Document:

Deed of Grant of a Production Payment dated December 12, 2013

		

			 

		

		
			Exhibit 10.36
		

		
			 
		

		
			DATED 12 December 2013
		

		
			 
		

		
			 
		

		
			 
		

		
			ENDEAVOUR ENERGY UK LIMITED
		

		
			 
		

		
			 
		

		
			 
		

		
			 - and - 
		

		
			 
		

		
			 
		

		
			 
		

		
			SAND WAVES S.A.
		

		
			 
		

		
			____________________________________________________________
		

		
			DEED OF GRANT OF A PRODUCTION PAYMENT
in respect of
		

		
			United Kingdom Continental Shelf
Seaward Production Licence P.1615 (Block 15/26c) and Seaward Production Licence P.226 (Block 15/27 Area E) (the Rochelle Field)
		

		
			____________________________________________________________
		

		
			 
		

		
			 
		

		

		

		 

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		TABLE OF CONTENTS
		

		
			TABLE OF CONTENTS 
		

			
					
						

					
					
						 

				
	
					
						DEFINITIONS AND INTERPRETATIONS

					
1 
				
	
					
						GRANT OF PRODUCTION PAYMENT

					
7 
				
	
					
						SALE AND PAYMENT

					
8 
				
	
					
						TAX

					
10 
				
	
					
						MAINTENANCE OF THE LICENCES AND CONDUCT OF OPERATIONS

					
13 
				
	
					
						 RIGHT TO AUDIT

					
13 
				
	
					
						MEASUREMENT METHODS

					
14 
				
	
					
						DEVELOPMENT

					
14 
				
	
					
						CONFIDENTIALITY

					
14 
				
	
					
						NOTICES

					
14 
				
	
					
						ASSIGNMENT

					
14 
				
	
					
						GOVERNING LAW AND JURISDICTION

					
15 
				
	
					
						EXPERT DETERMINATION

					
15 
				
	
					
						GENERAL 

					
15 
				

		
			 
		

		
			 
		

		

		

		 

		

			 

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		DEED OF GRANT DATED 12 December 2013 
		

		
			BETWEEN:
		

		
			(1)ENDEAVOUR ENERGY UK LIMITED, a company incorporated in England and Wales (registered number 05030838) whose registered office is at 33rd Floor, CityPoint, One Ropemaker Street, London EC2Y 9UE (the "Grantor"); and
		

		
			(2)SAND WAVES S.A., a  public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, with its registered office at 40 Avenue Monterey, L-2163 Luxembourg, Luxembourg, having a share capital of US$50,000 and being registered with the Luxembourg trade and companies register under number B 28.967 (the "Grantee").
		

		
			RECITALS:
		

		
			(A)The Grantor has agreed to grant to the Grantee the Production Payment with respect to the proceeds of sale of any and all Petroleum produced from the area covered by the Subject Interests on and subject to the following terms and conditions.
		

		
			(B)The Grantor received the written approval of the Secretary to enter into this Agreement and grant the Production Payment on 9 August 2013. 
		

		
			IT IS AGREED:
		

			
	
			
				 1.
			

			
	
			
			DEFINITIONS AND INTERPRETATIONS

			
	
			
				 1.1
			

			
	
			
			In this Agreement, save where the context otherwise requires, the following words and expressions have the following meanings:

		
			“Agreement” means this deed of grant of a production payment between the Parties, including the Schedules.
		

		
			“Available Production” for each Relevant Period, Petroleum produced and saved during such Relevant Period from all wells situated on, produced from or allocated to the Subject Interests and to which the Grantor is entitled as at the date of this Agreement or such lesser percentage interest share as may be held by the Grantor from time to time after deduction of Petroleum which: (i) may be used in the conduct of operations during such Relevant Period; or (ii) is produced from a well pursuant to a non-consent provision in which the Grantor has not elected to participate; or (iii) is required to be delivered during such Relevant Period to persons under the forward sale, prepayment or similar arrangements entered into by the Grantor in accordance with Clause 3.7(a).  
		

		
			“Blocks” means Block 15/26c of Licence P.1615 and Block 15/27 Area E of Licence P.226.
		

		
			“BTU” means British Thermal Unit. 
		

		

		

		 

		

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		“Business Day”  means any day (other than a Saturday, Sunday or public holiday) on which banks in the City of London, United Kingdom and in New York, New York, USA are generally open for business.
		

		
			“Code” has the meaning specified in Clause 4.16.
		

		
			“Contest” has the meaning specified in Clause 4.4.
		

		
			“Conversion Rate” means the close spot mid-trade composite (London) rate for a transaction between Dollars and Pound Sterling as quoted on Bloomberg on the Relevant Date or, if no such rate is quoted, the rate quoted by an authorised dealer of foreign exchange to be selected by the Grantor and approved by the Grantee. 
		

		
			“CPDI Regulations” has the meaning specified in Clause 4.16.
		

		
			“Current Market Value” means the volume weighted average price (whether fixed or floating) per barrel or BTU actually received by the Grantor at the point of sale for its share of production and sold from its share of Petroleum allocated to the Subject Interests for the Relevant Period, provided that:
		

			
	
			
				 (a)
			

			
	
			
			the relevant contract or other agreement was negotiated and agreed to on an open market, arm’s length basis; 

			
	
			
				 (b)
			

			
	
			
			the said price actually received shall be reduced by an appropriate share of customary marketing fees and be net of VAT or similar Tax due out of the proceeds of such Petroleum sales; and

			
	
			
				 (c)
			

			
	
			
			the price per barrel or BTU received by the Grantor under any forward sale, pre-payment or other similar arrangements entered into in accordance with this Agreement or under any financial hedge shall be disregarded for the purposes of the foregoing calculation. 

		
			Where any amount received by the Grantor is not denominated in Dollars, these shall be translated at the Conversion Rate on the Relevant Date, or where the Relevant Date is not a Business Day, on the next Business Day after the Relevant Date.
		

		
			“DECC Measurement Guidance” means the Department for Energy & Climate Change Guidance Notes for Petroleum Measurement in force from time to time.
		

		
			“Deficiency Amount” for a Relevant Period, means the aggregate amount of any Shortfalls outstanding from any prior Relevant Periods plus all amounts owing pursuant to Clauses 4.1, 4.6 and 4.8(c) of this Agreement and Clause 10 of the Sale and Purchase Agreement, which shall be multiplied by nine point seven five per cent. (9.75%)  per annum accruing on such Deficiency Amount either (i) with respect to any shortfall, the Settlement Date on which such Deficiency Amount would have been paid had the Target Dollar Amount been reached; or (ii) with respect to any amount owing pursuant to Clauses 4.1, 4.6 and 4.8(c) of this Agreement and Clause 11 of the Sale and Purchase Agreement, the date on which such amount became due and payable in accordance with the terms of this Agreement or the Sale and Purchase 
		

		 

		

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		Agreement (as applicable), in each case up to the date on which such Deficiency Amount is no longer outstanding.
		

		
			 
		

		
			“Dispute” has the meaning specified in Clause 12.2.
		

		
			 
		

		
			“Dollars” or “$” means the legal tender of the United States of America.
		

		
			 
		

		
			“Effective Date” means the date of this Agreement.
		

		
			 
		

		
			“Encumbrances” means all liens, charges (whether fixed or floating), farm-in or earn-in rights, royalty interests, pledges, options, net profit interests, rights of pre-emption, mortgages or other similar third party rights securing any obligation of any person or any other type of preferential arrangement having similar effect.
		

		
			“Equivalent” means, on the date on which any forward sale, prepayment or other similar arrangement is made pursuant to Clause 3.7 and denominated in a currency other than Dollars, the amount of such currency that is equal to twenty five million Dollars ($25,000,000), calculated at the close spot mid-trade composite (London) rate for a transaction between Dollars and such currency as quoted on Bloomberg on such date or, if no such rate is quoted, the rate quoted by an authorised dealer of foreign exchange to be selected by the Grantor and approved by the Grantee.
		

		
			“Existing Security” means the security created pursuant to the following security documents: 
		

			
	
			
				 (a)
			

			
	
			
			a debenture dated 12 April 2012 between the Grantor and Cyan Partners, LP and a supplemental agreement relating to the debenture dated 31 May 2012 between the Grantor and Cyan Partners, LP;

			
	
			
				 (b)
			

			
	
			
			the English security agreement entered into between the Grantor and Cidoval S.à r.l. originally dated 30 April 2013 and subsequently amended and restated on 21 May 2013; and

			
	
			
				 (c)
			

			
	
			
			the Deed of Reassignment and Charge entered into between the Grantor and MC Admin Co LLC dated as of 29 August 2013.

		
			in each case, as amended, restated, modified and/or supplemented from time to time.
		

		
			“Maximum Percentage” means:
		

			
	
			
				 (a)
			

			
	
			
			forty per cent (40%) of Available Production for the period through and including the first six (6) Settlement Dates;

			
	
			
				 (b)
			

			
	
			
			and for the period thereafter:

			
	
			
				 (A)
			

			
	
			
			if the Second Consent has not been obtained on or before the Second Consent Deadline Date,  fifty per cent. (50%) of Available Production; and

		 

		

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				 (B)
			

			
	
			
			if the Second Consent has been obtained on or before the Second Consent Deadline Date, ninety per cent. (90%) of Available Production, 

		
			in each case being the maximum percentage of Available Production to which the Grantee shall be entitled for each Relevant Period.  
		

		
			“MC Admin Co LLC” means MC Admin Co LLC, a limited liability company incorporated and registered in the State of Delaware.
		

		
			“New Pearl Reimbursement Agreement” has the meaning given to such term in the Security Agreement (as defined in the Sale and Purchase Agreement).
		

		
			“Party” or “Parties” means a party or parties to this Agreement.
		

		
			“Payee” has the meaning specified in Clause 4.11.
		

		
			“Payor” has the meaning specified in Clause 4.11.
		

		
			“Permitted Encumbrances” means the following:
		

		
			(a)Encumbrances arising under the Licence Interest Documents;
		

		
			(b)liens for taxes and royalties payable to HMRC pursuant to or in connection with a Licence;
		

		
			(c)      repairmen’s, mechanic’s, contractor’s or other similar liens or charges arising in the ordinary course of business;
		

		
			(d)Existing Security; and
		

		
			(e)  Encumbrances arising under the Production Payment Security Documents.
		

		
			“Petroleum” has the meaning ascribed to it under the Licences.
		

		
			“Pound Sterling” or “£” means the legal tender of the United Kingdom of Great Britain and Northern Ireland.
		

		
			“Production Payment” has the meaning ascribed to it in Clause 2.1.
		

		
			“Production Payment Percentage” for each Relevant Period, means a percentage of Available Production for such Relevant Period up to the Maximum Percentage, which shall be calculated as follows:
		

		
			{(Target Dollar Amount for the Settlement Date falling immediately following such Relevant Period + Deficiency Amount) / Current Market Value } * 100
		

		
			Available Production
		

		
			as may be adjusted in accordance with Clauses 4.1, 4.6, and 4.8(c) of this Agreement and Clause 10.12 of the Sale and Purchase Agreement.
		

		

		

		 

		

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		“Production Payment Security Documents” means the documents listed in paragraphs (b) to (e) (inclusive) of the definition of “Completion Documents” set out in the Sale and Purchase Agreement.
		

		
			“Purchase Price” means the aggregate of the Purchase Price (as defined in the Sale and Purchase Agreement), and any other further payments from time to time made by the Grantee to the Grantor in consideration for an increase in the value of the Production Payment.
		

		
			“Relevant Date” means the date on which a payment is actually received by the Grantor in respect of its share of Petroleum allocated to the Subject Interests. 
		

		
			“Relevant Period” means a period up to but not including a Settlement Date. For the avoidance of doubt, the first Relevant Period shall be the period from and including the Effective Date up to but not including the first Settlement Date, with the following Relevant Period being from and including the first Settlement Date up to but not including the next Settlement Date.
		

		
			“Relevant Schedule” means:
		

			
	
			
				 (a)
			

			
	
			
			from the date hereof until the Second Consent Deadline Date, Schedule 2,

			
	
			
				 (b)
			

			
	
			
			on and from the Second Consent Deadline Date:

			
	
			
				 (i)
			

			
	
			
			if the Second Consent has been obtained pursuant to Clause 2.8, Schedule 2;

			
	
			
				 (ii)
			

			
	
			
			if the Second Consent has not been obtained pursuant to Clause 2.8, Schedule 2A.

		
			“Revolving Credit Agreement” has the meaning given to such term in the Security Agreement (as defined in the Sale and Purchase Agreement).
		

		
			“Sale and Purchase Agreement” means the sale and purchase agreement between the Parties dated 12 December 2013.
		

		
			“Second Consent” has the meaning given to it in Clause 2.8.
		

		
			“Second Consent Deadline Date” means the date falling thirty (30) days after the Completion Date.
		

		
			“Secretary” means the Secretary of State for Energy & Climate Change, or any other person discharging the function of the Secretary of State in respect of the Licences.
		

		
			“Settlement Date” means:
		

		
			 
		

			
	
			
				 (a)
			

			
	
			
			from the date hereof until the Second Consent Deadline Date, each date set out in Schedule 1 as “Settlement Dates”,

			
	
			
				 (c)
			

			
	
			
			on and from the Second Consent Deadline Date:

		 

		

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				 (i)
			

			
	
			
			if the Second Consent has been obtained pursuant to Clause 2.8, each date set out in Schedule 1 as “Settlement Dates”; and

			
	
			
				 (ii)
			

			
	
			
			if the Second Consent has not been obtained pursuant to Clause 2.8, each date set out in Schedule 1A as “Settlement Dates”; and 

			
	
			
				 (d)
			

			
	
			
			only to the extent that there exists a Deficiency Amount following the final Settlement Date referred to in paragraph (a) or (b) (as applicable) above, each succeeding 31 March, 30 June, 30 September and 31 December thereafter until such time as the Deficiency Amount is reduced to zero.

		
			“Shortfall” means an amount, if any, by which the proceeds from the sale of Petroleum for a Relevant Period delivered to the Grantee is less than the Target Dollar Amount for such Relevant Period. 
		

		
			 
		

		
			“Subsidiary”  has the meaning given to such term in the Revolving Credit Agreement.
		

		
			 “Target Dollar Amount” shall:
		

		
			 
		

			
	
			
				 (a)
			

			
	
			
			for each Settlement Date specified in paragraph (a) or (b) (as applicable) of such definition, means the Dollar Amount set out next to the relevant Settlement Date in Schedule 1 or, if the Second Consent has not been obtained on or prior to the Second Consent Deadline Date, Schedule 1A, next to the relevant Settlement Date; and

			
	
			
				 (d)
			

			
	
			
			for each Settlement Date set out in paragraph (c) of such definition, be deemed to be zero. 

		
			“Tax Assessment” has the meaning specified in Clause 4.4.
		

		
			 
		

		
			“Termination Amount” means the amount specified as the “Termination Amount” in Schedule 1 or,  if the Second Consent has not been obtained on or prior to the Second Consent Deadline Date, Schedule 1A.
		

		
			 
		

		
			“Unpaid Amount” has the meaning specified in Clause 3.2.
		

		
			 
		

		
			“VAT” means value added tax imposed under the Value Added Tax Act 1994.
		

		
			 
		

			
	
			
				 1.2
			

			
	
			
			Unless otherwise defined herein, capitalised terms shall have the meaning attributable to such terms in the Sale and Purchase Agreement.

			
	
			
				 1.3
			

			
	
			
			All references to Clauses, Schedules and Recitals are, unless otherwise expressly stated, references to clauses and schedules of and recitals to this Agreement.

			
	
			
				 1.4
			

			
	
			
			The table of contents and headings in this Agreement are inserted for convenience only and shall not affect the meaning or construction of this Agreement.

			
	
			
				 1.5
			

			
	
			
			Any reference to any statute or statutory instrument in this Agreement shall be a reference to the same as amended, supplemented or re-enacted from time to time.

		 

		

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				 1.6
			

			
	
			
			Unless the context otherwise requires, reference to the singular shall include the plural and vice versa, reference to any gender shall include all genders, and references to persons shall include natural persons, bodies corporate, unincorporated associations, partnerships, government or state (whether or not having separate legal personality).

			
	
			
				 1.7
			

			
	
			
			Unless the context otherwise requires, references to documents and agreements shall be construed as references to those documents or agreements as may have been amended, supplemented and/or novated from time to time.

			
	
			
				 1.8
			

			
	
			
			In the event of any inconsistency between the main body of this Agreement and the Sale and Purchase Agreement in respect of the subject matter hereof, this Agreement shall prevail.

			
	
			
				 1.9
			

			
	
			
			References in this Agreement to the words "include", "including" and "other" shall be construed without limitation.

			
	
			
				 2.
			

			
	
			
			GRANT OF PRODUCTION PAYMENT

			
	
			
				 2.1
			

			
	
			
			In consideration for receipt of the Purchase Price, as of and from the Effective Date the Grantor hereby grants to the Grantee a production payment equal to the Production Payment Percentage of the proceeds of the sale of Available Production from the Subject Interests (the “Production Payment”), free and clear of any and all Encumbrances (except the Permitted Encumbrances) and all costs, expenses and deductions whatsoever, including all development, production, operational and Decommissioning Liabilities.   

			
	
			
				 2.2
			

			
	
			
			As and when the aggregate Production Payment paid by the Grantor to the Grantee in free and clear funds equals the Termination Amount, no Deficiency Amount is outstanding and no other amount is due and payable or will become due and payable on the last day of the current Relevant Period under or in connection with this Agreement or the production of Petroleum permanently ceases from the Subject Interests (whichever is the earlier), the rights and obligations under this Agreement shall immediately cease and determine and any and all security or credit support arrangements entered into in connection with this Agreement shall also cease and determine.

			
	
			
				 2.3
			

			
	
			
			For the avoidance of doubt, the Production Payment is a non-operating, non-expense and non-recourse bearing right and interest which does not include, is not subject to, and does not carry with it, any obligations, liabilities or burdens in relation to the Licences, the Rochelle UUOA or the Subject Interests other than as expressly set out in this Agreement and the Sale and Purchase Agreement.

			
	
			
				 2.4
			

			
	
			
			The Grantee shall look solely to the proceeds from the sale of Available Production attributable to the Production Payment Percentage under this Agreement for satisfaction and discharge of all amounts due pursuant to such Production Payment, and the Grantor shall not be personally liable for the payment and discharge thereof. 

			
	
			
				 2.5
			

			
	
			
			Nothing in Clause 2.4 above, shall:

		 

		

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				 (a)
			

			
	
			
			relieve the Grantor of its liability to account to the Grantee for the Production Payment Percentage of the proceeds of sale of Available Production which the Grantor received from the sale of such Available Production and which the Grantor fails to deliver to the Grantee in accordance with this Agreement; 

			
	
			
				 (b)
			

			
	
			
			relieve the Grantor of any obligation to respond in damages for breach of any of the warranties, covenants or other obligations set out in this Agreement and agreements entered into in connection herewith; 

			
	
			
				 (c)
			

			
	
			
			relieve the Grantor of its liability to make direct payment to the Grantee of any and all amounts falling due under and in accordance with Clause 3.2; and

			
	
			
				 (d)
			

			
	
			
			shall prevent the Grantee from being able to enforce its security in accordance with the terms of the Production Payment Security Documents and to look to the proceeds of such security for satisfaction and discharge of any and all amounts owing hereunder and in connection herewith, subject to the principle in Clause 2.4 that the Grantee shall only be entitled to enforce the security in order to recover amounts with respect to the proceeds from the sale of Available Production attributable to the Production Payment Percentage to which it would have been entitled under this Agreement.

			
	
			
				 2.6
			

			
	
			
			The Production Payment on Petroleum produced and saved from or allocated to the Subject Interests shall not be taken in kind by the Grantee and shall be payable only in money.

			
	
			
				 2.7
			

			
	
			
			All payments made pursuant to the terms of this Agreement, whether in respect of a Production Payment or otherwise, shall be made in Dollars.

			
	
			
				 2.8
			

			
	
			
			The Grantor shall use reasonable efforts to procure the written approval of the Secretary for the terms of the Production Payment to permit the maximum percentage of Available Production to which the Grantee shall be entitled pursuant to the terms of this Agreement, for all periods following the sixth (6th)  Settlement Date, to equal ninety per cent. (90%) of Available Production (the “Second Consent”).  The Grantor shall promptly deliver to the Grantee the request for the Second Consent and the response from the Secretary and any other written correspondence between the Secretary and the Grantor related to the Second Consent.

			
	
			
				 3.
			

			
	
			
			SALE AND PAYMENT

			
	
			
				 3.1
			

			
	
			
			With effect on and from the date hereof, the Grantor will be responsible for the marketing and sale of Available Production attributable to the Production Payment at the Current Market Value and the Grantor will disburse to the Grantee an amount equal to the sale proceeds thereof multiplied by the Production Payment Percentage to be paid within twenty (20) days after the end of each Relevant Period, provided that a sale has been made in such Relevant Period, by wire transfer to such account as shall be notified in writing by the Grantee to the Grantor. 

			
	
			
				 3.2
			

			
	
			
			If the Grantor fails to pay any amount payable by it in accordance with Clause 3.1 above on its due date (the “Unpaid Amount”), it shall become liable to pay forthwith 
		

		 

		

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			an additional amount equivalent to 2% (two per cent.) per annum on such Unpaid Amount, payable quarterly in arrears.

			
	
			
				 3.3
			

			
	
			
			At the time of payment, the Grantor shall provide to the Grantee a detailed statement showing the quantity and kind of Petroleum produced from or allocated to the Subject Interests in the Relevant Period, the Current Market Value and the Conversion Rates, together with a calculation of the Production Payment for such Relevant Period and any other information that the Grantee and/or the Grantor shall deem reasonably necessary to confirm the Grantee's entitlement.

			
	
			
				 3.4
			

			
	
			
			The Grantor shall ensure that all proceeds it receives from or in connection with the sale of its share of Petroleum allocated to the Subject Interests for each Relevant Period is deposited directly by the relevant contract counterparties into the applicable Rochelle Payment Account.

			
	
			
				 3.5
			

			
	
			
			If the Grantor shall wish to sell any Petroleum attributable to the Production Payment for less than the Current Market Value, the Parties shall agree upon the fair market value at which such Petroleum may be sold and such fair market value shall be adopted (and shall replace the Current Market Value) for the purposes of quantifying the Production Payment relating to such Available Production. 

			
	
			
				 3.6
			

			
	
			
			If the Parties are unable to agree upon the fair market value or on a mechanism for determining the same pursuant to Clause 3.5 within seven (7) days, the matter may be referred by the Grantee to an independent expert pursuant to Clause 13, provided that in making such determination the independent expert will have regard to the principle that the Grantee should not be required to accept any price or mechanism if and to the extent that the application of the same would result in the Grantee receiving a lower price for the Production Payment than would otherwise have been the case if the same were sold on an open market, arm's length basis.

			
	
			
				 3.7
			

			
	
			
			The Parties hereby agree that the Grantor shall be entitled to enter into any forward sale, pre-payment or other similar arrangements without the prior consent of the Grantee provided that at any one time the aggregate Dollar value, based on the price actually payable under the relevant transaction, of all Petroleum required to be delivered by the Grantor to counterparties and outstanding under all such forward sale, pre-payment or other similar arrangements shall not be in excess of:

			
	
			
				 (a)
			

			
	
			
			twenty-five million Dollars ($25,000,000) or, without duplication, the Equivalent in aggregate in respect of the Subject Interests; and 

			
	
			
				 (b)
			

			
	
			
			twenty-five million Dollars ($25,000,000) or, without duplication, the Equivalent in aggregate in respect of the other assets of the Grantor,

		
			at any one time other than with the prior written consent of the Grantee.
		

		 

		

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				 4.
			

			
	
			
			TAX

		
			Tax indemnity
		

			
	
			
				 4.1
			

			
	
			
			Subject to Clause 4.2, if the Grantee suffers a UK tax liability as a result of entering into the Sale and Purchase Agreement or the transactions contemplated by this Agreement, the Grantor shall indemnify the Grantee for such UK tax liability (including any interest and penalties), such indemnity to be satisfied by way of an increase in the Production Payment Percentage so that, overall, the Grantee is in no better or worse position than it would have been had no such UK tax liability been imposed.

			
	
			
				 4.2
			

			
	
			
			Clause 4.1 above shall not apply: 

			
	
			
				 (a)
			

			
	
			
			to the extent the Tax liability arises as a result of:

			
	
			
				 (i)
			

			
	
			
			the Grantee being resident for tax purposes in the UK; or

			
	
			
				 (ii)
			

			
	
			
			the Grantee having a permanent establishment in the UK (other than a permanent establishment which arises solely as a result of the transactions contemplated by this Agreement); or

			
	
			
				 (iii)
			

			
	
			
			the Grantee becoming resident for tax purposes in any jurisdiction other than Luxembourg other than as a result of the capitalisation or capital structure of the Grantee; or  

			
	
			
				 (b)
			

			
	
			
			to the extent the tax liability would not have arisen had the Grantee complied with its obligations under Clause 4.12 or Clause 4.13.  

			
	
			
				 4.3
			

			
	
			
			Any increase in the Production Payment Percentage pursuant to Clause 4.1 shall be satisfied on the Settlement Date immediately following the date on which the tax in question becomes recoverable by HMRC.  

			
	
			
				 4.4
			

			
	
			
			In the event the Grantor is required to indemnify the Grantee pursuant to Clause 4.1, the Grantee shall take such action, at the sole cost and expense of the Grantor, as the Grantor may reasonably request to avoid, dispute, resist, appeal, compromise or defend any assessment (a “Contest”) of the Grantee to tax by HMRC (the “Tax Assessment”).  The Grantor shall have the right to control any proceedings taken in connection with the Tax Assessment and agrees to pay directly to the taxing authority any required payments of tax, interest and penalties that are required to be paid in connection with, or as a precondition to, such Contest. The Grantee shall provide the Grantor with copies of all correspondence and documentation relating to the Tax Assessment and such other information, assistance and access to records and personnel as it reasonably requires.  The Grantee shall procure that no tax claim, action or issue in respect of which the Grantor could be required to make a payment under this Agreement is settled or otherwise compromised without the Grantor’s prior written consent (not to be unreasonably withheld).

			
	
			
				 4.5
			

			
	
			
			Notwithstanding the foregoing, the Grantee shall not be required to Contest or continue any Contest of a Tax Assessment if:

		 

		

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				 (a)
			

			
	
			
			the Grantee considers (acting reasonably) that it will not be properly reimbursed for costs and expenses already incurred in connection with the Contest of such Tax Assessment;

			
	
			
				 (b)
			

			
	
			
			the Grantor has not furnished the Grantee with written advice from a law firm practicing in relation to English law in form and substance reasonably satisfactory to the Grantee to the effect that there is a reasonable basis for the Contest; or

			
	
			
				 (c)
			

			
	
			
			the Grantee considers, in its reasonable discretion, such Contest might materially prejudice it or any MC Admin Co LLC affiliated entity.

			
	
			
				 4.6
			

			
	
			
			The Grantor shall indemnify the Grantee for its reasonable costs and expenses properly incurred in connection with any such action or proceedings as are referred to in Clause 4.4, such indemnity to be satisfied by way of an increase in the Production Payment Percentage.

		
			Withholding tax and gross up
		

			
	
			
				 4.7
			

			
	
			
			All sums payable under this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, save only as provided in this Agreement or as required by law.

			
	
			
				 4.8
			

			
	
			
			Subject to Clause 4.10, if the Grantor becomes aware that any deduction or withholding is required by law from any payment under this Agreement, then:

			
	
			
				 (a)
			

			
	
			
			the Grantor shall notify the Grantee of the requirement to deduct or withhold an amount; 

			
	
			
				 (b)
			

			
	
			
			the Grantor and the Grantee shall use reasonable endeavours so that payment can be made without such a withholding or deduction;

			
	
			
				 (c)
			

			
	
			
			in the event a withholding or deduction is required, the Grantor and the Grantee shall agree to increase the Production Payment Percentage so that, overall, the Grantee is in no better or worse position than it would have been had no withholding or deduction been imposed.

			
	
			
				 4.9
			

			
	
			
			To the extent that any deduction or withholding in respect of which an additional amount has been paid under Clause 4.8 above results in the Grantee obtaining a relief (all reasonable endeavours having been used to obtain such relief), the Grantee shall pay to the Grantor, within ten (10) Business Days of obtaining the benefit of the relief, an amount equal to the lesser of the value of the relief obtained and the additional sum paid under Clause 4.8. The Grantor, upon request of the Grantee, shall repay to the Grantee the amount paid to the Grantor pursuant to this Clause 4.9 (plus any interest, penalties or other charges imposed by the taxing authority) in the event that the Grantee is required to repay such relief.

			
	
			
				 4.10
			

			
	
			
			Clause 4.8(c) shall not apply to the extent that the deduction or withholding would not have arisen but for an assignment by the Grantee of any of its rights under this Agreement.

		

		

		 

		

			11

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		FATCA
		

			
	
			
				 4.11
			

			
	
			
			Any payor of an amount under this Agreement (the “Payor”), if requested by the payee of such amount (the “Payee”), shall deliver such other documentation prescribed by applicable law or reasonably requested by the Payor as will enable the Payor to determine whether or not the Payee is subject to United States backup withholding or information reporting requirements or obligations to deduct or withhold amounts required by sections 1471 to 1474 of the US Internal Revenue Code (or any associated regulations or other official guidance, or any treaty, law, regulation or other official guidance enacted in any other jurisdiction which facilitates the implementation of those sections).  

		
			Co-operation
		

			
	
			
				 4.12
			

			
	
			
			The Parties shall co-operate in completing any procedural formalities which the Grantor concludes is necessary in relation to obtaining relief under any applicable double taxation treaty in relation to any payments made under this Agreement which are subject to UK taxation. 

			
	
			
				 4.13
			

			
	
			
			If requested by the Grantor, the Grantee shall use all reasonable endeavours to satisfy and maintain its tax residence for the purposes of any applicable double taxation treaty between the UK and the jurisdiction of incorporation of the Grantee, provided that the Grantee shall not be required to do so if it would cause financial loss for it, MC Admin Co LLC or any MC Admin Co LLC affiliated entity (unless the Grantor indemnifies the Grantee in respect of such loss). If the Grantee considers that maintaining its tax residence in such manner would cause such financial loss, the Grantee shall notify the Grantor.

		
			VAT
		

			
	
			
				 4.14
			

			
	
			
			All sums payable under or pursuant to this Agreement are (unless expressly stated otherwise) exclusive of any applicable VAT which shall be payable upon receipt of a valid VAT invoice.  

		
			General
		

			
	
			
				 4.15
			

			
	
			
			Unless otherwise provided, each Party shall be responsible for reporting and discharging its own tax measured by the income, profit or gains of that Party.

		
			Intention of the Parties
		

			
	
			
				 4.16
			

			
	
			
			It is the intention of the Parties that the Production Payment be treated as “carve-out production payment” within the meaning of section 636(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and a “contingent payment debt instrument” that is subject to the “non-contingent bond method” within the meaning of Treasury Regulation Section 1.1275-4(b) (the “CPDI Regulation”).

		
			Reporting
		

		 

		

			12

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

			
	
			
				 4.17
			

			
	
			
			The “issue price”, “comparable yield” and “projected yield”, each as defined in the CPDI Regulation, are set forth in the Relevant Schedule.

			
	
			
				 4.18
			

			
	
			
			Subject to Clause 2.4, the indemnities contained in this Agreement shall survive in full force for a period of six (6) years after the termination hereof in accordance with Clause 2.2.

			
	
			
				 5.
			

			
	
			
			MAINTENANCE OF THE LICENCES AND CONDUCT OF OPERATIONS

			
	
			
				 5.1
			

			
	
			
			The Grantor shall comply with all the covenants and conditions contained in the Licences and the JOAs and shall not exercise any right to surrender, determine, wholly relinquish, terminate or abandon the Subject Interests or sell, transfer or otherwise dispose of the whole or any portion of the Subject Interests other than with the prior consent of the Grantee (such consent not to be unreasonably withheld or delayed).

			
	
			
				 5.2
			

			
	
			
			The Grantor shall take all reasonable and practical steps to enforce its rights and pursue any and all claims and remedies under the JOAs and in respect of the Licences and shall exercise its material discretions under the JOAs, all as a non-operator, consistent with good United Kingdom North Sea oil field practice.

			
	
			
				 5.3
			

			
	
			
			To the extent that the Grantor is entitled to influence operations carried out in the relevant Blocks under the JOAs or the area covered by the Rochelle UUOA, the Grantor shall carry on (and shall cause the relevant operator under the JOAs to carry on) all operations in such areas diligently and in a good and workmanlike manner consistent with good United Kingdom North Sea oil field practice.  However, the nature and extent of such operations shall be determined by the Grantor at its sole discretion.

			
	
			
				 6.
			

			
	
			
			RIGHT TO AUDIT

			
	
			
				 6.1
			

			
	
			
			The Grantee shall have the right for a period of twelve (12) months after the end of each calendar year, during reasonable working hours, to audit those books and records maintained by the Grantor insofar as they relate to any matter or item required to determine the accuracy of any statements or payments made with respect to the Production Payment during the preceding calendar year.  Such audit shall be at the sole expense of the Grantee who shall give no less than thirty (30) days’ notice to the Grantor of its intention to conduct such an audit. 

			
	
			
				 6.2
			

			
	
			
			At the conclusion of the audit, the Parties shall use all reasonable endeavours to settle all or any issues arising from the audit within ninety (90) days after the conclusion of each audit.

			
	
			
				 6.3
			

			
	
			
			The Parties shall have the right, on written notice given to the other Party, to refer for expert determination pursuant to Clause 13 any matters which cannot be resolved within such ninety (90) day period.

			
	
			
				 6.4
			

			
	
			
			The Grantor shall, subject to all obligations of confidentiality to which is bound, including under the Licences and the JOAs, provide copies of the following to the Grantee as soon as reasonably practicable:

		 

		

			13

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

			
	
			
				 (a)
			

			
	
			
			estimates of Available Production in the forthcoming month and expected prevailing market prices during said month;

			
	
			
				 (b)
			

			
	
			
			material notices received from (i) the Secretary in relation to the Licences and (ii) any other participant under the JOAs; and

			
	
			
				 (c)
			

			
	
			
			all information relating to any event or proceeding which is expected to (i) have a material adverse effect on the Subject Interests or (ii) cause a cessation in Available Production.

			
	
			
				 7.
			

			
	
			
			MEASUREMENT METHODS

			
	
			
				 7.1
			

			
	
			
			Subject to Clause 7.2, for the proper measurement of all Petroleum produced and saved from the Subject Interests, the Grantor shall use methods consistent with good oilfield practice as set out in the DECC Measurement Guidance.

			
	
			
				 7.2
			

			
	
			
			The Grantor may use alternative techniques to those identified in the DECC Measurement Guidance provided that they can be shown to give a similar or greater level of accuracy and reliability and provided that the proposed method of measurement is acceptable to the Department for Energy & Climate Change.

			
	
			
				 8.
			

			
	
			
			DEVELOPMENT

		
			Save for the obligations of the Grantor expressly set out in Clauses 5.2 and 5.3, the Grantor shall be under no obligation to the Grantee to develop the Subject Interests or any part thereof or to produce Petroleum which may be within, upon or under the Subject Interests.
		

			
	
			
				 9.
			

			
	
			
			CONFIDENTIALITY

		
			The provisions of clause 8 of the Sale and Purchase Agreement shall be incorporated into this Agreement mutatis mutandis.
		

			
	
			
				 10.
			

			
	
			
			NOTICES

		
			The provisions of clause 11 of the Sale and Purchase Agreement shall be incorporated into this Agreement mutatis mutandis.
		

			
	
			
				 11.
			

			
	
			
			ASSIGNMENT

			
	
			
				 11.1
			

			
	
			
			Subject to Clause 11.2, neither Party may assign, or grant any Encumbrance (other than any Encumbrances granted by the Grantee to its investors) over or deal in any way with any of its rights under this Agreement, without the prior written consent of the other Party (such consent not to unreasonably withheld or delayed).

			
	
			
				 11.2
			

			
	
			
			In the event that the Grantor sells, transfers or otherwise disposes of the whole or any part of the Subject Interests and such sale, transfer or disposal has been consented to by the Grantee pursuant to Clause 5.1, the Parties shall in good faith and using all reasonable endeavours agree upon a corresponding proportion of the rights, liabilities and obligations under this Agreement which shall be transferred to and assumed by 
		

		 

		

			14

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

			the purchaser. The Grantee shall, without warranty or representation and at the expense of the Grantor, execute (i) such documents and agreements as may be required to novate the released obligations to the purchaser of the Subject Interests (or part thereof) and (ii) any and all necessary documents required to unconditionally release the Grantor and each of its Affiliates from any security or credit support obligations granted in connection with such released obligations, so that the Grantor can transfer the Subject Interests (or part thereof) to the purchaser free and clear of all Encumbrances. 

			
	
			
				 12.
			

			
	
			
			GOVERNING LAW AND JURISDICTION

			
	
			
				 12.1
			

			
	
			
			This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

			
	
			
				 12.2
			

			
	
			
			Subject to Clause 13, the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”) and the Parties agree that the courts of England are the most appropriate and convenient forum to settle Disputes and accordingly no Party will argue to the contrary.

			
	
			
				 13.
			

			
	
			
			EXPERT DETERMINATION

			
	
			
				 13.1
			

			
	
			
			In the event of a request for expert determination pursuant to either Clause 3.6 or Clause 6.3, each matter of dispute shall be finally resolved and determined by a mutually acceptable partner in the London office of a leading international firm of chartered accountants, which individual shall have not less than ten (10) years of experience in the United Kingdom North Sea oil and gas industry.  If the Parties are unable to agree such appointment within a period of thirty (30) days after the date of any referral by the relevant Party, then either Party may request in writing such appointment be made by the President for the time being of the Institute of Chartered Accountants for England and Wales.  

			
	
			
				 13.2
			

			
	
			
			Any such independent chartered account appointed hereunder shall act as an expert and not as an arbitrator.  The Parties shall cooperate fully with any such independent chartered accountant and for this purpose shall make available to such independent chartered accountant all such books, records and statements of account as he or she may reasonably require in order to reach a determination hereunder.  The decision of the independent chartered accountant shall be given in writing within sixty (60) days after the date of his or her appointment and, in the absence of fraud, mistake of fact or law or other manifest error, will be final and binding on the Parties.  The costs of the independent chartered accountant shall be borne by the Parties in such proportion as the independent chartered accountant shall determine and in the absence of such determination shall be borne equally.

			
	
			
				 14.
			

			
	
			
			GENERAL

			
	
			
				 14.1
			

			
	
			
			The Parties shall, from time to time and at all times, do all such further acts and execute and deliver all such further deeds and documents as shall be reasonably 
		

		 

		

			15

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

			required by the other Party in order to fully perform and carry out the terms of this Agreement.

			
	
			
				 14.2
			

			
	
			
			This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and permitted assigns.

			
	
			
				 14.3
			

			
	
			
			No supplement to or modification of any provision of this Agreement shall be binding unless executed in writing by each Party.

			
	
			
				 14.4
			

			
	
			
			No waiver by either Party of any breach of a provision of this Agreement shall be binding unless made expressly in writing.  Any such waiver shall relate only to the breach to which it expressly relates and shall not apply to any subsequent or other breach.

			
	
			
				 14.5
			

			
	
			
			This Agreement, the Sale and Purchase Agreement and the Completion Documents replace and supersede any and all previous agreements, whether written or oral, between the Parties with respect to the Subject Interests insofar as such agreements pertain to the payment to the Grantee by the Grantor of the Production Payment.

			
	
			
				 14.6
			

			
	
			
			Nothing in this Agreement shall be construed as creating a partnership, association or trust of any kind or as imposing any partnership duty, liability or obligation.

			
	
			
				 14.7
			

			
	
			
			If any provision of this Agreement (or part of a provision) is found by any court or administrative body of competent jurisdiction to be invalid, unenforceable or illegal, the other provisions shall remain in force.  If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to give effect to the commercial intention of the Parties.

			
	
			
				 14.8
			

			
	
			
			The operation of the Contracts (Rights of Third Parties) Act 1999 is hereby excluded and no term of this Agreement is intended to be enforceable by any person who is not a party to this Agreement, notwithstanding that any such term of this Agreement may purport to confer, or may be construed as conferring any benefit on such person and irrespective of whether such person is identified in this Agreement.  

			
	
			
				 14.9
			

			
	
			
			This Agreement may be executed in any number of counterparts, each of which is an original and which together have the same effect as if each Party had signed the same document, provided, however, that none of the counterparts will be effective until both Parties have executed a counterpart hereof.  

			
	
			
				 14.10
			

			
	
			
			The Grantor shall, on demand, pay to the Grantee the amount of all costs and expenses (including legal fees) incurred by the Grantee in connection with the enforcement of or preservation of any rights under this Agreement.

			
	
			
				 14.11
			

			
	
			
			If, at any time on or after the date of this Agreement, EIC, the Grantor or any of their Subsidiaries grants or has granted security over any of their respective rights, interests or property to secure the Seller’s Grantor’s obligations under the Revolving Credit Agreement and/or the New Pearl Reimbursement Agreement (including, without limitation, pursuant to Section 7.18 of the Revolving Credit Agreement or Section 7.18 of the New Pearl Reimbursement Agreement); which rights, interests and 
		

		 

		

			16

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

			property are not subject to security granted in favour of Grantee to secure the obligations of Grantor hereunder, the Grantor shall, or shall procure that, concurrently therewith EIC, the Grantor or such Subsidiary (as applicable) grants security in respect of the same rights, interests and property to Grantee to secure the obligations of Grantor hereunder. Such security shall be granted pursuant to security agreements, mortgages, deeds of trust or other documents, instruments and agreements which are in substantially the same form (mutatis mutandis) as the security agreements, mortgages, deeds of trust or other documents, instruments and agreements pursuant to which security is granted to secure the obligations under the Revolving Credit Agreement and/or the New Pearl Reimbursement Agreement, except such security may vary as to lien priority. Any collateral pledged to the Grantee in accordance with this Section 14.11 may be disposed of, and the lien thereon released, pursuant to provisions which are substantially the same as those set forth in Section 23(Termination)  of the New York law security agreement described in paragraph (d) of the definition of “Completion Documents” set out in the Sale and Purchase Agreement or clause 17 of the Security Agreement (as defined in the Sale and Purchase Agreement).

		
			 
		

		
			 
		

		

		

		 

		

			17

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		AS WITNESS WHEREOF this Agreement has been executed and delivered as a deed by the Parties on the day and year first above written.
		

			
					
						EXECUTED and DELIVERED
as a Deed for and on behalf of:
ENDEAVOUR ENERGY UK LIMITED

					
						acting by Catherine Stubbs, a director of ENDEAVOUR ENERGY UK LIMITED

					
					
						 

					
						/s/ Catherine L. Stubbs  (signature)

				
	
					
						In the presence of: 

					
						/s/ Shannon Miller 

					
						Signature of Witness

					
						 

					
						Shannon Miller 

					
						Name of Witness

					
						 

					
						811 Main St., Ste. 2100, Houston, TX  77002

					
						Address of Witness

					
						 

					
						Executive Assistant

					
						Occupation of Witness

					
						 

					
					
						 

				
	
					
						 

					
					
						 

				

		

		

		 

		

			18

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		
		

			
					
						EXECUTED and DELIVERED
as a deed by:
SAND WAVES S.A. in accordance with the laws of the jurisdiction of its incorporation, in the presence of:

					
					
						 

					
						/s/ G.A van Huren /s/ S.P. Murray (signature)

				

		
			 
		

		
			 
		

		
			/s/ Sebastien Gaddini 
		

		
			Signature of Witness
		

		
			 
		

		
			Sebastien Gaddini 
		

		
			Name of Witness
		

		
			 
		

		
			40, avenue Monterey L-2163 Luxembourg
		

		
			Address of Witness
		

		
			 
		

		
			Principal Relationship Manager
		

		
			Occupation of Witness
		

		
			 
		

		

		

		 

		

			19

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		
		

		
			Schedule 1
		

			
					
						Settlement Date

					
					
						Target Dollar Amount ($)

				
	
					
						31-Mar-14

					
					
						1,571,354.17

				
	
					
						30-Jun-14

					
					
						1,428,940.97

				
	
					
						30-Sep-14

					
					
						1,414,722.22

				
	
					
						31-Dec-14

					
					
						1,393,958.33

				
	
					
						31-Mar-15

					
					
						1,361,458.33

				
	
					
						30-Jun-15

					
					
						1,346,788.19

				
	
					
						30-Sep-15

					
					
						7,998,333.33

				
	
					
						31-Dec-15

					
					
						12,811,458.33

				
	
					
						 

					
					
						 

				
	
					
						Termination Amount:

					
					
						$29,327,013.89

				

		

		

		 

		

			20

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		
		

		
			Schedule 1A
		

			
					
						Settlement Date

					
					
						Target Dollar Amount ($)

				
	
					
						31-Mar-14

					
					
						1,612,500.00

				
	
					
						30-Jun-14

					
					
						1,474,756.94

				
	
					
						30-Sep-14

					
					
						1,459,444.44

				
	
					
						31-Dec-14

					
					
						1,437,083.33

				
	
					
						31-Mar-15

					
					
						1,402,083.33

				
	
					
						30-Jun-15

					
					
						1,386,284.72

				
	
					
						30-Sep-15

					
					
						8,036,666.67

				
	
					
						31-Dec-15

					
					
						12,835,416.67

				
	
					
						 

					
					
						 

				
	
					
						Termination Amount:

					
					
						$29,644,236.11

				

		
			 
		

		 

		

			21

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		
		

		
			Schedule 2
		

			
					
						In accordance with Clause 4.16 of this Agreement, the parties to the Agreement intend for the Production Payment to be treated as a "contingent payment debt instrument" within the meaning of United States Treasury Regulations Section 1.1275-4 for U.S. federal income tax purposes.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						The debt instrument reflected by the Production Payment will be issued with "original issue discount."  The issue price is $25,000,000, total amount of original issue discount is $4,327,014, the issue date is December 12, 2013, and the comparable yield on the issue date is 10.25312%, compounded quarterly.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Projected Payment Schedule 

				
	
					
						 

					
					
						Date of Projected Payment

					
					
						 

					
					
						Noncontingent Payment

					
					
						 

					
					
						Contingent Payment

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						12/12/13

					
					
						 

					
					
						 

					
					
						 

					
					
						       $ (25,000,000.00)

					
					
						 

				
	
					
						 

					
					
						03/31/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,571,354.17 

					
					
						 

				
	
					
						 

					
					
						06/30/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,428,940.97 

					
					
						 

				
	
					
						 

					
					
						09/30/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,414,722.22 

					
					
						 

				
	
					
						 

					
					
						12/31/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,393,958.33 

					
					
						 

				
	
					
						 

					
					
						03/31/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,361,458.33 

					
					
						 

				
	
					
						 

					
					
						06/30/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,346,788.19 

					
					
						 

				
	
					
						 

					
					
						09/30/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						             7,998,333.33 

					
					
						 

				
	
					
						 

					
					
						12/31/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						           12,811,458.33 

					
					
						 

				

		
			 
		

		

		

		 

		

			22

		

		

			 

		

		

			 

		

		

			 

		

 

		

			 

		

		
		

		
			Schedule 2A
		

		
			 
		

			
					
						In accordance with Clause 4.16 of this Agreement, the parties to the Agreement intend for the Production Payment to be treated as a "contingent payment debt instrument" within the meaning of United States Treasury Regulations Section 1.1275-4 for U.S. federal income tax purposes.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						The debt instrument reflected by the Production Payment will be issued with "original issue discount."  The issue price is $25,000,000, total amount of original issue discount is $4,644,236, the issue date is December 12, 2013, and the comparable yield on the issue date is 11.03104%, compounded quarterly.

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Projected Payment Schedule 

				
	
					
						 

					
					
						Date of Projected Payment

					
					
						 

					
					
						Noncontingent Payment

					
					
						 

					
					
						Contingent Payment

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						12/12/13

					
					
						 

					
					
						 

					
					
						 

					
					
						       $ (25,000,000.00)

					
					
						 

				
	
					
						 

					
					
						03/31/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,612,500.00 

					
					
						 

				
	
					
						 

					
					
						06/30/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,474,756.94 

					
					
						 

				
	
					
						 

					
					
						09/30/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,459,444.44 

					
					
						 

				
	
					
						 

					
					
						12/31/14

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,437,083.33 

					
					
						 

				
	
					
						 

					
					
						03/31/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,402,083.33 

					
					
						 

				
	
					
						 

					
					
						06/30/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						             1,386,284.72 

					
					
						 

				
	
					
						 

					
					
						09/30/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						             8,036,666.67 

					
					
						 

				
	
					
						 

					
					
						12/31/15

					
					
						 

					$
0.00 
					
					
						 

					
					
						           12,835,416.67 

					
					
						 

				

		
			 
		

		 

		

			23Sale and Purchase Agreement dated December 12, 2013

		

			 

		

		
			Exhibit 10.37
		

		
			DATED 12 December 2013
		

		
			 
		

		
			ENDEAVOUR ENERGY UK LIMITED
		

		
			- and -
		

		
			SAND WAVES S.A.
		

		
			___________________________________________________________________
		

		
			SALE AND PURCHASE AGREEMENT
		

		
			relating to the grant of a Production Payment over interests in 
		

		
			United Kingdom
Seaward Production Licence P.1615 (Block 15/26c) and Seaward Production Licence P.226 (Block 15/27 Area E) (the Rochelle Field) 
___________________________________________________________________
		

		
			 
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		TABLE OF CONTENTS
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						1.

					
					
						DEFINITIONS AND INTERPRETATIONS

					
					
						2

				
	
					
						2.

					
					
						SALE AND PURCHASE

					
					
						9

				
	
					
						3.

					
					
						TERMINATION

					
					
						9

				
	
					
						4.

					
					
						COMPLETION

					
					
						9

				
	
					
						5.

					
					
						WARRANTIES OF THE SELLER

					
					
						10

				
	
					
						6.

					
					
						WARRANTIES OF THE BUYER

					
					
						12

				
	
					
						7.

					
					
						LIMITATION ON CLAIMS

					
					
						13

				
	
					
						8.

					
					
						ANNOUNCEMENTS AND CONFIDENTIALITY

					
					
						13

				
	
					
						9.

					
					
						COSTS AND EXPENSES

					
					
						15

				
	
					
						10.

					
					
						TAXATION

					
					
						15

				
	
					
						11.

					
					
						NOTICES

					
					
						17

				
	
					
						12.

					
					
						FURTHER ASSURANCE

					
					
						18

				
	
					
						13.

					
					
						ASSIGNMENT

					
					
						18

				
	
					
						14.

					
					
						WHOLE AGREEMENT

					
					
						19

				
	
					
						15.

					
					
						VARIATION AND WAIVER

					
					
						19

				
	
					
						16.

					
					
						SEVERANCE

					
					
						19

				
	
					
						17.

					
					
						GOVERNING LAW AND JURISDICTION

					
					
						19

				
	
					
						18.

					
					
						SUCCESSORS

					
					
						20

				
	
					
						19.

					
					
						THIRD PARTY RIGHTS

					
					
						20

				
	
					
						20.

					
					
						COUNTERPARTS

					
					
						20

				
	
					
						SCHEDULE 1 - FORM OF GRANT OF THE PRODUCTION PAYMENT

					
					
						22

				

		 

		

			 

		

 

		

			 

		

		

			 

		

		

			 

		

			
					
						SCHEDULE 2 - FORM OF ENGLISH LAW SECURITY AGREEMENT

					
					
						23

				
	
					
						SCHEDULE 3 - FORM OF ENGLISH LAW SHARE CHARGE

					
					
						24

				
	
					
						SCHEDULE 4 - FORM OF NEW YORK LAW SECURITY AGREEMENT

					
					
						25

				
	
					
						SCHEDULE 5 - FORM OF NEW YORK LAW GUARANTY

					
					
						26

				
	
					
						SCHEDULE 6 - FORM OF VINSON & ELKINS RLLP ENGLISH LAW DUE CAPACITY AND AUTHORISATION LEGAL OPINION

					
					
						27

				
	
					
						SCHEDULE 7 - FORM OF WOODBURN & WEDGE LEGAL OPINION

					
					
						28

				
	
					
						SCHEDULE 8 - FORM OF VINSON & ELKINS LLP NEW YORK LAW ENFORCEABILITY OPINION

					
					
						29

				
	
					
						SCHEDULE 9 - FORM OF INTERCREDITOR AGREEMENT

					
					
						30

				
	
					
						SCHEDULE 10 - FORM OF BLOCKED ACCOUNT AGREEMENT

					
					
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		THIS AGREEMENT is dated 12 December 2013
		

		
			PARTIES:
		

		
			1.ENDEAVOUR ENERGY UK LIMITED incorporated and registered in England and Wales with company number 05030838 whose registered office is at 33rd  Floor, CityPoint, One Ropemaker Street, London EC2Y 9UE (the “Seller”); and
		

		
			2.SAND WAVES S.A., a  public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, with its registered office at 40 Avenue Monterey, L-2163 Luxembourg, Luxembourg, having a share capital of US$50,000 and being registered with the Luxembourg trade and companies register under number B 28.967 (the “Buyer”). 
		

		
			RECITALS:
		

		
			(A)As at the date of this Agreement, the Seller holds a fifty percent (50%) legal and beneficial right, title and interest in Licence P.1615 (Block 15/26c) and a fifty-five point six one five percent (55.615%) legal and beneficial right, title and interest in Licence P.226 (Block 15/27 Area E), and a forty-four percent (44%) participating unit interest under the Rochelle UUOA.
		

		
			(B)The Seller desires to sell and grant to the Buyer and the Buyer desires to purchase and receive the Production Payment (as such term is hereinafter defined) subject to the terms and conditions of this Agreement.
		

		
			(C)The Seller obtained the Secretary’s Consent to enter into the Grant of the Production Payment and the Security Agreement on 9 August 2013. 
		

		
			IT IS AGREED:
		

			
	
			
				 1.
			

			
	
			
			DEFINITIONS AND INTERPRETATIONS

			
	
			
				 1.1
			

			
	
			
			The definitions and rules of interpretations in this Clause 1 apply in this Agreement.

		
			“Affiliate” means in relation to either Party, a subsidiary or a holding company of that Party and includes the ultimate holding company of that Party and any subsidiary of that holding company and for the purposes of this definition “holding company” and “subsidiary” shall be construed in accordance with section 1159 of the Companies Act 2006.
		

		
			“Agreement” means this sale and purchase agreement between the Parties, including the Schedules.
		

		
			“Account Bank” means JP Morgan Chase Bank, N.A., London Branch.
		

		
			“Assurances” has the meaning specified in Clause 5.2.
		

		
			“Block” means an offshore area located on the United Kingdom Continental Shelf (UKCS) forming part of a Licence and being separately designated and numbered as a block on the reference map showing all UKCS licence blocks deposited at the principal office of the UK Department for Energy and Climate Change.
		

		

		

		 

		

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		“Blocked Account Agreement” means the blocked account agreement with the Account Bank substantially in the form set out in Schedule 10.
		

		
			“Business Day” means any day (other than a Saturday, Sunday or public holiday) on which banks in the City of London, United Kingdom and in New York, New York, USA are generally open for business.
		

		
			“Completion” means the grant of the Production Payment over the Subject Interests in accordance with the provisions of this Agreement and the Grant of the Production Payment.
		

		
			“Completion Date” means the date on which Completion takes place.
		

		
			“Completion Documents” means:
		

		
			(a)the Grant of the Production Payment;
		

		
			(b)the English law security agreement between the Parties in the form set out in Schedule 2 (the “Security Agreement”);
		

		
			(c)the English law share charge between the shareholder of the Seller and the Buyer in the form set out in Schedule 3;
		

		
			(d)the New York law security agreement in the form set out in Schedule 4;
		

		
			(e)the New York law guaranty in the form set out in Schedule 5;
		

		
			(f)a certificate of good standing certificate of good standing under the laws of the State of Nevada in respect of EIC;
		

		
			(g)the legal opinion of Vinson & Elkins RLLP, English counsel to the Seller, as to due capacity and authorisation of the Seller, in the form set out in Schedule 6;
		

		
			(h)the legal opinion of Woodburn & Wedge, Nevada counsel to EIC, as to (the due capacity and authorisation of EIC to enter into certain Completion Documents, in the form set out in Schedule 7;
		

		
			(i)the legal opinion of Vinson & Elkins LLP, New York legal counsel to the Seller, as to the enforceability of certain of the Completion Documents, in the form set out in Schedule 8; and
		

		
			(j)the intercreditor agreement between the Parties and the holders of the Existing Security substantially in the form set out in Schedule 9.
		

		
			“Confidential Information” has the meaning specified in Clause 8.2.
		

		
			“Credit Agreement” means the credit agreement dated on or about the date of this Agreement between the Grantee, various lenders and MC Admin Co LLC.
		

		
			“Decommissioning Liabilities” means any and all claims, costs, charges, expenses, liabilities and obligations incurred in relation to the decommissioning and/or removal 
		

		 

		

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		and/or abandonment and making safe all of the joint property and other property related to the Subject Interests (including platforms, pipelines, plant, equipment, machinery, wells (including well cuttings), facilities and all other offshore and onshore installations and structures) whether such claims, costs, charges, expenses, liabilities and obligations are incurred under or pursuant to any of the Licence Interest Documents or under statutory law, common law, international law, international convention or any other obligation, including any decommissioning plans or IMO Guidelines and Standards or regulations under OSPAR Decision 98/3 or any subsequent decisions of OSPAR, and any guidelines, notes for industry on decommissioning offshore installations and pipelines made under the Petroleum Act or other relevant legislation and decommissioning programmes in effect from time to time and including any residual liability for anticipated and/or necessary continuing insurance, maintenance and monitoring costs, and regardless of whether such claims, costs, charges, expenses, liabilities and obligations arise as a consequence of negligence or breach of duty (statutory or otherwise) on the part of the Seller.
		

		
			“Dispute” has the meaning specified in Clause 17.2.
		

		
			“Dollars” or “$” means the legal tender of the United States of America.
		

		
			“EIC” means Endeavour International Corporation, the ultimate parent company of the Seller.
		

		
			“Encumbrances” means all liens, charges (whether fixed or floating), farm-in or earn-in rights, royalty interests, pledges, options, net profit interests, rights of pre-emption, mortgages or other similar third party rights securing any obligation of any person or any other type of preferential arrangement having similar effect, other than a Permitted Encumbrance.
		

		
			“Environment” means all or any of the following, alone or in combination, the air (including the air within buildings and the air within any other natural or man-made structures above or below ground or above or below water), water (including seawater inside or outside any territorial limits, freshwater and water under or within land or in pipes or sewerage systems), soil and land (including the seabed, subsoil and land under water) flora, fauna, fish and any ecological systems and living organisms supported by those media including man.
		

		
			“Environmental Law” means all United Kingdom acts and law concerning:
		

		
			(a)harm or damage to or protection of the Environment;
		

		
			(b)emissions, discharges, releases or escapes into or the presence in the Environment of wastes, pollutants or other contaminates; and/or
		

		
			(c)worker or public health or public safety.
		

		
			“Existing Security” means the security created pursuant to the following security documents: 
		

		 

		

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				 (a)
			

			
	
			
			a debenture dated 12 April 2012 between the Seller and Cyan Partners, LP and a supplemental agreement relating to the debenture dated 31 May 2012 between the Seller and Cyan Partners, LP;

			
	
			
				 (b)
			

			
	
			
			the English security agreement entered into between the Seller and Cidoval S.à r.l. originally dated 30 April 2013 and subsequently amended and restated on 21 May 2013; and

			
	
			
				 (c)
			

			
	
			
			the Deed of Reassignment and Charge entered into by and between the Seller and MC Admin Co LLC dated 29 August 2013,

		
			in each case, as amended, restated, modified and/or supplemented from time to time.
		

		
			“Grant of the Production Payment” means the grant of a production payment in respect of the proceeds from the sale of production from the Subject Interests entered or to be entered into by the Parties at Completion in the form set out in Schedule 1. 
		

		
			“HMRC” means Her Majesty’s Revenue and Customs.
		

		
			“IMO Guidelines and Standards” means the International Maritime Organisation Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone.
		

		
			“Insolvent” means:
		

		
			(a)it is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts;
		

		
			(b)the value of its assets is less than its liabilities (taking into account contingent and prospective liabilities); or
		

		
			(c)a moratorium is declared in respect of any of its indebtedness.
		

		
			“Insolvency Proceedings” means any corporate action, legal proceedings or other procedure or step is taken in relation to:
		

		
			(a)the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) other than a solvent liquidation or reorganisation;
		

		
			(b)a composition, compromise, assignment or arrangement with any creditor of a Party;
		

		
			(c)the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of a Party or any of its assets; or
		

		
			(d)enforcement of any security over all or any material part of the assets of a Party,
		

		
			or any analogous procedure or step is taken in any jurisdiction.
		

		

		

		 

		

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		“JOAs” means the Rochelle (P.1615) JOA, the Rochelle (P.226) JOA and the Rochelle UUOA, or either or all of them as the context may require.
		

		
			“Licence P.1615 means Seaward Production Licence P.1615 (Block 15/26c), and shall include any other licence issued in substitution or partial substitution thereof.
		

		
			“Licence P.226” means Seaward Production Licence P.226 (Block 15/27 – E), and shall include any other licence issued in substitution or partial substitution thereof. 
		

		
			“Licences” means Licence P.1615 and Licence P.226, or either or both them, as the context may require.
		

		
			“Licence Interest Documents” means the Licences and such other documents, agreements or contracts related to the Subject Interests and, where the context so admits, any one or more of such documents.
		

		
			“MC Admin Co LLC” means MC Admin Co LLC, a limited liability company incorporated and registered in the State of Delaware.
		

		
			“Party” or “Parties” means a party or the parties to this Agreement.
		

		
			“Payee” has the meaning specified in Clause 10.5.
		

		
			“Payor” has the meaning specified in Clause 10.5.
		

		
			“Permitted Encumbrances” means the following:
		

		
			(a)Encumbrances arising under the Licence Interest Documents; 
		

		
			(b)Taxes and royalties payable to HMRC pursuant to or in connection with a Licence;
		

		
			(c)liens for Taxes and royalties referred to in (b) above; 
		

		
			(d)repairmen’s, mechanic’s, contractor’s or other similar liens or charges arising in the ordinary course of business; 
		

		
			(e)the Existing Security; and
		

		
			(f) Encumbrances arising under the Production Payment Security Documents (as defined in the Deed of Grant).
		

		
			“Petroleum” has the meaning assigned to it under the Licences.
		

		
			“Petroleum Act” means the Petroleum Act 1998.
		

		
			“Production Payment” has the meaning specified in the Grant of the Production Payment.
		

		
			“Production Payment Percentage” has the meaning specified in the Grant of the Production Payment.
		

		
			“Purchase Price” has the meaning specified in Clause 2.
		

		

		

		 

		

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		“Rochelle Payment Accounts” means each of the accounts with account numbers 41035909 and 41164971 opened in the name of the Seller and maintained at the Account Bank (and any replacement account or subdivision or subaccount of those accounts), together with all amounts from time to time standing to the credit of, or accrued or accruing on, such accounts and any monies, proceeds or income paid or payable in respect of such accounts.
		

		
			“Rochelle (P.1615) JOA” means the joint operating agreement for Block 15/26c of Licence P.1615 dated 17 September 2010.
		

		
			“Rochelle (P.226) JOA” means the joint operating agreement for Block 15/27 Area E of Licence P.226 dated 21 January 1998.
		

		
			“Rochelle UUOA” means the unitisation and unit operating agreement in relation to the Rochelle Field (as defined therein) and applicable to Licence P.1298 (Block 15/26b) and the Licences dated 1 July 2011.
		

		
			“Secretary” means the Secretary of State for Energy and Climate Change, or any other person discharging the function of the Secretary of State in respect of the Licences.
		

		
			“Secretary’s Consent” means the consent of the Secretary to the grant of the Production Payment to and in favour of the Buyer and the creation of security over the Licences covering all amounts due under the Grant of the Production Payment.  
		

		
			“Seller’s Account” means:
		

		
			Intermediary:
		

		
			JP Morgan Chase Bank N A New York
		

		
			SWIFT BIC: CHASUS33
		

		
			Account 0010962009
		

		
			JPMorgan Chase Bank N A London
		

		
			Beneficiary Bank:
		

		
			JP Morgan Chase Bank N A London
		

		
			SWIFT BIC: CHASGB2L
		

		
			Account: 35047502
		

		
			IBAN: GB49CHAS60924235047502
		

		
			Account Reference:  Endeavour Energy UK Limited
		

		
			 
		

		
			“Seller’s Solicitors” means Vinson & Elkins RLLP of 33rd Floor, CityPoint, One Ropemaker Street, London EC2Y 9UE.
		

		
			“Subject Interests” means the Seller’s:
		

		
			(a)undivided legal and beneficial right, title and interest in each Licence; and
		

		
			(b)undivided legal and beneficial right, title and interest in and under the JOAs relating to the Licences, being a 50% interest with respect to Licence P.1615 (Block 15/26c), a 55.615% interest with respect to Licence P.226 (Block 15/27 Area E); and 
		

		

		

		 

		

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		(c)undivided legal and beneficial right, title and interest in and under the a 44% participating unit interest under the Rochelle UUOA; and,
		

		
			together in each case with all rights attaching thereto, including the Seller’s right in respect of Petroleum covered by the Licences and the JOAs and the right to take and receive the Seller’s percentage interest share of all production of Petroleum under such Licences and the JOAs and to receive the gross proceeds from the sale or other disposition thereof but expressly excluding any interest in a JOA or in such Petroleum acquired after Completion in excess of the interests described above.
		

		
			“Tax” means all forms of taxation whether direct or indirect and whether levied by reference to income, profits, gains, net wealth, asset values, turnover, added value or other reference and statutory, governmental, state, federal, provincial, local, government or municipal charges, duties, imposts, contributions, levies, withholdings or liabilities,  wherever chargeable and whether in the United Kingdom or any other jurisdiction; and any penalty, fine, surcharge, interest, charges or costs relating thereto.
		

		
			“US GAAP” means the accounting principles generally accepted in the United States in force and effect from time to time.
		

			
	
			
				 1.2
			

			
	
			
			A reference to a Clause or Schedule is a reference to a clause or schedule of this Agreement.  A reference to a paragraph is to a paragraph of the relevant Schedule of this Agreement.

			
	
			
				 1.3
			

			
	
			
			The table of contents and all headings in this Agreement are inserted for convenience only and shall not affect the meaning or construction of this Agreement.

			
	
			
				 1.4
			

			
	
			
			A “person” includes a natural person, corporate or unincorporated body (whether or not having separate legal personality). A reference to a “company” shall include any company, corporation or other body corporate, wherever and however incorporated.

			
	
			
				 1.5
			

			
	
			
			Words in the singular include the plural and vice versa.

			
	
			
				 1.6
			

			
	
			
			A reference to one gender includes a reference to the other gender.

			
	
			
				 1.7
			

			
	
			
			A reference to any statute, statutory provision or subordinate legislation is a reference to it as it is in force from time to time, provided that, as between the Parties, no amendment or re-enactment shall apply for the purposes of this Agreement to the extent that it would impose any new or extended obligation, liability or restriction on, or otherwise adversely affect the rights of, either Party.

			
	
			
				 1.8
			

			
	
			
			A reference to “writing” or “written” includes faxes but not e-mail.

			
	
			
				 1.9
			

			
	
			
			Where the words “include(s)”, “including” or “in particular” are used in this Agreement, they are deemed to have the words “without limitation” following them.

			
	
			
				 1.10
			

			
	
			
			Where the context permits, “other” and “otherwise” are illustrative and shall not limit the sense of the words preceding them.

		 

		

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				 1.11
			

			
	
			
			Unless the context otherwise requires, references to documents and agreements shall be construed as references to those documents or agreements as may have been amended, supplemented and/or novated from time to time.

			
	
			
				 2.
			

			
	
			
			SALE AND PURCHASE

		
			Subject to the terms and conditions of this Agreement, the Seller hereby agrees to sell and grant to the Buyer and the Buyer hereby agrees to purchase the Production Payment for a total purchase price of twenty-five million Dollars ($25,000,000) (the “Purchase Price”).
		

			
	
			
				 3.
			

			
	
			
			termination

			
	
			
				 3.1
			

			
	
			
			In the event that at any time prior to the Completion Date, the Seller is declared Insolvent or Insolvency Proceedings are commenced with respect to the Seller or its assets, this Agreement shall immediately terminate without either Party incurring any liability to the other Party other than with respect to antecedent breaches .

			
	
			
				 3.2
			

			
	
			
			In the event that this Agreement terminates pursuant to Clause 3.1 or Clause 4.3:

			
	
			
				 3.2.1
			

			
	
			
			this Agreement and the proposed grant of the Production Payment over the Subject Interests shall terminate, shall be rendered void and shall have no force or effect (except for the provisions set out in this Clause 3.2 and Clauses 8, 9, 10.1 to 10.5, 10.9 to 10.13, 12, 13 and 17) and the Buyer shall have no interest in the Subject Interests or the Petroleum and shall be deemed to have reassigned any rights or equitable interest it may have acquired under this Agreement to the Seller retroactive to the date of this Agreement; and

			
	
			
				 3.2.2
			

			
	
			
			no damages or remedies shall be permitted or required other than with respect to antecedent breaches.

			
	
			
				 4.
			

			
	
			
			COMPLETION 

			
	
			
				 4.1
			

			
	
			
			Completion under this Agreement shall take place at the offices of the Seller’s Solicitors (or such other location as the Parties may agree) on a Business Day which is no more than two  (2) Business Days after the date of this Agreement.

			
	
			
				 4.2
			

			
	
			
			On the Completion Date each of the following will be transacted:

			
	
			
				 4.2.1
			

			
	
			
			the Seller shall (and, where relevant, procure that EIC shall) deliver to the Buyer (to the extent not already delivered prior to Completion):

			
	
			
				 (a)
			

			
	
			
			the Completion Documents set out in paragraphs (a) to (k) (inclusive) of the definition of Completion Documents (subject to (i) the receipt of the signature of MC Admin Co LLC as provided for in 4.2.2(b) below in respect of (j) and (k), (ii) the receipt of the signature of Cidoval S.à r.l. as provided for in 4.2.2(b) below in respect of (j) and (iii) the Seller shall procure the signature of the Account Bank in respect of (k));

			
	
			
				 (b)
			

			
	
			
			a copy of the Secretary’s Consent; and

		 

		

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				 (c)
			

			
	
			
			a certificate from the Seller confirming the warranties set out in Clause 5.1 are true and correct in all material respects as at the Completion Date;

			
	
			
				 4.2.2
			

			
	
			
			the Buyer shall, after receipt of the documents set forth in Clause 4.2.1:

			
	
			
				 (a)
			

			
	
			
			pay the Purchase Price to the Seller in immediately available funds to the Seller’s Account; and

			
	
			
				 (b)
			

			
	
			
			deliver to the Seller the Completion Documents set out in paragraphs (a) to (e) inclusive and paragraphs (j) and (k) of the definition of Completion Documents (including procuring the signature of MC Admin Co LLC in respect of (j) and (k) and the signature of Cidoval S.à r.l. in respect of (j)).

			
	
			
				 4.3
			

			
	
			
			If either Party fails to comply with its obligations in this Clause 4 the other Party shall be entitled to terminate this Agreement with immediate effect upon written notice.

			
	
			
				 4.4
			

			
	
			
			Notwithstanding Completion:

			
	
			
				 (a)
			

			
	
			
			each provision of this Agreement (and any document referred to herein) not performed at or before Completion but which remains capable of performance; and

			
	
			
				 (b)
			

			
	
			
			all covenants and other undertakings contained in or entered into pursuant to this Agreement,

		
			will remain in full force and effect and (except as otherwise expressly provided) without limit in time.
		

			
	
			
				 4.5
			

			
	
			
			On or prior to the Completion Date, the Seller shall procure the opening of the Rochelle Payment Accounts.  Upon opening of the Rochelle Payment Accounts, the Seller shall direct all relevant contract counterparties with respect to the sale and purchase of its Available Production (as such term is defined in the Grant of the Production Payment) to deposit the proceeds paid under their applicable agreements directly into the applicable Rochelle Payment Account for each Relevant Period and shall ensure that such proceeds are so deposited.

			
	
			
				 4.6
			

			
	
			
			On or prior to the date five (5) days after the Completion Date, , the Seller shall deliver to the Buyer the executed Blocked Account Agreement, provided that the Seller has received the signature of the Buyer to the Blocked Account Agreement prior to such date.

			
	
			
				 4.7
			

			
	
			
			Following the Completion Date, the Seller and the Buyer shall, and the Buyer shall procure that MC Admin Co LLC shall, use reasonable efforts to enter into an amendment and restatement of the Blocked Account Agreement with the Account Bank, with such amendment and restatement reflecting that until the end of the Security Period (as defined in the Security Agreement), the Buyer shall have the sole right following the occurrence of an Enforcement Date (as defined in the Security Agreement) to issue instructions with respect to, and to direct the disposition of funds 
		

		 

		

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			in, the Rochelle Payment Accounts and any amounts credited thereto and any monies, proceeds or income paid into such Rochelle Payment Accounts.

			
	
			
				 5.
			

			
	
			
			WARRANTIES OF THE SELLER

			
	
			
				 5.1
			

			
	
			
			The Seller hereby warrants to the Buyer as at the date of this Agreement and as at Completion, in each case, by reference to the facts then subsisting:

			
	
			
				 5.1.1
			

			
	
			
			The Seller is a licensee under each of the Licences and, subject to the Permitted Encumbrances, is the sole legal and beneficial owner of the Subject Interests and has the right to grant the Production Payment to the Buyer.

			
	
			
				 5.1.2
			

			
	
			
			Each of the Licences and all rights of the Seller and interests thereunder or deriving therefrom are in full force and effect.  No act or omission of the Seller has occurred which would entitle the Secretary to revoke either of the Licences and no written notice has been received by the Seller from the Secretary of any intention to revoke either of the Licences.

			
	
			
				 5.1.3
			

			
	
			
			To the best of the Seller’s knowledge, no act or omission of any other licensee of the Licences has occurred which would entitle the Secretary to revoke either of the Licences and no written notice has been received by the Seller from the Secretary of any intention to revoke either of the Licences.

			
	
			
				 5.1.4
			

			
	
			
			Neither of the Licences is in the course of being surrendered in whole or in part.

			
	
			
				 5.1.5
			

			
	
			
			Other than Permitted Encumbrances, no Encumbrance has been created over the Subject Interests nor is there in effect any agreement or commitment to create the same.

			
	
			
				 5.1.6
			

			
	
			
			Each of the JOAs is in full force and effect and the Seller is not in breach of any material obligation thereunder nor has it received written notice that it has committed any breach or default thereunder which breach or default is of a material nature and subsisting.

			
	
			
				 5.1.7
			

			
	
			
			The Seller has not given any written notice of withdrawal under any of the JOAs nor has the Seller received any such written notice of withdrawal.

			
	
			
				 5.1.8
			

			
	
			
			The Seller is not a party to any litigation, arbitration or administrative proceeding in respect of which a writ or summons or other formal pleading has been served or judgment issued, nor is there any claim or dispute in relation to, and which is likely by itself or together with any such other proceeding to materially prejudice or detrimentally affect in any material manner, the Subject Interests and/or the Seller’s ability to perform its obligations under this Agreement or the Grant of the Production Payment, and to the best of the Seller’s knowledge, no such litigation, arbitration or administrative proceeding, claim or dispute is threatened or pending either by or against the Seller and there are no facts which have been made known to the Seller which indicate that any person has a claim which is likely to materially prejudice or detrimentally affect in any material manner the Subject 
		

		 

		

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			Interests and/or the Seller’s ability to observe or perform its obligations under this Agreement or the Grant of the Production Payment. 

			
	
			
				 5.1.9
			

			
	
			
			The Seller is duly incorporated with limited liability and validly exists under the laws of England and Wales and is resident for Tax purposes solely in the United Kingdom.

			
	
			
				 5.1.10
			

			
	
			
			The Seller has the corporate power and all necessary corporate action has been taken on the part of the Seller to enter into this Agreement and to perform the transactions contemplated by this Agreement.

			
	
			
				 5.1.11
			

			
	
			
			The signing and delivery of this Agreement do not and the performance of any of the transactions contemplated by this Agreement do not contravene or constitute a material default under any provisions contained in any agreement, instrument, law, judgment, order, licence, permit or consent by which the Seller or any of its assets is bound or affected and which would result in the Seller being unable to perform its obligations under this Agreement.

			
	
			
				 5.1.12
			

			
	
			
			The Seller has obtained all material permits, licences and other authorisations which are required under applicable Environmental Laws relating to the Subject Interests and such permits, licences and authorisations remain in full force and effect.

			
	
			
				 5.1.13
			

			
	
			
			The Seller is not Insolvent and no Insolvency Proceedings with respect to it or its assets have been commenced.

			
	
			
				 5.1.14
			

			
	
			
			The Production Payment will be treated as a liability in accordance with US GAAP.

			
	
			
				 5.2
			

			
	
			
			Neither the Seller nor any of its Affiliates nor any officer, shareholder, director, employee, agent, consultant or representative of the Seller or any of its Affiliates (including their auditors) makes or, as applicable, provides any representation, warranty or undertaking, statement, opinion, information or advice (including any representation, warranty or undertaking, statement, opinion, information or advice (a) communicated (orally or in writing) to the Buyer or any Affiliate of the Buyer or (b) made in any data, information or document communicated to the Buyer or any Affiliate of the Buyer or made by any officer, shareholder, director, employee, agent, consultant or representative of the Seller or any Affiliate of the Seller) (collectively the “Assurances”) other than those Assurances expressly set out in this Agreement and the Buyer acknowledges, affirms and warrants that it has not relied, and will not rely, upon any Assurances not expressly set out in this Agreement in entering into this Agreement or carrying out the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, the Seller makes no representation or warranty as to: (i) the amounts, quality or deliverability of reserves of crude oil, natural gas or other hydrocarbons attributable to the Subject Interests; (ii) any geological, geophysical, engineering, economic or other interpretations, forecasts or evaluations or any estimates or projections of reserves and resources; (iii) any forecast of expenditures, budgets or financial projections or statements of intent or opinion; (iv) any geological formation, drilling prospect or hydrocarbon reserve; (v) field life forecasts; or (vi) estimates of Decommissioning Liabilities.

		 

		

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				 6.
			

			
	
			
			WARRANTIES OF THE BUYER

			
	
			
				 6.1
			

			
	
			
			The Buyer hereby warrants to the Seller as at the date of this Agreement and as at Completion as follows:

			
	
			
				 6.1.1
			

			
	
			
			The Buyer is duly organised with limited liability and validly existing under the laws of the Grand Duchy of Luxembourg and does not have any taxable presence outside of the the Grand Duchy of Luxembourg.

			
	
			
				 6.1.2
			

			
	
			
			The Buyer has the corporate power and all necessary corporate action has been taken on the part of the Buyer to enter into this Agreement and to perform the transactions contemplated by this Agreement.

			
	
			
				 6.1.3
			

			
	
			
			The signing and delivery of this Agreement do not and the performance of any of the transactions contemplated by this Agreement do not contravene or constitute a default under any provisions contained in any agreement, instrument, law, judgment, order, licence, permit or consent by which the Buyer or any of its assets is bound or affected or which would result in the Buyer being unable to perform its obligations under this Agreement. 

			
	
			
				 6.1.4
			

			
	
			
			No litigation, arbitration, administrative proceeding, claim or dispute in respect of which a writ or summons or other formal pleading has been served or judgment issued against the Buyer or to which the Buyer is a party which is likely by itself or together with any such other proceedings to have a material adverse effect on its ability to observe or perform its obligations under this Agreement and the transactions contemplated hereby is subsisting or, to the best of the Buyer’s knowledge, threatened or pending against the Buyer or any of its assets.

			
	
			
				 6.1.5
			

			
	
			
			Neither the Buyer nor any of its Affiliates is Insolvent and no Insolvency Proceedings with respect to it or any of its Affiliates have been commenced.

			
	
			
				 7.
			

			
	
			
			LIMITATION ON CLAIMS

			
	
			
				 7.1
			

			
	
			
			The Seller shall not be liable for any claim for breach of warranty unless the Seller shall have received from the Buyer, as soon as practicable after the Buyer becomes aware of the same, written notice containing reasonable details of the relevant claim including the Buyer’s bona fide provisional estimate of the amount of the claim.

			
	
			
				 7.2
			

			
	
			
			Nothing in this Agreement shall relieve the Buyer of any duty, whether at common law or otherwise, to mitigate any loss or damage incurred by it in respect of any breach by the Seller of the warranties or any other term of this Agreement or in respect of its subject matter.

			
	
			
				 7.3
			

			
	
			
			The Buyer shall not be entitled to make any claim for breach of warranty if and to the extent that the facts or circumstances giving rise to the claim are known or ought reasonably to be known to the Buyer on or prior to the Completion Date whether as a result of its investigation of the Subject Interests or otherwise.

			
	
			
				 7.4
			

			
	
			
			The Buyer shall not be entitled to recover from the Seller the same sum or loss more than once in respect of any claim.

		 

		

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				 8.
			

			
	
			
			ANNOUNCEMENTS AND CONFIDENTIALITY

			
	
			
				 8.1
			

			
	
			
			Neither Party nor any Affiliate of either Party shall make any announcements with regard to this Agreement or any transactions contemplated herein unless prior thereto it furnishes the other Party with a copy of such announcement and obtains the prior written consent of the other Party to such announcement (such consent not to be unreasonably withheld or delayed) except to the extent such Party (or its Affiliate) is required by law, the Licence Interest Documents, or the requirements of a competent government agency or other regulatory body, or any recognised stock exchange or exchange regulated market in compliance with their rules and regulations to make any such announcement otherwise than in compliance with this Clause 8 in which case such Party will use all reasonable endeavours to provide to the other Party notification and a copy of such announcement two (2) Business Days prior to the date the announcement is to be made.

			
	
			
				 8.2
			

			
	
			
			The terms of this Agreement and all discussions and information exchanged between the Parties in connection with the transactions contemplated herein (the “Confidential Information”) shall be held confidential by the Parties and shall not be divulged in any way to any third party other than in connection with the Secretary’s Consent or the Intercreditor Agreement, by one Party without the prior written approval of the other Party; provided that either Party may, without such approval, disclose such Confidential Information to:

			
	
			
				 (a)
			

			
	
			
			any Affiliate of such Party, provided that such Affiliate is bound by the provisions of this Clause 8 and that such Party is responsible for any violation of this provision by its Affiliate;

			
	
			
				 (b)
			

			
	
			
			any professional consultants or other professional advisers, provided they are under existing confidentiality obligations or the disclosing Party obtains a similar undertaking of confidentiality (but excluding any right to make further disclosure) from such consultants or advisers;

			
	
			
				 (c)
			

			
	
			
			any independent legal advisors engaged, or proposed to be engaged, by or on behalf of a Party or an Affiliate where such legal advisors are bound by an obligation of confidentiality;

			
	
			
				 (d)
			

			
	
			
			any bank, financial institution or investor from whom such Party is seeking or obtaining finance, financial advice or an investment, provided the disclosing Party obtains a similar undertaking of confidentiality (but excluding any right to make further disclosure) from such bank, financial institution or investor;

			
	
			
				 (e)
			

			
	
			
			to the extent required by any applicable laws, the Licences, the other Licence Interest Documents or the requirements of any recognised stock exchange in compliance with its rules and regulations;

			
	
			
				 (f)
			

			
	
			
			a bona fide prospective transferee of a Party’s interest, or portion thereof in a Licence to the extent appropriate in order to allow the assessment of such interest (including an entity with whom a Party and/or its Affiliate are conducting bona fide negotiations directed towards a merger, consolidation or sale of the majority of its or an Affiliate’s shares);

		 

		

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				 (g)
			

			
	
			
			any government agency (including any Tax authority) reasonably requesting such information; or

			
	
			
				 (h)
			

			
	
			
			any court of competent jurisdiction acting in pursuance of its powers.

			
	
			
				 8.3
			

			
	
			
			The above undertaking of confidentiality shall not extend to any Confidential Information which is:

			
	
			
				 (a)
			

			
	
			
			generally available to the public other than as a result of a wrongful disclosure by a Party; or

			
	
			
				 (b)
			

			
	
			
			available to a Party on a non-confidential basis from a source other than the other Party if such source is entitled to disclose such information.

			
	
			
				 8.4
			

			
	
			
			The provisions of this Clause 8 shall survive for two (2) years from the date of any termination of this Agreement.

			
	
			
				 9.
			

			
	
			
			COSTS AND EXPENSES

		
			10.1Subject to Clauses  9.2, 10.9 and 10.11, all costs and expenses in connection with the negotiation, preparation, execution and performance of this Agreement, and any documents referred to in it, shall be borne by the Party that incurred the cost. 
		

		
			10.2The Seller must pay to the Buyer the amount of all reasonable legal fees, supported by an invoice or other evidence of incurrence, directly incurred by the Buyer in connection with the negotiation, preparation and execution of this Agreement and the Completion Documents; provided, that, in no event shall the Seller be responsible for the payment of any costs and expenses by any lender in connection with the transactions contemplated in this Agreement or the Completion Documents whether or not the Buyer has agreed to be or is otherwise liable for such costs and expenses. 
		

		
			11.3The Seller shall, on demand, pay to the Buyer the amount of all costs and expenses (including legal fees) incurred by the Buyer in connection with the enforcement of or preservation of any rights under this Agreement.
		

			
	
			
				 10.
			

			
	
			
			TAXATION

			
	
			
				 10.1
			

			
	
			
			All sums payable under this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, save only as provided in this Agreement or as required by law.

			
	
			
				 10.2
			

			
	
			
			Subject to Clause 10.4, if the Seller becomes aware that any deduction or withholding is required by law from any payment under this Agreement, then:

			
	
			
				 10.2.1
			

			
	
			
			the Seller shall notify the Buyer of the requirement to deduct or withhold an amount; 

			
	
			
				 10.2.2
			

			
	
			
			the Seller and the Buyer shall use reasonable endeavours so that payment can be made without such a withholding or deduction; and 

			
	
			
				 10.2.3
			

			
	
			
			in the event a withholding or deduction is required, the Seller shall pay such additional amount as will, after such deduction or withholding has been made, 
		

		 

		

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			leave the Buyer with the full amount which would have been received by it had no such deduction or withholding been required to be made.

			
	
			
				 10.3
			

			
	
			
			To the extent that any deduction or withholding in respect of which an additional amount has been paid under Clause 10.2.3 above results in the Buyer obtaining a relief (all reasonable endeavours having been used to obtain such relief), the Buyer shall pay to the Seller, within ten (10) Business Days of obtaining the benefit of the relief, an amount equal to the lesser of the value of the relief obtained and the additional sum paid under Clause 10.2. The Seller, upon request of the Buyer, shall repay to the Buyer the amount paid to the Seller pursuant to this Clause 10.3 (plus any interest, penalties or other charges imposed by the taxing authority) in the event that the Buyer is required to repay such relief. 

			
	
			
				 10.4
			

			
	
			
			Clause 10.2.3 shall not apply to the extent that the deduction or withholding would not have arisen but for an assignment by the Buyer of any of its rights under this Agreement.

			
	
			
				 10.5
			

			
	
			
			Any payor of an amount under this Agreement (the “Payor”), if requested by the payee of such amount (the “Payee”), shall deliver such other documentation prescribed by applicable law or reasonably requested by the Payor as will enable the Payor to determine whether or not the Payee is subject to United States backup withholding or information reporting requirements or obligations to deduct or withhold amounts required by sections 1471 to 1474 of the US Internal Revenue Code (or any associated regulations or other official guidance, or any treaty, law, regulation or other official guidance enacted in any other jurisdiction which facilitates the implementation of those sections).  

			
	
			
				 10.6
			

			
	
			
			The Seller shall record, and shall procure the recording of, the Production Payment as a liability in accordance with US GAAP.

			
	
			
				 10.7
			

			
	
			
			The indemnities in this Agreement shall survive in force for a period of six (6) years after the date of the termination of the Grant of the Production Payment.

			
	
			
				 10.8
			

			
	
			
			The Seller shall use commercially reasonable efforts to procure an advance tax agreement in respect of the Grant of the Production Payment from the Luxembourg tax authorities (in substantially the same terms as the draft advance tax ruling provided to the Buyer on or before the date of this Agreement) as promptly as practicable following the Completion Date.  The Buyer will use commercially reasonable efforts to co-operate in procuring such advance tax agreement, provided that all costs and expenses in connection therewith shall be borne by the Seller.

			
	
			
				 10.9
			

			
	
			
			Subject to Clause 10.10 the Seller agrees to reimburse the Buyer for any Luxembourg tax liability of the Buyer in respect of receipts of the Production Payment and the Buyer agrees to discharge such Luxembourg tax liability, Luxembourg chamber of commerce fee (“cotisation de la Chambre de Commerce”) or Luxembourg registration duty in respect of the entering into the relevant agreements or receipts of the Production Payment and the Buyer agrees to discharge such Luxembourg tax liabilities as they fall due, except for any Luxembourg registration duties (droit d'enregistrement) payable in the case of voluntary registration of the relevant agreements with the Administration de l'Enregistrement et des Domaines in 
		

		 

		

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			Luxembourg or if such registration is not required to maintain, preserve, establish or enforce the rights of such party under the relevant agreements.

			
	
			
				 10.10
			

			
	
			
			Clause 10.9 shall not apply to the extent that the Buyer takes any action following the procurement of any advance tax agreement contemplated by Clause 10.8 hereof to revoke or substantially amend the tax position agreed in such advance tax agreement.

			
	
			
				 10.11
			

			
	
			
			The Seller agrees to reimburse the Buyer for the fees and expenses for the corporate services for, and management of, the Buyer incurred in Luxembourg, including the fees charged by its corporate services provider and any other administrative costs incurred by reason of the establishment of the Buyer (including trade and companies register fees or fees from any other Luxembourg administrative authority and not otherwise excluded from the Seller’s obligations under Clause 10.9), notary and other counsel fees, including irrecoverable VAT charged, if applicable.

			
	
			
				 10.12
			

			
	
			
			Any payments made under this Clause 10 following Completion shall be satisfied by way of an increase in the Production Payment Percentage so that, overall, the Buyer is in no better or worse position than it would have been in had no liability under this Clause 10 arisen.

			
	
			
				 10.13
			

			
	
			
			The Buyer:

		
			(a)will not own any assets other than (i) the Production Payment and (ii) proceeds therefrom temporarily held pending distribution or the payment of taxes, other governmental charges or administrative expenses incurred in maintaining the existence and good standing of the Buyer;
		

		
			(b)will not incur any liabilities other than (i) under the Credit Agreement and the agreements entered into in connection therewith, and (ii) tax liabilities or other governmental charges or administrative expenses incurred in maintaining the existence and good standing of the Buyer;
		

		
			(c)will not take any activities unrelated to those described in Clause 10.13(a) and (b); and
		

		
			(d)will take reasonable steps to mitigate any liability which, in the absence of mitigation, would give rise to a claim by the Buyer under this Clause, provided that the Buyer shall only be required to mitigate steps where it is fully indemnified for any related out-of-pocket costs and expenses incurred by the Seller.
		

			
	
			
				 11.
			

			
	
			
			NOTICES

			
	
			
				 11.1
			

			
	
			
			A notice given under this Agreement shall be in writing in the English language and sent for the attention of the person, and to the address or fax number, given in this Clause 11 (or such other address, fax number or person as the relevant Party may notify to the other Party), and shall be:

			
	
			
				 (a)
			

			
	
			
			delivered personally; or

			
	
			
				 (b)
			

			
	
			
			delivered by commercial courier; or

		 

		

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				 (c)
			

			
	
			
			sent by fax; or

			
	
			
				 (d)
			

			
	
			
			sent by pre-paid first class post or recorded delivery; or

			
	
			
				 (e)
			

			
	
			
			(if the notice is to be served by post outside the country from which it is sent) sent by airmail.

			
	
			
				 11.2
			

			
	
			
			The addresses for service of notice are:

		
			ENDEAVOUR ENERGY UK LIMITED
		

		
			c/o Endeavour International Corporation
		

		
			811 Main Street, Suite 2100
		

		
			Houston, TX 77002
		

		
			USA
		

		
			 
		

		
			Attention:Catherine L. Stubbs, Senior Vice-President and Chief Financial Officer
		

		
			Fax number:+1 713 3078794
		

		
			 
		

		
			SAND WAVES S.A. 
		

		
			 
		

		
			40, avenue Monterey
		

		
			L-2163
		

		
			Luxembourg
		

		
			 
		

		
			Attention:Sebastien Gaddini
		

		
			Fax number:+352 49 6767 9851
		

			
	
			
				 11.3
			

			
	
			
			A notice is deemed to have been received:

			
	
			
				 (a)
			

			
	
			
			if delivered personally, at the time of delivery; or

			
	
			
				 (b)
			

			
	
			
			if delivered by commercial courier, at the time of signature of the courier’s receipt; or

			
	
			
				 (c)
			

			
	
			
			if sent by fax, at the time of transmission; or

			
	
			
				 (d)
			

			
	
			
			if sent by pre-paid first class post or recorded delivery, forty-eight (48) hours from the date of posting; or

			
	
			
				 (e)
			

			
	
			
			if sent by airmail, five (5) days from the date of posting; or

			
	
			
				 (f)
			

			
	
			
			if deemed receipt under this Clause 11.3 is not within business hours (meaning 9:00 a.m. to 5:30 p.m. Monday to Friday on a day that is a business day in the place of receipt), when business next starts in the place of deemed receipt.

			
	
			
				 11.4
			

			
	
			
			To prove service, it is sufficient to prove that the notice was transmitted by fax to the fax number of the recipient Party or, in the case of post, that the envelope containing the notice was properly addressed and posted.

		 

		

			19

		

		

			 

		

		

			 

		

 

		

			 

		

		

			 

		

		

			 

		

			
	
			
				 12.
			

			
	
			
			FURTHER ASSURANCE

		
			Each Party shall, from time to time upon request of the other Party, promptly and at its own cost and expense do or procure the doing of all such acts and/or execute or procure the execution of all documents in an agreed form as such other Party may reasonably consider necessary for giving full effect to this Agreement (or to such part of this Agreement as remains operative after termination) and securing the full benefit of rights, powers and remedies conferred upon such other Party in this Agreement.
		

			
	
			
				 13.
			

			
	
			
			ASSIGNMENT

		
			Neither Party may assign, or grant any Encumbrance (other than any Encumbrances granted by the Buyer to its investors) over or deal in any way with any of its rights under this Agreement, without the prior written consent of the other Party (such consent not to unreasonably withheld or delayed).
		

			
	
			
				 14.
			

			
	
			
			WHOLE AGREEMENT

			
	
			
				 14.1
			

			
	
			
			This Agreement and any documents referred to in it, constitute the whole agreement between the Parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter they cover.

			
	
			
				 14.2
			

			
	
			
			Nothing in Clause 7 or this Clause 14 operates to limit or exclude any liability for fraud.

			
	
			
				 15.
			

			
	
			
			VARIATION AND WAIVER

			
	
			
				 15.1
			

			
	
			
			A variation of this Agreement shall be in writing and signed by or on behalf of each Party.

			
	
			
				 15.2
			

			
	
			
			Any waiver of any right under this Agreement is only effective if it is in writing and signed by the waiving or consenting Party and it applies only in the circumstances for which it is given and shall not prevent the Party who has given the waiver or consent from subsequently relying on the provision it has waived.

			
	
			
				 15.3
			

			
	
			
			No failure to exercise or delay in exercising any right or remedy provided under this Agreement or by law constitutes a waiver of such right or remedy or shall prevent any future exercise in whole or in part thereof.

			
	
			
				 15.4
			

			
	
			
			No single or partial exercise of any right or remedy under this Agreement shall preclude or restrict the further exercise of any such right or remedy.

			
	
			
				 15.5
			

			
	
			
			Unless specifically provided otherwise, rights arising under this Agreement are cumulative and do not exclude rights provided by law.

			
	
			
				 16.
			

			
	
			
			SEVERANCE

			
	
			
				 16.1
			

			
	
			
			If any provision of this Agreement (or part of a provision) is found by any court or administrative body of competent jurisdiction to be invalid, unenforceable or illegal, the other provisions shall remain in force.

		 

		

			20

		

		

			 

		

		

			 

		

 

		

			 

		

		

			 

		

		

			 

		

			
	
			
				 16.2
			

			
	
			
			If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to give effect to the commercial intention of the Parties.

			
	
			
				 17.
			

			
	
			
			GOVERNING LAW AND JURISDICTION

			
	
			
				 17.1
			

			
	
			
			This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

			
	
			
				 17.2
			

			
	
			
			The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).

			
	
			
				 17.3
			

			
	
			
			The Parties agree that the courts of England are the most appropriate and convenient forum to settle Disputes and accordingly no Party will argue to the contrary.

			
	
			
				 18.
			

			
	
			
			SUCCESSORS

		
			The rights and obligations of the Parties shall continue for the benefit of and shall be binding on their respective successors and permitted assigns.
		

			
	
			
				 19.
			

			
	
			
			THIRD PARTY RIGHTS

		
			The operation of the Contracts (Rights of Third Parties) Act 1999 is hereby excluded and no term of this Agreement is intended to be enforceable by any person who is not a party to this Agreement, notwithstanding that any such term of this Agreement may purport to confer, or may be construed as conferring any benefit on such person and irrespective of whether such person is identified in this Agreement.  
		

			
	
			
				 20.
			

			
	
			
			COUNTERPARTS

		
			This Agreement may be executed in any number of counterparts, each of which is an original and which together have the same effect as if each Party had signed the same document, provided, however, that none of the counterparts will be effective until both Parties have executed a counterpart hereof.
		

		
			 
		

		

		

		 

		

			21

		

		

			 

		

		

			 

		

 

		

			 

		

		

			 

		

		

			 

		

		
		

		
			This Agreement has been entered into on the date stated at the beginning hereof.
		

		
			 
		

		
			Signed for and on behalf of
		

		
			ENDEAVOUR ENERGY UK LIMITED
		

		
			 
		

		
			 
		

		
			 
		

		
			   /s/ Catherine L. Stubbs_______________________
		

		
			 
		

		
			 
		

		
			Signed for and on behalf of
		

		
			 
		

		
			SAND WAVES S.A.
		

		
			 
		

		
			By: Lux Business Management S.à r.L.
		

		
			 
		

		
			   /s/ G.A van Huren____________________________
		

		
			 
		

		
			   /s/ S.P. Murray____________________________
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			22

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