Document:

exv4w1

 

OMNIBUS INSTRUMENT

     WHEREAS, the parties named herein desire to enter into certain Program Documents contained
herein, each such document dated as of this 23rd day of December, 2004, relating to the
issuance by Principal Life Income Fundings Trust 2004-81 (the “Trust”) of Notes to investors under
Principal Life’s secured notes program;

     WHEREAS, the Trust is a trust and will be organized under and its activities will be governed
by the provisions of the Trust Agreement (set forth in Section A of this Omnibus Instrument), dated
as of the date of the Pricing Supplement (attached to this Omnibus Instrument as Exhibit D)
(the “Pricing Supplement”), by and between the parties thereto indicated in Section F herein;

     WHEREAS, certain expense and indemnification arrangements between Principal Life and the
Trustee, on behalf of itself and on behalf of the Trust, are governed pursuant to the provisions of
the Expense and Indemnity Agreement dated as of March 5, 2004, by and between Principal Life and
the Trustee;

     WHEREAS, certain licensing arrangements between the Trust and Principal Financial Services,
Inc. will be governed pursuant to the provisions of the License Agreement (set forth in Section B
of this Omnibus Instrument), dated as of the date of the Pricing Supplement, by and between the
parties thereto indicated in Section F herein;

     WHEREAS, certain custodial arrangements of the Funding Agreement and the Guarantee will be
governed pursuant to the provisions of the Custodial Agreement (the “Custodial Agreement”) dated as
of March 5, 2004 by and among Bankers Trust Company, N.A., acting as custodian (the “Custodian”),
the Indenture Trustee and the Trustee, on behalf of the Trust;

     WHEREAS, the Notes will be issued pursuant to the Indenture (set forth in Section C of this
Omnibus Instrument), dated as of the Original Issue Date, by and between the parties thereto
indicated in Section F herein;

     WHEREAS, the sale of the Notes will be governed by the Terms Agreement (set forth in Section D
of this Omnibus Instrument), dated the date of the Pricing Supplement, by and among the parties
thereto indicated in Section F herein; and

     WHEREAS, certain agreements relating to the Notes, the Funding Agreement and the Guarantee are
set forth in the Coordination Agreement (set forth in Section E of this Omnibus Instrument), dated
as of the date of the Pricing Supplement, by and among the parties thereto indicated in Section F
herein.

     All capitalized terms used herein and not otherwise defined will have the meanings set forth
in the Indenture.

[Remainder of Page Left Intentionally Blank.]

 

 

SECTION A

TRUST AGREEMENT

     This TRUST AGREEMENT (this “Trust Agreement”), dated as of the date of the
Pricing Supplement, is entered into by and between GSS Holdings II, Inc., a
Delaware corporation, as trust beneficial owner (the “Trust Beneficial Owner”),
and U.S. Bank Trust National Association, a national banking association, as
Trustee (the “Trustee”).

W I T N E S S E T H:

     WHEREAS, the Trust Beneficial Owner and the Trustee desire to authorize
the issuance of a Trust Beneficial Interest and a series of Notes in connection
with the entry into this Trust Agreement;

     WHEREAS, all things necessary to make this Trust Agreement a valid and
legally binding agreement of the Trustee and the Trust Beneficial Owner,
enforceable in accordance with its terms, have been done;

     WHEREAS, the parties intend to provide for, among other things, (i) the
issuance and sale of the Notes (pursuant to the Indenture, the Distribution
Agreement and the related Terms Agreement) and the Trust Beneficial Interest,
(ii) the use of the proceeds of the sale of the Notes and Trust Beneficial
Interest to acquire the Funding Agreement, the payment obligations of which
will be fully and unconditionally guaranteed by the Guarantee, and (iii) all
other actions deemed necessary or desirable in connection with the transactions
contemplated by this Trust Agreement; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard Trust Terms, dated as of March 5, 2004, and attached to the
Omnibus Instrument as Exhibit A (the “Standard Trust Terms”) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meanings set forth in the Standard Trust Terms (the Standard
Trust Terms and this Trust Agreement, collectively, the “Trust Agreement”).

     NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which are hereby acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard Trust Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the
same force and effect as though fully set forth herein. To the extent that the
terms set forth in Article 2 of this Trust Agreement are inconsistent with the
terms of the Standard Trust Terms, the terms set forth in Article 2 herein
shall apply.

A-1

 

ARTICLE 2

     Section 2.01 Name. The Trust created and governed by the Trust Agreement
shall be the trust specified in the Omnibus Instrument. The name of the Trust
shall be the name specified in the first paragraph of the Omnibus Instrument,
as such name may be modified from time to time by the Trustee following written
notice to the Trust Beneficial Owner.

     Section 2.02 Jurisdiction. The Trust is hereby organized in, and formed
under and pursuant to, the laws of the State of New York.

     Section 2.03 Initial Capital Contribution and Ownership. The Trust
Beneficial Owner has paid or has caused to be paid to, or to an account at the
direction of, the Trustee, on the date hereof, the sum of $15 (or, in the case
of Notes issued with original issue discount, such amount multiplied by the
issue price of the Notes). The Trustee hereby acknowledges receipt in trust
from the Trust Beneficial Owner, as of the date hereof, of the foregoing
contribution, which shall be used along with the proceeds from the sale of the
series of Notes to purchase the Funding Agreement. Upon the creation of the
Trust and the registration of the Trust Beneficial Interest in the Securities
Register (as defined in the Trust Agreement) by the Registrar in the name of
the Trust Beneficial Owner, the Trust Beneficial Owner shall be the sole
beneficial owner of the Trust.

     Section 2.04 Acknowledgment. The Trustee, on behalf of the Trust,
expressly acknowledges its duties and obligations set forth in the Standard
Trust Terms incorporated herein.

     Section 2.05 Additional Terms.

     None

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Trust Agreement will enter into the Trust Agreement by
executing the Omnibus Instrument.

     By executing the Omnibus Instrument, the Trustee and the Trust Beneficial
Owner hereby agree that the Trust Agreement will constitute a legal, valid and
binding agreement between the Trustee and the Trust Beneficial Owner.

     All terms relating to the Trust or the series of Notes not otherwise
included in the Trust Agreement will be as specified in the Omnibus Instrument
or Pricing Supplement, as indicated herein.

A-2

 

     Section 2.07 Governing Law. The Trust Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.

     Section 2.08 Counterparts. The Trust Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

A-3

 

SECTION B

LICENSE AGREEMENT

     This LICENSE AGREEMENT (this “License Agreement”), dated as of the date of
the Pricing Supplement, is entered into by and between Principal Financial
Services, Inc., an Iowa corporation with its principal place of business at 711
High Street, Des Moines, Iowa 50392 (the “Licensor”), and the Principal Life
Income Fundings Trust specified in the Omnibus Instrument (the “Licensee”).

W I T N E S S E T H:

     WHEREAS, the Licensor is the owner of certain trademarks and service marks
and registrations and pending applications therefor, and may acquire additional
trademarks and service marks in the future, all as described more fully below;

     WHEREAS, the Licensee desires to use certain of the Licensor’s trademarks
and service marks in connection with the Licensee’s activities, as described
more fully below;

     WHEREAS, the Licensor and the Licensee wish to formalize the agreement
between them regarding the Licensee’s use of the Licensor’s marks; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard License Agreement Terms, dated March 5, 2004, and attached to
the Omnibus Instrument as Exhibit B (the “Standard License Agreement Terms”)
and all capitalized terms not otherwise defined herein (including the recitals
hereof) shall have the meanings set forth in the Standard License Agreement
Terms (the Standard License Agreement Terms and this License Agreement,
collectively, the “License Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein
and for other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard License Agreement Terms (except to the
extent expressly modified herein) are hereby incorporated herein by reference
with the same force and effect as though fully set forth herein. To the extent
that the terms set forth in Article 2 of this License Agreement are
inconsistent with the terms of the Standard License Agreement Terms, the terms
set forth in Article 2 herein shall apply.

ARTICLE 2

     Section 2.01 Additional Terms.

     None

B-1

 

     Section 2.02 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the License Agreement will enter into the License Agreement
by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, the Licensor and the Licensee hereby
agree that the License Agreement will constitute a legal, valid and binding
agreement between the Licensor and the Licensee.

     All terms relating to the Trust or the Notes not otherwise included in the
License Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement, as indicated herein.

     Section 2.03 Counterparts. The License Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

B-2

 

SECTION C

INDENTURE

     This INDENTURE (this “Indenture”) is entered into as of the Original Issue
Date by and between the Principal Life Income Fundings Trust specified in the
Omnibus Instrument (the “Trust”) and Citibank, N.A., as indenture trustee (the
“Indenture Trustee”).

     Citibank, N.A., in its capacity as indenture trustee, hereby accepts its
role as Registrar, Paying Agent, Transfer Agent and Calculation Agent
hereunder.

     References herein to “Indenture Trustee,” “Registrar,” “Transfer Agent,”
“Paying Agent” or “Calculation Agent” shall include the permitted successors
and assigns of any such entity from time to time.

W I T N E S S E T H:

     WHEREAS, the Trust has duly authorized the execution and delivery of this
Indenture to provide for the issuance of Notes;

     WHEREAS, all things necessary to make this Indenture a valid and legally
binding agreement of the Trust and the other parties to this Indenture,
enforceable in accordance with its terms, have been done, and the Trust
proposes to do all things necessary to make the Notes, when executed by the
Trust and authenticated and delivered pursuant hereto, valid and legally
binding obligations of the Trust as hereinafter provided; and

     WHEREAS, the parties hereto desire to incorporate by reference those
certain Standard Indenture Terms, dated as of March 5, 2004, and attached to
the Omnibus Instrument as Exhibit C (the “Standard Indenture Terms”) and all
capitalized terms not otherwise defined herein (including the recitals hereof)
shall have the meanings set forth in the Standard Indenture Terms (the Standard
Indenture Terms and this Indenture, collectively, the “Indenture”).

     NOW, THEREFORE, for and in consideration of the premises and the purchase
of the Notes by the Holders thereof, it is mutually covenanted and agreed by
each of the parties hereto as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. All terms, provisions and
agreements set forth in the Standard Indenture Terms (except to the extent
expressly modified herein) are hereby incorporated herein by reference (with
the same force and effect as though fully set forth herein). To the extent
that the terms set forth in Article 2 of this Indenture are inconsistent with
the terms of the Standard Indenture Terms, the terms set forth in Article 2
herein shall apply.

C-1

 

ARTICLE 2

     Section 2.01 Agreement to be Bound. Each of the Trust, the Indenture
Trustee, the Registrar, the Transfer Agent, the Paying Agent and the
Calculation Agent hereby agrees to be bound by all of the terms, provisions and
agreements set forth in the Indenture, with respect to all matters contemplated
in the Indenture, including, without limitation, those relating to the issuance
of the below-referenced Notes.

     Section 2.02 Designation of the Trust, the Notes, the Funding Agreement
and the Guarantee. The Trust created by the Trust Agreement and referred to in
the Indenture is the Principal Life Income Fundings Trust specified in the
Omnibus Instrument. The Notes issued by the Trust and governed by the
Indenture shall be the Notes specified in the Pricing Supplement. The Funding
Agreement designated hereby is the Funding Agreement designated in the Pricing
Supplement dated as of the Original Issue Date between the Trust and Principal
Life. The Guarantee designated hereby is the Guarantee dated as of the Original
Issue Date of PFG.

     Section 2.03 Additional Terms.

     None

     Section 2.04 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to the Indenture will enter into the Indenture by executing
the Omnibus Instrument.

     By executing the Omnibus Instrument, the Indenture Trustee, the Registrar,
the Transfer Agent, the Paying Agent, the Calculation Agent and the Trust
hereby agree that the Indenture will constitute a legal, valid and binding
agreement between the Indenture Trustee, the Registrar, the Transfer Agent, the
Paying Agent, the Calculation Agent and the Trust.

     All terms relating to the Trust or the Notes not otherwise included in the
Indenture will be as specified in the Omnibus Instrument or Pricing Supplement,
as indicated herein.

     Section 2.05 Counterparts. The Indenture, through the Omnibus Instrument,
may be executed in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute one
and the same instrument.

[Remainder of Page Left Intentionally Blank.]

C-2

 

SECTION D

TERMS AGREEMENT

     This TERMS AGREEMENT (this “Terms Agreement”) is entered into as of the
Original Issue Date by and among Principal Life Insurance Company (“Principal
Life”), Principal Financial Group, Inc. (“PFG”), the Principal Life Income
Fundings Trust specified in the Omnibus Instrument (the “Trust”) and the
Purchasing Agent specified in the Pricing Supplement (the “Purchasing Agent”).

W I T N E S S E T H:

     WHEREAS, Principal Life, PFG and the agents named therein, including the
Purchasing Agent have entered into that certain Distribution Agreement dated
March 5, 2004 (the “Distribution Agreement”).

     NOW, THEREFORE, in consideration of the mutual promises set forth herein
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, each of the parties hereby agrees as follows:

ARTICLE 1

     Section 1.01 Incorporation by Reference. The provisions of the
Distribution Agreement and the related definitions (unless otherwise specified
herein) are incorporated by reference herein and shall be deemed to have the
same force and effect as if set forth in full herein.

ARTICLE 2

     Section 2.01 Addition of Trust as Party to Distribution Agreement.

     Pursuant to Section 1 of the Distribution Agreement, each of the
undersigned parties hereby acknowledges and agrees that the Trust, upon
execution hereof by the Trust and the other parties to the Distribution
Agreement (other than any other trusts organized in connection with the
Registration Statement that are party thereto as of the date hereof), shall
become a Trust for purposes of the Distribution Agreement in accordance with
the terms thereof, in respect of the Notes, with all the authority, rights,
powers, duties and obligations of a Trust under the Distribution Agreement.
The Trust confirms that any agreement, covenant, acknowledgment, representation
or warranty under the Distribution Agreement applicable to the Trust is made by
the Trust at the date hereof, unless another time or times are specified in the
Distribution Agreement, in which case such agreement, covenant, acknowledgment,
representation or warranty shall be deemed to be confirmed by the Trust at such
specified time or times.

     Section 2.02 Purchase of Notes as Principal.

     (a) Subject in all respects to the terms and conditions of the
Distribution Agreement, the Trust hereby agrees to sell to the Purchasing Agent
and the Purchasing Agent hereby agrees to purchase the Notes having the terms
specified in the Pricing Supplement relating to such Notes.

D-1

 

     (b) In connection with any purchase of Notes from the Trust by the
Purchasing Agent as principal, the parties agrees that the items specified on
Schedule I of the Omnibus Instrument will be delivered as of the Settlement
Date.

     Section 2.03 Termination. Upon the termination of this Terms Agreement
pursuant to Section 13(b) of the Distribution Agreement the undersigned parties
hereby agree to that the expenses reasonably incurred prior to or in connection
with such termination will be borne by Principal Life and PFG.

     Section 2.04 Governing Law. This Terms Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the principles of conflicts of laws thereof.

     Section 2.05 Notices. For purposes of Section 14 of the Distribution
Agreement, the Trust’s communications details are as set forth in Section E of
the Omnibus Instrument.

     Section 2.06 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Terms Agreement will enter into this Terms Agreement
by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this
Terms Agreement will constitute a legal, valid and binding agreement by and
among such parties.

     All terms relating to the Trust or the Notes not otherwise included in
this Terms Agreement will be as specified in the Omnibus Instrument or Pricing
Supplement, as indicated herein.

     Section 2.07 Counterparts. This Terms Agreement, through the Omnibus
Instrument, may be executed in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.

[Remainder of Page Left Intentionally Blank.]

D-2

 

SECTION E

COORDINATION AGREEMENT

     This COORDINATION AGREEMENT (this “Coordination Agreement”), dated as of
the date of the Pricing Supplement, is entered into by and among Principal Life
Insurance Company (“Principal Life”), Principal Financial Group, Inc. (“PFG”),
the Principal Life Income Fundings Trust specified in the Omnibus Instrument
(the “Trust”), Principal Financial Services, Inc. (“PFSI”), Bankers Trust
Company, N.A. and Citibank, N.A., as indenture trustee (the “Indenture
Trustee”).

W I T N E S S E T H

     WHEREAS, the Trust will enter into the Funding Agreement with Principal
Life dated as of the Original Issue Date specified in the Pricing Supplement;

     WHEREAS, PFG will issue a Guarantee to the Trust as of the Original Issue
Date specified in the Pricing Supplement, which will fully and unconditionally
guarantee the payment obligations of Principal Life under the Funding
Agreement;

     WHEREAS, the Purchasing Agent (as defined in the Distribution Agreement)
have agreed to sell the Notes in accordance with the Registration Statement;

     WHEREAS, the Trust intends to issue the Notes in accordance with the
Indenture, to collaterally assign to, and grant a security interest in, the
Funding Agreement and the Guarantee to and in favor of the Indenture Trustee in
accordance with the Indenture to secure payment of the Notes;

     WHEREAS, the Custodian will hold the Funding Agreement and the Guarantee
on behalf of the Indenture Trustee pursuant to the terms of the Custodial
Agreement; and

     WHEREAS, certain licensing arrangements between the Trust and PFSI will be
governed pursuant to the provisions of the License Agreement.

     NOW, THEREFORE, to give effect to the agreements and arrangements
established under the Terms Agreement included in the Omnibus Instrument, as
applicable, the Trust Agreement, the Indenture and the Notes, and in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which are hereby
acknowledged, each party hereby agrees as follows:

ARTICLE 1

     Section 1.01 Delivery of the Funding Agreement and the Guarantee. The
Trust hereby authorizes the Custodian, on behalf of the Indenture Trustee, to
receive the Funding Agreement from Principal Life and the Guarantee from PFG
pursuant to the assignment of the Funding Agreement and Guarantee (the
“Assignment”), to be entered into on the Original Issue Date, included in the
closing instrument dated as of the Original Issue Date (the “Closing
Instrument”).

E-1

 

     Section 1.02 Issuance and Purchase of the Notes.

     (a) Delivery of the Funding Agreement and the Guarantee to the Custodian,
on behalf of the Indenture Trustee, pursuant to the Assignment or execution of
the cross receipt contained in the Closing Instrument shall be confirmation of
payment by the Trust for the Funding Agreement.

     (b) The Trust hereby directs the Indenture Trustee, upon receipt by the
Custodian, on behalf of the Indenture Trustee, of the Funding Agreement
pursuant to the Assignment and upon receipt by the Custodian, on behalf of the
Indenture Trustee, of the Guarantee, (i) to authenticate the certificates
representing the Notes (the “Notes Certificates”) in accordance with the
Indenture and (ii) to (A) deliver each relevant Notes Certificate to the
clearing system or systems identified in each such Notes Certificate, or to the
nominee of such clearing system, or the custodian thereof, for credit to such
accounts as the Purchasing Agent may direct, or (B) deliver each relevant Notes
Certificate to the purchasers thereof as identified by the Purchasing Agent.

ARTICLE 2

     Section 2.01 Directions Regarding Periodic Payments. As registered owner
of the Funding Agreement and the Guarantee as collateral securing payments on
the Notes, the Indenture Trustee will receive payments on the Funding Agreement
and the Guarantee on behalf of the Trust. The Trust hereby directs the
Indenture Trustee to use such funds to make payments on behalf of the Trust
pursuant to the Trust Agreement and the Indenture.

     Section 2.02 Maturity of the Funding Agreement. Upon the maturity of the
Funding Agreement and the return of funds thereunder, the Trust hereby directs
the Indenture Trustee to set aside from such funds an amount sufficient for the
repayment of the outstanding principal on the Notes and Trust Beneficial
Interest when due.

ARTICLE 3

     Section 3.01 Certificates. Principal Life hereby agrees to deliver an
Officer’s Certificate, a copy of which is attached hereto as Exhibit E, on a
quarterly basis to any rating agency currently rating the Program. The Trust
hereby agrees to deliver an Officer’s Certificate, a copy of which is attached
hereto as Exhibit F, on a quarterly basis to any rating agency currently rating
the Program.

     Section 3.02 Filings. Principal Life hereby covenants to file, or cause
to be filed, in a timely manner on behalf of the Trust all reports,
certifications or similar filings required under the Securities Exchange Act of
1934, as amended.

ARTICLE 4

     Section 4.01 No Additional Liability. Nothing in this Coordination
Agreement shall impose any liability or obligation on the part of any party to
this Coordination Agreement to make any payment or disbursement in addition to
any liability or obligation such party has under the Program Documents, except
to the extent that a party has actually received funds which it is obligated to
disburse pursuant to this Coordination Agreement.

E-2

 

     Section 4.02 No Conflict. This Coordination Agreement is intended to be
in furtherance of the agreements reflected in the documents related to the
Program Documents, and not in conflict. To the extent that a provision of this
Coordination Agreement conflicts with the provisions of one or more Program
Documents, the provisions of such Program Documents shall govern.

     Section 4.03 Governing Law. This Coordination Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
regard to the principles of conflicts of laws thereof.

     Section 4.04 Severability. If any provision in this Coordination
Agreement shall be invalid, illegal or unenforceable, such provision shall be
deemed severable from the remaining provisions of this Coordination Agreement
and shall in no way affect the validity or enforceability of such other
provisions of this Coordination Agreement.

     Section 4.05 Severability. If any provision in this Coordination
Agreement shall be invalid, illegal or unenforceable, such provision shall be
deemed severable from the remaining provisions of this Coordination Agreement
and shall in no way affect the validity or enforceability of such other
provisions of this Coordination Agreement.

     Section 4.06 Notices. All demands, notices and communications under this
Coordination Agreement shall be in writing and shall be deemed to have been
duly given upon receipt at the addresses set forth below:

	 	 	 
	To the Trust:
	 	 
	 
	

	 	Principal Life Income Fundings
Trust (followed by the number set forth in the Omnibus Instrument)
	

	 	c/o U.S. Bank Trust National Association
	

	 	100 Wall Street, 16th Floor
	

	 	New York, New York 10005
	

	 	Attention: Corporate Trust Administration
	

	 	Telephone: (212) 361-2458
	

	 	Facsimile: (212) 809-5459 and (212) 509-3384
	 
	To the Indenture Trustee:
	 	 
	 
	

	 	Citibank, N.A.
	

	 	Citibank Agency & Trust
	

	 	111 Wall Street, 14th Floor, Zone 3
	

	 	New York, New York 10005
	

	 	Attention: Nancy Forte
	

	 	Telephone: (212) 657-4703
	

	 	Facsimile: (212) 657-3862

E-3

 

	 	 	 
	To Principal Life:

	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011
	 
	 	 	With a copy to:

	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To PFG:

	 
	

	 	Principal Financial Group, Inc.
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011
	 
	 	 	With a copy to:
	 	 
	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To Principal Financial
Services, Inc.:
	 	 
	 
	

	 	Principal Financial Services, Inc.
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: General Counsel
	

	 	Telephone: (515) 247-5111
	

	 	Facsimile: (515) 248-3011

E-4

 

	 	 	 
	 	 	With a copy to:
	 	 
	 
	

	 	Principal Life Insurance Company
	

	 	711 High Street
	

	 	Des Moines, Iowa 50392
	

	 	Attention: Jim Fifield
	

	 	Telephone: (515) 248-9196
	

	 	Facsimile: (515) 235-9353
	 
	To Bankers Trust Company, N.A:
	 	 
	 
	

	 	Bankers Trust Company, N.A.
	

	 	665 Locust Street
	

	 	Des Moines, Iowa 50309-3702
	

	 	Attention: Angela C. Brick
	

	 	Telephone: (515) 245-2820
	

	 	Facsimile: (515) 247-2101

or at such other address as shall be designated by any such party in a written
notice to the other parties.

ARTICLE 5

     Section 5.01 Omnibus Instrument; Execution and Incorporation of Terms.

     The parties to this Coordination Agreement will enter into this
Coordination Agreement by executing the Omnibus Instrument.

     By executing the Omnibus Instrument, each party hereto agrees that this
Coordination Agreement will constitute a legal, valid and binding agreement by
and among the Trust, Principal Life, PFG, PFSI, the Custodian and the Indenture
Trustee.

     All terms relating to the Trust or the Notes not otherwise included in
this Coordination Agreement will be as specified in the Omnibus Instrument or
Pricing Supplement, as indicated herein.

     Section 5.02 Acknowledgment. Principal Life hereby acknowledges Section
2.10 of the Indenture and Section 6.1 of the Custodial Agreement. The Trust
hereby acknowledges and agrees to the terms of the Custodial Agreement.

     Section 5.03 Counterparts. This Coordination Agreement, through the
Omnibus Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.

     Section 5.04 Capitalized Terms. All capitalized terms used herein and not
otherwise defined in this Coordination Agreement will have the meanings set
forth in the Indenture.

[Remainder of Page Left Intentionally Blank.]

E-5

 

SECTION F

MISCELLANEOUS AND EXECUTION PAGES

     This Omnibus Instrument may be executed by each of the parties hereto in any number of
counterparts, and by each of the parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

     Each signatory, by its execution hereof, does hereby become a party to each of the agreements
or indenture identified for such party as of the date specified in such agreements or indenture.

     IN WITNESS WHEREOF, the undersigned have executed this Omnibus Instrument with respect to the
Notes as of the date first written above.

	 	 	 	 	 
	 	PRINCIPAL LIFE INSURANCE COMPANY (in executing below agrees and becomes a party to (i) the Terms Agreement set forth in Section D herein and (ii) the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Christopher P. Freese
 	 
	 	 	Name:  	Christopher P. Freese	 
	 	 	Title:  	Officer 	 
	 
	 	PRINCIPAL FINANCIAL GROUP, INC. (in executing below agrees and becomes a party to (i) the Terms Agreement set forth in Section D herein and (ii) the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Elizabeth D. Swanson
 	 
	 	 	Name:  	Elizabeth D. Swanson 	 
	 	 	Title:  	Counsel 	 
	 
	 	PRINCIPAL FINANCIAL SERVICES, INC. (in executing below agrees and becomes a party to (i) the License Agreement set forth in Section B herein and (ii) the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Elizabeth D. Swanson
 	 
	 	 	Name:  	Elizabeth D. Swanson 	 
	 	 	Title:  	Counsel 	 
	 

[Execution Page 1 of 3]

 

 

	 	 	 	 	 
	 	THE PRINCIPAL LIFE INCOME FUNDINGS TRUST DESIGNATED IN THIS OMNIBUS INSTRUMENT (in executing below agrees and becomes a party to (i) the License Agreement set forth in Section B herein, (ii) the Indenture set forth in Section C herein, (iii) the Terms Agreement set forth in Section D herein and (iv) the Coordination Agreement set forth in Section E herein)

By: U.S. Bank Trust National Association, not in its

individual capacity but solely in its capacity as

trustee of the Trust

 	 
	 	By:  	/s/ Thomas E. Tabor
 	 
	 	 	Name:  	Thomas E. Tabor 	 
	 	 	Title:  	Vice President 	 
	 
	 	U.S. BANK TRUST NATIONAL ASSOCIATION (in executing below agrees and becomes a party to the Trust Agreement set forth in Section A herein), as Trustee 

 	 
	 	By:  	/s/ Thomas E. Tabor
 	 
	 	 	Name:  	Thomas E. Tabor 	 
	 	 	Title:  	Vice President 	 
	 
	 	GSS HOLDINGS II, INC. (in executing below agrees and becomes a party to the Trust Agreement set forth in Section A herein), as Trust Beneficial Owner

 	 
	 	By:  	/s/ Andrew L. Stidd
 	 
	 	 	Name:  	Andrew L. Stidd 	 
	 	 	Title:  	President 	 
	 
	 	CITIBANK, N.A. (in executing below agrees and becomes a party to (i) the Indenture set forth in Section C herein, as Indenture Trustee, Registrar, Transfer Agent, Paying Agent and Calculation Agent and (ii) the Coordination Agreement set forth in Section E herein), as Indenture Trustee, Registrar, Transfer Agent, Paying Agent and Calculation Agent

 	 
	 	By:  	/s/ Nancy Forte
 	 
	 	 	Name:  	Nancy Forte 	 
	 	 	Title:  	Assistant Vice President 	 
	 

[Execution Page 2 of 3]

 

 

	 	 	 	 	 
	 	BANKERS TRUST COMPANY, N.A. (in executing below agrees and becomes a party to the Coordination Agreement set forth in Section E herein)

 	 
	 	By:  	/s/ Patty Ashbaugh
 	 
	 	 	Name:  	Patty Ashbaugh 	 
	 	 	Title:  	Vice President 	 
	 
	 	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (in executing below agrees and becomes a party to the Terms Agreement set forth in Section D herein)

 	 
	 	By:  	/s/ Sabina Ceddia
 	 
	 	 	Name:  	Sabina Ceddia 	 
	 	 	Title:  	Duly Authorized Attorney 	 
	 

[Execution Page 3 of 3]

 

 

INDEX OF EXHIBITS AND SCHEDULES TO THE OMNIBUS INSTRUMENT

	 	 	 
	Exhibit A

	 	Standard Trust Terms — Incorporated herein by reference to Exhibit
4.6 to Principal Life Insurance Company’s and Principal Financial
Group, Inc.’s Registration Statement on Form S-3 (Registration
Nos. 333-110499 and 333-110499-01.
	 
	 	 
	Exhibit B

	 	Standard License Agreement Terms — Incorporated herein by
reference to Exhibit 99.1 to Principal Life Insurance Company’s
Current Report on Form 8-K, filed on March 29, 2004.
	 
	 	 
	Exhibit C

	 	Standard Indenture Terms — Incorporated herein by reference to
Exhibit 4.1 to Principal Life Insurance Company’s and Principal
Financial Group, Inc.’s Registration Statement on Form S-3
(Registration Nos. 333-110499 and 333-110499-01.
	 
	 	 
	Exhibit D

	 	Pricing Supplement — Incorporated herein by reference to the
Pricing Supplement with respect to Principal Life Income Fundings
Trust 2004-81, filed on December 27, 2004, with the Securities and
Exchange Commission pursuant to Rule 424(b)(5) under the
Securities Act of 1933, as amended.
	 
	 	 
	Exhibit E

	 	Principal Life Insurance Company Officer’s Certificate
	 
	 	 
	Exhibit F

	 	Principal Life Income Fundings Trusts Trustee Officer’s Certificate
	 
	 	 
	Schedule I

	 	Terms Agreement Specifications

 

 

EXHIBIT E

Principal Life Insurance Company

Officer’s Certificate

     The undersigned, an officer of Principal Life Insurance Company, an Iowa
stock life insurance company (“Principal Life”), does hereby certify to
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of Principal Life, to the knowledge of the
undersigned and after reasonable inquiry, that:

	 	 	 
	1.

	 	each of the representations and warranties of Principal Life
contained in each Expense and Indemnity Agreement entered into in
connection with the Registration Statement (defined below), and each
Funding Agreement issued in connection with the Program (the
“Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and
correct on and as of the date hereof, with the same effect as though
such representation or warranty had been made on and as of the date
hereof;
	 
	2.

	 	no default under any of the Specified Agreements and no event
or any condition which, with notice or lapse of time or both, would
become a default, has occurred and is continuing as of the date
hereof;
	 
	3.

	 	Principal Life has performed and complied with, respectively,
in all material respects, all of the agreements, covenants,
obligations and conditions applicable to Principal Life required by
the Specified Agreements to be performed or complied with by
Principal Life on or before the date hereof;
	 
	4.

	 	the Registration Statement filed on Form S-3 (File Nos.
333-110499 and 333-110499-01) (the “Registration Statement”) by
Principal Life and Principal Financial Group, Inc. has been declared
effective by the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the
“Act”) and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been commenced by or are pending before or contemplated
by the Commission;
	 
	5.

	 	all filings, if any, required by Rule 424 and Rule 430A under
the Act have been made in a timely manner;
	 
	6.

	 	since
     , the Trusts organized in connection with the
program contemplated by the Registration Statement have issued the
following series of Notes:
	 
	

	 	[List each series of Notes.] [(collectively, the “Designated Notes”)]; and
	 
	7.

	 	the Funding Agreements issued in connection with the Designated
Notes have been executed and delivered by Principal Life in accordance
with the terms and conditions of the Program Documents.

E-1

 

          Capitalized terms used herein and not otherwise defined herein shall have the meanings set
forth in the Standard Indenture Terms attached as Exhibit 4.1 to the
Registration Statement.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the • day of •, 200•.

	 	 	 
	

	[Name], [in his/her] capacity as an
authorized officer of Principal Life
	 
	 	By:
	 
	 	 	

	

	 	Name:
	

	 	Title:

	 	 	 	 	 

E-2

 

EXHIBIT F

Principal Life Income Fundings Trusts

Trustee Officer’s Certificate

     U.S. Bank Trust National Association, not in its individual capacity but
solely in its capacity as trustee acting on behalf of each common law trust
organized under the laws of the State of New York (in such capacity, the
“Trustee,” and each such common law trust being referred to herein as, a
“Trust”) in connection with the program contemplated by Registration Statement
Nos. 333-110499 and 333-110499-01 filed on Form S-3 (the “Registration
Statement”) by Principal Life Insurance Company and Principal Financial Group,
Inc. with the Securities and Exchange Commission, does hereby certify to
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., in such capacity and on behalf of each Trust, to the knowledge of the
Trustee, that:

	 	 	 
	1.

	 	each of the representations and warranties of each Trust
contained in the Notes issued in connection with the Program, each
Indenture entered into in connection with the Registration Statement
and the Expense and Indemnity Agreement concerning the Trusts (the
“Specified Agreements”) (other than any representation or warranty
expressly made as of a date prior to the date hereof) are true and
correct on and as of the date hereof, with the same effect as though
such representation or warranty had been made on and as of the date
hereof;
	 
	2.

	 	no default under any of the Specified Agreements and no event
or any condition which, with notice or lapse of time or both, would
become a default, has occurred and is continuing as of the date
hereof;
	 
	3.

	 	each Trust has performed and complied with, respectively, in
all material respects, all of the agreements, covenants, obligations
and conditions applicable to such Trust required by the Specified
Agreements to be performed or complied with by such Trust on or
before the date hereof;
	 
	4.

	 	the Notes issued in connection with the Program, have been
issued, in all material respects, in accordance with the terms and
conditions of the Program Documents; and
	 
	5.

	 	each Funding Agreement has been executed and delivered by the
related Trust in accordance with the terms and conditions of the
Program Documents.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Standard Indenture Terms attached as Exhibit 4.1
to the Registration Statement. In no event shall U.S. Bank Trust National
Association in its personal corporate capacity have any liability for any of
the certifications or statements contained in this Trustee Officer’s
Certificate, such liability being solely that of each Trust.

F-1

 

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the • day of •, 200•.

	 	 	 
	

	 	U.S. Bank Trust National Association, not
in its capacity but solely in its capacity
as Trustee acting on behalf of each Trust
	 
	 	By:
	 
	 	 	

	

	 	Name:
	

	 	Title:

F-2

 

SCHEDULE I

Terms Agreement Specifications

     In connection with Section 3(a)(iv) of the Distribution Agreement, the
Program under which the Notes are issued is rated Aa2 by Moody’s Investors
Service, Inc. (“Moody’s”) and AA by Standard & Poor’s Rating Services, a
division of The McGraw-Hill Companies, Inc. (“S&P”). Principal Life and PFG
expect that the Notes will be rated Aa2 by Moody’s. The Company’s financial
strength rating is Aa2 by Moody’s and AA by S&P.

     In accordance with Section 2.02(b) of the Terms Agreement and in
connection with the purchase of Notes from the Trust by the Purchasing Agent as
principal, the following items will be delivered on the Settlement Date:

	 	•	 	Opinion of Sidley Austin Brown & Wood LLP regarding the
enforceability of the Guarantee and the Notes.

     All capitalized terms used herein and not otherwise defined herein will
have the meanings set forth in the Distribution Agreement.

I-1exv10w1

 

Exhibit 10.1

	 	 	 
	

	 	SOCIETE D’EXERCICE LIBERAL D’AVOCATS A FORME ANONYME

USD 15,000,000

RESERVE BASE REVOLVING FACILITY AGREEMENT

dated 23 December 2004

MADISON ENERGY FRANCE

as Borrower

MADISON OIL FRANCE

as Guarantor

TOREADOR RESOURCES CORPORATION

MADISON OIL COMPANY EUROPE

as Obligors

NATEXIS BANQUES POPULAIRES

as Agent, Arranger and Technical Bank

and

THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1

as Lenders

 

 

CONTENTS

	 	 	 	 	 
	CLAUSE	 	PAGE
	1. Definitions and interpretation
	 	 	2	 
	2. The Facility
	 	 	18	 
	3. Purpose
	 	 	18	 
	4. Conditions of utilisation
	 	 	19	 
	5. Utilisation
	 	 	20	 
	6. Borrowing Base
	 	 	20	 
	7. Repayment
	 	 	24	 
	8. Prepayment and Cancellation
	 	 	24	 
	9. Interest
	 	 	28	 
	10. Interest Periods
	 	 	29	 
	11. Changes to the calculation of interest
	 	 	29	 
	12. Fees
	 	 	30	 
	13. Tax gross up and indemnities
	 	 	32	 
	14. Increased costs
	 	 	35	 
	15. Other indemnities
	 	 	36	 
	16. Mitigation by the Lenders
	 	 	37	 
	17. Costs and expenses
	 	 	37	 
	18. Representations
	 	 	39	 
	19. Information undertakings
	 	 	46	 
	20. Financial covenants
	 	 	49	 
	21. General undertakings
	 	 	50	 
	22. Guarantee
	 	 	59	 
	23. Events of Default
	 	 	62	 
	24. Collection Account
	 	 	66	 
	25. Changes to the Lenders
	 	 	69	 

- ii -

 

	 	 	 	 	 
	CLAUSE	 	PAGE
	26. Changes to the Obligors
	 	 	72	 
	27. Role of the Agent, the Arranger and the Technical Bank
	 	 	73	 
	28. Conduct of business by the Finance Parties
	 	 	77	 
	29. Payment mechanics
	 	 	79	 
	30. Set-off
	 	 	81	 
	31. Notices
	 	 	81	 
	32. Calculations and certificates
	 	 	82	 
	33. Partial invalidity
	 	 	83	 
	34. Remedies and waivers
	 	 	83	 
	35. Consents, Amendments and waivers
	 	 	83	 
	36. Governing law
	 	 	85	 
	37. Enforcement - Jurisdiction of French courts
	 	 	85	 
	Schedule 1 The Original Lenders
	 	 	86	 
	Schedule 2 Conditions precedent
	 	 	87	 
	Schedule 3 Maximum Facility Amount Amortization Schedule
	 	 	89	 
	Schedule 4 Utilisation Request
	 	 	90	 
	Schedule 5 Mandatory Cost Formulae
	 	 	91	 
	Schedule 6 Form of Transfer Agreement
	 	 	92	 
	Schedule 7 Mining Titles
	 	 	95	 
	Schedule 8 Existing Financial Indebtedness
	 	 	96	 
	Schedule 9 Group Structure Chart
	 	 	97	 

- iii -

 

THIS AGREEMENT is dated 23 December 2004 and made between:

	(1)	 	MADISON ENERGY FRANCE, a société en commandite simple incorporated under
the laws of France whose registered office is 13/15, boulevard de la
Madeleine, 75001 Paris, registered with the registry of companies of Paris
under no. 391 727 450 (the “Borrower”);
	 
	(2)	 	MADISON OIL FRANCE, a société anonyme whose registered office is 13/15,
boulevard de la Madeleine, 75001 Paris, incorporated under the laws of
France registered with the registry of companies of Paris under no. 408
559 136 (the “Guarantor”);
	 
	(3)	 	TOREADOR RESOURCES CORPORATION, a company incorporated under the laws of
Delaware whose registration number is 0448603 and registered office is
1209 Orange Street Wilmington, DE 19801 USA (“TRC”);
	 
	(4)	 	MADISON OIL COMPANY EUROPE, a company incorporated under the laws of
Delaware whose registration number is 2341168 and registered office is
1209 Orange Street Wilmington, DE 19801 USA, (“MOCE”);
	 
	(5)	 	NATEXIS BANQUES POPULAIRES, a French bank whose registered office is
located at 45, rue Saint Dominique, 75007 Paris, registered with the
commercial and companies registry of Paris under number 542 044 524 as
arranger (the “Arranger”);
	 
	(6)	 	THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders) as
lenders (the “Original Lenders”);
	 
	(7)	 	NATEXIS BANQUES POPULAIRES, a French bank whose registered office is
located at 45, rue Saint Dominique, 75007 Paris, registered with the
commercial and companies registry of Paris under number 542 044 524 as
technical bank (the “Technical Bank”); and
	 
	(8)	 	NATEXIS BANQUES POPULAIRES, a French bank whose registered office is
located at 45, rue Saint Dominique, 75007 Paris, registered with the
commercial and companies registry of Paris under number 542 044 524 as
agent of the other Finance Parties (the “Agent”).

- 1 -

 

IT IS AGREED as follows:

SECTION 1

INTERPRETATION

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions

In this Agreement:

“Activity Report” means the activity report to be prepared monthly by the
Borrower, to be delivered to the Agent in accordance with paragraph
19.3.1, similar to the form of the Activity Report delivered to the Agent
for July 2004 but as may be modified from time to time by the Borrower
and/or TRC (in which case it shall be in form and substance satisfactory
to the Agent acting reasonably).

“Additional Cost Rate” has the meaning given to it in Schedule 5 (Mandatory Cost Formulae).

“Affiliate” means, in relation to any person, a Subsidiary of that person
or a Holding Company of that person or any other Subsidiary of that
Holding Company.

“Asset Life Cover Ratio” or “ALCR” means, on any Ratio Calculation Date,
the ratio of:

	 	(a)	 	the NPV (9) for the period from the relevant Ratio Calculation
Date to the Reserves Tail Date plus an amount equal to any monies
standing to the credit of the Collection Account at 11.00 am (Paris
time) as at such date; to
	 
	 	(b)	 	the Outstanding Amount (after any repayment of the Facility
made on such Ratio Calculation Date).

“Assigned Rights” means the rights of the Borrower to receive payments
under the Sale and Purchase Contracts, the Insurance Policy and the Hedge
Agreements, as assigned to the Agent (acting on behalf of the Lenders)
pursuant to the Assignment Agreements.

“Assignment Agreements” means the Insurance Policy Delegation Agreement
and Master Receivables Assignment Agreement.

“Authorisation” means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.

“Availability Period” means the period from the date on which the Lenders
are satisfied that the conditions precedent listed in Schedule 2
(Conditions precedent) have been met to the date which is thirty days
before the Final Maturity Date.

“Available Amount” means (a) the Maximum Amount minus (b) the Outstanding
Amount.

“Borrowing Base” has the meaning ascribed to that term in Clause 6.2
(Borrowing Base Determination)

- 2 -

 

“Borrowing Base Deficiency” means the amount by which the aggregate of the
Outstanding Amount and all accrued but unpaid fees and interest under the
Finance Documents exceeds the then applicable Maximum Amount.

“Borrowing Base Determination Date” means (i) Closing Date, 30 June 2005,
30 December 2005, 30 June 2006, 30 December 2006, 30 June 2007, 30
December 2007, 30 June 2008, 30 December 2008 and 30 June 2009, (ii) any
other date on which the Borrowing Base is re-set at the request of the
Agent in accordance with paragraph 6.2.8 and (iii) any other date on which
the Borrowing Base is re-set at the request of the Borrower in accordance
with paragraph 6.2.9.

“Borrowing Base Reduction Schedule” means the schedule of reduction of the
Borrowing Base as determined in accordance with Clause 6.2 (Borrowing Base
Determination).

“Borrowing Base Utilisation Ratio” means, on any date, the ratio of (a)
the aggregate of (i) the Outstanding Amount as at such date and (ii) all
fees and interest payable under the Finance Documents as at such date to
(b) the Maximum Amount as at such date, such ratio being expressed as a
percentage.

“Break Costs” means the amount (if any) by which:

	 	(a)	 	the interest which a Lender should have received for the period
from the date of receipt of all or any part of its participation in a
Loan or Unpaid Sum to the last day of the current Interest Period in
respect of that Loan or Unpaid Sum, had the principal amount or
Unpaid Sum received been paid on the last day of that Interest
Period;

exceeds:

	 	(b)	 	the amount which that Lender would be able to obtain by placing
an amount equal to the principal amount or Unpaid Sum received by it
on deposit with a leading bank in the Relevant Interbank Market for a
period starting on the Business Day following receipt or recovery and
ending on the last day of the current Interest Period.

“Business Day” means a day (other than a Saturday or Sunday) on which
banks are open for general business in London, New York and Paris.

“CEP” means Cifal Elan Petroleum Services Ltd, represented by Cifal,
acting as engineer advisor to the Technical Bank.

“CEP Report” means the report delivered by CEP in the month of September
2003.

“Code” means, at any date, the U.S. Internal Revenue Code of 1986 and the
regulations promulgated and the judicial and administrative decisions
rendered under it, all as the same may be in effect at such date.

“Collection Account” means the account opened in the name of the Borrower
in the books of the Agent (and any renewal or any redesignation thereof),
on which all monies relating to the Assigned Rights are to be paid, and
pledged in favour of the Lenders pursuant to the Pledge over Account
Agreement.

- 3 -

 

“Collection Account Balance” means the balance of monies from time to time
standing to the credit of the Collection Account.

“Commitment” means:

	 	(a)	 	in relation to an Original Lender, the amount set opposite its
name in Schedule 1 (The Original Lenders) and the amount of any other
Commitment transferred to it under this Agreement; and
	 
	 	(b)	 	in relation to any other Lender, the amount of any Commitment
transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this
Agreement.

“Consolidated Indebtedness” means on a consolidated basis, at any time
(without double counting), the aggregate indebtedness of any Group member
constituting Financial Indebtedness excluding (i) any Financial
Indebtedness of any Group member to another Group member and (ii)
indebtedness whose contractual maturity exceeds by more than one year the
Final Maturity Date and qualifying as equity (fonds propres) or
quasi-equity (quasi fonds propres) in accordance with GAAP, i.e. ranking
immediately above the debt owed to the shareholders but below any
non-secured indebtedness of the Group.

“Consolidated Stockholder Equity” means indebtedness qualifying as equity
(fonds propres).

“Consultant Report” means the detailed update report prepared on yearly
basis and the light update report prepared on a semi-annual basis (or more
frequently in accordance with the terms of this Agreement) and delivered
by the Independent Engineering Consultant in respect of the Proved
Reserves, the expected production and the net revenues deriving from the
Fields, in a form satisfactory to the Technical Bank.

“Closing Date” means the date on which the Agent has notified the Borrower
and the Lenders that all of the Conditions Precedent listed in Schedule 2
(Conditions precedent) have been satisfied (in each case in form and
content satisfactory to the Agent) in accordance with Clause 4.1
(Conditions precedent).

“Debt Service Cover Ratio” or “DSCR” means, on any Ratio Calculation Date,
the ratio of:

	 	(a)	 	the Pre Debt Cashflows, from, but not including, the relevant
Ratio Calculation Date until and including the next Ratio Calculation
Date plus the balance of the Collection Account at 11.00 am (Paris
time) as at the beginning of that period less the Minimum Balance; to
	 
	 	(b)	 	the Reduction Instalments and all fees, interest and all other
sums due and payable under the Finance Documents during that period.

“Default” means an Event of Default or any event or circumstance specified
in Clause 23 (Events of Default) which would (with the expiry of a grace
period, the giving of notice, the making of any determination under the
Finance Documents or any combination of any of the foregoing) be an Event
of Default.

- 4 -

 

“Determination Lender(s)” means the Technical Bank and two (2) other
Lenders chosen by the Technical Bank after consultation with the Borrower
at the time such instructing group shall act in accordance with Clauses
6.2.6 and 20.3 (Ratio Calculation Dates). In the case where there is only
one (1) other Lender than the Technical Bank, the Determination Lenders
shall be the Technical Bank and that other Lender. In the case where there
is no other Lender than the Technical Bank, the Technical Bank shall be
the Determination Lender.

“Discount Rate” means the higher of (a) 9% per annum or (b) the rate per
annum equal to the aggregate of (i) LIBOR for the relevant period and (ii)
the Margin.

“EBITDA” means on a consolidated basis, in relation to any period, the net
income of the Group on ordinary activities for such period:

	 	(a)	 	before deduction of any tax on such activities during such
period;
	 
	 	(b)	 	before any extraordinary or exceptional items during such
period;
	 
	 	(c)	 	before deduction of any Interest Costs during such period;
	 
	 	(d)	 	before any amount attributable to amortisation of intangible
assets and depreciation of tangible assets during such period;
	 
	 	(e)	 	after deducting the net income of any non-wholly owned
subsidiary during such period attributable to holders of stock or
equity interest of such subsidiary that are not members of the Group;
	 
	 	(f)	 	after deducting any gain over book value and after adding back
any loss on book value arising from the disposal of any fixed asset
by any member of the Group (other than the sale of trading stock)
during such period.

“Employee Plan” means an employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which a
U.S. member of the Group or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA.

“Encumbrance” 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.

“Environment” means all or any of the following media: air (including air
within buildings or other structures and whether above or below ground);
land (including buildings and any other structures or erections in, on or
under it and any soil and anything below the surface of land); land
covered with water; and water (including sea, ground and surface water).

“Environmental Law” means any law, treaty, convention, directive or
regulation having legal or judicial effect whether of commercial, civil,
administrative or criminal nature, concerning:

	 	(a)	 	pollution or contamination of the Environment;
	 
	 	(b)	 	harm, whether actual or potential, to mankind and human senses,
living organisms and ecological systems;

- 5 -

 

	 	(c)	 	the generation, manufacture, processing, distribution, use
(including abuse), treatment, storage, disposal, transport or
handling of dangerous materials; or
	 
	 	(d)	 	the emission, leak, release or discharge into the Environment
of noise, vibration, dust, fumes, gas, odours, smoke, steam,
effluvia, heat, light, radiation (of any kind), infection,
electricity or any dangerous material and any matter or thing capable
of constituting a nuisance or an actionable tort of any kind in
respect of such matters.

“ERISA” means, at any date, the United States Employee Retirement Income
Security Act of 1974 and the regulations promulgated and rulings issued
under it, all as the same may be in effect at such date.

“ERISA Affiliate” means any person that for purposes of Title I and Title
IV of ERISA and Section 412 of the Code would be deemed at any relevant
time to be a single employer with a U.S. member of the Group, pursuant to
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

“ERISA Event” means

	 	(a)	 	any reportable event, as defined in Section 4043 of ERISA, with
respect to an Employee Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be
notified of such event;
	 
	 	(b)	 	the filing of a notice of intent to terminate any Employee
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 Employee Plan
or the termination of any Employee Plan under Section 4041(c) of
ERISA;
	 
	 	(c)	 	the institution of proceedings under Section 4042 of ERISA by
the PBGC for the termination of, or the appointment of a trustee to
administer, any Employee Plan;
	 
	 	(d)	 	the failure to make a required contribution to any Employee
Plan that would result in the imposition of an encumbrance under
Section 412 of the Code or Section 302 of ERISA or the filing of any
request for a minimum funding waiver under Section 412 of the Code
with respect to any Employee Plan or Multiemployer Plan;
	 
	 	(e)	 	an engagement in a non-exempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA;
	 
	 	(f)	 	the complete or partial withdrawal of any U.S. member of the
Group or any ERISA Affiliate from a Multiemployer Plan; and
	 
	 	(g)	 	an Obligor or an ERISA Affiliate incurring any liability under
Title IV of ERISA with respect to any Employee Plan (other than
premiums due and not delinquent under Section 4007 of ERISA).

“Existing Fields” means all hydrocarbon fields in relation to which the
Borrower (or any of its Subsidiaries) holds the Licences listed in
Schedule 7 (Mining Titles) exist.

- 6 -

 

“Facility” means the reserve base revolving loan facility made available
under this Agreement as described in Clause 2 (The Facility).

“Facility Office” means the office or offices notified by a Lender to the
Agent in writing on or before the date it becomes a Lender (or, following
that date, by not less than five Business Days’ written notice) as the
office or offices through which it will perform its obligations under this
Agreement.

“Fee Letter” means the letter dated at latest at the first Utilisation
Date from the Arranger, the Agent and the Technical Bank to the Borrower
setting out the fees referred to in Clause 12 (Fees) and any other fee
letter relating to this Agreement.

“Fields” means the Existing Fields and any New Field.

“Final Maturity Date” means the earlier of (i) the date falling 5 years
after the date of execution of this Agreement and (ii) the Reserves Tail
Date.

“Finance Document” means this Agreement, the Fee Letter, any Security
Document, any Hedge Agreement and any other document designated as such by
the Agent and the Borrower.

“Finance Party” means the Agent, the Technical Bank, the Arranger or a
Lender.

“Financial Indebtedness” means any indebtedness for or in respect of:

	 	(a)	 	monies borrowed;
	 
	 	(b)	 	any amount raised by acceptance under any acceptance credit
facility;
	 
	 	(c)	 	any amount raised pursuant to any note purchase facility or the
issue of bonds, notes, debentures, loan stock or any similar
instrument;
	 
	 	(d)	 	the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, be treated as
a finance or capital lease;
	 
	 	(e)	 	receivables sold or discounted (other than any receivables to
the extent they are sold on a non-recourse basis);
	 
	 	(f)	 	any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial effect of a
borrowing;
	 
	 	(g)	 	any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or price
(and, when calculating the value of any derivative transaction, only
the marked to market value shall be taken into account);
	 
	 	(h)	 	any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or any other
instrument issued by a bank or financial institution; and
	 
	 	(i)	 	the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to (h)
above.

- 7 -

 

“First Consultant Report” means the report delivered in October 2004 by
the by the Independent Engineering Consultant which is an update of the
CEP Report delivered in September 2003 by the Independent Engineering
Consultant to the Agent relating to the Proved Reserves, the expected
production and the net revenues deriving from the Fields.

“GAAP” means generally accepted accounting principles in France or in the
United States, as the case may be.

“Grace Period” means the period from and including the date of execution
of this Agreement to and including the date falling six (6) months after
the date of execution of this Agreement.

“Group” means TRC, MOCE, MOF, the Borrower and any of their Subsidiaries.

“Guarantee” means the guarantee (caution solidaire) granted by the
Guarantor pursuant to Clause 22 (Guarantee) of this Agreement.

“Guaranteed Obligations” has the meaning given to it in Clause 22
(Guarantee) of this Agreement.

“Hedge Agreements” means the interest, currency or commodity swap, option,
cap, collar, floor or similar arrangement or other hedge arrangements
entered into by the Borrower with the Hedge Providers in terms
satisfactory to the Agent in accordance with Clause 21.22 (Hedge
Agreements), and maintained as long as all obligations under the Finance
Documents have not been fully discharged, in terms sufficient to cover all
payment obligations of the Borrower under the Facility.

“Hedge Providers” means the financial institutions, international trading
institutions and/or the Purchaser, reasonably agreed in writing in advance
by the Agent, which shall enter into the Hedge Agreements with the
Borrower.

“Holding Company” means, in relation to a company or corporation, any
other company or corporation in respect of which it is a Subsidiary.

“Indebtedness Ratio” means, on any Ratio Calculation Date, the ratio of
(a) Consolidated Stockholder Equity to (b) Consolidated Indebtedness
(excluding Consolidated Stockholder Equity).

“Independent Engineering Consultant” means CEP or any other independent
engineering consultant agreed in writing in advance by the Technical Bank
and the Borrower.

“Insurance Policy” means the insurance policy subscribed by the Borrower
to cover all damages and liabilities likely to be incurred in connection
with its activities (Energy Package) with AGF effective on 1 April 2003,
and/or any other insurance policy satisfactory to the Agent covering
damages and liabilities in connection with the activities of the Borrower
(and its Subsidiaries) in hydrocarbons in relation to the Fields.

“Insurance Policy Delegation Agreement” means the delegation agreement
entered into at latest on the first Utilisation Date between the Borrower
and the Finance Parties pursuant to which the Borrower has delegated the
insurance company to the Finance Parties.

- 8 -

 

“Insurance Proceeds” means the proceeds due under the Insurance Policy.

“Interest Costs” means on a consolidated basis, in relation to any period,
the aggregate of interest and financial charges paid or payable by any
member of the Group in respect of Financial Indebtedness (excluding any
Financial Indebtedness of any Group member to another Group member),
during such period including, but not limited to:

	 	(a)	 	discount and acceptance fees;
	 
	 	(b)	 	fees payable to any person for the issue by that person of any
guarantee or other assurance against financial loss;
	 
	 	(c)	 	amounts due under any swap, cap, floor, collar option or other
derivative transaction (taking into account only the net indebtedness
of the relevant person under that instrument at the relevant time)
relating to the protection against changes in interest rates.

“Interest Costs Ratio” means, on any Ratio Calculation Date, the ratio of
(a) EBITDA to (b) Interest Costs.

“Interest Period” means, in relation to a Loan, each period determined in
accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 9.3 (Default
interest).

“IRS” means the United States Internal Revenue Service or any successor.

“Joint Operating Agreements” means the agreements relating to the Nemours
permit to be entered into by the Borrower, Lundin International and
Vermilion Rep SAS, and any other an agreement entered into by the Borrower
(and its Subsidiaries) whereby the terms of the joint holding of a Licence
or Lease are specified, in accordance with the provisions of the Licence
or the Lease.

“Lease” means an agreement whereby the rights attached to a Licence are
implemented by a person other than the holder of the Licence.

“Lender” means:

	 	(a)	 	any Original Lender; and
	 
	 	(b)	 	any bank or financial institution which has become a Finance
Party in accordance with Clause 25 (Changes to the Lenders),

which in each case has not ceased to be a Finance Party in accordance with
the terms of this Agreement.

“LIBOR” means, in relation to any Loan:

	 	(a)	 	the applicable Screen Rate; or
	 
	 	(b)	 	(if no Screen Rate is available for the currency or Interest
Period of that Loan) the arithmetic mean of the rates (rounded
upwards to four decimal places) as supplied to

- 9 -

 

	 	 	 	the Agent at its request quoted by the Reference Banks to leading
banks in Relevant Interbank Market,

as of 11.00 a.m. (London time) two (2) Business Days prior to the Interest
Period of that Loan for the offering of deposits in USD and for a period
comparable to the Interest Period for that Loan, rounded up to the nearest
one-sixteenth of 1%.

“Licence” means the exploration licences (permis exclusifs de recherche)
and the concessions (concessions) listed in Schedule 7 (Mining Titles) and
any other licence, title, permit or authorisation, regardless of its
denomination, delivered by a public authority or a person acting in the
name of such authority, whereby the Borrower (or any of its Subsidiaries)
is entitled to conduct exploration and/or production operations regarding
a Field, even jointly.

“Loan” means a loan made or to be made under the Facility.

“Loan Life Cover Ratio” or “LLCR” means, on any Ratio Calculation Date,
the ratio of:

	 	(a)	 	the aggregate of NPV (9) for the period from, but not
including, such Ratio Calculation Date to the Final Maturity Date and
the amount standing to the credit of the Collection Account at 11.00
am (Paris time) on that Ratio Calculation Date; to
	 
	 	(b)	 	the aggregate of the Outstanding Amount (after any repayment,
if any, made on the Facility on such Ratio Calculation Date) on that
Ratio Calculation Date.

“Majority Lenders” means:

	 	(a)	 	if there are no Loans then outstanding, a Lender or Lenders
whose Commitments aggregate more than 66 2/3% of the Total Commitments
(or, if the Total Commitments have been reduced to zero, aggregated
more than 66 2/3% of the Total Commitments immediately prior to the
reduction); or
	 
	 	(b)	 	at any other time, a Lender or Lenders whose participations in
the Loans then outstanding aggregate more than 66 2/3% of all the
Loans then outstanding.

“Mandatory Cost” means the percentage rate per annum calculated by the
Agent in accordance with Schedule 5 (Mandatory Cost Formulae).

“Margin” means:

	 	(a)	 	2.25% per annum when the Borrowing Base Utilisation Ratio is
lower than 50%;
	 
	 	(b)	 	2.50% per annum when the Borrowing Base Utilisation Ratio is
between 50% and 75%; or
	 
	 	(c)	 	2.75% per annum when the Borrowing Base Utilisation Ratio is
above 75%.

“Margin Stock” means margin stock or “margin security” within the meaning
of Regulations T, U and X.

“Master Receivable Assignment Agreement” means the master receivable
assignment agreement (Convention Cadre de cession de créances
professionnelles à titre de garantie)

- 10 -

 

entered into at latest on the first Utilisation Date between the Borrower,
the Agent and the Lenders pursuant to which the Borrower has assigned to
the Lenders all its rights under the Sale and Purchase Contracts and the
Hedge Agreements.

“Material Adverse Effect” means a circumstance or event likely to have a
material adverse effect on:

	 	(a)	 	the activities, the financial and/or economic situation or the
assets of the Group taken as a whole;
	 
	 	(b)	 	the ability of an Obligor to perform its obligations under the
Transaction Documents;
	 
	 	(c)	 	the validity, enforceability, binding effect or performance of
the Transaction Documents; or
	 
	 	(d)	 	the development of the Fields.

“Maximum Facility Amount” means, in respect of each period mentioned in
column (A) of Schedule 3 (Maximum Facility Amount Amortization Schedule),
the amount mentioned in column (B) of Schedule 3 (Maximum Facility Amount
Amortization Schedule).

“Maximum Amount” means the lower of (i) the Borrowing Base and (ii) the
Maximum Facility Amount at any considered time.

“Minimum Balance” means, at any date, the amount equal (i) to the
Borrowing Base (ii) divided by the number of calendar Months remaining
until the Final Maturity Date, (iii) multiplied by 2, as calculated by the
Agent.

“Mining Law” means any law, treaty, convention, directive or regulation
having legal or judicial effect whether of a commercial, civil,
administrative or criminal nature relating, specifically or amongst other,
to exploration and/or exploitation of oil fields.

“Mining Works Permit” means the permits listed in Schedule 7 (Mining
Titles) and any other authorisation granted to the Borrower (or its
Subsidiaries) by any authority or person acting in the name of such
authority, to initiate and carry out works relating to the exploration
and/or exploitation of the Fields, even jointly.

“MOCE Share Pledge Agreements” means (i) the pledge agreement entered into
at latest on the first Utilisation Date between MOCE and the Finance
Parties pursuant to which MOCE has granted a pledge over all of its shares
in MOF in favor of the Finance Parties and (ii) the pledge agreement
entered into on the date hereof between MOCE and the Finance Parties
pursuant to which MOCE has granted a pledge over all of its shares in MEF
in favor of the Finance Parties.

“MOF Share Pledge Agreement” means the pledge agreement entered into at
latest on the first Utilisation Date between MOF and the Finance Parties
pursuant to which MOF has granted a pledge over all the shares of the
Borrower in favor of the Finance Parties.

“Month” means a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month, except
that:

- 11 -

 

	 	(a)	 	if the numerically corresponding day is not a Business Day,
that period shall end on the next Business Day in that calendar month
in which that period is to end if there is one, or if there is not,
on the immediately preceding Business Day; and
	 
	 	(b)	 	if there is no numerically corresponding day in the calendar
month in which that period is to end, that period shall end on the
last Business Day in that calendar month.

The above rules will only apply to the last Month of any period.

“Multiemployer Plan” means a “multiemployer plan” (as defined in Section
(3)(37) of ERISA) contributed to for any employees of a U.S. member of the
Group or any ERISA Affiliate.

“New Fields” means all hydrocarbon fields in which the Borrower (or any of
its Subsidiaries) acquires, after the date hereof, a beneficial interest
and over which it receives, after the date hereof, a valid and enforceable
authorisation for the purpose of exploration or production of hydrocarbons
and in relation to which a Licence, a Lease, Mining Works Permit or any
other title of ownership exist after the date hereof.

“Net Profits” means, in relation to any period, the profit of any member
of the Group on ordinary activities for such period:

	 	(a)	 	after deduction of any tax on such activities during such
period;
	 
	 	(b)	 	after any extraordinary or exceptional items during such
period;
	 
	 	(c)	 	after deduction of any Interest Costs during such period;
	 
	 	(d)	 	after any amount attributable to amortisation of intangible
assets and depreciation of tangible assets during such period;
	 
	 	(e)	 	after deducting the profits of any non-wholly owned subsidiary
during such period;

after deducting any gain over book value and after adding back any loss on
book value arising from the disposal of any fixed asset by any member of
the Group (other than the sale of trading stock) during such period.

“NPV (9)” means the net present value, as at the date of calculation, of
the future Pre Debt Cashflows up to the specified date on the basis of the
Discount Rate, as calculated by the Technical Bank.

“Obligor” means the Borrower, the Guarantor, TRC and/or MOCE.

“Operating Agreements” means the Sale and Purchase Contracts, the Joint
Operating Agreements, the Licences and all other agreements relating to
the operation of the Fields mutually designated as such by the Agent and
the Borrower.

“Original Financial Statements” means the audited consolidated financial
statements of TRC and its Subsidiaries for the financial year ended 31
December 2003 (including consolidated balance sheet and income statement)
and the audited financial statements of the Borrower for its financial
year ended 31 December 2003.

- 12 -

 

“Outstanding Amount” means the aggregate principal amount of the Loans
which have been made available to the Borrower under the Facility and
which remain outstanding at any considered time.

“Party” means a party to this Agreement.

“PBGC” means the U.S. Pension Benefit Guaranty Corporation, or any entity
succeeding to all or any of its functions under ERISA.

“Permitted Encumbrance” means the Encumbrances permitted in accordance
with Clause 21.7 (Negative pledge).

“Permitted Financial Indebtedness” means (i) any loan made within the
Group by a member of the Group to another member of the Group not
exceeding in aggregate USD 500,000 and (ii) any loans (other than loans
made pursuant to sub-paragraph (i)) made within the Group by a member of
the Group to another member of the Group for the purpose of financing the
development of hydrocarbon fields in Turkey.

“Petroleum” means any mineral oil or relative hydrocarbon and natural gas
existing in its natural condition in strata but not including coal or
bituminous shales or other stratified deposits from which oil can be
extracted by destructive distillation.

“Pledge over Account Agreement” means the agreement entered into at latest
on the first Utilisation Date between the Borrower and the Finance Parties
pursuant to which the Borrower has granted a pledge over the Collection
Account in favour of the Finance Parties.

“Pre Debt Cashflows” means the net cashflows derived from the exploitation
of the Proved Reserves. In calculating these cashflows, capital
expenditures, general and administrative costs, operative costs in
relation with the Fields exploitation, payments to other debt providers
and creditors, proceeds or outgoings from the Hedge Agreements, income
taxes and other taxes and withholdings will be taken into account.
However, interest, fees and repayments under the Facility will not be
included, although the effect of those payments on taxes and withholdings
will be included. At the discretion of the Technical Bank and for the
account of the Borrower, capital and operating costs shall be verified by
the Independent Engineering Consultant.

“Proved Reserves” means, at the time of an estimate, such quantities of
Petroleum deriving from the Fields which by analysis of geological and
engineering data, can be estimated with reasonable certainty to be
commercially recoverable, from a given date forward, from known reservoirs
and under current economic conditions, operating methods, and government
regulations. Establishment of current economic conditions should include
relevant historical Petroleum prices and associated costs and may involve
an averaging period that is consistent with the purpose of the reserves
estimate, appropriate contract obligations, corporate procedures, and
government regulations involved in reporting these reserves. In general,
reserves are considered proved if the commercial productibility of the
reservoir is supported by actual production or formation tests. In this
context, the term “proved” refers to the actual quantities of Petroleum
reserves and not just the productivity of the well or reservoir. In
certain cases, Proved Reserves may be assigned on the basis of well logs
and/or core analysis that indicate the subject reservoir is hydrocarbon
bearing and is analogous to reservoirs in the same area that are producing
or have demonstrated the ability to produce on formation tests. The area

- 13 -

 

of the reservoir considered as “proved” includes (1) the area delineated
by drilling and defined by fluid contacts, if any, and (2) the undrilled
portions of the reservoir that can reasonably be judged as commercially
productive on the basis of available geological and engineering data. In
the absence of data on fluid contacts, the lowest known occurrence of
hydrocarbons controls the proved limit unless otherwise indicated by
definitive geological, engineering or performance data. Reserves may be
classified as “proved” in accordance with the principles approved by the
board of directors of the Society of Petroleum Engineers, Inc. and the
executive board of the World Petroleum Congress in March 1997, if
facilities to process and transport those reserves to market are
operational at the time of the estimate or there is a reasonable
expectation that such facilities will be installed. Reserves which are to
be produced through the application of established improved recovery
methods are included in the proved classification when (1) successful
testing by a pilot project or favorable response of an installed program
in the same or an analogous reservoir with similar rock and fluid
properties provides support for the analysis on which the project was
based, and (2) it is reasonably certain that the project will proceed.
Reserves to be recovered by improved recovery methods that have yet to be
established through commercially successful applications are included in
the proved classification only (1) after a favorable production response
from the subject reservoir from either (a) a representative pilot or (b)
an installed program where the response provides support for the analysis
on which the project is based and (2) it is reasonably certain the project
will proceed.

“Proved Developed Producing Reserves (PDP Reserves)” means the fraction of
the Proved Reserves expected to be recovered from completion intervals
which are open and producing at the time of the estimate. Improved
recovery reserves are considered producing only after the improved
recovery project is in operation.

“Purchaser” means Total and/or any other reputable oil trading company
which has been agreed in writing by the Agent in advance (which agreement
by the Agent shall not be unreasonably withheld or delayed by the Agent)
or which is paying though letters of credit issued by banks that have been
agreed in writing by the Agent in advance (which agreement by the Agent
shall not be unreasonably withheld or delayed by the Agent).

“Qualifying Lender” has the meaning given to it in Clause 13 (Tax gross up
and indemnities).

“Ratio Calculation Date” means the date on which a ratio is calculated in
accordance with Clause 20.3 (Ratio Calculation Dates).

“Reduction Date” means the 25th day of each calendar month provided that
if any of those dates is not a Business Day then that Reduction Date shall
be deemed to be the next Business Day in that calendar month (if there is
one) or the preceding Business Day (if there is not).

“Reduction Instalment” means each instalment for the reduction of the
Loans referred to in Clause 7.2 (Reduction of the Facility).

“Reference Banks” means the principal London offices of Natexis Banques
Populaires, Barclays Bank plc and Chase Manhattan Bank or such other banks
as may be appointed by the Agent in consultation with the Borrower.

- 14 -

 

“Regulations T, U and X” means, respectively, Regulations T, U and X of
the Board of Governors of the Federal Reserve System of the United States
(or any successor) as now and from time to time in effect from the date of
this Agreement.

“Relevant Interbank Market” means the London interbank market.

“Reserves Tail Date” means the date on which the remaining Proved Reserves
as shown in the latest Consultant Report are forecasted to fall below 25%
of the total Proved Reserves as they appear in the First Consultant
Report.

“Sale and Purchase Contracts” means each sale and purchase contract
entered into between a Purchaser and the Borrower (or any of its
Subsidiaries) for quantities equal in aggregate to 100% of the Fields
production attributable to the Borrower (or any of its Subsidiaries), and
all oil sale and purchase contracts to be entered into between the
Borrower (or any of its Subsidiaries) and a Purchaser in addition to the
existing sale and purchase contract or in replacement or supplement to
each sale and purchase contract in the form agreed in writing in advance
by the Agent.

“Screen Rate” means the British Bankers Association Interest Settlement
Rate for LIBOR and the relevant period displayed on page LIBOR01 of the
Reuters screen. If the agreed page is replaced or service ceases to be
available, the Agent may specify another page or service displaying the
appropriate rate after consultation with the Borrower and the Lenders.

“SEC” means the United States Securities and Exchange Commission or any
successor thereto.

“Security” means any security interest created pursuant to the Security
Documents.

“Security Documents” means the Assignment Agreements, the Guarantee, the
U.S. Guarantees, the Pledge over Account Agreement, the Share Pledge
Agreements, and any other security granted by the Borrower or another
Group company to the Finance Parties securing the obligations of the
Obligors under the Finance Documents.

“Share Pledge Agreements” means the MOCE Share Pledge Agreement and the
MOF Share Pledge Agreement.

“Subsidiary” means any company or corporation more than half the issued
share capital and/or voting rights of which is beneficially owned,
directly or indirectly by an Obligor or which is a subsidiary of another
Subsidiary.

“Tax” means 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).

“Total Commitments” means the aggregate of the Commitments, being USD
15,000,000 at the date of this Agreement.

“Transaction Documents” means the Operating Agreements and the Finance
Documents.

“Transfer Agreement” means an agreement substantially in the form set out
in Schedule 6 (Form of Transfer Agreement) or any other form agreed
between the Agent and the Borrower.

- 15 -

 

“Transfer Date” means, in relation to a transfer, the later of:

	 	(a)	 	the proposed Transfer Date specified in the Transfer Agreement;
and
	 
	 	(b)	 	the date on which the Agent executes the Transfer Agreement.

“Unfunded Pension Liability” means the excess of an Employee Plan’s
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that plan’s assets, determined in accordance with the assumptions
used for funding the Employee Plan pursuant to Section 412 of the Code for
the applicable plan year.

“Unpaid Sum” means any sum due and payable but unpaid by the Borrower
under the Finance Documents.

“USD” means US Dollars, the currency of the United States of America.

“U.S. Obligor” means an Obligor whose jurisdiction of organisation is a
state of the United States of America or the District of Columbia.

“U.S. Guarantees” means the guarantee governed by the laws of the State of
New York entered into at latest on the first Utilisation Date by each of
TRC and MOCE in favor of the Finance Parties.

“Utilisation” means any utilisation of the Facility.

“Utilisation Date” means the date of a Utilisation, being the date on
which the relevant Loan is to be made.

“Utilisation Request” means a notice substantially in the form set out in
Schedule 4 (Utilisation Request).

“VAT” means value added tax.

	1.2	 	Construction

	 	1.2.1	 	Unless a contrary indication appears, any reference in this Agreement to:

	 	(a)	 	the “Agent”, the “Arranger”, the “Technical
Bank”, any “Finance Party”, any “Lender”, or any “Party” 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)	 	“corporate reconstruction” includes in relation
to any company any contribution of part of its business in
consideration of shares (apport partiel d’actifs) and any
demerger (scission) implemented in accordance with articles
L.236-1 to L.236-24 of the French Code de Commerce or any
other regulation to the same effect;
	 
	 	(d)	 	a “Finance Document”, an “Operating Agreement” or
a “Transaction Document” or any other agreement or instrument
is a reference to that Finance

- 16 -

 

	 	 	 	Document, Operating Agreement or Transaction Document or other agreement
or instrument as amended or novated;
	 
	 	(e)	 	“gross negligence” means “faute lourde”;
	 
	 	(f)	 	a “guarantee” includes any “cautionnement”,
“aval” and any “garantie” which is independent from the debt
to which it relates;
	 
	 	(g)	 	“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;
	 
	 	(h)	 	“merger” includes any fusion implemented in
accordance with articles L.236-1 to L.236-24 of the French
Code de Commerce or any other regulation to the same effect;
	 
	 	(i)	 	a “person” includes any person, firm, company,
corporation, government, state or agency of a state or any
grouping (whether or not having separate legal personality) or
two or more of the foregoing;
	 
	 	(j)	 	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
regulatory, self-regulatory or other authority or
organisation;
	 
	 	(k)	 	a “security interest” includes any type of
security (sûreté réelle) and transfer by way of security;
	 
	 	(l)	 	“wilful misconduct” means “dol”;
	 
	 	(m)	 	a provision of law is a reference to that
provision as amended or re-enacted; and
	 
	 	(n)	 	unless a contrary indication appears, a time of
day is a reference to Paris time.

	 	1.2.2	 	Section, Clause and Schedule headings are for ease of
reference only.
	 
	 	1.2.3	 	Unless a contrary indication appears, a term used in any other
Finance Document or in any notice given under or in connection with
any Finance Document has the same meaning in that Finance Document or
notice as in this Agreement.
	 
	 	1.2.4	 	A Default or an Event of Default is “continuing” if it has not
been remedied or waived.

- 17 -

 

SECTION 2

THE FACILITY

	2.	 	THE FACILITY
	 
	2.1	 	The Facility

Subject to the terms of this Agreement, the Lenders make available to the
Borrower a reserve base revolving loan facility for an aggregate amount
equal to the Total Commitments.

	2.2	 	Finance Parties’ rights and obligations

	 	2.2.1	 	The obligations of each Finance Party under the Finance
Documents are several (conjointes et non solidaires). Failure by a
Finance Party to perform its obligations under the Finance Documents
does not affect the obligations of any other Party under the Finance
Documents. No Finance Party is responsible for the obligations of
any other Finance Party under the Finance Documents.
	 
	 	2.2.2	 	The rights of each Finance Party under or in connection with
the Finance Documents are separate and independent rights and any
debt arising under the Finance Documents to a Finance Party from the
Obligors shall be a separate and independent debt.
	 
	 	2.2.3	 	A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents.

	3.	 	PURPOSE
	 
	3.1	 	Purpose

The Borrower shall apply all amounts borrowed by it under the Facility
towards (i) the financing of the acquisition and development of the New
Fields, (ii) the financing of the development of the Existing Fields,
(iii) general corporate purposes (including payment of fees and expenses
incurred under this Agreement) and/or (iv) the development by the Group of
hydrocarbon fields in Turkey.

	3.2	 	Monitoring

No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement, however the Agent shall have
the right to request from the Borrower evidence that the Loans are applied
to the purposes mentioned in Clause 3.1 Purpose).

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	4.	 	CONDITIONS OF UTILISATION
	 
	4.1	 	Conditions precedent

The Borrower may not deliver a Utilisation Request unless the Agent has
notified the Borrower and the Lenders that each document referred to in 0
(Conditions precedent) has been received and that all of the Conditions
Precedent listed in 0 (Conditions precedent) have been satisfied (in each
case in form and content satisfactory to the Agent). The Agent shall
notify the Borrower and the Lenders promptly upon being so satisfied.

	4.2	 	Further conditions precedent

The Lenders will only be obliged to comply with Clause 5.3 (Lenders’
participation) if on the date of each Utilisation Request, on each
proposed Utilisation Date and on any Reduction Date:

	 	4.2.1	 	no Default is continuing or would result from the proposed
Loan;
	 
	 	4.2.2	 	the representations made by the Obligors in Clause 18
(Representations) are true in all material respects; and
	 
	 	4.2.3	 	all fees and commissions payable and due by the Borrower have
been duly paid.

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SECTION 3

UTILISATION

	5.	 	UTILISATION
	 
	5.1	 	Delivery of a Utilisation Request

The Borrower may draw a Loan by delivery to the Agent of a duly completed
Utilisation Request not later than 3.00 p.m. (Paris time) three (3)
Business Days prior to the proposed Utilisation Date. No Utilisation
Request shall be sent in respect of the portion of a Loan which is
automatically rolled over in accordance with Clause 7.1 (Repayment).

	5.2	 	Utilisation conditions

	 	5.2.1	 	The amount of any Utilisation requested shall not exceed the Available Amount.
	 
	 	5.2.2	 	The proposed Utilisation Date must be a Business Day within
the Availability Period.
	 
	 	5.2.3	 	The amount of any Utilisation requested must be a minimum of
USD 1,000,000 or, if less, the Available Amount.
	 
	 	5.2.4	 	Each Utilisation Request is irrevocable.
	 
	 	5.2.5	 	No more than four (4) Loans (before consolidation of Loans in
accordance with Clause 10.3 (Consolidation of Loans) may be
outstanding simultaneously at any time.

	5.3	 	Lenders’ participation

	 	5.3.1	 	If the conditions set out in this Agreement have been met,
each Lender shall make its participation in each Loan available by
the Utilisation Date through its Facility Office.
	 
	 	5.3.2	 	The Lenders’ participation in each Loan will be made pro rata
to their Commitment.

	6.	 	BORROWING BASE
	 
	6.1	 	Consultant Report

	 	6.1.1	 	The Borrower shall procure that thirty (30) Business Days
before each Borrowing Base Determination Date (other than the first
Utilisation Date), the Independent Engineering Consultant shall
deliver to the Technical Bank a Consultant Report in connection with
the assessments of the amount of (i) the Proved Reserves, (ii) the
expected production of the Fields and (iii) the net revenues deriving
from the Fields.

	6.2	 	Borrowing Base Determination

	 	6.2.1	 	The Borrowing Base shall be calculated by the Technical Bank
upon reception of the Consultant Report within the timeframe provided
in Clause 6.1 (Consultant Report).
	 
	 	6.2.2	 	The Technical Bank shall calculate the Borrowing Base, that
shall be equal to the amount which is the lower of (i) NPV (9) from
the relevant Borrowing Base Determination Date to the Final Maturity
Date divided by 1.20 and (ii) NPV (9) from the relevant Borrowing
Base Determination Date to the Reserve Tail Date divided by

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	 	 	 	1.3. In making such calculation, the Technical Bank shall apply (a)
the data provided by the Independent Engineering Consultant in the
Consultant Report in connection with the relevant Borrowing Base
Determination Date and (b) the engineering and credit evaluation of
the Borrower and of the Proved Reserves made by the Technical Bank
applying the criteria and credit factors consistently and generally
applied for determination of borrowing base applicable to borrowers
conducting similar activities in the same geographical area as the
Borrower under similar licences and sale and purchase contracts.
	 
	 	6.2.3	 	On each Borrowing Base Determination Date, the Borrowing Base
shall be equal to the amount determined in Clause 6.2.2 and at any
other date than the Borrowing Base Determination Date, the Borrowing
Base shall be equal to the amount specified in the relevant Borrowing
Base Reduction Schedule that shall be calculated by the Technical
Bank by applying the principles set out above.
	 
	 	6.2.4	 	Each new Borrowing Base and new Borrowing Base Reduction
Schedule shall be determined by the Technical Bank and approved by
the Lenders as follows:

	 	(a)	 	an increase of the Borrowing Base (and the
determination of a new Borrowing Base Reduction Schedule
accordingly) shall require the written consent of all the
Lenders, for the avoidance of doubt the Borrowing Base shall
never exceed the Maximum Facility Amount;
	 
	 	(b)	 	a decrease of the Borrowing Base (and the
determination of a new Borrowing Base Reduction Schedule
accordingly) or the continuation of the existing Borrowing
Base (together with the relating Borrowing Base Reduction
Schedule either modified or continued) shall require the
written consent of the Majority Lenders,

	 	 	 	save that in the circumstances mentioned in sub-paragraph 6.2.6
below, such approval shall be obtained from the Determination
Lender(s).
	 
	 	6.2.5	 	The Technical Bank shall communicate to the Lenders the
Borrowing Base and Borrowing Base Reduction Schedule at least
twenty-one (21) Business Days before each Borrowing Base
Determination Date (provided that the Technical Bank has received the
Consultant Report within the timeframe provided in Clause 6.1
(Consultant Report)). The Lenders shall deliver to the Technical
Bank their approval or refusal to such Borrowing Base and Borrowing
Base Reduction Schedule at least fifteen (15) Business Days before
the relevant Borrowing Base Determination Date. The Lenders will be
deemed to have given their consent to such Borrowing Base and
Borrowing Base Reduction Schedule if they have not answered to the
Technical Bank at least fifteen (15) Business Days before the
relevant Borrowing Base Determination Date.
	 
	 	6.2.6	 	If (i) all the Lenders, as far as an increase of the Borrowing
Base (and the determination of a new Borrowing Base Reduction
Schedule accordingly) is concerned or (ii) the Majority Lenders, as
far as a decrease of the Borrowing Base (and the determination of a
new Borrowing Base Reduction Schedule accordingly) is

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	 	 	 	concerned, cannot reach an agreement as to the re-determination of
the Borrowing Base and the new Borrowing Base Reduction Schedule at
least fifteen (15) Business Days before the relevant Borrowing Base
Determination Date, all the Lenders shall meet in order to approve,
at the latest ten (10) Business Days before the relevant Borrowing
Base Determination Date, the new Borrowing Base and new Borrowing
Base Reduction Schedule (provided that the Lenders shall decide in
accordance with the majority or unanimity stipulated in paragraph
6.2.4 (a) and (b) above). Should the Lenders fail to reach an
agreement at the latest ten (10) Business Days before the relevant
Borrowing Base Determination Date, the Technical Bank shall appoint
the Determination Lender(s) at the latest eight (8) Business Days
before the relevant Borrowing Base Determination Date. The
Determination Lender(s) shall deliver to the Technical Bank its
(their) proposal as the applicable Borrowing Base and Borrowing
Base Reduction Schedule, as calculated in accordance with
paragraphs 6.2.1 and 6.2.2, at the latest five (5) Business Days
before the relevant Borrowing Base Determination Date. The
applicable Borrowing Base and Borrowing Base Reduction Schedule
shall be determined conclusively as being the average Borrowing
Base and Borrowing Base Reduction Schedule proposed by the three
Determination Lender(s). Such Borrowing Base and Borrowing Base
Reduction Schedule shall be binding on the Borrowers and the
Finance Parties.
	 
	 	6.2.7	 	A new Borrowing Base and a new Borrowing Base Reduction
Schedule shall enter into force on each Borrowing Base Determination
Date. The new Borrowing Base and the new Borrowing Base Reduction
Schedule shall be sent by the Agent to the Borrower and the Lenders
at the latest three (3) Business Days prior to the relevant Borrowing
Base Determination Date (save for the initial Borrowing Base and
Borrowing Base Reduction Schedule that shall be notified in writing
by the Technical Bank to the Borrower before the first Utilisation
Date).
	 
	 	6.2.8	 	The Agent may at any time reasonably request that a new
Borrowing Base be calculated and that a new Borrowing Base Reduction
Schedule be established. The Agent will be deemed to be acting
reasonably if:

	 	(a)	 	the Borrower or TRC is in breach of any of their
obligations under Clause 20 (Financial covenants), or
	 
	 	(b)	 	(1) there is (a) a material variation in
production or in the amount of the Proved Reserves shown in
the most recent Consultant Report or (b) a substantial adverse
change in economic conditions applicable to independent
producers operating oil fields in France and/or the Borrower’s
interests in France, (2) such event is likely to affect the
ability of the Borrower to meet its payment obligations under
the Facility, and (3) it is required by the Majority Lenders
to the Agent.

	 	6.2.9	 	The Borrower may, no more frequently than once every six (6)
months and without the consent of the Lenders, elect to adopt a
Borrowing Base which is lower than the approved and applicable
Borrowing Base. Such Borrowing Base shall enter into force after
fifteen (15) Business Days of its notification by the Borrower to the
Agent and the Technical Bank shall determine a new Borrowing Base
Reduction Schedule accordingly.

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	 	6.2.10	 	After calculation of the Borrowing Base by the Technical Bank in
accordance with the provision stated in sub-paragraph 6.2.1 to 6.2.9
above, the Parties acknowledge and agree that such determination by
the Technical Bank shall be binding on all Parties and the amount
determined as the “Borrowing Base” in accordance with the provisions
set out above shall apply to the relevant Borrowing Base
Determination Date.

	6.3	 	Borrowing Base Deficiency
	 
	 	 	If on any Borrowing Base Determination Date, the amount standing to the
credit of the Collection Account is not sufficient to repay to the Agent
the amount of the Borrowing Base Deficiency, the Borrower shall have a
sixty (60) days grace period to (a) repay to the Agent the amount
necessary to ensure that the Outstanding Amount does not exceed the
Maximum Amount or (b) validly create a cash collateral (gage-espèces) or
other Encumbrance satisfactory to the Finance Parties, for an amount at
least equal to the amount of Borrowing Base Deficiency. If, at the expiry
of this sixty (60) days grace period after the Borrowing Base Deficiency
has been established, the Outstanding Amount exceeds the Maximum Amount or
no satisfactory cash collateral (gage-espèces) or other Encumbrance has
been validly created in favour of the Finance Parties, the Lenders shall
be entitled to exercise any of their rights under this Agreement,
including, without limitation, to declare all amounts accrued or
outstanding under the Finance Documents immediately due and payable in
accordance with Clause 23.1(a) (Non-payment) and 23.19 (Acceleration).

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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

	7.	 	REPAYMENT
	 
	7.1	 	Repayment of Loans
	 
	 	 	The Borrower shall repay each Loan on each Reduction Date. However the
consolidated Loan (in accordance with Clause 10.3 (Consolidation of
Loans)) will be deemed automatically rolled over (in the same amount or in
an amount determined in accordance with Clause 7.2 (Reduction of the
Facility), as the case may be) on each Reduction Date, until the Final
Maturity Date.
	 
	7.2	 	Reduction of the Facility

	 	7.2.1	 	On each Reduction Date, unless the Outstanding Amount is
already equal to or less than the Maximum Amount (taking into account
the reduction on that day of the Borrowing Base in accordance with
the Borrowing Base Reduction Schedule), the Borrower shall ensure
that sufficient Loans are repaid on that Reduction Date to the extent
necessary so that the Outstanding Amount (after that repayment) is
equal to or less than the reduced amount of the Maximum Amount (as
calculated on that Reduction Date).
	 
	 	7.2.2	 	The Reduction Instalment shall be paid by the Borrower on each
Reduction Date in accordance with the provisions of Clause 29.1
(Payments by the Borrower).
	 
	 	7.2.3	 	Any reduction of the Outstanding Amount shall reduce rateably
the participation of each Lender in the Loans.
	 
	 	7.2.4	 	Each reduction of the Maximum Facility Amount in accordance
with Schedule 3 (Maximum Facility Amount Amortization Schedule) shall
reduce rateably the Commitments of the Lenders.

	7.3	 	Compliance with financial ratios

In the event that, on any Reduction Date, the LLCR is inferior to
1.15 and/or the DSCR is inferior to 1.10 and/or the ALCR is
inferior to 1.25, each as calculated on the latest Ratio
Calculation Date, the Reduction Instalment to be paid by the
Borrower on such Reduction Date shall be increased up to the amount
as shall be necessary to ensure that the LLCR is at least equal to
1.15, the DSCR is at least equal to 1.10 and the ALCR is at least
equal to 1.25 on that Reduction Date.

	8.	 	PREPAYMENT AND CANCELLATION
	 
	8.1	 	Illegality
	 
	 	 	If it becomes unlawful in any applicable jurisdiction for a Lender to
perform any of its obligations as contemplated by this Agreement or to
fund or maintain its participation in any Loan:

	 	8.1.1	 	that Lender shall promptly notify the Agent upon becoming
aware of that event;

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	 	8.1.2	 	upon the Agent notifying the Borrower, the Commitment of that
Lender will be immediately cancelled; and
	 
	 	8.1.3	 	the Borrower shall repay that Lender’s participation in the
Loans on the last day of the Interest Period for each Loan occurring
after the Agent has notified the Borrower or, if earlier, the date
specified by the Lender in the notice delivered to the Agent (being
no earlier than the last day of any applicable grace period permitted
by law).

	8.2	 	Change of control

	 	8.2.1	 	If any person or group of persons acting in concert gains control of any Obligor:

	 	(a)	 	the relevant Obligor shall promptly notify the
Agent upon becoming aware of that event; and
	 
	 	(b)	 	if the Majority Lenders so require, the Agent
shall, by not less than thirty (30) days notice to the
Borrower, cancel the Facility and declare all outstanding
Loans, together with accrued interest, and all other amounts
accrued under the Finance Documents immediately due and
payable, whereupon the Facility will be cancelled and all such
outstanding amounts will become immediately due and payable.

	 	8.2.2	 	For the purpose of paragraph (a) above “control” has the
meaning given in article L.233-3 of the French Code de commerce.

	8.3	 	Voluntary cancellation
	 
	 	 	The Borrower may, if it gives the Agent not less than fifteen (15)
Business Days’ prior notice, cancel the whole or any part (being a minimum
amount of USD 1,000,000 and multiples of USD 1,000,000) of the Available
Amount. Any cancellation under this Clause 8.3 shall reduce the
Commitments of the Lenders rateably under the Facility.
	 
	8.4	 	Voluntary prepayment of Loans
	 
	 	 	The Borrower may, if it gives the Agent not less than five (5) Business
Days’ prior notice, prepay the whole or any part of a Loan (but if in
part, being a minimum amount of USD 1,000,000 and multiples of USD
1,000,000).
	 
	8.5	 	Right of repayment and cancellation in relation to a single Lender

	 	8.5.1	 	If:

	 	(a)	 	any sum payable to any Lender by the Borrower is
required to be increased under paragraph (c) of Clause 13.2
(Tax gross-up) or under an equivalent provision of any Finance
Document;
	 
	 	(b)	 	any Lender claims indemnification from the
Borrower under Clause 13.3 (Tax indemnity) or Clause 14.1
(Increased costs); or
	 
	 	(c)	 	any Lender notifies the Agent of its Additional
Cost Rate under Schedule 5 (Mandatory Cost Formulae),

- 25 -

 

	 	 	 	the Borrower may, whilst (in the case of paragraphs (a) and (b)
above) the circumstance giving rise to the requirement or
indemnification continues or (in the case of paragraph (c) above)
that Additional Cost Rate is greater than zero, give the Agent
notice of cancellation of the Commitment of that Lender and its
intention to procure the repayment of that Lender’s participation
in the Loans.
	 
	 	8.5.2	 	On receipt of a notice referred to in paragraph 8.5.1 above,
the Commitment of that Lender shall immediately be reduced to zero.
	 
	 	8.5.3	 	On the last day of each Interest Period which ends after the
Borrower has given notice under paragraph 8.5.1 above (or, if
earlier, the date specified by the Borrower in that notice), the
Borrower shall repay that Lender’s participation in that Loan.

	8.6	 	Mandatory prepayment and cancellation in relation to a single Lender
	 
	 	 	If it becomes unlawful for the Borrower to perform any of its obligations
to any Lender under paragraph 13.2.3 or under an equivalent provision of
any Finance Document,

	 	8.6.1	 	the Borrower shall promptly notify the Agent upon becoming
aware of that event;
	 
	 	8.6.2	 	upon the Agent notifying that Lender, its Commitment will be
immediately cancelled; and
	 
	 	8.6.3	 	the Borrower shall repay that Lender’s participation in the
Loans on the last day of each Interest Period which ends after the
Borrower has given notice under paragraph 8.6.1 above or, if earlier,
the date specified by that Lender in a notice delivered to the Agent
(being no earlier than the last day of any applicable grace period
permitted by law).

	8.7	 	Restrictions

	 	8.7.1	 	Any notice of cancellation or prepayment given by any Party
under this Clause 8 shall be irrevocable and, unless a contrary
indication appears in this Agreement, shall specify the date or dates
upon which the relevant cancellation or prepayment is to be made and
the amount of that cancellation or prepayment.
	 
	 	8.7.2	 	Any prepayment under this Agreement shall be made to the Agent
in accordance with the provisions of Clause 29.1 (Payments by the
Borrower).
	 
	 	8.7.3	 	Any prepayment or cancellation under this Agreement shall be
made together with accrued interest on the amount prepaid and,
subject to any Break Costs, without premium or penalty.
	 
	 	8.7.4	 	The Borrower shall not repay or prepay all or any part of the
Loans or cancel all or any part of the Facility except at the times
and in the manner expressly provided for in this Agreement.
	 
	 	8.7.5	 	Unless a contrary indication appears in this Agreement, any
part of the Facility which is prepaid may be reborrowed up to the
amount equal to Available Amount on such date, in accordance with the
terms of this Agreement.

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	 	8.7.6	 	No amount of the Facility cancelled under this Agreement may
be subsequently reinstated.
	 
	 	8.7.7	 	If the Agent receives a notice under this Clause 8 it shall
promptly forward a copy of that notice to either the Borrower or the
affected Lender, as appropriate.

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SECTION 5

COSTS OF UTILISATION

	9.	 	INTEREST
	 
	9.1	 	Calculation of interest
	 
	 	 	Subject to the terms of this Agreement, the rate of interest on each Loan
for each Interest Period is the percentage rate per annum which is the
aggregate of the applicable:

	 	9.1.1	 	Margin;
	 
	 	9.1.2	 	LIBOR; and
	 
	 	9.1.3	 	Mandatory Cost, if any.

	9.2	 	Payment of interest
	 
	 	 	The Borrower shall pay accrued interest on each Loan on each Reduction
Date in accordance with Clause 29.1 (Payments by the Borrower).
	 
	9.3	 	Default interest

	 	9.3.1	 	If (i) the Borrower fails to pay any amount payable by it
under a Finance Document on its due date, interest shall accrue to
the fullest extent permitted by law on the overdue amount from the
due date up to the date of actual payment (both before and after
judgment) at a rate which, subject to paragraph (b) below, is 2%
higher than the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted a Loan for
successive Interest Periods, each of a duration selected by the Agent
(acting reasonably). Any interest accruing under this Clause 9.3
shall be immediately payable by the Borrower on demand by the Agent.
	 
	 	9.3.2	 	Default interest (if unpaid) arising on an overdue amount will
be compounded with the overdue amount only if, within the meaning of
article 1154 of the French Code Civil, such interest is due for a
period of at least one year, but will remain immediately due and
payable.

	9.4	 	Notification of rates of interest
	 
	 	 	Two (2) Business Days before the beginning of each Interest Period, the
Agent shall promptly notify the Lenders and the Borrower of the
determination of the rate and amount of interest payable for the Interest
Period. Each notification shall set out in reasonable detail the basis of
computation of the amount of interest payable.
	 
	 	 	The determination by the Agent of any interest payable under this Clause 9
shall be conclusive and binding on the Borrower in the absence of manifest
error.
	 
	9.5	 	Effective Global Rate (Taux Effectif Global)
	 
	 	 	For the purposes of Articles L313-1 et seq, R 313-1 and R313-2 of the
French Code de la Consommation, the Parties acknowledge that by virtue of
certain characteristics of the Facility

- 28 -

 

	 	 	(and in particular the variable interest rate applicable to the Loans) the
taux effectif global cannot be calculated at the date of this Agreement.
However, the Borrower acknowledges that it has received from the Agent a
letter containing an indicative calculation of the taux effectif global,
based on figured examples calculated on assumptions as to the taux de
période and durée de période set out in the letter. The Parties
acknowledge that that letter forms part of this Agreement.
	 
	10.	 	INTEREST PERIODS
	 
	10.1	 	Interest Periods

	 	10.1.1	 	The duration of each Interest Period is one (1) Month. The duration
of an Interest Period shall be shortened (i) in order to ensure that
the last day of each Interest Period corresponds to a Reduction Date
or (ii) for the purpose of consolidation of Loans as provided in
Clause 10.3 (Consolidation of Loans), in which case the applicable
rate of interest on such Loan for that Interest Period shall be the
percentage rate per annum which is the aggregate of the applicable
(i) Margin, (ii) the market rate (taux de marché) as determined by
the Agent and (iii) Mandatory Cost, if any.
	 
	 	10.1.2	 	A Loan has one Interest Period only and each Loan will be deemed
automatically rolled over on each Reduction Date up to an amount
equal to (a) the Outstanding Amount on such Reduction Date minus (b)
the aggregate of the Reduction Instalment and any amount to be repaid
in accordance with Clause 8 (Prepayment and Cancellation).
	 
	 	10.1.3	 	No Interest Period for any Loan shall extend beyond the Final
Maturity Date. If an Interest Period would otherwise extend beyond
the Final Maturity Date, it shall be shortened so that it ends on the
Final Maturity Date.

	10.2	 	Non-Business Days
	 
	 	 	If an Interest Period would otherwise end on a day which is not a Business
Day, that Interest Period will instead end on the next Business Day in
that calendar month (if there is one) or the preceding Business Day (if
there is not).
	 
	10.3	 	Consolidation of Loans
	 
	 	 	If two or more Loans are outstanding at the same time, those Loans will be
consolidated into, and treated as, a single Loan on the next Reduction
Date.
	 
	11.	 	CHANGES TO THE CALCULATION OF INTEREST
	 
	11.1	 	Absence of quotations
	 
	 	 	Subject to Clause 11.2 (Market disruption), if LIBOR is to be determined
by reference to the Reference Banks but a Reference Bank does not supply a
quotation by 11.30 a.m. (London time) two (2) Business Days prior to the
proposed Utilisation Date, the applicable LIBOR shall be determined on the
basis of the quotations of the remaining Reference Banks.
	 
	11.2	 	Market disruption

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	 	11.2.1	 	If a Market Disruption Event occurs in relation to a Loan, the
Agent shall promptly notify the Borrower and the Lenders of that
event and the rate of interest on each Lender’s share of that Loan
shall be the rate per annum which is the sum of:

	 	(a)	 	the Margin;
	 
	 	(b)	 	the rate notified to the Agent by that Lender as
soon as practicable and in any event before interest is due to
be paid in respect of that Loan, to be that which expresses as
a percentage rate per annum the cost to that Lender of funding
its participation in that Loan from whatever source it may
reasonably select; and
	 
	 	(c)	 	the Mandatory Cost, if any, applicable to that
Lender’s participation in the Loan.

	 	11.2.2	 	In this Agreement “Market Disruption Event” means:

	 	(a)	 	at or about noon two (2) Business Days prior to
the proposed Utilisation Date the Screen Rate is not available
and none or only one of the Reference Banks supplies a rate to
the Agent to determine LIBOR; or
	 
	 	(b)	 	before close of business in Paris two (2)
Business Days prior to the proposed Utilisation Date, the
Agent receives notifications from a Lender or Lenders (whose
participations in a Loan exceed thirty-five (35) per cent.
(35%) of that Loan) that the cost to it of obtaining matching
deposits in the Relevant Interbank Market would be in excess
of LIBOR.

	11.3	 	Alternative basis of interest or funding

	 	11.3.1	 	If a Market Disruption Event occurs and the Agent or the Borrower
so requires, the Agent and the Borrower shall enter into negotiations
(for a period of not more than forty five (45) days) with a view to
agreeing a substitute basis for determining the rate of interest.
	 
	 	11.3.2	 	Any alternative basis agreed pursuant to paragraph (a) above shall,
with the prior consent of all the Lenders and the Borrower, be
binding on all Parties.

	11.4	 	Break Costs

	 	11.4.1	 	The Borrower shall, within three (3) Business Days of demand by a
Finance Party, pay to that Finance Party its Break Costs attributable
to all or any part of a Loan or Unpaid Sum being paid by the Borrower
on a day other than the last day of an Interest Period for that Loan
or Unpaid Sum.
	 
	 	11.4.2	 	Each Lender shall, as soon as reasonably practicable after a demand
by the Agent, provide a certificate confirming the calculation of the
amount of its Break Costs for any Interest Period in which they
accrue.

	12.	 	FEES
	 
	12.1	 	Commitment fee

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	 	12.1.1	 	The Borrower shall pay to the Agent (for the account of each
Lender) a commitment fee computed at the rate of 50% of the Margin
then applicable on the Available Amount.
	 
	 	12.1.2	 	The accrued commitment fee is payable monthly in arrears on each
Reduction Date.

	12.2	 	Fee Letter
	 
	 	 	The Borrower shall pay to the Arranger, the Agent and the Technical Bank
the fees agreed in the Fee Letter in the amount and at the times
stipulated in the Fee Letter.

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

	13.	 	TAX GROSS UP AND INDEMNITIES
	 
	13.1	 	Definitions

	 	13.1.1	 	In this Agreement:
	 
	 	 	 	“Protected Party” means a Finance Party 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 Finance Document.
	 
	 	 	 	“Qualifying Lender” means a Lender which:

	 	(a)	 	has its Facility Office in France; or
	 
	 	(b)	 	fulfils the conditions imposed by French Law
taking into account, as the case may be, any double taxation
agreement (subject to the completion of any necessary
procedural formalities), in order for a payment not to be
subject to (or as the case may be, to be exempt from) any Tax
Deduction.

	 	 	 	“Tax Credit” means a credit against, relief or remission for, or
repayment of any Tax.
	 
	 	 	 	“Tax Deduction” means a deduction or withholding for or on account
of Tax from a payment under a Finance Document.
	 
	 	 	 	“Tax Payment” means an increased payment made by an Obligor to a
Finance Party under Clause 13.2 (Tax gross-up) or a payment under
Clause 13.3 (Tax indemnity).
	 
	 	 	 	“Treaty Lender” means a Lender which is entitled to a payment under
a double taxation agreement (subject to the completion of any
necessary procedural formalities) without a Tax Deduction.
	 
	 	13.1.2	 	Unless a contrary indication appears, in this Clause 13 a reference
to “determines” or “determined” means a determination made in the
absolute discretion of the person making the determination.

	13.2	 	Tax gross-up

	 	13.2.1	 	Each Obligor shall make all payments to be made by it without any
Tax Deduction, unless a Tax Deduction is required by law.
	 
	 	13.2.2	 	Each Obligor shall promptly upon becoming aware that it must make a
Tax Deduction (or that there is any change in the rate or the basis
of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender
shall notify the Agent on becoming so aware in respect of a payment
payable to that Lender. If the Agent receives such notification from
a Lender it shall notify the relevant Obligor.

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	 	13.2.3	 	If a Tax Deduction is required by law to be made by an Obligor, the
amount of the payment due from that Obligor 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.
	 
	 	13.2.4	 	That Obligor is not required to make an increased payment to a
Lender under paragraph 13.2.3 above for a Tax Deduction in respect of
tax imposed by France from a payment of interest on a Loan, if on the
date on which the payment falls due:

	 	(a)	 	the payment could have been made to the relevant
Lender without a Tax Deduction if it was a Qualifying Lender,
but on that date that Lender is not or has ceased to be a
Qualifying Lender other than as a result of any change after
the date it became a Lender under this Agreement in (or in the
interpretation, administration, or application of) any law or
double taxation agreement, or any published practice or
concession of any relevant taxing authority; or
	 
	 	(b)	 	the relevant Lender is a Treaty Lender and the
Obligor making the payment is able to demonstrate that the
payment could have been made to the Lender without the Tax
Deduction had that Lender complied with its obligations under
paragraph 13.2.7 below.

	 	13.2.5	 	If an Obligor is required to make a Tax Deduction, that Obligor
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.
	 
	 	13.2.6	 	Within thirty (30) Business Days of making either a Tax Deduction
or any payment required in connection with that Tax Deduction, the
Obligor making that Tax Deduction shall deliver to the Agent for the
Finance Party entitled to the payment evidence reasonably
satisfactory to that Finance Party that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to the relevant
taxing authority.
	 
	 	13.2.7	 	A Treaty Lender and the Obligor which makes a payment to which that
Treaty Lender is entitled shall co-operate in completing any
procedural formalities necessary for that Obligor to obtain
authorisation to make that payment without a Tax Deduction.

	13.3	 	Tax indemnity

	 	13.3.1	 	Each Obligor shall (within three (3) Business Days of demand by the
Agent) pay to a Protected Party an amount equal to the loss,
liability or cost which that Protected Party determines (on the basis
of justification to be communicated to the Borrower at his reasonable
request) will be or has been (directly or indirectly) suffered for or
on account of Tax by that Protected Party in respect of a Finance
Document.
	 
	 	13.3.2	 	Paragraph 13.3.1 above shall not apply:

	 	(a)	 	with respect to any Tax assessed on a Finance
Party:

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

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	 	(ii)	 	under the law of the jurisdiction in
which that Finance Party’s Facility 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 Finance Party; or
	 
	 	(b)	 	to the extent a loss, liability or cost:

	 	(i)	 	is compensated for by an increased
payment under Clause 13.2 (Tax gross-up); or
	 
	 	(ii)	 	would have been compensated for by an
increased payment under Clause 13.2 (Tax gross-up) but
was not so compensated solely because one of the
exclusions in paragraph 13.2.4 applied.

	 	13.3.3	 	A Protected Party making, or intending to make a claim under
paragraph (a) above shall promptly notify the Agent of the event
which will give, or has given, rise to the claim, following which the
Agent shall notify the relevant Obligor.
	 
	 	13.3.4	 	A Protected Party shall, on receiving a payment from the relevant
Obligor under this Clause 13.3, notify the Agent.

	13.4	 	Tax Credit
	 
	 	 	If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

	 	13.4.1	 	a Tax Credit is attributable to that Tax Payment; and
	 
	 	13.4.2	 	that Finance Party has obtained, utilised and retained that Tax Credit,

	 	 	the Finance Party shall pay an amount to that Obligor which that Finance
Party 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 made by
that Obligor.
	 
	13.5	 	Stamp taxes
	 
	 	 	The Borrower shall pay and, within three Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that
Finance Party incurs in relation to all stamp duty, registration and other
similar Taxes payable in respect of any Finance Document.
	 
	13.6	 	Value added tax

	 	13.6.1	 	All consideration expressed to be payable under a Finance Document
by any Party to a Finance Party shall be deemed to be exclusive of
any VAT. If VAT is chargeable, on any supply made by any Finance
Party to any Party in connection with a Finance Document, that Party
shall pay to the Finance Party (in addition to and at the same time
as paying the consideration) an amount equal to the amount of the
VAT.

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	 	13.6.2	 	Where a Finance Document requires any Party to reimburse a Finance
Party for any costs or expenses, that Party shall also at the same
time pay and indemnify the Finance Party against all VAT incurred by
the Finance Party in respect of the costs or expenses to the extent
that the Finance Party reasonably determines that it is not entitled
to credit or repayment of the VAT.

	14.	 	INCREASED COSTS
	 
	14.1	 	Increased costs

	 	14.1.1	 	Subject to Clause 14.3 (Exceptions) the Borrower shall, within
three Business Days of a demand by the Agent, pay for the account of
a Finance Party the amount of any Increased Costs incurred by that
Finance Party or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation after the
date of this Agreement or (ii) compliance with any law or regulation
made after the date of this Agreement.
	 
	 	14.1.2	 	In this Agreement “Increased Costs” means:

	 	(a)	 	a reduction in the rate of return from the
Facility or on a Finance Party’s (or its Affiliate’s) overall
capital;
	 
	 	(b)	 	an additional or increased cost; or
	 
	 	(c)	 	a reduction of any amount due and payable under
any Finance Document,

which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance
Party having entered into its Commitment or funding or performing
its obligations under any Finance Document.

	14.2	 	Increased cost claims

	 	14.2.1	 	A Finance Party intending to make a claim pursuant to Clause 14.1
(Increased costs) shall notify the Agent of the event giving rise to
the claim, following which the Agent shall promptly notify the
Borrower.
	 
	 	14.2.2	 	Each Finance Party shall, as soon as practicable after a demand by
the Agent, provide a certificate confirming the amount of its
Increased Costs.

	14.3	 	Exceptions
	 
	 	 	Clause 14.1 (Increased costs) does not apply to the extent any Increased Cost is:

	 	14.3.1	 	attributable to a Tax Deduction required by law to be made by an Obligor;
	 
	 	14.3.2	 	compensated for by Clause 13.3 (Tax indemnity) (or would have been
compensated for under Clause 13.3 (Tax indemnity) but was not so
compensated solely because one of the exclusions in paragraph (b) of
Clause 13.3 (Tax indemnity) applied);
	 
	 	14.3.3	 	compensated for by the payment of the Mandatory Cost; or

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	 	14.3.4	 	attributable to the wilful breach or gross negligence (faute grave)
by the relevant Finance Party or its Affiliates of any law or
regulation.

	15.	 	OTHER INDEMNITIES
	 
	15.1	 	Currency indemnity

	 	15.1.1	 	If any sum due from an Obligor under the Finance Documents (a
“Sum”), or any order, judgment or award given or made in relation to
a Sum, has to be converted from the currency (the “First Currency”)
in which that Sum is payable into another currency (the “Second
Currency”) for the purpose of:

	 	(a)	 	making or filing a claim or proof against the
Borrower;
	 
	 	(b)	 	obtaining or enforcing an order, judgment or
award in relation to any litigation or arbitration
proceedings,

	 	 	 	the relevant Obligor shall as an independent obligation within
three Business Days of demand, indemnify to the extent permitted by
law each Finance Party to whom that Sum is due against any cost,
loss or liability arising out of or as a result of the conversion
including any discrepancy between (A) the rate of exchange used to
convert that Sum from the First Currency into the Second Currency
and (B) the rate or rates of exchange available to that person at
the time of its receipt of that Sum.
	 
	 	15.1.2	 	The Obligors waive any right they may have in any jurisdiction to
pay any amount under the Finance Documents in a currency or currency
unit other than that in which it is expressed to be payable.

	15.2	 	Other indemnities
	 
	 	 	The Borrower shall, within 3 Business Days of demand, indemnify each
Finance Party against any cost, loss or liability incurred by that Finance
Party as a result of:

	 	15.2.1	 	the occurrence of any Event of Default;
	 
	 	15.2.2	 	a failure by an Obligor to pay any amount due under a Finance
Document on its due date;
	 
	 	15.2.3	 	funding, or making arrangements to fund, its participation in a
Loan requested by the Borrower in a Utilisation Request but not made
by reason of the operation of any one or more of the provisions of
this Agreement (other than by reason of default or negligence by that
Finance Party alone); or
	 
	 	15.2.4	 	a Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment given by the Borrower or the Facility not being
cancelled in accordance with a notice of cancellation given by the
Borrower.

	15.3	 	Indemnity to the Agent
	 
	 	 	The Borrower shall promptly indemnify the Agent against any cost, loss or
liability incurred by the Agent (acting reasonably) as a result of:

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	 	15.3.1	 	investigating any event which it reasonably believes is a Default;
or
	 
	 	15.3.2	 	acting or relying on any notice, request or instruction given by an
Obligor or a Finance Party which it reasonably believes to be
genuine, correct and appropriately authorised.

	16.	 	MITIGATION BY THE LENDERS
	 
	16.1	 	Mitigation

	 	16.1.1	 	Each Finance Party shall, in consultation with the Borrower, take
all reasonable steps to mitigate any circumstances which arise and
which would result in any amount becoming payable under or pursuant
to, or cancelled pursuant to, any of Clause 8.1 (Illegality), Clause
13 (Tax gross up and indemnities) Clause 14 (Increased costs) or
Schedule 5 (Mandatory Cost Formulae) including (but not limited to)
transferring its rights and obligations under the Finance Documents
to another Affiliate or Facility Office in a manner which would avoid
or minimize the circumstances in question and on terms acceptable to
the Agent and the Lenders.
	 
	 	16.1.2	 	Paragraph 16.1.1 above does not in any way limit the obligations of
the Obligors under the Finance Documents.

	16.2	 	Limitation of liability

	 	16.2.1	 	The Borrower shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of
steps taken by it under Clause 16.1 (Mitigation).
	 
	 	16.2.2	 	A Finance Party is not obliged to take any steps under Clause 16.1
(Mitigation) if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.

	17.	 	COSTS AND EXPENSES
	 
	17.1	 	Transaction expenses
	 
	 	 	The Borrower shall, within five (5) Business Days of demand, pay the
Agent, the Technical Bank and the Arranger the amount of all costs and
expenses (including legal and technical fees) reasonably incurred by any
of them in connection with the negotiation, preparation, printing,
execution, syndication and management of:

	 	17.1.1	 	the Facility, the Finance Documents and any other documents
referred to in this Agreement; and
	 
	 	17.1.2	 	any other Finance Documents executed after the date of this
Agreement.

	 	 	To the extent that such fees become payable on or before the first
Utilisation Date, the amount of such fees shall be set-off against the
amount of the first Utilisation. Fees incurred after the date of the first
Utilisation shall be paid by the Borrower to the Agent at the Agent’s
request.
	 
	 	 	The Borrower shall pay the initial fees relating to the preparation and
negotiation of the Facility and the Finance Documents and the initial
expertise fees charged by CEP in connection with

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	 	 	the due diligence of the Fields within the limits set forth in the term
sheet attached to the mandate letter dated 10 September 2004.
	 
	17.2	 	Amendment costs
	 
	 	 	If an Obligor requests an amendment, waiver or consent, the Borrower
shall, within five (5) Business Days of demand, reimburse the Agent for
the amount of all costs and expenses (including legal fees) reasonably
incurred by the Agent in responding to, evaluating, negotiating or
complying with that request or requirement.
	 
	17.3	 	Borrowing Base re-determination costs
	 
	 	 	All costs incurred in connection with the re-determination of the
Borrowing Base and due to the Independent Engineering Consultant shall be
borne by the Borrower and shall be repaid by the Borrower to the Agent,
within five (5) Business Days of demand.
	 
	 	 	To the extent that the Borrowing Base is increased after such fees have
been incurred, the amount of such fees shall be set-off against the amount
of the new Utilisation. Should this not be the case, the fees shall be
paid by the Borrower to the Agent, within five (5) Business Days of
demand.
	 
	17.4	 	Enforcement costs
	 
	 	 	The Borrower shall, within five (5) Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal fees)
incurred by that Finance Party in connection with the enforcement of, or
the preservation of any rights under, any Finance Document.

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SECTION 7

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

	18.	 	REPRESENTATIONS
	 
	 	 	Each Obligor makes the representations and warranties set out in this
Clause 18 to each Finance Party on the date of this Agreement. Such
representations and warranties will be deemed to be repeated on the date
of each Utilisation Request and on the first day of each Interest Period,
save as otherwise notified by the Borrower to the Agent, it being
understood that such notification shall in no way affect the rights of the
Lenders under Clause 23 (Events of Default).
	 
	18.1	 	Status

	 	18.1.1	 	It is a corporation, duly incorporated and validly existing under
the law of its jurisdiction of incorporation.
	 
	 	18.1.2	 	It and each of its Subsidiaries has the corporate power to own its
assets and carry on its business as it is being conducted.

	18.2	 	Binding obligations
	 
	 	 	The obligations expressed to be assumed by it in each Transaction Document
are legal, valid, binding and enforceable obligations, except to the
extent limited by debtors’ relief laws and general principles of equity.
	 
	18.3	 	Non-conflict with other obligations
	 
	 	 	The entry into and performance by it of, and the transactions contemplated
by, the Transaction Documents do not and will not conflict with:

	 	18.3.1	 	any law or regulation applicable to it;
	 
	 	18.3.2	 	its and each of its Subsidiaries’ constitutional documents; or
	 
	 	18.3.3	 	any material agreement or instrument binding upon it or any of its
Subsidiaries or any of its Subsidiaries’ assets.

	18.4	 	Power and authority
	 
	 	 	It has the corporate power to enter into, perform and deliver, and has
taken all necessary corporate action to authorise its entry into,
performance and delivery of, the Transaction Documents to which it is a
party and the transactions contemplated by those Transaction Documents.
	 
	18.5	 	Group
	 
	 	 	TRC holds, directly or indirectly, 100% of the shares of MOCE, MOCE holds,
directly or indirectly, 99.93% of the shares of MOF, MOF holds, directly
or indirectly,99.99% of the shares of the Borrower and MOCE holds,
directly or indirectly 0,01% of the shares of the Borrower.

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	18.6	 	Validity and admissibility in evidence
	 
	 	 	All Authorisations required or desirable:

	 	18.6.1	 	to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Transaction Documents to which it is a
party;
	 
	 	18.6.2	 	to make the Transaction Documents to which it is a party admissible
as evidence in each relevant jurisdiction; and
	 
	 	18.6.3	 	which are required to enable it to carry on its business as it is
being carried, except to the extent such failure to make, pay or
obtain the same could not reasonably be expected to have a Material
Adverse Effect.

	 	 	have been obtained or effected and are in full force and effect.
	 
	18.7	 	Governing law and enforcement

	 	18.7.1	 	The choice of French law as the governing law of the Finance
Documents (other than the U.S. Guarantees) and the choice of New York
law to governed the U.S. Guarantee will be recognised and enforced in
France and in the jurisdiction of incorporation of the Obligor, if
different.
	 
	 	18.7.2	 	Any judgment obtained in the jurisdiction of the governing law of
any Finance Document in relation to that Finance Document will be
recognised and enforced in France and in the jurisdiction of
incorporation of the Obligor, if different.

	18.8	 	Operating Agreements
	 
	 	 	The Borrower represents and warrants that the Operating Agreements are
valid and effective and have not been terminated or amended and the monies
expressed to be payable thereunder are payable in full. No written or oral
agreements exist between any persons which derogates to the obligations of
any party under the relevant Operating Agreement and there are no
circumstances which would entitle any such party to terminate an Operating
Agreement by reason of any failure to perform by the other party of its
obligations under that Operating Agreement save in the event of material
breach (inexécution fautive)
	 
	18.9	 	Licence
	 
	 	 	The Borrower represents and warrants that the Licence listed in Schedule 7
(Mining Titles) are validly held by the Borrower (or any of its
Subsidiaries).

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	18.10	 	Good Title to Assets and Authorisations

	 	18.10.1	 	The Borrower represents and warrants that it (or any of its
Subsidiaries) has valid, title, beneficial interest, Lease, Licence,
Mining Works Permit or other right permitting the exploration for or
production of oil and permitting it to operate and manage the Fields
in the manner in which the Fields are currently explored, operated
and managed and all the terms of any title, beneficial interest,
Lease, License or Mining Works Permit or other rights have been
complied with.
	 
	 	18.10.2	 	The Borrower represents and warrants that its titles or rights (or
the titles or rights any of its Subsidiaries) to operate the Fields
are free of any Encumbrance other than the security arising under the
Security Document.
	 
	 	18.10.3	 	The Borrower represents and warrants that it (or any of its
Subsidiaries) has valid, title, beneficial interest, Lease, Licence,
Mining Works Permit or other right, free of any Encumbrances (other
than the Security and those arising from law), to all or any of the
equipment currently used for the exploration of the Fields.

	18.11	 	Sale and Purchase Contracts
	 
	 	 	The Borrower represents and warrants that it (or any of its Subsidiaries)
is the owner of the oil at the time it is delivered to the Purchasers
under the Sale and Purchase Contracts, will be acting as a principal under
the Sale and Purchase Contracts and not as an agent or commission agent or
otherwise, and is the sole, lawful and beneficial owner of the rights
under the Sale and Purchase Contracts free from any Encumbrance. The Sale
and Purchase Contracts are in full force and effect and there are no
contracts, agreements or other arrangements in existence between the
Borrower (or any of its Subsidiaries) and the Purchasers which amend or
relate to the Sale and Purchase Contracts. The Purchasers will be notified
at the time of execution of the Master Receivables Assignment Agreement
that they are irrevocably instructed to pay all amounts due under the Sale
and Purchase Contracts exclusively to the Collection Account.
	 
	18.12	 	No default

	 	18.12.1	 	No Event of Default is continuing or might reasonably be expected
to result from the making of any Utilisation.
	 
	 	18.12.2	 	To the best of each Obligor’s knowledge, no other event or
circumstance is outstanding which constitutes a default under any
other agreement or instrument which is binding on it or any of its
Subsidiaries or to which its (or its Subsidiaries) assets are subject
which might have a Material Adverse Effect.

	18.13	 	No misleading information

	 	18.13.1	 	To the best of each Obligor’s knowledge, any factual information
provided by the Obligors to the Arranger, the Technical Bank or the
Agent was true and accurate in all material respects as at the date
it was provided or as at the date at which it is stated.
	 
	 	18.13.2	 	To the best of each Obligor’s knowledge, nothing has occurred or
been omitted from the information provided to the Arranger, the
Technical Bank or the Agent and no information has been given or
withheld that results in the information provided to the

- 41 -

 

	 	 	 	Arranger, the Technical Bank or the Agent being untrue or
misleading in any material respect.

	18.14	 	Financial statements

	 	18.14.1	 	The Borrower’s and TRC’s Original Financial Statements were
prepared in accordance with GAAP consistently applied.
	 
	 	18.14.2	 	The Borrower’s and TRC’s Original Financial Statements fairly
represent the Borrower’s or the Group’s, as the case may be,
financial condition and operations during the relevant financial year
and the quarterly management information delivered in accordance with
Clause 19.3 (Management information) fairly represents the financial
condition of the Borrower and operations during the relevant
financial year.

	18.15	 	Pari passu ranking
	 
	 	 	Each Obligor’s payment obligations under the Finance Documents rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred by
law applying to companies generally.
	 
	18.16	 	No proceedings pending or threatened
	 
	 	 	No litigation, arbitration or administrative proceedings before any court,
arbitral body or agency which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect have (to the best of its
knowledge and belief) been started or (to the best of its knowledge and
belief) been threatened against any Obligor or any of its Subsidiaries.
	 
	18.17	 	Strategic Stockpiling
	 
	 	 	The Borrower represents and warrants that it (or any of its Subsidiaries)
is not subject to article 2 of the Law n° 92-1443 dated 31 December 1992
on strategic stockpiling.
	 
	18.18	 	Compliance with laws
	 
	 	 	Each member of the Group, so far as it is aware, has performed and
observed all laws and regulations applicable to it, non compliance of
which could reasonably be expected to have a Material Adverse Effect.

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	18.19	 	Environment and Mining Law
	 
	 	 	Each member of the Group has at all times complied with all applicable
Environmental Law and Mining Law, non-compliance with which could
reasonably be expected to have a Material Adverse Effect and every
consent, authorisation, licence or approval required under or pursuant to
any Environmental Law and Mining Law by each member of the Group in
connection with the conduct of its business and the ownership, use,
exploitation or occupation of its assets the absence or lack of which
could reasonably be expected to have a Material Adverse Effect, has been
obtained and is in full force and effect. There has been no default in the
observance of the conditions and restrictions imposed in connection with
any of the same which default could reasonably be expected to have a
Material Adverse Effect, and to the knowledge of each member of the Group,
no circumstances have arisen which would entitle any person to revoke,
suspend, amend, vary, withdraw or refuse to amend any of the same.
	 
	18.20	 	Taxation
	 
	 	 	To the best of its knowledge, each Obligor’s has duly and punctually paid
and discharged all Taxes imposed upon it or its assets within the time
period allowed without incurring penalties (save to the extent that
payment is being contested in good faith).
	 
	18.21	 	Encumbrances
	 
	 	 	Save for Permitted Encumbrances, no Encumbrance exists over any of the
assets or rights located in France of any member of the Group.
	 
	18.22	 	Security
	 
	 	 	Each Security Document creates the Security which is expressed to be
created by that Security Document, evidences the Security it is expressed
to evidence and is binding and enforceable against it and any third party.
	 
	18.23	 	Solvency and insolvency proceedings
	 
	 	 	Neither the Obligors nor any of their Subsidiaries is unable or has
admitted inability to pay its debts as they fall due or has suspended
making payments on any of its debts or, by reason of actual or anticipated
financial difficulties, commenced negotiations with one or more of its
creditors with a view to rescheduling any of its indebtedness.
	 
	 	 	Neither the Obligors nor any of their Subsidiaries is insolvent in
accordance with applicable insolvency laws.
	 
	 	 	No moratorium has been declared in respect of any of the indebtedness of
an Obligor or any of its Subsidiaries.
	 
	 	 	None of the insolvency proceedings listed in Clause 23.7 (Insolvency
proceedings) affecting the Obligors or any of their Subsidiaries has
occurred.
	 
	18.24	 	Material Adverse Effect
	 
	 	 	Since 31 December 2003, no event or series of events that has or could be
expected to have a Material Adverse Effect has occurred.

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	18.25	 	ERISA

	 	18.25.1	 	Each Employee Plan is in compliance in form and operation in all
material respects with ERISA and the Code and all other applicable
laws and regulations save where any failure to comply would not
reasonably be expected to have a Material Adverse Effect.
	 
	 	18.25.2	 	Each Employee Plan which is intended to be qualified under Section
401(a) of the Code has been determined by the IRS to be so qualified
and nothing has occurred since the date of such determination that
would reasonably be expected to adversely affect such determination.
	 
	 	18.25.3	 	There exists no Unfunded Pension Liability with respect to any
Employee Plan, except as would not reasonably be expected to have a
Material Adverse Effect.
	 
	 	18.25.4	 	Neither a U.S. Obligor nor any ERISA Affiliate has incurred a
complete or partial withdrawal from any Multiemployer Plan, and if a
U.S. Obligor and each ERISA Affiliate were to withdraw in a complete
withdrawal as of the date hereof, the aggregate withdrawal liability
that would be incurred would not reasonably be expected to have a
Material Adverse Effect.
	 
	 	18.25.5	 	There are no actions, suits or claims pending against or involving
an Employee Plan (other than routine claims for benefits) which would
reasonably be expected either singly or in the aggregate to have a
Material Adverse Effect.
	 
	 	18.25.6	 	Each U.S. Obligor and each ERISA Affiliate have made all material
contributions to or under each such Employee Plan required by law
within the applicable time limits prescribed thereby and by the terms
of such Employee Plan, or any contract or agreement requiring
contributions to an Employee Plan, save where any failure to comply
would not reasonably be expected to have a Material Adverse Effect.
	 
	 	18.25.7	 	Neither a U.S. Obligor nor any ERISA Affiliate has ceased
operations at a facility so as to become subject to the provisions of
Section 4068(a) of ERISA, withdrawn as a substantial employer so as
to become subject to the provisions of Section 4063 of ERISA or
ceased making contributions to any Employee Plan subject to Section
4064(a) of ERISA to which it made contributions.
	 
	 	18.25.8	 	Neither a U.S. Obligor nor any ERISA Affiliate has incurred or
reasonably expects to incur any liability to the PBGC save for any
liability for premiums due in the ordinary course or other liability
which would not reasonably be expected to have a Material Adverse
Effect.

	18.26	 	Federal Reserve Regulations

	 	18.26.1	 	No U.S. Obligor is engaged nor will it engage principally, or as
one of its important activities, in the business of owning or
extending credit for the purpose of “buying” or “carrying” any Margin
Stock.
	 
	 	18.26.2	 	None of the proceeds of the Loans or other extensions of credit
under this Agreement will be used, directly or indirectly, for the
purpose of buying or carrying any Margin

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	 	 	 	Stock, for the purpose of reducing or retiring any Financial
Indebtedness that was originally incurred to buy or carry any
Margin Stock or for any other purpose which might cause all or any
Loans or other extensions of credit under this Agreement to be
considered a “purpose credit” within the meaning of Regulation U or
Regulation X.

	18.27	 	Investment Companies
	 
	 	 	No U.S. Obligor is an “investment company” or an “affiliated person” of an
“investment company” as such terms are defined in the Investment Company
Act of 1940 of the United States (the “1940 Act”) or otherwise subject to
regulation under the 1940 Act or subject to regulation under the Public
Utility Holding Company Act of 1935 of the United States, the Federal
Power Act of 1935 of the United States or the 1940 Act or any United
States federal or state statute or regulation restricting or limiting its
ability to incur indebtedness.
	 
	18.28	 	Anti-Terrorism Laws

	 	18.28.1	 	Neither the U.S. Obligors nor, to the knowledge of the U.S.
Obligors, any of their Affiliates, are in violation of any applicable
laws relating to terrorism or money laundering (“Anti-Terrorism
Laws”), including Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001 (the “Executive Order”), and the Uniting
and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.
	 
	 	18.28.2	 	Neither the U.S. Obligors nor, to the knowledge of the U.S.
Obligors, any of their Affiliates, or their respective brokers or
other agents acting or benefiting in any capacity in connection with
the Facility, are any of the following:

	 	(a)	 	a person or entity that is listed in the annex
to, or is otherwise subject to the provisions of, the
Executive Order;
	 
	 	(b)	 	a person or entity owned or controlled by, or
acting for or on behalf of, any person or entity that is
listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
	 
	 	(c)	 	a person or entity with which any Lender is
prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism law;
	 
	 	(d)	 	a person or entity that commits, threatens or
conspires to commit or supports “terrorism” as defined in the
Executive Order; or
	 
	 	(e)	 	a person or entity that is named as a “specially
designated national and blocked person” on the most current
list published by the U.S. Treasury Department Office of
Foreign Asset Control at its official website or any
replacement website or other replacement official publication
of such list;

	 	 	 	(any such person or entity, a “Prohibited Person or Entity”).
	 
	 	18.28.3	 	Neither the U.S. Obligors nor, to the knowledge of the U.S.
Obligors, any of their agents acting in any capacity in connection
with the Facility and the Finance Documents (i) conduct any business
or engages in making or receiving any

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	 	 	 	contribution of funds, goods or services to or for the benefit of
any person described in clause (b) above, (ii) deal in, or
otherwise engages in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order, or
(iii) engage in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.

	19.	 	INFORMATION UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 19 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
	 
	19.1	 	Financial statements

	 	19.1.1	 	TRC shall supply to the Agent in sufficient copies for all the Lenders:

	 	(a)	 	as soon as the same become available, but in any
event within one hundred eighty (180) days after the end of
each financial year the reference document established by TRC
in accordance with securities regulations applicable to it, or
its audited consolidated financial statements for that
financial year;
	 
	 	(b)	 	as soon as the same become available, but in any
event within forty-five (45) days after the end of each
financial quarter its non audited consolidated financial
statements for that financial quarter.

	 	19.1.2	 	The Borrower shall supply to the Agent in sufficient copies for all
the Lenders as soon as the same become available:

	 	(a)	 	as soon as the same become available, but in any
event within one hundred eighty (180) days after the end of
each financial year the reference document established by the
Borrower in accordance with securities regulations applicable
to it, or its audited consolidated financial statements for
that financial year; and
	 
	 	(b)	 	as soon as the same become available, but in any
event within ninety (90) days after the end of each financial
semester its non audited consolidated financial statements for
that financial semester.

	19.2	 	Requirements as to financial statements

	 	19.2.1	 	Each set of financial statements delivered by an Obligor pursuant
to Clause 19.1 (Financial statements) shall be certified by the Chief
Executive Officer or the Chief Financial Officer (each having power
to represent and bind the relevant Obligor) of that Obligor as fairly
representing its financial condition as at the date on which those
financial statements were drawn up.
	 
	 	19.2.2	 	Each Obligor shall procure that each set of financial statements of
that Obligor delivered pursuant to Clause 19.1 (Financial statements)
is prepared using GAAP, accounting practices and financial reference
periods consistent with those applied in the preparation of the
Original Financial Statements unless, in relation to any set of

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	 	 	 	financial statements, it notifies the Agent that there has been a
change in GAAP, the accounting practices or reference periods and
its auditors deliver to the Agent:

	 	(a)	 	a description of any change necessary for those
financial statements to reflect the GAAP, accounting practices
and reference periods upon which the Original Financial
Statements were prepared; and
	 
	 	(b)	 	sufficient information, in form and substance as
may be reasonably required by the Agent, to enable the Lenders
to determine whether Clause 20 (Financial covenants) has been
complied with and make an accurate comparison between the
financial position indicated in those financial statements and
the Original Financial Statements.

Any reference in this Agreement to those financial statements shall
be construed as a reference to those financial statements as
adjusted to reflect the basis upon which the Original Financial
Statements were prepared.

	19.3	 	Management information
	 
	 	 	The Borrower shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same become available, but in any event within ten
(10) days after the end of each Month:

	 	19.3.1	 	its Activity Report;
	 
	 	19.3.2	 	production summaries of the Fields (containing details of the
quantity of crude oil sold under the Sale and Purchase Contracts in
the relevant Month);
	 
	 	19.3.3	 	drilling and construction summaries relating to the Fields;
	 
	 	19.3.4	 	unaudited management accounts of the members of the Group having
rights in the Fields; and
	 
	 	19.3.5	 	any agreement or document relating to all hydrocarbon sales,
including shipping charges, bills of lading, other transport and
delivery documents and invoices in respect of the relevant quarter
relating to members of the Group having rights in the Fields when
relevant;

	 	 	all the above to be in form and substance reasonably satisfactory to the Agent.
	 
	19.4	 	Capital expenditure, operating expenses and partners’ budget
	 
	 	 	The Borrower shall promptly supply to the Agent (in sufficient copies for
all the Lenders if the Agent so requests) (a) all material agreements
executed after the date of this Agreement constituting capital expenditure
(with the corresponding “authorisations for expenditures” signed by the
Borrower and its partners, if any, in the association) or operating
expenses of the Group for works representing an amount exceeding USD
150,000 and (b) the annual budget approved by the partners of the Borrower
under the Joint Operating Agreements and any revision made to such annual
budget.
	 
	19.5	 	Mining Documents

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	 	 	The Borrower shall promptly supply to the Agent (in sufficient copies for
all the Lenders if the Agent so requests) a copy of (a) all material
documents relating to the Fields, the Licences or the Mining Works
Permits, addressed by the Borrower (or any of its Subsidiaries) or any
related company to any public authority or person acting in the name of
such authority or addressed to any person involved in any respect in the
operation of the Fields, notably joint holders of Licences and (b) all
material documents relating to the Fields, the Licences or the Mining
Works Permits addressed to the Borrower (or any of its Subsidiaries) or
any related company by any public authority or person acting in the name
of such authority, or by any person involved in any respect in the
operation of the Fields, notably joint holders of Licences.
	 
	19.6	 	Information: miscellaneous
	 
	 	 	The Borrower shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests):

	 	19.6.1	 	promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which are
current, threatened or pending against any member of the Group, and
which might, if adversely determined, have a Material Adverse Effect;
and
	 
	 	19.6.2	 	promptly, such further information regarding the financial
condition, business, assets (especially in relation to the assets
pledged or assigned under the Security Documents) and operations of
any member of the Group as any Finance Party (through the Agent) may
reasonably request.

	19.7	 	Notification of default

	 	19.7.1	 	Each Obligor shall notify the Agent of any Default (and the steps,
if any, being taken to remedy it) promptly upon becoming aware of its
occurrence.
	 
	 	19.7.2	 	Promptly upon a request by the Agent, the Borrower shall supply to
the Agent a certificate signed by a legal representative having power
to represent and bind the Borrower certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and
the steps, if any, being taken to remedy it).
	 
	 	19.7.3	 	The Borrower shall notify the Agent of any actual or, to its
knowledge, threatened material breach of, or material default under,
any of the Operating Agreements by any party thereto or the intention
of any party to an Operating Agreement to terminate or repudiate in
all or in part the Operating Agreement.

	19.8	 	New Fields
	 
	 	 	Upon obtaining any rights in a New Field, each Obligor shall promptly
inform the Agent an deliver to it any information relating to the New
Fields reasonably requested by the Agent.
	 
	19.9	 	ERISA-Related Information
	 
	 	 	The Borrower shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests):

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	 	19.9.1	 	promptly and in any event within fifteen (15) days after the U.S.
Obligor or any ERISA Affiliate files a Schedule B (or such other
schedule as contains actuarial information) to IRS Form 5500 in
respect of an Employee Plan with Unfunded Pension Liabilities, a copy
of such IRS Form 5500 (including the Schedule B); and
	 
	 	19.9.2	 	promptly and in any event within fifteen (15) days after the U.S.
Obligor or any ERISA Affiliate knows or has reason to know that any
ERISA Event which, individually or when aggregated with any other
ERISA Event, would reasonably be expected to have a Material Adverse
Effect has occurred, a written statement describing such ERISA Event
and the action, if any, which such U.S. Obligor or Affiliate proposes
to take with respect to such ERISA Event and a copy of any notice
filed with the PBGC or the IRS pertaining to such ERISA Event.

	20.	 	FINANCIAL COVENANTS
	 
	20.1	 	TRC shall ensure that the following financial ratios are complied with on
each Ratio Calculation Date:

	 	20.1.1	 	the Interest Costs Ratio shall not fall below 4; and
	 
	 	20.1.2	 	the Indebtedness Ratio shall not fall below 1;

	20.2	 	The Borrower shall ensure that the following financial ratios are
complied with on each Ratio Calculation Date:

	 	 	 	20.2.1 the ALCR shall not fall below 1.25;
	 
	 	 	 	20.2.2 the LLCR shall be at least equal to 1.15; and
	 
	 	 	 	20.2.3 the DSCR shall be at least equal to 1.10.

	20.3	 	Ratio Calculation Dates

	 	20.3.1	 	The Interest Costs Ratio and the Indebtedness Ratio shall be
calculated every six Months by the Agent on the basis of the audited
consolidated annual and quarterly financial statements of the Group
within five (5) Business Days of the delivery of such financial
statements in accordance with Clause 19.1 (a) and (b) (such date
being a Ratio Calculation Date).
	 
	 	20.3.2	 	The ALCR, LLCR and DSCR shall be determined on each 31 March and 30
September (or the next following Business Day of such day is not a
Business Day) (each such date being a Ratio Calculation Date). Such
ratios shall be sent by the Agent to the Lenders for approval by the
Majority Lenders fifteen (15) Business Days before such Ratio
Calculation Date. If Lenders representing more than the Majority
Lenders notify in writing their disagreement with the ratios
calculated by the Agent (such notification to be received by the
Agent at least ten (10) Business Days before the relevant Ratio
Calculation Determination Date), all the Lenders shall meet in order
to approve (on the basis of the decision of the Majority Lenders), at
the latest five (5) Business Days before the relevant Ratio
Calculation Date, the ALCR, LLCR and DSCR. Should the Lenders fail
to reach an agreement at the latest five (5) Business

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	 	 	 	Days before the relevant Ratio Calculation Date, the Technical
Bank, after consultation with the Borrower, shall appoint the two
other Determination Lenders at the latest three (3) Business Days
before the relevant Ratio Calculation Date. The ALCR, LLCR and DSCR
shall be conclusively determined by the Determination Lenders as
being the average of the ratios proposed by the three Determination
Lenders. Such ALCR, LLCR and DSCR shall be binding on the Borrowers
and the Finance Parties.
	 
	 	20.3.3	 	The ALCR, LLCR and DSCR may be recalculated on any other date at
the request of the Agent if this request (a) is based on a material
variation in production or in the amount of the Proved Reserves shown
in the most recent Consultant Report, a substantial adverse change in
economic conditions applicable to independent producers operating oil
fields in France and/or the Borrower’s (or its Subsidiaries’)
interests in France, (b) such event is likely to affect the ability
of the Borrower to meet its payment obligations under the Facility,
and (c) it is required by a Lender to the Agent.

	21.	 	GENERAL UNDERTAKINGS
	 
	 	 	The undertakings in this Clause 21 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
	 
	21.1	 	Authorisations
	 
	 	 	Each Obligor shall promptly:

	 	21.1.1	 	obtain, comply with and do all that is necessary to maintain in
full force and effect; and
	 
	 	21.1.2	 	supply certified copies to the Agent of,

	 	(a)	 	any Authorisation required to enable it to
perform its obligations under the Transaction Documents and to
ensure the legality, validity, enforceability or admissibility
in evidence in its jurisdiction of incorporation of any
Transaction Document; and
	 
	 	(b)	 	any Authorisation, licence or other right
required to enable it to carry out its business, trade and
ordinary activities, if failure to obtain, comply with and do
all that is necessary to maintain in full force and effect
could reasonably be expected to have a Material Adverse
Effect.

	21.2	 	Compliance with laws
	 
	 	 	Each Obligor shall comply (and shall makes its best effort so that each
member of the Group complies) with all regulations and laws to which it is
subject, if failure to do so could reasonably be expected to have a
Material Adverse Effect.

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	21.3	 	Environment and Mining Law
	 
	 	 	Each Obligor shall comply (and shall make its best effort so that each
member of the Group complies) with all applicable Environmental Laws and
Mining Laws, non-compliance, with which could reasonably be expected to
have a Material Adverse Effect, and every consent, authorisation, licence
or approval required under or pursuant to any Environmental Law and Mining
Law by each member of the Group in connection with the conduct of its
business and the ownership, use, exploitation or occupation of its assets,
the absence or lack of which could reasonably be expected to have a
Material Adverse Effect, shall be obtained and maintained in full force
and effect.
	 
	21.4	 	Payment of Taxes
	 
	 	 	Each Obligor shall pay and discharge all Taxes and governmental charges
payable by or assessed upon it prior to the date on which the same become
overdue unless, and only to the extent that, such Taxes and charges are
contested in good faith by appropriate proceedings, pending determination
of which payment may lawfully be withheld, and adequate provisions are
constituted with respect to any such Taxes or charges in accordance with
GAAP.
	 
	21.5	 	Financial Indebtedness and guarantees

	 	21.5.1	 	The Borrower and MOF shall not incur any new Financial Indebtedness
after the date of this Agreement other than Permitted Financial
Indebtedness or save if such new Financial Indebtedness is fully
subordinated to the Facility and if its main terms have been fully
disclosed to the Agent no later than ten (10) Business Days before
the date on which it is incurred.
	 
	 	21.5.2	 	TRC shall not incur any new Financial Indebtedness after the date
of this Agreement other than Permitted Financial Indebtedness or save
if its main terms have been fully disclosed to the Agent no later
than ten (10) Business Days before the date on which it is incurred
and if TRC complies with its obligations under paragraph 20.1.
	 
	 	21.5.3	 	The Borrower and MOF shall not grant, without the prior consent of
the Agent, any guarantee or indemnity (caution, aval ou garanties),
except (i) guarantees for the obligations of its Subsidiaries to the
extent such guarantees are granted in connection with the core
business of such Subsidiary, and (ii) guarantees granted in
connection with their core business for a maximum aggregate amount of
USD 500,000.

	21.6	 	Loans and dividends

	 	21.6.1	 	The Borrower shall not extend any loans other than loans authorised
as Permitted Financial Indebtedness provided they are made within the
interest of the Borrower.
	 
	 	21.6.2	 	MOF shall not extend any loans, save for loans to the Borrower
provided that such loans shall be fully subordinated to the Facility
and that their main terms shall be fully disclosed to the Agent no
later than five (5) Business Days before the date on which they are
incurred.

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	 	21.6.3	 	TRC shall not extend any loans save if the main terms of such loans
have been fully disclosed to the Agent no later than ten (10)
Business Days before the date on which they are incurred.
	 
	 	21.6.4	 	TRC shall not distribute preferred stock dividends to its
shareholders for an amount in aggregate in excess of USD 720,000 for
the year 2004 and USD 360,000 for the years thereafter, without prior
consent of the Agent.
	 
	 	21.6.5	 	TRC shall not distribute common stock dividends to its shareholders
for an amount in excess of an amount in aggregate equal to 25% of its
Net Profits less the amounts referred to in paragraph 21.6.4 above.

	21.7	 	Negative pledge

	 	21.7.1	 	MOF and the Borrower shall not (and shall ensure that none of their
Subsidiaries) create or permit to subsist any Encumbrance in respect
of Financial Indebtedness.
	 
	 	21.7.2	 	The Borrower shall not (and shall ensure that none of its
Subsidiaries will) create or permit to subsist any Encumbrance over
any rights arising of the Operating Agreements.
	 
	 	21.7.3	 	The Borrower shall not (and shall ensure that no other member of
the Group will):

	 	(a)	 	sell, transfer or otherwise dispose of any of its
rights arising of the Operating Agreements on terms whereby
they are or may be leased to or re-acquired by the Borrower or
any other member of the Group;
	 
	 	(b)	 	sell, transfer or otherwise dispose of any of its
receivables relating to any rights arising of the Operating
Agreements on recourse terms;
	 
	 	(c)	 	enter into any other preferential arrangement
having a similar effect;

	 	 	 	in circumstances where the arrangement or transaction is entered
into primarily as a method of raising Financial Indebtedness or of
financing the acquisition of an asset.
	 
	 	21.7.4	 	Paragraphs 21.7.1, 21.7.2 and 21.7.3 above do not apply to:

	 	(a)	 	any lien arising by operation of law and in the
ordinary course of trading in respect of any obligation which
is less than thirty (30) days overdue or which is being
contested in good faith and by appropriate means;
	 
	 	(b)	 	any right of set-off arising by operation of law;
	 
	 	(c)	 	any Encumbrance arising out of retention of title
provisions in a supplier’s standard conditions of supply in
respect of goods acquired by a member of the Group in the
ordinary course of trading;
	 
	 	(d)	 	any Security entered into pursuant to any Finance
Document;
	 
	 	(e)	 	any Encumbrance over or affecting any asset
acquired by a member of the Group after the date of this
Agreement if:

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	 	(i)	 	the Encumbrance was not created in
contemplation of the acquisition of that asset by a
member of the Group;
	 
	 	(ii)	 	the principal amount secured has not
been increased in contemplation of, or since the
acquisition of that asset by a member of the Group; and
	 
	 	(iii)	 	the Encumbrance is removed or
discharged within 2 months of the date of acquisition of
such asset;

	 	(f)	 	any Encumbrance over or affecting any asset of
any company which becomes a member of the Group after the date
of this Agreement, where the Encumbrance is created prior to
the date on which that company becomes a member of the Group,
if:

	 	(i)	 	the Encumbrance was not created in
contemplation of the acquisition of that company;
	 
	 	(ii)	 	the principal amount secured has not
increased in contemplation of or since the acquisition of
that company; and
	 
	 	(iii)	 	the Encumbrance is removed or
discharged within 2 months of that company becoming a
member of the Group;

	 	(g)	 	any Encumbrance securing indebtedness the
principal amount of which (when aggregated with the principal
amount of any other indebtedness which has the benefit of
Encumbrance given by any member of the Group other than any
permitted under paragraph (a) above (f)) does not exceed USD
500,000.

	21.8	 	Disposals
	 
	 	 	The Borrower shall not (and shall ensure that none of its Subsidiaries
will) enter into a single transaction or a series of transactions (whether
related or not) and whether voluntary or involuntary to sell, lease,
transfer or otherwise dispose of:

	 	21.8.1	 	any asset relating to the development, exploitation or management
of the Fields or any hydrocarbon producing asset relating to the
Fields each having a value exceeding USD 100,000, without the prior
written consent of the Agent;
	 
	 	21.8.2	 	any other interest or asset, if such event could reasonably be
expected to have a Material Adverse Effect, without prior written
information made to the Agent.

	21.9	 	Merger
	 
	 	 	No Obligor shall enter into any amalgamation, merger or corporate
reconstruction with entities other than members of the Group without the
prior written agreement of the Agent.
	 
	21.10	 	Change of business
	 
	 	 	Each Obligor shall make its best effort to procure that no substantial
change is made to the general nature of the business of each Obligor or
the Group from that carried on as at the date of this Agreement that could
reasonably be expected to have a Material Adverse Effect and the

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	 	 	operation of hydrocarbon fields remains the core activity of the Borrower
and the other members of the Group.
	 
	21.11	 	Insurance

	 	21.11.1	 	The Borrower (and its Subsidiaries) shall maintain insurances on
and in relation to its business, assets, production in the Fields
with reputable underwriters or insurance companies against those
risks, for the amounts and to the extent as is usual for companies
carrying on substantially the same business or owning the same assets
as the Borrower, and especially the Insurance Policy.
	 
	 	21.11.2	 	The Borrower (and its Subsidiaries) shall ensure that the
Insurance Proceeds under the Insurance Policy remain assigned to the
Finance Parties and that the insurance companies or brokers have been
notified the irrevocable instruction to pay all Insurance Proceeds
into the Collection Account.

	21.12	 	Change in constitutive documents and corporate status
	 
	 	 	No Obligor shall change its corporate status from that existing at the
date of this Agreement and shall not amend its constitutive documents nor
substantial terms if such change or amendment could reasonably be expected
to have a Material Adverse Effect without the prior written consent of the
Agent.
	 
	21.13	 	Consultant Report
	 
	 	 	The Borrower shall ensure that, save for the first Consultant Report, a
Consultant Report is delivered to the Technical Bank thirty (30) Business
Days before each Borrowing Base Determination Date or more frequently if
the Agent so requires.
	 
	21.14	 	Access
	 
	 	 	Each Obligor shall permit the Agent, the Technical Bank and any person
(being an accountant, auditor, solicitor, valuer or other professional
adviser of the Agent and/or the Technical Bank) authorised by the Agent
and the Technical Bank to have, at all reasonable times during normal
business hours and on reasonable notice, access to the property, premises
and accounting books and records of any member of the Group and to the
officers of any member of the Group, provided such is necessary in order
to ensure the proper execution of this Agreement or is considered
necessary by the Agent acting reasonably.
	 
	21.15	 	No Amendments to Sale and Purchase Contracts
	 
	 	 	The Borrower (and its Subsidiaries) shall not, without the prior consent
of the Agent, permit or suffer to occur any alteration or waiver of,
amendment to or departure from the terms of any Sale and Purchase
Contracts or avoid, release, rescind, terminate or otherwise cancel in
whole or in part (or agree to any of the foregoing or acquiesce in any of
the foregoing) any Sale and Purchase Contract provided that the Borrower
(and its Subsidiaries) shall be permitted to agree to minor alterations to
the terms of any Sale and Purchase Contracts if the same is required for
operational purposes and does not adversely affect any right of the
Finance Parties thereunder.

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	21.16	 	No modification to Operating Agreements

	 	21.16.1	 	The Borrower (and its Subsidiaries) shall not without the prior
written consent of the Agent initiate or consent to a modification or
termination of any of the Operating Agreements (other than the Sale
and Purchase Contracts), and shall ensure that no Operating Agreement
(other than the Sale and Purchase Contracts) will be amended or
terminated without the prior consent of the Agent, not to be
unreasonably withheld.
	 
	 	21.16.2	 	The Borrower (and its Subsidiaries) shall not initiate or consent
to a modification of the structure of ownership of the Licences,
Leases, as the case may be, and Mining Works Permit and other
interests relating to the Fields, without the prior consent of the
Agent, not to be unreasonably withheld.

	21.17	 	Compliance with Operating Agreements
	 
	 	 	The Borrower (and its Subsidiaries) will duly observe and perform all the
covenants, obligations and conditions which are required to be observed
and performed by it under the Operating Agreements to which it is party.
	 
	21.18	 	Sale and Purchase Contracts

	 	21.18.1	 	The Borrower (and its Subsidiaries) shall ensure that the Sale and
Purchase Contracts providing for the sale of 100% of the Fields
production attributable to the Borrower (and its Subsidiaries) are in
force at all times during the term of the Facility (such contract to
be for a duration equal to the term of the Facility and subject to a
prior notice of termination of at least ninety (90) days) and provide
for payments in EUR or in USD to the Collection Account.
	 
	 	21.18.2	 	Promptly upon, and in any event within two (2) Business Days of
receipt by the Borrower (or its Subsidiaries) thereof, the Borrower
(or its Subsidiaries) shall provide the Agent with copies of all
documents and communications given by any Purchaser to the Borrower
(or its Subsidiaries) in respect of any Sale and Purchase Contracts
which might reasonably be considered by the Agent to be material to
the assessment of the risk of non-performance by the Borrower (or its
Subsidiaries) and a Purchaser of any of their respective obligations
under the Sale and Purchase Contracts (or any of them) and any court
proceedings or arbitral tribunal constituted under or in relation to
the Sale and Purchase Contracts (or any of them) (as well as the
proceedings of such tribunal).
	 
	 	21.18.3	 	Promptly, and in all cases not less than two (2) Business Days
after becoming aware thereof, the Borrower (and its Subsidiaries)
shall inform the Agent of any material default or delay of
performance by a Purchaser under the Sale and Purchase Contracts and
deliver to the Agent a copy of any notices or advice issued by any
such party with respect to any circumstance which could have the
effect of delaying the delivery of or payment for hydrocarbons.
	 
	 	21.18.4	 	The Borrower (and its Subsidiaries) shall at all times comply with
all and any of its obligations under each of the Sale and Purchase
Contracts.
	 
	 	21.18.5	 	Promptly upon the execution by Borrower (or its Subsidiaries) of a
new Sale and Purchase Contract or of a renewal thereof, the Borrower
shall provide the Agent with a

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	 	 	 	certified copy of such Sale and Purchase Contract and shall
promptly carry out all perfection formalities to ensure that the
rights of the Borrower (or of its Subsidiaries) under such Sale and
Purchase Contract are assigned to the Lender and that the relevant
Purchaser is instructed to pay all sums due under such Sale and
Purchase Contract to be Collection Account.

	21.19	 	Payments under Sale and Purchase Contracts
	 
	 	 	The Borrower (and its Subsidiaries) shall ensure that (i) all invoices,
statements and other payment instructions delivered by the Borrower (or
its Subsidiaries) under the Sale and Purchase Contracts shall contain a
provision directing that all payments shall and may only be made by direct
deposit and transfer into the Collection Account and (ii) all the rights
of by the Borrower (or its Subsidiaries) to receive payments under any of
the Sale and Purchase Contracts remain assigned to the Agent (acting on
behalf of the Lenders).
	 
	21.20	 	Joint Venture Partners
	 
	 	 	No Obligor shall make any financial commitments to joint venture partners
without the prior consent of the Agent, if such commitments, if not met,
would be likely to affect the rights of the Borrower (or its Subsidiaries)
on the Fields.
	 
	21.21	 	Nomination of the operator of the Joint Operating Agreements
	 
	 	 	In the event that an Event of Default has occurred and is continuing and
the Agent (acting reasonably) considers that such Default derives from the
operatorship of the Fields, the Borrower (or its Subsidiaries) undertakes
to appoint without delay, at the request of the Agent and subject to the
relevant administrative authorisations and to approval of the other
members as provided for in the relevant Joint Operating Agreement, a
deputy operator agreed in writing by the Lenders in order to perform the
Joint Operating Agreements relating to the Fields in lieu of the Borrower
(or its Subsidiaries).
	 
	21.22	 	Hedge Agreements

	 	21.22.1	 	The Borrower (and its Subsidiaries) shall, immediately upon
entering into any Hedge Agreement, notify the Agent of the same and
provide a copy of such Hedge Agreement to the Agent.
	 
	 	21.22.2	 	The Borrower (and its Subsidiaries) shall (and undertakes to
procure that the other members of the Group shall):

	 	(a)	 	not enter into any Hedge Agreement other than (i)
those related to Petroleum which are entered into in the
course of its normal treasury management, (ii) those related
to interest rate or currency exposure which are entered into
in the course of its normal treasury management and (iii)
those that are in terms satisfactory to the Agent acting
reasonably;
	 
	 	(b)	 	not enter into any Hedge Agreement unless the
counterparty to such agreement is a Hedge Provider;

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	 	(c)	 	not enter into any Hedge Agreement providing for
hedge or swap of Petroleum the aggregate amount of which
exceeds 90% of the Borrower (and its Subsidiaries) estimated
monthly production of crude oil from the PDP Reserves as from
the date of any such Hedge Agreement until the maturity of
such Hedge Agreement;
	 
	 	(d)	 	not enter into any Hedge Agreement which provides
for a right for the Hedge Provider to set-off or net-off
amounts due to or from such Hedge Provider under such
agreement against amounts due to or from it under any other
agreement;
	 
	 	(e)	 	not enter into any Hedge Agreement which entitles
the counterparty thereto to terminate or close out such
agreement upon any relevant financial indebtedness (other than
financial indebtedness under such Hedge Agreement itself)
becoming capable of being terminated or being called due and
payable prior to its original maturity date (as distinct from
actually being so terminated or called due and payable); and
	 
	 	(f)	 	if at any time the yearly average forward curve
for Brent future (as determined by the London International
Petroleum Exchange (“IPE”) falls below (i) 28 USD per barrel
for the year 2005, (ii) 26 USD per barrel for the year 2006
and (iii) 25 USD per barrel for the years thereafter, the
Borrower shall promptly enter into and maintain at any time
thereafter Hedge Agreements (complying with requirements
provided in paragraphs (b) to (e) above) in relation to
Petroleum covering in aggregate at least 60% of the Borrower
(and its Subsidiaries) estimated monthly production of crude
oil from the PDP Reserves during the next 12 months as
determined by the Technical Bank on each Borrowing Base
Determination Date. Such Hedge Agreements will maintain the
Borrowing Base and shall be in terms reasonably satisfactory
to the Agent.

	21.23	 	Collection Account
	 
	 	 	The Borrower undertakes to operate the Collection Account in accordance
with the provisions of this Agreement and the Pledge over Account
Agreement.
	 
	21.24	 	New Fields
	 
	 	 	Upon obtaining any Licence, Lease, Mining Works Permit or other rights in
a New Field, the Borrower (and its Subsidiaries) shall, or shall procure,
that any security interest requested by the Agent, is promptly granted in
favour of the Finance Parties in form and substance reasonably
satisfactory to the Agent.
	 
	21.25	 	Further documents
	 
	 	 	Each Obligor shall, at the request of the Agent, take or procure that all
such actions are taken and execute or procure the execution of all such
documents as are, in the reasonably opinion of the Agent, necessary to
ensure that the Finance Parties preserve and benefit from all their rights
under the Finance Documents.
	 
	21.26	 	Federal Reserve Regulations

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	 	 	Each of the U.S. Obligors will guarantee the Facility without violating
Regulations T, U and X.
	 
	21.27	 	Compliance with ERISA

	 	21.27.1	 	No U.S. Obligor shall, or permit any of its ERISA Affiliates to,
(i) allow any Employee Plan with respect to which a U.S. Obligor or
any of its ERISA Affiliates may have any liability to terminate, (ii)
withdraw from any Employee Plan or Multiemployer Plan, (iii) allow
any ERISA Event to occur with respect to any Employee Plan, or (iv)
allow any Accumulated Funding Deficiency (as defined in Section 302
of ERISA and Section 412 of the Code) to exist involving any of its
Employee Plans; to the extent that any of the events described in
(i), (ii), (iii) or (iv), singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
	 
	 	21.27.2	 	No U.S. Obligor shall allow, or permit any of its ERISA Affiliates
to allow, an aggregate amount of Unfunded Pension Liability among all
Employee Plans (taking into account only Employee Plans with positive
Unfunded Pension Liability) or any potential withdrawal liability
under Section 4201 of ERISA, if the Borrower and its ERISA Affiliates
were to completely or partially withdraw from all Multiemployer
Plans, to the extent as would reasonably be expected to have a
Material Adverse Effect.
	 
	 	21.27.3	 	No U.S. Obligor shall fail, or permit any of its ERISA Affiliates
to fail, to comply in any material respect with ERISA or the related
provisions of the Code, if any such non-compliance, singly or in the
aggregate, would be reasonably be expected to have a Material Adverse
Effect.

	21.28	 	Compliance with 1940 Act
	 
	 	 	No U.S. Obligor shall (and the Borrower shall ensure that no other member
of the Group will) become an “investment company,” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment
company,” as such terms are defined in the 1940 Act. Neither the making
of any Loan, nor the guarantee of any Loan by any U.S. Obligor, nor the
consummation of the other transactions contemplated by this agreement will
violate any provision of the 1940 Act or any rule, regulation or order of
the SEC thereunder.
	 
	21.29	 	Anti-Terrorism Law
	 
	 	 	No U.S. Obligor shall (i) conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the
benefit of any Prohibited Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked
pursuant to the Executive Order or any other Anti-Terrorism Law, or (iii)
engage in or conspire to engage in any transaction that evades or avoids,
or has the purposes of evading or avoiding, or attempts to violate, any of
the prohibitions set forth in any Anti-Terrorism Law (and each U.S.
Obligor shall deliver to the Agent any certificate or other evidence
requested from time to time by the Agent in its reasonable discretion,
confirming such U.S. Obligor’s compliance with this Clause 21.29).

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	21.30	 	Embargoed Person
	 
	 	 	At all times through the Final Maturity Date no U.S. Obligor will cause or
permit that (a) any of the funds or properties of the U.S. Obligor that
are used directly to pay the U.S. Guarantees to constitute property of, or
be beneficially owned directly or indirectly by any person subject to
sanctions or trade restrictions under United States law that is identified
on the “List of Specially Designated Nationals and Blocked Persons”
maintained by the Office of Foreign Assets Control (OFAC) of the U.S.
Department of the Treasury and/or, to the knowledge of a U.S. Obligor, any
other similar list maintained by OFAC pursuant to any authorising statute
or Executive Order or regulation promulgated thereunder (an “Embargoed
Person”) or (b) any Embargoed Person to have a direct or indirect
interest, of any nature whatsoever in a U.S. Obligor, with the result that
either the investment in the U.S. Obligor (whether directly or indirectly)
is a violation of law by such U.S. Obligor, which violation of law would
result in a Material Adverse Effect or the Finance Documents are in
violation of law.
	 
	21.31	 	Anti-Money Laundering
	 
	 	 	At all times until the Final Maturity Date, to the best knowledge of each
U.S. Obligor (based upon reasonable inquiry by each U.S. Obligor), none of
the funds of the U.S. Obligor that are used to pay the U.S. Guarantees
shall be derived from any unlawful activity.
	 
	22.	 	GUARANTEE
	 
	22.1	 	Guarantee
	 
	 	 	In consideration of the Finance Parties entering into this Agreement, the
Guarantor irrevocably and unconditionally and jointly and severally:

	 	22.1.1	 	guarantees in accordance with articles 2011 et seq. of the French
Code civil and the terms of this Clause 22 (Guarantee) (as a caution
solidaire) to each Finance Party punctual performance by the Borrower
of all its payment obligations under the Finance Documents including
all interest accruing thereon and all fees, penalties, costs,
expenses, taxes and all other amounts incurred in connection
therewith (the “Guaranteed Obligations”); and
	 
	 	22.1.2	 	undertakes with each Finance Party that if and whenever the
Borrower fails to pay any amount due under or in connection with the
Guaranteed Obligations on its due date (whether at stated maturity,
by acceleration or at any other date) it will, acting as a caution
solidaire, immediately pay that amount to the Security Agent for the
account of the Finance Parties.

	22.2	 	Further guarantee provisions
	 
	 	 	The obligations of the under Clause 22.1 (Guarantee):

	 	22.2.1	 	will remain in full force and effect until the date on which all
amounts which may be or become due by the Borrower under or in
connection with any Finance Document have been irrevocably paid in
full;
	 
	 	22.2.2	 	are in addition to and are not in any way prejudiced by any other
security now or subsequently held by any Finance Party; and

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	 	22.2.3	 	will not be affected by any renewal or amendment of the Guaranteed Obligations.

	22.3	 	Waivers
	 
	 	 	The Guarantor irrevocably and expressly:

	 	22.3.1	 	waives any rights under article 2021 of the French Code civil
(bénéfice de discussion); by waiving its rights under article 2021 of
the French Code civil (bénéfice de discussion), the Guarantor accepts
and agrees that the Finance Parties may claim from it payment under
Clause 22.1 (Guarantee) without first requiring the Finance Parties
to proceed against or enforce any other rights or security or claim
payment from the Borrower;
	 
	 	22.3.2	 	waives any rights under article 2026 of the French Code civil
(bénéfice de division); by waiving its rights under article 2026 of
the French Code civil (bénéfice de division), the Guarantor accepts
and agrees that the Finance Parties may claim payment from it under
Clause 22.1 (Guarantee) of all the Guaranteed Obligations due and
remaining unpaid by the Borrower even if payment of the same amount
is guaranteed by other guarantors;
	 
	 	22.3.3	 	waives any rights of recourse prior to payment (recours avant
paiement) against the Borrower under article 2032 of the French Code
civil; and
	 
	 	22.3.4	 	waives any rights under article 2039 of the French Code civil to
take any action against the Borrower in the event of any extension of
the final repayment date of the Guaranteed Obligations or any other
date for payment of any amount due, owing or payable to any Finance
Party under any Guaranteed Obligation, even if decided without the
consent of the Guarantor, agrees that the guarantee will remain in
full force and effect notwithstanding such extension and acknowledges
that it will remain bound by the original maturity date of the
Guaranteed Obligations.

	22.4	 	No subrogation

	 	22.4.1	 	Until all amounts which may be or become payable by the Borrower
under or in connection with any of the Guaranteed Obligations have
been irrevocably paid in full, the Guarantor irrevocably and
expressly undertakes not to exercise any rights which it may have
(including its rights under article 2028 or under article 2033 of the
French Code civil):

	 	(a)	 	to be subrogated to or otherwise share in any
security or monies held, received or receivable by any Finance
Party or to claim any right of contribution in relation to any
payment made by the Guarantor under its guarantee;
	 
	 	(b)	 	to enforce any of its rights of subrogation and
indemnity against the Borrower or any other guarantor or
person.

	 	22.4.2	 	The Guarantor agrees that, to the extent that the agreement to
withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth in paragraph 22.4.1
above of this Clause 22.4 is found by any court of competent
jurisdiction to be void or voidable for any reason, any rights of
subrogation,

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	 	 	 	reimbursement, indemnification which the Guarantor may have against
the Borrower or under any security, and any rights of contribution
which the Guarantor may have against the Borrower shall be junior
and subordinate to:

	 	(a)	 	any rights any Finance Party may have against the
Borrower;
	 
	 	(b)	 	all right, title and interest which any Finance
Party may have in any such security; and
	 
	 	(c)	 	any right which any Finance Party may have
against the Borrower to use, sell or dispose of any item of
security as it sees fit without regard to any subrogation
rights which the Guarantor may have and, upon such disposal or
sale, any rights of subrogation which the Guarantor may have
had shall terminate.

	 	22.4.3	 	If any amount is paid to the Guarantor on account of any such
subrogation, reimbursement or indemnification rights at any time when
all relevant Guaranteed Obligations have not been paid in full, those
amounts shall be held for the benefit of the Finance Parties and
shall forthwith be paid over to the Finance Parties to be credited
and applied against such Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of this guarantee.

	22.5	 	No security
	 
	 	 	The Guarantor expressly agrees and accepts that, until all amounts which
may be or become due by the Borrower under or in connection with any
Guaranteed Obligation have been irrevocably paid in full, it shall not
take or accept any security interest of whatever nature on the assets of
the Borrower.
	 
	22.6	 	No benefit of payment deferrals
	 
	 	 	The Guarantor expressly agrees and accepts that it shall not invoke
against any Finance Party the benefit of any payment deferral or payment
reduction that the Borrower could obtain pursuant to a judgment inter alia
under article 1244-1 of the French Code civil or Title II of Book Sixth of
the French Code de commerce, even with the consent of the Finance Parties.
	 
	22.7	 	Continuing guarantee

	 	22.7.1	 	The Guarantor expressly agrees and accepts that its obligations
under this Guarantee are and will remain in full force and effect,
notwithstanding (i) any moratorium, insolvency or liquidation
proceedings (including any redressement judiciaire or liquidation
judiciaire) or any analogous proceedings concerning the Borrower and
any Obligor, (ii) any change in or suspension or termination of the
de facto or de jure links or relationships which exist or may exist
between itself and the Borrower and any Obligor, (iii) any change in
its legal form or in the legal form of the Borrower, an Obligor
and/or any Finance Party, or (iv) any merger or corporate
reconstruction of the Guarantor, the Borrower, an Obligor and/or any
Finance Party with any other person. In particular, the Guarantee
under Clause 22 (Guarantee) shall remain in full force and effect
notwithstanding any merger (fusion), demerger (scission) or partial
contribution of assets (apport partiel d’actifs) concerning the
Guarantor, the Borrower,

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	 	 	 	an Obligor and/or any Finance Party and in any such event any such
guarantee shall continue to cover all relevant Guaranteed
Obligations including those due under debts created under the
Finance Documents after any such reorganisation events.
	 
	 	22.7.2	 	The Guarantor:

	 	(a)	 	expressly represents and warrants that it is
fully aware of the business, financial condition and affairs
of the Borrower;
	 
	 	(b)	 	expressly represents and warrants it has made,
and expressly accepts and agrees that it will continue to
make, its own personal and independent appraisal of all risks
arising under or in connection with the Finance Documents
(including the legal situation, the state of the business,
financial condition and affairs of the Borrower and the nature
and extent of any recourse against any party or its assets)
and its obligations under its guarantee;
	 
	 	(c)	 	expressly represents and warrants that it has not
relied on any information supplied to it by any Finance Party
in connection with any Finance Document in this regard;
	 
	 	(d)	 	acknowledges that neither the legal situation,
the business, financial conditions and affairs of the
Borrower nor any other guarantee granted as security for the
Guaranteed Obligations is a determining condition of the issue
of the Guarantee; and
	 
	 	(e)	 	expressly accepts and agrees that, except to the
extent provided for by article L. 313-22 of the French Code
monétaire et financier relating to the annual information of
guarantors, no Finance Party shall have any obligation to
inform it as to (1) the legal situation, the state of the
business, financial condition and affairs of the Borrower or
(2) any extension of the final repayment date of any
Guaranteed Obligations or any other date for payment of any
amount due, owing or payable to any Finance Party under any
Finance Document or any payment deferral thereunder or any
renewal thereof or any default thereon.

	23.	 	EVENTS OF DEFAULT
	 
	 	 	Each of the events or circumstances set out in Clause 23 (Events of
Default) is an Event of Default.
	 
	23.1	 	Non-payment
	 
	 	 	An Obligor does not pay on the due date any amount payable pursuant to a
Finance Document at the place and in the currency in which it is expressed
to be payable unless:

	 	23.1.1	 	with respect to a Borrowing Base Deficiency, payment is made within
sixty (60) days after the Borrowing Base Deficiency has occurred; and
	 
	 	23.1.2	 	with respect to any other payment obligation, the failure to pay is
caused by administrative or technical error and payment is made
within three (3) Business Days of its due date.

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	23.2	 	Financial covenants

	 	23.2.1	 	Any requirement of Clause 20.1 is not satisfied and is not remedied
within thirty (30) Business Days.
	 
	 	23.2.2	 	Any requirement of Clause 20.2 is not satisfied and is not remedied
within fifteen (15) Business Days.

	23.3	 	Other obligations
	 
	 	 	An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 23.1 (Non-payment) and Clause 23.2
(Financial covenants)), and such is not remedied within ten (10) Business
Days following such non-compliance if such event is capable of remedy.
	 
	23.4	 	Misrepresentation
	 
	 	 	Any representation or statement made or deemed to be made by an Obligor in
the Finance Documents or any other document delivered by or on behalf of
an Obligor under or in connection with any Finance Document is or proves
to have been incorrect or misleading in any material respect when made or
deemed to be made and remains inaccurate for a period of ten (10) days
after the relevant Obligor has become aware of the said inaccuracy if such
event is capable of remedy.
	 
	23.5	 	Cross default

	 	23.5.1	 	Any Financial Indebtedness of any member of the Group is not paid
when due nor within any originally applicable grace period.
	 
	 	23.5.2	 	Any Financial Indebtedness of any member of the Group is declared
to be or otherwise becomes due and payable prior to its specified
maturity as a result of an event of default (however described).
	 
	 	23.5.3	 	Any commitment for any Financial Indebtedness of any member of the
Group is cancelled or suspended by a creditor of any member of the
Group as a result of an event of default (however described).
	 
	 	23.5.4	 	Any creditor of any member of the Group becomes entitled to declare
any Financial Indebtedness of any member of the Group due and payable
prior to its specified maturity as a result of an event of default
(however described).
	 
	 	23.5.5	 	No Event of Default will occur under this Clause 23.5 if (i) the
aggregate amount of Financial Indebtedness or commitment for
Financial Indebtedness falling within paragraphs 23.5.1 to 23.5.3
above for (x) the Borrower is less than USD 1,000,000 (or its
equivalent in any other currency) or (y) the Group is less than USD
2,000,000 (or its equivalent in any other currency), or (ii) the
anticipated termination of such Financial Indebtedness is contested
in good faith by the relevant member of the Group before the
competent jurisdiction (such contestation not to be abusive and to be
justified to the Agent by all relevant documents), unless the
Financial Indebtedness

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	 	 	 	concerned is due to a Lender, in which case an Event of Default will occur immediately.

	23.6	 	Insolvency

	 	23.6.1	 	A member of the Group is unable or admits inability pursuant to any
insolvency proceedings to pay its debts as they fall due, suspends
making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one
or more of its creditors with a view to rescheduling any of its
indebtedness.
	 
	 	23.6.2	 	An Obligor or any member of the Group is in a state of cessation
des paiements or becomes insolvent for the purpose of any applicable
insolvency law.
	 
	 	23.6.3	 	A moratorium is declared in respect of any indebtedness of any
member of the Group provided that such would have a Material Adverse
Effect.

	23.7	 	Insolvency proceedings

	 	23.7.1	 	Any corporate action, legal proceedings or other procedure or step
is taken in relation to:

	 	(a)	 	the suspension of payments, a moratorium of any
indebtedness, winding-up, dissolution, administration or
reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of any member of the Group;
	 
	 	(b)	 	a composition, assignment or arrangement with any
creditor of any member of the Group;
	 
	 	(c)	 	the appointment of a liquidator, receiver,
administrator, administrative receiver, compulsory manager or
other similar officer in respect of any member of the Group or
any of its assets;
	 
	 	(d)	 	enforcement of any Encumbrance over any assets of
any member of the Group, exceeding in aggregate USD 500,000.

	 	23.7.2	 	An Obligor or any member of the Group commences proceedings for
règlement amiable in accordance with articles L.611-3 to L.611-6 of
the French Code de Commerce or any other relevant regulation.
	 
	 	23.7.3	 	A judgement for redressement judiciaire, cession totale de
l’entreprise or liquidation judiciaire is entered in relation to an
Obligor or any member of the Group under articles L.620-1 to L.628-3
of the French Code de Commerce or any other relevant regulation.

	23.8	 	Creditors’ process
	 
	 	 	Any enforcement proceedings, or any expropriation, attachment,
sequestration, distress or execution affects any asset or assets of a
member of the Group.

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	23.9	 	Delisting
	 
	 	 	All or part of the shares of TRC cease to be listed on the Nasdaq unless
such shares are listed on the New York Stock Exchange or the American
Stock Exchange instead of the Nasdaq.
	 
	23.10	 	Material Adverse Effect
	 
	 	 	Any event or series of events occur which, in the reasonable opinion of
the Lenders, has or could be expected to have a Material Adverse Effect.
	 
	23.11	 	Operating Agreements
	 
	 	 	Any of the Operating Agreements is terminated, repudiated or amended
without the prior consent of the Agent, or any party to an Operating
Agreement is in breach of a material provision of an Operating Agreement
and such breach, provided that it could not be expected to have a Material
Adverse Effect, has not been remedied within ten (10) days and is capable
of remedy.
	 
	23.12	 	Consultant Report
	 
	 	 	The latest Consultant Report delivered to the Agent evidences that it is
unlikely that the Borrower will be able to repay the Outstanding Amount in
full on the Final Maturity Date and no satisfactory alternative comfort
is, in the opinion of the Agent (acting on the instructions of all the
Lenders), provided to the Lenders within thirty (30) Business Days of the
date of such Consultant Report.
	 
	23.13	 	Cessation of business
	 
	 	 	An Obligor shall suspend, cease or threaten to suspend or cease to carry
on all or a substantial part of its business where such event could
reasonably be expected to have a Material Adverse Effect.
	 
	23.14	 	Security

	 	23.14.1	 	An Obligor fails duly to perform or comply with any of the
obligations assumed by it in the Security Documents.
	 
	 	23.14.2	 	At any time any of the Security is or becomes unlawful or is not,
or ceases to be legal, valid, binding or enforceable or otherwise
ceases to be effective.

	23.15	 	Licences

	 	23.15.1	 	A Licence, Lease or Mining Works Permit held or jointly held by
the Borrower (or its Subsidiaries) ceases to be held by the Borrower
(or its Subsidiaries), for any reason, including withdrawal of the
Licence, Lease or Mining Works Permit by the relevant public
authority or renunciation of the Lease, Licence or Mining Works
Permit by the Borrower (or its Subsidiaries).
	 
	 	23.15.2	 	Oil reserve is found following the exploration activities in the
area relating to an exploration Licence (permis exclusif de
recherche) listed in Schedule 7 (Mining Titles) and the Borrower (or
its Subsidiaries) fails to promptly apply for a concession right
(concession) relating to that area and/or fails to obtain the
granting of a concession 

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	 	 	 	(concession) for the exploitation of such field within
the usual time frame for obtaining such concession right
(concession).
	 
	 	23.15.3	 	For the avoidance of doubt, no Event of Default will occur in the
case of the expiry an exploration Licence (permis exclusif de
recherche) listed in Schedule 7 (Mining Titles) at its normal date of
expiry, such as provided in the documents awarding that Licence.

	23.16	 	Expropriation
	 
	 	 	Any material assets of an Obligor are compulsorily purchased or
expropriated or the applicable governmental authority makes an order for
the compulsory purchase or expropriation of the same and such would
reasonably be expected to have a Material Adverse Effect.
	 
	23.17	 	State of crisis
	 
	 	 	Any applicable governmental authority takes restrictive provisions on the
import or export of Petroleum in accordance with article 11 of the Law n°
92-1443 dated 31 December 1992 or takes measures relating to energy
savings in accordance with law n° 74-908 dated 29 October 1974 where such
event could be expected to have a Material Adverse Effect, and such would
reasonably be expected to have a Material Adverse Effect.
	 
	23.18	 	Sale and Purchase Contracts
	 
	 	 	At any time, any Sale and Purchase Contract ceases to be in full force and
effect or a Purchaser does not pay any receivables due and payable
thereunder into the Collection Account or otherwise in accordance with the
instructions of the Agent.
	 
	23.19	 	Acceleration
	 
	 	 	On and at any time after the occurrence of an Event of Default which is
continuing and which is not remedied within five (5) Business Days as from
the date of occurrence of that Event of Default and for the Borrowing Base
Deficiency as stated in Clause 6.3 (Borrowing Base Deficiency), the Agent
may without mise en demeure or any other judicial or extra judicial step,
and shall if so directed by the Majority Lenders, by notice to the
Borrower but subject to the mandatory provisions of articles L.620-1 to
L.628-3 of the French Code de Commerce:

	 	23.19.1	 	cancel the Total Commitments whereupon they shall immediately be
cancelled; and/or
	 
	 	23.19.2	 	declare that all or part of the Loans, together with accrued
interest, and all other amounts accrued or outstanding under the
Finance Documents be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
	 
	 	23.19.3	 	exercise all or any of its rights under this Agreement, or the
Security Documents.

	24.	 	COLLECTION ACCOUNT
	 
	24.1	 	Payments on the Collection Account
	 
	 	 	For so long as all obligations of the Obligors under the Finance Documents
have not been discharged in full, the Borrower shall (a) maintain the
Collection Account, (b) direct all debtors
of the monies relating to the Assigned Rights to transfer the Assigned
Rights into the

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	 	 	Collection Account, and (c) ensure that all the monies
relating to the Assigned Rights are paid directly into the Collection
Account.
	 
	24.2	 	Operation of the Collection Account

	 	24.2.1	 	The Borrower shall ensure that, at any time after the Grace Period,
the Collection Account Balance shall be at least equal to the Minimum
Balance.
	 
	 	24.2.2	 	In addition to its obligations under paragraph 24.2.1 above, the
Borrower shall ensure that not later than three (3) Business Days
prior to each Reduction Date, the Collection Account Balance shall be
at least equal to the amount of the Loans, interest, fees, costs and
other sums due and payable on that Reduction Date, plus, after the
Grace Period, the Minimum Balance.
	 
	 	24.2.3	 	The Borrower shall not be entitled to receive, withdraw or
otherwise transfer the Collection Account Balance (or any part
thereof) provided that, if, at any time:

	 	(a)	 	all sums due on such date under the Finance
Documents, the Insurance Policy and the Hedge Agreements have
been irrevocably paid in full;
	 
	 	(b)	 	no Default shall have occurred and be continuing;
	 
	 	(c)	 	the Loan Life Cover Ratio at the latest Ratio
Calculation Date is not less than 1.2;
	 
	 	(d)	 	the Asset Life Cover Ratio at the latest Ratio
Calculation Date is not less than 1.3;
	 
	 	(e)	 	the Debt Service Cover Ratio at the latest Ratio
Calculation Date is not less than 1.15;
	 
	 	(f)	 	no Borrowing Base Deficiency exists as at such
date which has not been remedied in accordance with Clause 6.4
(Borrowing Base Deficiency); and
	 
	 	(g)	 	the Agent determines, in its absolute and sole
discretion, that the Borrower will be able to meet all of its
repayment obligations under this Agreement at the appropriate
time,

then the Agent shall transfer into the Borrower’s current account
(of which the Collection Account is a sub-division) an amount equal
to the Collection Account Balance minus, after the Grace Period,
the Minimum Balance.

	24.3	 	Operational Lockup
	 
	 	 	If at any time:

	 	24.3.1	 	the Loan Life Cover Ratio at the latest Ratio Calculation Date is less than 1.2; or,
	 
	 	24.3.2	 	the Asset Life Cover Ratio at the latest Ratio Calculation Date is less than 1.3; or
	 
	 	24.3.3	 	the Debt Service Cover Ratio at the latest Ratio Calculation Date
is less than 1.15; or

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	 	24.3.4	 	a Borrowing Base Deficiency exists which has not been remedied,
	 
	 	 	 	the funds standing to the credit of the Collection Account may only
be withdrawn by the Borrower in the following circumstances:

	 	(a)	 	the Borrower has provided a satisfactory detailed
budget for the current quarterly period including expected
expenses and revenues for the operations of the Fields (the
“Operational Budget") to the Agent;
	 
	 	(b)	 	the Operational Budget has been approved by the
Majority Lenders, acting reasonably;
	 
	 	(c)	 	the Borrower has provided to the Agent invoices
corresponding to the expenses appearing in the Operational
Budget (the “Agreed Expenses”); and
	 
	 	(d)	 	the funds withdrawn by the Borrower from the
Collection Account will be directly applied by the Agent
towards payment of Agreed Expenses.

	24.4	 	Remuneration of the Collection Account
	 
	 	 	The Collection Account Balance shall bear interest, (i) for amounts in
USD, at the rate of Federal Funds minus 0.25 % and (ii) for amounts in
EUR, at the rate of EONIA (European Overnight Index Average) minus 0.25 %.

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SECTION 8

CHANGES TO PARTIES

	25.	 	CHANGES TO THE LENDERS
	 
	25.1	 	Assignments and transfers by the Lenders

	 	25.1.1	 	Subject to this Clause 25, a Lender (the “Existing Lender”) may:

	 	(a)	 	assign any of its rights; or
	 
	 	(b)	 	transfer any of its rights (including such as
relate to that Lender’s participation in each Loan) and
obligations,

	 	 	 	to another bank or financial institution (the “New Lender”).
	 
	 	25.1.2	 	The consent of the Finance Parties is hereby given to a transfer by
an Existing Lender to a New Lender.

	25.2	 	Conditions of assignment or transfer

	 	25.2.1	 	The consent of the Borrower is required for an assignment or
transfer by a Lender, provided that:

	 	(a)	 	in the case of an assignment, no consent is
required if the assignment is to another Lender or an
Affiliate of a Lender, and
	 
	 	(b)	 	the Borrower hereby consents to a transfer to
another Lender or an Affiliate of a Lender.

	 	25.2.2	 	The consent of the Borrower to an assignment or transfer must not
be unreasonably withheld or delayed. The Borrower will be deemed to
have given its consent five (5) Business Days after the Lender has
requested it unless consent is expressly refused by the Borrower
within that time.
	 
	 	25.2.3	 	The consent of the Borrower to an assignment or transfer must not
be withheld solely because the assignment or transfer may result in
an increase to the Mandatory Cost.
	 
	 	25.2.4	 	An assignment will only be effective as among the Finance Parties
on receipt by the Agent of written confirmation from the New Lender
(in form and substance satisfactory to the Agent) that the New Lender
has become entitled to the same rights and will assume the same
obligations to the other Finance Parties as it would have been under
if it was an Original Lender.
	 
	 	25.2.5	 	A transfer will only be effective if the procedure set out in
Clause 25.4 (Procedure for transfer) is complied with.

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	 	25.2.6	 	If:

	 	(a)	 	a Lender assigns or transfers any of its rights
or obligations under the Finance Documents or changes its
Facility Office; and
	 
	 	(b)	 	as a result of circumstances existing at the date
the assignment, transfer or change occurs, the Borrower would
be obliged to make a payment to the New Lender or Lender
acting through its new Facility Office under Clause 13 (Tax
gross up and indemnities) or Clause 14 (Increased costs),

then the New Lender or Lender acting through its new Facility
Office is only entitled to receive payment under those Clauses to
the same extent as the Existing Lender or Lender acting through its
previous Facility Office would have been if the assignment,
transfer or change had not occurred.

	25.3	 	Limitation of responsibility of Existing Lenders

	 	25.3.1	 	Unless expressly agreed to the contrary, an Existing Lender makes
no representation or warranty and assumes no responsibility to a New
Lender for:

	 	(a)	 	the legality, validity, effectiveness, adequacy
or enforceability of the Finance Documents or any other
documents;
	 
	 	(b)	 	the financial condition of the Obligors;
	 
	 	(c)	 	the performance and observance by the Obligors of
their obligations under the Finance Documents or any other
documents; or
	 
	 	(d)	 	the accuracy of any statements (whether written
or oral) made in or in connection with any Finance Document or
any other document,

	 	 	 	and any representations or warranties implied by law are excluded.
	 
	 	25.3.2	 	Each New Lender confirms to the Existing Lender and the other
Finance Parties that it:

	 	(a)	 	has made (and shall continue to make) its own
independent investigation and assessment of the financial
condition and affairs of the Obligors and its related entities
in connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by
the Existing Lender in connection with any Finance Document;
and
	 
	 	(b)	 	will continue to make its own independent
appraisal of the creditworthiness of the Obligors and their
related entities whilst any amount is or may be outstanding
under the Finance Documents or any Commitment is in force.

	 	25.3.3	 	Nothing in any Finance Document obliges an Existing Lender to:

	 	(a)	 	accept a re-transfer from a New Lender of any of
the rights and obligations assigned or transferred under this
Clause 25; or

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	 	(b)	 	support any losses directly or indirectly
incurred by the New Lender by reason of the non-performance by
the Obligors of their obligations under the Finance Documents
or otherwise.

	25.4	 	Procedure for transfer

	 	25.4.1	 	Subject to the conditions set out in Clause 25.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph 25.4.2 below when the Agent executes a duly completed
Transfer Agreement delivered to it by the Existing Lender and the New
Lender. The Agent shall, as soon as reasonably practicable after
receipt by it of a duly completed Transfer Agreement appearing on its
face to comply with the terms of this Agreement and delivered in
accordance with the terms of this Agreement, execute that Transfer
Agreement.
	 
	 	25.4.2	 	By virtue of the execution of a Transfer Agreement, as from the
Transfer Date:

	 	(a)	 	to the extent that in the Transfer Agreement the
Existing Lender seeks to transfer its rights and obligations
under the Finance Documents, the Existing Lender shall be
discharged to the extent provided for in the Transfer
Agreement from further obligations towards the Borrower and
the other Finance Parties under the Finance Documents;
	 
	 	(b)	 	the rights and obligations of the Existing Lender
with respect to the Borrower shall be transferred to the New
Lender, to the extent provided for in the Transfer Agreement;
	 
	 	(c)	 	the Agent, the Arranger, the New Lender and other
Lenders shall have the same rights and obligations between
themselves as they would have had had the New Lender been an
Original Lender with the rights and/or obligations to which it
is entitled and subject as a result of the transfer and to
that extent the Agent, the Arranger and the Existing Lender
shall each be released from further obligations to each other
under the Finance Documents; and
	 
	 	(d)	 	the New Lender shall become a Party as a
“Lender”.

	25.5	 	Disclosure of information
	 
	 	 	Any Lender may disclose to any of its Affiliates and any other person:

	 	25.5.1	 	to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
	 
	 	25.5.2	 	with (or through) whom that Lender enters into (or may potentially
enter into) any sub-participation in relation to, or any other
transaction under which payments are to be made by reference to, this
Agreement or the Obligors; or
	 
	 	25.5.3	 	to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,

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	 	 	 	any information about the Obligors, the Group and the Finance Documents as
that Lender shall consider appropriate.

	26.	 	CHANGES TO THE OBLIGORS
	 
	 	 	The Obligors may not assign any of their rights or transfer any of their
rights or obligations under the Finance Documents.

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SECTION 9

THE FINANCE PARTIES

	27.	 	ROLE OF THE AGENT, THE ARRANGER AND THE TECHNICAL BANK

	27.1	 	Appointment of the Agent

	 	27.1.1	 	Each other Finance Party appoints the Agent to act as its agent
under and in connection with the Finance Documents (including the
Security Documents).

	 	27.1.2	 	Each other Finance Party authorises the Agent to exercise the
rights, powers, authorities and discretions specifically given to the
Agent under or in connection with the Finance Documents (including
the Security Documents) together with any other incidental rights,
powers, authorities and discretions.

	 	27.1.3	 	Each other Finance Party authorises in advance the Agent to sign in
its name and on its behalf all Security Documents and any other
document in connection with the Security Documents whether at the
time of execution, enforcement or release of the Security created
pursuant thereto or at any other time and any document relating to
the enforcement of the Security Documents.

	27.2	 	Duties of the Agent

	 	27.2.1	 	The Agent shall promptly forward to a Party the original or a copy
of any document which is delivered to the Agent for that Party by any
other Party.

	 	27.2.2	 	Except where a Finance Document specifically provides otherwise,
the Agent is not obliged to review or check the adequacy, accuracy or
completeness of any document it forwards to another Party.

	 	27.2.3	 	If the Agent receives notice from a Party referring to this
Agreement, describing a Default and stating that the circumstance
described is a Default, it shall promptly notify the Finance Parties.

	 	27.2.4	 	If the Agent is aware of the non-payment of any principal,
interest, commitment fee or other fee payable to a Finance Party
(other than the Agent, the Arranger or the Technical Bank) under
this Agreement it shall promptly notify the other Finance Parties.

	 	27.2.5	 	The Agent’s duties under the Finance Documents are solely
mechanical and administrative in nature.

	27.3	 	Role of the Arranger and the Technical Bank

Except as specifically provided in the Finance Documents, the Arranger,
and the Technical Bank have no obligations of any kind to any other Party
under or in connection with any Finance Document.

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	27.4	 	No fiduciary duties

	 	27.4.1	 	Nothing in this Agreement constitutes the Agent, the Arranger or
the Technical Bank as a trustee or fiduciary of any other person.

	 	27.4.2	 	Neither the Agent nor the Technical Bank nor the Arranger shall be
bound to account to any Lender for any sum or the profit element of
any sum received by it for its own account.

	27.5	 	Business with the Group

The Agent, the Arranger and the Technical Bank may accept deposits from,
lend money to and generally engage in any kind of banking or other
business with any member of the Group.

	27.6	 	Rights and discretions of the Agent

	 	27.6.1	 	The Agent may rely on:

	 	(a)	 	any representation, notice or document believed
by it to be genuine, correct and appropriately authorised; and

	 	(b)	 	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.

	 	27.6.2	 	The Agent may assume (unless it has received notice to the contrary
in its capacity as agent for the Lenders) that:

	 	(a)	 	no Default has occurred (unless it has actual
knowledge of a Default arising under Clause 23.1
(Non-payment)); and

	 	(b)	 	any right, power, authority or discretion vested
in any Party or the Majority Lenders has not been exercised.

	 	27.6.3	 	The Agent may engage, pay for and rely on the advice or services of
any lawyers, accountants, surveyors or other experts.

	 	27.6.4	 	The Agent may act in relation to the Finance Documents through its
personnel and agents.

	 	27.6.5	 	The Agent may disclose to any other Party any information it
reasonably believes it has received as agent under this Agreement.

	 	27.6.6	 	Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor the Technical Bank or the Arranger is
obliged to do or omit to do anything if it would or might in its
reasonable opinion constitute a breach of any law or regulation or a
breach of a fiduciary duty or duty of confidentiality.

	27.7	 	Majority Lenders’ instructions

	 	27.7.1	 	Unless a contrary indication appears in a Finance Document, the
Agent shall exercise any right, power, authority or discretion vested
in it as Agent in accordance with any

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	 	 	 	instructions given to it by the Majority Lenders (or, if so
instructed by the Majority Lenders, refrain from exercising any
right, power, authority or discretion vested in it as 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
Majority Lenders.

	 	27.7.2	 	Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the
Finance Parties.

	 	27.7.3	 	The Agent may refrain from acting in accordance with the
instructions of the Majority Lenders (or, if appropriate, the
Lenders) until it has received such security as it may require for
any cost, loss or liability (together with any associated VAT) which
it may incur in complying with the instructions.

	 	27.7.4	 	In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.

	 	27.7.5	 	The Agent is not authorised to act on behalf of a Lender in any
legal or arbitration proceedings relating to any Finance Document,
without having first obtained that Lender’s authority to act on its
behalf in those proceedings.

	27.8	 	Responsibility for documentation

Neither the Agent, the Arranger nor the Technical Bank:

	 	27.8.1	 	is responsible for the adequacy, accuracy and/or completeness of
any information (whether oral or written) supplied by the Agent, the
Arranger, the Obligors or any other person given in or in connection
with any Finance Document; or

	 	27.8.2	 	is responsible for the legality, validity, effectiveness, adequacy
or enforceability of any Finance Document or any other agreement,
arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document.

	27.9	 	Exclusion of liability

	 	27.9.1	 	Without limiting paragraph 27.9.2 below, the Agent or the Technical
Bank will not be liable for any action taken by it under or in
connection with any Finance Document, unless directly caused by its
gross negligence or wilful misconduct.

	 	27.9.2	 	No Party may take any proceedings against any officer, employee or
agent of the Agent or the Technical Bank in respect of any claim it
might have against the Agent or the Technical Bank or in respect of
any act or omission of any kind by that officer, employee or agent in
relation to any Finance Document and any officer, employee or agent
of the Agent or the Technical Bank may rely on this Clause 27.9.

	 	27.9.3	 	The Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required under
the Finance Documents to be paid by the Agent if the 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 Agent for that purpose.

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	27.10	 	Lenders’ indemnity to the Agent and the Technical Bank

Each Lender shall (in proportion to its share of the Total Commitments or,
if the Total Commitments are then zero, to its share of the Total
Commitments immediately prior to their reduction to zero) indemnify the
Agent and the Technical Bank, within three Business Days of demand,
against any cost, loss or liability incurred by the Agent and the
Technical Bank (otherwise than by reason of the Agent’s or the Technical
Bank’s gross negligence or wilful misconduct) in acting as Agent or
Technical Bank under the Finance Documents (unless they have been
reimbursed by the Borrower pursuant to a Finance Document).
	 
	27.11	 	Resignation of the Agent or the Technical Bank

	 	27.11.1	 	The Agent may resign and appoint one of its Affiliates as
successor by giving notice to the other Finance Parties and the
Borrower.

	 	27.11.2	 	Alternatively the Agent may resign by giving notice to the other
Finance Parties and the Borrower, in which case the Majority Lenders
(after consultation with the Borrower) may appoint a successor Agent.

	 	27.11.3	 	If the Majority Lenders have not appointed a successor Agent in
accordance with paragraph (b) above within 30 days after notice of
resignation was given, the Agent (after consultation with the
Borrower) may appoint a successor Agent.

	 	27.11.4	 	The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such
assistance as the successor Agent may reasonably request for the
purposes of performing its functions as Agent under the Finance
Documents.

	 	27.11.5	 	The Agent’s resignation notice shall only take effect upon the
appointment of a successor.

	 	27.11.6	 	Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance
Documents but shall remain entitled to the benefit of this Clause 27.
Its successor and each of the other Parties shall have the same
rights and obligations amongst themselves as they would have had if
such successor had been an original Party.

	 	27.11.7	 	The Technical Bank may resign in the same conditions as the Agent,
as provided in this Clause 27.11.

	27.12	 	Confidentiality

	 	27.12.1	 	In acting as agent for the Finance Parties, the Agent shall be
regarded as acting through its agency division which shall be treated
as a separate entity from any other of its divisions or departments.

	 	27.12.2	 	If information is received by another division or department of
the Agent, it may be treated as confidential to that division or
department and the Agent shall not be deemed to have notice of it.

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	27.13	 	Relationship with the Lenders

	 	27.13.1	 	The Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and acting through its Facility Office unless it
has received not less than five Business Days prior notice from that
Lender to the contrary in accordance with the terms of this
Agreement.

	 	27.13.2	 	Each Lender shall supply the Agent with any information required
by the Agent in order to calculate the Mandatory Cost in accordance
with Schedule 5 (Mandatory Cost Formulae).

	27.14	 	Credit appraisal by the Lenders

Without affecting the responsibility of the Obligors for information
supplied by them or on their behalf in connection with any Finance
Document, each Lender confirms to the Agent, the Arranger and the
Technical Bank 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 Finance Document
including but not limited to:

	 	27.14.1	 	the financial condition, status and nature of each member of the
Group;

	 	27.14.2	 	the legality, validity, effectiveness, adequacy or enforceability
of any Finance Document and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or
in connection with any Finance Document; and

	 	27.14.3	 	whether that Lender 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 Finance Document, the transactions
contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document.

	27.15	 	Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the
Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent would
otherwise be obliged to make under the Finance Documents and apply the
amount deducted in or towards satisfaction of the amount owed. For the
purposes of the Finance Documents that Party shall be regarded as having
received any amount so deducted.

	28.	 	CONDUCT OF BUSINESS BY THE FINANCE PARTIES

No provision of this Agreement will:

	 	28.1	 	interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;

	 	28.2	 	oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to it or the extent, order
and manner of any claim; or

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	 	28.3	 	oblige any Finance Party to disclose any information relating
to its affairs (tax or otherwise) or any computations in respect of
Tax.

- 78 -

 

SECTION 10

ADMINISTRATION

	29.	 	PAYMENT MECHANICS

	29.1	 	Payments by the Borrower

	 	29.1.1	 	On each date on which such sums are due under a Finance Document,
the Agent (acting on behalf of the Lenders) will apply any amount
standing to the credit of the Collection Account to:

	 	(a)	 	the payment of any unpaid fees, costs and
expenses due under this Agreement or the Fee Letter;

	 	(b)	 	the payment of any sums, to be repaid in
accordance with the provisions of Clause 8 (Prepayment and
Cancellation); and

	 	(c)	 	the payment of any other sums due to the Finance
Parties under the Finance Documents, including any Reduction
Instalment.

	 	29.1.2	 	The Borrower agrees that in the event it fails to do so, the Agent
may at any time debit the Collection Account to pay the premiums due
under the Insurance Policy and the fees, costs, deposits and margin
calls due under the Hedge Agreements.

	 	29.1.3	 	The Borrower expressly and irrevocably authorises the Agent (acting
on behalf of the Lenders) to debit the Collection Account for the
purpose of payment of the sums mentioned in paragraphs 29.1.1, 29.1.2
and 29.1.3 above.

	 	29.1.4	 	In the event that on any date on which a payment must be made under
the Finance Documents the sums standing to the credit of the
Collection Account are not sufficient to pay in full all sums due on
that date, the Agent shall be entitled to recover the unpaid sums
directly from the Borrower.

	29.2	 	Partial payments

If, at any time, the Collection Account Balance is insufficient to
discharge all the amounts then due and payable under the Finance Documents
or the Insurance Policy, the Agent shall apply the Collection Account
Balance towards the obligations of the Borrower in the following order:

	 	29.2.1	 	first, in or towards payment of the premiums due under the
Insurance Policy;

	 	29.2.2	 	secondly, in or towards payment of any unpaid fees, costs and
expenses of the Agent or the Technical Bank under the Finance
Documents;

	 	29.2.3	 	thirdly, in or towards payment of any accrued interest or
commission due but unpaid under the Finance Documents;

	 	29.2.4	 	fourthly, in or towards payment of any sum due under the Hedge
Agreements;

	 	29.2.5	 	fifthly, in or towards payment of any principal due but unpaid
under this Agreement;

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	 	29.2.6	 	lastly, in or towards payment of any other sum due but unpaid under
the Finance Documents.

	29.3	 	Payments to the Agent

On each date on which an Obligor or a Lender is required to make a payment
under a Finance Document, the Obligor or Lender shall make the same
available to the Agent (unless a contrary indication appears in a Finance
Document) for value on the due date at the time and in such funds
specified by the Agent as being customary at the time for settlement of
transactions in the relevant currency in the place of payment.

	29.4	 	Clawback

	 	29.4.1	 	Where a sum is to be paid to the Agent under the Finance Documents
for another Party, the Agent is not obliged to pay that sum to that
other Party (or to enter into or perform any related exchange
contract) until it has been able to establish to its satisfaction
that it has actually received that sum.

	 	29.4.2	 	If the Agent pays an amount to another Party and it proves to be
the case that the Agent had not actually received that amount, then
the Party to whom that amount (or the proceeds of any related
exchange contract) was paid by the Agent shall on demand refund the
same to the Agent together with interest on that amount from the date
of payment to the date of receipt by the Agent, calculated by the
Agent to reflect its cost of funds.

	29.5	 	No set-off by Obligors

All payments to be made by the Obligors under the Finance Documents shall
be calculated and be made without (and free and clear of any deduction
for) set-off or counterclaim.

	29.6	 	Business Days

	 	29.6.1	 	Any payment which is due to be made on a day that is not a Business
Day shall be made on the next Business Day in the same calendar month
(if there is one) or the preceding Business Day (if there is not).

	 	29.6.2	 	During any extension of the due date for payment of any principal
or an Unpaid Sum under this Agreement interest is payable on the
principal or Unpaid Sum at the rate payable on the original due date.

	29.7	 	Currency of account

	 	29.7.1	 	Subject to paragraphs 29.7.2 to 29.7.5 below, USD and EUR are the
currencies of account and payment for any sum due from the Borrower
under any Finance Document.

	 	29.7.2	 	A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid
Sum shall be made in the currency in which that Loan or Unpaid Sum is
denominated on its due date.

- 80 -

 

	 	29.7.3	 	Each payment of interest shall be made in the currency in which the
sum in respect of which the interest is payable was denominated when
that interest accrued.

	 	29.7.4	 	Each payment in respect of costs, expenses or Taxes shall be made
in the currency in which the costs, expenses or Taxes are incurred.

	 	29.7.5	 	Any amount expressed to be payable in a currency other than the
Base Currency shall be paid in that other currency.

	30.	 	SET-OFF

A Finance Party may set off any matured obligation due from the Obligors
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party
to the Borrower, regardless of the place of payment, booking branch or
currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the
set-off.

	31.	 	NOTICES

	31.1	 	Communications in writing

Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax, letter or telex.

	31.2	 	Addresses

The address, fax number and telex number (and the department or officer,
if any, for whose attention the communication is to be made) of each Party
for any communication or document to be made or delivered under or in
connection with the Finance Documents is:

	 	31.2.1	 	in the case of an Obligor, that identified with its name below;

	 	31.2.2	 	in the case of each Lender that notified in writing to the Agent on
or prior to the date on which it becomes a Party; and

	 	31.2.3	 	in the case of the Agent, that identified with its name below,

or any substitute address, fax number, telex number or department or
officer as the Party may notify to the Agent (or the Agent may notify to
the other Parties, if a change is made by the Agent) by not less than five
Business Days’ notice.

	31.3	 	Delivery

	 	31.3.1	 	Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will only
be effective:

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

	 	(b)	 	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;

- 81 -

 

	 	(c)	 	if by way of telex, when dispatched, but only if,
at the time of transmission, the correct answerback appears at
the start and at the end of the sender’s copy of the notice;

	 	 	 	and, if a particular department or officer is specified as part of
its address details provided under Clause 31.2 (Addresses), if
addressed to that department or officer.

	 	31.3.2	 	Any communication or document to be made or delivered to the Agent
will be effective only when actually received by the Agent and then
only if it is expressly marked for the attention of the department or
officer identified with the Agent’s signature below (or any
substitute department or officer as the Agent shall specify for this
purpose).

	 	31.3.3	 	All notices from or to the Obligors shall be sent through the
Agent.

	 	31.3.4	 	Any communication or document made or delivered to the Obligors in
accordance with this Clause will be deemed to have been made or
delivered to the Obligors.

	31.4	 	Electronic communication

	 	31.4.1	 	Any communication to be made between the Agent and a Lender under
or in connection with the Finance Documents may be made by electronic
mail or other electronic means, if the Agent and the relevant Lender:

	 	(a)	 	agree that, unless and until notified to the
contrary, this is to be an accepted form of communication;

	 	(b)	 	notify each other in writing of their electronic
mail address and/or any other information required to enable
the sending and receipt of information by that means; and

	 	(c)	 	notify each other of any change to their address
or any other such information supplied by them.

	 	31.4.2	 	Any electronic communication made between the Agent and a Lender
will be effective only when actually received in readable form and in
the case of any electronic communication made by a Lender to the
Agent only if it is addressed in such a manner as the Agent shall
specify for this purpose.

	31.5	 	Language

Any notice or other documents given under or in connection with any
Finance Document must be in English or in French.

	32.	 	CALCULATIONS AND CERTIFICATES

	32.1	 	Accounts

In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.

- 82 -

 

	32.2	 	Certificates and Determinations

Any certification or determination by a Finance Party of a rate or amount
under any Finance Document is, in the absence of manifest error, prima
facie evidence of the matters to which it relates.

	32.3	 	Day count convention

Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number
of days elapsed and a year of 360 days or, in any case where the practice
in the Relevant Interbank Market differs, in accordance with that market
practice.

	33.	 	PARTIAL INVALIDITY

If, at any time, any provision of the Finance Documents 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.

	34.	 	REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any right
or remedy prevent any further or other exercise or the exercise of any
other right or remedy. The rights and remedies provided in this Agreement
are cumulative and not exclusive of any rights or remedies provided by
law.

	35.	 	CONSENTS, AMENDMENTS AND WAIVERS

	35.1	 	Required consents

	 	35.1.1	 	Subject to Clause 35.2 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the
Majority Lenders and the Borrower and any such amendment or waiver
will be binding on all Parties.

	 	35.1.2	 	Subject to Clause 35.2 (Exceptions) any consent may be given by the
Agent only after the Agent has received from the Majority Lenders the
instruction to do so.

	 	35.1.3	 	The Agent may effect, on behalf of any Finance Party, any amendment
or waiver, or grant any consent, permitted by this Clause.

	35.2	 	Exceptions

	 	35.2.1	 	A consent, amendment or waiver that has the effect of changing or which relates to:

	 	(a)	 	the definition of “Majority Lenders” or
“Determination Lenders” in Clause 1.1 (Definitions);

	 	(b)	 	a modification to Clause 6.2 (Borrowing Base
Determination) or Clause 7 (Repayment), an increase of the
Borrowing Base or a modification to the Borrowing Base
Reduction Schedule determination procedure;

- 83 -

 

	 	(c)	 	an extension to the date of payment of any amount
under the Finance Documents;

	 	(d)	 	a reduction in the Margin or a reduction in the
amount of any payment of principal, interest, fees or
commission payable;

	 	(e)	 	an increase in or an extension of any Commitment;

	 	(f)	 	any modification of the Finance Documents (to the
exception of this agreement) which affect materially the
rights of the Lenders under such Finance Documents or increase
their commitment thereunder;

	 	(g)	 	any provision which expressly requires the
consent of all the Lenders; or

	 	(h)	 	Clause 2.2 (Finance Parties’ rights and
obligations), Clause 25 (Changes to the Lenders) or this
Clause 35;

	 	 	 	shall not be given or made without the prior consent of all the
Lenders.

	 	35.2.2	 	An amendment or waiver which relates to the rights or obligations
of the Agent, the Arranger or the Technical Bank may not be effected
without the consent of the Agent, the Arranger or the Technical Bank.

- 84 -

 

SECTION 11

GOVERNING LAW AND ENFORCEMENT

	36.	 	GOVERNING LAW

This Agreement is governed by French law.

	37.	 	ENFORCEMENT — JURISDICTION OF FRENCH COURTS

	37.1	 	The Tribunal de Commerce de Paris has exclusive jurisdiction to settle
any dispute arising out of or in connection with this Agreement (including
a dispute regarding the existence, validity or termination of this
Agreement) (a “Dispute”).

	37.2	 	Clause 37.1 is for the benefit of the Finance Parties only. As a result,
no Finance Party shall be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed by
law, the Finance Parties may take concurrent proceedings in any number of
jurisdictions.

This Agreement has been entered into in six (6) originals on the date stated at
the beginning of this Agreement.

- 85 -

 

Schedule 1

The Original Lenders

	 	 	 
	Name of Original Lender	 	Commitment
	Natexis Banques Populaires

	 	USD 15,000,000

- 86 -

 

Schedule 2

Conditions precedent

	1.	 	Obligors

	 	(a)	 	A K-bis extract (or similar document) for each Obligor, not
more than one month old.
	 
	 	(b)	 	A copy of the constitutive documents of each Obligor.
	 
	 	(c)	 	Evidence that the person(s) who has signed the Finance
Documents on behalf of each Obligor and any other member of the Group
was duly authorised so to sign.
	 
	 	(d)	 	A certificate of an authorised signatory of each Obligor
certifying that each copy document relating to it specified in this
Paragraph 1 of Schedule 2 is correct, complete and in full force and
effect as at the date of this Agreement.

	2.	 	Legal opinions and due diligence

	 	(a)	 	A legal opinion of Clifford Chance legal advisers to the
Arranger in France, satisfactory to the Agent.
	 
	 	(b)	 	A legal opinion of Ran Hamou, legal advisers to the Borrower
and MOF in France satisfactory to the Agent.
	 
	 	(c)	 	A legal opinion of Haynes and Boone LLP, legal advisers to the
U.S. Obligors in Delaware satisfactory to the Agent.
	 
	 	(d)	 	Audit of the Fields Licences and permits conducted by Clifford
Chance confirming that all Licences relating to the Fields and all
other government Licences/consents required to lift and sell
hydrocarbons have been obtained and remain legal and valid and that
all necessary and relevant government Licences, consents and waivers
in connection with the Transaction Documents (including but not
limited to any central bank and/or ministerial clearances).

	3.	 	Other documents and evidence

	 	(a)	 	A certified copy of the Original Financial Statements.
	 
	 	(b)	 	A certified copy of the Activity Report for November 2004.
	 
	 	(c)	 	A certified copy of the CEP Report and the First Consultant
Report.
	 
	 	(d)	 	An execution copy of each Finance Document.
	 
	 	(e)	 	Evidence that the Borrower has notified the assigned debtors
under the Assignment Agreement to pay all sums due to the Collection
Account.
	 
	 	(f)	 	A certified copy of the Sale and Purchase Contracts duly
executed by all parties thereto and of all other Operating
Agreements, Licences, Mining Works Permits or consents required to
lift and sell hydrocarbons.

- 87 -

 

	 	(g)	 	Confirmation that the Collection Account has been opened.
	 
	 	(h)	 	Evidence that the assets of the Obligors and the other members
of the Group are free and clear of any Encumbrance other than the
Permitted Encumbrances.
	 
	 	(i)	 	Other conditions precedent reasonably considered necessary by
the Arranger as a result of the due diligence process and a copy of
any other Authorisation or other document, opinion or assurance which
the Agent considers to be necessary or desirable (if it has notified
the Borrower accordingly) in connection with the entry into and
performance of the transactions contemplated by any Finance Document
or for the validity and enforceability of any Finance Document.

	4.	 	Authorisation
	 
	 	 	Evidence that the Ministère de l’Economie, des Finances et de l’Industrie
has irrevocably approved, or within two (2) months after notification,
subject to any request for clarification, has not opposed to, the
transactions contemplated by the Finance Documents, in form and substance
satisfactory to the Agent acting reasonably.

- 88 -

 

Schedule 3

Maximum Facility Amount Amortization Schedule

	 	 	 	 	 
	(A)	 	(B)
	Period	 	Maximum Facility Amount
	From Closing Date to 12 Months thereafter
	 	USD 15,000,000
	From 12 Months after the Closing Date to 24 Months
after the Closing Date
	 	USD 15,000,000
	From 24 Months after the Closing Date to 36 Months
after the Closing Date
	 	USD 10,000,000
	From 36 Months after the Closing Date to 48 Months
after the Closing Date
	 	USD 6,000,000
	From 48 Months after the Closing Date to the Final
Maturity Date
	 	USD 3,000,000
	On the Final Maturity Date
	 	USD 0

- 89 -

 

Schedule 4

Utilisation Request

	 	 	 
	From:

	 	Madison Energy France
	To:

	 	Natexis Banques Populaires as Agent
	Dated:

	 	[•]

Dear Sirs

Madison Energy France — Reserve Base Revolving Facility Agreement dated 23 December 2004

(the “Agreement”)

	1.	 	We refer to the Agreement. This is a Utilisation Request. Terms defined
in the Agreement have the same meaning in this Utilisation Request unless
given a different meaning in this Utilisation Request.

	2.	 	We wish to borrow a Loan on the following terms:

	 	 	 
	Proposed Utilisation Date:

	 	[•] (or, if that is not a Business
Day, the next Business Day)
	 
	 	 
	Amount:

	 	[•] or, if less, the Available

Amount on such date

	3.	 	We confirm that each condition specified in Clause 4 (Conditions of
utilisation) is satisfied on the date of this Utilisation Request.

	4.	 	We confirm that the representations made in Clause 18 (Representations)
are true in all material respects.

	5.	 	The proceeds of this Loan should be credited to the [Collection Account].

	6.	 	This Utilisation Request is irrevocable.

Yours faithfully

.......................................

authorised signatory for Madison Energy France

- 90 -

 

Schedule 5

Mandatory Cost Formulae

	1.	 	The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with the requirements of the European
Central Bank.

	2.	 	On the first day of each Interest Period (or as soon as possible
thereafter), the Agent shall calculate the Mandatory Cost, as a percentage
rate per annum, as a weighted average of the Lenders’ Additional Cost
Rates (as defined below) (weighted in proportion to the percentage
participation of each Lender in the relevant Loan).

	3.	 	Each Lender lending from a Facility Office in a Participating Member
State will notify to the Agent its reasonable determination of the cost
(expressed as a percentage of that Lender’s participation in all Loans
made from that Facility Office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from
that Facility Office (the “Additional Cost Rate”).

	4.	 	Each Lender shall supply any information required by the Agent for the
purpose of calculating the Mandatory Cost. In particular, but without
limitation, each Lender shall supply the following information on or prior
to the date on which it becomes a Lender:

	 	(a)	 	the jurisdiction of its Facility Office; and
	 
	 	(b)	 	any other information that the Agent may reasonably require for
such purpose.

	 	 	Each Lender shall promptly notify the Agent of any change to the
information provided by it pursuant to this paragraph.

	5.	 	The Agent shall have no liability to any person if such determination
results in a Mandatory Cost which over or under compensates any Lender and
shall be entitled to assume that the information provided by any Lender
pursuant to paragraphs 3 and 4 above is true and correct in all respects.

	6.	 	The Agent shall distribute the additional amounts received as a result of
the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate
for each Lender based on the information provided by each Lender pursuant
to paragraphs 3 and 4 above.

	7.	 	Any determination by the Agent pursuant to this Schedule in relation to a
formula, the Mandatory Cost, or any amount payable to a Lender shall, in
the absence of manifest error, be conclusive and binding on all Parties.

	8.	 	The Agent may from time to time, after consultation with the Borrower and
the Lenders, determine and notify to all Parties any amendments which are
required to be made to this Schedule in order to comply with any change in
law, regulation or any requirements from time to time imposed by the
European Central Bank (or, in any case, any other authority which replaces
all or any of its functions) and any such determination shall, in the
absence of manifest error, be conclusive and binding on all Parties.

- 91 -

 

Schedule 6

Form of Transfer Agreement

This Transfer Agreement is made on [•]

BETWEEN:

	(1)	 	[•] (the “Existing Lender”)

	 	 	and:

	(2)	 	[•] (the “New Lender”)

WHEREAS:

	(A)	 	The Existing Lender has entered into a reserve base revolving facility of
a maximum amount of USD 15,000,000 under a facility agreement dated 23
December 2004, between, amongst others, Madison Energy France, the
Financial Institutions listed in Schedule 1 (The Original Lenders) to that
Facility Agreement, and Natexis Banques Populaires acting as Arranger,
Agent and Technical Bank (the “Facility Agreement”).

	(B)	 	The Existing Lender wishes to transfer and the New Lender wishes to
acquire [all] [the part specified in the Schedule of this Transfer
Agreement] of the Existing Lender’s Commitment, rights and obligations
referred to in the Schedule to this Transfer Agreement. 1

	(C)	 	Terms defined in the Facility Agreement have the same meaning when used
in this Transfer Agreement.

IT IS AGREED AS FOLLOWS:

	1.	 	The Existing Lender and the New Lender agree to the transfer (cession) of
[all] [the part specified in the Schedule of this Transfer Agreement] of
the Existing Lender’s Commitment, rights and obligations referred to in
the Schedule to this Transfer Agreement in accordance with Clause 25.4
(Procedure for transfer) of the Facility Agreement.

	2.	 	The proposed Transfer Date is [•].

	3.	 	The Facility Office and address, fax number and attention details for
notices of the New Lender for the purposes of Clause 31.2 (Addresses) are
set out in the Schedule of this Transfer Agreement.

	4.	 	The New Lender acknowledges the limitations on the Existing Lender’s
liabilities set out in paragraph 25.3.1 of the Facility Agreement.

	1	 	The New Lender may, in the case of a transfer of rights by the Existing
Lender under this Transfer Agreement, if it considers it necessary to make the
transfer effective as against third parties, arrange for it to be notified by
way of signification to the Borrower in accordance with article 1690 of the
French Code civil.

- 92 -

 

	5.	 	The New Lender confirms to the other Finance Parties represented by the
Agent that it will assume the same obligations to those Parties as it
would have been under if it was an Original Lender.

	6.	 	This Transfer Agreement is governed by French law. The Tribunal of
Commerce of Paris shall have jurisdiction in relation to any dispute
concerning it.

- 93 -

 

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments]

	 	 	 
	[Existing Lender][New Lender]
	 	 
	 
	 	 
	By:

	 	By:

This Transfer Agreement is accepted by the Agent and the Transfer Date is
confirmed as [•].

Natexis Banques Populaires

By:

- 94 -

 

Schedule 7

Mining Titles

	•	 	Concession

	 	-	 	Concession of Châteaurenard, pursuant to a ministerial order dated 25 July 2001.
	 
	 	-	 	Concession of Saint-Firmin-des-Bois, pursuant to a
ministerial order dated 25 July 2001.
	 
	 	-	 	Concession of Charmottes, pursuant to a decree dated 19 October 1998.

	•	 	Licence

	 	-	 	Exclusive research licence “Aufferville Permit” pursuant to a
ministerial order dated 3 June 2004.
	 
	 	-	 	Joint exclusive research licence “Nemours Permit” pursuant to
a ministerial order dated 3 June 2004.
	 
	 	-	 	Exclusive research licence “Courtenay Permit” pursuant to a
ministerial order dated 20 September 2002.
	 
	 	-	 	Exclusive research licence “Nangis Permit” pursuant to a
ministerial order dated 23 June 2000.

	•	 	Mining Works Permit

	 	-	 	Permit regarding the operation of seven new drills within the
perimeter of concession of Châteaurenard and concession of
Saint-Firmin-des-Bois pursuant to a prefectoral order dated 14
January 2003.
	 
	 	-	 	Permit regarding nine hydrocarbon drills in the perimeter of
concession of Charmottes pursuant to a prefectoral order dated 7
November 2002.

- 95 -

 

Schedule 8

Existing Financial Indebtedness

	•	 	Borrower’s existing Financial Indebtedness: intragroup debts of USD
1,927,379 and EUR 1,449,789

	•	 	Guarantor’s existing Financial Indebtedness: intragroup debts of USD
12,048,788 and EUR 9,063,099

- 96 -

 

Schedule 9

Group Structure Chart

- 97 -

 

SIGNATURE PAGE

The Borrower

MADISON ENERGY FRANCE

          /s/
Muriel Granat

     
                
                
               
                
   

	 	 	 
	Name :

	 	Muriel Granat
	Address:

	 	13/15 Boulevard de la Madeleine
	

	 	75001 Paris
	Fax:

	 	+ 33 1 47 03 33 71
	Telephone:

	 	+ 33 1 47 03 24 24
	Attention:

	 	Muriel Granat

The Guarantor

MADISON OIL FRANCE

          /s/
Muriel Granat

     
                
                
               
                
   

	 	 	 
	Name :

	 	Muriel Granat
	Address:

	 	13/15 Boulevard de la Madeleine
	

	 	75001 Paris
	Fax:

	 	+ 33 1 47 03 33 71
	Telephone:

	 	+ 33 1 47 03 24 24
	Attention:

	 	Muriel Granat

- 98 -

 

The Obligors

TOREADOR RESOURCES CORPORATION

     
                
/s/ Doug Weir              
                
                      

	 	 	 
	Name:

	 	Doug Weir
	Address:

	 	1209 Orange Street Wilmington
	

	 	DE 19801 USA
	Fax:

	 	+ 1 214 559 39 45
	Telephone:

	 	+ 1 214 555 39 33
	Attention:

	 	Doug Weir

MADISON OIL COMPANY EUROPE

     
                
/s/ Doug Weir              
                
                      

	 	 	 
	Name:

	 	Doug Weir
	Address:

	 	1209 Orange Street Wilmington
	

	 	DE 19801 USA
	Fax:

	 	+ 1 214 559 39 45
	Telephone:

	 	+ 1 214 555 39 33
	Attention:

	 	Doug Weir

- 99 -

 

	 	 	 	 	 
	The Agent
	 	 	 	 
	 
	 	 	 	 
	NATEXIS BANQUES POPULAIRES	 	NATEXIS BANQUES POPULAIRES
	 
	 	 	 	 
	           /s/ Damien Mauvais                                      	 	                                                                            
	 
	 	 	 	 
	Name :

	 	Damien Mauvais
	 	Name:
	Address:

	 	47, rue Saint Dominique	 	 
	

	 	75007 Paris	 	 
	Fax:

	 	01 58 19 38 89	 	 
	Telephone:

	 	01 58 19 28 23	 	 
	Attention:

	 	Damien Mauvais / Albert Lam	 	 
	 
	 	 	 	 
	The Technical Bank	 	 
	 
	 	 	 	 
	NATEXIS BANQUES POPULAIRES	 	NATEXIS BANQUES POPULAIRES
	 
	 	 	 	 
	           /s/ Damien Mauvais                                      	 	                                                                            
	 
	 	 	 	 
	Name :

	 	Damien Mauvais	 	Name:
	Address:

	 	47, rue Saint Dominique	 	 
	

	 	75007 Paris	 	 
	Fax:

	 	01 58 19 38 89	 	 
	Telephone:

	 	01 58 19 28 23	 	 
	Attention:

	 	Damien Mauvais / Albert Lam	 	 

- 100 -

 

	 	 	 	 	 
	The Lender	 	 
	 
	 	 	 	 
	NATEXIS BANQUES POPULAIRES	 	NATEXIS BANQUES POPULAIRES
	 
	 	 	 	 
	     
             /s/ Damien Mauvais                                      	 	                                                                            
	 
	 	 	 	 
	Name :

	 	Damien Mauvais	 	Name:
	Address:

	 	47, rue Saint Dominique	 	 
	

	 	75007 Paris	 	 
	Fax:

	 	01 58 19 38 89	 	 
	Telephone:

	 	01 58 19 28 23	 	 
	Attention:

	 	Damien Mauvais / Albert Lam	 	 

- 101 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]