Contents

Page

Part 1 Interpretation

1

Definitions and Interpretation

1

Part 2 Conditions Precedent

42

Conditions Precedent

42

Part 3 Operation of the Facility

44

The Facility

44

Finance Parties’ Rights and Obligations

46

Purpose

47

Utilisation

47

Part 4 Payments, Cancellation, Interest and Fees

49

Repayment

49

Prepayment and Cancellation

50

Interest

54

Interest Periods

56

Changes to the Calculation of Interest

57

Fees

58

Part 5 Taxes, Increased Costs and Indemnities

59

Tax Gross-Up and Indemnities

59

Increased Costs

64

Other Indemnities

65

Mitigation by the Finance Parties

66

Part 6 Forecasts and Calculations and Borrowing Base Amount

67

Forecasts and Calculations

67

Part 7 Banks Accounts and Cash Management

78

Bank Accounts and Cash Management

78

Operation of Project Accounts

80

Debt Service Reserve Account

83

Authorised Investments

83

Part 8 Financial and Project Information

86

Information Undertakings

86

Part 9 Guarantee

95

Guarantee and Indemnity

95

Part 10 Representations, Covenants, Events of Default

99

Representations

99

Financial Covenants

107

General Undertakings

107

Events of Default

118

Part 11 Changes to Lenders and Obligors and Roles

124

Changes to the Lenders

124

Changes to the Obligors

130

Role of the Facility Agent and the Arranger

131

Part 12 Administration, Costs and Expenses

138

Payment Mechanics

138

Set-Off

141

Costs and Expenses

142

Notices

142

USA Patriot Act

144

Calculations and Certificates

145

Disclosure to numbering service providers

145

Partial Invalidity

146

Remedies and Waivers

146

Amendments and Waivers

146

Counterparts

149

Part 13 Governing Law and Enforcement

150

Governing Law

150

Jurisdiction

150

Contractual recognition of bail-in

150

Schedule 1 The Original Lenders

153

Schedule 2 Conditions Precedent

154

Schedule 3 Utilisation Requests

157

Schedule 4 Form of Transfer Certificate

158

Schedule 5 Form of Assignment Agreement

160

Schedule 6 Form of Lender Accession Notice

163

Schedule 7 Form of Compliance Certificate

164

Schedule 8 Form of Confidentiality Undertaking

166

Schedule 9 Form of Deed of Subordination

171

Schedule 10 Additional Guarantor Conditions Precedent

182

Schedule 11 Form of Obligor Accession Deed

183

(1)

VAALCO GABON (ETAME), INC., a company incorporated under the laws of Delaware with registered number 2515801 and having its registered office at Corporation Trust Center, 1209 N Orange St, Wilmington, DE 19801, USA (the “Borrower”);

(2)

VAALCO GABON S.A., a company incorporated under the laws of Gabon with registered number RG/POG 2014 B 1487 and having its registered office at Zone Industrielle OPRAG- Nouveau Port, B.P. 1335 Port-Gentil, Gabon (“Vaalco Gabon”);

(3)

VAALCO ENERGY, INC., a company incorporated under the laws of Delaware with registered number 2188793 and having its registered office at Corporation Trust Center, 1209 N Orange St, Wilmington, DE 19801, USA (the “Parent” and, together with Vaalco Gabon, the “Original Guarantors”);

(4)

GLENCORE ENERGY UK LTD., as arranger of the Facility (the “Mandated Lead Arranger”);

(5)

THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders), as lenders (the “Original Lenders”);

(6)

GLENCORE ENERGY UK LTD. (as the “Technical Bank”);

(7)

GLENCORE ENERGY UK LTD. (as the “Modelling Bank”);

(8)

GLENCORE ENERGY UK LTD., as agent of the Finance Parties under this Agreement (the “Facility Agent”); and

(9)

THE LAW DEBENTURE TRUST CORPORATION P.L.C., as Security Agent for the Secured Creditors on the terms and conditions set out in the Intercreditor Agreement (the “Security Agent”).

1

Definitions and Interpretation

1.1

Definitions

(A)

In relation to the financial statements delivered pursuant to Clause 22.1(A) or Clause 22.1(C), generally accepted accounting principles adopted by the U.S. Securities and Exchange Commission to the extent applicable to the relevant financial statements (the “US GAAP”); and

(B)

In relation to the financial statements delivered pursuant to Clause 22.1(B), the accounting principles of the Système Comptable OHADA (SYSCOHADA).

(A)

a US Dollar denominated institutional money market fund with at least USD 1 billion of funds and an average rate of maturity not exceeding one year;

(B)

a US Dollar denominated freely negotiable and marketable bond, treasury bill or debt security of a remaining maturity not exceeding one year issued by the United States of America or any agency or instrumentality thereof, or by any other sovereign government with a long-term credit rating of at least A3 by Moody’s or A- by Standard & Poor’s at such time;

(C)

a US Dollar denominated time deposit (of an original maturity not exceeding six months) made in London or New York or any other place agreed between the Borrower and the Facility Agent with a bank authorised to carry on business there whose long-term debt securities are, at such time, rated at least A3 by Moody’s or A- by Standard & Poor’s;

(D)

a US Dollar denominated instrument with a maturity of less than one year which has a short-term rating at such time of at least P1 by Moody’s or A1 by Standard & Poor’s or instruments with a maturity of less than one year issued by, or guaranteed by, entities whose short-term securities are rated at such time at least P1 by Moody’s or A1 by Standard & Poor’s; or

(E)

any other investment agreed between the Facility Agent and the Borrower;

(A)

one or more directors who are duly authorised whether singly or jointly, to act to bind that company or other legal person; or

(B)

a person or persons duly authorised by that company or other legal person to act to bind that company or other legal person;

(A)

the amount of its participation in any outstanding Loans; and

(B)

in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date,

other than, in relation to any proposed Utilisation, that Lender’s participation in any Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date;

(A)

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;

(B)

in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation; and

(C)

in relation to the United Kingdom, the UK Bail-In Legislation;

(A)

the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: a global regulatory framework for more resilient banks and banking systems”, “Basel III: international framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

(B)

the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

(C)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”;

(A)

the rights and interests of the Borrower in the Shareholder Loan Agreement;

(B)

the Offshore Project Accounts of the Borrower; and

(C)

the rights and interests of the Borrower in the Gabonese Law Security Agreement;

(A)

the Field(s); and

(B)

any other assets which are approved by the Majority Lenders and designated as such in accordance with Clause 17 (Forecasts and Calculations), but, in each case, excluding any of the foregoing which has ceased to be designated a Borrowing Base Asset in accordance with Clause 17 (Forecasts and Calculations);

(A)

the interest (excluding the Margin) 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;

(B)

the amount which that Lender would be able to obtain by placing an amount equal to the total sum received by it on deposit with a leading bank in the London interbank market for a period starting on the date of receipt or recovery and ending on the last day of the current Interest Period.

(A)

commencing on 1 April and ending on 30 September of each year; and

(B)

commencing on 1 October and ending on 31 March of each year,

(A)

any investment in a liquidity fund, provided that such investment is capable of being withdrawn in cash on not more than five Business Days’ notice;

(B)

certificates of deposit, maturing within one year after the relevant date of calculation;

(C)

any investment in marketable obligations in Sterling, US Dollar or euro having not more than three months to final maturity issued or guaranteed with a rating of A- or above by Standard & Poor’s (or its equivalent by Moody’s); or

(D)

any other instrument, security or investment approved in writing by the Majority Lenders;

(A)

the crude oil sale contract dated 20 December 2019, as amended on 14 December 2020, 19 March 2021, 14 July 2021 and 27 January 2022 between Vaalco Gabon, Addax Petroleum Etame Oil & Gas Gabon, PetroEnergy Resources Corporation and Tullow Oil Gabon SA as sellers and Exxonmobil Sales and Supply LLC as buyer in relation to crude oil from the Etame Marin Permit (Block G4-160) Field; and

(B)

the crude oil sale contract delivered pursuant to Clause 2.1 (Conditions Precedent to first Utilisation) of this Agreement between Vaalco Gabon as seller and Glencore Energy UK Ltd. as buyer in relation to crude oil from the Etame Marin Permit (Block G4-160) Field;

(A)

in relation to an Original Lender, at any time during a Specified Period, the amount set opposite that Specified Period in the column in which that Original Lender’s name appears in the table set out in Schedule 1 (The Original Lenders) and the amount of any other Commitment for that Specified Period transferred to it; and

(B)

in relation to any other Lender, at any time during a Specified Period the amount of any Commitment for that Specified Period transferred to it,

(A)

the outstanding principal amount of any Financial Indebtedness incurred;

(B)

any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in paragraph (A) above; and

(C)

the outstanding principal amount of any indebtedness arising in connection with any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing,

(i)

has a term shorter than 12 months; or

(ii)

corresponds to the pro-rata share of any finance or capital lease that an Obligor has, in its capacity as operator of a Petroleum Asset, included in its accounts in accordance with applicable US GAAP but which is to be funded by the Group’s non- operating partners under any joint operating agreement relating to that Petroleum Asset;

(A)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the 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 (including, without limitation, disruption of a technical or systems-related nature) to the treasury or payments operations of a Party preventing or severely inhibiting that or any other Party:

(i)

from performing its payment obligations under the Finance Documents; or

(ii)

from communicating with other Parties in accordance with the terms of the Finance Documents,

(A)

adding back Net Interest Payable;

(B)

adding back depletion and depreciation charged to the consolidated profit and loss account of the Group in accordance with the US GAAP;

(C)

adding back amounts amortised to the consolidated profit and loss account of the Group;

(D)

adding back any amount attributable to exploration expense (except to the extent that any such exploration expenses have been capitalised);

(E)

adding back any amount attributable to unrealised losses and deducting any amount attributable to unrealised gains on the value of any Derivative Transaction and any Hedging Transaction. For the avoidance of doubt, any realised losses will be deducted while any realised gains will be added back;

(F)

adding back any amount attributable to a loss and deducting any amount attributable to a gain against book value on the disposal of any non-current asset and any amount attributable to an impairment charge relating to a non-current asset;

(G)

adding back non-cash charges relating to employee benefit or management compensation plans of any member of the Group or any non-cash compensation charge arising from any equity-based awards for the benefit of officers, directors, employees and consultants of any member of the Group;

(H)

adding back or deducting (as applicable) the amount attributable to any other material item of an unusual or non-recurring nature which represent gains or losses, including (but not limited to) those arising on:

(i)

the refinancing of or the extinguishment of any financing, in relation to any cost associated with the original financing which is subsequently written off as a consequence of that refinancing or extinguishment; and

(ii)

the restructuring of the activities of an entity and the reversal of any provisions for the cost of restructuring;

(A)

Hydrocarbon prices;

(B)

exchange rates;

(C)

inflation rates;

(D)

discount rates;

(E)

interest rates;

(F)

Tax rates; and

(G)

any other assumption that the Technical Bank and the Borrower (each acting reasonably) agree shall be treated as an “Economic Assumption”;

(A)

any reportable event, as defined in Section 4043(b)(2) or 4043(c) of ERISA, with respect to a Single Employer Plan as to which the 30-day, post-event notice has not been waived by regulation;

(B)

the filing of a notice of intent to terminate or the termination of any Single Employer Plan under Section 4041(c) of ERISA;

(C)

the institution of proceedings under Section 4042 of ERISA by the PBGC for the termination of, or the appointment of a trustee to administer, any Single Employer Plan or Multiemployer Plan;

(D)

the failure to make a statutorily required contribution to any Single Employer Plan or Multiemployer Plan;

(E)

engagement in a non-exempt prohibited transaction within the meaning of Section 4975 of the Internal Revenue Code or Section 406 of ERISA;

(F)

the failure of any Employee Plan intended to be qualified under Section 401(a) of the Internal Revenue Code to be so qualified;

(G)

any partial or complete withdrawal from a Multiemployer Plan as to which any Obligor has any obligation or liability, contingent or otherwise;

(H)

any withdrawal from any Single Employer Plan to which any Obligor or ERISA Affiliate is or is treated as a substantial employer; or

(I)

the receipt by any Obligor or ERISA Affiliate of any notice that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA, or that a Multiemployer Plan is in endangered or critical status (within the meaning of Section 305 of ERISA);

(A)

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012; and

(B)

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repeating Directives 2006/48/EC and 2006/49/EC.

(A)

[*****]

(B)

[*****]

(C)

[*****]

(A)

sections 1471 to 1474 of the Code or any associated regulations;

(B)

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (A) above; or

(C)

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraph (A) or (B) above with the IRS, the US government or any governmental or taxation authority in any other jurisdiction;

(A)

in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; or

(B)

in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraph (A) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA;

(A)

the net present value of Net Cash Flow from that Forecast Date until the Field Depletion Date; and

(B)

the Capex Add-Back Amount from that Forecast Date;

(A)

moneys borrowed;

(B)

any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

(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 be treated in the accounts of the relevant entity as a finance or capital lease in accordance with the US GAAP, provided that, for the purpose of this Agreement, in no event shall any obligation of a person under any lease that would be categorised as and “operating lease” in accordance with Financial Accounting Standards Board Accounting Standards Update No. 2016 02, Leases (Topic 842) be considered Financial Indebtedness;;

(E)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(F)

any derivative or hedging 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 or hedging transaction, only the marked to market value shall be taken into account);

(G)

any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition but which is classified as a borrowing in the accounts of the relevant entity;

(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 in respect of an underlying liability of an entity which is not a member of the Group and which underlying liability would fall within one of the other paragraphs of this definition if it were a liability of a member of the Group; and

(I)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (A) to (H) above (but only to the extent that the Financial Indebtedness supported thereby is or is at any time in the future capable of being outstanding);

(A)

the Initial Forecast; and

(B)

any other forecast prepared and finally determined in accordance with Clause 17 (Forecasts and Calculations);

(A)

the date on which an asset becomes a Borrowing Base Asset pursuant to Clause 17 (Forecasts and Calculations);

(B)

the date of disposal of a Borrowing Base Asset (a “Disposal Forecast Date”);

(C)

each Scheduled Forecast Date;

(D)

the date of an increase of the Total Commitments pursuant to Clause 3.2 (Additional Commitment);

(E)

on request by the Modelling Bank following the termination of any Hedging Agreement or Derivative Agreement, the date set pursuant to paragraph (C) of Clause 17.2 (Adoption) for delivery of a Forecast;

(F)

on request by the Borrower (limited to one such request in any six-month period), the date set pursuant to paragraph (C) of Clause 17.2 (Adoption) for delivery of a Forecast; and

(G)

on request by the Majority Lenders or the Technical Bank (limited to one such request in any six-month period unless an Event of Default is continuing), the date set pursuant to paragraph (C) of Clause 17.2 (Adoption) for delivery of a Forecast;

(A)

any amount from the sale of crude oil, condensate, natural gas liquids and all output and product from any Borrowing Base Asset or otherwise received or to be received pursuant to any Project Document;

(B)

any amount representing interest on the Project Accounts and interest or distributions or income of any kind in respect of Authorised Investments;

(C)

all refunds of tax of any kind;

(D)

all Insurance Proceeds;

(E)

all damages or other payments for termination or non-performance or failure to perform or variation under any contract;

(F)

all net amounts received under any Derivative Agreement and any Hedging Agreement;

(G)

all amounts received in respect of any Permitted Disposal;

(H)

all other amounts which fall to be credited to the profit and loss account of an Obligor for the financial year in which the relevant period falls; and

(I)

any other costs, expenses or payments that the Borrower and the Majority Lenders agree to designate “Gross Revenues”;

(A)

sets out and itemises the Total Corporate Sources and the Total Corporate Uses for each quarterly period within the Forecast Period in at least the same level of detail as that included in the Initial Group Cash Flow Projection;

(B)

is in the same form as the Initial Group Cash Flow Projection or in such other form as may be approved by the Majority Lenders (acting reasonably); and

(C)

is signed by two directors of the Parent, for and on behalf of the Parent;

(A)

coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation; and

(B)

any substance unavoidably lost in the production thereof or used in conformity with Good Industry Practice for drilling and the production operations (including gas injection, fuel, secondary recovery pressure maintenance, re-pressuring or re- cycling operations) conducted for the purpose of winning and saving such substances but only for the duration of such use;

(i)

in relation to the Facility Agent (or its respective holding companies), Clause 27.7 (Insolvency) or Clause 27.8 (Insolvency proceedings) applies or has occurred;

(ii)

the Facility Agent or any of its Affiliates repudiates or rescinds its obligations under any Finance Document or (in its capacity as Lender) becomes a Non-Funding Lender; or

(iii)

the Facility Agent or any of its Affiliates 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;

(A)

in relation to any Obligor, any circumstances described in Clause 27.7 (Insolvency);

(B)

in relation to a Secured Creditor means that the Secured Creditor:

(i)

is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(ii)

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;

(iii)

makes a general assignment, arrangement or composition with or for the benefit of its creditors;

(iv)

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;

(v)

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 (iv) above and:

(vi)

has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009;

(vii)

has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(viii)

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 (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in paragraph (iv) above);

(ix)

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;

(x)

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 (i) to (ix) above; or

(xi)

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts;

(A)

the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and

(B)

the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,

(A)

the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

(B)

the time barring of claims under the Limitation Act 1980 and the Foreign Limitation Periods Act 1984, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;

(C)

the principle that in certain circumstances, any Security granted by way of fixed charge may be recharacterised as a floating charge;

(D)

the principle that additional interest imposed pursuant to any relevant agreement may be held to be unenforceable on the grounds that it is a penalty and thus void;

(E)

the principle that an English court may not give effect to an indemnity for legal costs incurred by an unsuccessful litigant;

(F)

similar principles, rights and defences under the laws of any Relevant Jurisdiction; and

(G)

any other matters which are set out as qualifications or reservations as to matters of law of general application in the legal opinions delivered pursuant to Schedule 2 (Conditions Precedent).

(A)

any Original Lender; and

(B)

any bank or financial institution which has become a Party as a lender in accordance with Clause 3.2 (Additional Commitment) or Clause 28 (Changes to the Lenders),

(A)

the applicable Screen Rate;

(B)

(if no Screen Rate is available for the Interest Period of that Loan) the Interpolated Screen Rate for that Loan; or

(C)

if:

(i)

no Screen Rate is available for the currency of that Loan; or

(ii)

no Screen Rate is available for the Interest Period of that Loan and it is not possible to calculate an Interpolated Screen Rate for that Loan,

(A)

the net present value of Net Cash Flow from that Forecast Date until the Final Maturity Date; and

(B)

the Capex Add-Back Amount as at that Forecast Date;

(A)

the aggregate of the Net Revenues of all the Obligors projected to be received in that Calculation Period; minus

(B)

the aggregate of all the Project Costs of all the Obligors projected to be made in that Calculation Period,

(A)

the aggregate amount of all Gross Revenues of the Obligors projected to be received in that Calculation Period; minus

(B)

the aggregate amount of all Royalty Payments projected to be made in that Calculation Period;

(A)

any Lender who fails to participate in any Utilisation in the amount and at the time required;

(B)

any Lender who has indicated publicly or to the Facility Agent or an Obligor that it does not intend to participate in all or part of any Utilisation;

(C)

any Lender which has rescinded or repudiated a Finance Document; or

(D)

any Lender in respect of which or in respect of whose holding company an Insolvency Event has occurred;

(A)

an account designated “Offshore Disbursement Account” established by the Borrower with the Offshore Account Bank pursuant to Clause 19 (Operation of the Project Accounts) and which is secured in favour of the Secured Creditors;

(B)

any other account designated as such by the Borrower and the Facility Agent, such accounts in each case being secured in favour of the Secured Creditors;

(A)

an account designated “Offshore Proceeds Account” established by Vaalco Gabon with the Offshore Account Bank pursuant to Clause 19 (Operation of the Project Accounts) and which is secured in favour of the Secured Creditors; and

(B)

any other account designated as such by the Borrower and the Facility Agent, such accounts being secured in favour of the Secured Creditors;

(A)

the Debt Service Reserve Account;

(B)

the Offshore Disbursement Account;

(C)

the Offshore Parent Account; and

(D)

the Offshore Proceeds Account;

(A)

the Onshore Proceeds Account; and

(B)

any other account designated as such by the Borrower and the Facility Agent;

(A)

the entire issued share capital of the Borrower;

(B)

the Insurances to which the Parent is party; and

(C)

the Offshore Parent Account;

(A)

which is made in the ordinary course of the day to day business of the acquiring company;

(B)

which is in respect of the implementation and development of a Borrowing Base Asset;

(C)

by an Obligor where the asset acquired or invested in is to be included as a Borrowing Base Assets as approved by the Majority Lenders (acting reasonably);

(D)

by an Obligor of an asset disposed to it by any other Obligor;

(E)

of any business engaged in the exploration for and production of Hydrocarbons to the extent that:

(i)

an updated Group Cash Flow Projection has been prepared taking into account the proposed acquisition or investment and delivered to the Facility Agent no later than 10 Business Days prior to the date of completion of the proposed acquisition or investment and which demonstrates that no breach of the Group Liquidity Test arises in the relevant Forecast Period to which that Group Cash Flow Projection relates; and

(ii)

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(F)

which is approved by the Majority Lenders (acting reasonably),

(A)

disposal permitted or not otherwise prohibited by Clause 26.8 (Disposals);

(B)

disposals expressly permitted under any Project Document;

(C)

disposals of cash for purposes not prohibited by the Finance Documents;

(D)

disposals expressly required in order to comply with its obligations under the Project Documents;

(E)

disposals of obsolete assets;

(F)

the sale of Hydrocarbons on arm’s length terms for cash consideration in the ordinary course of trading;

(G)

disposal of any Cash or Cash Equivalent Investments into any another Cash or Cash Equivalent Investment;

(H)

disposal of any Authorised Investment;

(I)

any Unitisation (provided that the effects of such Unitisation have been taken into account in the then current Forecast);

(J)

disposals between the Obligors where, in the opinion of the Majority Lenders, there is no prejudice to the interests of the Secured Creditors in the context of the Security which has been granted; or

(K)

disposals not falling within paragraphs (A) to (J) above which are consented to by the Majority Lenders;

(A)

any Financial Indebtedness arising under or contemplated by the Finance Documents;

(B)

any Financial Indebtedness owed by an Obligor or by any other member of the Group, in each case, to an Obligor, provided that such Obligor (as subordinated lender) has entered into a Deed of Subordination;

(C)

any guarantee given in respect of the netting or set-off arrangements entered into by any Obligor in the ordinary course of its banking arrangements which has the effect of netting debit and credit balances and permitted pursuant to this Agreement;

(D)

any Financial Indebtedness under purchase money debt in respect of, or finance or capital leases of, vehicles, plants, equipment or computers:

(i)

to the extent already existing at the date of this Agreement; or

(ii)

[*****]

(E)

any Financial Indebtedness arising under the Gabonese Customs Guarantee or the Bareboat Charterer PCG, the Boskalis PCG, the Operating Agreement PCG and the Tinworth PCG;

(F)

any Financial Indebtedness arising under any Derivative Agreement or any Hedging Agreement into which an Obligor may enter further to the provisions of Clause 26.16(A) (Hedging);

(G)

any guarantee or indemnity contained in the Transaction Documents;

(H)

any Financial Indebtedness arising under any letter of credit or letter of credit facility requested by the Parent in connection any Hedging Transactions existing as at the date of this Agreement under the ISDA Master Agreement dated 31 May 2018 between the Parent and BP Energy Company;

(I)

any Financial Indebtedness arising under any letter of credit or letter of credit facility requested by the Parent in connection with any Hedging Transaction under the ISDA Master Agreement dated on or about the date of this Agreement between the Parent and Glencore Commodities Limited; or

(J)

any Financial Indebtedness otherwise approved by the Majority Lenders;

(A)

any netting or set-off arrangement entered into in the ordinary course of financing arrangements for the purpose of netting or setting off debit and credit balances;

(B)

any payment or close out netting or set-off arrangement pursuant to any Hedging Agreement or Derivative Agreement entered into by an Obligor in accordance with this Agreement and the Intercreditor Agreement;

(C)

any lien securing obligations no more than 90 days overdue arising by operation of law;

(D)

any Security Interest arising under or contemplated by the Finance Documents or pursuant to the express terms of any Project Document;

(E)

any title retention provisions in a supplier’s standard conditions of supply of goods;

(F)

the Security Interest created or purported to be created by Vaalco Gabon over the Commercial Contracts in favour of the Etame Field Trustee and Paying Agent pursuant to the Etame Field Trustee and Paying Agent Agreement;

(G)

the Security Interest created or purported to be created by Vaalco Gabon in favour of the Onshore Account Bank in connection with the Gabonese Customs Guarantee;

(H)

any Security created by a member of the Group in the ordinary course of its banking or investment arrangements under the customary terms of a bank or securities intermediary where such member maintains an account;

(I)

any Security Interest over or affecting any asset acquired by an Obligor after the date of this Agreement if:

(i)

the Security was not created in contemplation of the acquisition of that asset;

(ii)

the principal amount secured has not been increased, in contemplation of or since the acquisition of that asset; and

(iii)

the Security is removed or discharged within 30 days of the date of acquisition of such asset;

(J)

any Security Interest securing Permitted Financial Indebtedness of the type described in paragraph (D) of the definition of “Permitted Financial Indebtedness; provided that (i) such Security Interest shall be created within one hundred twenty (120) days of the acquisition, repair, construction, improvement or lease, as applicable, of the related property, (ii) such Security Interest does not at any time encumber any property other than the property financed or improved by such Financial Indebtedness, and (iii) the principal amount of Financial Indebtedness secured by any such Security Interest shall at no time exceed one hundred percent (100%) of the original price for the purchase, repair, construction, improvement or lease amount (as applicable) of such property at the time of purchase, repair, construction, improvement or lease (as applicable);

(K)

any Security Interest over cash granted by, and/or any letter of credit issued at the request of, the Parent in connection with any hedging transactions existing as at the date of this Agreement under the ISDA Master Agreement dated 31 May 2018 between the Parent and BP Energy Company;

(L)

any Security Interest over cash granted by, and/or any letter of credit issued at the request of, the Parent in connection with the ISDA Master Agreement to be entered around the date of this Agreement between the Parent and Glencore Commodities Limited (or any hedging transaction thereunder); and

(M)

any Security Interest not falling within paragraphs (A) to (L) above which is consented to by the Majority Lenders;

(A)

the Joint Operating Agreement;

(B)

the Commercial Contracts;

(C)

the Etame Field Trustee and Paying Agent Agreement;

(D)

the Bareboat Charter Contract;

(E)

each Petroleum Agreement;

(F)

the Operating Agreement;

(G)

the FPSO Contract;

(H)

the Exclusive Exploitation Authorisations;

(I)

any Authorisation required for the production, transportation or sale of petroleum from a Borrowing Base Asset;

(J)

the Agreement for the Provision of Subsea Construction and Installation Services; and

(K)

any other agreement which the Facility Agent and the Borrower agree shall be a Project Document,

(A)

its Original Jurisdiction;

(B)

any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;

(C)

any jurisdiction where it conducts its business; and

(D)

the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it;

(A)

Clauses 24.1 (Status), 24.2 (Binding obligations), 24.3 (Non-conflict), 24.4 (Power and authority), each as at the time the power or authority was exercised only; and

(B)

Clauses 23.10(A) (Limitations on guarantee under US law), 24.5 (Validity and admissibility), 24.9 (Financial Statements), 24.10 (Proceedings pending or threatened), 24.12 (Breach of laws), 24.13 (Compliance with environmental laws), 24.14 (Security), 24.16 (Pari passu ranking), 24.17 (Assets), 24.18 (Project Documents), 24.22 (No Immunity), 24.23 (Ownership of Obligors), 24.24 (Sanctions), 24.25 (Anti-corruption law) and 24.29 (US Governmental Regulation);

(A)

formally designated, nominated or recommended as the replacement for the Screen Rate by:

(i)

the administrator of the Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by the Screen Rate); or

(ii)

any Relevant Nominating Body,

(B)

in the opinion of the Majority Lenders and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to the Screen Rate; or

(C)

in the opinion of the Majority Lenders and the Borrower, an appropriate successor to the Screen Rate;

(A)

the Initial Reserves Report; and

(B)

each other report which is prepared by the Independent Engineer and, in each case, is in substantially the same form as the Initial Reserves Report;

(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 amount of the maturing Loan;

(C)

made or to be made to the same Borrower for the purpose of refinancing a maturing Loan;

(A)

the US government;

(B)

the United Nations Security Council;

(C)

the European Union (or any of its members states);

(D)

the United Kingdom; and

(E)

the respective governmental institutions and agencies of any of the foregoing, including, without limitation the Office of Foreign Assets Control of the US Department of Treasury, the US Department of State and Her Majesty’s Treasury;

(A)

listed on, or (directly or indirectly) owned or controlled (as such terms are defined by the relevant Sanctions Authority) by one or more persons listed on, or acting on behalf of a person listed on, any Sanctions List;

(B)

located in, incorporated under the laws of, or (directly or indirectly) owned or controlled (as such terms are defined by the relevant Sanctions Authority), or acting on behalf of, a person located or ordinarily resident in or organised under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or

(C)

otherwise a target of Sanctions;

​​​​​(A)

the methodology, formula or other means of determining the Screen Rate has, in the opinion of the Majority Lenders and the Borrower, materially changed;

(B)

(i)

(b)

information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of the Screen Rate is insolvent,

(ii)

the administrator of the Screen Rate publicly announces that it has ceased or will cease, to provide the Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide the Screen Rate;

(iii)

the supervisor of the administrator of the Screen Rate publicly announces that the Screen Rate has been or will be permanently or indefinitely discontinued; or

(iv)

the administrator of the Screen Rate or its supervisor announces that the Screen Rate may no longer be used; or

(C)

the administrator of the Screen Rate determines that the Screen Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:

(i)

the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Majority Lenders and the Borrower) temporary; or

(ii)

the Screen Rate is calculated in accordance with any such policy or arrangement for a period no less than 10 Business Days; or

(D)

in the opinion of the Majority Lenders and the Borrower, the Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement;

(A)

the Borrower NY Law Security Agreement;

(B)

the Vaalco Gabon NY Law Security Agreement;

(C)

the Parent NY Law Pledge and Security Agreement;

(D)

the Parent English Law Security Agreement;

(E)

the Vaalco Gabon English Law Security Agreement;

(F)

the Gabonese Law Security Agreement; and

(G)

subject to the provisions of the Intercreditor Agreement, each other document evidencing or creating any Security Interest held or obtained from an Obligor for or in respect of any Secured Obligations;

(A)

the Available Facility or any other credit facility that is available for drawing in that period for the purposes of meeting any Total Corporate Uses in that period;

(B)

the actual cash balances of the Group (excluding any cash held by any member of the Group in its capacity as operator of a Petroleum Asset and related infrastructures where such cash is not attributable to a member of a Group’s working interest in that Petroleum Asset) on the first day of that period that are available for the purposes of meeting any Total Corporate Uses in that period;

(C)

any proceeds of any insurances (other than in respect of any insurance to be paid in settlement of claims in respect of third party liability) payable to any member of the Group;

(D)

all refunds or reimbursements of Taxes payable to any member of the Group;

(E)

all amounts payable to any member of the Group under any Hedging Agreement;

(F)

all tariffs, fees and charges payable to any member of the Group in respect of the use of any assets;

(G)

any committed and undrawn equity that is available for drawing in that period for the purposes of meeting any Total Corporate Uses in that period;

(H)

the aggregate amount of the proceeds of the sale of Hydrocarbons and refined products that is projected to be received by the Group in that period;

(I)

all compensation or other consideration on account of nationalisation, appropriation or requisition of all or part of any Hydrocarbon asset; and

(J)

any other sources of funds as the Parent and the Facility Agent may agree, where (i) for these purposes a credit facility (including the Facility) shall only be treated as being “available” on any date to the extent that no circumstances exist or are continuing on such date which would prohibit any lender under that credit facility from making, or would entitle any such lender to refuse to make, any utilisation available to any borrower under that credit facility and (ii) the Hydrocarbon price used for the determination of Total Corporate Sources shall be approved by the Technical Bank (acting reasonably);

(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;

(A)

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (“CRR”) as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the “Withdrawal Act”); and

(B)

the law of the United Kingdom or any part of it, which immediately before IP completion day (as defined in the European Union (Withdrawal Agreement) Act 2020) implemented Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC and its implementing measures (“CRD”);

(C)

direct EU legislation (as defined in the Withdrawal Act), which immediately before IP completion day (as defined in the European Union (Withdrawal Agreement) Act 2020) implemented EU CRD IV as it forms part of domestic law of the United Kingdom by virtue of the Withdrawal Act; and

(D)

any law or regulation of the United Kingdom which introduces into domestic law of the United Kingdom a provision which is equivalent to a provision set out in CRR or CRD and/or implements Basel III standards;

(A)

the Borrower which is resident for tax purposes in the United States; or

(B)

an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes;

(A)

IRS Form W-8BEN or W-8BEN-E,

(B)

IRS Form W-8IMY (with appropriate attachments),

(C)

IRS Form W-8ECI,

(D)

IRS Form W-8EXP,

(E)

IRS Form W-9,

(F)

in the case of a Lender relying on the so-called “portfolio interest exemption,” IRS Form W-8BEN or W-8BEN-E and a certificate to the effect that such Lender is not (i) a “bank” within the meaning of section 881(c)(3)(A) of the Internal Revenue Code, (ii) a “10 percent shareholder” of the relevant Obligor within the meaning of section 881(c)(3)(B) of the Internal Revenue Code, or (iii) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Internal Revenue Code, or

(G)

any other IRS form by which a person may claim complete exemption from, or reduction in the rate of, withholding (including backup withholding) of US federal income tax on interest and other payments to that person;

(A)

any value added tax imposed by the Value Added Tax Act 1994;

(B)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(C)

any other tax of a similar nature, whether imposed in the United Kingdom or in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (A) above, or imposed elsewhere; and

(A)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;

(B)

in relation to any other applicable Bail-In Legislation other than the UK Bail-In Legislation:

(i)

any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii)

any similar or analogous powers under that Bail-In Legislation; and

(C)

in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers.

1.2

Construction

(A)

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

(i)

“this Agreement” shall be construed as a reference to the agreement or document in which such reference appears together with all recitals and Schedules thereto;

(ii)

a reference to “assets” includes properties, revenues and rights of every description;

(iii)

an “authorisation” or “consent” shall be construed as including any authorisation, consent, approval, resolution, licence, exemption, permission, recording, notarisation, filing or registration;

(iv)

an “authorised officer” shall be construed, in relation to any Party, as a reference to a Director or other person duly authorised by such Party as notified by such Party to the Facility Agent as being authorised to sign any agreement, certificate or other document or to take any decision or action, as applicable. The provision of any certificate or the making of any certification by any authorised officer of an Obligor shall not create for that authorised officer any personal liability to the Finance Parties;

(v)

a “calendar year” is a reference to a period starting on (and including) 1 January and ending on (and including) the immediately following 31 December;

(vi)

a “certified copy” shall be construed as a reference to a copy of that document, certified by an authorised officer of the relevant Party delivering it to be a complete, accurate and up-to-date copy of the original document;

(vii)

a “clause” shall, subject to any contrary indication, be construed as a reference to a clause of the agreement or document in which such reference appears;

(viii)

“continuing” shall, in relation to any Default or Event of Default, be construed as meaning that such Default or Event of Default has not been remedied or waived;

(ix)

the “equivalent” on any given date in any currency (the “first currency”) of an amount denominated in another currency (the “second currency”) is a reference to the amount of the first currency which could be purchased with the amount of the second currency at the spot rate of exchange quoted by the Facility Agent in the normal course of business at or about 11.00 a.m. on such date for the purchase of the first currency with the second currency in the London foreign exchange markets for delivery on the second Business Day thereafter;

(x)

the “group” of any person, shall be construed as a reference to that person, its subsidiaries and any holding company of that person and all other subsidiaries of any such holding company, from time to time;

(xi)

a “holding company” of a company or corporation shall be construed as a reference to any company or corporation of which the first-mentioned company or corporation is a subsidiary;

(xii)

“include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrase or words of like import;

(xiii)

a “month” or “Month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next succeeding calendar month save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next succeeding Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it shall end on the immediately preceding Business Day provided that, if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month (and references to “months” and “Months” shall be construed accordingly);

(xiv)

a “person” shall be construed as a reference to any person, trust, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing;

(xv)

a reference to 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 a regulation, rule, official directive, request or guideline with which a prudent person carrying on the same or a similar business to an Obligor would comply) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

(xvi)

a “right” shall be construed as including any right, title, interest, claim, remedy, discretion, power or privilege, in each case whether actual, contingent, present or future;

(xvii)

a “Schedule” shall, subject to any contrary indication, be construed as a reference to a schedule of the agreement or document in which such reference appears;

(xviii)

a “subsidiary” of a company or corporation means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006 which shall be construed as a reference to any company or corporation:

(a)

which is controlled, directly or indirectly, by the first-mentioned company or corporation;

(b)

more than half the issued share capital of which is beneficially owned, directly or indirectly, by the first-mentioned company or corporation; or

(c)

which is a subsidiary of another subsidiary of the first-mentioned company or corporation,

(xix)

the “winding-up”, “dissolution” or “administration” of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, bankruptcy, winding-up, reorganisation, dissolution, administration, receivership, judicial custodianship, administrative receivership, arrangement, adjustment, protection or relief of debtors;

(xx)

a “year” is a reference to a period starting on one day in a month in a calendar year and ending on the numerically corresponding day in the same month in the next succeeding calendar year, save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next succeeding Business Day, unless that day falls in the month succeeding that in which it would otherwise have ended, in which case it shall end on the immediately preceding Business Day; provided that, if a period starts on the last Business Day in a month, that period shall end on the last Business Day in that later month (and references to “years” shall be construed accordingly); and

(xxi)

a provision of law is a reference to that provision as amended and re- enacted.

(B)

Any provision of Clause 8.2 (Illegality and Sanctions) and Clause 26.26 (Application of the Loans) shall not apply to or in favour of any Finance Party (other than any Finance Party which has notified the Facility Agent that the following carve-out shall not apply to it or any of its directors, officers or employees) or any director, officer or employee thereof, to the extent that such provisions would expose the Finance Party or any director, officer or employee thereof to liability under any applicable anti- boycott or blocking law, regulation or statute.

1.3

Interpretation

(A)

Words importing the singular shall include the plural and vice versa.

(B)

Words indicating any gender shall include each other gender.

(C)

Unless a contrary indication appears, a reference used in any other Finance Document or in any notice given under or in connection with any Finance Document to:

(i)

any party or person shall be construed so as to include its and any subsequent successors, permitted transferees and permitted assigns in accordance with their respective interests;

(ii)

a “Finance Document” or a “Transaction Document” or any other agreement or instrument is (other than a reference to a “Finance Document”, “Transaction Document”, or any other agreement or instrument in “original form”) a reference to that Finance Document or Transaction Document, or other agreement or instrument, as amended, novated, supplemented, extended or restated; and

(iii)

a time of day shall, save as otherwise provided in any agreement or document, be construed as a reference to London time.

(D)

Section, Part, Clause and Schedule headings contained in, and any index or table of contents to, any agreement or document are for ease of reference only.

1.4

Third Party Rights

(A)

Any Hedging Counterparty may enforce the terms of Clause 19.2 (Withdrawals), Clause 23 (Guarantee and Indemnity) and Clause 40.2(C) (Exceptions) by virtue of the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”). This paragraph 1.4(A) confers a benefit on each such Hedging Counterparty, and, subject to the remaining provisions of this Clause 1.4, is intended to be enforceable by each Hedging Counterparty by virtue of the Third Parties Act.

(B)

Subject to paragraph (A) above, a person who is not a party to this Agreement has no right under the Third Parties Act to enforce or enjoy the benefit of any term of this Agreement.

(C)

Notwithstanding any term of any Finance Document, this Agreement may be rescinded or varied without the consent of any person who is not a Party hereto.

1.5

The Security Agent

(A)

The Security Agent has agreed to become party to this Agreement only for the purpose of taking the benefit of the contractual provisions expressed to be given for the benefit of the Security Agent and the better preservation of its rights on behalf of the Secured Creditors under the Security Documents. The Security Agent shall not assume any responsibility or liability for and of the obligations of any other party by entering into this Agreement.

(B)

The Parties acknowledge and agree that the Security Agent is entering into this Agreement as Security Agent under the Intercreditor Agreement. As such, the Security Agent shall be entitled, in performing any of its duties under this Agreement, to all rights, privileges, protections, immunities, indemnities and limitations of liability provided to the Security Agent under the Intercreditor Agreement, which rights, privileges, protections, immunities and limitations are specifically incorporated herein by this reference therein.

1.6

Divisions

For all purposes under the Finance Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (A) if any asset, right, obligation or liability of any person becomes the asset, right, obligation or liability of a different person, then it shall be deemed to have been transferred from the original person to the subsequent person and (B) if any new person comes into existence, such new person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.

2

Conditions Precedent

2.1

Conditions Precedent to first Utilisation

2.2

Conditions Precedent to each Utilisation

(A)

in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan, and in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation;

(B)

the Repeating Representations to be made by each Obligor are, in the light of the facts and circumstances then existing, true and correct in all material respects (or, in the case of a Repeating Representation that contains a materiality concept, true and correct in all respects);

(C)

the aggregate of:

(i)

the amount of the Utilisation proposed to be made on the proposed Utilisation Date; and

(ii)

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 or before the proposed Utilisation Date,

(D)

the aggregate of:

(i)

the amount of the Utilisation proposed to be made on the proposed Utilisation Date; and

(ii)

the aggregate amount of all outstanding Utilisations on the proposed Utilisation Date less the amount of all outstanding Utilisations due to be repaid or prepaid on or before the proposed Utilisation Date,

2.3

Waivers of Conditions Precedent

(A)

The Facility Agent, acting in accordance with the instructions of the Lenders, may waive the requirement under Clause 2.1 (Conditions Precedent to first Utilisation) to deliver any one or more of the documents and other evidence listed in Schedule 2 (Conditions Precedent).

(B)

Satisfaction of any of the conditions set out in Clause 2.2 (Conditions Precedent to each Utilisation) may be waived by the Facility Agent acting in accordance with the instructions of the Majority Lenders.

(C)

Any waiver effected by the Facility Agent in accordance with this Clause shall be binding on all Parties.

(D)

For the avoidance of doubt, no Utilisation may be made under the Facility, until the Facility Agent has confirmed all relevant Conditions Precedent have been satisfied (acting reasonably) or waived in accordance with this Clause 2.

3

The Facility

3.1

The Facility

3.2

Additional Commitment

(A)

The Borrower may notify the Facility Agent (such notice being an “Additional Commitment Notice”) that it has agreed with any Lender or any other bank or financial institution (in each case, an “Additional Lender”) to increase the Total Commitments by the provision of additional commitments under the Facility (each such increase in commitments being an “Additional Commitment”), provided that:

(i)

the Additional Commitment Notice is delivered prior to the expiry of the Availability Period;

(ii)

the Additional Commitment Date (as defined below) takes place before the expiry of the Availability Period;

(iii)

the minimum amount of any Additional Commitment is not less than USD 5 million;

(iv)

the maximum aggregate amount of Additional Commitment (including all previous increases) does not exceed USD 50 million;

(v)

no Event of Default is continuing or would arise as a result of the provision of the Additional Commitment; and

(vi)

the terms of the Additional Commitment shall, for all purposes of this Agreement, be treated pursuant to the terms of this Agreement in the same manner as the existing Commitments.

(B)

Each Additional Commitment Notice shall:

(i)

confirm that the requirements of paragraph 3.2(A) above are fulfilled; and

(ii)

specify the date upon which the Additional Commitment is anticipated to be made available to the Borrower (the “Additional Commitment Date”).

(C)

In the event that the Additional Lender is not a Party to this Agreement, the Borrower shall procure that each Additional Lender:

(i)

delivers a Lender Accession Notice duly completed and signed on behalf of the Additional Lender and specifying its Additional Commitment to the Facility Agent; and

(ii)

accedes to the Intercreditor Agreement in accordance with the terms of the Intercreditor Agreement,

(D)

Subject to the conditions in paragraphs (B) and (C) above being met, from the relevant Additional Commitment Date:

(i)

the Additional Lender shall make available the relevant Additional Commitment for Utilisation under the Facility in accordance with the terms of this Agreement (as amended);

(ii)

the Additional Commitment shall rank pari passu with respect to existing Commitments; and

(iii)

any necessary rebalancing of the Commitments and outstandings under the Facility and the Additional Commitment provided by the Additional Lender to ensure that they are pro rata (the “New Commitment Rebalancing”) will be made by the Borrower making utilisations from the Additional Commitment within five business days of the relevant Additional Commitment Date:

(a)

in priority to utilisations from Commitments under the Facility; or

(b)

to effect a prepayment under the Facility to the existing Lenders (which amount may be redrawn by the Borrower),

(E)

Each Additional Lender may only become a party to this Agreement (and be entitled to share in the Security created under the Security Documents in accordance with the terms of the Finance Documents) if such Additional Lender simultaneously accedes to the Intercreditor Agreement in accordance with the terms of the Intercreditor Agreement.

(F)

Each Party (other than the relevant Additional Lender) irrevocably authorises and instructs the Facility Agent to execute on its behalf any Lender Accession Notice which has been duly completed and signed on behalf of that proposed Additional Lender and each Party agrees to be bound by such accession. The Facility Agent will promptly sign any such Lender Accession Notice (and in any event within three Business Days of receipt).

(G)

The Facility Agent shall only be obliged to execute a Lender Accession Notice delivered to it by an Additional Lender once the Facility Agent (acting reasonably) has, to the extent that the necessary information is not already available to it, received all required information to comply with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the accession of such Additional Lender.

(H)

On the date that the Facility Agent executes a Lender Accession Notice:

(i)

the Additional Lender party to that Lender Accession Notice, each other Finance Party and the Obligors shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had that Additional Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of that accession and with the Commitment specified by it as its Additional Commitment; and

(ii)

that Additional Lender shall become a Party to this Agreement as a “Lender”.

(I)

If an Additional Commitment is put in place pursuant to this Clause 3.2, the Facility Agent shall promptly provide each Lender and the Borrower with a revised Facility Reduction Schedule which incorporates amendments to reflect the application of this Clause 3.2.

3.3

Obligors’ Agent

(A)

Each Obligor (other than the Parent) by its execution of this Agreement or an Obligor Accession Deed irrevocably appoints the Parent (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

(i)

the Parent on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of the Borrower, Utilisation Requests), to execute on its behalf any Obligor Accession Deed, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and

(ii)

each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Parent,

(B)

Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors’ Agent or given to the Obligors’ Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors’ Agent and any other Obligor, those of the Obligors’ Agent shall prevail.

3.4

Amendments to Facility Reduction Schedule

4

Finance Parties’ Rights and Obligations

(A)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under any Finance Documents to which it is a Party 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.

(B)

The rights of each Finance Party under or in connection with the Finance Documents to which it is a Party 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 in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (C) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party’s participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Obligor.

(C)

A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

5

Purpose

5.1

Purpose

(A)

its general corporate purpose, including:

(i)

payment of any Financing Costs;

(ii)

refinancing maturing Loans; and

(iii)

payments to the Debt Service Reserve Account; and

(B)

on lending the proceeds of the Loans to Vaalco Gabon pursuant to the Shareholder Loan Agreement.

5.2

Monitoring

6

Utilisation

6.1

Delivery of a Utilisation Request

6.2

Completion of a Utilisation Request

(A)

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

(i)

the proposed Utilisation Date is a Business Day within the Availability Period;

(ii)

the amount of the Utilisation complies with Clause 6.3 (Amount); and

(iii)

the proposed Interest Period complies with Clause 10 (Interest Periods).

(B)

Only one Loan may be requested in each Utilisation Request and a maximum of two Utilisation Requests may be requested in any one month.

(C)

The Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation seven or more Loans would be outstanding.

6.3

Amount

6.4

Lenders’ participation

(A)

If the conditions set out in this Agreement have been met, each Lender under the Facility shall make its participation in the relevant Loan available by the Utilisation Date through its Facility Office in accordance with the terms of this Agreement.

(B)

The amount of a Lender’s participation in that Loan will be equal to the proportion borne by its Available Commitment to the Available Commitments under the Facility immediately prior to the making of the relevant Loan.

(C)

The Facility Agent shall notify each Lender of the amount of each Loan under the Facility and the amount of its participation in each such Loan not less than three Business Days before the Utilisation Date.

(D)

A Business Day for the purposes of Clause 6 (Utilisation) shall mean a day (other than a Saturday or Sunday) when banks are open for business in London and New York.

7

Repayment

7.1

Repayment of the Facility

(A)

All Loans outstanding under the Facility will be repaid semi-annually on each Repayment Date, in accordance with the Facility Reduction Schedule to the extent necessary to ensure that the amount of Loans outstanding on the day after that Repayment Date does not exceed the Total Commitments at that time.

(B)

Any repayment made during the Availability Period may be reutilised in accordance with this Agreement, but no repayment may be redrawn after the expiry of the Availability Period.

(C)

Without prejudice to the Borrower’s obligation under paragraph (A) if:

(i)

one or more Loans are to be made available to the Borrower:

(a)

on the same day that a maturing Loan is due to be repaid by it;

(b)

in whole or in part for the purpose of refinancing the maturing Loan; and

(ii)

the proportion borne by each Lender’s participation in the maturing Loan to the amount of that maturing Loan is the same as the proportion borne by that Lender’s participation in the new Loans to the aggregate amount of those new Loans,

(A)

if the amount of the maturing Loan exceeds the aggregate amount of the new Loans:

(1)

the Borrower will only be required to make a payment under Clause 31.1 (Payments to the Facility Agent) in an amount in the relevant currency equal to that excess; and

(2)

each Lender’s participation in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender’s participation in the maturing Loan and that Lender will not be required to make a payment under Clause 31.1 (Payments to the Facility Agent) in respect of its participation in the new Loans; and

(B)

if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans:

(1)

the Borrower will not be required to make a payment under Clause 31.1 (Payments to the Facility Agent); and

(2)

each Lender will be required to make a payment under Clause 31.1 (Payments to the Facility Agent) in respect of its participation in the new Loans only to the extent that its participation in the new Loans exceeds that Lender’s participation in the maturing Loan and the remainder of that Lender’s participation in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender’s participation in the maturing Loan.

7.2

Amendment to Facility Reduction Schedule

(A)

In the event that the Reserve Tail Date is earlier than the date falling five years after Financial Close, the Facility Reduction Schedule will be deemed to be amended so that:

(i)

the final Repayment Instalment for the Facility is to be paid on the Reserve Tail Date; and

(ii)

the Repayment Instalment payable on each Repayment Date shall be adjusted on a pro rata basis so as to ensure that all Loans under the Facility are fully repaid on the Reserve Tail Date.

(B)

If the Facility Reduction Schedule is deemed to be amended pursuant to this Clause 7.2, the Facility Agent shall promptly provide each Lender and the Borrower with a revised Facility Reduction Schedule which incorporates such amendments.

8

Prepayment and Cancellation

8.1

General

(A)

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.

(B)

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.

(C)

Any prepayment shall be made with accrued interest on the amount prepaid and, subject to Break Costs (excluding any Margin), without premium or penalty.

8.2

Illegality and Sanctions

(A)

If it becomes unlawful (including as a result of any Sanctions) in any applicable jurisdiction for a Lender (an “Illegality Lender”) to perform any of its obligations as contemplated by the Finance Documents, or to fund or maintain its participation in any Utilisation or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

(i)

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

(ii)

upon the Facility Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and

(iii)

the Borrower shall either:

(a)

if the Lender so requires, repay that Lender’s participation in the Utilisations made to the Borrower 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); or

(b)

replace that Lender in accordance with Clause 8.9(B) (Right of repayment and cancellation in relation to a single Lender) on or before the first date applicable under paragraph (a) above in respect of which a payment is due and payable.

(B)

If it becomes unlawful (including as a result of any Sanctions) in any applicable jurisdiction for the Borrower to perform any of its obligations as contemplated by the Finance Documents:

(i)

the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;

(ii)

the Facility Agent shall notify the Lenders; and

(iii)

the Borrower shall repay each Utilisation made to it on the last day of the Interest Period for that Utilisation occurring after the Facility Agent have notified the Lenders or, if earlier, the last day of any applicable grace period permitted by law.

8.3

Aggregate of Loans outstanding exceed the Borrowing Base Amount

8.4

Permitted disposals

8.5

Change of Control

(A)

Upon the occurrence of a Change of Control:

(i)

the relevant Obligor shall promptly notify the Facility Agent upon becoming aware of the occurrence of that event; and

(ii)

if the Majority Lenders so require, the Facility Agent shall, on not less than 30 days’ written notice to the Borrower, cancel the Commitments and the Borrower shall repay each Lender’s participation in any Utilisations on the last day of the then-current period under the Facility, together with accrued interest and all other amounts accrued under the Finance Documents.

(B)

For the purposes of paragraph (A) above, a “Change of Control” means any person (or persons with whom they act in concert) acquiring, directly or indirectly, more than 50 per cent. of the ordinary share capital in any Obligor carrying a right to vote in general meetings of that company.

8.6

Automatic Cancellation

8.7

Voluntary Cancellation

(A)

The Borrower may, by giving not less than 5 Business Days’ (or such shorter period as the Majority Lenders may agree) prior written notice to the Facility Agent, without penalty, cancel the undrawn Commitments under any Facility in whole or in part (but if in part, in a minimum amount of USD 5,000,000 or, if less, the balance of the undrawn Commitments). The relevant Commitments in respect of the Facility will be cancelled on a date specified in such notice, being a date not earlier than 5 Business Days (or such shorter period as the Majority Lenders may agree) after the relevant notice is received by that Facility Agent.

(B)

Any notice of cancellation will be irrevocable and will specify the date on which the cancellation shall take effect. Save as otherwise provided in this Agreement, no part of any Commitment which has been cancelled or which is the subject of a notice of cancellation may subsequently be reinstated.

(C)

When any cancellation of Commitments under the Facility takes effect, each Lender’s Available Commitment under the Facility will be reduced by an amount which bears the same proportion to the total amount being cancelled as its Available Commitment under the Facility bears to the Available Commitment (at that time) under the Facility.

8.8

Voluntary Prepayment of Loans

(A)

Subject to Clause 8.1 (General), a Loan may be prepaid whether in whole or in part (but, if in part, being an amount that reduces the amount of that Loan by a minimum amount of USD 5,000,000) by the Borrower without penalty upon 5 Business Days’ prior written notice to the Facility Agent.

(B)

Any notice of prepayment will be irrevocable and, unless a contrary indication appears in this Agreement, will specify the date on which the prepayment shall take effect. Any amount prepaid or repaid may not be redrawn if such prepayment or repayment and Utilisation occurs after the expiry of the Availability Period.

(C)

Prepayment shall take effect:

(i)

on the last day of the then-current Interest Period; or

(ii)

on any other date subject to payment by the Borrower, on demand of Break Costs (if any), in accordance with Clause 11.4 (Break Costs).

(D)

Unless a contrary indication appears in this Agreement, when any prepayment of the whole or part of a Loan takes place, each Lender’s participation in the relevant Loan shall be reduced rateably.

8.9

Right of repayment and cancellation in relation to a single Lender

(A)

If:

(i)

the Borrower reasonably believes that the sum payable to any Lender by an Obligor is required to be increased under Clause 13.2 (Tax gross-up);

(ii)

the Borrower receives a notice from the Facility Agent under Clause 13.3 (Tax Indemnity) or Clause 14 (Increased Costs);

(iii)

any Lender is or becomes a Non-Funding Lender; or

(iv)

any Lender is or becomes entitled to increase its rate of interest further to Clause 11.2 (Market disruption),

(a)

give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in the Utilisations;

(b)

in the case of a Non-Funding Lender or Illegality Lender, give the Facility Agent notice of cancellation of the Available Commitment of that Lender in relation to the Facility and reinstate all or part of such Available Commitment in accordance with paragraph (B) below; or

(c)

replace that Lender in accordance with paragraph (B) below.

(B)

The Borrower may:

(i)

in the circumstances set out in paragraph (A) above, Clause 8.1 (General) or Clause 8.2 (Illegality and Sanctions) or Clause 8.5(A)(ii) (Change of Control), replace an Existing Lender (as defined in Clause 28 (Changes to the Lenders)), with one or more other Lenders (which need not be Existing Lenders) (each a “Replacement Lender”), which have agreed to purchase all or part of the Commitment and participations of that Existing Lender in Utilisations made to the Borrower pursuant to an assignment or transfer in accordance with the provisions of Clause 28 (Changes to the Lenders); or

(ii)

in the circumstances set out in paragraph (A)(iv)(a) above, cancel the Available Commitments of the Non-Funding Lender or Illegality Lender in respect of the Facility and procure that one or more Replacement Lenders assume Commitments under the Facility in an aggregate amount not exceeding the Available Commitment of the relevant Non-Funding Lender or Illegality Lender in relation to the Facility,

(a)

each assignment or transfer under this paragraph (B) shall be arranged by the Borrower (with such reasonable assistance from the Existing Lender as the Borrower may reasonably request); and

(b)

no assignment or transfer made by an Existing Lender pursuant to this paragraph (B) will be effective unless and until:

(1)

it has received payment from the Replacement Lender or Replacement Lenders in an aggregate amount equal to the outstanding principal amount of the participations in the Utilisations owing to the Existing Lender, together with accrued and unpaid interest (to the extent that the Facility Agent has not given a notification under Clause 28.10 (Pro rata interest settlement)) and fees (including, without limitation, any Break Costs to the date of payment) and all other amounts payable to the Existing Lender under this Agreement; and

(2)

it has completed to its satisfaction, all the requirements under Clause 22.12 (“Know your customer” and “customer due diligence” requirements) in respect of the Replacement Lender.

(C)

On receipt of a notice from the Borrower referred to in paragraph (A) above, the Commitment of the relevant Existing Lender shall immediately be reduced to zero.

(D)

On the last day of each Interest Period which ends after the Borrower has given notice under paragraph (A) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay the relevant Existing Lender’s participation in the relevant Utilisation.

(E)

Paragraphs (A) and (B) do not in any way limit the obligations of any Finance Party under Clause 16.1 (Mitigation).

8.10

Updating of the Facility Reduction Schedule

9

Interest

9.1

Calculation of interest

(A)

Margin; and

(B)

LIBOR.

9.2

Margin

9.3

Payment of interest

9.4

Default interest

(A)

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 paragraph (B) below, is 2.0 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 shall be immediately payable by the Obligor on demand by the Facility Agent.

(B)

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:

(i)

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

(ii)

the rate of interest applying to the overdue amount during that first Interest Period shall be 2.0 per cent higher than the rate which would have applied if the overdue amount had not become due.

(C)

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.

9.5

Notification of rates of interest

9.6

Interest Rate Limitation

10

Interest Periods

10.1

Selection of Interest Periods

(A)

The Borrower shall select an Interest Period for a Loan in the Utilisation Request for that Loan.

(B)

Subject to this Clause, the Borrower may select an Interest Period of one, three or six months or such other period as may be agreed between the Borrower and the Facility Agent (acting on behalf of the Majority Lenders).

(C)

No Interest Period for a Loan under the Facility shall extend beyond the Final Maturity Date.

(D)

The first Interest Period of each Loan shall commence on the Utilisation Date. .

10.2

Changes to Interest Periods

(A)

Prior to determining the interest rate for a Loan, the Facility Agent may shorten the Interest Period for any Loan to ensure that there are sufficient Loans which have an Interest Period ending on a Forecast Date for any scheduled reduction to occur.

(B)

If the Facility Agent makes any of the changes to an Interest Period referred to in this Clause 10.2, it shall promptly notify the Borrower and the Lenders.

10.3

Non-Business Days

10.4

Consolidation and division of Loans

(A)

Subject to paragraph (B) below, if two or more Interest Periods for Loans under the Facility end on the same date, those Loans will, if so specified by the Borrower in the Utilisation Request or in a notice to the Facility Agent, be consolidated into, and treated as, a single Loan under the Facility on the last day of the Interest Period.

(B)

If the Borrower requests (in either a Utilisation Request or otherwise in a notice to the Facility Agent) that a Loan be divided into two or more Loans, that Loan will, on the last day of its Interest Period, be so divided into the amounts specified in such request, being an aggregate amount equal to the amount of the Loan immediately before its division.

11

Changes to the Calculation of Interest

11.1

Absence of quotations

11.2

Market disruption

(A)

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:

(i)

the Margin; and

(ii)

the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.

(B)

In this Agreement “Market Disruption Event” means if, on or about noon in London on the Quotation Day for the relevant Interest Period none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR for the Interest Period, or the Facility Agent receives notifications from a Lender or Lenders (whose participations exceed 35 per cent in aggregate of all participations) that the cost to it of obtaining matching deposits in the London interbank market would be materially in excess of LIBOR.

(C)

The Facility Agent shall notify the Borrower immediately upon receiving notice from the Lender(s).

11.3

Alternative basis of interest or funding

(A)

If a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

(B)

Any alternative basis agreed pursuant to paragraph (A) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

11.4

Break Costs

(A)

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 by it on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

(B)

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.

(C)

If, following a payment by the Borrower of all or part of a Loan or Unpaid Sum on a day other than the last day of an Interest Period for that Loan or Unpaid Sum, a Lender realises a profit, and no Event of Default is continuing, that Lender will pay an amount equal to that profit to the Borrower as soon as practicable.

12

Fees

12.1

Commitment fee

(A)

The Borrower shall pay to the Facility Agent for the account of each Lender a fee computed as follows:

(i)

35 per cent per annum of the applicable Margin on the daily amount (if any) by which the lower of the Total Commitments and the Borrowing Base Amount exceeds the amount of all outstanding Utilisations; and

(ii)

20 per cent per annum of the applicable Margin on the daily amount (if any) by which the Total Commitments exceed the Borrowing Base Amount.

(B)

The accrued commitment fee is payable quarterly (on each of 31 March, 30 June, 30 September and 31 December) in arrears on any undrawn and uncancelled portion of the Commitments for the period from the date of the Financial Close until and including the last day of the Availability Period.

(C)

No commitment fee is payable to the Facility Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Non- Funding Lender.

12.2

Upfront fee

12.3

Arrangement fee

12.4

Security Agent fees

13

Tax Gross-Up and Indemnities

13.1

Definitions

13.2

Tax gross-up

(A)

Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

(B)

The Borrower shall promptly upon becoming aware that an Obligor has to 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.

(C)

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.

(D)

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.

(E)

Within 30 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 (acting reasonably) that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(F)

If an Obligor makes any payment to a Finance Party in respect of or relating to a Tax Deduction, but such Obligor was not obliged to make such payment, the relevant Finance Party shall within five Business Days of demand refund such payment to such Obligor.

(G)

A payment shall not be increased under paragraph (C) above by reason of a Tax imposed by the United States if, on the date the payment falls due:

(i)

a Tax Deduction is required to be made in respect of any payment under or in connection with a Loan to the Borrower for US federal withholding Tax except (a) to the extent any such Tax Deduction is required as a result of a change in (or in the interpretation, administration, or application of) any law or treaty or any published practice or published concession of any relevant taxing authority binding on such Lender after the date on which it became a Lender under this Agreement or (b) to the extent any such increased amounts were payable to such Lender’s assignor immediately before the Lender became a party hereto pursuant to paragraph (A) above; or

(ii)

that Lender has not complied with its obligations under Clause 13.9 (US Withholding Tax Forms).

13.3

Tax Indemnity

(A)

Except as provided below, the Borrower shall (within five Business Days of demand by the Facility Agent) indemnify a Finance Party against any loss, liability or cost which that Finance Party determines will be or has been (directly or indirectly), suffered by that Finance Party for or on account of Tax by that Finance Party in respect of a Finance Document.

(B)

Paragraph (A) above shall not apply:

(i)

with respect to any Tax assessed on a Finance Party under the law of the jurisdiction in which:

(a)

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

(b)

that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction; or

(c)

that Finance Party otherwise has a present or prior connection (other than connections arising from such Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Finance Document, or sold or assigned an interest in any Loan or Finance Document), 

(ii)

to the extent a loss, liability or cost is compensated for by an increased payment under Clause 13.2 (Tax gross-up) or would have been compensated for by an increased payment under Clause 13.2 (Tax gross- up) but was not so compensated solely because one of the exclusions in paragraph (G) of Clause 13.2 (Tax gross-up) applied; or

(iii)

to the extent a loss, liability or cost relates to a FATCA Deduction required to be made by a Party.

(C)

A Finance Party making or intending to make a claim under paragraph (A) 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 provide to the Borrower a copy of the notification by such Finance Party.

(D)

A Finance Party shall, on receiving a payment from an Obligor under this Clause, notify the Facility Agent.

13.4

Tax Credit

(A)

If an Obligor makes a Tax Payment and the relevant Finance Party determines, in its sole discretion exercised in good faith, that:

(i)

a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to a Tax Deduction in consequence of which that Tax Payment was required; and

(ii)

that Finance Party has obtained and utilised that Tax Credit,

(B)

Nothing in this Clause will:

(i)

interfere with the rights of any Finance Party to arrange its affairs in whatever manner it thinks fit; or

(ii)

oblige any Finance Party to disclose any information relating to its Tax affairs or computations.

13.5

Stamp Taxes

13.6

Value added tax

(A)

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

(B)

Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that obligation shall be deemed to extend to all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that neither the Finance Party nor any other member of any VAT group of which it is a member is entitled to credit or repayment of the VAT.

13.7

FATCA Information

(A)

Subject to paragraph (C) below, each Party shall, within 10 Business Days of a reasonable request by another Party:

(i)

confirm to that other Party whether it is:

(a)

a FATCA Exempt Party; or

(b)

not a FATCA Exempt Party;

(ii)

supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and

(iii)

supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.

(B)

If a Party confirms to another Party pursuant to paragraph (A)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

(C)