Document:

exv4w5

 

	 	 	 
	 

	 	October 31, 2006
	 
	 	 
	To:

	 	Core Laboratories N.V.
	 

	 	Herengracht 424
	 

	 	1017 BZ Amsterdam
	 

	 	The Netherlands
	 
	 	 
	From:

	 	Lehman Brothers Inc., acting as Agent
	 

	 	Lehman Brothers OTC Derivatives Inc., acting as Principal
	 

	 	Attention: Transaction Management Group
	 

	 	Telephone: (212) 526-9986
	 

	 	Facsimile: (646) 885-9546
	 
	 	 
	Re: 

	 	Issuer Warrant Transaction
	 

	 	(Transaction Reference Number:                                         )

Ladies and Gentlemen:

     The purpose of this communication (this “Confirmation”) is to set forth the terms and
conditions of the above-referenced transaction entered into on the Trade Date specified below (the
“Transaction”) between Lehman Brothers OTC Derivatives Inc. (“Dealer”) represented by Lehman
Brothers Inc. (“Agent”) as its agent, and Core Laboratories N.V. (“Issuer”). This communication
constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. Lehman
Brothers OTC Derivatives Inc. is not a member of the Securities Investor Protection Corporation.

     1. This Confirmation is subject to, and incorporates, the definitions and provisions of the
2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions
and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions” and,
together with the 2000 Definitions, the “Definitions”), in each case as published by the
International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency
between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern. For
purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a
reference to a Call Option or an Option, as context requires.

     This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall be
subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement (the “ISDA
Form”) as if Dealer and Issuer had executed an agreement in such form (without any Schedule but
with the elections set forth in this Confirmation). For the avoidance of doubt, the Transaction
shall be the only transaction under the Agreement.

     All provisions contained in, or incorporated by reference to, the Agreement will govern this
Confirmation except as expressly modified herein. In the event of any inconsistency between this
Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.

     2. The Transaction is a Warrant Transaction, which shall be considered a Share Option
Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to
which this Confirmation relates are as follows:

General Terms:

	 	 	 	 	 
	 
	 	Trade Date:	 	October 31, 2006
	 
	 	 	 	 
	 
	 	Effective Date:	 	November 6, 2006, subject to postponement pursuant to Section 8(m) hereof
	 
	 	 	 	 
	 
	 	Warrant Style:	 	European

 

 

	 	 	 	 	 
	 
	 	Warrant Type:	 	Call
	 
	 	 	 	 
	 
	 	Seller:	 	Issuer
	 
	 	 	 	 
	 
	 	Buyer:	 	Dealer
	 
	 	 	 	 
	 
	 	Shares:	 	The Common Stock of Core Laboratories N.V., par value EUR 0.04 per share (NYSE Ticker Symbol: “CLB”).
	 
	 	 	 	 
	 
	 	Number of Warrants:	 	2,638,325
	 
	 	 	 	 
	 
	 	Daily Number of Warrants:	 	131,916.25
	 
	 	 	 	 
	 
	 	Warrant Entitlement:	 	One Share per Warrant
	 
	 	 	 	 
	 
	 	Strike Price:	 	USD127.5575
	 
	 	 	 	 
	 
	 	Premium:	 	USD48,150,000
	 
	 	 	 	 
	 
	 	Premium Payment Date:	 	The Effective Date
	 
	 	 	 	 
	 
	 	Exchange:	 	New York Stock Exchange
	 
	 	 	 	 
	 
	 	Related Exchange:	 	All Exchanges

Procedures for Exercise:

	 	 	 	 	 
	 

	 	Expiration Time:
	 	Valuation Time
	 
	 	 	 	 
	 

	 	Expiration Date(s):
	 	Each Scheduled Trading Day in the period beginning on and including the
First Expiration Date and ending on and including the Final Expiration Date shall be
an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on
such date.
	 
	 	 	 	 
	 

	 	 	 	Notwithstanding the foregoing and anything to the
contrary in the Equity Definitions, if a Market
Disruption Event occurs on any Expiration Date
(including the First Expiration Date), the
Calculation Agent shall (i) make adjustments, if
applicable, to the Daily Number of Warrants for
which such day shall be an Expiration Date and
(ii) designate the Scheduled Trading Day
immediately following such day (which may be an
Expiration Date for another Daily Number of
Warrants) as the Expiration Date for the
remaining Daily Number of Warrants or a portion
thereof for the original Expiration Date;
provided that any such designation shall be
subject to legal, regulatory or self-regulatory
requirements and related policies and procedures
applicable to Dealer (whether or not such
requirements, policies or procedures are imposed
by law or have been voluntarily adopted by
Dealer); provided further that if such Expiration
Date has not occurred pursuant to clause (ii) as
of the third Scheduled Trading Day following the
Final Expiration Date under this Transaction, the
Calculation Agent shall have the right to declare
such Scheduled Trading Day to be the final
Expiration Date and the Calculation Agent shall

2

 

	 	 	 	 	 
	 

	 	 	 	determine its good faith estimate of the fair
market value for the Shares as of the Valuation
Time on that third Scheduled Trading Day or on
any subsequent Scheduled Trading Day, as the
Calculation Agent shall determine using
commercially reasonable means.
	 
	 	 	 	 
	 

	 	First Expiration Date:
	 	The Scheduled Trading Day that is 20 Scheduled Trading Days
prior to the Final Expiration Date.
	 
	 	 	 	 
	 

	 	Final Expiration Date:
	 	January 25, 2012.
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	Section 6.3(a) of the Equity Definitions is hereby amended by
deleting the words “during the one hour period that ends at the relevant Valuation
Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as
the case may be,” in clause (ii) thereof.
	 
	 	 	 	 
	 

	 	Automatic Exercise:
	 	Applicable; and means that each Warrant not previously exercised under
the Transaction will be deemed to be automatically exercised at the Expiration Time on
the relevant Expiration Date unless Buyer notifies Seller (by telephone or in writing)
prior to the Expiration Time on the Expiration Date that it does not wish Automatic
Exercise to occur, in which case Automatic Exercise will not apply.
	 
	 	 	 	 
	 

	 	Issuer’s Telephone Number
and Telex and/or Facsimile Number
and Contact Details for purpose of Giving Notice:	 	To be provided by Issuer.
	 

	 	 
	 	 

Settlement Terms:

	 	 	 	 	 
	 

	 	Valuation Date:
	 	Each Expiration Date
	 
	 	 	 	 
	 

	 	Net Share Settlement:
	 	On each Settlement Date, Issuer shall deliver to Dealer a
number of Shares equal to the Number of Shares to be Delivered for such Settlement
Date and will pay to Dealer the related Fractional Share Amount, if any.
	 
	 	 	 	 
	 

	 	Number of Shares to be Delivered:
	 	For each Settlement Date, the Option Cash Settlement
Amount (determined as if Cash Settlement were applicable) for the Warrants for which
the Expiration Date is the corresponding Valuation Date divided by the Settlement
Price for such corresponding Valuation Date, rounded down to the nearest whole number.
	 
	 	 	 	 
	 

	 	Settlement Price:
	 	For any Valuation Date, the VWAP Price for such Valuation Date.
	 
	 	 	 	 
	 

	 	VWAP Price:
	 	For any Valuation Date, the volume weighted average price per Share
for such Valuation Date based on transactions executed on the New York Stock Exchange
for the period between 9:30 a.m. and 4:00 p.m. New York City Time during such

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	 	 	 	Valuation Date, as reported on Bloomberg Page
“CLB <Equity> AQR.N” (or any successor
thereto) or, in the event such price is not so
reported on such Valuation Date for any reason,
as reasonably determined by the Calculation
Agent.
	 
	 	 	 	 
	 

	 	Other Applicable Provisions:
	 	The provisions of Sections 9.1(c), 9.8, 9.9, 9.10,
9.11 (except that the Representation and Agreement contained in Section 9.11 of the
Equity Definitions shall be modified by excluding any representations therein relating
to restrictions, obligations, limitations or requirements under applicable securities
laws as a result of the fact that Seller is the Issuer of the Shares) and 9.12 of the
Equity Definitions will be applicable as if “Physical Settlement” applied to the
Transaction.

Adjustments:

	 	 	 	 	 
	 

	 	Method of Adjustment:
	 	Calculation Agent Adjustment
	 
	 	 	 	 
	 

	 	Extraordinary Dividend:
	 	Any dividend or distribution that has an ex-dividend date occurring
on or after the Trade Date and on or prior to the Expiration Date.

     Extraordinary Events:

	 	 	 	 	 	 	 
	 	 	New Shares:	 	In the definition of New Shares in Section 12.1(i) of the Equity
Definitions, the text in clause (i) shall be deleted in its entirety and replaced with
“publicly quoted, traded or listed on any of the New York Stock Exchange, the American
Stock Exchange or the Nasdaq Global Select Market or the Nasdaq Global Market (or
their respective successors)”.
	 
	 	 	 	 	 	 
	 	 	Consequences of Merger Events:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	(a) Share-for-Share:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 	 	 
	 

	 	 	 	(b) Share-for-Other:
	 	Cancellation and Payment (Calculation Agent Determination)
	 
	 	 	 	 	 	 
	 

	 	 	 	(c) Share-for-Combined:
	 	Cancellation and Payment (Calculation Agent Determination)
	 
	 	 	 	 	 	 
	 	 	Tender Offer:	 	Applicable.
	 
	 	 	 	 	 	 
	 

	 	 	 	Consequences of Tender Offers:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	(a) Share-for-Share:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 	 	 
	 

	 	 	 	(b) Share-for-Other:
	 	Cancellation and Payment (Calculation Agent
Determination) on that portion of the Other Consideration that consists of cash;
Modified Calculation Agent Adjustment on the remainder of the Other Consideration.
	 
	 	 	 	 	 	 
	 

	 	 	 	(c) Share-for-Combined:
	 	Modified Calculation Agent Adjustment
	 
	 	 	 	 	 	 
	 	 	Nationalization, Insolvency
and Delisting:	 	Cancellation and Payment (Calculation Agent Determination);
provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity

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	 	 	 	Definitions, it shall also constitute a Delisting
if the Exchange is located in the United States
and the Shares are not immediately re-listed,
re-traded or re-quoted on any of the New York
Stock Exchange, the American Stock Exchange, the
Nasdaq Global Select Market or the Nasdaq Global
Market (or their respective successors); if the
Shares are immediately re-listed, re-traded or
re-quoted on any such exchange or quotation
system, such exchange or quotation system shall
thereafter be deemed to be the Exchange.

Additional Disruption Events:

	 	 	 	 	 
	 

	 	(a) Change in Law:
	 	Applicable; provided that Section 12.9(a)(ii) of the Equity
Definitions is hereby amended by replacing the phrase “the interpretation” in the
third line thereof with the phrase “or announcement or statement of the formal or
informal interpretation”.
	 
	 	 	 	 
	 

	 	(b) Failure to Deliver:
	 	Applicable
	 
	 	 	 	 
	 

	 	(c) Insolvency Filing:
	 	Applicable
	 
	 	 	 	 
	 

	 	(d) Hedging Disruption:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	(e) Increased Cost of Hedging:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	(f) Loss of Stock Borrow:
	 	Applicable
	 
	 	 	 	 
	 

	 	     Maximum Stock Loan Rate:
	 	200 basis points per annum
	 
	 	 	 	 
	 

	 	(g) Increased Cost of Stock Borrow:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Hedging Party:
	 	Dealer for all applicable Additional Disruption Events
	 
	 	 	 	 
	 

	 	Determining Party:
	 	Dealer for all applicable Additional Disruption Events

	 	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments
	 	 
	Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	3.	 	 	Calculation Agent:	 	Dealer
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	4.	 	 	Account Details:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dealer Payment Instructions:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	To be provided by Dealer.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Issuer Payment Instructions:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	To be provided by Issuer.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	5.	 	 	Offices:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Office of Dealer for the Transaction is:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Lehman Brothers OTC Derivatives Inc.
	 

	 	 	 	 	 	 	 	745 Seventh Avenue	 	 

5

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	New York, New York 10019
	 
	 	 	 	 	 	 	 	 
	 	 	     The Office of Issuer for the Transaction is:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Core Laboratories N.V.	 	 
	 	 	 	 	Herengracht 424	 	 
	 	 	 	 	1017 BZ Amsterdam	 	 
	 	 	 	 	The Netherlands	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	6. Notices: For purposes of this Confirmation:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	(a)	 	Address for notices or communications to Issuer:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	To:
	 	Core Laboratories N.V.	 	 
	 

	 	 	 	 	 	Herengracht 424	 	 
	 

	 	 	 	 	 	1017 BZ Amsterdam	 	 
	 

	 	 	 	 	 	The Netherlands	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	with a copy:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	To:
	 	Core Laboratories LP	 	 
	 

	 	 	 	 	 	6316 Windfern Road	 	 
	 

	 	 	 	 	 	Houston, Texas 77040	 	 
	 

	 	 	 	Attn:
	 	General Counsel	 	 
	 

	 	 	 	Telephone:
	 	(713) 328-2673	 	 
	 

	 	 	 	Facsimile:
	 	(713) 328-2152	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	(b)	 	Address for notices or communications to Dealer:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	To:
	 	Lehman Brothers Inc., acting as Agent	 	 
	 

	 	 	 	 	 	Lehman Brothers OTC Derivatives Inc., acting as Principal	 	 
	 

	 	 	 	 	 	745 Seventh Avenue	 	 
	 

	 	 	 	 	 	New York, New York 10019	 	 
	 

	 	 	 	Attn:
	 	Transaction Management Group	 	 
	 

	 	 	 	Telephone No.:
	 	(212) 526-9986	 	 
	 

	 	 	 	Facsimile No.:
	 	(646) 885-9546	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	with a copy:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	To:
	 	Lehman Brothers Inc., acting as Agent	 	 
	 

	 	 	 	 	 	Lehman Brothers OTC Derivatives Inc., acting as Principal	 	 
	 

	 	 	 	 	 	745 Seventh Avenue	 	 
	 

	 	 	 	 	 	New York, New York 10019	 	 
	 

	 	 	 	Attn:
	 	Steve Roti – US Equity Linked	 	 
	 

	 	 	 	Telephone No.:
	 	(212) 526-0055	 	 
	 

	 	 	 	Facsimile No.:
	 	(917) 552-0561	 	 

     7. Representations, Warranties and Agreements:

     (a) In addition to the representations and warranties in the Agreement and those contained
elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer
as follows:

     (i) On the Trade Date, (A) none of Issuer and its officers and directors is aware of
any material nonpublic information regarding Issuer or the Shares and (B) all reports and
other documents filed by Issuer with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (the “Exchange Act”) when considered as a whole (with the
more recent such reports and documents deemed to amend inconsistent statements contained in
any earlier

6

 

such reports and documents), do not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made, not
misleading.

     (ii) Without limiting the generality of Section 13.1 of the Equity Definitions, Issuer
acknowledges that Dealer is not making any representations or warranties with respect to
the treatment of the Transaction under FASB Statements 133, 149 or 150, EITF Issue No.
00-19 (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

     (iii) Prior to the Effective Date, Issuer shall deliver to Dealer evidence of
corporate authority authorizing the Transaction and such other certificate or certificates
as Dealer shall reasonably request.

     (iv) Issuer is not entering into this Confirmation to create actual or apparent
trading activity in the Shares (or any security convertible into or exchangeable for
Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for Shares) or otherwise in violation of the
Exchange Act.

     (v) Issuer is not, and after giving effect to the transactions contemplated hereby
will not be, an “investment company” as such term is defined in the Investment Company Act
of 1940, as amended.

     (vi) On any Expiration Date, Issuer shall not, and shall cause its affiliates and
affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act) not to,
directly or indirectly (including, without limitation, by means of a cash-settled or other
derivative instrument) purchase, offer to purchase, place any bid or limit order that would
effect a purchase of, or commence any tender offer relating to, any Shares (or an
equivalent interest, including a unit of beneficial interest in a trust or limited
partnership or a depository share) or any security convertible into or exchangeable for
Shares.

     (vii) Issuer understands that no obligations of Dealer to it hereunder will be
entitled to the benefit of deposit insurance and that such obligations will not be
guaranteed by any affiliate of Dealer or any governmental agency.

     (viii) On the Trade Date (A) the assets of Issuer at their fair valuation exceed the
liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is
adequate to conduct the business of Issuer and (C) Issuer has the ability to pay its debts
and obligations as such debts mature and does not intend to, or does not believe that it
will, incur debt beyond its ability to pay as such debts mature.

     (ix) On each Expiration Date, the Shares shall not be subject to a “restricted
period,” as such term is defined in Regulation M under the Exchange Act.

     (x) Any Shares, when issued and delivered in a Net Share Settlement of the Warrants or
a Share Termination Alternative settlement in accordance with the terms of this
Confirmation, will be duly authorized and validly issued, fully paid and nonassessable, and
the issuance thereof will not be subject to any preemptive or similar rights.

     (b) Each of Dealer and Issuer agrees and represents that it is an “eligible contract
participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended.

     (c) Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is
intended to be exempt from registration under the Securities Act of 1933, as amended (the
“Securities Act”), by virtue of Section 4(2) thereof. Accordingly, Dealer represents and warrants
to Issuer that (i) it has the financial ability to bear the economic risk of its investment in the
Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor”
as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account without a view to the distribution or resale
thereof, and (iv) the assignment, transfer or other disposition of the Transaction has not been and
will not be registered under the Securities Act and is restricted under this Confirmation, the
Securities Act and state securities laws.

7

 

     (d) Each of Dealer and Issuer agrees and acknowledges that Dealer is a “financial
institution,” “swap participant” and “financial participant” within the meaning of Sections
101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”). The
parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities
contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which
each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section
741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section
101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a
“transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer
is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17),
546(e), 546(g), 555 and 560 of the Bankruptcy Code.

     8. Other Provisions:

     (a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary
Events. If Issuer shall owe Buyer any amount pursuant to Section 12.2, 12.3, 12.6, 12.7 or 12.9 of
the Equity Definitions (except in the event of an Insolvency, a Nationalization, a Tender Offer or
a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of
Shares consists solely of cash) or pursuant to Section 6(d)(ii) of the Agreement (except in the
event of an Event of Default in which Issuer is the Defaulting Party or a Termination Event in
which Issuer is the Affected Party, that resulted from an event or events within Issuer’s control)
(a “Payment Obligation”), Issuer shall have the right, in its sole discretion, to satisfy any such
Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable
telephonic notice to Buyer, confirmed in writing within one Scheduled Trading Day, between the
hours of 9:00 AM and 4:00 PM, New York City time, on the relevant Merger Date, Tender Offer Date or
Early Termination Date, as applicable (“Notice of Share Termination”). Upon such Notice of Share
Termination, the following provisions shall apply on the Scheduled Trading Day immediately
following the Merger Date, Tender Offer Date or Early Termination Date, as applicable:

	 	 	 
	Share Termination Alternative:

	 	Applicable and means that Issuer shall
deliver to Dealer the Share Termination
Delivery Property on the date on which
the Payment Obligation would otherwise be
due pursuant to Section 12.7 or 12.9 of
the Equity Definitions or Section
6(d)(ii) of the Agreement, as applicable
(the “Share Termination Payment Date”),
in satisfaction of the Payment
Obligation.
	 
	 	 
	Share Termination Delivery 

Property:

	 	A number of Share Termination Delivery
Units, as calculated by the Calculation
Agent, equal to the Payment Obligation
divided by the Share Termination Unit
Price. The Calculation Agent shall
adjust the Share Termination Delivery
Property by replacing any fractional
portion of a security therein with an
amount of cash equal to the value of such
fractional security based on the values
used to calculate the Share Termination
Unit Price.
	 
	 	 
	Share Termination Unit Price:

	 	The value of property contained in one
Share Termination Delivery Unit on the
date such Share Termination Delivery
Units are to be delivered as Share
Termination Delivery Property, as
determined by the Calculation Agent in
its discretion by commercially reasonable
means and notified by the Calculation
Agent to Issuer at the time of
notification of the Payment Obligation.
	 
	 	 
	Share Termination Delivery Unit:

	 	In the case of a Termination Event, Event
of Default or Delisting, one Share or, in
the case of a Merger Event, a Tender
Offer, a Nationalization or an
Insolvency, a unit consisting of the
number or amount of each type of property
received by a holder of one Share
(without consideration of any requirement
to pay cash or other consideration in
lieu of fractional amounts of any
securities) in such Merger Event, Tender
Offer, Nationalization or Insolvency. If
such

8

 

	 	 	 
	 

	 	Merger Event, Tender Offer, Nationalization or Insolvency involves a choice of
consideration to be received by holders, such holder shall be deemed to have
elected to receive the maximum possible amount of cash.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Other applicable provisions:

	 	If Share Termination Alternative is
applicable, the provisions of Sections 9.8,
9.9, 9.10, 9.11 (except that the
Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall
be modified by excluding any representations
therein relating to restrictions,
obligations, limitations or requirements
under applicable securities laws as a result
of the fact that Seller is the Issuer of the
Shares) and 9.12 of the Equity Definitions
will be applicable, as if “Physical
Settlement” were applicable and all
references to “Shares” shall be read as
references to “Share Termination Delivery
Units”.

     (b) Registration/Private Placement Procedures. (i) If, in the reasonable judgment of Dealer
upon the advice of counsel, either (a) any securities of Issuer or its affiliates comprising any
Share Termination Delivery Units or (b) any Shares, in either case deliverable to Dealer hereunder
(any such securities or Shares, “Delivered Securities”) would not be immediately freely
transferable by Dealer under Rule 144(k) under the Securities Act, then the provisions set forth in
this Section 8(b) shall apply. At the election of Issuer by notice to Buyer within one Exchange
Business Day after the relevant delivery obligation arises, but in any event at least one Exchange
Business Day prior to the date on which such delivery obligation is due, either (A) all Delivered
Securities delivered by Issuer to Buyer shall be, at the time of such delivery, covered by an
effective registration statement of Issuer for immediate resale by Buyer (such registration
statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any
sections describing the plan of distribution) in form and content commercially reasonably
satisfactory to Buyer) or (B) Issuer shall deliver additional Delivered Securities so that the
value of such Delivered Securities, as determined by the Calculation Agent to reflect an
appropriate liquidity discount equals the value of the number of Delivered Securities that would
otherwise be deliverable if such Delivered Securities were freely tradeable (without prospectus
delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”); provided that Issuer
may not make the election described in this clause (B) if, on the date of its election, it has
taken, or caused to be taken, any action that would make unavailable either the exemption pursuant
to Section 4(2) of the Securities Act for the delivery by Issuer to Dealer (or any affiliate
designated by Dealer) of the Delivered Securities or the exemption pursuant to Section 4(1) or
Section 4(3) of the Securities Act for resales of the Delivered Securities by Dealer (or any such
affiliate of Dealer). (For the avoidance of doubt, as used in this paragraph (b) only, the term
“Issuer” shall mean the issuer of the relevant securities, as the context shall require.)

     (ii) If Issuer makes the election described in clause (b)(i)(A) above:

     (A) Buyer (or an Affiliate of Buyer designated by Buyer) shall be afforded a
reasonable opportunity to conduct a “due diligence” investigation with respect to Issuer
that is customary in scope for underwritten offerings of equity securities; provided that
if Buyer is not reasonably satisfied with the results of the investigation described in
this subclause (A) or Issuer’s compliance with clause (b)(i)(A) above and subclause (ii)(B)
below, then Issuer shall be deemed to have made the election described in clause (b)(i)(B)
above; and

     (B) Buyer (or an Affiliate of Buyer designated by Buyer) and Issuer shall enter into
an agreement (a “Registration Agreement”) on commercially reasonable terms in connection
with the public resale of such Delivered Securities by Buyer or such Affiliate
substantially similar to underwriting agreements customary for underwritten offerings of
equity securities, in form and substance commercially reasonably satisfactory to Buyer or
such Affiliate and Issuer, which Registration Agreement shall include, without limitation,
provisions substantially similar to those contained in such underwriting agreements
relating to the indemnification of, and contribution in connection with the liability of,
Buyer and its Affiliates and Issuer, shall provide for the payment by Issuer of all
expenses in connection with such resale, including all registration costs and all fees

9

 

and expenses of counsel for Buyer, and shall provide for the delivery of accountants’
“comfort letters” to Buyer or such Affiliate with respect to the financial statements and
certain financial information contained in or incorporated by reference into the
Prospectus.

(iii) If Issuer makes or is deemed to make the election described in clause (b)(i)(B)
above:

     (A) All Delivered Securities shall be delivered to Dealer (or any Affiliate of Dealer
designated by Dealer) pursuant to the exception from the registration requirements of the
Securities Act provided by Section 4(2) thereof;

     (B) Buyer (or an Affiliate of Buyer designated by Buyer) and any potential
institutional purchaser of any such Delivered Securities from Buyer or such Affiliate
identified by Buyer shall be afforded a commercially reasonable opportunity to conduct a
due diligence investigation in compliance with applicable law with respect to Issuer
customary in scope for private placements of equity securities (including, without
limitation, the right to have made available to them for inspection all financial and other
records, pertinent corporate documents and other information reasonably requested by them);

     (C) Buyer (or an Affiliate of Buyer designated by Buyer) and Issuer shall enter into
an agreement (a “Private Placement Agreement”) on commercially reasonable terms in
connection with the private placement of such Delivered Securities by Issuer to Buyer or
such Affiliate and the private resale of such shares by Buyer or such Affiliate,
substantially similar to private placement purchase agreements customary for private
placements of equity securities, in form and substance commercially reasonably satisfactory
to Buyer and Issuer, which Private Placement Agreement shall include, without limitation,
provisions substantially similar to those contained in such private placement purchase
agreements relating to the indemnification of, and contribution in connection with the
liability of, Buyer and its Affiliates and Issuer, shall provide for the payment by Issuer
of all expenses in connection with such resale, including all fees and expenses of counsel
for Buyer, and shall contain representations, warranties and agreements of Issuer
reasonably necessary or advisable to establish and maintain the availability of an
exemption from the registration requirements of the Securities Act for such resales; and

     (D) Issuer agrees that any Delivered Securities so delivered to Dealer, (i) may be
transferred by and among Dealer and its Affiliates, and Issuer shall effect such transfer
without any further action by Dealer and (ii) after the minimum “holding period” within the
meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Delivered
Securities, Issuer shall promptly remove, or cause the transfer agent for such Delivered
Securities to remove, any legends referring to any such restrictions or requirements from
such Delivered Securities upon delivery by Dealer (or such Affiliate of Dealer) to Issuer
or such transfer agent of seller’s and broker’s representation letters customarily
delivered by Dealer in connection with resales of restricted securities pursuant to Rule
144 under the Securities Act, without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any other document, any
transfer tax stamps or payment of any other amount or any other action by Dealer (or such
affiliate of Dealer).

     (E) Issuer and Dealer shall not take, or cause to be taken, any action that would make
unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the
delivery by Issuer to Dealer (or any affiliate designated by Dealer) of the Delivered
Securities or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act
for resales of the Delivered Securities by Dealer (or any such affiliate of Dealer).

     (c) Make-whole. If Issuer makes the election described in clause (b)(i)(B) of Section 8(b)
hereof, then in either case Dealer or its affiliate may sell such Shares or Share Termination
Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the
Exchange Business Day following delivery of such Shares or Share Termination Delivery Units, as the
case may be, and ending on the Exchange Business Day on which Dealer completes the sale of all such
Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or
Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such
sales exceed the amount of the Payment Obligation (in the case of clause (x), or in the case that
both clause (x) and clause (y) apply) or the Freely

10

 

Tradeable Value (in the case that only clause (y) applies)(such amount of the Payment Obligation or
Freely Tradeable Value, as the case may be, the “Required Proceeds”). If any of such delivered
Shares or Share Termination Delivery Units remain after such realized net proceeds exceed the
Required Proceeds, Dealer shall return such remaining Shares or Share Termination Delivery Units to
Issuer. If the Required Proceeds exceed the realized net proceeds from such resale, Issuer shall
transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange
Trading Day immediately following the last day of the Resale Period the amount of such excess (the
“Additional Amount”) in cash or in a number of additional Shares (“Make-whole Shares”) in an amount
that, based on the Relevant Price on the last day of the Resale Period (as if such day was the
“Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the
Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in
the manner contemplated by this Section 8(c). This provision shall be applied successively until
the Additional Amount is equal to zero, subject to Section 8(f).

     (d) Additional Termination Events. The occurrence of either one of the following shall
constitute an Additional Termination Event with respect to which the Transaction is the sole
Affected Transaction and Issuer is the sole Affected Party:

     (i) Any person or group, other than Issuer, Issuer’s subsidiaries or any employee
benefits plan of Issuer or its subsidiaries, files a Schedule 13D or Schedule TO (or any
successor schedule, form or report) pursuant to the Exchange Act, disclosing that such
person or group has become the beneficial owner of shares with a majority of total voting
power of the Shares; or

     (ii) Issuer consolidates with or merges with or into another person or sells,
conveys, transfers or leases all or substantially all of its properties and assets to any
person (other than one of its subsidiaries) or any person (other than one of its
subsidiaries) consolidates with or merges with or into Issuer, and the Shares are
reclassified into, converted for or converted into the right to receive any other property
or security, provided that none of these circumstances will be an Additional Termination
Event if persons that beneficially own the Shares immediately prior to the transaction own,
directly or indirectly, a majority of the total voting power of all outstanding voting
stock of the surviving or transferee person immediately after the transaction in
substantially the same proportion as their ownership of the Shares immediately prior to the
transaction; or

     (iii) Issuer’s shareholders approve any plan or proposal for the liquidation or
dissolution of Issuer.

     The term “person” and the term “group” as used in this Section 8(d) have the meanings
given by Section 13(d) and 14(d) of the Exchange Act or any successor provisions.

     The term “group” as used in this Section 8(d) includes any group acting for the
purpose of acquiring, holding or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act or any successor provision.

     The term “beneficial owner” as used in this Section 8(d) is determined in accordance
with Rules 13d-3 and 13d-5 under the Exchange Act or any successor provisions, except that
a person will be deemed to have beneficial ownership of all shares that person has the
right to acquire irrespective of whether the right is exercisable immediately or only after
the passage of time.

     Notwithstanding the foregoing, it will not constitute an Additional Termination Event
if at least 90% of the consideration for the Shares (excluding cash
payments for fractional shares and cash payments made in respect of dissenter’s appraisal rights and cash payment
of the settlement amount, if any) in the transaction or transactions described above
consists of common stock (or depositary shares or receipts evidencing common stock) traded
on a United States national securities exchange or which will be so traded when exchanged
in connection with such transaction or transactions.

     (e) Repurchase Notices. Issuer shall, on any day on which Issuer effects any repurchase of
Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such
day if, following such repurchase, the Notice Percentage as determined on such day is (i) greater
than 9.5% and (ii) greater by 0.5% than the Notice Percentage included in the immediately preceding
Repurchase Notice

11

 

(or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the
date hereof). The “Notice Percentage” as of any day is the fraction, expressed as a percentage,
the numerator of which is the Number of Shares and the denominator of which is the number of Shares
outstanding on such day.

     (f) Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this
Confirmation, in no event shall Buyer be entitled to receive, or shall be deemed to receive, any
Shares if, upon such receipt of such Shares, the “beneficial ownership” (within the meaning of
Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Buyer or any
entity that directly or indirectly controls Buyer (collectively, “Buyer Group”) would be equal to
or greater than 8% or more of the outstanding Shares. If any delivery owed to Buyer hereunder is
not made, in whole or in part, as a result of this provision, Issuer’s obligation to make such
delivery shall not be extinguished and Issuer shall make such delivery as promptly as practicable
after, but in no event later than one Exchange Business Day after, Buyer gives notice to Issuer
that such delivery would not result in Buyer Group directly or indirectly so beneficially owning in
excess of 8% of the outstanding Shares.

     (g) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the Agreement
to the contrary, in no event shall Issuer be required to deliver Shares in connection with the
Transaction in excess of 5,276,650 Shares (the “Capped Number”). Issuer represents and warrants
(which shall be deemed to be repeated on each day that the Transaction is outstanding) that the
Capped Number is equal to or less than the number of authorized but unissued Shares of the Issuer
that are not reserved for future issuance in connection with transactions in the Shares (other than
the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available
Shares”). In the event Issuer shall not have delivered the full number of Shares otherwise
deliverable as a result of this Section 8(g) (the resulting deficit, the “Deficit Shares”), Issuer
shall be continually obligated to deliver, from time to time until the full number of Deficit
Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i)
Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after
the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii)
authorized and unissued Shares reserved for issuance in respect of other transactions prior to such
date which prior to the relevant date become no longer so reserved and (iii) Issuer additionally
authorizes and issues Shares that are not reserved for other transactions. Issuer shall
immediately notify Dealer of the occurrence of any of the foregoing events (including the number of
Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered)
and promptly deliver such Shares thereafter. Issuer shall not take any action to decrease the
number of Available Shares below the Capped Number. Issuer shall for as long as the Transaction is
outstanding maintain distributable retained earnings (“vrij uitkeerbare reserve”) of not less than
the maximum number of shares that Issuer may be required to deliver in connection with the
Transaction multiplied by the par value of such Shares. The par value of any Shares issued in
connection with the Transaction shall be charged to (“ten laste gebracht van”) the distributable
retained earnings (“vrij uitkeerbare reserve”) referred to in the preceding sentence.

     (h) Right to Extend. Dealer may postpone any Exercise Date or any other date of valuation or
delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent
shall make appropriate adjustments to the Number of Shares to be Delivered with respect to one or
more Valuation Dates), if Dealer determines, in its reasonable discretion, that such extension is
reasonably necessary or appropriate to preserve Dealer’s hedging or hedge unwind activity hereunder
in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in
connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would,
if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal,
regulatory or self-regulatory requirements, or with related policies and procedures applicable to
Dealer; provided that no event shall an Exercise Date occur after the Final Expiration Date.

     (i) Equity Rights. Buyer acknowledges and agrees that this Confirmation is not intended to
convey to it rights with respect to the Transaction that are senior to the claims of common
stockholders in the event of Issuer’s bankruptcy. For the avoidance of doubt, the parties agree
that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to
any claim arising as a result of a breach by Issuer of any of its obligations under this
Confirmation or the Agreement. For the avoidance of doubt,

12

 

the parties acknowledge that this Confirmation is not secured by any collateral that would
otherwise secure the obligations of Issuer hereinunder or pursuant to any other agreement.

     (j) Transfer and Assignment. Buyer may transfer or assign its rights and obligations
hereunder and under the Agreement, in whole or in part, without the consent of Issuer to any
Affiliate of Buyer or to any “qualified institutional buyer” as such term is defined in Rule
144A(a) under the Securities Act of 1933, or if such “qualified institutional investor” is an
individual residing or a legal entity incorporated within the European Economic Area, only if such
individual or legal entity qualifies as a “professional market party” as such term defined in
Article 1a, paragraph 3 of the exemption regulation to the Dutch Act on the Supervision of
Securities Trade 1995 (Vrijstellingsregeling Wet toezicht effectenverkeer 1995). Any other
transfer or assignment of Buyer’s rights and obligations hereunder or under the Agreement shall
require the consent of Issuer, which consent shall not be unreasonably withheld.

     (k) Disclosure. Effective from the date of commencement of discussions concerning the
Transaction, Issuer and each of its employees, representatives, or other agents may, at Issuer’s
sole discretion, disclose to any and all persons, without limitation of any kind, the tax treatment
and tax structure of the Transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to Issuer relating to such tax treatment and tax structure.

     (l) Designation by Dealer. Notwithstanding any other provision in this Confirmation to the
contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other
securities to or from Issuer, Dealer may designate any of its affiliates to purchase, sell, receive
or deliver such shares or other securities and otherwise to perform Dealer’s obligations in respect
of the Transaction on behalf of Dealer and any such designee may assume such obligations. Dealer
shall be discharged of its obligations to Issuer to the extent of any such performance.

     (m) Netting and Set-off. (i) If on any date cash would otherwise be payable or Shares or
other property would otherwise be deliverable hereunder or pursuant to the Agreement or pursuant to
any other agreement between the parties by Issuer to Dealer and cash would otherwise be payable or
Shares or other property would otherwise be deliverable hereunder or pursuant to the Agreement or
pursuant to any other agreement between the parties by Dealer to Issuer and the type of property
required to be paid or delivered by each such party on such date is the same, then, on such date,
each such party’s obligation to make such payment or delivery will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been payable or deliverable by
one such party exceeds the aggregate amount that would otherwise have been payable or deliverable
by the other such party, replaced by an obligation of the party by whom the larger aggregate amount
would have been payable or deliverable to pay or deliver to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

     (ii) In addition to and without limiting any rights of set-off that a party hereto may
have as a matter of law, pursuant to contract or otherwise, upon the occurrence of an Early
Termination Date, Dealer shall have the right to terminate, liquidate and otherwise close
out the Transaction and to set off any obligation or right that Dealer may have to or
against Issuer hereunder or under the Agreement against any right or obligation Dealer may
have against or to Issuer, including without limitation any right to receive a payment or
delivery pursuant to any provision of the Agreement or hereunder. In the case of a set-off
of any obligation to release, deliver or pay assets against any right to receive assets of
the same type, such obligation and right shall be set off in kind. In the case of a
set-off of any obligation to release, deliver or pay assets against any right to receive
assets of any other type, the value of each of such obligation and such right shall be
determined by the Calculation Agent and the result of such set-off shall be that the net
obligor shall pay or deliver to the other party an amount of cash or assets, at the net
obligor’s option, with a value (determined, in the case of a delivery of assets, by the
Calculation Agent) equal to that of the net obligation. In determining the value of any
obligation to release or deliver Shares or any right to receive Shares, the value at any
time of such obligation or right shall be determined by reference to the market value of
the Shares at such time, as determined by the Calculation Agent. If an obligation or right
is unascertained at the time of any such set-off, the Calculation Agent may in good faith
estimate the amount or value of such obligation or right, in which case set-off will be
effected in respect of that estimate, and the relevant party shall account to the other
party at the time such obligation or right is ascertained.

13

 

     (iii) Notwithstanding any provision of the Agreement (including without limitation
Section 6(f) thereof) and this Confirmation (including without limitation this Section
8(m)) or any other agreement between the parties to the contrary, (A) Dealer may net and
set off any rights of Dealer against Issuer arising under the Transaction only against
obligations of Dealer to Issuer arising under any transaction or instrument if such
transaction or instrument does not convey rights to Dealer senior to the claims of common
stockholders in the event of Issuer’s bankruptcy; and (B) in the event of Issuer’s
bankruptcy, Dealer waives any and all rights it may have to set-off in respect of the
Transaction, whether arising under agreement, applicable law or otherwise. Dealer will
give notice to Issuer of any netting or set off effected under this provision.

     (n) Additional Termination Event. If Dealer reasonably determines upon the advice of counsel
that it is advisable to terminate a portion of the Transaction so that Dealer’s related hedging
activities will comply with applicable securities laws, rules or regulations, an Additional
Termination Event shall occur in respect of which (1) Issuer shall be the sole Affected Party and
(2) the Transaction shall be the sole Affected Transaction.

     (o) Effectiveness. If, prior to the Effective Date, Dealer reasonably determines that it is
advisable to cancel the Transaction because of concerns that Dealer’s related hedging activities
could be viewed as not complying with applicable securities laws, rules or regulations, the
Transaction shall be cancelled and shall not become effective, and neither party shall have any
obligation to the other party in respect of the Transaction.

     (p) Opinion. Issuer shall deliver to Dealer an opinion of counsel, dated as of the Trade Date
and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in
Section 3(a)(i) and (ii) of the Agreement and with respect to the execution, delivery and
performance of the Transaction not violating or conflicting with the constitutional documents of
Issuer or with the Third Amended and Restated Credit Agreement among Core Laboratories N.V., Core
Laboratories LP, JP Morgan Chase Bank, N.A., Bank of America, N.A., JP Morgan Securities Inc. and
Banc of America Securities LLC, dated as of March 24, 2005, as amended to date.

     (q) Waiver of Trial by Jury. EACH OF ISSUER AND BUYER HEREBY IRREVOCABLY WAIVES (ON ITS OWN
BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF BUYER OR ITS AFFILIATES
IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

     (r) Governing Law. THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH
ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF
INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

     (s) Role of Agent. Lehman Brothers Inc. in its capacity as Agent will be responsible for (A)
effecting this Transaction, (B) issuing all required confirmations and statements to Dealer and
Issuer, (C) maintaining books and records relating to this Transaction in accordance with its
standard practices and procedures and in accordance with applicable law and (D) unless otherwise
requested by Issuer, receiving, delivering, and safeguarding Issuer’s funds and any securities in
connection with this Transaction, in accordance with its standard practices and procedures and in
accordance with applicable law.

	 	(i)	 	Agent is acting in connection with this Transaction solely in its capacity as
Agent for Dealer and Issuer pursuant to instructions from Dealer and Issuer. Agent
shall have no responsibility or personal liability to Dealer or Issuer arising from
any failure by Dealer or Issuer to pay or perform any obligations hereunder, or to
monitor or enforce compliance by Dealer or Issuer with any obligation hereunder,
including, without limitation, any obligations to maintain collateral. Each of Dealer
and Issuer agrees to

14

 

	 	 	 	proceed solely against the other to collect or recover any securities or monies
owing to it in connection with or as a result of this Transaction. Agent shall
otherwise have no liability in respect of this Transaction, except for its gross
negligence or willful misconduct in performing its duties as Agent.
	 
	 	(ii)	 	Any and all notices, demands, or communications of any kind relating to this
Transaction between Dealer and Issuer shall be transmitted exclusively through Agent
at the following address:
	 
	 	 	 	Lehman Brothers Inc., acting as Agent
	 	 	 	Lehman Brothers OTC Derivatives Inc., acting as Principal
	 	 	 	745 Seventh Avenue
	 	 	 	New York, New York 10019
	 	 	 	Attn: Transaction Management Group
	 	 	 	Telephone No.: (212) 526-9986
	 	 	 	Facsimile No.: (646) 885-9546
	 
	 	(iii)	 	The date and time of the Transaction evidenced hereby will be furnished by
the Agent to Dealer and Issuer upon written request.
	 
	 	(iv)	 	The Agent will furnish to Issuer upon written request a statement as to the
source and amount of any remuneration received or to be received by the Agent in
connection with the Transaction evidenced hereby.
	 
	 	(v)	 	Dealer and Issuer each represents and agrees (A) that this Transaction is not
unsuitable for it in the light of such party’s financial situation, investment
objectives and needs and (B) that it is entering into this Transaction in reliance
upon such tax, accounting, regulatory, legal and financial advice as it deems
necessary and not upon any view expressed by the other or the Agent.

     (t) Regulatory Provisions. (i) Issuer represents and warrants that it has received and read
and understands the Notice of Regulatory Treatment and the OTC Option Risk Disclosure Statement.
(i) The Agent will furnish Issuer upon written request a statement as to the source and amount of
any remuneration received or to be received by the Agent in connection with the Transaction
evidenced hereby.

15

 

     Issuer hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so
that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the
foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement
between Dealer and Issuer with respect to the Transaction, by manually signing this Confirmation or
this page hereof as evidence of agreement to such terms and providing the other information
requested herein and immediately returning an executed copy via facsimile to (646) 885-9546.

	 	 	 	 	 
	 	 	Yours faithfully,
	 
	 	 	 	 
	 	 	Lehman Brothers OTC Derivatives Inc.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

Agreed and Accepted By:

Core Laboratories N.V.

	 	 	 
	By:

	 	Core Laboratories International B.V.,
	 

	 	its Sole Managing Director

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	Jan Willem Sodderland	 	 
	 

	 	Title:
	 	Managing Director of Core Laboratories	 	 
	 

	 	 	 	International B.V.	 	 

2exv10w1

 

Exhibit 10.1

DATED 30 October 2006

ENDEAVOUR INTERNATIONAL CORPORATION

(as the Company)

arranged by

BNP PARIBAS

(as Mandated Lead Arranger, Agent, Security Trustee and Fronting Bank)

and

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

(as Mandated Lead Arranger, Account Bank and Technical Bank)

 

$225,000,000

SECURED REVOLVING LOAN AND

LETTER OF CREDIT FACILITY

AGREEMENT

 

Herbert Smith LLP

1

 

Exhibit 10.1

TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS AND INTERPRETATION

	 	 	1	 
	 
	 	 	 	 
	2. THE FACILITY

	 	 	27	 
	 
	 	 	 	 
	3. PURPOSE

	 	 	27	 
	 
	 	 	 	 
	4. CONDITIONS OF UTILISATION

	 	 	28	 
	 
	 	 	 	 
	5. UTILISATION — LOANS

	 	 	31	 
	 
	 	 	 	 
	6. UTILISATION — LETTERS OF CREDIT

	 	 	32	 
	 
	 	 	 	 
	7. PROJECTIONS

	 	 	40	 
	 
	 	 	 	 
	8. REPAYMENT

	 	 	49	 
	 
	 	 	 	 
	9. PREPAYMENT AND CANCELLATION

	 	 	50	 
	 
	 	 	 	 
	10. INTEREST

	 	 	53	 
	 
	 	 	 	 
	11. INTEREST PERIODS

	 	 	54	 
	 
	 	 	 	 
	12. CHANGES TO THE CALCULATION OF INTEREST

	 	 	54	 
	 
	 	 	 	 
	13. FEES

	 	 	56	 
	 
	 	 	 	 
	14. TAX GROSS UP AND INDEMNITIES

	 	 	59	 
	 
	 	 	 	 
	15. INCREASED COSTS

	 	 	65	 
	 
	 	 	 	 
	16. OTHER INDEMNITIES

	 	 	66	 
	 
	 	 	 	 
	17. MITIGATION BY THE LENDERS

	 	 	67	 
	 
	 	 	 	 
	18. COSTS AND EXPENSES

	 	 	68	 
	 
	 	 	 	 
	19. GUARANTEE AND INDEMNITY

	 	 	69	 
	 
	 	 	 	 
	20. PROJECT ACCOUNTS

	 	 	71	 
	 
	 	 	 	 
	21. REPRESENTATIONS

	 	 	79	 
	 
	 	 	 	 
	22. INFORMATION UNDERTAKINGS

	 	 	87	 
	 
	 	 	 	 
	23. GENERAL UNDERTAKINGS

	 	 	93	 
	 
	 	 	 	 
	24. FINANCIAL COVENANTS

	 	 	106	 
	 
	 	 	 	 
	25. EVENTS OF DEFAULT

	 	 	110	 
	 
	 	 	 	 
	26. CHANGES TO THE LENDERS

	 	 	115	 
	 
	 	 	 	 
	27. CHANGES TO THE OBLIGORS

	 	 	120	 
	 
	 	 	 	 
	28. ROLE OF THE ADMINISTRATIVE FINANCE PARTIES

	 	 	123	 

2

 

Exhibit 10.1

	 	 	 	 	 
	29. CONDUCT OF BUSINESS BY THE FINANCE PARTIES

	 	 	130	 
	 
	 	 	 	 
	30. SHARING AMONG THE FINANCE PARTIES

	 	 	131	 
	 
	 	 	 	 
	31. PAYMENT MECHANICS

	 	 	133	 
	 
	 	 	 	 
	32. SET-OFF

	 	 	136	 
	 
	 	 	 	 
	33. NOTICES

	 	 	136	 
	 
	 	 	 	 
	34. CALCULATIONS AND CERTIFICATES

	 	 	138	 
	 
	 	 	 	 
	35. PARTIAL INVALIDITY

	 	 	139	 
	 
	 	 	 	 
	36. REMEDIES AND WAIVERS

	 	 	139	 
	 
	 	 	 	 
	37. AMENDMENTS AND WAIVERS

	 	 	139	 
	 
	 	 	 	 
	38. COUNTERPARTS

	 	 	140	 
	 
	 	 	 	 
	39. GOVERNING LAW

	 	 	141	 
	 
	 	 	 	 
	40. ENFORCEMENT

	 	 	141	 
	 
	 	 	 	 
	SCHEDULE 1 The Original Obligors

	 	 	142	 
	SCHEDULE 2 The Original Lenders

	 	 	143	 
	SCHEDULE 3 Conditions precedent and Subsequent

	 	 	144	 
	SCHEDULE 4 Applicable Cover Ratios

	 	 	154	 
	SCHEDULE 5 Utilisation Request

	 	 	155	 
	SCHEDULE 6 Forms of Letter of Credit

	 	 	158	 
	SCHEDULE 7 Mandatory Cost Formulae

	 	 	165	 
	SCHEDULE 8 Form of Transfer Certificates

	 	 	168	 
	SCHEDULE 9 Form of Accession Letter

	 	 	171	 
	SCHEDULE 10 Initial Borrowing Base Assets

	 	 	173	 
	SCHEDULE 11 Summary of Projections Process

	 	 	174	 
	SCHEDULE 12 Group Structure

	 	 	175	 
	SCHEDULE 13 Hedging Policy

	 	 	176	 
	SCHEDULE 14 Margin

	 	 	178	 
	SCHEDULE 15 Director’s Certificate

	 	 	179	 

3

 

Exhibit 10.1

THIS AGREEMENT is dated                2006 and made between:

	(1)	 	ENDEAVOUR INTERNATIONAL CORPORATION (a corporation incorporated under the laws of the State
of Nevada whose principal place of business is 1000 Main Street, Suite 3300, Houston, Texas,
77002, USA) (the “Company”);
	 
	(2)	 	THE AFFILIATES of the Company listed in Part I (The Original Borrowers) of Schedule 1 (the
Original Obligors) as original borrowers (the “Original Borrowers”);
	 
	(3)	 	THE AFFILIATES of the Company listed in Part II (The Original Guarantors) of Schedule 1 (The
Original Obligors) as original guarantors (together with the Company, the “Original
Guarantors”);
	 
	(4)	 	BNP PARIBAS as mandated lead arranger, bookrunner and underwriter (a “Mandated Lead
Arranger”);
	 
	(5)	 	THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as mandated lead arranger, bookrunner and
underwriter (a “Mandated Lead Arranger” and together with BNP PARIBAS the “Mandated Lead
Arrangers”);
	 
	(6)	 	THE FINANCIAL INSTITUTIONS whose names appear in the first row of the table set out in
Schedule 2 (The Original Lenders) (the “Original Lenders”);
	 
	(7)	 	BNP PARIBAS as Agent, Security Trustee and Fronting Bank; and
	 
	(8)	 	THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as Account Bank and Technical Bank.

IT IS AGREED as follows:

INTERPRETATION

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement:
	 
	 	 	“Abandonment Date” means, in relation to each Borrowing Base Asset, the date (reflected in
each Projection) on which it is assumed that production of Petroleum from that Borrowing
Base Asset will no longer be commercially viable and the operation of such Borrowing Base
Asset will cease for economic reasons.
	 
	 	 	“Accession Letter” means a document substantially in the form set out in Schedule 9 (Form
of Accession Letter).
	 
	 	 	“Account Bank” means the Governor and Company of the Bank of Scotland in its capacity as
account bank in relation to the Project Accounts or any person that replaces it in such
capacity in accordance with this Agreement.
	 
	 	 	“Acquisition Agreement” means the Agreement dated 26th May 2006 between Paladin
Resources Limited (1) Endeavour Energy UK Limited (2) and Endeavour International
Corporation (3) granting put and call options over the entire issued share capital of
Talisman Expro Limited.

1

 

Exhibit 10.1

	 	 	“Additional Borrower” means a company which becomes an Additional Borrower in accordance
with Clause 27 (Changes to the Obligors).
	 
	 	 	“Additional Cost Rate” has the meaning given to it in Schedule 7 (Mandatory Cost formulae).
	 
	 	 	“Additional Guarantor” means a company which becomes an Additional Guarantor in accordance
with Clause 27 (Changes to the Obligors).
	 
	 	 	“Additional Obligor” means an Additional Borrower or an Additional Guarantor.
	 
	 	 	“Administrative Finance Parties” means each of the Mandated Lead Arrangers, the Agent, the
Account Bank, the Security Trustee, the Technical Bank and the Fronting Bank.
	 
	 	 	“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.
	 
	 	 	“Agent” means BNP Paribas in its capacity as agent for the other Finance Parties or any
other person that replaces it in such capacity in accordance with this Agreement.
	 
	 	 	“Agent’s Spot Rate of Exchange” means, in relation to any date, the Agent’s spot rate of
exchange for the purchase of the relevant currency with dollars in the London foreign
exchange market at or about 11.00 a.m. on the second Business Day prior to that date.
	 
	 	 	“Aggregate Commitments” means, in relation to any Specified Period or any day falling in
that Specified Period, the sum of the Lenders’ Commitments for that Specified Period
(which, as at the date of this Agreement and subject to any cancellation, reduction or
transfer of any Lender’s Commitment in accordance with this Agreement, is the amount (in
dollars) set opposite that Specified Period in the last column (headed “Aggregate
Commitments”) of the table in Schedule 2 (The Original Lenders)).
	 
	 	 	“Applicable Tranche A DSCR” means the figure determined in accordance with Schedule 4
(Applicable Cover Ratios).
	 
	 	 	“Applicable Tranche A FLCR” means the figure determined in accordance with Schedule 4
(Applicable Cover Ratios).
	 
	 	 	“Applicable Tranche A LLCR” means the figure determined in accordance with Schedule 4
(Applicable Cover Ratios).
	 
	 	 	“Applicable Tranche B DSCR” means the figure determined in accordance with Schedule 4
(Applicable Cover Ratios).
	 
	 	 	“Applicable Tranche B FLCR” means the figure determined in accordance with Schedule 4
(Applicable Cover Ratios).
	 
	 	 	“Applicable Tranche B LLCR” means the figure determined in accordance with Schedule 4
(Applicable Cover Ratios).
	 
	 	 	“Assumptions” means the Economic Assumptions and the Technical Assumptions.
	 
	 	 	“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption,
filing, notarisation or registration.
	 
	 	 	“Availability Period” means, in relation to a Loan, the period from and including the date
of this Agreement to and including the date falling one month prior to the Final Maturity
Date or, in relation to a Letter of Credit, the period from and including the date of this
Agreement to and including the date falling twelve months prior to the Final Maturity Date.
	 
	 	 	“Available Commitment” means a Lender’s Commitment minus:

2

 

Exhibit 10.1

	(A)	 	the Dollar Amount of its participation in any outstanding Utilisations (other
than that Lender’s participation in any Utilisations that are due to be repaid or
prepaid on or before the proposed Utilisation Date); and
	 
	(B)	 	in relation to any proposed Utilisations, the Dollar Amount of its
participation in any Utilisations that are due to be made on or before the proposed
Utilisation Date.

“Borrower” means an Original Borrower or an Additional Borrower.

“Borrower Group” means Endeavour International Holding and its Subsidiaries for the time
being other than any Non-Recourse Subsidiary.

“Borrower Update” means a report prepared by or on behalf of the Company which updates the
information and/or evaluation(s) contained in the most recent Reserves Report and including
any additional information and/or evaluation(s) as the Technical Bank may reasonably
require.

“Borrowing Base Asset” means (A) the Petroleum Assets listed in Schedule 10 (Initial
Borrowing Base Assets), (B) any other Petroleum Asset that has been designated as such in
accordance with Clause 7 (Projections) but, in the case of (A) or (B), excluding any of the
foregoing which has ceased to be designated a Borrowing Base Asset in accordance with
Clause 7 (Projections).

“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 or bank holiday) on which banks
are open for general business in London and Paris and:

	(A)	 	in relation to any date for the payment or purchase of dollars, New York; or
	 
	(B)	 	in relation to any date for the payment or purchase of Norwegian krone, Oslo;
or
	 
	(C)	 	in relation to any date for the payment or purchase of euro, any TARGET day.

“Calculation End Date” means, in relation to each Projection, the last day of the last
Calculation Period in which any item of Gross Expenditure and/or Gross Income is projected
to arise.

“Cash Collateral Account” has the meaning given in Clause 20.4 (Cash Collateral Accounts).

“Calculation Period” means each period of six months commencing on 1 January or 1 July of
each year.

3

 

Exhibit 10.1

“Commitment” means:

	(A)	 	in relation to each Original Lender at any time during a Specified Period,
the amount (in dollars) set opposite that Specified Period in the column in which that
Original Lender’s name appears in the table in Schedule 2 (The Original Lenders) and
the amount of any other Commitment for that Specified Period transferred to it under
this Agreement; and
	 
	(B)	 	in relation to any other Lender at any time during a Specified Period, the
amount (in dollars) of any Commitment for that Specified Period transferred to it
under this Agreement,

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

“Commitment Letter” means the commitment letter dated 9th August 2006 entered
into between the Mandated Lead Arrangers and the Company.

“Computer Model” means the computer model used to prepare the Initial Projection, as
amended from time to time in accordance with Clause 7.11 (Computer Model) or as otherwise
agreed between the Company, the Technical Bank and the Agent.

“Confidentiality Undertaking” means a confidentiality undertaking substantially in a form
from time to time recommended by the LMA or in any other form agreed between the Company
and the Agent.

“Default” means Event of Default or Potential Event of Default.

“Disruption Event” means either or both of:

	(A)	 	a material disruption to those payment or communications systems or to those
financial markets which are, in each case, required to operate in order for payments
to be made in connection with the Facilities (or otherwise in order for the
transactions contemplated by the Finance Documents to be carried out) which disruption
is not caused by, and is beyond the control of, any of the Parties; or
	 
	(B)	 	the occurrence of any other event which results in a disruption (of a
technical or systems-related nature) to the treasury or payments operations of a Party
preventing that, or any other Party;

	 	(i)	 	from performing its payment obligations under the Finance Documents; or
	 
	 	(ii)	 	from communicating with other Parties in accordance with the
terms of the Finance Documents,

(and which (in either such case)) is not caused by, and is beyond the control of,
the Party whose operations are disrupted.

“Dollar Amount” means, at any time:

	(A)	 	in relation to each Utilisation denominated in dollars, the relevant amount
of that Utilisation;
	 
	(B)	 	in relation to each Loan or, as the case may be, proposed Loan, not
denominated in dollars, the amount of that Loan converted into dollars at the Agent’s
Spot Rate of Exchange on the most recent valuation date (where, for these purposes,
“valuation date” means each of (a) the date on which the Agent receives the
Utilisation Request for that Loan; (b) the Utilisation Date for that Loan; (c) each
Scheduled Recalculation Date; (d) the date on which the Agent receives a Utilisation
Request

4

 

Exhibit 10.1

	 	 	for any other Utilisation; (e) the Utilisation Date for any other Utilisation; (f)
the first day of each Interest Period for that Loan; and (g) any other date falling
within the Interest Period of that Loan that the Agent (acting reasonably) may
nominate);
	 
	(C)	 	in relation to each Letter of Credit or, as the case may be, proposed Letter
of Credit not denominated in dollars, the relevant amount of that Letter of Credit
converted into dollars at the Agent’s Spot Rate of Exchange on the most recent
valuation date (where, for these purposes, “valuation date” means each of (a) the date
on which the Agent receives the Utilisation Request for the Letter of Credit; (b) the
Utilisation Date for that Letter of Credit; (c) the Expiry Date of that Letter of
Credit; (d) each Scheduled Recalculation Date; (e) the date on which the Agent
receives a Utilisation Request for any other Utilisation; (f) the Utilisation Date for
any other Utilisation; and (g) any other date falling within the Term of that Letter
of Credit as the Agent (acting reasonably) may nominate); and
	 
	(D)	 	in relation to any amount standing to the credit of any Project Account:

	 	(i)	 	(if the Project Account is denominated in dollars) the
relevant amount standing to the credit of that Project Account; or
	 
	 	(ii)	 	(if the Project Account is denominated in any other currency)
the relevant amount standing to the credit of that Project Account converted
into dollars at the Agent’s Spot Rate of Exchange on the most recent valuation
date (where, for these purposes, “valuation date” means the first day of each
Calculation Period, each Recalculation Date and any other date falling on or
before the Final Maturity Date as the Agent (acting reasonably) may nominate).

“Due Diligence Report” means the due diligence report from Ashurst referred to in paragraph
4.5 of Part 1 of Schedule 3.

“Dutch Banking Act” means the Credit System Supervision Act 1992 (Wet toezicht kredietwezen
1992).

“Dutch Borrower” means any Borrower which is incorporated in The Netherlands.

“Dutch Exemption Regulation” means the Exemption Regulation dated 26 June 2002 of the
Minister of Finance of The Netherlands as promulgated in connection with the Dutch Banking
Act.

“Dutch Obligor” means any Obligor which is incorporated in The Netherlands.

“Economic Assumption” means each of the following economic assumptions, and the values
ascribed to such assumptions, upon which each Projection or draft Projection and, in each
case, the calculations and information therein are, or are to be, based:

	(A)	 	commodity prices;
	 
	(B)	 	exchange rates;
	 
	(C)	 	inflation rates;
	 
	(D)	 	discount rates;
	 
	(E)	 	interest rates; and

5

 

Exhibit 10.1

	(F)	 	any other assumptions that the Technical Bank, the Agent and the Company
agree shall be treated as “Economic Assumptions”.

“Eligible Letter of Credit” means each Letter of Credit issued for the purpose referred to
in Clause 3.1.2(A) (Purpose) which the Agent (acting reasonably and in consultation with
the Company) determines is a Letter of Credit which has been issued for the purposes of
providing security and/or credit enhancement with respect to the obligations and
liabilities of any Obligor relating to the abandonment or decommissioning of any Borrowing
Base Asset which have been reflected in the current Projection and been deducted for the
purposes of determining each FLCR Amount and LLCR Amount included in such Projection).

“Endeavour International Holding” means Endeavour International Holding B.V., a private
company with limited liability (besloten vennootschap met beperkte aansprakelijkheid)
incorporated in The Netherlands having its corporate seat at Amsterdam, The Netherlands and
its registered address at Teleportboulevard 140, 1043 EJ, Amsterdam, The Netherlands.

“Enforcement Date” means the date on which a notice is issued under Clause 25.23
(Acceleration).

“Environmental Claims” means any claim by any person in connection with (i) a breach, or
alleged breach, of an Environmental Law; (ii) any accident, fire, explosion or other event
of any type involving an emission or substance which is capable of causing harm to any
living organism or the environment; or (iii) any other environmental contamination.

“Environmental Laws” means any law or regulation concerning (i) the protection of health
and safety; (ii) the environment; or (iii) any emission or substance which is capable of
causing harm to any living organism or the environment.

“Environmental Licence” means all Authorisations required by any Environmental Law for the
ownership of an interest in, or the operation or development of, any Petroleum Asset.

“Equivalent Field Document” means, to the extent that any member of the Group is permitted
to enter into the same under the Finance Documents, in relation to any Petroleum Asset that
is not a Borrowing Base Asset:

	(A)	 	each joint operating agreement and/or unitisation and unit operating
agreement relating thereto, each agreement relating to the transportation, processing
and/or storage of production therefrom and each agreement for the sale or marketing of
production therefrom and each other major agreement relating to that Petroleum Asset
and/or Petroleum produced therefrom;
	 
	(B)	 	any Authorisation required for the lawful exploitation, development or
operation of that Petroleum Asset or the production, transportation or sale of
Petroleum therefrom (and including, without limitation, any Petroleum production
licence);
	 
	(C)	 	any development plan approved by any relevant operating committee and/or any
appropriate governmental or other regulatory authority relating to that Petroleum
Asset;
	 
	(D)	 	any documents relating to the acquisition by any member of the Group of any
interests in that Petroleum Asset or of any entity holding the interest in that
Petroleum Asset; and

6

 

Exhibit 10.1

	(E)	 	any other document designated as such by the Company and the Agent.

“EURIBOR” means, in relation to any Loan in euro:

	(A)	 	the applicable Screen Rate; or
	 
	(B)	 	(if no Screen Rate is available for the Interest Period of that Loan) the
arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to
the Agent at its request quoted by the Reference Banks to leading banks in the
European interbank market,

as of 11.00 am Brussels time on the Quotation Day for the offering of deposits in euro for
a period comparable to the Interest Period of the relevant Loan.

“Event of Default” means any event or circumstance specified as such in Clause 25 (Events
of Default).

“Exemption Regulation” means the Exemption Regulation dated 26 June 2002 of the Ministry of
Finance of The Netherlands as promulgated in connection with the Dutch Act on the
Supervision of Credit Institutions 1992 (Wet toezicht kreditietwezen 1992) (the “wtk”), in
each case as amended.

“Expiry Date” means, for a Letter of Credit, the last day of its Term.

“Facility” means the credit facility described in Clause 2.1 (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 each of:

	(A)	 	any letter dated on or about the date of this Agreement between (i) all or
any of the Obligors and (ii) all or any of the Administrative Finance Parties relating
to the payment of fees by the Obligors (or any of them) to any such Administrative
Finance Party(ies); and
	 
	(B)	 	any other letter designated as such by the Agent and the Company.

“Final Maturity Date” means the earlier of the date falling five years less 10 days after
the date of this Agreement and the Reserve Tail Date.

“Finance Document” means:

	(A)	 	this Agreement;
	 
	(B)	 	any Security Document;
	 
	(C)	 	any Fee Letter;
	 
	(D)	 	(other than for the purposes of Clauses 14 (Tax Gross up and Indemnities) 15
(Increased Costs) and 37 (Amendments and Waivers)) any Secured Hedging Agreement;
	 
	(E)	 	any Transfer Certificate;
	 
	(F)	 	any Accession Letter;

7

 

Exhibit 10.1

	(G)	 	any other Accession Instrument;
	 
	(H)	 	the Intercreditor Agreement;
	 
	(I)	 	the Commitment Letter;
	 
	(J)	 	any BoS Counter-indemnity
	 
	(K)	 	any guarantee given by the Governor and Company of the Bank of Scotland in
favour of HBOS Treasury Services plc (“HBOSTS”) in respect of the liabilities of any
Obligor under any Secured Hedging Agreement entered into between HBOSTS and that
Obligor; and
	 
	(L)	 	any other document designated as such by the Company and the Agent.

“Finance Party” means each of the Lenders, the Hedging Banks, the Mandated Lead Arrangers,
the Fronting Bank, the Security Trustee, the Agent, the Account Bank and the Technical
Bank.

“Financial Indebtedness” means, at the relevant date, any indebtedness for or in respect
of:

	(A)	 	moneys borrowed;
	 
	(B)	 	any acceptance credit;
	 
	(C)	 	any bond, note, debenture, loan stock, or other similar instrument;
	 
	(D)	 	any redeemable preference share;
	 
	(E)	 	any finance or capital lease;
	 
	(F)	 	receivables sold or discounted (otherwise than on a non-recourse basis);
	 
	(G)	 	the acquisition cost of any asset to the extent payable after its acquisition
or possession by the party liable where the deferred payment is arranged primarily as
a method of raising finance or financing the acquisition of that asset;
	 
	(H)	 	any derivative transaction protecting against or benefiting from fluctuations
in any rate or price (and, except for non-payment of an amount, the then mark to
market value of the derivative transaction will be used to calculate its amount);
	 
	(I)	 	any other transaction (including any forward sale or purchase agreement)
which has the commercial effect of a borrowing;
	 
	(J)	 	any counter-indemnity obligation in respect of any guarantee, indemnity,
bond, letter of credit or any other instrument issued by a bank or financial
institution; or
	 
	(K)	 	any guarantee, indemnity or similar assurance against financial loss of any
person in respect of any item referred to in paragraphs (A) to (J) above,

but excluding, for the avoidance of doubt, any indebtedness arising from the purchase of
goods or services on normal credit terms in the ordinary course of business.

“FLCR Amount” means, in relation to any Calculation Period, the amount, in dollars,
calculated in accordance with the following formula:

8

 

Exhibit 10.1

FLCR Amount = A + B + C

where:

“A” is the net present value (as at the first day of that Calculation Period) of the
aggregate (the “relevant amount”) of the Projected Net Revenues for that Calculation Period
and for each Calculation Period occurring thereafter which ends on or before the
Calculation End Date (being the discounted value of the relevant amount calculated, using
the Computer Model, by applying the relevant discount rate agreed or determined in
accordance with Clause 7 (Projections) to the relevant amount);

“B” is the aggregate Dollar Amount of sums standing to the credit of the Cash Collateral
Accounts on the first day of that Calculation Period which have been credited thereto by a
Borrower for the purposes of complying with its obligations under Clause 6.13 (Cash
Collateral for Letters of Credit)); and

“C” is (to the extent that (i) such capital expenditure has been approved by the Technical
Bank and (ii) drawings under the Facility are forecast to be available to fund such capital
expenditure or the Company demonstrated to the satisfaction of the Technical Bank (acting
reasonably) that the Borrower Group has other committed funds, other than cash flow, to
fund such capital expenditure which is within this paragraph C) the net present value (as
at the first day of that Calculation Period) of the aggregate amount of capital expenditure
projected to be incurred by the Borrower Group in the period of twelve months commencing on
that first day of that Calculation Period (being, the discounted value of that aggregate
amount of capital expenditure calculated, using the Computer Model, by applying the
relevant discount rate agreed or determined in accordance with Clause 7 (Projections) to
that aggregate amount of capital expenditure).

“Fronting Bank” means BNP Paribas in its capacity as issuing bank for each Letter of Credit
or any other person that replaces it in such capacity in accordance with this Agreement.

“GAAP/IFRS” means:

	(A)	 	in relation to any member of the Group incorporated in the UK, generally
accepted accounting principles in the UK; or
	 
	(B)	 	in relation to any member of the Group that is not incorporated in the UK,
generally accepted accounting principles in that person’s jurisdiction of
incorporation,

or, in each case, if IFRS has been implemented by the Group or the relevant member thereof,
IFRS.

“Gross Expenditure” means, in relation to any period and any member of the Borrower Group,
without double counting:

	(A)	 	to the extent that the same is payable in that period by that member of the
Borrower Group in respect of any Borrowing Base Asset:

	 	(i)	 	all cash calls by the operator of that Borrowing Base Asset;
and
	 
	 	(ii)	 	to the extent not covered by paragraph (i) above:

9

 

Exhibit 10.1

	 	(a)	 	all costs of producing, lifting,
transporting, storing, processing, marketing and selling any Petroleum
derived from that Borrowing Base Asset;
	 
	 	(b)	 	all costs of reinstating any damaged
facilities relating to that Borrowing Base Asset;
	 
	 	(c)	 	all costs of satisfying any liability in
respect of seepage, pollution and well control;
	 
	 	(d)	 	all insurance premiums and all the fees,
costs and expenses of insurance brokers;
	 
	 	(e)	 	all exploration, appraisal and development
expenditure on that Borrowing Base Asset;
	 
	 	(f)	 	all costs of abandonment and any payments to
make provision for abandonment costs in accordance with all relevant
Project Documents relating to the whole or any part of that Borrowing
Base Asset or any physical assets associated with it; and
	 
	 	(g)	 	any royalties under any Petroleum production
licence;

	 	(iii)	 	any general and administrative expenditure or any other
expenses and payments not falling within the preceding sub-paragraphs of
paragraph (A) above which are payable by that member of the Borrower Group in
that period;

	(B)	 	any Taxes payable by that member of the Borrower Group in that period;
	 
	(C)	 	(if that member of the Borrower Group is an Obligor) any Hedging Costs which
are payable by that member of the Borrower Group in that period;
	 
	(D)	 	any other expense or payment not falling in the preceding paragraphs of this
definition which the Company elects to treat as “Gross Expenditure”.

“Gross Income” means, in relation to any period and any member of the Borrower Group,
without double counting:

	(A)	 	to the extent that the same is payable in that period to that member of the
Borrower Group in respect of any Borrowing Base Asset:

	 	(i)	 	the gross proceeds (without deductions whatsoever) of any
disposal of any Petroleum derived from that Borrowing Base Asset payable to
that member of the Borrower Group in that period;
	 
	 	(ii)	 	any gross proceeds (without any deductions whatsoever)
payable to that member of the Borrower Group in respect of the use or
reservation of capacity of any infrastructure forming part of, or relating to,
that Borrowing Base Asset;
	 
	 	(iii)	 	any other amounts payable to that member of the Borrower
Group in that period in respect of that Borrowing Base Asset;

10

 

Exhibit 10.1

	(B)	 	any refunds of Taxes payable to that member of the Borrower Group in that
period; and
	 
	(C)	 	(if that member of the Borrower Group is an Obligor) any Hedging Receipts
which are payable to that member of the Borrower Group in that period;

but excluding:

	 	(1)	 	any amount payable by way of loan or contribution to the
equity capital of that member of the Borrower Group in that period; and
	 
	 	(2)	 	any amount payable to that member of the Borrower Group in
that period which does not relate to a Borrowing Base Asset (other than any
amount referred to in paragraph (B) above).

“Group” means Endeavour International Corporation and its Subsidiaries for the time being
other than any Non-Recourse Subsidiary.

“Guarantor” means an Original Guarantor or an Additional Guarantor.

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

“IFRS” means the International Financial Reporting Standards, International Accounting
Standards and interpretations of those standards issued by the International Accounting
Standards Board and the International Financial Reporting Interpretations Committee and
their predecessor bodies.

“Independent Engineer” means Netherlands Sewell & Associates, Gaffney, Cline & Associates
Ltd and/or such other reputable independent petroleum engineer or other expert acceptable
to the Technical Bank and the Company.

“Information Memorandum” means the document in the form approved by the Company concerning
the Facility and the Obligors which is prepared by the Mandated Lead Arrangers and is to be
distributed to selected financial institutions for the purposes of the syndication of the
Facility.

“Information Package” means the written information and documents delivered to the Mandated
Lead Arrangers by any Obligor in connection with the negotiation of this Agreement and the
Commitment Letter and/or supplied pursuant to Clause 23.15 (Syndication).

“Initial Projection” means the Projection delivered pursuant to Clause 4 (Conditions of
Utilisation).

“Insolvency Officer” means any liquidator, trustee in bankruptcy, judicial custodian or
manager, compulsory manager, receiver, administrative receiver, administrator, curator,
bewindvoerder, vereffenaar or similar officer, in each case, appointed in any relevant
jurisdiction.

“Insurances” means any insurances that are required to be maintained by, or on behalf of,
any Obligor or any member of the Group in respect of the Borrowing Base Assets and/or any
activities related thereto pursuant to this Agreement.

“Intercreditor Agreement” means the agreement dated on or about the date of this Agreement
between, among others, the Company, the Obligors as defined therein and the Finance
Parties.

11

 

Exhibit 10.1

“Interest Period” means, in relation to a Loan, each period determined in accordance with
Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in
accordance with Clause 10.3 (Default interest).

“Interim Projection” means each Projection that is adopted or due to be adopted on each
Interim Recalculation Date.

“Interim Recalculation Date” means any date nominated by the Agent pursuant to Clause 7.1.2
(Adoption) as of which an Interim Projection is to be prepared and adopted.

“L/C Proportion” means, in relation to any Lender in respect of any Letter of Credit at any
time, the proportion (expressed as a percentage) borne by that Lender’s Commitment to the
Aggregate Commitments at such time or, if at any such time the Aggregate Commitments have
been reduced to zero, the proportion, (expressed as a percentage) borne by that Lender’s
Commitment to the Aggregate Commitments immediately prior to such reduction.

“Lender” means:

	(A)	 	any Original Lender; and
	 
	(B)	 	any bank, financial institution, trust, fund or other entity which has become
a Party in accordance with Clause 26 (Changes to the Lenders),

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

“Letter of Credit” means a letter of credit issued or to be issued pursuant to Clause 6
(Utilisation – Letters of Credit).

“LIBOR” means, in relation to any Loan:

	(A)	 	the applicable Screen Rate; or
	 
	(B)	 	(if no Screen Rate is available for the currency or the Interest Period of
that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places)
as supplied to the Agent at its request quoted by the Reference Banks to leading banks
in the London interbank market,

as of 11.00 a.m. (London time) on the Quotation Day for the offering of deposits in the
currency of that Loan and for a period comparable to the Interest Period for that Loan.

“LLCR Amount” means, in relation to any Calculation Period, the amount, in dollars,
calculated in accordance with the following formula:

LLCR Amount = A + B + C

where:

“A” is the net present value (as at the first day of that Calculation Period) of the
aggregate (the “relevant amount”) of the Projected Net Revenues for that Calculation Period
and for each Calculation Period occurring thereafter which ends on or before the Final
Maturity Date (being the discounted value of the relevant amount calculated, using the
Computer Model, by applying the relevant discount rate agreed or determined in accordance
with Clause 7 (Projections) to the relevant amount);

12

 

Exhibit 10.1

“B” is the aggregate Dollar Amount of sums standing to the credit of the Cash Collateral
Accounts on the first day of that Calculation Period which have been credited thereto by a
Borrower for the purposes of complying with its obligations under Clause 6.13 (Cash
Collateral for Letters of Credit)) in relation to each Letter of Credit that has been
issued in respect of any Borrowing Base Asset the Abandonment Date of which is projected to
occur prior to the Final Maturity Date); and

“C” is (to the extent that (i) such capital expenditure has been approved by the Technical
Bank and (ii) drawings under the Facility are forecast to be available to fund such capital
expenditure or the Company has demonstrated to the satisfaction of the Technical Bank
(acting reasonably) that the Borrower Group has other committed funds, other than cash
flow, to fund such capital expenditure which is within this paragraph C) the net present
value (as at the first day of that Calculation Period) of the aggregate amount of capital
expenditure projected to be incurred by the Borrower Group in the period of twelve months
(or such shorter period as ends on the Final Maturity Date) commencing on that first day of
that Calculation Period (being, the discounted value of that aggregate amount of capital
expenditure calculated, using the Computer Model, by applying the relevant discount rate
agreed or determined in accordance with Clause 7 (Projections) to that aggregate amount of
capital expenditure).

“LMA” means the Loan Market Association.

“Loan” means a loan made or to be made under the Facility or the principal amount
outstanding for the time being of that loan being a Tranche A Loan or a Tranche B Loan.

“Majority Lenders” means:

	(A)	 	until the Aggregate Commitments have been reduced to zero, a Lender or
Lenders whose Commitments aggregate more than 66.67% of the Aggregate Commitments (or,
if the Aggregate Commitments have been reduced to zero and there are no Utilisations
then outstanding, aggregated more than 66.67% of the Aggregate Commitments immediately
prior to the reduction); or
	 
	(B)	 	at any other time, a Lender or Lenders whose participations in the
Utilisations then outstanding aggregate more than 66.67% of all the Utilisations then
outstanding.

	 	 	“Mandatory Cost” means the percentage rate per annum calculated by the Agent in accordance
with Schedule 7 (Mandatory Cost Formulae).
	 
	 	 	“Margin” means the percentage rate per annum determined by the Agent in accordance with
Schedule 14 (Margin).
	 
	 	 	“Material Adverse Change” means any event, development or circumstance that has a material
adverse effect on:

	(A)	 	the ability of any Obligor to perform any of its payment obligations under
any Finance Document as and when they fall due to be performed;
	 
	(B)	 	the business, property, operations or financial condition of the Obligors
(taken as a whole);
	 
	(C)	 	the validity or enforceability of any provision of any Finance Document;

13

 

Exhibit 10.1

	(D)	 	the rights and remedies of any Finance Party under any Finance Document; or
	 
	(E)	 	the validity, enforceability, effectiveness or priority of any Security
created or purported to be created under the Finance Documents.

“Material Subsidiary” means each member of the Group whose:

	(A)	 	profits (calculated before making allowances for Taxes) represent more than
10% of the aggregate profits of the Group (calculated before making allowances for
Taxes) as shown by the latest audited consolidated accounts for the time being of the
Company as adjusted in such manner as the Agent and the Company may agree (each acting
reasonably) to be appropriate from time to time to take account of any matters
occurring after the relevant balance sheet date; or
	 
	(B)	 	fixed assets (other than intangible assets) have a book value which
represents more than 10% of the book value of the consolidated fixed assets (other
than intangible assets) of the Group as shown by the latest audited consolidated
accounts for the time being of the Company as adjusted in such manner as the Agent and
the Company may agree (each acting reasonably) to be appropriate from time to time to
take account of any matters occurring after the relevant balance sheet date.

“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:

	(A)	 	(subject to paragraph (C) below) 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;
	 
	(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; and
	 
	(C)	 	if an Interest Period begins on the last Business Day of a calendar month,
that Interest Period shall end on the last Business Day in the calendar month in which
that Interest Period is to end.

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

“NIBOR” means, in relation to any Loan in Norwegian krone:

	(A)	 	the applicable Screen Rate; or
	 
	(B)	 	(if no Screen Rate is available for the Interest Period of that Loan) the
arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to
the Agent at its request quoted by the Reference Banks to leading banks in the
European interbank market,

as of 11.00 am Oslo time on the Quotation Day for the offering of deposits in Norwegian
krone for a period comparable to the Interest Period of the relevant Loan.

14

 

Exhibit 10.1

“Non Recourse Subsidiary” means any Subsidiary of the Company which:

	(A)	 	does not own directly or indirectly (by shareholding or otherwise) an
interest in any Borrowing Base Asset; and
	 
	(B)	 	which has been nominated as a “Non-Recourse Subsidiary” by the Company by
written notice to the Agent.

“Obligor” means a Borrower or a Guarantor.

“Original Financial Statements” means:

	(A)	 	in relation to the Company, the audited consolidated financial statements of
the Company for the financial year ended 31 December 2005; and
	 
	(B)	 	in relation to each of the other Original Obligors, its financial statements
or, if the same have been audited, audited financial statements for its financial year
ended 31 December 2005.

“Original Obligor” means an Original Borrower or an Original Guarantor.

“Original Reserves” means, in relation to each Borrowing Base Asset, the quantities of
Petroleum forecast in the first Projection in which such Petroleum Asset is included as a
Borrowing Base Asset to be produced from such Borrowing Base Asset from the first day of
the first Calculation Period shown in such Projection up to (and including) the Abandonment
Date for such Borrowing Base Asset.

“Participating Member State” means any member state of the European Communities that adopts
or has adopted the euro as its lawful currency in accordance with legislation of the
European Community relating to Economic and Monetary Union.

“Party” means a party to this Agreement.

“Permitted Hedging Agreement” means any Secured Hedging Agreement or any other Hedging
Agreement entered into by any Obligor in accordance with Clause 23.22 (Hedging).

“Permitted Transaction” means:

	(A)	 	an intra-group re-organisation on a solvent basis
	 
	(B)	 	the transfer of any Borrowing Base Asset owned by Talisman Expro Limited to
Endeavour Energy UK Limited, on terms (i) whereby such asset remains a Borrowing Base
Asset and (ii) that ensure that the Security Trustee continues to have Security over
such Borrowing Base Asset upon the same, or more beneficial, terms as the Security
granted in favour of the Security Trustee over such Borrowing Base Asset before such
transfer and that the Security that the Security Trustee has over such Borrowing Base
Asset is not prejudiced or adversely affected in any way;
	 
	(C)	 	the winding-up of Talisman Expro Limited on a solvent basis at a time when it
has no assets whatsoever and is not a Borrower or Guarantor; or
	 
	(B)	 	any other transaction agreed by the Majority Lenders.

15

 

Exhibit 10.1

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

“Petroleum Asset” means (i) any Petroleum field, pipeline transmission system or other
Petroleum project, (ii) the facilities relating to such field, system or project and/or
(iii) the interests in such field, system, project or facilities.

“PMP” means a professional market party (professionele marktpartij) within the meaning of
the Dutch Exemption Regulation.

“Policy Guidelines” means the Dutch Central Bank’s Policy Guidelines (issued in relation to
the Exemption Regulation) dated 29 December 2004 (beleidsregel kernbegrippen
markttoetreding en handhaving wtk 1992).

“Potential Event of Default” means any event or circumstances specified in Clause 25
(Events of Default) which would (with the expiry of a grace period, the giving of notice,
the fulfilment of any condition, the making of any determination under the Finance
Documents or any combination of the foregoing) be an Event of Default.

“Probable Reserves” means, in relation to any Petroleum Asset, those quantities of
Petroleum which have a 50% or greater probability of being recovered from that Petroleum
Asset (as determined in accordance with the guidelines of the Society of Petroleum
Engineers).

“Proceeds Account” has the meaning given in Clause 20.3 (Proceeds Account).

“Project Accounts” means the Proceeds Accounts and the Cash Collateral Accounts.

“Project Documents” means:

	(A)	 	in relation to each Borrowing Base Asset:

	 	(1)	 	each joint operating agreement and/or unitisation and unit
operating agreement relating thereto, each agreement relating to the
development thereof or the transportation, processing and/or storage of
production therefrom and each agreement for the sale or marketing of
production therefrom and each other major agreement relating to that
Borrowing Base Asset and/or Petroleum produced therefrom;
	 
	 	(2)	 	any Authorisation required for the lawful exploitation,
development or operation of that Borrowing Base Asset or the production,
transportation or sale of Petroleum therefrom (and including, without
limitation, any Petroleum production licence);
	 
	 	(3)	 	any development plan approved by any relevant operating
committee and/or any appropriate governmental or other regulatory authority
relating to that Borrowing Base Asset;

	(B)	 	any documents relating to the acquisition by any member of the Borrower Group
of any interests in any Borrowing Base Asset or of any entity holding the interest in
such Borrowing Base Asset; and

16

 

Exhibit 10.1

	(C)	 	any other document designated as such by the Company and the Agent.

“Projected Net Revenues” means, in relation to any period, an amount (which may be a
negative or positive figure) calculated by deducting “B” from “A” where:

“A” is the aggregate of the Gross Income projected to be received in that period; and

“B” is the aggregate of the Gross Expenditure projected to be made in that period.

“Projection” means a consolidated cashflow and debt service projection in respect of the
Borrower Group prepared or to be prepared pursuant to this Agreement.

“Proven Reserves” means, in relation to any Petroleum Asset, those quantities of Petroleum
which have a 90% or greater probability of being recovered from that Petroleum Asset (as
determined in accordance with the guidelines of the Society of Petroleum Engineers).

“Qualifying Lender” has the meaning given to it in Clause 14 (Tax gross-up and
indemnities).

“Quotation Day” means, in relation to any period for which an interest rate is to be
determined:

	(A)	 	(if the currency is sterling) the first day of that period;
	 
	(B)	 	(if the currency is euro) two TARGET Days before the first day of that
period; or
	 
	(C)	 	(for any other currency) two Business Days before the first day of that
period,

unless market practice differs in the Relevant Interbank Market for a currency in which
case the Quotation Day for that currency will be determined by the Agent in accordance with
market practice in the Relevant Interbank Market and if quotations would normally be given
by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day
will be the last of those days.

“Recalculation Date” means any Scheduled Recalculation Date or Interim Recalculation Date.

“Reference Banks” means, in relation to LIBOR, the principal London offices of BNP Paribas
and the Governor and Company of the Bank of Scotland and, in relation to EURIBOR, the
principal offices in Brussels of BNP Paribas and the Governor and Company of the Bank of
Scotland and, in relation to NIBOR, the principal offices in Oslo of BNP Paribas and the
Governor and Company of the Bank of Scotland or in any case such other Banks as may be
appointed by the Agent in consultation with the Company.

“Relevant Affiliate” means, to the extent that it is not already an Obligor, any
wholly-owned Subsidiary of the Company.

“Relevant Interbank Market” means, in relation to euro, the European interbank market, in
relation to Norwegian krone, the Oslo interbank market and, in relation to any other
currency, the London interbank market.

“Relevant NPV” means, in relation to any Calculation Period, the FLCR Amount or, as the
case may be, the LLCR Amount (shown in the then current Projection) which is used to

17

 

Exhibit 10.1

derive the then applicable Tranche A Borrowing Base Amount and Tranche B Borrowing Base
Amount.

“Remaining Reserves” means, in relation to each Borrowing Base Asset and any date, the
quantities of Petroleum forecast in the then current Projection to be produced by that
Borrowing Base Asset in the period from that date up to (and including) the Abandonment
Date for such Borrowing Base Asset.

“Renewal Letter of Credit” means a Letter of Credit issued in accordance with the
requirements of Clause 6.4 (Renewal of a Letter of Credit).

“Repeating Representations” means each of the representations set out in Clause 21
(Representations) other than those in Clauses 21.6 (Pari passu ranking), 21.7 (Insolvency),
21.9 (Authorisations), 21.10 (Financial statements), 21.11 (No Material Adverse Change),
21.12 (Litigation), 21.13 (Information Package), 21.15 (Environmental Matters), 21.19 (Laws
and regulations), 21.20 (Insurances), 21.23 (Deduction of Tax), 21.24 (Ownership
structure), 21.26 (Share Security) and 21.27 (Information Memorandum).

“Reserve Tail Date” means the first day of the first Calculation Period in which the then
current Projection forecasts that the aggregate Remaining Reserves for all Borrowing Base
Assets falls below 20% of the aggregate Original Reserves for such Borrowing Base Assets.

“Reserves Report” means a report which:

	(A)	 	is prepared by an Independent Engineer;
	 
	(B)	 	is addressed to the Technical Bank and Security Trustee (on behalf of the
Secured Creditors) in a manner which ensures that the Independent Engineer owes a duty
of care to the Technical Bank, the Security Trustee and the Secured Creditors; and
	 
	(C)	 	contains such information and/or evaluation(s) (relating to each Borrowing
Base Asset or, as the case may be, any other Petroleum Asset which the Company is
seeking to have designated as a Borrowing Base Asset) as the Technical Bank may
reasonably require including (i) evaluation(s) of the recoverable reserves (both
Probable Reserves and Proven Reserves) and/or production profiles of such Borrowing
Base Assets or, as the case may be, Petroleum Assets and (ii) the operating costs and
expenditure profiles taken into consideration by the Independent Engineer for each
Borrowing Base Asset or, as the case may be, other Petroleum Asset included in such
report;

“Rollover Loan” means one or more Loans:

	(A)	 	made or to be made on the same day that a maturing Loan is due to be repaid;
	 
	(B)	 	the aggregate amount of which is equal to or less than the maturing Loan;
	 
	(C)	 	in the same currency as the maturing Loan; and
	 
	(D)	 	made or to be made to the same Borrower for the purpose of refinancing a
maturing Loan.

“Scheduled Projection” means each Projection that is adopted or due to be adopted on a
Scheduled Recalculation Date.

18

 

Exhibit 10.1

“Scheduled Recalculation Date” means each 1st April and
1st October
occurring before the Final Maturity Date.

“Screen Rate” means:

	(A)	 	in relation to LIBOR, the British Bankers’ Association Interest Settlement
Rate for the relevant currency and period;
	 
	(B)	 	in relation to EURIBOR, the percentage rate per annum determined by the
Banking Federation of the European Union for the relevant period; and
	 
	(C)	 	in relation to NIBOR, the percentage rate per annum
determined by Den
Norske Bank for the relevant currency and period,

displayed on the appropriate page of the Telerate 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 Company and the Lenders.

“Second Lien Facility” means the second lien credit and guarantee agreement dated on or
about the date of this Agreement between, amongst others, Endeavour International Holding,
the Guarantors as defined therein and Credit Suisse.

“Secured Creditors” has the meaning ascribed thereto in the Intercreditor Agreement.

“Security” means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar effect.

“Specified Period” means each period specified in the first column (headed “Specified
Period”) of the table set out in Schedule 2 (The Original Lenders).

“Subsidiary” means a subsidiary undertaking within the meaning of section 258 of the
Companies Act 1985.

“Syndication Date” means the date notified by the Mandated Lead Arrangers to the Company as
the date on which the primary syndication of this Facility is to be, or has been, effected.

“Talisman Expro Limited” means Talisman Expro Limited, a company incorporated in England
and Wales (Registered No. 03518803) having its registered office at 20-22 Bedford Row,
London WC1R 4JS.

“TARGET” means Trans-European Automated Real-time Gross Settlement Express Transfer payment
system.

“Target Assets” means the issued share capital of Talisman Expro Limited.

“TARGET Day” means any day on which TARGET is open for the settlement of payments in euro.

“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).

“Taxes Act” means the Income and Corporation Taxes Act 1988.

19

 

Exhibit 10.1

“Technical Assumption” means any assumption (other than an Economic Assumption), and the
values ascribed to such assumption, upon which each Projection or draft Projection and, in
each case, the calculations and information therein are, or are to be, based (including the
Abandonment Date for each Borrowing Base Asset).

“Technical Bank” means The Governor and Company of the Bank of Scotland in its capacity as
technical bank or any other person that replaces it in such capacity in accordance with
this Agreement.

“Term” means, in relation to any Letter of Credit, the period during which the Fronting
Bank is under a liability under that Letter of Credit.

“Total Available Commitments” means the aggregate for the time being of each Lender’s
Available Commitment.

“Total Relevant Outstandings” means, on any date, the amount which is the aggregate of the
aggregate Dollar Amount of all Loans and all Letters of Credit (other than Eligible Letters
of Credit) outstanding at such time. For this purpose, the amount outstanding under any
Letter of Credit shall be deemed to have been reduced by the amount of cash cover for such
Letter of Credit

“Tranche A Borrowing Base Amount” means, in relation to any Calculation Period or any day
falling in that Calculation Period, the amount (in dollars) reflected in each Projection
which is the lowest of A, B and C where:

	(A)	 	“A” is calculated by dividing the FLCR Amount relating to that Calculation
Period by the Applicable Tranche A FLCR; and
	 
	(B)	 	“B” is calculated by dividing the LLCR Amount relating to that Calculation
Period by the Applicable Tranche A LLCR; and
	 
	(C)	 	“C” is the maximum aggregate amount of Loans (in dollars) which could be
outstanding under the Facility without the Tranche A DSCR for any Calculation Period
being less than the Applicable Tranche A DSCR.

“Tranche A DSCR” means, in relation to any Calculation Period, the debt service cover ratio
for such period being the ratio of N:D as shown in the then current Projection, where:

“N” is the aggregate of (i) the Projected Net Revenues for such Calculation Period; (ii)
all Hedging Termination Payments which are due and payable to the Obligors in such
Calculation Period; and (iii) the aggregate Dollar Amount of the amounts standing to the
credit of the Proceeds Accounts on the first day of such Calculation Period which the
Technical Bank (acting reasonably) determines would be available to the Obligors for the
purposes of meeting their liabilities under the Finance Documents and any Permitted Hedging
Agreement as they fall due in such Calculation Period; and

“D” is the aggregate amount of (i) all principal, interest, fees, commission and other
amounts which are due and payable by the Obligors in such Calculation Period under the
Finance Documents (other than any Hedging Costs that are due and payable under any Secured
Hedging Agreement or any of the foregoing amounts which relate to Tranche B Loans) and (ii)
all Hedging Termination Payments which are due and payable by the Obligors in such
Calculation Period.

“Tranche A FLCR” means, in relation to any Calculation Period, the field life cover ratio
for such period being the ratio of N:D as shown in the then current Projection, where:

20

 

Exhibit 10.1

	(A)	 	“N” is the FLCR Amount relating to that Calculation Period; and
	 
	(B)	 	“D” is the aggregate Dollar Amount of all Tranche A Loans and Letters of
Credit (other than Eligible Letters of Credit) or, as the case may be, the projected
aggregate Dollar Amount of all Tranche A Loans and Letters of Credit (other than
Eligible Letters of Credit) outstanding on the first day of that Calculation Period.

“Tranche A LLCR” means, in relation to any Calculation Period, the loan life cover ratio
for such period being the ratio of N:D as shown in the then current Projection where:

“N” is the LLCR Amount relating to that Calculation Period; and

“D” is the aggregate Dollar Amount of all Tranche A Loans and Letters of Credit (other than
Eligible Letters of Credit) or, as the case may be, the projected aggregate Dollar Amount
of all Tranche A Loans and Letters of Credit (other than Eligible Letters of Credit)
outstanding on the first day of that Calculation Period.

“Tranche A Loan” has the meaning given in Clause 3.2 (Tranche A Loans and Tranche B Loans).

“Tranche A Maximum Available Amount” means, on any day, an amount (in dollars) which is the
lower of:

	(A)	 	the Tranche A Borrowing Base Amount on that day; and
	 
	(B)	 	the difference between the Aggregate Commitments on that day and the
aggregate Dollar Amount of all outstanding Letters of Credit on that day.

“Tranche B Borrowing Base Amount” means, in relation to any Calculation Period or any day
falling in that Calculation Period, the amount (in dollars) reflected in each Projection
which is the lowest of A, B and C where:

	(A)	 	“A” is calculated by dividing the FLCR Amount in relation to that Calculation
Period by the Applicable Tranche B FLCR; and
	 
	(B)	 	“B” is calculated by dividing the LLCR Amount in relation to that Calculation
Period by the Applicable Tranche B LLCR; and
	 
	(C)	 	“C” is the maximum aggregate amount of Loans (in Dollars) which could be
outstanding under the Facility without the Tranche B DSCR for any Calculation Period
being less than the Applicable Tranche B DSCR.

“Tranche B DSCR” means, in relation to any Calculation Period, the debt service cover ratio
for such period being the ratio of N:D as shown in the then current Projection, where:

“N” is the aggregate of (i) the Projected Net Revenues for such Calculation Period; (ii)
all Hedging Termination Payments which are due and payable to the Obligors in such
Calculation Period; and (iii) the aggregate Dollar Amount of the amounts standing to the
credit of the Proceeds Accounts on the first day of such Calculation Period which the
Technical Bank (acting reasonably) determines would be available to the Obligors for the
purposes of meeting their liabilities under the Finance Documents and any Permitted Hedging
Agreement as they fall due in such Calculation Period; and

“D” is the aggregate amount of (i) all principal, interest, fees, commission and other
amounts which are due and payable by the Obligors in such Calculation Period under the
Finance Documents (other than any Hedging Costs that are due and payable under any

21

 

Exhibit 10.1

Secured Hedging Agreement) and (ii) all Hedging Termination Payments which are due and
payable by the Obligors in such Calculation Period.

“Tranche B FLCR” means, in relation to any Calculation Period, the ratio of N:D as shown in
the then current Projection, where:

“N” is the FLCR Amount relating to that Calculation Period; and

“D” is the Total Relevant Outstandings outstanding or, as the case may be, projected to be
outstanding on the first day of that Calculation Period.

“Tranche B LLCR” means, in relation to any Calculation Period, the ratio of N:D as shown in
the then current Projection where:

“N” is the LLCR Amount relating to that Calculation Period; and

“D” is the Total Relevant Outstandings outstanding or, as the case may be, projected to be
outstanding on the first day of that Calculation Period.

“Tranche B Loan” has the meaning given in Clause 3.2 (Tranche A Loans and Tranche B
Loans).

“Tranche B Maximum Available Amount” means, on any day, an amount (in dollars) which is the
lower of:

	(A)	 	the Tranche B Borrowing Base Amount on that day; and
	 
	(B)	 	the difference between the Aggregate Commitments on that day and the
aggregate Dollar Amount of all outstanding Letters of Credit on that day.

“Transaction Documents” means the Project Documents and the Finance Documents.

“Transaction Party” means each Obligor and each other party (not being a Finance Party) who
is party to any Finance Document.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 8
(Form of Transfer Certificate) or any other form agreed between the Agent and the Company.

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

	(A)	 	the proposed Transfer Date specified in the Transfer Certificate; and
	 
	(B)	 	the date on which the Agent executes the Transfer Certificate.

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

“Utilisation” means a Loan or a Letter of Credit.

“Utilisation Date” means the date of a Utilisation, being (a) in the case of any Loan, the
date on which the Loan is made or (b) in the case of any Letter of Credit, the date on
which that Letter of Credit is issued or, as the case may be, in relation to any Letter of
Credit that is being or has been renewed, the date on which that Letter of Credit is
renewed and re-issued.

22

 

Exhibit 10.1

“Utilisation Request” means:

	 	(A)	 	in relation to any Loan, a notice substantially in the form set out in Part I
(Loans) of Schedule 5 (Utilisation Request); and
	 
	 	(B)	 	in relation to any Letter of Credit, a notice substantially in the form set
out in Part II (Letters of Credit) of Schedule 5 (Utilisation Request).

“VAT” means value added tax as provided for in the Value Added Tax Act 1994 and any other
tax of a similar nature.

	1.2	 	Construction

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

	 	(A)	 	any Finance Party or any Obligor or Transaction 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)	 	a “Finance Document” or any other agreement or instrument
is a reference to that Finance Document or other agreement or instrument as
amended or novated;
	 
	 	(D)	 	“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;
	 
	 	(E)	 	a “person” includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust or
partnership (whether or not having separate legal personality) or two or more
of the foregoing;
	 
	 	(F)	 	a “regulation” includes any regulation, rule, official
directive, request or guideline (whether or not having the force of law but,
if not having the force of law, being of a kind that is normally complied
with by those to whom it is addressed) of any governmental, intergovernmental
or supranational body, agency, department or regulatory, self-regulatory or
other authority or organisation;
	 
	 	(G)	 	“disposal” means a sale, transfer, grant, lease or other
disposal, whether voluntary or involuntary, and “dispose” will be construed
accordingly;
	 
	 	(H)	 	a “guarantee” includes any form of indemnity or other
assurance against financial loss (including any obligation to pay, purchase
or provide funds for the purchase of any liability), and the verb “to
guarantee” shall be construed accordingly;
	 
	 	(I)	 	a provision of law is a reference to that provision as
amended or re-enacted;
	 
	 	(J)	 	a time of day is a reference to London time;

23

 

Exhibit 10.1

	 	(K)	 	any matter “including” specific instances or examples of
such matter shall be construed without limitation to the generality of that
matter (and references to “include” shall be construed accordingly);
	 
	 	(L)	 	the Interest Period of a Letter of Credit will be construed
as a reference to the Term of that Letter of Credit;
	 
	 	(M)	 	an amount borrowed includes any amount utilised by way of
Letter of Credit;
	 
	 	(N)	 	a Utilisation made or to be made to a Borrower includes a
Letter of Credit issued on its behalf;
	 
	 	(O)	 	a Lender funding its participation in a Utilisation
includes a Lender participating in a Letter of Credit;
	 
	 	(P)	 	amounts outstanding under this Agreement include amounts
outstanding under any Letter of Credit;
	 
	 	(Q)	 	a Borrower “repaying” or “prepaying” a Letter of Credit
means:

	 	(1)	 	that Borrower providing cash cover for that
Letter of Credit;
	 
	 	(2)	 	the maximum amount payable under the Letter
of Credit being reduced in accordance with its terms; or
	 
	 	(3)	 	the Fronting Bank being satisfied that it
has no further liability under that Letter of Credit,

	 	 	 	and the amount by which a Letter of Credit is repaid or prepaid under
paragraphs (Q)(1) and (Q)(2) above is the amount of the relevant cash
cover or, as the case may be, relevant reduction;
	 
	 	(R)	 	a Borrower providing “cash cover” for a Letter of Credit
means a Borrower paying an amount in the currency in which that Letter of
Credit is determined to a Cash Collateral Account and that Borrower shall be
regarded as continuing to provide cash cover to the extent of the amount that
remains standing to the credit of that Cash Collateral Account from time to
time;
	 
	 	(S)	 	“€” or “euro(s)” is to the lawful currency for the time
being of the European Union;
	 
	 	(T)	 	“$” or “dollars” is to the lawful currency for the time
being of the United States of America;
	 
	 	(U)	 	“£” or “sterling” is to the lawful currency for the time
being of the United Kingdom of Great Britain and Northern Ireland; and
	 
	 	(V)	 	“NOK” or “Norwegian krone” is to the lawful currency for
the time being of the Kingdom of Norway.

	 	1.2.2	 	Section, Clause and Schedule headings are for ease of reference only.

24

 

Exhibit 10.1

	 	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. Unless otherwise
defined in this Agreement or unless the contrary is expressly specified in this
Agreement, terms defined in the Intercreditor Agreement shall have the same meaning when
used in this Agreement.
	 
	 	1.2.4	 	A Potential Event of Default is “continuing” if it has not been remedied or
waived. An Event of Default is continuing if it has not been waived.
	 
	 	1.2.5	 	For the purposes of this Agreement:

	 	(A)	 	subject to the first sentence in Clause 7.1.1 (Adoption), a
reference to the then “current Projection” is a reference to the Projection
most recently adopted pursuant to Clause 7.9 (Adoption of Projections); and
	 
	 	(B)	 	a reference to the date on which any Projection is “due” to
be adopted is a reference to the Recalculation Date as of which that
Projection is to be prepared and adopted under Clause 7.1.1 (Adoption).

	 	1.2.6	 	Any reference in this Agreement to:

	 	(A)	 	the Tranche A Borrowing Base Amount or Tranche B Borrowing
Base Amount which is “applicable” on any date or period is a reference to the
Tranche A Borrowing Base Amount or Tranche B Borrowing Base Amount relating
to that date or period as shown in the then current Projection as adjusted at
the request of the Company or the Majority Lenders by the Agent (after
consulting with the Company) to reflect any change in the aggregate amount
standing to the credit of the Cash Collateral Account(s) since the date of
the adoption of such Projection provided that the Agent shall, promptly upon
the making of such adjustment, notify the Company and the Lenders of such
adjustment;
	 
	 	(B)	 	the “face value” of any Letter of Credit is a reference to
the face amount of the Letter of Credit on the date of its issue (without
regard to any cash cover provided or any claims made thereunder); and
	 
	 	(C)	 	an “outstanding” amount of a Letter of Credit at any time
is a reference to the maximum amount that is or may be payable by the
Borrower in respect of that Letter of Credit at that time (save for the
purposes of Clause 8.3.2 (Reduction), without regard to any cash cover
provided in relation to such Letter of Credit).

	 	1.2.7	 	Unless a contrary intention appears, the obligation(s) of each Obligor and
Transaction Party under this Agreement and the other Finance Documents shall remain in
force for as long as any amount is outstanding under the Finance Documents or any
Commitment is in force.
	 
	 	1.2.8	 	The summary set out in Schedule 11 (Summary of Projections Process) is only a
summary of certain provisions of Clause 7 (Projections) and has been included only for
ease of reference. That Schedule (a) shall be ignored for the purposes of interpreting
the provisions of Clause 7 (Projections) and (b) is not intended to have any contractual
effect.

25

 

Exhibit 10.1

	1.3	 	Third party rights

	 	1.3.1	 	Unless expressly provided to the contrary in a Finance Document, a person who is
not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the
“Third Parties Act”) to enforce or to enjoy the benefit of any term of this Agreement.
	 
	 	1.3.2	 	Notwithstanding any term of any Finance Document, the consent of any person who
is not a Party is not required to rescind or vary this Agreement at any time.

26

 

Exhibit 10.1

THE FACILITY

	2.	 	THE FACILITY
	 
	2.1	 	Facility
	 
	 	 	Subject to the terms of this Agreement, the Lenders make available to the Borrowers a
multicurrency revolving credit facility (which may be utilised by way of Loans or Letters
of Credit) in an aggregate amount equal to the Aggregate Commitments from time to time.
	 
	2.2	 	Finance Parties’ rights and obligations

	 	2.2.1	 	The obligations of each Finance Party under the Finance Documents are several.
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 an Obligor 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

	 	3.1.1	 	Each Borrower shall apply the proceeds of the Loans borrowed by it under the
Facility in or towards:

	 	(A)	 	the making of payments to Paladin Resources Limited
required to be made under the Acquisition Agreement;
	 
	 	(B)	 	second, meeting its liabilities under this Agreement in
relation to any Letter of Credit in respect of which demands have been made;
	 
	 	(C)	 	third, funding the capital expenditure programme for the
development of the Borrowing Base Assets which has been taken into account in
the then current Projection or has otherwise been approved in writing by the
Technical Bank;
	 
	 	(D)	 	fourth, to pay items of Gross Expenditure to the extent
reflected in the then current Projection;
	 
	 	(E)	 	fifth, to pay costs associated with acquiring the Target
Assets;
	 
	 	(F)	 	sixth, to pay amounts due under the Finance Documents and
any Permitted Hedging Agreement;
	 
	 	(G)	 	seventh, to pay exploration, appraisal and development
expenditure in respect of any Petroleum asset in which an Obligor has an
interest; and

27

 

Exhibit 10.1

	 	(H)	 	eighth, for other lawful general corporate purposes of the
Obligors.

	 	3.1.2	 	Each Borrower shall utilise each Letter of Credit issued under the Facility at
its request in or toward:

	 	(A)	 	providing security or credit enhancement for the
performance of the obligations of any Obligor for decommissioning or
abandonment liabilities, to the extent such liabilities have been taken into
account in the current Projection; and
	 
	 	(B)	 	providing security or credit enhancement for the
performance of the obligations of any Obligor other than those referred to in
Clause 3.1.2(A).

	3.2	 	Tranche A Loans and Tranche B Loans
	 
	 	 	In each Utilisation Request relating to a Loan, the relevant Borrower will describe the
purpose for which the Loan is to be drawn and designate the same as a “Tranche A Loan” or a
“Tranche B Loan” provided that no Borrower may request a Tranche B Loan to the extent that
such Loan could in whole or in part be drawn as a Tranche A Loan.
	 
	3.3	 	Monitoring
	 
	 	 	No Finance Party is bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.
	 
	4.	 	CONDITIONS OF UTILISATION
	 
	4.1	 	Initial conditions precedent
	 
	 	 	No Borrower may deliver a Utilisation Request unless the Agent has received all of the
documents and other evidence listed in Part I (CPs to first Utilisation Request) of
Schedule 3 (Conditions precedent and subsequent) in form and substance satisfactory to the
Agent. The Agent shall notify the Company and the Lenders promptly upon being so
satisfied.
	 
	4.2	 	Further conditions precedent
	 
	 	 	The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) and the
Fronting Bank shall only be obliged to comply with Clause 6.5 (Issue of Letters of Credit),
in each case, if:

	 	4.2.1	 	on the date of the Utilisation Request and on the proposed Utilisation Date:

	 	(A)	 	in the case of a Rollover Loan or Renewal Letter of Credit,
no Event of Default is continuing or would result from the proposed
Utilisation and, in the case of any other Utilisation, no Default is
continuing or would result from the proposed Utilisation; and
	 
	 	(B)	 	the Repeating Representations to be made by each Obligor
are true in all material respects;

	 	4.2.2	 	other than in the case of a Rollover Loan or a Renewal Letter of Credit any
Projection which is due to be adopted by a Recalculation Date has been adopted in
accordance with Clause 7 (Projections) by such Recalculation Date unless:

28

 

Exhibit 10.1

	 	(A)	 	it has not been so adopted as a result of any failure by
any Finance Party to (i) perform its obligations under this Agreement or (ii)
take any action with respect to the preparation and/or adoption of such
Projection that it is required to take under Clause 7 (Projections) within
the timeframes provided for); or
	 
	 	(B)	 	it has not been so adopted but the Majority Lenders (acting
reasonably) are of the opinion that if such a Projection were to be adopted,
the conditions set out in Clauses 4.2.4 and 4.2.5 would be satisfied (taking
account of any revised Tranche A Borrowing Base Amount and Tranche B
Borrowing Base Amount resulting from such Projection).

	 	4.2.3	 	the aggregate of:

	 	(A)	 	the Dollar Amount of the Utilisation proposed to be made on
the proposed Utilisation Date; and
	 
	 	(B)	 	the aggregate Dollar Amount of all outstanding Utilisations
on the proposed Utilisation Date less the aggregate principal amount of all
outstanding Utilisations due to be repaid or prepaid on the proposed
Utilisation Date,

	 	 	 	does not exceed the Aggregate Commitments applicable on such proposed Utilisation
Date;
	 
	 	4.2.4	 	in the case of any proposed Tranche A Loan or any Letter of Credit which is not
an Eligible Letter of Credit the aggregate of:

	 	(A)	 	the Dollar Amount of the Utilisation proposed to be made on
the proposed Utilisation Date; and
	 
	 	(B)	 	the Dollar Amount of all outstanding Tranche A Loans and
all outstanding Letters of Credit (other than any Eligible Letter of Credit)
at the proposed Utilisation Date less the aggregate Dollar Amount of all
outstanding Tranche A Loans and all outstanding Letters of Credit (other than
any Eligible Letter of Credit) due to be repaid or prepaid on the proposed
Utilisation Date,

	 	 	 	does not exceed the Tranche A Maximum Available Amount applicable on such proposed
Utilisation Date;
	 
	 	4.2.5	 	In the case of any proposed Tranche B Loan or any Letter of Credit which is not
an Eligible Letter of Credit the aggregate of:

	 	(A)	 	the Dollar Amount of the Utilisation proposed to be made on
the proposed Utilisation Date; and
	 
	 	(B)	 	the Dollar Amount of all outstanding Loans and all
outstanding Letters of Credit (other than any Eligible Letter of Credit) at
the proposed Utilisation Date less the aggregate Dollar Amount of all
outstanding Loans and all outstanding Letters of Credit (other than any
Eligible Letter of Credit) due to be repaid or prepaid on the proposed
Utilisation Date,

29

 

Exhibit 10.1

	 	 	 	does not exceed the Tranche B Maximum Available Amount applicable on such proposed
Utilisation Date.
	 
	 	4.2.6	 	In the case of any proposed Utilisation by way of a Letter of Credit, the
aggregate of:

	 	(A)	 	the outstanding Dollar Amount of the proposed Letter of
Credit; and
	 
	 	(B)	 	the aggregate outstanding Dollar Amount of all other
outstanding Letters of Credit on the proposed Utilisation Date,

	 	 	 	does not exceed $60,000,000 or, if less, the Aggregate Commitments applicable on
such proposed Utilisation Date.
	 
	 	4.2.7	 	In the case of the first Utilisation, the Agent has received (either before, or
simultaneously with, the making of such Utilisation) all of the documents and other
evidence listed in Part II (CPs to first Utilisation) of Schedule 3 (Conditions
precedent and subsequent) in form and substance satisfactory to the Agent.

	4.3	 	Conditions subsequent

	 	4.3.1	 	The Obligors undertake to deliver to the Agent, on or before the date falling
thirty days after the date of the first Utilisation hereunder, all of the documents and
other evidence listed in Part III (Conditions Subsequent) of Schedule 3 (Conditions
precedent and subsequent), save for paragraph 12 thereof, in form and substance
satisfactory to the Agent.
	 
	 	4.3.2	 	The Obligors undertake to deliver to the Agent, on or before the 31 January
2007, all of the documents and other evidence listed in paragraph 12 (Corporate status
of Endeavour Energy Norge AS) of Part III (Conditions Subsequent) of Schedule 3
(Conditions precedent and subsequent) in form and substance satisfactory to the Agent

	4.4	 	Maximum number of Utilisations
	 
	 	 	A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation
more than 10 Loans or 10 Letters of Credit would be outstanding.

30

 

Exhibit 10.1

UTILISATION

	5.	 	UTILISATION — LOANS
	 
	5.1	 	Delivery of a Utilisation Request for Loans
	 
	 	 	A Borrower may request a Loan to be made by delivery to the Agent of a duly completed
Utilisation Request not later than 10.00 a.m. on the fourth Business Day prior to the
proposed Utilisation Date (or such later date as the Lenders may agree).
	 
	5.2	 	Completion of a Utilisation Request for Loans

	 	5.2.1	 	Each Utilisation Request for a Loan is irrevocable and will not be regarded as
having been duly completed unless:

	 	(A)	 	it specifies that it is for a Tranche A Loan or a Tranche B
Loan;
	 
	 	(B)	 	the proposed Utilisation Date is a Business Day within the
Availability Period;
	 
	 	(C)	 	the currency and amount of the Loan comply with Clause 5.3
(Currency and amount);
	 
	 	(D)	 	the proposed Interest Period complies with Clause 11
(Interest Periods); and
	 
	 	(E)	 	it has been duly signed by an authorised signatory of the
relevant Borrower.

	 	5.2.2	 	Only one Loan may be requested in each Utilisation Request delivered under this
Clause 5 (Utilisation – Loans).

	5.3	 	Currency and amount

	 	5.3.1	 	The currency specified in a Utilisation Request for a Loan must be dollars,
sterling, Norwegian krone or euro.
	 
	 	5.3.2	 	The amount of the proposed Loan must:

	 	(A)	 	if the currency selected is dollars a minimum of $5,000,000
or, if less, the maximum amount of the Facility that may be utilised for such
Loan under Clause 4.2 (Further conditions precedent);
	 
	 	(B)	 	if the currency selected is sterling, a minimum of
£3,000,000 or, if less, an amount (in sterling) the Dollar Amount of which is
equal to the maximum amount of the Facility that may be utilised for such
Loan under Clause 4.2 (Further conditions precedent);
	 
	 	(C)	 	if the currency selected is euro, a minimum of
€5,000,000 or, if less, an amount (in euro) the Dollar Amount of which is
equal to the maximum amount of the Facility that may be utilised for such
Loan under Clause 4.2 (Further conditions precedent); or

31

 

Exhibit 10.1

	 	(D)	 	if the currency selected is Norwegian krone, a minimum of
NOK 40,000,000 or, if less, an amount (in Norwegian krone) the Dollar Amount
of which is equal to the maximum amount of the Facility that may be utilised
for such Loan under Clause 4.2 (Further conditions precedent).

	5.4	 	Lenders’ participation

	 	5.4.1	 	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.
	 
	 	5.4.2	 	The amount of each Lender’s participation in each Loan will be equal to the
proportion borne by its Available Commitment to the Total Available Commitments
immediately prior to making the Loan.
	 
	 	5.4.3	 	The Agent shall determine the Dollar Amount of each Loan which is to be made in
a currency other than dollars and shall notify each Lender of the amount, currency and
Dollar Amount of each Loan and the amount of its participation in that Loan, in each
case, not later than 5.00 p.m. on the third Business Day prior to the Utilisation Date
for such Loan or, if (in the case of any Loan to be made pursuant to Clause 6.9 (Loans
to cover demands) it is not practicable to do so by such third Business Day, as soon as
reasonably practicable after receiving the relevant notice from the Fronting Bank
referred to in Clause 6.9 (Loans to cover demands).

	5.5	 	Deemed Utilisation Requests
	 
	 	 	Notwithstanding any other provision of this Agreement, each Utilisation Request that is
deemed to be issued pursuant to Clause 6.9 (Loans to cover demands) shall be deemed to have
been issued in compliance with Clause 5.1 (Delivery of a Utilisation Request for Loans) and
Clause 5.2 (Completion of a Utilisation Request for Loans) and all conditions (including
the conditions set out in Clause 4.2 (Further conditions precedent and subsequent)) that
are required to be met in order for each Lender to make its participation in the Loan
requested thereunder to be made available in accordance with Clause 5.4 (Lenders’
participation) shall be deemed to have been met on the Utilisation Date for such Loan. The
making of such Loan shall not be construed as a waiver of (i) any such conditions for any
other purposes or (ii) any Default that may be continuing at such time.`
	 
	6.	 	UTILISATION — LETTERS OF CREDIT
	 
	6.1	 	Delivery of a Utilisation Request for Letters of Credit

	 	6.1.1	 	Subject to Clause 6.1.2, a Borrower may request a Letter of Credit to be issued
by delivery to the Agent and the Fronting Bank of a duly completed Utilisation Request
not later than 10.00 a.m. on the fifth Business Day prior to the proposed Utilisation
Date (or such later date as the Lenders and the Fronting Bank may agree).
	 
	 	6.1.2	 	No Borrower may utilise the Facility by way of Letter of Credit unless it:

	 	(A)	 	maintains Cash Collateral Accounts in accordance with the
terms hereof;

32

 

Exhibit 10.1

	 	(B)	 	any decommissioning liabilities which any Eligible Letter
of Credit is to credit enhance the performance of have been included within
Gross Expenditure in the calculation of the Tranche A Borrowing Base Amount
and Tranche B Borrowing Base Amount;
	 
	 	(C)	 	has entered into a Security Document (in form and substance
satisfactory to the Security Trustee) pursuant to which Security over such
Cash Collateral Accounts is granted to the Security Trustee; and
	 
	 	(D)	 	has delivered to the Security Trustee, or procured the
delivery to the Security Trustee, any legal opinion or other document that
the Security Trustee may reasonably require in connection with the entry into
such Security Document.

	6.2	 	Completion of a Utilisation Request for Letters of Credit

	 	6.2.1	 	Each Utilisation Request for a Letter of Credit is irrevocable and will not be
regarded as having been duly completed unless:

	 	(A)	 	it specifies that it is for a Letter of Credit;
	 
	 	(B)	 	the proposed Utilisation Date is a Business Day within the
period from and including the date of this Agreement to and including the
date falling twelve months prior to the Final Maturity Date;
	 
	 	(C)	 	the currency and amount of the Letter of Credit comply with
Clause 6.3 (Currency and amount);
	 
	 	(D)	 	the form of Letter of Credit is attached (and the same is
in the form set out in Part I (Form of Letter of Credit) or Part II (Form of
Standby Letter of Credit) of Schedule 6 (Forms of Letter of Credit) or in
such other form as may be agreed between the Company, the Fronting Bank and
the Agent) (such agreement not to be unreasonably withheld if the form is
substantially the same as that set forth in Part I (Form of Letter of Credit)
or Part II (Form of Standby Letter of Credit) of Schedule 6 (Form of Letter
of Credit));
	 
	 	(E)	 	the proposed Expiry Date of the Letter of Credit falls on
or before the fifth Business Day prior to the Final Maturity Date;
	 
	 	(F)	 	the delivery instructions for the Letter of Credit are
specified;
	 
	 	(G)	 	it specifies each of the purposes for which the Letter of
Credit is to be applied and includes (i) a confirmation that each such
purpose complies with Clause 3.1.2 (Purpose) and (ii) an indication as to
whether (in the opinion of the relevant Borrower) such Letter of Credit
should be treated as an Eligible Letter of Credit; and
	 
	 	(H)	 	it has been duly signed by an authorised signatory of the
relevant Borrower.

	 	6.2.2	 	Only one Letter of Credit may be requested in each Utilisation Request delivered
under this Clause 6 (Utilisation – Letters of Credit).

33

 

Exhibit 10.1

	6.3	 	Currency and amount

	 	6.3.1	 	The currency specified in a Utilisation Request must be dollars, sterling,
Norwegian krone or euro.
	 
	 	6.3.2	 	The Dollar Amount of the proposed Letter of Credit must not exceed the maximum
amount of the Facility that may be utilised for such Letter of Credit under Clause 4.2
(Further conditions precedent).

	6.4	 	Renewal of a Letter of Credit

	 	6.4.1	 	Subject to Clause 6.1.2 (Delivery of a Utilisation Request for Letters of
Credit), a Borrower may request any Letter of Credit issued on its behalf to be renewed
by delivery to the Agent and the Fronting Bank of a Utilisation Request no earlier than
35 Business Days before the Expiry Date of the relevant Letter of Credit and no later
than 10.00 a.m. on the third Business Day prior to the Expiry Date of the relevant
Letter of Credit.
	 
	 	6.4.2	 	Each Utilisation Request relating to the renewal of a Letter of Credit is
irrevocable and will not be regarded as having been duly completed unless:

	 	(A)	 	it specifies that it is for the renewal of a Letter of
Credit;
	 
	 	(B)	 	the proposed Utilisation Date is a Business Day within the
period from and including the date of this Agreement to and including the
date falling twelve months prior to the Final Maturity Date;
	 
	 	(C)	 	the currency and amount of the Letter of Credit comply with
Clause 6.3 (Currency and amount);
	 
	 	(D)	 	a copy of the relevant Letter of Credit to be renewed is
attached;
	 
	 	(E)	 	the proposed new Expiry Date of the Letter of Credit falls
on or before the fifth Business Day prior to the Final Maturity Date;
	 
	 	(F)	 	the delivery instructions for the Letter of Credit are
specified;
	 
	 	(G)	 	it specifies each of the purposes for which the Letter of
Credit is to be applied and includes (i) a confirmation that each such
purpose complies with Clause 3.1.2 (Purpose) and (ii) an indication as to
whether (in the opinion of the relevant Borrower) such Letter of Credit
should be treated as an Eligible Letter of Credit; and
	 
	 	(H)	 	it has been duly signed by an authorised signatory of the
relevant Borrower.

	 	6.4.3	 	The terms of each renewed Letter of Credit shall be the same as those of the
relevant Letter of Credit immediately prior to its renewal, except that:

	 	(A)	 	its amount may be less than the amount of the Letter of
Credit immediately prior to its renewal if requested by the relevant Borrower
in the Utilisation Request; and

34

 

Exhibit 10.1

	 	(B)	 	its Term shall start on its Utilisation Date and shall end
on the proposed Expiry Date specified in the relevant Utilisation Request
relating to its renewal.

	6.5	 	Issue of Letters of Credit
	 
	 	 	If the conditions set out in this Agreement have been met, the Fronting Bank shall issue
or, as the case may be, renew and re-issue, each Letter of Credit on its proposed
Utilisation Date (provided, in the case of any Renewal Letter of Credit the Utilisation
Date of which falls before the Expiry Date of the relevant Letter of Credit which is being
renewed and replaced by that Renewal Letter of Credit, the Fronting Bank is satisfied it
has no liability under the relevant Letter of Credit being renewed and replaced).
	 
	6.6	 	Notification of LC issuance
	 
	 	 	The Agent shall determine the Dollar Amount of each Letter of Credit which is to be issued
in a currency other than Dollars and notify the Fronting Bank and each Lender of the
details of each requested Letter of Credit and each Lender’s L/C Proportion (as at the
relevant Utilisation Date) with respect to that requested Letter of Credit no later than
5.00 p.m. on the third Business Day prior to the relevant Utilisation Date.
	 
	6.7	 	Re-evaluation of Letter of Credit
	 
	 	 	On each Scheduled Recalculation Date, the Agent will re-determine, and notify the Fronting
Bank, the Borrower and each Lender of, the Dollar Amount of each Letter of Credit
denominated in a currency other than dollars.
	 
	6.8	 	Claims under a Letter of Credit

	 	6.8.1	 	Each Borrower irrevocably and unconditionally authorises the Fronting Bank to
pay any claim made or purported to be made under a Letter of Credit requested by it and
which appears on its face to be in order (a “claim”).
	 
	 	6.8.2	 	Save to the extent that any Loan is made pursuant to Clause 6.9 (Loans to cover
demands) in respect of a claim, each Borrower which requested a Letter of Credit shall
immediately on demand pay to the Agent for the Fronting Bank an amount equal to the
amount of any claim.
	 
	 	6.8.3	 	Each Borrower acknowledges that the Fronting Bank:

	 	(A)	 	is not obliged to carry out any investigation or seek any
confirmation from any other person before paying a claim; and
	 
	 	(B)	 	deals in documents only and will not be concerned with the
legality of a claim or any underlying transaction or any available set-off,
counterclaim or other defence of any person.

	 	6.8.4	 	The obligations of a Borrower under this Clause 6 (Utilisation – Letters of
Credit) will not be affected by:

	 	(A)	 	the sufficiency, accuracy or genuineness of any claim or
any other document; or

35

 

Exhibit 10.1

	 	(B)	 	any incapacity of, or limitation on the powers of, any
person signing a claim or other document.

	6.9	 	Loans to cover demands

	 	6.9.1	 	The Fronting Bank shall promptly issue a notice (a “claim notice”) to the Agent
and the Company to notify them of (i) any claim made under any Letter of Credit; (ii)
the amount of that claim (in the currency in which it is due to be paid); and (iii) the
date on which it is due to pay that claim. Any failure by the Fronting Bank to provide
any claim notice in accordance with this Clause 6.9.1 shall not release the Obligors and
the other Lenders from their obligations and liabilities under this Clause 6
(Utilisation – Letters of Credit) or otherwise prejudice such obligations and
liabilities.
	 
	 	6.9.2	 	If a claim notice has been issued, the Borrower at whose request the relevant
Letter of Credit was issued shall be deemed to have issued a Utilisation Request for a
Loan on the later of (a) the date on which that claim notice is issued and (b) 10.00
a.m. on the third Business Day prior to the date on which the Fronting Bank is due to
pay the relevant claim. The amount of such a proposed Loan shall be equal to the amount
of the claim specified in the claim notice (and such Loan shall be in the same currency
as that in which the claim is to be paid). The Utilisation Date for such a proposed
Loan shall be (i) the date specified in the claim notice as the date on which the
relevant claim is due to be paid or (ii) if later, the fourth Business Day after the
date on which the claim notice was issued. The Interest Period for such a Loan shall be
determined by the Agent (in consultation with the Company). Such Loan shall be deemed
to be a Tranche A Loan to the extent the amount in question could have been drawn in
accordance with Clause 4.2.4 and a Tranche B Loan as to any balance.

	6.10	 	Indemnities

	 	6.10.1	 	Save to the extent that any Loan is made pursuant to Clause 6.9 (Loans to cover
demands) in respect of any claim, each Borrower shall immediately on demand indemnify
the Fronting Bank against payment made, or any cost, loss or liability incurred, by the
Fronting Bank (otherwise than by reason of the Fronting Bank’s gross negligence or
wilful misconduct) in acting as the Fronting Bank under any Letter of Credit requested
by that Borrower.
	 
	 	6.10.2	 	Save to the extent that any Loan is made pursuant to Clause 6.9 (Loans to cover
demands) in respect of any claim, each Lender shall (according to its L/C Proportion)
immediately on demand indemnify the Fronting Bank against any payment made, or cost,
loss or liability incurred, by the Fronting Bank (otherwise than by reason of the
Fronting Bank’s gross negligence or wilful misconduct) in acting as the Fronting Bank
under any Letter of Credit (save to the extent that the Fronting Bank has been
reimbursed by an Obligor pursuant to a Finance Document).
	 
	 	6.10.3	 	If any Lender is not permitted (by its constitutional documents or any applicable law)
to comply with Clause 6.10.2, then that Lender will not be obliged to comply with Clause
6.10.2 and shall instead be deemed to have taken, on the first day of the Term of that
Letter of Credit (or if later, on the date the Lender’s participation in that Letter of
Credit is transferred or assigned to the Lender in accordance with the terms of this
Agreement), an undivided interest and participation in that Letter

36

 

Exhibit 10.1

	 	 	 	of Credit in an amount equal to its L/C Proportion of that Letter of Credit. On
receipt of demand from the Agent, that Lender shall pay to the Agent (for the
account of the Fronting Bank) an amount equal to its L/C Proportion of the total
amount demanded under Clause 6.10.2.
	 
	 	6.10.4	 	The Borrower which requested a Letter of Credit shall immediately on demand reimburse
any Lender for any payment it makes to the Fronting Bank under this Clause 6.10
(Indemnities) in respect of that Letter of Credit.
	 
	 	6.10.5	 	The obligations of the Borrowers and each Lender under this Clause 6.10 (Indemnities)
are continuing obligations and will extend to the ultimate balance of sums payable by
that Lender in respect of any Letter of Credit, regardless of any intermediate payment
or discharge in whole or in part.
	 
	 	6.10.6	 	The obligations of any Lender under this Clause 6.10 (Indemnities) will not be
affected by any act, omission, matter or thing which, but for this Clause 6.10.6, would
reduce, release or prejudice any of its obligations under this Clause 6.10
(Indemnities) (without limitation and whether or not known to it or any other person)
including:

	 	(A)	 	any time, waiver or consent granted to, or composition
with, any Obligor, any beneficiary under a Letter of Credit or other person;
	 
	 	(B)	 	the release of any other Obligor or any other person under
the terms of any composition or arrangement with any creditor or any other
person;
	 
	 	(C)	 	the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or enforce, any rights
against, or security over assets of, any Obligor, any beneficiary under a
Letter of Credit or other person;
	 
	 	(D)	 	any non-presentation or non-observance of any formality or
other requirement in respect of any instrument or any failure to realise the
full value of any security;
	 
	 	(E)	 	any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or status of an
Obligor, any beneficiary under a Letter of Credit or any other person;
	 
	 	(F)	 	any amendment (however fundamental) or replacement of a
Finance Document, any Letter of Credit or any other document or security;
	 
	 	(G)	 	any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document, any Letter of Credit or
any other document or security; or
	 
	 	(H)	 	any insolvency or similar proceedings.

	6.11	 	Ratings criteria

	 	6.11.1	 	If the Fronting Bank so requests at any time in relation to any Letter of Credit, any
Lender that does not meet the minimum rating criteria shall provide Lender Cash
Collateral (within three Business Days of a request from the Fronting Bank) in

37

 

Exhibit 10.1

	 	 	 	amount equal to that Lender’s L/C Proportion of the relevant outstanding amount of
that Letter of Credit.
	 
	 	6.11.2	 	For these purposes:

	 	(A)	 	the “minimum rating criteria” means a senior, unsecured and
unguaranteed long-term corporate debt rating of at least A3 with Moody’s
Investors Service Inc. or A- with Standard and Poor’s Rating Group or such
other lower credit rating as may be acceptable to the Fronting Bank;
	 
	 	(B)	 	the “relevant outstanding amount” of any Letter of Credit
means the outstanding amount of that Letter of Credit less the amount of any
cash cover for that Letter of Credit that has been provided by a Borrower;
and
	 
	 	(C)	 	a Lender providing “Lender Cash Collateral” in relation to
any Letter of Credit means that Lender paying an amount in the currency in
which that Letter of Credit is denominated to an interest-bearing account in
the name of that Lender and the following conditions are met:

	 	(1)	 	the account is with the Fronting Bank;
	 
	 	(2)	 	withdrawals from the account may only be
made:

	 	(a)	 	to pay the Fronting Bank
amounts due and payable to it by that Lender under Clause
6.10 (Indemnities) in respect of that Letter of Credit until
no amount is or may be outstanding under that Letter of
Credit;
	 
	 	(b)	 	(to the extent that such
Letter of Credit has been subsequently repaid or prepaid) to
repay that Lender an amount equal to that Lender’s L/C
Proportion of the amount of such repayment or prepayment; or
	 
	 	(c)	 	(to the extent that that
Lender’s Commitment is reduced and the same results in a
change to its L/C Proportion) to repay that Lender the amount
by which (i) the amount standing to the credit of the account
exceeds (ii) the amount equal to that Lender’s L/C Proportion
(after the relevant reduction in its Commitment) of the
relevant outstanding amount of that Letter of Credit;

	 	(3)	 	(subject to condition (4) below) that
Lender has executed a security document over that account, in form
and substance satisfactory to the Fronting Bank creating first
ranking Security over that account; and
	 
	 	(4)	 	any Security granted pursuant to condition
(3) above shall be released to such extent as may be necessary to
allow any repayments to that Lender permitted under condition (2)(b)
or (c) above.

38

 

Exhibit 10.1

	6.12	 	Rights of contribution
	 
	 	 	No Obligor will be entitled to any right of contribution or indemnity from any Finance
Party in respect of any payment it may make under this Clause 6 (Utilisation – Letters of
Credit).
	 
	6.13	 	Cash Collateral for Letters of Credit

	 	6.13.1	 	Each Borrower at whose request an Eligible Letter of Credit for the purposes described
in Clause 3.1.2(A) (Purpose) has been issued shall ensure at all times that the
aggregate of any cash cover provided in relation to such Letter of Credit is at least
equal to the Reserve Amount relating to such Letter of Credit.
	 
	 	6.13.2	 	For the purposes of this Agreement “Reserve Amount” means, in relation to any Eligible
Letter of Credit issued for the purposes described in 3.1.2(A) (Purpose) and the
Borrowing Base Asset in respect of which such Letter of Credit has been issued:

	 	(A)	 	at any time on or after the date (the “first cut-off date”)
falling one year prior to the Abandonment Date in respect of the Borrowing
Base Asset in respect of which such Letter of Credit has been issued, an
amount equal to the outstanding amount of that Letter of Credit;
	 
	 	(B)	 	in the period commencing on the date (the “second cut-off
date”) falling 2 years prior to the Abandonment Date in respect of the
Borrowing Base Asset in respect of which such Letter of Credit has been
issued and ending on the day before the first cut-off date, an amount equal
to 75% of the outstanding amount of that Letter of Credit;
	 
	 	(C)	 	in the period commencing on the date (the “third cut-off
date”) falling 4 years prior to the Abandonment Date in respect of the
Borrowing Base Asset in respect of which such Letter of Credit has been
issued and ending on the day before the second cut-off date, 50% of the
outstanding amount of that Letter of Credit; and
	 
	 	(D)	 	in the period commencing on the date falling 5 years prior
to the Abandonment Date in respect of the Borrowing Base Asset in respect of
which such Letter of Credit has been issued and ending on the day before the
third cut-off date, an amount equal to 25% of the outstanding amount of that
Letter of Credit.

39

 

Exhibit 10.1

PROJECTIONS

	7.	 	PROJECTIONS
	 
	7.1	 	Adoption

	 	7.1.1	 	Until the adoption of the first new Projection in accordance with this Clause 7
(Projections), the Initial Projection shall be the current Projection for the purposes
of this Agreement. A new Projection shall be prepared in accordance with this Clause 7
(Projections) and (subject to Clause 7.9 (Adoption of Projections)) adopted as of:

	 	(A)	 	subject to Clause 7.1.3, each Scheduled Recalculation Date;
and
	 
	 	(B)	 	subject to Clause 7.1.4, each Interim Recalculation Date:

	 	(1)	 	if the Company, the Agent (on the
instructions of Majority Lenders) or the Technical Bank so request(s)
and supports such request with reasonable and material circumstances
for the same;
	 
	 	(2)	 	following any request by the Company:

	 	(a)	 	for any Petroleum Asset
owned by a member of the Borrower Group to be designated a
Borrowing Base Asset; or
	 
	 	(b)	 	for any Borrowing Base
Asset to cease to be designated a Borrowing Base Asset; or
	 
	 	(c)	 	following receipt by the
Company of any new Reserves Report.

	 	7.1.2	 	Promptly following any request for a new Projection pursuant to Clause 7.1.1(B),
the Agent shall (after consulting with the Company and the Technical Bank) specify and
notify the Company and the Technical Bank of (a) the date as of which such Projection is
to be prepared and adopted and (b) the first Calculation Period that is to be shown in
such Projection.
	 
	 	7.1.3	 	If any Interim Projection (other than a Disposal Projection) is adopted not more
than two months prior to any Scheduled Recalculation Date or is in preparation not more
than two months prior to any Scheduled Recalculation Date with the intention of adopting
the same by that Scheduled Recalculation Date, the Scheduled Projection that was
scheduled to be prepared pursuant to Clause 7.1.1(A) for adoption by that Scheduled
Recalculation Date shall not be prepared.
	 
	 	7.1.4	 	No more than one request for an Interim Projection may be made pursuant to
Clause 7.1.1(B)(1) by either the Technical Bank or the Agent, on the one hand, or the
Company, on the other hand during any one Calculation Period.
	 
	 	7.1.5	 	For the purposes of this Agreement “Disposal Projection” means any Interim
Projection which is being prepared or to be adopted (as the case may be) pursuant to
Clause 7.1.1(B)(2)(b) following any request by the Company for any Borrowing Base Asset
to cease to be designated a Borrowing Base Asset.

40

 

Exhibit 10.1

	7.2	 	Content

	 	7.2.1	 	Each Projection and draft Projection prepared pursuant to this Clause 7
(Projections) must:

	 	(A)	 	be prepared using the Computer Model;
	 
	 	(B)	 	be in a form similar to the Initial Projection (or such
other form as the Agent, acting reasonably, may approve) and include the same
type of information (and in the same level of detail) as that included in the
Initial Projection;
	 
	 	(C)	 	be prepared on the basis of the Assumptions that are
proposed, approved, agreed and/or determined in accordance with this Clause 7
(Projections);
	 
	 	(D)	 	without prejudice to Clause 7.2.1(B), include:

	 	(1)	 	details of all the Assumptions on which it
is based;
	 
	 	(2)	 	calculations of:

	 	(a)	 	the Projected Net Revenues
for each Calculation Period ending on or before the
Calculation End Date;
	 
	 	(b)	 	the FLCR Amount and the
LLCR Amount relating to each Calculation Period ending on or
before the Calculation End Date;
	 
	 	(c)	 	the Tranche A FLCR, Tranche
A LLCR, Tranche B FLCR, Tranche B LLCR, Tranche A DSCR and
Tranche B DSCR for each Calculation Period ending on or
before the Calculation End Date;
	 
	 	(d)	 	the Tranche A Borrowing
Base Amount and the Tranche B Borrowing Base Amount for each
Calculation Period commencing on or before the Final Maturity
Date.

	 	7.2.2	 	The first Calculation Period shown in each Projection and draft Projection
prepared pursuant to this Clause 7 (Projections) shall be:

	 	(A)	 	in the case of any Scheduled Projection, the Calculation
Period in which the Scheduled Recalculation Date on which that Scheduled
Projection is due to be adopted occurs; and
	 
	 	(B)	 	in the case of any Interim Projection, the Calculation
Period specified by the Agent pursuant to Clause 7.1.2 (Adoption).

	7.3	 	Key principles
	 
	 	 	In (i) proposing, agreeing and/or determining Assumptions, (ii) preparing and/or approving
any Projection or draft Projection or (iii) otherwise carrying out their obligations, and
exercising their rights, under this Clause 7 (Projections), the Parties shall have regard
to and comply with the following principles:

41

 

Exhibit 10.1

	 	7.3.1	 	Each Projection shall be based on:

	 	(A)	 	to the extent that such Probable Reserves have been
validated, or adjusted by, the Technical Bank (acting reasonably), the
Probable Reserves of each Borrowing Base Asset that the Technical Bank
(acting reasonably) is satisfied is in commercial production; and
	 
	 	(B)	 	the Proven Reserves of any other Borrowing Base Asset, or

	 	 	 	such other reserves as may be agreed between the Company and the Technical Bank.
	 
	 	7.3.2	 	Each Projection must disregard any income or expenditure of any member of the
Borrower Group that is not Gross Income or Gross Expenditure.
	 
	 	7.3.3	 	Each Projection must disregard any VAT or similar tax which is payable in
respect of any Gross Income or Gross Expenditure except to the extent that:

	 	(A)	 	such VAT or similar tax will be payable by any member of
the Borrower Group and is not effectively recoverable by it in full; or
	 
	 	(B)	 	the Company can demonstrate to the reasonable satisfaction
of the Agent that such VAT or similar tax is a refund of VAT or similar tax
payable to any member of the Borrower Group.

	 	7.3.4	 	Each Projection must, in projecting interest rates and Petroleum sale prices,
take due account of the terms of any existing Permitted Hedging Agreement and all
relevant circumstances provided that any benefit of any Permitted Hedging Agreement
shall only be taken into account if the counterparty to such Permitted Hedging Agreement
is a person that, or whose obligations under the relevant Hedging Agreement are
guaranteed upon terms satisfactory to the Agent by a person that, has (i) a senior,
unsecured and unguaranteed long-term corporate debt rating of at least A3 with Moody’s
Investors Service Inc., A- with Standard and Poor’s Rating Group or with Fitch Ratings
or (ii) has such other credit rating approved by the Majority Lenders.
	 
	 	7.3.5	 	All figures for Taxes included in any Projection must be based on tax
legislation in force on the relevant Recalculation Date on which that Projection is due
to be adopted and on any official announcements or publications in force as at such date
stating that such legislation is to be altered, supplemented or replaced in whole or in
part.
	 
	 	7.3.6	 	For the purposes of calculating the Tranche A LLCR, Tranche A FLCR, Tranche B
LLCR, Tranche B FLCR, Tranche A DSCR, Tranche B DSCR, Tranche A Borrowing Base Amount or
Tranche B Borrowing Base Amount relating to any Calculation Period:

	 	(A)	 	any revenue or outgoings attributable to any Borrowing Base
Asset projected to arise on or after the Abandonment Date for that Borrowing
Base Asset shall be disregarded save for any outgoings (the “abandonment
outgoings”) projected to arise after such Abandonment Date that are connected
with the abandonment of that Borrowing Base Asset; and

42

 

Exhibit 10.1

	 	(B)	 	account shall be taken of the tax treatment relating to
such abandonment outgoings.

	 	7.3.7	 	The opening cash balance(s) and the closing cash balance(s) for each Calculation
Period shown in any Projection shall reflect the actual or projected book cash balances
of the Obligors only (in each case, as adjusted for any VAT payable and/or receivable).
	 
	 	7.3.8	 	The discount rate to be used in calculating the FLCR Amount and LLCR Amount will
be the higher of (i) 7 per cent per annum and (ii) 3 months $ LIBOR as determined by the
Agent plus 1.30 per cent per annum.
	 
	 	7.3.9	 	Where a Letter of Credit has or is to be issued pursuant to Clause 3.1.2(A) the
face amount of which exceeds the estimates of the Company and the Technical Bank in
respect of the underlying decommissioning or abandonment liability in question the
corresponding Technical Assumption for such decommissioning or abandonment liability
may, at the request of the Company, be similarly increased.

	7.4	 	Preparatory steps

	 	7.4.1	 	In relation to each new Projection (other than a Disposal Projection) that is to
be adopted under this Clause 7 (Projections):

	 	(A)	 	the Agent shall, no later than 45 days before each
Recalculation Date, submit to the Company its proposals for the Economic
Assumptions to be used for the Projection due to be adopted on such
Recalculation Date; and
	 
	 	(B)	 	the Company shall, no later than 40 days before each
Recalculation Date, submit to the Technical Bank its proposals for the
Technical Assumptions to be used for the Projection due to be adopted on such
Recalculation Date.

	 	7.4.2	 	The Company and the Agent (each acting reasonably) shall seek to agree the
Economic Assumptions to be used for each Projection (other than a Disposal Projection)
based on the proposals submitted in accordance with Clause 7.4.1(A) by the date falling
30 days before the Recalculation Date on which that Projection is due to be adopted. If
any of the Economic Assumptions have not been agreed between the Company and the Agent
by such date, then on the day following such date, the Agent shall submit the Company’s
proposals for any such Economic Assumption to the Lenders for their consideration in
accordance with Clause 7.6 (Consideration by Lenders). If the Majority Lenders approve,
or are deemed to have approved the relevant Economic Assumption, then the draft
Projection shall be prepared using that Economic Assumption. If on the other hand the
Majority Lenders do not approve the relevant Economic Assumption, then the draft
Projection shall be prepared using the Economic Assumption specified by the Agent
(acting reasonably).
	 
	 	7.4.3	 	The Company and the Technical Bank (each acting reasonably) shall seek to agree
the Technical Assumptions to be used for each draft Projection (other than a Disposal
Projection) based on the proposals submitted in accordance with Clause 7.4.1(B) by the
date falling 21 days before the Recalculation Date on which that Projection is due to be
adopted. If any of the Technical Assumptions have not been agreed between the Company
and the Technical Bank by such date, then the

43

 

Exhibit 10.1

	 	 	 	Technical Assumptions to be used in the preparation of the relevant draft
Projection shall be specified by the Technical Bank (acting reasonably).
	 
	 	7.4.4	 	The Company shall, no later than 28 days before each Recalculation Date, provide
the Agent with the senior, unsecured and unguaranteed long-term corporate debt rating of
each counterparty to each existing Permitted Hedging Agreement to which any member of
the Borrower Group is a party if the benefit of such Permitted Hedging Agreement is to
be taken into account in the new Projection that is due to be adopted on such
Recalculation Date. The Company shall promptly notify the Agent if, following the
provision of any such information to the Agent, it becomes aware of any change in any
such credit rating.

	7.5	 	Draft Projections

	 	7.5.1	 	The Company shall (in consultation with the Technical Bank and the Agent):

	 	(A)	 	in the case of any Projection other than a Disposal
Projection, prepare a draft Projection using:

	 	(1)	 	all the Assumptions that have been agreed
between the Company and the Agent or Technical Bank pursuant to
Clauses 7.4.2 and 7.4.3 (Preparatory steps); and
	 
	 	(2)	 	to the extent that the Company and the
Agent or Technical Bank, as appropriate, have not been able to reach
agreement on any such Assumptions, such Assumptions as determined in
accordance with Clauses 7.4.2 or 7.4.3 (Preparatory steps); and

	 	(B)	 	in the case of any Disposal Projection, prepare a draft
Disposal Projection:

	 	(1)	 	on the basis that the relevant Borrowing
Base Asset(s) have ceased to be so designated; and
	 
	 	(2)	 	otherwise using all of the Assumptions that
were used for the purposes of the then current Projection which the
relevant Disposal Projection is intended to supersede.

	 	7.5.2	 	If the Company has made a request under Clause 7.10 (Asset base) then, at the
Technical Bank’s option:

	 	(A)	 	the draft Projection shall be prepared on the basis that
the relevant Petroleum Asset(s) have been designated as Borrowing Base
Asset(s) and/or as the case may be, the relevant Borrowing Base Asset(s) have
ceased to be so designated; or

	 	(B)	 	the Company (in consultation with the Technical Bank) shall
prepare:

	 	(1)	 	a draft Projection on the basis that the
relevant Petroleum Asset(s) have been designated as Borrowing Base
Asset(s) and/or, as the case may be, the relevant Borrowing Base
Asset(s) have ceased to be so designated; and

44

 

Exhibit 10.1

	 	(2)	 	a further draft Projection on the basis
that no new Petroleum Asset(s) will be designated as Borrowing Base
Asset(s) and no current Borrowing Base Asset(s) will cease to be so
designated.

	 	7.5.3	 	If the Company has made a request under Clause 7.1.1(B)(2)(a) (Adoption), the
draft Projection shall be prepared on the basis that the relevant Petroleum Asset(s)
have been designated as Borrowing Base Asset(s).
	 
	 	7.5.4	 	The Company and the Agent will endeavour to ensure that each draft Projection is
delivered to each Lender no later than 14 days prior to the Recalculation Date on which
such Projection is due to be adopted.
	 
	 	7.5.5	 	Each draft Projection must be accompanied by details of the conditions (“CPs”)
(if any) that the Technical Bank and Agent consider necessary to be satisfied in order
for (if the Company has made a request under Clause 7.10.1 (Asset base) or the draft
Projection is being prepared pursuant to Clause 7.1.1(B)(2) (Adoption)), the relevant
Petroleum Asset(s) to be designated as Borrowing Base Asset(s) and/or, as the case may
be, the relevant Borrowing Base Asset(s) to cease to be so designated (provided that no
CPs shall be required to be satisfied in relation to any Borrowing Base Asset ceasing to
be so designated if, in accordance with Clause 7.6.4 (Consideration by Lenders), no
Lender is entitled to withhold its consent to such Borrowing Base Asset ceasing to be so
designated).

	7.6	 	Consideration by Lenders

	 	7.6.1	 	Each Lender may, within 10 days of receiving the draft Projection and other
information under Clause 7.5 (Draft Projections) or, in the case of the submission of an
Economic Assumption pursuant to Clause 7.4.2 (Preparatory steps), the relevant proposed
Economic Assumption, inform the Agent whether or not it approves of (as the case may
be):

	 	(A)	 	(save in the case of any Disposal Projection) the adoption
of each of the Assumptions used in the preparation of that draft Projection;
	 
	 	(B)	 	any relevant Petroleum Asset being designated as a
Borrowing Base Asset and to the CPs relating thereto (if any);
	 
	 	(C)	 	a Borrowing Base Asset ceasing to be so designated and to
the CPs relating thereto (if any); and
	 
	 	(D)	 	in the case of an Economic Assumption delivered pursuant to
Clause 7.4.2 (Preparatory steps), the relevant Economic Assumption.

	 	7.6.2	 	If, pursuant to clause 7.6.1, a Lender informs the Agent that it does not
approve of any Assumption(s), that Lender shall state the Assumption(s) it does not
approve and its reason(s) for not approving.
	 
	 	7.6.3	 	Any Lender that does not inform the Agent to the contrary within 10 days of
receiving the draft Projection and other information under Clause 7.5 (Draft
Projections) or, in the case of the submission of an Economic Assumption pursuant to
Clause 7.4.2 (Preparatory steps), the relevant proposed Economic Assumption, shall be
deemed to have approved of (as the case may be):

45

 

Exhibit 10.1

	 	(A)	 	the adoption of all of the Assumptions used in the
preparation of that draft Projection; and/or
	 
	 	(B)	 	any proposed Petroleum Asset being designated a Borrowing
Base Asset and to the CPs relating thereto (if any); and/or
	 
	 	(C)	 	the relevant Borrowing Base Asset ceasing to be so
designated and to the CPs relating thereto (if any); and/or
	 
	 	(D)	 	in the case of an Economic Assumption submitted pursuant to
Clause 7.4.2 (Preparatory steps), the relevant Economic Assumption.

	 	7.6.4	 	Where a draft Disposal Projection has been delivered to the Lenders the Lenders
shall be deemed to have approved all of the Assumptions used in the preparation of such
draft Disposal Projection provided that such draft Disposal Projection was prepared in
accordance with Clause 7.5.1(B) (Draft Projections).

	7.7	 	Lenders approve
	 
	 	 	If (as the case may be):

	 	7.7.1	 	the Majority Lenders approve, or are deemed to have approved, the use of each of
the Assumptions for the preparation of the relevant Projection; and/or
	 
	 	7.7.2	 	the Majority Lenders approve, or are deemed to have approved, any Petroleum
Asset being designated a Borrowing Base Asset and the CPs relating thereto; and/or
	 
	 	7.7.3	 	the Majority Lenders approve, or are deemed to have approved, any existing
Borrowing Base Asset ceasing to be so designated and the CPs relating thereto and/or
	 
	 	7.7.4	 	the Majority Lenders approve, or are deemed to have approved, any proposed
Economic Assumption submitted pursuant to Clause 7.4.2 (Preparatory steps),

	 	 	then (as the case may be):

	 	7.7.5	 	the draft Projection shall be adopted in accordance with Clause 7.9 (Adoption of
Projections); and/or
	 
	 	7.7.6	 	the draft Projection shall be adopted in accordance with Clause 7.9 (Adoption of
Projections) and the proposed new Petroleum Asset shall become a Borrowing Base Asset
(upon satisfaction of such CPs); and/or
	 
	 	7.7.7	 	the draft Projection shall be adopted in accordance with Clause 7.9 (Adoption of
Projections) and the relevant existing Borrowing Base Asset shall cease to be a
Borrowing Base Asset (upon satisfaction of such CPs); and/or
	 
	 	7.7.8	 	the relevant proposed Economic Assumption submitted pursuant to Clause 7.4.2
(Preparatory steps) shall be used in the preparation of the relevant draft Projection.

	7.8	 	Lenders do not approve

	 	7.8.1	 	If the Majority Lenders (acting reasonably) do not approve, or are not deemed to
have so approved, any of the Assumptions used in any Projection delivered to the

46

 

Exhibit 10.1

	 	 	 	Lenders for consideration pursuant to Clause 7.6 (Consideration by Lenders), then
the Agent and Technical Bank will (in consultation with the Lenders) promptly
prepare a new draft Projection to the satisfaction of the Majority Lenders (acting
reasonably).
	 
	 	7.8.2	 	The Agent, the Technical Bank and the Lenders shall consult with each other with
a view to ensuring that each draft Projection is prepared in a timely manner.
	 
	 	7.8.3	 	If the Majority Lenders (i) do not approve, or are not deemed to have approved,
the designation of any Petroleum Asset as a Borrowing Base Asset or (ii) require
conditions which (a) are more onerous than the CPs relating thereto in order for such
designation to be effected and (b) are not acceptable to the Company, then:

	 	(A)	 	if the Company has made a request under Clause 7.10.1
(Asset base), the Company will (in consultation with the Technical Bank and
Agent) promptly prepare a new draft Projection:

	 	(1)	 	based on the Assumptions that have been
agreed, approved or determined in accordance with the preceding
provisions of this Clause 7 (Projections); and
	 
	 	(2)	 	that does not take account of the proposed
Petroleum Asset as a Borrowing Base Asset; or

	 	(B)	 	if the draft Projection was prepared pursuant to Clause
7.1.1(B)(2)(a) (Adoption), the then current Projection shall remain in full
force and continue to be the current Projection.

	 	7.8.4	 	If the Majority Lenders (i) do not approve, or are not deemed to have approved,
of an existing Borrowing Base Asset ceasing to be so designated or (ii) require
conditions which (a) are more onerous than the CPs relating thereto in order for such
designation to cease and (b) are not acceptable to the Company, then:

	 	(A)	 	(in the case of any Projection other than a Disposal
Projection) the Company will (in consultation with the Technical Bank and
Agent) promptly prepare a new draft Projection:

	 	(1)	 	based on the Assumptions that have been
agreed, approved or determined in accordance with the preceding
provisions of this Clause 7 (Projections); and
	 
	 	(2)	 	that takes account of the relevant
Borrowing Base Asset as a Borrowing Base Asset; and

	 	(B)	 	in the case of a Disposal Projection, the then current
Projection which was intended to be superseded by such Disposal Projection
shall remain in force and continue to be the current Projection.

	7.9	 	Adoption of Projections

	 	7.9.1	 	Subject to Clauses 7.8.3(B) and 7.8.4(B) (Lenders do not approve), each draft
Projection prepared pursuant to (as the case may be) Clauses 7.5 (Draft Projections) and
7.8 (Lenders do not approve) will not be adopted as the current Projection for the
purposes of this Agreement until the latest of:

47

 

Exhibit 10.1

	 	(A)	 	the relevant Recalculation Date on which the relevant
Projection is due to be adopted;
	 
	 	(B)	 	the date on which any relevant CPs (together with any
additional conditions that the Majority Lenders may require in accordance
with the preceding provisions of this Clause 7 (Projections)) are satisfied;
and
	 
	 	(C)	 	in the case of a draft Projection prepared pursuant to
Clause 7.8 (Lenders do not approve), the date on which the Technical Bank and
Agent confirm that they have verified that the relevant draft Projection has
been prepared to their satisfaction in accordance with the requirements of
this Clause 7 (Projections).

	 	7.9.2	 	Upon such adoption of the Projection, the Agent shall inform the Lenders and the
Company accordingly and shall distribute a copy of that Projection to each of them.

	7.10	 	Asset base

	 	7.10.1	 	On or before the date falling 14 days before the date on which the Agent is due to
submit its proposals in respect of the Economic Assumptions to be used for any
Projection pursuant to Clause 7.4 (Preparatory steps), the Company may submit a request
to the Agent and the Technical Bank for any Petroleum Asset owned by a member of the
Borrower Group to be designated a Borrowing Base Asset and/or for any existing Borrowing
Base Asset to cease to be designated a Borrowing Base Asset.
	 
	 	7.10.2	 	If the Company has made a request under Clause 7.10.1 for any Petroleum Asset to be
designated a Borrowing Base Asset or a Projection is being prepared pursuant to Clause
7.1.1(B)(2)(a) (Adoption), it must, promptly following any request for the same by the
Agent and/or the Technical Bank deliver to the Agent and the Technical Bank all such
information, documentation and evidence as the Technical Bank and/or the Agent may
reasonably require with respect to such Petroleum Asset.

	7.11	 	Computer Model

	 	7.11.1	 	The Company may, with the consent of the Agent (such consent not to be unreasonably
withheld or delayed), make amendments to the Computer Model from time to time to correct
any deficiencies in such Computer Model (including any conflict between the Computer
Model and any Project Document) or otherwise to reflect any changes in circumstance
since the date of this Agreement.
	 
	 	7.11.2	 	Following any material amendment to the Computer Model, the Majority Lenders may
request for the amended Computer Model to be audited. If the Majority Lenders so
request, the amended Computer Model shall forthwith be audited (at the cost of the
Company) by a firm of model auditors approved by the Majority Lenders. Where an audit
has been so requested, until a satisfactory audit in relation to the amended Computer
Model has been delivered to the Majority Lenders, the existing unamended version shall
continue to be the “Computer Model” for the purpose of this Agreement.

48

 

Exhibit 10.1

REPAYMENT, PREPAYMENT AND CANCELLATION

	8.	 	REPAYMENT

	8.1	 	Reduction of Facility
	 
	 	 	The Aggregate Commitments shall reduce to zero on the Final Maturity Date.
	 
	8.2	 	Repayment of Loans

	 	8.2.1	 	Each Borrower which has drawn a Loan shall repay that Loan on the last day of
its Interest Period.
	 
	 	8.2.2	 	Notwithstanding any other provision of this Agreement, all Utilisations and
other amounts outstanding under the Facility shall be repaid on the Final Maturity Date.

	8.3	 	Reduction

	 	8.3.1	 	The Borrowers shall repay such amount of the Utilisations as is required to
ensure that at all times the aggregate Dollar Amount of the Utilisations does not exceed
the Aggregate Commitments at that time.
	 
	 	8.3.2	 	On each Scheduled Recalculation Date or other date on which a Projection is
adopted in accordance with Clause 7 (Projections) (or, if the same is not a Business
Day, the immediately preceding Business Day), the Borrowers shall repay (i) such amount
of the Utilisations as is required to reduce the Total Relevant Outstandings to the
Tranche B Borrowing Base Amount applicable on the day after such date and (ii) such
amounts of the Tranche A Loans and the outstanding Letters of Credit (other than any
Eligible Letter of Credit) as is required to reduce the Dollar Amount of all outstanding
Tranche A Loans and outstanding Letters of Credit (other than any Eligible Letter of
Credit) to the Tranche A Borrowing Base Amount applicable on the day after such date.
For this purpose, the amount outstanding under any Letter of Credit shall be deemed to
have been reduced by the amount of any cash cover for such Letter of Credit.
	 
	 	8.3.3	 	Any repayments under Clause 8.3.1 or Clause 8.3.2 of Utilisations shall be
applied:

	 	(A)	 	first, towards Tranche B Loans,
	 
	 	(B)	 	(if there are no outstanding Tranche B Loans) second,
towards Tranche A Loans; and
	 
	 	(C)	 	(if there are no outstanding Loans) third, towards
repayment of Letters of Credit.

	 	8.3.4	 	Any repayment of Letters of Credit provided under Clause 8.3.1 or Clause 8.3.2
shall be applied towards such Letters of Credit as the Agent and the Fronting Bank (both
acting in consultation with the Company) shall determine.

49

 

Exhibit 10.1

	9.	 	PREPAYMENT AND CANCELLATION
	 
	9.1	 	Illegality

	 	9.1.1	 	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 Utilisation:

	 	(A)	 	that Lender shall promptly notify the Agent upon becoming
aware of that event;
	 
	 	(B)	 	upon the Agent notifying the Company, the Commitment of
that Lender in respect of each Specified Period will be immediately
cancelled; and
	 
	 	(C)	 	each Borrower shall repay that Lender’s participation in
the Utilisations made to that Borrower on the last day of the Interest Period
for each Utilisation occurring after the Agent has notified the Company 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).

	 	9.1.2	 	If it becomes unlawful for the Fronting Bank to issue Letters of Credit, the
Fronting Bank shall notify the Agent upon becoming aware of that event, and upon the
Agent notifying the Company, the Facility shall cease to be available for the issue of
Letters of Credit until the appointment of a replacement Fronting Bank pursuant to
Clause 28.19 (Replacement of Fronting Bank) for whom it is lawful to issue Letters of
Credit.
	 
	 	9.1.3	 	If it becomes unlawful for the Fronting Bank to maintain outstanding any Letter
of Credit the relevant Borrower(s) will use their best endeavours to ensure the release
of the liability of the Fronting Bank under each such Letter of Credit or, failing this,
the relevant Borrower(s) shall repay or prepay the share of each Lender in each such
Letter of Credit on the date specified by the Fronting Bank (being no earlier than the
last day of any applicable grace period permitted by law).

	9.2	 	Change of control

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

	 	(A)	 	the Company shall promptly notify the Agent upon becoming
aware of that event;
	 
	 	(B)	 	if the Majority Lenders so require, the Agent shall, by not
less than fifteen Business Days notice to the Company, cancel the Facility
and declare (1) all outstanding Loans, together with accrued interest, and
all other amounts accrued under the Finance Documents immediately due and
payable and (2) full cash cover in respect of each Letter of Credit
immediately due and payable, whereupon the Facility will be cancelled and all
such outstanding amounts will become immediately due and payable.

	 	9.2.2	 	For the purposes of Clause 9.2.1, “control” has the meaning given to such term
in Section 416 of the Income and Corporation Taxes Act 1988 (whether or not that Act
applies to any Obligor).

50

 

Exhibit 10.1

	 	9.2.3	 	For the purposes of Clause 9.2.1, “acting in concert” has the meaning given to
such term in the City Code on Takeovers and Mergers and the presumptions specified
therein in relation to the term “acting in concert” shall apply to such term as used in
this Agreement (whether or not that code applies to any Obligor).

	9.3	 	Voluntary cancellation

	 	9.3.1	 	The Company may, if it gives the Agent not less than three Business Days’ (or
such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or
any part (being a minimum amount of $5,000,000) of the unutilised Aggregate Commitments.
	 
	 	9.3.2	 	On the date of the cancellation of any unutilised Aggregate Commitments pursuant
to Clause 9.3.1:

	 	(A)	 	the Commitment of each Lender for the Specified Period in
which the date of such cancellation occurs shall be reduced rateably; and
	 
	 	(B)	 	if, as a result of the reduction of any Lender’s Commitment
for that Specified Period (the “relevant Specified Period”) pursuant to
Clause 9.3.2(A), that Lender’s Commitment for any subsequent Specified Period
exceeds that reduced Commitment for the relevant Specified Period, that
Lender’s Commitment for each such subsequent Specified Period shall be
reduced to an amount equal to that reduced Commitment for the relevant
Specified Period.

	9.4	 	Voluntary Prepayment of Loans
	 
	 	 	The Borrower to which a Loan has been made may, if it gives the Agent not less than three
Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice,
prepay the whole or any part of a Loan (but if in part, being an amount that reduces the
Dollar Amount of the Loan by a minimum amount of $5,000,000).
	 
	9.5	 	Right of repayment and cancellation in relation to a single Lender

	 	9.5.1	 	If:

	 	(A)	 	any sum payable to any Lender by an Obligor is required to
be increased under Clause 14.2.3 (Tax gross-up); or
	 
	 	(B)	 	any Lender claims indemnification from the Company under
Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs),

	 	 	 	The Company may, whilst the circumstance giving rise to the requirement or
indemnification continues, give the Agent notice of cancellation of the
Commitments of that Lender and its intention to procure the repayment of that
Lender’s participation in the Utilisations.
	 
	 	9.5.2	 	On receipt of a notice referred to in Clause 9.5.1, the Commitment of that
Lender for each Specified Period shall immediately be reduced to zero.
	 
	 	9.5.3	 	On the last day of each Interest Period which ends after the Company has given
notice under Clause 9.5.1 (or, if earlier, the date specified by the Company] in that

51

 

Exhibit 10.1

	 	 	 	notice), each Borrower to which a Loan is outstanding shall repay that Lender’s
participation in that Loan.

	 	9.5.4	 	The Company shall, on demand made by the Agent following the receipt by it of
any notice referred to in Clause 9.5.1, provide or procure the provision of cash cover
for the amount of the relevant Lender’s aggregate participation in all outstanding
Letters of Credit.

	9.6	 	Restrictions

	 	9.6.1	 	Any notice of cancellation or prepayment given by any Party under this Clause 9
(Prepayment and cancellation) 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.
	 
	 	9.6.2	 	Any prepayment under this Agreement shall be made together with accrued interest
on the amount prepaid and, subject to any Break Costs, without premium or penalty.
	 
	 	9.6.3	 	Any part of the Facility which is prepaid may be reborrowed in accordance with
the terms of this Agreement.
	 
	 	9.6.4	 	The Borrowers shall not repay or prepay all or any part of the Utilisations or
cancel all or any part of the Commitments except at the times and in the manner
expressly provided for in this Agreement.
	 
	 	9.6.5	 	No amount of the Commitments cancelled under this Agreement may be subsequently
reinstated.
	 
	 	9.6.6	 	If the Agent receives a notice under this Clause 9 (Prepayment and cancellation)
it shall promptly forward a copy of that notice to either the Company or the affected
Lender, as appropriate.

52

 

Exhibit 10.1

COSTS OF UTILISATION

	10.	 	INTEREST
	 
	10.1	 	Calculation of interest
	 
	 	 	The rate of interest on each Loan for each Interest Period is the percentage rate per annum
which is the aggregate of the applicable:

	 	10.1.1	 	Margin;
	 
	 	10.1.2	 	LIBOR or, in relation to any Loan in euro, EURIBOR or, in relation to any Loan in
Norwegian krone, NIBOR; and
	 
	 	10.1.3	 	Mandatory Cost, if any.

	10.2	 	Payment of interest
	 
	 	 	The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the
last day of each Interest Period (and, if the Interest Period is longer than six Months, on
the dates falling at six monthly intervals after the first day of the Interest Period).
	 
	10.3	 	Default interest

	 	10.3.1	 	If an Obligor fails to pay any amount payable by it under a Finance Document on its
due date, interest shall accrue 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 Clause
10.3.2, is two per cent. per annum higher than the rate which would have been payable if
the overdue amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount for successive Interest Periods, each of a duration
selected by the Agent (acting reasonably). Any interest accruing under this Clause 10.3
(Default interest) shall be immediately payable by the Obligor on demand by the Agent.
	 
	 	10.3.2	 	If any overdue amount consists of all or part of a Loan which became due on a day
which was not the last day of an Interest Period relating to that Loan:

	 	(A)	 	the first Interest Period for that overdue amount shall
have a duration equal to the unexpired portion of the current Interest Period
relating to that Loan; and
	 
	 	(B)	 	the rate of interest applying to the overdue amount during
that first Interest Period shall be two per cent. higher than the rate which
would have applied if the overdue amount had not become due.

	 	10.3.3	 	Default interest (if unpaid) arising on an overdue amount will be compounded with the
overdue amount at the end of each Interest Period applicable to that overdue amount but
will remain immediately due and payable.

	10.4	 	Notification of rates of interest
	 
	 	 	The Agent shall promptly notify the Lenders and the relevant Borrower of the determination
of a rate of interest under this Agreement.

53

 

Exhibit 10.1

	11.	 	INTEREST PERIODS

	11.1	 	Selection of Interest Periods

	 	11.1.1	 	A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for
a Loan in the Utilisation Request for that Loan.
	 
	 	11.1.2	 	Subject to this Clause 11 (Interest Periods), and the penultimate sentence in Clause
6.9.2 (Loan to cover demands) a Borrower (or the Company on its behalf) may select an
Interest Period of one, two, three or six Months or any other period agreed between the
Company and the Agent (acting on the instructions of all the Lenders) provided that
prior to the Syndication Date, a Borrower may only select Interest Periods which have
been approved by the Agent (in consultation with the Mandated Lead Arrangers).
	 
	 	11.1.3	 	A Borrower (or the Company on its behalf) may, in relation to any Loan, select an
Interest Period of less than six Months which does not coincide with the periods
specified in Clause 11.1.2 for the purpose of ensuring that (a) the last day of such
Interest Period coincides with a Scheduled Recalculation Date and (b) that there are
sufficient Loans (with an aggregate Dollar Amount equal to or greater than the amount
required to be repaid under Clause 8.3 (Reduction) on such Scheduled Recalculation Date)
which have an Interest Period ending on such Scheduled Recalculation Date.
	 
	 	11.1.4	 	An Interest Period for a Loan shall not extend beyond the Final Maturity Date.
	 
	 	11.1.5	 	Each Interest Period for a Loan shall start on the Utilisation Date.
	 
	 	11.1.6	 	A Loan has one Interest Period only.

	11.2	 	Changes to Interest Periods

	 	11.2.1	 	Prior to determining the interest rate for a Loan, the Agent may shorten an Interest
Period for any Loan to ensure that (a) the last day of such Interest Period coincides
with a Scheduled Recalculation Date and (b) that there are sufficient Loans (with an
aggregate Dollar Amount equal to or greater than the amount required to be repaid under
Clause 8.3 (Reduction) on such Scheduled Recalculation Date) which have an Interest
Period ending on such Scheduled Recalculation Date.

	 	11.2.2	 	If the Agent makes any of the changes to an Interest Period referred to in this Clause
11.2, it shall promptly notify the Company and the Lenders.

	11.3	 	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).

	12.	 	CHANGES TO THE CALCULATION OF INTEREST
	 
	12.1	 	Absence of quotations
	 
	 	 	Subject to Clause 12.2 (Market disruption), if LIBOR or, if applicable, EURIBOR or NIBOR is
to be determined by reference to the Reference Banks but a Reference Bank

54

 

Exhibit 10.1

	 	 	does not supply a quotation by 11.00 a.m. (London time) on the Quotation Day, LIBOR or
EURIBOR or NIBOR shall be determined on the basis of the quotations of the remaining
Reference Banks.
	 
	12.2	 	Market disruption

	 	12.2.1	 	If a Market Disruption Event occurs in relation to a Loan for any Interest Period,
then the rate of interest on each Lender’s share of that Loan for the Interest Period
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 Interest Period, 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.

	 	12.2.2	 	In this Agreement “Market Disruption Event” means:

	 	(A)	 	at or about noon on the Quotation Day for the relevant
Interest Period 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, if
applicable, EURIBOR or NIBOR for the relevant currency and Interest Period;
or
	 
	 	(B)	 	before close of business in London on the Quotation Day for
the relevant Interest Period, the Agent receives notifications from a Lender
or Lenders (whose participations in a Loan exceed 30 per cent. of that Loan)
that the cost to it or them of obtaining matching deposits in the Relevant
Interbank Market would be in excess of LIBOR or, if applicable, EURIBOR or
NIBOR.

	12.3	 	Alternative basis of interest or funding

	 	12.3.1	 	If a Market Disruption Event occurs and the Agent or the Company so requires, the
Agent and the Company shall enter into negotiations (for a period of not more than
thirty days) with a view to agreeing a substitute basis for determining the rate of
interest.
	 
	 	12.3.2	 	Any alternative basis agreed pursuant to Clause 12.3.1 shall, with the prior consent
of all the Lenders and the Company, be binding on all Parties.

	12.4	 	Break Costs

	 	12.4.1	 	Each Borrower shall, within three 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 that Borrower on a day other than the last day of an Interest Period
for that Loan or Unpaid Sum.

55

 

Exhibit 10.1

	 	12.4.2	 	Each Lender shall, as soon as reasonably practicable after a demand by the Agent,
provide a certificate confirming the amount of its Break Costs for any Interest Period
in which they accrue and showing how that amount was calculated.

	13.	 	FEES

	13.1	 	Commitment fee
	 
	 	 	The Borrowers shall pay to the Agent (for the account of each Lender) in respect of each
Fee Period:

	 	13.1.1	 	a fee computed at the applicable Unavailable Rate on the daily amount (if any) of the
Unavailable Portion; and
	 
	 	13.1.2	 	a fee computed at the applicable Unutilised Rate on the daily amount (if any) of the
Unused Portion.

	13.2	 	LC commission
	 
	 	 	Each Borrower shall, in respect of each Letter of Credit requested by it, pay to the Agent
(for the account of each Lender) in respect of each Fee Period:

	 	13.2.1	 	a letter of credit commission at the Margin applicable to Letters of Credit on the
daily amount (if any) by which the LC Exposure exceeds the amount of cash cover provided
for that Letter of Credit; and
	 
	 	13.2.2	 	a letter of credit commission at the rate of 0.30 per cent. per annum on the daily
amount of the LC Exposure in respect of which cash cover has been provided.

	13.3	 	Computation and payment

	 	13.3.1	 	Any commitment fee and/or letter of credit commission payable under this Clause 13
(Fees) must be paid by the relevant Borrower(s) within two Business Days after receipt
by the Company of the calculation of such commitment fee or, as the case may be, such
letter of credit commission from the Agent under Clause 13.3.3.
	 
	 	13.3.2	 	Any such commitment fee must be paid in dollars and any such letter of credit
commission must be paid in the currency in which the Letter of Credit to which it
relates is denominated.
	 
	 	13.3.3	 	The Agent shall calculate the commitment fee and/or the letter of credit commission
payable for each Fee Period and shall notify the Company of the same within five
Business Days after the end of the relevant Fee Period. Each such calculation shall, in
the absence of manifest error, be conclusive evidence of the amount thereof.

	13.4	 	Definitions
	 
	 	 	For the purposes of this Agreement:

	 	13.4.1	 	“Fee Period” means:

	 	(A)	 	in relation to the commitment fee payable under Clause 13.1
(Commitment fee):

56

 

Exhibit 10.1

	 	(1)	 	the period commencing on the date of this
Agreement and ending on the first quarter date to occur thereafter;
and thereafter,
	 
	 	(2)	 	each successive period of three months (or,
in the case of the last such period, less) commencing on the day
after a quarter date and ending on the first quarter date to occur
thereafter (or, in the case of the last such period, on the Final
Maturity Date); and

	 	(B)	 	in relation to the letter of credit commission payable
under Clause 13.2 (LC commission) with respect to each Letter of Credit:

	 	(1)	 	the period commencing on the date of issue
of that Letter of Credit and ending on the first quarter date to
occur thereafter; and thereafter,
	 
	 	(2)	 	each successive period of three months (or,
in the case of the last such period, less) commencing on the day
after a quarter date and ending on the first quarter date to occur
thereafter (or, in the case of the last such period, the Expiry Date
of the relevant Letter of Credit),

	 	 	 	where, for these purposes, “quarter date” means 31 March, 30 June, 30 September or
31 December.
	 
	 	13.4.2	 	“LC Exposure” means, in relation to each Letter of Credit, the daily difference
between (a) the face value of that Letter of Credit and (b) the aggregate amount of all
claims thereunder that have been paid.
	 
	 	13.4.3	 	“Unavailable Rate” means, in relation to any day in any Fee Period, the percentage
rate per annum calculated by multiplying the Margin applicable to Letters of Credit on
that day by 0.25.
	 
	 	13.4.4	 	“Unutilised Rate” means, in relation to any day in any Fee Period, the percentage rate
per annum calculated by multiplying the Margin applicable to Letters of Credit on that
day by 0.5.
	 
	 	13.4.5	 	“Unused Portion” means the positive difference (if any) between A and B where:

	 	(A)	 	“A” is the lower of (i) Aggregate Commitments and (ii) the
aggregate of (a) the Tranche B Borrowing Base Amount and (b) the difference
between $60,000,000 and the outstanding Dollar Amount of all Letters of
Credit (other than any Eligible Letter of Credit); and
	 
	 	(B)	 	“B” is the aggregate outstanding Dollar Amount of all
Utilisations.

	 	13.4.6	 	“Unavailable Portion” means the positive difference (if any) between (i) Aggregate
Commitments and (ii) the aggregate of (a) the Tranche B Borrowing Base Amount and (b)
the difference between $60,000,000 and the outstanding Dollar Amount of all Letters of
Credit (other than any Eligible Letter of Credit).

57

 

Exhibit 10.1

	13.5	 	Other fees and costs
	 
	 	 	The Borrowers will pay to the relevant Finance Parties the relevant fees and other costs
and expenses in the amounts and at the times set out in the Fee Letters and the Commitment
Letter.
	 
	13.6	 	Independent Engineer and other representatives

	 	13.6.1	 	Subject to Clause 13.6.2 below, the Company shall, (or shall procure that an Obligor
will) within five Business Days of demand by the Agent, the Security Trustee or the
Technical Bank, pay, or reimburse the relevant Administrative Finance Party for any
payments that it has made in relation to, any reasonable fees, costs and expenses that
the relevant Administrative Finance Party has properly incurred in connection with (a)
the performance by the Independent Engineer of its functions pursuant to the Finance
Documents and/or (b) the appointment by such Administrative Finance Party of any legal
adviser, insurance adviser, environmental consultant, engineering consultant, model
auditor or tax model auditor, in each case, in connection with the exercise of its
rights and discretions or the performance of its duties and obligations, under the
Finance Documents.
	 
	 	13.6.2	 	Save to the extent that such fees, costs and expenses have been incurred in
circumstances where a Default has occurred, the Company shall only be obliged to pay or
reimburse (or shall procure that an Obligor will pay or reimburse) the relevant
Administrative Finance Party for any fees, costs and expenses incurred by it if the
Company has approved the appointment of the relevant Independent Engineer, adviser,
consultant or auditor and the terms (including fees) of the appointment (such approval
not to be unreasonably withheld or delayed).

58

 

Exhibit 10.1

ADDITIONAL PAYMENT OBLIGATIONS

	14.	 	TAX GROSS UP AND INDEMNITIES
	 
	14.1	 	Definitions

	 	14.1.1	 	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)	 	a Lender (other than a Lender within paragraph (B) below)
which is beneficially entitled to interest payable to that Lender in respect
of an advance under a Finance Document and is:

	 	(1)	 	a Lender:

	 	(a)	 	which is a bank (as defined
for the purpose of section 349 of the Taxes Act) making an
advance under a Finance Document; or
	 
	 	(b)	 	in respect of an advance
made under a Finance Document by a person that was a bank (as
defined for the purpose of section 349 of the Taxes Act) at
the time that that advance was made,

	 	 	 	and which is within the charge to United Kingdom corporation tax
as respects any payments of interest made in respect of that
advance; or
	 
	 	(2)	 	a Lender which is:

	 	(a)	 	a company resident in the
United Kingdom for United Kingdom tax purposes;
	 
	 	(b)	 	a partnership each member
of which is

	 	(i)	 	a company
resident in the United Kingdom for United Kingdom tax
purposes; or
	 
	 	(ii)	 	a company
not so resident in the United Kingdom which carries
on a trade in the United Kingdom through a permanent
establishment and which brings into account in
computing its chargeable profits (for the purposes of
section 11(2) of the Taxes Act) the whole of any
share of interest payable in respect of that advance
that falls to it by reason of sections 114 and 115 of
the Taxes Act;

59

 

Exhibit 10.1

	 	(c)	 	a company not so resident
in the United Kingdom which carries on a trade in the United
Kingdom through a permanent establishment and which brings
into account interest payable in respect of that advance in
computing the chargeable profits (for the purposes of section
11(2) of the Taxes Act) of that company; or

	 	(3)	 	a Treaty Lender; or

	 	(B)	 	a building society (as defined for the purpose of Section
477A of the Taxes Act).
	 
	 	 	 	“Tax Confirmation” means a confirmation by a Lender that the person beneficially
entitled to interest payable to that Lender in respect of an advance under a
Finance Document is:
	 
	 	(A)	 	a company resident in the United Kingdom, for United
Kingdom tax purposes; or
	 
	 	(B)	 	a partnership each member of which is:

	 	(1)	 	a company so resident in the United Kingdom; or
	 
	 	(2)	 	a company not so resident in the United
Kingdom which carries on a trade in the United Kingdom through a
permanent establishment and which brings into account in computing
its chargeable profits (for the purposes of section 11(2) of the
Taxes Act) the whole of any share of interest payable in respect of
that advance that falls to it by reason of sections 114 and 115 of
the Taxes Act; or

	 	(C)	 	a company not so resident in the United Kingdom which
carries on a trade in the United Kingdom through a permanent establishment
and which brings into account interest payable in respect of that advance in
computing the chargeable profits (for the purposes of section 11(2) of the
Taxes Act) of that company.

	 	 	 	“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 either the increase in a payment made by an Obligor to a
Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax
indemnity).
	 
	 	 	 	“Treaty Lender” means a Lender which:

	 	(A)	 	in the case of an Obligor which is resident in the United
Kingdom, is treated as a resident of a Treaty State for the purposes of the
Treaty and does not carry on a business in the United Kingdom through a
permanent establishment with which that Lender’s participation in the Loan is
effectively connected; or

60

 

Exhibit 10.1

	 	(B)	 	in the case of an Obligor which is not resident in the
United Kingdom, is treated as resident in a jurisdiction which has a double
taxation agreement with the jurisdiction in which the Obligor is resident or
treated as resident, which double tax treaty makes provision (subject to
satisfaction of any conditions provided therein) for full exemption from Tax
Deductions imposed by the jurisdiction in which the Obligor is resident or
treated as resident.

	 	 	 	“Treaty State” means a jurisdiction having a double taxation agreement (a
“Treaty”) with the United Kingdom which (subject to satisfaction of any conditions
provided for therein) makes provision for full exemption from tax imposed by the
United Kingdom on interest.
	 
	 	 	 	“UK Non-Bank Lender” means:

	 	(A)	 	where a Lender becomes a Party on the day on which this
Agreement is entered into, a Lender listed in Schedule 2 (The Original
Lenders) and identified as a “UK Non-Bank Lender” in that Schedule; and
	 
	 	(B)	 	where a Lender becomes a Party after the day on which this
Agreement is entered into, a Lender which gives a Tax Confirmation in the
Transfer Certificate which it executes on becoming a Party.

	 	14.1.2	 	Unless a contrary indication appears, in this Clause 14 (Tax gross-up and indemnities)
a reference to “determines” or “determined” means a determination made in the absolute
discretion of the person making the determination.

	14.2	 	Tax gross-up

	 	14.2.1	 	Each Obligor shall make all payments to be made by it without any Tax Deduction,
unless a Tax Deduction is required by law.
	 
	 	14.2.2	 	The Company shall promptly upon becoming aware that an Obligor 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 Company and that Obligor.
	 
	 	14.2.3	 	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.
	 
	 	14.2.4	 	An Obligor is not required to make an increased payment to a Lender under Clause
14.2.3 above for a Tax Deduction in respect of tax imposed by the United Kingdom 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

61

 

Exhibit 10.1

	 	 	 	the interpretation, administration, or application of) any law or Treaty,
or any published practice or concession of any relevant taxing authority;
or

	 	(B)	 	 

	 	(1)	 	the relevant Lender is a Qualifying Lender
solely under paragraph (A)(2) of the definition of “Qualifying
Lender” set out in Clause 14.1.1 (Definitions);
	 
	 	(2)	 	the Board of the Inland Revenue has given
(and not revoked) a direction (a “Direction”) under section 349C of
the Taxes Act (as that provision has effect on the date on which the
relevant Lender became a Party to this Agreement) which relates to
that payment and that Lender has received from that Obligor or the
Company a certified copy of that Direction; and
	 
	 	(3)	 	the payment could have been made to the
Lender without any Tax Deduction in the absence of that Direction; or

	 	(C)	 	the relevant Lender is a Qualifying Lender solely under
paragraph (A)(2) of the definition of “Qualifying Lender” set out in Clause
14.1.1 (Definitions) and it has not, other than by reason of any change after
the date of this Agreement in (or in the interpretation, administration, or
application of) any law, or any published practice or concession of any
relevant taxing authority, given a Tax Confirmation to the Company; or
	 
	 	(D)	 	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 Clause 14.2.7 below.

	 	14.2.5	 	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.
	 
	 	14.2.6	 	Within thirty 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.
	 
	 	14.2.7	 	A Treaty Lender and each 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.
	 
	 	14.2.8	 	A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is
entered into gives a Tax Confirmation to the Company by entering into this Agreement.
	 
	 	14.2.9	 	A UK Non-Bank Lender shall promptly notify the Company and the Agent if there is any
change in the position from that set out in the Tax Confirmation.
	 
	 	14.2.10	 	Each Lender that:

62

 

Exhibit 10.1

	 	(A)	 	is a Lender as at the date of this Agreement confirms on
the date of this Agreement; or
	 
	 	(B)	 	becomes a Lender after the date of this Agreement confirms
on the date on which it becomes a Lender pursuant to Clause 26 (Changes to
the Lenders),

	 	 	 	that it is a Qualifying Lender. A Lender will notify the Agent if it ceases to be
a Qualifying Lender at any time. The Agent will promptly upon receipt of any such
notification provide the Company a copy of the same.

	14.3	 	Tax indemnity

	 	14.3.1	 	The Company shall (or shall procure that an Obligor will) (within three Business Days
of demand by the Agent, such demand to be accompanied by a written calculation of the
amount claimed by the Protected Party) pay to a Protected Party an amount equal to the
loss, liability or cost which that Protected Party determines 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.
	 
	 	14.3.2	 	Clause 14.3.1 above shall not apply:

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

	 	(1)	 	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
	 
	 	(2)	 	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:

	 	(1)	 	is compensated for by an increased payment
under Clause 14.2 (Tax gross-up); or
	 
	 	(2)	 	would have been compensated for by an
increased payment under Clause 14.2 (Tax gross-up) but was not so
compensated solely because one of the exclusions in Clause 14.2.4
(Tax gross-up) applied.

	 	14.3.3	 	A Protected Party making, or intending to make a claim under Clause 14.3.1 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 Company.
	 
	 	14.3.4	 	A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3
(Tax indemnity), notify the Agent.

63

 

Exhibit 10.1

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

	 	14.4.1	 	a Tax Credit is attributable either to an increased payment of which that Tax Payment
forms part, or to that Tax Payment; and
	 
	 	14.4.2	 	that Finance Party has obtained, utilised and retained that Tax Credit,

	 	 	the Finance Party shall pay an amount to the 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 required to be made by the Obligor.
	 
	14.5	 	Stamp taxes
	 
	 	 	The Company shall (or shall procure that an Obligor will) 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 (other than a Transfer Certificate).
	 
	14.6	 	Value added tax

	 	14.6.1	 	All amounts set out, or expressed to be payable under a Finance Document by any Party
to a Finance Party which (in whole or in part) constitute the consideration for VAT
purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply,
and accordingly, subject to Clause 14.6.3 (Value added tax), if VAT is chargeable on any
supply made by any Finance Party to any Party under 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 (and such Finance Party shall
promptly provide an appropriate VAT invoice to such Party).
	 
	 	14.6.2	 	If VAT is chargeable on any supply made by any Finance Party (the “Supplier”) to any
other Finance Party (the “Recipient”) under a Finance Document, and any Party (the
“Relevant Party”) is required by the terms of any Finance Document to pay an amount
equal to the consideration for such supply to the Supplier (rather than being required
to reimburse the Recipient in respect of that consideration), such Party shall also pay
to the Supplier (in addition to and at the same time as paying such amount) an amount
equal to the amount of such VAT. The Recipient will promptly pay to the Relevant Party
an amount equal to any credit or repayment from the relevant tax authority which it
reasonably determines relates to the VAT chargeable on that supply.
	 
	 	14.6.3	 	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 neither it nor any other member
of any group of which it is a member for VAT purposes is entitled to credit or repayment
from the relevant tax authority in respect of the VAT.

64

 

Exhibit 10.1

	15.	 	INCREASED COSTS
	 
	15.1	 	Increased costs

	 	15.1.1	 	Subject to Clause 15.3 (Exceptions), the Company shall (or shall procure that an
Obligor will), 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 or (ii)
compliance with any law or regulation made after the date of this Agreement.
	 
	 	15.1.2	 	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 or
Letter of Credit.
	 
	15.2	 	Increased cost claims

	 	15.2.1	 	A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased costs)
shall notify the Agent of the event giving rise to the claim, following which the Agent
shall promptly notify the Company.
	 
	 	15.2.2	 	Each Finance Party shall, as soon as practicable after a demand by the Agent or the
Company, provide a certificate confirming the amount of its Increased Costs and setting
out the calculation of such amount in reasonable detail.

	15.3	 	Exceptions

	 	15.3.1	 	Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:

	 	(A)	 	attributable to a Tax Deduction required by law to be made
by an Obligor;
	 
	 	(B)	 	compensated for by Clause 14.3 (Tax indemnity) (or would
have been compensated for under Clause 14.3 (Tax indemnity) but was not so
compensated solely because any of the exclusions in Clause 14.3.2 (Tax
indemnity) applied);
	 
	 	(C)	 	compensated for by the payment of the Mandatory Cost;
	 
	 	(D)	 	attributable to the wilful breach by the relevant Finance
Party or its Affiliates of any law or regulation or any Finance Document to
which it is a party; or

65

 

Exhibit 10.1

	 	(E)	 	attributable to the implementation or application of or
compliance with the Basle II Accord or any law or regulation which implements
the Basle II Accord.

	 	15.3.2	 	In this Clause 15.3 (Exceptions):

	 	(A)	 	a reference to a “Tax Deduction” has the same meaning given
to the term in Clause 14.1 (Definitions); and
	 
	 	(B)	 	“Basle II Accord” means the paper titled “International
Convergence of Capital Measurement and Capital Standards, a Revised
Framework” published by the Basle Committee on Banking Supervision in June
2004 in the form existing as at the date of this Agreement.

	16.	 	OTHER INDEMNITIES
	 
	16.1	 	Currency indemnity

	 	16.1.1	 	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 that Obligor;
	 
	 	(B)	 	obtaining or enforcing an order, judgment or award in
relation to any litigation or arbitration proceedings,

	 	 	 	that Obligor shall as an independent obligation, within three Business Days of
demand, indemnify 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 (i) the rate of exchange used to convert that Sum from the
First Currency into the Second Currency and (ii) the rate or rates of exchange
available to that person at the time of its receipt of that Sum.
	 
	 	16.1.2	 	Without prejudice to Clause 16.1.1, each Obligor shall as an independent obligation,
within three Business Days of demand, indemnify each Finance Party against any cost,
loss or liability which that Finance Party incurs as a result of that Finance Party
receiving an amount in respect of that Obligor’s liability under any Finance Document in
a currency other than the currency in which that liability is expressed to be payable
under that Finance Document.
	 
	 	16.1.3	 	Each Obligor waives any right it 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.

	16.2	 	Other indemnities
	 
	 	 	The Company shall (or shall procure that an Obligor will), within three Business Days of
demand, indemnify each Finance Party against any cost, loss or liability incurred by that
Finance Party as a result of:

	 	16.2.1	 	the occurrence of any Event of Default;

66

 

Exhibit 10.1

	 	16.2.2	 	a failure by an Obligor to pay any amount due under a Finance Document on its due
date, including without limitation, any cost, loss or liability arising as a result of
Clause 30 (Sharing among the Finance Parties);
	 
	 	16.2.3	 	funding, or making arrangements to fund, its participation in a Utilisation requested
by a 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);
	 
	 	16.2.4	 	a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice
of prepayment given hereunder; or
	 
	 	16.2.5	 	the release of any Security constituted by any Finance Document or any release of any
Obligor which is permitted under the Finance Documents.

	16.3	 	Indemnity to the Agent
	 
	 	 	The Company shall (or shall procure that an Obligor will) promptly indemnify the Agent
against any cost, loss or liability incurred by the Agent (acting reasonably) as a result
of:

	 	16.3.1	 	investigating any event which it reasonably believes is a Default; or
	 
	 	16.3.2	 	acting or relying on any notice, request or instruction which it reasonably believes
to be genuine, correct and appropriately authorised.

	17.	 	MITIGATION BY THE LENDERS
	 
	17.1	 	Mitigation

	 	17.1.1	 	Each Finance Party shall, in consultation with the Company, 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 9.1 (Illegality),
Clause 14 (Tax gross-up and indemnities), Clause 15 (Increased costs) or paragraph 3 of
Schedule 7 (Mandatory Cost Formulae) including (but not limited to) transferring its
rights and obligations under the Finance Documents to another Affiliate or Facility
Office.
	 
	 	17.1.2	 	Clause 17.1.1 does not in any way limit the obligations of any Obligor under the
Finance Documents.

	17.2	 	Limitation of liability

	 	17.2.1	 	The Company shall (or shall procure that an Obligor will) 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 17.1 (Mitigation).
	 
	 	17.2.2	 	A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in
the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to
it.

67

 

Exhibit 10.1

	18.	 	COSTS AND EXPENSES
	 
	18.1	 	Transaction expenses
	 
	 	 	The Company shall (or shall procure that an Obligor will) promptly on demand pay the
Administrative Finance Parties the amount of all costs and expenses (including legal fees)
reasonably incurred by any of them in connection with:

	 	18.1.1	 	the negotiation, preparation, printing, execution and syndication of:

	 	(A)	 	this Agreement and any other documents referred to in this
Agreement; and
	 
	 	(B)	 	any other Finance Documents (other than a Transfer
Certificate and BOS Counter-Indemnity) executed after the date of this
Agreement;

	 	18.1.2	 	the designation or de-designation of any Petroleum Assets as Borrowing Base Assets;
and
	 
	 	18.1.3	 	the completion of the transactions and perfection of the Security intended to be
created pursuant to the Security Documents,

	 	 	subject to any applicable cap agreed between the Company and the Agent.
	 
	18.2	 	Amendment costs
	 
	 	 	If (a) a relevant party requests an amendment, waiver or consent to any Finance Document or
(b) an amendment is required pursuant to Clause 31.9 (Change of currency), the Obligors
shall, within three Business Days of demand, reimburse the Finance Parties for the amount
of all costs and expenses (including legal fees) reasonably incurred by the Finance Parties
in responding to, evaluating, negotiating or complying with that request or requirement.
For the purposes of this Clause, “relevant party” means any Obligor or any other party
(other than a Finance Party) to a Finance Document.
	 
	18.3	 	Enforcement costs
	 
	 	 	The Company shall (or shall procure that an Obligor will), within three 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.

68

 

Exhibit 10.1

GUARANTEE

	19.	 	GUARANTEE AND INDEMNITY
	 
	19.1	 	Guarantee and indemnity
	 
	 	 	Each Guarantor irrevocably and unconditionally jointly and severally:

	 	19.1.1	 	guarantees to each Finance Party punctual performance by each other Obligor of all
that other Obligor’s obligations under the Finance Documents;
	 
	 	19.1.2	 	undertakes with each Finance Party that whenever an Obligor does not pay any amount
when due under or in connection with any Finance Document, that Guarantor shall
immediately on demand pay that amount as if it was the principal obligor; and
	 
	 	19.1.3	 	indemnifies each Finance Party immediately on demand against any cost, loss or
liability suffered by that Finance Party if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability
shall be equal to the amount which that Finance Party would otherwise have been entitled
to recover.

	19.2	 	Continuing guarantee
	 
	 	 	This guarantee is a continuing guarantee and will extend to the ultimate balance of sums
payable by any Obligor under the Finance Documents, regardless of any intermediate payment
or discharge in whole or in part.
	 
	19.3	 	Reinstatement
	 
	 	 	If any payment by an Obligor or any discharge given by a Finance Party (whether in respect
of the obligations of any Obligor or any security for those obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event:

	 	19.3.1	 	the liability of each Obligor shall continue as if the payment, discharge, avoidance
or reduction had not occurred; and
	 
	 	19.3.2	 	each Finance Party shall be entitled to recover the value or amount of that security
or payment from each Obligor, as if the payment, discharge, avoidance or reduction had
not occurred.

	19.4	 	Waiver of defences
	 
	 	 	The obligations of each Guarantor under this Clause 19 (Guarantee and indemnity) will not
be affected by an act, omission, matter or thing which, but for this Clause 19.4, would
reduce, release or prejudice any of its obligations under this Clause 19 (Guarantee and
indemnity) (without limitation and whether or not known to it or any Finance Party)
including:

	 	19.4.1	 	any time, waiver or consent granted to, or composition with, any Obligor or other
person;
	 
	 	19.4.2	 	the release of any other Obligor or any other person under the terms of any
composition or arrangement with any creditor of any Obligor or other person;

69

 

Exhibit 10.1

	 	19.4.3	 	the taking, variation, compromise, exchange, renewal or release of, or refusal or
neglect to perfect, take up or enforce, any rights against, or security over assets of,
any Obligor or other person or any non-presentation or non-observance of any formality
or other requirement in respect of any instrument or any failure to realise the full
value of any security;
	 
	 	19.4.4	 	any incapacity or lack of power, authority or legal personality of or dissolution or
change in the members or status of an Obligor or any other person;
	 
	 	19.4.5	 	any amendment (however fundamental) or replacement of a Finance Document or any other
document or security;
	 
	 	19.4.6	 	any unenforceability, illegality or invalidity of any obligation of any person under
any Finance Document or any other document or security; or
	 
	 	19.4.7	 	any insolvency or similar proceedings.

	19.5	 	Immediate recourse
	 
	 	 	Each Guarantor waives any right it may have of first requiring any Finance Party (or any
trustee or agent on its behalf) to proceed against or enforce any other rights or security
or claim payment from any person before claiming from that Guarantor under this Clause 19
(Guarantee and indemnity). This waiver applies irrespective of any law or any provision of
a Finance Document to the contrary.
	 
	19.6	 	Appropriations
	 
	 	 	Until all amounts which may be or become payable by the Obligors under or in connection
with the Finance Documents have been irrevocably paid in full, each Finance Party (or any
trustee or agent on its behalf) may:

	 	19.6.1	 	refrain from applying or enforcing any other moneys, security or rights held or
received by that Finance Party (or any trustee or agent on its behalf) in respect of
those amounts, or apply and enforce the same in such manner and order as it sees fit
(whether against those amounts or otherwise) and no Guarantor shall be entitled to the
benefit of the same; and
	 
	 	19.6.2	 	hold in an interest-bearing suspense account any moneys received from any Guarantor or
on account of any Guarantor’s liability under this Clause 19 (Guarantee and indemnity).

	19.7	 	Deferral of Guarantors’ rights
	 
	 	 	Until all amounts which may be or become payable by the Obligors under or in connection
with the Finance Documents have been irrevocably paid in full and unless the Agent
otherwise directs, no Guarantor will exercise any rights which it may have by reason of
performance by it of its obligations under the Finance Documents:

	 	19.7.1	 	to be indemnified by an Obligor;
	 
	 	19.7.2	 	to claim any contribution from any other guarantor of any Obligor’s obligations under
the Finance Documents; and/or

70

 

Exhibit 10.1

	 	19.7.3	 	to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Finance Parties under the Finance Documents or of any
other guarantee or security taken pursuant to, or in connection with, the Finance
Documents by any Finance Party.

	19.8	 	Release of Guarantors’ right of contribution
	 
	 	 	If any Guarantor (a “Retiring Guarantor”) ceases to be a Guarantor in accordance with the
terms of the Finance Documents for the purpose of any sale or other disposal of that
Retiring Guarantor that is permitted under the terms of the Finance Documents, then on the
date such Retiring Guarantor ceases to be a Guarantor:

	 	19.8.1	 	that Retiring Guarantor is released by each other Guarantor from any liability
(whether past, present or future and whether actual or contingent) to make a
contribution to any other Guarantor arising by reason of the performance by any other
Guarantor of its obligations under the Finance Documents; and
	 
	 	19.8.2	 	each other Guarantor waives any rights it may have by reason of the performance of its
obligations under the Finance Documents to take the benefit (in whole or in part and
whether by way of subrogation or otherwise) of any rights of the Finance Parties under
any Finance Document or of any other security taken pursuant to, or in connection with,
any Finance Document where such rights or security are granted by or in relation to the
assets of the Retiring Guarantor.

	19.9	 	Additional security
	 
	 	 	This guarantee is in addition to and is not in any way prejudiced by any other guarantee or
security now or subsequently held by any Finance Party.
	 
	19.10	 	Limitation of guarantee
	 
	 	 	Notwithstanding any other provision of any Finance Document, the amount guaranteed by each
Guarantor hereunder shall be limited to the extent, if any, required so that its
obligations under this Clause 19 (Guarantee and indemnity) shall not be subject to
avoidance under Section 548 of Title 11 of the United States Code, or to being set aside or
annulled under any applicable law or regulation relating to fraud on creditors. In
determining the limitations, if any, on the amount of any Guarantor’s obligations hereunder
pursuant to the preceding sentence, it is the intention of the parties hereto that any
rights of subrogation or contribution which such Guarantor may have under this Clause 19
(Guarantee and indemnity), any other agreement or applicable law or regulation shall be
taken into account.
	 
	20.	 	PROJECT ACCOUNTS
	 
	20.1	 	General

	 	20.1.1	 	The provision of this Clause 20 (Project Accounts) shall apply from the date of this
Agreement for so long as any amount is or may be outstanding under the Finance Documents
or any Commitment is in force.
	 
	 	20.1.2	 	Each Obligor which is a member of the Borrower Group, other than Endeavour Energy
Netherlands B.V., shall maintain Proceeds Accounts and Cash Collateral Accounts in
accordance with Clause 20.3 (Proceeds Accounts) and Clause 20.4

71

 

Exhibit 10.1

	 	 	 	(Cash Collateral Accounts), in each case, with the Account Bank in London or such
other location as the Agent, the Account Bank and the Company may agree.
	 
	 	20.1.3	 	Each relevant Obligor shall give such notices as the Security Trustee may require in
connection with the perfection or protection of the Secured Creditors’ security over the
Project Accounts or for the purpose of giving effect to the provisions of this Clause 20
(Project Accounts).
	 
	 	20.1.4	 	Each Project Account (and each sub account) will be a separate account at the Account
Bank. A Project Account must be divided into separate sub accounts if the Security
Trustee so requires.
	 
	 	20.1.5	 	Each Project Account must be denominated in sterling, dollars, Norwegian krone or
euros or such other currencies as may be agreed between the relevant Obligor, the
Security Trustee and the Account Bank holding such Project Account (each, a “permitted
currency”). If any relevant Obligor or the Account Bank receives any moneys for
crediting to a Project Account in a currency other than a permitted currency, that
Obligor must convert those moneys into a permitted currency (at the Account Bank’s
prevailing rates for comparable transactions) on the date on which they are received.
The amount must be paid into the relevant Project Account immediately after it is
converted into a permitted currency.
	 
	 	20.1.6	 	The restrictions on the withdrawal of funds from Project Accounts contained in this
Agreement will not affect the obligations of the Obligors to make all payments required
to be made to the Secured Creditors on the respective due dates for payment in
accordance with the Finance Documents.
	 
	 	20.1.7	 	The detailed operating procedures for the Project Accounts will be agreed (with the
consent of the Security Trustee) from time to time between the Company and the Account
Bank. In the event of any inconsistency between this Agreement and those procedures,
this Agreement will prevail.
	 
	 	20.1.8	 	Each Obligor that has a Project Account must pay to the Account Bank such transaction
charges and other fees as the Company and the Account Bank, both acting reasonably, may
from time to time agree.
	 
	 	20.1.9	 	The Account Bank will not be obliged to make available to any Obligor any sum which it
is expecting to receive for the account of that Obligor until it has been able to
establish that it has received that sum.
	 
	 	20.1.10	 	Neither the ability of the Obligors to make any withdrawal from a Project Account in
accordance with this Agreement nor any such withdrawal will be construed as a waiver by
any Secured Creditor of any Security over the Project Accounts.

	20.2	 	Withdrawals

	 	20.2.1	 	No payments to, or withdrawals from, any Project Account may be made except as
expressly permitted by this Agreement.
	 
	 	20.2.2	 	No Obligor will request, and (in the case of Clause 20.2.2(B) only) the Account Bank
shall not permit, any withdrawal to be made from any Project Account:

	 	(A)	 	to the extent that such Project Account would become
overdrawn as a result; or

72

 

Exhibit 10.1

	 	(B)	 	if, prior to the date of the relevant proposed withdrawal,
the Security Trustee notifies the Account Bank that the withdrawal is not or
would not be permitted under any Finance Document,

	 	 	 	provided that nothing in this Clause 20.2.2 will prevent the Account Bank
complying with its obligations under law.
	 
	 	20.2.3	 	No Obligor may make any withdrawal from a Project Account at any time whilst a Default
is continuing (or if any such Default would result from the withdrawal) except:

	 	(A)	 	subject to Clause 20.2.4, in the case of the Proceeds
Accounts, as expressly permitted under Clause 20.3 (Proceeds Accounts); or
	 
	 	(B)	 	with the Security Trustee’s specific consent.

	 	20.2.4	 	If the Enforcement Date has occurred:

	 	(A)	 	no amount will be payable to any Obligor, or may be
withdrawn by any Obligor, with respect to the Project Accounts; and
	 
	 	(B)	 	the Security Trustee will be entitled (but not obliged)
without prior notice to, or the consent of, any Obligor to be the sole
signatory on the Project Accounts.

	 	20.2.5	 	The Security Trustee shall promptly notify the Account Bank of the occurrence of the
Enforcement Date and the Account Bank shall be entitled to treat any notice issued to it
under this Clause 20.2.5 at face value.

	20.3	 	Proceeds Accounts

	 	20.3.1	 	Each Obligor which is a member of the Borrower Group, other than Endeavour Energy
Netherlands B.V., shall:

	 	(A)	 	maintain with the Account Bank, accounts the names of which
shall include the designation “Proceeds “ (each a “Proceeds Account”); and
	 
	 	(B)	 	procure that all amounts received by it (or to its order)
are paid directly to the Proceeds Accounts maintained by it save to the
extent that any Project Document requires such amounts to be credited to a
joint account of the relevant Obligor and its co-venturers.

	 	20.3.2	 	Subject to Clause 20.2 (Withdrawals) and Clause 20.3.3, an Obligor may withdraw
amounts from the Proceeds Accounts maintained by it at any time and for any purposes.
	 
	 	20.3.3	 	Subject to Clause 20.2 (Withdrawals), if any Default has occurred and is continuing,
an Obligor may only withdraw amounts from the Proceeds Accounts maintained by it at the
following times and for the following purposes:

	 	(A)	 	first, at any time, in or towards payment of any
items of Permitted Expenditure but, unless the Security Trustee otherwise
agrees, only to the extent that such item of Permitted Expenditure does
not exceed 110% of the amount that has been provided for in the then
current Projection;

73

 

Exhibit 10.1

	 	(B)	 	second, at any time, in or towards payment pro rata of any
fees, commission, costs and expenses, accrued interest or Hedging Costs due
but unpaid under the Finance Documents and the Secured Hedging Agreements;
	 
	 	(C)	 	third, at any time, in or towards payment pro rata of (i)
any principal (including amounts payable under clause 6.8 (Claims under a
Letter of Credit) or clause 6.10 (Indemnities)), and any cash cover in
respect of any Letter of Credit, due but unpaid under the Finance Documents
and (ii) any Hedging Termination Payments due to any Hedging Bank but unpaid
under any Secured Hedging Agreement to the extent that such Hedging
Termination Payments have fallen due for payment as a result of the
termination of such Secured Hedging Agreement by that Hedging Bank; and
	 
	 	(D)	 	fourth, at any time, in or towards payment of any dividend
or distribution that has been declared prior to the occurrence of any such
Default.

	 	20.3.4	 	Any such withdrawals from a Proceeds Account may only be made in the order of priority
set out in Clause 20.3.3 so that no withdrawal may be made for a purpose set out in any
paragraph or sub-paragraph of Clause 20.3.3 if any amount of a kind referred to in a
preceding paragraph or sub-paragraph is due but unpaid.
	 
	 	20.3.5	 	Each Obligor may, at any time, transfer amounts from a Proceeds Account maintained by
it which is denominated in any one currency to any other Proceeds Account maintained by
it which is denominated in another currency.
	 
	 	20.3.6	 	For the purpose of this Agreement, “Permitted Expenditure” means, in relation to any
Obligor at any time:

	 	(A)	 	any costs of abandonment and payments to make provision for
abandonment costs in accordance with all relevant laws, regulations and the
relevant Project Documents relating to the whole or any part of any Borrowing
Base Asset, or any physical assets associated with it (including
contributions to a sinking fund), in each case, payable by that Obligor at
such time;
	 
	 	(B)	 	any transportation tariffs and sales and marketing costs
relating to the Petroleum derived from any Borrowing Base Asset that is
payable by that Obligor at such time;
	 
	 	(C)	 	any capital expenditure in respect of any Borrowing Base
Asset which that Obligor is required to meet at such time in order to
generate or sustain the production profiles for that Borrowing Base Asset
which have been used as an Assumption, and are reflected in, the then current
Projection;
	 
	 	(D)	 	any operating costs relating to any Borrowing Base Asset
payable by that Obligor at such time;
	 
	 	(E)	 	any royalties under any Petroleum production licence
relating to any Borrowing Base Asset payable by that Obligor at such time;

74

 

Exhibit 10.1

	 	(F)	 	any Taxes attributable to, or in connection with, any
Borrowing Base Asset payable by that Obligor at such time;
	 
	 	(G)	 	any exploration and appraisal expenditure on any Borrowing
Base Asset payable by that Obligor at such time but only to the extent that
(a) the Obligor was committed to meet such expenditure prior to the
occurrence of the relevant Default and (b) such expenditure cannot be funded
from any other existing cash balances of the Group; and
	 
	 	(H)	 	any general and administrative expenditure payable by that
Obligor at such time but only to the extent that the same is attributable to
a Borrowing Base Asset.

	20.4	 	Cash Collateral Accounts

	 	20.4.1	 	Any Borrower that wishes to request a Letter of Credit shall:

	 	(A)	 	maintain with the Account Bank accounts each designated as
“Cash Collateral” (the “Cash Collateral Account”) with the Account Bank; and
	 
	 	(B)	 	procure that all amounts of cash cover that it is required
to provide under this Agreement (or otherwise elects to provide) in relation
to any Letter of Credit are paid into such Cash Collateral Accounts.

	 	20.4.2	 	Subject to Clause 20.2 (Withdrawals) and unless the Agent otherwise consents, an
Obligor may only withdraw amounts from the Cash Collateral Accounts maintained by it at
the following times and for the following purposes:

	 	(A)	 	first, at any time, in or towards the payment to any Lender
of amounts due and payable to it under this Agreement in respect of the
relevant Letter of Credit for which cash cover has been provided; and
	 
	 	(B)	 	second, at any time when:

	 	(1)	 	no Default has occurred and is
continuing; and
	 
	 	(2)	 	the aggregate amount standing to the
credit of all the Cash Collateral Accounts maintained by that
Obligor exceeds the aggregate amount of cash cover that it is, at
that time, required to provide in respect of all Letters of Credit
that have been issued at its request,

	 	 	 	in or towards payment to any Proceeds Account maintained by it.

	 	20.4.3	 	Any such withdrawals from a Cash Collateral Account may only be made in the order of
priority set out in Clause 20.4.2 so that no withdrawal may be made for a purpose set
out in any paragraph or sub-paragraph of Clause 20.4.2 if any amount of a kind referred
to in a preceding paragraph or sub-paragraph is due but unpaid.
	 
	 	20.4.4	 	The Fronting Bank shall be entitled to request the Account Bank to withdraw from any
Cash Collateral Account any amount due to it in respect of a Letter of Credit which
remains unpaid by the Borrowers (and the Account Bank shall comply with any direction to
it by the Fronting Bank for such withdrawal(s)).

75

 

Exhibit 10.1

	20.5	 	Administration and miscellaneous

	 	20.5.1	 	Each Obligor shall provide the Agent and/or the Security Trustee and any of their
representatives with access on reasonable notice and during normal business hours to
review the books and records of its Project Accounts. The Account Bank must, and each
relevant Obligor authorises the Account Bank to, give the Agent and the Security Trustee
and their representatives unrestricted access to review such books and records held by
the Account Bank.
	 
	 	20.5.2	 	The Account Bank must provide to the Company and, at the request of any of the Agent,
the Security Trustee or the Fronting Bank to such other party, not less than five
Business Days after the end of each month, a full statement of all payments into and
from the Project Accounts.
	 
	 	20.5.3	 	Except where this Agreement specifically provides otherwise, no Obligor may exercise
any right which it may have under any applicable law to direct the Account Bank to
transfer any amount standing to the credit of a Project Account to it or to its order.
The Account Bank must notify the Agent and the Security Trustee if any Obligor purports
to exercise any such right.
	 
	 	20.5.4	 	The Account Bank will not be under any obligation to monitor withdrawals from the
Project Accounts or enquire as to the purpose of any withdrawal from a Project Account.
	 
	 	20.5.5	 	The Account Bank must notify the Agent and the Security Trustee promptly if it becomes
aware of the occurrence of a Default.
	 
	 	20.5.6	 	The Account Bank must not be required to act in a manner inconsistent with the Finance
Documents.
	 
	 	20.5.7	 	Each sum credited to a Project Account will, from the time it is credited until the
time it is withdrawn, bear interest at such rate as the relevant Obligor may from time
to time agree with the Account Bank. Such interest will be credited to the relevant
Project Account.

	20.6	 	Security

	 	20.6.1	 	Each Obligor shall, to the extent that such Security has not been effected under the
terms of an existing Security Document, enter into a Security Document (in form and
substance satisfactory to the Security Trustee acting reasonably) for the purposes of
creating Security over each of the Project Accounts maintained by it (and the sums
standing to the credit of such Project Accounts) in favour of the Security Trustee and
deliver to the Security Trustee, or procure the delivery to the Security Trustee of, any
legal opinion or other document that the Security Trustee may reasonably require in
connection with the entry into such Security Document. Such Security must be granted
and each such legal opinion or other document must be delivered:

	 	(A)	 	in the case of any Project Accounts which are in existence
on the date of this Agreement, on or before the date of the first Utilisation
hereunder; and
	 
	 	(B)	 	in the case of any other Project Account, on the date on
which such Project Account is opened.

76

 

Exhibit 10.1

	 	20.6.2	 	On the date on which such Security is granted in favour of the Security Trustee, the
Account Bank is deemed to have acknowledged that it has received notice that each
Project Account held by it is the subject of Security in favour of the Security Trustee.
	 
	 	20.6.3	 	The Account Bank acknowledges that it is not entitled to, and undertakes not to, claim
or exercise any lien, right of set-off, right to combine or consolidate accounts or any
other right, remedy or security over, against or with respect to any Project Account
held by it (save to set-off, from any Proceeds Account, transaction fees incurred by it
in exercise of its obligations under this Agreement) or moneys standing to the credit of
any such Project Account (or in the course of being credited to it), in each case,
without the consent of the Security Trustee.
	 
	 	20.6.4	 	The Account Bank confirms that it has received no other notice of any Security in
respect of any Project Account held by it in favour of any person other than the
Security Trustee.

	20.7	 	Protection of Account Bank

	 	20.7.1	 	The Obligors must indemnify the Account Bank against any cost, loss or liability
incurred by the Account Bank (otherwise than by reason of its gross negligence or wilful
misconduct) in acting as the Account Bank under or in connection with the Finance
Documents.
	 
	 	20.7.2	 	The Account Bank:

	 	(A)	 	is not responsible to any other Finance Party for the
adequacy, accuracy and/or completeness of any information (whether oral or
written) supplied by it, an Obligor or any other person given in or in
connection with any Finance Document or the Information Memorandum (save for
the statements provided by it pursuant to Clause 20.5 (Administration and
miscellaneous)); or
	 
	 	(B)	 	is not 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.

	20.8	 	Resignation of Account Bank

	 	20.8.1	 	The Account Bank (including any replacement Account Bank that is appointed in
accordance with this Clause 20.7 (Resignation of Account Bank)) must at all times be an
institution approved, licensed and authorised to accept deposits in each location where
any Project Accounts are held.
	 
	 	20.8.2	 	The Account Bank may resign and appoint one of its Affiliates acting through an office
in the United Kingdom or such other location as the Agent, the Account Bank and the
Company may agree as successor by giving notice to the other Finance Parties and the
Company.
	 
	 	20.8.3	 	Alternatively the Account Bank may resign by giving notice to the other Finance
Parties and the Company, in which case the Majority Lenders (after consultation with the
Company) may appoint a successor Account Bank.

77

 

Exhibit 10.1

	 	20.8.4	 	The retiring Account Bank shall, at its own cost (unless required to resign pursuant
to Clause 20.8.7 in which case the costs will be borne by the Company), make available
to the successor Account Bank such documents and records and provide such assistance as
the successor Account Bank may reasonably request for the purposes of performing its
functions as the Account Bank under the Finance Documents.
	 
	 	20.8.5	 	The Account Bank’s resignation notice shall only take effect upon the successor
Account Bank:

	 	(A)	 	notifying all the Parties that it accepts its appointment;
and
	 
	 	(B)	 	completing all such steps as may reasonably be required by
the Majority Lenders in order to ensure that (1) it accedes, and becomes a
party, to all relevant Finance Documents in its capacity as an Account Bank;
(2) the proceeds of all Project Accounts held by the retiring Account Bank
are transferred to the corresponding Project Accounts to be held with the
successor Account Bank; and (3) the Secured Creditors have valid and
enforceable Security over (i) the Project Accounts that are held, or to be
held by, the successor Account Bank and (ii) the amounts standing the credit
of such Project Accounts.

	 	20.8.6	 	Upon the appointment of a successor, the retiring Account Bank shall be discharged
from any further obligation in respect of the Finance Documents (in its capacity as
Account Bank) but shall remain entitled to the benefit of Clause 28.11 (Lenders’
Indemnity) and Clause 20.7 (Protection of Account Bank). 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.
	 
	 	20.8.7	 	After consultation with the Company, the Majority Lenders may, by notice to the
Account Bank, require it to resign in accordance with Clause 20.8.3 above. In this
event, the Account Bank shall resign in accordance with Clause 20.8.3 above.

78

 

Exhibit 10.1

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

	21.	 	REPRESENTATIONS
	 
	21.1	 	Timing of representations

	 	21.1.1	 	Subject to Clauses 21.1.3, 21.1.4 and 21.1.5, each Obligor makes the representations
and warranties set out in this Clauses 21 to each Finance Party on the date of this
Agreement save for those set out in Clause 21.27 (Information Memorandum) which it makes
to each Finance Party on the Syndication Date.
	 
	 	21.1.2	 	In addition, subject to Clauses 21.1.3, 21.1.4 and 21.1.5, the Repeating
Representations are deemed to be made by each Obligor by reference to the facts and
circumstances then existing on:

	 	(A)	 	the date of each Utilisation Request and the first day of
each (i) Interest Period and (ii) Term; and
	 
	 	(B)	 	in the case of an Additional Obligor, the day on which the
company becomes (or it is proposed that the company becomes) an Additional
Obligor.

	 	21.1.3	 	Talisman Expro Limited makes the representations and warranties set out in this Clause
21 (Representations) to each Finance Party on the date (the “accession date") on which
it becomes a Party hereto as an Obligor pursuant to Clause 4.3 (Conditions subsequent)
provided that:

	 	(A)	 	in making such representations and warranties and in making
the Repeating Representations at any time prior to the date which falls 90
days after the accession date, Talisman Expro Limited shall (in relation to
the Limited Representations) only make, or be deemed to make, such
representations and warranties insofar as it is aware of the matters
specified therein;
	 
	 	(B)	 	for the purposes of the representation and warranties made,
or deemed to be made, by Talisman Expro Limited, any references to “date of
this Agreement” shall be replaced with a reference to “the accession date”;
and

	 	21.1.4	 	In making the Limited Representations at any time prior to the date which falls 90
days after the date of this Agreement, each Obligor (other than Talisman Expro Limited)
shall, to the extent that such with representations and warranties relate to Talisman
Expro Limited, only make, or be deemed to make, such representations and warranties in
so far as it is aware of the matters specified therein.
	 
	 	21.1.5	 	For the purposes of Clauses 21.1.3 and 21.1.4, “Limited Representations” means:

	 	(A)	 	each representation and warranty set out in Clauses 21.8.2
(No default), 21.9.2 (Authorisations), 21.9.3 (Authorisations), 21.13
(Information Package), 21.17 (Borrowing Base Assets), 21.18 (Copies of
Project Documents), 21.19 (Laws and regulations) and 21.25 (No Security);

79

 

Exhibit 10.1

	 	(B)	 	to the extent that the same relates to any Project
Document, the representation and warranty set out in Clause 21.4 (legal
validity).

	21.2	 	Status

	 	21.2.1	 	It, and each member of the Group party to a Transaction Document is a limited
liability company, duly incorporated and validly existing under the laws of its
jurisdiction of incorporation.
	 
	 	21.2.2	 	It, and each member of the Group party to a Transaction Document has the power to own
its assets and carry on its business as it is being conducted.

	21.3	 	Powers and authority
	 
	 	 	It, and each member of the Group party to a Finance Document or material Project Document,
has the power to enter into and perform, and has taken all necessary action to authorise
the entry into, and performance of, the Finance Documents or material Project Documents to
which it is a party and the transactions contemplated by those Finance Documents or
material Project Documents.
	 
	21.4	 	Legal validity
	 
	 	 	Subject to any general principles of law limiting its obligations or the obligations of any
member of the Group and specifically referred to in any legal opinion required, and
delivered to the Agent, under this Agreement, each Finance Document and, to the best of its
knowledge (after due enquiry), each material Project Document to which it, or any member of
the Group, is a party:

	 	21.4.1	 	is in full force and effect; and
	 
	 	21.4.2	 	is its legally binding, valid and enforceable obligation or, as the case may be, the
legally binding, valid and enforceable obligation of that member of the Group,

	 	 	and no person is in default under any Finance Document or material Project Document.
	 
	21.5	 	Non-conflict
	 
	 	 	Subject to any general principles of law specifically referred to in the Norwegian legal
opinion described in paragraph 11.5 of Part I of Schedule 3 (Conditions precedent and
subsequent) the entry into and performance by it of, or any Transaction Party of, and the
transactions contemplated by, the Finance Documents, do not conflict with:

	 	21.5.1	 	any law or regulation applicable to it or any member of the Group party to such
documents;
	 
	 	21.5.2	 	its constitutional documents or the constitutional documents of any member of the
Group party to such documents; or
	 
	 	21.5.3	 	any document which is binding upon (i) it or any of its assets or (ii) any member of
the Group or any assets of any member of the Group.

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Exhibit 10.1

	21.6	 	Pari passu ranking
	 
	 	 	Its payment obligations, and the payment obligations of each Transaction Party, under the
Finance Documents rank at least pari passu with all its other present unsecured
obligations, except for obligations mandatorily preferred by law applying to companies
generally.
	 
	21.7	 	Insolvency
	 
	 	 	As at the date of this Agreement and, in the case of any member of the Borrower Group which
does not have an interest in any Borrowing Base Asset at the date of this Agreement, the
date on which any Petroleum Asset owned by such member of the Borrower Group becomes a
Borrowing Base Asset, neither it nor any member of the Group has taken any steps, and
(after due enquiry) it is not aware of any steps having been taken for:

	 	21.7.1	 	the winding-up, administration, or dissolution of it or any member of the Group (or
any of their respective assets); or
	 
	 	21.7.2	 	the appointment of any Insolvency Officer in relation to it or any member of the Group
or their respective assets,

	 	 	or any analogous step in any jurisdiction.
	 
	21.8	 	No default

	 	21.8.1	 	No Event of Default and, on the date of this Agreement, no Default has occurred and is
continuing or will result from the execution of, or the performance of any transaction
contemplated by, any Finance Document and so far as it is aware no circumstances exist
which threaten the foregoing.
	 
	 	21.8.2	 	No other event is outstanding which constitutes a default under any document which is
binding on it, or any member of the Group or any of its assets or any assets of any
member of the Group, in each case, to an extent or in a manner which is reasonably
likely to result in a Material Adverse Change.

	21.9	 	Authorisations

	 	21.9.1	 	As at the date of a Finance Document and the date on which any Petroleum Asset becomes
a Borrowing Base Asset, except for registration of any relevant Security Document, all
Authorisations required by it, or any Transaction Party in connection with the entry
into, performance, validity and enforceability of, and the transactions contemplated by,
that Finance Document have been obtained or effected (as appropriate) and are in full
force and effect, and to the best of its knowledge (after due enquiry), no steps have
been or are being taken for the revocation, variation or refusal of any such
Authorisation.
	 
	 	21.9.2	 	As at the date of this Agreement and the date on which any Petroleum Asset becomes a
Borrowing Base Asset, all material Authorisations required by it or any member of the
Group in connection with:

	 	(A)	 	the entry into, performance, validity and enforceability
of; and
	 
	 	(B)	 	the transactions (including the exploitation of the
Borrowing Base Assets) contemplated by,

81

 

Exhibit 10.1

	 	 	 	each of the material Project Documents to which it or any member of the Group is a
party have been obtained or effected (as appropriate) (or, in relation to the
matters referred to at paragraph (B) above, if not yet required, there is no
reason to believe that they will not be obtained in satisfactory terms at the time
they are required) and are in full force and effect and, to the best of its
knowledge (after due enquiry), no steps have been taken to revoke or amend such
Authorisations.
	 
	 	21.9.3	 	As at the date of this Agreement and the date on which any Petroleum Asset becomes a
Borrowing Base Asset, all material Authorisations required by it, or any member of the
Group in connection with the exploitation of the Borrowing Base Assets as contemplated
by the Finance Documents and each Projection, have been obtained or effected (as
appropriate) and are in full force and effect and, to the best of its knowledge (after
due enquiry), no steps have been taken to revoke or amend such Authorisations.

	21.10	 	Financial statements
	 
	 	 	Its audited financial statements or, in the case of the Company, its audited consolidated
financial statements most recently delivered to the Agent:

	 	21.10.1	 	have been prepared in accordance with GAAP/IFRS, consistently applied; and
	 
	 	21.10.2	 	give a true and fair view of its financial condition as at the date to which they
were drawn up,

	 	 	except, in each case, as disclosed to the contrary in those financial statements.
	 
	21.11	 	No Material Adverse Change
	 
	 	 	As at the date of this Agreement, there has been no Material Adverse Change.
	 
	21.12	 	Litigation
	 
	 	 	No litigation, arbitration or administrative proceedings are current or, to its knowledge,
pending or threatened which, if adversely determined, would be reasonably likely to result
in a Material Adverse Change.
	 
	21.13	 	Information Package

	 	21.13.1	 	The factual information contained in the Information Package was true and accurate in
all material respects as at its date or (if appropriate) as at the date (if any) at
which it is stated to be given.
	 
	 	21.13.2	 	The Information Package contains all information regarding each Obligor and the
Borrowing Base Assets which is material as at its date or (if appropriate) as at the
date (if any) at which it is stated to be given.
	 
	 	21.13.3	 	The estimates, forecasts and financial projections contained in the Information
Package have been prepared, in good faith and with due care on the basis of recent
historical information and assumptions believed by the Obligors to be reasonable as at
the date it is stated to be given.
	 
	 	21.13.4	 	Each estimate, forecast and expression of opinion or intention contained in the
Information Package was made in good faith, with due care and after careful

82

 

Exhibit 10.1

	 	 	 	consideration and enquiry and is believed by the Obligors to be reasonable as at
the date at which it is stated to be given.
	 
	 	21.13.5	 	The Information Package did not, when provided, omit any information which, if
disclosed, would make the Information Package untrue or misleading in any material
respect.
	 
	 	21.13.6	 	As at the date of this Agreement, nothing has occurred which, if disclosed, would
make the Information Package untrue or misleading in any material respect.

	21.14	 	Security
	 
	 	 	Subject to:

	 	(i)	 	any qualifications as to matters of law set out in any legal
opinion required, and delivered to the Agent, under this Agreement;
	 
	 	(ii)	 	any required registration of any Security Document;
	 
	 	(iii)	 	the delivery of any notices required to be delivered
pursuant to the Security Documents which has not been delivered on the date
that this representation and warranty is, or is deemed to be, given; and
	 
	 	(iv)	 	any rights of forfeiture (or similar rights) of the
counterparties to the Project Documents,

	 	 	 	each Security Document to which it or any Transaction Party is a party:
	 
	 	21.14.1	 	confers the Security of the type it purports to create over the assets over which a
Security is purported to be given by that Security Document and subject as provided at
Clause 21.17.2 each such Security is first ranking;
	 
	 	21.14.2	 	is valid and enforceable against (i) it or, as the case may be, the relevant
Transaction Party which is party thereto, and (ii) its or, as the case may be, such
Transaction Party ‘s Insolvency Officers and creditors; and
	 
	 	21.14.3	 	is not capable of being avoided or set aside, whether in the winding up,
administration, or dissolution or otherwise of it (or any of its assets) or, as the case
may be, such Transaction Party (or any such Transaction Party’s assets).

	21.15	 	Environmental matters

	 	21.15.1	 	To the best of its knowledge (after due enquiry) it has obtained all material
Environmental Licences required by it in connection with each of the Borrowing Base
Assets in which it has an interest and their exploitation and has at all times complied
in all material respects with all those Environmental Licences and it and each other
member of the Group has complied in all material respects with all applicable
Environmental Laws.
	 
	 	21.15.2	 	To the best of its knowledge (after due enquiry) there is no material environmental
contamination on any site connected with any Borrowing Base Asset or in which it or any
member of the Group has an interest.

83

 

Exhibit 10.1

	 	21.15.3	 	To the best of its knowledge (after due enquiry) there are no material Environmental
Claims current, or to its knowledge, pending or threatened, connected with it, any
member of the Group or any of the Borrowing Base Assets.

	21.16	 	Projections and Computer Model

	 	21.16.1	 	The then current Projection:

	 	(A)	 	is based on reasonable assumptions;
	 
	 	(B)	 	is consistent with the provisions of the Transaction
Documents in all material respects;
	 
	 	(C)	 	to the extent prepared by the Obligors has been prepared in
good faith and with due care; and
	 
	 	(D)	 	fairly represents the Obligors’ expectations as at the date
the Projection is produced and adopted,

	 	 	 	except, in the case of Clauses 21.16.1(A) and 21.16.1(D), to the extent the
Obligors’ assumptions and expectations differ from those of the Majority Lenders
or the Technical Bank (as the case may be).
	 
	 	21.16.2	 	The Computer Model:

	 	(A)	 	has been prepared in good faith and with due care;
	 
	 	(B)	 	is consistent with the provisions of the Transaction
Documents in all material respects; and
	 
	 	(C)	 	is accurate and does not contain any error which would
render any information produced by the Computer Model misleading in any
material respect.

	21.17	 	Borrowing Base Assets

	 	21.17.1	 	The Obligors own, or have sufficient access to and the right to use all assets
necessary for the exploitation of each Borrowing Base Asset as contemplated by the
Transaction Documents and the then current Projection.
	 
	 	21.17.2	 	Save as disclosed in Section C of the Due Diligence Report, to the best of its
knowledge (after due enquiry), the Obligors are the absolute legal and beneficial owner
of each Borrowing Base Asset free from any Security or other interest of any kind (other
than (i) the interests of co-venturers under the Project Documents relating to that
Borrowing Base Asset, (ii) the Security under the Security Documents or (iii) the
Security permitted under Clause 23.4 (Negative pledge)) and no member of the Group is
under any obligation to create any Security over any Borrowing Base Asset (except by
virtue of any Security Document or as permitted under Clause 23.4 (Negative pledge)).
	 
	 	21.17.3	 	So far as it is aware, no event or circumstance exists which entitles any person to
terminate or suspend any Authorisation of a kind referred to in Clause 21.9.2
(Authorisations).

84

 

Exhibit 10.1

	21.18	 	Copies of Project Documents
	 
	 	 	Save as disclosed in Section A of the Due Diligence Report, each copy of a Project Document
delivered to the Agent by it is, at the time it is delivered, a correct and complete copy
of the relevant document as in force at that time.
	 
	21.19	 	Laws and regulations
	 
	 	 	Subject to any general principles of law specifically referred to in the Norwegian legal
opinion described in paragraph 11.5 of Part I of Schedule 3 (Conditions precedent and
subsequent) it and each member of the Group, is in compliance in all material respects with
all applicable laws and regulations including any applicable tax laws and regulations.
	 
	21.20	 	Insurances

	 	21.20.1	 	All Insurances which are at any time required to be maintained or effected by it, or
any member of the Group, pursuant to the Finance Documents are in full force and effect
at that time, and to the best of its knowledge (after due enquiry), no event or
circumstance has occurred, nor has there been any omission to disclose a fact, which
would in either case entitle any insurer under those Insurances to avoid its liability
or otherwise reduce its liability.
	 
	 	21.20.2	 	The Security Trustee (as security trustee for the Secured Creditors) will, on and
from the first Utilisation Date, be named as co-insured in relation to all such
Insurances.

	21.21	 	No immunity

	 	21.21.1	 	It, and each member of the Group party to a Transaction Document is subject to civil
commercial law in respect of its obligations under the Transaction Documents.
	 
	 	21.21.2	 	None of it, any other member of the Group party to a Transaction Document, any of its
assets, or any assets of any other member of the Group party to a Transaction Document,
is entitled to any right of immunity, and the entry into and performance by it, and each
member of the Group party to a Transaction Document, of the Transaction Documents to
which it or, as the case may be, that member of the Group, is a party constitute private
and commercial acts.

	21.22	 	Governing law and enforcement
	 
	 	 	Subject to any qualifications as to matters of law set out in any legal opinion required,
and delivered to the Agent, under this Agreement:

	 	21.22.1	 	the relevant law chosen as the governing law of each of the Finance Documents to
which it, or any member of the Group, is a party will be recognised and enforced in its
jurisdiction of incorporation or, as the case may be, the jurisdiction of incorporation
of such member of the Group;
	 
	 	21.22.2	 	the submission by it, or any member of the Group, to the jurisdiction of the courts
of England under any relevant Finance Document to which it or, as the case may be, such
member of the Group, is a party and any undertaking given in any Finance Document by it,
or any member of the Group, not to claim any immunity, in each case, is legal, valid and
binding under the law of its jurisdiction of incorporation or,

85

 

Exhibit 10.1

	 	 	 	as the case may be, the jurisdiction of incorporation of such member of the Group;
and
	 
	 	21.22.3	 	any judgment obtained in England in relation to a Finance Document to which it, or
any member of the Group, is a party will be recognised and enforced in its jurisdiction
of incorporation or, as the case may be, the jurisdiction of incorporation of such
member of the Group.

	21.23	 	Deduction of Tax
	 
	 	 	As at the date of this Agreement it is not required under the law of its jurisdiction of
incorporation to make any deduction for or on account of Tax from any payment that it may
make under any Finance Document.
	 
	21.24	 	Ownership structure

	 	21.24.1	 	As at the date of this Agreement, each of the Company’s Subsidiaries, apart from
Endeavour Energy Norge AS, are Original Guarantors.
	 
	 	21.24.2	 	As at the date of this Agreement, the ownership structure of the Group is as set out
in Schedule 12 (Group Structure).

	21.25	 	No Security
	 
	 	 	No Security (or agreement to create the same) exists over any of its assets or any assets
of any member of the Group save, in each case, as permitted under Clause 23.4 (Negative
pledge).
	 
	21.26	 	Share Security
	 
	 	 	Each member of the Group that has entered into any Security Document for the purposes of
granting Security over its shares in another member of the Group is the legal and
beneficial owner of all of such shares and other assets (the “charged assets”) secured, or
purported to be secured, under such Security Document free from any Security (other than
the relevant Security created pursuant to that Security Document); and the charged assets
are free from any restrictions as to transfer or registration and are not subject to any
calls or other liability to pay money.
	 
	21.27	 	Information Memorandum

	 	21.27.1	 	The factual information contained in the Information Memorandum was true and accurate
in all material respects as at its date or (if appropriate) as at the date (if any) at
which it is stated to be given;
	 
	 	21.27.2	 	The Information Memorandum contains all information regarding each Obligor and the
Borrowing Base Assets which is material as at its date or (if appropriate) as at the
date (if any) at which it is stated to be given;
	 
	 	21.27.3	 	The estimates, forecasts and financial projections contained in the Information
Memorandum have been prepared, in good faith and with due care on the basis of recent
historical information and assumptions believed by the Obligors to be reasonable as at
the date it is stated to be given;

86

 

Exhibit 10.1

	 	21.27.4	 	Each estimate, forecast and expression of opinion or intention contained in the
Information Memorandum was made in good faith, with due care and after careful
consideration and enquiry and is believed by the Obligors to be reasonable as at the
date at which it is stated to be given;
	 
	 	21.27.5	 	The Information Memorandum did not, when provided, omit any information which, if
disclosed, would make the Information Memorandum untrue or misleading in any material
respect; and
	 
	 	21.27.6	 	As at the Syndication Date, nothing has occurred which, if disclosed, would make the
Information Memorandum untrue or misleading in any material respect.

	21.28	 	Dutch Work’s Council Act
	 
	 	 	None of the Obligors incorporated in The Netherlands is required to obtain advice from any
works council within the meaning of the Dutch Works Council Act (Wet op de
Ondernemingsraden).
	 
	21.29	 	Final Salary Pension Schemes
	 
	 	 	No member of the Group has at any time operated a final salary pension scheme.
	 
	21.30	 	Professional Market Policy
	 
	 	 	For the purpose of the Dutch Banking Act, each Dutch Obligor:

	 	21.30.1	 	represents and warrants to the Finance Parties on the date of this Agreement that it
has verified the status of each person which is a Lender under this Agreement on such
date and each such Lender is a PMP; and
	 
	 	21.30.2	 	if on the date on which a party becomes a Lender, it is a requirement of Netherlands
law that such party is a PMP, represents and warrants to the Finance Parties that it has
verified the status of such party on such date and each such party is a PMP.

	22.	 	INFORMATION UNDERTAKINGS
	 
	22.1	 	Financial statements

	 	22.1.1	 	The Company must supply to the Agent (in sufficient copies for all the Lenders if the
Agent so requests):

	 	(A)	 	its audited consolidated financial statements for each of
its financial years; and
	 
	 	(B)	 	its unaudited consolidated financial statements for each
six month period in each of its financial years.

	 	22.1.2	 	In addition, if the Agent so requests, each Obligor (other than the Company) must
supply to the Agent (in sufficient copies for all the Lenders if the Agent so requests):

	 	(A)	 	its financial statements (or, if the same have been
audited, audited financial statements) for each of its financial years; and

87

 

Exhibit 10.1

	 	(B)	 	its unaudited financial statements for each six month
period in each of its financial years.

	 	22.1.3	 	All financial statements for any financial year ending on or after 31st
December 2005 must be supplied as soon as they are available and:

	 	(A)	 	in the case of audited financial statements or audited
consolidated financial statements of the Company, within 120 days;
	 
	 	(B)	 	in the case of audited financial statements or audited
consolidated financial statements of each Obligor (other than the Company),
within 180 days or, in the case only of Endeavour Energy UK Limited and
Talisman Expro Limited or any other Obligor incorporated in England and
Wales, 304 days;
	 
	 	(C)	 	in the case of unaudited financial statements or unaudited
consolidated financial statements of the Company, within 90 days; and
	 
	 	(D)	 	in the case of unaudited financial statements or unaudited
consolidated financial statements of each Obligor (other than the Company),
within 120 days,

	 	 	 	of the end of the relevant financial period.
	 
	 	22.1.4	 	The Company must supply to the Agent, with each set of financial statements it
supplies in accordance with Clause 22.1.2 and Clause 22.1.3, a certificate signed by a
director of the Company (in form satisfactory to the Agent demonstrating the compliance
of the Group with Clause 24 (Financial Covenants) or, if it is not in compliance,
stating this fact together with a brief explanation therefor.

	22.2	 	Form of financial statements

	 	22.2.1	 	Each Obligor must ensure that each set of financial statements supplied under this
Agreement is prepared using GAAP/IFRS and gives (if audited) a true and fair view of, or
(if unaudited) fairly represents, the financial condition (consolidated or otherwise) of
the relevant person as at the date and for the period in respect of which those
financial statements were drawn up.
	 
	 	22.2.2	 	Each Obligor must notify the Agent of any change to GAAP/IFRS, accounting practices or
reference periods which affect the basis on which its audited consolidated financial
statements or audited financial statements are prepared.
	 
	 	22.2.3	 	If requested by the Agent, the relevant Obligor must supply to the Agent:

	 	(A)	 	a full description of any change notified under Clause
22.2.2; and
	 
	 	(B)	 	sufficient information to enable the Finance Parties to
make a proper comparison between the financial position shown by the set of
financial statements prepared on the changed basis and its most recent
audited consolidated financial statements or, as the case may be, audited
financial statements delivered to the Agent under this Agreement.

	 	22.2.4	 	If requested by the Agent, the Company must enter into discussions for a period of not
more than 30 days with a view to agreeing any amendments required to be

88

 

Exhibit 10.1

	 	 	 	made to this Agreement to place the relevant Obligor and the Finance Parties in the
same position as they would have been in if the change notified under Clause 22.2.2
had not happened. Any agreement between the Company and the Agent will, with the
prior consent of the Majority Lenders, be binding on all the Parties.
	 
	 	22.2.5	 	If no agreement is reached under Clause 22.2.4 on the required amendments to this
Agreement, the Company must ensure that its auditors certify those amendments required
to be made to this agreement to place the relevant Obligor and the Finance Parties in
the same position as they would have been in if the change notified under Clause 22.2.2
had not happened. The certificate of the auditors will, in the absence of manifest
error, be binding on all the Parties.

	22.3	 	Information: miscellaneous
	 
	 	 	Each Obligor must supply, and the Company must procure that each member of the Group
supplies, to the Agent (in sufficient copies for all the Lenders if the Agent so requests):

	 	22.3.1	 	copies of all documents dispatched by it to its creditors generally or any class of
them or required by its constitutional documents or law to be dispatched to its
shareholders (or any class of them) in their capacity as such, in each case, at the same
time as they are dispatched;
	 
	 	22.3.2	 	promptly upon becoming aware of them, details of any litigation, arbitration or
administrative proceedings relating to it which are current, threatened or pending
which, if adversely determined, is reasonably likely to result in a Material Adverse
Change;
	 
	 	22.3.3	 	promptly upon becoming aware of them, details of any potential or actual material
warranty claim or any other material claim or dispute relating to it under any
Transaction Document;
	 
	 	22.3.4	 	promptly upon becoming aware of it, any incident involving any material physical
damage to a Borrowing Base Asset in which it has an interest and its proposal for
reinstatement;
	 
	 	22.3.5	 	promptly upon changing its financial year end, details of the same; and
	 
	 	22.3.6	 	promptly on request, such further information regarding its financial condition and
operations as any Finance Party through the Agent may reasonably request.

	22.4	 	Information: Borrowing Base Assets
	 
	 	 	The Company shall supply to the Agent or, in the case of Clause 22.4.1, the Technical Bank
(in sufficient copies for all of the Lenders if the Agent or, as the case may be, the
Technical Bank, so request(s)):

	 	22.4.1	 	promptly upon receipt by it or any member of the Group, a copy of:

	 	(A)	 	any production reports, budgets prepared by any operator,
any minutes of operating committee meetings or any other document as the
Technical Bank may reasonably request from time to time, in each case,
relating to any Borrowing Base Asset; and

89

 

Exhibit 10.1

	 	(B)	 	any other information relating to a Borrowing Base Asset or
a member of the Group that could change any Assumption in the then current
Projection (in a material respect) or impose any additional material
liability on any member of the Group;

	 	22.4.2	 	promptly upon request by the Agent:

	 	(A)	 	a copy of any Project Document; and
	 
	 	(B)	 	such information as the Lenders may reasonably require in
respect of a Borrowing Base Asset or any member of the Group;

	 	22.4.3	 	not less than 14 days before any member of the Group enters into any new material
Project Document or any material amendment to any existing Project Document, details of
that Project Document or material amendment; and
	 
	 	22.4.4	 	promptly upon receipt by an Obligor, or any member of the Group, a certified copy of
any material Authorisation required under any law or regulation (including Environmental
Laws and Environmental Licences) to enable that Obligor or member of the Group to
perform its obligations under, or for the validity or enforceability of, any Finance
Document.

	22.5	 	Information: Projections and Reserves Reports

	 	22.5.1	 	The Company shall commission, at the expense of the Obligors, the Independent Engineer
to prepare a Reserves Report:

	 	(A)	 	on an annual basis for the purposes of the Scheduled
Projections to be adopted in accordance with Clause 7 (Projections);
	 
	 	(B)	 	if at any time the Company makes a request for a Petroleum
Asset to be designated a Borrowing Base Asset;
	 
	 	(C)	 	if the Technical Bank so requests at any other time
following the occurrence of an event which in the reasonable opinion of the
Technical Bank has, or is likely to have, a material adverse effect on the
risk profile of the Group; and
	 
	 	(D)	 	if at any time the Company notifies the Technical Bank and
Agent that an event has happened or a circumstance has arisen that will have
a material impact on the FLCR Amount and/or LLCR Amount and that it wishes
for such event or circumstance to be taken into account for the purposes of
the next Scheduled Projection.

	 	22.5.2	 	The Company shall use its reasonable endeavours to ensure that each Reserves Report
which is commissioned and prepared:

	 	(A)	 	pursuant to Clause 22.5.1(A), is delivered to the Technical
Bank and the Agent on or before 15th February of each year if the
same is to be taken into account for the purposes of the Scheduled Projection
that is due to be adopted on 1st April of such year (with the
first such report following drawdown hereunder being delivered on or before
15th February 2007.

90

 

Exhibit 10.1

	 	(B)	 	pursuant to Clause 22.5.1(B), is delivered to the Technical
Bank and the Agent within 21 days of the relevant request being made by the
Company;
	 
	 	(C)	 	pursuant to Clause 22.5.1(C), is delivered to the Technical
Bank and the Agent within 40 days (or such shorter period as may be
reasonably practicable) of the relevant request being made by the Technical
Bank; and
	 
	 	(D)	 	pursuant to Clause 22.5.1(D), is delivered to the Technical
Bank and the Agent no later than 40 days before the relevant Scheduled
Recalculation Date on which the relevant Scheduled Projection is due to be
adopted.

	 	22.5.3	 	The Company shall, at its expense, prepare or procure the preparation of Borrower
Updates and deliver each such Borrower Update to the Technical Bank and the Agent on or
before 15 August in each year (unless a Reserves Report is scheduled pursuant to Clause
22.5.2 to be delivered to the Technical Bank and the Agent within one month of such
date).
	 
	 	22.5.4	 	The Company shall supply, and shall procure that each member of the Group supplies,
promptly upon any request made by the Technical Bank or the Agent in connection with the
procedures provided for in Clause 7 (Projections) and the preparation and/or adoption of
any Projections, all such information and documents as the Agent or the Technical Bank
may reasonably request.

	22.6	 	Notification of Default

	 	22.6.1	 	Unless the Agent has already been so notified, an Obligor shall, as soon as it becomes
aware, promptly notify the Agent of any Default (and the steps, if any, being taken to
remedy it).
	 
	 	22.6.2	 	Promptly on request by the Agent and together with the financial statements specified
in Clause 22.1.2(A) (Financial statements), each Obligor must supply to the Agent a
certificate, signed by two of its authorised signatories on its behalf, certifying that
no Default is outstanding or, if a Default is outstanding, specifying the Default and
the steps, if any, being taken to remedy it.

	22.7	 	Use of websites

	 	22.7.1	 	Except as provided below, an Obligor may deliver any information under the Finance
Documents to a Lender by posting it on to an electronic website if:

	 	(A)	 	the Agent and the relevant Obligor agree;
	 
	 	(B)	 	the relevant Obligor and the Agent designate an electronic
website for this purpose;
	 
	 	(C)	 	both the relevant Obligor and the Agent are aware of the
address of and any relevant password specifications for the website; and
	 
	 	(D)	 	the information posted is in a format agreed between the
relevant Obligor and the Agent.

91

 

Exhibit 10.1

	 	 	 	The Agent must supply each relevant Lender with the address of and any relevant
password specifications for the website.
	 
	 	22.7.2	 	Notwithstanding the above, each relevant Obligor must supply to the Agent in paper
form a copy of any information posted on the website together with sufficient copies for
each Lender:

	 	(A)	 	if requested to do so by the Agent; or
	 
	 	(B)	 	if so required by a governmental requirement,

	 	 	 	in each case within 10 Business Days of receipt of the request.
	 
	 	22.7.3	 	The Agent must promptly upon becoming aware of its occurrence, notify the relevant
Obligor and the Lenders if:

	 	(A)	 	the website cannot be accessed;
	 
	 	(B)	 	the website or any information on the website is infected
by any electronic virus or similar software;
	 
	 	(C)	 	the relevant password specification for the website is
changed; or
	 
	 	(D)	 	any information to be supplied under this Agreement is
posted on the website or amended after being posted.

	 	 	 	In the circumstances in paragraphs (A) or (B) above occur, the relevant Obligor
must supply any information required under this Agreement in paper form.

	22.8	 	“Know your customer” checks

	 	22.8.1	 	If:

	 	(A)	 	the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation made
after the date of this Agreement;
	 
	 	(B)	 	any change in the status, or the composition of the
shareholders, of an Obligor after the date of this Agreement; or
	 
	 	(C)	 	a proposed assignment or transfer by a Lender of any of its
rights and obligations under this Agreement to a party that is not a Lender
prior to such assignment or transfer,

	 	 	 	obliges the Agent or any other Finance Party (or, in the case of Clause 22.8.1(C)
above, any prospective new Lender) to comply with “know your customer” or similar
identification procedures in circumstances where the necessary information is not
already available to it, each Obligor shall promptly upon the request of the Agent
or any Finance Party supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Agent (for itself or on behalf of
any Finance Party) or any Finance Party (for itself or, in the case of the event
described in Clause 22.8.1(C) above, on behalf of any prospective new Lender) in
order for the Agent, such Finance Party or, in the case of the event described in
Clause 22.8.1(C) above, any prospective new Lender to carry out and be satisfied
it has complied with all necessary “know your

92

 

Exhibit 10.1

	 	 	 	customer” or other similar checks under all applicable laws and regulations
pursuant to the transactions contemplated in the Finance Documents.
	 
	 	22.8.2	 	Each Finance Party shall promptly upon the request of the Agent supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by the Agent
(for itself) in order for the Agent to carry out and be satisfied it has complied with
all necessary “know your customer” or other similar checks under all applicable laws and
regulations pursuant to the transactions contemplated in the Finance Documents.
	 
	 	22.8.3	 	The Company shall, by not less than 10 Business Days’ prior written notice to the
Agent, notify the Agent (which shall promptly notify the Finance Parties) of its
intention to request that any Relevant Affiliate becomes an Additional Obligor pursuant
to Clause 27 (Changes to the Obligors).
	 
	 	22.8.4	 	If the accession of any person to this Agreement as an Additional Obligor pursuant to
Clause 27 (Changes to the Obligors) obliges the Agent or any other Finance Party to
comply with “know your customer” or similar identification procedures in circumstances
where the necessary information is not already available to it, the Company shall
promptly upon the request of the Agent or any other Finance Party supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by the Agent
(for itself or on behalf of any Finance Party) or any other Finance Party (for itself or
on behalf of any prospective new Finance Party) in order for the Agent or such Finance
Party or any prospective new Finance Party to carry out and be satisfied it has complied
with the results of all necessary “know your customer” or other similar checks under all
applicable laws and regulations pursuant to the accession of such person to this
Agreement as an Additional Obligor.

	22.9	 	Permitted Transactions
	 
	 	 	Each Obligor shall consult with the Agent prior to completing any Permitted Transaction
described in paragraph (B) or (C) of the definition of “Permitted Transaction” set out in
Clause 1.1 (Definitions) and promptly notify the Agent upon the completion of the same.
The Obligors shall provide such evidence as the Agent (acting reasonably) may request for
the purposes of ensuring that each such Permitted Transaction has been or, as the case may
be, will be, completed upon the terms described in the relevant paragraph of the definition
of “Permitted Transaction” and that the interests of the Secured Creditors have not been
adversely affected.
	 
	23.	 	GENERAL UNDERTAKINGS
	 
	23.1	 	Authorisations
	 
	 	 	Each Obligor shall, and shall procure that each member of the Group shall, promptly obtain,
maintain and comply with the terms of any material Authorisation required under any law or
regulation (including Environmental Laws and Environmental Licences):

	 	23.1.1	 	to enable it to perform its obligations (or exercise its rights) under, or for the
validity or enforceability of, any Finance Document; or
	 
	 	23.1.2	 	to enable it to perform its obligations (or exercise its rights) under, or for the
validity or enforceability of, any other Finance Document or material Project

93

 

Exhibit 10.1

	 	 	 	Document to which it is party or for the exploitation and/or operation of any
Borrowing Base Asset in which it has an interest as contemplated by the Finance
Document or material Project Document and the then current Projection.

	23.2	 	Compliance with laws
	 
	 	 	Each Obligor shall, and shall procure that each member of the Group shall, comply in all
material respects with all laws and regulations applicable to it or its assets or
activities for the time being.
	 
	23.3	 	Pari passu ranking
	 
	 	 	Each Obligor shall, and shall procure that each member of the Group party to a Finance
Document, shall ensure that its obligations under the Finance Documents rank at least pari
passu with all its other present and future unsecured obligations, except for obligations
mandatorily preferred by law applying to companies generally.
	 
	23.4	 	Negative pledge

	 	23.4.1	 	Except as provided in Clause 23.4.2:

	 	(A)	 	no Obligor may create or allow to exist any Security on,
over, or affecting, any of its assets; and
	 
	 	(B)	 	each Obligor shall procure that no member of the Group
creates or allows to exist any Security on, over, or affecting, any of its
assets.

	 	23.4.2	 	Clause 23.4.1 does not apply to:

	 	(A)	 	any Security constituted by the Security Documents or
arising under any other Finance Document;
	 
	 	(B)	 	any Security comprising a netting or set-off arrangement
entered into by an Obligor or any other member of the Group:

	 	(1)	 	in the ordinary course of its banking and
trading arrangements for the purpose of netting debit and credit
balances;
	 
	 	(2)	 	under any Permitted Hedging Agreement; or
	 
	 	(3)	 	under any other Hedging Agreement to which
any member of the Group that is not an Obligor is a party;

	 	(C)	 	any lien arising by operation of law and in the ordinary
course of trading and does not secure any amount more than 30 days overdue;
	 
	 	(D)	 	any Security that arises under or pursuant to a Project
Document which does not secure any Financial Indebtedness;
	 
	 	(E)	 	any Security that are retention of title or set off
arrangements constituted under industry standard conditions for the supply of
goods acquired by any Obligor or any other member of the Group in the
ordinary course of its trading;

94

 

Exhibit 10.1

	 	(F)	 	any Security arising pursuant to the specific terms of any
Equivalent Field Document which does not secure any Financial Indebtedness;
	 
	 	(G)	 	any Security which the Majority Lenders have consented to
in writing;
	 
	 	(H)	 	any Security securing Financial Indebtedness, the
outstanding principal amount of which (when aggregated with the outstanding
principal amount of any other Financial Indebtedness which has the benefit of
any Security given by any member of the Group other than permitted under
paragraphs (A)-(G) above) does not exceed $250,000 (or its equivalent in
other currencies).

	 	23.4.3	 	No Obligor may, and each Obligor shall procure that no member of the Group shall:

	 	(A)	 	sell, transfer or otherwise dispose of any of its assets on
terms where it is or may be leased to or re-acquired or acquired by that
company or any member of the Group or Non Recourse Subsidiary; or
	 
	 	(B)	 	sell, transfer or otherwise dispose of any of its
receivables on recourse terms,
	 
	 	in circumstances where the transaction is entered into primarily as a method of
raising Financial Indebtedness or of financing the acquisition of an asset.

	 	23.4.4	 	No Obligor may, and each Obligor shall ensure that no member of the Group shall, agree
to an amendment of any document or enter into a document which may restrict its ability
to create a Security envisaged by a Security Document.

	23.5	 	Disposals

	 	23.5.1	 	Except as provided in Clause 23.5.2, no Obligor may, and each Obligor shall procure
that no member of the Group shall, either in a single transaction or in a series of
transactions and whether related or not, dispose of all or any part of any Borrowing
Base Asset or any interests therein or any of its shareholding in any person holding any
interest in any Borrowing Base Assets.
	 
	 	23.5.2	 	Clause 23.5.1 does not apply to:

	 	(A)	 	sales of Petroleum under any Project Document or otherwise
on arms’ length terms for cash-only consideration;
	 
	 	(B)	 	disposals arising solely by virtue of a unitisation or
redetermination of a Borrowing Base Asset;
	 
	 	(C)	 	disposals of surplus materials or of materials that are
forthwith replaced with materials of equivalent utility;
	 
	 	(D)	 	disposals of obsolete or surplus assets;
	 
	 	(E)	 	disposals of materials used in the course of its operations
where such disposals are made in the ordinary course of business and on arms’
length terms;

95

 

Exhibit 10.1

	 	(F)	 	disposals of a Petroleum Asset which has ceased to be
designated as a Borrowing Base Asset where the Dollar Amount of all
Utilisations are reduced in accordance with Clause 8.3 (Reduction) in each
case, following the adoption of the new Projection which takes account of
such Petroleum Asset ceasing to be designated a Borrowing Base Asset;
	 
	 	(G)	 	any step which is part of a Permitted Transaction;

	 
	 	(H)	 	disposals with prior consent of the Majority Lenders;
	 
	 	(I)	 	any step which is part of a Permitted Hedging Agreement.

	23.6	 	Financial Indebtedness

	 	23.6.1	 	Except as provided in Clause 23.6.2, no Obligor may, and each Obligor shall procure
that no member of the Group shall, at any time incur or have outstanding any Financial
Indebtedness.
	 
	 	23.6.2	 	Clause 23.6.1 does not apply to:

	 	(A)	 	any Financial Indebtedness incurred under the Finance
Documents or;
	 
	 	(B)	 	any Financial Indebtedness accruing under the $81,250,000
convertible senior notes due 2012 of Endeavour International Corporation and
any refinancing thereof providing the principal amount does not exceed
$81,250,000.
	 
	 	(C)	 	Financial Indebtedness incurred under any Permitted Hedging
Agreement or any guarantee given by a member of the Group in respect of a
Permitted Hedging Agreement;
	 
	 	(D)	 	any Financial Indebtedness owed by an Obligor to another
Obligor;
	 
	 	(E)	 	any Financial Indebtedness which is subordinated to amounts
due to the Finance Parties under the Finance Documents pursuant to a
Subordination Agreement approved by the Majority Lenders;
	 
	 	(F)	 	any Financial Indebtedness incurred under the Second Lien
Facility;
	 
	 	(G)	 	any Financial Indebtedness incurred other than under
Clauses 23.6.2(A) to (F) which does not at any time exceed (in aggregate)
$10,000,000 (or its equivalent in one or more other currencies);
	 
	 	(H)	 	any other Financial Indebtedness incurred with the prior
consent of the Majority Lenders.

	23.7	 	Credits and guarantees

	 	23.7.1	 	Except as provided in Clause 23.7.2, no Obligor may, and each Obligor shall procure
that no member of the Group shall, make any loan or extend any other form of credit or
financial accommodation, or give any guarantee of any person’s Financial Indebtedness,
to any person, or otherwise be a creditor in respect of any Financial Indebtedness of
any person.

96

 

Exhibit 10.1

	 	23.7.2	 	Clause 23.7.1 does not apply to:

	 	(A)	 	any loan, credit or financial accommodation to the extent
required by or pursuant to any Project Document or any Equivalent Field
Document;
	 
	 	(B)	 	trade credit and guarantees on usual commercial terms
including guarantees by a member of the Group of oil and gas trading
obligations of any other member of the Group;
	 
	 	(C)	 	the guarantee given by the Company to Paladin Resources
Limited under the terms of the Acquisition Agreement;
	 
	 	(D)	 	any Financial Indebtedness permitted under Clause 23.6.2
above
	 
	 	(E)	 	the guarantees given by the Obligors under Article XII of
the Second Lien Facility; and
	 
	 	(F)	 	any extension of credit given pursuant to a Permitted
Hedging Agreement in relation to hedge receipts.

	23.8	 	Change of business

	 	23.8.1	 	Each Obligor shall procure that no substantial change is made to the general nature of
its business or the business of the Group from that carried on at the date of this
Agreement.
	 
	 	23.8.2	 	No Obligor shall:

	 	(A)	 	carry on any business other than the ownership and
exploitation of interests in Petroleum Assets and the exploration for, and
production and disposal of Petroleum from, the areas covered by the petroleum
production licences for such Petroleum Assets and activities associated with
those activities; or
	 
	 	(B)	 	own any assets or incur any liabilities except for the
purposes of carrying on that business.

	23.9	 	Corporate existence

	 	23.9.1	 	Each Obligor shall maintain, and shall ensure that each member of the Group maintains,
its corporate existence under the laws of its jurisdiction of incorporation and each
Obligor shall not, and shall ensure that no member of the Group will, change its
corporate domicile, or attempt to resolve to do so.
	 
	 	23.9.2	 	No Obligor may, and each Obligor shall procure that no member of the Group shall,
enter into any amalgamation, demerger, merger or reconstruction except a solvent
amalgamation, demerger, merger or reconstruction within the Group with the consent of
the Majority Lenders (such consent not to be unreasonably withheld).
	 
	 	23.9.3	 	The restrictions in clauses 23.9.1 and 23.9.2 shall not apply to any step or procedure
which is part of a Permitted Transaction.

97

 

Exhibit 10.1

	23.10	 	Environmental matters

	 	23.10.1	 	Each Obligor shall ensure that it, and the Company shall procure that each member of
the Group is, and has been, in compliance in all material respects with all
Environmental Laws and Environmental Licences applicable to it.
	 
	 	23.10.2	 	Each Obligor shall, and the Company shall procure that each member of the Group,
shall promptly upon becoming aware of the same notify the Agent of:

	 	(A)	 	any material Environmental Claim current, or to its
knowledge, pending or threatened; or
	 
	 	(B)	 	any circumstances reasonably likely to result in an
Environmental Claim.

	23.11	 	Insurance

	 	23.11.1	 	Each Obligor shall, and the Company shall procure that each member of the Group
shall:

	 	(A)	 	take out and maintain, or caused to be taken out and
maintained, with respect to all of its assets and activities, insurance
policies:

	 	(1)	 	in such amounts and on such terms and
against such risks as are normally insured against by prudent owners
of comparable assets in the region in which the relevant assets are
located or activities are taking place; and
	 
	 	(2)	 	against any other risks which the Agent may
reasonably require as a result of any material change(s) in
circumstances, risks or the Majority Lenders’ reasonable perception
of risk.

	 	(B)	 	ensure that each Insurance is maintained:

	 	(1)	 	with an insurance company or underwriters
acceptable to the Agent (acting reasonably); and
	 
	 	(2)	 	otherwise on terms consistent with the good
practice of prudent owners of comparable assets;

	 	(C)	 	ensure that moneys received by it under any Insurances
relating to third party liability are applied directly to the person to whom
the liability to which the sum relates was incurred, or to the relevant
insured party in reimbursement of moneys expended in satisfaction of such
liability;
	 
	 	(D)	 	procure that the Security Trustee (as security trustee for
the Secured Creditors) is, on and from the first Utilisation Date, named as a
co-insured party upon the policy, certificate or cover note relating to each
Insurance;
	 
	 	(E)	 	not do, or knowingly permit anything to be done, which may
make any Insurance void, voidable, unavailable or unenforceable or render any
sum which may be paid out under such insurance repayable in whole or in part;

98

 

Exhibit 10.1

	 	(F)	 	promptly pay all premiums, calls and contributions and do
all other things necessary to keep each Insurance maintained in full force
and effect;
	 
	 	(G)	 	produce to the Agent (i) the policy, certificate or cover
note relating to any Insurance, (ii) the receipt for payment of any premium
for any Insurance or (iii) such other details of any Insurance as the Agent
may reasonably request; and
	 
	 	(H)	 	if the Security Trustee so requires:

	 	(1)	 	enter into a Security Document (in form and
substance satisfactory to the Security Trustee) for the purposes of
granting Security over such Insurances which relate to the Borrowing
Base Assets and the proceeds thereof in favour of the Security
Trustee unless such Security has been granted under an existing
Security Document; and
	 
	 	(2)	 	deliver to the Security Trustee, or procure
the delivery to the Security Trustee of, any legal opinion or other
document that the Security Trustee may reasonably require in
connection with the entry into such Security Document.

	 	23.11.2	 	No Finance Party shall have any liability for the payment of premiums or any other
amount owing in respect of any insurance.
	 
	 	23.11.3	 	If any Obligor or member of the Group fails to pay any premium relating to any
Insurances, the Agent may, at its sole discretion, pay any premium due and the Obligors
shall immediately pay to the Agent the amount of such premium.

	23.12	 	Project Documents
	 
	 	 	Each Obligor shall:

	 	23.12.1	 	ensure that none of its rights under or in respect of any Project Document are at any
time cancelled, terminated, suspended or limited if the same would be reasonably likely
to result in a Material Adverse Change;
	 
	 	23.12.2	 	not agree to any waiver, amendment, termination or cancellation of any Project
Document if the same would be reasonably likely to result in a Material Adverse Change;
	 
	 	23.12.3	 	duly and properly perform, in all material respects, its obligations under the
Project Documents (except to the extent, if any, they are inconsistent with its
obligations under the Finance Documents);
	 
	 	23.12.4	 	exercise its rights, and (so far as within its power) ensure that others exercise
their respective rights, under and in respect of the Project Documents consistently with
its obligations under the Finance Documents; and
	 
	 	23.12.5	 	not enter into any Project Document the entry into, performance, termination or
breach of which would be reasonably likely to result in a Material Adverse Change.

99

 

Exhibit 10.1

	23.13	 	Borrowing Base Assets
	 
	 	 	Each Obligor shall:

	 	23.13.1	 	exercise such votes and other rights as it may have under the Project Documents with
a view to ensuring (so far as it is able) that each Borrowing Base Asset is at all times
exploited and operated in a reasonable and prudent manner and in accordance with good
industry practice, all applicable laws and regulations and the provisions of the Project
Documents;
	 
	 	23.13.2	 	prior to the Abandonment Date forecast in the then current Projection, not concur in,
and shall vote against, any proposal or decision to abandon all or any material part of
any of its Borrowing Base Assets unless the Technical Bank has confirmed to the Company
that if a new Projection (reflecting such an abandonment) were to be adopted, the same
would not result in the Borrowers having to reduce the Utilisations in accordance with
Clause 8.3.2 (Reduction) following the adoption of that Projection;
	 
	 	23.13.3	 	not exercise its rights on any operating or similar committee in a manner that would
be materially prejudicial to the interests of any Finance Party under the Finance
Documents; and
	 
	 	23.13.4	 	maintain full and proper technical and financial records in relation to each of its
Borrowing Base Assets, and ensure (so far as it is able) that the Agent (and/or any
person nominated by it) is afforded reasonable access to each of its Borrowing Base
Assets and all such records during normal business hours on reasonable notice.

	23.14	 	Taxes
	 
	 	 	Each Obligor shall, and the Company shall procure that each member of the Group shall:

	 	23.14.1	 	maintain its tax residence in the relevant country of incorporation;
	 
	 	23.14.2	 	procure that all Taxes payable by, or assessed upon, it are paid when due save to the
extent that such payment is being contested in good faith and being lawfully withheld;
	 
	 	23.14.3	 	to the fullest extent it is able to do so, apply any and all tax credits, losses,
reliefs or allowances taken into account in any Projection at any time in the manner, at
the time and to the extent that they were so taken into account;
	 
	 	23.14.4	 	not surrender or dispose of any tax credit, loss, relief or allowance to any person
other than an Obligor; and
	 
	 	23.14.5	 	file all tax returns required to be filed by it in any jurisdiction within the period
required by law.

	23.15	 	Syndication
	 
	 	 	Each Obligor shall, provide all reasonable assistance to the Mandated Lead Arrangers and
the Finance Parties in effecting the primary syndication of the Facility, including by:

100

 

Exhibit 10.1

	 	23.15.1	 	providing such information available to it as may be required by the Mandated Lead
Arrangers or any Lender (acting reasonably) in connection with syndication of the
Facility (including in connection with the preparation, revision and approval of the
Information Memorandum);
	 
	 	23.15.2	 	making management and members of staff available at reasonable times and on
reasonable notice for the purposes of making presentations to potential lending
institutions; and
	 
	 	23.15.3	 	otherwise assisting the Mandated Lead Arrangers or any Lenders, to the extent
reasonably necessary to achieve the successful syndication of the Facility.

	23.16	 	Security Documents

	 	23.16.1	 	Save as disclosed in Section D of the Due Diligence Report and save, for any
registration of the Security Documents which is to be undertaken by the Lenders’ legal
counsel, each Obligor shall, and shall ensure that each member of the Group party to any
Security Document shall, take all such steps (including the obtaining and/or carrying
out of all relevant approvals, filings, registrations or recordings) as are available to
it and as are reasonably necessary for the purposes of ensuring that each Security
Document:

	 	(A)	 	confers the Security of the type it purports to create over
the assets over which a Security is purported to be given by that Security
Document and subject to Clause 21.17.2 each such Security is first ranking;
	 
	 	(B)	 	is valid and enforceable against the relevant member of the
Group which is party thereto and such Group member’s Insolvency Officers and
creditors; and
	 
	 	(C)	 	is not capable of being avoided or set aside, whether in
the winding up, administration or dissolution or otherwise of such member of
the Group.

	 	23.16.2	 	Without prejudice to Clause 23.16.1 each Obligor shall, and shall ensure that each
member of the Group party to any Security Document shall, promptly pay all stamp,
registration and similar taxes and fees that are payable in connection with each
Security Document to which it is a party.

	23.17	 	Petroleum won and saved
	 
	 	 	Each Obligor shall use all reasonable endeavours to procure that all Petroleum won and
saved from any Borrowing Base Asset and which it is entitled to lift is dealt with in
accordance with good commercial practice and is sold (whether pursuant to a spot or term
contract) on the best terms (as to price and otherwise) as are reasonably available to
companies of comparable standing to the relevant Obligor at the date the relevant contract
is entered into.

	23.18	 	Capital expenditure
	 
	 	 	Each Obligor shall, to the extent that the then current Projection provides for any capital
expenditure to be incurred in any Calculation Period and such capital expenditure has been
taken into account as item “C” in the formulae set out in Clause 1.1 (Definitions) in the
definition of “FLCR Amount” or “LLCR Amount” (as the case may be) for the purposes of the
then applicable Relevant NPV, use reasonable endeavours to ensure that such capital

101

 

Exhibit 10.1

	 	 	expenditure is incurred in such period save to the extent that any developments
contemplated in such Projection can be carried out at a lower cost than provided for in
such Projection.
	 
	23.19	 	Ownership
	 
	 	 	The Company must (subject only to any Security constituted under any Security Document) at
all times beneficially and legally own (whether directly or indirectly) the whole of the
issued share capital of each Obligor (other than itself).
	 
	23.20	 	Exploration and appraisal expenditure
	 
	 	 	No Obligor may, and each Obligor shall procure that no member of the Group will, enter into
any arrangements whereby it incurs any commitment to meet any exploration and appraisal
expenditure in relation to the Borrowing Base Assets save to the extent that:

	 	23.20.1	 	(in relation to any exploration and appraisal expenditure to be incurred in any
Calculation Period) the Borrowers have demonstrated to the reasonable satisfaction of
the Technical Bank that:

	 	(A)	 	any such expenditure can be funded out of amounts standing
to the credit of the Proceeds Accounts and any other accounts of any other
members of the Borrower Group (other than any Cash Collateral Accounts) on
the first day of that Calculation Period which the Company would otherwise be
entitled (pursuant to Clause 23.21 (Distributions) to pay to its shareholders
by way of dividend;
	 
	 	(B)	 	the Group will be able to meet all its other liabilities as
they fall due in that Calculation Period;
	 
	 	(C)	 	the relevant member(s) of the Group will be entitled to
make such withdrawals from such account(s) to meet such expenditure when the
same falls due for payment; or

	 	23.20.2	 	such expenditure does not exceed 110% of the amount that has been included in the
then current Projection.

	23.21	 	Distributions

	 	23.21.1	 	At any time while a Default has occurred and is continuing, no Obligor shall, and the
Company shall ensure that no member of the Group shall, make or pay, or permit to be
made or paid, any dividend or distribution (whether in cash or in kind) in relation to
its share capital, any redemption or reduction of any share capital, any payments in
respect of any loans made available to it by any Affiliate or any other distribution to
any of its shareholders save for any of the foregoing in and among or to the Obligors
and any dividend or distribution that has been declared prior to the occurrence of any
such Default.
	 
	 	23.21.2	 	No Obligor may, and each Obligor shall ensure that no member of the Group will, agree
to any arrangement (other than the Finance Documents or the Second Lien Facility) which
may restrict its ability to declare, make or pay any dividend, distribution or any
payments referred to in Clause 23.21.1.

102

 

Exhibit 10.1

	 	23.21.3	 	No Obligor may, and each Obligor shall ensure that no member of the Group will, make
or pay any dividend or distribution in relation to its share capital in cash save to the
extent the same has been approved by the Agent, at its sole discretion.

	23.22	 	Hedging

	 	23.22.1	 	Each Obligor shall comply with the requirements of Schedule 13 (Hedging Policy).
	 
	 	23.22.2	 	Promptly upon request, the Company shall provide to the Agent a report (in a form
satisfactory to the Agent, acting reasonably) which confirms whether the Obligors are in
compliance with the requirements of Schedule 13 (Hedging Policy).
	 
	 	23.22.3	 	No Obligor may enter into any Hedging Agreement unless:

	 	(A)	 	such Hedging Agreement has been entered into pursuant to
Clause 23.22.1 in connection with the Borrowing Base Assets;
	 
	 	(B)	 	such Hedging Agreement has been entered into with a Hedging
Bank or such other hedging counterparty that has a credit rating of at least
A3 with Moody’s Investors Service Inc. or A- with Standard and Poor’s Rating
Group or such other lower credit rating as may be acceptable to the Majority
Lenders; and
	 
	 	(C)	 	in the case of any such Hedging Agreement with a Hedging
Bank, that Hedging Agreement has been entered into in compliance with the
Intercreditor Agreement.

	 	23.22.4	 	Each Obligor that enters into a Hedging Agreement on or after the date of this
Agreement shall:

	 	(A)	 	enter into a Security Document in form and substance
satisfactory to the Security Trustee for the purposes of granting Security
over that Hedging Agreement in favour of the Security Trustee unless Security
over such Hedging Agreement has been granted to the Security Trustee under
any existing Security Document;
	 
	 	(B)	 	without prejudice to Clause 23.16.1 (Security Documents),
promptly obtain all such Authorisations as may be necessary in order for such
Security to be granted; and
	 
	 	(C)	 	deliver to the Security Trustee, or procure the delivery to
the Security Trustee of, any legal opinion or other document that the
Security Trustee may reasonably require in connection with the entry into
such Security Document.

	 	23.22.5	 	Save for:

	 	(A)	 	any Security that is permitted to be granted pursuant to
Clause 23.4 (Negative pledge) in respect of any such Hedging Agreement; and
	 
	 	(B)	 	any guarantee that is permitted pursuant to Clause 23.6
(Financial Indebtedness) and Clause 23.7 (Credits and guarantees) in respect
of any such Hedging Agreement,

103

 

Exhibit 10.1

	 	 	 	no Obligor may, and each Obligor shall ensure that no member of the Group shall,
enter into any margin call arrangement, post any collateral or credit support,
grant any Security or otherwise give any guarantee or other financial
accommodation in respect of any Hedging Agreement that such Obligor or, as the
case may be, such member of the Group enters into.
	 
	 	23.22.6	 	The Obligors shall ensure that no member of the Group (other than an Obligor) enters
into any Hedging Agreement.
	 
	 	23.22.7	 	No Obligor shall after the date of this Agreement enter into any Hedging Agreement
under any Master Agreement, Schedule or other agreement in effect prior to the date of
this Agreement, except a Master Agreement in respect of the existing commodity hedges
which the Group has in place with J. Aron and Company (a Goldman Sachs subsidiary).

	23.23	 	Non-Recourse Subsidiaries
	 
	 	 	Unless the Agent (acting reasonably) shall otherwise agree in writing, the Company:

	 	(A)	 	will procure that (i) no investment in any Non-Recourse
Subsidiary is made by any member of the Group (whether represented by amounts
subscribed for shares, debentures or otherwise howsoever) and (ii) no
Non-Recourse Subsidiary will incur or permit to remain outstanding any
indebtedness (whether present, future, actual or contingent) or other
liability to any member of the Group, unless (x) (in every such case) at the
time such investment is made or indebtedness or other liability is incurred,
no Default is continuing and immediately prior to the making of such
investment or such indebtedness or other liability being incurred a director
of the Company has certified on behalf of the Company that no Default is
continuing and (y) the Company would, under the terms of this Agreement,
otherwise be free to pay an amount equal to the amount of such investment,
indebtedness or liability to its shareholders by way of dividend;
	 
	 	(B)	 	without prejudice to the generality of the foregoing, it
will procure that no member of the Group gives any guarantee, undertaking or
indemnity or undertakes to permit to subsist any other liability whatsoever
contingent or otherwise in favour of or in respect of an obligation of any
Non-Recourse Subsidiary (whether in respect of indebtedness or the
performance of any obligation or otherwise howsoever);
	 
	 	(C)	 	without prejudice to the foregoing, it will ensure that all
transactions entered into between any member of the Group and any
Non-Recourse Subsidiary (other than the declaration or payment of any
dividend or other distribution by a Non-Recourse Subsidiary to a member of
the Group) shall be on an arms length basis and on normal commercial terms;
	 
	 	(D)	 	will ensure that no Non-Recourse Subsidiary acquires any
interest in or entitlement to (or to the revenues from) any asset the
revenues from which were included in a Projection;
	 
	 	(E)	 	will ensure that no Non-Recourse Subsidiary itself has any
subsidiary other than a subsidiary which is also a Non-Recourse Subsidiary;

104

 

Exhibit 10.1

	 	(F)	 	will procure that, insofar as there is a significant risk
that it might materially affect the ability of any Obligor to perform any of
their obligations under the Transaction Documents or might otherwise result
in a liability being imposed on any Finance Party, each Non-Recourse
Subsidiary:

	 	(1)	 	exercises all its powers to obtain and
maintain in full force and effect all material Authorisations
applicable to it and will comply in all material respects with all
conditions and obligations to which such material Authorisations may
be subject;
	 
	 	(2)	 	carries on its business as a whole in a
prudent manner and uses all reasonable endeavours to procure that
each Petroleum interest of it is operated in accordance with good
oilfield practice;
	 
	 	(3)	 	promptly pays as and when due, unless and
to the extent only that such royalties, Taxes and duties are being
contested by it in good faith, all royalties, Taxes and duties of
whatsoever kind and whether payable in the United Kingdom or
elsewhere; and
	 
	 	(4)	 	complies with all laws and regulations,
applicable to it (including all Environmental Laws and Licences) in
all material respects;

	 	(G)	 	will procure that each Non-Recourse Subsidiary, (i)
promptly upon becoming aware of the same, gives written notice to the Agent
of every notice of default or adverse claim or demand made by any person
against such Non-Recourse Subsidiary affecting any of its assets of
whatsoever nature (disregarding for this purpose any of the aforesaid of a
spurious nature) if such default (if proved) or claim or demand (if
successful) is reasonably likely to result in a liability being imposed on
any member of the Group and (ii) diligently takes all reasonable steps open
to such Non-Recourse Subsidiary to remedy any such default and protect and
defend its interest in the relevant asset against any such adverse claim or
demand; and
	 
	 	(H)	 	will procure that each Non-Recourse Subsidiary, as soon as
reasonably practicable following request by the Agent, provides to the Agent
such information as the Agent may reasonably request for the purpose of
monitoring compliance with the representations, covenants and other
obligations hereunder which have application to Non-Recourse Subsidiaries.

	23.24	 	Technical covenants
	 
	 	 	The Obligors undertake to procure that at each Recalculation Date (for each period or date
in respect of which such ratio is shown in the then current Projection) the Tranche A FLCR,
Tranche A LLCR, Tranche A DSCR, Tranche B FLCR, Tranche B LLCR and Tranche B DSCR (as shown
in such Projection) are not less than the relevant multiples shown in Schedule 4
(Applicable Cover Ratios).

105

 

Exhibit 10.1

	23.25	 	Director’s Certificate
	 
	 	 	Endeavour International Holding B.V. shall deliver to the Agent within seven days prior to
each Recalculation Date a certificate (“Director’s Certificate”) signed by a director on
its behalf substantially in the form of Schedule 15 (Director’s Certificate), each such
Director’s Certificate to be a Finance Document.
	 
	24.	 	FINANCIAL COVENANTS
	 
	24.1	 	Definitions
	 
	 	 	In this Clause 24 (Financial covenants):

	 	24.1.1	 	“Consolidated Cash and Cash Equivalents” means, at any time:

	 	(A)	 	cash in hand or on deposit with any acceptable bank
(including cash collateral balances for decommissioning costs and debt
service cash balances);
	 
	 	(B)	 	certificates of deposit, maturing within one year after the
relevant date of calculation, issued by an acceptable bank;
	 
	 	(C)	 	any investment in marketable obligations issued or
guaranteed by the government of the United States of America or the U.K. or
by an instrumentality or agency of the government of the United States of
America or the U.K. having an equivalent credit rating;
	 
	 	(D)	 	open market commercial paper:

	 	(1)	 	for which a recognised trading market
exists;
	 
	 	(2)	 	issued in the United States of America or
the U.K.;
	 
	 	(3)	 	which matures within one year after the
relevant date of calculation; and
	 
	 	(4)	 	which has a credit rating of either A 1 by
Standard & Poor’s or Fitch or P 1 by Moody’s, or, if no rating is
available in respect of the commercial paper, the issuer of which
has, in respect of its long term debt obligations, an equivalent
rating;

	 	(E)	 	Sterling bills of exchange eligible for rediscount at the
Bank of England and accepted by an acceptable bank; or
	 
	 	(F)	 	any other instrument, security or investment approved by
the Majority Lenders,

in each case, to which any member of the Group is beneficially entitled at that
time and which is capable of being applied against Consolidated Total Borrowings.
An “acceptable bank” for this purpose is a commercial bank or trust company which
has a rating of A- or higher by Standard & Poor’s Rating Group or Fitch or A3 or
higher by Moody’s Investors Service Inc. or a comparable rating from an
internationally recognised credit rating agency for its long term debt obligations
or has been approved by the Majority Lenders.

106

 

Exhibit 10.1

	 	24.1.2	 	“Consolidated EBITDA” means the consolidated gross pre taxation profits of the Group
for a Measurement Period:

	 	(A)	 	excluding the gross pre taxation profits of a member of the
Group for that part of that Measurement Period when it was not a member of
the Group and the gross pre taxation profits relating to business or assets
acquired by a member of the Group during that Measurement Period for that
part of that Measurement Period when the business or assets were not owned by
a member of the Group; and
	 
	 	(B)	 	excluding the gross pre taxation profits attributable to
any member of the Group or to any business or assets sold during that
Measurement Period,

and all as adjusted by:

	 	(1)	 	adding back Consolidated Net Interest
Payable;
	 
	 	(2)	 	taking no account of any exceptional or
extraordinary item;
	 
	 	(3)	 	excluding any amount attributable to
minority interests;
	 
	 	(4)	 	adding back depreciation, depletion,
amortisation and all exploration and appraisal write-offs;
	 
	 	(5)	 	taking no account of any revaluation of an
asset or any loss or gain over book value arising on the disposal of
an asset (otherwise than in the ordinary course of trading) by a
member of the Group during that Measurement Period;
	 
	 	(6)	 	adding back any non-cash decommissioning
charges;
	 
	 	(7)	 	adding back any non-cash impairment
charges; and
	 
	 	(8)	 	taking no account of any other non-cash
charges or credits (including any non-cash charges or credits arising
by reason of the operation of IAS 17 or IAS 39).

	 	24.1.3	 	“Consolidated Interest Payable” means all interest and other financing charges
(whether, in each case, paid, payable or capitalised) incurred by the Group during a
Measurement Period (excluding any amortisation of any financing fees which have been
paid and any amortisation of any interest related to decommissioning liabilities).
	 
	 	24.1.4	 	“Consolidated Interest Receivable” means all interest and other financing charges
received or receivable by the Group during a Measurement Period.
	 
	 	24.1.5	 	“Consolidated Net Interest Payable” means Consolidated Interest Payable less
Consolidated Interest Receivable during the relevant Measurement Period.
	 
	 	24.1.6	 	“Consolidated Total Borrowings” means, in respect of the Group, at any time the
aggregate of the following:

	 	(A)	 	the outstanding principal amount of any moneys borrowed;

107

 

Exhibit 10.1

	 	(B)	 	the outstanding principal amount of any acceptance under
any acceptance credit;
	 
	 	(C)	 	the outstanding principal amount of any bond, note,
debenture, loan stock or other similar instrument;
	 
	 	(D)	 	the capital element of indebtedness under a finance or
capital lease;
	 
	 	(E)	 	the outstanding principal amount of all moneys owing in
connection with the sale or discounting of receivables (otherwise than on a
non recourse basis);
	 
	 	(F)	 	the outstanding principal amount of any indebtedness
arising from any deferred payment agreements arranged primarily as a method
of raising finance or financing the acquisition of an asset;
	 
	 	(G)	 	any fixed or minimum premium payable on the repayment or
redemption of any instrument referred to in paragraph (C) above;
	 
	 	(H)	 	the outstanding principal amount of any indebtedness
arising in connection with any other transaction (including any forward sale
or purchase agreement) which has the commercial effect of a borrowing;
	 
	 	(I)	 	the outstanding amount of any guarantee, indemnity, bond,
letter of credit or any other instrument issued by a bank or financial
institution in respect of which any member of the Group has provided a
counter-indemnity; and
	 
	 	(J)	 	the outstanding principal amount of any indebtedness of any
person of a type referred to in paragraphs (A) – (I) above which is the
subject of a guarantee, indemnity or similar assurance against financial loss
given by a member of the Group.

	 	24.1.7	 	“Consolidated Total Net Borrowings” means at any time Consolidated Total Borrowings
less Consolidated Cash and Cash Equivalents.
	 
	 	24.1.8	 	“Current Assets” means, in relation to the Group, the aggregate value of the current
assets which are reasonably expected to be realised, consumed or sold in the ordinary
course of the trading activities of the Group within one year of the date from which any
calculation falls to be made together with cash at bank.
	 
	 	24.1.9	 	“Current Liabilities” means, in relation to the Group, the aggregate value of the
current liabilities which are reasonably expected to be repayable or payable within one
year from the date on which any calculation falls to be made but disregarding any
amounts repayable under the Facility which it is anticipated are to be funded by way of
a Rollover Loan.
	 
	 	24.1.10	 	“Current Ratio” means the ratio of Current Assets to Current Liabilities.
	 
	 	24.1.11	 	“IAS 17” means standard 17 (relating to leases) under IFRS.
	 
	 	24.1.12	 	“IAS 39” means standard 39 (relating to financial instruments) under IFRS.

108

 

Exhibit 10.1

	 	24.1.13	 	“Measurement Period” means each of the two consecutive six month periods in a
financial year of the Company.

	24.2	 	Interpretation

	 	24.2.1	 	Except as provided to the contrary in this Agreement, an accounting term used in this
Clause is to be construed in accordance with the principles applied in the preparation
of the financial statements delivered in accordance with Clause 22.1 (Financial
Statements).
	 
	 	24.2.2	 	Any amount in a currency other than dollars is to be taken into account at its dollar
equivalent calculated on the basis of:

	 	(A)	 	the Agent’s spot rate of exchange for the purchase of the
relevant currency in the London foreign exchange market for dollars at or
about 11.00 a.m. on the day the relevant amount falls to be calculated; or
	 
	 	(B)	 	if the amount is to be calculated on the last day of a
financial period of the Company, the relevant rates of exchange used by the
Company in, or in connection with, its financial statements for that period.

	 	24.2.3	 	No item must be credited or deducted more than once in any calculation under this
Clause 24 (Financial Covenant).

	24.3	 	Current Ratio
	 
	 	 	The Company must ensure that the Current Ratio on the last day of each Measurement Period
is greater than 1.1:1
	 
	24.4	 	Gearing
	 
	 	 	The Company must ensure that the ratio of (1) Consolidated Total Net Borrowings to (2)
Consolidated EBITDA on the last day of each Measurement Period is less than or equal to
3.0:1.
	 
	24.5	 	Compliance
	 
	 	 	The financial covenant set out in this Clause 24 (Financial Covenant) shall be tested by
reference to each of the financial statements most recently delivered pursuant to Clause
22.1 (Financial statements).
	 
	24.6	 	Verification
	 
	 	 	The Agent may, at any time, at the Company’s expense, require the auditors of the Company
to verify any figure or calculation made in any certificate delivered pursuant to Clause
22.1.4 (Financial Statements) if it reasonably believes that any such figure or calculation
is incorrect. If the Agent is not satisfied (acting reasonably) with the verification
provided by the auditors, it may, at the Company’s expense, appoint an independent firm of
accountants to investigate and verify the relevant figures. Such verification shall be
conclusive evidence of whether the Company is in compliance with Clause 24 (Financial
Covenant).

109

 

Exhibit 10.1

	25.	 	EVENTS OF DEFAULT
	 
	25.1	 	General
	 
	 	 	Each of the events or circumstances set out in Clause 25.2 (Non-payment and failure to
reduce) to Clause 25.22 (Inability to discharge liabilities) (inclusive) is an Event of
Default.
	 
	25.2	 	Non-payment and failure to reduce
	 
	 	 	An Obligor or any Transaction Party does not pay on the due date any amount payable by it
under the Finance Documents in the manner required under the Finance Documents, unless the
non-payment:

	 	25.2.1	 	is caused by technical or administrative error or a Disruption Event; and
	 
	 	25.2.2	 	is remedied within two Business Days of the due date.

	25.3	 	Breach of other obligations

	 	25.3.1	 	The Company does not comply with any term of Clause 23.24 (Technical covenants) or
Clause 24 (Financial Covenants).
	 
	 	25.3.2	 	An Obligor or any Transaction Party does not comply with any other term of the Finance
Documents to which it is a party not already referred to in Clause 25.3.1, unless the
non-compliance:

	 	(A)	 	in the reasonable opinion of the Majority Lenders, is
capable of remedy; and
	 
	 	(B)	 	is remedied within 10 Business Days of the earlier of the
Agent giving notice and the relevant Obligor or Transaction Party (as the
case may be) becoming aware of the non-compliance.

	25.4	 	Misrepresentation
	 
	 	 	A representation made or repeated by any Obligor or Transaction Party in any Finance
Document to which it is a party or in any document delivered by or on behalf of any Obligor
or Transaction Party under any Finance Document to which it is a party is incorrect in any
material respect when made or deemed to be repeated, unless the circumstances giving rise
to the misrepresentation:

	 	25.4.1	 	are capable of remedy; and
	 
	 	25.4.2	 	are remedied within 10 Business Days of the earlier of the Agent giving notice and the
relevant Obligor or Transaction Party (as the case may be) becoming aware of the
misrepresentation.

	25.5	 	Cross-default

	 	25.5.1	 	Any of the following occurs in respect of an Obligor or any other member of the Group:

	 	(A)	 	any of its Financial Indebtedness is not paid when due and
payable (after the expiry of any originally applicable grace period);

110

 

Exhibit 10.1

	 	(B)	 	any of its Financial Indebtedness:

	 	(1)	 	becomes prematurely due and payable;
	 
	 	(2)	 	is placed on demand; or
	 
	 	(3)	 	is capable of being declared by a creditor
to be prematurely due and payable or being placed on demand,

in each case, as a result of an event of default (howsoever described); or

	 	(C)	 	any commitment for its Financial Indebtedness is cancelled
or suspended as a result of an event of default (howsoever described),

unless the aggregate amount of Financial Indebtedness falling within Clause
25.5.1(A), Clause 25.5.1(B) or Clause 25.5.1(C) (as the case may be) is less than
$10,000,000 (or its equivalent in one or more other currencies).

	25.6	 	Insolvency
	 
	 	 	Any of the following occurs in respect of an Obligor or any other member of the Group:

	 	25.6.1	 	it is, or is deemed for the purposes of any law to be, unable to pay its debts as they
fall due or insolvent;
	 
	 	25.6.2	 	it admits its inability to pay its debts as they fall due;
	 
	 	25.6.3	 	it suspends making payments on any of its debts or announces an intention to do so;
	 
	 	25.6.4	 	by reason of actual or anticipated financial difficulties, it begins negotiations with
any creditor for the rescheduling of any of its indebtedness; or
	 
	 	25.6.5	 	a moratorium is declared in respect of any of its indebtedness.

	25.7	 	Insolvency proceedings

	 	25.7.1	 	Except as provided in Clause 25.7.2, any of the following occurs in respect of an
Obligor or any other member of the Group:

	 	(A)	 	any step is taken with a view to a faillissement, surséance
van betaling, composition, assignment or similar arrangement with any of its
creditors;
	 
	 	(B)	 	a meeting of it is convened for the purpose of considering
any resolution for (or to petition for) its winding-up, administration, or
dissolution or any such resolution is passed;
	 
	 	(C)	 	any person presents a petition, files an application or
takes any other analogous steps for its winding-up, administration, or
dissolution;
	 
	 	(D)	 	an order for its winding-up, administration, or dissolution
is made;
	 
	 	(E)	 	any Insolvency Officer is appointed in respect of it or any
of its assets;
	 
	 	(F)	 	its directors or other officers request the appointment of
an Insolvency Officer;

111

 

Exhibit 10.1

	 	(G)	 	a notice under section 36 of the Tax Collection Act of The
Netherlands (Invorderingswet 1990) or section 16(d) of the Social Insurance
Co-ordination Act of The Netherlands (Coördinatiewet Sociale Verzekeringen)
is filed upon a member of the Group that is incorporated or established in
The Netherlands; or
	 
	 	(H)	 	any other analogous step or procedure is taken in any
jurisdiction.

	 	25.7.2	 	Clause 25.7.1 does not apply to:

	 	(A)	 	any step or procedure which is part of a Permitted
Transaction; or
	 
	 	(B)	 	a petition for winding-up presented by a creditor which is
being contested in good faith and with due diligence and is discharged or
struck out within 14 days; or
	 
	 	(C)	 	any petition, action, proceeding or step which is
demonstrated by the Company to the reasonable satisfaction of the Agent to be
frivolous, vexatious or otherwise an abuse of process of court.

	25.8	 	Enforcement of security
	 
	 	 	Any steps are taken to enforce any Security securing Financial Indebtedness in excess of
$5,000,000 (or its equivalent in one or more other currencies), in aggregate, over any part
of the assets of an Obligor or any other member of the Group.
	 
	25.9	 	Creditors’ process
	 
	 	 	Any prejudgment attachment (conservatoir Beslag), expropriation attachment, sequestration,
distress, execution, diligence or analogous event affects any asset(s) of any Obligor or
any other member of the Group having an aggregate value in excess of $5,000,000 (or its
equivalent in one or more other currencies) and is not discharged within 14 days unless it
is any petition, action, proceeding or step which is demonstrated by the Company to the
reasonable satisfaction of the Agent to be frivolous, vexatious or otherwise an abuse of
process of court.
	 
	25.10	 	Analogous proceedings
	 
	 	 	There occurs, in relation to any Obligor or any other member of the Group, any event
anywhere which, in the reasonable opinion of the Majority Lenders, corresponds with any of
those mentioned in Clauses 25.6 (Insolvency) to 25.9 (Creditors’ process) (inclusive).
	 
	25.11	 	Cessation of business
	 
	 	 	Any Obligor threatens to cease to carry on business except as part of a Permitted
Transaction.
	 
	25.12	 	Unlawfulness
	 
	 	 	It is or becomes unlawful for any Obligor to perform any of its material obligations under
any Project Document.

112

 

Exhibit 10.1

	25.13	 	Effectiveness of Finance Documents

	 	25.13.1	 	It is or becomes unlawful for any Obligor or Transaction Party to perform any of its
payment obligations or other material obligations under the Finance Documents.
	 
	 	25.13.2	 	Any Finance Document, the guarantee of any Guarantor or any Security purported to be
created or evidenced by any Security Document is not effective or is unenforceable or is
alleged by any Obligor or any Transaction Party to be ineffective or unenforceable for
any reason.
	 
	 	25.13.3	 	An Obligor or Transaction Party repudiates a Finance Document or evidences an
intention to repudiate a Finance Document.

	25.14	 	Ownership
	 
	 	 	Any member of the Group that holds any interests in any Borrowing Base Assets or Obligor is
not or ceases to be a wholly-owned (directly or indirectly) by the Company.
	 
	25.15	 	Project Documents

	 	25.15.1	 	All or any part of any Project Document is not, or ceases to be, a legal, valid and
binding obligation of any person expressed to be party to it in circumstances which are
reasonably likely to result in a Material Adverse Change.
	 
	 	25.15.2	 	Any party to any Project Document defaults under that Project Document in
circumstances which are reasonably likely to result in a Material Adverse Change.
	 
	 	25.15.3	 	All or any part of any Project Document is suspended, terminated or revoked in
circumstances which are reasonably likely to result in a Material Adverse Change.

	25.16	 	Borrowing Base Assets

	 	25.16.1	 	A decision is taken to abandon a Borrowing Base Asset unless such a decision was
taken in compliance with Clause 23.13.2 (Borrowing Base Assets).
	 
	 	25.16.2	 	All or any part of the interest of any member of the Group in any Borrowing Base
Asset (or any Petroleum or revenues or other moneys arising in respect of it) is
nationalised, expropriated, compulsorily acquired or seized by any government or any
governmental or public sector agency, or any such government or agency takes, or
officially announces that it will take, any step with a view to any of the foregoing and
the same is reasonably likely to result in a Material Adverse Change.

	25.17	 	Litigation
	 
	 	 	Any judgment is made or award is issued against any Obligor in relation to any litigation,
arbitration or administrative proceedings in an amount equal to or exceeding $10,000,000
(or its equivalent in one or more other currencies) or any litigation, arbitration or
administrative proceeding is instituted or current in respect of any Obligor or any member
of the Group which would be reasonably likely, if adversely determined, to result in a
Material Adverse Change.

113

 

Exhibit 10.1

	25.18	 	Authorisations
	 
	 	 	Any Authorisation necessary for the ownership of any interest in, the development or the
operation of, any Borrowing Base Asset is revoked, cancelled, surrendered, terminated or
varied and the same would be reasonably likely to result in a Material Adverse Change.
	 
	25.19	 	Material Adverse Change
	 
	 	 	An event occurs which is reasonably likely to result in a Material Adverse Change as
compared to the position as at the date of this Agreement.
	 
	25.20	 	Qualification of accounts
	 
	 	 	Any audited financial statements delivered to the Agent under this Agreement is qualified
in any material way.
	 
	25.21	 	Evidential inadmissibility
	 
	 	 	At any time any act, condition or thing required to be done, fulfilled or performed (other
than by the Finance Parties) in order to make each Finance Document to which any Obligor or
Transaction Party is a party admissible in evidence in the country in which such party is
incorporated is not done, fulfilled or performed to the extent or in a respect such that
the effect thereof is materially to impair the legality, validity or enforceability of the
obligations of any Obligor or any Transaction Party under the Finance Documents.
	 
	25.22	 	Inability to discharge liabilities
	 
	 	 	Any Projection adopted pursuant to Clause 7 (Projections) demonstrates that the Borrower
Group will not be able to discharge all its payment obligations arising prior to the Final
Maturity Date as and when the same are anticipated to fall due.
	 
	25.23	 	Acceleration
	 
	 	 	On and at any time after the occurrence of an Event of Default which is continuing the
Agent may, and shall if so directed by the Majority Lenders, by notice to the Company:

	 	25.23.1	 	cancel the Aggregate Commitments whereupon they shall immediately be cancelled;
and/or
	 
	 	25.23.2	 	declare that all or part of the Utilisations, 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
	 
	 	25.23.3	 	declare that all or part of the Utilisations payable on demand, whereupon they shall
immediately become payable on demand by the Agent on the instructions of the Majority
Lenders; and/or
	 
	 	25.23.4	 	declare that full cash cover in respect of each Letter of Credit is immediately due
and payable whereupon it shall become due and payable.

114

 

Exhibit 10.1

CHANGES TO PARTIES

	26.	 	CHANGES TO THE LENDERS
	 
	26.1	 	Assignments and transfers by the Lenders
	 
	 	 	Subject to this Clause 26 (Changes to the Lenders), a Lender (the “Existing Lender”) may:

	 	26.1.1	 	assign any of its rights; or
	 
	 	26.1.2	 	transfer by novation any of its rights and obligations,

to another bank or financial institution or to a trust, fund or other entity which is
regularly engaged in or established for the purpose of making, purchasing or investing in
loans, securities or other financial assets (the “New Lender”).

	26.2	 	Conditions of assignment or transfer

	 	26.2.1	 	The consent of the Fronting Bank is required for any assignment or transfer by a
Lender.
	 
	 	26.2.2	 	Any Lender wishing to assign or transfer all or any of its rights and obligations
under the Finance Documents shall give the Company not less than 5 Business Days prior
written notice to that effect.
	 
	 	26.2.3	 	The consent of the Company is required for an assignment or transfer by a Lender,
unless subject to Clause 26.2.6(B) (a) the assignment or transfer is to another Lender
or an Affiliate of a Lender (b) an Event of Default has occurred and is continuing or
(c) the assignment or transfer is effected pursuant to the primary syndication of the
Facility.
	 
	 	26.2.4	 	The consent of the Company to an assignment or transfer must not be unreasonably
withheld or delayed. The Company will be deemed to have given its consent five Business
Days after the Existing Lender has requested it unless consent is expressly refused by
the Company within that time.
	 
	 	26.2.5	 	The consent of the Company to an assignment or transfer must not be withheld solely
because the assignment or transfer may result in an increase to the Mandatory Cost.
	 
	 	26.2.6	 	An assignment will only be effective:

	 	(A)	 	on receipt by the Agent of written confirmation from the
New Lender (in form and substance satisfactory to the Agent) that the New
Lender will assume the same obligations to the other Finance Parties as it
would have been under if it was an Original Lender; and
	 
	 	(B)	 	on performance by the Agent of all necessary “know your
customer” or other similar checks under all applicable laws and regulations
in relation to such assignment to a New Lender, the completion of which the
Agent shall promptly notify to the Existing Lender and the New Lender.

	 	26.2.7	 	At any time whilst it is a requirement of Netherlands law that each Lender is a PMP,
notwithstanding that no consent is required of the Company under Clause

115

 

Exhibit 10.1

26.2.3 in relation to any proposed assignment or transfer, the Company may, within
5 Business Days of receipt of the relevant notice from the relevant Lender, object
to such assignment or transfer on the sole grounds that the relevant assignee or
transferee is not a PMP.

	 	26.2.8	 	If no Objection Notice is received by the relevant Lender within such 5 Business Day
period the relevant Lender shall be entitled to proceed with such assignment or
transfer.
	 
	 	26.2.9	 	If an Objection Notice is received during such 5 Business Day period, the relevant
Lender shall not be entitled to proceed with such assignment or transfer unless and
until it is established that the relevant assignee or transferee is a PMP.
	 
	 	26.2.10	 	A transfer will only be effective if the procedure set out in Clause 26.5 (Procedure
for transfer) is complied with.
	 
	 	26.2.11	 	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, an Obligor would be obliged to make a
payment to the New Lender or Lender acting through its new Facility Office
under Clause 14 (Tax gross-up and indemnities) or Clause 15 (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.

	 	26.2.12	 	A Lender may not assign or transfer any of its Commitment for any Specified Period
without also assigning or transferring an equal proportion of the amount of its
Commitment for each of the other Specified Periods.
	 
	 	26.2.13	 	Where the consent of the Company is required under Clause 26.2.3 above, the assigning
or transferring Lender shall provide a copy of the Company’s response to the Agent. If
the Company does not provide a response, the assigning Lender shall inform the Agent of
this fact.

	26.3	 	Assignment or transfer fee
	 
	 	 	The New Lender shall, on the date upon which an assignment or transfer takes effect (other
than pursuant to the primary syndication of the Facility), pay to the Agent (for its own
account) a fee of $2,000.
	 
	26.4	 	Limitation of responsibility of Existing Lenders

	 	26.4.1	 	Unless expressly agreed to the contrary, an Existing Lender and an existing Finance
Party 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;

116

 

Exhibit 10.1

	 	(B)	 	the financial condition of any Obligor or any other member
of the Group;
	 
	 	(C)	 	the performance and observance by any Obligor or any other
member of the Group of its 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.

	 	26.4.2	 	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 each
Obligor 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 or any existing Finance Party in connection with any
Finance Document; and
	 
	 	(B)	 	will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst any amount
is or may be outstanding under the Finance Documents or any Commitment is in
force.

	 	26.4.3	 	Nothing in any Finance Document obliges an Existing Lender or any existing Finance
Party to:

	 	(A)	 	accept a re-transfer from a New Lender of any of the rights
and obligations assigned or transferred under this Clause 26 (Changes to the
Lenders); or
	 
	 	(B)	 	support any losses directly or indirectly incurred by the
New Lender by reason of the non-performance by any Obligor or Transaction
Party of its obligations under the Finance Documents or otherwise.

	26.5	 	Procedure for transfer

	 	26.5.1	 	Subject to the conditions set out in Clause 26.2 (Conditions of assignment or
transfer) a transfer is effected in accordance with Clause 26.5.3 when the Agent
executes an otherwise duly completed Transfer Certificate 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 Certificate 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 Certificate.
	 
	 	26.5.2	 	The Agent shall only be obliged to execute a Transfer Certificate delivered to it by
the Existing Lender and the New Lender once it is satisfied it has complied with all
necessary “know your customer” or other similar checks under all applicable laws and
regulations in relation to the transfer to such New Lender.
	 
	 	26.5.3	 	On the Transfer Date:

117

 

Exhibit 10.1

	 	(A)	 	to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation its rights and obligations under the
Finance Documents each of the Obligors and the Existing Lender shall be
released from further obligations towards one another under the Finance
Documents and their respective rights against one another under the Finance
Documents shall be cancelled (being the “Discharged Rights and Obligations”);
	 
	 	(B)	 	each of the Obligors and the New Lender shall assume
obligations towards one another and/or acquire rights against one another
which differ from the Discharged Rights and Obligations only insofar as that
Obligor and the New Lender have assumed and/or acquired the same in place of
that Obligor and the Existing Lender;
	 
	 	(C)	 	the existing Finance Parties and the New Lender shall
acquire the same rights and assume the same obligations between themselves as
they would have acquired and assumed had the New Lender been an Original
Lender with the rights and/or obligations acquired or assumed by it as a
result of the transfer and to that extent the existing Finance Parties 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”.

	26.6	 	Copy of Transfer Certificates
	 
	 	 	The Agent shall, as soon as reasonably practicable after it has executed a Transfer
Certificate, send to the Company a copy of that Transfer Certificate.
	 
	26.7	 	Disclosure of information

	 	26.7.1	 	Any Lender may disclose to any of its Affiliates and any other person:

	 	(A)	 	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;
	 
	 	(B)	 	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 any Obligor; or
	 
	 	(C)	 	to whom, and to the extent that, information is required to
be disclosed by any applicable law or regulation,
	 
	 	(D)	 	which is a rating agency;
	 
	 	(E)	 	in connection with any securitisation;
	 
	 	(F)	 	which is one of its professional advisers;
	 
	 	(G)	 	which is a person in whose favour that Finance Party
creates Security over its rights under or in connection with the Transaction
Documents,

118

 

Exhibit 10.1

any information about any Obligor, any other member of the Group, the Borrowing
Base Assets, and the Transaction Documents as that Lender shall consider
appropriate if, in relation to Clauses 26.7.1(A), 26.7.1(B), 26.7.1(E) and
26.7.1(G), the person to whom the information is to be given has entered into a
Confidentiality Undertaking.

	 	26.7.2	 	In addition, any Lender may disclose any such information to any person if such
disclosure is required to be made (a) in connection with any litigation, arbitration or
administrative proceedings or (b) to any governmental, banking, taxation or other
regulatory authority.

	26.8	 	Accession of Hedging Banks
	 
	 	 	A Lender may make a request at any time for any of its Affiliates that has entered, or is
to enter, into a Hedging Agreement with an Obligor to become a Hedging Bank and such
Affiliate may accede, and become a party, to the Finance Documents as a Hedging Bank, in
each case, in accordance with the Intercreditor Agreement.
	 
	26.9	 	Professional Market Party Representations

	 	 	 	26.9.1

	 	(A)	 	Each Lender which is a party to this Agreement on the date
hereof represents and warrants to each Party on the date hereof (i) that it
is a PMP and (ii) that it is aware that it does not benefit from the
(creditor) protection offered by the Dutch Banking Act when lending monies to
persons or entities which are subject to the prohibition of Section 82 of the
Dutch Banking Act;
	 
	 	(B)	 	if on the date on which a party becomes a Lender, it is a
requirement of Dutch law that such party is a PMP, each such new Lender
represents and warrants to each Party on the date on which it becomes a party
to this Agreement as a Lender that it is a PMP in accordance with paragraph 3
of the Transfer Certificate; and
	 
	 	(C)	 	each such Lender or Party acknowledges that each of the
Finance Parties and each Dutch Borrower have relied upon such representation
and warranty and undertakes, to the extent necessary, to provide its
reasonable assistance to each Dutch Borrower in verifying such Lender’s or
Party’s status as a PMP.

	 	26.9.2	 	For the purpose of the “wtk” (as defined in the definition of Exemption Regulation in
Clause 1.1 (Definitions)), each Dutch Borrower:

	 	(A)	 	represents and warrants to the Finance Parties on the date
of this Agreement that it has verified the status of each person which is a
Lender under a Finance Document on such date and each such Lender is either
(i) a PMP in accordance with the requirements of the Exemption Regulation and
the Policy Guidelines and/or (ii) is exempted from the PMP requirement
because it forms a closed circle (besloten kring) with the relevant Dutch
Borrower; and
	 
	 	(B)	 	if on the date on which a party becomes a Lender, it is a
requirement of Dutch law that such party is a PMP, represents and warrants to
the

119

 

Exhibit 10.1

	 	 	 	Finance Parties on the date on which each such party becomes a Lender that
it has verified the status of such party on such date and each such party
is either (i) a PMP in accordance with the requirements of the Exemption
Regulation and the Policy Guidelines and/or (ii) is exempted from the PMP
requirement because it forms a closed circle (besloten kring) with the
relevant Dutch Borrower.

	 	26.9.3	 	Notwithstanding any of other provision to the contrary:

	 	(A)	 	at any time whilst it is a requirement of Dutch law that
each Lender is a PMP, notwithstanding that no consent is required of the
Company under Clause 26.2.3 in relation to any proposed assignment or
transfer, the Company may, within five Business Days of receipt of the
relevant notice from the relevant Lender under Clause 26.2.2, object to such
assignment or transfer by notice in writing to the Lender wishing to effect
such assignment or transfer on the sole grounds that the relevant assignee or
transferee is not a PMP;
	 
	 	(B)	 	if no such objection is received by the relevant Lender
within such five Business Day period the Lender shall be entitled to proceed
with such assignment or transfer; and
	 
	 	(C)	 	if such an objection is received during such five Business
Day period the relevant Lender shall not be entitled to proceed with such
assignment or transfer unless and until it is established that the relevant
assignee or transferee is a PMP.

	27.	 	CHANGES TO THE OBLIGORS
	 
	27.1	 	Assignments and transfer by Obligors

	 	27.1.1	 	No Obligor may assign any of its rights or transfer any of its rights or obligations
under the Finance Documents.
	 
	 	27.1.2	 	This Clause 27 (Changes to the Obligors) shall not apply with respect to the accession
of Talisman Expro Limited hereto as an Obligor pursuant to Clause 4.3 (Conditions
subsequent).

	27.2	 	Additional Borrowers

	 	27.2.1	 	The Company may request that any Relevant Affiliate becomes an Additional Borrower.
That Relevant Affiliate shall become an Additional Borrower if:

	 	(A)	 	all Lenders approve the addition of that Relevant
Affiliate,
	 
	 	(B)	 	that Relevant Affiliate (a) delivers to the Agent a duly
completed and executed Accession Letter and (b) executes and enters into all
other documents and takes all such other steps as the Agent may reasonably
require for the purposes of ensuring that it accedes and becomes a party to,
all relevant Finance Documents as an Obligor;
	 
	 	(C)	 	the Company confirms that no Default is continuing or would
occur as a result of that Relevant Affiliate becoming an Additional Borrower;
and

120

 

Exhibit 10.1

	 	(D)	 	the Agent has received all of the documents and other
evidence listed in Part IV (Conditions precedent required to be delivered by
an Additional Obligor) of Schedule 3 (Conditions precedent and subsequent) in
relation to that Additional Borrower, each in form and substance satisfactory
to the Agent.

	 	27.2.2	 	The Agent shall, in relation to each proposed Additional Borrower, notify the Company
and the Lenders promptly upon being satisfied that it has received (in form and
substance satisfactory to it) all the documents and other evidence listed in Part IV
(Conditions precedent required to be delivered by an Additional Obligor) of Schedule 3
(Conditions precedent and subsequent).

	27.3	 	Additional Guarantors

	 	27.3.1	 	The Company may request that any Relevant Affiliate becomes an Additional Guarantor.
That Relevant Affiliate shall become an Additional Guarantor if:

	 	(A)	 	that Relevant Affiliate (a) delivers to the Agent a duly
completed and executed Accession Letter and (b) executes and enters into all
other documents and takes all such other steps as the Agent may reasonably
require for the purposes of ensuring that it accedes and becomes a party to,
all relevant Finance Documents as an Obligor; and
	 
	 	(B)	 	the Agent has received all of the documents and other
evidence listed in Part IV (Conditions precedent required to be delivered by
an Additional Obligor) of Schedule 3 (Conditions precedent and subsequent) in
relation to that Additional Guarantor, each in form and substance
satisfactory to the Agent.

	 	27.3.2	 	The Company shall procure that (i) promptly upon any member of the Group becoming a
Material Subsidiary and (ii) prior to any member of the Borrower Group acquiring a
Borrowing Base Asset (if it is not already an Obligor) it shall become an Additional
Guarantor (unless prohibited under the laws of their jurisdiction of incorporation,
despite the Company and such member of the Group or Borrower Group having used all
reasonable endeavours to overcome such prohibition) and shall ensure that:

	 	(A)	 	such member of the group (a) delivers to the Agent a duly
completed and executed Accession Letter and (b) executes and enters into all
other documents and takes all such other steps as the Agent may reasonably
require for the purposes of ensuring that it accedes and becomes a party to,
all relevant Finance Documents as an Additional Guarantor; and
	 
	 	(B)	 	the Agent receives all of the documents and other evidence
listed in Part IV (Conditions precedent required to be delivered by an
Additional Obligor) of Schedule 3 (Conditions precedent and subsequent) in
relation to that Additional Guarantor, each in form and substance
satisfactory to the Agent.

	 	27.3.3	 	The Agent shall, in relation to each proposed Additional Guarantor, notify the Company
and the Lenders promptly upon being satisfied that it has received (in form and
substance satisfactory to it) all the documents and other evidence listed in

121

 

Exhibit 10.1

	 	 	 	Part IV (Conditions precedent required to be delivered by an Additional Obligor) of
Schedule 3 (Conditions precedent and subsequent).

	27.4	 	Repetition of Representations
	 
	 	 	Delivery of an Accession Letter constitutes confirmation by the relevant intended Obligor
that the Repeating Representations are true and correct in relation to it as at the date of
delivery as if made by reference to the facts and circumstances then existing.
	 
	27.5	 	Release of non-asset holding Obligors

	 	27.5.1	 	For the purposes of this Clause 27.5 (Release of non-asset holding Obligors), a
“Relevant Obligor” means any Obligor (other than the Company) that (a) does not have an
interest in any Borrowing Base Asset or any person holding an interest in any Borrowing
Base Asset, whether by reason of any Borrowing Base Asset ceasing to be so designated in
accordance with this Agreement or otherwise) and (b) is not a Material Subsidiary.
	 
	 	27.5.2	 	The Company may submit a request to the Agent at any time for any Relevant Obligor to
cease to be an Obligor.
	 
	 	27.5.3	 	Subject to Clause 27.5.4, as soon as reasonably practicable after the submission of
any such request, the Finance Parties shall (at the cost and expense of the Obligors)
take all such steps as the Company may reasonably require for the purposes of ensuring:

	 	(A)	 	that the Relevant Obligor ceases to be an Obligor for the
purposes of the Finance Documents; and
	 
	 	(B)	 	the release of any Security under the Finance Documents
granted to the Finance Parties (a) by the Relevant Obligor over its assets or
(b) by any other person over the shares in the Relevant Obligor.

	 	27.5.4	 	A Relevant Obligor may only cease to be an Obligor pursuant to this Clause 27.5
(Release of non-asset holding Obligors) if:

	 	(A)	 	no Default is continuing or would result from it ceasing to
be an Obligor (and the Company confirms that this is the case); and
	 
	 	(B)	 	(other than in the case of Talisman Expro Limited) the
Majority Lenders consent to such Relevant Obligor ceasing to be an Obligor;
and
	 
	 	(C)	 	in the case only of Talisman Expro Limited:

	 	(1)	 	the Permitted Transaction described in
paragraph (B) of the definition of “Permitted Transaction” has been
completed upon the terms described therein;
	 
	 	(2)	 	Talisman Expro Limited is under no actual
or contingent obligation as a Borrower; and
	 
	 	(3)	 	Talisman Expro Limited has no assets
whatsoever,

and, in each case, the Company confirms the same to the Agent.

122

 

Exhibit 10.1

THE FINANCE PARTIES

	28.	 	ROLE OF THE ADMINISTRATIVE FINANCE PARTIES
	 
	28.1	 	General
	 
	 	 	For the purposes only of this Clause 28 (Role of the Administrative Finance Parties),
references to the Administrative Finance Parties shall be construed as excluding the
Security Trustee.
	 
	28.2	 	Appointment of the Agent

	 	28.2.1	 	Each other Finance Party appoints the Agent to act as its agent under and in
connection with the Finance Documents.
	 
	 	28.2.2	 	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 together with any other incidental rights, powers, authorities and
discretions.

	28.3	 	Duties of the Agent

	 	28.3.1	 	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.
	 
	 	28.3.2	 	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.
	 
	 	28.3.3	 	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 other Finance Parties.
	 
	 	28.3.4	 	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 Administrative Finance Parties)
under this Agreement it shall promptly notify the other Finance Parties.
	 
	 	28.3.5	 	The Agent’s duties under the Finance Documents are solely mechanical and
administrative in nature.

	28.4	 	Role of the Mandated Lead Arrangers
	 
	 	 	Except as specifically provided in the Finance Documents, the Mandated Lead Arrangers have
no obligations of any kind to any other Party under or in connection with any Finance
Document.
	 
	28.5	 	No fiduciary duties

	 	28.5.1	 	Nothing in this Agreement constitutes any Administrative Finance Party as a trustee or
fiduciary of any other person.
	 
	 	28.5.2	 	No Administrative Finance Party shall be bound to account to any Finance Party for any
sum or the profit element of any sum received by it for its own account.

123

 

Exhibit 10.1

	28.6	 	Business with the Group
	 
	 	 	Each Administrative Finance Party may accept deposits from, lend money to and generally
engage in any kind of banking or other business with any Obligor or any other member of the
Group.
	 
	28.7	 	Rights and discretions of the Administrative Finance Parties

	 	28.7.1	 	Each Administrative Finance Party 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.

	 	28.7.2	 	Each Administrative Finance Party may assume (unless it has received notice to the
contrary in its capacity as an Administrative Finance Party) that:

	 	(A)	 	no Default has occurred (unless it has actual knowledge of
a Default arising under Clause 25.2 (Non-payment and failure to reduce));
	 
	 	(B)	 	any right, power, authority or discretion vested in any
Party or the Majority Lenders has not been exercised; and
	 
	 	(C)	 	any notice or request made by the Company (other than a
Utilisation Request) is made on behalf of and with the consent and knowledge
of all the Obligors.

	 	28.7.3	 	Each Administrative Finance Party may engage, pay for and rely on the advice or
services of any lawyers, accountants, surveyors or other experts.
	 
	 	28.7.4	 	Each Administrative Finance Party may act in relation to the Finance Documents through
its personnel and agents.
	 
	 	28.7.5	 	Each Administrative Finance Party may disclose to any other Party any information it
reasonably believes it has received in its capacity as such under this Agreement.
	 
	 	28.7.6	 	Notwithstanding any other provision of any Finance Document to the contrary, no
Administrative Finance Party 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.

	28.8	 	Majority Lenders’ instructions

	 	28.8.1	 	Unless a contrary indication appears in a Finance Document, each of the Agent and the
Technical Bank shall (a) exercise any right, power, authority or discretion vested in it
in such capacity in accordance with any 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 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.

124

 

Exhibit 10.1

	 	28.8.2	 	Unless a contrary indication appears in a Finance Document, any instructions given by
the Majority Lenders will be binding on all the Finance Parties.
	 
	 	28.8.3	 	Each of the Agent and the Technical Bank 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.
	 
	 	28.8.4	 	In the absence of instructions from the Majority Lenders, (or, if appropriate, the
Lenders) the Agent or the Technical Bank may act (or refrain from taking action) as it
considers to be in the best interest of the Lenders.
	 
	 	28.8.5	 	Each of the Technical Bank and the Agent is not authorised to act on behalf of a
Lender (without first obtaining that Lender’s consent) in any legal or arbitration
proceedings relating to any Finance Document.

	28.9	 	Responsibility for documentation
	 
	 	 	No Administrative Finance Party:

	 	28.9.1	 	is responsible to any other Finance Party for the adequacy, accuracy and/or
completeness of any information (whether oral or written) supplied by it, an Obligor or
any other person given in or in connection with any Finance Document or the Information
Memorandum; or
	 
	 	28.9.2	 	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.

	28.10	 	Exclusion of liability

	 	28.10.1	 	Without limiting Clause 28.10.2, and without prejudice to the provisions of paragraph
(e) of Clause 31.10 (Disruption to Payment Systems etc.) no Administrative Finance Party
will be liable (including, without limitation, for negligence or any other category of
liability whatsoever) for any action taken by it under or in connection with any Finance
Document, unless directly caused by its gross negligence or wilful misconduct.
	 
	 	28.10.2	 	No Party (other than an Administrative Finance Party) may take any proceedings
against any officer, employee or agent of that Administrative Finance Party in respect
of any claim it might have against that Administrative Finance Party 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 that Administrative Finance Party
may rely on this Clause subject to Clause 1.3 (Third Party Rights) and the provisions of
the Third Parties Act.
	 
	 	28.10.3	 	No Administrative Finance Party will 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 that Administrative Finance Party if it 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 it for that purpose.

125

 

Exhibit 10.1

	 	28.10.4	 	Nothing in this Agreement shall oblige any Administrative Finance Party to carry out
any “know your customer” or other checks in relation to any person on behalf of any
Finance Party and each Finance Party confirms to the Administrative Finance Parties that
it is solely responsible for any such checks it is required to carry out and that it may
not rely on any statement in relation to such checks made by any Administrative Finance
Party.

	28.11	 	Lenders’ indemnity
	 
	 	 	Each Lender shall (in proportion to its share of the Aggregate Commitments or, if the
Aggregate Commitments are then zero, to its share of the Aggregate Commitments immediately
prior to their reduction to zero) indemnify each Administrative Finance Party within three
Business Days of demand, against any cost, loss or liability (including, without
limitation, for negligence or any other category of liability whatsoever) incurred by that
Administrative Finance Party (otherwise than by reason of its gross negligence or wilful
misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 31.10
(Disruption to Payment Systems etc.) notwithstanding such Administrative Finance Party’s
negligence, gross negligence or any other category of liability whatsoever but not
including any claim based on the fraud of an Administrative Finance Party in acting in its
capacity as such an Administrative Finance Party (unless that Administrative Finance Party
has been reimbursed for the same by an Obligor). The Obligors shall forthwith on demand
reimburse each Finance Party for any payments made by it under this Clause 28.11 (Lenders’
indemnity).
	 
	28.12	 	Resignation

	 	28.12.1	 	Each Administrative Finance Party (other than the Mandated Lead Arrangers and the
Fronting Bank) may resign and appoint one of its Affiliates acting through an office in
the United Kingdom or Paris as successor by giving notice to the other Finance Parties
and the Company.
	 
	 	28.12.2	 	Alternatively such an Administrative Finance Party may resign by giving notice to the
other Finance Parties and the Company, in which case the Majority Lenders (after
consultation with the Company) may appoint a successor Administrative Finance Party.
	 
	 	28.12.3	 	If the Majority Lenders have not appointed a successor Administrative Finance Party
in accordance with Clause 28.12.2 within 30 days after notice of resignation was given,
the incumbent Administrative Finance Party (after consultation with the Company and the
Majority Lenders) may appoint a successor Administrative Finance Party (acting through
an office in the United Kingdom or Paris).
	 
	 	28.12.4	 	The retiring Administrative Finance Party shall, at its own cost, make available to
the successor Administrative Finance Party such documents and records and provide such
assistance as the successor Administrative Finance Party may reasonably request for the
purposes of performing its functions as such an Administrative Finance Party under the
Finance Documents.
	 
	 	28.12.5	 	An Administrative Finance Party’s resignation notice shall only take effect upon the
successor Administrative Finance Party (a) notifying all the Parties that it accepts its
appointment and (b) completing all such steps as may reasonably be required by the Agent
or (where the successor Administrative Finance Party is seeking to be appointed as a
successor Agent) the Majority Lenders in order to (1)

126

 

Exhibit 10.1

	 	 	 	ensure that it accedes, and becomes a party, to all relevant Finance Documents in
its relevant capacity as that Administrative Finance Party and (2) facilitate the
change in identity of the relevant Administrative Finance Party.
	 
	 	28.12.6	 	Upon the appointment of a successor, the retiring Administrative Finance Party shall
be discharged from any further obligation in respect of the Finance Documents but shall
remain entitled to the benefit of this Clause 28 (Role of the Administrative Finance
Parties). 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.
	 
	 	28.12.7	 	After consultation with the Company, the Majority Lenders may, by notice to any
Administrative Finance Party (other than the Mandated Lead Arrangers or the Fronting
Bank), require it to resign in accordance with Clause 28.12.2 above. In this event, the
relevant Administrative Finance Party shall resign in accordance with Clause 28.12.2
above.

	28.13	 	Confidentiality

	 	28.13.1	 	In acting under the Finance Documents, the relevant division through which such
Administrative Finance Party acts shall be treated as a separate entity from any other
of its divisions or departments.
	 
	 	28.13.2	 	If information is received by another division or department of the Administrative
Finance Party, it may be treated as confidential to that relevant division and the
Administrative Finance Party shall not be deemed to have notice of it.

	28.14	 	Relationship with the Lenders

	 	28.14.1	 	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.
	 
	 	28.14.2	 	Each Lender shall supply the Agent with any information required by the Agent in
order to calculate the Mandatory Cost in accordance with Schedule 7 (Mandatory Cost
Formulae).

	28.15	 	Credit appraisal by the Lenders
	 
	 	 	Without affecting the responsibility of any Obligor for information supplied by it or on
its behalf in connection with any Finance Document, each Finance Party confirms to each
Administrative Finance Party 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:

	 	28.15.1	 	the financial condition, status and nature of each Obligor and each other member of
the Group;
	 
	 	28.15.2	 	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;

127

 

Exhibit 10.1

	 	28.15.3	 	whether that Finance Party 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; and
	 
	 	28.15.4	 	the adequacy, accuracy and/or completeness of the Information Memorandum and any
other information provided by that Administrative Finance Party, any other Party or by
any other person 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.

	28.16	 	Reference Banks
	 
	 	 	If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an
Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Company)
appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.
	 
	28.17	 	Management Time
	 
	 	 	Any amount payable to an Administrative Finance Party under Clause 16.3 (Indemnity to the
Agent), Clause 18 (Costs and expenses) and Clause 28.11 (Lenders’ indemnity) shall include
the reasonable cost of utilising that Administrative Finance Party’s management time or
other resources and will be calculated on the basis of such reasonable daily or hourly
rates as the Administrative Finance Party may notify to the Company and the Lenders, and is
in addition to any fee paid or payable to Administrative Finance Party under Clause 13
(Fees).
	 
	28.18	 	Deduction
	 
	 	 	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.
	 
	28.19	 	Replacement of Fronting Bank

	 	28.19.1	 	If:

	 	(A)	 	the Fronting Bank’s senior unsecured and unguaranteed
long-term corporate debt rating with Moody’s Investors Service Inc. falls
below A3 or with Standard and Poor’s Rating Group falls below A- (or, in
either case, such other rating as may be the minimum rating that the relevant
member of the Group is entitled to offer a beneficiary to whom a Letter of
Credit has or is to be issued (as certified by the Company upon request by
the Fronting Bank)); or
	 
	 	(B)	 	the Company has received a notice from the Agent pursuant
to Clause 9.1.2 (Illegality),

128

 

Exhibit 10.1

then (unless the Company, by notice to the Fronting Bank and the Agent, otherwise
requires) the Fronting Bank shall resign as Fronting Bank by giving notice to the
other Finance Parties and the Company, in which case the Company (after
consultation with the Agent) may appoint another Lender (who is willing to accept
such appointment) acting through an office in the United Kingdom to be a successor
Fronting Bank.

	 	28.19.2	 	The resignation of the retiring Fronting Bank and the appointment of any successor
Fronting Bank shall both become effective upon the successor Fronting Bank:

	 	(A)	 	notifying all the Parties that it accepts such appointment;
and
	 
	 	(B)	 	executing and delivering to the Agent duly completed
deed(s) or instrument of accession in such form as the Agent may require and
taking all such other steps as the Agent may require to ensure that (a) it
accedes, and becomes a party, to the relevant Finance Documents, as Fronting
Bank and (b) the retiring Fronting Bank is released from all liability under
all outstanding Letters of Credit in issue at such time,

whereupon the retiring Fronting Bank shall be discharged from any further
obligation in respect of the Finance Documents but shall remain entitled to the
benefit of this Clause 28 (Role of the Administrative Finance Parties). 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.

	 	28.19.3	 	The successor Fronting Bank shall, immediately following its appointment, issue to
the beneficiary of each outstanding Letter of Credit at that time, a replacement Letter
of Credit.
	 
	 	28.19.4	 	The Parties shall take such action as the retiring Fronting Bank, the successor
Fronting Bank and the Agent may consider necessary in order that the Security Documents
shall provide for perfected and enforceable Security in favour of any successor Fronting
Bank and the Finance Parties (including any such action that may be required in order
for any cash cover that has been provided in relation to any outstanding Letters of
Credit and held by the retiring Fronting Bank to be transferred to, and be held by, the
successor Fronting Bank).
	 
	 	28.19.5	 	The retiring Fronting Bank shall, at its own cost, make available to the successor
Fronting Bank such documents and records and provide such assistance as the successor
may reasonably request for the purposes of performing its functions as Fronting Bank
under the Finance Documents.

	28.20	 	Parallel Debt (Covenant to pay the Security Trustee)

	 	28.20.1	 	Notwithstanding any other provision of this Agreement, each Dutch Obligor hereby
irrevocably and unconditionally undertakes to pay to the Security Trustee, as creditor
in its own right and not as representative of the other Finance Parties, sums equal to
and in the currency of each amount payable by such Dutch Obligor under the Principal
Obligations from time to time due in accordance with the terms and conditions of the
Principal Obligations (such payment undertaking being for the purposes of this Clause
28.20, the “Parallel Debt”).

129

 

Exhibit 10.1

	 	28.20.2	 	The Security Trustee shall have its own independent right to demand payment of the
Parallel Obligations, irrespective of any discharge of such Dutch Obligor’s obligation
to pay those amounts to the other Finance Parties resulting from failure by them to take
appropriate steps, in insolvency proceedings affecting that Dutch Obligor, to preserve
their entitlement to be paid those amounts.
	 
	 	28.20.3	 	Any amount due and payable by a Dutch Obligor to the Security Trustee under the
Parallel Obligations shall be decreased to the extent that the other Finance Parties
have received (and are able to retain) payment in full of the corresponding outstanding
Principal Obligations and any amount due and payable by a Dutch Obligor to the other
Finance Parties under those Principal Obligations shall be decreased to the extent that
the Security Trustee has received (and is able to retain) payment in full of the
corresponding Parallel Obligations.
	 
	 	28.20.4	 	The rights of the Finance Parties (other than the Security Trustee) to receive
payment of the Principal Obligations payable by each Dutch Obligor are several and are
separate and independent from, and without prejudice to, the rights of the Security
Trustee to receive payment under the Parallel Obligations.
	 
	 	28.20.5	 	All monies received or recovered by the Security Trustee pursuant to this Clause
28.20 and enforcement proceeds received or recovered by the Security Trustee pursuant to
this Clause 28.20 shall be applied by the Security Trustee in accordance with the terms
of this Agreement.
	 
	 	28.20.6	 	For the purposes of this Clause 28.20 (Parallel Debt (Covenant to pay the Security
Trustee))

	 	(A)	 	“Parallel Obligations” means the monetary obligations
arising from the Parallel Debt; and
	 
	 	(B)	 	“Principal Obligations” means any and all monetary
obligations of the Obligors under or pursuant to the Finance Documents
(whether now existing or hereafter created or arising).

	28.21	 	First Lien Discharge determination
	 
	 	 	The Agent shall not make a determination for the purposes of determining the First Lien
Discharge Date under the Intercreditor Agreement unless each of the Hedging Banks has
confirmed to it that all Hedging Debt due to such Hedging Bank has been discharged and paid
in full.
	 
	29.	 	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
	 
	 	28.3	 	oblige any Finance Party to disclose any information relating to its affairs
(tax or otherwise) or any computations in respect of Tax.

130

 

Exhibit 10.1

	30.	 	SHARING AMONG THE FINANCE PARTIES
	 
	30.1	 	Payments to Finance Parties
	 
	 	 	If a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an
Obligor other than in accordance with Clause 31 (Payment mechanics) and applies that amount
to a payment due under the Finance Documents then:

	 	30.1.1	 	the Recovering Finance Party shall, within three Business Days, notify details of the
receipt or recovery, to the Agent;
	 
	 	30.1.2	 	the Agent shall determine whether the receipt or recovery is in excess of the amount
the Recovering Finance Party would have been paid had the receipt or recovery been
received or made by the Agent and distributed in accordance with Clause 31 (Payment
mechanics), without taking account of any Tax which would be imposed on the Agent in
relation to the receipt, recovery or distribution; and
	 
	 	30.1.3	 	the Recovering Finance Party shall, within three Business Days of demand by the Agent,
pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery
less any amount which the Agent determines may be retained by the Recovering Finance
Party as its share of any payment to be made, in accordance with Clause 31.5 (Partial
payments).

	30.2	 	Redistribution of payments
	 
	 	 	The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor
and distribute it between the Finance Parties (other than the Recovering Finance Party) in
accordance with Clause 31.5 (Partial payments).
	 
	30.3	 	Recovering Finance Party’s rights

	 	30.3.1	 	On a distribution by the Agent under Clause 30.2 (Redistribution of payments), the
Recovering Finance Party will be subrogated to the rights of the Finance Parties which
have shared in the redistribution.
	 
	 	30.3.2	 	If and to the extent that the Recovering Finance Party is not able to rely on its
rights under Clause 30.3.1, the relevant Obligor shall be liable to the Recovering
Finance Party for a debt equal to the Sharing Payment which is immediately due and
payable.

	30.4	 	Reversal of redistribution
	 
	 	 	If any part of the Sharing Payment received or recovered by a Recovering Finance Party
becomes repayable and is repaid by that Recovering Finance Party, then:

	 	30.4.1	 	each Finance Party which has received a share of the relevant Sharing Payment pursuant
to Clause 30.2 (Redistribution of payments) shall, upon request of the Agent, pay to the
Agent for account of that Recovering Finance Party an amount equal to the appropriate
part of its share of the Sharing Payment (together with an amount as is necessary to
reimburse that Recovering Finance Party for its proportion of any interest on the
Sharing Payment which that Recovering Finance Party is required to pay); and

131

 

Exhibit 10.1

	 	30.4.2	 	that Recovering Finance Party’s rights of subrogation in respect of any reimbursement
shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance
Party for the amount so reimbursed.

	30.5	 	Exceptions

	 	30.5.1	 	This Clause 30 (Sharing among the Finance Parties) shall not apply to the extent that
the Recovering Finance Party would not, after making any payment pursuant to this
Clause, have a valid and enforceable claim against the relevant Obligor.
	 
	 	30.5.2	 	A Recovering Finance Party is not obliged to share with any other Finance Party any
amount which the Recovering Finance Party has received or recovered as a result of
taking legal or arbitration proceedings, if:

	 	(A)	 	it notified that other Finance Party of the legal or
arbitration proceedings; and
	 
	 	(B)	 	that other Finance Party had an opportunity to participate
in those legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take separate legal
or arbitration proceedings.

	 	30.5.3	 	The provisions of Clauses 30.1 (Payments to Finance Parties) to 30.4 (Reversal of
redistribution) inclusive shall not apply to any payments between an Obligor and a
Finance Party under or in respect of a Secured Hedging Agreement.

132

 

Exhibit 10.1

ADMINISTRATION

	31.	 	PAYMENT MECHANICS
	 
	31.1	 	Payments to the Agent

	 	31.1.1	 	On each date on which an Obligor or a Finance Party is required to make a payment
under a Finance Document, that Obligor or Finance Party 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.
	 
	 	31.1.2	 	Payment shall be made to such account in the principal financial centre of the country
of that currency (or, in relation to euro, in a principal financial centre in a
Participating Member State or London) with such bank as the Agent specifies.

	31.2	 	Distributions by the Agent
	 
	 	 	Each payment received by the Agent under the Finance Documents for another Party shall,
subject to Clause 31.3 (Distributions to an Obligor) and Clause 31.4 (Clawback) be made
available by the Agent as soon as practicable after receipt to the Party entitled to
receive payment in accordance with this Agreement (in the case of a Lender, for the account
of its Facility Office), to such account as that Party may notify to the Agent by not less
than five Business Days’ notice with a bank in the principal financial centre of the
country of that currency (or, in relation to euro, in a principal financial centre in a
Participating Member State or London).
	 
	31.3	 	Distributions to an Obligor
	 
	 	 	The Agent may (with the consent of the Obligor or in accordance with Clause 32 (Set-off))
apply any amount received by it for that Obligor in or towards payment (on the date and in
the currency and funds of receipt) of any amount due from that Obligor under the Finance
Documents or in or towards purchase of any amount of any currency to be so applied.
	 
	31.4	 	Clawback

	 	31.4.1	 	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.
	 
	 	31.4.2	 	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.

	31.5	 	Partial payments

	 	31.5.1	 	If the Agent receives a payment that is insufficient to discharge all the amounts then
due and payable by an Obligor under the Finance Documents, the Agent shall

133

 

Exhibit 10.1

	 	 	 	apply that payment towards the obligations of that Obligor under the Finance
Documents in the following order:

	 	(A)	 	first, in or towards payment pro rata of any unpaid fees,
costs and expenses of the Administrative Finance Parties under the Finance
Documents;
	 
	 	(B)	 	secondly, in or towards payment pro rata of any accrued
interest, commitment fees or commission due but unpaid under the Finance
Documents;
	 
	 	(C)	 	thirdly, in or towards payment pro rata of any principal
(including amounts payable under Clause 6.8 (Claims under a Letter of Credit)
or Clause 6.10 (Indemnities)) and (to the extent that any Letter(s) of Credit
remain(s) outstanding) any cash cover due but unpaid under the Finance
Documents (provided that, in the case of any cash cover due but unpaid, the
same shall be held in accordance with Clause 31.5.4); and
	 
	 	(D)	 	fourthly, in or towards payment pro rata of any other sum
due but unpaid under the Finance Documents.

	 	31.5.2	 	The Agent shall, if so directed by the Majority Lenders, vary the order set out in
Clauses 31.5.1(B) to 31.5.1(D) above.
	 
	 	31.5.3	 	Clauses 31.5.1 and 31.5.2 above will override any appropriation made by an Obligor.
	 
	 	31.5.4	 	Any amount to be distributed, pursuant to Clause 31.5.1(C), with respect to the
payment of any amounts comprising cash cover shall (notwithstanding Clause 1.2.1(R)
(Construction)) be paid to and retained by the Fronting Bank for the Contingent
Indebtedness to be covered by such cash cover. Any amount so retained by the Fronting
Bank as cash cover for the Contingent Indebtedness shall be applied by the Fronting Bank
in the discharge of such Contingent Indebtedness as the same matures provided that if
any such Contingent Indebtedness expires or matures at less than the aggregate amount of
such cash cover retained by the Fronting Bank, the balance of the cash cover shall be
paid by the Fronting Bank to the Agent for application in accordance with the order of
payment provided for in Clause 31.5.1 (where, for these purposes, “Contingent
Indebtedness” means the liabilities of the Fronting Bank, the Lenders or, as the case
may be, the Obligors, with respect to any outstanding Letter(s) of Credit which have not
matured and remain contingent by reason of such Letter(s) of Credit being outstanding).
	 
	 	31.5.5	 	For the purposes of Clause 31.5.1 above:

	 	(A)	 	references to “Finance Document” shall exclude any Secured
Hedging Agreement; and
	 
	 	(B)	 	references to “Finance Party” shall exclude any Hedging
Bank.

	31.6	 	No set-off by Obligors
	 
	 	 	All payments to be made by an Obligor under the Finance Documents shall be calculated and
be made without (and free and clear of any deduction for) set-off or counterclaim.

134

 

Exhibit 10.1

	31.7	 	Business Days

	 	31.7.1	 	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).
	 
	 	31.7.2	 	During any extension of the due date for payment of any principal or Unpaid Sum under
this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on
the original due date.

	31.8	 	Currency of account

	 	31.8.1	 	Subject to Clauses 31.8.2 to 31.8.5, dollars is the currency of account and payment
for any sum due from an Obligor under any Finance Document.
	 
	 	31.8.2	 	A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum
shall be made in the currency in which that Utilisation or Unpaid Sum is denominated on
its due date. Any cash cover to be provided in relation to any Letter of Credit shall
be made in the currency in which that Letter of Credit is denominated.
	 
	 	31.8.3	 	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.
	 
	 	31.8.4	 	Each payment in respect of costs, expenses or Taxes shall be made in the currency in
which the costs, expenses or Taxes are incurred.
	 
	 	31.8.5	 	Any amount expressed to be payable in a currency other than dollars shall be paid in
that other currency.

	31.9	 	Change of currency

	 	31.9.1	 	Unless otherwise prohibited by law, if more than one currency or currency unit are at
the same time recognised by the central bank of any country as the lawful currency of
that country, then:

	 	(A)	 	any reference in the Finance Documents to, and any
obligations arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or currency unit
of that country designated by the Agent (after consultation with the
Company); and
	 
	 	(B)	 	any translation from one currency or currency unit to
another shall be at the official rate of exchange recognised by the central
bank for the conversion of that currency or currency unit into the other,
rounded up or down by the Agent (acting reasonably).

	 	31.9.2	 	If a change in any currency of a country occurs, this Agreement will, to the extent
the Agent (acting reasonably and after consultation with the Company) specifies to be
necessary, be amended to comply with any generally accepted conventions and market
practice in the Relevant Interbank Market and otherwise to reflect the change in
currency.

135

 

Exhibit 10.1

	31.10	 	Disruption to Payment Systems etc.
	 
	 	 	If either the Agent determines (in its discretion) that a Disruption Event has occurred or
the Agent is notified by the Company that a Disruption Event has occurred:

	 	31.10.1	 	the Agent may, and shall if requested to do so by the Company, consult with the
Company with a view to agreeing with the Company such changes to the operation or
administration of the Facility as the Agent may deem necessary in the circumstances;
	 
	 	31.10.2	 	the Agent shall not be obliged to consult with the Company in relation to any changes
mentioned in paragraph 31.10.1 if, in its opinion, it is not practicable to do so in the
circumstances and, in any event, shall have no obligation to agree to such changes;
	 
	 	31.10.3	 	the Agent may consult with the Finance Parties in relation to any changes mentioned
in paragraph 31.10.1 but shall not be obliged to do so if, in its opinion, it is not
practicable to do so in the circumstances;
	 
	 	31.10.4	 	any such changes agreed upon by the Agent and the Company shall (whether or not it is
finally determined that a Disruption Event has occurred) be binding upon the Parties as
an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents
notwithstanding the provisions of Clause 37 (Amendments and Waivers);
	 
	 	31.10.5	 	the Agent shall not be liable for any damages, costs or losses whatsoever (including,
without limitation for negligence, gross negligence or any other category of liability
whatsoever but not including any claim based on the fraud of the Agent) arising as a
result of its taking, or failing to take, any actions pursuant to or in connection with
this Clause 31.10; and
	 
	 	31.10.6	 	the Agent shall notify the Finance Parties of all changes agreed pursuant to
paragraph 31.10.4 above.

	32.	 	SET-OFF
	 
	 	 	A Finance Party may set off any matured obligation due from an Obligor under the Finance
Documents (to the extent beneficially owned by that Finance Party) against any matured
obligation owed by that Finance Party to that Obligor, 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.
	 
	33.	 	NOTICES
	 
	33.1	 	In writing
	 
	 	 	Any communication in connection with a Finance Document must be in writing and, unless
otherwise stated, may be given in person, by fax or letter.

136

 

Exhibit 10.1

	33.2	 	Contact details

	 	33.2.1	 	Except as provided in this Clause 33.2 (Contact details), the contact details of each
Party for all communications in connection with the Finance Documents are those notified
by that Party for this purpose to the Agent on or before the date it becomes a Party.
	 
	 	33.2.2	 	Any Party may change its contact details by giving five Business Days’ notice to the
Facility Agent or (in the case of the Facility Agent) to the other Parties.
	 
	 	33.2.3	 	Where a Party nominates a particular department or officer to receive a communication,
a communication will not be effective if it fails to specify that department or officer.

	33.3	 	Effectiveness

	 	33.3.1	 	Except as provided in Clause 33.3.2 and Clause 33.3.3, any communication in connection
with a Finance Document will be deemed to be given as follows:

	 	(A)	 	if delivered in person, at the time of delivery; and
	 
	 	(B)	 	if by fax , when received in legible form.

	 	33.3.2	 	A communication given under Clause 33.4.1 (Obligors) but received on a non-working day
or after business hours in the place of receipt will only be deemed to be given on the
next working day in that place.
	 
	 	33.3.3	 	A communication to any Administrative Finance Party will only be effective on actual
receipt by it.

	33.4	 	Obligors

	 	33.4.1	 	All communications under the Finance Documents:

	 	(A)	 	to or from the Technical Bank must be sent through the
Technical Bank (provided that the relevant communication is also copied to
the Agent);
	 
	 	(B)	 	to or from any other Administrative Finance Party (in its
capacity as such) may be made directly to, or as the case may be, come
directly from, that Administrative Finance Party (provided that the relevant
communication is also copied to the Agent); and
	 
	 	(C)	 	to or from any other Finance Party must be sent through the
Agent.

	 	33.4.2	 	All communications under the Finance Documents to or from an Obligor may be sent
through the Company.
	 
	 	33.4.3	 	Each Obligor (other than the Company) irrevocably appoints the Company to act as its
agent:

	 	(A)	 	to give and receive all communications under the Finance
Documents;
	 
	 	(B)	 	to supply all information concerning itself to any Finance
Party; and
	 
	 	(C)	 	to sign all documents under or in connection with the
Finance Documents.

137

 

Exhibit 10.1

	 	33.4.4	 	Any communication given to the Company in connection with a Finance Document will be
deemed to have been given also to the other Obligors.
	 
	 	33.4.5	 	The Finance Parties may assume that any communication made by the Company is made with
the consent of each other Obligor.

	33.5	 	Electronic Communication

	 	33.5.1	 	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.

	 	33.5.2	 	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.

	33.6	 	Language

	 	33.6.1	 	Any notice given in connection with a Finance Document must be in English.
	 
	 	33.6.2	 	Any other document provided in connection with a Finance Document must be:

	 	(A)	 	in English; or
	 
	 	(B)	 	(unless the Agent otherwise agrees) accompanied by a
certified English translation. In this case, the English translation
prevails unless the document is a statutory or other official document.

	34.	 	CALCULATIONS AND CERTIFICATES
	 
	34.1	 	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.
	 
	34.2	 	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, conclusive evidence of the matters to which
it relates.

138

 

Exhibit 10.1

	34.3	 	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 the case of sterling) 365 days or, in any case where the practice in the
Relevant Interbank Market differs, in accordance with that market practice.
	 
	35.	 	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.
	 
	36.	 	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.
	 
	37.	 	AMENDMENTS AND WAIVERS
	 
	37.1	 	Required consents

	 	37.1.1	 	Subject to Clause 37.2 (Exceptions) any term of the Finance Documents (other than the
Intercreditor Agreement) may be amended or waived only with the consent of the Majority
Lenders and the Obligors and any such amendment or waiver will be binding on all
Parties.
	 
	 	37.1.2	 	Any term of the Intercreditor Agreement may be amended or waived in accordance with
its terms.
	 
	 	37.1.3	 	The Agent may effect, on behalf of any Finance Party, any amendment or waiver
permitted by this Clause.

	37.2	 	Exceptions

	 	37.2.1	 	An amendment or waiver that has the effect of changing or which relates to:

	 	(A)	 	the definition of “Majority Lenders” in Clause 1.1
(Definitions);
	 
	 	(B)	 	an extension to the date of payment of any amount under the
Finance Documents;
	 
	 	(C)	 	a reduction in the Margin or a reduction in the amount of
any payment of principal, interest, fees or commission payable;
	 
	 	(D)	 	an increase in or an extension of any Commitment;
	 
	 	(E)	 	a change to the Borrowers or Guarantors other than in
accordance with Clause 27 (Changes to the Obligors);

139

 

Exhibit 10.1

	 	(F)	 	any provision which expressly requires the consent of all
the Lenders;
	 
	 	(G)	 	Clause 2.2 (Finance Parties’ rights and obligations),
Clause 26 (Changes to the Lenders) or this Clause 37 (Amendments and
waivers); or
	 
	 	(H)	 	the release of any Security granted under any Security
Document save where such release is required pursuant to the terms of any
Finance Document;

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

	 	37.2.2	 	An amendment or waiver which related to Clauses 23.6 (Financial Indebtedness), 23.7
(Credits or Guarantees), 23.24 (Technical Covenants), 24.3 (Current Ratio) or 24.4
(Gearing) shall not be made without the consent of the Majority Creditors. The
“Majority Creditors” for this purpose shall be Lenders and Hedging Banks the sum of
whose:

	 	(A)	 	Participation in Utilisations then outstanding;
	 
	 	(B)	 	Hedge Termination Payments receivable; and
	 
	 	(C)	 	Marked to market exposure (if positive) under Secured
Hedging Agreements,

Aggregate more than 66.67% of the sum of the Utilisations then outstanding, Hedge
Termination Amounts payable by the Obligors and market to market positive exposures
under Secured Hedging Agreements

	 	37.2.3	 	The Agent shall, in its sole discretion but acting reasonably, determine the Majority
Creditors for the purposes of Clause 37.2.2 and each of the Obligors, Lenders and
Hedging Banks shall provide the Agent with such information and documents as the Agent
may reasonably require for the purposes of making such determination.
	 
	 	37.2.4	 	An amendment or waiver which relates to the rights or obligations of any
Administrative Finance Party or Hedging Bank may not be effected without the consent of
that Finance Party.
	 
	 	37.2.5	 	Any term of any Fee Letter may be amended or waived without the prior consent of the
Majority Lenders.

	38.	 	COUNTERPARTS
	 
	 	 	Each Finance Document may be executed in any number of counterparts, and this has the same
effect as if the signatures on the counterparts were on a single copy of the Finance
Document.

140

 

Exhibit 10.1

GOVERNING LAW AND ENFORCEMENT

	39.	 	GOVERNING LAW
	 
	 	 	This Agreement is governed by English law.
	 
	40.	 	ENFORCEMENT
	 
	40.1	 	Jurisdiction

	 	40.1.1	 	The courts of England have 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”).
	 
	 	40.1.2	 	The Parties agree that the courts of England are the most appropriate and convenient
courts to settle Disputes and accordingly no Party will argue to the contrary.
	 
	 	40.1.3	 	This Clause 40.1 (Jurisdiction) 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.

	40.2	 	Service of process
	 
	 	 	Without prejudice to any other mode of service allowed under any relevant law, each Obligor
(other than an Obligor incorporated in England and Wales):

	 	40.2.1	 	irrevocably appoints Endeavour Energy UK Limited as its agent for service of process
in relation to any proceedings before the English courts in connection with any Finance
Document; and
	 
	 	40.2.2	 	agrees that failure by a process agent to notify the relevant Obligor of the process
will not invalidate the proceedings concerned.

	 	 	Each of the Obligors expressly agrees and consents to the provisions of this Clause 40
(Enforcement).
	 
	40.3	 	Waiver of immunity
	 
	 	 	Each Obligor irrevocably and unconditionally:

	 	40.3.1	 	agrees not to claim any immunity from proceedings brought by a Finance Party against
that Obligor in relation to a Finance Document and to ensure that no such claim is made
on its behalf;
	 
	 	40.3.2	 	consents generally to the giving of any relief or the issue of any process in
connection with those proceedings; and
	 
	 	40.3.3	 	waives all rights of immunity in respect of it or its assets.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

141

 

Exhibit 10.1

SCHEDULE 1

THE ORIGINAL OBLIGORS

PART I

THE ORIGINAL BORROWERS

	 	 	 	 	 	 	 
	 	 	Registration number (or	 	Jurisdiction of
	Name of Original Borrowers	 	equivalent, if any)	 	incorporation
	Endeavour International Holding B.V.

	 	34229293	 	Netherlands
	Endeavour Energy UK Limited

	 	 	5030838	 	 	England and Wales
	Endeavour Energy Norge AS

	 	 	934651758	 	 	Norway

PART II

THE ORIGINAL GUARANTORS

	 	 	 	 	 	 	 
	 	 	Registration number (or	 	Jurisdiction of
	Name of Original Guarantors	 	equivalent, if any)	 	incorporation
	Endeavour International Corporation

	 	 	C897-2000	 	 	Nevada, U.S.A
	Endeavour Operating Corporation

	 	 	3737839	 	 	Delaware, U.S.A
	END Operating Management Company

	 	 	3900636	 	 	Delaware U.S.A.
	END Management Company

	 	 	3737839	 	 	Delaware, U.S.A.
	Endeavour International Holding B.V.

	 	 	34229293	 	 	Netherlands
	Endeavour Energy Netherlands B.V.

	 	 	34229296	 	 	Netherlands
	Endeavour Energy UK Limited

	 	 	5030838	 	 	England and Wales

142

 

Exhibit 10.1

SCHEDULE 2

THE ORIGINAL LENDERS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	THE GOVERNOR	 	 	 	 
	 	 	 	 	 	 	AND COMPANY OF	 	 	 	 
	 	 	 	 	 	 	THE BANK OF	 	 	Aggregate	 
	 	 	BNP PARIBAS	 	 	SCOTLAND	 	 	Commitments	 
	Specified Period	 	(dollars)	 	 	(dollars)	 	 	(dollars)	 
	From the date of
this Agreement up to
and including 31
March 2007
	 	 	112,500,000.00	 	 	 	112,500,000.00	 	 	 	225,000,000.00	 
	From 1 April 2007 up
to and including 30
September 2007
	 	 	112,500,000.00	 	 	 	112,500,000.00	 	 	 	225,000,000.00	 
	From 1 October 2007
up to and including
31 March 2008
	 	 	95,000,000.00	 	 	 	95,000,000.00	 	 	 	190,000,000.00	 
	From 1 April 2008 up
to and including 30
September 2008
	 	 	77,500,000.00	 	 	 	77,500,000.00	 	 	 	155,000,000.00	 
	From 1 October 2008
up to and including
31 March 2009
	 	 	60,000,000.00	 	 	 	60,000,000.00	 	 	 	120,000,000.00	 
	From 1 April 2009 up
to and including 30
September 2009
	 	 	42,500,000.00	 	 	 	42,500,000.00	 	 	 	85,000,000.00	 
	From 1 October 2009
up to and including
31 March 2010
	 	 	32,500,000.00	 	 	 	32,500,000.00	 	 	 	65,000,000.00	 
	From 1 April 2010 up
to and including 30
September 2010
	 	 	22,500,000.00	 	 	 	22,500,000.00	 	 	 	45,000,000.00	 
	From 1 October 2010
up to and including
31 March 2011
	 	 	15,000,000.00	 	 	 	15,000,000.00	 	 	 	30,000,000.00	 
	From 1 April 2011 up
to and including 30
September 2011
	 	 	7,500,000.00	 	 	 	7,500,000.00	 	 	 	15,000,000.00	 
	On and from the
Final Maturity Date
	 	 	 	 	 	 	 	 	 	 	0	 

143

 

Exhibit 10.1

SCHEDULE 3

CONDITIONS PRECEDENT AND SUBSEQUENT

Part I

CPs to first Utilisation Request

	1.	 	OBLIGORS AND TRANSACTION PARTIES
	 
	1.1	 	A copy of the constitutional documents of each Obligor and each Transaction Party.
	 
	1.2	 	A copy of a resolution of the respective board of directors of each Obligor and each
Transaction Party (or a committee of its board of directors) and of the respective general
meeting of shareholders of each Dutch Obligor:

	 	1.2.1	 	approving the terms of, and the transactions contemplated by, such of the
Finance Documents that it is or will become party to;
	 
	 	1.2.2	 	authorising a specified person or persons to execute each such document on its
behalf; and
	 
	 	1.2.3	 	authorising a specified person or persons, on its behalf, to sign and/or
dispatch all other documents and notices to be signed and/or dispatched by it under or
in connection with any such document.

	1.3	 	If applicable, a copy of a resolution of the board of directors of each relevant Obligor or
Transaction Party establishing the committee referred to in paragraph 1.2 above.
	 
	1.4	 	For each Obligor and each Transaction Party, a specimen of the signature of each person
authorised by the resolutions referred to in paragraph 1.2 above.
	 
	2.	 	CERTIFICATES
	 
	2.1	 	A certificate of a person who is both a director and an authorised signatory of each Obligor
certifying on behalf of that Obligor that:

	 	2.1.1	 	the borrowing or, as the case may be, the guaranteeing of the Aggregate
Commitments in full would not cause any borrowing, guaranteeing or similar limit binding
on it to be exceeded; and
	 
	 	2.1.2	 	each copy document specified in Paragraph 1 of Part I of Schedule 3 relating to
it is correct, complete and in full force and effect as at a date no earlier than the
date of this Agreement.

	2.2	 	A certificate of a person who is both a director and an authorised signatory of the Company
confirming that no Default has occurred and is continuing.
	 
	3.	 	FINANCE AND OTHER DOCUMENTS
	 
	3.1	 	Originals of the following documents duly executed by all parties to them and in full force
and effect:

	 	3.1.1	 	the Fee Letters;

144

 

Exhibit 10.1

	 	3.1.2	 	the Intercreditor Agreement;
	 
	 	3.1.3	 	any other side letter or ancillary document the form of which has been agreed
between the Company and Mandated Lead Arrangers on or before the date of this Agreement.

	4.	 	REPORTS ETC.
	 
	4.1	 	The Original Financial Statements for the Company and each other Obligor.
	 
	4.2	 	A copy of a Projection and the Computer Model used to prepare that Projection.
	 
	4.3	 	A copy of a report from the Independent Engineer dated no earlier than December 31, 2005
together with a reliance letter in respect thereof.
	 
	4.4	 	A copy of a letter addressed to the Agent from the Group’s insurance brokers confirming,
among other things, that (a) the insurances required hereunder are in place and effective; (b)
all premiums therefor have been paid; and (c) the Security Trustee has been named as
co-insured or additional insured in respect of all such insurances.
	 
	4.5	 	A due diligence report addressed to BNP Paribas, The Governor and Company of the Bank of
Scotland and the Lenders as at the Syndication Date from Ashurst in respect of the Borrowing
Base Assets dated no earlier than 30 October 2006.
	 
	4.6	 	A due diligence report addressed to BNP Paribas (as Agent) for itself and each other Lender
as at the Syndication Date from Herbert Smith LLP.
	 
	4.7	 	Reports from KPMG (addressed to the Agent for itself and each other Lender as at the
Syndication Date) as, respectively, auditors and tax auditors of the Computer Model.
	 
	5.	 	FEES
	 
	 	 	Evidence that all fees (including legal fees and fees due and payable under the Fee
Letters) due and payable have been or will be paid on the first Utilisation Date.
	 
	6.	 	“KNOW YOUR CUSTOMER” CHECKS
	 
	 	 	Confirmation from the Finance Parties that they have completed all “know your customer”
requirements to their satisfaction.
	 
	7.	 	PROJECT ACCOUNTS
	 
	 	 	Evidence that each of the Project Accounts has been opened.
	 
	8.	 	SECURITY DOCUMENTS
	 
	8.1	 	Originals of the following documents duly executed by all parties to them and (subject to any
required registration and/or the delivery of any required notice) in full force and effect:

	 	8.1.1	 	a debenture between Endeavour Energy UK Limited and the Security Trustee
governed by English law;

145

 

Exhibit 10.1

	 	8.1.2	 	a charge over shares between Endeavour International Holding B.V. and the
Security Trustee governed by English law;
	 
	 	8.1.3	 	an accounts charge between and Endeavour Energy Norge AS and the Security
Trustee governed by English law;
	 
	 	8.1.4	 	a debenture (creating security over accounts and Hedging Agreements) between
Endeavour International Holding B.V. and the Security Trustee governed by English law;
	 
	 	8.1.5	 	a share pledge agreement between Endeavour International Holding B.V. and the
Security Trustee governed by Norwegian law together with the share pledge registration
form in the format set out in Schedule 1 to the share pledge agreement, the power of
attorney in the format set out in schedule 2 to the share pledge agreement and a
transcript from the Norwegian Central Securities Depository (VPS) confirming Endeavour
International Holding B.V.’s ownership to the shares and registration of the pledge in
favour of the Security Trustee;
	 
	 	8.1.6	 	a share pledge agreement between Endeavour Energy Norge AS and the Security
Trustee governed by Norwegian law together with the share pledge registration form in
the format set out in Schedule 1 to the share pledge agreement, the power of attorney in
the format set out in schedule 2 to the share pledge agreement and a transcript from the
Norwegian Central Securities Depository (VPS) confirming Endeavour International Holding
B.V.’s ownership to the shares and registration of the pledge in favour of the Security
Trustee
	 
	 	8.1.7	 	a pledge agreement and a charge deed regarding charge over receivables between
Endeavour Energy Norge AS and the Security Trustee governed by Norwegian law;
	 
	 	8.1.8	 	an agreement and deed of pledge of shares between Endeavour International
Holding B.V. and the Security Trustee governed by the laws of The Netherlands.
	 
	 	8.1.9	 	an agreement and deed of pledge of shares between Endeavour Energy Netherlands
B.V. and the Security Trustee governed by the laws of The Netherlands; and
	 
	 	8.1.10	 	a security agreement between the Guarantors and the Security Trustee governed by the
laws of the State of New York.

	8.2	 	Each of the share certificates, stock transfer forms and notices of assignment that are
required to be delivered pursuant to any Security Document.
	 
	9.	 	LEGAL OPINIONS
	 
	9.1	 	A legal opinion of Herbert Smith, legal advisers to the Mandated Lead Arrangers in respect of
the laws of England addressed to the initial Finance Parties and those acceding to the
Agreement on primary syndication.
	 
	9.2	 	A legal opinion of Stibbe, legal advisers to the Mandated Lead Arrangers in respect of the
laws of The Netherlands, addressed to the initial Finance Parties and those acceding to the
Agreement on primary syndication.

146

 

Exhibit 10.1

	9.3	 	A legal opinion of Bracewell & Giuliani LLP, legal advisers to the Mandated Lead Arrangers in
respect of the laws of the State of Delaware, addressed to the initial Finance Parties and
those acceding to the Agreement on primary syndication.
	 
	9.4	 	A legal opinion of Rice, Silbey, Reuther & Sullivan, legal advisers to the Mandated Lead
Arrangers in respect of the laws of the State of Nevada, addressed to the initial Finance
Parties and those acceding to the Agreement on primary syndication.
	 
	9.5	 	A legal opinion of Wikborg, Rein & Co., legal advisers to the Mandated Lead Arrangers in
respect of the laws of the Norway, addressed to the initial Finance Parties and those acceding
to the Agreement on primary syndication.
	 
	10.	 	HEDGING
	 
	 	 	Evidence that the Hedging Agreements (if any) required under Schedule 13 (Hedging Policy)
to be entered into on or before the first Utilisation Date have been entered into.
	 
	11.	 	CASH COVER
	 
	 	 	Evidence that the Cash Collateral Accounts have been funded in accordance with the
requirements of this Agreement or will be so funded on the first Utilisation Date to the
extent required in accordance with the terms of this Agreement.
	 
	12.	 	AUTHORISATIONS
	 
	12.1	 	Confirmation from the Obligors that all relevant authorisations necessary in connection with
the Transaction Documents have been obtained and are in full force and effect or will be in
full force and effect when required.

SCHEDULE 3

CONDITIONS PRECEDENT AND SUBSEQUENT

Part II

C.P.s to First Utilisation

	1.	 	ACQUISITION AGREEMENT
	 
	 	 	Evidence that the Acquisition Agreement has been unconditionally completed in accordance
with its terms and that all condition to the exercise of the Put Option or Call Option
thereunder (whichever has been exercised) have been fulfilled.
	 
	2.	 	EQUITY CONTRIBUTION
	 
	 	 	A letter from the Company, addressed to the Agent, signed by a director of the Company,
confirming an equity contribution to the Company of not less than US$175,000,000 and
confirming that this, taken together with the Facility, the Second Lien Facility and any
cash in hand, is sufficient to complete acquisition and pay all related fees, commissions
and expenses the Second Lien Facility.

147

 

Exhibit 10.1

SCHEDULE 3

CONDITIONS PRECEDENT AND SUBSEQUENT

Part III

Conditions Subsequent

	1.	 	OBLIGORS AND TRANSACTION PARTIES
	 
	1.1	 	A copy of the constitutional documents of Talisman Expro Limited.
	 
	1.2	 	A copy of a resolution of the board of directors of Talisman Expro Limited (or a committee of
its board of directors):

	 	1.2.1	 	approving the terms of, and the transactions contemplated by, each of the
documents it is or will become party to;
	 
	 	1.2.2	 	authorising a specified person or persons to execute each such document on its
behalf; and
	 
	 	1.2.3	 	authorising a specified person or persons, on its behalf, to sign and/or
dispatch all other documents and notices to be signed and/or dispatched by it under or
in connection with any such document.
	 
	 	1.3	 	If applicable, a copy of a resolution of the board of directors of Talisman Expro Limited
establishing the committee referred to in paragraph 1.2 above.

	1.4	 	A specimen of the signature of each person authorised by the resolutions referred to in
paragraph 1.2 above.
	 
	2.	 	CERTIFICATES
	 
	2.1	 	A certificate of a person who is both a director and an authorised signatory of Talisman
Expro Limited certifying on behalf of Talisman Expro Limited that:

	 	2.1.1	 	the borrowing or, as the case may be, the guaranteeing of the Aggregate
Commitments in full would not cause any borrowing, guaranteeing or similar limit binding
on it to be exceeded; and
	 
	 	2.1.2	 	each copy document specified in this Part III (Conditions subsequent) of
Schedule 3 is correct, complete and in full force and effect as at a date no earlier
than the date of this Agreement.

148

 

Exhibit 10.1

	3.	 	SECURITY DOCUMENTS
	 
	3.1	 	A debenture between Talisman Expro Limited and the Security Trustee governed by English law.
	 
	3.2	 	A charge over shares between Endeavour Energy UK Limited and the Security Trustee governed by
English law.
	 
	4.	 	ACCESSION DOCUMENTS
	 
	 	 	Evidence that Talisman Expro Limited has acceded to this Agreement and the Intercreditor
Agreement as an Additional Borrower and an Additional Guarantor.
	 
	5.	 	LEGAL OPINION
	 
	 	 	A legal opinion of Herbert Smith LLP, legal advisers to the Mandated Lead Arrangers in
respect of the laws of England addressed to the Finance Parties and those acceding to this
Agreement on primary syndication in relation to the documents referred to at 1 and 2 above.
	 
	6.	 	WHITEWASH PROCEDURES
	 
	6.1	 	Evidence that the requirements of Chapter VI of the Companies Act 1985 have been complied
with in relation to Talisman Expro Limited.
	 
	6.2	 	A letter from Ernst & Young, auditors to Talisman Expro Limited, addressed to the Mandated
Lead Arrangers, regarding the net assets of Talisman Expro Limited.
	 
	7.	 	NOTICE
	 
	 	 	Each of the share certificates, stock transfer forms and notices of assignment that are
required to be delivered pursuant to the Debenture referred to at paragraph 3 above.
	 
	8.	 	PROJECT ACCOUNT
	 
	 	 	Evidence that Talisman Expro Limited has opened each Project Account required hereunder.
	 
	9.	 	KNOW YOUR CUSTOMER
	 
	 	 	Evidence that all “know your customer” or similar identification procedures relating to
Talisman Expro Limited have been carried out and completed.
	 
	10.	 	FINANCIAL STATEMENTS
	 
	 	 	The financial statements or, if the same have been audited, audited financial statements
for Talisman Expro Limited for its financial year ended 31 December 2005.
	 
	11.	 	REGISTRATION OF SECURITY
	 
	 	 	Evidence of Registration of all Security Documents referred to in Part I of Schedule 3
(Conditions Precedent and Subsequent), to the extent required or recommended by any legal
adviser to the Mandated Lead Arrangers to ensure the same are valid and enforceable.

149

 

Exhibit 10.1

	12.	 	CORPORATE STATUS OF ENDEAVOUR ENERGY NORGE AS
	 
	 	 	Evidence that Endeavour Energy Norge AS (i) has completed all steps required to procure the
cancellation of all 3,950,385 shares of Endeavour Energy Norge AS that as of the date of
this agreement are owned by Endeavour Energy Norge AS, including but not limited to
documentation that Endeavour Energy Norge AS has held an extraordinary shareholders meeting
where a reduction of the Endeavour Energy Norge AS’ share capital by cancellation of
3,950,385 shares was resolved, (ii) has made all the required notifications and/or
advertisements in connection with the two-month notice period following the resolution to
reduce the share capital, and (iii) has registered new articles of association and the
reduced share capital with the Norwegian Register of Business Enterprises and has
registered updated details for number of shares and shareholders with the Norwegian Central
Securities Depository (VPS) showing Endeavour International Holding B.V. as the only
shareholder of Endeavour Energy Norge AS immediately upon the expiry of the two-month
notice period.

150

 

Exhibit 10.1

SCHEDULE 3

CONDITIONS PRECEDENT AND SUBSEQUENT

Part IV

Conditions precedent required to be delivered by an Additional Obligor

	1.	 	An Accession Letter, duly executed by the Additional Obligor and the Company and duly
executed originals of any other documents (in form and substance satisfactory to the Agent) as
may be necessary to ensure that the Additional Obligors accedes, and becomes a party, to each
relevant Finance Document (“accession documents”).
	 
	2.	 	A copy of the constitutional documents of the Additional Obligor and any other person (an
“Additional Transaction Party”) entering into any Security Documents referred to in paragraph
12 below.
	 
	3.	 	A copy of a resolution of the respective board of directors (or equivalent) of (a) the
Additional Obligor and (b) any Additional Transaction Party, in each case:

	 	3.1	 	approving the terms of, and the transactions contemplated by, each of the
documents it is or will become party to (the “Relevant Documents”);
	 
	 	3.2	 	authorising a specified person or persons to execute each such Relevant
Document on its behalf; and
	 
	 	3.3	 	authorising a specified person or persons, on its behalf, to sign and/or
despatch all other documents and notices (including, in relation to an Additional
Borrower, any Utilisation Request) to be signed and/or despatched by it under or in
connection with any such Relevant Document.

	4.	 	A specimen of the signature of each person authorised by the resolution referred to in
paragraph 3 above.
	 
	5.	 	In the case of an Additional Guarantor, a copy of a resolution signed by all the holders of
the issued shares of the Additional Guarantor, approving the terms of, and the transactions
contemplated by, the Finance Documents to which the Additional Guarantor is, or will become, a
party.
	 
	6.	 	A certificate of the Additional Obligor (signed by a director or, if appropriate, an officer)
confirming that borrowing or guaranteeing, as appropriate, the Aggregate Commitments would not
cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.
	 
	7.	 	A certificate of an authorised signatory of:

	 	7.1	 	the Additional Obligor; and
	 
	 	7.2	 	each Additional Transaction Party (if any)

	 	 	(in each case) certifying that each copy document listed in this Part IV of Schedule 3
relating to it is correct, complete and in full force and effect as at a date no earlier
than the date of the Relevant Document(s) to which it is a party.

	8.	 	A copy of any other Authorisation or other document, opinion or assurance which the Agent
considers to be necessary or desirable in connection with the entry into and

151

 

Exhibit 10.1

	 	 	performance of
the transactions contemplated by each Relevant Document or for the validity and enforceability
of any Relevant Document.
	 
	9.	 	If available, the latest audited financial statements of the Additional Obligor.
	 
	10.	 	Such legal opinions in relation to the Additional Obligor, any Additional Transaction Party
and/or the Relevant Documents as the Agent may reasonably require (together with any documents
that may be required for the delivery of such legal opinions).
	 
	11.	 	If the proposed Additional Obligor is incorporated in a jurisdiction other than England and
Wales, evidence that the process agent specified in Clause 40.2 (Service of process), if not
an Obligor, has accepted its appointment in relation to the proposed Additional Obligor.
	 
	12.	 	Security Document(s) creating Security over (a) the entire issued share capital of the
Additional Obligor, (b) the Project Accounts (if any) that the relevant Additional Obligor
will be required to maintain hereunder, and (c) if required by Majority Lenders, all of the
assets of the Additional Obligor, in the case of (a), (b) and (c) duly executed by the
relevant parties in form and substance satisfactory to the Security Trustee together with:

	 	12.1	 	(to the extent applicable) evidence that all approvals, filings,
registrations, recordings and other things necessary or desirable (including the
carrying out of the procedures specified in ss.155-8 of the Companies Act 1985 (if
appropriate)) to ensure the validity, effectiveness, priority and enforceability of
each such Security Document have been carried out;
	 
	 	12.2	 	copies of each of the notices required to be given under each such Security
Document together with other copies of acknowledgements from each person to whom
notice was given, in the form required by such document; and
	 
	 	12.3	 	(if required by the Agent) evidence that the Security Trustee or its nominee
has been entered in the register of members (or equivalent) of such proposed
Additional Obligor as sole shareholder of all its issued share capital.

	13.	 	Evidence that each Project Account (if any) that the relevant Additional Obligor will be
required to maintain hereunder has been opened.

	14.	 	Evidence that all “know your customer” or similar identification procedures relating to the
proposed Additional Obligor or any Additional Transaction Party have been carried out and
completed.

152

 

Exhibit 10.1

SCHEDULE 4

APPLICABLE COVER RATIOS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	 	Applicable	 	 	Applicable	 	 	Applicable	 	 	Applicable	 	 	Applicable	 
	 	 	Tranche A	 	 	Tranche A	 	 	Tranche A	 	 	Tranche B	 	 	Tranche B	 	 	Tranche B	 
	 	 	FLCR	 	 	LLCR	 	 	DSCR	 	 	FLCR	 	 	LLCR	 	 	DSCR	 
	From the date
hereof until the
day before the
first Scheduled
Recalculation Date
falling on or after
the second
anniversary of the
date of this
Agreement
	 	1.40x	 	 	1.20x	 	 	1.20x	 	 	1.25x	 	 	1.15x	 	 	1.15x	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	On and from the
first Scheduled
Recalculation Date
falling on or after
the second
anniversary of the
date of this
Agreement
	 	1.50x	 	 	1.30x	 	 	1.20x	 	 	1.30x	 	 	1.20x	 	 	1.15x	 

153

 

Exhibit 10.1

SCHEDULE 5

UTILISATION REQUEST

Part I

Loans

From: [Borrower]

To: [Agent]

Dated:

Dear Sirs

Secured Revolving Credit Facility Agreement dated [   ] between, among others,

Endeavour International Corporation, BNP Paribas and the Governor and Company of the Bank of

Scotland

(as amended from time to time) (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:
	 	[      ]
	 
	 	 	 	 
	 

	 	Currency:
	 	[            ]
	 
	 	 	 	 
	 

	 	Interest Period:
	 	 [            ]

	3.	 	The purpose of the Loan is [            ]. Such Loan is to be [a Tranche
A Loan]*[a Tranche B Loan].

	4.	 	We confirm that each condition specified in Clause 4.2 (Further conditions precedent and
subsequent) of the Agreement is satisfied on the date of this Utilisation Request.
	 
	5.	 	The proceeds of this Loan should be credited to [NB. specify relevant Proceeds Account].
	 
	6.	 	This Utilisation Request is irrevocable.

	 	 	 	 	 
	 

	 	 	 	Yours faithfully
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	authorised signatory for
[name of relevant Borrower]

 

			
	*	 	Delete whichever is inapplicable.

154

 

Exhibit 10.1

SCHEDULE 5

UTILISATION REQUEST

Part II

Letters of Credit

From: [Borrower]

To: [Agent]

Dated:

Dear Sirs

Secured Revolving Credit Facility Agreement dated [            ] between, among

others, Endeavour International Corporation, BNP Paribas and the Governor and Company of the Bank

of Scotland (as amended from time to time) (the “Agreement”)

	1.	 	We wish to arrange for a Letter of Credit to be [issued][renewed] by the Fronting Bank on the
following terms:

	 	 	 	 	 
	 

	 	Proposed Utilisation Date:	 	[
           ] (or, if that is not a Business Day, the next Business Day)
	 
	 	 	 	 
	 

	 	Amount:
	 	[            ]
	 
	 	 	 	 
	 

	 	Currency:
	 	[            ]
	 
	 	 	 	 
	 

	 	Expiry Date:
	 	 [            ]
	 
	 	 	 	 
	 

	 	Beneficiary:
	 	 [            ]

	2.	 	We confirm that each condition specified in Clause 4.2 (Further conditions precedent and
subsequent) of the Agreement is satisfied on the date of this Utilisation Request.
	 
	3.	 	We confirm that the Letter of Credit will be applied for the following purpose(s) and that
each such purpose complies with Clause 3.1.2 (Purpose) of the Agreement:
	 
	 	 	[NB. insert description of purpose(s).]
	 
	 	 	In our view, this Letter of Credit, should [not]* be treated as an Eligible
Letter of Credit.
	 
	4.	 	We attach a copy of [the proposed Letter of Credit/the existing Letter of Credit to be
renewed].
	 
	5.	 	The Letter of Credit once [issued]/[renewed] is to be delivered to [NB. Specify detailed
delivery instructions].

 

			
	*	 	Delete/insert as appropriate.

155

 

Exhibit 10.1

	6.	 	This Utilisation Request is irrevocable.

	 	 	 	 	 	 	 
	 

	 	 	 	Yours faithfully
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	authorised signatory for

[name of relevant Borrower]	 	 

156

 

Exhibit 10.1

SCHEDULE 6

FORMS OF LETTER OF CREDIT

PART 1

FORM OF LETTER OF CREDIT

To: [Beneficiary]

	 	 	 
	           (the “Beneficiary”)

	 	[DATE]

Dear Sirs,

Irrevocable Standby Letter of Credit no. [            ]

For the account and at the request of {[Endeavour Entity]} [(acting on behalf of [            ])],
we BNP Paribas Paris (the “Fronting Bank”) hereby issue this irrevocable standby letter of credit
(“Letter of Credit”) [reference number] in your favour on the following terms and conditions:

	1.	 	DEFINITIONS
	 
	 	 	In this Letter of Credit:
	 
	 	 	“Business Day” means a day (other than a Saturday or a Sunday) on which banks are open for
general business in London and Paris.
	 
	 	 	“Demand” means a demand for a payment under this Letter of Credit in the form of the
schedule to this Letter of Credit.
	 
	 	 	“Expiry Date” means [latest date for presentation of demand letter to be inserted].
	 
	 	 	“Total L/C Amount” means [amount to be inserted].
	 
	2.	 	FRONTING BANK’S AGREEMENT
	 
	2.1	 	The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to
the Fronting Bank a duly completed Demand. A Demand may not be given after the Expiry Date.
	 
	2.2	 	A Demand must be received at the latest by the Fronting Bank by [5.00] p.m. (Paris time) on
any Business Day falling on or before the Expiry Date.
	 
	2.3	 	Subject to the terms of this Letter of Credit, the Fronting Bank unconditionally and
irrevocably undertakes to the Beneficiary that, within five Business Days of receipt by it of
a Demand validly presented under this Letter of Credit, it must pay to the Beneficiary the
amount which is demanded for payment in that Demand.
	 
	2.4	 	The Fronting Bank will not be obliged to make a payment under this Letter of Credit if as a
result the aggregate of all payments made by it under this Letter of Credit would exceed the
Total L/C Amount.

157

 

Exhibit 10.1

	3.	 	EXPIRY
	 
	3.1	 	On 5.00 p.m. (Paris time) on the Expiry Date the obligations of the Fronting Bank under this
Letter of Credit will cease with no further liability on the part of the Fronting Bank except
for any Demand validly presented under the Letter of Credit that remains unpaid.
	 
	3.2	 	The Fronting Bank will be released from its obligations under this Letter of Credit on the
date prior to the Expiry Date (if any) notified by the Beneficiary to the Fronting Bank as the
date upon which the obligations of the Fronting Bank under this Letter of Credit are released.
	 
	3.3	 	When the Fronting Bank is no longer under any obligation under this Letter of Credit, the
Beneficiary must return the original of this Letter of Credit to the Fronting Bank.
	 
	4.	 	PAYMENTS
	 
	 	 	All payments under this Letter of Credit must be made in [currency] and for value on the
due date to the account nominated by the Beneficiary in the Demand.
	 
	5.	 	DELIVERY OF DEMAND
	 
	 	 	Each Demand must be in writing, bearing the Beneficiary’s original handwritten signature,
and may be given in person or by post, and must be received by the Fronting Bank at its
address as follows:
	 
	 	 	BNP PARIBAS

21 PLACE DU MARCHE SAINT HONORE

F-75031 PARIS CEDEX 01

ATTENTION: Operations Center ECEP/GTS
	 
	6.	 	ASSIGNMENT
	 
	 	 	The Beneficiary’s rights under this Letter of Credit may not be assigned or transferred.
	 
	7.	 	[ISP]/[UCP]1
	 
	 	 	Except to the extent it is inconsistent with the express terms of this Letter of Credit,
this Letter of Credit is subject to the [International Standby Practices (ISP 98),
International Chamber of Commerce Publication No. 590]/[the Uniform Customs and Practice
for Documentary Credits (1993 Revision, International Chamber of Commerce Publication No.
500)].
	 
	8.	 	GOVERNING LAW
	 
	 	 	This Letter of Credit is governed by and shall be construed in accordance with English law.
	 
	9.	 	JURISDICTION
	 
	 	 	The English courts have exclusive jurisdiction to settle any dispute in connection with
this Letter of Credit.

 

			
	1	 	To be selected.

158

 

Exhibit 10.1

	 	 	 	 	 	 	 
	 

	 	 	 	Yours faithfully
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	For and on behalf of BNP PARIBAS	 	 

159

 

Exhibit 10.1

Schedule

FORM OF DEMAND

From: [Beneficiary]

To: BNP PARIBAS

          [Address]

[Dated]

Dear Sirs

Your Irrevocable Standby Letter of Credit no. [       ] dated [       ] issued in favour of
[Beneficiary] (the “Letter of Credit”)

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when
used in this Demand.

	1.	 	We certify that the sum of [       ] is due [and has remained unpaid for at least [       ]
Business Days] [under [set out underlying contract or agreement]]. We therefore demand
payment of the sum of [       ].
	 
	2.	 	Payment should be made to the following account:
	 
	 	 	Name:
	 
	 	 	Account Number:
	 
	 	 	Bank:
	 
	3.	 	The date of this Demand is not later than the Expiry Date.

	 	 	 	 	 	 	 
	 

	 	 	 	Yours faithfully
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	authorised signatory for [Beneficiary]	 	 

160

 

Exhibit 10.1

SCHEDULE 6

PART II

FORM OF STANDBY LETTER OF CREDIT

To: [Beneficiary]

	 	 	 
	      (the “Beneficiary”)

	 	[DATE]

Dear Sirs,

Irrevocable Standby Letter of Credit no. [       ]

For the account and at the request of {[Endeavour Entity]} [(acting on behalf of [ ])],
we BNP Paribas Paris (the “Fronting Bank”) hereby issue this irrevocable standby letter of credit
(“Letter of Credit”) [reference number] in your favour on the following terms and conditions:

	1.	 	DEFINITIONS
	 
	 	 	In this Letter of Credit:
	 
	 	 	“Business Day” means a day (other than a Saturday or a Sunday) on which banks are open for
general business in London and Paris.
	 
	 	 	“Demand” means a demand for a payment under this Letter of Credit.
	 
	 	 	“Expiry Date” means [latest date for presentation of demand letter to be inserted].
	 
	 	 	“Total L/C Amount” means [amount to be inserted].
	 
	2.	 	FRONTING BANK’S AGREEMENT
	 
	2.1	 	The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to
the Fronting Bank a duly completed Demand. A Demand may not be given after the Expiry Date.
	 
	2.2	 	A Demand must be received at the latest by the Fronting Bank by 5.00 p.m. (Paris time) on any
Business Day falling on or before the Expiry Date.
	 
	2.3	 	Subject to the terms of this Letter of Credit, the Fronting Bank unconditionally and
irrevocably undertakes to the Beneficiary that, within five Business Days of receipt by it of
a Demand validly presented under this Letter of Credit, it must pay to the Beneficiary the
amount of the Demand. Demand(s) in excess of the Total L/C Amount are acceptable, provided
that the Fronting Bank shall not be obliged to make a payment(s) hereunder exceeding in
aggregate the Total L/C Amount.
	 
	3.	 	EXPIRY
	 
	3.1	 	On 5.00 p.m. (Paris time) on the Expiry Date the obligations of the Fronting Bank under this
Letter of Credit will cease with no further liability on the part of the Fronting Bank except
for any Demand validly presented under the Letter of Credit that remains unpaid.

161

 

Exhibit 10.1

	3.2	 	The Fronting Bank will be released from its obligations under this Letter of Credit on the
date prior to the Expiry Date (if any) notified by the Beneficiary to the Fronting Bank as the
date upon which the obligations of the Fronting Bank under this Letter of Credit are released.
	 
	3.3	 	When the Fronting Bank is no longer under any obligation under this Letter of Credit, the
Beneficiary must return the original of this Letter of Credit to the Fronting Bank.
	 
	4.	 	PAYMENTS
	 
	 	 	All payments under this Letter of Credit must be made in [currency] and for value on the
due date to the account nominated by the Beneficiary in the Demand.
	 
	 	 	All issuing banking charges and commissions are for the account of the applicant. All
other charges are for beneficiary’s account.
	 
	5.	 	DELIVERY OF DEMAND
	 
	 	 	Each Demand must be presented at our offices:
	 
	 	 	BNP PARIBAS

21 PLACE DU MARCHE SAINT HONORE

F-75031 PARIS CEDEX 01

ATTENTION: Operations Center ECEP/GTS
	 
	 	 	Fax or telex copy of documents is acceptable for drawing under this Letter of Credit.
	 
	6.	 	ASSIGNMENT
	 
	 	 	The Beneficiary’s rights under this Letter of Credit may not be assigned or transferred.
	 
	7.	 	[ISP]/[UCP]2
	 
	 	 	Except to the extent it is inconsistent with the express terms of this Letter of Credit,
this Letter of Credit is subject to the [International Standby Practices (ISP 98),
International Chamber of Commerce Publication No. 590]/[the Uniform Customs and Practice
for Documentary Credits (1993 Revision, International Chamber of Commerce Publication No.
500)].
	 
	8.	 	GOVERNING LAW
	 
	 	 	This Letter of Credit is governed by and shall be construed in accordance with English law.
	 
	9.	 	JURISDICTION
	 
	 	 	The English courts have exclusive jurisdiction to settle any dispute in connection with
this Letter of Credit.

 

			
	2	 	To be selected.

162

 

Exhibit 10.1

	 	 	 	 	 	 	 
	 

	 	 	 	Yours faithfully
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	For and on behalf of BNP PARIBAS	 	 

163

 

Exhibit 10.1

SCHEDULE 7

MANDATORY COST FORMULAE

	1.	 	The Mandatory Cost is an addition to the interest rate to compensate lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) 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, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in
accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to
the percentage participation of each Lender in the relevant Loan) and will be expressed as a
percentage rate per annum.
	 
	3.	 	The Additional Cost Rate for any Lender lending from a Facility Office in a Participating
Member State will be the percentage notified by that Lender to the Agent. This percentage
will be certified by that Lender in its notice to the Agent to be 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.
	 
	4.	 	The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom
will be calculated by the Agent as follows:
	 
	4.1	 	in relation to a sterling Loan:
	 
	 	 	AB + C(B-D)+E x 0.01 per cent per annum
	 
	 	 	100-(A+C)
	 
	4.2	 	in relation to a Loan in any currency other than sterling:
	 
	 	 	E x 0.01 per cent per annum.

                300 
	 
	 	 	Where:

	 	 	 	 	 
	 

	 	A
	 	is the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which that Lender is from time to time required to maintain as an
interest free cash ratio deposit with the Bank of England to comply with cash ratio
requirements.
	 
	 	 	 	 
	 

	 	B
	 	is the percentage rate of interest (excluding the Margin and the Mandatory
Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in
Clause 10.3.1 (Default interest)) payable for the relevant Interest Period on the
Loan.
	 
	 	 	 	 
	 

	 	C
	 	is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with the
Bank of England.
	 
	 	 	 	 
	 

	 	D
	 	is the percentage rate per annum payable by the Bank of England to the Agent
on interest bearing Special Deposits.

164

 

Exhibit 10.1

	 	 	 	 	 
	 

	 	E
	 	is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Agent as being the average of the most recent rates of charge
supplied by the Reference Banks to the Agent pursuant to paragraph 7 below and
expressed in pounds per £1,000,000.

	5.	 	For the purposes of this Schedule:
	 
	5.1	 	“Eligible Liabilities” and “Special Deposits” have the meanings given to them from time to
time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank
of England;
	 
	5.2	 	“Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such
other law or regulation as may be in force from time to time in respect of the payment of fees
for the acceptance of deposits;
	 
	5.3	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees
Rules but taking into account any applicable discount rate); and
	 
	5.4	 	“Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the
Fees Rules.
	 
	6.	 	In application of the above formulae, A, B, C and D will be included in the formulae as
percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A
negative result obtained by subtracting D from B shall be taken as zero. The resulting
figures shall be rounded to four decimal places.
	 
	7.	 	If requested by the Agent, each Reference Bank shall, as soon as practicable after
publication by the Financial Services Authority, supply to the Agent, the rate of charge
payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules
in respect of the relevant financial year of the Financial Services Authority (calculated for
this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that
Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff
Base of that Reference Bank.
	 
	8.	 	Each Lender shall supply any information required by the Agent for the purpose of calculating
its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the
following information on or prior to the date on which it becomes a Lender:
	 
	8.1	 	the jurisdiction of its Facility Office; and
	 
	8.2	 	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.
	 
	9.	 	The percentages of each Lender for the purpose of A and C above and the rates of charge of
each Reference Bank for the purpose of E above shall be determined by the Agent based upon the
information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that,
unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to
cash ratio deposits and Special Deposits are the same as those of a 

165

 

Exhibit 10.1

	 	 	typical bank from its
jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility
Office.
	 
	10.	 	The Agent shall have no liability to any person if such determination results in an
Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3,
7 and 8 above is true and correct in all respects.
	 
	11.	 	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 and each Reference Bank pursuant to paragraphs 3, 7 and 8
above.
	 
	12.	 	Any determination by the Agent pursuant to this Schedule in relation to a formula, the
Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.
	 
	13.	 	The Agent may from time to time, after consultation with the Company 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 Bank of England, the Financial Services Authority or 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.

166

 

Exhibit 10.1

SCHEDULE 8

FORM OF TRANSFER CERTIFICATE

To: [Agent] and [Security Trustee]

From: [The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)

Dated:

Dear Sirs

Secured Revolving Credit Facility Agreement dated [       ] between, among

others, Endeavour International Corporation, BNP Paribas and the Governor and Company of the Bank

of Scotland

(as amended from time to time) (the “Agreement”)

	1.	 	We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement
have the same meaning in this Transfer Certificate unless given a different meaning in this
Transfer Certificate.
	 
	2.	 	We refer to Clause 26.5 (Procedure for transfer) of the Agreement:

	 	2.1.	 	The Existing Lender and the New Lender agree to the Existing Lender
transferring to the New Lender by novation all or part of the Existing Lender’s
Commitment, rights and obligations referred to in the Schedule hereto in accordance
with Clause 26.5 (Procedure for transfer) of the Agreement.
	 
	 	2.2	 	The proposed Transfer Date is [      ].
	 
	 	2.3	 	The Facility Office and address, fax number and attention details for notices
of the New Lender for the purposes of Clause 33.2 (Contact details) of the Agreement
are set out in the Schedule.

	3.	 	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations
set out in Clause 25.4 (Limitation of responsibility of Existing Lenders) of the Agreement and
represents and warrants to each Party that on the date it becomes a party to the Agreement (i)
that it is a PMP and (ii) that it is aware that it does not benefit from the (creditor)
protection offered by the Dutch Banking Act when lending monies to persons or entities which
are subject to the prohibition of Section 82 of the Dutch Banking Act;

	 	 	[4. The New Lender confirms that the person beneficially entitled to interest payable to that Lender
in respect of an advance under a Finance Document is either:

	 	4.1	 	a company resident in the United Kingdom for United Kingdom tax purposes;
	 
	 	4.2	 	a partnership each member of which is:

	 	(i)	 	a company so resident in the United Kingdom; or
	 
	 	(ii)	 	a company not so resident in the United Kingdom which
carries on a trade in the United Kingdom through a permanent establishment
and which brings into account in computing its chargeable profits (for the
purposes of section 11(2) of the Taxes Act) the whole of any share of

167

 

Exhibit 10.1

	 	 	 	interest payable in respect of that advance that falls to it by reason of
sections 114 and 115 of the Taxes Act; or

	 	4.3	 	a company not so resident in the United Kingdom which carries on a trade in
the United Kingdom through a permanent establishment and which brings into account
interest payable in respect of that advance in computing the chargeable profits (for
the purposes of section 11(2) of the Taxes Act) of that company.]

	 	 	 
	[4/5.]

	 	This Transfer Certificate may be executed in any number of
counterparts and this has the same effect as if the signatures on
the counterparts were on a single copy of this Transfer
Certificate.
	 
	 	 
	[5/6.]

	 	The New Lender agrees to become a party to, and be bound by the
terms of the Agreement and Intercreditor Agreement as a Lender on
and from the Transfer Date.
	 
	 	 
	[6/7.]

	 	This Transfer Certificate is governed by English law.

168

 

Exhibit 10.1

THE SCHEDULE

Commitment/rights and obligations to be transferred

[insert relevant details including details of Commitment and participation amount and whether any

Secured Hedging Agreement is to be transferred]

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

account details for payments.]

	 	 	 
	[Existing Lender]

	 	[New Lender]
	 
	 	 
	By:

	 	By:

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

[Agent]

By:

This Transfer Certificate is accepted by the Security Trustee.

[Security Trustee]

By:

169

 

Exhibit 10.1

SCHEDULE 9

FORM OF ACCESSION LETTER

To: [Agent] and [Security Trustee]

From: [Subsidiary] and [Company]

Dated:

Dear Sirs

          Secured
Revolving Credit Facility Agreement dated [   
] between, among

others, Endeavour International Corporation, BNP Paribas and the Governor and Company of the Bank

of Scotland

(as amended from time to time) (the “Agreement”)

	1.	 	We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have
the same meaning in this Accession Letter unless given a different meaning in this Accession
Letter.
	 
	2.	 	[Subsidiary] agrees to become an Additional [Borrower]/[Guarantor] and to be bound by (i) the
terms of the Agreement and the Intercreditor Agreement as an Obligor and (ii) the terms of the
other Finance Documents as an Additional [Borrower]/[Guarantor]. [Subsidiary] is a company
duly incorporated under the laws of [name of relevant jurisdiction].
	 
	3.	 	[Subsidiary’s] administrative details are as follows:
	 
	 	 	Address:
	 
	 	 	Fax No:
	 
	 	 	Attention:
	 
	4.	 	This Accession Letter is governed by English law.

[This Accession Letter has been executed and delivered as a deed on the date stated at the
beginning of this Accession Letter.]3

	 	 	 
	 

	 	Yours faithfully,
	 
	 	 
	 

	 	 
	authorised signatory for

	 	authorised signatory for
	 
	 	 
	[name of relevant Subsidiary]

	 	[Company]

 

			
	3	 	If to be entered by way of deed, execution
clause to be amended as appropriate.

170

 

Exhibit 10.1

This Accession Letter is accepted by the Agent and the Security Trustee.

[Agent]

By:

[Security Trustee]

By:

171

 

Exhibit 10.1

SCHEDULE 10

INITIAL BORROWING BASE ASSETS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Field	 	Block	 	Licence	 	Interest (%) 4	 	Country	 	Group entity5
	Goldeneye

	 	20/4b
	 	P592
	 	7.5	 	 	England
	 	Talisman Expro Limited
	Bittern

	 	29/1b
	 	P361
	 	2.422	 	 	England
	 	Talisman Expro Limited
	Alba

	 	16/2b
	 	P213
	 	2.25	 	 	England
	 	Talisman Expro Limited
	Caledonia

	 	16/2b
	 	P213
	 	2.82964	 	 	England
	 	Talisman Expro Limited
	Ivanhoe

	 	15/21a and 15/21b
	 	P218 and P588
	 	23.455	 	 	England
	 	Talisman Expro Limited
	Rob Roy

	 	15/21a and 15/21b
	 	P218 and P588
	 	23.455	 	 	England
	 	Talisman Expro Limited
	Hamish

	 	15/21a and 15/21b
	 	P218 and P588
	 	23.455	 	 	England
	 	Talisman Expro Limited
	Renee

	 	15/27
	 	P226
	 	77.5	 	 	England
	 	Talisman Expro Limited
	Rubie

	 	15/28b
	 	P339
	 	40.78	 	 	England
	 	Talisman Expro Limited
	Enoch

	 	16/13
	 	P219
	 	8	 	 	England
	 	Endeavour Energy UK Limited
	Brage

	 	PL053B, PL055,
PL055B and PL185
	 	30/6, 31/4 and 31/7
	 	4.44	 	 	Norway
	 	Endeavour Energy Norge AS
	Sognefjord

	 	PL055 and PL055B
	 	31/4
	 	3.2	 	 	Norway
	 	Endeavour Energy Norge AS
	Njord

	 	PL132 and PL107
	 	6407/10 and 6407/7
	 	2.5	 	 	Norway
	 	Endeavour Energy Norge AS

 

			
	4	 	Interest in Field given, rather than interest
in the Block.
	 
	5	 	Assuming due completion of the Acquisition
Agreement.

172

 

Exhibit 10.1

SCHEDULE 11

SUMMARY OF PROJECTIONS PROCESS

The summary set out in this Schedule 11 is only a summary of certain provisions of Clause 7
(Projections) and has been included only for ease of reference. This Schedule (a) shall be ignored
for the purposes of interpreting the provisions of Clause 7 (Projections) and (b) is not intended
to have any contractual effect.

In the table set out below, “RD” is a reference to any Recalculation Date.

	 	 	 
	Date/Period	 	Action
	 
	 	 
	RD – 59 days

	 	Company may submit request for assets to be included/excluded as
Borrowing Base Assets.
	 
	 	 
	RD – 45 days

	 	Agent submits Economic Assumptions to Company.
This step is not applicable to Disposal Projections.
	 
	 	 
	RD – 40 days

	 	Company submits Technical Assumptions to Technical Bank.
This step is not applicable to Disposal Projections.
	 
	 	 
	RD – 30 days

	 	Company and Agent agree Economic Assumptions.
This step is not applicable to Disposal Projections.
	 
	 	 
	RD – 21 days

	 	Company and Technical Bank agree Technical Assumptions.
This step is not applicable to Disposal Projections.
	 
	 	 
	RD – 14 days

	 	Draft Projection issued to Lenders.
	 
	 	 
	Within 10 days of
receipt of
Projection

	 	Lenders approve Projection.
	 
	 	 
	RD

	 	Projection adopted (but note Clause 7.9 (Adoption of Projections)).

173

 

Exhibit 10.1

SCHEDULE 12

GROUP STRUCTURE

174

 

Exhibit 10.1

SCHEDULE 13

HEDGING POLICY

	(A)	 	The Obligors shall ensure that, by reference to the applicable production profiles of the
Proved Reserves on a rolling three-year basis:

	 	(i)	 	no more than 75% shall be hedged by way of swaps or collars; and
	 
	 	(ii)	 	not less than 50% shall be hedged by way of options, swaps and collars,
in each case as determined by the Technical Bank.

	(B)	 	No limitation is placed upon the use of put options, however they should be used only to
cover genuine commercial exposure of the Obligors, so that the Obligors’ obligations in
respect of any hedging above will be funded by an appropriate income stream and provided that
no Obligor shall enter into any hedging arrangements which are speculative rather than
relating to any exposure of the Obligor or which are primarily intended to have the commercial
effect of raising finance.

	(C)	 	It is agreed that hedging counterparties need not be banks, or affiliates thereof, who are
Lenders in the Facility but the Obligors shall ensure that hedging is undertaken with
counterparties with a Standard and Poor’s rating of A- or greater (or will then benefit of a
guarantee or other credit support provided or issued by a person with the requisite rating).
Hedging undertaken with a lower rated counterparty shall not be reflected in the Projections.

	(D)	 	Any hedging involving a credit exposure (swaps or collars) undertaken with parties who are
not Lenders (or affiliates thereof) will not share in the security enjoyed by the Lenders.

	(E)	 	The Obligors shall also undertake reasonable measures to mitigate their exposure to movements
in foreign exchange rates and interest rates, to the extent that such adverse movements would
have an adverse impact upon its net operating income.

	(F)	 	The commodities hedging entered into with J. Aron and Company in respect of which the
confirmations were entered into on or before 15 October 2006 shall not breach the terms of
this Hedging Policy.

	(G)	 	It is acknowledged that the commodities hedging referred to in paragraph (F) of this Hedging
Policy would, but for paragraph (F), breach this Hedging Policy.

175

 

Exhibit 10.1

	(H)	 	The Obligors shall not enter into any further Hedging Agreement until aggregate hedge volumes
are compliant with the parameters set out in paragraphs (A) to (E) of this Hedging Policy.

176

 

Exhibit 10.1

SCHEDULE 14

MARGIN

	1.	 	The margin (which may fluctuate during the Interest Period of a Loan) applicable on any day
for any Tranche A Loan and any Letter of Credit shall be the percentage rate per annum
determined by the Agent by reference to the following table.

	 	 	 
	Margin if Utilisation Percentage on the Relevant
Recalculation Date is less than 50%
	 	0.90 per cent
	 
	 	 
	Margin if Utilisation Percentage on the Relevant
Recalculation Date is 50% or more but less than or equal to
75%
	 	1.10 per cent
	 
	 	 
	Margin if Utilisation Percentage on the Relevant
Recalculation Date is more than 75%
	 	1.30 per cent

	2.	 	The margin applicable on any day for any Tranche B Loan shall be 1.70 per cent per annum.
	 
	3.	 	For the purposes of this Agreement:
	 
	 	 	“Relevant Recalculation Date” means, in relation to any day, the Recalculation Date
immediately preceding, or coinciding with, such day.
	 
	 	 	“Utilisation Percentage” means on any day, the amount (expressed as a percentage)
determined by the Agent in accordance with the following formula:

	 	 	 
	
UP = 
	A	x100
	B

	 	 	where:
	 
	 	 	“UP” is the relevant amount (expressed as a percentage) to be determined:
	 
	 	 	“A” is the aggregate Dollar Amount of all Tranche A Loans and all outstanding Letters of
Credit on that day; and
	 
	 	 	“B” is the lesser of (i) the Tranche A Borrowing Base Amount applicable on that day plus
$60,000,000 minus the Dollar Amount of all outstanding Letters of Credit (other than any
Eligible Letter of Credit) and (ii) the Aggregate Commitments on that day.

177

 

Exhibit 10.1

SCHEDULE 15

DIRECTORS CERTIFICATE

From: Endeavour International Holding B.V.

To: [Agent]

Dated:

Dear Sirs

Secured Revolving Credit Facility Agreement dated [       ] between, among others,
Endeavour International Corporation, BNP Paribas and the Governor and Company of the Bank of
Scotland (as amended from time to time) (the “Agreement”)

	3.	 	We refer to the Agreement. This is a Director’s Certificate pursuant to Clause 23.24
(Director’s Certificate). Terms defined in the Agreement have the same meaning in this
Director’s Certificate unless given a different meaning in this Director’s Certificate.

	4.	 	We represent and warrant, having made due enquiry and on the basis of the current management
accounts and other financial information of each Obligor, that as at the Recalculation Date
immediately following the date hereof the financial condition of the Obligors is or will be
such that they will be able to perform their payment obligations falling due for payment under
the Agreement and under the Second Lien Facility during the period of six months following
that Recalculation Date;

	5.	 	We repeat the representation made under Clause 21.12 (Litigation) as defined in the Agreement
and certify also to the best of our knowledge that there is no event, development or
circumstance imminent which could result in such representation failing to be repeated during
the period of six months after date of this letter;

	6.	 	We repeat the representation made under Clause 21.11 (Material Adverse Change) as defined in
the Agreement, and certify also to the best of our knowledge that there is no event,
development or circumstance imminent which could result in a Material Adverse Change.

	 	 	 	 	 	 	 
	 

	 	 	 	Yours faithfully
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Director	 	 
	 

	 	 	 	For Endeavour International Holding B.V.	 	 

178

 

Exhibit 10.1

	 	 	 
	SIGNATORIES
	 	 
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	ENDEAVOUR
	 	)
	INTERNATIONAL
	 	)
	CORPORATION
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	ENDEAVOUR
	 	)
	OPERATING
	 	)
	CORPORATION
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	END OPERATING
	 	)
	MANAGEMENT
	 	)
	COMPANY
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	END
	 	)
	MANAGEMENT
	 	)
	COMPANY
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	ENDEAVOUR
	 	)
	INTERNATIONAL
	 	)
	HOLDING B.V.
	 	)

1

 

Exhibit 10.1

	 	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	ENDEAVOUR
	 	)
	ENERGY
	 	)
	NETHERLANDS B.V.
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	ENDEAVOUR
	 	)
	ENERGY U.K.
	 	)
	LIMITED
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Lance Gilliland
	 
	 	)
	for and on behalf of
	 	)/s/ Don Teague
	ENDEAVOUR
	 	)
	ENERGY NORGE AS
	 	)
	 
	 	 
	SIGNED by
	 	) /s/ Kevin collonges-Duflouleur
	 
	 	) Kevin collonges-Duflouleur
	for and on behalf of
	 	)
	BNP PARIBAS
	 	)/s/ Vincent Veron
	(in all capacities in which it
	 	)Vincent Veron
	is party to this Agreement)
	 	)Vice President
	 
	 	 
	SIGNED by
	 	) /s/ Alastair Carmichael
	 
	 	)
	for and on behalf of
	 	)
	THE GOVERNOR AND
	 	)
	COMPANY OF THE BANK
	 	)
	OF SCOTLAND
	 	)
	(in all capacities in which it
	 	)
	is party to this Agreement)
	 	)

2

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