence), then the
Funding Date shall have been deemed to have occurred, regardless of any subsequent determination
that one or more of the conditions thereto had not been met (although the occurrence of the Funding
Date shall not release the Borrower from any liability for failure to satisfy one or more of the
applicable conditions contained in this Section 5).



          SECTION 6. Representations, Warranties and Agreements. In order to induce the Lenders
to enter into this Agreement and to make Term Loans, the Borrower makes the following
representations, warranties and agreements, in each case after giving effect to the Transaction,
all of which shall survive the execution and delivery of this Agreement and the Notes and the
making of the Term Loans on the Funding Date being deemed to constitute a representation and
warranty that the matters specified in this Section 6 are true and correct in all material respects
on and
as of the Funding Date (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).



          6.01. Company Status. Each of Holdings and each of its Subsidiaries (a) is a duly
organized and validly existing Business in good standing (or, in the case of any Non-U.S.
Subsidiary of Holdings, the applicable equivalent of “good standing” to the extent that such
concept exists in such Non-U.S. Subsidiary’s jurisdiction of organization) under the laws of the
jurisdiction of its organization, (b) has the Business power and authority to own its property and
assets and to transact the business in which it is engaged and presently proposes to engage and (c)
is duly qualified and is authorized to do business and is in good standing in each jurisdiction
where the ownership, leasing or operation of its property or the conduct of its business requires
such qualifications except for failures to be so qualified or authorized which, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. No
certifications by any Governmental Authority are required for operation of the business of Holdings
and its Subsidiaries that are not in place, except for such certifications or agreements, the
absence of which could not reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect.



          6.02. Power and Authority. Each Credit Party has the Business power and authority to
execute, deliver and perform the terms and provisions of each of the Credit Documents to which it
is party and has taken all necessary Business action to authorize the execution, delivery and
performance by it of each of such Credit Documents. Each Credit Party has duly executed and
delivered each of the Credit Documents to which it is party, and each of such Credit Documents
constitutes its legal, valid and binding obligation enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights
and by equitable principles (regardless of whether enforcement is sought in equity or at law).



          6.03. No Violation. Neither the execution, delivery or performance by any Credit
Party of the Credit Documents to which it is a party, nor compliance by it with the terms and
provisions thereof, (a) will contravene any provision of any law, statute, rule or regulation or
any order, writ, injunction or decree of any court or Governmental Authority, (b) will conflict
with or result in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets
of any Credit Party or any of its Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement or loan agreement, or any other material agreement, contract or
instrument, in each case to which any Credit Party or any of its Subsidiaries is a party or by
which it or any its property or assets is bound or to which it may be subject, or (c) will violate
any provision of the certificate or articles of incorporation, certificate of formation,



48









 







limited liability company agreement or by-laws (or equivalent constitutional, organizational and/or
formation documents), as applicable, of any Credit Party or any of its Subsidiaries.



          6.04. Approvals. No order, consent, approval, license, authorization or validation of, or filing, recording
or registration with (except (a) for those that have otherwise been obtained or made on or prior to
the Funding Date and which remain in full force and effect on the Funding Date and, (b) filings
which are necessary to perfect the security interests created or intended to be created under the
Security Documents, which filings will be made within ten days following the Funding Date), or
exemption by, any Governmental Authority is required to be obtained or made by, or on behalf of,
any Credit Party to authorize, or is required to be obtained or made by, or on behalf of, any
Credit Party in connection with, (i) the execution, delivery and performance of any Credit Document
or (ii) the legality, validity, binding effect or enforceability of any such Credit Document.



          6.05. Financial Statements; Financial Condition; Undisclosed Liabilities; Projections.
(a) (i) The audited consolidated balance sheet of Holdings at December 31, 2007, December 31, 2008
and December 31, 2009 and the related consolidated statements of income and cash flows and changes
in shareholders’ equity of Holdings for the fiscal years of Holdings ended on such dates, in each
case furnished to the Lenders prior to the Funding Date, present fairly in all material respects
the consolidated financial position of Holdings at the date of said financial statements and the
results for the respective periods covered thereby and (ii) the unaudited consolidated balance
sheet of Holdings at June 30, 2010 and the related consolidated statements of income and cash flows
and changes in shareholders’ equity of Holdings for the six-month period ended on such date,
furnished to the Lenders prior to the Funding Date, present fairly in all material respects the
consolidated financial position of Holdings at the date of said financial statements and the
results for the respective periods covered thereby, subject to normal year-end adjustments. All
such financial statements have been prepared in accordance with GAAP consistently applied except to
the extent provided in the notes to said financial statements (and except for the absence of
footnotes in interim financial statements).



          (b) (i) The pro forma consolidated balance sheet of Holdings as at June 30, 2010 (after
giving effect to the Transaction) and (ii) the pro forma income statement of Holdings for the
six-month period ended June 30, 2010 (after giving effect to the Transaction and the financing
therefor), copies of which have been furnished to the Lenders prior to the Funding Date, present
good faith estimates of the pro forma consolidated financial position of Holdings as of such date
and the consolidated results of operations of Holdings for such six-month period, as the case may
be.



          (c) On and as of the Funding Date, and after giving effect to the Transaction and to all
Indebtedness being incurred or assumed and Term Loans created by the Credit Parties in connection
therewith on such date, (i) the sum of the fair value of the assets, at a fair valuation, of the
Credit Parties and their Subsidiaries (taken as a whole) will exceed their debts (taken as a
whole), (ii) the sum of the present fair salable value of the assets of the Credit Parties and
their Subsidiaries (taken as a whole) will exceed their debts (taken as a whole), (iii) the Credit
Parties and their Subsidiaries (taken as a whole) have not incurred and do not intend to incur,
and do not believe that they will incur, debts beyond their ability to pay such debts as such
debts mature, and (iv) the Credit Parties and their Subsidiaries (taken as a whole) will have
sufficient capital with which to conduct their businesses. For purposes of this Section 6.05(c),
“debt” means any liability on a claim, and “claim” means (A) right to payment, whether or not such
a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (B) right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be
computed as the amount that, in the



49









 







light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual or matured
liability.



          (d) Except as disclosed in the financial statements delivered pursuant to Section 6.05(a),
and except for the Indebtedness incurred and/or outstanding under this Agreement, there were as of
the Funding Date no liabilities or obligations with respect to Holdings or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not
due) which, either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. As of the Funding Date, neither Holdings nor the Borrower knows of any
basis for the assertion against it or any of its Subsidiaries of any liability or obligation of
any nature whatsoever that is not disclosed in such financial statements delivered pursuant to
Section 6.05(a) or (b) or referred to in the immediately preceding sentence which, either
individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.



          (e) The Projections delivered to the Administrative Agent and the Lenders prior to the
Funding Date have been prepared in good faith and are based on assumptions believed to be
reasonable at the time made, and as of the Funding Date, and there are no statements or
conclusions in the Projections which are based upon or include information known to the Borrower
to be misleading in any material respect or which fail to take into account material information
known to Holdings or the Borrower regarding the matters reported therein. On the Funding Date,
each of Holdings and the Borrower believes that the Projections are reasonable and attainable, it
being recognized by the Lenders, however, that projections as to future events are not to be
viewed as facts and that the actual results during the period or periods covered by the
Projections may differ materially from the projected results.



          (f) After giving effect to the Transaction, since December 31, 2009, nothing has occurred
that has had, or could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.



          6.06. Litigation. There are no actions, suits or proceedings pending or, to the
knowledge of Holdings or the Borrower, threatened (a) with respect to the Transaction or any Credit
Document or (b) that has had, or could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.



          6.07. True and Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Holdings or the Borrower to the Administrative Agent or any Lender
(including, without limitation, all information contained in the Credit Documents) for purposes of
or in connection with this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole) hereafter furnished
by or on behalf of Holdings or the Borrower in writing to the Administrative Agent or any Lender
will be, true and accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided, it being understood and agreed that for
purposes of this Section 6.07, such factual information shall not include the Projections or any
pro forma financial information.



          6.08. Use of Proceeds; Margin Regulations. (a) All proceeds of the Term Loans shall
be used (i) to fund the Refinancing, (ii) to pay fees and expenses incurred in connection with the
Transaction and (iii) for Holdings’ and its Subsidiaries
general corporate purposes, including without limitation, to cash collateralize letters of
credit issued for the account of Holdings or any of its Subsidiaries and to fund Capital
Expenditures.



50









 





          (b) No part of the proceeds of any Term Loan will be used to purchase or carry any Margin
Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the
making of any Term Loan nor the use of the proceeds thereof will violate or be inconsistent with
the provisions of Regulation T, U or X.



          6.09. Tax Returns and Payments. Each of Holdings and each of its Subsidiaries has
timely filed or caused to be timely filed with the appropriate taxing authority all Federal, state
and material local returns, statements, forms and reports for taxes (the “Returns”)
required to be filed by, or with respect to the income, properties or operations of, Holdings
and/or any of its Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of Holdings and its Subsidiaries, as applicable, for the periods covered
thereby. Each of Holdings and each of its Subsidiaries has paid all taxes and assessments payable
by it which have become due, other than (a) those that are being contested in good faith and
adequately disclosed and for which adequate reserves have been established in accordance with GAAP
and (b) immaterial amounts of taxes or assessments that Holdings and its Subsidiaries are not aware
are due; provided that upon Holdings or such Subsidiary becoming aware that such taxes and
assessments are due, such Person shall promptly pay all such taxes and assessments, together with
any interest and additional charges thereon. There is no action, suit, proceeding, investigation,
audit or claim now pending or, to the knowledge of Holdings or the Borrower, threatened (in
writing) by any authority regarding any taxes relating to Holdings or any of its Subsidiaries. As
of the Funding Date, neither Holdings nor any of its Subsidiaries has entered into an agreement or
waiver or been requested to enter into an agreement or waiver extending any statute of limitations
relating to the payment or collection of taxes of Holdings or any of its Subsidiaries, or is aware
of any circumstances that would cause the taxable years or other taxable periods of Holdings or any
of its Subsidiaries not to be subject to the normally applicable statute of limitations. Neither
Holdings nor any of its Subsidiaries has incurred, nor will any of them incur, any material tax
liability in connection with the Transaction or any other transactions contemplated hereby (it
being understood that the representation contained in this sentence does not cover any future tax
liabilities of Holdings or any of its Subsidiaries arising as a result of the operation of their
businesses in the ordinary course of business) or any tax liability resulting from indemnification
(or yield protection provisions) under this Agreement).



          6.10. Compliance with ERISA. (a) Schedule 6.10(a) hereto sets forth each Plan as of
the date of this Agreement. Each Plan (and each related trust, insurance contract or fund) is in
substantial compliance with its terms and with all applicable laws, including without limitation
ERISA and the Code; each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter from the Internal
Revenue Service (or has submitted, or is within the remedial amendment period for submitting, an
application for a determination letter with the Internal Revenue Service, and is awaiting receipt
of a response) to the effect that it meets the requirements of Sections 401(a) and 501(a) of the
Code or is comprised of a master or prototype plan that has received a favorable opinion letter
from the Internal Revenue Service; or a volume submitter plan that has received a favorable
advisory letter from the Internal Revenue Service; no Reportable Event has occurred; no Employee
Benefit Plan is a Multiemployer Plan; no Plan has an Unfunded Current Liability that could
reasonably be expected to result in a material liability; no ERISA Event has occurred, or is
reasonably expected to occur, with respect to any Plan; all contributions required to be made with
respect to a Plan have been timely made or have been reflected on the most recent consolidated
balance sheet filed prior to the date
hereof or accrued in the accounting records of Holdings and its Subsidiaries; no action, suit,
proceeding, hearing, or audit or investigation by a Governmental Authority with respect to the
administration, operation or the investment of assets of any Plan (other than routine claims and
appeals for benefits) is pending, expected or threatened that is reasonably expected to result in
a material liability to Holdings or any of its Subsidiaries; no Multiemployer Plan that is subject
to Section 412 of the Code or Section 302 of ERISA has applied for or received an extension of any
amortization period, within the meaning of Section 431(d) of the Code or Section 304(d) of ERISA;
Holdings, any of its Subsidiaries



51









 







and any ERISA Affiliate have not withdrawn as a substantial
employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making
contributions to any Plan subject to Section 4064(a) of ERISA that has terminated and to which it
made contributions at any time within the five Plan years preceding the date of termination; none
of Holdings, any of its Subsidiaries or any ERISA Affiliate have incurred or reasonably expect to
incur any liability to the PBGC except for any liability for premiums due in the ordinary course or
other liability which could not reasonably be expected to result in material liability, and no lien
imposed under the Code or ERISA on the assets of Holdings or any of its Subsidiaries or any ERISA
Affiliate exists or is expected to arise on account of any Plan; none of Holdings, any of its
Subsidiaries or any ERISA Affiliate has incurred, or is expected to incur, any liability under
Section 4069 or 4212(c) of ERISA; each Employee Benefit Plan that is a group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section
4980B of the Code, except to the extent that any non-compliance with any such provisions could not
reasonably be expected to result in a material liability to Holdings or any of its Subsidiaries;
each Employee Benefit Plain that is group health plan (as defined in 45 Code of Federal
Regulations Section 160.103) has at all times been operated in compliance with the provisions of
the Health Insurance Portability and Accountability Act of 1996 and the regulations promulgated
thereunder, except to the extent that any non-compliance with such provisions and regulations could
not reasonably be expected to result in a material liability to Holdings or any of its
Subsidiaries; no lien imposed under the Code or ERISA on the assets of Holdings, any of its
Subsidiaries or any ERISA Affiliate exists or is expected to arise on account of any Plan; and
Holdings and its Subsidiaries may amend any Plan sponsored by any of them (other than a defined
benefit plan) to cease contributions thereunder and may terminate any Plan sponsored by any of
them without, in each case, incurring any material liability (other than ordinary administrative
termination costs that are immaterial in nature);



          Subject to Section 6.10(b), each Non-U.S. Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good standing with
applicable regulatory authorities. All contributions required to be made with respect to a
Non-U.S. Pension Plan have been timely made. Neither Holdings nor any of its Subsidiaries has
incurred any obligation in connection with the termination of, or withdrawal from, any Non-U.S.
Pension Plan (other than a defined contribution plan). The present value of the accrued benefit
liabilities (whether or not vested) under each Non-U.S. Pension Plan (other than a Non-U.S. Pension
Plan that (i) is not required to be funded under applicable law or (ii) is a defined contribution
plan), determined as of the end of Holdings’ most recently ended fiscal year on the basis of
actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets
of such Non-U.S. Pension Plan allocable to such benefit liabilities by an amount that could
reasonably be expected to have a Material Adverse Effect.



          (b) Without limiting the effect of preceding clause (a), neither Holdings nor any of its
Subsidiaries is or has at any time been, within the United Kingdom, an employer (for the purposes
of sections 38 to 51 of the United Kingdom’s Pensions Act 2004) of an occupational pension scheme
which is not a money purchase scheme (both terms as defined in the United Kingdom’s Pension
Schemes Act
1993) or has at any time been “connected” with or an “associate” of (as those terms are used
in sections 38 and 43 of the United Kingdom’s Pensions Act 2004) such an employer.



          6.11. Security Documents. (a) The provisions of each Security Document (other than
the Mortgages which are addressed in Section 6.11(b)) are effective to create in favor of the
Collateral Agent for the benefit of the Secured Creditors a legal, valid and enforceable security
interest of the type that it purports to create in all right, title and interest of the Credit
Parties in the Collateral described therein, and the Collateral Agent, for the benefit of the
Secured Creditors, has (or upon filing of UCC financing statements and other required filings
registrations or notices or taking of possession or control



52









 







(which shall occur within 10 days
following the Funding Date) will have) a fully perfected security interest in all right, title and
interest in all of the Collateral described therein, subject to no other Liens other than Permitted
Liens; provided that (i) the Borrower shall not be deemed to represent pursuant to the
foregoing that the U.S. Security Agreement creates a legal, valid and enforceable security interest
in (1) the Equity Interests of Endeavour Energy Luxembourg S.a.r.l. or of Endeavour Energy New
Ventures I, Ltd. or (2) any Collateral (as defined in the U.S. Security Agreement) granted by any
Grantor (as defined in the U.S. Security Agreement) that is not organized under the laws of the
United States or any state thereof (other than Equity Interests held by any such Grantor in any
Person that is organized under the laws of the United States or any state thereof), and (ii) no
steps have been taken in order to perfect any such security interest in the Equity Interests
referred to in clause (i)(1) above or the Collateral referred to in clause (i)(2) (other than
Equity Interests held by any such Grantor in any Person that is organized under the laws of the
United States or any state thereof), in each case granted pursuant to the U.S. Security Agreement.
The recordation of (i) the grant of security interest in U.S. Patents and (ii) the grant of
security interest in U.S. Trademarks in the respective form attached to the U.S. Security
Agreement, in each case in the United States Patent and Trademark Office, together with filings on
Form UCC-1 made pursuant to the U.S. Security Agreement, will create, to the extent as may be
perfected by such filings and recordation, a perfected security interest in the United States
trademarks and patents covered by the U.S. Security Agreement, and the recordation of the grant of
security interest in U.S. Copyrights in the form attached to the U.S. Security Agreement with the
United States Copyright Office, together with filings on Form UCC-1 made pursuant to the U.S.
Security Agreement, will create, to the extent as may be perfected by such filings and recordation,
a perfected security interest in the United States copyrights covered by the U.S. Security
Agreement.



          (b) Upon filing or recording, as applicable, with the appropriate recording office, each
Mortgage shall create, as security for the obligations purported to be secured thereby, a valid
and enforceable perfected first priority security interest in and mortgage lien on the respective
Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Secured Creditors, subject to no other Liens other
than Permitted Liens.



          6.12. Properties. (a) All Real Property (other than Oil and Gas Properties) leased
by Holdings or any of its Subsidiaries as of the Funding Date, and the nature of the interest
therein, is set forth in Schedule 6.12(a) hereto. Each of Holdings and each of its Subsidiaries has
a valid and indefeasible leasehold interest in the material properties set forth in Schedule
6.12(a) free and clear of all Liens other than Permitted Liens. As of the Funding Date, none of
Holdings or any of its Subsidiaries owns any Real Property other than Oil and Gas Properties.



          (b) All Oil and Gas Properties owned or leased by Holdings or any of its Subsidiaries as of
the Funding Date (other than Oil and Gas Properties which (i) are not developed, (ii) have no
reserves or (iii) in which none of Holdings or any of its Subsidiaries have any material
working interests) are reflected in the Reserve Report as of December 31, 2009 or are otherwise
set forth in Schedule 6.12(b).



          (c) Each of Holdings and each of its Subsidiaries, as applicable, has good and defensible
(from the perspective of a reasonably prudent investor in the Oil and Gas Business) title to all
of the Oil and Gas Properties included in the most recent Reserve Report delivered pursuant to
Section 5.13 or 7.01(d), as the case may be, free from all Liens, claims and title imperfections,
except for (i) such imperfections of title as do not in the aggregate detract from the value
thereof to, or the use thereof in, the business of Holdings and its Subsidiaries in any material
respect, (ii) Oil and Gas Properties disposed of since the date of the most recent Reserve Report
as permitted by Section 8.02, and (iii) Liens expressly permitted by Section 8.01. The quantum
and nature of the interest of Holdings and each of its Subsidiaries in and to the Oil and Gas
Properties as set forth in each Reserve Report includes or will



53









 







include the entire interest of
Holdings and each of its Subsidiaries in such Oil and Gas Properties as of the date of such
Reserve Report and are or will be complete and accurate in all material respects as of the date of
such Reserve Report; and there are no “back-in” or “reversionary” interests held by third parties
which could reduce the interest (working, net revenue or otherwise) of Holdings and its
Subsidiaries in such Oil and Gas Properties in any material respect, except as expressly set forth
or given effect to in such Reserve Report. Except for obligations to contribute a proportionate
share of the costs of defaulting or non-consenting co-owners or as otherwise expressly set forth
in the most recent Reserve Report, neither Holdings nor any Subsidiary is obligated to bear any
percentage share of the costs and expenses relating to the drilling, development and production of
the Oil and Gas Properties in excess of its working interests.



          (d) Holdings and each of its Subsidiaries has complied with all obligations under all
licenses, leases, subleases and term mineral interests in their respective Oil and Gas Properties
and all such licenses, leases, subleases and term mineral interests are valid, subsisting and in
full force and effect, and neither Holdings nor any of its Subsidiaries has knowledge that a
default exists under any of the terms or provisions, express or implied, of any of such licenses,
leases, subleases or interests or under any agreement to which the same are subject, except to the
extent any inaccuracy in the foregoing could not reasonably be expected to result in a Material
Adverse Effect. All of the Oil and Gas Contracts and obligations of Holdings and each of its
Subsidiaries that relate to the Oil and Gas Properties are in full force and effect and constitute
legal, valid and binding obligations of Holdings and its Subsidiaries party thereto, except to the
extent any inaccuracy in the foregoing could not reasonably be expected to result in a Material
Adverse Effect. None of Holdings or any of its Subsidiaries or, to the knowledge of Holdings or
its Subsidiaries, any other party to any licenses, leases, subleases or term mineral interests in
the Oil and Gas Properties or any Oil and Gas Contract (i) is in breach of or default, or with the
lapse of time or the giving of notice, or both, would be in breach or default, with respect to any
obligations thereunder, whether express or implied, except such that could not reasonably be
expected to result in a Material Adverse Effect or (ii) has given or threatened to give notice of
any default under or inquiry into any possible default under, or action to alter, terminate,
rescind or procure a judicial reformation of, any licenses or lease in the Oil and Gas Properties
or any Oil and Gas Contract. Holdings and each of its Subsidiaries enjoys peaceful and
undisturbed possession under all such licenses, leases, subleases and term mineral interests.



          (e) Holdings and each of its Subsidiaries has complied with all obligations under all
Authorizations, and to the best knowledge of Holdings and the Borrower, no steps have been taken
for the revocation, variation or refusal of any Authorization, except to the extent any
non-compliance with such obligations or any such revocation, variation or refusal could not
reasonably be expected to have, either individually or in the aggregate, a Material Adverse
Effect.



          6.13. Capitalization. On and as of the Funding Date, (a) the authorized capital stock
of Holdings consists of (i) 450,000,000 shares of common stock $.001 par value per share (such
authorized shares of common stock, together with any subsequently authorized shares of common stock
of Holdings, “Holdings Common Stock”) and (ii) 10,000,000 shares of preferred stock $.001
par value and (b) the authorized capital stock of the Borrower consists of 10,000 ordinary shares
of common stock, £0.10 par value per ordinary share. The outstanding Equity Interests of each
Credit Party have been duly authorized and validly issued (to the extent applicable) and have been
issued free of preemptive rights and each Person listed on Schedule 6.13 hereto as of the Funding
Date owns beneficially and of record all of the Equity Interests it is listed as owning free and
clear of any Liens (other than Permitted Liens). As of the Funding Date, except as set forth or
Schedule 6.13, no Credit Party has outstanding any securities convertible into or exchangeable for
its respective Equity Interests or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreement providing for the issuance



54









 







(contingent or otherwise)
of, or any calls, commitments or claims of any character relating to, its Equity Interests or any
equity-related appreciation or similar rights.



          6.14. Subsidiaries. On and as of the Funding Date, Holdings has no Subsidiaries other
than those Subsidiaries listed on Schedule 6.14 hereto. Schedule 6.14 sets forth, as of the
Funding Date, the percentage ownership (direct and indirect) of Holdings in each class of capital
stock or other Equity Interests of each of its Subsidiaries and also identifies the direct owner
thereof. All outstanding shares of Equity Interests of each Subsidiary of Holdings have been duly
and validly issued, are fully paid and non-assessable and have been issued free of preemptive
rights. Other than as set forth on Schedule 6.14, no Subsidiary of Holdings has outstanding any
securities convertible into or exchangeable for its Equity Interests or outstanding any right to
subscribe for or to purchase, or any options or warrants for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its Equity Interests or any appreciation or similar rights. On the Funding
Date, 100% of the Equity Interests of each Credit Party are owned directly or indirectly by
Holdings.



          6.15. Compliance with Statutes, etc. (a) Each of Holdings and each of its
Subsidiaries is qualified under and is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, and has obtained all required Authorizations
from, all Governmental Authorities in respect of the conduct of its business and the ownership of
its property (including statutes, regulations, orders and restrictions applicable to the Oil and
Gas Business and applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls, except such statutes, regulations, orders and restrictions
that are expressly addressed in Section 6.17), except such non-compliances as could not, either
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.



          (b) Each of Holdings and each of its Subsidiaries is in compliance with all bonding
requirements for the ownership and operation of its Oil and Gas Properties.



          6.16. Investment Company Act. Neither Holdings nor any of its Subsidiaries is an
“investment company” or a company “controlled” by an “investment company,” within the meaning of
the Investment Company Act of 1940, as amended.



          6.17. Environmental Matters. Except as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect: (a) each of Holdings and each of its
Subsidiaries is in compliance with all applicable Environmental Laws and, with respect to its
current operations, has obtained and is in compliance with all permits required of it under
Environmental Law, and there are no proceedings pending or, to the knowledge of Holdings or the
Borrower, threatened to revoke or rescind any such permit; (b) there are no claims, proceedings,
investigations or notices of violation pending or, to the knowledge of Holdings or the Borrower,
threatened against Holdings or any of its Subsidiaries under any Environmental Law; (c) no Lien,
other than a Permitted Lien, has been recorded or, to the knowledge of Holdings or the Borrower,
threatened under any Environmental Law with respect to any Real Property currently owned by
Holdings or any of its Subsidiaries; (d) neither Holdings nor any of its Subsidiaries has
contracted to assume or accept responsibility for any liability of any non-affiliated Person under
any Environmental Law; and (e) there are no facts, circumstances, conditions or occurrences with
respect to the past or present business or operations of Holdings, any of its Subsidiaries or any
of their respective predecessors, or any Real Property or facility at any time owned, leased or
operated by Holdings, any of its Subsidiaries or any of their respective predecessors, that could
be reasonably expected to give rise to any claim, proceeding, investigation, action or liability of
or against Holdings or any of its Subsidiaries under any Environmental Law.



55









 





          6.18. Employment and Labor Relations. (a) Neither Holdings nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect. There is (a) no unfair labor
practice complaint pending against Holdings or any of its Subsidiaries or, to the knowledge of
Holdings or the Borrower, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Holdings or any of its Subsidiaries or, to the knowledge of
Holdings or the Borrower, threatened (in writing) against any of them, (b) no strike, labor
dispute, slowdown or stoppage pending against Holdings or any of its Subsidiaries or, to the
knowledge of Holdings or the Borrower, threatened (in writing) against Holdings or any of its
Subsidiaries, (c) no union representation question exists with respect to the employees of Holdings
or any of its Subsidiaries, (d) no legal actions, lawsuits, arbitrations, administrative or other
proceedings, charges, complaints, investigations, inspections, audits or notices of violations or
possible violations are pending or, to the knowledge of Holdings or the Borrower, threatened
against Holdings or any of its Subsidiaries by or on behalf of, or otherwise involving, any current
or former employee, any person alleging to be a current or former employee, any applicant for
employment, or any class of the foregoing, or any Governmental Authority, that involve the labor or
employment relations and practices of Holdings or any of its Subsidiaries, including but not
limited to claims of employment discrimination and (e) no violation of the Fair Labor Standards Act
or any other applicable federal, state or foreign wage and hour laws, except (with respect to any
matter specified in clauses (a) — (e) above, either individually or in the aggregate) such as
could not reasonably be expected to have a Material Adverse Effect.



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



56









 







Employment Equality (Age) Regulations 2006 or
Employment Equality (Religion and Belief) Regulations 2003, (v) no complaint of non-compliance by
Holdings or any of its Subsidiaries with any provisions of the Treaty of Rome, European Union
directives or other directly applicable European Union laws, statutes, regulations, codes of
conduct, collective agreements, terms and conditions of employment, orders, declarations and
awards relevant to any individual afforded the status of a worker, except (with respect to any
matter specified in clauses (i) — (v) above, either individually or in the aggregate) such as
could not reasonably be expected to have a Material Adverse Effect.



          6.19. Intellectual Property, etc. Each of Holdings and each of its Subsidiaries owns
or has the right to use all the patents, trademarks, permits, domain names, service marks, trade
names, copyrights, licenses, franchises, inventions, trade secrets, proprietary information and
know-how of any type, whether or not written (including, but not limited to, rights in computer
programs and databases) and formulas, or rights with respect to the foregoing, and has obtained
assignments of all leases, licenses and other rights of whatever nature, necessary for the present
conduct of its business, without any known conflict with the rights of others which, or the failure
to own or have which, as the case may be, could reasonably be expected, either individually or in
the aggregate, to have a Material Adverse Effect.



          6.20. Indebtedness. Schedule 6.20 hereto sets forth a list of all Indebtedness
(including Contingent Obligations) of Holdings and its Subsidiaries as of the Funding Date and
which is to remain outstanding after giving effect to the Transaction (excluding the Obligations)
in each case showing the aggregate principal amount thereof and the name of the respective borrower
and any Person that directly or indirectly guarantees such debt.



          6.21. Insurance. Schedule 6.21 hereto sets forth a listing of all insurance maintained by Holdings and its
Subsidiaries as of the Funding Date, with the amounts insured (and any deductibles) set forth
therein.



          6.22. Holding Company. Holdings is a holding company and does not (a) have any
material liabilities (other than (i) liabilities arising under the Credit Documents, any Class C
Convertible Preferred Stock and any Junior Financing, (ii) other liabilities which are permitted by
this Agreement and are incurred in connection with the financing and operation of Holdings’ and its
Subsidiaries’ businesses and (iii) taxes and other liabilities arising under applicable law) or (b)
own any material assets or engage in any operations or business (other than (i) its direct or
indirect ownership of its Subsidiaries and (ii) Investments permitted under Section 8.05.



          6.23. Immaterial Subsidiaries. On the Funding Date, each of Endeavour Energy
Luxembourg S.àr.l., Endeavour Energy New Ventures I, Ltd. and Endeavour Energy North Sea Limited
is an Immaterial Subsidiary.



          SECTION 7. Affirmative Covenants. Each of Holdings and the Borrower hereby covenants
and agrees that on and after the Funding Date and until the Term Loans and Notes (in each case
together with interest thereon), Fees and all other Obligations (other than indemnities described
in Section 11.13 which are not then due and payable) incurred hereunder and thereunder, are paid in
full:



          7.01. Information Covenants. The Borrower will furnish to the Administrative Agent
and each Lender:




     (a) Monthly Reports. Within 30 days after the end of each fiscal month of
Holdings, the consolidated balance sheet of Holdings as at the end of such fiscal month and
the related consolidated statements of income and statement of cash flows for such fiscal
month and for the elapsed portion of the fiscal year ended with the last day of such fiscal
month, in each case (i) setting forth comparative figures for the corresponding fiscal month
in the prior fiscal year and



57









 







comparable forecast figures for such fiscal month as set forth
in the respective forecast delivered pursuant to Section 7.01(f) and (ii) in the form
prepared for Holdings’ and its Subsidiaries’ monthly internal management reporting package.




     (b) Quarterly Financial Statements. Within 45 days after the close of each
quarterly accounting period in each fiscal year of Holdings, (i) the consolidated balance
sheet of Holdings as at the end of such quarterly accounting period and the related
consolidated statements of income and retained earnings and statement of cash flows for such
quarterly accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, in each case setting forth comparative figures
for all such financial information for the corresponding quarterly accounting period in the
prior fiscal year, and (ii) management’s discussion and analysis of the important
operational and financial developments during such quarterly accounting period. All of the
foregoing financial statements shall be certified by an Authorized Officer of Holdings that
they fairly present in all material respects in accordance with GAAP the consolidated
financial condition of Holdings as of the dates indicated and the consolidated results of
operations for the periods indicated, subject to normal year-end audit adjustments and the
absence of footnotes.




     (c) Annual Financial Statements. Within 90 days after the close of each fiscal
year of Holdings, (i) the consolidated balance sheet of Holdings as at the end of such
fiscal year and the related consolidated statements of income and retained earnings and
statement of cash flows for such fiscal year, setting forth comparative figures for the
preceding fiscal year, and certified by KPMG LLP or another independent certified public
accountants of recognized national standing reasonably acceptable to the Administrative
Agent, accompanied by an opinion of such accounting firm (which opinion shall be without a
“going concern” or like qualification or exception and without any qualification or
exception as to scope of audit) and (ii) management’s discussion and analysis of the
important operational and financial developments during such fiscal year.




     (d) Reserve Report. Prior to or concurrently with any delivery of financial
statements under clause (c) of this Section 7.01 and, solely as to each quarter ending on
June 30, under clause (b) of this Section 7.01 (or more frequently at the Borrower’s option)
(1) a Reserve Report (which shall be (i) an annual Reserve Report (as described in the
definition of such term) in the case of a Reserve Report delivered in connection with annual
financial statements or (ii) a semi-annual Reserve Report (as so described) in the case of a
Reserve Report delivered in connection with quarterly financial statements for the fiscal
quarter ended June 30) setting forth, among other things, (x) the Oil and Gas Properties
owned by Holdings and each of its Subsidiaries and covered by such Reserve Report, (y) the
Proved Reserves and Probable Reserves attributable to such Oil and Gas Properties and (z) a
projection of the rate of production and cash flows of such Proved Reserves and Probable
Reserves as of the date as of which the information set forth in such Reserve Report is
provided, all in accordance with the guidelines published by the SEC (but utilizing the
pricing parameters set forth in the definition of the term PV-10 Value (and, in the case of
an annual Reserve Report, in addition to such pricing parameters those specified in such SEC
guidelines) and utilizing such operating cost and other assumptions as proposed by the
Borrower and (2) a certificate of an Authorized Officer showing any additions to or
deletions from the Oil and Gas Properties made by Holdings and each of its Subsidiaries and
in Proved Reserves and Probable Reserves attributable to such Oil and Gas Properties since
the date of the most recently delivered previous Reserve Report.



58









 






     (e) Management Letters. Promptly after Holdings’ or any of its Subsidiaries’
receipt thereof, a copy of any “management letter” received from its certified public
accountants and management’s response thereto.




     (f) Forecasts. No later than the 15th day after the end of each fiscal year of
Holdings, a forecast in form satisfactory to the Administrative Agent (including forecasted
statements of income, cash flow statement and balance sheets for Holdings and its
Subsidiaries on a consolidated basis) for each of the twelve months of each succeeding
fiscal year through the Maturity Date, in each case setting forth, with appropriate
discussion, the principal assumptions upon which such budget is based.




     (g) Compliance Certificate. At the time of the delivery of the financial
statements provided for in Sections 7.01(b) and (c), a compliance certificate from the chief
financial officer of Holdings in the form of Exhibit H certifying on behalf of Holdings
that, to such officer’s knowledge after due inquiry, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall (i) set forth
in reasonable detail the calculations required to establish whether Holdings and its
Subsidiaries were in compliance with the provisions of Sections 4.02(b), 4.02(c), 4.02(d),
4.02(e), 4.02(f), 8.01(w), 8.02(e), 8.02(f), 8.02(n), 8.02(o),
8.04(i)(x), 8.04(m), 8.07, 8.08, 8.09 and 8.10 at the end of such fiscal quarter or
year, as the case may be, (ii) if delivered with the financial statements required by
Section 7.01(c), set forth in reasonable detail the amount of (and the calculations required
to establish the amount of) Excess Cash Flow for the respective Excess Cash Flow Payment
Period and the amount of any required payment under Section 4.02(f) in respect of such
Excess Cash Flow Payment Period, (iii) certify that there have been no changes to Schedule
VI of the U.S. Security Agreement, in each case since the Funding Date or, if later, since
the date of the most recent certificate delivered pursuant to this Section 7.01(g), or if
there have been any such changes, a list in reasonable detail of such changes (but, in each
case with respect to this clause (iii), only to the extent that such changes are required to
be reported to the Collateral Agent pursuant to the terms of the U.S. Security Agreement)
and whether Holdings and the other Credit Parties have otherwise taken all actions required
to be taken by them pursuant to the U.S. Security Agreement in connection with any such
changes and (iv) notify the Administrative Agent of the acquisition by it or any of the
Subsidiaries of any Oil and Gas Property or Real Property (or any interest in any Oil and
Gas Property or Real Property) having a value in excess of $5,000,000.




     (h) Notice of Default, Litigation and Material Adverse Effect. Promptly, and
in any event within three Business Days after any officer of Holdings or any of its
Subsidiaries obtains knowledge thereof, notice of (A) the occurrence of any event which
constitutes a Default or an Event of Default, (B) any litigation or governmental
investigation or proceeding pending against Holdings or any of its Subsidiaries (x) which,
either individually or in the aggregate, has had, or could reasonably be expected to have, a
Material Adverse Effect or (y) with respect to any Credit Documents or (C) any other event,
change or circumstance that has had, or could reasonably be expected to have, a Material
Adverse Effect.




     (i) Other Reports and Filings. Promptly after the filing or delivery thereof,
copies of all financial information, proxy materials and reports, if any, which Holdings or
any of its Subsidiaries shall (i) publicly file with the SEC or (ii) deliver to holders (or
any trustee, agent or other representative therefor) of any Qualified Preferred Stock, any
Junior Financing or any other material Indebtedness, in each case pursuant to the terms of
the documentation governing the same.



59









 






     (j) Environmental Matters. Promptly after any officer of Holdings or any of
its Subsidiaries obtains knowledge thereof, notice of one or more of the following
environmental matters, but only to the extent that such environmental matters, either
individually or when aggregated with all other such environmental matters, could reasonably
be expected to have a Material Adverse Effect:




     (i) any pending or threatened claim, proceeding, investigation or notice of
violation issued under or pursuant to any Environmental Law against Holdings or any
of its Subsidiaries or any Real Property, facility or Oil and Gas Property owned,
leased or operated by Holdings or any of its Subsidiaries;




     (ii) any condition or occurrence on or arising from any Real Property, facility
or Oil and Gas Property owned, leased or operated by Holdings or any of its
Subsidiaries that could reasonably be expected to form the basis of an claim,
proceeding, investigation, action or notice of violation against Holdings or any of
its Subsidiaries or any such Real Property or facility under any Environmental Law;




     (iii) issuance under any Environmental Law of any liens or restrictions on the
ownership, lease, occupancy, use or transferability by Holdings or any of its
Subsidiaries
of any Real Property, facility or Oil and Gas Property owned, operated or
leased by Holdings or any of its Subsidiaries; and




     (iv) the taking of any removal or remedial action as required by any
Environmental Law or any Governmental Authority in response to the actual or alleged
presence, Release or threatened Release of any Hazardous Material on any Real
Property, facility or Oil and Gas Property owned, leased, used or operated by
Holdings or any of its Subsidiaries.




All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings’ or
such Subsidiary’s response thereto.




     (k) Landlord and Storage Agreements. Promptly after execution thereof, copies
of all future material agreements between a Credit Party and any landlord, warehouseman,
processor, shipper, bailee or other Person that owns any premises at which any Collateral
may be kept or that otherwise may possess or handle any Collateral.




     (l) Other Information. From time to time, such other information or documents
(financial or otherwise, and including without limitation Project Documents and amendments
thereto) with respect to Holdings or any of its Subsidiaries as the Administrative Agent or
any Lender (through the Administrative Agent) may reasonably request.


Notwithstanding the foregoing, the obligations in clauses (b), (c) and (i) of this Section 7.01 may
be satisfied with respect to financial information (or, in the case of such clause (i), other
information) of Holdings and the Subsidiaries by filing Holdings’ Form l0-K or 10-Q, as applicable
(or, in the case of such clause (i), such other applicable filing), with the SEC or by making such
information available on Holdings’ or the Borrower’s website, in each case to the extent the
Borrower has notified the Administrative Agent and the Lenders of such filing or that such
information is available on such website; provided that to the extent such information is
in lieu of information required to be provided under Section 7.01(c), Holdings separately delivers
to the Administrative Agent a report and opinion of KPMG LLP or any other independent certified
public accounting firm of nationally recognized standing acceptable to the Administrative Agent,
which report and opinion shall be prepared in accordance with


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generally accepted auditing standards
and shall not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit.




          7.02. Books, Records and Inspections; Annual Meetings. (a) Holdings will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in which full, true and
correct entries in conformity with GAAP and all requirements of law shall be made of all dealings
and transactions in relation to its business and activities. Holdings will, and will cause each of
its Subsidiaries to, permit officers and designated representatives of the Administrative Agent (i)
to visit and inspect, under guidance of officers of Holdings or such Subsidiary, any of the
properties of Holdings or such Subsidiary and (ii) to examine the books of account of Holdings or
such Subsidiary and discuss the affairs, finances and accounts of Holdings or such Subsidiary with,
and be advised as to the same by, its and their officers and independent accountants, all upon
reasonable prior notice and at such reasonable times and intervals and to such reasonable extent as
the Administrative Agent may reasonably request.



          (b) At the request of the Administrative Agent, Holdings will within 120 days after the close
of each fiscal year of Holdings, hold a meeting (which may be by conference call or
teleconference), at a time and place selected by Holdings and reasonably acceptable to the
Administrative Agent, with all of the Lenders that choose to participate, to review the financial
results of the previous fiscal year and the financial condition of Holdings and its Subsidiaries
and the budgets presented for the current fiscal year of Holdings and its Subsidiaries.



          7.03. Maintenance of Property; Insurance. (a) Holdings will, and will cause each of
its Subsidiaries to, (i) keep all property necessary to the business of Holdings and its
Subsidiaries in good working order and condition, ordinary wear and tear excepted and subject to
the occurrence of casualty events, (ii) maintain with financially sound and reputable insurance
companies insurance on all such property and against all such risks as is consistent and in
accordance with industry practice for companies similarly situated owning similar properties and
engaged in similar businesses as Holdings and its Subsidiaries, and (iii) furnish to the
Administrative Agent, upon its request therefor, full information as to the insurance carried.
Such insurance shall include physical damage insurance on all real and personal property,
including, without limitation, on Oil and Gas Properties (whether now owned or hereafter acquired)
on an all risk basis. The provisions of this Section 7.03 shall be deemed supplemental to, but not
duplicative of, the provisions of any Security Documents that require the maintenance of insurance.



          (b) Holdings will, and will cause each of its Subsidiaries to, at all times keep its property
insured in favor of the Collateral Agent, and all policies or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by Holdings and/or
such Subsidiaries) (i) shall be endorsed to the Collateral Agent’s satisfaction for the benefit of
the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee
and/or additional insured), (ii) shall state that such insurance policies shall not be canceled
without at least 30 days’ prior written notice thereof by the respective insurer to the Collateral
Agent, (iii) shall provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the other Secured Creditors, and (iv) shall
be deposited with the Collateral Agent.



          (c) If Holdings or any of its Subsidiaries shall fail to maintain insurance in accordance
with this Section 7.03, or if Holdings or any of its Subsidiaries shall fail to so endorse and
deposit all policies or certificates with respect thereto, the Administrative Agent shall have the
right (but shall be under no obligation) to procure such insurance, and Holdings and the Borrower
jointly and severally agree to reimburse the Administrative Agent for all costs and expenses of
procuring such insurance.



          7.04. Existence; Franchises; Oil and Gas Properties. (a) Holdings will, and will
cause each of its Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force



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and effect its existence and its material rights, franchises, licenses, permits,
copyrights, trademarks and patents and pay all royalties when due; provided,
however, that nothing in this Section 7.04 shall prevent (a) sales of assets and other
transactions by Holdings or any of its Subsidiaries in accordance with Section 8.02 or (b) the
withdrawal by Holdings or any of its Subsidiaries of its qualification as a Business in any
jurisdiction other than the United States or any State thereof or the United Kingdom if such
withdrawal could not, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.



          (b) Holdings will, and will cause each of its Subsidiaries to, (i) comply in all material
respects with the terms and provisions of all oil and gas leases and licenses relating to the Oil
and Gas Properties of Holdings and each of its Subsidiaries and all contracts and agreements
relating thereto or to the production and sale of Hydrocarbons therefrom; provided that
Holdings and its Subsidiaries shall
have the right to abandon Oil and Gas Properties in the exercise of Holdings’ or such
Subsidiaries’ reasonable judgment, in each case in compliance with the relevant Oil and Gas
Contracts governing such Oil and Gas Properties, and (ii) with respect to any such Oil and Gas
Properties or oil and gas gathering assets that are operated by operators other than Holdings or
any of its Subsidiary, use all commercially reasonable efforts to enforce in a manner consistent
with industry practice the operator’s contractual obligations to maintain, develop, and operate
such Oil and Gas Properties and oil and gas gathering assets in accordance with the applicable
operating agreements.



          7.05. Compliance with Statutes, etc. (a) Holdings will, and will cause each of its
Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all Governmental Authorities in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls other than such statutes, regulations, orders and
restrictions that are expressly addressed in Section 7.06), except such non-compliances as could
not, either individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.



          (b) Holdings shall, and shall cause each of its Subsidiaries to, maintain and comply with the
terms and conditions of any material Authorization required under any law or regulation (including
Environmental Law) (i) to enable it to perform its obligations and/or exercise its rights under,
or the validity or enforceability of, each Credit Document and Project Document and (ii) to enable
it to conduct the Oil and Gas Business in which has an interest except, in the case of preceding
clause (ii) only, such failure to maintain or non-compliance as could not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.



          7.06. Compliance with Environmental Laws. (a) Holdings will comply, and will cause
each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or
required by, the ownership, lease or operation of Real Property, facilities and Oil and Gas
Property now or hereafter owned, leased or operated by Holdings or any of its Subsidiaries, except
such noncompliances as could not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, and will promptly pay or cause to be paid all costs and expenses
for which Holdings or its Subsidiaries are legally obligated that are incurred in connection with
such compliance, and will keep or cause to be kept all such Real Property, facilities and Oil and
Gas Properties free and clear of any Liens imposed pursuant to such Environmental Laws. Holdings
and its Subsidiaries will generate, use, treat, store, Release and dispose of, and will cause the
generation, use, treatment, storage, Release and disposal of Hazardous Materials on any Real
Property, facilities or Oil and Gas Properties now or hereafter owned, leased or operated by
Holdings or any of its Subsidiaries, and transport or cause the transportation of Hazardous
Materials to or from any such Real Property, facilities or Oil and Gas Properties in compliance
with all applicable Environmental Laws, except for such Hazardous Materials generated, used,
treated, stored, Released and disposed of at any such Real Properties, facilities or Oil and



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Gas Properties in connection with or arising out of the business or operations of Holdings or any of
its Subsidiaries as would not, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.



          (b) Upon (i) the receipt by the Administrative Agent or any Lender of any notice from the
Borrower of the type described in Section 7.01(j), (ii) a reasonable determination that Holdings
or any of its Subsidiaries are not in compliance with Section 7.06(a) or (iii) the exercise by the
Administrative Agent or the Lenders of any of the remedies pursuant to the penultimate paragraph
of Section 9, each of Holdings and the Borrower will (in each case) collectively, or if either
Holdings or the
Borrower so desire, individually, provide, upon the request of the Administrative Agent at
the sole expense of Holdings and the Borrower, as applicable, an environmental site assessment
report concerning any Real Property or facilities owned, leased or operated by Holdings or any of
its Subsidiaries, prepared by an environmental consulting firm reasonably acceptable to by the
Administrative Agent, indicating, as the circumstances may dictate, the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in connection with
such Hazardous Materials on such Real Property or facilities. If either Holdings or the Borrower
fails to provide the same within 30 days after such request was made, the Administrative Agent may
order the same, the cost of which shall be borne by the non-responsive Credit Party; and each of
Holdings and the Borrower shall grant and hereby grants to the Administrative Agent and the
Lenders and their respective agents access to such Real Property and specifically grant the
Administrative Agent and the Lenders an irrevocable non-exclusive license, subject to the rights
of tenants, to undertake such an assessment at any reasonable time upon reasonable notice to
Holdings and the Borrower, all at the sole expense of each of Holdings and the Borrower.



          7.07. ERISA. (a) As soon as reasonably practicable and, in any event, within ten
(10) days after Holdings, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know of the occurrence of any of the following, Holdings will deliver to each of the Lenders a
certificate of any Authorized Officer of Holdings setting forth the full details as to such
occurrence and the action, if any, that Holdings, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to be given or filed
by Holdings, such Subsidiary, the Plan administrator or such ERISA Affiliate to or with the PBGC or
any other Governmental Authority, or a Plan participant with respect thereto, and any notices
received by Holdings, such Subsidiary or ERISA Affiliate from the PBGC or any other Governmental
Authority, or a Plan participant with respect thereto: an ERISA Event (except to the extent that
Holdings has previously delivered to the Lenders a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA becoming subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1)
thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the
following 30 days (except to the extent that a waiver to the advance reporting requirement of PBGC
Regulation Section 4043.61 applies with respect to such event); a failure of Holdings, any of its
Subsidiaries, or an ERISA Affiliate to timely make any contribution required to be made with
respect to a Plan or Non-U.S. Pension Plan; the existence of potential withdrawal liability under
Section 4201 of ERISA if Holdings, any of its Subsidiaries and any ERISA Affiliate were to withdraw
completely from any and all Multiemployer Plans if such withdrawal is reasonably expected to occur
and such liability could reasonably be expected to result in a material liability; the adoption of,
or the commencement of contributions to, any Plan subject to Section 412 of the Code by Holdings,
any of its Subsidiaries or any ERISA Affiliate; the adoption of any amendment to a Plan subject to
Section 412 of the Code that results in a material increase in the contribution obligations of
Holdings, any of its Subsidiaries or any ERISA Affiliate; a Plan has an Unfunded Current Liability
that could reasonably be expected to result in a material liability; with respect to group health
plans (as defined in Section 607(1) of ERISA, or Section 4980B(g)(2) of the Code), a



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violation of
the provisions of Part 6 of subtitle B of Title 1 of ERISA and Section 4980B of the Code that is
reasonably expected to result in a material liability to Holdings or any of its Subsidiaries; with
respect to group health plans (as defined in 45 Code of Federal Regulations Section 160.103), a
violation of the Health Insurance Portability and Accountability Act of 1996 and the regulations
promulgated thereunder that could reasonably be expected to result in a material liability to
Holdings or any of its Subsidiaries; or the incurrence of any material liability by Holdings or any
of its Subsidiaries pursuant to any portion of
an employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits
to retired employees or other former employees (other than as required by Section 601 of ERISA).
Holdings will deliver to each of the Lenders (i) a copy of each funding waiver request filed with
the Internal Revenue Service or any other Governmental Authority with respect to any Plan pursuant
to Section 412(d) of the Code or Section 302(c) of ERISA and all communications received by
Holdings, any of its Subsidiaries or any ERISA Affiliate from the Internal Revenue Service or any
other Governmental Authority regarding such funding waiver request, (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA and (iii) a complete copy of the annual report (on Internal Revenue
Service Form 5500-series) of each Plan (including, to the extent required, the related financial
and actuarial statements and opinions and other supporting statements, certifications, schedules
and information) required to be filed with the U.S. Department of Labor. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence of this Section
7.07(a), copies of annual reports and any records, documents or other information required to be
furnished to the PBGC or any other Governmental Authority, and any material notices received by
Holdings or any of its Subsidiaries or any ERISA Affiliate, with respect to any Plan or Non-U.S.
Plan, shall be delivered to the Lenders no later than ten (10) days after the date such annual
reports have been filed or such records, documents and/or information have been furnished to the
PBGC or other Governmental Authority or such notice has been received by Holdings, any of its
Subsidiaries, or any ERISA Affiliate, as applicable.



          (b) If, at any time after the date of this Agreement, Holdings or any of its Subsidiaries or
any ERISA Affiliate maintains, or contributes to (or incurs an obligation to contribute to), a
pension plan as defined in Section 3(2) of ERISA that is subject to Section 412 of the Code or
Section 302 or Title IV of ERISA (including, without limitation, a Multiemployer Plan) which is
not set forth in Schedule 6.10(a) hereto as may be updated from time to time, then Holdings shall
deliver to the Agent an updated Schedule 6.10(a) as soon as reasonably practicable and, in any
event, within ten (10) days after Holdings, such Subsidiary or such ERISA Affiliate first
maintains, or contributes to (or incurs an obligation to contribute to), such pension plan. Such
updated Schedule 6.10(a) shall supersede and replace the existing Schedule 6.10(a).



          (c) Holdings and each of its applicable Subsidiaries shall ensure that all Non-U.S. Plans
administered by it or to which it contributes obtains or retains (as applicable) registered status
under and as required by applicable law and is administered in a timely manner in all respects in
compliance with all applicable laws, except where the failure to do any of the foregoing, either
individually or in the aggregate, would not be reasonably likely to result in a Material Adverse
Effect.



          (d) Holdings and its Subsidiaries shall ensure that none of Holdings or any of its
Subsidiaries is or has at any time been, within the United Kingdom, an employer (for the purposes
of sections 38 through 51 of the United Kingdom’s Pensions Act 2004) of an occupational pension
scheme which is not a money purchase scheme (both terms as defined in the United Kingdom’s Pension
Schemes Act 1993) or “connected” with or an “associate” of (as those terms are used in sections 38
or 43 of the United Kingdom’s Pensions Act 2004) such an employer.



          7.08. End of Fiscal Years; Fiscal Quarters. Holdings will cause (a) its and each of
its Subsidiaries’ fiscal years to end on December 31 of each calendar year and (b) its and each of
its



64









 







Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31;
provided that nothing in this Section 7.08 shall prohibit any Subsidiary of Holdings from
maintaining a tax year that does not end on December 31.



          7.09. Performance of Obligations. Holdings will, and will cause each of its Subsidiaries to, perform all of its obligations
under the terms of each mortgage, indenture, security agreement, loan agreement or credit agreement
and each other agreement, contract or instrument by which it is bound, except such non-performances
as could not, either individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.



          7.10. Payment of Taxes. Holdings will pay and discharge, and will cause each of its
Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any properties belonging to it, prior to the
date on which penalties attach thereto, and all lawful claims which, if unpaid, would become a Lien
or charge upon any properties of Holdings or any of its Subsidiaries not otherwise permitted under
Section 8.01(a); provided that neither Holdings nor any of its Subsidiaries shall be
required to pay any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.



          7.11. Use of Proceeds. The Borrower will use the proceeds of the Term Loans only as
provided in Section 6.08.



          7.12. Additional Security; Further Assurances; etc. (a) Holdings will, and will
cause each other Credit Party to, grant to the Collateral Agent for the benefit of the Secured
Creditors security interests and Mortgages in such assets and Real Property of Holdings and such
other Credit Party (including, without limitation, Oil and Gas Properties and other properties of
Holdings and such other Credit Party acquired subsequent to the Funding Date) as are not covered by
the original Security Documents and as may be reasonably requested from time to time by the
Administrative Agent or the Required Lenders (collectively, the “Additional Security
Documents”). All such security interests and Mortgages shall be granted pursuant to
documentation satisfactory in form and substance to the Collateral Agent and shall constitute valid
and enforceable perfected security interests, hypothecations and Mortgages superior to and prior to
the rights of all third Persons and enforceable against third parties and subject to no other Liens
except for Permitted Liens. The Additional Security Documents or instruments related thereto shall
have been duly recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Additional Security Documents and all taxes, fees and other charges payable
in connection therewith shall have been paid in full. It is understood and agreed that,
notwithstanding anything to the contrary above in this clause (a), neither Holdings nor any of its
Subsidiaries will be required pursuant to this clause (a) to (i) grant a security interest in or
mortgage on any Oil and Gas Property that would not otherwise be required under Section 7.12(g),
(ii) grant a security interest in or mortgage on any leased Real Property that is not an Oil and
Gas Property or (iii) grant a security interest in or mortgage on any owned Real Property that is
not an Oil and Gas Property unless (x) any such item of Real Property individually has a Fair
Market Value of at least $2,500,000 or (y) the aggregate Fair Market Value of such Real Property
that would otherwise be excluded from the requirements of this clause (a) would exceed $10,000,000.



          (b) Holdings will, and will cause each of the other Credit Parties to, at the expense of
Holdings and the Borrower, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney, certificates, real
property surveys,
reports, landlord lien waivers, collateral access agreements, bailee agreements, control
agreements and other assurances or instruments and take such further steps relating to the
Collateral covered by any of



65









 







the Security Documents as the Collateral Agent may reasonably
require. Furthermore, Holdings will, and will cause the other Credit Parties to, deliver to the
Collateral Agent such opinions of counsel, title insurance and other related documents as may be
reasonably requested by the Collateral Agent to assure itself that this Section 7.12 has been
complied with.



          (c) Holdings will cause each Non-Guarantor Subsidiary that ceases to be an Immaterial
Subsidiary to execute and deliver all Security Documents (in such form as may be appropriate, as
determined by the Administrative Agent, in light of the jurisdiction of organization of such
Subsidiary and the location of assets owned by such Subsidiary) and all other relevant
documentation (including opinions of counsel as of the type described in Section 5) as such
Subsidiary would have had to deliver if such Subsidiary were a Credit Party on the Funding Date.



          (d) If the Administrative Agent or the Required Lenders reasonably determine that they are
required by law or regulation to have appraisals prepared in respect of any Real Property of
Holdings and the other Credit Parties constituting Collateral, Holdings and the Borrower will, at
their own expense, provide to the Administrative Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and
substance satisfactory to the Administrative Agent.



          (e) Each of Holdings and the Borrower agree that each action required by clauses (a) through
(d) of this Section 7.12 shall be completed as soon as possible, but in no event later than 60
days after such action is requested to be taken by the Administrative Agent or the Required
Lenders; provided that, in no event will Holdings or any of its Subsidiaries be required
to take any action, other than using its commercially reasonable efforts, to obtain consents from
third parties with respect to its compliance with this Section 7.12.



          (f) Within 90 days after Funding Date, furnish the Administrative Agent with title
information reasonably satisfactory to the Administrative Agent showing good and defensible (from
the perspective of a reasonably prudent investor in the Oil and Gas Business) title, subject only
to Permitted Liens, to U.S. Oil and Gas Properties representing in the aggregate not less than 85%
of 2P Reserve Value of Holdings’ and its Subsidiaries’ U.S. Oil and Gas Properties as of December
31, 2009, and within 60 days after the making of a request therefor by the Administrative Agent,
furnish such title information or Oil and Gas Contracts as may be necessary to achieve title
information coverage with respect to Oil and Gas Properties representing in the aggregate not less
than 85% of 2P Reserve Value as set forth in the Reserve Report most recently delivered pursuant
to Section 7.01(d) prior to the making of such request.



          (g) Regularly monitor engineering data covering all Oil and Gas Properties of Holdings and
each of its Subsidiaries and mortgage or cause to be mortgaged such of the same to the Collateral
Agent on behalf of the Secured Creditors pursuant to a Mortgage to the extent necessary to ensure
that the Obligations shall at all times be secured by first priority perfected Liens and security
interests in (i) each Oil and Gas Property having an individual value of $5,000,000 or more (on a
contribution to 2P Reserve Value basis) and (ii) Oil and Gas Properties in the aggregate
representing not less than 85% of the aggregate 2P Reserve Value attributable to all Oil and Gas
Properties, in each case based on the 2P Reserve Value reflected in the most recent Reserve
Report.



          7.13. Ownership of Subsidiaries; etc. Except pursuant to a Permitted Acquisition consummated in accordance with the terms hereof,
Holdings will, and will cause each of its Subsidiaries to, own, directly or indirectly, 100% of the
Equity Interests of each of their Subsidiaries (other than, in the case of a Non-U.S. Subsidiary of
Holdings, directors’ qualifying shares and/or other nominal amounts of shares required to be held
by local nationals, in each case to the extent required by applicable law).




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          7.14. Qualified Preferred Stock. Holdings will pay all Dividends on its Qualified Preferred Stock (other than Class C
Convertible Preferred Stock) solely through the issuance of additional shares of such Qualified
Preferred Stock (but not in cash); provided that in lieu of issuing additional units of
such Qualified Preferred Stock as Dividends, Holdings may increase the liquidation preference of
the units of the Qualified Preferred Stock in respect of which Dividends have accrued.




          7.15. Maintenance of Company Separateness. Holdings will, and will cause each of its Subsidiaries to, satisfy customary Business
formalities, including the holding of regular Board of Directors’ and members’ meetings or action
by managers or members without a meeting and the maintenance of Business records. Neither Holdings
nor any other Credit Party shall make any payment to a creditor of any Non-Guarantor Subsidiary in
respect of any liability of any Non-Guarantor Subsidiary, and no bank account of any Non-Guarantor
Subsidiary shall be commingled with any bank account of Holdings or any other Credit Party. Any
financial statements distributed to any creditors of any Non-Guarantor Subsidiary shall clearly
establish or indicate the corporate separateness of such Non-Guarantor Subsidiary from Holdings and
its other Subsidiaries. Finally, neither Holdings nor any of its Subsidiaries shall take any
action, or conduct its affairs in a manner, which is likely to result in the Business existence of
Holdings, any other Credit Party or any Non-Guarantor Subsidiaries being ignored, or in the assets
and liabilities of Holdings or any other Credit Party being substantively consolidated with those
of any other such Person or any Non-Guarantor Subsidiary in a bankruptcy, reorganization or other
insolvency proceeding.




          7.16. Board Information Rights. Holdings and (if applicable) the Borrower shall (i) give the Administrative Agent notice of
all meetings and activities of the Board of Directors of each of Holdings and (if applicable) the
Borrower at the same time as furnished to the directors of Holdings and (if applicable) the
Borrower, (ii) provide the Administrative Agent all notices, documents and information furnished to
the directors of Holdings and (if applicable) the Borrower, whether at or in connection with a
meeting, an action by written consent or otherwise, at the same time furnished to such directors,
(iii) provide the Administrative Agent copies of the minutes of all such meetings at the time such
minutes are furnished to the members of the applicable Board of Directors and (iv) furnish to the
Administrative Agent, at the same time such information is delivered to the Board of Directors of
Holdings, comparable figures with respect to annual financial statements delivered pursuant to
Section 7.01(c) as set forth in the respective forecast delivered pursuant to Section 7.01(f).
Notwithstanding any other provision of this Section 7.16, Holdings and the Borrower shall be
entitled to withhold information from the Administrative Agent delivered to such Board of Directors
prior to any meeting of such Board of Directors if Holdings or the Borrower, as the case may be,
reasonably believes, at the recommendation of counsel, there is a reasonable likelihood that the
receipt of such information by Administrative Agent would create a conflict of interest for in
respect of the Term Loans or, if privileged, would reasonably be expected to effectively waive the
attorney/client privilege of Holdings or the Borrower with respect thereto. Holdings and the
Borrower will, promptly following request therefor, cause the Chief Executive Officer and/or the
Chief Financial Officer (as determined by the Administrative Agent) of each of Holdings and the
Borrower to meet (telephonically, or at the Administrative Agent’s option, in person) with
representatives of the Administrative Agent to review and discuss any documents or other
information delivered to the Administrative Agent pursuant to this Section 7.16.




          7.17. Permitted Acquisitions. (a) Subject to the provisions of this Section 7.17 and the requirements contained in the
definition of Permitted Acquisition, the Qualified Credit Parties may from time to time effect
Permitted Acquisitions, so long as (in each case except to the extent the Required Lenders
otherwise specifically agree in writing in the case of a specific Permitted Acquisition): (i) no
Default or Event of Default shall have occurred and be continuing at the time of the consummation
of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) the Borrower
shall have given to the Administrative Agent and the Lenders at least 10 Business Days’ prior
written notice of any






67









 







Permitted Acquisition (or such shorter period of time as may be reasonably acceptable to the
Administrative Agent), which notice shall describe in reasonable detail the principal terms and
conditions of such Permitted Acquisition; (iii) drafts of the definitive documentation for each
such Permitted Acquisition shall have been delivered to the Administrative Agent at least five
Business Days’ prior to the consummation thereof (with subsequent drafts to be delivered to the
Administrative Agent as and when such drafts become available to the Borrower); (iv) in the case of
any Material Permitted Acquisition, calculations are made by the Borrower with respect to the
financial covenant contained in Sections 8.08 through 8.10, inclusive, for the respective
Calculation Period on a Pro Forma Basis as if the respective Material Permitted Acquisition (as
well as all other Material Permitted Acquisitions theretofore consummated after the first day of
such Calculation Period) had occurred on the first day of such Calculation Period, and such
calculations shall show that such financial covenants would have been complied with as of the last
day of such Calculation Period; (v) in the case of any Material Permitted Acquisition, based on
good faith projections prepared by the Borrower for the period from the date of the consummation of
the respective Material Permitted Acquisition to the date which is one year thereafter, the level
of financial performance measured by the financial covenants set forth in Sections 8.08 through
8.10, inclusive, shall be better than or equal to such level as would be required to provide that
no Default or Event of Default would exist under the financial covenants contained in such Sections
8.08 through 8.10, inclusive, as compliance with such financial covenants would be required through
the date which is one year from the date of the consummation of the respective Material Permitted
Acquisition; (vi) all representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such Permitted Acquisition
(both before and after giving effect thereto), unless stated to relate to a specific earlier date,
in which case such representations and warranties shall be true and correct in all material
respects as of such earlier date; (vii) such Permitted Acquisition is permitted under, and is
consummated in accordance with, Section 8.02(n), (o) or (p); and (viii) the Borrower shall have
delivered to the Administrative Agent and each Lender a certificate executed by an Authorized
Officer of the Borrower, certifying to the best of such officer’s knowledge, compliance with the
requirements of preceding clauses (i) through (vii), inclusive, and containing the calculations (in
reasonable detail) required by preceding clauses (iv), (v) and (vii).




          (b) At the time of each Permitted Acquisition involving the creation or acquisition of a
Subsidiary, or the acquisition of capital stock or other Equity Interest of any Person, the
capital stock or other Equity Interests thereof created or acquired in connection with such
Permitted Acquisition shall be pledged for the benefit of the Secured Creditors pursuant to (and
to the extent required by) the applicable Security Document.




          (c) The Borrower will cause each Subsidiary which is formed to effect, or is acquired
pursuant to, a Permitted Acquisition to comply with, and to execute and deliver all of the
documentation as and to the extent required by, Sections 7.12 and 8.15, to the reasonable
satisfaction of the Administrative Agent.




          (d) The consummation of each Permitted Acquisition shall be deemed to be a representation and
warranty by each of Holdings and the Borrower that the certifications pursuant to this Section
7.17 are true and correct and that all conditions thereto have been satisfied and that same is
permitted in accordance with the terms of this Agreement, which representation and warranty shall
be deemed to be a representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 9.




          7.18. Commodity Hedging Agreements. From and after the 90th day following the Funding Date, Holdings and its Subsidiaries will
maintain in effect Commodity Hedging Agreements with one or more Approved Third Party Credit
Providers that establish minimum prices in accordance




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with the Borrower’s hedging policies as in effect on the Funding Date or in accordance with
generally accepted business practice on a volume of Hydrocarbons equal to not less than (i) 50% of
the projected PDP production (measured as of each date of delivery to the Administrative Agent of
the Reserve Reports and certificates required by Section 7.01(d)) from the Oil and Gas Properties
of Holdings and its Subsidiaries for the succeeding twelve calendar months and (ii) 35% of such
projected PDP production for the twelve calendar month period subsequent to the calendar month
period referred to in preceding clause (i). It is understood and agreed that Reserve Reports
reflect projected production on an annual basis, and the Borrower shall be permitted to determine
projected production on a monthly basis for purposes of this Section 7.18 by prorating annual
production reflected in such Reserve Reports over the months covered thereby or using such other
method as the Borrower deems reasonable.




          7.19. Project Documents, etc. Each Credit Party shall (i) ensure that none of its rights under or in respect of any Project
Document are at any time cancelled, terminated, suspended or limited if the same would be
reasonably likely to result in a Material Adverse Effect, (ii) not agree to any waiver, amendment,
termination or cancellation of any Project Document if the same would be reasonably likely to
result in Material Adverse Effect, (iii) duly and properly perform, in all material respects, its
obligations under the Project Documents (except to the extent, if any, that such performance is
inconsistent with its obligation under the Credit Documents or any such failure to perform as could
not, either individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect), (iv) exercise its rights, under and in respect of the Project Documents consistently with
its obligations under the Credit Documents and (v) not enter into any Project Document which would
be reasonably likely to result in a Material Adverse Effect.




          7.20. Oil and Gas Properties. Each Credit Party shall (i) exercise such votes and other rights as it may have under the
Project Documents with a view to ensuring (so far as able) that each Oil and Gas Property in which
Holding or any of its Subsidiaries has an interest is at all times exploited and operated in a
reasonable and prudent manner and in accordance with good industry practice, all applicable laws
and regulations and the provisions of the Project Documents, (ii) not concur in, and shall vote
against, any proposal or decision to abandon all or any material part of any of Oil and Gas
Properties in which Holdings or any of its Subsidiaries has an interest unless the Administrative
Agent has granted its prior written consent, (iii) not exercise its rights on any operating or
similar committee in a manner that would be materially prejudicial to the interests of any Credit
Party, the Administrative Agent or the Lenders and (iv) maintain full and proper technical and
financial records in relation to each Oil and Gas Property in which Holdings or any of its
Subsidiaries has an interest and ensure (so far as it is able) that the Administrative Agent
(and/or any person nominated by it) is afforded reasonable access to each Oil and Gas Property in
which it has an interest and all such records during normal business hours on reasonable notice.




          7.21. Listing of the Notes. (a) The Borrower shall (i) cause the Notes (including any Notes issued in connection with
the payment of PIK Interest) to be admitted for listing on either the Cayman Island Stock Exchange
or Channel Island Stock Exchange (either such Exchange, an “Approved Stock Exchange”) prior
to December 31, 2010, in either case in accordance with the listing rules promulgated by the
respective Approved Stock Exchange and applicable law, (ii) cause the Notes to continue to be
listed on an Approved Stock Exchange at all times from and after December 31, 2010 and (iii) comply
with all obligations required pursuant to the respective Approved Stock Exchange relating to the
continued listing of the Notes on such Approved Stock Exchange.




          (b) Promptly following receipt thereof by the Borrower, the Borrower shall deliver to the
Administrative Agent copies of all financial information, reports, documents or other materials
filed with an Approved Stock Exchange.






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          SECTION 8. Negative Covenants. Each of Holdings and the Borrower hereby covenants and agrees that on and after the Funding
Date and until the Term Loans and Notes (in each case, together with interest thereon), Fees and
all other Obligations (other than any indemnities described in Section 11.13 which are not then due
and payable) incurred hereunder and thereunder, are paid in full:




          8.01. Liens. Holdings will not, and will not permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible
or intangible) of Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement, contingent or otherwise,
to repurchase such property or assets (including sales of accounts receivable with recourse to
Holdings or any of its Subsidiaries), or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or notice statute; provided
that the provisions of this Section 8.01 shall not prevent the creation, incurrence, assumption or
existence of the following (Liens described below are herein referred to as “Permitted
Liens”):





     (a) inchoate Liens for taxes, assessments or governmental charges or levies not yet due
or Liens for taxes, assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP;




     (b) Liens in respect of property or assets of Holdings or any of its Subsidiaries
imposed by law or which were incurred in the ordinary course of business and do not secure
Indebtedness for borrowed money, such as operators’, vendors’, carriers’, warehousemen’s,
materialmen’s, repairmen’s, suppliers’, workers’, construction and mechanics’ liens and
other similar Liens arising in the ordinary course of business, and (i) which do not in the
aggregate materially detract from the value of Holdings’ or such Subsidiary’s property or
assets or materially impair the use thereof in the operation of the business of Holdings or
such Subsidiary or (ii) which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;




     (c) Liens in existence on the Funding Date which are listed, and the property subject
thereto described, in Schedule 8.01(c) hereto, plus renewals, replacements and extensions of
such Liens; provided that (i) the aggregate principal amount of the Indebtedness, if
any, secured by such Liens does not increase from that amount outstanding at the time of any
such renewal, replacement or extension and (ii) any such renewal, replacement or extension
does not encumber any additional assets or properties of Holdings or any of its
Subsidiaries;




     (d) Liens created by or pursuant to this Agreement and the Security Documents;




     (e) (i) licenses, sublicenses, leases or subleases granted by Holdings or any of its
Subsidiaries to other Persons not materially interfering with the conduct of the business of
Holdings or any of its Subsidiaries and (ii) any interest or title of a lessor, sublessor or
licensor under any lease or license agreement permitted by this Agreement to which Holdings
or any of its Subsidiaries is a party;




     (f) Liens upon assets of Holdings or any of its Subsidiaries subject to Capitalized
Lease Obligations to the extent such Capitalized Lease Obligations are permitted by Section
8.04(d); provided that (i) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (ii) the Lien encumbering
the asset giving rise to the Capitalized Lease Obligation does not encumber any other asset
of Holdings or any of its Subsidiaries;



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     (g) Liens placed upon equipment or machinery acquired after the Funding Date and used
in the ordinary course of business of Holdings or any of its Subsidiaries and placed at the
time of the acquisition thereof by Holdings or such Subsidiary or within 90 days thereafter
to secure Indebtedness incurred to pay all or a portion of the purchase price thereof or to
secure Indebtedness incurred solely for the purpose of financing the acquisition of any such
equipment or machinery or extensions, renewals or replacements of any of the foregoing for
the same or a lesser amount; provided that (i) the Indebtedness secured by such
Liens is permitted by Section 8.04(d) and (ii) in all events, the Lien encumbering the
equipment or machinery so acquired does not encumber any other asset of Holdings or such
Subsidiary;




     (h) easements, rights-of-way, restrictions, encroachments and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of Holdings or any of its
Subsidiaries;




     (i) Liens arising from precautionary UCC financing statement filings regarding
operating leases entered into in the ordinary course of business;




     (j) Liens arising out of the existence of judgments or awards in respect of which
Holdings or any of its Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review and in respect of which there shall have been secured a subsisting
stay of execution pending such appeal or proceedings; provided that the aggregate
amount of all cash and the Fair Market Value of all other property subject to such Liens
does not exceed $7,500,000 at any time outstanding;




     (k) statutory and common law landlords’ liens under leases to which Holdings or any of
its Subsidiaries is a party;




     (l) Liens (other than Liens imposed under ERISA) incurred in the ordinary course of
business in connection with workers compensation claims, unemployment insurance and social
security benefits and Liens securing the performance of bids, tenders, leases and contracts
in the ordinary course of business, statutory obligations, surety bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of business and
consistent with past practice (exclusive of obligations in respect of the payment for
borrowed money);




     (m) Liens arising out of any conditional sale, title retention, consignment or other
similar arrangements for the sale of goods entered into by Holdings or any of its
Subsidiaries in the ordinary course of business to the extent such Liens do not attach to
any assets other than the goods subject to such arrangements;




     (n) Liens (i) incurred in the ordinary course of business in connection with the
purchase, processing or shipping of goods or assets (or the related assets and proceeds
thereof), which Liens are in favor of the seller or shipper of such goods or assets and only
attach to such goods or assets, and (ii) in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the importation of
goods;




     (o) bankers’ Liens, rights of setoff and other similar Liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more accounts maintained by
Holdings or any of its Subsidiaries, in each case granted in the ordinary course of business
in favor of the
bank or banks with which such accounts are maintained, securing amounts owing to such
bank or banks with respect to cash management and operating account arrangements;



71









 






     (p) Liens on insurance proceeds securing the payment of financed insurance premiums;




     (q) Liens arising in the ordinary course of business under rig deposits, operating
agreements, joint venture agreements, partnership agreements, oil and gas leases, Oil and
Gas Contracts, overriding royalty agreements, farm-out and farm-in agreements, division
orders, contracts for the sale, transportation or exchange of oil or natural gas,
unitization and pooling declarations and agreements, area of mutual interest agreements,
marketing agreements, processing agreements, net profits agreements, development agreements,
gas balancing or deferred production agreements, injection, repressuring and recycling
agreements, salt water or other disposal agreements, seismic or other geophysical permits or
agreements and other agreements that are customary in the Oil and Gas Business;
provided, that (i) the amount of any obligations secured thereby that are
delinquent, that are not diligently contested in good faith and for which adequate reserves
are not maintained by Holdings, the Borrower or the applicable Subsidiary, as the case may
be, do not exceed, at any time outstanding, the amount owing by Holdings, the Borrower or
such Subsidiary, as applicable, for two months’ billed operating expenses or other
expenditures attributable to such Person’s interest in the property covered thereby, (ii)
the obligations secured thereby do not constitute obligations in respect of borrowed money
and (iii) any such Liens referred to in this clause (q) do not materially impair the use of
the property affected by such Liens or the purposes for which such property is held by
Holdings or such Subsidiary or materially impair the value of such property;




     (r) Liens reserved in leases or licenses of Oil and Gas Properties and in Oil and Gas
Contracts for royalties, bonus or rental payments and for compliance with the terms of such
leases, provided, that the amount of any obligations secured thereby that are
delinquent, that are not diligently contested in good faith and for which adequate reserves
are not maintained by Holdings, the Borrower or the applicable Subsidiary, as the case may
be, do not exceed, at any time outstanding, the amount owing by Holdings, the Borrower or
such Subsidiary, as applicable, for two months’ payments as due thereunder;




     (s) Liens securing Permitted Junior Debt (subject to the limitations set forth in the
definition of such term); provided that the Permitted Junior Debt Notes
Representative in respect of such Permitted Junior Debt and the Collateral Agent shall have
executed and delivered the Permitted Junior Debt Intercreditor Agreement;




     (t) Liens on pipeline or pipeline facilities that arise under operation of law;




     (u) Liens not securing any obligation arising from UCC financing statements (and
similar filings) filed inadvertently or with malicious intent, which the Borrower diligently
seeks to remove and terminate (or causes to be removed or terminated) promptly upon, and in
any event no later than 120 days following, its discovery of same;




     (v) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on
property or assets of a Subsidiary of Holdings in existence at the time such Subsidiary is
acquired pursuant to a Permitted Acquisition; provided that (a) any Indebtedness
that is secured by such Liens is permitted to exist under Section 8.04(g), and (b) such
Liens are not incurred in connection with, or in contemplation or anticipation of, such
Permitted Acquisition and do not attach to any other asset of Holdings or any of its
Subsidiaries; and




     (w) Liens arising from deposits of cash or Cash Equivalents to secure obligations under
the Hess Contracts (or letters of credit supporting such obligations) or other obligations
permitted under Section 8.04(i) so long as the aggregate amount of such cash and Cash



72









 







Equivalents so deposited does not exceed $32,234,880 (it being understood and agreed that
the initial utilization of this basket with respect to cash and Cash Equivalents securing
letters of credit supporting obligations under the Hess Contracts shall be deemed to have
been made on the Effective Date).


In connection with the granting of Liens of the type described in clauses (c), (f), (g), (i), (q),
(r) and (v) of this Section 8.01 by the Borrower of any of its Subsidiaries, the Collateral Agent
shall, to the extent requested by (and at the expense of) the Borrower, execute appropriate lien
releases or lien subordination agreements in favor of the holder or holders of such Liens, in each
case in form and substance satisfactory to the Collateral Agent and solely with respect to the item
or items of equipment or other assets subject to such Liens.




          8.02. Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any partnership, joint venture, or transaction of merger or
consolidation, or convey, sell, lease, assign or otherwise dispose of all or any part of its
property or assets, or enter into any sale-leaseback transactions, or purchase or otherwise acquire
(in one or a series of related transactions) any part of the property or assets (including Oil and
Gas Properties) but excluding purchases or other acquisitions of Hydrocarbons and other inventory,
materials and equipment in the ordinary course of business) of any Person, except that:





     (a) Capital Expenditures shall be permitted to the extent not in violation of Section
8.07;




     (b) Holdings and its Subsidiaries may sell Hydrocarbons and other inventory in the
ordinary course of business;




     (c) Holdings and its Subsidiaries may liquidate or otherwise dispose of obsolete,
uneconomic or worn-out property in the ordinary course of business;




     (d) (i) Investments may be made to the extent permitted by Section 8.05, (ii) Liens
may be granted to the extent permitted by Section 8.01 and (iii) Dividends may be made to
the extent permitted by Section 8.03;




     (e) Holdings and its Subsidiaries may sell assets (other than the capital stock or
other Equity Interests of the Borrower or of any other Wholly-Owned Subsidiary, unless all
of the capital stock or other Equity Interests of such Wholly-Owned Subsidiary (other than
the Borrower) are sold in accordance with this clause (e)), so long as (i) no Default or
Event of Default then exists or would result therefrom, (ii) each such sale is in an
arm’s-length transaction and Holdings or the respective Subsidiary receives at least Fair
Market Value, (iii) the consideration received by Holdings or such Subsidiary consists of
at least 90% cash and is paid at the time of the closing of such sale (iv) the Net Sale
Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section
4.02(d) and (v) the aggregate amount of the cash and non-cash proceeds received from all
assets sold pursuant to this clause (e) shall not exceed $25,000,000 in any fiscal year of
Holdings (for this purpose, using the Fair Market Value of property other than cash);




     (f) Holdings and its Subsidiaries may sell, in one or more transactions, up to 50% of
the 2P Reserves located in the North Sea listed in Holdings’ Reserve Report delivered
pursuant to Section 5.13 so long as (i) no Default or Event of Default then exists or would
result therefrom, (ii) each such sale is in an arm’s-length transaction and Holdings or the
respective Subsidiary receives at least Fair Market Value, (iii) the consideration received
by Holdings or



73









 







such Subsidiary consists of at least 90% cash and is paid at the time of the closing of
such sale and (iv) the Net Sale Proceeds therefore are applied and/or reinvested as (and to
the extent) required by Section 4.02(d);




     (g) Holdings and its Subsidiaries may dispose of Oil and Gas Properties and acquire
Oil and Gas Properties in contemporaneous exchanges; provided that (i) such
acquired Oil and Gas Properties have a comparable or higher value as reasonably determined
by Holdings, (ii) the only consideration paid for such acquisition is the Oil and Gas
Property disposed of in connection with such acquisition or other consideration
independently permitted under any other clause of this Section 8.02 and (iii) if the Fair
Market Value of the Oil and Gas Properties to be disposed exceeds $50,000,000, Holdings
shall obtain a resolution of its Board of Directors approving such exchange and deliver
such resolutions to the Administrative Agent;




     (h) Holdings and its Subsidiaries may lease (as lessee) or license (as licensee) real
or personal property other than Oil and Gas Properties, so long as any such lease or
license does not create a Capitalized Lease Obligation except to the extent permitted by
Section 8.04(d);




     (i) Holdings and its Subsidiaries may sell or discount, in each case without recourse
and in the ordinary course of business, accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection thereof and not as
part of any financing transaction;




     (j) Holdings and its Subsidiaries may grant licenses, sublicenses, leases or subleases
to other Persons not materially interfering with the conduct of the business of Holdings or
any of its Subsidiaries, in each case so long as no such grant otherwise affects the
Collateral Agent’s security interest in the asset or property subject thereto;




     (k) Holdings and its Subsidiaries may convey, sell or otherwise transfer all or any
part of its business, properties and assets to Holdings or any Subsidiary of Holdings, so
long as (i) any security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets so transferred shall
remain in full force and effect and perfected (to at least the same extent as in effect
immediately prior to such transfer) and all actions required to maintain said perfected
status have been taken and (ii) any such business, property and assets conveyed, sold or
otherwise transferred pursuant to this clause (k) by (A) a Credit Party are conveyed, sold
or otherwise transferred to another Credit Party and (B) a Qualified Credit Party are
conveyed, sold or otherwise transferred to another Qualified Credit Party;




     (l) Holdings and its Subsidiaries may merge or consolidate with and into, or be
dissolved or liquidated into, Holdings or any other Subsidiary of Holdings, so long as (i)
in the case of any such merger, consolidation, dissolution or liquidation involving a
Credit Party, a Credit Party is the surviving or continuing entity of any such merger,
consolidation, dissolution or liquidation, (ii) in the case of any such merger,
consolidation, dissolution or liquidation involving a Qualified Credit Party, a Qualified
Credit Party is the surviving or continuing entity of any such merger, consolidation,
dissolution or liquidation, (iii) in the case of any such merger, consolidation,
dissolution or liquidation involving the Borrower, the Borrower is the surviving or
continuing entity of any such merger, consolidation, dissolution or liquidation, and (iv)
any security interests granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Security Documents in the assets of Holdings or such Subsidiary
shall remain in full force and effect and perfected (to at least the same extent as in
effect immediately prior to such merger,
consolidation, dissolution or liquidation) and all actions required to maintain said
perfected status have been taken;



74









 






     (m) each of Holdings and its Subsidiaries may liquidate or otherwise dispose of Cash
Equivalents in the ordinary course of business, in each case for cash at Fair Market Value;




     (n) Holding and its Subsidiaries may make Permitted Business Investments and
consummate Permitted Acquisitions pursuant to this clause (n) so long as the sum of the
aggregate amount paid in respect of such Permitted Business Investments and the Aggregate
Consideration paid in respect of Permitted Acquisitions, in each case made pursuant to this
clause (n), when added to the aggregate amount of Capital Expenditures made pursuant to
Section 8.07(e), does not exceed $50,000,000;




     (o) Holding and its Subsidiaries may make Permitted Business Investments and
consummate Permitted Acquisitions pursuant to this clause (o); provided that the
aggregate consideration paid in connection with such Permitted Business Investments
plus the Aggregate Consideration paid in connection with such Permitted
Acquisitions, in each case made pursuant to this clause (o), in any fiscal year does not
exceed 5% of 2P Reserve Value based on the most recently delivered annual Reserve Report;




     (p) Holdings and its Subsidiaries may make Permitted Business Investments and
consummate Permitted Acquisitions pursuant to this clause (p) with Net Sale Proceeds from
Asset Sales made in accordance with Section 8.02(e) and (f);




     (q) Holdings and its Subsidiaries may enter into contractual joint venture
arrangements with third parties pursuant to Oil and Gas Contracts; provided that
such arrangements do not result in, or constitute the formation of, a Business in which
Holdings or any of its Subsidiaries acquire Equity Interests not otherwise permitted by
Section 8.05; and




     (r) Holdings and its Subsidiaries may dispose of Hydrocarbon Interests in exchange for
a commitment of the transferee to bear a disproportionate share of the costs attributable
to the Oil and Gas Properties to which such Hydrocarbon Interests relate.


To the extent the Required Lenders waive the provisions of this Section 8.02 with respect to the
sale of any Collateral, or any Collateral is sold as permitted by this Section 8.02 (other than to
Holdings or a Subsidiary thereof), such Collateral shall be sold free and clear of the Liens
created by the Security Documents, and the Administrative Agent and the Collateral Agent shall
execute appropriate releases in order to effect the foregoing to the extent requested by (and at
the expense of) the Borrower. For the avoidance of doubt, Holdings’ and its Subsidiaries’ use of
cash and Cash Equivalents to acquire assets in accordance with this Section 8.02 shall not
constitute a conveyance, sale, lease or other disposition of property or assets that is subject to
the restrictions set forth in this Section 8.02.




          8.03. Dividends. Holdings will not, and will not permit any of its Subsidiaries to, authorize, declare or
pay any Dividends with respect to Holdings or any of its Subsidiaries, except that:





     (a) any Subsidiary of Holdings may authorize, declare and pay cash Dividends to
Holdings or to any Wholly-Owned Subsidiary of Holdings;




     (b) any Non-Wholly-Owned Subsidiary of Holdings may authorize, declare and pay cash
Dividends to its shareholders, members or partners generally, so long as Holdings or its
respective Subsidiary which owns the Equity Interest in the Subsidiary paying such Dividends
receives at least its proportionate share thereof (based upon its relative holding of the
Equity Interest in the Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of Equity Interests of such Subsidiary);



75









 






     (c) any Subsidiary may authorize, declare and pay non-cash Dividends to Holdings or any
other Subsidiary of Holdings so long as, after giving effect thereto, (i) any property or
asset which is the subject of any Dividend made pursuant to this clause (c) (A) by any
Credit Party is owned by another Credit Party and (B) by any Qualified Credit Party is owned
by another Qualified Credit Party, and (ii) any security interests granted to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the
property or assets which are the subject of such Dividend shall remain in full force and
effect and perfected (to at least the same extent as in effect immediately prior to such
Dividend) and all actions required to maintain said perfected status have been taken;




     (d) Holdings may redeem, repurchase or otherwise acquire for value, outstanding shares
of Holdings Common Stock (or options or warrants to purchases Holdings Common Stock)
following the death, disability or termination of employment of officers, directors or
employees of Holdings or any of its Subsidiaries or following the vesting of restricted
stock options of Holdings’ employees in order to fund any Taxes due upon such vesting;
provided that (i) the only consideration paid by Holdings in respect of such
redemptions, purchases or other acquisitions shall be cash, (ii) at the time of any purchase
or payment permitted to be made pursuant to this Section 8.03(d), no Default or Event of
Default shall then exist or result therefrom and (iii) the amount of all such redemptions,
repurchases or other acquisitions shall not exceed (A) $2,500,000 in any fiscal year of
Holdings or (B) $5,000,000 in the aggregate;




     (e) Holdings, may pay regularly scheduled Dividends on its Qualified Preferred Stock
pursuant to the terms thereof solely through the issuance of additional units of such
Qualified Preferred Stock (but not in cash); provided that in lieu of issuing
additional units of such Qualified Preferred Stock as Dividends, Holdings may increase the
liquidation preference of the units of Qualified Preferred Stock in respect of which such
Dividends have accrued; and




     (f) Holdings may pay regularly scheduled cash Dividends on all outstanding shares of
its Class C Convertible Preferred Stock.



          8.04. Indebtedness. Holdings will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Indebtedness, except:





     (a) Indebtedness incurred pursuant to this Agreement and the other Credit Documents;




     (b) Existing Indebtedness outstanding on the Funding Date and listed on Schedule 6.20
hereto (as reduced by any repayments of principal thereof), plus extensions, renewals or
refinancings thereof (“Refinancing Debt”); provided that (i) the aggregate
principal amount of the Indebtedness to be extended, renewed or refinanced (“Refinanced
Debt”) does not increase from that amount outstanding at the time of any such extension,
renewal or refinancing, (ii) the weighted average life to maturity of such Refinancing Debt
is greater than or equal to that of the related Refinanced Debt, (iii) the final stated
maturity of such Refinancing Debt shall be no earlier than the maturity date applicable to
the related Refinanced Debt, and (iv) no Refinancing Debt shall have greater security than
the related Refinanced Debt;




     (c) Indebtedness of Holdings or any of its Subsidiaries under Hedging Agreements so
long as the entering into of such Hedging Agreements are bona fide hedging activities and
are not for speculative purposes;




     (d) Indebtedness of Holdings or any of its Subsidiaries evidenced by Capitalized Lease
Obligations (to the extent permitted pursuant to Section 8.07) and purchase money



76









 







Indebtedness described in Section 8.01(g); provided that in no event shall the sum
of the aggregate principal amount of all Capitalized Lease Obligations and purchase money
Indebtedness permitted by this clause (d) exceed $5,000,000 at any time outstanding;




     (e) Indebtedness constituting Intercompany Loans to the extent permitted by Section
8.05(h);




     (f) Indebtedness consisting of guaranties by the Qualified Credit Parties of each
other’s Indebtedness and lease and other contractual obligations permitted under this
Agreement;




     (g) Indebtedness of a Qualified Credit Party acquired pursuant to a Permitted
Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition of an asset
securing such Indebtedness); provided that (i) such Indebtedness was not incurred in
connection with, or in anticipation or contemplation of, such Permitted Acquisition and (ii)
such Indebtedness does not constitute debt for borrowed money, it being understood and
agreed that Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (ii);




     (h) Indebtedness arising from the honoring by a bank or other financial institution of
a check, draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business, so long as
such Indebtedness is extinguished within four Business Days of the incurrence thereof;




     (i) Indebtedness of Holdings or any of its Subsidiaries with respect to (A) Third Party
Letters of Credit or (B) performance bonds, surety bonds, appeal bonds or customs bonds, or
obligations in respect of letters of credit posted in lieu of, or to secure, any such bonds,
required in the ordinary course of business or in connection with the enforcement of rights
or claims of Holdings or such Subsidiary or in connection with judgments that do not result
in a Default or an Event of Default; provided that (x) the aggregate outstanding
amount of all such Third Party Letters of Credit, performance bonds, surety bonds, appeal
bonds, customs bonds and letters of credit issued in lieu of any such bonds permitted by
this clause (i) shall not at any time exceed $60,000,000 and (y) all Indebtedness under this
clause (i) shall be unsecured, except as permitted under Section 8.01(w) and for security
granted pursuant to the Security Documents in respect of no more than $25,000,000 of
outstanding obligations under Hedging Agreements entered into with and Third Party Letters
of Credit issued by Approved Third Party Credit Providers that are party to the
Intercreditor Agreement;




     (j) Indebtedness of Holdings or any of its Subsidiaries which may be deemed to exist in
connection with agreements providing for indemnification, purchase price adjustments and
similar obligations in connection with the acquisition or disposition of assets in
accordance with the requirements of this Agreement, so long as any such obligations are
those of the Person making the respective acquisition or sale, and are not guaranteed by any
other Person except as permitted by Section 8.04(f);




     (k) Indebtedness consisting of the financing of insurance premiums;




     (l) Permitted Junior Debt; and




     (m) so long as no Default or Event of Default then exists or would result therefrom,
additional Indebtedness of Holdings or any of its Subsidiaries in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding.



77









 





          8.05. Advances, Investments and Loans. Holdings will not, and will not permit any of its Subsidiaries to, directly or indirectly,
lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations
or securities of, or any other Equity Interest in, or make any capital contribution to, any other
Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale
of currency or other commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an “Investment” and, collectively,
“Investments”), except:





     (a) Holdings and its Subsidiaries may acquire and hold accounts receivables owing to
any of them, if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms of Holdings or such Subsidiary;




     (b) Subject to the limitations set forth in Section 8.05(h) and (i), Holdings and its
Subsidiaries may acquire and hold cash and Cash Equivalents;




     (c) Holdings and its Subsidiaries may hold the Investments held by them on the Funding
Date and described on Schedule 8.05(c) hereto; provided that any additional
Investments made with respect thereto shall be permitted only if permitted under the other
provisions of this Section 8.05;




     (d) Holdings and its Subsidiaries may acquire and own investments (including debt
obligations) received in connection with the bankruptcy or reorganization of suppliers and
customers and in good faith settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;




     (e) Holdings and its Subsidiaries may make loans and advances to their officers,
employees and consultants for moving, relocation and travel expenses and other similar
expenditures, in each case in the ordinary course of business in an aggregate amount not to
exceed $2,500,000 at any time (determined without regard to any write-downs or write-offs of
such loans and advances);




     (f) Holdings and its Subsidiaries may acquire and hold obligations of their officers,
employees and consultants in connection with such officers’, employees’ and consultants’
acquisition of shares of Holdings Common Stock (so long as no cash is actually advanced by
Holdings or any of its Subsidiaries in connection with the acquisition of such obligations);




     (g) Holdings and its Subsidiaries may enter into Hedging Agreements to the extent
permitted by Section 8.04(c);




     (h) Holdings or any of its Subsidiaries may make intercompany loans and advances to
Holdings or any other Subsidiary of Holdings (“Intercompany Loans”);
provided that (A) other than (x) loans and advances to any Subsidiary that is not a
Credit Party (including any Immaterial Subsidiary that is not a Credit Party) in an
aggregate outstanding amount that does not, when added to the aggregate amount of
Investments outstanding pursuant to Section 8.05(i)(C)(x), exceed $1,000,000 at any time and
(y) loans and advances to the Dutch Subsidiaries pursuant to Holdings’ tax planning and cash
management policies consistent with past practice (so long as
within one Business Day following receipt by any Dutch Subsidiary of the proceeds of
such loans and advances, the same are contributed, loaned or advanced to a Qualified Credit
Party to the extent that the aggregate amount of cash and Cash Equivalents held by all the
Dutch Subsidiaries would otherwise exceed $2,500,000), any such Intercompany Loans made by a
Credit Party shall be made to another Credit Party and any such Intercompany Loan made by a
Qualified Credit Party shall be made to another Qualified Credit Party, (B) to the



78









 







extent any such Intercompany Loan made by a Credit Party is evidenced by a note issued
on or after the Funding Date, such note shall be evidenced by an Intercompany Note which
shall be pledged to the Collateral Agent pursuant to the applicable Security Documents, (C)
each Intercompany Loan made to a Credit Party by any Subsidiary of Holdings that is not a
Credit Party shall be subject to the subordination provisions reasonably acceptable to the
Administrative Agent and (D) any Intercompany Loans made to any Credit Party or any
Qualified Credit Party pursuant to this clause (h) shall cease to be permitted by this
clause (h) if such Credit Party or such Qualified Credit Party ceases to constitute a Credit
Party or a Qualified Credit Party, as the case may be;




     (i) Holdings or any of its Subsidiaries may make capital contributions to, or acquire
Equity Interests of, any other Subsidiary of Holdings; provided that (A) any
security interest granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in any assets so contributed shall remain in full force
and effect and perfected (to at least the same extent as in effect immediately prior to such
contribution) and all actions required to maintain said perfected status have been taken,
(B) to the extent such acquired Equity Interests are issued to a Credit Party the same are
pledged to the Collateral Agent pursuant to the respective Security Documents, (C) other
than (x) cash contributions to, or acquisitions of Equity Interests of, any Subsidiary that
is not a Credit Party (including any Immaterial Subsidiary that is not a Credit Party) in an
aggregate outstanding amount (calculated as of the date of such contributions or
acquisitions, net any returns) that does not, when added to the aggregate amount of
Intercompany Loans outstanding pursuant to Section 8.05(h)(A)(x), exceed $1,000,000 and (y)
cash contributions to the Dutch Subsidiaries pursuant to Holdings’ tax planning and cash
management policies consistent with past practice (so long as within one Business Day
following receipt by any Dutch Subsidiary of the proceeds of such cash contributions, the
same are contributed, loaned or advanced to a Qualified Credit Party to the extent that the
aggregate amount of cash and Cash Equivalents held by all the Dutch Subsidiaries would
otherwise exceed $2,500,000), any such cash contributions (or acquisitions of Equity
Interests) made by a Credit Party shall be made to (or shall be Equity Interests of) another
Credit Party and any such cash contributions (or acquisitions of Equity Interests) made by a
Qualified Credit Party shall be made to (or shall be Equity Interests of) another Qualified
Credit Party, (D) any Investment made in or to any Credit Party or any Qualified Credit
Party pursuant to this clause (i) shall cease to be permitted hereunder if such Credit Party
ceases to constitute a Credit Party or such Qualified Credit Party ceases to constitute a
Qualified Credit Party, as the case may be;




     (j) Holdings and its Subsidiaries may own the Equity Interests of their respective
Subsidiaries created or acquired in accordance with the terms of this Agreement (so long as
all amounts invested in such Subsidiaries are independently justified under another
provision of this Section 8.05);




     (k) Contingent Obligations permitted by Section 8.04, to the extent constituting
Investments, shall be permitted;




     (l) Holdings or any of its Subsidiaries may acquire and hold non-cash consideration
issued by the purchaser of assets in connection with a sale of such assets to the extent
permitted by Sections 8.02(e) and 8.02(f); and




     (m) Permitted Acquisitions shall be permitted in accordance with the requirements of
Section 7.17.



          8.06. Transactions with Affiliates. Holdings will not, and will not permit any of its Subsidiaries to, enter into any
transaction or series of related transactions with any Affiliate of Holdings






79









 







or any of its Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to Holdings or such Subsidiary as would reasonably be
obtained by Holdings or such Subsidiary at that time in a comparable arm’s-length transaction with
a Person other than an Affiliate, except that the following in any event shall be permitted:





     (a) Dividends may be paid to the extent provided in Section 8.03;




     (b) loans may be made and other transactions may be entered into by Holdings and its
Subsidiaries to the extent permitted by Sections 8.02, 8.04 and 8.05;




     (c) customary fees, indemnities and reimbursements may be paid to non-officer directors
or managers of Holdings and its Subsidiaries;




     (d) Holding may issue Holdings Common Stock and Qualified Preferred Stock (and options,
warrants and rights with respect thereto);




     (e) Holdings and its Subsidiaries may enter into, and may make payments under,
employment agreements, employee benefits plans, stock compensation plans, indemnification
provisions and other similar compensatory arrangements with officers, employees, managers
and directors of Holdings and its Subsidiaries in the ordinary course of business; and




     (f) Subsidiaries of Holdings may pay management fees, licensing fees and similar fees
to Holdings or to any Qualified Credit Party.



          8.07. Capital Expenditures. (a) Holdings will not, and will not permit any of its Subsidiaries to, make any Capital
Expenditures, except that (i) during the period from the Funding Date through and including
December 31, 2010, Holdings and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of all such Capital Expenditures does not exceed $70,000,000 and (ii) during any
fiscal year of Holdings set forth below (taken as one accounting period), Holdings and its
Subsidiaries may make Capital Expenditures so long as the aggregate amount of all such Capital
Expenditures does not exceed in any fiscal year of Holdings set forth below the amount set forth
opposite such fiscal year below:




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






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


80









 







fiscal year shall reduce, on a dollar-for-dollar basis, the amount of Capital
Expenditures pursuant to Section 8.07(a) that are permitted to be made in the immediately
succeeding fiscal year.




          (c) In addition to the foregoing, Holdings and its Subsidiaries may make additional Capital
Expenditures (which Capital Expenditures will not be included in any determination under Section
8.07(a) or (b)) with the amount of Net Sale Proceeds received by Holdings or any of its
Subsidiaries from any Asset Sale so long as such Net Sale Proceeds are reinvested within the
Relevant Reinvestment Period, but only to the extent that such Net Sale Proceeds are not otherwise
required to be applied as a mandatory repayment pursuant to Section 4.02(d).




          (d) In addition to the foregoing, Holdings and its Subsidiaries may make additional Capital
Expenditures (which Capital Expenditures will not be included in any determination under Section
8.07(a) or (b)) with the amount of Net Insurance Proceeds received by Holdings or any of its
Subsidiaries from any Recovery Event so long as such Net Insurance Proceeds are reinvested within
the Relevant Reinvestment Period, but only to the extent that such Net Insurance Proceeds are not
otherwise required to be applied as a mandatory repayment pursuant to Section 4.02(e).




          (e) In addition to the foregoing, Holdings and its Subsidiaries may make additional Capital
Expenditures (which Capital Expenditures will not be included in any determination under Section
8.07(a) or (b)) so long as the amount aggregate amount of such Capital Expenditures, when added to
the Aggregate Consideration paid in respect of all Permitted Acquisitions consummated pursuant to
Section 8.02(n) and the aggregate amount of Permitted Business Investments made pursuant to
Section 8.02(n), does not exceed $50,000,000.




          8.08. Maximum Total Leverage Ratio. Holdings will not permit the Total Leverage Ratio for any Test Period ending on the last
day of any fiscal quarter of Holdings set forth below to be greater than the ratio set forth
opposite such fiscal quarter below:




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






81









 






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




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






          8.10. Minimum Asset Coverage Ratios. (a) Holdings will not permit the Reserve Coverage Ratio as of the last day of any fiscal
quarter of Holdings ending after the Funding Date to be less than 3.00:1.00.




          (b) Holdings will not permit the PDP Coverage Ratio as of the last day of any fiscal quarter
ending (i) after the Funding Date and on or prior to September 30, 2011, to be less than 0.25:1.00
and (ii) after September 30, 2011, to be less than 0.50:1.00.




          8.11. Limitations on Prepayments of Junior Financing; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements, etc.
Holdings will not, and will not permit any of its Subsidiaries to:





     (a) make (or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption, repurchase or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar required
“repurchase” event of (including, in each case without limitation, by way of depositing with
the trustee with respect thereto or any other Person money or securities before due for the
purpose of paying when due), any Junior Financing; provided that (i) the 2012
Convertible Senior Notes, the 2014 Convertible Senior Notes and the 2014 Senior Subordinated
Notes may be prepaid, redeemed or acquired (A) in accordance with Section 8.04(b) or (B)
with Net Cash Proceeds of Permitted Junior Debt or issuances of common Equity Interests or
Qualified Preferred Stock and (ii) Permitted Junior Debt may, subject to the provisions of
the definition thereof, be prepaid, redeemed or acquired with Net



82









 







Cash Proceeds from subsequent issuances of Permitted Junior Debt, common Equity Interests or
Qualified Preferred Stock;




     (b) amend or modify, or permit the amendment or modification of, any provision of any
Junior Financing (or any documentation evidencing same) in any manner that is adverse to the
interests of the Lenders in any material respect without the prior written consent of the
Administrative Agent;




     (c) designate any Indebtedness (or related interest obligations) as “Designated Senior
Debt” or similar term except for the Obligations;




     (d) amend, modify or change its certificate or articles of organization (including,
without limitation, by the filing or modification of any certificate or articles of
designation), certificate of formation, limited liability company agreement or by-laws (or
the equivalent organizational documents), as applicable, or any agreement entered into by it
with respect to its capital stock or other Equity Interests (including any Qualified
Preferred Stock), or enter into any new agreement with respect to its capital stock or other
Equity Interests, unless such amendment, modification, change or other action contemplated
by this clause (d) could not reasonably be expected to be adverse to the interests of the
Lenders in any material respect and the terms of any such amendment, modification, change or
other action will not violate any of the other provisions of this Agreement or any other
Credit Document; or




     (e) amend, modify or change any provision of (i) any Management Agreement unless such
amendment, modification or change could not reasonably be expected to be adverse to the
interests of the Lenders in any material respect (although no amendment, modification or
change may be made to any monetary term thereof) or (ii) any Tax Sharing Agreement or enter
into any new tax sharing agreement, tax allocation agreement or similar agreement unless
such amendment, modification, change or entering into any such new tax sharing agreement
could not reasonably be expected to be adverse to the interests of the Lenders in any
material respect (although no amendment, modification or change may be made to any monetary
term thereof).



          8.12. Limitation on Certain Restrictions on Subsidiaries. Holdings will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on the ability of any
such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any
other Equity Interest or participation in its profits owned by Holdings or any of its Subsidiaries,
or pay any Indebtedness owed to Holdings or any of its Subsidiaries, (b) make loans or advances to
Holdings or any of its Subsidiaries or (c) transfer any of its properties or assets to Holdings or
any of its Subsidiaries, except for such encumbrances or restrictions existing on the Funding Date
and set forth on Schedule 8.12 and such other encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) any
agreement evidencing any Permitted Junior Debt; provided that such encumbrances and
restrictions in agreements evidencing Permitted Junior Debt are on customary and market terms for
similar financings and in any event are no more onerous to Holdings and its Subsidiaries than those
encumbrances and restrictions contained in this Agreement and the other Loan Documents, but only if
such negative pledge or restriction expressly permits Liens for the benefit of the Administrative
Agent and/or the Collateral Agent and the Lenders with respect to the credit facilities established
hereunder and the Obligations under the Credit Documents on a senior basis, (iv) customary
provisions restricting subletting or assignment of any lease governing any leasehold interest of
Holdings or any of its Subsidiaries, (v) customary provisions restricting assignment of any
licensing agreement (in which Holdings or any of its Subsidiaries is the licensee), Oil and Gas
Contracts or other contract entered into by
Holdings or any of its Subsidiaries in the ordinary course of business, (vi) restrictions on the
transfer of any asset pending the close of the sale of such asset, (vii) restrictions on the
transfer of any asset subject to a Lien permitted by Section 8.01(c),






83









 







(f), (g), (p) and (w), (viii) customary provisions restricting assignment of any agreement
entered into in the ordinary course of business, and (ix) any agreement in effect at the time a
Person becomes a Subsidiary, so long as such agreement was not entered into in contemplation of
such Person becoming a Subsidiary.




          8.13. Limitation on Issuance of Equity Interests. (a) Holdings will not, and will not permit any of its Subsidiaries to, issue (i) any
Preferred Equity Interests other than issuance by Holdings of Qualified Preferred Stock pursuant to
clause (c) below or (ii) any redeemable common stock or other redeemable common Equity Interests
other than redeemable common stock or other redeemable common Equity Interests that is or are
redeemable at the sole option of Holdings or such Subsidiary, as the case may be.




          (b) Holdings will not permit any of its Subsidiaries to issue any capital stock or other
Equity Interests (including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, capital stock or other Equity Interests, except (i) for
transfers and replacements of then outstanding shares of capital stock or other Equity Interests,
(ii) for stock splits, stock dividends and other issuances which do not decrease the percentage
ownership of Holdings or any of its Subsidiaries in any class of the capital stock or other Equity
Interests of such Subsidiary, (iii) in the case of Non U.S. Subsidiaries of Holdings, to
qualifying directors to the extent required by applicable law and for other nominal share
issuances to Persons other than Holdings and its Subsidiaries to the extent required under
applicable law and (iv) for issuances by Subsidiaries of Holdings which are newly created or
acquired in accordance with the terms of this Agreement.




          (c) Holdings may from time to time (i) issue Qualified Preferred Stock, so long as (x) no
Default or Event of Default shall exist at the time of any such issuance or immediately after
giving effect thereto, and (y) with respect to each issuance of Qualified Preferred Stock, the
gross cash proceeds therefrom (or in the case of Qualified Preferred Stock directly issued by
Holdings as consideration for Permitted Acquisitions, the Fair Market Value of the assets received
therefor) shall be at least equal to 100% of the liquidation preference thereof at the time of
issuance and (ii) issue additional units of Qualified Preferred Stock to pay in kind regularly
scheduled Dividends on Qualified Preferred Stock theretofore issued in compliance with this
Section 8.13(c).




          8.14. Business. (a) Holdings will not, and will not permit any of its Subsidiaries to, engage directly or
indirectly in any business other than the Oil and Gas Business.




          (b) Notwithstanding the foregoing or anything else in this Agreement to the contrary,
Holdings will not (i) have any material liabilities other than (A) liabilities arising under the
Credit Documents, any Class C Convertible Preferred Stock and any Junior Financing, (B) other
liabilities which are permitted by this Agreement and are incurred in connection with the
financing and operation of Holdings’ and its Subsidiaries’ businesses, and (C) taxes and other
liabilities arising under any applicable law or (ii) own any material assets or engage in any
operations or business (other than (A) its direct or indirect ownership of its Subsidiaries and
(B) investments permitted under Section 8.05).




          8.15. Limitation on Creation of Subsidiaries. (a) Holdings will not, and will not permit any of its Subsidiaries to, establish, create
or acquire after the Funding Date any Subsidiary (other than Non-Wholly-Owned Subsidiaries
permitted to be acquired in accordance with the requirements of Section 8.15(b)); provided
that Holdings and its
Wholly-Owned Subsidiaries shall be permitted to establish, create and, to the extent permitted
by this Agreement, acquire Wholly-Owned Subsidiaries, so long as, in each case, (i) at least 10
days’ prior written notice thereof is given to the Administrative Agent (or such shorter period of
time as is acceptable to the Administrative Agent in any given case), (ii) the capital stock or
other Equity Interests of such new Wholly-Owned Subsidiary are promptly pledged pursuant to, and to
the extent required by, this Agreement and the applicable Security Documents and the






84









 







certificates, if any, representing such stock or other Equity Interests, together with stock or
other appropriate powers duly executed in blank, are delivered to the Collateral Agent and (iii)
each such new Wholly-Owned Subsidiary becomes a party to the applicable Security Documents and, to
the extent requested by the Administrative Agent or the Required Lenders, takes all actions
required pursuant to Section 7.12. In addition, each new Wholly-Owned Subsidiary that is required
to execute any Credit Document shall execute and deliver, or cause to be executed and delivered,
all other relevant documentation (including opinions of counsel) of the type described in Section 5
as such new Wholly-Owned Subsidiary would have had to deliver if such new Subsidiary were a Credit
Party on the Funding Date.




          (b) In addition to Subsidiaries of Holdings created pursuant to preceding clause (a),
Holdings and its Wholly-Owned Subsidiaries may acquire Non-Wholly-Owned Subsidiaries after the
Funding Date as a result of Permitted Acquisitions (subject to the limitations contained in the
definition thereof); provided that (i) all of the capital stock or other Equity Interests
of each such Non-Wholly-Owned Subsidiary shall be pledged by any Credit Party which owns same as,
and to the extent, required by the applicable Security Documents, and (ii) each such
Non-Wholly-Owned Subsidiary shall take the actions specified in Section 8.15(a) to the same extent
that such Non-Wholly Owned Subsidiary would have been required to take if it were a Wholly-Owned
Subsidiary of Holdings.




          8.16. Limitation on Commodity Hedging. Holdings will not and will not permit any of its Subsidiaries to enter into any Commodity
Hedge Agreement if, after giving effect thereto the total volume of Hydrocarbons to be hedged under
Commodity Hedging Agreements would exceed, at the time of entering into any Commodity Hedge
Agreement, 90% of the projected 2P production from the Oil and Gas Properties of Holdings and each
of its Subsidiaries for the period during which such Commodity Hedging Agreement is in effect.




          8.17. Elections. Without the prior written consent of the Required Lenders and the Administrative Agent,
Holdings will not, and will not permit any of its Subsidiaries to, make any election for U.S.
federal income tax purposes that causes the Indebtedness of the Borrower to be treated as the
Indebtedness of a “U.S. person” (as such term is defined under Section 7701(a)(30) of the Code) for
U.S. federal income tax purposes.




          SECTION 9. Events of Default.




          Upon the occurrence of any of the following specified events (each, an “Event of
Default”):




          9.01. Payments. The Borrower shall (a) default in the payment when due of any principal of any Term Loan or
any Note, or (b) default, and such default shall continue unremedied for three or more Business
Days, in the payment when due of any interest on any Term Loan or any Note or any Fees or any other
amounts owing hereunder or under any other Credit Document; or




          9.02. Representations, etc. Any representation, warranty or statement made or deemed made by any Credit Party herein or in
any other Credit Document or in any certificate delivered to the Administrative Agent or any Lender
pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which
made or deemed made; or




          9.03. Covenants. Holdings or any of its Subsidiaries shall (a) default in the due performance or observance
by it of any term, covenant or agreement contained in Section 7.01(b), 7.01(c), 7.01(g)(i) and
(ii), 7.03 (other than clause (a)(i) thereof), 7.04 (with respect to the Borrower only), 7.11,
7.13, 7.17 or Section 8 or (b) default in the due performance or observance by it of any other
term, covenant or agreement contained in this Agreement (other than those set forth in Sections
9.01 and






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9.02) and such default shall continue unremedied for a period of 30 days following the earlier of
(i) Holdings’ or the Borrower’s actual knowledge of such default and (ii) written notice from the
Administrative Agent or the Required Lenders specifying such default; or




          9.04. Default Under Other Agreements. (a) Holdings or any of its Subsidiaries shall (i) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any, provided in an
instrument or agreement under which such Indebtedness was created or (ii) default in the observance
or performance of any agreement or condition relating to any Indebtedness (other than the
Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard to whether any
notice is required), any such Indebtedness to become due prior to its stated maturity, or (b) any
Indebtedness (other than the Obligations) of Holdings or any of its Subsidiaries shall be declared
to be (or shall become) due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; provided that, it
shall not be a Default or an Event of Default under this Section 9.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (a) and (b) is at least
$7,500,000; or




          9.05. Bankruptcy, etc. Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) shall commence a
voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as
now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an
involuntary case is commenced against Holdings or any of its Subsidiaries (other than any
Immaterial Subsidiary), and the petition is not controverted within 10 days, or is not dismissed
within 60 days after the filing thereof; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of Holdings or any of
its Subsidiaries (other than any Immaterial Subsidiary), to operate all or any substantial portion
of the business of Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary), or
Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter
in effect relating to Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary),
or there is commenced against Holdings or any of its Subsidiaries (other than any Immaterial
Subsidiary) any such proceeding which remains undismissed for a period of 60 days after the filing
thereof, or Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) is
adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Subsidiaries (other than any Immaterial
Subsidiary) makes a general assignment for the benefit of creditors; or any Business action is
taken by Holdings or any of its Subsidiaries (other than any Immaterial Subsidiary) for the purpose
of effecting any of the foregoing; or




          9.06. ERISA. (a) An ERISA Event shall have occurred, a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1)
thereof) and an event described in Subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the
following 30 days (except to the extent that a waiver to the advance reporting requirement of PBGC
Regulation 4043.61 applies with respect to such event); any Plan shall have an Unfunded Current
Liability; there is or arises any potential withdrawal
liability under Section 4201 of ERISA, if Holdings, any of its Subsidiaries, or any ERISA
Affiliate were to withdraw completely from any and all Multiemployer Plans; a contribution
required to be made by Holdings, any of its Subsidiaries or any ERISA Affiliate with respect to a
Plan or Non-U.S. Plan has not been timely made, Holdings, any of its Subsidiaries or any ERISA
Affiliate has incurred or is likely to incur any liability on account of a group health plan (as
defined in Section 607(1)






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of ERISA, Section 4980B(g)(2) of the Code or 45 Code of Federal Regulations Section 160.103) under
Section 4980B of the Code and/or the Health Insurance Portability and Accountability Act of 1996;
or Holdings or any of its Subsidiaries has incurred or is likely to incur liabilities pursuant to
any portion of any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as required by Section
601 of ERISA); any applicable law, rule or regulation is adopted, changed or interpreted, or the
interpretation or administration thereof is changed, in each case after the date hereof, by any
Governmental Authority (a “Change in Law”), or, as a result of a Change in Law, an event
occurs following a Change in Law, with respect to or otherwise affecting any Plan; (b) there shall
result from any of the events set forth in (a) above the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability described in (a) or (b) above, either individually or in the
aggregate, in the opinion of the Required Lenders has had, or could reasonably be expected to have,
a Material Adverse Effect; or




          9.07. Security Documents. Any of the Security Documents shall cease to be in full force and effect, or shall cease to
give the Collateral Agent for the benefit of the Secured Creditors the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a perfected security
interest in, and Lien on, all of the Collateral (other than any immaterial portion thereof), in
favor of the Collateral Agent, subject to no other Liens (except Permitted Liens), or any Credit
Party shall default in the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any such Security Document and such default shall
continue beyond the period of grace, if any, specifically applicable thereto pursuant to the terms
of such Security Document; or




          9.08. Guaranties. Any Guaranty or any provision thereof shall cease to be in full force or effect as to any
Guarantor (except as a result of a release of any Guarantor in accordance with the terms thereof),
or any Guarantor or any Person acting for or on behalf of such Guarantor shall deny or disaffirm
such Guarantor’s obligations under the Guaranty to which it is a party or any Guarantor shall
default in the due performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Guaranty to which it is a party; or




          9.09. Judgments. One or more judgments or decrees shall be entered against Holdings or any Subsidiary of
Holdings involving in the aggregate for Holdings and its Subsidiaries a liability (to the extent
not paid or not covered by a reputable and solvent insurance company pursuant to which the insurer
has accepted liability therefor in writing) and such judgments and decrees either shall be final
and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any
period of 30 consecutive days, and the aggregate amount of all such judgments equals or exceeds
$7,500,000; or




          9.10. Nationalization. All or any part of the interest of Holdings or any of its Subsidiaries in any Oil and Gas
Property (or any Hydrocarbons or revenues or other monies arising in respect of it) is (a)
nationalized, expropriated, compulsorily acquired or seized by any Governmental Authority, or (b)
any such Governmental Authority takes, or officially announces it will take, any step with a view
to any of the foregoing and in either case such action is reasonably likely to result in a Material
Adverse Effect; or




          9.11. Project Documents. (a) All or any part of any Project Document is not, or ceases to be, a legal, valid and
binding obligations of any Person party thereto in any circumstance which is reasonably likely to
have a Material Adverse Effect, (b) any party to any Project Document defaults under such Project
Document in the circumstances which are reasonably likely to result in a Material Adverse Effect or
(c) all or any part of any Project Document is suspended, terminated or revoked in circumstances
which are reasonably likely to result in a Material Adverse Effect; or





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          9.12. Change of Control. A Change of Control shall occur;



then, and in any such event, and at any time thereafter, if any Event of Default shall then be
continuing, the Administrative Agent, upon the written request of the Required Lenders, shall by
written notice to the Borrower, take any or all of the following actions, without prejudice to the
rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims
against any Credit Party (provided that, if an Event of Default specified in Section 9.05
shall occur with respect to the Borrower, the result which would occur upon the giving of written
notice by the Administrative Agent as specified in clauses (a) and (b) below, shall occur
automatically without the giving of any such notice): (a) declare the Total Commitment terminated,
whereupon all Commitments of each Lender shall forthwith terminate immediately without any other
notice of any kind; (b) declare the principal of and any accrued interest in respect of all Term
Loans and the Notes and all Obligations owing hereunder and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Credit Party; and (c) enforce, as Collateral Agent,
all of the Liens and security interests created pursuant to the Security Documents.



After the exercise of remedies provided for in immediately preceding paragraph, any amounts
received on account of the Obligations shall be applied by the Administrative Agent in the
following order (to the fullest extent permitted by mandatory provisions of applicable law):





     First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest, but including
legal, consultant fees and other out-of-pocket expenses payable under Section 11.01)
payable to the Administrative Agent, the Collateral Agent or the Lead Arranger in its
capacity as such;




     Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the Lenders
(including reasonable attorneys’ and consultants’ fees and disbursements payable under
Section 11.01), ratably among them in proportion to the amounts described in this
clause Second payable to them;




     Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Term Loans, ratably among the Lenders in proportion to the respective
amounts described in this clause Third payable to them;




     Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Term Loans ratably among the Lenders in proportion to the respective
amounts described in this clause Fourth held by them;




     Fifth, to the payment of all other Obligations that are due and payable to the
Administrative Agent, Collateral Agent and the other Lenders on such date, ratably based
upon the respective aggregate amounts of all such Obligations owing to the Administrative
Agent, Collateral Agent and the other Lenders on such date; and




     Last, the balance, if any, after all of the Obligations have been paid in full,
to the Borrower or other Credit Party as otherwise required by applicable law.



          SECTION 10. The Administrative Agent.




          10.01. Appointment. The Lenders hereby irrevocably designate and appoint Cyan
Partners, LP, as Administrative Agent (for purposes of this Section 10 and Section 11.01, the term
“Administrative Agent” also shall include Cyan Partners, LP, in its capacity as Collateral Agent
pursuant to the Security Documents) to act as specified herein and in the other Credit Documents.
Each Lender



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hereby irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize the Administrative Agent to take such action on its
behalf under the provisions of this Agreement, the other Credit Documents and any other instruments
and agreements referred to herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the Administrative Agent
by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The
Administrative Agent may perform any of its duties hereunder by or through its officers, directors,
agents, employees or affiliates.




          10.02. Nature of Duties. (a) The Administrative Agent in its capacity as such shall
have no duties or responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither the Administrative Agent in its capacity as such nor any of its
officers, directors, agents, employees or affiliates shall be liable for any action taken or
omitted by it or them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in
respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other
Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any other Credit Document
except as expressly set forth herein or therein.




          (b) Notwithstanding any other provision of this Agreement or any provision of any other
Credit Document, the Lead Arranger is named as such for recognition purposes only, and in its
capacity as such shall have no powers, duties, responsibilities or liabilities with respect to
this Agreement or the other Credit Documents or the transactions contemplated hereby and thereby;
it being understood and agreed that the Lead Arranger shall be entitled to all indemnification and
reimbursement rights in favor of the Administrative Agent as, and to the extent, provided for
under Sections 10.06 and 11.01. Without limitation of the foregoing, the Lead Arranger shall not,
solely by reason of this Agreement or any other Credit Documents, have any fiduciary relationship
in respect of any Lender or any other Person.




          10.03. Lack of Reliance on the Administrative Agent. Independently and without
reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (a) its own independent investigation of the
financial condition and affairs of Holdings and its Subsidiaries in connection with the making and
the continuance of the Term Loans and the taking or not taking of any action in connection herewith
and (b) its own appraisal of the creditworthiness of Holdings and its Subsidiaries and, except as
expressly provided in this Agreement, the Administrative Agent shall not have
any duty or responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect thereto, whether coming
into its possession before the making of the Term Loans or at any time or times thereafter. The
Administrative Agent shall not be responsible to any Lender or the holder of any Note for any
recitals, statements, information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of Holdings or any of its
Subsidiaries or be required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of Holdings or any of its Subsidiaries or the existence or possible existence
of any Default or Event of Default.




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          10.04. Certain Rights of the Agents. If any Agent shall request instructions from the
Required Lenders with respect to any act or action (including failure to act) in connection with
this Agreement or any other Credit Document, such Agent shall be entitled to refrain from such act
or taking such action unless and until such Agent shall have received instructions from the
Required Lenders; and such Agent shall not incur liability to any Lender by reason of so
refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall
have any right of action whatsoever against such Agent as a result of such Agent acting or
refraining from acting hereunder or under any other Credit Document in accordance with the
instructions of the Required Lenders.




          10.05. Reliance. The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone
message signed, sent or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of counsel selected by the
Administrative Agent.




          10.06. Indemnification. To the extent the Administrative Agent (or any affiliate,
officer, director, employee, representative, agent, sub-agent or advisor thereof (each, a
“Related Party”)) is not reimbursed and indemnified by the Borrower, the Lenders will
reimburse and indemnify the Administrative Agent (and any such Related Party) in proportion to
their respective “percentage” as used in determining the Required Lenders (determined as if there
were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any
such Related Party) in performing its duties hereunder or under any other Credit Document or in any
way relating to or arising out of this Agreement or any other Credit Document; provided
that (a) the unreimbursed expense or indemnified loss was incurred by or asserted against the
Administrative Agent in its capacity as such (or any Related Party acting for the Administrative
Agent in connection with such capacity) and (b) no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent’s (or such affiliates’ thereof)
gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).




          10.07. Each Agent in its Individual Capacity. With respect to its obligation to make Term Loans under this Agreement, each Agent shall
have the rights and powers specified herein for a “Lender” and may exercise the same rights
and powers as though it were not performing the duties specified herein; and the term
“Lender,” “Required Lenders,” “holders of Notes” or any similar terms
shall, unless the context clearly indicates otherwise, include such Agent in its individual
capacity. Each Agent and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, investment banking, trust or other business with, or provide debt
financing, equity capital or other services (including financial advisory services) to any Credit
Party or any Affiliate of any Credit Party (or any Person engaged in a similar business with any
Credit Party or any Affiliate thereof) as if they were not performing the duties specified herein,
and may accept fees and other consideration from any Credit Party or any Affiliate of any Credit
Party for services in connection with this Agreement and otherwise without having to account for
the same to the Lenders.




          10.08. Holders. Any Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until a written notice of the assignment, transfer or
endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who, at the time of making such request or giving such
authority or consent, is




90









 







the holder of any Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes
issued in exchange therefor.




          10.09. Resignation by the Administrative Agent. (a) The Administrative Agent may
resign from the performance of all of its respective functions and duties hereunder and/or under
the other Credit Documents at any time by giving 15 Business Days’ prior written notice to the
Lenders and, unless a Default or an Event of Default then exists, the Borrower. Any such
resignation by an Administrative Agent hereunder shall also constitute its resignation as the
Collateral Agent, and upon the effectiveness of such resignation of an Administrative Agent in
accordance with this Section 10.09 the resigning Administrative Agent shall no longer be required
to discharge any duties of the “Collateral Agent” under the Security Documents. Such resignation
shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b)
and (c) below or as otherwise provided below.




          (b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders
shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably acceptable to the Borrower, which acceptance shall not be
unreasonably withheld or delayed (provided that the Borrower’s approval shall not be
required if an Event of Default then exists).




          (c) If a successor Administrative Agent shall not have been so appointed within such 15
Business Day period, the Administrative Agent, with the consent of the Borrower (which consent
shall not be unreasonably withheld or delayed, provided that the Borrower’s consent shall
not be required if an Event of Default then exists), shall then appoint a successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as
the Required Lenders appoint a successor Administrative Agent as provided above.




          (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c)
above by the 20th Business Day after the date such notice of resignation was given by the
Administrative Agent, the Administrative Agent’s resignation shall become effective and the
Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder
and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.




          (e) Upon a resignation of the Administrative Agent (and the Collateral Agent) pursuant to
this Section 10.09, the Administrative Agent (and the Collateral Agent) shall remain indemnified
to the extent provided in this Agreement and the other Credit Documents and the provisions of this
Section 10 (and the analogous provisions of the other Credit Documents) shall continue in effect
for the benefit of the Administrative Agent (and the Collateral Agent) for all of its actions and
inactions while serving as the Administrative Agent (and the Collateral Agent).




          10.10. Collateral Matters. (a) Each Lender authorizes and directs the Collateral
Agent to enter into the Subsidiaries Guaranty and Security Documents for the benefit of the Lenders
and the other Secured Creditors. Each Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action
taken by the Required Lenders in accordance with the provisions of this Agreement or the Security
Documents, and the exercise by the Required Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. The Collateral Agent is hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent from any Lender, from time to
time prior to an Event of Default, to take any action with respect to any Collateral or Security
Documents which may be necessary to perfect and maintain perfected the security interest in and
liens upon the Collateral granted pursuant to the Security Documents.




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          (b) The Lenders hereby authorize the Collateral Agent, at its option and in its discretion,
to release any Lien granted to or held by the Collateral Agent upon any Collateral (i) upon
termination of the Total Commitment and payment and satisfaction of all of the Obligations (other
than inchoate indemnification obligations) at any time arising under or in respect of this
Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or otherwise disposed of (to Persons other than Holdings and its
Subsidiaries) upon the sale or other disposition thereof in compliance with Section 8.02, (iii) if
approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders
hereunder, to the extent required by Section 11.12) or (iv) as otherwise may be expressly provided
in the relevant Security Documents. Upon request by the Administrative Agent at any time, the
Lenders will confirm in writing the Collateral Agent’s authority to release particular types or
items of Collateral pursuant to this Section 10.10.




          (c) The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other
Person to assure that the Collateral exists or is owned by any Credit Party or is cared for,
protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto
have been properly or sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers
granted or available to the Collateral Agent in this Section 10.10 or in any of the Security
Documents, it being understood and agreed that in respect of the Collateral, or any act, omission
or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the
Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders,
except for its gross negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).




          10.11. Delivery of Information. The Administrative Agent shall not be required to deliver to any Lender originals or copies
of any documents, instruments, notices, communications or other information received by the
Administrative Agent from any Credit Party, any Subsidiary thereof, the Required Lenders, any
Lender or any other Person under or in connection with this Agreement or any other Credit Document
except (a) as specifically provided in this Agreement or any other Credit Document and (b) as
specifically requested from time to time in writing by any Lender with respect to a specific
document, instrument, notice or other written communication received by and in the possession of
the Administrative Agent at the time of receipt of such request and then only in accordance with
such specific request.




          SECTION 11. Miscellaneous.




          11.01. Payment of Expenses, etc. (a) The Borrower hereby agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs
and expenses of the Administrative Agent (including, without limitation, the reasonable fees and
disbursements of White & Case LLP and the Administrative Agent’s other counsel and consultants) in
connection with the preparation, execution, delivery and administration of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and therein and any
amendment, waiver or consent relating hereto or thereto, of the Administrative Agent and its
Affiliates in connection with its or their syndication efforts with respect to this Agreement and
of the Administrative Agent and, after the occurrence of an Event of Default, each of the Lenders
in connection with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the nature of a
“work-out” or pursuant to any insolvency or bankruptcy proceedings (including, in each case without
limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative
Agent and, after the occurrence of an Event of Default, counsel for




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each of the Lenders); (ii) pay
and hold the Administrative Agent and each of the Lenders harmless from and against any and all
present and future stamp, excise and other similar documentary taxes with respect to the foregoing
matters and save the Administrative Agent and each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other than to the extent
attributable to the Administrative Agent or such Lender) to pay such taxes; and (iii) indemnify the
Administrative Agent and each Lender, and each of their respective officers, directors, employees,
representatives, agents, affiliates, trustees and investment advisors (each, an “Indemnified
Person”) from and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and
disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising
out of, or in any way related to, or by reason of, (x) any investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Lender is a party thereto and whether or
not such investigation, litigation or other proceeding is brought by or on behalf of any Credit
Party) related to the entering into and/or performance of this Agreement or any other Credit
Document or the use of the proceeds of any Term Loans hereunder or the consummation of the
Transaction or any other transactions contemplated herein or in any other Credit Document or the
syndication of this Agreement or the exercise of any of their rights or remedies provided herein or
in the other Credit Documents, or (y) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real Property at any time
owned, leased, used by or operated by Holdings or any of its Subsidiaries or any of their
respective predecessors (but with respect to formerly owned, leased, used or operated Real
Properties, only to the extent arising from
the acts or omissions of Holdings or any of its Subsidiaries), the generation, storage,
transportation, handling or disposal of Hazardous Materials by Holdings or any of its Subsidiaries
or any of their respective predecessors at any location, whether or not owned, leased, used by or
operated by Holdings or any of its Subsidiaries, the non-compliance by Holdings or any of its
Subsidiaries with any Environmental Law (including applicable permits thereunder) applicable to any
Real Property, or any claim under any Environmental Law asserted against Holdings, any of its
Subsidiaries or any of their respective predecessors or any Real Property at any time owned,
leased, used by or operated by such entity, including, in each case, without limitation, the
reasonable fees and disbursements of counsel and other consultants incurred in connection with any
such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct
of the Indemnified Person to be indemnified (as determined by a court of competent jurisdiction in
a final and non-appealable decision)). To the extent that the undertaking to indemnify, pay or
hold harmless the Administrative Agent or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Holdings shall make the maximum
contribution to the payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.




          (b) To the full extent permitted by applicable law, each of Holdings and the Borrower shall
not assert, and hereby waives, any claim against any Indemnified Person, on any theory of
liability, for special, indirect, consequential or incidental damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this Agreement, any other
Credit Document, any other agreement or instrument contemplated hereby or thereby, the
transactions contemplated hereby or thereby or any Loan or the use of the proceeds thereof. No
Indemnified Person shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the other Credit
Documents or the transactions contemplated hereby or thereby, except to the extent the liability
of such Indemnified Person results from such Indemnified Person’s gross negligence or willful
misconduct (as determined by a court of competent jurisdiction in a final and non-appealable
decision).




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          11.02. Right of Setoff. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent and each Lender is
hereby authorized at any time or from time to time, without presentment, demand, protest or other
notice of any kind to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by the Administrative Agent or such Lender or
any Affiliate, branch or agency thereof (including, without limitation, by branches and agencies of
the Administrative Agent or such Lender or Affiliate wherever located) to or for the credit or the
account of Holdings or any of its Subsidiaries against and on account of the Obligations and
liabilities of the Credit Parties to the Administrative Agent or such Lender under this Agreement
or under any of the other Credit Documents, including, without limitation, all interests in
Obligations purchased by such Lender pursuant to Section 11.04(b), and all other claims of any
nature or description arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not the Administrative Agent or such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent
or unmatured.




          11.03. Notices. Except as otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopier or cable
communication) and mailed, telegraphed, telecopied, cabled or delivered: if to the Borrower, to
Endeavour Energy UK Limited, 114 St. Martin’s Lane, London WC2N 4BE, England, Attention: J. Michael
Kirksey, Facsimile: 44 20 7451 2351, with a copy to Endeavour International Corporation, 1001
Fannin, Suite 1600, Houston, Texas 77002, Attention: J. Michael Kirksey, Facsimile: (713)
307-8794, if to any Credit Party (other than the Borrower), c/o Endeavour International
Corporation, 1001 Fannin, Suite 1600, Houston, Texas 77002, Attention: J. Michael Kirksey,
Facsimile: (713) 307-8794, if to any Lender, at its address specified on Schedule 11.03 hereto; and
if to the Administrative Agent, at the Notice Office; or, as to any Credit Party or the
Administrative Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Lender, at such other address as shall be
designated by such Lender in a written notice to the Borrower and the Administrative Agent. All
such notices and communications shall, when mailed, telegraphed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telecopier, except that notices
and communications to the Administrative Agent, and the Borrower shall not be effective until
received by the Administrative Agent or the Borrower, as the case may be.




          11.04. Benefit of Agreement; Assignments; Participations. (a) This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that neither Holdings nor the
Borrower may assign or transfer any of its rights, obligations or interest hereunder without the
prior written consent of the Lenders and, provided further, that, although any
Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall
remain a “Lender” for all purposes hereunder (and may not transfer or assign all or any portion of
its Commitment or any related Obligations hereunder except as provided in Sections 2.08 and
11.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a
“Lender” hereunder and, provided further, that no Lender shall transfer or grant
any participation under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver
would (i) extend the final scheduled maturity of any Term Loan or Note in which such participant is
participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except
in connection with a waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the participant’s participation over
the amount thereof then in effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the




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Total Commitment shall not constitute a change in the
terms of such participation, and that an increase in any Commitment (or the available portion
thereof) or Term Loan shall be permitted without the consent of any participant if the
participant’s participation is not increased as a result thereof), (ii) consent to the assignment
or transfer by Holdings or the Borrower of any of its rights and obligations under this Agreement
or (iii) release all or substantially all of the Collateral under all of the Security Documents
(except as expressly provided in the Credit Documents) supporting the Term Loans hereunder in which
such participant is participating. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Credit Documents (the participant’s
rights against such Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such participation.




          (b) Notwithstanding the foregoing, any Lender (or any Lender together with one or more other
Lenders) may (x) assign all or a portion of its Commitments and related outstanding Obligations
(or, if the Commitments have terminated, outstanding Obligations) hereunder to (i) (A) its
parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender
or its parent company or (B) to one or more other Lenders or any affiliate of any such other
Lender which is at least 50% owned by such other Lender or its parent company (provided
that any fund that invests in loans and is managed or advised by the same investment advisor of
another fund which is a Lender (or by an Affiliate of such investment advisor) shall be treated as
an affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the
case of any Lender that is a fund that invests in loans, any other fund that invests in loans and
is managed or advised by the same investment advisor of any Lender or by an Affiliate of such
investment advisor; provided that, in no event shall any assignment of Commitments or Term
Loans pursuant to this clause (x) be made to Holdings, the Borrower or any of their respective
Subsidiaries or Affiliates, or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such Commitment and
related outstanding Obligations (or, if the Commitment has terminated, outstanding Obligations)
hereunder to one or more Eligible Transferees (treating any fund that invests in loans and any
other fund that invests in loans and is managed or advised by the same investment advisor of such
fund or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which
assignees shall become a party to this Agreement as a Lender by execution of an Assignment and
Assumption Agreement, provided that (i) at such time, Schedule 1.01(b) shall be deemed
modified to reflect the Commitments and/or outstanding Term Loans, as the case may be, of such new
Lender and of the existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning
Lender (or, upon such assigning Lender’s indemnifying the Borrower for any lost Note pursuant to a
customary indemnification agreement) new Notes will be issued, at the Borrower’s expense, to such
new Lender and to the assigning Lender, such new Notes to be in conformity with the requirements
of Section 2.04 (with appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Term Loans, as the case may be, (iii) the consent of the
Administrative Agent and after the Syndication Date, so long as no Default or Event of Default
then exists, the Borrower, shall be required in connection with any such assignment pursuant to
clause (y) above (such consent, in any case, not to be unreasonably withheld, delayed or
conditioned); provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the Administrative Agent within 5
Business Days after having received notice thereof, (iv) the Administrative Agent shall receive at
the time of each such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (v) no such transfer or assignment will be effective
until recorded by the Administrative Agent on the Register pursuant to Section 11.15. To the
extent of any assignment pursuant to this Section 11.04(b), the assigning Lender shall be relieved
of its obligations hereunder with respect to its assigned Commitment and outstanding Term Loans.
To the extent that an assignment of all or any portion of a Lender’s Commitment and related
outstanding Obligations pursuant to Section 2.08 or this Section 11.04(b), would, at the time of
such assignment, result in increased costs




95









 







under Section 2.09 from those being charged by the
respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to
pay such increased costs (although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective assignment).




          (c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Term
Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank and, with prior notification to the Administrative Agent (but
without the consent of the Administrative Agent or the Borrower), any Lender which is a fund may
pledge all or any portion of its Term Loans and Notes to its trustee or to a collateral agent or
financial institution providing credit or credit support to such Lender in support of its
obligations to such trustee, such collateral agent or such financial institution, as the case may
be. No pledge pursuant to this clause (c) shall release the transferor Lender from any of its
obligations hereunder.




          (d) Any Lender which assigns all of its Commitments and/or Term Loans hereunder in accordance
with Section 11.04(b) shall cease to constitute a “Lender” hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation, Sections 2.09,
4.04, 10.06, 11.01 and 11.06), which shall survive as to such assigning Lender.




          11.05. No Waiver; Remedies Cumulative. No failure or delay on the part of the
Administrative Agent, the Collateral Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing between the
Borrower or any other Credit Party and the Administrative Agent, the Collateral Agent or any Lender
shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, the
Collateral Agent or any Lender would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative Agent, the
Collateral Agent or any Lender to any other or further action in any circumstances without notice
or demand.




          11.06. Payments Pro Rata. (a) Except as otherwise provided in this Agreement, the
Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of
the Borrower in respect of any Obligations hereunder, the Administrative Agent shall distribute
such payment to the Lenders entitled thereto (other than any Lender that has consented in writing
to waive its pro rata share of any such payment) pro rata based
upon their respective shares, if any, of the Obligations with respect to which such payment was
received.




          (b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by
voluntary payment, by realization upon security, by the exercise of the right of setoff or
banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise), which is applicable to the payment of the principal of, or interest on,
the Term Loans, of a sum which with respect to the related sum or sums received by other Lenders
is in a greater proportion than the total of such Obligation then owed and due to such Lender
bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to
such receipt, then such Lender receiving such excess payment shall purchase for cash without
recourse or warranty from the other Lenders an interest in the Obligations of the respective
Credit Party to such Lenders in such amount as shall result in a proportional participation by all
the Lenders in such amount; provided that if




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all or any portion of such excess amount is
thereafter recovered from such Lenders, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.




          (c) Notwithstanding anything to the contrary contained herein, the provisions of the
preceding Sections 11.06(a) and (b) shall be subject to the express provisions of this Agreement
which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to
Defaulting Lenders.




          11.07. Calculations; Computations. (a) All accounting determinations under this
Agreement and all financial statements to be furnished to the Lenders pursuant hereto shall be made
and prepared in accordance with GAAP
consistently applied throughout the periods involved (except as set forth in the notes thereto
or as otherwise disclosed in writing by Holdings to the Lenders); provided that, (i) except
as otherwise specifically provided herein, all computations and all definitions (including
accounting terms) used in determining compliance with Sections 8.07 through 8.10, inclusive, shall
utilize GAAP and policies in conformity with those used to prepare the audited financial statements
of Holdings and its Subsidiaries referred to in Section 6.05(a) for the fiscal year ended December
31, 2009 and (ii) to the extent expressly provided herein, certain calculations shall be made on a
Pro Forma Basis. Holdings, the Borrower and the Administrative Agent, on behalf of the Lenders,
agree that in the event of any material change in GAAP (any such change, for the purpose of this
Section 11.07, an “Accounting Change”) that occurs after the date of this Agreement, then
following the written request of either the Borrower or the Administrative Agent, the Borrower and
the Administrative Agent shall enter into good faith negotiations in order to amend such provisions
of this Agreement so as to equitably reflect any such Accounting Change with the desired result
that the criteria for evaluating the financial condition of Holdings and its Subsidiaries shall be
the same after such Accounting Change as if such Accounting Change had not been made, and until
such time as such an amendment shall have been executed and delivered by Holdings, the Borrower and
Required Lenders, (a) all financial covenants, standards and terms in this Agreement shall be
calculated and/or construed as if such Accounting Change had not been made, and (b) the Borrower
shall prepare footnotes to each certificate and the financial statements required to be delivered
pursuant to Sections 7.01(a), (b), (c), and (g) hereunder that show the differences between the
financial statements delivered (which reflect such Accounting Change) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Change).




          (b) All computations of interest and Fees hereunder shall be made on the basis of a year of
360 days for the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or Fees are payable.




          (c) For purposes of any computation determining compliance with any incurrence or expenditure
tests set forth in Sections 7 and/or 8 or with Dollar-based basket levels appearing in Sections
4.01 or 4.02 or any definitions contained in Section 1.01, any amounts so incurred, expended or
utilized (to the extent incurred, expended or utilized in a currency other than Dollars) shall be
converted into Dollars on the basis of the Exchange Rates as in effect on the date of such
incurrence, expenditure or utilization under any provision of any such Section or definition that
has an aggregate Dollar limitation provided for therein (and to the extent the respective
incurrence, expenditure or utilization test regulates the aggregate amount outstanding at any time
and it is expressed in terms of Dollars, all outstanding amounts originally incurred or spent in
currencies other than Dollars shall be converted into Dollars on the basis of the Exchange Rates
as in effect on the date of any new incurrence, expenditure or utilization made under any
provision of any such Section that regulates the Dollar amount outstanding at any time).




          11.08. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THE RELEVANT SECURITY DOCUMENT BE




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




          (b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES (TO THE FULLEST EXTENT
PERMITTED BY LAW) ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.




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          (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.




          11.09. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent.
Delivery of an executed counterpart hereof by facsimile or electronic transmission shall be as
effective as delivery of any original executed counterpart hereof.




          11.10. Effectiveness. This Agreement shall become effective on the date (the
“Effective Date”) on which Holdings, the Borrower, the Administrative Agent and each of the
Lenders shall have signed a copy of this Agreement (whether the same or different copies) and shall
have delivered the same to the Administrative Agent at the Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written
telex or facsimile transmission notice (actually received) that the same has been signed and mailed
to it. The Administrative Agent will give the Borrower and each Lender prompt written notice of
the occurrence of the Effective Date.




          11.11. Headings Descriptive. The headings of the several sections and subsections of
this Agreement are inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.




          11.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless
such change, waiver, discharge or termination is in writing signed by the respective Credit Parties
party hereto or thereto and the Required Lenders (although additional parties may be added to (and
schedules and annexes may be modified to reflect such additions), and Subsidiaries of the Borrower
may be released from, the Security Documents in accordance with the provisions hereof and thereof
without the consent of the other Credit Parties party thereto or the Required Lenders),
provided that no such change, waiver, discharge or termination shall, without the consent
of each Lender (other than a Defaulting Lender) (with Obligations being directly affected in the
case of following clause (i)), (i) extend the final scheduled maturity of any Term Loan or Note, or
reduce the rate or extend the time of payment of interest or Fees thereon (except in connection
with the waiver of applicability of any post-default increase in interest rates), or reduce (or
forgive) the principal amount thereof, (ii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the Security Documents, (iii)
amend, modify or waive any provision of this Section 11.12(a) (except for technical amendments with
respect to additional extensions of credit pursuant to this Agreement which afford the protections
to such additional extensions of credit of the type provided to the Commitments and the Term Loans
on the Effective Date), (iv) release the Holdings Guaranty or release all or substantially all of
the aggregate value of the Subsidiaries Guaranties, (v) reduce the “majority” voting threshold
specified in the definition of Required Lenders (it being understood that, with the consent of the
Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the
determination of the Required Lenders on substantially the same basis as the extensions of
Commitments and/or Term Loans are included on the Effective Date) or (vi) consent to the assignment
or transfer by Holdings or the Borrower of any of its rights and obligations under this Agreement;
provided further, that no such change, waiver, discharge or termination shall (1)
increase the Commitment of any Lender over the amount thereof then in effect without the consent of
such Lender (it being understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total Commitment shall not
constitute an increase of the
Commitment of any Lender, and that an increase in the available




99









 







portion of the Commitment of
any Lender shall not constitute an increase of the Commitment of such Lender), (2) without the
consent of the Administrative Agent, amend, modify or waive any provision of Section 10 or any
other provision of this Agreement or any other Credit Document as same relates to the rights or
obligations of the Administrative Agent or (3) without the consent of the Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the Collateral Agent.




          (b) If, in connection with any proposed change, waiver, discharge or termination of or to any
of the provisions of this Agreement as contemplated by clauses (i) through (vi), inclusive, of the
first proviso to Section 11.12(a), the consent of the Required Lenders is obtained but the consent
of one or more of such other Lenders whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Lenders whose individual consent is required
are treated as described below, to replace each such non-consenting Lender or Lenders with one or
more Replacement Lenders pursuant to Section 2.08 so long as at the time of such replacement, each
such Replacement Lender consents to the proposed change, waiver, discharge or termination,
provided further, that the Borrower shall not have the right to replace a Lender
or repay its Term Loans solely as a result of the exercise of such Lender’s rights (and the
withholding of any required consent by such Lender) pursuant to the second proviso to Section
11.12(a).




          (c) Holdings, the Borrower and the Administrative Agent may, without the input or consent of
the Lenders, effect technical amendments to this Agreement and the other Credit Documents as may
be necessary or appropriate in the reasonable opinion of the Borrower and the Administrative Agent
to effect the provisions of Section 2.10.




          11.13. Survival. All indemnities set forth herein including, without limitation, in
Sections 2.09, 4.04, 10.06 and 11.01 shall survive the execution, delivery and termination of this
Agreement and the Notes and the making and repayment of the Obligations.




          11.14. Domicile of Term Loans. Each Lender may transfer and carry its Term Loans at,
to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding
anything to the contrary contained herein, to the extent that a transfer of Term Loans pursuant to
this Section 11.14 would, at the time of such transfer, result in increased costs under Section
2.09 or 4.04, from those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above resulting from changes after
the date of the respective transfer to the extent otherwise required under any such Section).




          11.15. Register. The Borrower hereby designates the Administrative Agent to serve as
its agent, solely for purposes of this Section 11.15, to maintain a register (the
“Register”) on which it will record the Commitments from time to time of each of the
Lenders, the Term Loans made by each of the Lenders (including any increases to the principal
amounts thereof as a result of payment of PIK Interest) and each repayment in respect of the
principal amount of the Term Loans of each Lender. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower’s obligations in respect of such Term
Loans. With respect to any Lender, the transfer of the Commitment of such Lender and the rights to
the principal of, and interest on, any Term Loan made pursuant to such Commitment shall not be
effective until such transfer is recorded on the Register maintained by the Administrative
Agent with respect to ownership of such Commitment and Term Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitment and Term Loans shall remain owing
to the transferor. The registration of assignment or transfer of all or part of any Commitments
and Term Loans shall be recorded by the Administrative Agent on the Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 11.04(b). Coincident with the delivery of such an
Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or




100









 







part of a Term Loan, or as soon thereafter as practicable, the
assigning or transferor Lender shall surrender the Note evidencing such Term Loan, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to the assigning or
transferor Lender and/or the new Lender. The Borrower agrees to indemnify the Administrative Agent
from and against any and all losses, claims, damages and liabilities of whatsoever nature which may
be imposed on, asserted against or incurred by the Administrative Agent in performing its duties
under this Section 11.15.




          11.16. Confidentiality. (a) Subject to the provisions of clause (b) of this Section
11.16, each Lender agrees that it will not disclose without the prior consent of the Borrower
(other than to its employees, auditors, advisors or counsel or to another Lender if such Lender or
such Lender’s holding or parent company in its sole discretion determines that any such party
should have access to such information, provided such Persons shall be subject to the provisions of
this Section 11.16 to the same extent as such Lender) any information with respect to Holdings or
any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any
other Credit Document, provided that any Lender may disclose any such information (i) as
has become generally available to the public other than by virtue of a breach of this Section
11.16(a) by the respective Lender, (ii) as may be required or appropriate in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body having or claiming to
have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere) or their
successors, (iii) as may be required or appropriate in respect to any summons or subpoena or in
connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Lender or to comply with a request by a Governmental Authority, (v) to the
Administrative Agent or the Collateral Agent, (vi) to any direct or indirect contractual
counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty’s
professional advisor), so long as such contractual counterparty (or such professional advisor)
agrees to be bound by the provisions of this Section 11.16, (vii) in connection with the
enforcement of remedies pursuant to this Agreement and the other Credit Documents, (viii) to any
prospective or actual transferee, pledgee or participant in connection with any contemplated
transfer, pledge or participation of any of the Notes or Commitments or any interest therein by
such Lender; provided that such prospective transferee, pledgee or participant agrees to be
bound by the confidentiality provisions contained in this Section 11.16, (ix) to (A) any bank or
financial institution and (B) S&P, Moody’s, Fitch Ratings and/or other ratings agencies, as such
Lender deems necessary or appropriate in connection with such Lender’s obtaining financing;
provided, however, that such financial institution or ratings agency shall be
informed of the confidentiality of such information and (x) to its investors or potential investors
as such Lender reasonably deems necessary or appropriate; provided, however, that
such investors or potential investors shall be informed of the confidentiality of such information.




          (b) Each of Holdings and the Borrower hereby acknowledges and agrees that each Lender may
share with any of its Affiliates, and such Affiliates may share with such Lender, any information
related to Holdings or any of its Subsidiaries (including, without limitation, any non-public
customer information regarding the creditworthiness of Holdings and its Subsidiaries),
provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent
as such Lender.




          (c) Notwithstanding anything to the contrary contained in this Section, each of Holdings and
the Borrower hereby agrees that the Administrative Agent and its Affiliates may publicize its
services in connection with this Agreement and the other Credit Documents and the transactions
contemplated herein and therein, including, without limitation, through granting interviews with
and providing information to the financial press and other media and by publicizing such services
on its web-site or other electronic medium; provided, however, that the Administrative Agent and
its Affiliates shall not publicize as contemplated above in this clause (c) until the earlier to
occur of (i) the 5th day following the Funding Date and (ii) such date as when Holdings shall have
publicly announced the




101









 







consummation of the Transaction. In addition, each of Holdings and the
Borrower hereby authorizes the Administrative Agent to place a customary “tombstone” advertisement
regarding this Agreement and the transactions contemplated herein related hereto in publications
of its choice at the Borrower’s expense.




          11.17. Patriot Act. Each Lender subject to the USA PATRIOT ACT (Title 111 of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”) hereby notifies Holdings and
the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify
and record information that identifies Holdings, the Borrower and the other Credit Parties and
other information that will allow such Lender to identify Holdings, the Borrower and the other
Credit Parties in accordance with the Patriot Act.




          11.18. Process Agent. (a) Each Credit Party hereby irrevocably and unconditionally
appoints CT Corporation with an office on the date hereof at 111 Eighth Avenue, New York, New York
10011, and its successors hereunder (the “Process Agent”), as its agent to receive on
behalf of such Credit Party and its property all writs, claims, process, and summonses in any
action or proceeding brought against such Credit Party in the State of New York. Such service may
be made by mailing or delivering a copy of such process to any Credit Party in care of the Process
Agent at the address specified above for the Process Agent, and such Credit Party irrevocably
authorizes and directs the Process Agent to accept such service on its behalf. Failure by the
Process Agent to give notice to the applicable Credit Party, or failure of the applicable Credit
Party, to receive notice of such service of process shall not impair or affect the validity of such
service on the Process Agent or any such Credit Party, or of any judgment based thereon. Each
Credit Party covenants and agrees that it shall take any and all reasonable action, including the
execution and filing of any and all documents that may be necessary to continue the designation of
the Process Agent above in full force and effect, and to cause the Process Agent to act as such.
Each Credit Party hereto further covenants and agrees to maintain at all times an agent with
offices in New York City to act as its Process Agent. Nothing herein shall in any way be deemed to
limit the ability to serve any such writs, process or summonses in any other manner permitted by
applicable law.




          (b) Each Credit Party that is not incorporated in England and Wales and that has executed, or
will on the Funding Date execute, any Credit Document governed by the law of England and Wales
irrevocably and unconditionally appoints the Borrower, with an office on the date hereof at 114
St. Martin’s Lane, London WC2N 4BE, England, and its successors hereunder (the “UK Process
Agent”), as its agent to receive on behalf of such Credit Party and its property all writs,
claims, process, and summonses in any action or proceeding brought against such Credit Party in
England and Wales. Such service may be made by mailing or delivering a copy of such process to
any Credit Party in care of the U.K. Process Agent at the address specified above for the U.K.
Process Agent, and such Credit Party irrevocably authorizes and directs the UK Process Agent to
accept such service on its behalf. Failure by
the UK Process Agent to give notice to such Credit Party, or failure of such Credit Party, to
receive notice of such service of process shall not impair or affect the validity of such service
on the UK Process Agent or any such Credit Party, or of any judgment based thereon. Each such
Credit Party covenants and agrees that it shall take any and all reasonable action, including the
execution and filing of any and all documents that may be necessary to continue the designation of
the U.K. Process Agent above in full force and effect, and to cause the U.K. Process Agent to act
as such. Each such Credit Party hereto further covenants and agrees to maintain at all times an
agent with offices in England to act as its UK Process Agent. Nothing herein shall in any way be
deemed to limit the ability to serve any such writs, process or summonses in any other manner
permitted by applicable law. If any person appointed as an agent for service of process pursuant
to Section 5.20 is unable for any reason to act as agent for service of process, Holdings (on
behalf of all such Credit Parties) shall immediately (and in any event within five days of such
event taking place) appoint another agent on terms acceptable to the Administrative Agent. In the
event that Holdings fails to appoint such agent on terms acceptable to the Administrative Agent,
the Administrative Agent shall have the right to appoint an agent on process.




102









 








          11.19. Judgment Currency. If, for the purposes of obtaining judgment in any court, it
is necessary to convert a sum due hereunder or any other Credit Document in one currency into
another currency, the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase the first currency with such other
currency on the Business Day preceding that on which final judgment is given. The obligation of
the Credit Parties in respect of any such sum due from it to the Administrative Agent or the
Lenders hereunder or under the other Credit Documents shall, notwithstanding any judgment in a
currency (the “Judgment Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be
discharged only to the extent that on the Business Day following receipt by the Administrative
Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due
to the Administrative Agent from the Credit Parties in the Agreement Currency, the Credit Parties
agree, jointly and severally, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or the Person to whom such obligation was owing against such
loss.




          11.20. Maximum Lawful Rate. Notwithstanding anything to the contrary contained in any
Credit Document, the interest paid or agreed to be paid under the Credit Documents shall not exceed
the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”).
If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the
Maximum Rate, the excess interest shall be applied to the principal of the Loans, or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the interest contracted
for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts
the total amount of interest throughout the contemplated term of the Obligations hereunder.




          11.21. INTERCREDITOR AGREEMENT. (a) EACH LENDER PARTY HERETO HEREBY AUTHORIZES THE
ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT TO EXECUTE AND DELIVER
THE INTERCREDITOR AGREEMENT AND UPON THE REQUEST OF THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE COLLATERAL AGENT EACH AGREE TO EXECUTE AND DELIVER THE INTERCREDITOR AGREEMENT PROVIDED SUCH
AGREEMENT IS IN FORM AND SUBSTANCE TO SATISFACTORY TO EACH SUCH AGENT AND EACH LENDER PARTY
UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT AT ALL TIMES FOLLOWING THE EXECUTION AND DELIVERY OF THE
INTERCREDITOR AGREEMENT SUCH LENDER (AND EACH OF ITS SUCCESSORS AND ASSIGNS) SHALL BE BOUND BY THE
TERMS THEREOF.




          (b) EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE
INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NO AGENT OR ANY OF AFFILIATES
MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS
CONTAINED IN THE INTERCREDITOR AGREEMENT.




          SECTION 12. Holdings Guaranty.




          12.01. Guaranty. In order to induce the Administrative Agent, the Collateral Agent
and the Lenders to enter into this Agreement and to extend credit hereunder, and to induce the
other Guaranteed Creditors to enter into Hedging Agreements and in recognition of the direct
benefits to be




103









 







received by Holdings from the proceeds of the Term Loans and the entering into of
such Hedging Agreements, Holdings hereby agrees with the Guaranteed Creditors as follows: Holdings
hereby unconditionally and irrevocably guarantees as primary obligor and not merely as surety the
full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all
of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any or all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors becomes due and payable
hereunder, Holdings, unconditionally and irrevocably, promises to pay such indebtedness to the
Administrative Agent and/or the other Guaranteed Creditors, or order, on demand, together with any
and all expenses which may be incurred by the Administrative Agent and the other Guaranteed
Creditors in collecting any of the Guaranteed Obligations. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of
any such claim effected by such payee with any such claimant (including the Borrower), then and in
such event Holdings agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon Holdings, notwithstanding any revocation of this Holdings Guaranty or other instrument
evidencing any liability of the Borrower, and Holdings shall be and remain liable to the aforesaid
payees hereunder for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.




          12.02. Bankruptcy. Additionally, Holdings unconditionally and irrevocably guarantees
the payment of any and all of the Guaranteed Obligations to the Guaranteed Creditors whether or not
due or payable by the Borrower upon the occurrence of any of the events specified in Section 9.05,
and irrevocably and
unconditionally promises to pay such indebtedness to the Guaranteed Creditors, or order, on
demand, in lawful money of the United States.




          12.03. Nature of Liability. The liability of Holdings hereunder is primary, absolute
and unconditional, exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations, whether executed by any other guarantor or by any other party, and the
liability of Holdings hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by
the Borrower, or (e) any payment made to any Guaranteed Creditor on the Guaranteed Obligations
which any such Guaranteed Creditor repays to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and Holdings
waives any right to the deferral or modification of its obligations hereunder by reason of any such
proceeding, or (f) any action or inaction by the Guaranteed Creditors as contemplated in Section
12.05, or (g) any invalidity, irregularity or enforceability of all or any part of the Guaranteed
Obligations or of any security therefor.




          12.04. Independent Obligation. The obligations of Holdings hereunder are independent
of the obligations of any other guarantor, any other party or the Borrower, and a separate action
or actions may be brought and prosecuted against Holdings whether or not action is brought against
any other guarantor, any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings waives, to the
fullest extent permitted by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which
operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.




104









 








          12.05. Authorization. Holdings authorizes the Guaranteed Creditors without notice or
demand (except as shall be required by applicable statute and cannot be waived), and without
affecting or impairing its liability hereunder, from time to time to:





     (i) change the manner, place or terms of payment of, and/or change or extend the time
of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations
(including any increase or decrease in the principal amount thereof or the rate of interest
or fees thereon), any security therefor, or any liability incurred directly or indirectly in
respect thereof, and this Holdings Guaranty shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;




     (ii) take and hold security for the payment of the Guaranteed Obligations and sell,
exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and
in any order any property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, the Guaranteed Obligations or any liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset
there against;




     (iii) exercise or refrain from exercising any rights against the Borrower, any other
Credit Party or others or otherwise act or refrain from acting;




     (iv) release or substitute any one or more endorsers, guarantors, the Borrower, other
Credit Parties or other obligors;




     (v) settle or compromise any of the Guaranteed Obligations, any security therefor or
any liability (including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to the payment
of any liability (whether due or not) of the Borrower to its creditors other than the
Guaranteed Creditors;




     (vi) apply any sums by whomsoever paid or howsoever realized to any liability or
liabilities of the Borrower to the Guaranteed Creditors regardless of what liability or
liabilities of the Borrower remain unpaid;




     (vii) consent to or waive any breach of, or any act, omission or default under, this
Agreement, any other Credit Document, any Hedging Agreement or any of the instruments or
agreements referred to herein or therein, or otherwise amend, modify or supplement this
Agreement, any other Credit Document, any Hedging Agreement or any of such other instruments
or agreements; and/or




     (viii) take any other action which would, under otherwise applicable principles of
common law, give rise to a legal or equitable discharge of Holdings from its liabilities
under this Holdings Guaranty.



          12.06. Reliance. It is not necessary for any Guaranteed Creditor to inquire into the
capacity or powers of Holdings or any of its Subsidiaries or the officers, directors, partners or
agents acting or purporting to act on their behalf, and any Guaranteed Obligations made or created
in reliance upon the professed exercise of such powers shall be guaranteed hereunder.




          12.07. Subordination. Any indebtedness of the Borrower now or hereafter owing to
Holdings is hereby subordinated to the Guaranteed Obligations owing to the Guaranteed Creditors;
and if the Administrative Agent so requests at a time when an Event of Default exists, all such
indebtedness of the Borrower to Holdings shall be collected, enforced and received by Holdings for
the benefit of the Guaranteed Creditors and be paid over to the Administrative Agent on behalf of
the Guaranteed Creditors




105









 







on account of the Guaranteed Obligations to the Guaranteed Creditors, but
without affecting or impairing in any manner the liability of Holdings under the other provisions
of this Holdings Guaranty. Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any such indebtedness of the Borrower to Holdings, Holdings shall mark such note or
negotiable instrument with a legend that the same is subject to this subordination. Without
limiting the generality of the foregoing, Holdings hereby agrees with the Guaranteed Creditors that
it will not exercise any right of subrogation which it may at any time otherwise have as a result
of this Holdings Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash.




          12.08. Waiver. (a) Holdings waives any right (except as shall be required by
applicable statute and cannot be waived) to require any Guaranteed Creditor to (i) proceed against
the Borrower, any other guarantor or any other party, (ii) proceed against or exhaust any security
held from the Borrower, any other guarantor or any other party or (iii) pursue any other remedy in
any Guaranteed Creditor’s power
whatsoever. Holdings waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party, other than payment of the Guaranteed Obligations
to the extent of such payment, based on or arising out of the disability of the Borrower, Holdings,
any other guarantor or any other party, or the validity, legality or unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower other than payment of the Guaranteed Obligations to the extent of such
payment. The Guaranteed Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or any other Guaranteed Creditor by one or more judicial
or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to
the extent such sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of Holdings hereunder except to the extent the
Guaranteed Obligations have been paid. Holdings waives any defense arising out of any such
election by the Guaranteed Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of Holdings against the Borrower
or any other party or any security.




          (b) Holdings waives all presentments, demands for performance, protests and notices,
including without limitation notices of nonperformance, notices of protest, notices of dishonor,
notices of acceptance of this Holdings Guaranty, notices making any claim or demand in Holdings,
and notices of the existence, creation or incurring of new or additional Guaranteed Obligations,
and promptness in commencing suit against any party. Holdings assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which Holdings assumes and incurs hereunder, and agrees that
neither the Administrative Agent nor any of the other Guaranteed Creditors shall have any duty to
advise Holdings of information known to them regarding such circumstances or risks.




          (c) Holdings waives any defense (i) based on any lack of authority of the officers,
directors, partners, or agents purporting to act on behalf any of its Subsidiaries or any
principal of any of its Subsidiaries or any defect in the formation of any of its Subsidiaries or
any principal thereof, (ii) based on the application by the Borrower of the proceeds of the Term
Loans for purposes other than the purposes represented by the Borrower to the Lenders, (iii) based
on any statute or rule of law that provides that the obligation of a surety must be neither larger
in amount nor in any other respects more burdensome than that of a principal, (iv) based on a
Lender’s election, in any proceeding instituted under the Bankruptcy Code, of the application of
Section 1111 subdivision (b)(2) of the Bankruptcy Code or any successor statute and (v) any
borrowing or any grant of security interest under Section 364 of the Bankruptcy Code.




106









 








          12.09. Payments. All payments made by Holdings pursuant to this Section 12 shall be
made in Dollars and will be made without setoff, counterclaim or other defense, and shall be
subject to the provisions of Sections 4.03 and 4.04.




          12.10. Maximum Liability. It is the desire and intent of Holdings and the Guaranteed
Creditors that this Holdings Guaranty shall be enforced against Holdings to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in which enforcement is
sought. If, however, and to the extent that, the obligations of Holdings under this Holdings
Guaranty shall be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers), then the amount of Holdings’ obligations
under this Holdings Guaranty shall be deemed to be reduced and Holdings shall pay the maximum
amount of the Guaranteed Obligations which would be permissible under applicable law.




* * *





107












 





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



	 	 	 	 	 
	 	ENDEAVOUR INTERNATIONAL CORPORATION

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

 	 
	 	By:  	/s/ J. Michael Kirksey
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CYAN PARTNERS, LP,

Individually and as Administrative Agent

 	 
	 	By:  	/s/ Jonathan Tunis
 	 
	 	 	Name:  	Jonathan Tunis 	 
	 	 	Title:  	Authorized Signatory 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CYRUS OPPORTUNITIES FUND II, L.P.,

As Lender



By: CYRUS CAPITAL PARNTERS L.P.,

As Investment Manager

 	 
	 	By:  	/s/ David A. Milich
 	 
	 	 	Name:  	David A. Milich 	 
	 	 	Title:  	COO 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CYRUS EUROPE FUND, L.P., As Lender



By: CYRUS CAPITAL PARNTERS L.P.,

As Investment Manager

 	 
	 	By:  	/s/ David A. Milich
 	 
	 	 	Name:  	David A. Milich 	 
	 	 	Title:  	COO 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CRESCENT I, L.P., As Lender



By: CYRUS CAPITAL PARNTERS L.P.,

As Investment Manager

 	 
	 	By:  	/s/ David A. Milich
 	 
	 	 	Name:  	David A. Milich 	 
	 	 	Title:  	COO 	 



 









 







	 	 	 	 	 
	 	CYR FUND, L.P., As Lender



By: CYRUS CAPITAL PARNTERS L.P.,

As Investment Manager

 	 
	 	By:  	/s/ David A. Milich
 	 
	 	 	Name:  	David A. Milich 	 
	 	 	Title:  	COO 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CYRUS CAPITAL PARNTERS L.P., as Lender

 	 
	 	By:  	/s/ Brennan McCaw
 	 
	 	 	Name:  	Brennan McCaw 	 
	 	 	Title:  	CFO 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	MTP ENERGY INFRASTRUCTURE

FIANNCE MASTER FUND, LTD., as Lender




By: MTP Energy Management LLC, its

Investment Manager



By: Magnetar Financial LLC, its

Managing Member

 	 
	 	By:  	/s/ Doug Litowitz
 	 
	 	 	Name:  	Doug Litowitz 	 
	 	 	Title:  	Counsel 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	TRIANGLE PEAK PARTNERS PRIVATE 

EQUITY, L.P., as Lender



By: Triangle Peak Partners Private Equity 

GP, LLC, its General Partner

 	 
	 	By:  	/s/ Dain F. DeGroff
 	 
	 	 	Name:  	Dain F. DeGroff 	 
	 	 	Title:  	Managing Member 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	Helios Corporate LLC, as Lender

 	 
	 	By:  	/s/ Brett Cohen
 	 
	 	 	Name:  	Brett Cohen 	 
	 	 	Title:  	Authorized Signatory 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	THE ROTHSCHILD FOUNDATION 

EUROPE, as Lender

 	 
	 	By:  	/s/ Rothschild
 	 
	 	 	Name:  	Lord Rothschild OM GME 	 
	 	 	Title:  	Chairman 	 
	 
	 	 	 
	 	By:  	/s/ Adam Bennett
 	 
	 	 	Name:  	Adam Bennett 	 
	 	 	Title:  	Authorized Signatory 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	DODER TRUST LIMITED (as Trustee for 

the Jader Trust No 4), as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	 	 
	 	By:  	/s/ Judith Benevides
 	 
	 	 	Name:  	Judith Benevides 	 
	 	 	Title:  	Authorized Signatory 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	DODER TRUST LIMITED (as Trustee for 

the Bat Hanadiv No 3), as Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Authorized Signatory 	 
	 
	 	 	 
	 	By:  	/s/ Judith Benevides
 	 
	 	 	Name:  	Judith Benevides 	 
	 	 	Title:  	Authorized Signatory 	 



 









 







TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	SECTION 1.

	 	Definitions and Accounting Terms
	 	 	1	 
	 
	 	 	 	 	 	 
	1.01.

	 	Defined Terms
	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2.

	 	Amount and Terms of Credit
	 	 	30	 
	 
	 	 	 	 	 	 
	2.01.

	 	The Commitments
	 	 	30	 
	2.02.

	 	Notice of Borrowing
	 	 	31	 
	2.03.

	 	Disbursement of Funds
	 	 	31	 
	2.04.

	 	Notes
	 	 	32	 
	2.05.

	 	Pro Rata Borrowings
	 	 	32	 
	2.06.

	 	Interest
	 	 	32	 
	2.07.

	 	Change of Lending Office
	 	 	33	 
	2.08.

	 	Replacement of Lenders
	 	 	33	 
	2.09.

	 	Capital Adequacy
	 	 	34	 
	2.10.

	 	Incremental Term Loans
	 	 	34	 
	 
	 	 	 	 	 	 
	SECTION 3.

	 	Fees; Reductions of Commitment
	 	 	35	 
	 
	 	 	 	 	 	 
	3.01.

	 	Fees
	 	 	35	 
	3.02.

	 	Voluntary Termination or Reduction of Commitments
	 	 	35	 
	3.03.

	 	Mandatory Reduction of Commitments
	 	 	35	 
	 
	 	 	 	 	 	 
	SECTION 4.

	 	Prepayments; Payments; Taxes
	 	 	35	 
	 
	 	 	 	 	 	 
	4.01.

	 	Voluntary Prepayments
	 	 	35	 
	4.02.

	 	Mandatory Repayments
	 	 	36	 
	4.03.

	 	Method and Place of Payment
	 	 	38	 
	4.04.

	 	Tax Gross-Up and Indemnities
	 	 	38	 
	 
	 	 	 	 	 	 
	SECTION 5.

	 	Conditions Precedent to the Funding Date
	 	 	40	 
	 
	 	 	 	 	 	 
	5.01.

	 	Effective Date; Notes
	 	 	40	 
	5.02.

	 	Officer’s Certificate
	 	 	40	 
	5.03.

	 	Opinions of Counsel
	 	 	41	 
	5.04.

	 	Company Documents; Proceedings; etc.
	 	 	41	 
	5.05.

	 	Employee Benefit Plans; Shareholders’ Agreements; Management
Agreements; Employment Agreements; Collective Bargaining Agreements; Tax Sharing
Agreements; Existing Indebtedness Agreements; Project Documents
	 	 	41	 
	5.06.

	 	Consummation of the Refinancing
	 	 	42	 
	5.07.

	 	Adverse Change, Approvals
	 	 	43	 
	5.08.

	 	Litigation
	 	 	44	 
	5.09.

	 	Guaranties and Security Documents
	 	 	44	 
	5.10.

	 	[Reserved]
	 	 	46	 
	5.11.

	 	Financial Statements; Pro Forma
Balance Sheet; Projections etc.
	 	 	46	 
	5.12.

	 	Solvency Certificate; Insurance Certificates
	 	 	46	 
	5.13.

	 	Reserve Report; Qualifications
	 	 	47	 
	5.14.

	 	Fees, etc.
	 	 	47	 
	5.15.

	 	Syndication Letter
	 	 	47	 






(i) 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	5.16.

	 	No Default; Representations and Warranties
	 	 	47	 
	5.17.

	 	Notice of Borrowing
	 	 	47	 
	5.18.

	 	Patriot Act; Know Your Customer
	 	 	47	 
	5.19.

	 	Service of Process
	 	 	47	 
	5.20.

	 	U.K. Service of Process
	 	 	47	 
	 
	 	 	 	 	 	 
	SECTION 6.

	 	Representations, Warranties and Agreements
	 	 	48	 
	 
	 	 	 	 	 	 
	6.01.

	 	Company Status
	 	 	48	 
	6.02.

	 	Power and Authority
	 	 	48	 
	6.03.

	 	No Violation
	 	 	48	 
	6.04.

	 	Approvals
	 	 	49	 
	6.05.

	 	Financial Statements; Financial Condition; Undisclosed Liabilities; Projections
	 	 	49	 
	6.06.

	 	Litigation
	 	 	50	 
	6.07.

	 	True and Complete Disclosure
	 	 	50	 
	6.08.

	 	Use of Proceeds; Margin Regulations
	 	 	50	 
	6.09.

	 	Tax Returns and Payments
	 	 	51	 
	6.10.

	 	Compliance with ERISA
	 	 	51	 
	6.11.

	 	Security Documents
	 	 	52	 
	6.12.

	 	Properties
	 	 	53	 
	6.13.

	 	Capitalization
	 	 	54	 
	6.14.

	 	Subsidiaries
	 	 	55	 
	6.15.

	 	Compliance with Statutes, etc.
	 	 	55	 
	6.16.

	 	Investment Company Act
	 	 	55	 
	6.17.

	 	Environmental Matters
	 	 	55	 
	6.18.

	 	Employment and Labor Relations
	 	 	56	 
	6.19.

	 	Intellectual Property, etc.
	 	 	57	 
	6.20.

	 	Indebtedness
	 	 	57	 
	6.21.

	 	Insurance
	 	 	57	 
	6.22.

	 	Holding Company
	 	 	57	 
	6.23.

	 	Immaterial Subsidiaries
	 	 	57	 
	 
	 	 	 	 	 	 
	SECTION 7.

	 	Affirmative Covenants
	 	 	57	 
	 
	 	 	 	 	 	 
	7.01.

	 	Information Covenants
	 	 	57	 
	7.02.

	 	Books, Records and Inspections; Annual Meetings
	 	 	61	 
	7.03.

	 	Maintenance of Property; Insurance
	 	 	61	 
	7.04.

	 	Existence; Franchises; Oil and Gas Properties
	 	 	61	 
	7.05.

	 	Compliance with Statutes, etc.
	 	 	62	 
	7.06.

	 	Compliance with Environmental Laws
	 	 	62	 
	7.07.

	 	ERISA
	 	 	63	 
	7.08.

	 	End of Fiscal Years; Fiscal Quarters
	 	 	64	 
	7.09.

	 	Performance of Obligations
	 	 	65	 
	7.10.

	 	Payment of Taxes
	 	 	65	 
	7.11.

	 	Use of Proceeds
	 	 	65	 
	7.12.

	 	Additional Security; Further Assurances; etc.
	 	 	65	 
	7.13.

	 	Ownership of Subsidiaries; etc.
	 	 	66	 
	7.14.

	 	Qualified Preferred Stock
	 	 	67	 
	7.15.

	 	Maintenance of Company Separateness
	 	 	67	 
	7.16.

	 	Board Information Rights
	 	 	67	 
	7.17.

	 	Permitted Acquisitions
	 	 	67	 
	7.18.

	 	Commodity Hedging Agreements
	 	 	68	 
	7.19.

	 	Project Documents, etc.
	 	 	69	 
	7.20.

	 	Oil and Gas Properties
	 	 	69	 






(ii) 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	7.21.

	 	Listing of the Notes
	 	 	69	 
	 
	 	 	 	 	 	 
	SECTION 8.

	 	Negative Covenants
	 	 	70	 
	 
	 	 	 	 	 	 
	8.01.

	 	Liens
	 	 	70	 
	8.02.

	 	Consolidation, Merger, Purchase or Sale of Assets, etc.
	 	 	73	 
	8.03.

	 	Dividends
	 	 	75	 
	8.04.

	 	Indebtedness
	 	 	76	 
	8.05.

	 	Advances, Investments and Loans
	 	 	78	 
	8.06.

	 	Transactions with Affiliates
	 	 	79	 
	8.07.

	 	Capital Expenditures
	 	 	80	 
	8.08.

	 	Maximum Total Leverage Ratio
	 	 	81	 
	8.09.

	 	Minimum EBITDAX
	 	 	82	 
	8.10.

	 	Minimum Asset Coverage Ratios
	 	 	82	 
	8.11.

	 	Limitations on Prepayments of Junior Financing; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements, etc.
	 	 	82	 
	8.12.

	 	Limitation on Certain Restrictions on Subsidiaries
	 	 	83	 
	8.13.

	 	Limitation on Issuance of Equity Interests
	 	 	84	 
	8.14.

	 	Business
	 	 	84	 
	8.15.

	 	Limitation on Creation of Subsidiaries
	 	 	84	 
	8.16.

	 	Limitation on Commodity Hedging
	 	 	85	 
	8.17.

	 	Elections
	 	 	85	 
	 
	 	 	 	 	 	 
	SECTION 9.

	 	Events of Default
	 	 	85	 
	 
	 	 	 	 	 	 
	9.01.

	 	Payments
	 	 	85	 
	9.02.

	 	Representations, etc.
	 	 	85	 
	9.03.

	 	Covenants
	 	 	85	 
	9.04.

	 	Default Under Other Agreements
	 	 	86	 
	9.05.

	 	Bankruptcy, etc.
	 	 	86	 
	9.06.

	 	ERISA
	 	 	86	 
	9.07.

	 	Security Documents
	 	 	87	 
	9.08.

	 	Guaranties
	 	 	87	 
	9.09.

	 	Judgments
	 	 	87	 
	9.10.

	 	Nationalization
	 	 	87	 
	9.11.

	 	Project Documents
	 	 	87	 
	9.12.

	 	Change of Control
	 	 	88	 
	 
	 	 	 	 	 	 
	SECTION 10.

	 	The Administrative Agent
	 	 	88	 
	 
	 	 	 	 	 	 
	10.01.

	 	Appointment
	 	 	88	 
	10.02.

	 	Nature of Duties
	 	 	89	 
	10.03.

	 	Lack of Reliance on the Administrative Agent
	 	 	89	 
	10.04.

	 	Certain Rights of the Agents
	 	 	90	 
	10.05.

	 	Reliance
	 	 	90	 
	10.06.

	 	Indemnification
	 	 	90	 
	10.07.

	 	Each Agent in its Individual Capacity
	 	 	90	 
	10.08.

	 	Holders	 	 	90	 
	10.09.

	 	Resignation by the Administrative Agent
	 	 	91	 
	10.10.

	 	Collateral Matters
	 	 	91	 
	10.11.

	 	Delivery of Information
	 	 	92	 
	 
	 	 	 	 	 	 
	SECTION 11.

	 	Miscellaneous
	 	 	92	 
	 
	 	 	 	 	 	 
	11.01.

	 	Payment of Expenses, etc.
	 	 	92	 






(iii) 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	11.02.

	 	Right of Setoff
	 	 	94	 
	11.03.

	 	Notices
	 	 	94	 
	11.04.

	 	Benefit of Agreement; Assignments; Participations
	 	 	94	 
	11.05.

	 	No Waiver; Remedies Cumulative
	 	 	96	 
	11.06.

	 	Payments Pro Rata
	 	 	96	 
	11.07.

	 	Calculations; Computations
	 	 	97	 
	11.08.

	 	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL
	 	 	97	 
	11.09.

	 	Counterparts
	 	 	99	 
	11.10.

	 	Effectiveness
	 	 	99	 
	11.11.

	 	Headings Descriptive
	 	 	99	 
	11.12.

	 	Amendment or Waiver; etc.
	 	 	99	 
	11.13.

	 	Survival
	 	 	100	 
	11.14.

	 	Domicile of Term Loans
	 	 	100	 
	11.15.

	 	Register
	 	 	100	 
	11.16.

	 	Confidentiality
	 	 	101	 
	11.17.

	 	Patriot Act
	 	 	102	 
	11.18.

	 	Process Agent
	 	 	102	 
	11.19.

	 	Judgment Currency
	 	 	103	 
	11.20.

	 	Maximum Lawful Rate
	 	 	103	 
	11.21.

	 	INTERCREDITOR AGREEMENT
	 	 	103	 
	 
	 	 	 	 	 	 
	SECTION 12.

	 	Holdings Guaranty
	 	 	103	 
	 
	 	 	 	 	 	 
	12.01.

	 	Guaranty
	 	 	103	 
	12.02.

	 	Bankruptcy
	 	 	104	 
	12.03.

	 	Nature of Liability
	 	 	104	 
	12.04.

	 	Independent Obligation
	 	 	104	 
	12.05.

	 	Authorization
	 	 	105	 
	12.06.

	 	Reliance
	 	 	105	 
	12.07.

	 	Subordination
	 	 	105	 
	12.08.

	 	Waiver
	 	 	106	 
	12.09.

	 	Payments
	 	 	107	 
	12.10.

	 	Maximum Liability
	 	 	107	 






(iv) 









 






	 	 	 

	SCHEDULE 1.01(a)

	 	Commitments
	SCHEDULE 1.01(b)

	 	Subsidiary Guarantors
	SCHEDULE 5.09(g)

	 	Accounts
	SCHEDULE 6.10(a)

	 	Plans
	SCHEDULE 6.12(a)

	 	Leased Real Property (other than Oil and Gas Properties)
	SCHEDULE 6.12(b)

	 	Oil and Gas Properties
	SCHEDULE 6.13

	 	Capitalization
	SCHEDULE 6.14

	 	Subsidiaries
	SCHEDULE 6.20

	 	Existing Indebtedness
	SCHEDULE 6.21

	 	Insurance
	SCHEDULE 8.01(b)

	 	Existing Liens
	SCHEDULE 8.05(c)

	 	Existing Investments
	SCHEDULE 8.12

	 	Existing Encumbrances or Restrictions
	SCHEDULE 11.03

	 	Lender Addresses
	 
	 	 
	EXHIBIT A

	 	Form of Notice of Borrowing
	EXHIBIT B

	 	Form of Note
	EXHIBIT C-1

	 	Opinion of Vinson & Elkins LLP, Special New York and
Texas Counsel to the Credit Parties
	EXHIBIT C-2

	 	Opinion of Woodburn and Wedge, Special Nevada Counsel to the Credit Parties
	EXHIBIT C-3

	 	Opinion of Nauta Dutilh, Special Dutch Counsel to the Agents
	EXHIBIT C-4

	 	Opinion of White & Case LLP, Special English Counsel to the Agents
	EXHIBIT D-1

	 	Form of Officer’s Certificate (U.S.)
	EXHIBIT D-2

	 	Form of Officer’s Certificate (English)
	EXHIBIT D-3

	 	Form of Officer’s Certificate (Dutch)
	EXHIBIT E

	 	Form of Subsidiaries Guaranty
	EXHIBIT F-1

	 	Form of U.S. Security Agreement
	EXHIBIT F-2

	 	Form of English Debenture
	EXHIBIT F-3

	 	Form of English Charge Over Shares
	EXHIBIT F-4

	 	Form of Dutch Pledge Agreement
	EXHIBIT F-5

	 	Form of Scottish Security
	EXHIBIT G

	 	Form of Solvency Certificate
	EXHIBIT H

	 	Form of Compliance Certificate
	EXHIBIT I

	 	Form of Assignment and Assumption Agreement
	EXHIBIT J

	 	Form of Intercompany Note







(v) 











 





Schedule 1.01(a)

Commitments




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






 









 





Schedule 1.01(b)

Subsidiary Guarantors





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




 









 











Schedule 5.09(g)

Accounts




Deposit Accounts



	 	 	 	 	 	 	 	 	 	 	 
	Credit Party	 	Sort Code	 	Bank Account Number	 	Designation	 	Location of Account
	Endeavour Energy UK 

Limited

	 	JPMorgan Chase
Bank, N.A., London
Branch 60-92-42
	 	 	35047501	 	 	UK Operations in GBP
	 	Bournemouth, England
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy UK 

Limited

	 	JPMorgan Chase
Bank, N.A., London
Branch 60-92-42
	 	 	35047502	 	 	UK Operations in USD
	 	Bournemouth, England
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Operating 

Corporation

	 	JPMorgan Chase
Bank, N.A.
	 	 	179910996265	 	 	Operating Account
	 	Houston, Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Operating 

Corporation

	 	JPMorgan Chase
Bank, N.A.
	 	 	825-874-035	 	 	Demand Deposit

Account
	 	Houston, Texas
	 
	 	 	 	 	 	 	 	 	 	 





 









 





Schedule 6.10(a)

Plans




None.



 









 





Schedule 6.12(a)

Leased Real Property



Leased Real Property of the Credit Parties





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




 









 





SCHEDULE

6.12(b)

Oil and Gas

Properties




Endeavour International Corporation

List of Properties

Source: December 31, 2009 Reserve Report (Strip Pricing)

Plus January 2010 reserve adds




	 	 	 	 	 	 	 
	Property Name	 	 	 	 	 	 
	UK:
	 	 	 	 	 	 
	Alba

	 	 	 	 	 	*
	Bacchus

	 	 	 	 	 	*
	Bittern

	 	 	 	 	 	*
	Columbus

	 	 	 	 	 	*
	Cygnus

	 	 	 	 	 	*
	Enoch

	 	 	 	 	 	*
	Goldeneye

	 	 	 	 	 	*
	IVRRH

	 	 	 	 	 	*
	Renee

	 	 	 	 	 	*
	Rochelle

	 	 	 	 	 	*
	Rubie

	 	 	 	 	 	*
	 
	 	 	 	 	 	 
	US:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Austin 21 #1

	 	De Soto
	 	Louisiana
	 	*
	Batchelor 3-1H

	 	Red River
	 	Louisiana
	 	*
	Bazer, M L 20 #1D

	 	De Soto
	 	Louisiana
	 	*
	Bazer, M L 20 #1D PNP

	 	De Soto
	 	Louisiana
	 	*
	Bonomo Investment Co LLC 35 #1

	 	Caddo
	 	Louisiana
	 	*
	Chiggero ETAL 14 #1-H

	 	Caddo
	 	Louisiana
	 	*
	Davis 15 #1

	 	Red River
	 	Louisiana
	 	*
	Desoto LP 17 #1

	 	De Soto
	 	Louisiana
	 	*
	Dixie Farm 11-1H

	 	Red River
	 	Louisiana
	 	* 1
	Fielder, Cyrus 15 #1

	 	Caddo
	 	Louisiana
	 	*
	Fortson 3 #2

	 	De Soto
	 	Louisiana
	 	*
	Indigo Minerals 3-1H

	 	Red River
	 	Louisiana
	 	*
	International Paper 21 #1

	 	De Soto
	 	Louisiana
	 	*






 









 





SCHEDULE

6.12(b)

Oil and Gas

Properties




Endeavour International Corporation

List of Properties

Source: December 31, 2009 Reserve Report (Strip Pricing)

Plus January 2010 reserve adds





	 	 	 	 	 	 	 
	Property Name	 	 	 	 	 	 
	Johnson, A S ET AL 10 #1

	 	De Soto
	 	Louisiana
	 	*
	Jones, G C 22 #1

	 	De Soto
	 	Louisiana
	 	*
	Jones, G C 22 #2

	 	De Soto
	 	Louisiana
	 	*
	Jones, G C 23 #3

	 	De Soto
	 	Louisiana
	 	*
	Little 11 #1

	 	Red River & Bienville
	 	Louisiana
	 	*
	Madison, Clarence 2 #1

	 	Red River
	 	Louisiana
	 	*
	Marks, Roy Est 10 #1

	 	Red River
	 	Louisiana
	 	*
	McCoy 23 #1

	 	De Soto
	 	Louisiana
	 	*
	Metcalf HNSVL 14 #5H

	 	Caddo
	 	Louisiana
	 	*
	Russell, Mary 3 #1

	 	Red River
	 	Louisiana
	 	*
	Smith, Lillie22 #1

	 	De Soto
	 	Louisiana
	 	*
	Tracy 3 #1

	 	De Soto
	 	Louisiana
	 	*
	Moore Cowbell

	 	Lea
	 	New Mexico	 	 
	Lucky Penny

	 	Lea
	 	New Mexico	 	 
	Pardee & Curtain Lumber Co. C-4

	 	Cameron
	 	Pennsylvania
	 	* 1
	Pardee & Curtain Lumber Co. C-5

	 	Cameron
	 	Pennsylvania
	 	* 1
	Pardee & Curtain Lumber Co. C-7H

	 	Cameron
	 	Pennsylvania
	 	* 1
	Pardee & Curtain Lumber Co. C-9H

	 	Cameron
	 	Pennsylvania
	 	* 1
	Pardee & Curtain Lumber Co. C-10-H

	 	Cameron
	 	Pennsylvania
	 	* 1
	Cochran 1 (Garwood)

	 	Colorado
	 	Texas
	 	*
	Cochran 2 (Garwood)

	 	Colorado
	 	Texas
	 	*
	Cochran 3 (Garwood)

	 	Colorado
	 	Texas
	 	*
	Cochran 4 (Garwood)

	 	Colorado
	 	Texas
	 	*
	Cochran 5 (Garwood)

	 	Colorado
	 	Texas
	 	*
	Cochran 6 (Garwood)

	 	Colorado
	 	Texas
	 	*
	Tuttle #6H — 6 Stages

	 	Gregg
	 	Texas
	 	*
	Tuttle #8H — 6 Stages

	 	Gregg
	 	Texas
	 	*
	Tuttle AJ Gas Unit #5

	 	Gregg
	 	Texas
	 	*
	Tuttle, A J #7H

	 	Gregg
	 	Texas
	 	*
	Williams #3

	 	Gregg
	 	Texas
	 	*
	Armour Runnels 1

	 	Matagorda
	 	Texas	 	 






 









 





SCHEDULE

6.12(b)

Oil and Gas

Properties




Endeavour International Corporation

List of Properties

Source: December 31, 2009 Reserve Report (Strip Pricing)

Plus January 2010 reserve adds






 




			
	*	 	Mortgaged property
	 
	1	 	Acquired after December 31, 2009






 











 












Schedule 6.13

Capitalization




Part I: Equity Ownership of Subsidiaries



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







 









 






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







 









 





Schedule 6.13

Part II: Convertible Securities



The Credit Parties have issued the following securities that are convertible into Equity Interests:





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





 









 





Schedule 6.13

Part III: Options




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






 









 





Schedule 6.14

Subsidiaries



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







 









 








Schedule 6.20

Existing Indebtedness



Holdings has Indebtedness pursuant to its 6.00% Convertible Senior Notes due 2012, in a principal
amount of $81,250,000.



Holdings also has Indebtedness pursuant to its 12.00% Senior Subordinated Notes due 2014, in a
principal amount of $50,373,000, which Indebtedness is guaranteed by all U.S. Subsidiaries of
Holdings.



Endeavour Energy Luxembourg S.a.r.l. has Indebtedness pursuant to its 11.50% Convertible Bonds due
2014, in a principal amount of $51,271,000, which Indebtedness is guaranteed by Holdings.



Series C Preferred Stock, issued by Holdings, with the terms set forth in the Certificate of
Designation of Series C Preferred Stock originally filed with the Nevada Secretary of State on
October 30, 2006, as amended.



The Credit Parties have the following outstanding Letters of Credit:




	 	 	 	 	 
	Title	 	Amount	 	Borrower
	Standby Letter of Credit (BNP Paribas)

	 	£11,900,000
	 	Endeavour Energy UK
Limited
	Standby Letter of Credit (BNP Paribas)

	 	£6,600,000
	 	Endeavour Energy UK
Limited
	Standby Letter of Credit (BNP Paribas)

	 	£2,100,000
	 	Endeavour Energy UK
Limited





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






 









 





Schedule 6.21








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





 









 





Coverage Summary




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







 











 





Coverage Summary




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Policy Period	 	Policy No.	 	Coverage	 	Limits/Amounts	 	Carrier
	 

	 	 	 	 	 	£	5,000	 	 	Money Any other loss	 	 
	 

	 	 	 	 	 	£10,000/£100pw Personal Injury following robbery or holdup	 	 
	 	 	 	 	 	 	Legal Liability for injury to persons or damage to third party property:	 	 
	 

	 	 	 	 	 	£	10,000,000	 	 	Injury to Employees	 	 
	 

	 	 	 	 	 	£	2,000,000	 	 	Injury to the public and damage to property	 	 
	 	 	 	 	 	 	Commercial Legal Expenses Section:	 	 
	 

	 	 	 	 	 	£	50,000	 	 	Limit per Insured Incident	 	 
	 

	 	 	 	 	 	£	50,000	 	 	Annual Limit for Compesation Awards	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	11/01/09-10	 	BM0901674	 	Energy Package	 	Section 1 (A) & (B) — Onshore & Offshore Property (Platform and Pipelines)


$71,770,250 FI value, as per worksheets attached to policy, any one accident or occurrence
sub-limited to $7,500,000 any one accident or occurrence in respect of data reacquisition,
reconstruction or reconstitution costs.	 	Lloyds of London & Other
Companies(through JLT
Agnew Higgins)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Plus additional 25% each item separately in respect of Sue and Labour
expense, General Average and Salvage Charges, Removal of Wreck/Debris and
Expediting Expense but not exceeding 50% in all.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Section 1 (C) & (D) — Crude Oil / Cargo,	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	$	8,500,000	 	 	each section any one shipment / location.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Section 2 — Operators Extra Expense	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	In respect of the UK Sector of the North Sea:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	$	125,000,000	 	 	Combined Single Limit any one accident or occurrence.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	$	2,500,000	 	 	Sub-limit of any one accident or occurrence in respect of Care, Custody & Control.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	$	120,000,000	 	 	any one occurrence in respect of OPOL.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	In respect of Wells scheduled in the USA:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	$20,000,000 Combined Single Limit any one accident or occurrence in respect of all
Wells except Exploratory and Development Drilling Wells with dry hole cost in excess of
$8,000,000 (100%) or Total Measured Depth of more than 17,500 feet where the Combined Single
Limit is increase to	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	$30,000,000 any one accident or occurrence, as scheduled. Any additional onshore
wells in excess of 17,500’ TMD(100%) or AFE in excess of $8,000,000 (100%) to be agreed
prior to spud. Slip Leader and Agreement Parties.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	$	2,500,000	 	 	Sub-limit of any one accident or occurrence in respect of Care, Custody and Control.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Section 3 — Liabilities	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	In respect of the UK Sector of the North Sea:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	$125,000,000 any one accident or occurrence combined single limit over sub-section A (onshore)
and sub-section B (offshore).
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Section 4 — War and Terrorism	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Values and limits as Sections 1, 2, 3 and 5	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Section 5 — Loss of Production Income	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	For limits and indemnity period as scheduled in respect of the Insured’s interest in
Goldeneye fields including coverage in respect of dependency premises as schedule attached.


Indemnity Period: 730 days.	 	 





















 





Coverage Summary




	 	 	 	 	 	 	 	 	 	 	 
	Policy Period	 	Policy No.	 	Coverage	 	Limits/Amounts	 	Carrier
	11/01/09-10

	 	BM0901674
	 	Energy Package (Cont’d)
	 	Deductibles (100%):



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


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


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


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


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


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


Offshore:


$1,500,000 Combined Single Excess any one accident or occurrence.

$150,000 any one accident or occurrence in respect of Care, Custody and Control.


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


Onshore:


$250,000 Combined Single Excess any one accident or occurrence.

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


Section 3 — Liabilities — (Excess)


$150,000 any one accident or occurrence offshore and onshore, except:

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


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


Section 4 — War and Terrorism


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


Section 5 — Loss of Production Income — (Excess)


45 days waiting period any one occurrence.


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


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






 









 





Coverage Summary




	 	 	 	 	 	 	 	 	 
	Policy Period	 	Policy No.	 	Coverage	 	Limits/Amounts	 	Carrier
	2/26/10-11

	 	34-MGU-10-A20905
	 	Primary Directors & Officers
	 	$10,000,000 Annual Aggregate

Deductibles:

$500,000       Per loss for Securities Claims/ $250,000 per loss
All other claims, except zero for non imdemnifiable claims
	 	US Specialty Insurance Co.
	 
	 	 	 	 	 	 	 	 
	2/26/10-11

	 	NY10DO2211753NV
	 	Excess Directors & Officers
	 	$10,000,000 Annual Aggregate

Excess of:

$10,000,000 Per Loss
	 	Navigators Insurance Co.
	 
	 	 	 	 	 	 	 	 
	2/26/10-11

	 	DOXG235497002
	 	Excess Directors & Officers –
Broad Form Side A
	 	$10,000,000 Annual Aggregate 

Excess of:

$20,000,000 Per Loss
	 	ACE






 









 





Named Insureds




	 	 	 
	Named Insureds	 	Description of Operations
	Endeavour International Corporation

	 	Public Holding Company
	 
	 	 
	Endeavor Operating Corporation

	 	Holding Company
	 
	 	 
	Endeavour Energy UK Limited

	 	Acquiring, exploring for and developing of
natural gas and oil properties
	 
	 	 
	Endeavour Energy New Ventures Inc.

	 	New Ventures Holding Company
	 
	 	 
	Endeavour Energy New Ventures I, Ltd

	 	Inactive New Ventures Company
	 
	 	 
	Endeavour Energy North Sea L.P.

	 	Investment Holding Partnership
	 
	 	 
	Endeavour Energy North Sea LLC

	 	General Partner of the LP
	 
	 	 
	END Management Company

	 	Payroll management company
	 
	 	 
	Endeavour International Holding B.V.

	 	Holding Company
	 
	 	 
	Endeavour Energy Netherlands B.V.

	 	Acquiring, exploring for and developing of
natural gas and oil properties
	 
	 	 
	Endeavour North Sea Limited

	 	Acquiring, exploring for and developing of
natural gas and oil properties
	 
	 	 
	Endeavour Energy Luxembourg S.a.r.l.

	 	Financing Company






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





 











 








Schedule 8.01(c)

Existing Liens




	 	 	 	 	 	 	 	 	 	 	 
	Secured Party	 	Debtor	 	File Number	 	File Date	 	Location of Filing	 	Collateral
	Dell Financial 

Services L.L.C.
	 	Endeavour

International

Corporation
	 	2010013574-3
	 	05/28/2010
	 	Secretary of State

of Nevada
	 	Computer Equipment
	 	 	 	 	 	 	 	 	 	 	 
	Independent 

Television News 

Limited
	 	Endeavour Energy UK

Limited
	 	525752/13
	 	06/20/2005
	 	Companies House UK
	 	Funds in Secured

Party’s deposit

account specifically

designated to secure

rent owing to landlord

pursuant to London

office

lease1








 




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





 









 





Schedule 8.05(c)

Existing Investments




Part I: Shares in Subsidiaries


This Schedule 8.05(c), Part I incorporates relevant information from Credit Parties’ response to
Schedule 6.13, Part I.






 









 








Schedule 8.05(c)

Part II: Intercompany Debt





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




 









 











Schedule 8.05(c)

Part III: Other Investment Property




	 	 	 	 	 	 	 
	Grantor	 	Sort Code	 	Bank Account Number	 	Designation
	Endeavour Operating Corporation

	 	JPMorgan Chase
Bank, N.A.
	 	619034-0829*
	 	Prime Money Market

Securities Account
	Endeavour International Holding
B.V.

	 	12-27-14
	 	36401001*
	 	EUR Proceeds Account
	Endeavour International Holding
B.V.

	 	12-27-14
	 	34601U5D01*
	 	USD Proceeds Account
	Endeavour International Holding
B.V.

	 	12-27-14
	 	34601USD02*
	 	USD Cash Collateral Account
	Endeavour International Holding
B.V.

	 	12-27-14
	 	06221716*
	 	GBP Cash Collateral Account
	Endeavour Energy UK Limited

	 	12-27-14
	 	34602USD01*
	 	USD Proceeds Account
	Endeavour Energy UK Limited

	 	12-27-14
	 	06221724*
	 	GBP Proceeds Account
	Endeavour Energy UK Limited

	 	12-27-14
	 	34602USD02*
	 	USD Cash Collateral Account
	Endeavour Energy UK Limited

	 	12-27-14
	 	06221732*
	 	GBP Cash Collateral Account
	Endeavour Energy UK Limited

	 	BNP Paribas
	 	34337J
	 	Cash collateral account
pledged to BNP Paribas to
secure the Letters of
Credit listed on Schedule
6.20
	Endeavour North Sea Limited

	 	12-27-14
	 	34604USD01*
	 	USD Proceeds Account
	Endeavour North Sea Limited

	 	12-27-14
	 	06221791*
	 	GBP Proceeds Account
	Endeavour North Sea Limited

	 	12-27-14
	 	34604USD02*
	 	USD Cash Collateral Account
	Endeavour North Sea Limited

	 	12-27-14
	 	06221804*
	 	GBP Cash Collateral Account
	Endeavour International Holding
B.V.

	 	JPMorgan Chase
Bank, N.A.
	 	0657-017001
	 	Operations in USD (account

located in the

Netherlands)
	Endeavour International Holding
B.V.

	 	JPMorgan Chase
Bank, N.A.
	 	0657-783919
	 	Operations in EUR (account

located in the

Netherlands)
	Endeavour Energy Netherlands B.V.

	 	JPMorgan Chase
Bank, N.A.
	 	0657-017101
	 	Operations in USD (account

located in the

Netherlands)
	Endeavour Energy Netherlands B.V.

	 	JPMorgan Chase
Bank, N.A.
	 	0657-803898
	 	Operations in EUR (account

located in the

Netherlands)





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






 




			
	*	 	Accounts to be closed following Refinancing.





 









 





Schedule 8.12

Existing Encumbrances or Restrictions



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








 









 








Schedule 11.03

Lender Addresses




	 	 	 
	Lender	 	Address
	CYRUS OPPORTUNITIES FUND II, L.P.

	 	c/o Cyan Partners, LP
	 

	 	399 Park Avenue, 39th Floor
	 

	 	New York, NY 10022
	 
	 	 
	CYRUS EUROPE FUND, L.P.

	 	c/o Cyan Partners, LP
	 

	 	399 Park Avenue, 39th Floor
	 

	 	New York, NY 10022
	 
	 	 
	CRESCENT 1, L.P.

	 	c/o Cyan Partners, LP
	 

	 	399 Park Avenue, 39th Floor
	 

	 	New York, NY 10022
	 
	 	 
	CYR FUND, L.P.

	 	c/o Cyan Partners, LP
	 

	 	399 Park Avenue, 39th Floor
	 

	 	New York, NY 10022
	 
	 	 
	CYRUS CAPITAL PARTNERS, L.P.

	 	c/o Cyan Partners, LP
	 

	 	399 Park Avenue, 39th Floor
	 

	 	New York, NY 10022
	 
	 	 
	MTP ENERGY INFRASTRUCTURE FINANCE MASTER

	 	c/o Magnetar Financial LLC
	FUND, LTD.

	 	1603 Orrington Avenue, 13th Floor
	 

	 	Evanston, IL 60201
	 
	 	 
	TRIANGLE PEAK PARTNERS PRIVATE EQUITY, LP

	 	Carmel Plaza, Suite 305
	 

	 	P.O. Box 3788
	 

	 	Carmel, CA 93921
	 
	 	 
	HELIOS CORPORATE LLC

	 	400 Madison Avenue
	 

	 	Suite 8D
	 

	 	New York, NY 10017
	 
	 	 
	THE ROTHSCHILD FOUNDATION EUROPE

	 	32-33 St. James’s Place
	 

	 	London SW1A 1NR
	 

	 	United Kingdom
	 
	 	 
	DODER TRUST LIMITED (as Trustee for the

	 	c/o Carter Ledyard & Milburn
	Jader Trust No 4)

	 	2 Wall Street
	 

	 	New York, NY 10005






 









 






	 	 	 
	Lender	 	Address
	DODER TRUST LIMITED (as Trustee for The

	 	Argyle House
	Bat Hanadiv Foundation No 3)

	 	41a Cedar Avenue
	 

	 	Hamilton HM12
	 

	 	Bermuda







 












 





EXHIBIT A




FORM OF NOTICE OF BORROWING




[Date]



Cyan Partners, LP, as Administrative Agent (the
“Administrative Agent”) for the Lenders
party to the Credit Agreement referred to below



399 Park Avenue, 39th Floor

New York, New York 10022

Attention: Divya Gopal



Ladies and Gentlemen:




          The undersigned, Endeavour Energy UK Limited (the “Borrower”), refers to the Credit
Agreement, dated as of August 16, 2010 (as amended, restated, modified and/or supplemented from
time to time, the “Credit Agreement”, the capitalized terms defined therein being used
herein as therein defined), among Endeavour International Corporation, the Borrower, the lenders
party thereto (each, a “Lender” and collectively, the “Lenders”), and you, as
Administrative Agent for such Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.02(a) of the Credit Agreement, that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information relating to such
Borrowing (the “Proposed Borrowing”) as required by Section 2.02(a) of the Credit
Agreement:



          (i) The Business Day of the Proposed Borrowing is                      ___, ___.1



          (ii) The aggregate principal amount of the Proposed Borrowing is
$                    .





          The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the Proposed Borrowing:



     (A) the representations and warranties contained in the Credit Agreement and in the
other Credit Documents are and will be true and correct in all material respects, before and
immediately after giving effect to the Proposed Borrowing, as though made on such date,
unless stated to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier date; and



     (B) no Default or Event of Default has occurred and is continuing, or would immediately
result from such Proposed Borrowing.





 




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




 









 










	 	 	 	 	 
	 	Very truly yours,





ENDEAVOUR ENERGY UK LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



EXHIBIT B




FORM OF NOTE




			
	$                    
	 	New York, New York






                     __, ___




          FOR VALUE RECEIVED, ENDEAVOUR ENERGY UK LIMITED, a company incorporated in England and Wales
(the “Borrower”), hereby promises to pay to [                                        ] or its successors and
registered assigns (the “Lender”), in lawful money of the United States of America in
immediately available funds, at the Payment Office (as defined in the Credit Agreement referred to
below) initially located at 399 Park Avenue, 39th Floor, New York, New York 10022, on the Maturity
Date (as defined in the Credit Agreement) the principal sum of                      DOLLARS ($                    ) or,
if less, the unpaid principal amount of all Term Loans (as defined in the Credit Agreement) made by
the Lender pursuant to the Credit Agreement, payable at such times and in such amounts as are
specified in the Credit Agreement.



          The Borrower also promises to pay interest on the unpaid principal amount of each Term Loan
made by the Lender in like money at said office from the date hereof until paid at the rate and at
the times provided in Section 2.06 of the Credit Agreement.



          This Note is one of the Notes referred to in the Credit Agreement, dated as of August 16,
2010, among Endeavour International Corporation, the Borrower, the lenders party thereto from time
to time (including the Lender), and Cyan Partners, LP, as Administrative Agent for such Lenders (as
amended, restated, modified and/or supplemented from time to time, the “Credit Agreement”)
and is entitled to the benefits of the Credit Agreement and of the other Credit Documents (as
defined in the Credit Agreement). This Note is secured by the Security Documents (as defined in
the Credit Agreement). As provided in the Credit Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Maturity Date, in whole or in part.



          In case an Event of Default (as defined in the Credit Agreement) shall occur and be
continuing, the principal of and accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the Credit Agreement.



          The Borrower hereby waives (to the extent permitted by applicable law) presentment, demand,
protest or notice of any kind in connection with this Note.



 









 





Exhibit B

Page 2




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



	 	 	 	 	 
	 	ENDEAVOUR ENERGY UK LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



9









 












EXHIBIT C-1



August 16, 2010




Each of the Addressees Listed in

the Attached Schedule I





			
	     Re:	 	Credit Facility for Endeavour Energy UK Limited




Ladies and Gentlemen:





     (a) We have acted as counsel to Endeavour International Corporation, a Nevada
corporation (“Holdings”), in connection with the transactions contemplated by the
Opinion Documents (as such term is defined below). This opinion letter is furnished to you
pursuant to Section 5.03(a) of the Agreement (as defined below). Unless otherwise defined
in the body of this opinion letter, capitalized terms used herein shall have the meanings
assigned to such terms in the Agreement. Other terms that are defined in the Uniform
Commercial Code as in effect in the State of New York (the “NY UCC”) have the same
meaning when used herein unless otherwise indicated by the context in which such terms are
so used. In addition, as used herein:




     (b) the term “Opinion Parties” means, collectively, (i) Endeavour Operating
Corporation, a Delaware corporation (“EOC”); (ii) Endeavour Energy New Ventures
Inc., a Delaware corporation (“New Ventures”); (iii) END Management Company, a
Delaware corporation (“END Management”); (iv) Endeavour Energy North Sea, L.P., a
Delaware limited partnership (“Endeavour North Sea L.P.”); and (v) Endeavour Energy
North Sea LLC, a Delaware limited liability company (“Endeavour North Sea LLC”);




     (c) the term “U.S. Credit Parties” means, collectively, the Opinion Parties
and Holdings;




     (d) the term “Credit Parties” means, collectively, the U.S. Credit Parties and
the following entities: (i) Endeavour Energy UK Limited, an England and Wales corporation
(“Borrower”); (ii) Endeavour International Holding B.V., a Netherlands private
limited liability company (“Holding B.V.”); (iii) Endeavour Energy Netherlands
B.V., a Netherlands private limited liability company (“Netherlands B.V.”); (iv)
Endeavour Energy Luxembourg S.ÀR.L., a private limited liability



	 	 	 

	Vinson & Elkins LLP Attorneys at Law

	 	First City Tower, 1001 Fannin Street, Suite 2500
	Abu Dhabi Austin Beijing Dallas Dubai Hong Kong Houston

	 	Houston, TX 77002-6760
	London Moscow New York Palo Alto Shanghai Tokyo Washington

	 	Tel +1.713.758.2222 Fax +1.713.758.2346 www.velaw.com






 









 






			
	 	 	 
	
	 	August 16, 2010    Page 2







company organized under the laws of Luxembourg (“Endeavour Luxembourg”); (v)
Endeavour North Sea Limited, a private limited company incorporated in England and Wales
(“Endeavour North Sea Limited”); and (vi) Endeavour Energy New Ventures I, Ltd., a
Bermuda exempted company (“Endeavour Berumda”).



     In rendering the opinions set forth below, we have reviewed an execution copy of the following
documents and instruments:




     (i) the Credit Agreement (the “Agreement”) dated as of August 16, 2010
(the “Closing Date”), among Holdings, Borrower, the Lenders party thereto
and Cyan Partners, LP, as administrative agent for the Lenders (the
“Administrative Agent”).;




     (ii) the U.S. Security Agreement, dated as of the Closing Date (the “U.S.
Security Agreement”), among Holdings, EOC, New Ventures, END Management,
Endeavour North Sea L.P., Endeavour North Sea LLC, Holding B.V., Netherlands B.V.
(with the foregoing entities collectively referred to herein as the
“Grantors”), and Cyan Partners, LP, in its capacity as the Collateral Agent
(the “Collateral Agent”);




     (iii) the Subsidiaries Guaranty, dated as of the Closing Date, among EOC,
Holding B.V., Netherlands B.V., Endeavour North Sea L.P., Endeavour North Sea LLC,
END Management, and New Ventures (as guarantors) in favor of the Administrative
Agent;




     (iv) the Deed of Trust, Assignment of Production, Security Agreement, Fixture
Filing and Financing Statement dated as of the Closing Date (the “Gregg County
Deed of Trust”), by EOC in favor of (A) Philip D. Weller, as trustee for the
benefit of the Collateral Agent and (B) the Collateral Agent, as beneficiary for
the benefit of itself and the Secured Creditors (as therein defined), which Gregg
County Deed of Trust is to be recorded in Gregg County, Texas;




     (v) the Deed of Trust, Assignment of Production, Security Agreement, Fixture
Filing and Financing Statement dated as of the Closing Date (the “Colorado
County Deed of Trust” and, together with the Gregg County Deed of Trust, the
“Texas Deeds of Trust”), by EOC in favor of (A)
Philip D. Weller, as trustee for the benefit of the Collateral Agent and (B)
the Collateral Agent, as beneficiary for the benefit of itself and the Secured



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 3







Creditors (as therein defined), which Colorado County Deed of Trust is to be
recorded in Colorado County, Texas;




     (vi) the Subordination Agreement dated as of the Closing Date, among Endeavour
Luxembourg, Holding B.V. and the Administrative Agent;




     (vii) the Subordination Agreement dated as of the Closing Date, among the
Borrower, Holding B.V. and the Administrative Agent;




     (viii) the Subordination Agreement dated as of the Closing Date, among
Endeavour North Sea Limited, the Borrower and the Administrative Agent;




     (ix) the Uncertificated Security Control Agreement dated as of the Closing
Date, among EOC, Endeavour North Sea LLC, Holding B.V., Netherlands B.V., Endeavour
North Sea L.P., New Ventures, Endeavour Bermuda, and the Collateral Agent;




     (x) the Amended and Restated Blocked Account Control Agreement (“Shifting
Control”) dated as of the Closing Date (the “Deposit Account Control
Agreement”), by and among EOC, the Collateral Agent and JPMorgan Chase Bank,
N.A., as the Depositary (the “Depositary”), which relates to the deposit
account or deposit accounts therein identified (collectively, whether one or more,
the “Deposit Accounts”);




     (xi) Open-End Mortgage, Assignment of Production, Security Agreement, Fixture
Filing, As-Extracted Collateral Filing and Financing Statement, dated as of the
Closing Date (the “Pennsylvania Mortgage”), by EOC in favor of the
Collateral Agent for the benefit of itself and the Secured Creditors (as therein
defined);




     (xii) Mortgage, Assignment of Production and Rents, Security Agreement,
Fixture Filing, and Financing Statement, dated as of the Closing Date (the
“Louisiana Mortgage”), by EOC in favor of the Collateral Agent for the
benefit of itself and the Secured Creditors (as therein defined);




     (xiii) Charge Over Shares dated as of the Closing Date (the “Share
Charge”), between Endeavour North Sea L.P. and the Collateral Agent;



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 4







     (xiv) Agreement and Deed of Pledge of Shares dated as of the Closing Date (the
“Dutch Pledge” and, together with the Pennsylvania Mortgage, the Louisiana
Mortgage and the Share Charge, the “Designated Documents”), among EOC,
Holdings B.V., and Cyan Partners, LP, as the pledgee;




     (xv) each of the agreements listed on Schedule II hereto (the
“Applicable Contracts”);




     (xvi) each Opinion Party’s constitutive documents and resolutions listed on
Schedule III hereto (the “Organizational Documents”);




     (xvii) unfiled copies of the UCC-1 Financing Statements listed on Part A of
Schedule IV hereto (the “Financing Statements”), which Financing
Statements relate to the Article 9 Collateral (as defined in paragraph 9 below);




     (xviii) unfiled copies of the UCC-1 Financing Statements listed on Part B
Schedule IV hereto (the “Fixture Financing Statements”), which
financing statements relate to the fixtures described therein; and




     (xix) unfiled copies of the UCC-1 Financing Statements listed on Part C
Schedule IV hereto (the “As-Extracted Collateral Financing
Statements”), which financing statements relate to the as-extracted collateral
described therein.



     The documents listed in clause (i) through (x) above are referred to herein as the
“Opinion Documents”. Additionally, in rendering the opinions set forth below, we have
reviewed such other records, certificates and documents as we have deemed appropriate for the
purposes of such opinions. As to any facts material to our opinion, we have made no independent
investigation of such facts and have relied, to the extent that we deem such reliance proper, upon
statements of public officials and officers or other representatives of the Credit Parties and on
the representations and warranties relating to factual matters set forth in the Opinion Documents.



     In rendering the opinions expressed below, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to authentic original documents of all documents submitted to us as
copies, which assumptions we have not independently verified. In addition, with your permission
and without independent investigation, we have made the following assumptions:



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 5







     (i) Each party to the Opinion Documents and the Designated Documents other
than the Opinion Parties (each such party other than the Opinion Parties, a
“Transaction Party”) is a corporation, partnership, limited liability
company or other entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization;




     (ii) Each Transaction Party has full power and authority (corporate,
partnership, limited liability company or otherwise) to execute, deliver and
perform its obligations under the Opinion Documents and the Designated Documents to
which it is a party;




     (iii) Each Opinion Document and each Designated Document has been duly
executed and delivered by each Transaction Party that is a party thereto;




     (iv) The execution, delivery and performance by each Transaction Party of the
Opinion Documents and the Designated Documents to which it is a party have been
duly authorized by all necessary entity action (corporate, partnership, limited
liability company or otherwise) and do not contravene the constituent documents of
such Transaction Party;




     (v) The execution, delivery and performance by each Transaction Party and each
Opinion Party of the Opinion Documents and the Designated Documents to which it is
a party do not conflict with or result in the breach of any document or instrument
binding on it (except that we have not made such assumption with respect to the
Organizational Documents or Applicable Contracts, to the extent of our opinion in
paragraphs 5 and 6(b) below);




     (vi) The execution, delivery and performance by each Transaction Party and
each Opinion Party of the Opinion Documents and the Designated Documents to which
it is a party do not contravene any provision of any law, rule, regulation, order,
validation, writ, judgment, injunction, decree, determination or award applicable
to any of them (except that we have not made such assumption with respect to
Applicable Laws (as defined in paragraph 6 below) applicable to each Credit Party,
to the extent of our opinion in paragraph 6(a) below);




     (vii) No authorization, approval, consent, order, validation, license,
franchise, permit or other action by, and no notice to or filing, recording or
registration with, any Governmental Authority or any other third party is



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 6







required for the due execution, delivery and performance by each Transaction
Party and each Opinion Party of the Opinion Documents and the Designated Documents
to which it is a party that has not been duly obtained or made and that is not in
full force and effect (except that we have not made such assumption with respect to
Governmental Approvals (as defined in paragraph 8 below) required to be obtained or
taken by each Credit Party as to which we express our opinion in paragraph 8
below);




     (viii) The Opinion Documents and the Designated Documents constitute the
valid, binding and enforceable obligations of each party thereto (other than the
Credit Parties to the extent of our opinions in paragraphs 3 and 4 below); and




     (ix) The laws of any jurisdiction other than the laws that are the subject of
this opinion letter do not affect the opinions rendered herein or the terms of the
Opinion Documents and the Designated Documents.



     With respect to certain of the foregoing matters, please refer to the other opinions of
counsel being rendered in connection with the Opinion Documents and the Designated Documents.



     Based upon the foregoing, and subject to the assumptions, qualifications, exceptions and
limitations set forth herein, it is our opinion that:




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




 









 











			
	 	 	 
	
	 	August 16, 2010    Page 7







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






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



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 8







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




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






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




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




 









 











			
	 	 	 
	
	 	August 16, 2010    Page 9







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






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




 









 











			
	 	 	 
	
	 	August 16, 2010    Page 10







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






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




 









 











			
	 	 	 
	
	 	August 16, 2010    Page 11







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






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




 









 











			
	 	 	 
	
	 	August 16, 2010    Page 12






     In rendering the foregoing opinions, we have also assumed, with your permission, and without
independent investigation on our part, the following:




     A. With respect to our opinions set forth in paragraphs 9 through 14 above, we have
assumed that each Opinion Party has, or has the power to transfer, rights in the properties
in which it is purporting to grant a security interest sufficient for attachment of such
security interest within the meaning of Section 9-203 of the NY UCC and Section 9.203 of
the Texas UCC.




     B. With respect to our opinions set forth in paragraphs 9 through 14 above, we have
assumed that the Collateral Agent has acquired its interests in the Article 9 Collateral
and the Trust Property for value within the meaning of Section 9-203 of the NY UCC and
Section 9.203 of the Texas UCC.




     C. With respect to our opinions set forth in paragraphs 9 through 14 above, we have
assumed the descriptions of collateral contained in or attached as schedules to, the U.S.
Security Agreement, the Texas Deeds of Trust, the Financing Statements, the Fixture
Financing Statements and the As-Extracted Collateral Financing Statements sufficiently
describe (for the purposes of the attachment and perfection of security interests) the
collateral intended to be covered thereby.




     D. With respect to our opinion set forth in paragraph 10 above, we have relied on the
Organizational Documents as the basis for determining that (i) the correct legal name of
each Opinion Party is as set forth on the Financing Statements, and (ii) each Opinion Party
is solely organized under the laws of the State of Delaware.




     E. With respect to our opinion set forth in paragraph 11, we have assumed that (i) the
Depositary is a “bank” within the meaning of Section 9-102(a)(8) of the NY UCC;(ii) the
Depositary shall hold and maintain each Deposit Account as a “deposit account” (within the
meaning of Section 9-102(a)(29) of the NY UCC); (iii) the agreement between EOC and the
Depositary pertaining to the Deposit Account specifies that it is governed by the law of
the State of New York; and (iv) the Depositary will comply with its obligations under the
Deposit Account Control Agreement.




     F. With respect to our opinion set forth in paragraph 12 above, we have assumed that
the certificates evidencing the Certificated Securities will at all times be held by the
Collateral Agent in the State of New York.



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 13






     The opinions set forth above are subject to the following qualifications and exceptions:




     (a) The opinions in paragraphs 0 through 2 and 5 above are limited in
all respects to the Delaware Statutes. The opinions in paragraph 0 above
to the extent they relate to the existence and good standing of Opinion
Parties in the State of Delaware are based solely on the certificates
listed on Schedule V hereto. The opinions in paragraph 0 above to
the extent they relate to the due qualification of the Opinion Parties to
do business in, and standing of the Opinion Parties as foreign entities
under the laws of, the State or States set forth on Schedule V
hereto are based solely on the certificates listed on Schedule V
hereto.




     (b) The enforceability of each Opinion Document and the provisions
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other laws now or hereafter in effect
relating to or affecting enforcement of creditors’ rights generally and by
general principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing), regardless of
whether such enforcement is considered in a proceeding in equity or at law.




     (c) With respect to our opinions set forth in paragraphs 3 and 4
above, we express no opinion with respect to the validity or enforceability
of the following provisions to the extent that they are contained in the
Opinion Documents: (i) provisions purporting to release, exculpate, hold
harmless, or exempt any person or entity from, or to require
indemnification or contribution of or by any person or entity for,
liability for any matter to the extent that the same are inconsistent with
applicable law (including case law) or with public policy; (ii) provisions
purporting to waive, subordinate or not give effect to rights to notice,
demands, legal defenses or other rights or benefits that cannot be waived,
subordinated or rendered ineffective under applicable law; (iii) provisions
purporting to provide remedies inconsistent with applicable law; (iv)
provisions purporting to render void and of no effect any transfers of the
Credit Parties’ rights in any collateral in violation of the terms of the
Opinion Documents; (v) other than with respect to our opinions set forth in
paragraphs 9 through 14



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 14







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



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 15







or by waivers, modifications or amendments (whether made in writing,
orally, or by course of conduct), and we express no opinion on the effect
of the foregoing on the enforceability of the Opinion Documents.




     (d) Insofar as our opinion set forth in paragraph 3 above relates to
the enforceability under New York law of the provisions of the Opinion
Documents (other than the Texas Deeds of Trust) choosing New York law as
the governing law thereof, such opinion is rendered solely in reliance upon
the Act of July 19, 1984, ch. 421, 1984 McKinney’s Sess. Law of N.Y. 1406
(codified at N.Y. Gen. Oblig. Law §§5-1401 (McKinney 1989)) (the
“Act”) and is subject to the qualifications that such
enforceability (i) as specified in the Act, does not apply to the extent
provided to the contrary in subsection two of Section 1-105 of the NY UCC,
(ii) may be limited by public policy considerations of any jurisdiction in
which enforcement of such provisions is sought, and (iii) is subject to any
U.S. Constitutional requirement under the Full Faith and Credit Clause or
the Due Process Clause thereof or the exercise of any applicable judicial
discretion in favor of another jurisdiction.




     (e) As to our opinion set forth in paragraph 19 above as to the
enforceability under Texas law of the provisions of the Opinion Documents
(other than the Texas Deeds of Trust) choosing New York law as the
governing law thereof, such opinion is rendered solely in reliance upon
Title 9, Chapter 271 of the Texas Business and Commerce Code (“Chapter
271”), which applies to transactions in which a party pays or receives,
or is obligated to pay or entitled to receive, consideration in excess of
$1,000,000, and is subject to the qualifications that such enforceability
(i) as specified in Chapter 271, does not apply to an issue that another
Texas statute (such as Section 1.301(b) of the Texas UCC), or a federal
statute, provides is governed by the law of a particular jurisdiction, (ii)
may be limited by public policy considerations of any jurisdiction in which
enforcement of such provisions is sought, and (iii) is subject to any U.S.
Constitutional requirement under the Full Faith and Credit Clause or the
Due Process Clause thereof or the exercise of any applicable judicial
discretion in favor of another jurisdiction. In rendering our opinion in
paragraph 19 above, with your permission and without independent
investigation,



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 16







we have assumed that either the Administrative Agent or one of the
Lenders has its place of business or, if it has more than one place of
business, its chief executive office or an office from which it has
conducted a substantial part of the negotiations relating to the
transaction evidenced by the Opinion Documents, in the State of New York.




     Our opinion in paragraph 6(a) above states, among other things, that the
execution and delivery by each Credit Party of each Opinion Document to which it is a
party do not, and the performance of its obligations thereunder will not, result in
any violation by such Credit Party of any Applicable Law, which Applicable Law
includes, among other things, certain laws, rules and regulations of the State of
Texas. We note that such opinion in paragraph 6(a) as to those Opinion Documents
governed by New York law is based, in part, upon Chapter 271, which is discussed in
the preceding paragraph. To the extent that, in rendering such opinion in paragraph
6(a) as to the Opinion Documents governed by New York law, we have relied upon
Chapter 271, such opinion in paragraph 6(a) is also subject to the qualifications set
forth in the immediately preceding paragraph.




     (f) Certain of the remedial provisions with respect to the Article 9
Collateral and the Trust Property (including waivers with respect to the
exercise of remedies against the collateral) contained in the U.S. Security
Agreement and in each Texas Deed of Trust may be unenforceable in whole or
in part, but the inclusion of such provisions does not affect the validity
of the U.S. Security Agreement or either Texas Deed of Trust, in each case
taken as a whole, and the U.S. Security Agreement and each Texas Deed of
Trust, in each case taken as a whole, together with applicable law,
contains adequate provisions for the practical realization of the benefits
intended to be provided thereby (it being understood that we express no
opinion as to the adequacy of such provisions to the extent it is necessary
to seek execution or enforcement of rights or remedies under the laws of
any jurisdiction outside the State of New York or, in the case of each
Texas Deed of Trust, outside of the State of Texas). Additionally, we note
that the remedies under the U.S. Security Agreement to sell or offer for
sale the Article 9 Collateral are subject to compliance with applicable
state and federal securities laws.



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 17







     (g) In the case of property which becomes Article 9 Collateral after
the date hereof, our opinion in paragraph 9 above, as to the creation and
validity of the security interests therein described, is subject to the
effect of Section 552 of the Federal Bankruptcy Code, which limits the
extent to which property acquired by a debtor after the commencement of a
case under the Federal Bankruptcy Code may be subject to such security
interest arising from a security agreement entered into by the debtor
before the commencement of such case.




     (h) We express no opinion as to Article 9 Collateral or Trust Property
that is subject to a state statute or a statute, regulation or treaty of
the United States referred to in Section 9-311(a) of the NY UCC or the
Delaware UCC or in Section 9.311(a) of the Texas UCC.




     (i) With respect to our opinions set forth in paragraphs 9 and 10
above, we express no opinion as to Article 9 Collateral consisting of
commercial tort claims.




     (j) With respect to our opinion in paragraph 10 above, we express no
opinion as to the perfection of a security interest in any items of
collateral that are or are to become fixtures, as-extracted collateral or
timber to be cut.




     (k) Other than the filing of the Financing Statements in the filing
offices set forth in our opinion in paragraph 10 above, we express no
opinion as to any other actions (including any filings or registrations)
that may be necessary under any applicable law in connection with
perfection of a security interest in Article 9 Collateral consisting of
patents, trademarks, copyrights or other intellectual property rights.




     (l) With respect to our opinions set forth in paragraphs 9 through 14
above, (i) we express no opinion as to the priority of any security
interest, and (ii) we express no opinion as to the perfection of any lien
or security interest granted in the Opinion Documents by Holdings.




     (m) We express no opinion herein regarding the enforceability of any
provision in an Opinion Document that purports to prohibit, restrict or
condition the assignment of any Credit Party’s



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 18







rights or obligations under such Opinion Document to the extent that
such restriction on assignability is governed by Sections 9-406 through
9-409 of the NY UCC.




     (n) With respect to our opinions set forth in paragraphs 9 through 14
above, the attachment and perfection of the Collateral Agent’s and the
Administrative Agent’s security interest in proceeds is limited to the
extent set forth in Section 9-315 of the NY UCC, the Delaware UCC or the
Texas UCC.




     (o) We express no opinion as to any actions that may be required to be
taken periodically under the NY UCC, the Delaware UCC, the Texas UCC or
under any other applicable law in order for the effectiveness of the
Financing Statements, the Fixture Financing Statements, the As-Extracted
Collateral Financing Statements or perfection of any security interest to
be maintained.




     (p) We express no opinion with respect to the legality, validity,
binding nature or enforceability of any of the provisions of each Texas
Deed of Trust purporting to cover any property which becomes property of
EOC after the date hereof, unless such property is specifically identified
in such Texas Deed of Trust and the parties can be shown to have
anticipated, on the date of execution of such Texas Deed of Trust, the
acquisition of such property. In addition, each Texas Deed of Trust will
not secure any portion of the obligations described therein to the extent
that such obligations were not reasonably within the contemplation of the
parties at the time they entered into each Texas Deed of Trust. We express
no opinion as to provisions of either Texas Deed of Trust as they may
relate to property other than the Trust Property located in the State of
Texas.




     (q) We have made no examination of, and express no opinion with
respect to, the accuracy and completeness of the description of any portion
of the Trust Property. We have assumed, without investigation, the
accuracy and completeness under applicable law of the descriptions of all
of the Trust Property. We have also assumed that EOC has good title to the
Trust Property and the power to grant the liens and security interests
intended to be granted therein.



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 19







     (r) We bring to your attention that Section 16.035 of the Texas Civil
Practice and Remedies Code provides a four-year statute of limitations to
enforce liens on real property created by a mortgage or deed of trust; the
four-year statute begins to run on the maturity date of the indebtedness
secured thereby. Therefore, if the maturity of the Secured Obligations is
extended, an instrument should be filed, prior to the expiration of such
four-year period, in the real property records of the Office of the County
Clerk of each Applicable County where the property subject to each Texas
Deed of Trust is located referring to such Texas Deed of Trust and giving
notice of such extension. We further note that the obligations of EOC
under each Texas Deed of Trust may be limited by the provisions of Sections
51.003 through 51.005 of the Texas Property Code relating to limitations on
deficiencies following any foreclosure.




     (s) With respect to the equity securities and other investment
property that is subject to the security interests granted under the U.S.
Security Agreement, we note that certain of such equity securities and
other investment property has been issued by entities that are organized
under the laws of foreign jurisdictions outside of the United States, and
we express no opinion as to the effect of the laws of such foreign
jurisdictions on the opinions herein stated. Our opinions with respect to
the security interests of the Collateral Agent in any such equity
securities and other investment property is limited in all respect to the
NY UCC, and we note that the laws of the jurisdiction of an issuer of
pledged securities may affect, among other things, whether the securities
are characterized as certificated securities, the exercise of remedies with
respect to such securities and the exercise of voting or other rights with
respect to such securities




     (t) In rendering the opinions expressed in paragraphs 6(b) and 6(c)
above: (i) we have not reviewed, and express no opinion with respect to,
documents other than the Applicable Contracts, irrespective of whether they
secure, support or otherwise relate to or are referred to in the Applicable
Contracts or might under certain circumstances result in an event of
default or require early payment under any of the Applicable Contracts;
(ii) we have made no examination of, and express no opinion with respect
to, any financial, accounting or similar covenant or provision contained in
the Applicable Contracts to the



 









 





			
	 	 	 
	
	 	August 16, 2010    Page 20







extent that any such covenant or provision would require a
determination as to any financial or accounting matters; (iii) we express
no opinion as to any breach of any confidentiality provision contained in
any Applicable Contract caused by any Opinion Document or any Credit
Party’s actions pursuant thereto or in contemplation thereof; and (iv) our
opinions in paragraphs 6(b) and 6(c) above are limited to the laws of the
State of New York regardless of the law that governs the Applicable
Contracts. In every case, we have assumed that a court would enforce the
Applicable Contracts as written and we have limited our opinion to matters
readily ascertainable from the face of the Applicable Contracts.



     We express no opinion as to the laws of any jurisdiction other than: (i) Applicable Laws; and
(ii) with respect to our opinion set forth in paragraph 10 above, the Delaware UCC. As to our
opinions set forth herein regarding the Delaware Statutes and Article 9 of the Delaware UCC, we
have based such opinions solely on our review of the generally available compilations of the
Delaware Statutes and of Article 9 of the Delaware UCC as in effect on the date hereof, and we have
not reviewed any other laws of the State of Delaware or retained or relied on any opinion or advice
of Delaware counsel.



     This opinion has been prepared in accordance with the customary practice of lawyers who
regularly give and lawyers who regularly advise recipients regarding opinions of this kind.



     This opinion letter is rendered as of the date set forth above. We expressly disclaim any
obligation to update this letter after such date.



     This opinion letter is given solely for your benefit and the benefit of the Lenders in
connection with the transactions contemplated by the Opinion Documents and may not be furnished to,
or relied upon by, any other person or for any other purpose without our prior written consent.
Notwithstanding the foregoing, at your request, we hereby consent to:




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




 









 











			
	 	 	 
	
	 	August 16, 2010    Page 21







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




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




Very truly yours,




VINSON & ELKINS LLP




 









 





SCHEDULE I TO OPINION LETTER




Addressees



Cyan Partners, LP, as the Administrative Agent and as the Collateral Agent




Each Lender that is a party to the

Agreement as of the date hereof




 









 





SCHEDULE II TO OPINION LETTER




Applicable Contracts





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




 









 











SCHEDULE III TO OPINION LETTER




Organizational Documents



Endeavour Operating Corporation





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




Endeavour Energy New Ventures Inc.





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




END Management Company





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




Endeavour Energy North Sea, L.P.





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




 









 












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




Endeavour Energy North Sea LLC





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




 









 











SCHEDULE IV TO OPINION LETTER




Financing Statements, Fixture Financing Statements and

As-Extracted Collateral Financing Statements



Part A. Financing Statements



The following financing statements on form UCC-1, which (a) name the Person listed below as
debtor and the Collateral Agent as secured party for the benefit of the Lenders, (b) cover the
Article 9 Collateral (as defined in paragraph 9 of the foregoing opinion), and (c) are to be
filed in the office listed opposite the name of such debtor:




	 	 	 
	Name of Debtor	 	Filing Office
	Endeavour Operating Corporation

	 	Delaware
	 
	 	 
	Endeavour Energy New Ventures Inc.

	 	Delaware
	 
	 	 
	END Management Company

	 	Delaware
	 
	 	 
	Endeavour Energy North Sea, L.P.

	 	Delaware
	 
	 	 
	Endeavour Energy North Sea LLC

	 	Delaware





Part B. Fixture Financing Statements



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




	 	 	 
	Name of Debtor	 	Filing Office
	Endeavour Operating Corporation

	 	Real Property Records of the Office of the County Clerk of Colorado County, Texas
	 
	 	 
	Endeavour Operating Corporation

	 	Real Property Records the Office of the County Clerk of Gregg County, Texas






 









 





Part C. As-Extracted Collateral Financing Statements



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




	 	 	 
	Name of Debtor	 	Filing Office
	Endeavour Operating Corporation

	 	Real Property Records of the Office of the County Clerk of Colorado County, Texas
	 
	 	 
	Endeavour Operating Corporation

	 	Real Property Records of the Office of the County Clerk of Gregg County, Texas






 









 





SCHEDULE V TO OPINION LETTER




Existence, Foreign Qualification, and Good Standing Certificates




Foreign Qualification



	 	 	 
	Opinion Party	 	State(s)
	Endeavour Operating Corporation

	 	Alabama
	 

	 	Louisiana
	 

	 	Montana
	 

	 	New Mexico
	 

	 	Pennsylvania
	 

	 	Texas






Foreign Qualification Certificates




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





Existence/Good Standing Certificates




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




 









 












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






 











 




EXHIBIT C-2


August 16, 2010


Cyan Partners, LP

399 Park Avenue, 39th Floor

New York, NY 10022


Re: Endeavour International Corporation, a Nevada corporation.


Ladies and Gentlemen:


     We have acted as special Nevada counsel to Endeavour International Corporation, a Nevada
corporation (the “Company”), in connection with the Credit Agreement, dated as of August 16, 2010
(the “Credit Agreement”), by and among the Company, Endeavour Energy UK Limited, as the Borrower,
the various lenders from time to time party to the Credit Agreement and Cyan Partners, LP, as
Administrative Agent. This opinion is being furnished with respect to the Company pursuant to
Section 5.03 of the Credit Agreement. All capitalized terms used in this letter without definition
have the meanings assigned to them in the Credit Agreement.



     In connection with the opinions set forth herein, we have examined executed originals or
copies certified or otherwise identified to our satisfaction, each of which is dated the date
hereof unless otherwise noted:




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





 









 





August 16, 2010

Page 2





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





     In connection with the opinions set forth herein, we have relied on the certificates of
officers of the Company, certificates of public officials and such other documents, records, public
filings and information as we have deemed necessary or appropriate and as to matters of fact upon
the representations and warranties set forth in the Transaction Documents. We have assumed that
all signatures are genuine; that all documents submitted to us as originals are authentic; that all
documents submitted to us as copies conform to the originals; and that the facts stated in all such
documents are true and correct. In rendering this opinion, we have not made any independent
investigation as to accuracy or completeness of any facts or representations, warranties, data or
other information, whether written or oral, that may have been made by or on behalf of the parties,
except as specifically set forth herein. We have further assumed that the Credit Agreement is the
valid and binding obligation of the Lenders.



     We note that the Transaction Documents provide that they shall be governed by and construed in
accordance with the laws of the State of New York. Therefore, we assume that the Transaction
Documents are each enforceable under the laws of the State of New York.



     Based upon the foregoing and subject to the qualifications set forth hereinafter, we are of
the opinion that:



     1. The Company is duly incorporated and validly existing as a corporation in good standing
under the laws of the State of Nevada. The Company has corporate power and corporate authority to
enter into the Transaction Documents, to perform its obligations thereunder and to consummate the
transactions contemplated by each of the Transaction Documents to which it is a party. The Company
has the corporate power and authority to own its property and assets and to transact the business
in which it is engaged as described in the Company’s Form 10-K filed with the Securities and
Exchange Commission on March 16, 2010.



     2. The execution and delivery of the Transaction Documents by the Company and the performance
by the Company of its obligations thereunder have been duly authorized by all necessary corporate
action on the part of the Company.



     3. To the extent that Nevada law governs such issues, each of the Transaction Documents has
been duly and validly executed and delivered by the Company.



     4. The execution, delivery and performance of the Transaction Documents, the consummation of
the transactions contemplated therein and the performance by the Company of its obligations
thereunder do not and will not result in any violation of the provisions of the Articles of
Incorporation or Bylaws of the Company or any statute, rule or regulation of the State of Nevada.



 









 





August 16, 2010

Page 3




     5. No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Nevada court or Nevada governmental authority or agency, is
necessary or required in connection with the due authorization, execution and delivery by the
Company of the Transaction Documents, the performance by the Company of its obligations thereunder
or the consummation by the Company of the transactions contemplated thereby, except (i) such as
those which have already been obtained or made, (ii) the filing of the Financing Statement in the
filing office set forth in paragraph 6 hereof and (iii) other authorizations, approvals, consents,
registrations and filings required under federal and state securities laws, as to which we offer no
opinion.



     6. To the extent that the filing of a financing statement can be effective under the NV UCC to
perfect a security interest in the Collateral, as defined in the U.S. Security Agreement, the
security interest in favor of the Agent in the Collateral described in the Financing Statement will
be perfected upon the filing of the Financing Statement in the office of the Secretary of State of
the State of Nevada.



     The opinions and other matters in this letter are qualified in their entirety and subject to
the following additional assumptions, qualification and limitations:



     I. Our opinions expressed in paragraph 6, above, are subject to the following additional
assumptions, qualifications and limitations:



          i. We assume that the security interest in the Collateral granted to the Collateral Agent in
the U.S. Security Agreement has attached under the applicable Uniform Commercial Code. We express
no opinion with respect to the perfection of a security interest in or transfer of any Collateral
with respect to which a security interest or transfer cannot be perfected by the filing of a
financing statement pursuant Section 104.9311 of the NV UCC. The generic description of the
Collateral set forth in the Financing Statement as “all assets of the Debtor” is permissible under
the NV UCC; however, upon filing of the Financing Statement in the office of the Nevada Secretary
of State, perfection of the Agent’s security interest by such filing will only occur as to those
items and types of Collateral described in the U.S. Security Agreement in which a security interest
may be perfected by filing in the office of the Nevada Secretary of State.




          ii. We express no opinion as to the priority of any security interest created, or purported to
be created, by any of the Transaction Documents.




          iii. We call to your attention that Section 552 of the United States Bankruptcy Code limits
the extent to which property acquired by a debtor after the commencement of a case under the United
States Bankruptcy Code may be subject to a security interest arising from a security agreement
entered into by such debtor before the commencement of such case.




          iv. We express no opinion as to any actions that may be required to be taken periodically
under the NV UCC or other applicable law in order for the effectiveness of the Financing Statement,
or the validity or perfection of any security interest, to be maintained. We





 









 








August 16, 2010

Page 4



note that a financing statement filed in the State of Nevada is generally effective for a period of
five years from the date of filing. However, Nevada Revised Statutes Section 104.9515 requires the
filing of continuation statements within the period of six months before the expiration of five
years from the date of the filing of the original financing statement or the filing of any
continuation statements in order to maintain the effectiveness of the financing statement. Upon
lapse of the five year period and without the proper filing of a continuation statement the
security interest becomes unperfected (unless the security interest is perfected without filing)
and any priority is lost.




          v. We do not express any opinion with respect to the perfection of a security interest in the
Collateral or the proceeds thereof that constitutes cash or cash equivalents, except to the extent
that they constitute proceeds under Nevada Revised Statutes Section 104.9315, during any period of
time when they are not held by the Lender or its agent.




          vi. Perfection of a security interest in proceeds of any Collateral may be limited as provided
in Nevada Revised Statutes Section 104.9315.




          vii. We call to your attention that the security interest of the Agent in any of the
Collateral which constitutes accounts under the NV UCC may be subject to the rights of account
debtors claims and defenses of such account debtors and the terms of agreements with such account
debtors.




          viii. The rights of the Company to assign any Collateral consisting of claims against any
government or governmental agency (including, without limitation, the United States of America or
any state thereof or any agency or department thereof or of any state) may be limited by the
Federal Assignment of Claims Act or similar state or local statute.




          ix. We call to your attention (i) that perfection of any security interest in the Collateral
by filing will lapse (x) four months after the Company changes its location to another jurisdiction
or (y) one year after the Company transfers such of the Collateral to a person who thereby becomes
a debtor under the U.S. Security Agreement and who is located in another jurisdiction, unless, in
either case, appropriate steps are taken to perfect such security interest in such other
jurisdiction before the expiration of such four-month or one-year period, as applicable.




          x. If the Company changes its name so as to make the Financing Statement filed against it
seriously misleading, then perfection will lapse as to any of the Collateral acquired by such party
more than four months after such change unless a new appropriate financing statement indicating the
new name of the Company is properly filed before the expiration of such four-month period.




     II. The foregoing opinions are limited to the matters expressly set forth herein and no
opinion may be implied or inferred beyond the matters expressly stated. We disclaim any obligation
to update this letter for events occurring after the date of this letter, or as a result of
knowledge acquired by us after that date, including changes in any of the statutory or decisional



 









 





August 16, 2010

Page 5



law after the date of this letter. We are members of the bar of the State of Nevada. We express
no opinion as to the effect and application of any United States federal law, rule or regulation or
any securities or blue-sky laws of any state, including the State of Nevada. We are not opining
on, and assume no responsibility as to the applicability to or the effect on any of the matters
covered herein of the laws of any other jurisdiction other than the laws of Nevada as presently in
effect.




     The opinions rendered herein are for the sole benefit of, and may only be relied upon by the
addressees and any Person that subsequently becomes a Lender in accordance with Section 11.04(b) of
the Credit Agreement as if it were addressed to such Person and delivered on the date hereof, and
the opinions herein expressed are not to be used, circulated or otherwise referred to in connection
with any transaction other than those contemplated by the Transaction Documents, provided that the
law firm of Vinson & Elkins LLP may rely upon and refer to this opinion in connection with the
opinion to be rendered by them pursuant to Section 5.03 of the Credit Agreement, provided further,
that this opinion may be furnished by you to, but may not be relied upon in any manner by, (1) your
legal counsel and independent auditors who need to know such information and are informed of the
confidential nature of this opinion, (2) any regulatory authority having jurisdiction over you upon
the request or demand of such regulatory authority, (3) any Person to the extent required pursuant
to the order of any court or administrative agency or in any pending legal or administrative
proceeding or as otherwise required by applicable law or compulsory legal process, provided that
you take reasonable steps to procure that such Person maintains the confidentiality of this
opinion, (4) any Person that subsequently becomes the Administrative Agent or Collateral Agent in
accordance with Section 10.09 of the Credit Agreement, (5) any Person that proposes to become a
Lender under the Credit Agreement, and (6) any Person that proposes to become or becomes a Secured
Creditor under a Secured Hedging Agreement or Secured Reimbursement Agreement (each as defined in
the U.S. Security Agreement), in each case, in compliance with the requirements of the Credit
Agreement and the U.S. Security Agreement.



	 	 	 	 	 
	 	Very truly yours,



WOODBURN and WEDGE

 	 
	 	By:  	/s/
Gregg P. Barnard	 
	 	 	Gregg P. Barnard 	 
	 	 	 	 
	 




 











 





			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
EXHIBIT C-3




London, 16 August 2010




Cyan Partners, LP

399 Park Avenue, 39th Floor

New York, New York

United States of America 10022



Ladies and Gentlemen:



This opinion letter is rendered to you at your request in connection with the
Opinion Documents.



Capitalised terms used in this opinion letter have the meanings set forth in Exhibit
A. The section headings used in this opinion letter are for convenience of
reference only and are not to affect its construction or to be taken into
consideration in its interpretation.



This opinion letter is addressed solely to you. It may only be relied upon by you
(which hereafter for the purpose of this opinion letter also includes any person
authorised to rely upon this opinion letter, pursuant to trus paragraph) in
connection with the Opinion Documents. This opinion letter is strictly limited to
the matters stated in it and may not be read as extending by implication to any
matters not specifically referred to in it. Nothing in this opinion letter should be
taken as expressing an opinion in respect of any representations or warranties, or
other information, contained in the Opinion Documents or any other document
reviewed in connection with this opinion letter. This opinion letter may not be
relied upon by any other person, other than any person, not otherwise an
addressee of this letter, who becomes a Lender as defined in the Credit
Agreement (as defined below) during the primary syndication of the facilities
therein, and without our prior written consent, its contents may not be disclosed
by you for any purpose, other than (on a non-reliance basis) to any persons:





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




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









 









 





			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
limitation of liability clause and have been filed with the Rotterdam Court of First Instance. They
can be consulted at www.nauradulilh.com and will be provided free of charge upon request.









 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        2


        London, 16 August 2010




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




In rendering the opinions expressed in this opinion letter, we have exclusively
reviewed and relied upon the Opinion Documents and the Corporate Documents and
we have assumed that the Opinion Documents have been entered into for bona fide
commercial reasons. We have not investigated or verified any factual matter
disclosed to us in the course of our review.



This opinion letter sets out our opinion on certain matters of the laws with general
applicability of the Netherlands, and, insofar as they are directly applicable in the
Netherlands, of the European Union, as at today’s date and as presently interpreted
under published authoritative case law of the Netherlands courts, the European
General Court and the European Court of Justice. We do not express any opinion
on Netherlands or European competition law, tax law or regulatory law. No
undertaking is assumed on our part to revise, update or amend this opinion letter in
connection with or to notify or inform you of, any developments and/or changes of
Netherlands law subsequent to today’s date. We do not purport to opine on the
consequences of amendments to the Opinion Documents subsequent to the date of
this opinion letter.



The opinions expressed in this opinion letter are to be construed and interpreted in
accordance with Netherlands law. This opinion letter may only be relied upon by
you, and our willingness to render this opinion letter is based, on the condition that
you accept (i) that the legal relationship between yourselves (which for the purpose
of this opinion letter also includes any person authorised to rely upon this opinion
letter pursuant to the preceding paragraphs) and NautaDutilh UK is governed by
Netherlands law and (ii) that any issues of interpretation or liability arising out of or
in connection with this opinion letter are submitted to the exclusive jurisdiction of
the competent courts at Rotterdam, the Netherlands.










 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        3


        London, 16 August 2010


In this opinion letter, legal concepts are expressed in English terms. The Netherlands
legal concepts concerned may not be identical in meaning to the concepts described
by the English tenns as they exist under the law of other jurisdictions. In the event of
a conflict or inconsistency, the relevant expression shall be deemed to refer only to
the Netherlands legal concepts described by the English terms.



For the purposes of this opinion letter, we have assumed that:





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




c. (i) no regulations (reglement) have been adopted by any corporate body
of any Netherlands Company and (ii) the Articles of Association of each
Netherlands Company are its articles of association currently in force.
The Extracts support item (ii) of this assumption;



d. none of the Netherlands Companies has (i) been dissolved (ontbonden),
(ii) ceased to exist pursuant to a merger (jusie) or a division (splitsing),
(iii) had its assets placed under administration (onder bewind gestelcf),
(iv) been declared bankrupt (jailliet verk/aard) or granted a suspension of
payments (surseance van betaling verleencf) or (v) been made subject to
similar proceedings in any jurisdiction or otherwise been limited in its
power to dispose of its assets. The Extracts and our inquiries of today
with the Bankruptcy Clerk’s Office support the items (i) through (iv) of
this assumption. However, this information does not constitute
conclusive evidence that the events set out in items (i) through (iv) have
not occurred;





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










 









 





			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        4


        London, 16 August 2010


Company;



f. the resolutions recorded in the Resolutions are in full force and effect,
and the factual statements made and the confirmations given in the
Resolutions are complete and correct;



g. each Power of Attorney (i) is in full force and effect, and (ii) validly
authorises the person or persons purported to be granted power of
attorney, to represent and bind the relevant Netherlands Company vis-avis
the other parties to the Opinion Documents with regard to the
transactions contemplated by and for the purposes stated in the Opinion
Documents under any applicable law other than Netherlands law;



h. each of the parties to the Opinion Documents other than the Netherlands
Companies has:





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






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











 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        5


        London, 16 August 2010




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






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




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




     Corporate Status




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





     Corporate Power




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





     Corporate Action








 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        6


        London, 16 August 2010




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






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










 









 





			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        7


        London, 16 August 2010




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






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











 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        8


        London, 16 August 2010




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




The opinions expressed above are subject to the following qualifications:





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










 









 





			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
        9


        London, 16 August 2010




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






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






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






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















 









 











			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





        
        10


        London, 16 August 2010




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















 









 











			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      
       11


       London, 16 August 2010




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















 









 











			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

        12



        London, 16 August 2010




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





Yours faithfully,




Nauta Dutilh UK

Arjan J.J. Pors










 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

        13



        London, 16 August 2010



EXHIBIT A

LIST OF

DEFINITIONS




	 	 	 	 	 

	“Articles of Association”

	 	a.
	 	in relation to Endeavour Energy Netherlands B. V”’ its articles of
association as they read after the
execution of a deed of amendment dated 26 July 2010, which, according to the relevant
Extract, was the last amendment to this Netherlands Company’s articles of association; and
	 
	 

	 	b.
	 	in relation to Endeavour International
Holding B.V., its articles of association
as they read after the execution of a eed
of amendment dated 26 July 2010,
which, according to the relevant Extract, was the last amendment to this
Netherlands Company’s articles of
association.
	 
	 	 	 	 
	“Bankruptcy Clerk’s Office”

	 	(i)
	 	the online central insolvency register
(Centraal Insolventie Register) held by
the Council for the Administration of
Justice (Raad voor de Rechtspraak);
	 
	 

	 	(ii)
	 	the online EU Insolvency Register
(Centraal lnsolventie Register-EU
Registraties) held by the Council for the
Administration of Justice (Raad voor de
Rechtspraak); and
	 
	 

	 	(iii)
	 	the Amsterdam court bankruptcy clerk’s office
	 
	 	 	 	 
	“Bankruptcy Code”	 	the Netherlands Bankruptcy Code (Faillissementswet)
	 
	 	 	 	 
	“Collateral”	 	the Shares as defined in the Deeds of Pledge of Shares
	 
	 	 	 	 
	“Commercial Register”	 	the Amsterdam Chamber of Commerce Commercial Register (handelsregister gehouden











 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

       14



        London, 16 August 2010



	 	 	 	 	 

	 	 	has the meaning ascribed thereto in the has the
	 
	 	 	 	 
	“Corporate Documents”	 	meaning ascribed thereto in the Guaranty
	 
	 	 	 	 
	“Credit Agreement”

	 	a.
	 	In relation to Endeavour Energy Netherlands BV., its deed of incorporation (akte van
oprichting), dated 27 June 2005; and
	 
	“Deeds of Incorporation”

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











 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

     15



     London, 16 August 2010



	 	 	 	 	 

	 	 	Wetboek)
	 
	 	 	 	 
	“NCCP”	 	the Netherlands Code of Civil Procedure (Wethoek van Burgerlijke Rechtsvordering)
	 
	 	 	 	 
	“the Netherlands”	 	the Kingdom of the Netherlands, excluding Aruba and the Netherlands Antilles
	 
	 	 	 	 
	“Netherlands Companies”	 	Endeavour Energy Netherlands B. V. and Endeavour International Holding B. V.
	 
	 	 	 	 
	“Opinion Documents”	 	the documents listed in Exhibit B
	 
	 	 	 	 
	“Parallel Debt”	 	has the meaning ascribed thereto in the Deeds of Pledge of Shares
	 
	 	 	 	 
	“Pledgee”	 	Cyan Partners, LP, a lintited partnership organised and existing under the laws of the State of Delaware, United States of America, having
its registered office at 399 Park A venue, New York, NY, United States of America 10022
	 
	 	 	 	 
	“Power of Attorney”	 	the Share Pledge Powers of Attorney and the Resolutions Powers of Attorney together
	 
	 	 	 	 
	“Relevant Moment”	 	the moment of:
	 

	 	i.
	 	in relation to the Deeds of Pledge of Shares, the execution (passeren) of that deed by a competent civil-law notary;
	 
	 

	 	ii.
	 	in relation to Future Collateral, after the moment referred to under (i) above at which moment the relevant Pledgor acquires that Future Collateral.
	 
	 	 	 	 
	“Resolutions”	 	in relation to each Netherlands Company, the document or documents containing the resolutions of
its managing board (bestuur), dated 30 July 2010 and the resolutions of its general meeting of
shareholders (algemene vergadering van aandeelhouders), dated 29 July 2010











 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

       16



        London, 16 August 2010



	 	 	 	 	 

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











 









 








			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

       17



        London, 16 August 2010



EXHIBIT B

LIST OF

OPINION DOCUMENTS




A. FOREIGN FINANCE DOCUMENTS





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





B. DEEDS OF PLEDGE OF SHARES





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











 










 







			
	 	 	 
	ATIQRNEYS , CIVIL LAW NOTARIES · TAX ADVISERS
	 	NautaDutilh          








Bowman House

29 Wilson Street

London EC2M 2SJ

T +44 20 7786 9100

F +44 20 7588 6888




Amsterdam




Brussels




London




Luxembourg




New York,




Rotterdam





      

       18



        London, 16 August 2010



EXHIBIT C

LIST OF

CORPORATE DOCUMENTS





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







 











 





EXHIBIT C-4




	 	 	 

	White & Case llp

	 	     Tel +44 (0)20 7532 1000
	5 Old Broad Street

	 	     Fax +44 (0)20 7532 1001
	London EC2N 10W

	 	www.whitecase.com





16 August 2010



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



Dear Sirs





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






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






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






	3.	 	In this opinion:






(a) “Companies Act” means the Companies Act 2006 including any statutory
modification or re-enactment thereof for the time being in force together with any
orders or regulations made or issued under or by virtue of the Companies Act.


A limited liability partnership registered in England & Wales under number OC324340.
Regulated by the Solicitors Regulation Authority. The term partner is used to refer to a member of
this partnership or an employee of equivalent standing and qualifications, a list of whom is
available at the registered office address above.



ABU DHABI ALMATY ANKARA BEIJING BERLIN BRATISLAVA BRUSSELS BUCHAREST BUDAPEST DOHA
DUSSELDORF FRANKFURT GENEVA HAMBURG HELSINKI HONG KONG ISTANBUL JOHANNESBURG LONDON LOS ANGELES
MEXICO CITY MIAMI MOSCOW MUNICH NEW YORK PALO ALTO PARIS PRAGUE RIYADH SAO PAULO SHANGHAI SINGAPORE
STOCKHOLM TOKYO WARSAW WASHINGTON, DC







1









 









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






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






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




2









 






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






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




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






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




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






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




3









 












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






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






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




4









 






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




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



Yours faithfully,



White & Case LLP







5









 








APPENDIX A





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




6









 






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




7









 






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






8











 





APPENDIX B





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






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






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






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




9









 












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






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






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






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






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






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






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




10









 












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






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






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






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






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






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






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






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






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






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




11









 












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






12












 





EXHIBIT D-1




FORM OF OFFICERS’ CERTIFICATE




     I, the undersigned, [Chairman of the Board/Chief Executive Officer/President/Vice President]
of [Name of Credit Party], a [corporation] [limited partnership] [limited liability company]
[organized and existing under the laws of the State of [______]] (the “Company”), do hereby
certify as of the date hereof, solely in my capacity as an officer of the Company and not in my
individual capacity, on behalf of the Company, that:



     1. This Certificate is furnished pursuant to the Credit Agreement, dated as of [insert closing
date], 2010, among [the Company,] [Endeavour International Corporation] [Endeavour Energy UK
Limited], the lenders party thereto from time to time, and Cyan Partners, LP, as Administrative
Agent (such Credit Agreement, as in effect on the date of this Certificate, being herein called the
“Credit Agreement”). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.



     2. The named individuals listed on Annex A hereto are duly elected or appointed officers of
the Company, and each individual holds the office of the Company set forth opposite such
individual’s name. The signature written opposite the name and title of each such officer is such
officer’s genuine signature.



     3. Attached hereto as Annex B is a certified copy of the [Certificate of Incorporation of the
Company] [Certificate of Partnership of the Company] [Certificate of Formation of the Company], as
filed in the Office of the Secretary of State of the State of ______ on _________ __, ____,
together with all amendments thereto adopted through the date hereof.



     4. Attached hereto as Annex C is a [true and correct copy of the By-Laws of the Company which
were duly adopted and are in full force and effect on the date hereof] [true and correct copy of
the [Partnership Agreement of the Company] [Limited Liability Company Agreement of the Company]
which was duly adopted and is in full force and effect on the date hereof, together with all
amendments thereto adopted through the date hereof.



     5. Attached hereto as Annex D is a true and correct copy of resolutions which were duly
adopted on _________ __, ____ [by unanimous written consent of the Board of Directors of the
Company] [by a meeting of the Board of Directors of the Company at which a quorum was present and
acting throughout], and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Annex D, no resolutions have been adopted by the Board of Directors of the
Company which deal with the execution, delivery or performance of any of the Documents to which the
Company[, as the general partner of the Company,] [, as the managing member of the Company,] is a
party.



     [6. On the date hereof, all of the conditions set forth in Section 5.06, 5.07, 5.08 and 5.16
of the Credit Agreement have been satisfied.]



     [6.][7.] On the date hereof, the representations and warranties contained in the Credit
Documents to which the Company is a party are true and correct in all material respects with the
same effect as though such representations and warranties had been made on the date



 









 





Exhibit D-1
Page 2



hereof, both before and immediately after giving effect to the incurrence of Term Loans on the date
hereof, unless stated to relate to a specific earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier date.




     [7.][8.] On the date hereof, no Default or Event of Default has occurred and is continuing or
would immediately result from the incurrence of Term Loans on the date hereof.



     [8.][9.] There is no pending proceeding for the dissolution or liquidation of the Company or,
to the knowledge of the undersigned, threatening its existence.



 









 





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



	 	 	 	 	 	 	 

	 	 	[NAME OF CREDIT PARTY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






 









 






Exhibit D-1
Page 4




     I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby certify, on the
date hereof, solely in my capacity as an officer of the Company and not in my individual capacity,
on behalf of the Company, that:



     1. [Name of Person making above certifications] is the duly elected and qualified
[Chairman/Vice-Chairman/President/Vice-President/Director] of the Company and the signature above
is [his] [her] genuine signature.



     2. [The certification made by [name of Person making above certifications] on behalf of the
Company in Items 2, 3, 4, 5 and [8.][9.] is true and correct.]1



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



	 	 	 	 	 	 	 

	 	 	[NAME OF CREDIT PARTY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 








 




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




 









 










ANNEX A




	 	 	 	 	 
	Name2	 	Office	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 
	 	 







 




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






 











 







Exhibit D-2




To Credit Agreement




OFFICERS’ CERTIFICATE



          I, the undersigned, Director of Endeavour Energy UK Limited, a limited company incorporated
under the laws of England and Wales with company registered number 05030838 (the
“Company”), do hereby certify as of the date hereof, solely in my capacity as an officer of
the Company and not in my individual capacity, on behalf of the Company, that:


          1. This Certificate is furnished pursuant to the credit agreement, dated as of                                         ,
2010, among the Company, Endeavour International Corporation, the lenders party thereto from time
to time, and Cyan Partners, LP, as Administrative Agent (such credit agreement, as in effect on the
date of this Certificate, being herein called the “Credit Agreement”). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the
Credit Agreement.


          2. The named individuals listed on Annex A hereto are duly elected or appointed officers of
the Company, being duly authorised by the Company to deliver this Certificate and each holds the
office of the Company set forth opposite such individual’s name. The signature written opposite
the name and title of each such officer is such officer’s genuine signature.


          3. Attached hereto as Annex B is a true, complete and up-to-date copy of the Certificate of
Incorporation of the Company and any Certificate of Incorporation on Change of Name of the Company.


          4. Attached hereto as Annex C is a true and correct copy of the constitutional documents of
the Company, consisting of its Memorandum and Articles of Association which were duly adopted and
are in full force and effect on the date hereof, together with all amendments thereto adopted
through the date hereof.


          5. Attached hereto as Annex D is a true and correct copy of resolutions which were duly
adopted on
                     ___, ___ by a meeting of the Board of Directors of the Company at which a
quorum was present and acting throughout (which resolutions have not been rescinded, amended or
modified), and which approve the execution, delivery and performance of each of the Credit
Documents to which the Company is a party and all transactions contemplated thereby. Except as
attached hereto as Annex D, no resolutions have been adopted by the Board of Directors of the
Company which deal with the execution, delivery or performance of any of the Documents to which the
Company is a party.


          6. Attached hereto as Annex E is a true and correct copy of resolutions which were duly
adopted on
                     ___, ___ by the shareholder of the Company (which resolutions have not been
rescinded, amended or modified), authorising the potential conflict of directors’ interest
resulting from the transactions contemplated by the Credit Agreement.


          7. Attached hereto as Annex F is a copy of a power of attorney which is correct, complete and
in full force and effect on the date hereof (which power of attorney has not been rescinded,
amended or modified).



 









 






Page 2







          8. On the date hereof, all of the conditions set forth in Section 5.06, 5.07, 5.08 and 5.16 of
the Credit Agreement have been satisfied.


          9. On the date hereof, the representations and warranties contained in the Credit Documents to
which the Company is a party are true and correct in all material respects with the same effect as
though such representations and warranties had been made on the date hereof, both before and
immediately after giving effect to the incurrence of Term Loans on the date hereof, unless stated
to relate to a specific earlier date, in which case such representations and warranties were true
and correct in all material respects as of such earlier date.


          10. On the date hereof, no Default or Event of Default has occurred and is continuing or would
immediately result from the incurrence of Term Loans on the date hereof.


          11. There is no pending proceeding for the dissolution or liquidation of the Company or, to
the knowledge of the undersigned, threatening its existence.


          12. I have examined the terms of all relevant agreements to which the Company is a party and
the constitutional documents of the Company (“Relevant Documents”), and we can confirm to you that
entry into the Credit Documents to which the Company is a party and drawing and/or guaranteeing of
all amounts capable of being drawn under the Credit Documents to which the Company is a party,
taking into account, when aggregated with, any other Indebtedness of the Company, (a) will be
within the corporate powers of the Company, and (b) does not and will not cause to be exceeded any
limit or restriction on any of the powers of the Company (whether contained in any Relevant
Documents or otherwise) or the right or ability of the directors of the Company to exercise such
powers.



 









 





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



	 	 	 	 	 
	 	ENDEAVOUR ENERGY UK LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	Robert Fitzpatrick 	 
	 	 	Title:  	Director 	 



 









 







Page 4




          I, the undersigned, Director of the Company, do hereby certify, on the date hereof, solely in
my capacity as an officer of the Company and not in my individual capacity, on behalf of the
Company, that:


          1. Robert Fitzpatrick is a duly elected and qualified Director of the Company and the
signature above is his genuine signature.


          2. The certification made by Robert Fitzpatrick on behalf of the Company in Items 2, 3, 4, 5,
7 , 10 and 11 is true and correct.


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



	 	 	 	 	 
	 
	 	ENDEAVOUR ENERGY UK LIMITED

 	 
	 	By:  	 	 
	 	 	Name:  	James William Munns 	 
	 	 	Title:  	Director 	 



 









 







	 	 	 	 	 



Page 5




ANNEX A




	 	 	 	 	 
	Name	 	Office	 	Signature
	 
	James William Munns
 


	 	Director
 

	 	 
	 
	 	 	 	 
	Robert Fitzpatrick
 


	 	Director
 

	 	 
	 
	 	 	 	 
	Mike Kirksey
 


	 	Authorised Signatory
 

	 	 






 









 






Page 6




ANNEX B

Certificate of Incorporation and any Certificate of Incorporation on Change of Name





 









 








Page 7




ANNEX C

Memorandum and Articles of Association





 









 








Page 8




ANNEX D

Board resolution





 









 








Page 9




ANNEX E

Shareholder resolution





 









 








Page 10




ANNEX F

Power of Attorney





 












 





EXHIBIT D-3




OFFICERS’ CERTIFICATE




ENDEAVOUR ENERGY NETHERLANDS B.V.




          I, the undersigned, Managing Director (statutair bestuurder) of Endeavour Energy Netherlands
B.V., a private company with limited liability (besloten vennoostchap met beperkte
aansprakelijkheid) incorporated under the laws of the Netherlands registered with the Trade
Register (Handelsregister) of the Chamber of Commerce (Kamer van Koophandel en Fabrieken) under
file number 34229296 (the “Company”), do hereby certify as of the date hereof, solely in
my capacity as a managing director (bestuurder) of the Company and not in my individual capacity,
on behalf of the Company, that:




          1. This Certificate is a certificate as referred to in Section 5.04 of the Credit Agreement,
dated as of ___  August, 2010, among inter alia the Company, Endeavour International Corporation,
Endeavour Energy UK Limited, the lenders party thereto from time to time, and Cyan Partners, LP, as
Administrative Agent (such Credit Agreement, as in effect on the date of this Certificate, being
herein called the “Credit Agreement”). Unless otherwise defined herein, capitalized terms
used in this Certificate shall have the meanings set forth in the Credit Agreement.




          2. The named individuals listed on Annex A hereto are duly elected or appointed officers of
the Company, and each holds the office of the Company set forth opposite such individual’s name.
The signature written opposite the name and title of each such officer is such officer’s genuine
signature.




          3. The utilising or guaranteeing or securing, as appropriate, of the Total Commitment would
not cause any borrowing, guaranteeing, security or similar limit binding on the Company to be
exceeded.




          4. Attached hereto as Annex B is a true and complete copy of the Deed of Incorporation of the
Company, as filed with the Trade Register (Handelsregister) of the Chamber of Commerce (Kamer van
Koophandel en Fabrieken).




          5. Attached hereto as Annex C is a true, complete and up to date copy of the Articles of
Association of the Company , as filed with the Trade Register (Handelsregister) of the Chamber of
Commerce (Kamer van Koophandel en Fabrieken).




          6. Attached hereto as Annex D is a true and correct copy of resolutions which were duly
adopted on 30 July, 2010 by unanimous written consent of the managing board (bestuur)
of the Company, and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Annex D, no resolutions have been adopted by the managing board (bestuur) of the
Company which deal with the execution, delivery or performance of any of the Credit Documents to
which the Company is a party.







 









 








Exhibit E-3

Page 2




          7. Attached hereto as Annex E is a true and correct copy of resolutions which were duly
adopted on 30 July, 2010 by unanimous written consent of the general meeting of shareholders
(algemene vergadering van aandeelhouders) of the Company, and said resolutions have not been
rescinded, amended or modified. Except as attached hereto as Annex E, no resolutions have been
adopted by the general meeting of shareholders (algemene vergadering van aandeelhouders) of the
Company which deal with the execution, delivery or performance of any of the Credit Documents to
which the Company is a party.




          8. Attached hereto as Annex F is a true, complete and up to date copy of an extract from the
Trade Register (Handelsregister) of the Chamber of Commerce (Kamer van Koophandel en Fabrieken)
pertaining to the Company.




          9. On the date hereof, the representations and warranties contained in the Credit Agreement
and in the other Credit Documents to which the Company is a party are true and correct in all
material respects with respect to the Company, with the same effect as though such representations
and warranties had been made on the date hereof, both before and immediately after giving effect to
the incurrence of Term Loans on the date hereof, unless stated to relate to a specific earlier
date, in which case such representations and warranties were true and correct in all material
respects as of such earlier date.




          10. On the date hereof, no Default or Event of Default has occurred and is continuing or would
immediately result from the incurrence of Term Loans on the date hereof.




          11. There is no pending proceeding for the dissolution or liquidation of the Company or, to
the knowledge of the undersigned, threatening its existence.




          12. I have examined the terms of all relevant agreements to which the Company is a party and
the constitutional documents of the Company (“Relevant Documents”), and we can confirm to you that
entry into the Credit Documents to which the Company is a party and drawing and/or guaranteeing of
all amounts capable of being drawn under the Credit Documents to which the Company is a party,
taking into account, when aggregated with, any other Indebtedness of the Company, (a) will be
within the corporate powers of the Company, and (b) does not and will not cause to be exceeded any
limit or restriction on any of the powers of the Company (whether contained in any Relevant
Documents or otherwise) or the right or ability of the directors of the Company to exercise such
powers.









 









 







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




	 	 	 	 	 
	 	ENDEAVOUR ENERGY NETHERLANDS B.V.

 	 
	 	By:  	 	 
	 	 	Name:  	J.M. Kirksey 	 
	 	 	Title:  	managing director A 	 



 









 






	 	 	 	 	 



Exhibit E-3

Page 4




          I, the undersigned, managing director (statutair bestuurder) of the Company, do hereby
certify, on the date hereof, solely in my capacity as a managing director of the Company and not in
my individual capacity, on behalf of the Company, that:




          1. Mr. Jerrel Michael Kirksey is a duly elected and qualified managing director (statutair
bestuurder) of the Company and the signature above is his genuine signature.




          2. The certification made by Mr. Jerrel Michael Kirksey on behalf of the Company in Items 2,
3, 4, 5, 6, 7, 8, 9 and 11 is true and correct.




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




	 	 	 	 	 
	 	ENDEAVOUR ENERGY NETHERLANDS B.V. 

 	 
	 	By:  	 	 
	 	 	Name:  	F.J.C. Lucassen 	 
	 	 	Title:  	managing director B



 









 





Exhibit E-3

Page 5




ANNEX A




	 	 	 	 	 
	Name	 	Office	 	Signature
	 
	Mr. Franciscus Jacobus 

Joannes Lucassen
	 	Managing director B
	 	 	 
	Mr. Jerrel Michael Kirksey
	 	Managing director A







 











 





Exhibit E




SUBSIDIARIES GUARANTY




          SUBSIDIARIES GUARANTY (as amended, modified, restated and/or supplemented from time to time,
this “Guaranty”), dated as of August 16, 2010, made by and among each of the undersigned
guarantors (each, a “Guarantor” and, together with any other entity that becomes a
guarantor hereunder pursuant to Section 23 hereof, collectively, the “Guarantors”) in favor
of Cyan Partners, LP, as Administrative Agent (together with any successor administrative agent,
the “Administrative Agent”), for the benefit of the Secured Creditors (as defined below).
Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit
Agreement (as defined below) shall be used herein as therein defined.




W I T N E S S E T H

:




          WHEREAS, Endeavour International Corporation (“Holdings”), Endeavour Energy UK Limited
(the “Borrower”), the lenders from time to time party thereto (the “Lenders”) and
the Administrative Agent, have entered into a Credit Agreement, dated as of August 16, 2010 (as
amended, modified, restated and/or supplemented from time to time, the “Credit Agreement”),
providing for the making of Term Loans to the Borrower, all as contemplated therein (the Lenders,
the Administrative Agent and the Collateral Agent are herein called the “Lender
Creditors”);




          WHEREAS, the Borrower and/or one or more of its Subsidiaries or parent companies may at any
time and from time to time enter into one or more Hedging Agreements with one or more Approved
Third Party Credit Providers, each such Hedging Agreement with an Approved Third Party Credit
Provider that is party to the Intercreditor Agreement, a “Secured Hedging Agreement”);




          WHEREAS, the Borrower and/or one or more of its Subsidiaries or parent companies may at any
time and from time to time have one or more Third Party Letters of Credit issued for the account of
such entity and, in connection therewith, enter into agreements with respect to such Person’s
obligations to reimburse Approved Third Party Credit Providers for amounts funded under Third Party
Letters of Credit issued by such Approved Third Party Credit Providers (any such reimbursement
agreement with respect to Third Party Letters of Credit issued by an Approved Third Party Credit
Provider that is party to the Intercreditor Agreement, a “Secured Reimbursement Agreement”
and each Approved Third Party Credit Provider referred to in this recital and the immediately
preceding recital together with the Lender Creditors, the “Secured Creditors”);




          WHEREAS, each Guarantor is a direct or indirect Subsidiary of Holdings, which is the indirect
parent company of the Borrower;




          WHEREAS, it is a condition precedent to the making of Term Loans to the Borrower under the
Credit Agreement, to the entering into of Hedging Agreements by Approved






 









 







Third Party Credit Providers from time to time and to the issuance of Third Party Letters of
Credit by Approved Third Party Credit Providers that each Guarantor shall have executed and
delivered to the Administrative Agent this Guaranty; and




          WHEREAS, each Guarantor will obtain benefits from the incurrence of Term Loans by the Borrower
under the Credit Agreement, the entering into by Holdings and/or one or more of its Subsidiaries of
Secured Hedging Agreements with Approved Third Party Credit Providers from time to time and the
issuance of Third Party Letters of Credit by Approved Third Party Credit Providers and,
accordingly, desires to execute this Guaranty in order to satisfy the condition described in the
preceding paragraph and to induce the Lenders to make Term Loans to the Borrower and the Approved
Third Party Credit Providers to enter into Secured Hedging Agreements and issue Third Party Letters
of Credit;




          WHEREAS, “Corresponding Obligations” shall, in respect of a Guarantor, mean any obligation of
such Guarantor to pay an amount to the Lenders, the Agents or any other Secured Creditor (or any
one of them), whether for principal, interest, fees, costs, any overdraft or otherwise and whether
present or future (a) under or in connection with the Secured Debt Agreements (as defined below),
including the Guaranteed Obligations, other than any obligation arising under or in connection with
the Parallel Debt and (b) any other indebtedness of such Guarantor as the Lenders (or the
Collateral Agent on their behalf) and the Borrower may agree from time to time.




          WHEREAS, “Parallel Debt” shall mean the Parallel Debt as defined in Section 2 of this
Guaranty.




          NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each
Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby
makes the following representations and warranties to the Administrative Agent for the benefit of
the Secured Creditors and hereby covenants and agrees with each other Guarantor and the
Administrative Agent for the benefit of the Secured Creditors as follows:




          1. GUARANTY. (a) Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees as a primary obligor and not merely as surety:





     (i) to the Lender Creditors the full and prompt payment when due (whether at the stated
maturity, by required prepayment, acceleration or otherwise) of (x) the principal of,
premium, if any, and interest (including PIK Interest) on the Notes issued by, and the Term
Loans made to, the Borrower under the Credit Agreement, and (y) all other obligations
(including, without limitation, obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the
Borrower to the Lender Creditors under each Credit Document to which the Borrower is a party
(including, without limitation, indemnities, fees and interest (including PIK Interest)
thereon (including, without limitation, any
interest (including PIK Interest) accruing after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided for in the Credit



2









 






Agreement, whether or not such interest is an allowed claim in any such proceeding)),
whether now existing or hereafter incurred under, arising out of or in connection with each
such Credit Document and the due performance and compliance by the Borrower with all of the
terms, conditions, covenants and agreements contained in all such Credit Documents (all such
principal, premium, interest, liabilities, indebtedness and obligations under this clause
(i), except to the extent consisting of obligations or liabilities with respect to Secured
Hedging Agreements or Secured Reimbursement Agreements, being herein collectively called the
“Credit Document Obligations”);




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




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



3









 





          Notwithstanding anything to the contrary contained herein or in any other Credit Document, the
aggregate amount of Other Obligations to be included within the Guaranteed Obligations pursuant to
this Guaranty shall not at any time exceed $25,000,000 (the “Other Obligations Cap”). No
amount of Other Obligations in excess of the Other Obligations Cap shall receive the benefit of
this Guaranty and in no event shall any proceeds received upon collection from or other realization
upon this Guaranty be applied to the Other Obligations in an amount in excess of the Other
Obligations Cap.




          As used herein, the term “Guaranteed Party” shall mean the Borrower and each other
Subsidiary of Holdings party to any Secured Hedging Agreement or any Secured Reimbursement
Agreement. Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce
this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without
proceeding against any other Guarantor, the Borrower or any other Guaranteed Party, or against any
security for the Guaranteed Obligations, or under any other guaranty covering all or a portion of
the Guaranteed Obligations. This Guaranty is a guaranty of prompt payment and not of collection;
provided that notwithstanding anything in this Guaranty to the contrary, in no event will
any Guarantor be responsible for specific performance of any Guaranteed Obligation then due if the
performance of such Guaranteed Obligation is specific to a Credit Party and it would be impossible
or reasonably impracticable after using all reasonable efforts for such other Guarantor to perform
the Guaranteed Obligation.




          (b) Additionally, each Guarantor, jointly and severally, unconditionally and irrevocably,
guarantees the payment of any and all Guaranteed Obligations whether or not due or payable by the
Borrower or any other Guaranteed Party upon the occurrence in respect of the Borrower or any other
Guaranteed Party of any of the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations
to the Secured Creditors, or order, on demand.




          2. PARALLEL DEBT




          (a) In respect of ensuring the validity and enforceability of any Security Document governed
by the law of the Netherlands, each Guarantor which is a party to any Security Document governed by
the laws of the Netherlands hereby irrevocably and unconditionally undertakes to pay to the
Collateral Agent amounts equal to the amounts payable by it in respect of its Corresponding
Obligations as they may exist from time to time, which undertaking the Collateral Agent hereby
accepts. Each payment undertaking of a Guarantor to the Collateral Agent under this
Clause 2 is hereinafter to be referred to as a “Parallel Debt”. Each Parallel Debt will be payable
in the currency or currencies of the relevant Corresponding Obligation and will become due and
payable as and when the Corresponding Obligation to which it corresponds becomes due and payable.




          (b) Each of the parties to this Guaranty hereby acknowledges that (i)
each Parallel Debt constitutes an undertaking, obligation and liability of the relevant Guarantor
to the Collateral Agent which is separate and independent from, and without prejudice to, the
Corresponding Obligation to which it corresponds; and (ii) each Parallel Debt represents the
Collateral Agent’s own separate and independent claim to receive payment of such Parallel Debt






4









 







from the relevant Guarantor; provided, that the total amount that may become due on a Parallel
Debt of a Credit Party shall never exceed the total amount which may become due under all of the
Corresponding Obligations of such Credit Party to all the Secured Creditors.




          (c) To the extent the Collateral Agent irrevocably receives any amount in payment or recovery
of a Parallel Debt of a Guarantor, the Collateral Agent shall distribute such amount among the
Lenders who are creditors of the Corresponding Obligations of that Guarantor in accordance with the
terms of this Guaranty, as if such amount were received by the Collateral Agent in payment or
recovery of the Corresponding Obligation to which it corresponds.




          (d) The Collateral Agent, on behalf of itself and on behalf of each Secured Creditor hereby
confirms and accepts that to the extent the Collateral Agent irrevocably receives any amount in
payment of a Parallel Debt from a Guarantor, the Collateral Agent shall distribute such amount
among the Secured Creditors as if such amount were received by the Collateral Agent in payment of
the Corresponding Obligation to which that Parallel Debt corresponds.




          (e) The total amount due by the relevant Guarantor pursuant to a Parallel Debt shall be
decreased to the extent that (i) the relevant Guarantor shall have paid any amount to one or more
of the Secured Creditors to reduce the relevant Guarantor’s outstanding Corresponding Obligations
or (ii) any of the Secured Creditors otherwise receives any amount in payment of such Corresponding
Obligations (other than by virtue of clause (f) hereafter).




          (f) To the extent that the relevant Guarantor shall have paid any amount to the Collateral
Agent under a Parallel Debt or the Collateral Agent otherwise received monies in payment of a
Parallel Debt, the total amount due and payable under the Corresponding Obligations shall be
decreased by such amount.




          (g) If any payment of the Corresponding Obligations by the relevant Guarantor (or otherwise on
its behalf) is subsequently avoided or reduced in whole or in part by virtue of any provisions or
enactments relating to bankruptcy or liquidation of the relevant Guarantor or similar laws of
general application relating to the obligations of the relevant Guarantor, the liability of the
relevant Guarantor shall continue as if the payment, avoidance or reduction in whole or in part had
not occurred and the relevant Secured Creditor shall be entitled to receive an amount from the
relevant Guarantor, as if the avoidance or reduction in whole or in part had not occurred.




          3. LIABILITY OF GUARANTORS ABSOLUTE. The liability of each Guarantor hereunder is
primary, absolute, joint and several, and unconditional and is exclusive and independent of any
security for or other guaranty of the indebtedness of the Borrower or any other Guaranteed Party
whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party,
and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance
or occurrence whatsoever, including, without limitation: (a) any direction as to application of
payment by the Borrower, any other Guaranteed Party or any other party, (b) any other continuing or
other
guaranty, undertaking or maximum liability of a Guarantor or of any other party as to the
Guaranteed Obligations, (c) any payment




5









 







on or in reduction of any such other guaranty or
undertaking (other than any payment applied in satisfaction of the Guaranteed Obligations), (d) any
dissolution, termination or increase, decrease or change in personnel by the Borrower or any other
Guaranteed Party, (e) the failure of the Guarantor to receive any benefit from or as a result of
its execution, delivery and performance of this Guaranty, (f) any payment made to any Secured
Creditor on the indebtedness which any Secured Creditor repays the Borrower or any other Guaranteed
Party pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of
its obligations hereunder by reason of any such proceeding, (g) any action or inaction by the
Secured Creditors as contemplated in Section 5 hereof, (h) any invalidity, rescission, irregularity
or unenforceability of all or any part of the Guaranteed Obligations or of any security therefore
and (i) any legal or equity defenses, including suretyship defenses.




          4. OBLIGATIONS OF GUARANTORS INDEPENDENT. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor, any other guarantor, the
Borrower or any other Guaranteed Party, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any
other guarantor, the Borrower or any other Guaranteed Party and whether or not any other Guarantor,
any other guarantor, the Borrower or any other Guaranteed Party be joined in any such action or
actions. Each Guarantor waives (to the fullest extent permitted by applicable law) the benefits of
any statute of limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or any other Guaranteed Party or other circumstance which operates to toll
any statute of limitations as to the Borrower or such other Guaranteed Party shall operate to toll
the statute of limitations as to each Guarantor.




          5. WAIVERS BY GUARANTORS. (a) Each Guarantor hereby waives (to the fullest extent
permitted by applicable law) notice of acceptance of this Guaranty and notice of the existence,
creation or incurrence of any new or additional liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, demand for performance, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Secured Creditor against, and any other notice to, any party
liable thereon (including such Guarantor, any other Guarantor, any other guarantor, the Borrower or
any other Guaranteed Party) and each Guarantor further hereby waives any and all notice of the
creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice or proof of
reliance by any Secured Creditor upon this Guaranty, and the Guaranteed Obligations shall
conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended,
modified, supplemented or waived, in reliance upon this Guaranty.




          (b) Each Guarantor waives any right to require the Secured Creditors to: (i) proceed against
the Borrower, any other Guaranteed Party, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any
security held from the Borrower, any other Guaranteed Party, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the
Secured Creditors’ power whatsoever. Each Guarantor waives any defense based on or arising out of
any defense of the Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party other than payment of the



6









 




Guaranteed Obligations
to the extent of such payment, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guaranteed Party, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower or any other Guaranteed Party other than payment of the Guaranteed
Obligations to the extent of such payment. The Secured Creditors may, at their election, foreclose
on any collateral serving as security held by the Administrative Agent, the Collateral Agent or the
other Secured Creditors by one or more judicial or nonjudicial sales, whether or not every aspect
of any such sale is commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Secured Creditors may have against the Borrower,
any other Guaranteed Party or any other party, or any security, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations
have been paid. Each Guarantor waives any defense arising out of any such election by the Secured
Creditors, even though such election operates to impair or extinguish any right of reimbursement,
contribution, indemnification or subrogation or other right or remedy of such Guarantor against the
Borrower, any other Guaranteed Party, any other guarantor of the Guaranteed Obligations or any
other party or any security.




          (c) Each Guarantor has knowledge and assumes all responsibility for being and keeping itself
informed of the Borrower’s, each other Guaranteed Party’s and each other Guarantor’s financial
condition, affairs and assets, and of all other circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and has adequate means to obtain from the Borrower, each other
Guaranteed Party and each other Guarantor on an ongoing basis information relating thereto and the
Borrower’s, each other Guaranteed Party’s and each other Guarantor’s ability to pay and perform its
respective Guaranteed Obligations, and agrees to assume the responsibility for keeping, and to
keep, so informed for so long as this Guaranty is in effect. Each Guarantor acknowledges and
agrees that (x) the Secured Creditors shall have no obligation to investigate the financial
condition or affairs of the Borrower, any other Guaranteed Party or any other Guarantor for the
benefit of such Guarantor nor to advise such Guarantor of any fact respecting, or any change in,
the financial condition, assets or affairs of the Borrower, any other Guaranteed Party or any other
Guarantor that might become known to any Secured Creditor at any time, whether or not such Secured
Creditor knows or believes or has reason to know or believe that any such fact or change is unknown
to such Guarantor, or might (or does) increase the risk of such Guarantor as guarantor hereunder,
or might (or would) affect the willingness of such Guarantor to continue as a guarantor of the
Guaranteed Obligations hereunder and (y) the Secured Creditors shall have no duty to advise any
Guarantor of information known to them regarding any of the aforementioned circumstances or risks.




          (d) Each Guarantor hereby acknowledges and agrees that no Secured Creditor nor any other
Person shall be under any obligation (a) to marshal any assets in favor of such Guarantor or in
payment of any or all of the liabilities of any Guaranteed Party under the Credit Documents or the
obligation of such Guarantor hereunder or (b) to pursue any other remedy that such Guarantor may or
may not be able to pursue itself any right to which such Guarantor hereby waives.




7









 








          (e) Each Guarantor warrants and agrees that each of the waivers set forth in Section 3 and in
this Section 4 is made with full knowledge of its significance and consequences and that if any of
such waivers are determined to be contrary to any applicable law or public policy, such waivers
shall be effective only to the maximum extent permitted by applicable law.




          6. RIGHTS OF SECURED CREDITORS. Subject to Section 4, any Secured Creditor may
(except as shall be required by applicable statute and cannot be waived) at any time and from time
to time without the consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations or liabilities of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:





     (a) change the manner, place or terms of payment of, and/or change, increase or extend
the time of payment of, renew, increase, accelerate or alter, any of the Guaranteed
Obligations (including, without limitation, any increase or decrease in the rate of interest
thereon or the principal amount thereof), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, increased, accelerated, renewed or altered;




     (b) take and hold security for the payment of the Guaranteed Obligations and sell,
exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and
in any order any property or other collateral by whomsoever at any time pledged or mortgaged
to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including
any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or
any offset thereagainst;




     (c) exercise or refrain from exercising any rights against the Borrower, any other
Guaranteed Party, any other Credit Party, any Subsidiary thereof, any other guarantor of the
Borrower or others or otherwise act or refrain from acting;




     (d) release or substitute any one or more endorsers, Guarantors, other guarantors, the
Borrower, any other Guaranteed Party or other obligors;




     (e) settle or compromise any of the Guaranteed Obligations, any security therefor or
any liability (including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof to the payment
of any liability (whether due or not) of the Borrower or any other
Guaranteed Party to creditors of the Borrower or such other Guaranteed Party other than
the Secured Creditors;




     (f) apply any sums by whomsoever paid or howsoever realized to any liability or
liabilities of the Borrower or any other Guaranteed Party to the Secured Creditors
regardless of what liabilities of the Borrower or such other Guaranteed Party remain unpaid;



8









 






     (g) consent to or waive any breach of, or any act, omission or default under, any of
the Secured Hedging Agreements, the Secured Reimbursement Agreements, the Credit Documents
or any of the instruments or agreements referred to therein, or otherwise amend, modify or
supplement any of the Secured Hedging Agreements, the Secured Reimbursement Agreements, the
Credit Documents or any of such other instruments or agreements;




     (h) act or fail to act in any manner which may deprive such Guarantor of its right to
subrogation against the Borrower or any other Guaranteed Party to recover full indemnity for
any payments made pursuant to this Guaranty; and/or




     (i) take any other action or omit to take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge of such
Guarantor from its liabilities under this Guaranty (including, without limitation, any
action or omission whatsoever that might otherwise vary the risk of such Guarantor or
constitute a legal or equitable defense to or discharge of the liabilities of a guarantor or
surety or that might otherwise limit recourse against such Guarantor).



          No invalidity, illegality, irregularity or unenforceability of all or any part of the
Guaranteed Obligations, the Credit Documents, the Secured Hedging Agreements, the Secured
Reimbursement Agreements or any other agreement or instrument relating to the Guaranteed
Obligations or of any security or guarantee therefor shall affect, impair or be a defense to this
Guaranty, and this Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might constitute a legal
or equitable discharge of a surety or guarantor except payment of the Guaranteed Obligations to the
extent of such payment.




          7. CONTINUING GUARANTY. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively presumed to have been
created in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies which any Secured
Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle
such Guarantor to any other further notice or demand in similar or other circumstances or
constitute a
waiver of the rights of any Secured Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire
into the capacity or powers of the Borrower or any other Guaranteed Party or the officers,
directors, partners or agents acting or purporting to act on its or their behalf, and any
indebtedness made or created under this Guaranty, the other Credit Documents, the Secured Hedging
Agreements or the Secured Reimbursement Agreements (being collectively the “Secured Debt
Agreements”) in reliance upon the professed exercise of such powers shall be guaranteed
hereunder.




9









 








          8. SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS. Any indebtedness of the
Borrower or any other Guaranteed Party now or hereafter held by any Guarantor is hereby
subordinated to the indebtedness of the Borrower or such other Guaranteed Party to the Secured
Creditors, and such indebtedness of the Borrower or such other Guaranteed Party to any Guarantor,
if the Administrative Agent or the Collateral Agent, after an Event of Default has occurred and is
continuing, so requests, shall be collected, enforced and received by such Guarantor as trustee for
the Secured Creditors and be paid over to the Secured Creditors on account of the indebtedness of
the Borrower or such other Guaranteed Party to the Secured Creditors, but without affecting or
impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty
except to the extent that Guaranteed Obligations have been paid. Prior to the transfer by any
Guarantor of any note or negotiable instrument evidencing any indebtedness of the Borrower or any
other Guaranteed Party to such Guarantor, such Guarantor shall mark such note or negotiable
instrument with a legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Guarantor hereby agrees with the Secured Creditors that it will
not exercise any right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash; provided, that if any
amount shall be paid to such Guarantor on account of such subrogation rights at any time prior to
the irrevocable payment in full in cash of all the Guaranteed Obligations, such amount shall be
held in trust for the benefit of the Secured Creditors and shall forthwith be paid to the Secured
Creditors to be credited and applied upon the Guaranteed Obligations, whether matured or unmatured,
in accordance with the terms of the Credit Documents or, if the Credit Documents do not provide for
the application of such amount, to be held by the Secured Creditors as collateral security for any
Guaranteed Obligations thereafter existing.




          9. GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT OR COLLATERAL AGENT. Notwithstanding
anything to the contrary contained elsewhere in this Guaranty, the Secured Creditors agree (by
their acceptance of the benefits of this Guaranty) that this Guaranty may be enforced only by the
action of the Administrative Agent or the Collateral Agent, in each case acting upon the
instructions of the Required Lenders (or, after the date on which all Credit Document Obligations
have been paid in full, the holders of at least a majority of the outstanding Other Obligations)
and that no other Secured Creditor shall have any right individually to seek to enforce or to
enforce this Guaranty or to realize upon the security to be granted by the Security Documents, it
being understood and agreed that such rights and remedies
may be exercised by the Administrative Agent or the Collateral Agent or, after all the Credit
Document Obligations have been paid in full, by the holders of at least a majority of the
outstanding Other Obligations, as the case may be, for the benefit of the Secured Creditors upon
the terms of this Guaranty and the Security Documents. The Secured Creditors further agree that
this Guaranty may not be enforced against any director, officer, employee, partner, member or
stockholder of any Guarantor (except to the extent such partner, member or stockholder is also a
Guarantor hereunder). It is understood and agreed that the agreement in this Section 9 is among
and solely for the benefit of, and binding upon, the Secured Creditors and that, if the Required
Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the
holders of at least a majority of the outstanding Other Obligations) so agree (without requiring
the consent of any Guarantor), this Guaranty may be directly enforced by any Secured Creditor.





10











 





          10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS. In order to induce the
Lenders to make Term Loans to the Borrower pursuant to the Credit Agreement, and in order to induce
the Approved Third Party Credit Providers to execute, deliver and perform the Secured Hedging
Agreements to which they are a party and to issue Approved Third Party Letters of Credit, each
Guarantor represents, warrants and covenants that:





     (a) such Guarantor (i) is a duly organized and validly existing Business in good
standing under the laws of the jurisdiction of its organization, (ii) has the Business,
power and authority to own its property and assets and to transact the business in which it
is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to
do business and, to the extent applicable, is in good standing in each jurisdiction where
the nature of its business requires such qualification, authorization and good standing,
except for failures to be so qualified which, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect;




     (b) such Guarantor has the Business power and authority to execute, deliver and perform
the terms and provisions of this Guaranty and each other Secured Debt Agreement to which it
is a party and has taken all necessary Business action to authorize the execution, delivery
and performance by it of this Guaranty and each such other Secured Debt Agreement;




     (c) such Guarantor has duly executed and delivered this Guaranty and each other Secured
Debt Agreement to which it is a party, and this Guaranty and each such other Secured Debt
Agreement constitutes the legal, valid and binding obligation of such Guarantor enforceable
in accordance with its terms, except to the extent that the enforceability hereof or thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws generally affecting creditors’ rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law);




     (d) neither the execution, delivery or performance by such Guarantor of this Guaranty
or any other Secured Debt Agreement to which it is a party, nor compliance by
it with the terms and provisions hereof and thereof, will (i) contravene any provision
of any applicable law, statute, rule or regulation or any applicable order, writ, injunction
or decree of any court or Governmental Authority, (ii) conflict with or result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, loan agreement, credit agreement, or any other material agreement, contract or
instrument to which such Guarantor or any of its Subsidiaries is a party or by which it or
any of its property or assets is bound or to which it may be subject or (iii) violate any
provision of the certificate or articles of incorporation, by-laws, partnership agreement or
limited liability company agreement (or equivalent organizational documents), as the case
may be, of such Guarantor or any of its Subsidiaries;



11









 






     (e) no order, consent, approval, license, authorization or validation of, or filing,
recording or registration with (except as have been obtained or made prior to the date when
required and which remain in full force and effect), or exemption by, any Governmental
Authority is required to authorize, or is required in connection with, (i) the execution,
delivery and performance by such Guarantor of this Guaranty or any other Secured Debt
Agreement to which such Guarantor is a party or (ii) the legality, validity, binding effect
or enforceability of this Guaranty or any other Secured Debt Agreement to which such
Guarantor is a party;




     (f) there are no actions, suits or proceedings pending or, to such Guarantor’s
knowledge, threatened (i) with respect to this Guaranty or any other Secured Debt Agreement
to which such Guarantor is a party or (ii) with respect to such Guarantor or any of its
Subsidiaries that, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect;




     (g) until the termination of the Total Commitment, all Secured Hedging Agreements and
all Secured Reimbursement Agreements and until such time as no Note remains outstanding and
all Guaranteed Obligations have been paid in full (other than indemnities described in
Section 11.01 of the Credit Agreement and analogous provisions in the Security Documents
which are not then due and payable), such Guarantor will comply, and will cause each of its
Subsidiaries to comply, with all of the applicable provisions, covenants and agreements
contained in Sections 7 and 8 of the Credit Agreement, and will take, or will refrain from
taking, as the case may be, all actions that are necessary to be taken or not taken so that
no violation of any provision, covenant or agreement contained in Sections 7 and 8 of the
Credit Agreement, and so that no Default or Event of Default, is caused by the actions of
such Guarantor or any of its Subsidiaries; and




     (h) an executed copy of each of the Credit Documents and each other Secured Debt
Agreement has been made available to a senior officer of such Guarantor and such officer is
familiar with the contents thereof.



          11. EXPENSES. The Guarantors hereby jointly and severally agree to pay all reasonable
out-of-pocket costs and expenses of the Collateral Agent, the Administrative Agent and each other
Secured Creditor in connection with the enforcement of this Guaranty and the protection of the
Secured Creditors’ rights hereunder and any amendment, waiver or consent relating hereto
(including, in each case, without limitation, the reasonable fees and disbursements of counsel
employed by the Collateral Agent, the Administrative Agent and each other Secured Creditor).




          12. BENEFIT AND BINDING EFFECT. This Guaranty shall be binding upon each Guarantor
and its successors and assigns and shall inure to the benefit of the Secured Creditors and their
successors and assigns.




          13. AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of





12









 







each Guarantor
directly affected thereby (it being understood that the addition or release of any Guarantor
hereunder shall not constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released) and with the written consent of either (x) the
Required Lenders (or, to the extent required by Section 11.12 of the Credit Agreement, with the
written consent of each Lender) at all times prior to the time at which all Credit Document
Obligations have been paid in full or (y) the holders of at least a majority of the outstanding
Other Obligations at all times after the time at which all Credit Document Obligations have been
paid in full.




          14. SET OFF. In addition to any rights now or hereafter granted under applicable law
(including, without limitation, Section 151 of the New York Debtor and Creditor Law) and not by way
of limitation of any such rights, upon the occurrence and during the continuance of an Event of
Default (such term to mean and include any “Event of Default” as defined in the Credit Agreement
and any payment default under any Secured Hedging Agreement or any Secured Reimbursement Agreement
continuing after any applicable grace period), each Secured Creditor is hereby authorized, at any
time or from time to time, without notice to any Guarantor or to any other Person, any such notice
being expressly waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured Creditor to or for
the credit or the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether
or not such Secured Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or unmatured. Each Secured
Creditor (by its acceptance of the benefits hereof) acknowledges and agrees that the provisions of
this Section 13 are subject to the sharing provisions set forth in Section 11.06 of the Credit
Agreement.




          15. NOTICE . Except as otherwise specified herein, all notices, requests, demands or other
communications to or upon the respective parties hereto shall be sent or delivered by mail,
telegraph, telex, telecopy, cable or courier service and all such notices and communications shall,
when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when
deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as
the case may be, or sent by telex or telecopier, except that notices and communications to the
Administrative Agent or any Guarantor shall not be effective until received by the Administrative
Agent or such Guarantor, as the case may be. All notices and other communications shall be in
writing and addressed to such party at (i) in the case of any Lender Creditor, as provided in the
Credit Agreement, (ii) in the case of any Guarantor, c/o Endeavour International Corporation, 1001
Fannin, Suite 1600, Houston, Texas 77022, Attention J. Michael Kirksey, Telephone No.: (713)
307-8788, Telecopier No.: (713) 307-8794, and (iii) in the case of any Approved Third Party Credit
Provider, at such address as such Secured Creditor shall have specified in writing to the
Guarantors; or in any case at such other address as any of the Persons listed above may hereafter
notify the others in writing.




          16. REINSTATEMENT. If any claim is ever made upon any Secured Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having






13









 







jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including, without limitation, the Borrower or any other Guaranteed
Party), then and in such event each Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or the cancellation of any Note, any Secured Hedging Agreement, any Secured Reimbursement
Agreement or any other instrument evidencing any liability of the Borrower or any other Guaranteed
Party, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never originally been
received by any such payee.




          17.
CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL BY JURY. (a)
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). Any legal action or proceeding with respect to
this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the
courts of the State of New York or of the United States of America for the Southern District of New
York, in each case located within the City of New York, and, by execution and delivery of this
Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. Each Guarantor
hereby further irrevocably waives any claim that any such courts lack personal jurisdiction over
such Guarantor, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Guaranty or any other Credit
Document to which such Guarantor is a party brought in any of the aforesaid courts, that any such
court lacks personal jurisdiction over such Guarantor. Each Guarantor further irrevocably consents
to the service of process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage prepaid, to each
Guarantor at its address set forth in Section 15, such service to become effective 30 Business Days
after such mailing. Each Guarantor hereby irrevocably waives any objection to such service of
process out of the aforementioned courts and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced with the aforementioned courts hereunder or under any
other Credit Document to which such Guarantor is a party that such service of process was in any
way invalid or ineffective. Nothing herein shall affect the right of any of the Secured Creditors
to serve process in any other manner permitted by law or to commence legal proceedings or otherwise
proceed against each Guarantor in any other jurisdiction.




          (b) Each Guarantor hereby irrevocably waives (to the fullest extent permitted by applicable
law) any objection which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other
Credit Document to which such Guarantor is a party brought in the courts referred to in clause (a)
above and hereby further irrevocably waives and agrees not to plead or claim in any such court that
such action or proceeding brought in any such court has been brought in an inconvenient forum.






14









 








          (c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS
GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH
GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.




          18. RELEASE OF LIABILITY OF GUARANTOR UPON SALE OR DISSOLUTION. In the event that all
of the capital stock or other equity interests of one or more Guarantors is sold or otherwise
disposed of or liquidated in compliance with the requirements of Section 8.02 of the Credit
Agreement (or such sale, other disposition or liquidation has been approved in writing by the
Required Lenders (or all the Lenders if required by Section 11.12 of the Credit Agreement)) and the
proceeds of such sale, disposition or liquidation are applied in accordance with the provisions of
the Credit Agreement, to the extent applicable, such Guarantor shall, upon consummation of such
sale or other disposition (except to the extent that such sale or disposition is to Holdings or
another Subsidiary thereof), be released from this Guaranty automatically and without further
action and this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or more Persons that
own, directly or indirectly, all of the capital stock or other equity interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section 17).




          19. CONTRIBUTION. At any time a payment in respect of the Guaranteed Obligations is
made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor
shall be determined as provided in the immediately following sentence, with the right of
contribution of each Guarantor to be revised and restated as of each date on which a payment (a
“Relevant Payment”) is made on the Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such
Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant
Payment exceeding such Guarantor’s Contribution Percentage (as defined below) of the aggregate
payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date
of the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Guarantor
shall have a right of contribution against each other Guarantor who has made payments in respect of
the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount
less than such other Guarantor’s Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed
Obligations (the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an
amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such
Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors multiplied
by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor’s right of contribution
pursuant to the preceding sentences shall arise at the time of each computation, subject to
adjustment to the time of each computation; provided that no Guarantor may take any action
to enforce such right until the Guaranteed Obligations have been irrevocably paid in full in cash
and the Total Commitment have been terminated, it being expressly recognized and agreed by all
parties hereto that any Guarantor’s right of contribution arising pursuant to this Section 18
against any other Guarantor






15









 







shall be expressly junior and subordinate to such other Guarantor’s
obligations and liabilities in respect of the Guaranteed Obligations and any other obligations
owing under this Guaranty. As used in this Section 18: (i) each Guarantor’s “Contribution
Percentage” shall mean the percentage obtained by dividing (x) the Adjusted Net Worth (as
defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii)
the “Adjusted Net Worth” of each Guarantor shall mean the greater of (x) the Net Worth (as
defined below) of such Guarantor and (y) zero; and (iii) the “Net Worth” of each Guarantor
shall mean the amount by which the fair saleable value of such Guarantor’s assets on the date of
any Relevant Payment exceeds its existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed Obligations arising under this Guaranty)
or any guaranteed obligations arising under any guaranty of subordinated indebtedness of Holdings
or any of its Subsidiaries (“Subordinated Indebtedness”) on such date. Notwithstanding
anything to the contrary contained above, any Guarantor that is released from this Guaranty
pursuant to Section 17 hereof shall thereafter have no contribution obligations, or rights,
pursuant to this Section 18, and at the time of any such release, if the released Guarantor had an
Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be deemed reduced to $0, and the
contribution rights and obligations of the remaining Guarantors shall be recalculated on the
respective date of release (as otherwise provided above) based on the payments made hereunder by
the remaining Guarantors. All parties hereto recognize and agree that, except for any right of
contribution arising pursuant to this Section 18, each Guarantor who makes any payment in respect
of the Guaranteed
Obligations shall have no right of contribution or subrogation against any other Guarantor in
respect of such payment until all of the Guaranteed Obligations have been irrevocably paid in full
in cash. Each of the Guarantors recognizes and acknowledges that the rights to contribution
arising hereunder shall constitute an asset in favor of the party entitled to such contribution.
In this connection, each Guarantor has the right to waive its contribution right against any
Guarantor to the extent that after giving effect to such waiver such Guarantor would remain
solvent, in the determination of the Required Lenders.




          20. LIMITATION ON GUARANTEED OBLIGATIONS. Each Guarantor and each Secured Creditor
(by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the
foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of
this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such
Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and
all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws
and after giving effect to any rights to contribution pursuant to any agreement providing for an
equitable contribution among such Guarantor and the other Guarantors, result in the Guaranteed
Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent
transfer or conveyance. This Guaranty does not apply to any Guarantor organized under the laws of
the Netherlands to the extent that such Guarantor’s entry into this Guaranty would violate Sections
2:98c or 2:207c of the Dutch Civil Code.




          21. COUNTERPARTS. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so







16









 







executed and delivered
shall be an original, but all of which shall together constitute one and the same instrument. A
set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.




          22. PAYMENTS. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense, and shall be made in immediately available funds at the
Payment Office on the same basis as payments are made by the Borrower under Sections 4.03 of the
Credit Agreement.




          23. ADDITIONAL GUARANTORS. It is understood and agreed that any Subsidiary of
Holdings that is required to execute a counterpart of this Guaranty after the date hereof pursuant
to the Credit Agreement shall become a Guarantor hereunder by (x) executing and delivering a
counterpart hereof to the Administrative Agent or executing a joinder agreement and delivering same
to the
Administrative Agent, in each case as may be requested by (and in form and substance
satisfactory to) the Administrative Agent and (y) taking all actions as specified in this Guaranty
as would have been taken by such Guarantor had it been an original party to this Guaranty, in each
case with all documents and actions required to be taken above to be taken to the reasonable
satisfaction of the Administrative Agent.




          24. HEADINGS DESCRIPTIVE. The headings of the several Sections of this Guaranty are
inserted for convenience only and shall not in any way affect the meaning or construction of any
provision of this Guaranty.




          25. JUDGMENT CURRENCY. If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or any other Secured Debt Agreement in one currency into
another currency, the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase the first currency with such other
currency on the Business Day preceding that on which final judgment is given. The obligation of
any Guarantor in respect of any such sum due from it to the Administrative Agent or any other
Secured Creditor hereunder or under the other Secured Debt Agreements shall, notwithstanding any
judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated
in accordance with the applicable provisions of the Secured Debt Agreements (the “Agreement
Currency”), be discharged only to the extent that on the Business Day following receipt by the
Administrative Agent of any sum adjudged to be so due in the Judgment Currency, the Administrative
Agent may in accordance with normal banking procedures purchase the Agreement Currency with the
Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum
originally due to the Administrative Agent or any other secured creditor from the Guarantors in the
Agreement Currency, the Guarantors agree, jointly and severally, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such other Secured
Creditor to whom such obligation was owing against such loss.




* * *



17









 





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



	 	 	 	 	 
	 	ENDEAVOUR OPERATING CORPORATION,
    as a Guarantor

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

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ENDEAVOUR ENERGY NETHERLANDS B.V.,

with its corporate seat in Amsterdam, the Netherlands
    as a Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ENDEAVOUR ENERGY NORTH SEA L.P.,
    as a Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



18









 






	 	 	 	 	 



	 	 	 	 	 
	 	ENDEAVOUR ENERGY NORTH SEA LLC,
    as a Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	END MANAGEMENT COMPANY
    as a Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	END ENERGY NEW VENTURES INC.
    as a Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Accepted and Agreed to:



CYAN PARTNERS, LP,
 as Administrative Agent and Collateral Agent

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 



19









 






	 	 	 	 	 



	 	 	 	 	 

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







 











 





Exhibit F-1




EXECUTION VERSION




      
 




U.S. SECURITY AGREEMENT




Dated as of August 16, 2010




From




The Grantors referred to herein

as Grantors




to




Cyan Partners, LP

as Collateral Agent




      
 




 









 





Table of Contents




	 	 	 	 	 
	 	 	Page
	Section 1. Grant of Security

	 	 	2	 
	Section 2. Security for Obligations

	 	 	7	 
	Section 3. Grantors Remain Liable

	 	 	8	 
	Section 4. Delivery and Control of Security Collateral

	 	 	9	 
	Section 5. Maintaining the Account Collateral

	 	 	9	 
	Section 6. Representations and Warranties

	 	 	10	 
	Section 7. Further Assurances

	 	 	12	 
	Section 8. Post-Closing Changes; Collections on Assigned Agreements, Receivables and Related
Contracts

	 	 	13	 
	Section 9. As to Intellectual Property Collateral

	 	 	14	 
	Section 10. Voting Rights; Dividends; Etc.

	 	 	16	 
	Section 11. As to the Assigned Agreements

	 	 	18	 
	Section 12. As to Letter-of-Credit Rights

	 	 	18	 
	Section 13. Commercial Tort Claims

	 	 	18	 
	Section 14. Transfers and Other Liens; Additional Shares

	 	 	18	 
	Section 15. Collateral Agent Appointed Attorney in Fact

	 	 	18	 
	Section 16. Collateral Agent May Perform

	 	 	19	 
	Section 17. The Collateral Agent’s Duties

	 	 	19	 
	Section 18. Remedies

	 	 	20	 
	Section 19. Indemnity and Expenses

	 	 	22	 
	Section 20. Amendments; Waivers; Additional Grantors; Etc.

	 	 	23	 
	Section 21. Notices, Etc.

	 	 	23	 
	Section 22. Continuing Security Interest; Assignments under the Credit Agreements

	 	 	24	 
	Section 23. Release; Termination

	 	 	24	 
	Section 24. Security Interest Absolute

	 	 	25	 
	Section 25. Execution in Counterparts

	 	 	26	 
	Section 26. Governing Law

	 	 	26	 






	 	 	 	 	 

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






	 	 	 	 	 

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






(i)









 






Table of Contents

(continued)




	 	 	 	 	 
	 	 	 	 	Page
	Exhibit C

	 	-
	 	Form of Intellectual Property Security Agreement Supplement
	Exhibit D

	 	-
	 	Form of Security Agreement Supplement






(ii)









 






U.S. SECURITY AGREEMENT




          U.S. SECURITY AGREEMENT dated August 16, 2010 (this “Agreement”) made by the persons
listed on the signature pages hereof (such persons so listed being, collectively, the
“Grantors”), to Cyan Partners, LP as collateral agent (together with any successor
collateral agent appointed pursuant to Clause 10.09 of the Credit Agreement (hereinafter defined),
the “Collateral Agent”) for the Secured Creditors (as defined below).




PRELIMINARY STATEMENTS




          1. WHEREAS, Endeavour International Corporation, a Delaware corporation, Endeavour Energy UK
Limited, a United Kingdom private limited company, Cyan Partners, LP, as sole lead arranger, sole
book runner and Administrative Agent, and the lenders from time to time party thereto (the
“Lenders”) have entered into a Credit Agreement, dated as of August 16, 2010, (said
agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified
from time to time, being the “Credit Agreement” and the Lenders, the Administrative Agent,
the Collateral Agent, and each other Agent being the “Lender Creditors”).




          2. The Grantors may at any time and from time to time enter into one or more Hedging
Agreements with one or more Approved Third Party Credit Providers (each such Hedging Agreement with
an Approved Third Party Credit Provider that is a party to the Intercreditor Agreement, a
“Secured Hedging Agreement”).




          3. Each Grantor may at any time or from time to time have one or more Third Party Letters of
Credit issued for the account of such Grantor and, in connection therewith, enter into agreements
with respect to such Grantor’s obligations to reimburse Approved Third Party Credit Providers for
amounts funded under Third Party Letters of Credit issued by such Approved Third Party Credit
Providers (any such reimbursement agreement with respect to Third Party Letters of Credit issued by
an Approved Third Party Credit Provider that is party to the Intercreditor Agreement, a
“Secured Reimbursement Agreement” and each Approved Third Party Credit Provider referred to
in Recital 2 and this Recital 3 together with the Lender Creditors, the “Secured
Creditors”).




          4. Pursuant to the Guaranties, Holdings and each Subsidiary Guarantor has guaranteed to the
Secured Creditors the payment when due of all Secured Obligations.




          5. Each Grantor is the owner of the shares of stock or other Equity Interests (the
“Initial Pledged Equity”) set forth opposite such Grantor’s name on and as otherwise
described in Part I of Schedule I hereto and issued by the Persons named therein.




          6. Each Grantor is the owner of the deposit accounts (the “Pledged Deposit Accounts”)
set forth opposite such Grantor’s name on Schedule II hereto.




          7. It is a condition precedent to the making of Term Loans pursuant to the Credit Agreement,
the entering into of Hedging Agreements by Approved Third Party Credit
Providers from time to time and the issuance of Third Party Letters of Credit by Approved
Third Party Credit Providers from time to time, that the Grantors shall have granted the security





 









 







interest contemplated by this Agreement. Each Grantor will derive substantial direct and indirect
benefit from the transactions contemplated by the Credit Documents, the Secured Hedging Agreements
and the Secured Reimbursement Agreements (collectively, the “Secured Debt Agreements”).




          8. Terms defined in the Credit Agreement and not otherwise defined herein are used herein as
defined in the Credit Agreement. Further, unless otherwise defined in this Agreement or in the
Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9. “UCC” means the Uniform
Commercial Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non perfection or the priority of the security interest
in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time
to time in such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non perfection or priority.




          NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to make
Term Loans and the Approved Third Party Credit Providers to enter into Hedging Agreements and to
issue Third Party Letters of Credit, the undersigned hereby agree with the Collateral Agent, for
the benefit of the Lenders and the Secured Creditors:




          Section 1. Grant of Security. Each Grantor hereby grants to the Collateral Agent, for the
benefit of the Secured Creditors a security interest in all such Grantor’s right, title and
interest in and to the following, in each case, as to each type of property described below,
whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):





     (a) all equipment in all of its forms, including, without limitation, all machinery,
tools, motor vehicles, vessels, aircraft, furniture and fixtures, and all parts thereof and
all accessions thereto, including, without limitation, computer programs and supporting
information that constitute equipment within the meaning of the UCC (any and all such
property being the “Equipment”);




     (b) all inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods in which such Grantor
has an interest in mass or a joint or other interest or right of any kind (including,
without limitation, goods in which such Grantor has an interest or right as consignee) and
(iii) goods that are returned to or repossessed or stopped in transit by such Grantor, and
all accessions thereto and products thereof and documents therefor, including, without
limitation, computer programs and supporting information that constitute inventory within
the meaning of the UCC (any and all such property being the “Inventory”);




     (c) all accounts (including, without limitation, health-care-insurance receivables),
chattel paper (including, without limitation, tangible chattel paper and electronic chattel
paper), instruments (including, without limitation, promissory notes), deposit accounts,
letter-of-credit rights, general intangibles (including, without limitation,



-2-









 






payment
intangibles) and other obligations of any kind, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services and whether or not
earned by performance, and all rights now or hereafter existing in and to all supporting
obligations and in and to all security agreements, mortgages, Liens, leases, letters of
credit and other contracts securing or otherwise relating to the foregoing property (any and
all of such accounts, chattel paper, instruments, deposit accounts, letter-of-credit rights,
general intangibles and other obligations, to the extent not referred to in clause (d), (e)
or (f) below, being the “Receivables,” and any and all such supporting obligations,
security agreements, mortgages, Liens, leases, letters of credit and other contracts being
the “Related Contracts”);




     (d) the following (the “Security Collateral”):




     (i) the Initial Pledged Equity and the certificates, if any, representing the
Initial Pledged Equity, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Initial Pledged
Equity and all warrants, rights or options issued thereon or with respect thereto;




     (ii) all additional shares of stock and other Equity Interests in which such
Grantor shall from time to time acquire any interest in any manner (such shares and
other Equity Interests, together with the Initial Pledged Equity, being the
“Pledged Equity”), and the certificates, if any, representing such
additional shares or other Equity Interests, and all dividends, distributions,
return of capital, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of
such shares or other Equity Interests and all warrants, rights or options issued
thereon or with respect thereto;




     (iii) all indebtedness from time to time owed to such Grantor (all such
indebtedness owed to the Grantors, including any indebtedness owed to the Grantors
as of the date hereof, collectively being the “Pledged Debt”) and the
instruments, if any, evidencing such indebtedness, and all interest, cash,
instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such indebtedness; and




     (iv) all other investment property (including, without limitation, all
(A) securities, whether certificated or uncertificated, (B) security entitlements,
(C) securities accounts, (D) commodity contracts and (E) commodity accounts) in
which such Grantor has now, or acquires from time to time hereafter, any right,
title or interest in any manner, and the certificates or instruments, if any,
representing or evidencing such investment property, and all dividends,
distributions, return of capital, interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or in



-3-









 






exchange for any or all of such investment property and all warrants, rights or
options issued thereon or with respect thereto;




     (e) all contract rights of each Grantor including, without limitation, each Hedging
Agreement, to which such Grantor is now or may hereafter become a party, in each case as
such agreements may be amended, amended and restated, supplemented or otherwise modified
from time to time (collectively, the “Assigned Agreements”), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements,
(iii) claims of such Grantor for damages arising out of or for breach of or default under
the Assigned Agreements and (iv) the right of such Grantor to terminate the Assigned
Agreements, to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder (all such Collateral being the “Agreement Collateral”);




(f) the following (collectively, the “Account Collateral”):




     (i) the Pledged Deposit Accounts and all funds and financial assets from time
to time credited thereto (including, without limitation, all cash and Cash
Equivalents and all certificates and instruments, if any, from time to time
representing or evidencing the Pledged Deposit Accounts);




     (ii) all promissory notes, certificates of deposit, checks and other
instruments from time to time delivered to or otherwise possessed by the Collateral
Agent for or on behalf of such Grantor in substitution for or in addition to any or
all of the then existing Account Collateral; and




     (iii) all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the then existing Account Collateral;




(g) the following (collectively, the “Intellectual Property Collateral”):




     (i) all patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);




     (ii) all trademarks, service marks, domain names, trade dress, logos, designs,
slogans, trade names, business names, corporate names and other source identifiers,
whether registered or unregistered (provided that no security interest shall
be granted in United States intent-to-use trademark applications to the extent that,
and solely during the period in which, the grant of a security interest therein
would impair the validity or enforceability of such intent-to-use trademark
applications under applicable federal law), together, in each case, with the
goodwill symbolized thereby (“Trademarks”);



-4-









 






     (iii) all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);




     (iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data files),
firmware and documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any substitutions,
replacements, improvements, error corrections, updates and new versions of any of
the foregoing (“Computer Software”);




     (v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and data,
including, without limitation, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade Secrets”), and all
other intellectual, industrial and intangible property of any type, including,
without limitation, industrial designs and mask works;




     (vi) all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications for
registration set forth in Schedule IV hereto, together with all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations thereof;




     (vii) all tangible embodiments of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;




     (viii) all agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any of the foregoing to which such
Grantor, now or hereafter, is a party or a beneficiary, including, without
limitation, the agreements set forth in Schedule IV hereto (“IP
Agreements”); and




     (ix) any and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or breach with
respect to any of the foregoing, with the right, but not the obligation, to sue for
and collect, or otherwise recover, such damages,


but in any event excluding any intellectual property component of any undivided interest of any
Grantor in a joint operating agreement, the terms of which preclude the granting of a separate
security interest in such intellectual property component;





     (h) to the extent that such commercial tort claims may lawfully be pledged or assigned
under the laws of any relevant jurisdiction, the commercial tort claims described



-5-









 




in
Schedule V hereto (together with any commercial tort claims as to which the Grantors
have complied with the requirements of Section 13, the “Commercial Tort Claims
Collateral”);





     (i) all books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor pertaining to any
of the Collateral;




     (j) all general intangibles; and




     (k) all proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating to, any and
all of the Collateral (including, without limitation, proceeds, collateral and supporting
obligations that constitute property of the types described in clauses (a) through (j) of
this Section 1), and, to the extent not otherwise included, all (A) payments under
insurance (whether or not the Collateral Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral, and (B) cash.


Notwithstanding the foregoing, the Collateral shall not include: (a) any Grantor’s right, title or
interest in any permit, lease, license, contract or other agreement, to which such Grantor is a
party to the extent, but only to the extent, that the creation by such Grantor of any lien or
encumbrance thereon, would, under the terms of such permit, lease, license, contract or other
agreement constitute or result in (i) the abandonment, invalidation, or unenforceability of any
such right, title or interest of such Grantor therein or (ii) a breach or termination pursuant to
the terms thereof, or a default under such permit, lease, license, contract or other agreement
(other than to the extent that any such term would be rendered unenforceable or otherwise deemed
ineffective by the UCC (including Sections 9-406, 9-407, 9-408 and 9-409 thereof) of any relevant
jurisdiction or any other legal or regulatory requirement or principle of equity; provided
that (A) immediately upon the ineffectiveness, lapse or termination of any such terms, the
Collateral shall include, and such Grantor shall be deemed to have granted a security interest in,
all such rights, title and interests as if such provision had never been in effect and (B) to the
extent that any such permit, lease, license, contract or other agreement would otherwise constitute
Collateral (but for the provisions of this paragraph), all proceeds resulting from the sale or
disposition by any Grantor of any rights, title or interests of such Grantor under such permit,
lease, license contract or other agreement shall constitute Collateral; (b) any Equipment owned by
any Grantor that is subject to a purchase money lien or a Capitalized Lease Obligation if the
contract or other agreement in which such lien or encumbrance is granted (or the documentation
providing for such Capitalized Lease Obligation) prohibits or requires the consent of any person
other than such Grantor as a condition to the creation of any other lien or encumbrance on such
equipment for so long as such encumbrance is not removed, terminated, or rendered unenforceable or
otherwise deemed ineffective by the UCC (including Section 9-406, 9-407, 9-408 and 9-409 of the
UCC) of any relevant jurisdiction or any other legal or regulatory requirement or principle of
equity; (c) any letter-of-credit rights solely to the extent any Grantor is required by applicable
law to apply the proceeds of a drawing of such letter of credit for a
specified purpose; and (d) any monies, checks, securities or other items on deposit or otherwise
held in deposit accounts or trust accounts specifically and exclusively used for payroll, payroll





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taxes, deferred compensation and other employee wage and benefit payments to or for the benefit of
any Grantor’s employees (collectively, the “Excluded Property”). It is acknowledged and
agreed that the Excluded Property shall not constitute Collateral hereunder until such time as such
property or assets shall no longer constitute Excluded Property.




          Section 2. Security for Obligations. This Agreement secures, in the case of each Grantor,
the payment and performance of the following (collectively, the “Secured Obligations”):





     (a) the full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, principal, premium, interest, PIK Interest (including, without limitation, all
interest (including PIK Interest) that accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of such Grantor at the rate provided for in the respective documentation, whether
or not a claim for post-petition interest is allowed in any such proceeding), fees, costs
and indemnities) of such Grantor to the Lenders, whether now existing or hereafter incurred
under, arising out of, or in connection with, each Credit Document to which such Grantor is
a party (including, without limitation, all such obligations, liabilities and indebtedness
of such Grantor under the Guaranty to which it is a party) and the due performance and
compliance by such Grantor with all of the terms, conditions and agreements contained in
each such Credit Document;




     (b) the full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of
such Grantor at the rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding) owing by such Grantor to
the Approved Third Party Credit Providers under any Secured Hedging Agreement, whether now
in existence or hereafter arising (including, without limitation, all obligations,
liabilities and indebtedness of such Grantor under any Guaranty in respect of the Secured
Hedging Agreements), and the due performance and compliance by such Grantor with all of the
terms, conditions and agreements contained in each such Secured Hedging Agreement;




     (c) the full and prompt payment when due (whether at stated maturity, by acceleration
or otherwise) of all obligations, liabilities and indebtedness (including, without
limitation, all interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of
such Grantor at the rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding) owing by such Grantor to
the Approved Third Party Credit Providers under any Secured Reimbursement Agreement, whether
now in existence or hereafter arising (including, without limitation, all obligations,
liabilities and indebtedness of such Grantor
under any Guaranty in respect of the Secured
Reimbursement Agreements), and the due




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performance and compliance by such Grantor with all of the terms, conditions and
agreements contained in each such Secured Reimbursement Agreement;




     (d) any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;




     (e) in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of such Grantor referred to in clauses (a), (b)
and (c) above, after an Event of Default shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of
its rights hereunder, together with reasonable attorneys’ fees and court costs;




     (f) all amounts paid by any Indemnified Party (as hereinafter defined) as to which such
Indemnified Party has the right to reimbursement under Section 19 of this
Agreement; and




     (g) all amounts owing to any Agent pursuant to any of the Credit Documents in its
capacity as such;


it being acknowledged and agreed that the Secured Obligations shall include extensions of credit of
the types described above, whether outstanding on the date of this Agreement or extended from time
to time after the date of this Agreement.



Without limiting the generality of the foregoing, this Agreement secures, as to each Grantor, the
payment of all amounts that constitute part of the Secured Obligations and would be owed by such
Grantor to any Secured Creditor under the Secured Debt Agreements but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Credit Party.




          Notwithstanding anything to the contrary contained herein or in any other Credit Document, the
aggregate amount of Secured Obligations of the type described in clauses (b) and (c) of this
Section 2 (collectively, the “Secured Third Party Credit Obligations”) secured by
the Collateral pursuant to this Agreement and the Collateral (as defined under the respective
Security Documents) pursuant to the other Security Documents shall not at any time exceed
$25,000,000 (the “Secured Third Party Credit Obligations Cap”). No amount of Secured Third
Party Credit Obligations in excess of the Secured Third Party Credit Obligations Cap shall receive
the benefit of the security interests granted pursuant to this Agreement and in no event shall any
proceeds received upon the sale of, collection from, or other realization upon all or any part of
the Collateral (as defined in this Agreement and the other Security Documents) be applied to the
Secured Third Party Credit Obligations in an amount in excess of the Secured Third Party Credit
Obligations Cap.




          Section 3. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a)
each Grantor shall remain liable under the contracts and agreements included in such Grantor’s
Collateral to the extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had
not been executed, (b) the exercise by the Collateral Agent of any of the rights hereunder shall
not release any Grantor from





-8-









 







any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Creditor shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this Agreement or any other
Credit Document, nor shall any Secured Creditor be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.




          Section 4. Delivery and Control of Security Collateral. (a) All certificates or
instruments representing or evidencing Security Collateral shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Collateral Agent. The Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger denominations.




          (b) With respect to any Security Collateral that constitutes an uncertificated security, the
relevant Grantor will cause the issuer thereof either (i) to register the Collateral Agent as the
registered owner of such security or (ii) to agree with such Grantor and the Collateral Agent that
such issuer will comply with instructions with respect to such security originated by the
Collateral Agent without further consent of such Grantor, such agreement to be in form and
substance satisfactory to the Collateral Agent (such agreement being an “Uncertificated
Security Control Agreement”).




          (c) With respect to any Security Collateral that constitutes a security entitlement as to
which the Collateral Agent is not the securities intermediary, the relevant Grantor will at all
times following the 15th Business Day after the Funding Date cause the securities intermediary with
respect to such securities account or security entitlement either (i) to identify in its records
the Collateral Agent as the entitlement holder thereof or (ii) to agree with such Grantor and the
Collateral Agent that such securities intermediary will comply with entitlement orders originated
by the Collateral Agent without further consent of such Grantor, such agreement to be in form and
substance satisfactory to the Collateral Agent (a “Securities Account Control Agreement” or
“Securities/Deposit Account Control Agreement,” respectively).




          (d) The Collateral Agent shall have the right, at any time in its discretion and without
notice to any Grantor, to transfer to or to register in the name of the Collateral Agent or any of
its nominees any or all of the Security Collateral, subject only to the revocable rights specified
in Section 10(a).




          (e) Upon the request of the Collateral Agent, each Grantor will notify each issuer of Security
Collateral granted by it hereunder that such Security Collateral is subject to the security
interest granted hereunder.




          Section 5. Maintaining the Account Collateral. So long as any Term Loans or any other Secured Obligations shall remain unpaid or any Secured
Hedging Agreement or Secured Reimbursement Agreement shall be in effect:





     (i) Each Grantor will maintain deposit accounts only with the Collateral Agent or with
a bank (a “Pledged Account Bank”) that has agreed with such Grantor and



-9-









 






the Collateral Agent to comply with instructions originated by the Collateral Agent directing
the disposition of funds in such deposit account without the further consent of such
Grantor, such agreement to be in form and substance satisfactory to the Collateral Agent (a
“Deposit Account Control Agreement”); provided, however, this
Section 5(i) shall not apply to deposit accounts (i) with an aggregate balance of no more
than $100,000 at any time or (ii) operated solely as a payroll account;




     (ii) Each Grantor will (A) promptly instruct each Person obligated at any time to make
any payment to such Grantor for any reason (an “Obligor”) to make such payment to a
Pledged Deposit Account, and (B) deposit in a Pledged Deposit Account, at the end of each
Business Day, all proceeds of Collateral and all other cash of such Grantor in excess of
$100,000 in the aggregate; provided, however, this Section 5(ii) shall not
apply with respect to the Dutch Subsidiaries with respect to any of their deposit accounts;




     (iii) Each Grantor agrees that it shall not close any Pledged Deposit Account or
terminate any Deposit Account Control Agreement, in each case without the prior written
consent of the Collateral Agent; and




     (iv) The Collateral Agent may, at any time and without notice to, or consent from, the
Grantor, transfer, or direct the transfer of, funds from the Pledged Deposit Accounts to
satisfy the Grantor’s obligations under the Credit Documents; provided, that the
Collateral Agent may only exercise any such rights if an Event of Default shall have
occurred and be continuing.



          Section 6. Representations and Warranties. Each Grantor represents and warrants as
follows:





     (a) Such Grantor’s exact legal name, location, chief executive office, type of
organization, jurisdiction of organization and organizational identification number is set
forth in Schedule VI hereto. Such Grantor has no trade names other than as listed
on Schedule IV hereto. Within the five years preceding the date hereof, such
Grantor has not changed its name, location, chief executive office, type of organization,
jurisdiction of organization or organizational identification number from those set forth in
Schedule VI hereto except as set forth in Schedule VII hereto.




     (b) Such Grantor is the legal and beneficial owner of the Collateral granted or
purported to be granted by it free and clear of any Lien, claim, option or right of others,
except for the security interest created under this Agreement or permitted under the Credit
Agreement. No effective financing statement or other instrument similar in effect covering
all or any part of such Collateral or listing such Grantor or any trade name of such Grantor
as debtor is on file in any recording office, except such as may have been
filed in favor of the Collateral Agent relating to the Credit Documents or as otherwise
permitted under the Credit Agreement.




     (c) All of the Equipment and Inventory of such Grantor are located at the places
specified therefor in Schedule VIII hereto or at another location as to which such



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Grantor has complied with the requirements of Section 8(a). Such Grantor has
exclusive possession and control of its Equipment and Inventory, other than Inventory stored
at any leased premises or warehouse for which a landlord’s or warehouseman’s agreement, in
form and substance satisfactory to the Collateral Agent, is in effect.




     (d) None of the Receivables or Agreement Collateral is evidenced by a promissory note
or other instrument that has not been delivered to the Collateral Agent.




     (e) If such Grantor is an issuer of Security Collateral, such Grantor confirms that it
has received notice of the security interest granted hereunder.




     (f) The Pledged Equity pledged by such Grantor hereunder has been duly authorized and
validly issued and is fully paid and non assessable. The Pledged Debt pledged by such
Grantor hereunder has been duly authorized, authenticated or issued and delivered, is the
legal, valid and binding obligation of the issuers thereof, is evidenced by one or more
promissory notes (which promissory notes have been delivered to the Collateral Agent) and is
not in default.




     (g) The Initial Pledged Equity pledged by such Grantor constitutes the percentage of
the issued and outstanding Equity Interests of the issuers thereof indicated on Schedule
I hereto. The Initial Pledged Debt constitutes all of the outstanding indebtedness owed
to such Grantor by the issuers thereof and is outstanding in the principal amount indicated
on Schedule I hereto.




     (h) Such Grantor has no deposit accounts, other than (i) the Pledged Deposit Accounts
listed on Schedule II hereto, (ii) the additional Pledged Deposit Accounts as to
which such Grantor has complied with the applicable requirements of Section 5 and
(iii) the deposit accounts of the Dutch Subsidiaries.




     (i) This Agreement creates in favor of the Collateral Agent for the benefit of the
Secured Creditors a valid security interest in the Collateral granted by such Grantor,
securing the payment of the Secured Obligations; all filings and other actions (including,
without limitation, (A) actions necessary to obtain control of Collateral as provided in
Sections 9-104, 9-106 and 9-107 of the UCC and (B) actions necessary to perfect the
Collateral Agent’s security interest with respect to Collateral, as required by the
Collateral Agent) to perfect the security interest in the Collateral granted by such Grantor
have been duly made or taken, or to the extent such actions have not been completed as of
the date hereof, will be duly made or taken promptly following the execution and delivery
hereof, and in any event within two Business Days of the date hereof; and such security
interest is (or will be upon the completion of such actions not yet completed) first
priority; provided, that (i) no Grantor shall be deemed to represent pursuant to the
foregoing that this Agreement creates a valid security interest in (1) any Pledged Equity
Interests of any Person that is not organized under the laws of the United States or
any state thereof or (2) any Collateral granted by any Grantor that is not organized under
the laws of the United States or any state thereof (other than Equity Interests held by any
such Grantor in any Person that is organized under the laws of the United States or any
state thereof), and (ii) no steps have been taken in order to perfect any such security



-11-









 






interest in the Pledged Equity Interests referred to in clause (i)(1) above or the
Collateral referred to in clause (i)(2) above (other than Equity Interests held by any such
Grantor in any Person that is organized under the laws of the United States or any state
thereof).




     (j) No authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is required for (i)
the grant by such Grantor of the security interest granted hereunder or for the execution,
delivery or performance of this Agreement by such Grantor, (ii) the perfection or
maintenance of the security interest created hereunder (including the first priority nature
of such security interest), except for the filing of financing and continuation statements
under the UCC, which financing statements have either been filed or will be filed promptly
(and in any event within two Business Days after the execution and delivery of this
Agreement), the other actions required by the Collateral Agent as referred to in clause (i)
above and the actions described in Section 4 with respect to the Security
Collateral, which actions have been taken, or will be taken promptly after the execution and
delivery of this Agreement, or (iii) the exercise by the Collateral Agent of its voting or
other rights provided for in this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection with the disposition of
any portion of the Security Collateral by laws affecting the offering and sale of securities
generally; provided, that the Collateral Agent acknowledges and agrees that no
Grantor is making (or will be deemed to have made) the foregoing representations with
respect to (1) any Pledged Equity Interests of any Person that is not organized under the
laws of the United States or any state thereof or (2) any Collateral granted by any Grantor
that is not organized under the laws of the United States or any state thereof (other than
Equity Interests held by any such Grantor in any Person that is organized under the laws of
the United States or any state thereof).




     (k) As of the date hereof, the aggregate fair market value of all Intellectual Property
Collateral of the Credit Parties is less than $100,000.



          Section 7. Further Assurances. (a) Each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute and deliver, or otherwise authenticate,
all further instruments and documents, and take all further action that may be necessary or
desirable, or that the Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by such Grantor hereunder or to
enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect
to any Collateral of such Grantor. Without limiting the generality of the foregoing, each Grantor
will promptly with respect to Collateral of such Grantor: (i) if any such Collateral shall be
evidenced by a promissory note or other instrument or chattel paper, deliver and pledge to the
Collateral Agent hereunder such note or instrument or chattel paper duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and substance satisfactory to the
Collateral Agent; (ii) file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the Collateral Agent may
reasonably request, in order to perfect and preserve the security interest granted or purported to
be granted by such Grantor hereunder; and (iii) deliver to the Collateral Agent evidence that all
other actions that the Collateral Agent




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may deem reasonably necessary or desirable in order to
perfect and protect the security interest granted or purported to be granted by such Grantor under
this Agreement has been taken.




          (b) Each Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation, one or more
financing statements indicating that such financing statements cover all assets or all personal
property (or words of similar effect) of such Grantor, regardless of whether any particular asset
described in such financing statements falls within the scope of the UCC or the granting clause of
this Agreement. A photocopy or other reproduction of this Agreement shall be sufficient as a
financing statement where permitted by law. Each Grantor ratifies its authorization for the
Collateral Agent to have filed such financing statements, continuation statements or amendments
filed prior to the date hereof.




          (c) Each Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor subject to this
Agreement and such other reports in connection with such Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.




          (d) Each Grantor will furnish to the Collateral Agent, at any time upon the reasonable request
of the Collateral Agent, an opinion of counsel, from outside counsel reasonably satisfactory to the
Collateral Agent, to the effect that all financing or continuation statements have been filed, and
all other action has been taken to perfect continuously from the date hereof the security interest
granted hereunder; provided, that no Grantor shall be required pursuant to this Section
7(d) to deliver opinions with respect to the perfection of any such security interest in (i) the
Pledged Equity Interests of any Person that is not organized under the laws of the United States or
any state thereof or (ii) any Collateral granted by any Grantor that is not organized under the
laws of the United State or any state thereof (other than Equity Interests held by such Grantor in
any Person that is organized under the laws of the United States or any state thereof).




          Section 8. Post-Closing Changes; Collections on Assigned Agreements, Receivables and Related
Contracts. (a) No Grantor will change its name, type of organization, jurisdiction of
organization, organizational identification number or location, except that any such changes shall
be permitted (so long as not in violation of the applicable requirements of the Secured Debt
Agreements and so long as same do not involve (x) a registered organization ceasing to constitute
same or (y) such Grantor changing its jurisdiction of organization or location from the United
States or a State thereof to a jurisdiction of organization or location, as the case may be,
outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent
not less than 15 days’ prior written notice of each change to the information listed on
Schedule VI (as adjusted for any
subsequent changes thereto previously made in accordance with this sentence), together with a
supplement to Schedule VI which shall correct all information contained therein for such
Grantor, and (ii) in connection with such change or changes, it shall have taken all action
reasonably requested by the Collateral Agent to maintain the security interests of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully perfected and in full
force and effect. In addition, to the extent that such Grantor does not have an organizational
identification number and later obtains one, such Grantor shall promptly thereafter notify the
Collateral Agent of such organizational identification number and




-13-









 







shall take all actions reasonably
satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full
force and effect.




          (b) Except as otherwise provided in this subsection (b), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor under the Assigned
Agreements, Receivables and Related Contracts. In connection with such collections, such Grantor
may take such action as such Grantor or the Collateral Agent may deem necessary or advisable to
enforce collection of the Assigned Agreements, Receivables and Related Contracts; provided,
however, that the Collateral Agent shall have the right at any time following the
occurrence of an Event of Default, and upon written notice to such Grantor of its intention to do
so, to notify the Obligors under any Assigned Agreements, Receivables and Related Contracts of the
assignment of such Assigned Agreements, Receivables and Related Contracts to the Collateral Agent
and to direct such Obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Collateral Agent and, upon such notification and at the expense of such
Grantor, to enforce collection of any such Assigned Agreements, Receivables and Related Contracts,
to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done, and to otherwise exercise all rights with respect to such
Assigned Agreements, Receivables and Related Contracts, including, without limitation, those set
forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of the notice from the
Collateral Agent referred to in the proviso to the preceding sentence, (i) all amounts and proceeds
(including, without limitation, instruments) received by such Grantor in respect of the Assigned
Agreements, Receivables and Related Contracts of such Grantor shall be received in trust for the
benefit of the Collateral Agent hereunder, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Collateral Agent in the same form as so received (with any
necessary endorsement) to be deposited in a cash collateral account and applied as provided in
Section 18(b) and (ii) such Grantor will not adjust, settle or compromise the
amount or payment of any Receivable or amount due on any Assigned Agreement or Related Contract,
release wholly or partly any Obligor thereof or allow any credit or discount thereon. No Grantor
will permit or consent to the subordination of its right to payment under any of the Assigned
Agreements, Receivables and Related Contracts to any other indebtedness or obligations of the
Obligor thereof.




          Section 9. As to Intellectual Property Collateral. Each Grantor hereby agrees that, if at
any time, and from time to time, the aggregate fair market value of the Intellectual Property
Collateral of all the Credit Parties shall exceed $100,000, then the Grantors shall:





     (a) With respect to each item of its Intellectual Property Collateral, each Grantor
agrees to take, at its expense, all necessary steps, including, without limitation, in the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other Governmental
Authority, to (i) maintain the validity and enforceability of such Intellectual Property
Collateral and maintain such Intellectual Property Collateral in full force and effect, and
(ii) pursue the registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such Intellectual Property
Collateral of such Grantor, including, without limitation, the payment of required fees and
taxes, the filing of responses to office actions issued by the U.S. Patent and Trademark
Office, the U.S. Copyright Office or other governmental



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authorities, the filing of
applications for renewal or extension, the filing of affidavits under Section 8 and 15 of
the U.S. Trademark Act, the filing of divisional, continuation, continuation-in-part,
reissue and renewal applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. No Grantor shall, without the written consent of the
Collateral Agent, discontinue use of or otherwise abandon any Intellectual Property
Collateral, or abandon any right to file an application for patent, trademark, or copyright,
unless such Grantor shall have previously determined that such use or the pursuit or
maintenance of such Intellectual Property Collateral is no longer desirable in the conduct
of such Grantor’s business and that the loss thereof would not be reasonably likely to have
a Material Adverse Effect, in which case, such Grantor will give prompt notice of any such
abandonment to the Collateral Agent.




     (b) Each Grantor agrees promptly to notify the Collateral Agent if such Grantor becomes
aware (i) that any item of the Intellectual Property Collateral may have become abandoned,
placed in the public domain, invalid or unenforceable, or of any adverse determination or
development regarding such Grantor’s ownership of any of the Intellectual Property
Collateral or its right to register the same or to keep and maintain and enforce the same,
or (ii) of any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the U.S. Patent and Trademark
Office or any court) regarding any item of the Intellectual Property Collateral.




     (c) In the event that any Grantor becomes aware that any item of the Intellectual
Property Collateral is being infringed or misappropriated by a third party, such Grantor
shall promptly notify the Collateral Agent and shall take such actions, at its expense, as
such Grantor or the Collateral Agent deems reasonable and appropriate under the
circumstances to protect or enforce such Intellectual Property Collateral, including,
without limitation, suing for infringement or misappropriation and for an injunction against
such infringement or misappropriation.




     (d) Each Grantor shall use proper statutory notice in connection with its use of each
item of its Intellectual Property Collateral. No Grantor shall do or permit any act or
knowingly omit to do any act whereby any of its Intellectual Property Collateral may lapse
or become invalid or unenforceable or placed in the public domain.




     (e) Each Grantor shall take all steps which it or the Collateral Agent deems reasonable
and appropriate under the circumstances to preserve and protect each item of its
Intellectual Property Collateral, including, without limitation, maintaining the quality of
any and all products or services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the date hereof, and taking
all steps necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.




     (f) Each Grantor agrees that, should it obtain an ownership interest in any item of the
type set forth in Section 1(g) (excluding any intellectual property component of any
undivided interest of any Grantor in a joint operating agreement, the terms of



-15-









 






which
preclude the granting of a separate security interest in such intellectual property
component; except to the extent any such terms are rendered ineffective by Sections 9-406,
9-407, 9-408 or 9-409 of the UCC) that is not on the date hereof a part of the Intellectual
Property Collateral, and such acquisition shall cause the total aggregate value of the
Intellectual Property Collateral to exceed $100,000 (“After-Acquired Intellectual
Property”), then (i) the provisions of this Agreement shall automatically apply thereto,
(ii) any such After-Acquired Intellectual Property and, in the case of trademarks, the
goodwill symbolized thereby, shall automatically become part of the Intellectual Property
Collateral subject to the terms and conditions of this Agreement with respect thereto and
(iii) in the case of the first such ownership interest obtained in After-Acquired
Intellectual Property, within ten business days following the date on which each such
Grantor obtains such ownership interest each such Grantor shall execute or otherwise
authenticate an agreement, in substantially the form set forth in Exhibit B hereto
or otherwise in form and substance satisfactory to the Collateral Agent (an
“Intellectual Property Security Agreement”), for recording the security interest
granted hereunder to the Collateral Agent in such Intellectual Property Collateral with the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other Governmental
Authorities necessary to perfect the security interest hereunder in such Intellectual
Property Collateral.




     (g) If, at the end of each fiscal quarter of each Grantor following the execution of
the Intellectual Property Security Agreement, the acquisition of After-Acquired Intellectual
Property shall have caused the total aggregate value of the Intellectual Property Collateral
to exceed $100,000, such Grantor shall give prompt written notice to the Collateral Agent
identifying any additional After-Acquired Intellectual Property acquired during such fiscal
quarter, and such Grantor shall execute and deliver to the Collateral Agent with such
written notice, or otherwise authenticate, an agreement substantially in the form of
Exhibit C hereto or otherwise in form and substance satisfactory to the Collateral
Agent (an “IP Security Agreement Supplement”) covering such After-Acquired
Intellectual Property, which IP Security Agreement Supplement shall be recorded with the
U.S. Patent and Trademark Office, the U.S. Copyright Office and any other governmental
authorities necessary to perfect the security interest hereunder in such After-Acquired
Intellectual Property.



          Section 10. Voting Rights; Dividends; Etc. (a) So long as no Default or Event of Default
shall have occurred and be continuing:





     (i) Each Grantor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Security Collateral of such Grantor or any part thereof for any
purpose; provided however, that such Grantor will not exercise or refrain
from exercising any such right if such action would have a material adverse effect on the
value of the Security Collateral or any part thereof or of the rights of the Secured
Creditors therein.




     (ii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest and other distributions paid in respect of the Security Collateral of such Grantor
if



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and to the extent that the payment thereof is not otherwise prohibited by the terms of
the Credit Documents; provided, however, that any and all




     (A) dividends, interest and other distributions paid or payable other than in
cash in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security Collateral,




     (B) dividends and other distributions paid or payable in cash in respect of any
Security Collateral in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid in surplus;
and




     (C) cash paid, payable or otherwise distributed in respect of principal of, or
in redemption of, or in exchange for, any Security Collateral,




that in each case are not otherwise expressly permitted to be retained by such Grantor
pursuant to the terms of the Credit Agreement shall be, and shall be forthwith delivered to
the Collateral Agent to hold as, Security Collateral and shall, if received by such Grantor,
be received in trust for the benefit of the Collateral Agent, be segregated from the other
property or funds of such Grantor and be forthwith delivered to the Collateral Agent as
Security Collateral in the same form as so received (with any necessary indorsement).




     (iii) The Collateral Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain pursuant to
paragraph (ii) above.



          (b) Upon the occurrence and during the continuance of a Default or Event of Default:





     (i) All rights of each Grantor (A) to exercise or refrain from exercising the voting
and other consensual rights that it would otherwise be entitled to exercise pursuant to
Section 10(a)(i) shall, upon notice to such Grantor by the Collateral Agent, cease
and (B) to receive the dividends, interest and other distributions that it would otherwise
be authorized to receive and retain pursuant to Section 10(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to exercise or refrain from exercising such
voting and other
consensual rights and to receive and hold as Security Collateral such dividends,
interest and other distributions.




     (ii) All dividends, interest and other distributions that are received by any Grantor
contrary to the provisions of paragraph (i) of this Section 10(b) shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from other funds of
such Grantor and shall be forthwith paid over to the Collateral Agent as Security Collateral
in the same form as so received (with any necessary indorsement).




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          Section 11. As to the Assigned Agreements. (a) Each Grantor hereby
consents on its behalf and on behalf of its Subsidiaries to the assignment and pledge to the
Collateral Agent for benefit of the Secured Creditors of each Assigned Agreement to which it is a
party by any other Grantor hereunder.


          (b) Each Grantor agrees, and has effectively so instructed each other party to each Assigned
Agreement to which it is a party, that all payments due or to become due under or in connection
with such Assigned Agreement will be made directly to a Pledged Deposit Account.


          (c) All moneys received or collected pursuant to subsection (b) above and not deposited
directly into a Pledged Deposit Account shall be applied as provided in Section 18(b).


          Section 12. As to Letter-of-Credit Rights. Upon the occurrence of a Default or Event of
Default, each Grantor will, promptly upon request by the Collateral Agent, (i) notify (and such
Grantor hereby authorizes the Collateral Agent to notify) the issuer and each nominated person with
respect to each of the Related Contracts consisting of letters of credit that the proceeds thereof
have been assigned to the Collateral Agent hereunder and any payments due or to become due in
respect thereof are to be made directly to the Collateral Agent or its designee and (ii) arrange
for the Collateral Agent to become the transferee beneficiary of letter of credit.


          Section 13. Commercial Tort Claims. Each Grantor will promptly give notice to the
Collateral Agent of any material commercial tort claim capable of lawfully being pledged or
assigned that may arise after the date hereof and will immediately execute or otherwise
authenticate a supplement to this Agreement, and otherwise take all necessary action, to subject
such commercial tort claim to the first priority security interest created under this Agreement.


          Section 14. Transfers and Other Liens; Additional Shares. (a) Each Grantor
agrees that it will not (i) sell, assign or otherwise dispose of, or grant any
option with respect to, any of the Collateral, other than sales, assignments and other dispositions
of Collateral, and options relating to Collateral, permitted under the Secured Debt Agreements, or
(ii) create or suffer to exist any Lien upon or with respect to any of the Collateral of such
Grantor except for the pledge, assignment and security interest created under the Credit Agreement
and Liens permitted under the Credit Agreement.


          (b) Each Grantor agrees that it will (i) cause each issuer of the Pledged Equity pledged by
such Grantor not to issue any Equity Interests or other securities in addition to or in
substitution for the Pledged Equity issued by such issuer, except to such Grantor, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all
additional Equity Interests or other securities.


          Section 15. Collateral Agent Appointed Attorney in Fact. Following the occurrence and
during the continuance of a Default or Event of Default, each Grantor hereby irrevocably appoints
the Collateral Agent such Grantor’s attorney in fact, with full authority in the place and stead of
such Grantor and in the name of such Grantor or otherwise, from time to time in the Collateral
Agent’s discretion, to take any action and to execute any instrument that



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the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement, including, without
limitation:





     (a) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant
to this Agreement,




     (b) to ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of any of the
Collateral,




     (c) to receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and




     (d) to file any claims or take any action or institute any proceedings that the
Collateral Agent may deem necessary or desirable for the collection of any of the Collateral
or otherwise to enforce compliance with the terms and conditions of any Assigned Agreement
or the rights of the Collateral Agent with respect to any of the Collateral.


          Section 16. Collateral Agent May Perform. If any Grantor fails to perform any agreement
contained herein, the Collateral Agent may, but without any obligation to do so and without notice,
itself perform, or cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor under Section 19.


          Section 17. The Collateral Agent’s Duties. (a) The powers conferred on the Collateral Agent hereunder are solely to protect the Secured
Creditors’ interest in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not any Secured
Creditor has or is deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation
of any Collateral in its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.


          (b) Anything contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent deems it to be necessary, appoint one or more subagents
(each a “Subagent”) for the Collateral Agent hereunder with respect to all or any part of
the Collateral. In the event that the Collateral Agent so appoints any Subagent with respect to
any Collateral, (i) the assignment and pledge of such Collateral and the security interest granted
in such Collateral by each Grantor hereunder shall be deemed for purposes of this Agreement to have
been made to such Subagent, in addition to the Collateral Agent, for the benefit of the Secured
Creditors, as security for the Secured Obligations of such Grantor, (ii) such Subagent shall
automatically be vested, in addition to the Collateral Agent, with all rights,




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powers, privileges, interests and remedies of the Collateral Agent hereunder with respect to such Collateral, and (iii)
the term “Collateral Agent,” when used herein in relation to any rights,
powers, privileges, interests and remedies of the Collateral Agent with respect to such Collateral, shall include such
Subagent; provided, however, that no such Subagent shall be authorized to take any
action with respect to any such Collateral unless and except to the extent expressly authorized in
writing by the Collateral Agent.



          Section 18. Remedies.


          If any Event of Default shall have occurred and be continuing:




     (a) The Collateral Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may: (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of the Collateral Agent
forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place and time to be designated by the
Collateral Agent that is reasonably convenient to both parties; (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Collateral Agent’s offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or leased by any of the Grantors
where the Collateral or any part thereof is assembled or located for a reasonable
period in order to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise any and all
rights and remedies of any of the Grantors under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any and all
rights of such Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements, the Receivables, the Related
Contracts and the other Collateral, (B) withdraw, or cause or direct the withdrawal, of all
funds with respect to the Account Collateral and (C) exercise all other rights and remedies
with respect to the Assigned Agreements, the Receivables, the Related Contracts and the
other Collateral, including, without limitation, those set forth in Section 9-607 of the
UCC. Each Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days’ notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so adjourned.




     (b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds
received by or on behalf of the Collateral Agent in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may, in the discretion of the
Collateral Agent, be held by the Collateral Agent as collateral for, and/or



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then or at any time thereafter applied in whole or in part by the Collateral Agent for the benefit of the
Secured Creditors against, all or any part of the Secured Obligations, in the manner set
forth in the last sentence of Section 9 of the Credit Agreement (in the case the
Intercreditor Agreement is not in effect) or as otherwise provided in the Intercreditor
Agreement (in the case the Intercreditor Agreement is in effect). Any surplus of such cash
or cash proceeds held by or on the behalf of the Collateral Agent and remaining after
payment in full of all the Secured Obligations shall be paid over to the applicable Grantor
or to whomsoever may be lawfully entitled to receive such surplus.




     (c) All payments received by any Grantor under or in connection with any Assigned
Agreement or otherwise in respect of the Collateral shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Collateral Agent in the same form as so received (with
any necessary endorsement).




     (d) The Collateral Agent may, without notice to any Grantor except as required by law
and at any time or from time to time, charge, set off and otherwise apply all or any part of
the Secured Obligations against any funds held with respect to the Account Collateral or in
any other deposit account.




     (e) The Collateral Agent may send to each bank, securities intermediary or issuer party
to any Deposit Account Control Agreement, Securities/Deposit Account Control Agreement,
Securities Account Control Agreement or Uncertificated Security Control Agreement a “Notice of Exclusive Control” (or similar term) as defined in and
under such Agreement.




     (f) In the event of any sale or other disposition of any of the Intellectual Property
Collateral of any Grantor, the goodwill symbolized by any Trademarks subject to such sale or
other disposition shall be included therein, and such Grantor shall supply to the Collateral
Agent or its designee such Grantor’s know-how and expertise, and documents and things
relating to any Intellectual Property Collateral subject to such sale or other disposition,
and such Grantor’s customer lists and other records and documents relating to such
Intellectual Property Collateral and to the manufacture, distribution, advertising and sale
of products and services of such Grantor.




     (g) If the Collateral Agent shall determine to exercise its right to sell all or any of
the Security Collateral of any Grantor pursuant to this Section 18, each Grantor
agrees that, upon request of the Collateral Agent, such Grantor will, at its own expense:




     (i) execute and deliver, and cause each issuer of such Security Collateral
contemplated to be sold and the directors and officers thereof to execute and
deliver, all such instruments and documents, and do or cause to be done all such
other acts and things, as may be necessary or, in the opinion of the Collateral
Agent, advisable to register such Security Collateral under the provisions of the
Securities Act of 1933 (as amended from time to time, the “Securities Act”),
to cause the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by



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law to be furnished
and to make all amendments and supplements thereto and to the related prospectus
that, in the opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and regulations
of the Securities and Exchange Commission applicable thereto;




     (ii) use its best efforts to qualify the Security Collateral under the state
securities or “Blue Sky” laws and to obtain all necessary governmental approvals for
the sale of such Security Collateral, as requested by the Collateral Agent;




     (iii) cause each such issuer of such Security Collateral to make available to
its security holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act;




     (iv) provide the Collateral Agent with such other information and projections
as may be necessary or, in the opinion of the Collateral Agent, advisable to enable
the Collateral Agent to effect the sale of such Security Collateral; and




     (v) do or cause to be done all such other acts and things as may be necessary
to make such sale of such Security Collateral or any part thereof valid and binding
and in compliance with applicable law.




     (h) The Collateral Agent is authorized, in connection with any sale of the Security
Collateral pursuant to this Section 18, to deliver or otherwise disclose to any
prospective purchaser of the Security Collateral: (i) any registration statement or
prospectus, and all supplements and amendments thereto, prepared pursuant to subsection
(g)(i) above; (ii) any information and projections provided to it pursuant to subsection
(g)(iv) above; and (iii) any other information in its possession relating to such Security
Collateral.




     (i) Each Grantor acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Secured Creditors by reason of the failure by such Grantor to
perform any of the covenants contained in subsection (g) above and, consequently, agrees
that, if such Grantor shall fail to perform any of such covenants, it will pay, as
liquidated damages and not as a penalty, an amount equal to the value of the Security
Collateral on the date the Collateral Agent shall demand compliance with subsection (g)
above.


          Section 19. Indemnity and Expenses. (a) Each Grantor agrees to indemnify, defend and save
and hold harmless each Secured Creditor and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in connection with or
resulting from this Agreement (including, without limitation, enforcement of this Agreement),
except to the extent such claim, damage, loss, liability or expense is found in



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a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence or willful misconduct.



          (b) Each Grantor will upon demand pay to the Collateral Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents, that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Collateral Agent or the other Secured Creditors
hereunder or (iv) the failure by such Grantor to perform or observe any of the provisions hereof.


          Section 20. Amendments; Waivers; Additional Grantors; Etc. (a) No amendment, modification
or waiver of any provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing and signed by each
Grantor directly affected thereby (it being understood that the addition or release of any Grantor
hereunder shall not constitute a amendment, modification, waiver or consent affecting any Grantor
other than the Grantor so added or released) the Collateral Agent (with the written consent of
Required Secured Creditors), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given.


          (b) For the purpose of this Agreement, “Required Secured Creditors” shall mean (i) at
any time when any Secured Obligations of the type described in Section 2(a) are
outstanding, the Required Lenders (or, to the extent provided in Section 11.12 of the Credit
Agreement, each of the Lenders) and (ii) at any time after all of the Secured Obligations of the
type described in Section 2(a) have been paid in full, the holders of a majority of the
Secured Third Party Credit Obligations. No failure on the part of the Collateral Agent or any
other Secured Creditor to exercise, and no delay in exercising any right hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right.


          (c) Upon the execution and delivery by any Person of a security agreement supplement in
substantially the form of Exhibit D hereto (each a “Security Agreement
Supplement”), such Person shall be referred to as an “Additional Grantor” and shall be
and become a Grantor hereunder, and each reference in this Agreement and the other Credit Documents
to “Grantor” shall also mean and be a reference to such Additional Grantor, each reference in this
Agreement and the other Credit Documents to the “Collateral” shall also mean and be a reference to
the Collateral granted by such Additional Grantor and each reference in this Agreement to a
Schedule shall also mean and be a reference to the schedules attached to such Security Agreement
Supplement.


          Section 21. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopier or telex communication), addressed
as follows: (a) in the case of any Grantor, c/o Endeavour International Corporation, 1001 Fannin,
Suite 1600, Houston, Texas 77002, Attention: J. Michael Kirksey, Telephone No.: (713) 307-8788,
Telecopier No.: (713) 307-8794, (b) in the case of the Collateral Agent, 399




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Park Avenue, 39th Floor, New York, New York 10022, Attention: Divya Gopal, Telephone No.: (212) 380-5864, Telecopier
No.: (212) 380-5871, (c) in the case of any Lender, at such address as such Lender shall have
specified in the Credit Agreement and (d) in the case of any Approved Third Party Credit Provider,
at such address as such Approved Third Party Credit Provider shall have specified in writing to
each Grantor and the Collateral Agent; or, as to any party hereto, at such other address as shall
be designated by such party in a written notice to the other parties hereto. All such notices and
other communications shall, when mailed, telegraphed, telecopied, telexed, or otherwise delivered,
be effective when deposited in the mails, delivered to the telegraph company, telecopied, confirmed
by telex answerback, sent by electronic mail and confirmed in writing, or otherwise delivered (or
confirmed by a signed receipt), respectively, addressed as aforesaid; except that notices and other
communications to the Collateral Agent shall not be effective until received by the Collateral
Agent. Delivery by telecopier of an executed counterpart of any amendment, modification or waiver
of any provision of, or any consent with respect to, this Agreement or of any Security Agreement
Supplement or Schedule hereto shall be effective as delivery of an original executed counterpart
thereof.



          Section 22. Continuing Security Interest; Assignments under the Credit Agreements. This
Agreement shall create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the later of (i) the payment in full in cash (it being understood for
the purposes of this Agreement that receipt of Collateral pursuant to a credit bid shall be
regarded as cash) of the Secured Obligations and (ii) the termination or expiration of all Secured
Hedging Agreements and Secured Reimbursement Agreements (or such earlier date as any Approved Third
Party Credit Provider(s) shall have received in the aggregate an amount equal to the Secured Third
Party Credit Obligations Cap in respect of the Secured Third Party Credit Obligations), (b) be
binding upon each Grantor, its successors and assigns and (c) inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Secured Creditors and their
respective successors, transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lenders may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Term Loans owing to it and the Note or Notes) to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof granted to such
Lenders herein or otherwise, in each case as provided in Section 11.04 of the Credit
Agreement.


          Section 23. Release; Termination. (a) Upon any sale, lease, transfer or other disposition
of any item of Collateral of any Grantor effected in accordance with the terms of the Secured Debt
Agreements, then the security interest hereunder shall be released, and the Collateral Agent will,
at such Grantor’s reasonable request and at such Grantor’s sole expense, take all steps necessary
to evidence such release; provided, however, that at the time of such request and
such release no Default or Event of Default shall have occurred and be continuing.


          (b) Upon the later of (i) the payment in full in cash of the Secured Obligations, and (ii) the
termination or expiration of all Secured Hedging Agreements and Secured Reimbursement Agreements
(or such earlier date as any Approved Third Party Credit Provider(s) shall have received in the
aggregate an amount equal to the Secured Third Party Credit Obligations Cap in respect of Secured
Third Party Credit Obligations), the pledge and security interest granted hereby shall terminate
and all rights to the Collateral shall revert to the





-24-









 








applicable Grantor. Upon any such termination, the Collateral Agent will, at the applicable Grantor’s expense, execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence such termination.



          Section 24. Security Interest Absolute. The Obligations of each Grantor under this
Agreement are independent of the Secured Obligations or any other Obligations of any other Credit
Party under or in respect of the Credit Documents, and a separate action or actions may be brought
and prosecuted against each Grantor to enforce this Agreement, irrespective of whether any action
is brought against such Grantor or any other Credit Party or whether such Grantor or any other
Credit Party is joined in any such action or actions. All rights of the Collateral Agent and the
other Secured Creditors and the pledge, assignment and security interest hereunder, and all obligations of each Grantor hereunder,
shall be irrevocable, absolute and unconditional irrespective of, and each Grantor hereby
irrevocably waives (to the maximum extent permitted by applicable law) any defenses it may now have
or may hereafter acquire in any way relating to, any or all of the following:




     (a) any lack of validity or enforceability of any Credit Document or any other
agreement or instrument relating thereto;




     (b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations or any other Obligations of any other Credit Party under
or in respect of the Credit Documents or any other amendment or waiver of or any consent to
any departure from any Credit Document, including, without limitation, any increase in the
Secured Obligations resulting from the extension of additional credit to any Credit Party or
any of its Subsidiaries or otherwise;




     (c) any taking, exchange, release or non perfection of any Collateral or any other
collateral, or any taking, release or amendment or waiver of or consent to departure from
any guaranty, for all or any of the Secured Obligations;




     (d) any manner of application of any Collateral or any other collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of sale or other
disposition of any Collateral or any other collateral for all or any of the Secured
Obligations or any other Obligations of any other Credit Party under or in respect of the
Credit Documents or any other assets of any Credit Party or any of its Subsidiaries;




     (e) any change, restructuring or termination of the corporate structure or existence of
any Credit Party or any of its Subsidiaries;




     (f) any failure of any Secured Creditor to disclose to any Credit Party any information
relating to the business, condition (financial or otherwise), operations, performance,
assets, nature of assets, liabilities or prospects of any other Credit Party now or
hereafter known to such Secured Creditor (each Grantor waiving any duty on the part of the
Secured Creditors to disclose such information);




     (g) the failure of any other Person to execute this Agreement or any other Security
Instrument, guaranty or agreement or the release or reduction of liability of any Grantor or
other grantor or surety with respect to the Secured Obligations; or



-25-









 






     (h) any other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by any Secured Creditor that might
otherwise constitute a defense available to, or a discharge of, such Grantor or any other
Grantor or a third party grantor of a security interest.


          This Agreement shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Secured Obligations is rescinded or must otherwise be returned by
any Secured Creditor or by any other Person upon the insolvency, bankruptcy or reorganization of
any Credit Party or otherwise, all as though such payment had not been made.


          Section 25. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of
a signature page to this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.


          Section 26. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.



               THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT (EXCEPT THAT, IN
THE CASE OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDINGS WITH RESPECT TO ANY GRANTOR, ACTIONS
OR PROCEEDINGS RELATED TO THIS AGREEMENT MAY BE BROUGHT IN SUCH COURT HOLDING SUCH BANKRUPTCY,
INSOLVENCY OR SIMILAR PROCEEDINGS) MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. EACH GRANTOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH GRANTOR, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT TO WHICH SUCH GRANTOR IS A
PARTY BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER
SUCH GRANTOR. EACH GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH GRANTOR AT ITS ADDRESS SET FORTH IN SCHEDULE
VI, AND, IN THE CASE OF SERVICE OF PROCESS TO ANY OF THE DUTCH SUBSIDIARIES IN THEIR RESPECTIVE
CAPACITIES AS “GRANTORS” HEREUNDER, AS PROVIDED IN SECTION 11.18 OF THE CREDIT AGREEMENT, IN EACH
CASE SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH



-26-









 





MAILING. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS OUT OF THE AFOREMENTIONED COURTS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED WITH THE
AFOREMENTIONED COURTS HEREUNDER THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR ANY SECURED CREDITOR TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GRANTOR IN ANY OTHER
JURISDICTION.



          EACH GRANTOR HEREBY IRREVOCABLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO
IN THE IMMEDIATELY PRECEDING PARAGRAPH ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


          EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.



[SIGNATURES APPEAR ON FOLLOWING PAGE]




-27-











 





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




	 	 	 	 	 
	 	ENDEAVOUR INTERNATIONAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ENDEAVOUR OPERATING CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





	 	 	 	 	 
	 	ENDEAVOUR ENERGY NORTH SEA LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ENDEAVOUR ENERGY NORTH SEA, L.P.

 	 
	 	By:  	Endeavour Energy North Sea LLC, its
 	 
	 	 	general partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ENDEAVOUR ENERGY NEW VENTURES INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	END MANAGEMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	ENDEAVOUR INTERNATIONAL HOLDING

B.V., with its corporate seat in Amsterdam, the

Netherlands

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



-34-









 






	 	 	 	 	 



	 	 	 	 	 
	 	ENDEAVOUR ENERGY NETHERLANDS

B.V., with its corporate seat in Amsterdam, the

Netherlands

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




-35-









 





	 	 	 	 	 
	 	Acknowledged and agreed as of the date hereof:





CYAN PARTNERS, LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





SCHEDULE I




INVESTMENT PROPERTY




Part I




Initial Pledged Equity




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Class of Equity	 	Par	 	Number of	 	Certificate	 	Percentage of
	Grantor	 	Issuer	 	Interest	 	Value	 	Shares	 	Number	 	outstanding shares
	Endeavour 

International 

Corporation

	 	Endeavour Operating

Corporation
	 	Common
	 	$	0.001	 	 	 	100	 	 	 	2	 	 	 	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour Operating 

Corporation

	 	Endeavour Energy
New Ventures Inc.
	 	Common
	 	$	0.01	 	 	 	1,000	 	 	 	1	 	 	 	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour Operating 

Corporation

	 	END Management

Company
	 	Common
	 	$	0.01	 	 	 	1,000	 	 	 	1	 	 	 	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy 

North Sea LLC

	 	Endeavour Energy
North Sea, L.P.
	 	General Partnership

Interest
	 	 	N/A	 	 	 	N/A	 	 	Un-certificated
	 	 	0.1	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour
International
Holding B.V.

	 	Endeavour Energy
North Sea, L.P.
	 	Limited Partnership

Interest
	 	 	N/A	 	 	 	N/A	 	 	Un-certificated
	 	 	99.9	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy
Netherlands B.V.

	 	Endeavour Energy

North Sea, LLC
	 	Membership Interest
	 	 	N/A	 	 	 	N/A	 	 	Un-certificated
	 	 	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour Operating 

Corporation

	 	Endeavour Energy
New Ventures I,
Ltd.
	 	Ordinary
	 	$	1.00	 	 	 	1	 	 	Un-certificated
	 	 	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Endeavour
International
Holding B.V.

	 	Endeavour Energy
Luxembourg S.à r.l.
	 	Ordinary
	 	 	N/A	 	 	 	500	 	 	Un-certificated
	 	 	100	 







 











 





Schedule I

Page 2




Part II




Pledged Debt




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





 









 





Schedule I

Page 3




Part III




Other Investment Property



     This Schedule I Part III incorporates all Pledged Deposit Accounts as set out in
Schedule II.



 









 





SCHEDULE II




Pledged Deposit Accounts




	 	 	 	 	 	 	 	 	 
	Grantor	 	Sort Code	 	Bank Account Number	 	Designation
	Endeavour Operating Corporation

	 	JPMorgan Chase
Bank, N.A
	 	 	179910996265	 	 	Operating Account
	Endeavour Operating Corporation

	 	JPMorgan Chase
Bank, N.A
	 	 	825-874-035	 	 	Demand Deposit Account






 









 





SCHEDULE III




[INTENTIONALLY LEFT BLANK.]




 









 





SCHEDULE IV




INTELLECTUAL PROPERTY




NONE.



 









 





SCHEDULE V




COMMERCIAL TORT CLAIMS




NONE.



 









 





SCHEDULE VI




LEGAL NAME, LOCATION, CHIEF EXECUTIVE OFFICE, TYPE OF ORGANIZATION, JURISDICTION OF

ORGANIZATION AND ORGANIZATIONAL IDENTIFICATION NUMBER




	 	 	 	 	 	 	 	 	 	 	 
	Grantor’s Legal	 	 	 	Chief Executive	 	Type of	 	Jurisdiction of	 	Organizational
	Name	 	Location	 	Office	 	Organization	 	Organization	 	I.D. No.
	Endeavour
 International

Corporation
	 	Nevada	 	1001 Fannin Street,	 	Corporation	 	Nevada	 	NV20001178064
	 	 	 	Suite 1600,	 	 	 	 	 	 
	 	 	 	Houston, Texas	 	 	 	 	 	 
	 	 	 	77002	 		 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour
Operating
Corporation
	 	Houston	 	1001 Fannin Street,	 	Corporation	 	Delaware	 	3737839
	 	 	 	Suite 1600,	 	 	 	 	 	 
	 	 	 	Houston, Texas	 	 	 	 	 	 
	 		 	77002	 		 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy
New Ventures Inc.
	 	Houston	 	1001 Fannin Street,	 	Corporation	 	Delaware	 	3900636
	 	 	 	Suite 1600,	 	 	 	 	 	 
	 	 	 	Houston, Texas	 	 	 	 	 	 
	 		 	77002	 		 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	END Management
Company
	 	Houston	 	1001 Fannin Street,	 	Corporation	 	Delaware	 	3900274
	 	 	 	Suite 1600,	 	 	 	 	 	 
	 	 	 	Houston, Texas	 	 	 	 	 	 
	 		 	77002	 		 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy
North Sea LLC
	 	Houston	 	1001 Fannin Street,	 	Limited Liability	 	Delaware	 	4621624
	 		 	Suite 1600 Houston,	 	Company	 	 	 	 
	 		 	Texas 77002	 		 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy
North Sea, L.P.
	 	Houston	 	1001 Fannin Street,	 	Limited Partnership	 	Delaware	 	4591023
	 	 	 	Suite 1600 Houston,	 	 	 	 	 	 
	 		 	Texas 77002	 		 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour
International
Holding B.V.
	 	Amsterdam	 	Teleportboulevard	 	Private company with	 	Netherlands	 	34229293
	 	 	 	140, 1043 EJ	 	limited liability	 	 	 	 
	 	 	 	Amsterdam, The	 	under the laws of	 	 	 	 
	 		 	Netherlands	 	the Netherlands	 		 	
	 
	 	 	 	 	 	 	 	 	 	 
	Endeavour Energy
Netherlands B.V.
	 	Amsterdam	 	Teleportboulevard	 	Private company with	 	Netherlands	 	34229296
	 	 	 	140, 1043 EJ	 	limited liability	 	 	 	 
	 	 	 	Amsterdam, The	 	under the laws of	 	 	 	 
	 		 	Netherlands	 	the Netherlands	 		 	






 









 





SCHEDULE VII




CHANGES IN NAME, LOCATION ETC.





	1.	 	ENDEAVOUR OPERATING CORPORATION
	 
	 	 	
Change of name from CSOR Acquisition Corp. on 26 February 2004
	 
	 	 	Change of address from 1000 Main Street, Suite 3300, Houston, Texas, 77002 on or about 15
February 2008
	 
	2.	 	ENDEAVOUR INTERNATIONAL CORPORATION
	 
	 	 	
Change of name from Continental Southern Resources, Inc. on 27 February 2004
	 
	 	 	Change of address from 1000 Main Street, Suite 3300, Houston, Texas, 77002 on or about 15
February 2008
	 
	3.	 	ENDEAVOUR ENERGY NORTH SEA LLC

	 
	 	 	
None
	 
	4.	 	ENDEAVOUR ENERGY NORTH SEA, L.P.

	 
	 	 	
None
	 
	5.	 	ENDEAVOUR ENERGY NEW VENTURES INC.

	 
	 	 	
Change of Name from END Operating Management Company on August 20, 2008
	 
	 	 	Change of address from 1000 Main Street, Suite 3300, Houston, Texas, 77002 on or about 15
February 2008
	 
	6.	 	END MANAGEMENT COMPANY

	 
	 	 	
Change of address from 1000 Main Street, Suite 3300, Houston, Texas, 77002 on or about 15
February 2008
	 
	7.	 	ENDEAVOUR INTERNATIONAL HOLDING B.V.

	 
	 	 	
None
	 
	8.	 	ENDEAVOUR ENERGY NETHERLANDS B.V.
	 
	 	 	
None





 









 





SCHEDULE VIII




LOCATIONS OF EQUIPMENT AND INVENTORY




ENDEAVOUR INTERNATIONAL CORPORATION




	 	 	 

	Locations of Equipment

	 	N/A
	Locations of Inventory

	 	N/A
	Leased Real Property

	 	14,514 sq. ft. of rentable area on Floor 16 of the
First City Tower Building, 1001 Fannin Street,
Houston, Texas 77002, leased through December 1,
2010;






ENDEAVOUR OPERATING CORPORATION




	 	 	 

	Locations of Equipment

	 	Alabama, Louisiana, Montana, New Mexico,
Pennsylvania and Texas.
	Locations of Inventory

	 	Alabama, Louisiana, Montana, New Mexico,
Pennsylvania and Texas.
	Leased Real Property

	 	5,025 sq. ft. of rentable area at 1125 17th Street,
Suite 1525, Denver, Colorado 80202, leased through
December 31, 2011.






ENDEAVOUR ENERGY NORTH SEA LLC




	 	 	 

	Locations of Equipment

	 	N/A
	Locations of Inventory

	 	N/A






ENDEAVOUR ENERGY NORTH SEA, L.P.




	 	 	 

	Locations of Equipment

	 	N/A
	Locations of Inventory

	 	N/A






ENDEAVOUR ENERGY NEW VENTURES INC.




	 	 	 

	Locations of Equipment

	 	N/A
	Locations of Inventory

	 	N/A






END MANAGEMENT COMPANY




	 	 	 

	Locations of Equipment

	 	N/A
	Locations of Inventory

	 	N/A






 









 





EXHIBIT A

to

THE SECURITY AGREEMENT




FORM OF CONSENT AND AGREEMENT




          The undersigned hereby (a) acknowledges notice of, and consents to the terms and provisions
of, the Security Agreement dated as of August 16, 2010 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement”; the terms
defined therein being used herein as therein defined) from                                          (the “Grantor”)
and certain other grantors from time to time party thereto to Cyan Partners, LP, as Collateral
Agent, for the Secured Creditors, (b) consents in all respects to the pledge and assignment to the
Collateral Agent of all of the Grantor’s right, title and interest in, to and under the Assigned
Agreement (as defined below) pursuant to the Security Agreement, (c) acknowledges that the Grantor
has provided it with notice of the right of the Collateral Agent in the exercise of its rights and
remedies under the Security Agreement to make all demands, give all notices, take all actions and
exercise all rights of the Grantor under the Assigned Agreement, and (d) agrees with the Collateral
Agent that:





     (1) A true copy of the agreement between the undersigned and the Grantor dated                     
       ,                     (the “Assigned Agreement”), including, without limitation, all
amendments, modifications, restatements and supplements is attached hereto as Schedule 1.
The Assigned Agreement is in full force and effect, and the undersigned is not aware of any
default under the Assigned Agreement or any event that would give any party the right to
terminate or rescind the Assigned Agreement. No prepayments have been made of any amounts
to become due under the Assigned Agreement.




     (2) The undersigned will make all payments to be made by it under or in connection with
the Assigned Agreement directly to a Pledged Deposit Account or otherwise in accordance with
the instructions of the Collateral Agent.




     (3) All payments referred to in paragraph 2 above shall be made by the undersigned
irrespective of, and without deduction for, any counterclaim, defense, recoupment or set off
and shall be final, and the undersigned will not seek to recover from any Secured Creditor
for any reason any such payment once made.




     (4) The Collateral Agent or its designee shall be entitled to exercise any and all
rights and remedies of the Grantor under the Assigned Agreement in accordance with the terms
of the Security Agreement, and the undersigned shall comply in all respects with such
exercise.




     (5) The undersigned will not, without the prior written consent of the Collateral
Agent, (i) cancel or terminate the Assigned Agreement or consent to or accept any
cancellation or termination thereof, or (ii) amend, amend and restate, supplement or
otherwise modify the Assigned Agreement, except, in each case, to the extent otherwise
permitted under the Credit Agreement referred to in the Security Agreement.



 









 






     (6) In the event of a default by the Grantor in the performance of any of its obligations
under the Assigned Agreement, or upon the occurrence or non-occurrence of any event or condition
under the Assigned Agreement which would immediately or with the passage of any applicable grace
period or the giving of notice, or both, enable the undersigned to terminate or suspend its
obligations under the Assigned Agreement, the undersigned shall not terminate the Assigned
Agreement until it first gives the Collateral Agent written notice of the default and permits the
Collateral Agent to cure the default within a period of 60 days after the later of (i) notice of
default having been given to the Collateral Agent by the undersigned and (ii) the expiration of the
applicable cure period provided in the Assigned Agreement for the Grantor to cure the default.




     (7) The undersigned shall deliver to the Collateral Agent, concurrently with the delivery
thereof to the Grantor, a copy of each notice, request or demand given by the undersigned pursuant
to the Assigned Agreement.




     (8) Except as specifically provided in this Consent and Agreement, neither the Collateral
Agent nor any other Secured Creditor shall have any liability or obligation under the Assigned
Agreement as a result of this Consent and Agreement, the Security Agreement or otherwise.




     (9) Upon the enforcement of the Security Agreement by the Collateral Agent and the transfer of
the Assigned Agreement to a transferee, the undersigned will recognize the transferee as the
counterparty to the Assigned Agreement in the place and stead of the Grantor.



          In order to induce the Lenders to make Terms Loans, the Approved Third Party Credit Providers
to enter into Hedging Agreements with one or more Grantors from time to time and the Approved Third
Party Credit Providers to provide Third Party Letters of Credit for the account of one or more
Grantors from time to time, the undersigned repeats and reaffirms for the benefit of the Secured
Creditors the representations and warranties made by it in the Assigned Agreement.




          This Consent and Agreement shall be binding upon the undersigned and its successors and
assigns, and shall inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Secured Creditors and their successors, transferees and assigns. This
Consent and Agreement shall be governed by and construed in accordance with the laws of the State
of New York.




[SIGNATURES ON FOLLOWING PAGE]




 









 





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




          Dated:                             , 20[       ]




	 	 	 	 	 
	 	[NAME OF OBLIGOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





EXHIBIT B

to

THE SECURITY AGREEMENT




FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT




          This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and restated, supplemented
or otherwise modified from time to time, the “IP Security
Agreement”) dated          , 2010,
is made by the Persons listed on the signature pages hereof (collectively, the “Grantors”)
in favor of Cyan Partners, LP as Collateral Agent (as defined in the Security Agreement referred to
below) for the Secured Creditors (as defined in the Security Agreement referred to below).




          WHEREAS, Endeavour International Corporation, a Delaware corporation and Endeavour Energy UK
Limited, a United Kingdom private limited company, have entered into a Credit Agreement dated as of
August 16, 2010 (said agreement, as it may hereafter be amended, amended and restated, supplemented
or otherwise modified from time to time, being the “Credit Agreement”) with the lenders
party thereto from time to time (the “Lenders”) and the Cyan Partners, LP, as
Administrative Agent.




          WHEREAS, as a condition precedent to the making of Terms Loans by the Lenders under the Credit
Agreement, the entry into Hedging Agreement by the Approved Third Party Credit Providers from time
to time and the issuance by the Approved Third Party Credit Providers of Third Party Letters of
Credit for the account of one or more Grantors from time to time, each Grantor has executed and
delivered that certain Security Agreement dated August 16, 2010 made by the Grantors to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement”). Terms defined in the Security Agreement and not otherwise
defined herein are used herein as defined in the Security Agreement.




          WHEREAS, under the terms of the Security Agreement, the Grantors have granted to the
Collateral Agent, for the benefit of the Secured Creditors, a security interest in, among other
property, certain intellectual property of the Grantors, and have agreed therein to execute this IP
Security Agreement for recording with the U.S. Patent and Trademark Office, the United States
Copyright Office and other governmental authorities within ten Business Days following the
acquisition of any After-Acquired Intellectual Property.




          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Grantor agrees as follows:




          SECTION 1. Grant of Security. Each Grantor hereby grants to the Collateral Agent for
the benefit of the Secured Creditors a security interest in all of such Grantor’s right, title and
interest in and to the following (the “Collateral”):





     (i) the patents and patent applications set forth in Schedule A hereto (the
“Patents”);



 









 






     (ii) the trademark and service mark registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in United
States intent-to-use trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark applications under applicable federal law),
together with the goodwill symbolized thereby (the “Trademarks”);




     (iii) all copyrights, whether registered or unregistered, now owned or hereafter
acquired by such Grantor, including, without limitation, the copyright registrations and
applications and exclusive copyright licenses set forth in Schedule C hereto (the
“Copyrights”);




     (iv) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto;




     (v) any and all claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with respect to any of
the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise
recover, such damages; and




     (vi) any and all proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to, and supporting obligations relating to, any
and all of the Collateral of or arising from any of the foregoing.



          SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral by each Grantor under this IP Security Agreement secures the payment of all Secured
Obligations of such Grantor now or hereafter existing, whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, penalties, fees, indemnifications,
contract causes of action, costs, expenses or otherwise. Without limiting the generality of the
foregoing, this IP Security Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Secured Obligations and that would be owed by such Grantor to any Secured
Creditor under the Secured Debt Agreements but for the fact that such Secured Obligations are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Credit Party.




          SECTION 3. Recordation. Each Grantor authorizes and requests that the Register of
Copyrights, the Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer record this IP Security Agreement.




          SECTION 4. Execution in Counterparts. This IP Security Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.




          SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has been entered
into in conjunction with the provisions of the Security Agreement. Each Grantor






 









 







does hereby acknowledge and confirm that the grant of the security interest hereunder to, and
the rights and remedies of, the Collateral Agent with respect to the Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are incorporated herein by
reference as if fully set forth herein.




          SECTION 6. Governing Law. This IP Security Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.




[Signatures on following page]




 









 





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




	 	 	 	 	 
	 	[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for Notices:

 	 
	 	 	 
	 	 	 
	 	 	 




 









 





EXHIBIT C

to

THE SECURITY AGREEMENT




FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT




          This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this “IP Security Agreement
Supplement”) dated                             , 20 [       ], is made by the Person listed on the signature page hereof
(the “Grantor”) in favor of Cyan Partners, LP, as Collateral Agent (such term used herein
as defined in the Security Agreement referred to below); for the Secured Creditors (used herein as
defined in the Security Agreement referred to below).




          WHEREAS, Endeavour International Corporation, a Delaware corporation and Endeavour Energy UK
Limited, a United Kingdom private limited company, have entered into a Credit Agreement dated as of
August 16, 2010 (said agreement, as it may hereafter be amended, amended and restated, supplemented
or otherwise modified from time to time, being the “Credit Agreement”) with certain lenders
(the “Lenders”) and the Cyan Partners, LP, as Administrative Agent.




          WHEREAS, pursuant to the Credit Agreement, the Grantor and certain other Persons have executed
and delivered that certain Security Agreement dated August 16, 2010 made by the Grantor and such
other Persons to the Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”) and that certain Intellectual
Property Security Agreement dated as of
              , 20 [___] (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “IP Security Agreement”). Terms
defined in the Security Agreement and not otherwise defined herein are used herein as defined in
the Security Agreement.




          WHEREAS, under the terms of the Security Agreement, the Grantor has granted to the Collateral
Agent, for the benefit of the Secured Creditors, a security interest in the Additional Collateral
(as defined in Section 1 below) of the Grantor and has agreed to execute this IP Security Agreement
Supplement for recording with the U.S. Patent and Trademark Office, the United States Copyright
Office and other governmental authorities.




          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Grantor agrees as follows:




          SECTION 1. Grant of Security. The Grantor hereby grants to the Collateral Agent, for
the benefit of the Secured Creditors, a security interest in all of the Grantor’s right, title and
interest in and to the following (the “Additional Collateral”):





     (i) the patents and patent applications set forth in Schedule A hereto (the
“Patents”);




     (ii) the trademark and service mark registrations and applications set forth in
Schedule B hereto (provided that no security interest shall be granted in United
States intent-to-use trademark applications to the extent that, and solely during the period
in which, the grant of a security interest therein would impair the validity or
enforceability



 









 







of such intent-to-use trademark applications under applicable federal law), together
with the goodwill symbolized thereby (the “Trademarks”);




     (iii) the copyright registrations and applications and exclusive copyright licenses set
forth in Schedule C hereto (the “Copyrights”);




     (iv) all reissues, divisions, continuations, continuations-in-part, extensions,
renewals and reexaminations of any of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto;




     (v) all any and all claims for damages and injunctive relief for past, present and
future infringement, dilution, misappropriation, violation, misuse or breach with respect to
any of the foregoing, with the right, but not the obligation, to sue for and collect, or
otherwise recover, such damages; and




     (vi) any and all proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to, and supporting obligations relating to, any
and all of the foregoing or arising from any of the foregoing.



          SECTION 2. Security for Obligations. The grant of a security interest in the
Additional Collateral by the Grantor under this IP Security Agreement Supplement secures the
payment of all Secured Obligations of the Grantor now or hereafter existing, whether direct or
indirect, absolute or contingent, and whether for principal, interest, premiums, penalties, fees,
indemnifications, contract causes of action, costs, expenses or otherwise. Without limiting the
generality of the foregoing, this IP Security Agreement Supplement and the IP Security Agreement
secures the payment of all amounts that constitute part of the Secured Obligations and that would
be owed by the undersigned to any Secured Creditor under the Secured Debt Agreements but for the
fact that such Secured Obligations are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Credit Party




          SECTION 3. Recordation. The Grantor authorizes and requests that the Register of
Copyrights, the Commissioner for Patents and the Commissioner for Trademarks and any other
applicable government officer to record this IP Security Agreement Supplement.




          SECTION 4. Grants, Rights and Remedies. This IP Security Agreement Supplement has
been entered into in conjunction with the provisions of the Security Agreement. The Grantor does
hereby acknowledge and confirm that the grant of the security interest hereunder to, and the rights
and remedies of, the Collateral Agent with respect to the Additional Collateral are more fully set
forth in the Security Agreement, the terms and provisions of which are incorporated herein by
reference as if fully set forth herein.




          SECTION 6. Governing Law. This IP Security Agreement Supplement shall be governed by,
and construed in accordance with, the laws of the State of New York.







 









 








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




	 	 	 	 	 
	 	[NAME OF GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for Notices:

 	 
	 	 	 
	 	 	 
	 	 	 




 









 





EXHIBIT D

to

THE SECURITY AGREEMENT




FORM OF SECURITY AGREEMENT SUPPLEMENT




[DATE]




Cyan Partners, LP, as Collateral Agent for

the Secured Creditors

399 Park Avenue, 39th Floor

New York, New York 10022

Attn: Divya Gopal




ENDEAVOUR INTERNATIONAL CORPORATION



Ladies and Gentlemen:




          Reference is made to the Credit Agreement dated as of August 16, 2010 (said agreement, as it
may hereafter be amended, amended and restated, supplemented or otherwise modified from time to
time, being the “Credit Agreement”) among Endeavour International Corporation, a Delaware
corporation, Endeavour Energy UK Limited, a United Kingdom private limited company, various lenders
from time to time party thereto (the “Lenders”) and Cyan Partners, LP, as Administrative
Agent.




          Further reference is made to the U.S. Security Agreement, dated August 16, 2010, made by the
Grantors party thereto in favor of the Collateral Agent for the benefit of the Secured Creditors
(used herein as defined in such security agreement; such security agreement, as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Security
Agreement”). Terms defined in the Security Agreement and not otherwise defined herein are used
herein as defined in the Security Agreement.




          SECTION 1. Grant of Security. The undersigned hereby grants to the Collateral Agent,
for the benefit of the Secured Creditors, a security interest in all of its right, title and
interest in and to the following, in each case whether now owned or hereafter acquired by the
undersigned, wherever located and whether now or hereafter existing or arising (collectively, the
undersigned’s “Collateral”): all Equipment, Inventory, Receivables, Related Contracts,
Security Collateral (including, without limitation, the shares of stock and other Equity Interests
set forth on Part I of Schedule I hereto, the indebtedness set forth on Part II of
Schedule I hereto and the securities and securities/deposit accounts set forth on
Schedule II hereto), Agreement Collateral, Account Collateral (including, without
limitation, the deposit accounts set forth on Schedule IV hereto), Intellectual Property
Collateral, Commercial Tort Claims Collateral (including, without limitation, the commercial tort
claims described in Schedule V hereto), all books and records (including, without
limitation, customer lists, credit files, printouts and other computer output materials and
records) of the undersigned pertaining to any of the undersigned’s Collateral, and all proceeds of,
collateral for, income, royalties and other payments now or hereafter due and payable with respect
to, and supporting obligations relating to, any and all of the undersigned’s Collateral (including,
without limitation, proceeds, collateral and supporting obligations that






 









 







constitute property of the types described in this Section 1) and, to the extent not otherwise
included, all (A) payments under insurance (whether or not the Collateral Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, and (B) cash. Notwithstanding the
foregoing, the Collateral shall not include any Excluded Property until such time as any property
or assets shall no longer constitute Excluded Property.




          SECTION 2. Security for Obligations. The grant of a security interest in, the
Collateral by the undersigned under this Security Agreement Supplement and the Security Agreement
secures the payment of all Secured Obligations of the undersigned now or hereafter existing,
whether direct or indirect, absolute or contingent, and whether for principal, interest, premiums,
penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise.
Without limiting the generality of the foregoing, this Security Agreement Supplement and the
Security Agreement secures the payment of all amounts that constitute part of the Secured
Obligations and that would be owed by the undersigned to any Secured Creditor under the Secured
Debt Agreements but for the fact that such Secured Obligations are unenforceable or not allowable
due to the existence of a bankruptcy, reorganization or similar proceeding involving any Credit
Party.




          SECTION 3. Representations and Warranties. (a) The undersigned’s exact legal name,
location, chief executive office, type of organization, jurisdiction of organization and
organizational identification number is set forth in Schedule VI hereto. The undersigned
has no trade names other than as listed on Schedule IV hereto. Within the five years
preceding the date hereof, the undersigned has not changed its name, location, chief executive
office, type of organization, jurisdiction of organization or organizational identification number
from those set forth in Schedule VI hereto except as set forth in Schedule VII
hereto.




          (b) All of the Equipment of the undersigned is located at the places specified therefor in
Schedule VIII hereto. Within the five years preceding the date hereof, the undersigned has
not changed the location of its Equipment except as set forth in Schedule VII hereto.




          (c) The undersigned is not a beneficiary or assignee under any letter of credit, other than
the letters of credit described in Schedule IX hereto.




          (d) The undersigned hereby makes each other representation and warranty set forth in
Section 6 of the Security Agreement with respect to itself and the Collateral granted by
it.




          SECTION 4. Obligations Under the Security Agreement. The undersigned hereby agrees,
as of the date first above written, to be bound as a Grantor by all of the terms and provisions of
the Security Agreement to the same extent as each of the other Grantors. The undersigned further
agrees, as of the date first above written, that each reference in the Security Agreement to an
“Additional Grantor” or a “Grantor” shall also mean and be a reference to the undersigned, that
each reference to the “Collateral” or any part thereof shall also mean and be a reference to the
undersigned’s Collateral or part thereof, as the case may be, and that each






 









 







reference in the Security Agreement to a Schedule shall also mean and be a reference to the
schedules attached hereto.




          SECTION 6. Governing Law. This Security Agreement Supplement shall be governed by,
and construed in accordance with, the laws of the State of New York.1




	 	 	 	 	 
	 	Very truly yours,





[NAME OF ADDITIONAL GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for Notices:

 	 
	 	 	 
	 	 	 
	 	 	 





 




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




 









 










	 	 	 	 	 
	 	Acknowledged and agreed as of the date hereof:





CYAN PARTNERS, LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	Address for Notices:

 	 




 











 





Exhibit F-2




	 	 	 

	

	 	EXECUTION COPY






 





Dated ____ August 2010




DEBENTURE




between




ENDEAVOUR ENERGY UK LIMITED

as the Company




and




CYAN PARTNERS, LP

as Collateral Agent




 





White & Case LLP

5 Old Broad Street

London EC2N 1DW






 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	1. DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS

	 	 	2	 
	2. COVENANTS TO PAY

	 	 	7	 
	3. SECURITY

	 	 	9	 
	4. FLOATING CHARGE

	 	 	10	 
	5. FURTHER ASSURANCE

	 	 	13	 
	6. UNDERTAKINGS WITH RESPECT TO THE CHARGED ASSETS

	 	 	13	 
	7. FURTHER UNDERTAKINGS

	 	 	14	 
	8. ACCOUNTS AND RECEIPTS

	 	 	15	 
	9. THE COLLATERAL AGENT

	 	 	17	 
	10. RIGHTS OF THE COLLATERAL AGENT

	 	 	26	 
	11. EXONERATION

	 	 	28	 
	12. APPOINTMENT OF RECEIVER OR ADMINISTRATOR

	 	 	28	 
	13. RECEIVER’S POWERS

	 	 	29	 
	14. PROTECTION OF PURCHASERS

	 	 	30	 
	15. POWER OF ATTORNEY AND DELEGATION

	 	 	30	 
	16. APPLICATION OF MONIES RECEIVED UNDER THIS DEBENTURE

	 	 	31	 
	17. RELEASE OF SECURITY

	 	 	32	 
	18. POWER OF SEVERANCE

	 	 	32	 
	19. NEW ACCOUNTS

	 	 	32	 
	20. MISCELLANEOUS

	 	 	33	 
	21. NOTICES

	 	 	36	 
	22. CERTIFICATES AND DETERMINATIONS

	 	 	38	 
	23. PARTIAL INVALIDITY

	 	 	38	 
	24. COUNTERPARTS

	 	 	38	 
	25. THIRD PARTIES

	 	 	38	 
	26. GOVERNING LAW

	 	 	38	 
	27. ENFORCEMENT

	 	 	39	 
	SCHEDULE 1 FORM OF NOTICES

	 	 	40	 
	SCHEDULE 2 PROJECT AGREEMENTS

	 	 	44	 






(i)









 





THIS DEBENTURE is made on ___August 2010




BETWEEN:





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






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




IT IS AGREED as follows:





	1.	 	DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS
	 
	1.1	 	Definitions






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




2









 






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






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




3









 






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






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






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






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




4









 






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






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




5









 












	1.6	 	Intercreditor Agreement






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






	1.7	 	Incorporation






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






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






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




6









 












	2.	 	COVENANTS TO PAY
	 
	2.1	 	Covenant to pay Secured Liabilities






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






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




7









 






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






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






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




8









 












	3.	 	SECURITY
	 
	3.1	 	General






	 	(a)	 	All the Security created under this Debenture:






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






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






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






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






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




9









 






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






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






	4.	 	FLOATING CHARGE
	 
	4.1	 	Creation of floating charge






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






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






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




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






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






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






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




11









 












	4.6	 	Project Agreements






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






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






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






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






	4.7	 	Gas sales agreements






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






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




12









 






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






	5.	 	FURTHER ASSURANCE






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






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






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






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






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




13









 












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






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






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




14









 












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






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






	 	(a)	 	for the purposes of granting security over:






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






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






	8.	 	ACCOUNTS AND RECEIPTS
	 
	8.1	 	Accounts General






	 	(a)	 	The Company will:






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






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




15









 












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






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






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






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






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






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




16









 












	9.	 	THE COLLATERAL AGENT
	 
	9.1	 	The Collateral Agent






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






	9.2	 	Trust






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






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






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






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






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




17









 






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






	9.3	 	Additional trustees






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






	9.4	 	Remuneration and indemnity






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






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




18









 












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






	9.5	 	Exclusion of liability






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




19









 






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






	9.6	 	Instructions






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






	9.7	 	Rights and discretions of the Collateral Agent






	 	(a)	 	The Collateral Agent may rely on:






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






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






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




20









 






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






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






	9.8	 	Information






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






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






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






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




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






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






	 	(a)	 	The Collateral Agent shall:






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




22









 






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






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






	9.15	 	Legal restrictions and confidentiality






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




23









 






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






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






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






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




24









 






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






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






	9.20	 	Insolvency Events






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






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






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






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




25









 






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






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






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






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






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






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






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






26











 






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






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




27









 












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






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






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






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




28









 












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






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




29









 






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






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






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




30









 






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






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






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






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






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




31









 












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






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






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




32









 






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






	20.	 	MISCELLANEOUS
	 
	20.1	 	The Company
	 
	 	 	This Debenture shall be binding on the successors and assigns of the Company.

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






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






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




33









 






	20.5	 	Continuing Security






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






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






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




34









 






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






	20.7	 	Non competition






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






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






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






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




35









 






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




36









 






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





	 	 	 	 	 

	 
	 	Company
	 	 
	 	 	 
	 	 
	 	 	Address:

	 	Endeavour Energy UK Limited
	 	 	 

	 	114 St. Martin’s Lane
	 	 	 

	 	London WC2N 4BE
	 	 	 

	 	England
	 	 	 
	 	 
	 	 	For the Attention of:

	 	Mike Kirksey
	 	 	 
	 	 
	 	 	Fax Number:

	 	+44 207 451 2352
	 	 	 
	 	 
	 	 	Email:

	 	Mike.Kirksey@endeavourcorp.com
	 	 	 
	 	 
	 	 	With a copy to:

	 	Endeavour International Corporation
	 	 	 

	 	1001 Fannin Street, Suite 1600
	 	 	 

	 	Houston, Texas 77002
	 	 	 

	 	United States of America
	 	 	 
	 	 
	 	 	For the Attention of:

	 	Mike Kirksey / Cathy Stubbs
	 	 	 
	 	 
	 	 	Fax Number:

	 	+1 713 307 8794
	 	 	 
	 	 
	 	 	Email:

	 	Mike.Kirksey@endeavourcorp.com /
	 	 	 

	 	Cathy.Stubbs@endeavourcorp.com
	 	 	 
	 	 
	 	 	Collateral Agent
	 	 
	 	 	 
	 	 
	 	 	Address:

	 	Cyan Partners, LP
	 	 	 

	 	399 Park Avenue
	 	 	 

	 	39th Floor
	 	 	 

	 	New York 10022
	 	 	 

	 	United States of America
	 	 	 
	 	 
	 	 	Fax Number:

	 	+1 212 380 5871
	 	 	 
	 	 
	 	 	For the Attention of:

	 	Divya Gopal







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






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




37









 












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






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






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




38









 






	27.	 	ENFORCEMENT
	 
	27.1	 	Jurisdiction






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






	27.2	 	Waiver of immunity
	 
	 	 	The Company irrevocably and unconditionally:






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




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







39









 








SCHEDULE 1

FORM OF NOTICES




[Headed notepaper of the Company]



BY REGISTERED MAIL



To: [relevant counterparty]



Dated [•]



Dear Sirs




Notice of [Assignment]/[Charge]



We hereby give you notice that by a debenture dated [•] August 2010 (the “Debenture”) [and a Scots
law Assignation of Security dated [•] August 2010 (the “Assignation”)/a Scots law Bond and Floating
Charge dated [•] August 2010 (the “Charge”)] made between ourselves (the “Company”) and Cyan
Partners, LP (the “Collateral Agent”) all of our rights to and title and interest from time to time
in the property described in the Annex to this notice ([“Assigned Property”]/[“Charged Property”])
was [assigned]/[charged] by us to the Collateral Agent in accordance with the provisions of the
relevant agreements.



On behalf of the Collateral Agent, we hereby irrevocably instruct and authorise you:





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




Would you please acknowledge receipt of this Notice by returning to us the copy of this Notice duly
signed by your authorised signatory.



Your acknowledgement will be deemed to confirm in favour of the Collateral Agent that you:





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







 




			
	1	 	Delete if not applicable.




40









 











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




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



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




	 	 	 	 	 
	Yours faithfully

 	 
	
 	 
	for and on behalf of 	 
	Endeavour Energy UK Limited 	 



41









 






	 	 	 	 	 



Annex




Description of [Assigned Property]/[Charged Property]

[description]



42









 





[On copy of Notice]



To: [Collateral Agent] and [the Company]



Dated [•]



Dear Sirs




Notice of [Assignment]/[Charge]



We acknowledge receipt of the enclosed Notice of [Assignment]/[Charge].




	 	 	 	 	 
	Yours faithfully

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



43









 






	 	 	 	 	 



SCHEDULE 2

PROJECT AGREEMENTS





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




44









 






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




45









 











	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	SIGNED AS A DEED

	 	 	)	 	 	 	 
	for and on behalf of

	 	 	)	 	 	 	 
	ENDEAVOUR ENERGY UK LIMITED

	 	 	)	 	 	ENDEAVOUR ENERGY UK LIMITED by	 
	acting by

	 	 	)	 	 	 	 
	of 1001 Fannin Street, Suite 1600, Houston,

	 	 	)	 	 	 	 
	Texas 77002, United States of America

	 	 	)	 	 	 	 
	in the exercise of a power of attorney

	 	 	)	 	 	 	 
	dated 3 August 2010 granted by

	 	 	)	 	 	 	 
	 

	 	 	 	 	 	 	 
	ENDEAVOUR ENERGY UK LIMITED

	 	 	)	 	 	 	 
	 
	 	 	 	 	 	 	 
	In the presence of:
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Signature of witness
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Name of witness
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	(in BLOCK CAPITALS)
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Address of Witness
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	 	 
	 

	 	 	)	 	 	 	 
	for and on behalf of

	 	 	)	 	 	 	 
	CYAN PARTNERS, LP

	 	 	)	 	 	 	 







46











 





Exhibit F-3




	 	 	 
	
	EXECUTION COPY
	 	 	 
	 
	 	 






Dated ____ August 2010




CHARGE OVER SHARES




between




ENDEAVOUR ENERGY UK LIMITED

as the Company




and




CYAN PARTNERS, LP

as Collateral Agent




 





White & Case LLP

5 Old Broad Street

London EC2N 1DW



 









 





TABLE OF CONTENTS




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






(i)









 





THIS DEED is made on ___ August 2010




BETWEEN:





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




IT IS AGREED as follows:





	1.	 	DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS
	 
	1.1	 	Definitions






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






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




 









 












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






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






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




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






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




3









 












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






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






	1.8	 	Incorporation






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






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




4









 












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






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






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






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




5









 












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






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






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




6









 












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






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






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






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






	6.5	 	Dividends






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




7









 












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






	6.6	 	Voting Rights and other matters






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






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




8









 












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






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






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






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






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




9









 












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






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






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






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






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






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




10









 












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






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




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






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




12









 












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






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






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




13









 












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






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






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






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






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




14









 












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






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






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






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




15









 












	 	 	monies shall not operate to reduce the Secured Liabilities at the time when that Secured
Creditor received notice.
	 
	16.	 	MISCELLANEOUS
	 
	16.1	 	The Company
	 
	 	 	This Deed shall be binding on the successors and assigns of the Company.

	 
	16.2	 	Assignment and transfer
	 
	 	 	The Company may not assign or transfer any of its rights or obligations under this Deed
without the prior consent of each Lender. The Collateral Agent may assign and transfer all
or any part of its rights and obligations under this Deed to a replacement collateral agent
appointed pursuant to the terms of the Credit Agreement.
	 
	16.3	 	Disclosure
	 
	 	 	The Collateral Agent may disclose to any of its Affiliates and any other person:






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






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






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






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




16









 












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






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






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




17









 












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






	16.7	 	Non-competition






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






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






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






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




18









 












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




19









 












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





	 	 	 	 	 
	 

	 	Address:
	 	Endeavour Energy UK Limited
	 

	 	 	 	114 St. Martin’s Lane
	 

	 	 	 	London WC2N 4BE
	 

	 	 	 	England
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Mike Kirksey
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+44 207 451 2352
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Endeavour International Corporation
	 

	 	 	 	1001 Fannin Street, Suite 1600
	 

	 	 	 	Houston, Texas 77002
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Mike Kirksey / Cathy Stubbs
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+1 713 307 8794
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com /
	 

	 	 	 	Cathy.Stubbs@endeavourcorp.com
	 
	 	 	 	 
	 

	 	Collateral Agent	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Cyan Partners, LP
	 

	 	 	 	399 Park Avenue
	 

	 	 	 	39th Floor
	 

	 	 	 	New York 10022
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+1 212 380 5871
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Divya Gopal







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






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






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




20









 












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






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






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






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




21









 












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






	23.2	 	Waiver of immunity
	 
	 	 	The Company irrevocably and unconditionally:






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




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








22









 








	 	 	 	 	 	 	 
	SIGNED AS A DEED

	)	 	 	 	 	 
	for and on behalf of

	)	 	 	 	 	 
	ENDEAVOUR ENERGY UK LIMITED  	)	 	 	ENDEAVOUR ENERGY UK LIMITED by
	acting by

	)	 	 	 	 	 
	of 1001 Fannin Street, Suite 1600, Houston,

	)	 	 	 	 	 
	Texas 77002, United States of America

	)	 	 	 	 	 
	in the exercise of a power of attorney

	)	 	 	 	 	 
	dated 3 August 2010 granted by

	)	 	 	 

	 	 
	ENDEAVOUR ENERGY UK LIMITED

	)	 	 	 	 	 
	 
	 	 	 	 	 	 






	 	 	 	 	 	 	 	 
	In the presence of:
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Signature of witness
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Name of witness
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	(in BLOCK CAPITALS)
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Address of Witness
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 


	 	 	 	 	 	 	 






	 	 	 	 	 	 	 
	SIGNED by

	 	)	 	 	 	 	 
	 

	 	)	 	 	 	 	 
	for and on behalf of

	 	)	 	 	 	 	 
	CYAN PARTNERS, LP

	 	)	 	 	 	 	 







23











 





			
	
	 	EXECUTION COPY






 





Dated ____ August 2010




CHARGE OVER SHARES




between




ENDEAVOUR ENERGY NORTH SEA, L.P.

as the Company




and




CYAN PARTNERS, LP

as Collateral Agent




 





White & Case LLP

5 Old Broad Street

London EC2N 1DW








 









 








TABLE OF CONTENTS




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






(i)









 





THIS
DEED is made on ___ August 2010




BETWEEN:





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




IT IS AGREED as follows:





	1.	 	DEFINITIONS, CONSTRUCTION AND INCORPORATION OF TERMS
	 
	1.1	 	Definitions






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




 









 












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






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






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






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




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






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




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

	 
	1.8	 	Intercreditor Agreement






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






	1.9	 	Incorporation






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






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




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






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






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






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




5









 












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






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






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






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




6









 












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






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






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






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






	6.5	 	Dividends






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




7









 












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






	6.6	 	Voting Rights and other matters






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






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




8









 












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






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






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






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






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




9









 












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






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






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






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






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






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




10









 












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






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




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






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




12









 












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






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






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




13









 












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






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






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






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






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




14









 












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






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






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






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




15









 












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






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






	 	 	any information about the Company, the Credit Documents or this Deed as the Collateral Agent
shall consider appropriate if, in relation to Clause 16.3(b), the person to whom the
information is to be given has entered into a Confidentiality Undertaking.
	 
	16.4	 	Property
	 
	 	 	This Deed is and will remain the property of the Collateral Agent.
	 
	16.5	 	Continuing Security






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




16









 












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






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






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




17









 












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






	16.7	 	Non-competition






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






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






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






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




18









 












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




19









 












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





	 	 	 	 	 

	 

	 	Company	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Endeavour Energy North Sea, L.P.
	 

	 	 	 	c/o Corporation Trust Company
	 

	 	 	 	1209 Orange Street
	 

	 	 	 	Wilmington
	 

	 	 	 	Delaware 19801
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	For the Attention of: 
	 	Mike Kirksey
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Endeavour Energy North Sea, L.P.
	 

	 	 	 	c/o Endeavour International Corporation
	 

	 	 	 	1001 Fannin Street, Suite 1600
	 

	 	 	 	Houston, Texas 77002
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Mike Kirksey / Cathy Stubbs
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+1 713 307 8794
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com /
	 

	 	 	 	Cathy.Stubbs@endeavourcorp.com
	 
	 	 	 	 
	 

	 	Collateral Agent	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Cyan Partners, LP
	 

	 	 	 	399 Park Avenue
	 

	 	 	 	39th Floor
	 

	 	 	 	New York 10022
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+1 212 380 5871
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Divya Gopal







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






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






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




20









 












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






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






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






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




21









 












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






	23.2	 	Waiver of immunity
	 
	 	 	The Company irrevocably and unconditionally:






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




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








22









 








	 	 	 	 	 	 	 

	SIGNED AS A DEED by

	 	 	 	 	)	 
	ENDEAVOUR ENERGY NORTH SEA, L.P.

	 	 	 	 	)	 
	acting by

	 	 	 	 	)	 
	Endeavour Energy North Sea LLC, as sole general	 	 	)	 
	partner

	 	 	 	 	)	 
	 

	 	 	 	 	)	 
	In the presence of:

	 	 	 	 	)	 
	 

	 	 	 	 	)	 
	 
	 	 	 	 	 	 
	Signature of witness
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name of witness
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	(in BLOCK CAPITALS)
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address of witness
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED by

	 	 	 	 	)	 
	 

	 	 	 	 	)	 
	for and on behalf of

	 	 	 	 	)	 
	CYAN PARTNERS, LP

	 	 	 	 	)	 
	 

	 	 	 	 	)	 
	 

	 	 	 	 	)	 







23











 





Exhibit F-4




EG/JJK

Deed of pledge of shares

Endeavour International Holding B.V.



On this, the sixteenth day of August two thousand and ten, appeared before me, Albert Hendrik
Geerling, civil law notary at Rotterdam, the Netherlands:





	1.	 	Jan Joris van Kampen, employed at the offices of me, civil law notary, located at 3014 DA
Rotterdam, the Netherlands, Weena 750, born in Amsterdam, the Netherlands, on the nineteenth
day of January nineteen hundred eighty-three,
and acting for the purpose of this deed as the holder of a written power of attorney from:






	 	a.	 	Endeavour Operating Corporation a company incorporated and existing under the
laws of the State of Delaware, United States of America, having its registered office
at 1000 Main Street, Suite 3300, Houston, Texas, 77002, United States of America
which company is hereinafter referred to as: the ‘Pledgor’;
	 
	 	b.	 	Endeavour International Holding B.V. a company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid), having its corporate seat at
Amsterdam, the Netherlands (address: 1043 EJ Amsterdam, the Netherlands
Teleportboulevard 140, Trade Register number 34229293),
which company is hereinafter referred to as: the ‘Company’; and






	2.	 	Jesler Jan Hartman Kok, born at Groningen, the Netherlands on the twenty-sixth day of
November nineteen hundred eighty, residing at 3031 SK Rotterdam, the Netherlands, Brussestraat
18c, holder of Dutch passport number NK5917452, acting for the purpose of this deed as the
holder of a written power of attorney from Cyan Partners, LP, a company organised and existing
under the laws of the State of Delaware, United States of America having its registered office
at 399 Park Avenue, New York, New York, United States of America 10022,
which company is hereinafter referred to as: the ‘Pledgee’.





Powers of attorney



The powers of attorney are evidenced by three (3) private deeds, which will be attached to this
deed.



The persons appearing, acting in their capacities as mentioned above, declared as follows:





	A.	 	on the sixteenth day of August two thousand and ten, inter alios, the Pledgee (as
Administrative Agent, Sole Arranger and Sole Book Runner), Endeavour Energy UK Limited as
Borrower, and Endeavour International Corporation as Holdings, entered into a one hundred and
sixty million American dollars (USD 160,000,000) term loan facility agreement (the ‘Credit
Agreement’);
	 
	B.	 	on the sixteenth day of August two thousand and ten, inter alios, the Pledgee, the Pledgor
and the Company entered into a guarantee agreement pursuant to which inter alios each of the
Pledgor and the Company guarantees any and all obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom), whether present or future, actual or
contingent, that may at any time be owing by a Credit Party (as defined in the Credit
Agreement) to the Secured




1









 






	 	 	Creditors (as defined in the Credit Agreement) under or pursuant to the Credit Documents
(as defined in the Credit Agreement) (the “Subsidiary Guaranty”);






	C.	 	the Present Shares (as defined below) were acquired by the Pledgor by virtue of the deed of
incorporation of the Company, executed on the twenty-seventh of June two thousand and five
before M.P. Bongard, civil-law notary in Amsterdam;
	 
	D.	 	the Pledgor has agreed to execute this present deed of pledge of shares (the “Deed”) as
security for the payment when due of the Secured Obligations (as defined below);
	 
	E.	 	it is envisaged that the Existing Security (as defined below) will be terminated pursuant to
a letter of termination of rights of pledge to be issued and signed by or on behalf of BNP
Paribas S.A. and to be signed for acknowledgement and receipt by — inter alios - the Pledgor
and the Company;
	 
	F.	 	it has been agreed that the voting rights attaching to the Shares (as defined below) will be
vested in the Pledgee subject to the suspensive conditions (opschortende voorwaarden) set out
in Clause 3 (Rights in respect of the Voting Rights) of this Deed;
	 
	G.	 	the articles of association of the Company permit the creation of a right of pledge on the shares in its capital and the vesting of voting rights attaching to such shares in the
Pledgee;
	 
	H.	 	the general meeting of shareholders of the Company has resolved to give the legally required
approval for the creation of the right of pledge, including the vesting of the voting rights
attaching to the Shares (as defined below) in the Pledgee, as evidenced by resolutions of the
general meeting of shareholders of the Company dated twenty nine July two thousand ten.




Consequently, the persons appearing declared:




It is hereby agreed as follows:





	1.	 	Definitions and interpretation
	 
	1.1	 	All capitalized terms used in this Deed including the recitals, and not otherwise defined
herein shall have the meaning assigned to them in the Credit Agreement.
	 
	1.2	 	a. Headings are for convenience of reference only.






	 	b.	 	Where the context so permits, the singular includes the plural and vice
versa.
	 
	 	c.	 	Save where the contrary is indicated, any reference in this Deed to the
parties or a party to this Deed shall be construed so as to include its or their
respective successors, transferees and assigns from time to time and any successor of
such a successor, transferee or assign in accordance with their respective interests.
	 
	 	d.	 	A ‘clause’ shall, subject to any indication to the contrary, be construed
as a reference to a clause of this Deed.




2









 












	 	e.	 	References to the Credit Agreement, the (other) Credit Documents, this
Deed, or any other agreement or document shall, where applicable, be deemed to be
references to such Credit Agreement, the (other) Credit Documents, this Deed, or any
other agreement or document as the same may have been, or may from time to time be,
extended, prolonged, amended, restated, supplemented, renewed or novated, as persons
may accede thereto as a party or withdraw therefrom as a party in part or in whole or
be released thereunder in part or in whole, and as facilities and financial services
are or may from time to time be granted, extended, prolonged, increased, reduced,
cancelled, withdrawn, amended, restated, supplemented, renewed or novated there
under.
	 
	 	f.	 	A statute or statutory provision shall be construed as a reference to such
statute or statutory provision as the same may have been, or may from time to time
be, amended or re-enacted and all instruments, orders, plans, regulations, by-laws,
permissions and directions at any time made there under.
	 
	 	g.	 	References to the Dutch Civil Code are references to het Nederlands
Burgerlijk Wetboek, references to the Dutch Bankruptcy Act are references to de
Nederlandse Faillissementswet.






	1.3	 	In this Deed the following words and expressions shall have the following meaning:






	 	•	 	‘Collateral’ means (i) the Shares and (ii) the Rights;
	 
	 	•	 	‘Conditions Precedent’ means each of the following conditions precedent
(opschortende voorwaarden): (i) the termination of the Existing Security, (ii) the
occurrence of an Event of Default, and (iii) the issuance of a Voting Rights Notice;
	 
	 	•	 	‘Default Notice’ means a notice in writing to be issued by the Pledgee to the
Pledgor and the Company upon or after the occurrence of an Event of Default;
	 
	 	•	 	‘Enforcement Event’ means the issuance of a Default Notice following an Event of
Default which also constitutes a default (verzuim) in the fulfillment of the Secured
Obligations within the meaning of Article 3:248 of the Dutch Civil Code;
	 
	 	•	 	‘Existing Security’ means the rights of pledge and all other security interests
created or purported to be created under or pursuant to:






	 	(a)	 	a notarial deed of first ranking pledge over the Present
Shares dated first of November two thousand six executed before H.B.H.
Kraak, civil law notary at Amsterdam between the Pledgor as pledgor, BNP
Paribas S.A. as pledgee and the Company as the company;
	 
	 	(b)	 	a notarial deed of second ranking pledge over the Present
Shares




3









 






	 	 	 	dated seven March two thousand eight executed before P.H.N. Quist, civil law
notary at Amsterdam between the Pledgor as pledgor, BNP Paribas S.A. as
pledgee and the Company as the company; and






	 	(c)	 	a notarial deed of third ranking pledge over the Present
Shares dated eight February two thousand ten executed before P.H.N. Quist,
civil law notary at Amsterdam between the Pledgor as pledgor, BNP Paribas
S.A. as pledgee and the Company as the company;






	 	•	 	‘Future Rights’ means any and all Rights in respect of Future Shares;
	 
	 	•	 	‘Future Shares’ means all shares in the capital of the Company which the Pledgor
may hold at any time, which may be issued to or acquired by the Pledgor after the
date of this Deed;
	 
	 	•	 	‘Intercreditor Agreement’ has the meaning ascribed thereto in the Credit
Agreement;
	 
	 	•	 	‘Parallel Debt’ has the meaning ascribed thereto in clause 2 (Parallel Debt) of
the Subsidiary Guaranty;
	 
	 	•	 	‘Parallel Obligations’ means the obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor to the Pledgee arising
from the Parallel Debt;
	 
	 	•	 	‘Present Shares’ means one hundred percent (100%) of the registered and paid-up shares in the issued capital of the Company, being one hundred eighty (180) shares,
each with a nominal value of one hundred Euro (EUR 100.-), numbered 1 to 180
inclusive;
	 
	 	•	 	‘Principal Obligations’ means any and all obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor under or pursuant to
the Credit Documents (whether now existing or hereafter created or arising) together
with all monies and liabilities payable or to be discharged by the Pledgor pursuant
to the terms of this Deed, other than obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) under the Parallel Obligations;
	 
	 	•	 	‘Rights’ means any and all rights to or under dividends, other distributions,
proceeds, options, warrants, claim rights and other similar rights, other than shares
in the capital of the Company, currently existing or in the future arising or
received with respect to or out of the Shares but excluding the Voting Rights;
	 
	 	•	 	‘Rights of Pledge’ means each of the rights of pledge created under this Deed;
	 
	 	•	 	‘Secured Obligations’ means collectively the Parallel Obligations and the
Principal Obligations to the extent owing to the Pledgee;
	 
	 	•	 	‘Security Period’ means the period beginning on the date hereof and




4









 






	 	 	 	ending on the earliest date upon which (a) all Secured Obligations have been
irrevocably paid and discharged, or have ceased to exist, and (b) all Rights of
Pledge have been released and discharged by the Pledgee in accordance with clause
8.2 below;






	 	•	 	‘Shares’ means the Present Shares and the Future Shares;
	 
	 	•	 	‘Voting Rights’ means the voting rights attached to the Shares;
	 
	 	•	 	‘Voting Rights Notice’ means a notice in writing by the Pledgee to the Pledgor and
the Company that it wishes to exercise the Voting Rights.






	2.	 	Pledge of the Shares and the other Collateral
	 
	2.1	 	The Pledgor hereby agrees with the Pledgee and hereby undertakes that the Pledgor shall grant
to the Pledgee the rights of pledge purported to be granted under or pursuant to this Deed.
	 
	2.2	 	As security for the payment and discharge in full, when due (whether at stated maturity, by
acceleration or otherwise), of the Secured Obligations, the Pledgor hereby grants, to the
Pledgee a right of pledge (pandrecht), on the Present Shares and, to the extent legally
possible hereby grants in advance (verpandt bij voorbaat) to the Pledgee a right of pledge on
the Future Shares, and the Pledgee hereby accepts such rights of pledge.
	 
	 	 	To the extent no valid pledge on the Future Shares is created by this Deed, the Pledgor
irrevocably and unconditionally undertakes to pledge to the Pledgee the Future Shares
immediately after the Pledgor has acquired such shares.
	 
	2.3	 	Subject to clause 3.2 with respect to dividends and other distributions, the Pledgor, to the
extent such pledge is not included in the Rights of Pledge in respect of the Shares, and to
the fullest extent possible as permitted by applicable law, hereby pledges the Rights in favor
of the Pledgee as security for the full and prompt payment and discharge of its Secured
Obligations and the Pledgee accepts such pledge.
	 
	 	 	To the extent no valid pledge on the Rights is created hereunder, the Pledgor, irrevocably
and unconditionally undertakes, immediately on demand by the Pledgee, to pledge in favor
of the Pledgee and to assign to the Pledgee the Rights subject to clause 3.2. under the
same terms and the same conditions as set forth in this Deed.
	 
	2.4	 	The Pledgor irrevocably and unconditionally undertakes to take such action (including the
execution of documents to be made up in form and substance satisfactory to the Pledgee) as and
when the Pledgee deems necessary in its reasonable opinion from time to time to create,
perfect and maintain a valid and enforceable right of pledge in favor of the Pledgee with
respect to the Collateral (and thereupon the Collateral shall become subject to a right of
pledge as provided in this Deed).
	 
	2.5	 	The Pledgor hereby grants to the Pledgee an irrevocable and non-exclusive power of attorney
(without obligation) to pledge to the Pledgee the Future Shares immediately after the Pledgor
has acquired such shares.




5









 






	 	 	This power of attorney includes the right of substitution.






	2.6	 	Each of the Rights of Pledge is one and indivisible (één en ondeelbaar).
Partial fulfillment of the Secured Obligations shall not extinguish the Rights of Pledge
proportionally.
	 
	2.7	 	The Rights of Pledge include all accessory rights (afhankelijke rechten) and all ancillary
rights (nevenrechten) attached to the Collateral.
	 
	2.8	 	The Company is hereby notified of the Rights of Pledge created by this Deed.
	 
	3.	 	Rights in respect of the Voting Rights
	 
	3.1	 	The Voting Rights are hereby vested in the Pledgee within the meaning of article 2:198
paragraph 3 of the Dutch Civil Code, subject to the Conditions Precedent being satisfied.
Therefore, provided that the Conditions Precedent have not been satisfied,
the Pledgor shall remain entitled and authorized to exercise the Voting
Rights, provided that the Pledgor may not exercise the Voting Rights in any
manner which could be prejudicial to any of the Secured Creditors.
As long as the Conditions Precedent have not been satisfied, the Pledgee
shall not have the rights which are granted to the holders of depositary
receipts issued for shares with the cooperation of a company.
	 
	3.2	 	Upon the Conditions Precedent having been satisfied:






	 	i.	 	the Pledgee shall be fully entitled, to the exclusion of the Pledgor, to
exercise the Voting Rights pertaining to the Shares;
	 
	 	ii.	 	in the event Dutch company law prevents the Voting Rights to return to the
Pledgor when the respective Event of Default has been cured or waived by the Pledgee,
the Pledgee shall at the request of the Pledgor (not to be unreasonably withheld or
delayed) give a power of attorney to the Pledgor to exercise the Voting Rights for as
long as no new Voting Rights Notice has been issued.
	 
	 	 	 	For the duration of such power of attorney clauses 3.2 (i) is not applicable.
	 
	 	 	 	Upon a new Voting Rights Notice being issued, the power of attorney shall
automatically terminate.
	 
	 	 	 	The Pledgor may not exercise the Voting Rights in any manner which could be
prejudicial to any of the Secured Creditors.






	4.	 	Dividends and other distributions upon issuance of Default Notice
	 
	4.1	 	Subject to Clause 4.2 of this Deed and subject to the suspensive condition (opschortende
voorwaarde)of the termination of the Existing Security the Pledgee shall be entitled to
receive, retain and utilize any and all dividends and other distributions received in cash or
other payment of money in respect of the Collateral.
	 
	4.2	 	The Pledgee grants permission to the Pledgor, within the meaning of article 3:246 paragraph 4
of the Dutch Civil Code to receive, retain and utilize any and all dividends and other
distributions received in cash or other payment of




6









 






	 	 	money in respect of the Collateral until such permission has
been withdrawn by means of a Default Notice issued by the
Pledgee.






	4.3	 	Upon the Default Notice being issued:






	 	i.	 	all rights of the Pledgor to receive dividends and other distributions
pursuant to the Rights shall automatically cease, and thereupon the Pledgee shall
have the sole right to receive and hold as collateral such dividends and other
distributions and such dividends or other distributions must be paid directly to the
Pledgee or as it may direct;
	 
	 	ii.	 	the Pledgee shall be entitled to collect any repayment on the Shares
(terugbetaling op aandelen) and all liquidation proceeds, if any, which are to be
distributed in respect of the Shares upon dissolution and liquidation of the Company
or otherwise;
	 
	 	iii.	 	all payments which are received by the Pledgor contrary to the provisions-
of this clause 4 shall be received on behalf of and for the benefit of the Pledgee,
shall be segregated from the other assets of the Pledgor and shall be immediately
paid over or delivered (with any necessary endorsements) to the Pledgee or its
authorized designee or as the Pledgee may otherwise direct as collateral in the exact
form as received, to be held by the Pledgee as collateral and as further collateral
security for the Secured Obligations. This is without prejudice to any right the
Pledgee may have against the person who made the payment.




5. Representations and warranties





	 	 	The Pledgor represents and warrants that the following is true and correct on the date of
this Deed and each time any Future Shares and/or Future Rights will be pledged to the
Pledgee:






	 	i.	 	the Present Shares are and each Future Share will be, fully paid-up and the
Collateral is free and clear of any lien, charge, encumbrance with any restricted
rights (beperkte rechten), attachment (beslag), or any other right or security
interest whatsoever, other than: (i) those created under this Deed, (ii) the Existing
Security and (iii) and any encumbrances permitted under the Credit Documents;
	 
	 	ii.	 	the Pledgor holds full and exclusive title to the Collateral and is
authorized (beschikkingsbevoegd) to create a right of pledge thereover;
	 
	 	iii.	 	the Pledgor acquired the Present Shares by incorporation of the Company,
executed by deed on the twenty-seventh of June two thousand and five before M.P.
Bongard, civil-law notary in Amsterdam;
	 
	 	iv.	 	no depositary receipts (certificaten van aandelen) have been issued for the
Present Shares or will be issued for the Future Shares with the concurrence of the
Company; and
	 
	 	v.	 	all information provided by the Pledgor with regard to this deed is correct
and complete.









7









 






6 Undertakings





	6.1	 	Except to the extent permitted pursuant to the Credit Documents, the Pledgor undertakes not
to waive without the prior written consent of the Pledgee (not to be unreasonably withheld or
delayed), any accessory rights (afhankelijke rechten) or ancillary rights (nevenrechten)
attached to the Collateral and in general not to perform any acts which result or could result
in a material reduction of the value of the Shares.
	 
	6.2	 	Except to the extent permitted pursuant to the Credit Documents, the Pledgor shall not,
without the prior written consent of the Pledgee (not to be unreasonably withheld or delayed),
transfer or further pledge or otherwise encumber any of the Shares or agree to a court
settlement or an out-of-court settlement (gerechtelijk or buitengerechtelijk akkoord) in
respect of the Shares.
	 
	6.3	 	The Pledgor shall, at the Pledgee’s first request, provide in the English language the
Pledgee all information and supporting documentation relating to the Collateral and allow the
Pledgee to inspect its administrative records during office hours, all of the foregoing to the
extent required by the Pledgee (acting reasonably) for the purpose of this Deed.
The Pledgor shall forthwith inform the Pledgee of any attachment (beslag) over
any part of the Collateral.
	 
	 	 	The pledgor shall:






	 	i.	 	send the Pledgee a copy of the relevant attachment or seizure documentation
as well as all other documents required under applicable law for challenging the
attachment or seizure (if and to the extent possible);
	 
	 	ii.	 	notify the third party or the court process server acting on behalf of such
third party in writing of the Pledgee’s interest over the Collateral; and
	 
	 	iii.	 	take such measures as may reasonably be required to protect the Pledgee’s
interest over the Collateral.






	6.4	 	The Pledgor covenants for the benefit of the Pledgee throughout the Security Period to
co-operate with the Pledgee in the collection and recovery of the Collateral and to render all
reasonable assistance as may be required pursuant to any exchange regulations and/or foreign
statutory rules or other rules, including the taking of any legal action that the Pledgee may
deem necessary in connection therewith after the issuance of a Default Notice to it.
	 
	6.5	 	In addition and without prejudice to the obligations of the Pledgor pursuant to clauses 6.3
and 6.4 above, the Pledgor shall notify the Pledgee promptly of any event or circumstance
which could reasonably be of importance to the Pledgee with a view to the preservation and
exercise of the Pledgee’s rights under or pursuant to this Deed.




7 Enforcement and power of attorney





	7.1	 	Without prejudice to any other right or remedy available to the Pledgee, following the
occurrence of an Enforcement Event the Pledgee shall be empowered, at its discretion, to
immediately enforce the Rights of Pledge against the




8









 






	 	 	Pledgor without any (further) notice of default being required and the Pledgee may
immediately exercise in respect of any and all of the Shares any and all of its rights and
powers set out in this Deed (subject to restrictions following from mandatory provisions
of law) irrespective of whether the Pledgee or any of the Secured Creditors shall have
proceeded against or claimed payment from any party liable for any of the Secured
Obligations.






	 	7.2	 	Upon the occurrence of an Event of Default, the Pledgee shall be entitled to sell or procure
the sale of the Collateral forthwith, all to the extent permitted by applicable laws.
	 
	 	 	 	To the fullest extent permitted by law, the Pledgor waives (which waiver the Pledgee hereby accepts) any right it may have (i)
pursuant to section 3:234 Dutch Civil Code to demand, in the event that the Pledgee enforces the Rights of Pledge, that the Pledgee
shall also enforce any of the security interests (zekerheidsrechten) granted by any of the Credit Partys and (ii) of requiring the
Pledgee to firstly proceed against or claim payment from any person or entity or enforce any guarantee or security granted by any
other person or entity before enforcing the Rights of Pledge and/or any other rights under this Deed.
	 
	 	7.3	 	The Pledgor will not be entitled to request the summary
proceedings judge (voorzieningenrechter) of
the district court to order that
the Collateral shall be sold in a
manner deviating from the
provision of section 3:250 Dutch
Civil Code.
	 
	 	7.4	 	In the event that the Pledgee forecloses or intends to foreclose the Rights of Pledge, it
will not be obliged to give notice (thereof) (as provided in section 3:249 and section 3:252
Dutch Civil Code) to the Pledgor or any person having the benefit of an encumbrance on
Collateral comprised in such Rights of Pledge (save as may be otherwise provided in the Credit
Documents).
	 
	 	7.5	 	The Pledgee shall apply the proceeds of the Collateral and the foreclosure of the Rights of
Pledge or any of them in satisfaction of the Secured Obligations, in each case in accordance
with the Credit Agreement, the Intercreditor Agreement and in accordance with applicable
provisions of Dutch law.
	 
	 	7.6	 	In addition to the undertakings contained in clause 2.4 above, the Pledgor shall at any time,
upon written request of the Pledgee after the issuance of a Default Notice to the Pledgor,
execute and cause to be filed, at such Pledgor’s expense, such documents and instruments, and
do such other acts and things, as the Pledgee may reasonably deem desirable in obtaining the
full benefits of this Deed (including the protection and preservation of its rights) and of
the rights and powers granted hereunder or granted to a pledgee under the laws of the
Netherlands.
	 
	 	7.7	 	The Pledgor hereby grants to the Pledgee (and any of its delegates) an irrevocable power of
attorney (the ‘Power of Attorney’) in accordance with section 3:74 (1) Dutch Civil Code to,
following the issuance of a Default Notice to it, perform all acts and execute all documents
in order to perfect or implement




9









 






	 	 	 	this Deed on its behalf, and to take
all actions which are necessary for
the Pledgee (and any of its
delegates) to create, maintain,
protect, preserve and exercise its
rights under this Deed (acting
reasonably).
The parties agree that section 3:68
(Selbsteintritt) Dutch Civil Code
will not apply and to the extent
necessary, the Pledgor hereby waives
any rights it may have under section
3:68 Dutch Civil Code, which waiver
the Pledgee hereby accepts.






	8	 	Termination
	 
	8.1	 	The Pledgee is entitled to terminate by notice (opzeggen) in whole or in part any Right of
Pledge on all or part of the Collateral and the contractual arrangements set forth herein.
	 
	 	 	Notice of termination must be given in writing by the Pledgee to the Pledgor.
	 
	8.2	 	The Rights of Pledge or any of them shall terminate by operation of law when all Secured
Obligations have been unconditionally and irrevocably paid and discharged in full and all
obligations under the Credit Documents have terminated.
	 
	 	 	At the request of the Pledgor, the Pledgee shall confirm such termination in writing and
will execute all documents reasonably requested by the Pledgor in relation thereto (at the
expense of the Pledgor).
	 
	9.	 	Assignment and information
	 
	9.1	 	Subject to the relevant provisions of the Credit Documents, the Pledgee (but not, for the
avoidance of doubt, the Pledgor) shall be entitled to assign and/or transfer all or part of
its rights and obligations under this Deed to any assignee and/or transferee.
	 
	9.2	 	The Pledgor hereby in advance gives its irrevocable consent to (geeft toestemming bij
voorbaat) within the meaning of section 6:156 Dutch Civil Code and hereby in advance
irrevocably co-operates with (verleent bij voorbaat mede-werking aan), within the meaning of
sections 6:159 and 6:156 Dutch Civil Code, any such assignment and/or transfer executed in
accordance with the relevant provisions of the Credit Documents, including by means of an
assumption of debt (schuldoverneming) or transfer of agreement (contracts-overneming), as the
case may be, hereunder.
	 
	9.3	 	If the Pledgee assigns and transfers its rights or obligations and the relevant transferee is
subrogated in the rights of the Pledgee (in de rechten van de pandhouder treedt) in respect of
the Rights of Pledge, the Pledgor must promptly ensure that the conditional transfer of voting
rights to that person will be effected in accordance with section 2:198 (3) Dutch Civil Code.
	 
	9.4	 	The Pledgee shall be entitled to impart any information concerning the Pledgor to any
successor or proposed successor, subject to any confidentiality provision of the Credit
Agreement.
	 
	10.	 	Records of Pledgee
	 
	 	 	Subject to proof to the contrary, the records of the Pledgee shall be conclusive




10









 






	 	 	evidence (dwingend bewijs) of the existence and amount of the Secured Obligations, subject
to and in accordance with the terms of the Credit Documents and this Deed.






	11.	 	Costs
	 
	 	 	Subject to any provision to the contrary herein, all costs reasonably incurred in
connection with the creation of the Rights of Pledge and the performance by the parties of
their rights and obligations under this Deed shall be for the account of the persons or
entities designated in or pursuant to the Credit Agreement and shall be settled in
accordance therewith.
	 
	12.	 	Notices
	 
	 	 	Any notices and other communications under or in connection with this Deed shall be given
in accordance with clause 11.03 of the Credit Agreement.
	 
	13.	 	Suspension of rights and indemnity
	 
	13.1	 	Throughout the Security Period, the Pledgor shall not:






	 	i.	 	receive, claim or have the benefit of any payment, distribution or security
from or on account of any Credit Party under any indemnity or otherwise or exercise
its rights of defense, suspension, retention, set off or counter claim as against any
Credit Party;
	 
	 	ii.	 	take recourse (verhaal) or take any other step to enforce any right against
any Borrower or Guarantor or their respective assets; and
	 
	 	iii.	 	claim or vote in competition with the Pledgee or any of the other Secured
Creditors in the bankruptcy, suspension of payment or liquidation or analogous
circumstance of any Credit Part,






	 	 	except in each case, in such manner and upon such terms as the Pledgee, acting reasonably,
may require.
	 
	 	 	Subject to the condition precedent (opschortende voorwaarde) that the Pledgee exercises
its rights to enforce the Rights of Pledge in accordance with Clause 7 of this Deed, the
Pledgor hereby waives in advance any rights it may have as set out under (i), (ii) and
(iii) above, which waiver is hereby accepted by the Pledgee.
	 
	 	 	Any payment, distribution or security received by the Pledgor contrary to the provisions
of this Deed shall be received and held by the Pledgor as custodian (bewaarnemer) for the
benefit of the Pledgee and the other Secured Creditors and shall, pending payment or
transfer to the Pledgee, to the extent legally possible, be segregated from the other
assets of the Pledgor and shall be forthwith paid over or transferred to the Pledgee.
	 
	 	 	If notwithstanding the above the Pledgor exercises any right of defense, suspension,
retention, set off or counter claim in respect of any amount, it shall forthwith pay an
amount equal to such amount to the Pledgee.
	 
	13.2	 	The Pledgee shall not be liable to the Pledgor under or pursuant to the Credit Documents
whatsoever except for its willful misconduct (opzet) or gross negligence (grove schuld).




11









 












	14.	 	Limitation, waiver
	 
	 	 	The Pledgor waives, to the fullest extent permitted by law, its right (i) to dissolve this
Deed, pursuant to section 6:265 Dutch Civil Code or on any other ground or (ii) to avoid
this Deed, including but not limited to error (dwaling), which waiver the Pledgee hereby
accepts.
	 
	15.	 	Security interest absolute
	 
	 	 	All rights of the Pledgee, the Rights of Pledge and all obligations of the Pledgor
hereunder shall be absolute and unconditional irrespective of:






	 	i.	 	any change in the time, manner or place of payment of the Secured
Obligations or any change of or amendment to the Credit Documents and any other
document related thereto, or any other agreement or instrument relating to any of
them; or
	 
	 	ii.	 	any exchange, release or non perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any other
collateral for the Secured Obligations.






	16.	 	Amendment of this Deed
	 
	 	 	This Deed may only be amended by a written agreement between the Pledgor and the Pledgee
(with the consent of the other Secured Creditors under the Credit Documents), to the
extent required by Dutch law, executed before a Dutch civil-law notary.
	 
	17.	 	Governing law and jurisdiction
	 
	 	 	This Deed shall be governed by and construed in accordance with the laws of the
Netherlands.
	 
	 	 	The Pledgor consents to the exclusive jurisdiction of the courts of Amsterdam, the
Netherlands.
	 
	 	 	The Pledgor hereby waives any objection that it may now or hereafter have to the
jurisdiction of such courts, which waiver the Pledgee hereby accepts.
	 
	 	 	This clause is for the benefit of the Pledgee only and shall not limit its right to bring
proceedings against the Pledgor in connection with this Deed or the Credit Documents in
any other court of competent jurisdiction or concurrently in more than one jurisdiction.
	 
	18.	 	Severability of provisions
	 
	18.1	 	Any provision of this Deed which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
	 
	18.2	 	The parties hereto agree that they will negotiate in good faith to replace any provision
hereof held invalid, illegal or unenforceable as set out in clause 18.1 above with a valid
provision which is as similar as possible in substance to the invalid, illegal or
unenforceable provision.




12









 












	 
	19.	 	Remedies and prevalence
	 
	19.1	 	The rights and remedies of the Pledgee herein, and the obligations, representations and
warranties of the Pledgor herein, are cumulative and are not exclusive of any rights or
remedies of the Pledgee, or obligations, representations or warranties of the Pledgor,
conferred or imposed by law or the Credit Documents.
	 
	19.2	 	To the extent there is a conflict between the provisions of the Credit Documents and this
Deed, the provisions of the Credit Documents shall prevail (but only to the extent that the
validity and enforceability of the pledges created or purported to be created pursuant this
Deed and the powers of attorney given pursuant this Deed are not affected as a consequence).
	 
	20.	 	Final Provisions
	 
	20.1	 	With due observance of article 20 of the articles of association of the Company, the Pledgor,
having given the members of the Management Board of the Company the opportunity to cast their
advisory votes, as holder of all of the shares in the share capital of the Company herewith
resolves, without holding a meeting of shareholders, to approve this Deed including, without
limitation, the Rights of Pledge and the transfer of the Voting Rights on the Shares subject
to the Conditions Precedent having been satisfied.
	 
	20.2	 	The person appearing referred to under 1 above, acting as representative of the Company,
declared that the Company has always accepted as valid the transfer by which the Pledgor
acquired the Present Shares and all previous transfers of the Present Shares, that the Company
acknowledges the right of pledge created by this Deed on the Present Shares, and that the
Company will cause the right of pledge on the Present Shares to be recorded in its
shareholders register without delay. Furthermore, the person appearing referred to under A
above, acting as representative of the Company, declared that the Company acknowledges the
right of pledge created by this Deed on the Future Shares and undertakes to enter such right
of pledge in its shareholders register without delay as soon as the Pledgor becomes the holder
of the Future Shares.
	 
	20.3	 	The Pledgor, the Pledgee and the Company are aware of the fact that the undersigned civil law
notary works with NautaDutilh N.V., the firm that has advised the Pledgee in this transaction.
With reference to the Code of Conduct (Verordening beroeps- en gedragsregels) of the Royal
Notarial Professional organisation (Koninklijke Notariële Beroepsorganisatie KNB), the parties
to this Deed herewith explicitly agree that he executes this Deed.





CONCLUSION




The persons appearing are known to me, civil law notary.






This deed was executed in Rotterdam on the date mentioned in its heading.



After I, civil law notary, had conveyed and explained the contents of the deed in substance to the
persons appearing, they declared that they had taken note of the contents of the deed, were in
agreement with the contents and did not wish them to be read out in full. Following a partial
reading, the deed was signed by the persons appearing and






13









 







by me, civil law notary at eleven hundred hours.




J.J. van Kampen

J.J. Hartman Kok

A.H. Geerling, civil law notary

ISSUED AS A TRUE COPY

by me, Albert Hendrik Geerling, civil law notary at
 Rotterdam, on this the sixteenth day of August two
 thousand and ten.





14












 





EG/JJK

Deed of pledge of shares

Endeavour Energy Netherlands B.V.



On this, the sixteenth day of August two thousand and ten, appeared before me, Albert Hendrik
Geerling, civil law notary at Rotterdam, the Netherlands:





	1.	 	Jan Joris van Kampen, employed at the offices of me, civil law notary, located at 3014 DA
Rotterdam, the Netherlands, Weena 750, born in Amsterdam, the Netherlands, on the nineteenth
day of January nineteen hundred eighty-three, and acting for the purpose of this deed as the holder of a written power of attorney from:






	 	a.	 	Endeavour International Holding B.V. a company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid), having its corporate seat at
Amsterdam, the Netherlands (address: 1043 EJ Amsterdam, the Netherlands,
Teleportboulevard 140, Trade Register number 34229293),






	 	 	 	which company is hereinafter referred to as: the ‘Pledgor’






	 	b.	 	Endeavour Energy Netherlands B.V. a company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid), having its corporate seat at
Amsterdam, the Netherlands (address: 1043 EJ Amsterdam, the Netherlands,
Teleportboulevard 140, Trade Register number 34229296),






	 	 	 	which company is hereinafter referred to as: the ‘Company’; and






	2.	 	Jesler Jan Hartman Kok, born at Groningen, the Netherlands on the twenty-sixth day of
November nineteen hundred eighty, residing at Brussestraat 18c, 3031 SK Rotterdam, the
Netherlands, holder of Dutch passport number NK5917452, acting for the purpose of this deed as
the holder of a written power of attorney from Cyan Partners, LP, a company organised and
existing under the laws of the State of Delaware, United States of America having its
registered office at 399 Park Avenue, New York, New York, United States of America 10022,






	 	 	which company is hereinafter referred to as: the ‘Pledgee’.





Powers of attorney



The powers of attorney are evidenced by three (3) private deeds, which will be attached to this
deed.



The persons appearing, acting in their capacities as mentioned above, declared as follows:





	A.	 	on the sixteenth day of August two thousand and ten, inter alios, the Pledgee (as
Administrative Agent, Sole Arranger and Sole Book Runner), Endeavour Energy UK Limited as
Borrower, and Endeavour International Corporation as Holdings, entered into a one hundred and
sixty million American dollars (USD 160,000,000) term loan facility agreement (the ‘Credit
Agreement’);
	 
	B.	 	on the sixteenth day of August two thousand and ten, inter alios, the Pledgee, the Pledgor
and the Company entered into a guarantee agreement pursuant to which inter alios each of the
Pledgor and the Company guarantees any and all obligations to pay an amount of money
(verplichtingen tot voldoening van een




1









 












	 	 	geldsom), whether present or future, actual or contingent, that may at any time be owing
by a Credit Party (as defined in the Credit Agreement) to the Secured Creditors (as
defined in the Credit Agreement) under or pursuant to the Credit Documents (as defined in
the Credit Agreement) (the “Subsidiary Guaranty”);






	C.	 	the Present Shares (as defined below) were acquired by the Pledgor by virtue of the deed of
incorporation of the Company, executed on the twenty-seventh of June two thousand and five
before M.P. Bongard, civil-law notary in Amsterdam;
	 
	D.	 	the Pledgor has agreed to execute this present deed of pledge of shares (the “Deed”) as
security for the payment when due of the Secured Obligations (as defined below);
	 
	E.	 	it is envisaged that the Existing Security (as defined below) will be terminated pursuant to
a letter of termination of rights of pledge to be issued and signed by or on behalf of BNP
Paribas S.A. and to be signed for acknowledgement and receipt by — inter alios - the Pledgor
and the Company;
	 
	F.	 	it has been agreed that the voting rights attaching to the Shares (as defined below) will be
vested in the Pledgee subject to the suspensive conditions (opschortende voorwaarden) set out
in Clause 3 (Rights in respect of the Voting Rights) of this Deed;
	 
	G.	 	the articles of association of the Company permit the creation of a right of pledge on the
 shares in its capital and the vesting of voting rights attaching to such shares in the
Pledgee;
	 
	H.	 	the general meeting of shareholders of the Company has resolved to give the legally required
approval for the creation of the right of pledge, including the vesting of the voting rights
attaching to the Shares (as defined below) in the Pledgee, as evidenced by resolutions of the
general meeting of shareholders of the Company dated thirty July two thousand ten.




Consequently, the persons appearing declared:




It is hereby agreed as follows:





	1.	Definitions and interpretation
	 
	1.1	All capitalized terms used in this Deed including the recitals, and not otherwise defined
herein shall have the meaning assigned to them in the Credit Agreement.
	 
	1.2	a. 	 	 Headings are for convenience of reference only.






	 	b.	 	Where the context so permits, the singular includes the plural and vice
versa.
	 
	 	c.	 	Save where the contrary is indicated, any reference in this Deed to the
parties or a party to this Deed shall be construed so as to include its or their
respective successors, transferees and assigns from time to time and any successor of
such a successor, transferee or assign in accordance with their respective interests.




2









 












	 	d.	 	A ‘clause’ shall, subject to any indication to the contrary, be construed
as a reference to a clause of this Deed.
	 
	 	e.	 	References to the Credit Agreement, the (other) Credit Documents, this
Deed, or any other agreement or document shall, where applicable, be deemed to be
references to such Credit Agreement, the (other) Credit Documents, this Deed, or any
other agreement or document as the same may have been, or may from time to time be,
extended, prolonged, amended, restated, supplemented, renewed or novated, as persons
may accede thereto as a party or withdraw therefrom as a party in part or in whole or
be released thereunder in part or in whole, and as facilities and financial services
are or may from time to time be granted, extended, prolonged, increased, reduced,
cancelled, withdrawn, amended, restated, supplemented, renewed or novated there
under.
	 
	 	f.	 	A statute or statutory provision shall be construed as a reference to such
statute or statutory provision as the same may have been, or may from time to time
be, amended or re-enacted and all instruments, orders, plans, regulations, by-laws,
permissions and directions at any time made there under.
	 
	 	g.	 	References to the Dutch Civil Code are references to het Nederlands
Burgerlijk Wetboek, references to the Dutch Bankruptcy Act are references to de
Nederlandse Faillissementswet.






	1.3	 	In this Deed the following words and expressions shall have the following meaning:






	 	•	 	‘Collateral’ means (i) the Shares and (ii) the Rights;
	 
	 	•	 	‘Conditions Precedent’ means each of the following conditions precedent
(opschortende voorwaarden): (i) the termination of the Existing Security, (ii) the
occurrence of an Event of Default, and (iii) the issuance of a Voting Rights Notice;
	 
	 	•	 	‘Default Notice’ means a notice in writing to be issued by the Pledgee to the
Pledgor and the Company upon or after the occurrence of an Event of Default;
	 
	 	•	 	‘Enforcement Event’ means the issuance of a Default Notice following an Event of
Default which also constitutes a default (verzuim) in the fulfillment of the Secured
Obligations within the meaning of Article 3:248 of the Dutch Civil Code;
	 
	 	•	 	‘Existing Security’ means the rights of pledge and all other security interests
created or purported to be created under or pursuant to:






	 	(a)	 	a notarial deed of first ranking pledge over the Present
Shares dated first of November two thousand six executed before H.B.H.
Kraak, civil law notary at Amsterdam between the Pledgor as pledgor, BNP
Paribas S.A. as pledgee and the Company as the company;




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	 	(b)	 	a notarial deed of second ranking pledge over the Present
Shares dated seven March two thousand eight executed before P.H.N. Quist,
civil law notary at Amsterdam between the Pledgor as pledgor, BNP Paribas
S.A. as pledgee and the Company as the company; and
	 
	 	(c)	 	a notarial deed of third ranking pledge over the Present
Shares dated eight February two thousand ten executed before P.H.N. Quist,
civil law notary at Amsterdam between the Pledgor as pledgor, BNP Paribas
S.A. as pledgee and the Company as the company;






	 	•	 	‘Future Rights’ means any and all Rights in respect of Future Shares;
	 
	 	•	 	‘Future Shares’ means all shares in the capital of the Company which the Pledgor
may hold at any time, which may be issued to or acquired by the Pledgor after the
date of this Deed;
	 
	 	•	 	‘Intercreditor Agreement’ has the meaning ascribed thereto in the Credit
Agreement;
	 
	 	•	 	‘Parallel Debt’ has the meaning ascribed thereto in clause 2 (Parallel Debt) of
the Subsidiary Guaranty;
	 
	 	•	 	‘Parallel Obligations’ means the obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor to the Pledgee arising
from the Parallel Debt;
	 
	 	•	 	‘Present Shares’ means one hundred percent (100%) of the registered and paid-up
 shares in the issued capital of the Company, being one hundred eighty (180) shares,
each with a nominal value of one hundred Euro (EUR 100.-), numbered 1 to 180
inclusive;
	 
	 	•	 	‘Principal Obligations’ means any and all obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) of the Pledgor under or pursuant to
the Credit Documents (whether now existing or hereafter created or arising) together
with all monies and liabilities payable or to be discharged by the Pledgor pursuant
to the terms of this Deed, other than obligations to pay an amount of money
(verplichtingen tot voldoening van een geldsom) under the Parallel Obligations;
	 
	 	•	 	‘Rights’ means any and all rights to or under dividends, other distributions,
proceeds, options, warrants, claim rights and other similar rights, other than shares
in the capital of the Company, currently existing or in the future arising or
received with respect to or out of the Shares but excluding the Voting Rights;
	 
	 	•	 	‘Rights of Pledge’ means each of the rights of pledge created under this Deed;
	 
	 	•	 	‘Secured Obligations’ means collectively the
Parallel Obligations and the Principal Obligations to the extent owing to the Pledgee;




4









 








	 	•	 	‘Security Period’ means the period beginning on the date hereof and ending on the
earliest date upon which (a) all Secured Obligations have been irrevocably paid and
discharged, or have ceased to exist, and (b) all Rights of Pledge have been released
and discharged by the Pledgee in accordance with clause 8.2 below;
	 
	 	•	 	‘Shares’ means the Present Shares and the Future Shares;
	 
	 	•	 	‘Voting Rights’ means the voting rights attached to the Shares;
	 
	 	•	 	‘Voting Rights Notice’ means a notice in writing by the Pledgee to the Pledgor and
the Company that it wishes to exercise the Voting Rights.






	2.	 	Pledge of the Shares and the other Collateral
	 
	2.1	 	The Pledgor hereby agrees with the Pledgee and hereby undertakes that the Pledgor shall grant
to the Pledgee the rights of pledge purported to be granted under or pursuant to this Deed.
	 
	2.2	 	As security for the payment and discharge in full, when due (whether at stated maturity, by
acceleration or otherwise), of the Secured Obligations, the Pledgor hereby grants, to the
Pledgee a right of pledge (pandrecht), on the Present Shares and, to the extent legally
possible hereby grants in advance (verpandt bij voorbaat) to the Pledgee a right of pledge on
the Future Shares, and the Pledgee hereby accepts such rights of pledge.
	 
	 	 	To the extent no valid pledge on the Future Shares is created by this Deed, the Pledgor
irrevocably and unconditionally undertakes to pledge to the Pledgee the Future Shares
immediately after the Pledgor has acquired such shares.
	 
	2.3	 	Subject to clause 3.2 with respect to dividends and other distributions, the Pledgor, to the
extent such pledge is not included in the Rights of Pledge in respect of the Shares, and to
the fullest extent possible as permitted by applicable law, hereby pledges the Rights in favor
of the Pledgee as security for the full and prompt payment and discharge of its Secured
Obligations and the Pledgee accepts such pledge.
	 
	 	 	To the extent no valid pledge on the Rights is created hereunder, the Pledgor, irrevocably
and unconditionally undertakes, immediately on demand by the Pledgee, to pledge in favor
of the Pledgee and to assign to the Pledgee the Rights subject to clause 3.2. under the
same terms and the same conditions as set forth in this Deed.
	 
	2.4	 	The Pledgor irrevocably and unconditionally undertakes to take such action (including the
execution of documents to be made up in form and substance satisfactory to the Pledgee) as and
when the Pledgee deems necessary in its reasonable opinion from time to time to create,
perfect and maintain a valid and enforceable right of pledge in favor of the Pledgee with
respect to the Collateral (and thereupon the Collateral shall become subject to a right of
pledge as provided in this Deed).




5









 





	2.5	 	The Pledgor hereby grants to the Pledgee an irrevocable and
non-exclusive power of attorney (without obligation) to pledge to the Pledgee the Future Shares immediately after the
Pledgor has acquired such shares.
This power of attorney includes the right of substitution.
	 
	2.6	 	Each of the Rights of Pledge is one and indivisible (één en ondeelbaar).
Partial fulfillment of the Secured Obligations shall not extinguish the Rights of Pledge
proportionally.
	 
	2.7	 	The Rights of Pledge include all accessory rights (afhankelijke rechten) and all ancillary
rights (nevenrechten) attached to the Collateral.
	 
	2.8	 	The Company is hereby notified of the Rights of Pledge created by this Deed.
	 
	3.	 	Rights in respect of the Voting Rights
	 
	3.1	 	The Voting Rights are hereby vested in the Pledgee within the meaning of article 2:198
paragraph 3 of the Dutch Civil Code, subject to the Conditions Precedent being satisfied.
	 
	 	 	Therefore, provided that the Conditions Precedent have not been satisfied,
the Pledgor shall remain entitled and authorized to exercise the Voting
Rights, provided that the Pledgor may not exercise the Voting Rights in any
manner which could be prejudicial to any of the Secured Creditors.
	 
	 	 	As long as the Conditions Precedent have not been satisfied, the Pledgee
shall not have the rights which are granted to the holders of depositary
receipts issued for shares with the cooperation of a company.
	 
	3.2	 	Upon the Conditions Precedent having been satisfied:






	 	i.	 	the Pledgee shall be fully entitled, to the exclusion of the Pledgor, to
exercise the Voting Rights pertaining to the Shares;
	 
	 	ii.	 	in the event Dutch company law prevents the Voting Rights to return to the
Pledgor when the respective Event of Default has been cured or waived by the Pledgee,
the Pledgee shall at the request of the Pledgor (not to be unreasonably withheld or
delayed) give a power of attorney to the Pledgor to exercise the Voting Rights for as
long as no new Voting Rights Notice has been issued.
	 
	 	 	 	For the duration of such power of attorney clauses 3.2 (i) is not applicable.
	 
	 	 	 	Upon a new Voting Rights Notice being issued, the power of attorney shall
automatically terminate.
	 
	 	 	 	The Pledgor may not exercise the Voting Rights in any manner which could be
prejudicial to any of the Secured Creditors.






	4.	 	Dividends and other distributions upon issuance of Default Notice
	 
	4.1	 	Subject to Clause 4.2 of this Deed and subject to the suspensive condition (opschortende
voorwaarde) of termination of the Existing Security the Pledgee shall be entitled to receive,
retain and utilize any and all dividends and other distributions received in cash or other
payment of money in respect of the Collateral.




6









 












	 
	4.2	 	The Pledgee grants permission to the Pledgor, within the
meaning of article 3:246 paragraph 4 of the Dutch Civil Code to receive, retain
and utilize any and all dividends and other distributions
received in cash or other payment of money in respect of the
Collateral until such permission has been withdrawn by means
of a Default Notice issued by the Pledgee.
	 
	4.3	 	Upon the Default Notice being issued:






	 	i.	 	all rights of the Pledgor to receive dividends and other distributions
pursuant to the Rights shall automatically cease, and thereupon the Pledgee shall
have the sole right to receive and hold as collateral such dividends and other
distributions and such dividends or other distributions must be paid directly to the
Pledgee or as it may direct;
	 
	 	ii.	 	the Pledgee shall be entitled to collect any repayment on the Shares
(terugbetaling op aandelen) and all liquidation proceeds, if any, which are to be
distributed in respect of the Shares upon dissolution and liquidation of the Company
or otherwise;
	 
	 	iii.	 	all payments which are received by the Pledgor contrary to the provisions-
of this clause 4 shall be received on behalf of and for the benefit of the Pledgee,
shall be segregated from the other assets of the Pledgor and shall be immediately
paid over or delivered (with any necessary endorsements) to the Pledgee or its
authorized designee or as the Pledgee may otherwise direct as collateral in the exact
form as received, to be held by the Pledgee as collateral and as further collateral
security for the Secured Obligations. This is without prejudice to any right the
Pledgee may have against the person who made the payment.






	5.	 	Representations and warranties






	 	 	The Pledgor represents and warrants that the following is true and correct on the date of
this Deed and each time any Future Shares and/or Future Rights will be pledged to the
Pledgee:






	 	i.	 	the Present Shares are and each Future Share will be, fully paid-up and the
Collateral is free and clear of any lien, charge, encumbrance with any restricted
rights (beperkte rechten), attachment (beslag), or any other right or security
interest whatsoever, other than: (i) those created under this Deed, (ii) the Existing
Security and (iii) any encumbrances permitted under the Credit Documents;
	 
	 	ii.	 	the Pledgor holds full and exclusive title to the Collateral and is
authorized (beschikkingsbevoegd) to create a right of pledge thereover;
	 
	 	iii.	 	the Pledgor acquired the Present Shares by incorporation of the Company,
executed by deed on the twenty-seventh of June two thousand and five before M.P.
Bongard, civil-law notary in Amsterdam;
	 
	 	iv.	 	no depositary receipts (certificaten van aandelen) have been issued for the
Present Shares or will be issued for the Future Shares with the concurrence of the
Company; and
	 
	 	v.	 	all information provided by the Pledgor with regard to this deed is correct and complete.




7









 








	6.	 	Undertakings






	6.1	 	Except to the extent permitted pursuant to the Credit Documents, the Pledgor undertakes not
to waive without the prior written consent of the Pledgee (not to be unreasonably withheld or
delayed), any accessory rights (afhankelijke rechten) or ancillary rights (nevenrechten)
attached to the Collateral and in general not to perform any acts which result or could result
in a material reduction of the value of the Shares.
	 
	6.2	 	Except to the extent permitted pursuant to the Credit Documents, the Pledgor shall not,
without the prior written consent of the Pledgee (not to be unreasonably withheld or delayed),
transfer or further pledge or otherwise encumber any of the Shares or agree to a court
settlement or an out-of-court settlement (gerechtelijk or buitengerechtelijk akkoord) in
respect of the Shares.
	 
	6.3	 	The Pledgor shall, at the Pledgee’s first request, provide in the English language the
Pledgee all information and supporting documentation relating to the Collateral and allow the
Pledgee to inspect its administrative records during office hours, all of the foregoing to the
extent required by the Pledgee (acting reasonably) for the purpose of this Deed.
	 
	 	 	The Pledgor shall forthwith inform the Pledgee of any attachment (beslag) over any part of
the Collateral.
	 
	 	 	The pledgor shall:






	 	i.	 	send the Pledgee a copy of the relevant attachment or seizure documentation
as well as all other documents required under applicable law for challenging the
attachment or seizure (if and to the extent possible);
	 
	 	ii.	 	notify the third party or the court process server acting on behalf of such
third party in writing of the Pledgee’s interest over the Collateral; and
	 
	 	iii.	 	take such measures as may reasonably be required to protect the Pledgee’s
interest over the Collateral.






	6.4	 	The Pledgor covenants for the benefit of the Pledgee throughout the Security Period to
co-operate with the Pledgee in the collection and recovery of the Collateral and to render all
reasonable assistance as may be required pursuant to any exchange regulations and/or foreign
statutory rules or other rules, including the taking of any legal action that the Pledgee may
deem necessary in connection therewith after the issuance of a Default Notice to it.
	 
	6.5	 	In addition and without prejudice to the obligations of the Pledgor pursuant to clauses 6.3
and 6.4 above, the Pledgor shall notify the Pledgee promptly of any event or circumstance
which could reasonably be of importance to the Pledgee with a view to the preservation and
exercise of the Pledgee’s rights under or pursuant to this Deed.




8









 






	 
	7.	 	Enforcement and power of attorney
	 
	7.1	 	Without prejudice to any other right or remedy available to the Pledgee, following the occurrence of an Enforcement Event the Pledgee shall be empowered, at its
discretion, to immediately enforce the Rights of Pledge against the Pledgor without any
(further) notice of default being required and the Pledgee may immediately exercise in
respect of any and all of the Shares any and all of its rights and powers set out in this
Deed (subject to restrictions following from mandatory provisions of law) irrespective of
whether the Pledgee or any of the Secured Creditors shall have proceeded against or
claimed payment from any party liable for any of the Secured Obligations.






	7.2	 	Upon the occurrence of an Event of Default, the Pledgee shall be entitled to sell or procure
the sale of the Collateral forthwith, all to the extent permitted by applicable laws.
	 
	 	 	To the fullest extent permitted by law, the Pledgor waives (which waiver the Pledgee
hereby accepts) any right it may have (i) pursuant to section 3:234 Dutch Civil Code to
demand, in the event that the Pledgee enforces the Rights of Pledge, that the Pledgee
shall also enforce any of the security interests (zekerheidsrechten) granted by any of the
Credit Partys and (ii) of requiring the Pledgee to firstly proceed against or claim
payment from any person or entity or enforce any guarantee or security granted by any
other person or entity before enforcing the Rights of Pledge and/or any other rights under
this Deed.
	 
	7.3	 	The Pledgor will not be entitled to request the summary proceedings judge
(voorzieningenrechter) of the district court to order that the Collateral shall be sold in a
manner deviating from the provision of section 3:250 Dutch Civil Code.
	 
	7.4	 	In the event that the Pledgee forecloses or intends to foreclose the Rights of Pledge, it
will not be obliged to give notice (thereof) (as provided in section 3:249 and section 3:252
Dutch Civil Code) to the Pledgor or any person having the benefit of an encumbrance on
Collateral comprised in such Rights of Pledge (save as may be otherwise provided in the Credit
Documents).
	 
	7.5	 	The Pledgee shall apply the proceeds of the Collateral and the foreclosure of the Rights of
Pledge or any of them in satisfaction of the Secured Obligations, in each case in accordance
with the Credit Agreement, the Intercreditor Agreement and in accordance with applicable
provisions of Dutch law.
	 
	7.6	 	In addition to the undertakings contained in clause 2.4 above, the Pledgor shall at any time,
upon written request of the Pledgee after the issuance of a Default Notice to the Pledgor,
execute and cause to be filed, at such Pledgor’s expense, such documents and instruments, and
do such other acts and things, as the Pledgee may reasonably deem desirable in obtaining the
full benefits of this Deed (including the protection and preservation of its rights) and of
the rights and powers granted hereunder or granted to a pledgee under the laws of the
Netherlands.
	 
	7.7	 	The Pledgor hereby grants to the Pledgee (and any of its delegates) an irrevocable power of
attorney (the ‘Power of Attorney’) in accordance with section




9









 






	 	 	3:74 (1) Dutch Civil Code to, following the issuance of a Default Notice to it, perform
all acts and execute all documents in order to perfect or implement this Deed on its
behalf, and to take all actions which are necessary for the Pledgee (and any of its
delegates) to create, maintain, protect, preserve and exercise its rights under this Deed
(acting reasonably).
	 
	 	 	The parties agree that section 3:68 (Selbsteintritt) Dutch Civil Code will not apply and
to the extent necessary, the Pledgor hereby waives any rights it may have under section
3:68 Dutch Civil Code, which waiver the Pledgee hereby accepts.






	8.	 	Termination
	 
	8.1	 	The Pledgee is entitled to terminate by notice (opzeggen) in whole or in part any Right of
Pledge on all or part of the Collateral and the contractual arrangements set forth herein.
	 
	 	 	Notice of termination must be given in writing by the Pledgee to the Pledgor.
	 
	8.2	 	The Rights of Pledge or any of them shall terminate by operation of law when all Secured
Obligations have been unconditionally and irrevocably paid and discharged in full and all
obligations under the Credit Documents have terminated.
	 
	 	 	At the request of the Pledgor, the Pledgee shall confirm such termination in writing and
will execute all documents reasonably requested by the Pledgor in relation thereto (at the
expense of the Pledgor).
	 
	9.	 	Assignment and information
	 
	9.1	 	Subject to the relevant provisions of the Credit Documents, the Pledgee (but not, for the
avoidance of doubt, the Pledgor) shall be entitled to assign and/or transfer all or part of
its rights and obligations under this Deed to any assignee and/or transferee.
	 
	9.2	 	The Pledgor hereby in advance gives its irrevocable consent to (geeft toestemming bij
voorbaat) within the meaning of section 6:156 Dutch Civil Code and hereby in advance
irrevocably co-operates with (verleent bij voorbaat mede-werking aan), within the meaning of
sections 6:159 and 6:156 Dutch Civil Code, any such assignment and/or transfer executed in
accordance with the relevant provisions of the Credit Documents, including by means of an
assumption of debt (schuldoverneming) or transfer of agreement (contracts-overneming), as the
case may be, hereunder.
	 
	9.3	 	If the Pledgee assigns and transfers its rights or obligations and the relevant transferee is
subrogated in the rights of the Pledgee (in de rechten van de pandhouder treedt) in respect of
the Rights of Pledge, the Pledgor must promptly ensure that the conditional transfer of voting
rights to that person will be effected in accordance with section 2:198 (3) Dutch Civil Code.
	 
	9.4	 	The Pledgee shall be entitled to impart any information concerning the Pledgor to any
successor or proposed successor, subject to any confidentiality provision of the Credit
Agreement.




10









 












	10.	 	Records of Pledgee
	 
	 	 	Subject to proof to the contrary, the records of the Pledgee shall be conclusive evidence
(dwingend bewijs) of the existence and amount of the Secured Obligations, subject to and
in accordance with the terms of the Credit Documents and this Deed.
	 
	11.	 	Costs
	 
	 	 	Subject to any provision to the contrary herein, all costs reasonably incurred in
connection with the creation of the Rights of Pledge and the performance by the parties of
their rights and obligations under this Deed shall be for the account of the persons or
entities designated in or pursuant to the Credit Agreement and shall be settled in
accordance therewith.
	 
	12.	 	Notices
	 
	 	 	Any notices and other communications under or in connection with this Deed shall be given
in accordance with clause 11.03 of the Credit Agreement.
	 
	13.	 	Suspension of rights and indemnity
	 
	13.1	 	Throughout the Security Period, the Pledgor shall not:






	 	i.	 	receive, claim or have the benefit of any payment, distribution or security
from or on account of any Credit Party under any indemnity or otherwise or exercise
its rights of defense, suspension, retention, set off or counter claim as against any
Credit Party;
	 
	 	ii.	 	take recourse (verhaal) or take any other step to enforce any right against
any Borrower or Guarantor or their respective assets; and
	 
	 	iii.	 	claim or vote in competition with the Pledgee or any of the other Secured
Creditors in the bankruptcy, suspension of payment or liquidation or analogous
circumstance of any Credit Part,






	 	 	except in each case, in such manner and upon such terms as the Pledgee, acting reasonably,
may require.
	 
	 	 	Subject to the condition precedent (opschortende voorwaarde) that the Pledgee exercises
its rights to enforce the Rights of Pledge in accordance with Clause 7 of this Deed, the
Pledgor hereby waives in advance any rights it may have as set out under (i), (ii) and
(iii) above, which waiver is hereby accepted by the Pledgee.
	 
	 	 	Any payment, distribution or security received by the Pledgor contrary to the provisions
of this Deed shall be received and held by the Pledgor as custodian (bewaarnemer) for the
benefit of the Pledgee and the other Secured Creditors and shall, pending payment or
transfer to the Pledgee, to the extent legally possible, be segregated from the other
assets of the Pledgor and shall be forthwith paid over or transferred to the Pledgee.
	 
	 	 	If notwithstanding the above the Pledgor exercises any right of defense, suspension,
retention, set off or counter claim in respect of any amount, it shall forthwith pay an
amount equal to such amount to the Pledgee.






	13.2	 	The Pledgee shall not be liable to the Pledgor under or
pursuant to the Credit Documents whatsoever except for its willful misconduct (opzet) or gross negligence (grove
schuld).




11









 








	14.	 	Limitation, waiver
	 
	 	 	The Pledgor waives, to the fullest extent permitted by law, its right (i) to dissolve this
Deed, pursuant to section 6:265 Dutch Civil Code or on any other ground or (ii) to avoid
this Deed, including but not limited to error (dwaling), which waiver the Pledgee hereby
accepts.
	 
	15.	 	Security interest absolute
	 
	 	 	All rights of the Pledgee, the Rights of Pledge and all obligations of the Pledgor
hereunder shall be absolute and unconditional irrespective of:






	 	i.	 	any change in the time, manner or place of payment of the Secured
Obligations or any change of or amendment to the Credit Documents and any other
document related thereto, or any other agreement or instrument relating to any of
them; or
	 
	 	ii.	 	any exchange, release or non perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any other
collateral for the Secured Obligations.






	16.	 	Amendment of this Deed
	 
	 	 	This Deed may only be amended by a written agreement between the Pledgor and the Pledgee
(with the consent of the other Secured Creditors under the Credit Documents), to the
extent required by Dutch law, executed before a Dutch civil-law notary.
	 
	17.	 	Governing law and jurisdiction
	 
	 	 	This Deed shall be governed by and construed in accordance with the laws of the
Netherlands.
	 
	 	 	The Pledgor consents to the exclusive jurisdiction of the courts of Amsterdam,
the Netherlands.
	 
	 	 	The Pledgor hereby waives any objection that it may now or hereafter have to the
jurisdiction of such courts, which waiver the Pledgee hereby accepts.
	 
	 	 	This clause is for the benefit of the Pledgee only and shall not limit its right to bring
proceedings against the Pledgor in connection with this Deed or the Credit Documents in
any other court of competent jurisdiction or concurrently in more than one jurisdiction.
	 
	18.	 	Severability of provisions
	 
	18.1	 	Any provision of this Deed which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
	 
	18.2	 	The parties hereto agree that they will negotiate in good faith to replace any provision
hereof held invalid, illegal or unenforceable as set out in clause 18.1 above with a valid
provision which is as similar as possible in substance to the invalid, illegal or unenforceable provision.




12









 








	19.	 	Remedies and prevalence
	 
	19.1	 	The rights and remedies of the Pledgee herein, and the obligations, representations and
warranties of the Pledgor herein, are cumulative and are not exclusive of any rights or
remedies of the Pledgee, or obligations, representations or warranties of the Pledgor,
conferred or imposed by law or the Credit Documents.
	 
	19.2	 	To the extent there is a conflict between the provisions of the Credit Documents and this
Deed, the provisions of the Credit Documents shall prevail (but only to the extent that the
validity and enforceability of the pledges created or purported to be created pursuant this
Deed and the powers of attorney given pursuant this Deed are not affected as a consequence).
	 
	20.	 	Final Provisions
	 
	20.1	 	With due observance of article 20 of the articles of association of the Company, the Pledgor,
having given the members of the Management Board of the Company the opportunity to cast their
advisory votes, as holder of all of the shares in the share capital of the Company herewith
resolves, without holding a meeting of shareholders, to approve this Deed including, without
limitation, the Rights of Pledge and the transfer of the Voting Rights on the Shares subject
to the Conditions Precedent having been satisfied.
	 
	20.2	 	The person appearing referred to under 1 above, acting as representative of the Company,
declared that the Company has always accepted as valid the transfer by which the Pledgor
acquired the Present Shares and all previous transfers of the Present Shares, that the Company
acknowledges the right of pledge created by this Deed on the Present Shares, and that the
Company will cause the right of pledge on the Present Shares to be recorded in its
shareholders register without delay. Furthermore, the person appearing referred to under A
above, acting as representative of the Company, declared that the Company acknowledges the
right of pledge created by this Deed on the Future Shares and undertakes to enter such right
of pledge in its shareholders register without delay as soon as the Pledgor becomes the holder
of the Future Shares.
	 
	20.3	 	The Pledgor, the Pledgee and the Company are aware of the fact that the undersigned civil law
notary works with NautaDutilh N.V., the firm that has advised the Pledgee in this transaction.
With reference to the Code of Conduct (Verordening beroeps- en gedragsregels) of the Royal
Notarial Professional organisation (Koninklijke Notariële Beroepsorganisatie KNB), the parties
to this Deed herewith explicitly agree that he executes this Deed.





CONCLUSION



The persons appearing are known to me, civil law notary.



This deed was executed in Rotterdam on the date mentioned in its heading.



After I, civil law notary, had conveyed and explained the contents of the deed in substance to the
persons appearing, they declared that they had taken note of the contents of the deed, were in
agreement with the contents and did not wish them to be read out






13









 







in full. Following a partial reading, the deed was signed by the persons appearing and
by me, civil law notary at eleven hundred hours and five minutes.




J.J. van Kampen

J.J. Hartman Kok

A.H. Geerling, civil law notary

ISSUED AS A TRUE COPY

by me, Albert Hendrik Geerling, civil law notary at Rotterdam,

on this the sixteenth day of August two thousand and ten.





14











 





Exhibit F-5

To Credit Agreement



THIS ASSIGNATION IN SECURITY is made



BETWEEN:





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





WHEREAS:





	 	 	The Board of Directors of the Company is satisfied that the giving of the security
contained or provided for in this Assignation is likely to promote the success of the
Company for the benefit of its members as a whole and that its execution and delivery and
the exercise of the rights and performance of its obligations under this Assignation would
not contravene any provision of its constitution and its Board have passed a resolution to
that effect.




NOW IT IS AGREED as follows:





	1.	 	Definitions and Interpretation
	 
	 	 	Specific Definitions
	 
	1.1	 	Terms defined in the Credit Agreement (as defined below) shall, unless otherwise defined in
this Assignation, have the same meanings when used in this Assignation and, in addition, the
following words and expressions shall have the following meanings:
	 
	 	 	“Agreements”: means the joint operating agreements, unitisation and unit operating
agreements, joint facilities and transportation and processing agreements set out in Part
B of Schedule 1 (Agreements) as the same may have been, or may from time to time be,
restated, varied, amended, supplemented, substituted, novated or assigned, together with
all documents which are supplemental to, or are expressed to be collateral with, or are
entered into pursuant to or in connection with, any such agreements.
	 
	 	 	“Assignation”: means this instrument and all its provisions.
	 
	 	 	“Assigned Rights”: means the Company’s whole right, title, interest and benefit in and to
(but not any of the obligations under) the Project Agreements, together with:






	 	(a)	 	all the rights and benefits now or in the future arising under, pertaining
to or deriving from the Project Agreements;
	 
	 	(b)	 	all monies, debts and liabilities which now are or have been or at any time
hereafter shall or may be or become due, owing or incurred to the Company under or in
connection with the Project Agreements;
	 
	 	(c)	 	the proceeds of any claims, awards, decrees and judgments which may at any
time be receivable or received by the Company in respect of the Project Agreements;
	 
	 	(d)	 	the right of the Company to rescind or otherwise terminate the Project Agreements.
	 
	 	(e)	 	the right to make demands under, or compel or require performance of, any
Project Agreement or otherwise exercise all rights, remedies and discretions arising
under or




1









 





Exhibit F-5

To Credit Agreement




	 	 	 	in connection with any Project Agreement or available at law or in equity or
otherwise;
	 
	 	(f)	 	all other rights, interests and benefits whatsoever accruing to or for the
benefit of the Company arising under or in connection with any Project Agreement;
	 
	 	(g)	 	the proceeds of sale and/or other realisation of that property or asset (or
any part thereof or interest therein);
	 
	 	(h)	 	all Security, options, agreements, rights, easements, benefits,
indemnities, guarantees or warranties in respect of such property or asset; and
	 
	 	(i)	 	all rights under any lease, licence or agreement for lease, sale or use in
respect of such property or asset.






	 	 	“BP”: means BP Exploration Operating Company Limited.
	 
	 	 	“Business Day”: shall mean for all purposes, any day except Saturday, Sunday and any
day which shall be in New York, London or Aberdeen, a legal holiday or a day on which
banking institutions are authorized or required by law or other government action to
close.
	 
	 	 	“Credit Agreement”: means the term loan credit agreement dated on or about the date
of this Assignation between (among others) the Company and the Administrative Agent.
	 
	 	 	“Credit Party”: shall have the meaning given to it in the Credit Agreement.
	 
	 	 	“Delegate”: means any person appointed by the Collateral Agent pursuant to Clause 9.2
to 9.4 (Delegation) and any person appointed as attorney of the Collateral Agent and/or
any Delegate.
	 
	 	 	“Enforcement Date”: means the date on which a notice is issued by the Administrative
Agent to the Borrower under section 9 (Events of Default) of the Credit Agreement upon the
occurrence of an Event of Default which is continuing.
	 
	 	 	“Enoch PLTPA”: means the Enoch pipeline liquids transportation and processing
agreement dated 24 February 2006 and made between, among others, the Company and BP.
	 
	 	 	“Group”: means Endeavour International Corporation and its Subsidiaries for the time
being.
	 
	 	 	“Indemnified Party”: shall have the meaning given to it in the U.S. Security
Agreement.
	 
	 	 	“Licences”: means the rights under the licences detailed in Part A of Schedule 1
(Licences).
	 
	 	 	“Open Permission”: means the Open Permission (Creation Of Security Rights Over
Licences) granted by the Secretary of State on 19 March 2004.
	 
	 	 	“Project Agreements”: means the Agreements and the Licenses.
	 
	 	 	“Secretary of State”: means the Secretary of State for Energy and Climate Change of
Her Majesty’s Government of the United Kingdom and any successor in relevant function in
relation to the Licences.
	 
	 	 	“Secured Creditors”: shall have the meaning given to it in the U.S. Security Agreement.
	 
	 	 	“Secured Hedging Agreement”: shall have the meaning given to it in the U.S. Security
Agreement.




2









 




Exhibit F-5

To Credit Agreement





	 	 	“Secured Liabilities”: shall have the meaning given to it in Clause 2 (Covenant to pay
Secured Liabilities) below.
	 
	 	 	“Secured Reimbursement Agreement”: shall have the meaning given to it in the U.S. Security
Agreement.
	 
	 	 	“Security”: means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar effect.
	 
	 	 	“Security Period”: means the period beginning on the date of this Assignation and ending
on the date on which the Collateral Agent has determined that all of the Secured
Liabilities (whether actual or contingent) have been unconditionally and irrevocably paid
and discharged in full and no further Secured Liabilities are capable of being
outstanding.
	 
	 	 	“Tax”: any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same).
	 
	 	 	General Definitions






	1.2	 	Any reference in this Assignation to:






	 	1.2.1	 	the “Collateral Agent”, the “Company”, any “Secured Creditor”, any “Credit
Party” or any other person shall be construed so as to include its successors in
title, permitted assignees and permitted transferees and, in the case of the
Collateral Agent, shall include any person for the time being appointed as additional
collateral agent pursuant to the Credit Agreement;
	 
	 	1.2.2	 	“assets” includes present and future properties, revenues and rights of
every description;
	 
	 	1.2.3	 	“indebtedness” includes any obligation (whether incurred as principal or
as surety) for the payment or repayment of money, whether present or future, actual
or contingent;
	 
	 	1.2.4	 	a “person” includes any individual, firm, company, corporation,
government, state or agency of a state or any association, trust, joint venture,
consortium or partnership (whether or not having separate legal personality);
	 
	 	1.2.5	 	a “regulation” includes any regulation, rule, official directive, request
or guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or of any regulatory,
self-regulatory or other authority or organisation;
	 
	 	1.2.6	 	a “fixed security” is to be construed in accordance with the terms of
Section 47 of the Bankruptcy and Diligence etc. (Scotland) Act 2007;
	 
	 	1.2.7	 	“without limitation” shall include a reference to without prejudice to the
generality of the foregoing;
	 
	 	1.2.8	 	“attachment” shall include, without limitation, land attachment, interim
attachment, money attachment and residual attachment;
	 
	 	1.2.9	 	“Secured Liabilities” includes any liabilities which would be treated as
such but for the liquidation or dissolution or similar event affecting the Company;
and




3









 




Exhibit F-5

To Credit Agreement





	 	1.2.10	 	a provision of law is a reference to that provision as amended or re-enacted.






	 	 	Construction
	 
	1.3	 	Clause and Schedule headings are for ease of reference only.
	 
	1.4	 	Any reference in this Assignation to any asset shall be construed so as to include:






	 	1.4.1	 	the benefit of any covenants for title and warrandice given or entered
into by any predecessor in title of the Company in respect of that asset and all
other rights, benefits, claims, contracts, warranties, remedies, security or
indemnities in respect of that asset; and
	 
	 	1.4.2	 	the proceeds of sale of any part of that asset and any other moneys paid
or payable in respect of or in connection with that asset.






	1.5	 	Any reference in this Assignation to any Credit Document or any other agreement or other
document shall be construed as a reference to that Credit Document or that other agreement or
document as the same may have been, or may from time to time be, restated, varied, amended,
supplemented, substituted, novated or assigned, whether or not as a result of any of the same:






	 	1.5.1	 	there is an increase or decrease in any facility made available under that
Credit Document or other agreement or document or an increase or decrease in the
period for which any facility is available or in which it is repayable;
	 
	 	1.5.2	 	any additional, further or substituted facility to or for such facility is provided;
	 
	 	1.5.3	 	any rate of interest, commission or fees or relevant purpose is changed;
	 
	 	1.5.4	 	the identity of the parties is changed;
	 
	 	1.5.5	 	the identity of the providers of any security is changed;
	 
	 	1.5.6	 	there is an increased or additional liability on the part of any person; or
	 
	 	1.5.7	 	a new agreement is effectively created or deemed to be created.






	1.6	 	Any reference in this Assignation to “this Assignation” shall be deemed to be a reference to
this Assignation as a whole and not limited to the particular Clause, Schedule or provision in
which the relevant reference appears and to this Assignation as amended, novated, assigned,
supplemented, extended or restated from time to time and any reference in this Assignation to
a “Clause” or a “Schedule” is, unless otherwise provided, a reference to a Clause or a
Schedule of this Assignation.
	 
	1.7	 	Unless the context otherwise requires, words denoting the singular number only shall include
the plural and vice versa.
	 
	1.8	 	Where any provision of this Assignation is stated to include one or more things, that shall
be by way of example or for the avoidance of doubt only and shall not limit the generality of
that provision.
	 
	1.9	 	Any change in the constitution of the Collateral Agent or its absorption of or amalgamation
with any other person or the acquisition of all or part of its undertaking by any other person
shall not in any way prejudice or affect its rights under this Assignation.




4









 





Exhibit F-5

To Credit Agreement




	1.10	 	Any reference in this Assignation to the liquidation, administration, insolvency, bankruptcy,
judicial factory or other similar incapacity of any body corporate shall be construed to
include the equivalent proceeding or occurrence in any other jurisdiction.
	 
	1.11	 	This Assignation is a Credit Document for the purposes of the Credit Agreement.
	 
	 	 	Intercreditor Agreement
	 
	1.12	 	Following execution of the Intercreditor Agreement, this Assignation will be subject to the
terms of the Intercreditor Agreement.
	 
	1.13	 	In the event of any inconsistency between a provision of this Assignation and a provision of
the Intercreditor Agreement, the provision of the Intercreditor Agreement will prevail.
	 
	 	 	Incorporation
	 
	1.14	 	Without prejudice to the application of any other provisions of the Credit Agreement to this
Assignation (by reason of this Assignation being a Credit Document for the purposes of the
Credit Agreement), sections 4.04 (Tax Gross-Up and Indemnities), 11.02 (Right of Setoff),
11.05 (No Waiver; Remedies Cumulative), 11.07 (Calculations; Computations), 11.12 (Amendment
or Waiver, etc.) and 11.19 (Judgment Currency) of the Credit Agreement shall apply to this
Assignation, mutatis mutandis, as if the same had been set out herein with references in such
clauses to:






	 	1.14.1	 	any “Credit Party” or “Borrower” being construed, (A) if the context so requires,
as references to the Company (as defined herein) or (B) if the context so requires,
including the Company (as defined herein);
	 
	 	1.14.2	 	the “Agreement” being construed as references to this Assignation;
	 
	 	1.14.3	 	the “parties” or “party” being construed as references to the Parties or, as the
case may be, a Party to this Assignation;
	 
	 	1.14.4	 	the “Credit Documents” being construed as (a) including this Assignation; or (b) if
the context so requires, as references specifically to this Assignation; and
	 
	 	1.14.5	 	in the context of section 4.04 (Tax Gross-Up and Indemnities) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being, if the context so
requires, construed, in each case, as references to the Collateral Agent and, in the
context of section 11.01(a)(ii) (Payment of Expenses, etc.) of the Credit Agreement,
the “Administrative Agent” or a “Lender” being construed, in each case, as references
to each Secured Creditor, Delegate (as defined herein), attorney, manager, agent or
other person as may be appointed by the Collateral Agent under this Assignation; and
	 
	 	1.14.6	 	in the context of section 11.07 and 11.12, references to particular sections are
references to sections in the Credit Agreement.






	2.	 	Covenant to Pay
	 
	 	 	Covenant to pay Secured Liabilities
	 
	2.1	 	The Company covenants that it shall promptly on demand pay to the Secured Creditors, in
accordance with the Credit Documents:




5









 





Exhibit F-5

To Credit Agreement










	 	2.1.1	 	the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, PIK Interest
(including, without limitation, all interest (including PIK Interest) that accrues
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganisation or similar proceeding of the Company at the
rate provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding), fees, costs and
indemnities) of the Company to the Lenders, whether now existing or incurred after
the date of this Assignation under, arising out of, or in connection with, each
Credit Document to which the Company is a party and the due performance and
compliance by the Company with all of the terms, conditions and agreements contained
in each such Credit Document;
	 
	 	2.1.2	 	the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest is
allowed in any such proceeding) owing by the Company to the Approved Third Party
Credit Providers under any Secured Hedging Agreement, whether now in existence or
arising after the date of this Assignation and the due performance and compliance by
the Company with all of the terms, conditions and agreements contained in each such
Secured Hedging Agreement;
	 
	 	2.1.3	 	the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest is
allowed in any such proceeding) owing by the Company to the Approved Third Party
Credit Providers under any Secured Reimbursement Agreement, whether now in existence
or arising after the date of this Assignation (including, without limitation, all
obligations, liabilities and indebtedness of the Company under any Guaranty in
respect of the Secured Reimbursement Agreements), and the due performance and
compliance by the Company with all of the terms, conditions and agreements contained
in each such Secured Reimbursement Agreement;
	 
	 	2.1.4	 	any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;
	 
	 	2.1.5	 	in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of the Company referred to in paragraphs
2.1.1, 2.1.2 and 2.1.3 above, on and after the Enforcement Date, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realising on
the Collateral, or of any exercise by the Collateral Agent of its rights under
this Assignation, together with reasonable attorneys’ fees and court costs;
	 
	 	2.1.6	 	all amounts paid by any Indemnified Party as to which such Indemnified
Party has the right to reimbursement under this Assignation; and
	 
	 	2.1.7	 	all amounts owing to any Agent pursuant to any of the Credit Documents in
its capacity as such,




6









 





Exhibit F-5

To Credit Agreement




	 	 	it being acknowledged and agreed that the “Secured Liabilities” shall include
extensions of credit of the types described above, whether outstanding on the
date of this Assignation or extended from time to time after the date of this
Assignation.






	2.2	 	Notwithstanding anything to the contrary contained in this Assignation or any other Credit
Document, the aggregate amount of Secured Liabilities of the type described in paragraphs
2.1.2 and 2.1.3 of Clause 2.1 (collectively, the “Secured Third Party Credit Obligations”)
secured by the Collateral shall not at any time exceed $25,000,000 (the “Secured Third Party
Credit Obligations Cap”). No amount of Secured Third Party Credit Obligations in excess of
the Secured Third Party Credit Obligations Cap shall receive the benefit of the security
interests created under this Assignation and in no event shall any proceeds received upon the
sale of, collection from, or other realisation upon all or any part of the Collateral be
applied to the Secured Third Party Credit Obligations in any amount in excess of the Secured
Third Party Credit Obligations Cap.
	 
	 	 	Potential invalidity
	 
	2.3	 	Neither the covenant to pay in Clause 2.1 (Covenant to pay Secured Liabilities), nor the
Security created by this Assignation shall extend to or include any liability or sum which
would, but for this Clause 2.3, cause such covenant, obligation or Security to be unlawful
under any applicable law.
	 
	3.	 	Grant of Security
	 
	3.1	 	The Company, as a continuing security for the payment, performance and discharge of all the
Secured Liabilities, hereby assigns to the Collateral Agent (as agent and trustee for itself
and each of the other Secured Creditors) the Assigned Rights.
	 
	4.	 	Perfection of Security
	 
	 	 	Notices of Assignation
	 
	4.1	 	The Company agrees that the Collateral Agent and any of their respective agents may give
notice of the relevant provisions of this Assignation to the Secretary of State.
	 
	4.2	 	The Company shall join the Collateral Agent in giving a notice of assignation in the form set
out in Part 1 of Schedule 2 (Form of Notice) or in such other form as the Collateral Agent may
reasonably require, duly signed by or on behalf of the Company, within 5 Business Days to each
person who is a party to an Agreement (as required by the Collateral Agent) and shall use all
reasonable endeavours to procure that each person on whom any such notice is served promptly
provides to the Collateral Agent a duly signed acknowledgement of that notice in the form set
out in Part 2 of Schedule 2 (Form of Acknowledgement) or in such other form as the Collateral
Agent may reasonably require.
	 
	 	 	Deposit of Documents
	 
	4.3	 	The Company shall, promptly upon the request of the Collateral Agent from time to time,
deliver to the Collateral Agent a copy of each Project Agreement as is then in effect and all
such other documents relating to the Assigned Rights as the Collateral Agent may reasonably
require.




7









 





Exhibit F-5

To Credit Agreement




	5.	 	Further Assurance
	 
	 	 	Further Assurance
	 
	5.1	 	The Company shall promptly do all such acts and execute all such documents (including
assignments, assignations, transfers, mortgages, charges, notices and instructions) as the
Collateral Agent may reasonably specify (and in such form as the Collateral Agent may
reasonably require in favour of the Collateral Agent or its nominee(s)) to:






	 	5.1.1	 	perfect the security created or intended to be created in respect of the
Assigned Rights (which may include the execution by the Company of a mortgage,
charge, assignation, assignment or other Security over all or any of the assets
forming part of, or which are intended to form part of, the Assigned Rights);
	 
	 	5.1.2	 	confer on the Collateral Agent Security over any assets of the Company
located in any jurisdiction equivalent or similar to the security intended to be
created by, or pursuant to, this Assignation;
	 
	 	5.1.3	 	facilitate the exercise of any rights, powers and remedies of the
Collateral Agent or any Delegate provided by or pursuant to this Assignation or by
law;
	 
	 	5.1.4	 	facilitate the realisation of the assets which form part of, or are
intended to form part of, the Assigned Rights;
	 
	 	5.1.5	 	assign any Assigned Rights; and/or
	 
	 	5.1.6	 	create fixed security over any heritable, freehold, commonhold or
leasehold properties or other properties capable of being charged by way of fixed
security.






	 	 	Necessary Action
	 
	5.2	 	The Company shall take all such action as is available to it (including making all filings
and registrations) as may be necessary for the purpose of the creation, perfection, protection
or maintenance of any security created or intended to be created in favour of the Collateral
Agent by or pursuant to this Assignation.
	 
	6.	 	Undertakings
	 
	 	 	General
	 
	6.1	 	The undertakings in this Clause 7 remain in force from the date of this Assignation for so
long as any amount is outstanding under this Assignation.
	 
	 	 	Negative Pledge
	 
	6.2	 	The Company undertakes to the Collateral Agent that it shall (except as permitted by section
8.01 (Liens) of the Credit Agreement):






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




8









 





Exhibit F-5

To Credit Agreement










	 	 	Restriction on Disposals
	 
	6.3	 	The Company undertakes to the Collateral Agent that it shall (except as permitted by section
8.02 (Consolidation, Merger, Purchase or Sale of Assets, etc.) of the Credit Agreement) not,
either in a single transaction or in a series of transactions and whether related or not,
dispose of the Assigned Rights or any part of them.
	 
	 	 	Project Agreements
	 
	6.4	 	The security created by, or pursuant to, this Assignation in relation to each Assigned Right
shall, to the extent required by the terms of that Assigned Right, in each case as that
agreement may have been subsequently assigned, transferred or novated, be:






	 	(a)	 	without prejudice to the provisions of that Assigned Right;
	 
	 	(b)	 	subordinated to the express rights specified under that Assigned Right of
the parties thereto from time to time (other than the Company); and
	 
	 	(c)	 	subject to the liabilities and obligations of the Company relating to the
interest of the Company in and under that Assigned Right,






	 	 	provided that, nothing in this Clause 6.4 shall (i) release the Company from any
obligations to fulfil any requisite condition in connection therewith or (ii) (subject to
Clause 6.5 below) impose on the Collateral Agent or other party appointed by it an
obligation to perform any of the obligations of the Company under any Assigned Right or to
procure the performance of the Company of any such obligation.
	 
	6.5	 	The Company and the Collateral Agent acknowledge that:






	 	(a)	 	in the event of the Collateral Agent exercising any rights created under
this Assignation in respect of the Enoch PLTPA, the Collateral Agent will continue to
fulfil the obligations of the Company under the Enoch PLTPA; and
	 
	 	(b)	 	BP may rely on the undertaking given by the Collateral Agent under Clause
(a) above.






	 	 	Prejudicial Action
	 
	6.6	 	The Company will not do or cause or permit to be done anything, which may in any way reduce,
jeopardise or otherwise prejudice the value to the Collateral Agent of the Assigned Rights.
	 
	7.	 	The Assigned Rights
	 
	 	 	Liability of Company
	 
	7.1	 	The Company undertakes and agrees with the Collateral Agent that, notwithstanding the
assignation contained in Clause 3 (Grant of Security), it shall remain liable to observe and
perform all of the obligations assumed by it under or in connection with the Project
Agreements and the Collateral Agent (without prejudice to Clause 6.5 above) shall not have or
incur any obligation or liability under or in connection with the Project Agreements by reason
of that assignation contained in Clause 3 (Grant of Security).




9









 





Exhibit F-5

To Credit Agreement




	 	 	Exercise of Rights and Powers
	 
	7.2	 	At any time on or after the Enforcement Date, the Collateral Agent shall be entitled to
exercise, without notice to the Company or prior authorisation of any court, at any time or
times and in such manner as the Collateral Agent shall think fit all or any of the rights,
powers and remedies held by it as assignee of the Assigned Rights and (without limitation) to:






	 	7.2.1	 	collect, demand and receive or recover by legal process all or any moneys
payable under or in connection with the Project Agreements or for the time being
comprised in the Assigned Rights and on payment to give an effectual discharge for
them;
	 
	 	7.2.2	 	exercise all such other rights, powers and remedies as the Company is then
entitled to exercise in relation to the Assigned Rights (or might, but for the terms
of this Assignation, exercise) to the exclusion of the Company (and the Company shall
exercise all such rights, powers and remedies in accordance with the instructions of
the Collateral Agent);
	 
	 	7.2.3	 	do all such acts, deeds, documents and things as the Collateral Agent may
consider necessary or proper in relation to any of the rights, powers and remedies
referred to above;
	 
	 	7.2.4	 	to exercise and do all such rights and things as the Collateral Agent
would be entitled to exercise and do if it were the absolute owner of the Assigned
Rights and if the Collateral Agent had been a party to the Project Agreements instead
of the Company including, without prejudice to the generality of the foregoing, to
terminate any or all of the Project Agreements and any other Assigned Rights, sell
(at any time and without the Collateral Agent being under any obligation to have
regard for what effect the time of sale might have on the realisation price), dispose
of and/or take possession of all or any Assigned Rights;
	 
	 	7.2.5	 	to apply any monies, dividends to creditors, share of profits, interest or
other payments which may be received or receivable by the Collateral Agent or by any
nominee in respect of the Assigned Rights as though they were proceeds of sale;
	 
	 	7.2.6	 	to settle, adjust, refer to arbitration or any other dispute resolution
procedure, compromise and/or arrange any claims, accounts, disputes, questions and
demands with or by any person relating in any way to the Assigned Rights;
	 
	 	7.2.7	 	to bring, prosecute, enforce, defend and abandon actions, suits and
proceedings in relation to the Assigned Rights;
	 
	 	7.2.8	 	to redeem any security (whether or not having priority to the security
created by or pursuant to this Assignation) over any Assigned Rights and to settle
the accounts of the holders of any such security; and
	 
	 	7.2.9	 	to do all such other acts and things it may consider necessary or
expedient for the realisation of the Assigned Rights or incidental to the exercise of
any of the rights conferred on the Collateral Agent under or by virtue of this
Assignation and to concur in the doing of anything which the Collateral Agent has the
right to do and to do any such thing jointly with any other person.






	7.3	 	Neither the Collateral Agent nor their nominee(s) shall be under any duty to the Company or
any other person to make any enquiry into the nature or sufficiency of any payment received by
it in respect of the Assigned Rights or the adequacy of performance by any person party to any




10









 





Exhibit F-5

To Credit Agreement




	 	 	Project Agreement of any of its obligations under or in connection with that Project
Agreement or to present or file or make any claim, take any action or do any other act or
thing for the purpose of collecting and/or enforcing the payment of any amount to which it
may be entitled in respect of the Assigned Rights or to enforce any other rights, title,
interests or claims assigned under this Assignation or to which the Collateral Agent may
at any time be entitled pursuant to this Assignation.
	 
	7.4	 	The Collateral Agent shall not in any circumstances, either by reason of any dealing with the
Assigned Rights or any part of the Assigned Rights or for any other reason whatsoever be
liable to account to the Company for anything except in respect of the Assigned Rights own
actual receipts or be liable to the Company for any loss or damage arising from any
realisation by the Collateral Agent of the Assigned Rights or any part of the Assigned Rights
or from any act, default or omission of the Collateral Agent in relation to the Assigned
Rights or any part of the Assigned Rights or from any exercise or non-exercise by the
Collateral Agent of any power, authority or discretion conferred upon it in relation to the
Assigned Rights or any part of the Assigned Rights by or pursuant to this Assignation or
otherwise by any applicable law.
	 
	8.	 	Enforcement of Security
	 
	 	 	When Security becomes Enforceable
	 
	8.1	 	At any time on or after the Enforcement Date, the security created by, or pursuant to, this
Assignation shall become immediately enforceable and the Collateral Agent may, without notice
to the Company or prior authorisation from any court, in its absolute discretion enforce all
or any part of that security at the times, in the manner and on the terms it thinks fit and,
to the extent permitted by law, take possession of and hold or dispose of all or any part of
the Assigned Rights and exercise the rights and powers conferred by law and those referred to
in Clause 7.2.
	 
	 	 	Right of Appropriation
	 
	8.2	 	Without prejudice to the other provisions of this Assignation, to the extent that any of the
Assigned Rights constitute “financial collateral”, and this Assignation and the obligations of
the Company hereunder constitute a “security financial collateral arrangement” (in each case
as defined in, and for the purposes of, the Financial Collateral Arrangements (No. 2)
Regulations 2003 (SI 2003/3226) (the “Regulations”), the Collateral Agent shall at any time on
or after the Enforcement Date have the right to appropriate all or any part of the Assigned
Rights in or towards discharge of the Secured Liabilities. For this purpose, the parties
agree that the value of any such Assigned Rights so appropriated shall be the market price of
such Assigned Rights at the time the right of appropriation is exercised as determined by the
Collateral Agent by reference to such method or source of valuation as the Collateral Agent
may select, including by independent valuation. For this purpose, the parties agree that the
methods or sources of valuation provided for in this Clause 8.2 (Right of appropriation) or
selected by the Collateral Agent in accordance with this Clause 8.2 (Right of appropriation)
shall constitute a commercially reasonable method of valuation for the purposes of the
Regulations.
	 
	8.3	 	The Collateral Agent shall notify the Company as soon as reasonably practicable of the
exercise of its rights of appropriation as regards such of the Assigned Rights as are
specified in such notice.
	 
	 	 	Redemption of Prior Security

	 
	8.4	 	


At any time on or after the Enforcement Date, the Collateral Agent may:




11









 




Exhibit F-5

To Credit Agreement











	 	8.4.1	 	redeem any prior Security over any Assigned Rights; or
	 
	 	8.4.2	 	procure the transfer of that Security to the Collateral Agent; or
	 
	 	8.4.3	 	settle and pass the accounts of the person or persons entitled to such
Security (and any accounts so settled and passed shall be conclusive and binding on
the Company).






	8.5	 	All principal moneys, interest, costs, charges and expenses of and incidental to any such
redemption or transfer shall be paid by the Company to the Collateral Agent and every Delegate
on demand and shall be secured by this Assignation.
	 
	9.	 	Discretions and Delegation
	 
	 	 	Discretion
	 
	9.1	 	Any liberty or power which may be exercised or any determination which may be made under this
Assignation by the Collateral Agent or any Delegate may be exercised or made in its absolute
and unfettered discretion without any obligation to give reasons.
	 
	 	 	Delegation
	 
	9.2	 	The Collateral Agent may delegate (either generally or specifically) by power of attorney or
in any other manner to any person any right, power, authority or discretion conferred on it by
this Assignation (including the power of attorney).
	 
	9.3	 	Any such delegation may be made upon such terms and conditions (including the power to
sub-delegate) as the Collateral Agent (as the case may be) shall think fit.
	 
	9.4	 	The Collateral Agent shall be in any way liable or responsible to the Company for any loss or
liability arising from any act, default, omission or misconduct on the part of any Delegate.
	 
	10.	 	Power of Attorney
	 
	 	 	Appointment and Powers
	 
	10.1	 	The Company hereby irrevocably and by way of security appoints the Collateral Agent and any
Delegate severally to be its attorney in its name and on its behalf and as its act and deed:






	 	10.1.1	 	to execute and deliver any documents or instruments which the Collateral Agent may
require for perfecting the title of the Collateral Agent to the Charged Property or
for vesting the same in the Collateral Agent, its nominee or any purchaser,
	 
	 	10.1.2	 	to sign, execute, seal and deliver and otherwise perfect any further security
document which the Company is required to enter into pursuant to this Assignation;
and security created by, or pursuant to, this Assignation; and
	 
	 	10.1.3	 	otherwise generally to sign, seal, execute and deliver all deeds, assurances,
agreements and documents and to do all acts and things which (i) may be required for
the full exercise of all or any of the powers conferred on the Collateral Agent under
this Assignation; (ii) the Company is required to do pursuant to this Assignation; or
(iii) may be deemed expedient by the Collateral Agent in connection with (A) any
preservation, disposition, realisation or getting in by the Collateral Agent of the
Assigned Rights or any part thereof or (B) any other exercise of any other power
under this Assignation.




12









 




Exhibit F-5

To Credit Agreement











	 	 	The Collateral Agent confirms that it will only exercise the rights set out in this Clause
10.1 following the occurrence of a Default or Event of Default under the Credit Documents.
	 
	 	 	Ratification
	 
	10.2	 	The Company ratifies and confirms and agrees to ratify and confirm all acts and things which
any attorney mentioned in this Clause 10 (Power of Attorney) does or purports to do in
exercise of the powers granted by this Clause 10. All moneys expended by any such attorney
shall be deemed to be expenses incurred by the Collateral Agent under this Assignation.
	 
	11.	 	Protection of Purchasers
	 
	 	 	Consideration
	 
	11.1	 	The receipt of the Collateral Agent or any Delegate shall be a conclusive discharge to a
purchaser and, in making any sale or other disposal of any of the Assigned Rights (including a
disposal by a Delegate to any subsidiary of the Company) or in making any acquisition in the
exercise of their respective powers, the Collateral Agent and every Delegate may do so for
such consideration, in such manner and on such terms as it or he thinks fit.
	 
	 	 	Protection of Third Parties
	 
	11.2	 	No person (including a purchaser) dealing with the Collateral Agent or any Delegate shall be
bound to enquire:






	 	11.2.1	 	whether the Secured Liabilities have become payable; or
	 
	 	11.2.2	 	whether any power which the Collateral Agent or any Delegate is purporting to
exercise has arisen or become exercisable; or
	 
	 	11.2.3	 	whether any money remains due under the Credit Documents; or
	 
	 	11.2.4	 	how any money paid to the Collateral Agent or to any Delegate is to be applied,






	 	 	or shall be concerned with any propriety, regularity or purpose on the part of the
Collateral Agent or any Delegate in such dealings or in the exercise of any such power.
	 
	12.	 	Application of Proceeds
	 
	 	 	Order of Application
	 
	12.1	 	Any monies received under the powers hereby conferred shall, subject to the repayment of any
claims or debts having priority to this Assignation, be applied for the purposes and in the
order of priority provided for in:






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




13









 




Exhibit F-5

To Credit Agreement











	 	 	Suspense account
	 
	12.2	 	The Collateral Agent may credit any monies received under this Assignation to an interest
bearing suspense account for so long and in such manner as the Collateral Agent may from time
to time determine.
	 
	13.	 	No Liability as Creditor nor Mortgagee in Possession
	 
	13.1	 	Neither the Collateral Agent nor any Delegate shall in any circumstances (either by reason of
entering into or taking possession of any Assigned Rights or for any other reason and whether
as creditor, heritable creditor or mortgagee in possession or on any other basis) be liable to
account to the Company for anything, except actual receipts, or be liable to the Company for
any costs, charges, losses, liabilities or expenses arising from the realisation of any
Assigned Rights or from any act, default or omission of the Collateral Agent, any Delegate or
any of their respective officers, agents or employees in relation to the Assigned Rights or
from any exercise or purported exercise or non-exercise by the Collateral Agent or any
Delegate of any power, authority or discretion provided by or pursuant to this Assignation or
by law or for any other loss of any nature whatsoever in connection with the Assigned Rights
or the Credit Documents.
	 
	14.	 	Effectiveness of Security
	 
	 	 	Continuing Security
	 
	14.1	 	The security created by, or pursuant to, this Assignation shall remain in full force and
effect as a continuing security for the Secured Liabilities, unless and until discharged by
the Collateral Agent, and will extend to the ultimate balance of all the Secured Liabilities,
regardless of any intermediate payment or discharge in whole or in part.
	 
	 	 	Cumulative Rights
	 
	14.2	 	The security created by, or pursuant to, this Assignation and all rights, powers and remedies
of the Collateral Agent provided by or pursuant to this Assignation or by law shall be
cumulative, in addition to and independent of any other Security now or subsequently held by
the Collateral Agent or any other Secured Creditor for the Secured Liabilities or any other
obligations or any rights, powers and remedies provided by law. No prior Security held by the
Collateral Agent (whether in its capacity as agent and trustee or otherwise) or any of the
other Secured Creditors over the whole or any part of the Assigned Rights shall be superseded
by, supersede or merge into, the security created by, or pursuant to, this Assignation.
	 
	 	 	Reinstatement
	 
	14.3	 	If any discharge, release or arrangement (whether in respect of the obligations of a Credit
Party or any Security for those obligations or otherwise) is made by the Collateral Agent or
any other Secured Creditor in whole or in part on the faith of any payment, Security or other
disposition which is avoided or must be restored in insolvency, liquidation, administration or
otherwise, without limitation, then the liability of the Company under, the security created
by, or pursuant to, this Assignation will continue or be reinstated as if the discharge,
release or arrangement had not occurred.
	 
	14.4	 	The Collateral Agent may concede or compromise any claim that any payment or any discharge is
liable to avoidance, restoration or reduction.




14









 




Exhibit F-5

To Credit Agreement





	 	 	Waiver of Defences
	 
	14.5	 	Neither the obligations of the Company under this Assignation nor the security created by, or
pursuant to, this Assignation nor the rights, powers and remedies of the Collateral Agent
provided by or pursuant to this Assignation or by law will be affected by an act, omission,
matter or thing which, but for this Clause 14.5, would reduce, release or prejudice any of its
obligations under this Assignation, any of that security or any of those rights, powers and
remedies (without limitation and whether or not known to it or the Collateral Agent or any
other Secured Creditor) including:






	 	14.5.1	 	any time, waiver or consent granted to, or composition with any Credit Party or any
other person;
	 
	 	14.5.2	 	the release of any person under the terms of any composition or arrangement with
any creditor of any person;
	 
	 	14.5.3	 	the taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or Security over assets
of any Credit Party, or any other person or any non-presentation or non-observance of
any formality or other requirement in respect of any instrument or any failure to
realise the full value of any Security;
	 
	 	14.5.4	 	any incapacity or lack of power, authority or legal personality of, or dissolution
or change in the members or status of any Credit Party , or any other person;
	 
	 	14.5.5	 	any variation, amendment, novation, supplement, extension (whether of maturity or
otherwise), substitution, restatement (in each case, however fundamental and of
whatsoever nature and whether or not more onerous) or replacement of any Credit
Document or any other document or Security including without limitation any change in
the purpose of, any extension of or any increase in, any facility or the addition of
any new facility under any Credit Document or other document or Security;
	 
	 	14.5.6	 	any unenforceability, illegality or invalidity of any obligation of any other
person under any Credit Document or any other document or Security; or
	 
	 	14.5.7	 	any insolvency or similar proceedings.






	 	 	Guarantor Intent
	 
	14.6	 	Without prejudice to the generality of Clause 14.5 (Waiver of Defences), the Company
expressly confirms that it intends that the security created by, or pursuant to, this
Assignation shall extend from time to time to any (however fundamental) variation, increase,
extension or addition of or to any facility or amount made available under any of the Credit
Documents and/or any of the Credit Documents including, without limitation, any of the same
which are for the purposes of or in connection with any of the following: business
acquisitions of any nature; increasing working capital; enabling investor distributions to be
made; carrying out restructurings; refinancing existing facilities; refinancing any other
indebtedness; making facilities available to new borrowers; and/or any other variation or
extension of the purposes for which any such facility or amount might be made available from
time to time, together with any fees, costs and/or expenses associated with any of the
foregoing.




15









 




Exhibit F-5

To Credit Agreement





	 	 	Immediate Recourse
	 
	14.7	 	The Company waives any right it may have of first requiring the Collateral Agent or any other
Secured Creditor to proceed against or enforce any other rights or Security or claim payment
from any person or file any proof or claim in any insolvency, administration, winding up or
liquidation proceedings relating to any person before claiming from it under this Assignation.
This waiver applies irrespective of any law or any provision of any Credit Document to the
contrary.
	 
	 	 	Appropriations
	 
	14.8	 	Until all the Secured Liabilities which may be or become payable by the Company under or in
connection with this Assignation have been irrevocably paid, performed and discharged in full,
the Collateral Agent may:






	 	14.8.1	 	without affecting the liability of the Company under this Assignation:






	 	(a)	 	refrain from applying or enforcing any other moneys,
Security or rights held or received by it in respect of the Secured
Liabilities; or
	 
	 	(b)	 	apply and enforce the same in such manner and order as it
sees fit (whether against the Secured Liabilities or otherwise) and the
Company shall not be entitled to direct the appropriation of any such
moneys, Security or rights or to enjoy the benefit of the same; and/or






	 	14.8.2	 	hold in a suspense account any moneys received from the Company or on account of
the Company’s liability in respect of the Secured Liabilities. Amounts standing to
the credit of any such suspense account shall bear interest at a rate considered by
the Collateral Agent to be a fair market rate.






	 	 	Deferral of Company’s Rights
	 
	14.9	 	Until the Secured Liabilities, and all amounts which may be or become due and payable in
respect of the Secured Liabilities, have been irrevocably paid, performed or discharged in
full and unless the Collateral Agent otherwise directs, the Company shall not exercise any
rights which it may have by reason of performance by it of its obligations under this
Assignation or by reason of any amount being payable to:






	 	14.9.1	 	be indemnified by a Credit Party;
	 
	 	14.9.2	 	claim any contribution from any other guarantor of any Credit Party’s obligations
under the Credit Documents;
	 
	 	14.9.3	 	take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Collateral Agent and/or any of the other Secured
Creditors under the Credit Documents or of any other Security taken pursuant to, or
in connection with, the Credit Documents by the Collateral Agent or any other Secured
Creditor;
	 
	 	14.9.4	 	to bring legal or other proceedings for an order requiring a Credit Party to make
any payment, or perform any obligation, in respect of which the Company has given a
guarantee, undertaking or indemnity;
	 
	 	14.9.5	 	exercise any right of set-off against any Credit Party; and/or




16









 




Exhibit F-5

To Credit Agreement





	 	14.9.6	 	claim or prove as a creditor of any Credit Party or in its estate in competition
with any Secured Creditor.






	14.10	 	The rights of the Collateral Agent and/or any of the other Secured Creditors under Clause
14.9 above shall be free from any right of quasi-retainer or other rule or principle of fund
ascertainment arising either at law or in equity.
	 
	14.11	 	If the Company receives any benefit, payment or distribution in relation to any rights
referred to in Clause 14.9 above, it shall hold that benefit, payment or distribution to the
extent necessary to enable all the Secured Liabilities, and all amounts which may be or become
due and payable in respect of the Secured Liabilities, to be repaid in full on trust for the
Collateral Agent (as agent and trustee for itself and each of the other Secured Creditors) and
shall promptly pay or transfer the same to the Collateral Agent or as the Collateral Agent may
direct for application in accordance with Clause 12 (Application of Proceeds).
	 
	 	 	No Security held by Company
	 
	14.12	 	The Company shall not take or receive any Security from a Credit Party or any other person
in connection with its liability under this Assignation. However, if any such Security is so
taken or received by the Company:






	 	14.12.1	 	the Company undertakes to hold it on trust for the Collateral Agent (as agent and
trustee for itself and each of the other Secured Creditors), together with all moneys
at any time received or held in respect of such Security, for application in or
towards payment and discharge of the Secured Liabilities; and
	 
	 	14.12.2	 	on demand by the Collateral Agent, the Company shall promptly transfer, assign or
pay to the Collateral Agent all Security and all moneys from time to time held on
trust by it under this Clause 14.12.






	15.	 	Certificates and Determinations
	 
	15.1	 	Any certificate or determination by the Collateral Agent of a rate or amount under this
Assignation is, in the absence of manifest error, conclusive evidence of the matters to which
it relates.
	 
	16.	 	Partial Invalidity
	 
	16.1	 	If, at any time, any provision of this Assignation or becomes illegal, invalid or
unenforceable in any respect under any law of any jurisdiction, neither the legality, validity
or enforceability of the remaining provisions of this Assignation nor the legality, validity
or enforceability of such provision under the law of any other jurisdiction will in any way be
affected or impaired and, if any part of the security created, or intended to be created, by
this Assignation is invalid, unenforceable or ineffective for any reason, that shall not
affect or impair any other part of the security.
	 
	17.	 	Remedies and Waivers
	 
	17.1	 	No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent, any
right, remedy or power under this Assignation shall operate as a waiver, nor shall any single
or partial exercise of any right, remedy or power prevent any further or other exercise or the
exercise of any other right, remedy or power. The rights, remedies and powers provided in
this Assignation are cumulative and are in addition to, not exclusive of, any rights, remedies
or powers provided by law.




17









 





Exhibit F-5

To Credit Agreement




	17.2	 	Any amendment, waiver or consent by the Collateral Agent under this Assignation must be in
writing and may be given subject to any conditions thought fit by the Collateral Agent. Any
waiver or consent shall be effective only in the instance and for the purpose for which it is
given.
	 
	18.	 	Notices
	 
	 	 	Communications in writing
	 
	18.1	 	Any communication to be made under or in connection with this Assignation shall be made in
writing and, unless otherwise stated, may be made by fax or letter.
	 
	 	 	Addresses
	 
	18.2	 	The address and fax number (and the department or officer, if any, for whose attention the
communication is to be made) of the Company and the Collateral Agent for any communication or
document to be made or delivered under or in connection with this Assignation is that
identified with its name below:





	 	 	 	 	 

	 

	 	Company	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Endeavour Energy UK Limited
	 

	 	 	 	114 St. Martin’s Lane
	 

	 	 	 	London
	 

	 	 	 	WC2N 4BE
	 

	 	 	 	England
	 
	 	 	 	 
	 

	 	For the Attentionof:
	 	Mike Kirksey
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+44 207 451 2352
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Endeavour International Corporation
	 

	 	 	 	1001 Fannin Street, Suite 1600
	 

	 	 	 	Houston
	 

	 	 	 	Texas 77002
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Mike Kirksey / Cathy Stubbs
	 
	 	 	 	 
	 

	 	Fax Number:
	 	+1 713 307 8794
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com /
	 

	 	 	 	Cathy.Stubbs@endeavourcorp.com
	 
	 	 	 	 
	 

	 	Collateral Agent	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Cyan Partners, LP
	 

	 	 	 	399 Park Avenue
	 

	 	 	 	39th Floor
	 

	 	 	 	New York
	 

	 	 	 	10022
United States of America






18









 




Exhibit F-5

To Credit Agreement





	 	 	 	 	 

	 

	 	Fax Number:
	 	+1 212 380 5871
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Divya Gopal







	 	 	or any substitute address, fax number or department or officer as the Company may
notify to the Collateral Agent or, as the case may be, the Collateral Agent may notify to
the Company, in each case by not less than five Business Days’ notice.
	 
	 	 	Delivery
	 
	18.3	 	Any communication or document made or delivered by one person to another under or in
connection with this Assignation will only be effective:






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






	 	 	and, if a particular department or officer is specified as part of its address details
provided under Clause 18.2 (Addresses), if addressed to that department or officer.
	 
	 	 	Any communication or document to be made or delivered to the Collateral Agent will be
effective only when actually received by it and then only if it is expressly marked for
the attention of the department or officer identified with the Collateral Agent’s name in
Clause 18.2 (Addresses) (or any substitute department or officer as it shall specify for
this purpose).
	 
	19.	 	Assignation
	 
	19.1	 	The Company may not assign or transfer any of its rights or obligations under this
Assignation without the prior consent of each Lender. The Collateral Agent may assign and
transfer all or any part of its rights and obligations under this Assignation to any
replacement Collateral Agent appointed pursuant to the terms of the Credit Agreement.
	 
	20.	 	Releases
	 
	20.1	 	Upon the expiry of the Security Period (but not otherwise) and subject to Clauses 14.3 and
14.4 (Reinstatement), the Collateral Agent shall, at the request and cost of the Company, take
whatever action is necessary to release the Assigned Rights of from the security created by,
or pursuant to, this Assignation.
	 
	21.	 	Consent to Registration
	 
	21.1	 	The Company consents to the registration of this Assignation and each certificate referred to
in Clause 15 (Certificates and Determinations) for preservation and execution.
	 
	22.	 	Governing Law
	 
	22.1	 	This Assignation and any non-contractual obligations arising out of or in connection with it
are governed by the law of Scotland.




19









 




Exhibit F-5

To Credit Agreement





	23.	 	Enforcement
	 
	 	 	Jurisdiction
	 
	23.1	 	The courts of Scotland have exclusive jurisdiction to settle any dispute arising out of or in
connection with this Assignation (including a dispute relating to the existence, validity or
termination of this Assignation or any non-contractual obligation arising out of or in
connection with this Assignation) (a “Dispute”).
	 
	23.2	 	The Company agrees that the courts of Scotland are the most appropriate and convenient courts
to settle Disputes and accordingly it will not argue to the contrary or take proceedings
relating to a Dispute in any other courts.
	 
	23.3	 	Clauses 23.1 and 23.2 above are for the benefit of the Collateral Agent only. As a result,
the Collateral Agent shall not be prevented from taking proceedings relating to a Dispute in
any other courts with jurisdiction. To the extent allowed by law, the Collateral Agent may
take concurrent proceedings in any number of jurisdictions.
	 
	23.4	 	Without prejudice to Clauses 23.1 and 23.2 above, the Company further agrees that proceedings
relating to a Dispute may be brought in the courts of Scotland and England and irrevocably
submits to the jurisdiction of such courts.
	 
	23.5	 	The Company irrevocably waives any right it may have to the trial by jury in any proceedings
relating to a Dispute.




20









 





Exhibit F-5

To Credit Agreement




	 	 	Waiver of Immunity
	 
	23.6	 	To the extent that the Company may in any jurisdiction claim for itself or its assets
immunity from suit, execution, attachment (whether in aid of execution, before judgment or
otherwise) or other legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not claimed), the Company
irrevocably agrees not to claim and irrevocably waives such immunity to the fullest extent
permitted by the laws of that jurisdiction.




IN WITNESS WHEREOF: this Assignation consisting of this and the preceding twenty (20) pages and the
two Schedules annexed are executed as follows:



THE COMPANY




	 	 	 

	SUBSCRIBED FOR and ON BEHALF OF
	 	 
	 

	 	 
	ENDEAVOUR ENERGY UK LIMITED

acting by of 1001 Fannin Street, Suite 1600,
Houston, Texas 77002, United States of America in
the exercise of a power of attorney dated 3
August 2010 granted by Endeavour Energy UK
Limited in the presence of:

	 	Duly Authorised Attorney






	 	 	 

	Witness signature:
	 	 
	 

	 	 
	 
	 	 
	Witness name:
	 	 
	 

	 	 
	 
	 	 
	Witness address:
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	Place of Signing:
	 	 
	 

	 	 
	 
	 	 
	Date of Signing:
	 	 
	 

	 	 






THE COLLATERAL AGENT 




	 	 	 	 	 

	SUBSCRIBED FOR and ON BEHALF OF
	 	)	 	 
	 
	 	 	 
	CYAN PARTNERS, LP (as agent and trustee for
	 	)	 	(Authorised Signatory)
	itself and each of the other Secured Creditors) by its
	 	)	 	 
	attorney in the presence of:
	 	)	 	 






	 	 	 

	Witness signature:
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	Witness name:
	 	 
	 

	 	 
	 
	 	 
	Witness address:
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	Place of Signing:
	 	 
	 

	 	 
	 
	 	 
	Date of Signing:
	 	 
	 

	 	 






21









 




Exhibit F-5

To Credit Agreement





Schedule 1




This is the Schedule 1 referred to in the foregoing Assignation by Endeavour Energy UK Limited in

favour of Cyan Partners, LP (as agent and trustee for itself and each of the other Secured

Creditors) dated           August 2010



Part A




Licences




	1.	 	The Petroleum Production Licence P.592 dated 3 June 1987;
	 
	2.	 	The Petroleum Production Licence P.361 dated 16 December 1980;
	 
	3.	 	The Petroleum Production Licence P.213 dated 15 March 1972;
	 
	4.	 	The Petroleum Production Licence P.218 dated 15 March 1972;
	 
	5.	 	The Petroleum Production Licence P.588 dated 3 June 1987;
	 
	6.	 	The Petroleum Production Licence P.226 dated 15 March 1972;
	 
	7.	 	The Petroleum Production Licence P.339 dated 16 December 1980;
	 
	8.	 	The Petroleum Production Licence P.219 dated 15 March 1972;
	 
	9.	 	The Petroleum Production Licence P.1314 dated 22 December 2005; and
	 
	10.	 	The Petroleum Production Licence P.255 dated 30 November 1977.





Part B




Agreements




	1.	 	The joint operating agreement for P.592 Block 20/4b dated 2 September 1999;
	 
	2.	 	The Goldeneye unitisation and unit operating agreement dated 15 March 2002;
	 
	3.	 	The joint operating agreement for P.361 Block 29/1b dated 23 November 1988;
	 
	4.	 	The Triton joint facilities operating agreement dated 14 April 2000;
	 
	5.	 	The Bittern unitisation and unit operating agreement dated 23 January 2002;
	 
	6.	 	The joint operating agreement for P.213 Block 16/26a (Area A — “Alba Field Area”) dated 10
October 1990;
	 
	7.	 	The joint operating agreement for P.218 and P.588 Blocks 15/21f and 15/21b dated 13 August
1987 (as it applies to the Ivanhoe Area, the Rob Roy Area and the Hamish Area by virtue of a
Supplemental Agreement dated 31 December 1987);
	 
	8.	 	The joint operating agreement for P.226 Block 15/27 dated 21 January 1998 as it applies in
the manner of a separate contract to Area A — “Renee” (as described in the agreement entitled
“Amendment to the Joint Operating Agreement for United Kingdom Petroleum Production Licence
P.226 for Block 15/27” dated 25 February 2000 (the “Amendment Agreement”));




22









 





Exhibit F-5

To Credit Agreement




	9.	 	The joint operating agreement for P.226 Block 15/27 dated 21 January 1998 (as amended under
the terms of the Amendment Agreement) as it applies in the manner of a separate contract to
Area Beta — “Rochelle” (as defined in an agreement dated 23 December 2009 entitled “Amendment
to the Joint Operating Agreements for United Kingdom Petroleum Production Licence P.226 for
Block 15/27 Area B and United Kingdom Petroleum Production Licence P.226 for Block 15/27 Area
C” under which Areas B and C (each as defined in the Amendment Agreement) were merged and a
new Area Beta was created);
	 
	10.	 	The joint operating agreement for P.339 Block 15/28b (“Rubie Field Area”) dated 26 January
1999;
	 
	11.	 	The joint operating agreement for P.219 Block 16/13a & 16/13e — “Enoch” dated 7 March 1986;
	 
	12.	 	The Enoch unitisation and unit operating agreement dated 1 July 2005;
	 
	13.	 	The Enoch PL Transport and Processing Agreement dated 24 February 2006;
	 
	14.	 	The joint operating agreement for P.1314 Block 23/16f — “Columbus” dated 27 September 2006;
and
	 
	15.	 	The joint operating agreement for P.255 Block 22/06a North — “Bacchus” dated 15 September
2006.




23









 





Exhibit F-5

To Credit Agreement









Schedule 2




This is the Schedule 2 referred to in the foregoing Assignation by Endeavour Energy UK Limited in

favour of Cyan Partners, LP (as agent and trustee for itself and each of the other Secured

Creditors) dated           August 2010



Part 1 — Form of Notice




[Headed notepaper of Endeavour Energy UK Limited]


BY REGISTERED MAIL



To: [relevant counterparty]



Dated [•]



Dear Sirs




Notice of Assignment



We hereby give you notice that by an English law debenture dated [•] August 2010 (the “Debenture”)
and a Scots law Assignation of Security dated [•] August 2010 (the “Assignation”) made between
ourselves (the “Company”) and Cyan Partners, LP (the “Collateral Agent”) all of our rights to and
title and interest from time to time in the property described in the Annex to this notice (the
“Assigned Property”) were assigned by us to the Collateral Agent in accordance with the provisions
of the relevant agreements.



On behalf of the Collateral Agent, we hereby irrevocably instruct and authorise you:





	1.	 	on written request from the Collateral Agent to make all payments due to us in respect
of the Assigned Property to the Collateral Agent instead at [details] unless and until the
Collateral Agent notifies you otherwise; and
	 
	2.	 	to disclose to the Collateral Agent such information regarding the Assigned Property
as it may from time to time reasonably request and to send copies of all notices relating to
the Assigned Property to the Collateral Agent.




Would you please acknowledge receipt of this Notice by returning to us the copy of this Notice duly
signed by your authorised signatory.



Your acknowledgement will be deemed to confirm in favour of the Collateral Agent that you:





	1.	 	have not received any other notice of the interest of any third party relating to the
Assigned Property;
	 
	2.	 	are not aware of any dispute between ourselves and yourselves relating to the Assigned
Property; and
	 
	3.	 	shall not raise any set off, defence or counter claim against the Collateral Agent in
respect of any payments now or in future expressed to be payable under the Assigned Property.




This Notice is, to the extent that it relates to any requirement for notice under the Assignation,
governed by the laws of Scotland and any dispute or claim arising out of or in connection with it
and/or the






24









 





Exhibit F-5

To Credit Agreement





Assignation or its subject matter, existence, negotiation, validity, termination, or enforceability
(including any non-contractual disputes or claims) shall be governed by and construed in accordance
with the laws of Scotland.



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



Yours faithfully




 

for and on behalf of

Endeavour Energy UK Limited




Part 2 — Form of Acknowledgement





	To: 	 	 Cyan Partners, LP Park Avenue, 39th Floor, New York, New York, 10022
(Attention: Divya Gopal)
	 
	 	 	Endeavour Energy UK Limited, 33rd Floor, City Point, One Ropemaker St, London
EC2Y 9UE




Dated [•]




Description of Assigned Property



Dear Sirs




Notice of Assignment



We acknowledge receipt of the enclosed Notice of Assignment.



Yours faithfully




 

duly authorised signatory for and on

behalf of [relevant counterparty]




25









 






Dated           August 2010

 






ENDEAVOUR ENERGY UK LIMITED



AND



CYAN PARTNERS, LP



(as agent and trustee for itself and each of the other Secured Creditors)



 





ASSIGNATION IN SECURITY



 





CMS Cameron McKenna LLP



6 Queens Road



Aberdeen



AB15 4ZT



T +44(0)1224 622 002



F +44(0)1224 622 066



Ref: ANFR/MAMC/FRFO/042158.00013



 









 




 Exhibit F-5

To Credit Agreement




Table of Contents




	 	 	 	 	 	 	 

	1.	 	Definitions and Interpretation
	 	 	1	 
	2.	 	Covenant to Pay
	 	 	5	 
	3.	 	Grant of Security
	 	 	7	 
	4.	 	Perfection of Security
	 	 	7	 
	5.	 	Further Assurance
	 	 	8	 
	6.	 	Undertakings
	 	 	8	 
	7.	 	The Assigned Rights
	 	 	9	 
	8.	 	Enforcement of Security
	 	 	11	 
	9.	 	Discretions and Delegation
	 	 	12	 
	10.	 	Power of Attorney
	 	 	12	 
	11.	 	Protection of Purchasers
	 	 	13	 
	12.	 	Application of Proceeds
	 	 	13	 
	13.	 	No Liability as Creditor nor Mortgagee in Possession
	 	 	14	 
	14.	 	Effectiveness of Security
	 	 	14	 
	15.	 	Certificates and Determinations
	 	 	17	 
	16.	 	Partial Invalidity
	 	 	17	 
	17.	 	Remedies and Waivers
	 	 	17	 
	18.	 	Notices
	 	 	18	 
	19.	 	Assignation
	 	 	19	 
	20.	 	Releases
	 	 	19	 
	21.	 	Consent to Registration
	 	 	19	 
	22.	 	Governing Law
	 	 	19	 
	23.	 	Enforcement
	 	 	20	 







 











 





THIS BOND AND FLOATING CHARGE by:





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





WHEREAS:





	 	 	The Board of Directors of the Company is satisfied that the giving of the security
contained or provided for in this Charge is likely to promote the success of the Company
for the benefit of its members as a whole and that its execution and delivery and the
exercise of the rights and performance of its obligations under this Charge would not
contravene any provision of its constitution and its Board have passed a resolution to
that effect.





NOW IT IS AGREED as follows:





	1.	 	Definitions and Interpretation
	 
	 	 	Definitions
	 
	1.1	 	Terms defined in the Credit Agreement (as defined below) shall, unless otherwise defined in
this Charge or unless a contrary intention appears, bear the same meanings when used in this
Charge and the following terms shall have the following meanings:
	 
	 	 	“Business Day”: shall mean for all purposes, any day except Saturday, Sunday and any day
which shall be in New York, London or Aberdeen, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to close.
	 
	 	 	“Charge”: means this instrument and all its provisions.
	 
	 	 	“Charged Property”: means the whole of the Properties (including uncalled capital) which
is or may be from time to time comprised in the Properties and undertaking of the Company.
	 
	 	 	“Credit Agreement”: means the term loan credit agreement dated on or about the date of
this Charge between (among others) the Company and the Administrative Agent.
	 
	 	 	“Credit Party”: shall have the meaning given to it in the Credit Agreement.
	 
	 	 	“Delegate”: means any person appointed by the Collateral Agent or any Receiver pursuant to
Clause 9.2 to 9.4 (Delegation) and any person appointed as attorney of the Collateral
Agent and/or any Receiver or Delegate.
	 
	 	 	“Enforcement Date”: means the date on which a notice is issued by the Administrative Agent
to the Borrower under section 9 (Events of Default) of the Credit Agreement upon the
occurrence of an Event of Default which is continuing.
	 
	 	 	“Group”: means Endeavour International Corporation and its Subsidiaries for the time
being.
	 
	 	 	“Indemnified Party”: shall have the meaning given to it in the U.S. Security Agreement.
	 
	 	 	“Premises”: means all buildings and erections from time to time situated on or forming
part of any Properties.




1









 






	 	 	“Properties”: means the heritable, freehold, commonhold or leasehold property of the
Company and any other real estate interest of the Company and references to any
“Properties” shall include references to the whole or any part or parts of them.
	 
	 	 	“Receiver”: means a receiver, receiver and manager or administrative receiver of the whole
or any part or parts of the Charged Property.
	 
	 	 	“Secured Creditors”: shall have the meaning given to it in the U.S. Security Agreement.
	 
	 	 	“Secured Hedging Agreement”: shall have the meaning given to it in the U.S. Security
Agreement.
	 
	 	 	“Secured Liabilities”: shall have the meaning given to it in Clause 2 (Covenant to pay
Secured Liabilities) below.
	 
	 	 	“Secured Reimbursement Agreement”: shall have the meaning given to it in the U.S. Security
Agreement.
	 
	 	 	“Security”: means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar effect.
	 
	 	 	“Security Period”: means the period beginning on the date of this Charge and ending on the
date on which the Collateral Agent has determined that all of the Secured Liabilities
(whether actual or contingent) have been unconditionally and irrevocably paid and
discharged in full and no further Secured Liabilities are capable of being outstanding.
	 
	 	 	“Tax”: any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same).
	 
	 	 	General Definitions
	 
	1.2	 	Any reference in this Charge to:






	 	1.2.1	 	the “Collateral Agent”, the “Company”, any “Secured Creditor”, any “Credit
Party” or any other person shall be construed so as to include its successors in
title, permitted assignees and permitted transferees and, in the case of the
Collateral Agent, shall include any person for the time being appointed as additional
security agent pursuant to the Credit Agreement;
	 
	 	1.2.2	 	“assets” includes present and future properties, revenues and rights of
every description;
	 
	 	1.2.3	 	“indebtedness” includes any obligation (whether incurred as principal or
as surety) for the payment or repayment of money, whether present or future, actual
or contingent;
	 
	 	1.2.4	 	a “person” includes any individual, firm, company, corporation,
government, state or agency of a state or any association, trust, joint venture,
consortium or partnership (whether or not having separate legal personality);
	 
	 	1.2.5	 	a “regulation” includes any regulation, rule, official directive, request
or guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or of any regulatory,
self-regulatory or other authority or organisation;
	 
	 	1.2.6	 	a “fixed security” is to be construed in accordance with the terms of
Section 47 of the Bankruptcy and Diligence etc. (Scotland) Act 2007;




2









 






	 	1.2.7	 	“without limitation” shall include a reference to without prejudice to the
generality of the foregoing;
	 
	 	1.2.8	 	“attachment” shall include, without limitation, land attachment, interim
attachment, money attachment and residual attachment;
	 
	 	1.2.9	 	“Secured Liabilities” includes any liabilities which would be treated as
such but for the liquidation or dissolution or similar event affecting the Company;
and
	 
	 	1.2.10	 	a provision of law is a reference to that provision as amended or re-enacted.






	 	 	Construction
	 
	1.3	 	Clause and Schedule headings are for ease of reference only.
	 
	1.4	 	Any reference in this Charge to any asset shall be construed so as to include:






	 	1.4.1	 	the benefit of any covenants for title and warrandice given or entered
into by any predecessor in title of the Company in respect of that asset and all
other rights, benefits, claims, contracts, warranties, remedies, security or
indemnities in respect of that asset;
	 
	 	1.4.2	 	the proceeds of sale of any part of that asset and any other moneys paid
or payable in respect of or in connection with that asset; and
	 
	 	1.4.3	 	in respect of any Properties, all Premises and all fixtures and fittings
(including trade fixtures and fittings and tenants’ fixtures and fittings) from time
to time in or on those Properties.






	1.5	 	Any reference in this Charge to any Credit Document or any other agreement or other document
shall be construed as a reference to that Credit Document or that other agreement or document
as the same may have been, or may from time to time be, restated, varied, amended,
supplemented, substituted, novated or assigned, whether or not as a result of any of the same:






	 	1.5.1	 	there is an increase or decrease in any facility made available under that
Credit Document or other agreement or document or an increase or decrease in the
period for which any facility is available or in which it is repayable;
	 
	 	1.5.2	 	any additional, further or substituted facility to or for such facility is provided;
	 
	 	1.5.3	 	any rate of interest, commission or fees or relevant purpose is changed;
	 
	 	1.5.4	 	the identity of the parties is changed;
	 
	 	1.5.5	 	the identity of the providers of any security is changed;
	 
	 	1.5.6	 	there is an increased or additional liability on the part of any person; or
	 
	 	1.5.7	 	a new agreement is effectively created or deemed to be created.






	1.6	 	Any reference in this Charge to “this Charge” shall be deemed to be a reference to this
Charge as a whole and not limited to the particular Clause, Schedule or provision in which the
relevant reference appears and to this Charge as amended, novated, assigned, supplemented,
extended or restated from time to time and any reference in this Charge to a “Clause” or a
“Schedule” is, unless otherwise provided, a reference to a Clause or a Schedule of this
Charge.
	 
	1.7	 	Unless the context otherwise requires, words denoting the singular number only shall include
the plural and vice versa.




3









 












	1.8	 	Where any provision of this Charge is stated to include one or more things, that shall be by
way of example or for the avoidance of doubt only and shall not limit the generality of that
provision.
	 
	1.9	 	Any change in the constitution of the Collateral Agent or its absorption of or amalgamation
with any other person or the acquisition of all or part of its undertaking by any other person
shall not in any way prejudice or affect its rights under this Charge.
	 
	1.10	 	Any reference in this Charge to the liquidation, administration, insolvency, bankruptcy,
judicial factory or other similar incapacity of any body corporate shall be construed to
include the equivalent proceeding or occurrence in any other jurisdiction.
	 
	1.11	 	This Charge is a Credit Document for the purposes of the Credit Agreement.





Intercreditor Agreement





	1.12	 	Following execution of the Intercreditor Agreement, this Charge will be subject to the terms
of the Intercreditor Agreement.
	 
	1.13	 	In the event of any inconsistency between a provision of this Charge and a provision of the
Intercreditor Agreement, the provision of the Intercreditor Agreement will prevail.





Incorporation





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






	 	1.14.1	 	any “Credit Party” or “Borrower” being construed, (A) if the context so requires,
as references to the Company (as defined herein) or (B) if the context so requires,
including the Company (as defined herein);
	 
	 	1.14.2	 	the “Agreement” being construed as references to this Charge;
	 
	 	1.14.3	 	the “parties” or “party” being construed as references to the Parties or, as the
case may be, a Party to this Charge;
	 
	 	1.14.4	 	the “Credit Documents” being construed as (a) including this Charge; or (b) if the
context so requires, as references specifically to this Charge; and
	 
	 	1.14.5	 	in the context of section 4.04 (Tax Gross-Up and Indemnities) of the Credit
Agreement, the “Administrative Agent” or a “Lender” being, if the context so
requires, construed, in each case, as references to the Collateral Agent and, in the
context of section 11.01(a)(ii) (Payment of Expenses, etc.) of the Credit Agreement,
the “Administrative Agent” or a “Lender” being construed, in each case, as references
to each Secured Creditor, Receiver (as defined herein), Delegate (as defined herein),
attorney, manager, agent or other person as may be appointed by the Collateral Agent
under this Charge; and
	 
	 	1.14.6	 	in the context of section 11.07 and 11.12, references to particular sections are
references to sections in the Credit Agreement.




4









 












	2.	 	Covenant to Pay
	 
	 	 	Covenant to pay Secured Liabilities
	 
	2.1	 	The Company covenants that it shall promptly on demand pay to the Secured Creditors, in
accordance with the Credit Documents:






	 	2.1.1	 	the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, principal, premium, interest, PIK Interest
(including, without limitation, all interest (including PIK Interest) that accrues
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency, reorganisation or similar proceeding of the Company at the
rate provided for in the respective documentation, whether or not a claim for
post-petition interest is allowed in any such proceeding), fees, costs and
indemnities) of the Company to the Lenders, whether now existing or incurred after
the date of this Charge under, arising out of, or in connection with, each Credit
Document to which the Company is a party and the due performance and compliance by
the Company with all of the terms, conditions and agreements contained in each such
Credit Document;
	 
	 	2.1.2	 	the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest is
allowed in any such proceeding) owing by the Company to the Approved Third Party
Credit Providers under any Secured Hedging Agreement, whether now in existence or
arising after the date of this Charge and the due performance and compliance by the
Company with all of the terms, conditions and agreements contained in each such
Secured Hedging Agreement;
	 
	 	2.1.3	 	the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of all obligations, liabilities and indebtedness
(including, without limitation, all interest that accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency,
reorganisation or similar proceeding of the Company at the rate provided for in the
respective documentation, whether or not a claim for post-petition interest is
allowed in any such proceeding) owing by the Company to the Approved Third Party
Credit Providers under any Secured Reimbursement Agreement, whether now in existence
or arising after the date of this Charge (including, without limitation, all
obligations, liabilities and indebtedness of the Company under any Guaranty in
respect of the Secured Reimbursement Agreements), and the due performance and
compliance by the Company with all of the terms, conditions and agreements contained
in each such Secured Reimbursement Agreement;
	 
	 	2.1.4	 	any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral;
	 
	 	2.1.5	 	in the event of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of the Company referred to in paragraphs
2.1.1, 2.1.2 and 2.1.3 above, on and after the Enforcement Date, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling or otherwise
disposing of or realising on the Collateral, or of any exercise by the Collateral
Agent of its rights under this Charge, together with reasonable attorneys’ fees and
court costs;
	 
	 	2.1.6	 	all amounts paid by any Indemnified Party as to which such Indemnified
Party has the right to reimbursement under this Charge; and




5









 






	 	2.1.7	 	all amounts owing to any Agent pursuant to any of the Credit Documents in
its capacity as such,
	 
	 	 	 	it being acknowledged and agreed that the “Secured Liabilities” shall include
extensions of credit of the types described above, whether outstanding on the
date of this Charge or extended from time to time after the date of this Charge.






	2.2	 	Notwithstanding anything to the contrary contained in this Charge or any other Credit
Document, the aggregate amount of Secured Liabilities of the type described in paragraphs
2.1.2 and 2.1.3 of Clause 2.1 (collectively, the “Secured Third Party Credit Obligations”)
secured by the Collateral shall not at any time exceed $25,000,000 (the “Secured Third Party
Credit Obligations Cap”). No amount of Secured Third Party Credit Obligations in excess of
the Secured Third Party Credit Obligations Cap shall receive the benefit of the security
interests created under this Charge and in no event shall any proceeds received upon the sale
of, collection from, or other realisation upon all or any part of the Collateral be applied to
the Secured Third Party Credit Obligations in any amount in excess of the Secured Third Party
Credit Obligations Cap.
	 
	 	 	Potential invalidity
	 
	2.3	 	Neither the covenant to pay in Clause 2.1 (Covenant to pay Secured Liabilities), nor the
Security created by this Charge shall extend to or include any liability or sum which would,
but for this Clause 2.3, cause such covenant, obligation or Security to be unlawful under any
applicable law.
	 
	3.	 	Floating Charge
	 
	 	 	Creation of Floating Charge
	 
	3.1	 	The Company, as a continuing security for the payment, performance and discharge of all the
Secured Liabilities, grants in favour of the Collateral Agent (as agent and trustee for itself
and each of the other Secured Creditors) a floating charge over the Charged Property.
	 
	 	 	Qualifying Floating Charge
	 
	3.2	 	The provisions of paragraph 14 of Schedule B1 to the Insolvency Act 1986 shall apply to the
floating charge created pursuant to Clause 3.1 (Creation of Floating Charge).
	 
	4.	 	Further Assurance
	 
	 	 	Further Assurance
	 
	4.1	 	The Company shall promptly do all such acts and execute all such documents (including
assignments, assignations, transfers, mortgages, charges, notices and instructions) as the
Collateral Agent or any Receiver may reasonably specify (and in such form as the Collateral
Agent or any Receiver may reasonably require in favour of the Collateral Agent or its
nominee(s)) to:






	 	4.1.1	 	perfect the floating charge created or intended to be created in respect
of the Charged Property (which may include the execution by the Company of a
mortgage, charge, assignation, assignment or other Security over all or any of the
assets forming part of, or which are intended to form part of, the Charged Property);
	 
	 	4.1.2	 	confer on the Collateral Agent Security over any Properties and assets of
the Company located in any jurisdiction equivalent or similar to the security
intended to be created by or pursuant to this Charge;




6









 






	 	4.1.3	 	facilitate the exercise of any rights, powers and remedies of the
Collateral Agent or any Receiver or Delegate provided by or pursuant to this Charge
or by law;
	 
	 	4.1.4	 	facilitate the realisation of the assets which form part of, or are
intended to form part of, the Charged Property; and /or
	 
	 	4.1.5	 	create fixed security over any heritable, freehold, commonhold or
leasehold property and any other assets capable of being charged by way of fixed
security.






	 	 	Necessary Action
	 
	4.2	 	The Company shall take all such action as is available to it (including making all filings
and registrations) as may be necessary for the purpose of the creation, perfection, protection
or maintenance of any security created or intended to be created in favour of the Collateral
Agent by or pursuant to this Charge.
	 
	5.	 	Undertakings
	 
	 	 	General
	 
	5.1	 	The undertakings in this Clause 5 remain in force from the date of this Charge for so long as
any amount is outstanding under this Charge.
	 
	 	 	Negative Pledge
	 
	5.2	 	The Company undertakes to the Collateral Agent that it shall (except as permitted by section
8.01 (Liens) of the Credit Agreement):






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






	 	 	Restriction on Disposals
	 
	5.3	 	The Company undertakes to the Collateral Agent that it shall (except as permitted by section
8.02 (Consolidation, Merger, Purchase or Sale of Assets, etc.) of the Credit Agreement) not,
either in a single transaction or in a series of transactions and whether related or not,
dispose of the Charged Property or any part of them.
	 
	 	 	Prejudicial Action
	 
	5.4	 	The Company will not do or cause or permit to be done anything, which may in any way reduce,
jeopardise or otherwise prejudice the value to the Collateral Agent of the Charged Property.
	 
	6.	 	Enforcement of Security
	 
	 	 	When Security becomes Enforceable
	 
	6.1	 	At any time on or after the Enforcement Date, the floating charge created by this Charge
shall become immediately enforceable and the Collateral Agent may, without notice to the
Company or prior authorisation from any court, in its absolute discretion enforce all or any
part of that security at the times, in the manner and on the terms it thinks fit and, to the
extent permitted by law, take possession of and hold or dispose of all or any part of the
Charged Property.




7









 






	 	 	Right of Appropriation
	 
	6.2	 	Without prejudice to the other provisions of this Charge, to the extent that any of the
Charged Property constitutes “financial collateral”, and this Charge and the obligations of
the Company hereunder constitute a “security financial collateral arrangement” (in each case
as defined in, and for the purposes of, the Financial Collateral Arrangements (No. 2)
Regulations 2003 (SI 2003/3226) (the “Regulations”), the Collateral Agent shall at any time on
or after the Enforcement Date have the right to appropriate all or any part of the Charged
Property in or towards discharge of the Secured Liabilities. For this purpose, the parties
agree that the value of any such Charged Assets so appropriated shall be the market price of
such Charged Property at the time the right of appropriation is exercised as determined by the
Collateral Agent by reference to such method or source of valuation as the Collateral Agent
may select, including by independent valuation. For this purpose, the parties agree that the
methods or sources of valuation provided for in this Clause 6.2 (Right of appropriation) or
selected by the Collateral Agent in accordance with this Clause 6.2 (Right of appropriation)
shall constitute a commercially reasonable method of valuation for the purposes of the
Regulations.
	 
	6.3	 	The Collateral Agent shall notify the Company as soon as reasonably practicable of the
exercise of its rights of appropriation as regards such of the Charged Property as are
specified in such notice.
	 
	 	 	Redemption of Prior Security
	 
	6.4	 	At any time on or after the Enforcement Date, the Collateral Agent or any Receiver may:






	 	6.4.1	 	redeem any prior Security over any Charged Property; or
	 
	 	6.4.2	 	procure the transfer of that Security to the Collateral Agent; or
	 
	 	6.4.3	 	settle and pass the accounts of the person or persons entitled to such
Security (and any accounts so settled and passed shall be conclusive and binding on
the Company).






	6.5	 	All principal moneys, interest, costs, charges and expenses of and incidental to any such
redemption or transfer shall be paid by the Company to the Collateral Agent and every Receiver
on demand and shall be secured by this Charge.
	 
	7.	 	Appointment of Receiver and Administrator
	 
	 	 	Appointment
	 
	7.1	 	At any time on or after the Enforcement Date or if an application is presented for the making
of an administration order in relation to the Company or any person who is entitled to do so
gives written notice of its intention to appoint an administrator of the Company or files such
a notice with the court or if the Company or it’s directors so requests the Collateral Agent
in writing or if a petition is made for the appointment of a judicial factor to the Company
(in which case, in each such case, the floating charge created by this Charge shall become
immediately enforceable), the Collateral Agent may without prior notice to the Company:






	 	7.1.1	 	appoint any one or more persons to be a Receiver of the whole or any part
or parts of the Charged Property; or
	 
	 	7.1.2	 	appoint one or more persons to be an administrator of the Company,






	 	 	in each case in accordance with and to the extent permitted by applicable laws.




8









 






	 	 	Removal
	 
	7.2	 	The Collateral Agent may by writing under its hand (or by an application to the court where
required by law):






	 	7.2.1	 	remove any Receiver appointed by it; and
	 
	 	7.2.2	 	may, whenever it deems it expedient, appoint any one or more persons to be
a new Receiver in the place of or in addition to any Receiver.






	 	 	Statutory Powers of Appointment
	 
	7.3	 	The powers of appointment of a Receiver created by this Charge shall be in addition to all
statutory and other powers of appointment of the Collateral Agent and such powers shall be and
remain exercisable from time to time by the Collateral Agent in respect of any part or parts
of the Charged Property.
	 
	 	 	Capacity of Receiver
	 
	7.4	 	Each Receiver shall be deemed to be the agent of the Company for all purposes. The Company
alone shall be responsible for a Receiver’s contracts, engagements, acts, omissions, defaults
and losses and for liabilities incurred by him.
	 
	7.5	 	The agency of each Receiver shall continue until the Company goes into liquidation and after
that the Receiver shall act as principal and shall not become the agent of the Collateral
Agent.
	 
	7.6	 	If there is more than one Receiver holding office at the same time, each Receiver shall
(unless the document appointing him states otherwise) be entitled to act (and to exercise all
of the powers conferred on a Receiver under this Charge and by statute) individually or
together with any other person appointed or substituted as Receiver.
	 
	 	 	Remuneration of Receiver
	 
	7.7	 	Subject to section 58 of the Insolvency Act 1986, the Collateral Agent may fix the
remuneration of any Receiver appointed by it without any restriction and the remuneration of
the Receiver shall be a debt secured by this Charge, which shall be due and payable
immediately upon its being paid by the Collateral Agent.
	 
	8.	 	Powers of Receiver
	 
	 	 	General
	 
	8.1	 	Each Receiver has, and is entitled to exercise (to the extent permitted by law), all of the
rights, powers and discretions set out below in this Clause 8 in addition to those conferred
by law.
	 
	8.2	 	Without prejudice to the generality of this Clause 8, each Receiver shall have all the
rights, powers and discretions of a receiver under schedule 2 to the Insolvency Act 1986.
	 
	 	 	Specific Powers
	 
	8.3	 	Each Receiver shall have (to the extent permitted by law) the following powers:






	 	8.3.1	 	power to purchase or acquire land and purchase, acquire or grant any
interest in or right over land as he thinks fit;
	 
	 	8.3.2	 	power to take immediate possession of, get in and collect any Charged Property;
	 
	 	8.3.3	 	power to carry on the business of the Company as he thinks fit;




9









 






	 	8.3.4	 	power (but without any obligation to do so) to:






	 	(a)	 	make and effect all repairs, alterations, additions and
insurances and do all other acts which the Company might do in the ordinary
conduct of its business as well for the protection as for the improvement of
the Charged Property;
	 
	 	(b)	 	commence or complete any building operations on the
Charged Property;
	 
	 	(c)	 	apply for and maintain any planning permission, building
regulation approval or any other permission, consent or licence in respect
of the Charged Property; and
	 
	 	(d)	 	negotiate for compensation with any authority which may
intend to acquire or be in the process of acquiring all or any part of the
Charged Property and make objections to any order for the acquisition of all
or any part of the Charged Property and represent the Company at any enquiry
to be held to consider such objections or otherwise relating to any such
acquisition,






	 	 	 	in each case as he thinks fit;
	 
	 	8.3.5	 	power to appoint and discharge managers, officers, agents, advisers,
accountants, servants, workmen, contractors, surveyors, architects, lawyers and
others for the purposes of this Charge upon such terms as to remuneration or
otherwise as he thinks fit and power to discharge any such persons appointed by the
Company (and the costs incurred by any Receiver in carrying out such acts or doing
such things shall be reimbursed to that Receiver by the Company on demand and until
so reimbursed shall carry such interest as shall reasonably be determined by the
Receiver from the date of payment by the Receiver until reimbursed (after as well as
before any judgment));
	 
	 	8.3.6	 	power to raise and borrow money either unsecured or (with the prior
consent of the Collateral Agent) on the security of any Charged Property either in
priority to the floating charge created by this Charge or otherwise and generally on
any terms and for whatever purpose he thinks fit;
	 
	 	8.3.7	 	power to sell, exchange, convert into money and realise any Charged
Property by public auction or private contract and generally in any manner and on any
terms as he thinks fit;
	 
	 	8.3.8	 	power to sever and sell separately any fixtures from the properties
containing them without the consent of the Company;
	 
	 	8.3.9	 	power to let any Charged Property for any term and at any rent (with or
without a premium) as he thinks fit and power to accept a surrender of any lease or
tenancy of any Charged Property on any terms which he thinks fit (including the
payment of money to a lessee or tenant on a surrender);
	 
	 	8.3.10	 	power to settle, adjust, refer to arbitration, compromise and arrange any claims,
accounts, disputes, questions and demands with or by any person who is or claims to
be a creditor of the Company or relating in any way to any Charged Property;
	 
	 	8.3.11	 	power to bring, prosecute, enforce, defend and abandon all actions, suits and
proceedings in relation to any Charged Property or in relation to the Company which
may seem to him to be expedient;
	 
	 	8.3.12	 	power to give valid receipts for all moneys and execute all assurances and things
which may be proper or desirable for realising any Charged Property;




10









 






	 	8.3.13	 	power to form a subsidiary of the Company and transfer to that subsidiary any
Charged Property;
	 
	 	8.3.14	 	power to do all such acts as may seem to him to be necessary or desirable in order
to initiate or continue any development of any Charged Property and for these
purposes to appoint and to enter into such contracts with such building and
engineering contractors or other contractors and professional advisers as he may
think fit;
	 
	 	8.3.15	 	power to call any meeting of the members or directors of the Company in order to
consider such resolutions or other business as he thinks fit;
	 
	 	8.3.16	 	power to exercise in relation to any Charged Property all the powers and rights
which he would be capable of exercising if he were the absolute beneficial owner of
the same;
	 
	 	8.3.17	 	power to do all other acts and things which he may consider desirable or necessary
for realising any Charged Property or incidental or conducive to any of the rights,
powers or discretions conferred on a Receiver under or by virtue of this Charge; and
	 
	 	8.3.18	 	power to exercise any of the above powers in the name of or on behalf of the
Company or in his own name and, in each case, at the cost of the Company.






	 	 	Collateral Agent’s Powers
	 
	8.4	 	To the fullest extent permitted by law, any right, power or discretion created by this Charge
(either expressly or impliedly) upon a Receiver may after the floating charge created by this
Charge has become enforceable be exercised by the Collateral Agent in relation to any Charged
Property, irrespective of whether or not it has taken possession of any Charged Property and
without first appointing a Receiver or notwithstanding the appointment of a Receiver.
	 
	9.	 	Discretions and Delegation
	 
	 	 	Discretion
	 
	9.1	 	Any liberty or power which may be exercised or any determination which may be made under this
Charge by the Collateral Agent or any Receiver may be exercised or made in its absolute and
unfettered discretion without any obligation to give reasons.
	 
	 	 	Delegation
	 
	9.2	 	Each of the Collateral Agent and any Receiver may delegate (either generally or specifically)
by power of attorney or in any other manner to any person any right, power, authority or
discretion conferred on it by this Charge (including the power of attorney).
	 
	9.3	 	Any such delegation may be made upon such terms and conditions (including the power to
sub-delegate) as the Collateral Agent or any Receiver (as the case may be) shall think fit.
	 
	9.4	 	Neither the Collateral Agent nor any Receiver shall be in any way liable or responsible to
the Company for any loss or liability arising from any act, default, omission or misconduct on
the part of any Delegate.
	 
	10.	 	Power of Attorney
	 
	 	 	Appointment and Powers
	 
	10.1	 	The Company hereby irrevocably and by way of security appoints the Collateral Agent and any
Receiver and any Delegate severally to be its attorney in its name and on its behalf and as
its act and deed:




11









 












	 	10.1.1	 	to execute and deliver any documents or instruments which the Collateral Agent or
such Receiver may require for perfecting the title of the Collateral Agent to the
Charged Property or for vesting the same in the Collateral Agent, its nominee or any
purchaser,
	 
	 	10.1.2	 	to sign, execute, seal and deliver and otherwise perfect any further security
document which the Company is required to enter into pursuant to this Charge; and
	 
	 	10.1.3	 	otherwise generally to sign, seal, execute and deliver all deeds, assurances,
agreements and documents and to do all acts and things which (i) may be required for
the full exercise of all or any of the powers conferred on the Collateral Agent or
any Receiver under this Charge; (ii) the Company is required to do pursuant to this
Charge; or (iii) may be deemed expedient by the Collateral Agent or a Receiver in
connection with (A) any preservation, disposition, realisation or getting in by the
Collateral Agent or such Receiver of the Charged Property or any part thereof or (B)
any other exercise of any other power under this Charge.






	 	 	The Collateral Agent confirms that it will only exercise the rights set out in this Clause
10.1 following the occurrence of a Default or Event of Default under the Credit Documents.
	 
	 	 	Ratification
	 
	10.2	 	The Company ratifies and confirms and agrees to ratify and confirm all acts and things which
any attorney mentioned in this Clause 10 (Power of Attorney) does or purports to do in
exercise of the powers granted by this Clause 10. All moneys expended by any such attorney
shall be deemed to be expenses incurred by the Collateral Agent under this Charge.
	 
	11.	 	Protection of Purchasers
	 
	 	 	Consideration
	 
	11.1	 	The receipt of the Collateral Agent or any Receiver or Delegate shall be a conclusive
discharge to a purchaser and, in making any sale or other disposal of any of the Charged
Property (including a disposal by a Receiver or Delegate to any subsidiary of the Company) or
in making any acquisition in the exercise of their respective powers, the Collateral Agent,
every Receiver and every Delegate may do so for such consideration, in such manner and on such
terms as it or he thinks fit.
	 
	 	 	Protection of Third Parties
	 
	11.2	 	No person (including a purchaser) dealing with the Collateral Agent, any Receiver or any
Delegate shall be bound to enquire:






	 	11.2.1	 	whether the Secured Liabilities have become payable; or
	 
	 	11.2.2	 	whether any power which the Collateral Agent or any Receiver or Delegate is
purporting to exercise has arisen or become exercisable; or
	 
	 	11.2.3	 	whether any money remains due under the Credit Documents; or
	 
	 	11.2.4	 	how any money paid to the Collateral Agent or to any Receiver or Delegate is to be
applied,






	 	 	or shall be concerned with any propriety, regularity or purpose on the part of the
Collateral Agent or any Receiver or Delegate in such dealings or in the exercise of any
such power.




12









 












	12.	 	Application of Proceeds
	 
	 	 	Order of Application
	 
	12.1	 	Any monies received under the powers hereby conferred shall, subject to the repayment of any
claims or debts having priority to this Charge, be applied for the purposes and in the order
of priority provided for in:






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






	 	 	Suspense account
	 
	12.2	 	The Collateral Agent may credit any monies received under this Charge to an interest bearing
suspense account for so long and in such manner as the Collateral Agent may from time to time
determine and any Receiver may retain the same for such period as he and the Collateral Agent
consider appropriate.
	 
	13.	 	No Liability as Creditor nor Mortgagee in Possession
	 
	13.1	 	Neither the Collateral Agent nor any Receiver or Delegate shall in any circumstances (either
by reason of entering into or taking possession of any Charged Property or for any other
reason and whether as creditor, heritable creditor or mortgagee in possession or on any other
basis) be liable to account to the Company for anything, except actual receipts, or be liable
to the Company for any costs, charges, losses, liabilities or expenses arising from the
realisation of any Charged Property or from any act, default or omission of the Collateral
Agent, any Receiver, any Delegate or any of their respective officers, agents or employees in
relation to the Charged Property or from any exercise or purported exercise or non-exercise by
the Collateral Agent or any Receiver or Delegate of any power, authority or discretion
provided by or pursuant to this Charge or by law or for any other loss of any nature
whatsoever in connection with the Charged Property or the Credit Documents.
	 
	13.2	 	If the Collateral Agent, any Receiver or any Delegate enters into or takes possession of the
Charged Property, it or he may to the extent permitted by law, at any time relinquish
possession.
	 
	14.	 	Effectiveness of Security
	 
	 	 	Continuing Security
	 
	14.1	 	The floating charge created by this Charge shall remain in full force and effect as a
continuing security for the Secured Liabilities, unless and until discharged by the Collateral
Agent, and will extend to the ultimate balance of all the Secured Liabilities, regardless of
any intermediate payment or discharge in whole or in part.
	 
	 	 	Cumulative Rights
	 
	14.2	 	The floating charge created by this Charge and all rights, powers and remedies of the
Collateral Agent provided by or pursuant to this Charge or by law shall be cumulative, in
addition to and independent of any other Security now or subsequently held by the Collateral
Agent or any other Secured Creditor for the Secured Liabilities or any other obligations or
any rights, powers and remedies provided by law. No prior Security held by the Collateral
Agent (whether in its capacity as agent and trustee or otherwise) or any of the other Secured
Creditors over the whole or any part of the Charged Property shall be superseded by, supersede
or merge into, the floating charge created by this Charge.




13









 






	 	 	Reinstatement
	 
	14.3	 	If any discharge, release or arrangement (whether in respect of the obligations of a Credit
Party or any Security for those obligations or otherwise) is made by the Collateral Agent or
any other Secured Creditor in whole or in part on the faith of any payment, Security or other
disposition which is avoided or must be restored in insolvency, liquidation, administration or
otherwise, without limitation, then the liability of the Company under, the floating charge
created by this Charge will continue or be reinstated as if the discharge, release or
arrangement had not occurred.
	 
	14.4	 	The Collateral Agent may concede or compromise any claim that any payment or any discharge is
liable to avoidance, restoration or reduction.
	 
	 	 	Waiver of Defences
	 
	14.5	 	Neither the obligations of the Company under this Charge nor the floating charge created by
this Charge nor the rights, powers and remedies of the Collateral Agent provided by or
pursuant to this Charge or by law will be affected by an act, omission, matter or thing which,
but for this Clause 14.5, would reduce, release or prejudice any of its obligations under this
Charge, any of that security or any of those rights, powers and remedies (without limitation
and whether or not known to it or the Collateral Agent or any other Secured Creditor)
including:






	 	14.5.1	 	any time, waiver or consent granted to, or composition with any Credit Party or any
other person;
	 
	 	14.5.2	 	the release of any person under the terms of any composition or arrangement with
any creditor of any person;
	 
	 	14.5.3	 	the taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or Security over assets
of any Credit Party, or any other person or any non-presentation or non-observance of
any formality or other requirement in respect of any instrument or any failure to
realise the full value of any Security;
	 
	 	14.5.4	 	any incapacity or lack of power, authority or legal personality of, or dissolution
or change in the members or status of any Credit Party , or any other person;
	 
	 	14.5.5	 	any variation, amendment, novation, supplement, extension (whether of maturity or
otherwise), substitution, restatement (in each case, however fundamental and of
whatsoever nature and whether or not more onerous) or replacement of any Credit
Document or any other document or Security including without limitation any change in
the purpose of, any extension of or any increase in, any facility or the addition of
any new facility under any Credit Document or other document or Security;
	 
	 	14.5.6	 	any unenforceability, illegality or invalidity of any obligation of any other
person under any Credit Document or any other document or Security; or
	 
	 	14.5.7	 	any insolvency or similar proceedings.






	 	 	Guarantor Intent
	 
	14.6	 	Without prejudice to the generality of Clause 14.5 (Waiver of Defences), the Company
expressly confirms that it intends that the floating charge created by this Charge shall
extend from time to time to any (however fundamental) variation, increase, extension or
addition of or to any facility or amount made available under any of the Credit Documents
and/or any of the Credit Documents including, without limitation, any of the same which are
for the purposes of or in connection with any of the following: business acquisitions of any
nature; increasing working capital; enabling investor distributions to be made; carrying out
restructurings;




14









 






	 	 	refinancing existing facilities; refinancing any other indebtedness; making facilities
available to new borrowers; and/or any other variation or extension of the purposes for
which any such facility or amount might be made available from time to time, together with
any fees, costs and/or expenses associated with any of the foregoing.
	 
	 	 	Immediate Recourse
	 
	14.7	 	The Company waives any right it may have of first requiring the Collateral Agent or any other
Secured Creditor to proceed against or enforce any other rights or Security or claim payment
from any person or file any proof or claim in any insolvency, administration, winding up or
liquidation proceedings relating to any person before claiming from it under this Charge.
This waiver applies irrespective of any law or any provision of any Credit Document to the
contrary.
	 
	 	 	Appropriations
	 
	14.8	 	Until all the Secured Liabilities which may be or become payable by the Company under or in
connection with this Charge have been irrevocably paid, performed and discharged in full, the
Collateral Agent may:






	 	14.8.1	 	without affecting the liability of the Company under this Charge:






	 	(a)	 	refrain from applying or enforcing any other moneys,
Security or rights held or received by it in respect of the Secured
Liabilities; or
	 
	 	(b)	 	apply and enforce the same in such manner and order as it
sees fit (whether against the Secured Liabilities or otherwise) and the
Company shall not be entitled to direct the appropriation of any such
moneys, Security or rights or to enjoy the benefit of the same; and/or






	 	14.8.2	 	hold in a suspense account any moneys received from the Company or on account of
the Company’s liability in respect of the Secured Liabilities. Amounts standing to
the credit of any such suspense account shall bear interest at a rate considered by
the Collateral Agent to be a fair market rate.






	 	 	Deferral of Company’s Rights
	 
	14.9	 	Until the Secured Liabilities, and all amounts which may be or become due and payable in
respect of the Secured Liabilities, have been irrevocably paid, performed or discharged in
full and unless the Collateral Agent otherwise directs, the Company shall not exercise any
rights which it may have by reason of performance by it of its obligations under this Charge
or by reason of any amount being payable to:






	 	14.9.1	 	be indemnified by an Credit Party;
	 
	 	14.9.2	 	claim any contribution from any other guarantor of any Credit Party’s obligations
under the Credit Documents;
	 
	 	14.9.3	 	take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Collateral Agent and/or any of the other Secured
Creditors under the Credit Documents or of any other Security taken pursuant to, or
in connection with, the Credit Documents by the Collateral Agent or any other Secured
Creditor;
	 
	 	14.9.4	 	to bring legal or other proceedings for an order requiring an Credit Party to make
any payment, or perform any obligation, in respect of which the Company has given a
guarantee, undertaking or indemnity;
	 
	 	14.9.5	 	exercise any right of set-off against any Credit Party; and/or




15









 






	 	14.9.6	 	claim or prove as a creditor of any Credit Party or in its estate in competition
with any Secured Creditor.






	14.10	 	The rights of the Collateral Agent and/or any of the other Secured Creditors under Clause
14.9 above shall be free from any right of quasi-retainer or other rule or principle of fund
ascertainment arising either at law or in equity.
	 
	14.11	 	If the Company receives any benefit, payment or distribution in relation to any rights
referred to in Clause 14.9 above, it shall hold that benefit, payment or distribution to the
extent necessary to enable all the Secured Liabilities, and all amounts which may be or become
due and payable in respect of the Secured Liabilities, to be repaid in full on trust for the
Collateral Agent (as agent and trustee for itself and each of the other Secured Creditors) and
shall promptly pay or transfer the same to the Collateral Agent or as the Collateral Agent may
direct for application in accordance with Clause 12 (Application of Proceeds).
	 
	 	 	No Security held by Company
	 
	14.12	 	The Company shall not take or receive any Security from a Credit Party or any other person
in connection with its liability under this Charge. However, if any such Security is so taken
or received by the Company:






	 	14.12.1	 	the Company undertakes to hold it on trust for the Collateral Agent (as agent and
trustee for itself and each of the other Secured Creditors), together with all moneys
at any time received or held in respect of such Security, for application in or
towards payment and discharge of the Secured Liabilities; and
	 
	 	14.12.2	 	on demand by the Collateral Agent, the Company shall promptly transfer, assign or
pay to the Collateral Agent all Security and all moneys from time to time held on
trust by it under this Clause 14.12.






	15.	 	Certificates and Determinations
	 
	15.1	 	Any certificate or determination by the Collateral Agent of a rate or amount under this
Charge is, in the absence of manifest error, conclusive evidence of the matters to which it
relates.
	 
	16.	 	Partial Invalidity
	 
	16.1	 	If, at any time, any provision of this Charge is or becomes illegal, invalid or unenforceable
in any respect under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions of this Charge nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will in any way be
affected or impaired and, if any part of the floating charge created, or intended to be
created, by this Charge is invalid, unenforceable or ineffective for any reason, that shall
not affect or impair any other part of the security.
	 
	17.	 	Remedies and Waivers
	 
	17.1	 	No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent, any
right, remedy or power under this Charge shall operate as a waiver, nor shall any single or
partial exercise of any right, remedy or power prevent any further or other exercise or the
exercise of any other right, remedy or power. The rights, remedies and powers provided in
this Charge are cumulative and are in addition to, not exclusive of, any rights, remedies or
powers provided by law.
	 
	17.2	 	Any amendment, waiver or consent by the Collateral Agent under this Charge must be in writing
and may be given subject to any conditions thought fit by the Collateral Agent. Any waiver or
consent shall be effective only in the instance and for the purpose for which it is given.




16









 






	18.	 	Notices
	 
	 	 	Communications in writing
	 
	18.1	 	Any communication to be made under or in connection with this Charge shall be made in writing
and, unless otherwise stated, may be made by fax or letter.
	 
	 	 	Addresses
	 
	18.2	 	The address and fax number (and the department or officer, if any, for whose attention the
communication is to be made) of the Company and the Collateral Agent for any communication or
document to be made or delivered under or in connection with this Charge is that identified
with its name below:





	 	 	 	 	 

	 

	 	Company	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Endeavour Energy UK Limited
	 

	 	 	 	 114 St. Martin’s Lane
	 

	 	 	 	London
	 

	 	 	 	WC2N 4BE
	 

	 	 	 	England
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Mike Kirksey
	 
	 	 	 	 
	 

	 	Fax Number:
	 	 +44 207 451 2352
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Endeavour International Corporation
	 

	 	 	 	 1001 Fannin Street, Suite 1600
	 

	 	 	 	Houston
	 

	 	 	 	Texas 77002
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Mike Kirksey / Cathy Stubbs
	 
	 	 	 	 
	 

	 	Fax Number:
	 	 +1 713 307 8794
	 
	 	 	 	 
	 

	 	Email:
	 	Mike.Kirksey@endeavourcorp.com /
	 

	 	 	 	Cathy.Stubbs@endeavourcorp.com
	 
	 	 	 	 
	 

	 	Collateral Agent	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	Cyan Partners, LP
	 

	 	 	 	 399 Park Avenue
	 

	 	 	 	 39th Floor
	 

	 	 	 	New York
	 

	 	 	 	 10022
	 

	 	 	 	United States of America
	 
	 	 	 	 
	 

	 	Fax Number:
	 	 +1 212 380 5871
	 
	 	 	 	 
	 

	 	For the Attention of:
	 	Divya Gopal







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




17









 












	 	 	Delivery
	 
	18.3	 	Any communication or document made or delivered by one person to another under or in
connection with this Charge will only be effective:






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






	 	 	and, if a particular department or officer is specified as part of its address details
provided under Clause 18.2 (Addresses), if addressed to that department or officer.
	 
	18.4	 	Any communication or document to be made or delivered to the Collateral Agent will be
effective only when actually received by it and then only if it is expressly marked for the
attention of the department or officer identified with the Collateral Agent’s name in Clause
18.2 (Addresses) (or any substitute department or officer as it shall specify for this
purpose).
	 
	19.	 	Assignation
	 
	19.1	 	The Company may not assign or transfer any of its rights or obligations under this Charge
without the prior consent of each Lender. The Collateral Agent may assign and transfer all or
any part of its rights and obligations under this Charge to any replacement Collateral Agent
appointed pursuant to the terms of the Credit Agreement.
	 
	20.	 	Releases
	 
	20.1	 	Upon the expiry of the Security Period (but not otherwise) and subject to Clauses 14.3 and
14.4 (Reinstatement), the Collateral Agent shall, at the request and cost of the Company, take
whatever action is necessary to release the Charged Property of from the floating charge
created by this Charge.
	 
	21.	 	Consent to Registration
	 
	21.1	 	The Company consents to the registration of this Charge and each certificate referred to in
Clause 15 (Certificates and Determinations) for preservation and execution.
	 
	22.	 	Governing Law
	 
	22.1	 	This Charge and any non-contractual obligations arising out of or in connection with it are
governed by the law of Scotland.
	 
	23.	 	Enforcement
	 
	 	 	Jurisdiction
	 
	23.1	 	The courts of Scotland have exclusive jurisdiction to settle any dispute arising out of or in
connection with this Charge (including a dispute relating to the existence, validity or
termination of this Charge or any non-contractual obligation arising out of or in connection
with this Charge) (a “Dispute”).
	 
	23.2	 	The Company agrees that the courts of Scotland are the most appropriate and convenient courts
to settle Disputes and accordingly it will not argue to the contrary or take proceedings
relating to a Dispute in any other courts.
	 
	23.3	 	Clauses 23.1 and 23.2 above are for the benefit of the Collateral Agent only. As a result,
the Collateral Agent shall not be prevented from taking proceedings relating to a Dispute in
any





18









 





	 	 	other courts with jurisdiction. To the extent allowed by law, the Collateral Agent may
take concurrent proceedings in any number of jurisdictions.
	 
	23.4	 	Without prejudice to Clauses 23.1 and 23.2 above, the Company further agrees that proceedings
relating to a Dispute may be brought in the courts of Scotland and England and irrevocably
submits to the jurisdiction of such courts.
	 
	23.5	 	The Company irrevocably waives any right it may have to the trial by jury in any proceedings
relating to a Dispute.
	 
	23.6	 	Waiver of Immunity
	 
	23.7	 	To the extent that the Company may in any jurisdiction claim for itself or its assets
immunity from suit, execution, attachment (whether in aid of execution, before judgment or
otherwise) or other legal process and to the extent that in any such jurisdiction there may be
attributed to itself or its assets such immunity (whether or not claimed), the Company
irrevocably agrees not to claim and irrevocably waives such immunity to the fullest extent
permitted by the laws of that jurisdiction.





IN WITNESS WHEREOF: this Charge consisting of this and the preceding eighteen (18) pages are
executed as follows:




THE COMPANY




	 	 	 

	SUBSCRIBED FOR and ON BEHALF OF

	 	 

	ENDEAVOUR ENERGY UK LIMITED

	 	Duly Authorised Attorney
	acting by of 1001 Fannin Street, Suite 1600,
Houston, Texas 77002, United States of America in
the exercise of a power of attorney dated 3
August 2010 granted by Endeavour Energy UK
Limited in the presence of:
	 	 






	 	 	 	 	 

	Witness signature:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Witness name:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Witness address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Place of Signing:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Date of Signing:
	 	 	 	 






THE COLLATERAL AGENT




	 	 	 	 	 	 	 	 	 

	SUBSCRIBED FOR and ON BEHALF OF

	 	 	)	 	 	 
	 	 
	CYAN PARTNERS, LP (as agent and trustee for

	 	 	)	 	 	(Authorised Signatory)	 	 
	itself and each of the other Secured Creditors) by its

	 	 	)	 	 	 	 	 
	attorney in the presence of:

	 	 	)	 	 	 	 	 






	 	 	 	 	 

	Witness signature:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Witness name:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Witness address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Place of Signing:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Date of Signing:
	 	 	 	 
	 

	 	 

	 	 






19









 






Dated            August 2010



ENDEAVOUR ENERGY UK LIMITED




AND



CYAN PARTNERS, LP

(as agent and trustee for itself and each of the other Secured Creditors)



 





BOND AND FLOATING CHARGE



 





CMS Cameron McKenna LLP

6 Queens Road

Aberdeen

AB15 4ZT



T +44(0)1224 622 002

F +44(0)1224 622 066



Ref: ANFR/MAMC/FRFO/042158.00013



 









 





Table of Contents




	 	 	 	 	 

	1. Definitions and Interpretation
	 	 	1	 
	2. Covenant to Pay
	 	 	5	 
	3. Floating Charge
	 	 	6	 
	4. Further Assurance
	 	 	6	 
	5. Undertakings
	 	 	7	 
	6. Enforcement of Security
	 	 	7	 
	7. Appointment of Receiver and Administrator
	 	 	8	 
	8. Powers of Receiver
	 	 	9	 
	9. Discretions and Delegation
	 	 	11	 
	10. Power of Attorney
	 	 	11	 
	11. Protection of Purchasers
	 	 	12	 
	12. Application of Proceeds
	 	 	13	 
	13. No Liability as Creditor nor Mortgagee in Possession
	 	 	13	 
	14. Effectiveness of Security
	 	 	13	 
	15. Certificates and Determinations
	 	 	16	 
	16. Partial Invalidity
	 	 	16	 
	17. Remedies and Waivers
	 	 	16	 
	18. Notices
	 	 	17	 
	19. Assignation
	 	 	18	 
	20. Releases
	 	 	18	 
	21. Consent to Registration
	 	 	18	 
	22. Governing Law
	 	 	18	 
	23. Enforcement
	 	 	18	 







 











 






	 	 	 	 	 



EXHIBIT G




FORM OF SOLVENCY CERTIFICATE



To the Administrative Agent and each of the Lenders
party to the Credit Agreement referred to below:





          I, the undersigned, the Chief Financial Officer of Endeavour International Corporation
(“Holdings”), a Nevada Corporation, in that capacity only and not in my individual
capacity, do hereby certify as of the date hereof that:



          1. This Certificate is furnished to Cyan Partners, LP, as Administrative Agent (the
“Administrative Agent”), and the Lenders pursuant to Section 5.12(i) of the Credit
Agreement, dated as of August 16, 2010 among Holdings, Endeavour Energy UK Limited (the
“Borrower”), the lenders from time to time party thereto (each, a “Lender” and,
collectively, the “Lenders”), and the Administrative Agent (the “Credit
Agreement”). Unless otherwise defined herein, capitalized terms used in this Certificate shall
have the meanings set forth in the Credit Agreement.



          2. For purposes of this Certificate, the terms below shall have the following definitions:




	 	(a)	 	“Fair Value”
	 
	 	 	 	The amount at which the assets (both tangible and intangible), in their
entirety, of each of the Borrower (on a stand-alone basis) and Holdings and
its Subsidiaries (taken as a whole), as the case may be, would change hands
between a willing buyer and a willing seller, within a commercially
reasonable period of time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act.
	 
	 	(b)	 	“Present Fair Salable Value”
	 
	 	 	 	The amount that could be obtained by an independent willing seller from an
independent willing buyer if the assets of each of the Borrower (on a
stand-alone basis) and Holdings and its Subsidiaries (taken as a whole), as
the case may be, are sold with reasonable promptness in an arm’s-length
transaction under present conditions for the sale of comparable business
enterprises.
	 
	 	(c)	 	“New Financing”
	 
	 	 	 	All Indebtedness incurred or assumed or to be incurred by Holdings and its
Subsidiaries in connection with the Transaction (including Indebtedness
under the Credit Documents and all other financings contemplated by the
other Credit Documents), in each case after giving effect to the Transaction
and the incurrence of all financings, redemptions and repayments in
connection therewith.




 









 











Exhibit G

Page 2





	 	(d)	 	“Stated Liabilities”
	 
	 	 	 	The recorded liabilities (including contingent liabilities that would be
recorded in accordance with GAAP) of each of the Borrower (on a stand-alone
basis) and Holdings and its Subsidiaries (taken as a whole), as the case may
be, as of the date hereof after giving effect to the consummation of the
Transaction (which, for purposes of this Certificate, shall include the
retirement and repayment on the Effective Date of indebtedness in respect of
Refinancing with the proceeds of the New Financing), determined in
accordance with GAAP consistently applied, together with the amount of the
New Financing.
	 
	 	(e)	 	“Identified Contingent Liabilities”
	 
	 	 	 	The reasonably estimated maximum amount of liabilities reasonably likely to
result from pending litigation, asserted claims and assessments, guaranties,
uninsured risks and other contingent liabilities (other than such contingent
liabilities included within the term “Stated Liabilities”) of each of the
Borrower (on a stand-alone basis) and Holdings and its Subsidiaries (taken
as a whole), as the case may be, after giving effect to the Transaction
(including all fees and expenses related thereto but exclusive of such
contingent liabilities to the extent reflected in Stated Liabilities), as
identified and explained in terms of their nature and reasonably estimated
magnitude by responsible officers of Holdings and its Subsidiaries or that
have been identified as such by an officer of Holdings or any of its
Subsidiaries, determined in accordance with GAAP.
	 
	 	(f)	 	“will be able to pay its or their respective Stated
Liabilities and Identified Contingent Liabilities as they mature or otherwise
become payable”
	 
	 	 	 	Each of the Borrower (on a stand-alone basis) and Holdings and its
Subsidiaries (taken as a whole), as the case may be, will have sufficient
assets and cash flow to pay its or their respective Stated Liabilities and
Identified Contingent Liabilities as those liabilities mature or otherwise
become payable.
	 
	 	(g)	 	“does or do not have Unreasonably Small Capital”
	 
	 	 	 	Each of the Borrower (on a stand-alone basis), the Borrower and its
Subsidiaries (taken as a whole) and Holdings and its Subsidiaries (taken as
a whole), as the case may be, after giving effect to the consummation of the
Transaction and the incurrence of all Indebtedness (including the Term
Loans) and Liens by such Person or such group of Persons, as the case may
be, in connection therewith, is or are a going concern and has or have
sufficient capital to ensure that it or they will continue to be and remain
a going concern (as such term is determined in accordance with GAAP) after
giving due consideration to the prevailing practice in the industry or
industries in which it or they are engaged or are to engage.





          3. For purposes of this Certificate, I, or officers of Holdings and/or its Subsidiaries under
my direction and supervision, have performed the following procedures as of and for the periods set
forth below.




	 	(a)	 	Reviewed the financial statements (including the pro
forma financial statements) referred to in Sections 6.05(a) and (b) of
the Credit Agreement.




 









 





Exhibit G
Page 3



	 	(b)	 	Made (or caused to be made under my direction and supervision)
such examination or investigation as is reasonably necessary to enable me to
express an informed opinion as to the matters referred to in this Certificate.
	 
	 	(c)	 	Reviewed to my satisfaction the Credit Documents and the
respective Schedules and Exhibits thereto.





          4. Based on and subject to the foregoing, I hereby certify on behalf of Holdings that, on and
as of the date hereof and after giving effect to the consummation of the Transaction and the
related financing transactions (including the incurrence of the New Financing), it is my opinion
that (i) the Fair Value and Present Fair Salable Value of the assets of each of the Borrower (on a
stand-alone basis) and Holdings and its Subsidiaries (taken as a whole), as the case may be, exceed
its or their respective Stated Liabilities and Identified Contingent Liabilities; (ii) each of the
Borrower (on a stand-alone basis) and Holdings and its Subsidiaries (taken as a whole), as the case
may be, do not have Unreasonably Small Capital; and (iii) each of the Borrower (on a stand-alone
basis) and Holdings and its Subsidiaries (taken as a whole), as the case may be, intends to and
believes that it will be able to pay its or their respective Stated Liabilities and Identified
Contingent Liabilities as they mature or otherwise become payable.



          5. Holdings and the Borrower do not intend, in consummating the transactions contemplated by
the New Financing, to delay, hinder, or defraud either present or future creditors.



          IN WITNESS WHEREOF, the undersigned has set his hand this ___ day of August, 2010.



	 	 	 	 	 
	 	ENDEAVOUR INTERNATIONAL

CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	Chief Financial Officer 	 



 









 






	 	 	 	 	 



EXHIBIT H




FORM OF COMPLIANCE CERTIFICATE





          This Compliance Certificate is delivered to you pursuant to Section 7.01(g) of the Credit
Agreement, dated as of August 16, 2010, among Endeavour International Corporation
(“Holdings”), Endeavour Energy UK Limited, the lenders party thereto from time to time, and
Cyan Partners, LP, as Administrative Agent (as amended, restated, modified and/or supplemented from
time to time, the “Credit Agreement”). Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.



     1. I am the duly elected, qualified and acting chief financial officer of Holdings.



     2. I have reviewed and am familiar with the contents of this Compliance Certificate. I am
providing this Compliance Certificate solely in my capacity as the chief financial officer of
Holdings. The matters set forth herein are true to the best of my knowledge in my capacity as
chief financial officer of Holdings after due inquiry.



     3. I have reviewed the terms of the Credit Agreement and the other Credit Documents and have
made or caused to be made under my supervision a review in reasonable detail of the transactions
and condition of Holdings and its Subsidiaries for the accounting period from [                    , ___] and
ending on [                    , ___] (the “Test Period”) and covered by the financial statements
[attached hereto as ANNEX 1 / available on the website of Holdings] (the “Financial
Statements”). Such review did not disclose the existence during or at the end of the
accounting period covered by the Financial Statements, and I have no knowledge of the existence, as
of the date of this Compliance Certificate, of any condition or event which constitutes a Default
or an Event of Default [, except as set forth below].



     4. Attached hereto as ANNEX 2 are the computations showing (in reasonable detail) compliance
with the covenants specified therein.



     5. Attached hereto as ANNEX 3 is the information required to establish compliance with
Sections 4.02(b), 4.02(c), 4.02(d) and 4.02(e) of the Credit Agreement for the Test Period ending
on [_______, ___].



     [6. Attached hereto as ANNEX 4 is the information required to establish compliance with
Section 4.02(f) of the Credit Agreement for the Test Period ending on [                    ,
___].]2



     7. [I hereby certify that there have been no changes to Schedule VI of the U.S. Security
Agreement in each case since the Funding Date, or if later, since the date of the most recent
certificate delivered pursuant to Section 7.01(g) of the Credit Agreement.][Attached hereto as
ANNEX 5 is a list in reasonable detail of any changes to Schedule VI of the U.S. Security Agreement
to the extent required to be reported to the Collateral Agent under the terms of the U.S. Security
Agreement and confirmation that Holdings and/or the other Credit Parties have taken all actions
necessary under the terms of the U.S. Security Agreement in relation to such changes, or if not,
details of what actions remain required to be taken.]






 




			
	2	 	Insert for Compliance Certificate in respect
of fiscal year end only.




 









 










ANNEX 2

Page 1




     8. Attached hereto at ANNEX 6 is a list of all acquisitions by Holdings or any of its
Subsidiaries of any Oil and Gas Property or Real Property (or any interest in any Oil and Gas
Property or Real Property) having a value in excess of $5,000,000.



 









 





Exhibit H

Page 2




          IN WITNESS WHEREOF, I have executed this Compliance Certificate this ___ day of _____.



	 	 	 	 	 
	 	ENDEAVOUR INTERNATIONAL

CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 









 






	 	 	 	 	 



ANNEX 1





          [Applicable Financial Statements To Be Attached
If Not Otherwise Made Available On The Website Of Holdings]




 











 





ANNEX 2




          The information described herein is as of                     ,      3 (the
“Computation Date”) and (a) in the case of items B(ii), B(iii) [,
D(i)(a)]4 and D(i)(e) below, pertains to the period from the Funding Date
through the last day of the Test Period ending on [                    ,      ] and (b) in the case of items
B(i), B(v), [D(i)(a),]5 D(ii), D(iii), D(iv) and D(v) below, pertains to the
Test Period ending on [                    ,      ].




	I.	 	Negative and Financial Covenants
	 
	A.	 	Liens (Section 8.01(w))






	 	(i)	 	The aggregate amount of deposits of cash or Cash Equivalents to secure
obligations under the Hess Contracts (or letters of credit supporting such
obligations) or other obligations permitted under Section 8.04(i) subject to Liens
permitted pursuant to Section 8.01(w) is $                    .






	B.	 	Consolidation, Merger, Purchase or Sale of Assets (Section 8.02)






	 	(i)	 	The aggregate amount of cash and non-cash proceeds received during the
year-to-date period ending on the Computation Date from all assets sold pursuant to
Section 8.02(e) is $                    6, using the Fair Market Value of
property other than cash.
	 
	 	(ii)	 	[Holdings and its Subsidiaries have sold [     ]% of the 2P Reserves located in
the North Sea (as determined by reference to the 2P Reserves listed in Holdings’
December 31, 2009 Reserve Report) in accordance with Section 8.02(f).] OR
[Neither Holdings nor any of its Subsidiaries have sold any of the 2P Reserves located
in the North Sea pursuant to Section 8.02(f).]
	 
	 	(iii)	 	Pursuant to Section 8.02(n), Holdings and its Subsidiaries have paid an
aggregate amount equal to $                    7 in respect of (1)
Permitted Business Investments made, (2) Permitted Acquisitions consummated and (3) Capital Expenditures made pursuant to
Section 8.07(e).







 




			
	3	 	Insert the last day of the respective fiscal
quarter or year covered by the financial statements which are required to be
accompanied with this Compliance Certificate.
	 
	4	 	Reference to this item to be included for
each Compliance Certificate delivered with respect to a Test Period ending on
or prior to December 31, 2010, and to be deleted for each Compliance
Certificate delivered with respect to a Test Period ending after December 31,
2010.
	 
	5	 	Reference to this item to be deleted for each
Compliance Certificate delivered with respect to a Test Period ending on or
prior to December 31, 2010, and to be included for each Compliance Certificate
delivered with respect to a Test Period ending after December 31, 2010.
	 
	6	 	Amount may not exceed $25,000,000 in any
fiscal year of Holdings.
	 
	7	 	Amount may not exceed $50,000,000.




 









 










ANNEX 2

Page 2





	 	(iv)	 	Pursuant to Section 8.02(o), Holdings and its Subsidiaries have paid an
aggregate amount of consideration during the year-to-date period ending on the
Computation Date equal to $                    8 in connection with (1)
Permitted Business Investments made and (2) Permitted Acquisitions consummated.






	C.	 	Indebtedness (Section 8.04)






	 	(i)	 	Pursuant to Section 8.04(i)(x), Holdings and its Subsidiaries have
Indebtedness with respect to (1) Third Party Letters of Credit and (2) performance
bonds, surety bonds, appeal bonds or customs bonds, or obligations in respect of
letters of credit posted in lieu of, or to secure, any such bonds, required in the
ordinary course of business or in connection with the enforcement of rights or claims
of Holdings or such Subsidiary or in connection with judgments that do not result in a
Default or an Event of Default in an aggregate amount outstanding of
$                    9.
	 
	 	(ii)	 	Pursuant to Section 8.04(m), Holdings and its Subsidiaries have additional
Indebtedness in an aggregate principal amount outstanding of
$_________10.






	D.	 	Financial Covenants






	 	(i)	 	Capital Expenditures (Section 8.07)






	 	a.	 	The aggregate amount of all Capital Expenditures made by
Holdings and its Subsidiaries during the year-to-date period ending on the
Computation Date pursuant to Section 8.07(a) and Section 8.07(b) is
$                    11.
	 
	 	b.	 	[Holdings and its Subsidiaries have made Capital Expenditures
with Net Sale Proceeds received by Holdings or any of its Subsidiaries from
any Asset Sale in the amount of $                     pursuant to Section 8.07(c).]
OR [Neither Holdings nor any of its Subsidiaries have made any Capital
Expenditures with Net Sale Proceeds from any Asset Sale pursuant to Section
8.07(c).]
	 
	 	c.	 	[Holdings and its Subsidiaries have made Capital Expenditures
with Net Insurance Proceeds received by Holdings or any of its Subsidiaries
from any Recovery Event in the amount of $                     pursuant to Section
8.07(d).] OR







 




			
	8	 	Amount may not exceed 5% of 2P Reserve Value
in any fiscal year based on most recently delivered Reserve Report.
	 
	9	 	Amount may not exceed $60,000,000 at any
time.
	 
	10	 	Amount may not exceed $10,000,000 at any
time.
	 
	11	 	Subject to Section 8.07(b), amount may not
exceed (1) $70,000,000 for period from Funding Date through and including
December 31, 2010, (2) $200,000,000 for fiscal year ending December 31, 2011,
(3) $350,000,000 for fiscal year ending December 31, 2012 and (4) $175,000,000
for fiscal year ending December 31, 2013. Additional calculations may be
attached to demonstrate compliance for amounts in excess of the foregoing
thresholds pursuant to Section 8.07(b).




 









 










ANNEX 2

Page 3





[Neither Holdings nor any of its Subsidiaries have made any Capital
Expenditures with Net Insurance Proceeds from any Recovery Event pursuant to Section 8.07(d).]




	 	d.	 	Pursuant to Section 8.07(e), Holdings and its Subsidiaries
have paid an aggregate amount equal to $                    12 in
respect of (1) Permitted Business Investments made pursuant to Section
8.02(n), (2) Permitted Acquisitions consummated pursuant to Section 8.02(n)
and (3) Capital Expenditures made.






	 	(ii)	 	Total Leverage Ratio (Section 8.08) (as of the last day
of the Test Period)






	 	a.	 	Consolidated Net Indebtedness13 as at the Computation Date 	$           
	 
	 	b.	 	Consolidated EBITDAX14 for
the Test Period ended on the Computation Date 	$            
	 
	 	c.	 	Ratio of line a. to line b. 	[         ]:1.00 
	 
	 	d.	 	Level required pursuant to Section 8.08 	[         ]:1.00 






	 	(iii)	 	Minimum EBITDAX (Section 8.09) (as of the last day of the
Test Period)






	 	a.	 	Consolidated EBITDAX for the Test Period 	$            
	 
	 	b.	 	Minimum amount required pursuant to Section 8.09 	$            






	 	(iv)	 	Reserve Coverage Ratio (Section 8.10(a))






	 	a.	 	Sum of the PV-10 Value and the Probable
Reserve Value, in each case as at the Computation Date
	$            
	 
	 	b.	 	Consolidated Net Secured
Indebtedness15 on the Computation Date
	$            







 




			
	12	 	Amount may not exceed $50,000,000.
	 
	13	 	To be determined excluding Indebtedness of
Holdings or any of its Subsidiaries of the type described in clause (g) of the
definition of Indebtedness in the Credit Agreement. Attach hereto in
reasonable detail the calculations required to arrive at Consolidated Net
Indebtedness.
	 
	14	 	To be determined on a Pro Forma Basis in
accordance with the definition of “Pro Forma Basis” contained in the Credit
Agreement. Attach hereto in reasonable detail the calculations required to
arrive at Consolidated EBITDAX.




 









 










ANNEX 2

Page 4





	 	c.	 	Ratio of line a. to b.
	[         ]:1.00 
	 
	 	d.	 	Level required pursuant to Section 8.10(a)	3.00:1.00 






	 	(v)	 	PDP Coverage Ratio (Section 8.10(b))






	 	a.	 	PV-10 Value16 as
at the Computation Date 	$            
	 
	 	b.	 	Consolidated Net Secured Indebtedness
as at the Computation Date 	$            
	 
	 	c.	 	Ratio of line a. to b. 	[         ]:1.00 
	 
	 	d.	 	Level required pursuant to Section 8.10(b) 	[         ]:1.00 







 




			
	(...continued)
	 
	15	 	Attach hereto in reasonable detail the
calculations required to arrive at Consolidated Net Secured Indebtedness.
	 
	16	 	To be determined by substituting the phrase
“from PDP production on Holdings’ and each of its Subsidiaries’ Oil and Gas
Properties” for the phrase “from Proved Reserves on Holdings’ and each of its
Subsidiaries’ Oil and Gas Properties” appearing in the second line of the
definition thereof in the Credit Agreement.




 









 










ANNEX 3




          1. [During the Test Period ended on the Computation Date, neither Holdings nor any of its
Subsidiaries has received any Net Cash Proceeds which would require a mandatory repayment pursuant
to Section 4.02(b) of the Credit Agreement.]17



          2. [During such Test Period ended on the Computation Date, neither the Holdings nor any of its
Subsidiaries has received any Net Cash Proceeds which would require a mandatory repayment pursuant
to Section 4.02(c) of the Credit Agreement.]18



          3. [During such Test Period ended on the Computation Date, neither the Holdings nor any
of its Subsidiaries has received any Net Sale Proceeds which would require a mandatory repayment
pursuant to Section 4.02(d) of the Credit Agreement.]19



          4. [During such Test Period ended on the Computation Date, neither the Holdings
nor any of its Subsidiaries has received any Net Insurance Proceeds from a Recovery Event
which would require a mandatory repayment pursuant to Section 4.02(e) of the Credit
Agreement.]20





 




			
	17	 	If Holdings or any of its Subsidiaries has
received such Net Cash Proceeds, the certificate should describe the amounts
and dates of the receipt thereof, as well as the amounts and dates of the
required mandatory repayments pursuant to Section 4.02(b), together with the
certification that such payments have in fact been made.
	 
	18	 	If Holdings or any of its Subsidiaries has
received any Net Cash Proceeds, the certificate should describe same and state
the date of each receipt thereof as well as the amounts and dates of the
required mandatory repayments pursuant to Section 4.02(c), together with the
certification that such payments have in fact been made.
	 
	19	 	If Holdings or any of its Subsidiaries has
received any Net Sale Proceeds, the certificate should describe same and state
the date of each receipt thereof and the amount of Net Sale Proceeds received
on each such date, together with sufficient information as to mandatory
repayments and/or reinvestments thereof to determine compliance with Section
4.02(d) of the Credit Agreement, together with a statement that Holdings is in
compliance with the requirements of said Section 4.02(d).
	 
	20	 	If Holdings or any of its Subsidiaries has
received any Net Insurance Proceeds, the certificate should describe same and
state the date of each receipt thereof and the amount of Net Insurance Proceeds
received on each such date, together with sufficient information as to
mandatory repayments and/or reinvestments thereof to determine compliance with
Section 4.02(e) of the Credit Agreement, together with a statement that
Holdings is in compliance with the requirements of said Section 4.02(e).




 









 










ANNEX 4




          The amount of Excess Cash Flow for the fiscal year ended on the Computation Date
was $                     and the amount of the payment required pursuant to Section 4.02(f) of the
Credit Agreement for such fiscal year was $                    .21





 




			
	21	 	Include for Compliance Certificates
delivered in respect of fiscal year end only (commencing with the fiscal year
ending closest to December 31, 2010). Attached hereto in reasonable detail the
calculations required to establish Excess Cash Flow, together with sufficient
information as to related mandatory repayments thereof to determine compliance
with Section 4.02(f) of the Credit Agreement, together with a statement that
Holdings is in compliance with the requirements of said Section 4.02(f).




 









 










ANNEX 5




[Changes to Schedule VI of the U.S. Security Agreement]





 









 








ANNEX 6




     [Acquisitions of Oil and Gas Property or Real Property (or any interest in any Oil and
Gas Property or Real Property) having a value in excess of $5,000,000]



 









 





EXHIBIT 1




FORM OF ASSIGNMENT

AND

ASSUMPTION AGREEMENT1




          This Assignment and Assumption Agreement (this “Assignment”) is dated as of
[                    ] and is entered into by and between [the][each] Assignor identified in item
[1][2] below ([the] [each, an] “Assignor”) and [the] [each] Assignee identified in item 2
below ([the] [each, an] “Assignee”). [It is understood and agreed that the rights and
obligations of such [Assignees][and Assignors] hereunder are several and not joint.] Capitalized
terms used herein but not defined herein shall have the meanings given to them in the Credit
Agreement identified below (as amended, restated, supplemented and/or otherwise modified from time
to time, the “Credit Agreement”). The Standard Terms and Conditions for Assignment and
Assumption Agreement set forth in Annex 1 hereto (the “Standard Terms and Conditions”) are
hereby agreed to and incorporated herein by reference and made a part of this Assignment as if set
forth herein in full.



          For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to
[the] [each] Assignee, and [the] [each] Assignee hereby irrevocably purchases and assumes from
[the][each] Assignor, subject to and in accordance with the Standard Terms and Conditions and the
Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated
below, the interest in and to all of [the][each] Assignor’s rights and obligations under the Credit
Agreement and any other documents or instruments delivered pursuant thereto that represents the
amount and percentage interest identified below of all of the [respective] Assignor’s outstanding
rights and obligations identified below ([the] [each, an] “Assigned Interest”). [Each]
[Such] sale and assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment, without representation or warranty by [the][any] Assignor.



	 	 	 	 	 

	[1.

	 	Assignor:
	 	                                                            
	 
	 	 	 	 
	2.

	 	Assignee:
	 	                                                            ]2
	 
	 	 	 	 
	[1][3].

	 	Credit Agreement:
	 	Credit Agreement, dated as of August 16, 2010, among Endeavour
International Corporation (“Holdings”), Endeavour Energy UK Limited (the
“Borrower”), the Lenders party thereto from time to time, and Cyan
Partners, LP, as Administrative Agent.
	 
	 	 	 	 
	[2.

	 	Assigned Interest:3	 	 








 




			
	1	 	This Form of Assignment and Assumption
Agreement should be used by Lenders for an assignment to a single Assignee or
to funds managed by the same or related investment managers.
	 
	2	 	If the form is used for a single
Assignor and Assignee, items 1 and 2 should list the Assignor and the
Assignee, respectively. In the case of an assignment to funds managed by
the same or related investment managers, or an assignment by multiple
Assignors, the Assignors and the Assignee(s) should be listed in the table
under bracketed item 2 below.
	 
	3	 	Insert this chart if this Form of
Assignment and Assumption Agreement is being used for assignments to funds
managed by the same or related investment managers or for an assignment by
multiple Assignors. Insert additional rows as needed.




 









 










Exhibit I

Page 2




	 	 	 	 	 	 	 
	 	 	 	 	Aggregate Amount of Term Loans	 	
	Assignor	 	Assignee	 	for all Lenders	 	Amount of Term Loans Assigned
	 
	 	 	 	 	 	 
	[Name of Assignor]

	 	[Name of Assignee]
	 	                    
	 	                    
	 
	 	 	 	 	 	 
	[Name of Assignor]

	 	[Name of Assignee]
	 	                    
	 	                    






 









 





Exhibit I

Page 3




	[4. Assigned Interest:4





	 	 	 
	Aggregate Amount of Term Loans	 	 
	for all Lenders 	 	Amount of Term Loans Assigned
	 
	 	 
	$                    

	 	$                    





Effective Date                     ,      ,      .




	 	 	 	 	 	 	 
	Assignor[s] Information	 	 	 	Assignee[s] Information	 	 
	 
	 	 	 	 	 	 
	Payment Instructions:
	 	                    	 	Payment Instructions:	 	                    
	 
	 	                    	 	 	 	                    
	 
	 	                    	 	 	 	                    
	 
	 	                    	 	 	 	                    
	 
	 	Reference:     	 	 	 	Reference:     
	 
	 	 	 	 	 	 
	Notice Instructions:
	 	                    	 	Notice Instructions:	 	                    
	 
	 	                    	 	 	 	                    
	 
	 	                    	 	 	 	                    
	 
	 	                    	 	 	 	                    
	 
	 	Reference:     	 	 	 	Reference:     








 




			
	4	 	Insert this chart if this Form of
Assignment and Assumption Agreement is being used by a single Assignor for an
assignment to a single Assignee.






 











 





Exhibit I

Page 4




The terms set forth in this Assignment are hereby agreed to:




	 	 	 	 	 	 	 	 	 

	ASSIGNOR	 	ASSIGNEE	 	 
	[NAME OF ASSIGNOR]	 	[NAME OF ASSIGNEE]5	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	Title:	 	 








 




			
	5	 	Add additional signature blocks, as
needed, if this Form of Assignment and Assumption Agreement is being
used by funds managed by the same or related investment managers.




 









 










Exhibit I

Page 5




	 	 	 	 	 
	[Consented to and]6 Accepted:

CYAN PARTNERS, LP,

as Administrative Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	[ENDEAVOUR ENERGY UK LIMITED,

as Borrower

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:]7  	 	 	 
	 





 




			
	6	 	Insert only if assignment is being made to an
Eligible Transferee pursuant to Section 11.04(b)(y) of the Credit Agreement.
Consent of the Administrative Agent shall not be unreasonably withheld, delayed
or conditioned.
	 
	7	 	Insert only if (i) no Event of Default
or Default under the Credit Agreement is then in existence, (ii) the assignment
is being made to an Eligible Transferee pursuant to 11.04(b)(y) of the Credit
Agreement and (iii) assignment is not being made before the Syndication Date.
Consent of the Borrower shall not be unreasonably withheld, delayed or
conditioned.




 









 










ANNEX I

TO

EXHIBIT I




ENDEAVOUR ENERGY UK LIMITED




CREDIT AGREEMENT



STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT



          1. Representations and Warranties.




          1.1. Assignor. [The] [Each] Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of [the] [its] Assigned Interest, (ii) [the] [its] Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and to
consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to
(i) any statements, warranties or representations made in or in connection with any Credit
Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Credit Document or any other instrument or document delivered
pursuant thereto (other than this Assignment) or any collateral thereunder, (iii) the financial
condition of Holdings, any of its Subsidiaries or affiliates or any other Person obligated in
respect of any Credit Document or (iv) the performance or observance by Holdings, any of its
Subsidiaries or affiliates or any other Person of any of their respective obligations under any
Credit Document.



1.2. Assignee. [The] [Each] Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
to consummate the transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) confirms that it is (A) a Lender, (B) a parent company and/or an affiliate of
[the][each] Assignor which is at least 50% owned by [the][each] Assignor or its parent company, (C)
a fund that invests in bank loans and is managed by the same investment advisor as a Lender, by an
affiliate of such investment advisor or by a Lender or (D) an Eligible Transferee under Section
11.04(b)(y) of the Credit Agreement; (iii) from and after the Effective Date, it shall be bound by
the provisions of the Credit Agreement and, to the extent of [the][its] Assigned Interest, shall
have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant to Section 7.01
thereof, as applicable, and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and to purchase [the][its]
Assigned Interest on the basis of which it has made such analysis and decision and (v) if it is
organized under the laws of a jurisdiction outside the United States, it has attached to this
Assignment any tax documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by it; (b) agrees that it will, independently and without
reliance upon the Administrative Agent, [the][each] Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement; (c) appoints and authorizes
the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and the other Credit Documents as are delegated to
or otherwise conferred upon the Administrative Agent or the Collateral Agent, as the case may be,
by the terms thereof, together with such powers as are reasonably incidental thereto and (d) agrees
that it will perform in accordance with their terms all of the obligations which by the terms of
the Credit Documents are required to be performed by it as a Lender.






 









 








Annex I

to Exhibit I

Page 2




          2. Payment. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the] [each] Assigned Interest (including payments of principal,
interest, fees, commissions and other amounts) to [the][each] Assignor for amounts which have
accrued to but excluding the Effective Date and to [the] [each] Assignee for amounts which have
accrued from and after the Effective Date.




          3. Effect of Assignment. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Effective Date and the recordation of this Assignment by the
Administrative Agent on the Register pursuant to Section 11.15 of the Credit Agreement, (i)
[the][each] Assignee shall be a party to the Credit Agreement and, to the extent provided in this
Assignment, have the rights and obligations of a Lender thereunder and under the other Credit
Documents and (ii) [the][each] Assignor shall, to the extent provided in this Assignment,
relinquish its rights and be released from its obligations under the Credit Agreement and the other
Credit Documents.




          4. General Provisions. This Assignment shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and permitted assigns. This
Assignment may be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this Assignment by telecopy
shall be effective as delivery of a manually executed counterpart of the Assignment. THIS
ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW).




* * *











 









 








EXHIBIT J




FORM OF INTERCOMPANY NOTE



[This Note, and the obligations of each Payor (as defined below) hereunder, shall be
subordinate and junior in right of payment to all Senior Indebtedness (as defined in Section 1.07
of Annex A hereto) on the terms and conditions set forth in Annex A hereto, which Annex A is herein
incorporated by reference and made a part hereof as if set forth herein in its entirety. Annex A
shall not be amended, modified or supplemented without the written consent of the Required Lenders
(as defined in the Credit Agreement referred to below) (or, after such Credit Agreement has been
terminated, the other holders holding a majority of the outstanding other Senior Indebtedness)]




New York, New York

                          ,      




          FOR VALUE RECEIVED, each of the undersigned, to the extent a borrower from time to time from
any other entity listed on the signature page hereto (each, in such capacity, a “Payor”),
hereby promises to pay on demand to the order of such other entity listed below (each, in such
capacity, a “Payee”), in lawful money of the [United States of America] in immediately
available funds, at such location as a Payee shall from time to time designate, the unpaid
principal amount of all loans and advances made by such Payee to such Payor.




          Each Payor also promises to pay interest on the unpaid principal amount hereof in like money
at said location from the date hereof until paid at such rate per annum as shall be agreed upon
from time to time by such Payor and the respective Payee.




          This Note is an Intercompany Note referred to in the Credit Agreement dated as of August 16,
2010, among Endeavour International Corporation, Endeavour Energy UK Limited, the lenders party
thereto from time to time, and Cyan Partners, LP, as Administrative Agent for such Lenders (as
amended, restated, modified and/or supplemented from time to time, the “Credit Agreement”)
and shall be pledged pursuant to the applicable Security Documents (as defined in the Credit
Agreement). The Payor hereby acknowledges and agrees that the Collateral Agent (as defined in the
Credit Agreement) may, pursuant to such Security Documents as in effect from time to time, exercise
all rights provided therein with respect to this Note.




          Each Payee is hereby authorized (but shall not be required) to record all loans and advances
made by it to any Payor (all of which shall be evidenced by this Note), and all repayments or
prepayments thereof, in its books and records, such books and records constituting prima facie
evidence of the accuracy of the information contained therein.




          All payments under this Note shall be made without offset, counterclaim or deduction of any
kind.




          Each Payor hereby waives (to the extent permitted by applicable law) presentment, demand,
protest or notice of any kind in connection with this Note.







 









 








Exhibit J

Page 2




          THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW
YORK.




	 	 	 	 	 
	 	[NAME OF EACH CREDIT PARTY],

as Payor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Pay to the order of

 	 	 
	
 	 	 
	 	 	 
	 	 	 
	 
	[NAME OF EACH CREDIT PARTY],

as Payee

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



 









 






	 	 	 	 	 



ANNEX A

TO

INTERCOMPANY NOTE




          Section 1.01. Subordination of Liabilities. Each entity that is a “Payor” under the
promissory note (the “Note”) to which this Annex A is attached (each, a “Payor”),
for itself, its successors and assigns, covenants and agrees, and each “Payee” under the Note
(each, a “Payee”) by its acceptance thereof likewise covenants and agrees, that the payment
of the principal of, and interest on, and all other amounts owing in respect of, the Note (the
“Subordinated Indebtedness”) is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, to the prior payment in full in cash of all Senior Indebtedness (as
defined in Section 1.07 of this Annex A). The provisions of this Annex A shall constitute a
continuing offer to all persons or other entities who, in reliance upon such provisions, become
holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit
of the holders of Senior Indebtedness, and such holders are hereby made obligees hereunder the same
as if their names were written herein as such, and they and/or each of them may proceed to enforce
such provisions.




          Section 1.02. No Payor to Make Payments with Respect to Subordinated Indebtedness in
Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness (including, without
limitation, interest thereon or fees or any other amounts owing in respect thereof), whether at
stated maturity, by acceleration or otherwise, all Obligations (as defined in the Credit Agreement)
due and owing in respect thereof (other than unasserted contingent indemnification Obligations)
shall first be paid in full in cash before any payment of any kind or character (whether in cash,
property, securities or otherwise) is made on account of the Subordinated Indebtedness and no Payor
nor any person or other entity on its behalf may make any payment of Subordinated Indebtedness, or
acquire any Subordinated Indebtedness for cash, property or securities until all Senior
Indebtedness has been paid in full in cash if any Default or Event of Default (each as defined
below) is then in existence or would result therefrom. Each Payee hereby agrees that, so long as
any Default or Event of Default in respect of any Senior Indebtedness has occurred and is
continuing, it will not ask, demand, sue for, or otherwise take, accept or receive, any amounts
owing in respect of the Note. As used herein, the terms “Default” and “Event of
Default” shall mean any Default or Event of Default (or any similar term), respectively, under
and as defined in, the relevant documentation governing any Senior Indebtedness and in any event
shall include any payment default with respect to any Senior Indebtedness.




          (b) In the event that, notwithstanding the provisions of the preceding subsection (a) of this
Section 1.02, any payment shall be made on account of the Subordinated Indebtedness at a time when
payment is not permitted by the terms of the Note or by said subsection (a), such payment shall be
held by the respective Payee that received such payment, in trust for the benefit of, and shall be
paid forthwith over and delivered to, the holders of Senior Indebtedness or their representative or
representatives under the agreements pursuant to which the Senior Indebtedness may have been
issued, as their respective interests may appear, for application pro rata to the payment of all
Senior Indebtedness (after giving effect to the relative priorities of such Senior Indebtedness
pursuant to the terms thereof or otherwise) remaining unpaid to the extent necessary to pay all
such Senior Indebtedness in full in cash in accordance with the terms of such Senior Indebtedness,
after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. Without in any way modifying the
provisions of this Annex A or affecting the subordination effected hereby if such notice is not
given, each Payor shall give the respective Payee prompt written notice of any maturity of Senior
Indebtedness after which such Senior Indebtedness remains unsatisfied.




          Section 1.03. Subordination to Prior Payment of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of each Payor. (a) Upon any distribution of assets of any Payor
upon any total or partial dissolution, winding up, liquidation or reorganization of such Payor
(whether in bank-




 









 








Annex A

Page 2



ruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors,
marshalling of assets or otherwise and whether voluntary or involuntary):






     (i) the holders of all Senior Indebtedness shall first be entitled to receive payment
in full in cash of all Senior Indebtedness (including, without limitation, post-petition
interest at the rate provided in the documentation with respect to the Senior Indebtedness,
whether or not such post-petition interest is an allowed claim against the debtor in any
bankruptcy or similar proceeding) before any Payee is entitled to receive any payment of any
kind or character on account of the Subordinated Indebtedness;




     (ii) any payment or distribution of assets of any Payor of any kind or character,
whether in cash, property or securities, to which any Payee would be entitled except for the
provisions of this Annex A, shall be paid by the liquidating trustee or agent or other
person or entity making such payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives under the agreements pursuant to
which the Senior Indebtedness may have been issued, to the extent necessary to make payment
in full in cash of all Senior Indebtedness remaining unpaid (after giving effect to the
relative priorities of such Senior Indebtedness pursuant to the terms thereof or otherwise),
after giving effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness; and




     (iii) in the event that, notwithstanding the foregoing provisions of this Section 1.03,
any payment or distribution of assets of any Payor of any kind or character, whether in
cash, property or securities, shall be received by the any Payee on account of Subordinated
Indebtedness before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be received and held in trust for and shall forthwith be paid over to the
holders of the Senior Indebtedness (after giving effect to the relative priorities of such
Senior Indebtedness pursuant to the terms thereof or otherwise) remaining unpaid or their
representative or representatives under the agreements pursuant to which the Senior
Indebtedness may have been issued, for application to the payment of such Senior
Indebtedness until all such Senior Indebtedness shall have been paid in full in cash, after
giving effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.



          (b) To the extent any payment of Senior Indebtedness (whether by or on behalf of any Payor, as
proceeds of security or enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is recovered by, or paid
over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar person,
the Senior Indebtedness or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment has not occurred.




          (c) If any Payee does not file a proper claim or proof of debt in the form required in any
proceeding or other action referred to in the introductory paragraph of this Section 1.03 prior to
30 days before the expiration of the time to file such claim or claims, then any of the holders of
the Senior Indebtedness or their representative is hereby authorized to file an appropriate claim
for and on behalf of such Payee.




          (d) Without in any way modifying the provisions of this Annex A or affecting the subordination
effected hereby if such notice is not given, each Payor shall give prompt written notice to






 









 








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the respective Payee under the Note of any dissolution, winding up, liquidation or
reorganization of such Payor (whether in bankruptcy, insolvency or receivership proceedings or upon
assignment for the benefit of creditors or otherwise).




          Section 1.04. Subrogation. Subject to the prior payment in full in cash of all
Senior Indebtedness, each Payee shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the respective Payor applicable to
the Senior Indebtedness until all amounts owing on the Note shall be paid in full, and for the
purpose of such subrogation no payments or distributions to the holders of the Senior Indebtedness
by or on behalf of such Payor or by or on behalf of the such Payee by virtue of this Annex A which
otherwise would have been made to such Payee shall, as between such Payor, its creditors other than
the holders of Senior Indebtedness, and such Payee, be deemed to be payment by such Payor to or on
account of the Senior Indebtedness, it being understood that the provisions of this Annex A are and
are intended solely for the purpose of defining the relative rights of such Payee, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.




          Section 1.05. Obligation of each Payor Unconditional. Nothing contained in this
Annex A or in the Note is intended to or shall impair, as between each Payor and the respective
Payee, the obligation of such Payor, which is absolute and unconditional, to pay to such Payee the
principal of and interest on the Note as and when the same shall become due and payable in
accordance with the terms of this Note, or is intended to or shall affect the relative rights of
such Payee and creditors of such Payor, other than the holders of the Senior Indebtedness, nor
shall anything herein or therein, except as expressly provided herein, prevent such Payee from
exercising all remedies otherwise permitted by applicable law, subject to the rights, if any, under
this Annex A of the holders of Senior Indebtedness in respect of cash, property, or securities of
such Payor received upon the exercise of any such remedy. Upon any distribution of assets of any
Payor referred to in this Annex A, the respective Payee shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee
or agent or other Person making any distribution to such Payee, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of such Payor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Annex A.




          Section 1.06. Subordination Rights Not Impaired by Acts or Omissions of any Payor or
Holders of Senior Indebtedness. No right of any present or future holders of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of any Payor or by any act or failure to act
by any Payee, or by any noncompliance by any Payor with the terms and provisions of the Note,
regardless of any knowledge thereof with which any Payee may have or be otherwise charged. The
holders of the Senior Indebtedness may, without in any way affecting the obligations of the Payee
with respect thereto, at any time or from time to time and in their absolute discretion, change the
manner, place or terms of payment of, change or extend the time of payment of, or renew, or alter
or increase the amount of, any Senior Indebtedness, or amend, modify or supplement any agreement or
instrument governing or evidencing such Senior Indebtedness or any other document referred to
therein, or exercise or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of default thereunder and the release of any
collateral securing such Senior Indebtedness, all without notice to or assent from the holder of
the Note.




          Section 1.07. Senior Indebtedness. The term “Senior Indebtedness” shall mean
all Obligations (as such term is defined in the Credit Agreement) of each Payor under, or in
respect of the






 









 








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Credit Agreement and each other Credit Document (as defined in the Credit Agreement) to which
such Payor is a party, and any renewal, extension, restatement, refinancing or refunding of any
thereof.




          Section 1.08. Miscellaneous. If, at any time, all or part of any payment with
respect to Senior Indebtedness theretofore made by any Payor or any other Person or entity is
rescinded or must otherwise be returned by the holders of Senior Indebtedness for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or reorganization of such
Payor or such other Person or entity), the subordination provisions set forth herein shall continue
to be effective or be reinstated, as the case may be, all as though such payment had not been made.