Up to $100,000,000BORROWING BASE FACILITY AGREEMENT






Originally dated 22 July 2010
and amended on 21 February 2012, 27 June 2012 and the Effective Date

TRANSGLOBE PETROLEUM INTERNATIONAL INC.
arranged by
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED
as Co-ordinating Mandated Lead Arranger and Initial Mandated Lead Arranger
and
EXPORT DEVELOPMENT CANADA and INTERNATIONAL FINANCE CORPORATION
as additional Mandated Lead Arrangers









Xxxxxxx Xxxxx Freehills LLP

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TABLE OF CONTENTS
Clause    Headings    Page
1.DEFINITIONS AND INTERPRETATION    1
2.THE FACILITY    25
3.PURPOSE    25
4.CONDITIONS OF UTILISATION    26
5.UTILISATION - LOANS    27
6.UTILISATION - LETTERS OF CREDIT    29
7.PROJECTIONS    35
8.REPAYMENT    41
9.PREPAYMENT AND CANCELLATION    42
10.INTEREST    46
11.INTEREST PERIODS    47
12.CHANGES TO THE CALCULATION OF INTEREST    47
13.FEES    49
00.XXX GROSS-UP AND INDEMNITIES    51
15.INCREASED COSTS    54
16.OTHER INDEMNITIES    54
17.MITIGATION BY THE LENDERS    56
18.COSTS AND EXPENSES    56
19.GUARANTEE AND INDEMNITY    57
20.PROJECT ACCOUNTS    61
21.REPRESENTATIONS    68
22.INFORMATION UNDERTAKINGS    74
00.XXXXXXXXX COVENANTS    81
24.GENERAL UNDERTAKINGS    82
00.XXXXXX OF DEFAULT    93
26.CHANGES TO THE LENDERS    97
27.RESTRICTION ON DEBT PURCHASE TRANSACTIONS    103
28.CHANGES TO THE OBLIGORS    103
29.ROLE OF THE ADMINISTRATIVE FINANCE PARTIES    105
30.THE SECURITY TRUSTEE    111
31.CONDUCT OF BUSINESS BY THE FINANCE PARTIES    120
32.SHARING AMONG THE FINANCE PARTIES AND PREFERRED PAYMENTS    123
33.PAYMENT MECHANICS    126
34.SET-OFF    132
35.NOTICES    132
36.CALCULATIONS AND CERTIFICATES    137
37.PARTIAL INVALIDITY    137
38.REMEDIES AND WAIVERS    137

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39.AMENDMENTS AND WAIVERS    137
40.CONFIDENTIALITY    140
41.COUNTERPARTS    143
42.GOVERNING LAW    143
43.ENFORCEMENT    143
FORM OF LETTER OF CREDIT
159
FORM OF COMPLIANCE CERTIFICATE
178
DELETED]
179
INSURANCE SPECIFICATIONS
180
FORM OF DISBURSEMENT CONFIRMATION
181

    

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THIS AGREEMENT is dated 22 July 2010 (as amended on 21 February 2012 and 27 June 2012 and as further amended on the Effective Date (as defined below)) and, in its amended form, is made between:
(1)
TRANSGLOBE PETROLEUM INTERNATIONAL INC. (the "Borrower");
(2)
THE AFFILIATES of the Borrower listed in Part I (The Original Guarantors) of Schedule 1 (The Guarantors) as original guarantors (the "Original Guarantors") and the Affiliate of the Borrower listed in Part II (The Additional Guarantor) of Schedule 1 (The Guarantors) as an Additional Guarantor;
(3)
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED as co-ordinating mandated lead arranger and initial mandated lead arranger (the "Co-ordinating Mandated Lead Arranger" and the "Initial Mandated Lead Arranger");
(4)
EXPORT DEVELOPMENT CANADA and INTERNATIONAL FINANCE CORPORATION as additional mandated lead arrangers (together with the Co-ordinating Mandated Lead Arranger and Initial Mandated Lead Arranger, the "Mandated Lead Arrangers");
(5)
SUMITOMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH and EXPORT DEVELOPMENT CANADA as original lenders (the "Original Bank Tranche Lenders") and INTERNATIONAL FINANCE CORPORATION ("IFC") (which became a Party to this Agreement, as a Lender, pursuant to the Amendment and Restatement Agreement);
(6)
SUMITOMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH as Facility Agent;
(7)
SUMITOMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH as the issuer of any Letters of Credit (the "Fronting Bank");
(8)
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED as Security Trustee;
(9)
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED as Technical Bank; and
(10)
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED as English Account Bank.
IT IS AGREED as follows:
INTERPRETATION
1.
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
"Abandonment Date" means, in relation to each Borrowing Base Asset and each Projection, the date shown in such Projection on which it is reasonably anticipated that such Borrowing Base Asset and/or the relevant facilities relating thereto will be abandoned.
"Acceptable Bank" means a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or A3 or higher by Xxxxx'x Investor Services Limited or a comparable rating from an internationally recognised credit rating agency or any other bank or financial institution approved by the Facility Agent.
"Account Banks" means the Egyptian Account Bank and the English Account Bank, and "Account Bank" means either one of them.
"Accession Letter" means a letter substantially in the form set out in Part I (Form of Accession Letter) of Schedule 10 (Accession Documents).

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"Additional Cost Rate" has the meaning given to that term in Schedule 7 (Mandatory Cost Formula).
"Additional Guarantor" means the company listed in Part II (The Additional Guarantor) of Schedule 1 (The Guarantors) and any other company which becomes an Additional Guarantor in accordance with Clause 28 (Changes to the Obligors).
"Administrative Finance Parties" means each of the Mandated Lead Arrangers, the Facility Agent, the Security Trustee, the Technical Bank, the Fronting Bank and the English Account Bank.
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"Aggregate Bank Tranche Commitments" means, in relation to any Specified Period or any day falling in that Specified Period, the sum of the Bank Tranche Lenders' Bank Tranche Commitments for that Specified Period, which as at the Effective Date and subject to any cancellation, reduction or transfer of any Bank Tranche Lender's Bank Tranche Commitment in accordance with this Agreement, is the amount (in dollars) set opposite that Specified Period in the last column (headed "Aggregate Bank Tranche Commitments") of the table in Part I of Schedule 2 (The Lenders).
"Aggregate Commitments" means, in relation to any Specified Period or any day falling in that Specified Period, the sum of the Bank Tranche Commitments and the IFC Tranche Commitment for that Specified Period.
"Amendment and Restatement Agreement" means the amendment and restatement agreement dated on or about 11 June 2013 between, among others, the Borrower and the Facility Agent which amends certain terms of this Agreement.
"Applicable Payment" means:
(A)
in respect of a payment made by or on behalf of EGPC to an Egyptian Borrowing Base Obligor, the payment of any amount to its Egyptian Revenue Account; or
(B)
in respect of a payment made by or on behalf of any other person to TransGlobe West Gharib, the payment of any amount which is equal to or exceeds $[redacted] (or its equivalent in another currency or currencies) to the Egyptian Revenue Account.
"Assignment Agreement" means an agreement substantially in the form set out in Schedule 9 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.
"Assumptions" means the Economic Assumptions and the Technical Assumptions.
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
"Availability Period" means the period from and including 1 July 2010 to and including the date falling one month prior to the Final Maturity Date.
"Available Commitment" means, in relation to a Tranche, a Xxxxxx's Commitment under that Tranche minus:
(A)
the amount of its participation in any outstanding Utilisations under that Tranche (other than that Xxxxxx's participation in any Utilisations under that Tranche that are due to be repaid or prepaid on or before the proposed Utilisation Date); and

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(B)
in relation to any proposed Utilisations under that Tranche, the amount of its participation in any Utilisations under that Tranche that are due to be made on or before the proposed Utilisation Date.
"Bank Tranche" has the meaning given to it in Clause 2.1 (Facility).
"Bank Tranche Commitment" means:
(A)
in relation to each Original Bank Tranche Lender at any time during a Specified Period, the amount (in dollars) set opposite that Specified Period in the column in which that Bank Tranche Lender's name appears in the table in Part I of Schedule 2 (The Lenders) and the amount of any other Bank Tranche Commitment for that Specified Period transferred to it under this Agreement; and
(B)
in relation to any other Bank Tranche Lender at any time during a Specified Period, the amount (in dollars) of any Bank Tranche Commitment for that Specified Period transferred to it under this Agreement,
in each case, to the extent not cancelled, reduced or transferred by it under this Agreement.
"Bank Tranche Lender" means:
(A)
an Original Bank Tranche Lender; and
(B)
any bank, financial institution, trust fund or other entity which has become a Party in accordance with Clause 26 (Changes to the Lenders) (other than IFC),
which has not ceased to be a Party in accordance with the terms of this Agreement.
"Block" means:
(A)    Block 32, Block S-1 or West Gharib; or
(B)
any other group of Petroleum Assets in which a member of the Group has an interest and which, at the time they are designated as Borrowing Base Assets, are classified as a Block by the Technical Bank in consultation with the Borrower.
"Block 32" means Block 32 in the Masila Basin area in Eastern Yemen in which TG Holdings Yemen Inc. has a 13.81087% working interest.
"Block S-1" means Block S-1 in the Marib Basin area in Western Yemen in which XX Xxxx Yemen Inc. has a 20.62% working interest.
"Borrower Update" means a report prepared by or on behalf of the Borrower which updates the information and/or evaluation(s) contained in the most recent Reserves Report and including any additional information and/or evaluation(s) as the Technical Bank may reasonably require.
"Borrowing Base Amount" means, in relation to a Calculation Period or any day falling within such period, the amount (in dollars) specified in each Projection which is:
(A)    the lesser of A and B where:
(i)    "A" is the maximum aggregate amount of Utilisations which could be outstanding during that Calculation Period and which results in a PLCR as at the first day of that Calculation Period of not less than 1.5:1; and
(ii)    "B" is the maximum aggregate amount of Utilisations which could be outstanding during that Calculation Period and which results in a LLCR as at the first day of that Calculation Period of not less than 1.3:1,
plus

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(B)
(to the extent the same has been approved by the Technical Bank) the amount of any capital expenditure in respect of any Borrowing Base Asset which is forecast to be spent in the first six months following the adoption of such Projection, provided that such amount shall not exceed the lower of (i) the aggregate of the capital expenditure projected to be undertaken in respect of Proven + Probable Reserves relating to Borrowing Base Assets as set out in the Reserves Report for that Calculation Period and (ii) the aggregate of the capital expenditure projected to be undertaken in respect of Proven + Probable Reserves relating to Borrowing Base Assets as set out in the Projection for that Calculation Period.
"Borrowing Base Asset" means (A) the Petroleum Assets listed in Part II (Revised Borrowing Base Assets) of Schedule 11 (Borrowing Base Assets) and (B) any other Petroleum Asset that has been designated as such in accordance with Clause 7 (Projections) but, in the case of (A) or (B), excluding any of the foregoing which has ceased to be designated a Borrowing Base Asset in accordance with Clause 7 (Projections).
"Borrowing Base Obligor" means:
(A)    TransGlobe West Gharib and TransGlobe West Xxxx; and
(B)    any other Obligor which owns or exploits a Borrowing Base Asset.
"Break Costs" means the amount (if any) by which:
(A)
the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(B)
the amount which that Xxxxxx would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and Calgary (in Alberta, Canada) and, in relation to any date for the payment or purchase of dollars, New York.
"Calculation End Date" means, in relation to each Projection, the last day of the last Calculation Period in which any item of Gross Expenditure and/or Gross Income is projected to arise.
"Calculation Period" means, in relation to each Projection, each of:
(A)
the period (the "first Calculation Period") commencing on the Recalculation Date on which such Projection is due to be adopted and ending on the first 30 June or 31 December to occur thereafter; and
(B)
thereafter, each successive period of six months commencing on 1 January or 1 July of each year.
"Commitment" means each of the Bank Tranche Commitment and the IFC Tranche Commitment.
"Compliance Certificate" means a certificate substantially in the form set out in Schedule 15 (Form of Compliance Certificate).

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"Computer Model" means the computer model used to prepare the Initial Projection, as amended from time to time in accordance with Clause 7.11 (Computer Model) or as otherwise agreed between the Borrower and the Technical Bank.
"Confidential Information" means all information relating to any member of the Group, the Finance Documents, the Borrowing Base Assets or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
(A)    any member of the Group or any of its advisers; or
(B)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:
(1)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 40 (Confidentiality); or
(2)
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(3)
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (A) or (B) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.
"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Borrower and the Facility Agent.
"Cover Ratio Event" has the meaning given to that term in Clause 1.2 (Construction).
"CTA" means the Corporation Tax Act 2009.
"Debentures" means the unsecured debentures issued by the Parent pursuant to the terms of the Indenture.
"Debt Purchase Transaction" means, in relation to a person, a transaction where such person:
(A)    purchases by way of assignment or transfer;
(B)    enters into any sub-participation in respect of; or
(C)
enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,
any Commitment or amount outstanding under this Agreement.
"Debt Service Reserve Account" has the meaning given to that term in Clause 20 (Project Accounts).
"Default" means an Event of Default or any event or circumstance specified in Clause 25 (Events of Default) (other than Clause 25.19 (Acceleration) and Clause 25.20 (IFC Acceleration)) which would (with the expiry of a grace period, the giving of notice, the

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making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
"Defaulting Lender" means any Lender:
(A)
which has failed to make its participation in a Loan available or has notified the Facility Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders' participation);
(B)    which has otherwise rescinded or repudiated a Finance Document; or
(C)
with respect to which an Insolvency Event has occurred and is continuing, unless, in the case of paragraph (A) above:
(1)    its failure to pay is caused by:
(a)
administrative or technical error; or
(b)
a Disruption Event; and
(c)
payment is made within 3 Business Days of its due date; or
(2)
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
"Defined Convertible Currency" means pounds sterling, euros, dollars or Canadian dollars.
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Trustee.
"Disbursement Account" has the meaning given to that term in Clause 20.8.2 (Other accounts).
"Disruption Event" means either or both of:
(A)
a material disruption to those payment or communication systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(B)
the occurrence of any other event which results in a disruption (of technical or systems related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(1)
from performing its payment obligations under the Finance Documents; or
(2)
from communicating with other Parties in accordance with the terms of the Finance Documents,
and which, in either such case, is not caused by, and is beyond the control of, the Party whose operations are disrupted.
"DSCR" means, in relation to any Calculation Period, the debt service cover ratio for such period being the ratio of A-B-C+D+E:F as shown in the then current Projection, where:
"A" is the Gross Income of the Group projected to be received in that Calculation Period
"B" is the aggregate of (i) the Group's general and administrative expenditure (excluding, for the avoidance of doubt, any expenditure to be made in respect of F below) and (ii) operating expenditure and capital expenditure on Borrowing Base Assets, in each case projected to be made in that Calculation Period

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"C" is Gross Expenditure (excluding any expenditure falling within B above) projected to be made in that Calculation Period 
"D" is the balance of the Revenue Accounts (in aggregate) on the first day of such Calculation Period, provided that, to the extent that any amount of D is projected to be utilised in any Calculation Period to ensure that the DSCR is at least 1.2:1 (the "Deficient Cash Amount"), D in any subsequent Calculation Period in the then current Projection shall be reduced by the Deficient Cash Amount
"E" is the amount of the undrawn Borrowing Base Amount which is available for drawing on the first day of such Calculation Period, provided that, to the extent that any amount of E is projected to be utilised in any Calculation Period to ensure the DSCR is at least 1.2:1 (the "Deficient Drawn Amount"), E in any subsequent Calculation Period in the then current Projection shall be reduced by the Deficient Drawn Amount
"F" is the aggregate amount of principal, interest, fees, commission and other amounts due and payable by the Obligors in the relevant Calculation Period under the Finance Documents, excluding the repayment of any principal which may be re-borrowed as a Rollover Loan but including any amounts of principal, interest, fees, commission and other amounts which would be due and payable on any Deficient Drawn Amount.
For the purposes of this definition, the Deficient Cash Amount shall be utilised in any Calculation Period to ensure that the DSCR is at least 1.2:1 and prior to the utilisation in any Calculation Period of the Deficient Drawn Amount.
"Economic Assumption" means each of the following economic assumptions, and the values ascribed to such assumptions, upon which each Projection or draft Projection and, in each case, the calculations and information therein are, or are to be, based:
(A)    Petroleum prices;
(B)    exchange rates;
(C)    inflation rates;
(D)    [deleted];
(E)    interest rates; and
(F)
any other assumption that the Technical Bank and the Borrower agree shall be treated as "Economic Assumptions".
"Effective Date" has the meaning given to that term in the Amendment and Restatement Agreement.
"EGPC" means the Egyptian General Petroleum Corporation, an Egyptian legal entity created by the Egyptian Law No. 167 of 1958 (as amended).
"Egyptian Account Bank" means HSBC Bank Egypt S.A.E (or such other bank having a branch in Egypt as may be acceptable to the Borrower and the Facility Agent, each acting reasonably) in its capacity as account bank in relation to the Egyptian Revenue Accounts.
"Egyptian Account Charge" means:
(A)
the account charge dated 28 July 2010 made between TransGlobe West Gharib, the Egyptian Account Bank and the Security Trustee, governed by Egyptian law; or
(B)
any other account charge to be made by an Egyptian Borrowing Base Obligor, the Egyptian Account Bank and the Security Trustee, governed by Egyptian law.
"Egyptian Account Control Agreement" means:

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(A)
the account control agreement dated 28 July 2010 made between TransGlobe West Gharib, the Egyptian Account Bank and the Security Trustee, governed by Egyptian law; or
(B)
any other account control agreement to be made by an Egyptian Borrowing Base Obligor, the Egyptian Account Bank and the Security Trustee, governed by English law.
"Egyptian Borrowing Base Obligor" means any Borrowing Base Obligor which owns or exploits a Borrowing Base Asset located in Egypt.
"Egyptian Revenue Accounts" has the meaning given to that term in Clause 20 (Project Accounts).
"Enforcement Date" means the date on which a notice is issued under Clause 25.19 (Acceleration) or Clause 25.20. (IFC Acceleration).
"English Account Bank" means Sumitomo Mitsui Banking Corporation Europe Limited in its capacity as account bank in relation to the Project Accounts (other than the Egyptian Revenue Accounts) or any other person that replaces it in such capacity in accordance with this Agreement.
"English Revenue Accounts" has the meaning given to that term in Clause 20 (Project Accounts).
"Environment" means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(A)
air (including, without limitation, air within natural or man-made structures, whether above or below ground);
(B)
water (including without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
(C)
land (including, without limitation, land under water).
"Environmental Claims" means any claim by any person in connection with (i) a breach, or alleged breach, of Environmental Laws; (ii) any accident, fire, explosion or other event of any type involving an emission or substance which is capable of causing harm to the Environment; or (iii) any other environmental contamination.
"Environmental Laws" means any law or regulation concerning (i) the protection of health and safety; (ii) the Environment; or (iii) any emission or substance which is capable of causing harm to the Environment.
"Environmental Licences" means all Authorisations necessary under Environmental Law for the ownership of an interest in any Petroleum Asset, the exploitation of such Petroleum Asset (or any aspect thereof), and/or the carrying out of the operations and activities relating to such Petroleum Asset.
"Event of Default" means any event or circumstance specified as such in Clause 25 (Events of Default) (other than each of Clause 25.19 (Acceleration) and Clause 25.20 (IFC Acceleration)) and an IFC Event of Default.
"Existing Credit Agreement" means the Second Amended and Restated Credit Agreement dated as of February 5, 2008, as amended, between the Borrower, the Parent and the other Obligors (as defined therein), Standard Bank Plc as agent and the Banks (as defined therein).
"Expiry Date" means, for a Letter of Credit, the last day of its Term.
"Facility" means the credit facility described in Clause 2.1 (Facility).

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"Facility Agent" means Sumitomo Mitsui Banking Corporation, Brussels Branch in its capacity as agent for the other Finance Parties or any other person that replaces it in such capacity in accordance with this Agreement.
"Facility Office" means the office or offices notified by a Lender to the Facility Agent (and, in the case of IFC whilst it is a Lender, to the Facility Agent and the Borrower) in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement (and, in the case of IFC whilst it is a Lender, the IFC Finance Contract).
"Fee Letter" means each of:
(A)
any letter between (i) all or any of the Obligors and (ii) all or any of the Administrative Finance Parties or IFC relating to the payment of fees by the Obligors (or any of them) to such Administrative Finance Party(ies) or IFC (as applicable); and
(B)
any other letter designated as such by the Facility Agent and the Borrower.
"Final Maturity Date" means the earlier to occur of:
(A)
31 December 2017 (or such later date as may be agreed between the Lenders and the Borrower); and
(B)    the Reserve Tail Date.
"Finance Document" means:
(A)    this Agreement;
(B)    any Security Document;
(C)    any Egyptian Account Control Agreement;
(D)    any Fee Letter;
(E)
(other than for the purposes of Clauses 14 (Tax Gross up and Indemnities), 15 (Increased Costs), 33.9 (No set-off by Obligors) and 39 (Amendments and Waivers)) any Hedging Agreement entered into with a Hedging Bank;
(F)
any Transfer Certificate;
(G)    any Accession Letter;
(H)    any Hedging Accession Agreement;
(I)    any Compliance Certificate;
(J)    the Mandate Letter;
(K)     (whilst IFC is a Lender) the IFC Finance Contract; and
(L)
any other document designated as such by the Borrower and the Facility Agent.
"Finance Party" means each of the Lenders, the Hedging Banks, the Mandated Lead Arrangers, the Fronting Bank, the Security Trustee, the Facility Agent, the English Account Bank and the Technical Bank.
"Financial Indebtedness" means any indebtedness for or in respect of:
(A)
moneys borrowed;
(B)
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

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(C)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(D)
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
(E)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(F)
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(G)
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
(H)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;
(I)
the amount paid up or credited as paid up on any redeemable share capital; and
(J)
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (A) to (I) above.
"Financial Quarter" means the period commencing on the day after one Financial Quarter Date and ending on the next Financial Quarter Date.
"Financial Quarter Date" means 31 March, 30 June, 30 September and 31 December.
"GAAP" means international financial reporting standards.
"Gross Expenditure" means, in relation to any period and any member of the Group, without double counting:
(A)
to the extent that the same is payable in that period by that member of the Group:
(1)
in respect of any Borrowing Base Asset, all cash calls and invoices delivered by the operator of that Borrowing Base Asset; and
(2)    to the extent not covered by paragraph (1) above:
(a)
all costs of producing, lifting, transporting, storing, processing and selling any Petroleum derived from that Borrowing Base Asset;
(b)
all costs of reinstating any damaged facilities relating to that Borrowing Base Asset;
(c)
all costs of satisfying any liability in respect of seepage, pollution and well control;
(d)
all insurance premiums and all the fees, costs and expenses of insurance brokers;
(e)
all exploration, appraisal, development and operational expenditure on that Borrowing Base Asset;
(f)
all costs of abandonment and any payments to make provision for abandonment costs in accordance with all relevant Project Documents relating to the whole or any part of that Borrowing Base Asset or any physical assets associated with it; and

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(g)
any royalties under any Petroleum production licence;
(B)    any Taxes payable by that member of the Group in that period;
(C)
any bonuses payable to governmental authorities in respect of Borrowing Base Assets in accordance with an applicable production sharing agreement;
(D)
any general and administrative expenditure not falling within paragraph (A) above which is payable by that member of the Group in that period;
(E)
any Hedging Costs which are payable by that member of the Group in that period; and
(F)
any other expenditure payable by any member of the Group in that period (whether or not related to the Borrowing Base Assets),
and disregarding any amount of principal, interest, fees, commission and other amounts due and payable by the Obligors under the Finance Documents in the relevant period.
"Gross Income" means, in relation to any period and Obligor, without double counting:
(A)
to the extent that the same is payable in that period to that Obligor in respect of any Borrowing Base Asset:
(1)
the gross proceeds (without deductions whatsoever) of any disposal of any Petroleum derived from that Borrowing Base Asset paid or payable to that Obligor in that period; and
(2)
any other amounts paid or payable to that Obligor in that period in respect of that Borrowing Base Asset (including any proceeds of insurance and refunds of Taxes); and
(B)
any Hedging Receipts which are payable to that Obligor in that period.
"Group" means the Parent and its Subsidiaries for the time being.
"Group Structure Chart" means the structure chart of the Group in a form initialled by or on behalf of the Borrower and the Facility Agent on or before the signing of this Agreement for the purposes of identification.
"Guarantor" means an Original Guarantor or an Additional Guarantor, unless (in each case) it has ceased to be a Guarantor in accordance with Clause 28 (Changes to the Obligors).
"Hedging Accession Agreement" means an agreement the form and substance of which complies with (a) the form of the agreement set out in Part II (Form of Hedging Accession Agreement) of Schedule 10 (Accession Documents) or (b) such other form as the Facility Agent may approve (acting reasonably).
"Hedging Agreement" means each interest, currency or commodity swap, option, cap, collar, floor or similar arrangement or other hedging arrangement.
"Hedging Bank" means:
(A)
any Lender that is party to a Hedging Agreement; and
(B)
any Affiliate of any Lender that (i) is a party to a Hedging Agreement and (ii) accedes, and becomes a party, to this Agreement as a "Hedging Bank" in accordance with this Agreement (provided that such Affiliate shall cease to be a "Hedging Bank" when that Lender ceases to be a Lender hereunder or, if earlier, when it ceases to be an Affiliate of the relevant Lender).
"Hedging Costs" means any amount falling due from an Obligor under a Hedging Agreement except for any Hedging Termination Payment.

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"Hedging Liabilities" means any liabilities of any Obligor under or in respect of any Hedging Agreement (including any Hedging Costs and Hedging Termination Payments due, in each case, from that Obligor under such Hedging Agreement).
"Hedging Receipts" means any amount falling due to an Obligor under a Hedging Agreement except for any Hedging Termination Payment.
"Hedging Termination Payment" means any amount falling due from or, as the case may be, to any Obligor under a Hedging Agreement as a direct or indirect result of the termination of that Hedging Agreement, other than interest accruing on any amount not paid when due.
"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
"IFC Approved Purpose" means general corporate purposes relating to the Borrowing Base Assets, the refinancing of maturing Loans and the financing of the Obligors' working capital requirements in Egypt, Yemen or any other jurisdiction agreed by the Borrower and IFC and the general administrative and operating expenses of the Obligors.
"IFC Event of Default" has the meaning given to that term in Clause 25.20 (IFC Acceleration).
"IFC Finance Contract" means the agreement dated on or about the Effective Date between the Borrower and IFC.
"IFC Information Undertakings" means each of the undertakings set out in clauses 5.1 (Access to premises etc.), 5.4 (Payments to government authorities) and 5.7 (Information covenants) of the IFC Finance Contract.
"IFC Representations" means each of the representations set out in Clause 3 (Representations) of the IFC Finance Contract.
"IFC Tranche" has the meaning given to that term in Clause 2.1 (Facility).
"IFC Tranche Commitment" means, in relation to IFC, at any time during a Specified Period, the amount (in dollars) set opposite that Specified Period in the column in which IFC's name appears in the table in Part II of Schedule 2 (The Lenders) and the amount of any other Commitment for that Specified Period transferred to it under this Agreement, to the extent not cancelled, reduced or transferred by it under this Agreement.
"Impaired Agent" means the Facility Agent or the Security Trustee (as the case may be) at any time when:
(A)
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
(B)
the Facility Agent or the Security Trustee (as the case may be) otherwise rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document;
(C)
(if the Facility Agent or the Security Trustee (as the case may be) is also a Lender) it is a Defaulting Lender under paragraph (A) or (B) of the definition of "Defaulting Lender"; or
(D)
an Insolvency Event has occurred and is continuing with respect to the Facility Agent or the Security Trustee (as the case may be);
unless, in the case of paragraph (A) above:
(1)    its failure to pay is caused by:
(a)    administrative or technical error; or

11/11665581    12


(b)    a Disruption Event; and
payment is made within 3 Business Days of its due date; or
(2)
the Facility Agent or the Security Trustee (as the case may be) is disputing in good faith whether it is contractually obliged to make the payment in question.
"Inconvertibility Balance" has the meaning given to that term in Clause 32.6(B) (Payments during an Inconvertibility Event).
"Inconvertibility Event" has the meaning given to that term in Clause 32.5 (Exceptions).
"Indenture" means the indenture agreement dated on or about 22 February 2012 between the Parent and Olympia Trust Company pursuant to which the Parent may issue unsecured debentures.
"Independent Auditor" means a firm of auditors of international standing selected by the Facility Agent after consultation with the Borrower.
"Independent Engineer" means XxXxxxxx and XxxXxxxxxxx or such other reputable independent petroleum engineer or other expert appointed by the Technical Bank in consultation with the Borrower.
"Information Memorandum" means the document in the form approved by the Borrower concerning the Facility and the Group which was prepared by the Mandated Lead Arrangers and distributed to selected financial institutions for the purposes of syndication of the Facility.
"Initial Projection" means the Projection delivered pursuant to Clause 4.1 (Initial conditions precedent).
"Insolvency Event" in relation to a Finance Party means that the Finance Party:
(A)
is dissolved (other than pursuant to a consolidation, amalgamation or merger);
(B)
becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
(C)
makes a general assignment, arrangement or composition with or for the benefit of its creditors;
(D)
institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;
(E)
has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (D) above and:
(1)
results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
(2)
is not dismissed, discharged, stayed or restrained in each case within 7 days of the institution or presentation thereof;

11/11665581    13


(F)
has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
(G)
seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets;
(H)
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
(I)
causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (A) to (H) above; or
(J)
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
"Insolvency Officer" means any liquidator, trustee in bankruptcy, judicial custodian or manager, compulsory manager, receiver, receiver and manager, administrative receiver, administrator, monitor or other similar officer, in each case, appointed in any jurisdiction.
"Insurances" means any insurances that are required to be maintained by, or on behalf of, any member of the Group pursuant to this Agreement.
"Interim Projection" means each Projection that is adopted or due to be adopted on each Interim Recalculation Date.
"Interim Recalculation Date" means any date nominated by the Technical Bank pursuant to Clause 7.1.2 (Adoption).
"Interest Period" means, in relation to a Loan, each period determined in accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 10.3 (Default interest).
"ISDA Master Agreement" means the 1992 or 2002 ISDA Master Agreement (Multicurrency–Cross Border) published by the International Swaps and Derivatives Association.
"ITA" means the Income Tax Act 2007.
"L/C Commission" has the meaning given to that term in Clause 13.2 (L/C commission).
"L/C Proportion" means, in relation to any Lender in respect of any Letter of Credit at any time, the proportion (expressed as a percentage) borne by that Xxxxxx's Commitment to the Aggregate Commitments at such time or, if at any such time the Aggregate Commitments have been reduced to zero, the proportion, (expressed as a percentage) borne by that Xxxxxx's Commitment to the Aggregate Commitments immediately prior to such reduction.
"Lender" means each Bank Tranche Lender and IFC, which in each case has not ceased to be a Party in accordance with the terms of this Agreement.
"Letter of Credit" means a letter of credit issued or to be issued pursuant to Clause 6 (Utilisation – Letters of Credit).
"LIBOR" means, in relation to any Loan:
(A)
the applicable Screen Rate; or

11/11665581    14


(B)
(if no Screen Rate is available for dollars for the Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,
as of 11.00 a.m. (London time) on the Quotation Day for the offering of deposits in dollars and for a period comparable to the Interest Period of that Loan.
"LLCR" means the loan life cover ratio being, in relation to any Calculation Period, the ratio of N:D as shown in the then current Projection where:
"N" is the net present value (as at the first day of that Calculation Period) of the aggregate of the Projected Net Revenues for that Calculation Period and for each Calculation Period occurring thereafter which ends on or before the Final Maturity Date, discounted at a discount rate which is equal to the higher of (i) the aggregate of the US$ LIBOR 5-year swap fixed rate on that date plus the Margin and (ii) 8 per cent. per annum, taking into account the effect of any Hedging Agreements then existing; and
"D" is the aggregate amount of the Utilisations outstanding or, as the case may be, projected to be outstanding on the first day of that Calculation Period.
"LMA" means the Loan Market Association.
"Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.
"Majority Lenders" means:
(A)
until the Aggregate Commitments have been reduced to zero, a Lender or Lenders whose Commitments aggregate 662/3% or more of the Aggregate Commitments (or, if the Aggregate Commitments have been reduced to zero and there are no Utilisations then outstanding, aggregated 662/3% or more of the Aggregate Commitments immediately prior to the reduction); or
(B)
at any other time, a Lender or Lenders whose participations in the Utilisations then outstanding aggregate 662/3% or more of all the Utilisations then outstanding.
"Mandate Letter" means the mandate letter dated 14 December 2009 between the Borrower and Sumitomo Mitsui Banking Corporation Europe Limited.
"Mandatory Cost" means the percentage rate per annum calculated by the Facility Agent in accordance with Schedule 7 (Mandatory Cost Formula).
"Margin" means, in relation to any Utilisation on any day, [amount has been redacted], provided that on each day that the aggregate of the outstanding Utilisations is less than [amount has been redacted], the Margin shall be [amount has been redacted].
"Material Adverse Effect" means a material adverse effect on:
(A)
the ability of any Obligor to perform any of its obligations under any Finance Document as and when they fall due to be performed;
(B)
the business, property, operations, prospects or financial condition of the Obligors taken as a whole;
(C)
the validity or enforceability of any Finance Document or any material provision thereof; or
(D)
the rights and remedies of any Finance Party under any Finance Document.
"Maximum Available Amount" has the meaning given to that term in Clause 4.2.3.

11/11665581    15


"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(A)
(subject to paragraph (C) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(B)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(C)
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period.
"Obligor" means the Borrower or a Guarantor.
"Original Obligor" means the Borrower or an Original Guarantor.
"Original Reserves" means, in relation to each Borrowing Base Asset, the quantities of Petroleum forecast in the first Projection in which such Petroleum Asset is included as a Borrowing Base Asset to be produced from such Borrowing Base Asset from the first day of the first Calculation Period shown in such Projection up to (and including) the Abandonment Date for such Borrowing Base Asset, as such quantity of Petroleum reserves may be adjusted to reflect actual recoveries of Petroleum since the date of such first Projection and any upgrade or downgrade of Petroleum reserves taken into account in the current Projection.
"Parent" means TransGlobe Energy Corporation.
"Participating Member State" means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.
"Party" means a party to this Agreement.
"Petroleum" means any mineral, oil or relative hydrocarbon (including condensate and natural gas liquids) and natural gas existing in its natural condition in strata (but not including coal or bituminous shale or other stratified deposits from which oil can be extracted by destructive distillation).
"Petroleum Asset" means (i) any Petroleum field, pipeline transmission system or other Petroleum project, (ii) the xxxxx, facilities and equipment relating to such field, system or project and/or (iii) the interests in such field, system, project, xxxxx, facilities or equipment.
"PLCR" means the project life cover ratio being, being, in relation to any Calculation Period, the ratio of N:D as shown in the then current Projection where:
"N" is the net present value (as at the first day of that Calculation Period) of the aggregate of the Projected Net Revenues for that Calculation Period and for each Calculation Period occurring thereafter which ends on or before the Calculation End Date, discounted at a discount rate which is equal to the higher of (i) the aggregate of the US$ LIBOR 5-year swap fixed rate on that date plus the Margin and (ii) 8 per cent. per annum, taking into account the effect of any Hedging Agreements then existing; and
"D" is the aggregate amount of the Utilisations outstanding or, as the case may be, projected to be outstanding on the first day of that Calculation Period.

11/11665581    16


"Preferred Payment" has the meaning given to that term in Clause 32.5.2 (Exceptions).
"Project Accounts" means the Revenue Accounts and the Debt Service Reserve Account.
"Project Documents" means, in relation to each Borrowing Base Asset:
(A)
each joint operating agreement and/or unitisation and unit operating agreement relating thereto, each agreement relating to the transportation, processing and/or storage of production therefrom and each agreement for the sale or marketing of production therefrom and each other major agreement relating to that Borrowing Base Asset and/or Petroleum produced therefrom;
(B)
any Authorisation required for the lawful exploitation, development or operation of that Borrowing Base Asset or the production, transportation or sale of Petroleum therefrom (and including, without limitation, any Petroleum production licence);
(C)
any development plan approved by any relevant operating committee and/or any appropriate governmental or other regulatory authority relating to that Borrowing Base Asset;
(D)
any documents relating to the acquisition by any Obligor of any interests in any Borrowing Base Asset or of any entity holding the interest in such Borrowing Base Asset; and
(E)
any other document designated as such by the Borrower and the Facility Agent.
"Projected Net Revenues" means, in relation to any period, an amount (which may be a negative or positive figure) calculated by deducting "B" from "A" where:
"A" is the aggregate of the Gross Income of the Group projected to be received in that period; and
"B" is the aggregate of the Gross Expenditure of the Group projected to be made in that period, but disregarding any:
(A)
amount described in paragraphs (A)(2)(c), (A)(2)(d), (A)(2)(g) and (F) of the definition of Gross Expenditure which does not relate to a Borrowing Base Asset; and
(B)
general and administrative expenditure which does not relate to a Borrowing Base Asset for all periods other than the first Calculation Period in any Projection.
"Projection" means a consolidated cashflow and debt service projection in respect of the Group prepared or to be prepared pursuant to this Agreement.
"Proven + Probable Reserves" means, in relation to any Petroleum Asset, proved + probable reserves as determined in accordance with The Canadian Securities Administrators National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities) for reporting issuers in Canada, as may be amended, supplemented or replaced from time to time.
"Proven Reserves" means, in relation to any Petroleum Asset, proved reserves as determined in accordance with The Canadian Securities Administrators National Instrument 51-101 (Standards of Disclosure for Oil and Gas Activities) for reporting issuers in Canada, as may be amended, supplemented or replaced from time to time.
"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the London interbank market in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the London interbank market

11/00000000    17


(and if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Day will be the last of those days).
"Recalculation Date" means any Scheduled Recalculation Date or Interim Recalculation Date.
"Reduction Date" means (i) each Recalculation Date and (ii) to the extent that the same does not coincide with a Recalculation Date, each date on which a Projection is adopted in accordance with Clause 7 (Projections).
"Reference Banks" means Sumitomo Mitsui Banking Corporation Europe Limited or such other banks as may be appointed by the Facility Agent in consultation with the Borrower.
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
"Relevant Affiliate" means, to the extent that it is not already an Obligor, any wholly-owned Subsidiary of an Obligor or any wholly-owned Subsidiary of a Holding Company of an Obligor.
"Remaining Reserves" means, in relation to each Borrowing Base Asset and any date, the quantities of Petroleum forecast in the then current Projection to be produced by that Borrowing Base Asset in the period from that date up to (and including) the Abandonment Date for such Borrowing Base Asset (as determined in accordance with Clause 7 (Projections)).
"Renewal Letter of Credit" means a Letter of Credit issued in accordance with the requirements of Clause 6.4 (Renewal of a Letter of Credit).
"Repeating Representations" means each of the representations set out in Clause 21 (Representations) other than in sub-Clauses 21.7 (Governing law and enforcement), 21.8 (Deduction of Tax), 21.9 (No filing or stamp taxes), 21.11 (No misleading information), 21.12.2 (Financial statements), 21.14 (No proceedings pending or threatened), 21.15 (Ownership), 21.17 (Environmental matters), 21.20 (Security), 21.24 (No Financial Indebtedness, guarantees or Security) and 21.26 (Solvency).
"Reports" means each of the documents listed in paragraph 4 of Part I of Schedule 3 (Conditions precedent).
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
"Required Balance" means in relation to any date, the aggregate amount of interest and L/C Commission payable by the Borrower under the Finance Documents for the following six month period on the Utilisations outstanding on that date, as determined by the Facility Agent from time to time (and notified to the Borrower in writing).
"Required Retention Amount" means, in relation to any date, the amount, in dollars, equal to:
(A)
the amount certified by the Borrower (in a Working Capital Certificate delivered to the Technical Bank, the English Account Bank and the Facility Agent no later than 10 Business Days prior to that date) as being the aggregate amount required to be retained by the Borrowing Base Obligors in the Revenue Accounts in order for each Borrowing Base Obligor to meet its liabilities, in each case as they fall due in the period of 90 days from that date (in each case taking into account the

11/00000000    18


income receivable by it in that period and the timing of the receipt of such income); or
(B)
if the Borrower fails to deliver a Working Capital Certificate to the Technical Bank, the English Account Bank and the Facility Agent at least 10 Business Days prior to that date, the amount which the Facility Agent (in consultation with the Technical Bank) determines acting reasonably as being the amount required by the Borrowing Base Obligors in order to meet their working capital requirements in the period of 90 days from that date.
"Reserves Report" means a report prepared by an Independent Engineer containing such information and/or evaluation(s) (relating to each Borrowing Base Asset or, as the case may be, any other Petroleum Asset which the Borrower is seeking to have designated as a Borrowing Base Asset) as the Technical Bank may reasonably require including evaluation(s) of the recoverable reserves (both Proven + Probable Reserves and Proven Reserves) and/or production profiles of such Borrowing Base Assets or, as the case may be, Petroleum Assets.
"Reserve Tail Date" means the Reduction Date immediately preceding the date (reflected in each Projection) on which the aggregate Remaining Reserves for all Borrowing Base Assets is forecast to fall below 20% of the aggregate Original Reserves for such Borrowing Base Assets (as determined in accordance with Clause 7 (Projections)).
"Restricted Payment Event" means, at any time, circumstances in which:
(A)
the Central Bank of Egypt or other Relevant Authority in Egypt has implemented restrictions in such a way that the Egyptian Borrowing Base Obligors are prohibited, notwithstanding the provisions of their production sharing agreements, from remitting, in a Defined Convertible Currency, profits made or funds received by them, or funds held by them in a bank account located, in Egypt, to a Person or a bank account located in a country other than Egypt; and
(B)
the Borrowing Base Obligors:
(i)
have received, in the prior three month period, payments for cargos lifted or otherwise received in a country other than Egypt in an aggregate amount of less than [redacted], and if such were the case,
(ii)
have received, in the prior three month period, payments for cargos lifted or otherwise received in a country other than Egypt, which, when aggregated with payments to be received in the subsequent three month period, as advised by EGPC or other Relevant Authority in Egypt, for cargos to be lifted or otherwise received in a country other than Egypt, amount to less than [redacted].
"Revenue Accounts" means the English Revenue Accounts and the Egyptian Revenue Accounts.
"Rollover Loan" means one or more Loans:
(A)    made or to be made on the same day that a maturing Loan is due to be repaid;
(B)    the aggregate amount of which is equal to or less than the maturing Loan; and
(C)
made or to be made to the Borrower for the purpose of refinancing a maturing Loan.
"Scheduled Projection" means each Projection that is adopted or due to be adopted on a Scheduled Recalculation Date.

11/11665581    19


"Scheduled Recalculation Date" means each 30 June and 31 December occurring before the Final Maturity Date.
"Screen Rate" means in relation to LIBOR, the British Bankers' Association Interest Settlement Rate for dollars for the relevant period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Facility Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders.
"Secured Liabilities" means all or any monies, obligations and liabilities now or hereafter due, owing or incurred by any Obligor to any Finance Party under or pursuant to the Finance Documents, in each case, whether by acceleration or otherwise, and whether such monies, obligations or liabilities are express or implied; present, future or contingent; joint or several; incurred as principal or surety; originally owing to the Finance Party(ies) or purchased (whether by assignment or otherwise) or acquired in any other way by the Finance Party(ies); or denominated in dollars or any other currency.
"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
"Security Document" means:
(A)
each document entered into pursuant to which Security over the share capital of each Obligor (other than the Parent) is granted to the Finance Parties or, as the case may be, the Security Trustee (in its capacity as such);
(B)
each document entered into pursuant to which Security is granted by any Obligor over that Xxxxxxx's assets to the Finance Parties or, as the case may be, the Security Trustee (in its capacity as such);
(C)
each other document evidencing or creating any Security in favour of the Finance Parties (or, as the case may be, the Security Trustee (in its capacity as such)) for, or in respect of, the liabilities and obligations of any Obligor under this Agreement or any other Finance Documents; and
(D)    each other document designated as such by the Facility Agent and the Borrower.
"Security Trustee" means Sumitomo Mitsui Banking Corporation Europe Limited in its capacity as security trustee for the Finance Parties or any other person that replaces it in such capacity in accordance with this Agreement.
"Specified Period" means each period specified in the first column (headed "Specified Period") of each table set out in Schedule 2 (The Lenders).
"Subsidiary" means, in relation to any person (a "parent entity"), any other person (the "relevant entity") (a) in respect of which that parent entity holds or owns (directly or indirectly) more than 50% of the voting capital or similar ownership rights or (b) over which that parent entity has direct or indirect control (where, for the purposes of this definition, "control" means the power to direct the management and the policies of the relevant entity whether through the ownership of voting capital, by contract or otherwise).
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
"Technical Assumption" means any assumptions (other than an Economic Assumption), and the values ascribed to such assumptions, upon which each Projection or draft Projection and, in each case, the calculations and information therein are, or are to be, based.

11/11665581    20


"Technical Bank" means Sumitomo Mitsui Banking Corporation Europe Limited in its capacity as technical bank or any other person that replaces it in such capacity in accordance with this Agreement.
"Term" means, in relation to any Letter of Credit, the period during which the Fronting Bank is under a liability under that Letter of Credit.
"Test Date" has the meaning given to that term in Clause 23.2 (Definitions).
"Total Available Commitments" means the aggregate for the time being of each Lender's Available Commitment.
"Tranche" means the Bank Tranche or the IFC Tranche or both.
"Transaction Documents" means the Project Documents and the Finance Documents.
"Transaction Security" means the Security created or expressed to be created in favour of the Security Trustee pursuant to the Security Documents.
"Transfer Certificate" means a certificate substantially in one of the forms set out in Schedule 8 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Borrower.
"Transfer Date" means, in relation to an assignment or a transfer, the later of:
(A)
the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and
(B)
the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.
"TransGlobe Egypt" means TransGlobe Petroleum Egypt Inc.
"TransGlobe GOS" means TransGlobe GOS Inc.
"TransGlobe West Xxxx" means TransGlobe West Xxxx Inc.
"TransGlobe West Gharib" means TransGlobe West Gharib Inc.
"TransGlobe West Yemen" means XX Xxxx Yemen Inc.
"TransGlobe Yemen" means TG Holdings Yemen Inc.
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.
"Utilisation" means a Loan or a Letter of Credit.
"Utilisation Date" means the date of a Utilisation, being (a) in the case of any Loan, the date on which the Loan is made or (b) in the case of any Letter of Credit, the date on which that Letter of Credit is issued or, as the case may be, in relation to any Letter of Credit that is being or has been renewed, the date on which that Letter of Credit is renewed and re-issued.
"Utilisation Request" means:
(A)
in relation to any Loan, a notice substantially in the form set out in Part I (Loans) of Schedule 5 (Utilisation Request); and
(B)
in relation to any Letter of Credit, a notice substantially in the form set out in Part II (Letters of Credit) of Schedule 5 (Utilisation Request).
"VAT" means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.

11/11665581    21


"West Gharib" means that part of the West Gharib region of Egypt in which TransGlobe West Gharib has a 100% working interest.
"Working Capital Certificate" means a certificate substantially in the form set out in Schedule 13 (Working Capital Certificate).
1.2
Construction
1.2.1
Unless a contrary indication appears, any reference in this Agreement to:
(A)
any Finance Party or any Obligor shall be construed so as to include its successors in title, permitted assigns and permitted transferees;
(B)
"assets" includes present and future properties, revenues and rights of every description;
(C)
a "Finance Document" or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;
(D)
"indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(E)
a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
(F)
a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a kind that is normally complied with by those to whom it is addressed) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
(G)
"disposal" means a sale, transfer, grant, lease or other disposal, whether voluntary or involuntary, and "dispose" will be construed accordingly;
(H)
a provision of law is a reference to that provision as amended or re-enacted;
(I)
a time of day is a reference to London time;
(J)
any matter "including" specific instances or examples of such matter shall be construed without limitation to the generality of that matter (and references to "include" shall be construed accordingly); and
(K)
the Interest Period of a Letter of Credit will be construed as a reference to the Term of that Letter of Credit;
(L)
an amount borrowed includes any amount utilised by way of Letter of Credit;
(M)
a Utilisation made or to be made to the Borrower includes a Letter of Credit issued on its behalf;
(N)
a Lender funding its participation in a Utilisation includes a Lender participating in a Letter of Credit;

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(O)
amounts outstanding under this Agreement include amounts outstanding under any Letter of Credit;
(P)
an "outstanding" amount of a Letter of Credit at any time is the maximum amount that is or may be payable by the Borrower in respect of that Letter of Credit at that time (without regard to any cash cover provided in relation to such Letter of Credit);
(Q)
the "face value" of any Letter of Credit is a reference to the face amount of the Letter of Credit on the date of its issue (without regard to any cash cover provided or any claims made thereunder);
(R)
the Borrower "repaying" or "prepaying" a Letter of Credit means:
(1)
the Borrower providing cash cover for that Letter of Credit;
(2)
the maximum amount payable under the Letter of Credit being reduced in accordance with its terms; or
(3)
the Fronting Bank being satisfied that it has no further liability under that Letter of Credit,
and the amount by which a Letter of Credit is repaid or prepaid under paragraphs (R)(1) and (R)(2) above is the amount of the relevant cash cover or, as the case may be, relevant reduction;
(S)
the Borrower providing "cash cover" for a Letter of Credit means the Borrower paying an amount in the currency in which that Letter of Credit is denominated to an interest-bearing account in the name of the Borrower and the following conditions are met:
(1)
the account is with the Fronting Bank or any other Finance Party nominated by the Facility Agent with the approval of the Fronting Bank and the Majority Lenders;
(2)
withdrawals from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Letter of Credit until no amount is or may be outstanding under that Letter of Credit; or
(3)
the Borrower has executed a security document, in form and substance satisfactory to the Facility Agent, the Security Trustee and the Fronting Bank creating a first ranking security interest over that account;
(T)
"USD", "$" or "dollars" is to the lawful currency for the time being of the United States of America; and
(U)
"EGP" or "Egyptian pounds" is to the lawful currency for the time being of Egypt.
1.2.2
Clause and Schedule headings are for ease of reference only.
1.2.3
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
1.2.4
A Default is "continuing" if it has not been remedied or waived.

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1.2.5
If a moratorium occurs in respect of an Obligor, the ending of that moratorium will not remedy any Event of Default caused by the moratorium and, notwithstanding any other term of the Finance Documents, that Event of Default will continue to be outstanding unless and until it is expressly waived by the Agent (acting on the instructions of the Majority Lenders).
1.2.6
For the purposes of this Agreement:
(A)
subject to the first sentence in Clause 7.1.1 (Adoption), a reference to the then "current Projection" is a reference to the Projection most recently adopted pursuant to Clause 7.9 (Adoption of Projections); and
(B)
a reference to the date on which any Projection is "due" to be adopted is a reference to the Recalculation Date as of which that Projection is to be prepared and adopted under Clause 7.1.1 (Adoption).
1.2.7
For the purposes of this Agreement:
(A)
a "Cover Ratio Event" shall occur if any Projection adopted pursuant to Clause 7 (Projections) demonstrates that:
(1)
the PLCR on any current or future Calculation Date shown in that Projection is less than 1.5:1;
(2)
the LLCR on any current or future Calculation Date shown in that Projection is less than 1.3:1; or
(3)
the DSCR on any current or future Calculation Date shown in that Projection is less than 1.2:1; and
(B)
each such Cover Ratio Event shall be "continuing" until the adoption of a subsequent Projection pursuant to Clause 7 (Projections) which demonstrates that (as applicable):
(1)
the PLCR on each current and future Calculation Date shown in that Projection is equal to or greater than 1.5:1;
(2)
the LLCR on each current and future Calculation Date shown in that Projection is equal to or greater than 1.3:1; and
(3)
the DSCR on each current and future Calculation Date shown in that Projection is equal to or greater than 1.2:1.
1.2.8
Any reference in this Agreement to a "Utilisation Request" for any Loan shall include any Utilisation Request which has been deemed to have been issued pursuant to Clause 6.7 (Loans to cover demands).
1.2.9
Any reference in this Agreement to the Borrowing Base Amount which is "applicable" at any date or period is a reference to the Borrowing Base Amount relating to that date or period as shown in the then current Projection.
1.2.10
Unless a contrary intention appears, the obligation(s) of each Obligor under this Agreement and/or the other Finance Documents shall remain in force for as long as any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
1.2.11
For the purpose of this Agreement, reference to a Commitment under a Tranche means, in relation to the Bank Tranche, the Bank Tranche Commitment and, in relation to the IFC Tranche, the IFC Tranche Commitment.

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1.3
Third party rights
1.3.1
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.
1.3.2
Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.
2.
THE FACILITY
2.1
Facility
Subject to the terms of this Agreement (and in the case of IFC whilst it is a Lender, the terms of the IFC Finance Contract), the Lenders make available to the Borrower:
2.1.12
a revolving credit facility made available by the Bank Tranche Lenders (which may be utilised by way of loans or letters of credit) in an aggregate amount equal to the Aggregate Bank Tranche Commitments from time to time (the "Bank Tranche"); and
2.1.13
a revolving loan facility made available by IFC (which may be utilised by way of loans or letters of credit) in an aggregate amount equal to the IFC Tranche Commitment from time to time (the "IFC Tranche").
2.2
Finance Parties' rights and obligations
2.2.3
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
2.2.4
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
2.2.5
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
3.
PURPOSE
3.1
Purpose
The Borrower shall apply all amounts borrowed by it under the Facility:
3.1.6
firstly, towards the refinancing of amounts outstanding under the Existing Credit Agreement; and
3.1.7
thereafter, towards any other lawful general corporate purposes of the Borrower.
3.2
Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4.
CONDITIONS OF UTILISATION
4.1
Initial conditions precedent

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4.1.1
The Borrower may not deliver a Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part I (CPs to first Utilisation Request) of Schedule 3 (Conditions precedent) in form and substance satisfactory to the Facility Agent (acting on the instructions of all the Lenders). The Facility Agent shall notify the Borrower promptly upon being so satisfied.
4.1.2
The Lenders will only be obliged to comply with Clause 5.4 (Xxxxxxx' participation) in relation to any Loan if, on or before the Utilisation Date for that Loan, the Facility Agent has received all of the documents and other evidence listed in Part II (CPs to first Utilisation) of Schedule 3 (Conditions precedent) in form and substance satisfactory to the Agent (acting on the instructions of all the Lenders).
4.2
Further conditions precedent
The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) and the Fronting Bank shall only be obliged to comply with Clause 6.5 (Issue of Letters of Credit) if:
4.2.1
on the date of the Utilisation Request and on the proposed Utilisation Date:
(A)
in the case of a Rollover Loan or Renewal Letter of Credit, no Event of Default is continuing or would result from the proposed Utilisation and, in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation;
(B)
in case of a Utilisation, other than a Rollover Loan, no Restricted Payment Event is continuing; and
(C)
the Repeating Representations and the IFC Representations to be made by each Obligor are true in all material respects;
4.2.2
other than in the case of a Rollover Loan or a Renewal Letter of Credit:
(A)
any Projection which is due to be adopted by a Recalculation Date has been adopted in accordance with Clause 7 (Projections) by such Recalculation Date (unless it has not been so adopted as a result of any failure on the part of any Finance Party to perform its obligations under this Agreement); and
(B)
no Cover Ratio Event is continuing;
4.2.3
the aggregate of:
(C)
the amount of the Utilisation proposed to be made on the proposed Utilisation Date; and
(D)
the aggregate amount of all outstanding Utilisations on the proposed Utilisation Date less the aggregate amount of all outstanding Utilisations due to be repaid or prepaid on the proposed Utilisation Date,
does not exceed the lower of (i) the Aggregate Commitments and (ii) the Borrowing Base Amount, in each case, applicable on such proposed Utilisation Date (the "Maximum Available Amount");
4.2.4
the aggregate of:
(C)
the portion of the Utilisation proposed to be made under the Bank Tranche on the proposed Utilisation Date; and
(D)
the aggregate amount of all portions of all outstanding Utilisations under the Bank Tranche on the proposed Utilisation Date less the aggregate

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amount of all portions of all outstanding Utilisations under the Bank Tranche due to be repaid or prepaid on the proposed Utilisation Date,
does not exceed the Aggregate Bank Tranche Commitments under the Bank Tranche; and
4.2.5
the aggregate of:
(A)
the portion of the Utilisation proposed to be made under the IFC Tranche on the proposed Utilisation Date; and
(B)
the aggregate amount of all portions of all outstanding Utilisations under the IFC Tranche on the proposed Utilisation Date less the aggregate amount of all portions of all outstanding Utilisations under the IFC Tranche due to be repaid or prepaid on the proposed Utilisation Date,
does not exceed the IFC Tranche Commitment under the IFC Tranche.
4.3
Maximum number of Utilisations
The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation more than 10 Utilisations would be outstanding.
5.
UTILISATION - LOANS
5.1
Delivery of a Utilisation Request for Loans
5.1.6
The Borrower may request a Loan to be made by delivery to each of the Facility Agent and IFC (whilst it is a Lender) of a duly completed Utilisation Request not later than 10 a.m. on the fifth Business Day prior to the proposed Utilisation Date (or such later date as the Lenders may agree).
5.2
Completion of a Utilisation Request for Loans
5.2.1
Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless:
(C)
it specifies that:
(4)
it is for a Loan; and
(5)
whilst IFC is a Lender, the proceeds of the portion of the Loan to be provided by IFC under the IFC Tranche:
(a)
will be used for an IFC Approved Purpose; and
(b)
will not be applied in reimbursement of, or otherwise used for, expenditures in the territories of any country that is not a member of the World Bank or for goods produced in, or services supplied from, such a country;
(D)
the proposed Utilisation Date is a Business Day within the Availability Period;
(E)
the currency and amount of the Loan comply with Clause 5.3 (Currency and amount);
(F)
the proposed Interest Period complies with Clause 11 (Interest Periods); and
(G)
it has been duly signed by an authorised signatory of the Borrower.

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5.2.2
Only one Loan may be requested in each Utilisation Request delivered under this Clause 5 (Utilisation - Loans).
5.3
Currency and amount
5.3.1
The currency specified in a Utilisation Request for a Loan must be dollars.
5.3.2
The aggregate amount of the proposed Loan requested in each Utilisation Request must be an amount which is a minimum of $1,000,000 or, if less, the maximum amount of the Facility that may be utilised for such Loan under Clause 4.2 (Further conditions precedent).
5.4
Lenders' participation
5.4.1
If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.
5.4.2
The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Total Available Commitments immediately prior to making the Loan.
5.4.3
The Facility Agent shall notify each Lender of the amount of each Loan not later than 5 p.m. on the third Business Day prior to the Utilisation Date for such Loan or, if (in the case of any Loan to be made pursuant to Clause 6.7 (Loans to cover demands)) it is not able to provide the same by such third Business Day, as soon as reasonably practicable after receiving the relevant notice from the Fronting Bank referred to in Clause 6.7 (Loans to cover demands).
5.5
Deemed Utilisation Requests
Notwithstanding any other provision of this Agreement, each Utilisation Request that is deemed to be issued pursuant to Clause 6.7 (Loans to cover demands) and Clause 6.11 (Deemed Loans) shall be deemed to have been issued in compliance with Clause 5.1 (Delivery of a Utilisation Request for Loans) and Clause 5.2 (Completion of a Utilisation Request for Loans) and all conditions (including the conditions set out in Clause 4.2 (Further conditions precedent)) that are required to be met in order for each Lender to make its participation in the Loan requested thereunder to be made available in accordance with Clause 5.4 (Lenders' participation) shall be deemed to have been met on the Utilisation Date for such Loan. The making of such Loan shall not be construed as a waiver of (i) any such conditions for any other purposes or (ii) any Default that may be continuing at such time.
5.6
Cancellation of Commitments
The Total Available Commitments shall be immediately cancelled at the end of the Availability Period.
5.7
Confirmation of disbursement
5.7.1
Promptly following the disbursement of each Loan, and in any event within five Business Days of its Utilisation Date, the Facility Agent shall deliver to IFC a disbursement receipt substantially in the form set out in Schedule 18 (Form of disbursement confirmation) and confirming that the portion of the Loan provided by IFC under the IFC Tranche has been disbursed to the Borrower.
5.7.2
Clause 5.7.1 shall not apply to Loans made pursuant to Clauses 6.7 (Loans to cover demands) or Clause 6.11 (Deemed Loans) or the True-Up Amount (as

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defined in the Amendment and Restatement Agreement) advanced on the Effective Date.
6.
UTILISATION - LETTERS OF CREDIT
6.1
Delivery of Utilisation Request for Letter of Credit
The Borrower may request a Letter of Credit to be issued by delivery to the Facility Agent and the Fronting Bank (with, whilst a Lender, a copy to IFC) of a duly completed Utilisation Request not later than 5 p.m. on the fifth Business Day prior to the proposed Utilisation Date (or such later date as the Lenders and the Fronting Bank may agree).
6.2
Completion of Utilisation Request for Letter of Credit
6.2.3
Each Utilisation Request for a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless:
(C)
it specifies that:
(1)
it is for a Letter of Credit; and
(2)
(whilst IFC is a Lender) the Letter of Credit to be provided:
(c)
will be used for an IFC Approved Purpose; and
(d)
will not be utilised for reimbursement of, or otherwise used for, expenditures in the territories of any country that is not a member of the World Bank or for goods produced in, or services supplied from, such a country;
(D)
the proposed Utilisation Date is a Business Day within the Availability Period;
(E)
the currency and amount of the Letter of Credit comply with Clause 6.3 (Currency and amount);
(F)
the form of the Letter of Credit is attached (and the same is in the form set out in Schedule 6 (Form of Letter of Credit) or in such other form as may be agreed between the Borrower, the Fronting Bank and the Facility Agent (acting on the instructions of the Majority Lenders));
(G)
the proposed Expiry Date of the Letter of Credit falls on or before the date which is three Months before the Final Maturity Date or, if the Borrower agrees in the relevant Utilisation Request to provide cash cover for that Letter of Credit in accordance with Clause 6.10 (Cash cover in respect of an Extended Letter of Credit), three years after the Final Maturity Date;
(H)
the delivery instructions for the Letter of Credit are specified;
(I)
it has been duly signed by an authorised signatory of the relevant Borrower; and
(J)
the identity of the beneficiary of the Letter of Credit has been approved by the Fronting Bank (acting reasonably).
6.2.4
Only one Letter of Credit may be requested in each Utilisation Request delivered under this Clause 6.2 (Completion of Utilisation Request for Letter of Credit).
6.3
Currency and amount
6.3.4
The currency specified in a Utilisation Request must be dollars.

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6.3.5
The amount of the proposed Letter of Credit must not exceed the Maximum Available Amount and the amount of the proposed Letter of Credit must be an amount which is a minimum amount of $500,000 or, if less, that Maximum Available Amount.
6.4
Renewal of a Letter of Credit
6.4.1
The Borrower may request any Letter of Credit issued on its behalf to be renewed by delivery to the Facility Agent and the Fronting Bank (with, whilst it is a Lender, a copy to IFC) of a Utilisation Request no earlier than 20 Business Days before the Expiry Date of the relevant Letter of Credit and no later than 5 p.m. on the fifth Business Day prior to the Expiry Date of the relevant Letter of Credit.
6.4.2
Each Utilisation Request relating to the renewal of a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless:
(A)
it specifies that it is for the renewal of a Letter of Credit;
(B)
the proposed Utilisation Date is a Business Day within the Availability Period;
(C)
the currency and amount of the Letter of Credit comply with Clause 6.3 (Currency and amount);
(D)
a copy of the relevant Letter of Credit to be renewed is attached;
(E)
the proposed new Expiry Date of the Letter of Credit falls on or before the date which is three Months before the Final Maturity Date or, if the Borrower agrees in the relevant Utilisation Request to provide cash cover for that Letter of Credit in accordance with Clause 6.10 (Cash cover in respect of an Extended Letter of Credit), three years after the Final Maturity Date;
(F)
the delivery instructions for the Letter of Credit are specified;
(G)
it has been duly signed by an authorised signatory of the Borrower; and
(H)
the identity of the beneficiary of the Letter of Credit has been approved by the Fronting Bank (acting reasonably).
6.4.3
The terms of each renewed Letter of Credit shall be the same as those of the relevant Letter of Credit immediately prior to its renewal, except that:
(A)
its amount may be less than the amount of the Letter of Credit immediately prior to its renewal; and
(B)
its Term shall start on its Utilisation Date and shall end on the proposed Expiry Date specified in the relevant Utilisation Request relating to its renewal.
6.4.4
Only one Letter of Credit may be requested in each Utilisation Request delivered under this Clause 6.4 (Renewal of a Letter of Credit).
6.5
Issue of Letters of Credit
If the conditions set out in this Agreement have been met, the Fronting Bank shall issue or, as the case may be, renew and re-issue, each Letter of Credit on its proposed Utilisation Date (provided, in the case of any Renewal Letter of Credit the Utilisation Date of which falls before the Expiry Date of the relevant Letter of Credit which is being renewed and replaced by that Renewal Letter of Credit, the Fronting Bank is satisfied it has no further liability under the relevant Letter of Credit being renewed and replaced).

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6.6
Claims under a Letter of Credit
6.6.3
The Borrower irrevocably and unconditionally authorises the Fronting Bank to pay any claim made or purported to be made under a Letter of Credit requested by it and which appears on its face to be in order (a "claim").
6.6.4
Save to the extent that any Loan is made pursuant to Clause 6.7 (Loans to cover demands) in respect of any claim, the Borrower shall immediately on demand pay to the Facility Agent for the Fronting Bank an amount equal to the amount of any claim.
6.6.5
The Borrower acknowledges that the Fronting Bank:
(A)
is not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and
(B)
deals in documents only and will not be concerned with the legality of a claim or any underlying transaction or any available set-off, counterclaim or other defence of any person.
6.6.6
The obligations of the Borrower under this Clause 6 (Utilisation – Letters of Credit) will not be affected by:
(A)
the sufficiency, accuracy or genuineness of any claim or any other document; or
(B)
any incapacity of, or limitation on the powers of, any person signing a claim or other document.
6.7
Loans to cover demands
6.7.1
The Fronting Bank shall promptly issue a notice (a "claim notice") to the Facility Agent, IFC (whilst it is a Lender) and the Borrower to notify them of (i) any claim made under any Letter of Credit; (ii) the amount of that claim (in the currency in which it is due to be paid); and (iii) the date on which it is due to pay that claim. Any failure by the Fronting Bank to provide any claim notice in accordance with this Clause 6.7.1 shall not release the Obligors and the other Lenders from their obligations and liabilities under this Clause 6 (Utilisations – Letters of Credit) or otherwise prejudice such obligations and liabilities.
6.7.2
If a claim notice has been issued, the Borrower shall be deemed to have issued a Utilisation Request for a Loan, to be proportionately advanced under the Bank Tranche and the IFC Tranche on the date which is the later of (a) the date on which that claim notice is issued and (b) 5 p.m. on the fifth Business Day prior to the date on which the Fronting Bank is due to pay the relevant claim. The aggregate amount of such proposed Loan shall be equal to the amount of the claim specified in the claim notice. The Utilisation Date for such proposed Loan shall be (i) the date specified in the claim notice as the date on which the relevant claim is due to be paid or (ii) if later, the third Business Day after the date on which the claim notice was issued. The Interest Period for such Loan shall be determined by the Facility Agent (in consultation with the Borrower).
6.8
Indemnities
6.8.1
Save to the extent that any Loan is made pursuant to Clause 6.7 (Loans to cover demands) in respect of any claim, the Borrower shall immediately on demand indemnify the Fronting Bank against payment made, or any cost, loss or liability incurred, by the Fronting Bank (otherwise than by reason of the Fronting Bank's

11/00000000    31


gross negligence or wilful misconduct) in acting as the Fronting Bank under any Letter of Credit requested by the Borrower.
6.8.2
Save to the extent that any Loan is made pursuant to Clause 6.7 (Loans to cover demands) in respect of any claim, each Lender shall (according to its L/C Proportion) immediately on demand indemnify the Fronting Bank against any payment made, or cost, loss or liability incurred, by the Fronting Bank (otherwise than by reason of the Fronting Bank's gross negligence or wilful misconduct) in acting as the Fronting Bank under any Letter of Credit (unless the Fronting Bank has been reimbursed by an Obligor pursuant to a Finance Document).
6.8.3
If any Lender is not permitted (by its constitutional documents or any applicable law) to comply with Clause 6.8.2, then that Lender will not be obliged to comply with Clause 6.8.2 and shall instead be deemed to have taken, on the first day of the Term of that Letter of Credit (or if later, on the date the Lender's participation in that Letter of Credit is transferred or assigned to the Lender in accordance with the terms of this Agreement), an undivided interest and participation in that Letter of Credit in an amount equal to its L/C Proportion of that Letter of Credit. On receipt of demand from the Facility Agent, that Xxxxxx shall pay to the Facility Agent (for the account of the Fronting Bank) an amount equal to its L/C Proportion of the total amount demanded under Clause 6.8.2.
6.8.4
The Borrower shall immediately on demand reimburse any Lender for any payment it makes to the Fronting Bank under this Clause 6.8 (Indemnities) in respect of that Letter of Credit, save to the extent that a Loan is made pursuant to Clause 6.7 (Loans to cover demands) in respect of any such payment.
6.8.5
The obligations of each Lender under this Clause 6.8 (Indemnities) are continuing obligations and will extend to the ultimate balance of sums payable by that Lender in respect of any Letter of Credit, regardless of any intermediate payment or discharge in whole or in part.
6.8.6
The obligations of any Lender under this Clause 6.8 (Indemnities) will not be affected by any act, omission, matter or thing which, but for this Clause 6.8.6, would reduce, release or prejudice any of its obligations under this Clause 6.8 (Indemnities) (without limitation and whether or not known to it or any other person) including:
(A)
any time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under a Letter of Credit or any other person;
(B)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor or any other person;
(C)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor, any beneficiary under a Letter of Credit or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(D)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any beneficiary under a Letter of Credit or any other person;
(E)
any amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit or any other document or security;

11/11665581    32


(F)
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Letter of Credit or any other document or security; or
(G)
any insolvency or similar proceedings.
6.9
Ratings criteria
6.9.1
If the Fronting Bank so requests at any time in relation to any Letter of Credit, any Lender that is not an Acceptable Bank shall provide Lender Cash Collateral (within two Business Days of a request from the Fronting Bank) in amount equal to that Xxxxxx's L/C Proportion of the relevant outstanding amount of that Letter of Credit.
6.9.2
If a Lender fails to provide Lender Cash Collateral in relation to any Letter of Credit in accordance with Clause 6.9.1 above, the Borrower shall, within two Business Days of a request from the Fronting Bank, provide cash cover in an amount equal to that Xxxxxx's L/C Proportion of the relevant outstanding amount of that Letter of Credit.
6.9.3
For these purposes:
(C)
the "relevant outstanding amount" of any Letter of Credit means the outstanding amount of that Letter of Credit less the amount of any cash cover for that Letter of Credit that has been provided by a Borrower; and
(D)
a Lender providing "Lender Cash Collateral" in relation to any Letter of Credit means that Lender paying an amount in the currency in which that Letter of Credit is denominated to an interest-bearing account in the name of that Lender and the following conditions are met:
(4)
the account is with the Fronting Bank;
(5)
withdrawals from the account may only be made:
(a)
to pay the Fronting Bank amounts due and payable to it by that Lender under Clause 6.8 (Indemnities) in respect of that Letter of Credit until no amount is or may be outstanding under that Letter of Credit;
(b)
(to the extent that such Letter of Credit has been subsequently repaid or prepaid) to repay that Lender an amount equal to that Xxxxxx's L/C Proportion of the amount of such repayment or prepayment; or
(c)
(to the extent that that Xxxxxx's Commitment is reduced and the same results in a change to its L/C Proportion) to repay that Lender the amount by which (i) the amount standing to the credit of the account exceeds (ii) the amount equal to that Xxxxxx's L/C Proportion (after the relevant reduction in its Commitment) of the relevant outstanding amount of that Letter of Credit;
(6)
(subject to condition (4) below) that Xxxxxx has executed a security document over that account, in form and substance satisfactory to the Fronting Bank creating first ranking Security over that account; and

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(7)
any Security granted pursuant to condition (3) above shall be released to such extent as may be necessary to allow any repayments to that Lender permitted under condition (2)(b) or (c) above.
6.10
Cash cover in respect of an Extended Letter of Credit
6.10.1
If the Expiry Date of a Letter of Credit falls later than three Months before the Final Maturity Date (such Letter of Credit being an "Extended Letter of Credit"), the Borrower shall, as security for its obligations under Clause 6.6 (Claims under a Letter of Credit) and Clause 6.8 (Indemnities) in respect of that Extended Letter of Credit, by no later than the earlier of:
(C)
the date falling three (3) Months prior to the Final Maturity Date; and
(D)
the date on which the whole of the Facility is repaid or prepaid and cancelled,
pay to the Fronting Bank cash cover for that Extended Letter of Credit.
6.10.2
If and to the extent the Borrower fails to make any payment to the Fronting Bank pursuant to this Agreement in relation to an Extended Letter of Credit on the due date, then the Borrower hereby irrevocably authorises the Fronting Bank to apply the cash cover towards such payment.
6.11
Deemed Loans
6.11.1
If the Borrower fails to provide cash cover in respect of an Extended Letter of Credit when due in accordance with Clause 6.10 (Cash cover in respect of an Extended Letter of Credit) the Borrower shall be deemed to have issued a Utilisation Request for a Loan in the amount required to achieve full cash cover in respect of that Extended Letter of Credit, to be proportionately advanced under the Bank Tranche and the IFC Tranche, on the date upon which the cash cover should have been made in accordance with Clause 6.10.1. The Utilisation Date for such proposed Loan shall be the date on which the cash cover should have been made by the Borrower in accordance with Clause 6.10.1. The Interest Period for such Loan shall be determined by the Facility Agent.
6.11.2
If any deemed Loan is made in accordance with Clause 6.11.1, the proceeds of that deemed Loan shall be held by the Fronting Bank as cash cover for the applicable Extended Letter of Credit.
6.12
Deemed participation in the Extended Letter of Credit
On and from the date on which full cash cover in respect of an Extended Letter of Credit is provided pursuant to Clause 6.10 (Cash cover in respect of an Extended Letter of Credit) and/or Clause 6.11 (Deemed Loans) and notwithstanding any other provision of this Agreement (i) to the extent that the Fronting Bank is not a Lender it shall be deemed to be a Lender and (ii) the L/C Proportion of the Fronting Bank in respect of that Extended Letter of Credit shall be deemed to be one hundred per cent.
6.13
Release of security
Provided the Obligors comply with Clauses 6.10 (Cash cover in respect of an Extended Letter of Credit) to 6.12 (Deemed participation in the Extended Letter of Credit) and provide cash cover for each Extended Letter of Credit, such arrangements shall not prejudice the right of the Obligors to have all other Security released in accordance with the terms of the Finance Documents.

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6.14
Rights of contribution
No Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this Clause 6 (Utilisation – Letters of Credit).
7.
PROJECTIONS
7.1
Adoption
7.1.5
Until the adoption of the first new Projection in accordance with this Clause 7 (Projections), the Initial Projection shall be the current Projection for the purposes of this Agreement. A new Projection shall be prepared in accordance with this Clause 7 (Projections) and adopted as of:
(C)
subject to Clause 7.1.3, each Scheduled Recalculation Date; and
(D)
each Interim Recalculation Date:
(1)
if the Facility Agent so requests, following the occurrence of any Default;
(2)
if in the opinion of the Facility Agent (acting on the instructions of the Majority Lenders) there has been or will be a material adverse change with respect to any of the assumptions on which the current Projection was based which (if a new Projection were then to be adopted) would reasonably be expected to result in a Cover Ratio Event;
(3)
following any request by the Borrower:
(a)
for any Petroleum Asset to be designated a Borrowing Base Asset; or
(b)
for any Borrowing Base Asset to cease to be designated a Borrowing Base Asset;
(4)
if in the Technical Bank's reasonable opinion there is a material increase in the proportion of the Gross Income being received in Egyptian pounds (as compared with the position at the date of the then current Projection); or
(5)
if the Majority Lenders so request at any time.
7.1.6
Promptly following any request by the Facility Agent, the Technical Bank or the Borrower for a new Projection pursuant to Clause 7.1.1(B), the Technical Bank (acting reasonably) shall specify and notify the Borrower and the Facility Agent of the date as of which such Projection is to be prepared and adopted (an "Interim Recalculation Date")
7.1.7
If any Interim Projection is adopted not more than two Months prior to any Scheduled Recalculation Date or is in preparation not more than two Months prior to any Scheduled Recalculation Date with the intention of adopting the same by that Scheduled Recalculation Date, the Scheduled Projection that was scheduled to be prepared pursuant to Clause 7.1.1(A) for adoption by that Scheduled Recalculation Date shall not be prepared but, for the avoidance of doubt, save as aforesaid, the adoption of an Interim Projection shall not affect the obligations of the parties hereunder to prepare Projections or the timing therefor.


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7.2
Content
Each Projection and draft Projection prepared pursuant to this Clause 7 (Projections) must:
7.2.6
be prepared using the Computer Model;
7.2.7
be in a form similar to the Initial Projection (or such other form as the Technical Bank may approve) and include the same type of information (and in the same level of detail) as that included in the Initial Projection;
7.2.8
be prepared on the basis of the Assumptions that are proposed, approved, agreed and/or determined in accordance with this Clause 7 (Projections); and
7.2.9
without prejudice to Clause 7.2.2, include:
(E)
details of all the Assumptions on which it is based; and
(F)
calculations of:
(1)
the Projected Net Revenues for each Calculation Period ending on or before the Calculation End Date;
(2)
the PLCR, LLCR and DSCR relating to each Calculation Period ending on or before the Final Maturity Date;
(3)
the Borrowing Base Amount for each Calculation Period commencing on or before the Final Maturity Date; and
(4)
the Reserve Tail Date.
7.3
Key principles
In (i) proposing, agreeing and/or determining Assumptions, (ii) preparing and/or approving any Projection or draft Projection or (iii) otherwise carrying out their obligations, and exercising their rights, under this Clause 7 (Projections), the Parties shall have regard to and comply with the following principles:
7.3.5
Each Projection shall generally be based on the Proven + Probable Reserves of each Borrowing Base Asset or such other reserves basis (which basis shall not include reserves other than Proven + Probable Reserves of each Borrowing Base Asset) as may be determined by the Technical Bank and risk-adjusted by the Technical Bank in such manner as the Technical Bank may determine (acting reasonably).
7.3.6
Each Projection will, in projecting interest rates and Petroleum sale prices, take account of the terms of any existing Hedging Agreement to the extent that such Hedging Agreement is between a member of the Group and (i) a Lender which is an Acceptable Bank or (ii) another Lender approved by the Technical Bank (acting reasonably).
7.3.7
All figures for Taxes included in any Projection must be based on tax legislation in force on the relevant Recalculation Date on which that Projection is due to be adopted and on any official announcements or publications in force as at such date stating that such legislation is to be altered, supplemented or replaced in whole or in part.
7.3.8
For the purposes of determining the opening cash balance(s) and the closing cash balance(s) for each Calculation Period shown in any Projection, all amounts standing to the credit of accounts that are not Project Accounts shall be disregarded.

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7.3.9
The Gross Expenditures associated with the abandonment of any Borrowing Base Asset will be assumed to occur in the Calculation Period in which the Abandonment Date for such Borrowing Base Asset occurs.
7.3.10
Reserves and cash flow from Borrowing Base Assets are to be disregarded to the extent that the Technical Bank (acting reasonably) concludes that whether by reason of non-payment or delay in payment by any offtaker, the imposition of exchange controls or otherwise, the relevant cash flows may not be received into a Revenue Account and be available for debt service.
7.3.11
Unless the Technical Bank indicates otherwise, for each period of two Calculation Periods in each Projection, the revenues of the Egyptian Borrowing Base Obligors will be capped in such Projection at the lesser of (i) projected net revenues from the Borrowing Base Assets of such Egyptian Borrowing Base Obligors and (ii) the amount of the previous 12 months' cash payments from EGPC and other buyers (excluding any offsets but including any direct sales and receipts of payments), including cargo liftings (if any).
7.4
Preparatory steps
7.4.1
No later than 40 Business Days before each relevant Recalculation Date or, in relation to any Interim Projection, such later date as the Technical Bank may specify:
(I)
the Technical Bank shall, acting reasonably and subject to Clause 7.4.3 below, submit to the Borrower its proposals for the Economic Assumptions, which shall be consistent with assumptions made by the Technical Bank for credit facilities similar to the Facility and in respect of borrowers and assets similar to the Borrower and the Borrowing Base Assets; and
(J)
the Borrower shall submit to the Technical Bank its proposals for the Technical Assumptions,
to be used, in each case, for the Projection due to be adopted on such Recalculation Date.
7.4.2
The Borrower and the Technical Bank shall seek to agree the Assumptions to be used for each Projection based on the proposals submitted in accordance with Clause 7.4.1 by (i) the date falling 30 Business Days before the relevant Recalculation Date on which that Projection is due to be adopted or (ii) in relation to any Interim Projection, such later date as the Technical Bank may specify.
7.4.3
For as long as IFC is a Lender, the oil price assumption to be used for any Projection must not exceed the World Bank's forecast oil price which shall be provided by IFC to the Technical Bank at least 10 Business Days before the date that the Technical Bank is due to submit the Economic Assumptions to the Borrower under Clause 7.4.1(A).
7.5
Draft Projections
7.5.7
The Technical Bank shall prepare a draft Projection using:
(A)
all the Assumptions that have been agreed between the Borrower and the Technical Bank pursuant to Clause 7.4.2 (Preparatory steps); and
(B)
to the extent that the Borrower and the Technical Bank have not been able to reach agreement on any such Assumptions by the date referred to

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in Clause 7.4.2 (Preparatory steps), such Assumptions as determined by the Technical Bank (acting reasonably).
7.5.8
If the Borrower has made a request under Clause 7.10 (Asset base) and/or the Projection in question is being prepared pursuant to Clause 7.1.1(B)(3) (Adoption) then, at the Technical Bank's option:
(H)
the draft Projection shall be prepared on the basis that the relevant Petroleum Asset(s) have been designated as Borrowing Base Asset(s) and/or as the case may be, the relevant Borrowing Base Asset(s) have ceased to be so designated; or
(I)
the Technical Bank shall prepare:
(1)
a draft Projection on the basis that the relevant Petroleum Asset(s) have been designated as Borrowing Base Asset(s) and/or, as the case may be, the relevant Borrowing Base Asset(s) have ceased to be so designated; and
(2)
a further draft Projection on the basis that no new Petroleum Asset(s) will be designated as Borrowing Base Asset(s) and no current Borrowing Base Asset(s) will cease to be so designated.
7.5.9
The Borrower and the Technical Bank will endeavour to ensure that each draft Projection is delivered (through the Facility Agent) to each Lender no later than 15 Business Days prior to the Recalculation Date on which such Projection is due to be adopted.
7.5.10
If the Borrower has made a request under Clause 7.10.1 (Asset base) or the draft Projection is being prepared pursuant to Clause 7.1.1(B)(3) (Adoption) the relevant draft Projection must be accompanied by details of the conditions ("CPs") (if any) that the Technical Bank (acting reasonably) considers necessary to be satisfied in order for the relevant Petroleum Asset(s) to be designated as Borrowing Base Asset(s) and/or, as the case may be, the relevant Borrowing Base Asset(s) to cease to be so designated.
7.6
Consideration by Xxxxxxx
7.6.3
Each Lender may, within 10 Business Days of receiving the draft Projection and other information under Clause 7.5 (Draft Projections), inform (through the Facility Agent) the Technical Bank whether or not it approves each of:
(A)
the adoption of each of the Assumptions used in the preparation of that draft Projection;
(B)
any relevant Petroleum Asset being designated as a Borrowing Base Asset and to the CPs relating thereto (if any); and
(C)
a Borrowing Base Asset ceasing to be so designated and to the CPs relating thereto (if any).
7.6.4
Any Lender that does not inform (through the Facility Agent) the Technical Bank to the contrary within 10 Business Days of receiving the draft Projection and other information under Clause 7.5 (Draft Projections) shall be deemed to have approved (as the case may be):
(E)
the adoption of all of the Technical Assumptions used in the preparation of that draft Projection; and/or

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(F)
any proposed Petroleum Asset being designated a Borrowing Base Asset and to the CPs relating thereto (if any); and/or
(G)
the relevant Borrowing Base Asset ceasing to be so designated and to the CPs relating thereto (if any).
7.7
Lenders approve
If (as the case may be):
7.7.7
the Majority Lenders approve, or are deemed to have approved, the use of each of the Assumptions for the preparation of the relevant Projection; and/or
7.7.8
all the Lenders approve, or are deemed to have approved, any Petroleum Asset being designated a Borrowing Base Asset and the CPs relating thereto; and/or
7.7.9
the Majority Lenders approve, or are deemed to have approved, any existing Borrowing Base Asset ceasing to be so designated and the CPs relating thereto,
then (as the case may be):
7.7.10
the draft Projection shall be adopted pursuant to Clause 7.9 (Adoption of Projections); and/or
7.7.11
the proposed new Petroleum Asset shall become a Borrowing Base Asset (upon satisfaction of such CPs); and/or
7.7.12
the relevant existing Borrowing Base Asset shall cease to be a Borrowing Base Asset (upon satisfaction of such CPs).
7.8
Lenders do not approve
7.8.4
If Majority Lenders do not approve, or are not deemed to have so approved, any of the Assumptions referred to the Lenders for approval pursuant to Clause 7.6 (Consideration by Lenders):
(C)
any Lender that does not approve the adoption of the Assumptions referred to in Clause 7.6.1(A) (Consideration by Xxxxxxx) shall, within 10 Business Days of receiving the draft Projection, inform (through the Facility Agent) the Technical Bank and provide to the Technical Bank and each other Lender (through the Facility Agent) its proposed Borrowing Base Amount together its own draft Projections (including an amended Computer Model) with such amendments to the Assumptions as it considers necessary; and
(D)
the Technical Bank shall, before the relevant Recalculation Date, adopt the highest Borrowing Base Amount that, based on the Borrowing Base Amount either approved by Lenders or submitted under Clause 7.8.1(A), achieves Majority Lenders approval and shall revise the draft Projection to reflect such Assumptions provided by the Lenders as it considers reasonable such that the draft Projection reflects that Borrowing Base Amount and such draft Projection shall be adopted in accordance with Clause 7.9 (Adoption of Projections).
7.8.5
If all the Lenders (i) do not approve, or are not deemed to have approved, the designation of any Petroleum Asset as a Borrowing Base Asset or (ii) require conditions which (a) are more onerous than the CPs relating thereto in order for such designation to be effected and (b) are not acceptable to the Borrower, then the Technical Bank will promptly prepare a new draft Projection:

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(J)
based on the Assumptions that have been agreed, approved or determined in accordance with the preceding provisions of this Clause 7 (Projections); and
(K)
that does not take account of the proposed Petroleum Asset as a Borrowing Base Asset.
7.8.6
If the Majority Lenders (i) do not approve, or are not deemed to have approved, of an existing Borrowing Base Asset ceasing to be so designated or (ii) require conditions which (a) are more onerous than the CPs relating thereto in order for such designation to cease and (b) are not acceptable to the Borrower, then the Technical Bank will promptly prepare a new draft Projection:
(A)
based on the Assumptions that have been agreed, approved or determined in accordance with the preceding provisions of this Clause 7 (Projections); and
(B)
that takes account of the relevant Borrowing Base Asset as a Borrowing Base Asset.
7.9
Adoption of Projections
7.9.3
Each draft Projection prepared pursuant to (as the case may be) Clauses 7.7 (Lenders approve) and 7.8 (Lenders do not approve) will not be adopted as the current Projection for the purposes of this Agreement until the latest of:
(E)
the relevant Recalculation Date on which the relevant Projection is due to be adopted; and
(F)
the date on which any relevant CPs (together with any additional conditions that the Majority Lenders may require in accordance with the preceding provisions of this Clause 7 (Projections)) are satisfied.
7.9.4
Upon such adoption of the Projection, the Facility Agent shall inform the Lenders and the Borrower accordingly and shall distribute a copy of that Projection to each of them.
7.10
Asset base
7.10.3
On or before the date falling 15 Business Days before the date on which the Technical Bank and the Borrower are due to submit their proposals in respect of the Assumptions to be used for any Projection pursuant to Clause 7.4 (Preparatory steps), the Borrower may submit a request to the Facility Agent, the Technical Bank and the Lenders for any Petroleum Asset to be designated a Borrowing Base Asset and/or for any existing Borrowing Base Asset to cease to be designated a Borrowing Base Asset.
7.10.4
If the Borrower has made a request under Clause 7.10.1 for any Petroleum Asset to be designated a Borrowing Base Asset or a Projection is being prepared pursuant to Clause 7.1.1(B)(3) (Adoption), the Borrower must deliver to the Lenders, the Facility Agent and the Technical Bank (at the same time it makes the relevant request for such Petroleum Asset to be designated a Borrowing Base Asset) all such information, documentation and evidence as the Lenders, the Technical Bank and/or the Facility Agent may reasonably require with respect to such Petroleum Asset.
7.10.5
No Petroleum Asset may be designated as a Borrowing Base Asset without the prior consent of the Facility Agent (acting on the instructions of all the Lenders).

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7.10.6
No Petroleum Asset may cease to be designated as a Borrowing Base Asset without the prior consent of the Facility Agent (acting on the instructions of the Majority Lenders).
7.11
Computer Model
7.11.1
The Technical Bank may, with the prior consent of the Borrower and the Majority Lenders, make amendments to the Computer Model from time to time (such consent not to be unreasonably withheld or delayed) to correct any deficiencies in such Computer Model (including any conflict between the Computer Model and any Project Document) or otherwise to reflect any changes in circumstance since the date of this Agreement.
7.11.2
Following any amendment to the Computer Model which is determined to be material by the Technical Bank (in its sole discretion), the Technical Bank may request for the amended Computer Model to be re-audited. If the Technical Bank so requests, the amended Computer Model shall forthwith be re-audited (at the cost of the Borrower) by a firm of model auditors approved by the Technical Bank provided that no re-audit of the Computer Model shall be undertaken at the cost of the Borrower more than once during a financial year of the Borrower unless the requirement for a re-audit has resulted from the acquisition and/or disposal of assets by a member of the Group. Where an audit has been so requested, until a satisfactory audit in relation to the amended Computer Model has been delivered to the Technical Bank, the existing unamended version shall continue to be the "Computer Model" for the purpose of this Agreement.
8.
REPAYMENT
8.1
Reduction of Facility
The Aggregate Commitments shall reduce to zero on the Final Maturity Date.
8.2
Repayment of Utilisations
8.2.12
The Borrower shall repay each Loan on the last day of its Interest Period.
8.2.13
Notwithstanding any other provision of this Agreement, all Utilisations and other amounts outstanding under the Facility shall be repaid on the Final Maturity Date.
8.3
Reduction
8.3.4
The Borrower shall repay such amount of the Utilisations as is required to ensure that at:
(A)
all times the aggregate amount of the Utilisations does not exceed the Aggregate Commitments at that time;
(A)
at all times the aggregate amount of those portions of the Utilisations made under the Bank Tranche does not exceed the Aggregate Bank Tranche Commitments; and
(B)
at all times the aggregate amount of those portions of the Utilisations made under the IFC Tranche does not exceed the IFC Tranche Commitments.
8.3.5
In addition, on each Reduction Date, the Borrower shall repay such amount of the Utilisations as is required to reduce the aggregate amount of the Utilisations to the Borrowing Base Amount applicable on the day after such Reduction Date.

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8.3.6
Any repayments under this Clause 8.3 of Loans shall be applied towards such Loans as the Facility Agent (after consultation with the Borrower) shall determine and any cash cover provided under this Clause 8.3 shall be applied towards such Letters of Credit as the Facility Agent and the Fronting Bank (both acting in consultation with the Borrower) shall determine, in each case provided that all repayments of Utilisations shall be made pro rata to the respective Utilisations.
9.
PREPAYMENT AND CANCELLATION
9.1
Illegality
9.1.14
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Utilisation:
(A)
that Xxxxxx shall promptly notify the Facility Agent upon becoming aware of that event;
(B)
upon the Facility Agent notifying the Borrower, the Commitment of that Lender in respect of each Specified Period thereafter will be immediately cancelled; and
(C)
the Borrower shall repay that Xxxxxx's participation in the Utilisations on the last day of the Interest Period for each Utilisation occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law).
9.2
Change of control
9.2.7
If (a) any Obligor (other than the Parent) ceases to be a wholly-owned Subsidiary of the Parent, (b) any person or group of persons acting in concert gains control of the Parent or (c) a "Change of Control" as defined in the Indenture occurs (each a "Change of Control"):
(A)
the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;
(B)
no Lender shall be obliged to fund a Utilisation (except for a Rollover Loan); and
(C)
if the Majority Lenders require, the Facility Agent shall, by not less than fifteen Business Days' notice to the Borrower, cancel the Facility and declare (1) all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable and (2) full cash cover in respect of each Letter of Credit is immediately due and payable, whereupon the Facility will be cancelled and all such outstanding amounts will become immediately due and payable.
9.2.8
If a Change of Control occurs in respect of the Parent, and the Majority Lenders do not require the Facility Agent to cancel the Facility and require all amounts outstanding thereunder to be immediately due and payable in accordance with paragraph (C) of Clause 9.2.1 above, if any Lender is unable (acting reasonably) to complete satisfactory "know your customer" or similar identification procedures in respect of the acquiror(s) of the Parent:

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(A)
that Lender may notify the Facility Agent, upon determining that it is unable to complete such procedures satisfactorily, of its requirement for its Commitment to be cancelled and its participations in the Utilisations to be prepaid in full; and
(B)
the Facility Agent shall, by not less than 15 Business Days' notice to the Borrower, cancel the Commitment of that Lender in respect of each Specified Period thereafter and require the Borrower to repay that Xxxxxx's participation in the Utilisations, whereupon that Xxxxxx's Commitment shall be cancelled and that Xxxxxx's participations in the Utilisations shall become immediately due and payable.
9.2.9
For the purposes of Clause 9.2.1, "control" of the Parent means:
(A)
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
(1)
cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the Parent; or
(2)
appoint or remove all, or the majority, of the directors or other equivalent officers of the Parent; or
(3)
give directions with respect to the operating and financial policies of the Parent with which the directors or other equivalent officers of the Parent are obliged to comply; and/or
(B)
the holding beneficially of more than 50% of the issued share capital of the Parent (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
9.2.10
For the purposes of Clause 9.2.1, "acting in concert" has the meaning given to such term in the City Code on Takeovers and Mergers and the presumptions specified therein in relation to the term "acting in concert" shall apply to such term as used in this Agreement (whether or not that code applies to the Obligors).
9.3
Cover Ratio Event
9.3.11
If a Cover Ratio Event occurs and for or so long as a Cover Ratio Event is continuing:
(A)
the Borrower shall promptly provide to the Facility Agent such information as the Facility Agent may request in order to determine the Obligors' available cashflow;
(B)
the Borrower shall procure that on each Reduction Date and on the last day of each Interest Period, all Excess Revenues are applied in prepayment of the Utilisations.
9.3.12
For the purposes of this Clause 9.3 (Cover Ratio Event), "Excess Revenues" means, on any date, [description of how the excess revenue amount is determined has been redacted – commercially sensitive term negotiated between the parties].
9.4
Failure to convert or refinance Debentures
If the Parent has not redeemed the Debentures in full either:

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9.4.5
by converting the Debentures into common shares of the Parent;
9.4.6
from the cash proceeds of an equity issuance by the Parent; and/or
9.4.7
from the proceeds of an unsecured subordinated convertible debenture issuance on substantially similar terms as to subordination as the Debentures,
in each case on or before 28 February 2017, then on 1 March 2017 the Facility Agent may (and shall, if instructed by the Majority Lenders) notify the Borrower that (1) the Facility is to be cancelled with immediate effect, (2) all outstanding Loans, together with accrued interest and all other amounts accrued under the Finance Documents are to be immediately due and payable and (3) full cash cover in respect of each Letter of Credit is to be immediately due and payable, whereupon (1) the Facility shall be cancelled with immediate effect, (2) all outstanding Loans, together with accrued interest and all other amounts accrued under the Finance Documents shall be immediately due and payable and (3) full cash cover in respect of each Letter of Credit shall be immediately due and payable.
9.5
Voluntary cancellation
9.5.13
The Borrower may, if it gives the Facility Agent not less than fifteen Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of $1,000,000 and an integral multiple of $500,000) of the Total Available Commitments.
9.5.14
On the date of the cancellation of any Aggregate Commitments relating to any Specified Period pursuant to Clause 9.5.1:
(A)
the Commitment of each Lender shall be reduced rateably; and
(B)
if, as a result of the reduction of any Lender's Commitment for that Specified Period (the "relevant Specified Period") pursuant to Clause 9.5.2(A) that Lender's Commitment for any subsequent Specified Period exceeds that reduced Commitment for the relevant Specified Period, that Xxxxxx's Commitment for each such subsequent Specified Period shall be reduced to an amount equal to that reduced Commitment for the relevant Specified Period.
9.6
Voluntary Prepayment of Loans
The Borrower may, if it gives the Facility Agent (with a copy to IFC whilst it is a Lender) not less than fifteen Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Loan (but if in part, being an amount that reduces the amount of the Loan by a minimum amount of $500,000).
9.7
Right of repayment and cancellation in relation to a single Lender
9.7.5
If:
(A)
any sum payable to any Lender by an Obligor is required to be increased under Clause 14.2.3 (Tax gross-up); or
(B)
any Lender claims indemnification from the Borrower under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs),
the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent (and, if that Lender is IFC, with a copy to IFC) notice of cancellation of the Commitments of that Lender for each Specified Period and its intention to procure the repayment of that Xxxxxx's participation in the Utilisations.

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9.7.6
On receipt of a notice referred to in Clause 9.7.1, the Commitment of that Lender for each Specified Period thereafter shall immediately be reduced to zero.
9.7.7
On the last day of each Interest Period which ends after the Borrower has given notice under Clause 9.7.1 above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Xxxxxx's participation in that Loan, together with all interest and other amounts accrued under the Finance Documents.
9.7.8
The Borrower shall, on demand made by the Facility Agent following the receipt by it of any notice referred to in Clause 9.7.1, provide or procure the provision of cash cover for the amount of the relevant Xxxxxx's aggregate participation in all outstanding Letters of Credit.
9.8
Right of cancellation in relation to a Defaulting Lender
9.8.7
If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent 10 Business Days' notice of cancellation of the Available Commitment of that Lender.
9.8.8
On the date (the "cancellation date") on which the cancellation of the Available Commitment of any Defaulting Lender pursuant to Clause 9.8.1 takes effect:
(A)
the Commitment of that Defaulting Lender for the Specified Period (the "initial Specified Period") in which the cancellation date occurs shall be reduced by an amount equal to the Available Commitment so cancelled; and
(B)
that Defaulting Xxxxxx's Commitment for each subsequent Specified Period shall be reduced by the same proportion by which its Commitment for the initial Specified Period is reduced pursuant to Clause 9.8.2(A).
9.8.9
The Facility Agent shall as soon as practicable after receipt of a notice referred to in Clause 9.8.1, notify all the Lenders.
9.9
Restrictions
9.9.3
Any notice of cancellation or prepayment given by any Party under this Clause 9 (Prepayment and cancellation) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
9.9.4
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
9.9.5
Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement.
9.9.6
The Borrower shall not repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
9.9.7
No amount of the Commitments cancelled under this Agreement may be subsequently reinstated.

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9.9.8
If the Facility Agent receives a notice under this Clause 9 (Prepayment and cancellation) it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.
9.9.9
Upon the repayment or prepayment of any Loan for any reason, the Facility Agent, the Borrower and any Hedging Bank that is a party to any Hedging Agreement (or hedging transaction thereunder) relating, in each case, to the Borrower's interest rate exposure under this Agreement shall consult in good faith with a view to amending the terms of such Hedging Agreement and/or transaction to reflect any change in the Borrower's interest rate exposure under this Agreement arising as a result of such repayment or prepayment. Any amendments to any Hedging Agreement and/or transaction under a Hedging Agreement to be effected pursuant to this Clause 9.9.7 shall be effected at the Borrower' sole cost and expense.
9.9.10
Subject to Clauses 9.1 (Illegality), 9.7 (Right of repayment and cancellation in relation to a single Lender) and 9.8 (Right of cancellation in relation to a Defaulting Lender):
(C)
any cancellation of Aggregate Commitments under this Clause 9 (Prepayment And Cancellation) shall be made pro rata to the respective Available Commitment under the Tranches; and
(D)
any prepayment of Utilisations under this Clause 9 (Prepayment And Cancellation) shall be made pro rata to the respective amounts outstanding under the Tranches.
10.
INTEREST
10.1
Calculation of interest
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
10.1.11
Margin;
10.1.12
LIBOR; and
10.1.13
Mandatory Cost, if any.
10.2
Payment of interest
The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six‑monthly intervals after the first day of the Interest Period).
10.3
Default interest
10.3.8
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to Clause 10.3.2, is 2 per cent. higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this Clause 10.3 (Default interest) shall be immediately payable by the Obligor on demand by the Facility Agent.

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10.3.9
If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:
(A)
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(B)
the rate of interest applying to the overdue amount during that first Interest Period shall be 2 per cent. higher than the rate which would have applied if the overdue amount had not become due.
10.3.10
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
10.4
Notification of rates of interest
The Facility Agent shall promptly notify the Lenders and the relevant Borrower of the determination of a rate of interest under this Agreement.
11.
INTEREST PERIODS
11.1
Selection of Interest Periods
11.1.13
The Borrower may select an Interest Period for a Loan in the Utilisation Request for that Loan.
11.1.14
Subject to this Clause 11 (Interest Periods) and the last sentence of Clause 6.7.2 (Loans to cover demands), the Borrower may select an Interest Period of one, two, three or six Months or any other period agreed between the Borrower and the Facility Agent (acting on the instructions of all the Lenders).
11.1.15
An Interest Period for a Loan shall not extend beyond the Final Maturity Date.
11.1.16
Each Interest Period for a Loan shall start on the Utilisation Date.
11.1.17
A Loan has one Interest Period only.
11.2
Changes to Interest Periods
11.2.11
Prior to determining the interest rate for a Loan, the Facility Agent may shorten an Interest Period for any Loan to ensure that (a) the last day of such Interest Period coincides with a Reduction Date and (b) that there are sufficient Loans (with an aggregate amount equal to or greater than the amount required to be repaid under Clause 8.3 (Reduction) on such Reduction Date) which have an Interest Period ending on such Reduction Date.
11.2.12
If the Facility Agent makes any of the changes to an Interest Period referred to in this Clause 11.2, it shall promptly notify the Borrower and the Lenders.
11.3
Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
12.
CHANGES TO THE CALCULATION OF INTEREST
12.1
Absence of quotations
Subject to Clause 12.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11.00 a.m. on

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the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
12.2
Market disruption
12.2.15
If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender's share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:
(A)
the applicable Margin;
(B)
the rate notified to the Facility Agent by that Xxxxxx as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and
(C)
the Mandatory Cost, if any, applicable to that Xxxxxx's participation in the Loan.
12.2.16
In this Agreement "Market Disruption Event" means:
(A)
at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or (if more than one) only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR for the relevant Interest Period; or
(B)
before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed [redacted] per cent. of that Loan) that the cost to it of obtaining matching deposits in the London interbank market would be in excess of LIBOR.
12.3
Alternative basis of interest or funding
12.3.7
If a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall, without prejudice to the operation of Clause 12.2 (Market disruption), enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.
12.3.8
Any alternative basis agreed pursuant to Clause 12.3.1 shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
12.4
Break Costs
12.4.9
The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
12.4.10
Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
12.5
Interest Provisions Applicable to Canadian Obligors
12.5.10
In this Clause 12.5, the term "Canadian Obligor" means any Obligor incorporated or otherwise organized under the laws of Canada or any province or territory thereof.

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12.5.11
For the purposes of the Interest Act (Canada) and disclosure thereunder, the rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement.
12.5.12
Any provision of this Agreement that would oblige a Canadian Obligor to pay any fine, penalty or rate of interest on any arrears of principal or interest secured by a mortgage on real property or hypothec on immovables that has the effect of increasing the charge on arrears beyond the rate of interest payable on principal money not in arrears shall not apply to such Canadian Obligor, which shall be required to pay interest on money in arrears at the same rate of interest payable on principal money not in arrears.
12.5.13
If any provision of this Agreement would oblige a Canadian Obligor to make any payment of interest or other amount payable to any Finance Party in an amount or calculated at a rate which would be prohibited by law or would result in a receipt by that Finance Party of "interest" at a "criminal rate" (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by applicable law or so result in a receipt by that Finance Party of "interest" at a "criminal rate", such adjustment to be effected, to the extent necessary (but only to the extent necessary), as follows:
(C)
first, by reducing the amount or rate of interest; and
(D)
thereafter, by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid which would constitute interest for purposes of section 347 of the Criminal Code (Canada).
13.
FEES
13.1
Commitment fee
The Borrower shall pay to the Facility Agent (for the account of each Lender) in respect of each Fee Period:
13.1.17
a fee computed at the applicable Unavailable Rate on the daily amount (if any) by which the Aggregate Commitments exceeds the applicable Borrowing Base Amount; and
13.1.18
a fee computed at the applicable Unutilised Rate on the daily amount (if any) by which the applicable Maximum Available Amount exceeds the outstanding Utilisations.
13.2
L/C commission
The Borrower shall, in respect of each Letter of Credit requested by it, pay to the Facility Agent (for the account of each Lender) in respect of each Fee Period a letter of credit commission ("L/C Commission") equal to [redacted] per cent. of the Margin on the daily amount of the L/C Exposure in respect of that Letter of Credit.
13.3
Fronting Bank fee
The Borrower shall pay to the Fronting Bank (for its own account) fronting fees in respect of each Letter of Credit requested by it in the amounts and at the times set out in the applicable Fee Letter.
13.4
Computation and payment

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13.4.14
Any commitment fee and/or L/C Commission payable under this Clause 13 (Fees) must be paid by the Borrower within two Business Days after receipt by the Borrower of the calculation of such commitment fee or, as the case may be, such L/C Commission from the Facility Agent under Clause 13.4.3.
13.4.15
Any such commitment fee and L/C Commission must be paid in dollars.
13.4.16
The Facility Agent shall calculate the commitment fee and/or the L/C Commission payable for each Fee Period and shall notify the Borrower of the same within five Business Days after the end of the relevant Fee Period. Each such calculation shall, in the absence of manifest error, be conclusive evidence of the amount thereof.
13.5
Definitions
For the purposes of this Agreement:
13.5.11
"Fee Period" means:
(D)
in relation to the commitment fee payable under Clause 13.1 (Commitment fee):
(1)
the period commencing on the date of this Agreement and ending on the first quarter date to occur thereafter; and thereafter,
(2)
each successive period of three Months (or, in the case of the last such period, less) commencing on the day after a quarter date and ending on the first quarter date to occur thereafter (or, in the case of the last such period, on the Final Maturity Date) or, if earlier, on the date that the Commitments have been cancelled; and
(E)
in relation to the L/C Commission with respect to each Letter of Credit:
(1)
the period commencing on the date of issue of that Letter of Credit and ending on the first quarter date to occur thereafter; and thereafter,
(2)
each successive period of three months (or, in the case of the last such period, less) commencing on the day after a quarter date and ending on the first quarter date to occur thereafter (or, in the case of the last such period, the Expiry Date of the relevant Letter of Credit),
where, for these purposes, "quarter date" means 31 March, 30 June, 30 September or 31 December, and provided that, with respect to the period of three Months within which the Effective Date falls, there shall be two Fee Periods, the first such period commencing on the day after the last quarter date and ending on the Effective Date and the second such period commencing on the day after the Effective Date and ending on the second quarter date to occur thereafter.
13.5.12
"L/C Exposure" means, in relation to each Letter of Credit, the daily difference between:
(E)
the face value of that Letter of Credit; and
(F)
the aggregate amount of all claims thereunder that have been paid,
less the amount of cash cover which has been provided in respect of the relevant Letter of Credit.

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13.5.13
"Unavailable Rate" means, in relation to any day in any Fee Period, the percentage rate per annum which is equal to [amount has been redacted] of the applicable Margin on that day.
13.5.14
"Unutilised Rate" means, in relation to any day in any Fee Period, the percentage rate per annum which is equal to [amount has been redacted] of the applicable Margin on that day.
13.6
Other fees and costs
The Borrower will pay to the relevant Finance Parties the relevant fees and other costs and expenses in the amounts and at the times set out in the Fee Letters and the Mandate Letter.
13.7
Independent Engineer and other representatives
The Borrower shall, within five Business Days of demand by the Facility Agent, the Security Trustee or the Technical Bank, pay, or reimburse the relevant Finance Party for any payments that it has made in relation to, any reasonable fees, costs and expenses properly incurred by (a) the Independent Engineer pursuant to the Finance Documents and/or (b) any legal adviser, insurance adviser, environmental consultant, engineering consultant, or model auditor appointed by that Finance Party in connection with the exercise of its rights and discretions or the performance of its duties and obligations, under the Finance Documents.
14.
TAX GROSS-UP AND INDEMNITIES
14.1
Definitions
14.1.9
In this Agreement:
"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.
"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document.
"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).
14.1.10
Unless a contrary indication appears, in this Clause 14 (Tax gross-up and indemnities) a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
14.2
Tax gross-up
14.2.11
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
14.2.12
The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that

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Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrower and that Obligor.
14.2.13
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
14.2.14
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
14.2.15
Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
14.3
Tax indemnity
14.3.17
The Borrower shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
14.3.18
Clause 14.3.1 above shall not apply:
(A)
with respect to any Tax assessed on a Finance Party:
(1)
under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
(2)
under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(B)
to the extent a loss, liability or cost is compensated for by an increased payment under Clause 14.2 (Tax gross-up).
14.3.19
A Protected Party making, or intending to make a claim under Clause 14.3.1 above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Borrower.
14.3.20
A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3 (Tax indemnity), notify the Facility Agent.
14.4
Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
14.4.15
a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and

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14.4.16
that Finance Party has obtained, utilised and retained that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
14.5
Stamp taxes
The Borrower shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
14.6
Value added tax
14.6.1
All amounts set out or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on any such supply or supplies, and accordingly, subject to Clause 14.6.2, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).
14.6.2
If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Subject Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT.
14.6.3
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
14.6.4
Any reference in this Clause 14.6 (Value added tax) to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).


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15.
INCREASED COSTS
15.1
Increased costs
15.1.16
Subject to Clause 15.3 (Exceptions), the Borrower shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement.
15.1.17
In this Agreement "Increased Costs" means:
(A)
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;
(B)
an additional or increased cost; or
(C)
a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
15.2
Increased cost claims
15.2.21
A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower.
15.2.22
Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Increased Costs.
15.3
Exceptions
15.3.17
Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:
(C)
attributable to a Tax Deduction required by law to be made by an Obligor;
(D)
compensated for by Clause 14.3 (Tax indemnity) (or would have been compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 14.3.2 (Tax indemnity) applied);
(E)
compensated for by the payment of the Mandatory Cost; or
(F)
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
15.3.18
In this Clause 15.3 (Exceptions), a reference to a "Tax Deduction" has the same meaning given to the term in Clause 14.1 (Definitions).
16.
OTHER INDEMNITIES
16.1
Currency indemnity
16.1.23
If any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:

11/11665581    54


(A)
making or filing a claim or proof against that Obligor;
(B)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
16.1.24
Without prejudice to Clause 16.1.1, each Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability which that Finance Party incurs as a result of that Finance Party receiving an amount in respect of that Xxxxxxx's liability under any Finance Document in a currency other than the currency in which that liability is expressed to be payable under that Finance Document.
16.1.25
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
16.2
Other indemnities
The Borrower shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:
16.2.19
the occurrence of any Event of Default;
16.2.20
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties and Preferred Payments);
16.2.21
funding, or making arrangements to fund, its participation in a Utilisation requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone);
16.2.22
a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by the Borrower;
16.2.23
any Environmental Claim against the relevant Finance Party arising as a result of the relevant Finance Party being a party to this Agreement or any other Finance Document unless caused by the gross negligence or wilful misconduct of the relevant Finance Party; or
16.2.24
any abandonment of any Petroleum Asset in which any member of the Group has an interest arising as a result of the relevant Finance Party being a party to this Agreement or any other Finance Document unless caused by the gross negligence or wilful misconduct of the relevant Finance Party.
16.3
Indemnity to the Administrative Finance Parties
The Borrower shall promptly indemnify each Administrative Finance Party against any cost, loss or liability incurred by that Administrative Finance Party (acting reasonably) as a result of:

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16.3.1
(in the case of the Facility Agent or the Security Trustee) investigating any event which it reasonably believes is a Default; or
16.3.2
acting or relying on any notice, request or instruction made in connection with any Finance Document and which it reasonably believes to be genuine, correct and appropriately authorised.
17.
MITIGATION BY THE LENDERS
17.1
Mitigation
17.1.25
Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 9.1 (Illegality), Clause 14 (Tax gross-up and indemnities), Clause 15 (Increased costs) or paragraph 3 of Schedule 7 (Mandatory Cost Formula) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
17.1.26
Clause 17.1.1 does not in any way limit the obligations of any Obligor under the Finance Documents.
17.2
Limitation of liability
17.2.3
The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1 (Mitigation).
17.2.4
A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
18.
COSTS AND EXPENSES
18.1
Transaction expenses
The Borrower shall promptly on demand pay the Administrative Finance Parties the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with:
18.1.5
the negotiation, preparation, printing, execution and syndication of:
(D)
this Agreement and any other documents referred to in this Agreement; and
(E)
any other Finance Documents executed after the date of this Agreement;
18.1.6
the designation or de-designation of any Petroleum Assets as Borrowing Base Assets;
18.1.7
the completion of the transactions and perfection of the Security intended to be created pursuant to the Security Documents; and
18.1.8
the release of any Security constituted by any Finance Document or the release of any Obligor pursuant to Clause 28 (Changes to the Obligors).
18.2
Amendment costs
If (a) an Obligor requests an amendment, waiver or consent to any Finance Document or (b) an amendment is required pursuant to Clause 33.12 (Change of currency), the Obligors shall, within three Business Days of demand, reimburse the Finance Parties for the amount

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of all costs and expenses (including legal fees) reasonably incurred by the Finance Parties in responding to, evaluating, negotiating or complying with that request or requirement.
18.3
Enforcement costs
The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.
19.
GUARANTEE AND INDEMNITY
19.1
Guarantee and indemnity
Each Guarantor irrevocably and unconditionally jointly and severally:
19.1.5
guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents;
19.1.6
undertakes with each Finance Party that whenever an Obligor does not pay any amount when due or expressed to be due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
19.1.7
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 19 (Guarantee and indemnity) if the amount claimed had been recoverable on the basis of a guarantee.
19.2
Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
19.3
Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 19 (Guarantee and indemnity) will continue or be reinstated as if the discharge, release or arrangement had not occurred.
19.4
Waiver of defences
The obligations of each Guarantor under this Clause 19 (Guarantee and indemnity) will not be affected by (and the intention of each Guarantor is that its obligation shall continue in full force and effect notwithstanding) an act, omission, matter or thing which, but for this Clause 19.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause 19 (Guarantee and indemnity) (without limitation and whether or not known to it or any Finance Party) including:

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19.4.1
any time, waiver or consent granted to, or composition with, any Obligor or other person;
19.4.2
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any Obligor or other person;
19.4.3
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
19.4.4
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
19.4.5
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
19.4.6
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
19.4.7
any insolvency or similar proceedings.
19.5
Guarantor intent
Without prejudice to the generality of Clause ‎‎19.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
19.6
Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 19 (Guarantee and indemnity). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
19.7
Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
19.7.1
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

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19.7.2
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 19 (Guarantee and indemnity).
19.8
Deferral of Guarantors' rights
19.8.1
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent or the Security Trustee otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 19 (Guarantee and indemnity):
(E)
to be indemnified by an Obligor;
(F)
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;
(G)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
(H)
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 19.1 (Guarantee and indemnity); and/or
(I)
to exercise or claim any right of set off or counterclaim against any other Obligor or any other person liable or claim or prove in competition with the Finance Parties in the bankruptcy or liquidation of any other Obligor or any other person liable or have the benefit of, or share in, any payment from or composition with, any other Obligor or any other person liable or any other Security now or hereafter held by the Finance Parties in respect of the obligations of any Obligor under the Finance Documents or for the obligations or liabilities of any other person liable but so that, if so directed by the Facility Agent or the Security Trustee, it will prove for the whole or any part of its claim in the liquidation or bankruptcy of any other Obligor on terms that the benefit of such proof and of all of the money received by it in respect thereof shall be held on trust for the Finance Parties and applied in or towards discharge of the obligations of the Obligors under the Finance Documents in such manner as the Facility Agent or the Security Trustee (as the case may be) shall deem appropriate.
19.8.2
Without prejudice to Clause 19.8.1 or Clause 19.9 (Authority), if an Obligor receives any benefit, payment or distribution in relation to such rights described in Clause 19.8.1 it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Facility Agent or the Security Trustee or as the Facility Agent or the Security Trustee may direct for application in accordance with Clause 33 (Payment Mechanics).


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19.9
Authority
If any Obligor fails to claim or prove in the liquidation or bankruptcy of any other Obligor promptly upon being directed to do so by the Facility Agent or the Security Trustee as contemplated by Clause 19.8.1(E):
19.9.1
the Facility Agent or the Security Trustee (as the case may be) may, and is irrevocably authorised on behalf of such Obligor to, file any claims or proofs in such liquidation or bankruptcy on its behalf; and
19.9.2
the trustee in bankruptcy, liquidator, assignee or other person distributing the assets of any Obligor or their proceeds is directed to pay distributions on the obligations or liabilities of such Obligor direct to the Facility Agent or the Security Trustee (as the case may be) on behalf of the Finance Parties until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.
19.10
Release of Guarantors' right of contribution
If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor that is permitted under the terms of the Finance Documents, then on the date such Retiring Guarantor ceases to be a Guarantor:
19.10.1
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and
19.10.2
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
19.11
Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
19.12
Further assurance
Each Guarantor agrees that it shall promptly, at the direction of the Facility Agent or the Security Trustee, execute and deliver at its own expense any document (executed as a deed or under hand as the Facility Agent or the Security Trustee may direct) and do any act or thing reasonably required in order to confirm or establish the validity and enforceability of the guarantee and indemnity intended to be created by it under this Clause 19 (Guarantee and indemnity).
19.13
Stay of acceleration
If acceleration of the time for payment, or the liability of a Guarantor to make any payment, of any amount specified to be payable by a Guarantor in respect of the obligations guaranteed pursuant hereto is stayed, prohibited or otherwise affected upon the insolvency, bankruptcy, reorganisation or winding-up of a Guarantor or other event affecting a Guarantor or affecting the payment of any of the obligations guaranteed by a Guarantor, all such amounts otherwise subject to acceleration or payment shall nonetheless be deemed for all purposes of this Agreement to be and to have become due and payable by the

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Guarantor and shall be payable by the Guarantor under this Agreement immediately after demand therefore.
20.
PROJECT ACCOUNTS
20.1
General
20.1.1
Each Borrowing Base Obligor shall maintain Revenue Accounts and the Borrower shall maintain a Debt Service Reserve Account in accordance with Clause 20.3 (Revenue Accounts), Clause 20.4 (Egyptian Revenue Account) and Clause 20.5 (Debt Service Reserve Account), in each case, with an Account Bank.
20.1.2
Each such Obligor shall give such notices as the Facility Agent or the Security Trustee may reasonably require in connection with the perfection or protection of the Finance Parties' security over the Project Accounts or for the purpose of giving effect to the provisions of this Clause 20 (Project Accounts).
20.1.3
Each Project Account (and each sub‑account) will be a separate account at the relevant Account Bank. A Project Account must be divided into separate sub‑accounts if the Facility Agent or Security Trustee so requires and the relevant Account Bank so permits.
20.1.4
Each Project Account must be denominated in dollars or, in the case of the Egyptian Revenue Accounts, dollars and Egyptian pounds, or such other currency(ies) as may be agreed between the relevant Obligor, the Security Trustee and the relevant Account Bank (each, a "permitted currency"). If any Obligor or any Account Bank receives any moneys for crediting to a Project Account in a currency other than a permitted currency, that Obligor must convert those moneys into a permitted currency (at the relevant Account Bank's prevailing rates for comparable transactions) on the date on which they are received. The amount must be paid into the relevant Project Account immediately after it is converted into a permitted currency.
20.1.5
The restrictions on the withdrawal of funds from Project Accounts contained in this Agreement will not affect the obligations of the Obligors to make all payments required to be made to the Finance Parties on the respective due dates for payment in accordance with the Finance Documents.
20.1.6
The detailed operating procedures for the Project Accounts will be agreed (with the consent of the Facility Agent and the Security Trustee) from time to time between the Borrower and the relevant Account Bank. In the event of any inconsistency between this Agreement and those procedures, this Agreement will prevail.
20.1.7
Each Obligor that has a Project Account must pay to the relevant Account Bank such transaction charges and other fees as the Borrower and the relevant Account Bank, both acting reasonably, may from time to time agree.
20.1.8
The English Account Bank will not be obliged to make available to any Obligor any sum which it is expecting to receive for the account of that Obligor until it has been able to establish that it has received that sum.
20.1.9
Neither the ability of the Obligors to make any withdrawal from a Project Account in accordance with this Agreement nor any such withdrawal will be construed as a waiver by any Finance Party of any Security over the Project Accounts.

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20.1.10
Subject to Clause 20.8 (Other accounts), no member of the Group may open and maintain any bank, deposit, savings or other type of account other than a Project Account.
20.2
Withdrawals
20.2.1
No payments to, or withdrawals from, any Project Account may be made except as expressly permitted by this Agreement.
20.2.2
No Obligor will request (and the English Account Bank shall not permit) any withdrawal to be made from any Project Account:
(F)
to the extent that such Project Account would become overdrawn as a result; or
(G)
if, prior to the date of the relevant proposed withdrawal, the Facility Agent or the Security Trustee notifies the relevant Account Bank that the withdrawal is not or would not be permitted under any Finance Document,
provided that nothing in this Clause will prevent the English Account Bank complying with its obligations under law.
20.2.3
No Obligor may make any withdrawal from a Project Account at any time whilst an Event of Default is continuing except:
(C)
in the case of the Revenue Accounts, as expressly permitted under Clauses 20.3 (Revenue Accounts) or 20.4 (Egyptian Revenue Account); or
(D)
with the Security Trustee's specific consent.
20.2.4
Notwithstanding any other provision of this Agreement, if the Enforcement Date has occurred:
(A)
no amount will be payable to any Obligor, or may be withdrawn by any Obligor, with respect to the Project Accounts; and
(B)
the Security Trustee will be entitled (but not obliged) without prior notice to, or the consent of, any Obligor to be the sole signatory on the Project Accounts.
20.2.5
The Facility Agent shall promptly notify each Account Bank of the occurrence of the Enforcement Date. Each Account Bank shall be entitled to treat any such notice at face value.
20.2.6
At any time while a Restricted Payment Event is continuing, no Obligor may make any withdrawals from the English Revenue Accounts if, following such withdrawal, the aggregate balance in dollars of the English Revenue Accounts would be less than the aggregate amount of the outstanding Loans and L/C Exposures.
20.2.7
Subject to Clause 32.7.2 (Bank Tranche sharing provisions during or following an Inconvertibility Event), the Obligors must ensure that the Inconvertibility Balance is maintained in the Egyptian Revenue Accounts and such amounts are not withdrawn without the consent of the Facility Agent (acting on the instructions of all Bank Tranche Lenders).
20.3
Revenue Accounts

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20.3.8
Each Borrowing Base Obligor shall maintain an account (an "English Revenue Account") with the English Account Bank and each Egyptian Borrowing Base Obligor may in addition maintain an account (an "Egyptian Revenue Account") with the Egyptian Account Bank provided that Security has been created over such Egyptian Revenue Account in favour of the Security Trustee and in form and substance satisfactory to the Security Trustee (acting reasonably).
20.3.9
Each Borrowing Base Obligor shall procure that all amounts received by it (or to its order) are paid directly to a Revenue Account maintained by it, or as otherwise agreed by the Facility Agent.
20.3.10
Subject to Clause 9.3 (Cover Ratio Event) and Clause 20.2 (Withdrawals), a Borrowing Base Obligor may withdraw amounts from a Revenue Account at the following times and for the following purposes (which may include transfers to other members of the Group for the following purposes):
(D)
first, at any time, in or towards payment of Gross Expenditure (other than any Hedging Costs) payable in respect of any Petroleum Asset in which a member of the Group has an interest provided that:
(1)
the Borrowing Base Obligors shall not, in any Calculation Period, withdraw amounts from the Revenue Accounts in or towards payments of:
(a)
exploration, appraisal and development expenditure in relation to:
(i)
the Blocks (taken as a whole) which in aggregate exceeds an amount equal to [redacted]; and
(ii)
all other Petroleum Assets which are not Borrowing Base Assets which in aggregate exceeds an amount equal to [redacted];
(b)
operational expenditure in relation to:
(i)
a Block which in aggregate exceeds an amount equal to [redacted];
(ii)
the Blocks (taken as a whole) which exceeds an amount equal to [redacted]; and
(iii)
all other Petroleum Assets which are not Borrowing Base Assets which in aggregate exceeds an amount equal to [redacted];
(c)
general and administrative expenditure of the Group which in aggregate exceeds [redacted]; and
(d)
discretionary expenditure which in aggregate exceeds [redacted] (and provided that such amount is not more than [redacted]) (the "Discretionary Expenditure Budget"),
in each case of the respective amount provided for such aggregate payments in that Calculation Period in the then current Projection (subject to Clause 20.3.4 below); and

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(2)
where a Cover Ratio Event has occurred and is continuing, no Borrowing Base Obligor may withdraw any amount from the Revenue Account(s) maintained by it for expenditure of any type described in sub-paragraphs (1)(a) to (1)(d) above unless such expenditure was committed prior to the occurrence of such Cover Ratio Event;
(E)
second, at any time, in or towards payment pro rata of any unpaid fees, costs and expenses or accrued interest under the Finance Documents (other than the Hedging Agreements) and any Hedging Costs;
(F)
third, at any time, in or towards payment pro rata of any principal due but unpaid under this Agreement and (to the extent permitted pursuant to Clause 31.3.1 (Hedging Banks)) any Hedging Termination Payments due from an Obligor but unpaid;
(G)
fourth, at any time, towards payment of such amount, if any, to the credit of the Debt Service Reserve Account as is required for the balance of such account to be equal to the Required Balance; and
(H)
fifth, subject to Clause 20.3.6 (Revenue Accounts) and on a Recalculation Date or not more than 5 Business Days after such Recalculation Date (or such later date as the Facility Agent (acting on the instructions of the Majority Lenders) may agree), for other lawful general corporate purposes of that Borrowing Base Obligor (including transfers to other accounts held by that Borrowing Base Obligor) provided that no Default or Cover Ratio Event has occurred and is continuing.
20.3.11
In any Calculation Period, the Borrowing Base Obligors may apply the proceeds of the Discretionary Expenditure Budget on any Gross Expenditure item, and the limitations on withdrawals from the Revenue Accounts described in sub-Clauses 20.3.3(A)(1)(a), 20.3.3(A)(1)(b) and 20.3.3(A)(1)(c) above shall be disregarded in respect of such application.
20.3.12
Any such withdrawals from a Revenue Account may only be made in the order of priority set out in Clause 20.3.3 (Revenue Accounts) so that no withdrawal may be made for a purpose set out in any of sub-Clauses 20.3.3(A), 20.3.3(B), 20.3.3(C), 20.3.3(D), or 20.3.3(E) if any amount of a kind referred to in a preceding sub‑Clause is due but unpaid.
20.3.13
No amount may be withdrawn pursuant to Clause 20.3.3(E) (Revenue Accounts) to the extent that:
(A)
such withdrawal would leave standing to the credit of the Revenue Accounts an aggregate balance of less than the aggregate Required Retention Amount of each Revenue Account; or
(B)
such amount represents a Deficient Cash Amount (as such term is defined in the definition of DSCR) in the then current Projection.
20.3.14
A Borrowing Base Obligor may, at any time, transfer amounts from the Revenue Account maintained by it which is denominated in any one currency to any other Revenue Account maintained by it which is denominated in another currency.
20.4
Egyptian Revenue Account
20.4.1
On the first Business Day following each Recalculation Date, each Egyptian Borrowing Base Obligor shall deliver to the Facility Agent, the Technical Bank and

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the English Account Bank a Working Capital Certificate which sets out (1) its projected expenditure and the projected expenditure of each other member of the Group in Egypt (which is permitted to be withdrawn from a Revenue Account in accordance with Clause 20.3.3(A) above) in (i) Egyptian pounds and (ii) dollars and (2) its projected income in (i) Egyptian pounds and (ii) dollars, in each case in each Month from the date of the Working Capital Certificate to the next Scheduled Recalculation Date (the "Sweep Period").
20.4.2
If on any day during a Sweep Period an Applicable Payment is paid to the Egyptian Revenue Account and as a result of such Applicable Payment the dollar balance of the Egyptian Revenue Account of an Egyptian Borrowing Base Obligor exceeds the sum of:
(C)
the aggregate amount of expenditure projected in the Working Capital Certificate for that Sweep Period to be disbursed in dollars in that Sweep Period; less
(D)
the aggregate amount of actual expenditure disbursed in dollars by that Egyptian Borrowing Base Obligor and by each other member of the Group in Egypt in the Sweep Period up to and including that date,
that Egyptian Borrowing Base Obligor shall, subject to Clause 20.4.4 below, promptly transfer that excess dollar amount to its English Revenue Account.
20.4.3
If on any day during a Sweep Period the aggregate of all amounts paid to an Egyptian Revenue Account in Egyptian pounds in that Sweep Period exceeds [redacted] of the aggregate amount of expenditure projected in the Working Capital Certificate for that Sweep Period to be disbursed in Egyptian pounds in that Sweep Period, that Egyptian Borrowing Base Obligor shall, unless otherwise agreed by the Facility Agent (acting on the instructions of the Majority Lenders), promptly convert that excess Egyptian pound amount into dollars and, subject to Clause 20.4.2 above, deposit such dollar amount into its Egyptian Revenue Account.
20.4.4
Clause 20.4.2 shall not apply in respect of any Applicable Payment which is transferred to an Egyptian Revenue Account from another account maintained by a member of the Group, provided that any such Applicable Payment transferred to such Egyptian Revenue Account from any other Revenue Account must be disbursed by the relevant Egyptian Borrowing Base Obligor within 7 days of its receipt into that Egyptian Revenue Account.
20.5
Debt Service Reserve Account
20.5.1
The Borrower shall maintain an account (the "Debt Service Reserve Account") and shall:
(E)
on the first Utilisation Date, credit to the Debt Service Reserve Account the amount required to ensure that the sum standing to the credit of the Debt Service Reserve Account is not less than the Required Balance; and
(F)
on each subsequent date on which the Borrower delivers a Utilisation Request, credit to the Debt Service Reserve Account the amount required to ensure that the sum standing to the credit of the Debt Service Reserve Account is not less than the Required Balance taking into account the amount of the requested Utilisation.

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20.5.2
Subject to Clause 20.2 (Withdrawals), the Borrower may only withdraw amounts from the Debt Service Reserve Account (whilst no Default is continuing) such amount by which the aggregate amount standing to the credit of the Debt Service Reserve Account exceeds the Required Balance (taking into account the amount of any Utilisation requested in a Utilisation Request but not yet made), for its general corporate purposes.
20.6
Administration and miscellaneous
20.6.3
Each Obligor shall provide the Facility Agent and/or the Security Trustee and any of their representatives with access on reasonable notice and during normal business hours to review the books and records of the Project Accounts. The English Account Bank must, and each Obligor authorises each Account Bank to, give the Facility Agent, the Security Trustee and their representatives unrestricted access to review such books and records held by that Account Bank.
20.6.4
The English Account Bank must, if requested by the Facility Agent, provide to the Facility Agent and the Security Trustee, not less than five Business Days after the end of each month, a full statement of all payments into and from the Project Accounts maintained by it.
20.6.5
The Borrower must, if requested by the Facility Agent, provide to the Facility Agent, the Security Trustee and the Borrower, not less than five Business Days after the end of each month, a full statement of all payments into and from the Egyptian Revenue Accounts held by each Egyptian Borrowing Base Obligor.
20.6.6
The Obligors must, within three Business Days of demand, indemnify the English Account Bank against any cost, loss or liability incurred by that Account Bank (otherwise than by reason of its gross negligence or wilful misconduct) in acting as an Account Bank under or in connection with the Finance Documents.
20.6.7
Except where this Agreement specifically provides otherwise, no Obligor may exercise any right which it may have under any applicable law to direct an Account Bank to transfer any amount standing to the credit of a Project Account to it or to its order. The English Account Bank must notify the Facility Agent and the Security Trustee if any Obligor purports to exercise any such right.
20.6.8
No Account Bank will be under any obligation to enquire as to the purpose of any withdrawal from a Project Account.
20.6.9
The English Account Bank must notify the Facility Agent promptly if it becomes aware of the occurrence of a Default.
20.6.10
No Account Bank must be required to act in a manner inconsistent with the Finance Documents.
20.6.11
Each sum credited to a Project Account will, from the time it is credited until the time it is withdrawn, bear interest at such rate as the relevant Obligor may from time to time agree with the relevant Account Bank. Such interest will be credited to the relevant Project Account.
20.7
Security
20.7.3
Each Obligor shall, to the extent that such Security has not been effected under the terms of an existing Security Document, enter into a Security Document (in form and substance satisfactory to the Security Trustee acting reasonably) for the purposes of creating Security over each of the Project Accounts maintained by it (and the sums standing to the credit of such Project Accounts) in favour of the

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Security Trustee and deliver to the Security Trustee, or procure the delivery to the Security Trustee of, any legal opinion or other document that the Security Trustee may reasonably require in connection with the entry into such Security Document. Such Security must be granted and each such legal opinion or other document must be delivered:
(G)
(in the case of any Project Account which (a) is in existence on the date of this Agreement or (b) is to be opened on or before the date of issue of the first Utilisation Request under this Agreement) pursuant to Clause 4.1 (Initial conditions precedent) on or before the first Utilisation Date; and
(H)
(in the case of any other Project Account) on the date on which such Project Account is opened.
20.7.4
The English Account Bank consents to the grant of such Security and on the date on which such Security is granted in favour of the Security Trustee, the English Account Bank shall be deemed to have acknowledged that it has received notice of such Security over each Project Account that is the subject of such Security.
20.7.5
The English Account Bank acknowledges that it is not entitled to, and undertakes not to, claim or exercise any lien, right of set-off, right to combine or consolidate accounts or any other right, remedy or security over, against or with respect to any Project Account (save to set-off transaction fees incurred by it in exercise of its obligations under this Agreement) or moneys standing to the credit of any Project Account or in the course of being credited to it without the consent of the Security Trustee.
20.7.6
The English Account Bank confirms that it has received no other notice of any Security in respect of any Project Account in favour of any person other than the Security Trustee.
20.8
Other accounts
20.8.3
The Parent may maintain any bank, deposit, savings or other type of account.
20.8.4
The Borrower shall maintain an account (the "Disbursement Account") with the English Account Bank into which the proceeds of Loans shall be deposited (other than the proceeds of Loans the purpose of which is to repay amounts outstanding under the Existing Credit Agreement and any fees and or expenses payable by the Obligors in respect of this Facility, which amounts shall be paid directly to the relevant recipient).
20.8.5
Without prejudice to Clause 20.8.4 below, each other member of the Group may maintain a bank account for the purpose of making payments of day-to-day operational and general and administrative expenses provided that the maximum balance of any one account shall not exceed $[redacted] (or its equivalent in another currency or currencies) and the aggregate balance of all such accounts shall not exceed $[redacted] (or its equivalent in another currency or currencies) at any time.
20.8.6
Any Obligor may maintain a bank account with:
(A)
the English Account Bank, for any purpose; or
(B)
the Egyptian Account Bank, solely for the purpose of holding amounts due to be disbursed on expenditure projected to be made in the then current Projection,

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provided that it enters into a Security Document (in form and substance satisfactory to the Security Trustee acting reasonably) for the purposes of creating a floating charge over such bank account maintained by it (and the sums standing to the credit of such bank accounts) in favour of the Security Trustee and delivers to the Security Trustee, or procures the delivery to the Security Trustee of, any legal opinion or other document that the Security Trustee may reasonably require in connection with the entry into of such Security Document. Such Security must be granted and each such legal opinion or other document must be delivered on the date on which such bank account is opened.
21.
REPRESENTATIONS
21.1
Timing of representations
21.1.8
Each Obligor makes the representations and warranties set out in this Clause 21 (Representations) to each Finance Party on the date of this Agreement
21.1.9
In addition, the Repeating Representations and the IFC Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on:
(A)
the date of each Utilisation Request and the first day of each (i) Interest Period and (ii) Term; and
(B)
in the case of an Additional Guarantor, the day on which the company becomes (or it is proposed that the company becomes) an Additional Guarantor.
21.2
Status
21.2.15
It is a corporation, duly incorporated and validly existing under the laws of its jurisdiction of incorporation.
21.2.16
It has the power to own its assets and carry on its business as it is being conducted.
21.3
Binding obligations
The obligations expressed to be assumed by it in each Transaction Document to which it is a party are, subject to any general principles of law limiting its obligations which are specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation) or Clause 28 (Changes to the Obligors), legal, valid, binding and enforceable obligations.
21.4
Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents, do not and will not conflict with:
21.4.3
any law or regulation applicable to it;
21.4.4
its constitutional documents; or
21.4.5
any agreement or instrument binding upon it or any of its assets, which would, or would be reasonably likely to have a Material Adverse Effect.
21.5
Power and authority
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which

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it, or as the case may be, that Group member, is a party and the transactions contemplated by those Transaction Documents.
21.6
Validity and admissibility in evidence
All Authorisations required or desirable:
21.6.7
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;
21.6.8
to enable it to carry out its business and operations; and
21.6.9
to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation,
have been obtained or effected and are in full force and effect.
21.7
Governing law and enforcement
Except as specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation):
21.7.7
The relevant law chosen as the governing law of each of the Finance Documents to which it is a party will be recognised and enforced in its jurisdiction of incorporation.
21.7.8
The submission by it to the jurisdiction of the courts of England under any relevant Finance Document to which it is a party and any undertaking given in any Finance Document by it not to claim any immunity, in each case, is legal, valid and binding under the law of its jurisdiction of incorporation.
21.7.9
Any judgment obtained in England in relation to a Finance Document to which it is a party will be recognised and enforced in its jurisdiction of incorporation.
21.8
Deduction of Tax
It is not required under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document.
21.9
No filing or stamp taxes
Except as specifically referred to in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation), under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
21.10
No default
21.10.1
No Default has occurred and is continuing or will result from the execution of, or performance of any transaction contemplated by, any Finance Document or from the making of any Utilisation.
21.10.2
No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any member of the Group to which its, or such Group members' assets are subject which would, or would be reasonably likely to, have a Material Adverse Effect.
21.11
No misleading information

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21.11.1
Any factual information contained in the Information Memorandum pertaining to the Group was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.
21.11.2
The financial projections contained in the Information Memorandum have been prepared in good faith, with due care and on the basis of (a) recent historical information and (b) assumptions that it considers reasonable.