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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q





(Mark One)





m QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE


ACT OF 1934


For the quarterly period ended September 30,2013





□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE


ACT OF 1934





For the transition period from to


Commission file number: 001-35167





KOSM^S


ENERGY


Kosmos Energy Ltd.





(Exact name of registrant as specified in its charter)





Bermuda 98-0686001


(State or other jurisdiction of (I.R.S. Employer


incorporation or organization) Identification No.)


Clarendon House


2 Church Street


Hamilton, Bermuda HM 11


(Address of principal executive offices) (Zip Code)


Registrant’s telephone number, including area code: +1 441 295 5950


Not applicable


(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934


during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing


requirements for the past 90 days. Yes (HI No □


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File


required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter


period that the registrant was required to submit and post such files). Yes El No □


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See


the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer El Accelerated filer □


Non-accelerated filer □ Smaller reporting company □


(Do not check if a smaller reporting company)


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No El


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


 Class Outstanding at October 28, 2013


Common Shares, $0.01 par value 387,559,187


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TABLE OF CONTENTS





Unless otherwise stated in this report, references to “Kosmos, ” “we, ” “us ” or “the company ” refer to Kosmos Energy Ltd. and its


subsidiaries. We have provided definitions for some of the industry terms used in this report in the “Glossary and Selected Abbreviations ” beginning





on page 3.





Page


PART I. FINANCIAL INFORMATION





Glossary and Select Abbreviations 3





Item 1. Financial Statements


Consolidated Balance Sheets as of September 30, 2013 and December 31. 2012 6


Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012 7


Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30. 2013 and 2012 8


Consolidated Statements of Shareholders’ Equity for the nine months ended September 30. 2013 9


Consolidated Statements of Cash Flows for the nine months ended September 30. 2013 and 2012 10


Notes to Consolidated Financial Statements 11


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22


Item 3. Quantitative and Qualitative Disclosures about Market Risk 31


Item 4. Controls and Procedures 33





PART II. OTHER INFORMATION





Item 1. Legal Proceedings 34


Item 1A. Risk Factors 34


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 34


Item 3. Defaults Unon Senior Securities 34


Item 4. Mine Safety Disclosures 34


Item 5. Other Information 34


Item 6. Exhibits 35


Signatures 36


Index to Exhibits 37





2


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KOSMOS ENERGY LTD.


GLOSSARY AND SELECTED ABBREVIATIONS





The following are abbreviations and definitions of certain terms that may be used in this report. Unless listed below, all defined terms under Rule 4-


10(a) of Regulation S-X shall have their statutorily prescribed meanings.





"2D seismic data ” Two-dimensional seismic data, serving as interpretive data that allows a view of a vertical cross-section beneath


a prospective area.


"3D seismic data ” Three-dimensional seismic data, serving as geophysical data that depicts the subsurface strata in three


dimensions. 3D seismic data typically provides a more detailed and accurate interpretation of the subsurface


strata than 2D seismic data.


"API" A specific gravity scale, expressed in degrees, that denotes the relative density of various petroleum liquids. The


scale increases inversely with density. Thus lighter petroleum liquids will have a higher API than heavier ones.


"ASC” Financial Accounting Standards Board Accounting Standards Codification.


"ASU” Financial Accounting Standards Board Accounting Standards Update.


"Barrel” or "Bbl" A standard measure of volume for petroleum corresponding to approximately 42 gallons at 60 degrees


Fahrenheit.


"BBbl" Billion barrels of oil.


“BBoe ” Billion barrels of oil equivalent.


"Bcf” Billion cubic feet.


"Boe ” Barrels of oil equivalent. Volumes of natural gas converted to barrels of oil using a conversion factor of 6,000


cubic feet of natural gas to one barrel of oil.


"Boepd” Barrels of oil equivalent per day.


“Bopd” Barrels of oil per day.


"Bwpd” Barrels of water per day.


"Debt cover ratio ” The “debt cover ratio” is broadly defined, for each applicable calculation date, as the ratio of (x) total long-term


debt less cash and cash equivalents and restricted cash, to (y) the aggregate EBITDAX (see below) of the


Company for the previous twelve months.


"Developed acreage” The number of acres that are allocated or assignable to productive wells or wells capable of production.


"Development ” The phase in which an oil or natural gas field is brought into production by drilling development wells and


installing appropriate production systems.


"Dry hole ” A well that has not encountered a hydrocarbon bearing reservoir expected to produce in commercial quantities.


"EBITDAX” Net income (loss) plus (1) exploration expense, (2) depletion, depreciation and amortization expense, (3) equity-


based compensation expense, (4) (gain) loss on commodity derivatives, (5) (gain) loss on sale of oil and gas


properties, (6) interest (income) expense, (7) income taxes, (8) loss on extinguishment of debt, (9) doubtful


accounts expense, and (10) similar items.


3


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“E&P" Exploration and production.


“FASB ” Financial Accounting Standards Board.


“Farm-in ” An agreement whereby an oil company acquires a portion of the participating interest in a block from the owner


of such interest, usually in return for cash and for taking on a portion of the drilling costs of one or more


specific wells or other performance by the assignee as a condition of the assignment.


"Farm-out” An agreement whereby the owner of the participating interest agrees to assign a portion of its participating interest


in a block to another party for cash or for the assignee taking on a portion of the drilling costs of one or more


specific wells and/or other work as a condition of the assignment.


“FPSO” Floating production, storage and offloading vessel.


"Ghana Obligors” Kosmos Energy Operating, Kosrnos Energy International, Kosrnos Energy Finance International, Kosmos


Energy Development, Kosmos Energy Ghana HC and an “Obligor” from time to time, as defined under the


Facility Agreement, as amended and restated.


“Interest cover ratio ” The “interest cover ratio” is broadly defined, for each applicable calculation date, as the ratio of (x) the aggregate


EBITDAX (see above) of the Company for the previous twelve months, to ( y) interest expense less interest


income for the Company for the previous twelve months.


“Loan life cover ratio ” The “loan life cover ratio” is broadly defined, for each applicable forecast period, as the ratio of (x) net present


value of net cash flow through the final maturity date of the Facility plus the net present value of capital


expenditures incurred in relation to the Jubilee Field and certain other fields in Ghana, to (y) the aggregate loan


amounts outstanding under the Facility.


“MBbl” Thousand barrels of oil.


“Mcf" Thousand cubic feet of natural gas.


“Mcfpd” Thousand cubic feet per day of natural gas.


“MMBbl” Million barrels of oil.


"MMBoe ” Million barrels of oil equivalent.


“MMcf” Million cubic feet of natural gas.


“Natural gas liquid" or “NGL ” Components of natural gas that are separated from the gas state in the form of liquids. These include propane,


butane, and ethane, among others.


“Petroleum contract” A contract in which the owner of hydrocarbons gives an E&P company temporary and limited rights, including


an exclusive option to explore for, develop, and produce hydrocarbons from the lease area.


“Petroleum system ” A petroleum system consists of organic material that has been buried at a sufficient depth to allow adequate


temperature and pressure to expel hydrocarbons and cause the movement of oil and natural gas from the area in


which it was formed to a reservoir rock where it can accumulate.


“Plan of development” or "PoD ” A written document outlining the steps to be undertaken to develop a field.


“Productive well ” An exploratory or development well found to be capable of producing either oil or natural gas in sufficient


quantities to justify completion as an oil or natural gas well.


4


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“Prospect(s) ” A potential trap that may contain hydrocarbons and is supported by the necessary amount and quality of


geologic and geophysical data to indicate a probability of oil and/or natural gas accumulation ready to be drilled.


The five required elements (generation, migration, reservoir, seal and trap) must be present for a prospect to


work and if any of them fail neither oil nor natural gas will be present, at least not in commercial volumes.


“Proved reserves" Estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data


demonstrate with reasonable certainty to be economically recoverable in future years from known reservoirs


under existing economic and operating conditions, as well as additional reserves expected to be obtained through


confirmed improved recovery techniques, as defined in SEC Regulation S-X 4-10(a)(2).


“Proved developed reserves ” Proved developed reserves are those proved reserves that can be expected to be recovered through existing wells


and facilities and by existing operating methods.


“Proved undeveloped reserves” Proved undeveloped reserves are those proved reserves that are expected to be recovered from future wells and


facilities, including future improved recovery projects which are anticipated with a high degree of certainty in


reservoirs which have previously shown favorable response to improved recovery projects.


“Reconnaissance contract” A contract in which the owner of minerals gives an E&P company rights to perform evaluation of existing data


or potentially acquire additional data but does not convey an exclusive option to explore for, develop, and/or


produce minerals from the lease area.


“Shelf margin ” The path created by the change in direction of the shoreline in reaction to the filling of a sedimentary basin.


“Structural trap ” A structural trap is a topographic feature in the earth’s subsurface that forms a high point in the rock strata.


This facilitates the accumulation of oil and gas in the strata.


“Structural-stratigraphic trap ” A structural-stratigraphic trap is a combination trap with structural and stratigraphic features.


“Stratigraphy ” The study of the composition, relative ages and distribution of layers of sedimentary rock.


“Stratigraphic trap” A stratigraphic trap is formed from a change in the character of the rock rather than faulting or folding of the


rock and oil is held in place by changes in the porosity and permeability of overlying rocks.


“Submarine fan ” A fan-shaped deposit of sediments occurring in a deep water setting where sediments have been transported via


mass flow, gravity induced, processes from the shallow to deep water. These systems commonly develop at the


bottom of sedimentary basins or at the end of large rivers.


"Three-way fault trap ” A structural trap where at least one of the components of closure is formed by offset of rock layers across a


fault.


“Trap” A configuration of rocks suitable for containing hydrocarbons and sealed by a relatively impermeable formation


through which hydrocarbons will not migrate.


“Undeveloped acreage” Lease acreage on which wells have not been drilled or completed to a point that would permit the production of


commercial quantities of natural gas and oil regardless of whether such acreage contains discovered resources.


5


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KOSMOS ENERGY LTD.





CONSOLIDATED BALANCE SHEETS








(In thousands, except share data)








September 30, December 31,


2013


2012


(Unaudited)


Assets


Current assets:


Cash and cash equivalents $ 440,267 $ 515,164


Restricted cash 19,377 21,341


Receivables:


Joint interest billings 71,591 21,539


Oil sales 113,067 108,995


Other 4,995 3,682


Inventories 33,118 33,281


Prepaid expenses and other 11,596 10,470


Current deferred tax assets 14,515 34,585


Derivatives 917 1,061


Total current assets 709,443 750,118





Property and equipment:


Oil and gas properties, net 1,486,224 1,510,312


Other property, net 15,490 15,450


Property and equipment, net 1,501,714 1,525,762





Other assets:


Restricted cash 24,634 29,884


Deferred financing costs, net of accumulated amortization of $22,191 and $13,922 at September 30,2013 and December 31,


2012, respectively 42,897 50,214


Long-term deferred tax assets 14,808 10,145


Derivatives 1,583 ---


Total assets s 2,295,079 S 2,366,123





Liabilities and shareholders’ equity


Current liabilities:


Accounts payable $ 98,818 S 128,855


Accrued liabilities 115,866 41,021


Derivatives 9,458 20,377


Total current liabilities 224,142 190,253





Long-term liabilities:


Long-term debt 900,000 1,000,000


Derivatives 1,335 3,226


Asset retirement obligations 35,226 27,484


Deferred tax liability 145,193 104,137


Other long-term liabilities 18,886 12,117


Total long-term liabilities 1,100,640 1,146,964





Shareholders’ equity:


Preference shares, $0.01 par value; 200,000,000 authorized shares; zero issued at September 30, 2013 and December 31, 2012 --- ---


Common shares, $0.01 par value; 2,000,000,000 authorized shares; 391,956,419 and 391,423,703 issued at September 30,


2013 and December 31, 2012, respectively 3,920 3,914


Additional paid-in capital 1,763,227 1,712,880


Accumulated deficit (778,386) (683,176)


Accumulated other comprehensive income 2,563 3,685


Treasury stock, at cost, 4,397,232 and 2,731,941 shares at September 30, 2013 and December 31, 2012, respectively (21,027) (8,397)


Total shareholders’ equity 970,297 1,028,906


Total liabilities and shareholders’ equity $ 2,295,079 $ 2,366,123





See accompanying notes.





6





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KOSMOS ENERGY LTD.


CONSOLIDATED STATEMENTS OF OPERATIONS





(In thousands, except per share data)





(Unaudited)








Three Months Ended Nine Months Ended


_September 30,_ _September 30,_


2013 2012 2013 2012


Revenues and other income:





Oil and gas revenue $ 215,169 $ 222,375 $ 636,648 $ 450,360


Interest income 77 137 191 1,165


Other income 133 725 708 930





Total revenues and other income 215,379 223,237 637,547 452,455





Costs and expenses:


Oil and gas production 32,576 44,873 79,651 71,791


Exploration expenses 78,038 38,127 194,384 96,134


General and administrative 35,646 39,898 118,787 112,558


Depletion and depreciation 58,367 63,794 175,578 128,442


Amortization---deferred financing costs 2,786 2,194 8,269 6,582


Interest expense 8,781 20,213 27,789 43,717


Derivatives, net 7,585 24,529 386 26,407


Other expenses, net 1,864 (64) 3,345 728





Total costs and expenses 225,643 233,564 608,189 486,359





Income (loss) before income taxes (10,264) (10,327) 29,358 (33,904)


Income tax expense 34,224 25,923 124,568 64,730





Net loss $ (44,488) _(36,250) $ (95,210) _(98,634)








Net loss per share:


Basic $_(012) _(040) $_(0.25) _(0.27)


Diluted $_(0.12) _(0.10) $_(0.25) _(0.27)





Weighted average number of shares used to compute net loss per share:


Basic 377,654 _373,448 376,509 _371,140


Diluted 377,654 _373,448 376,509 _371,140








See accompanying notes.


7


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KOSMOS ENERGY LTD.





CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS





(In thousands)





(Unaudited)


Three Months Ended September 30, Nine Months Ended September 30,





2013 2M2 2013 2012








Net loss $ (44,488) $ (36,250) $ (95,210) $ (98,634)


Other comprehensive income (loss):


Reclassification adjustments for derivative (gains) losses included in


net loss (405) (133) (1,122) 295


Other comprehensive income (loss) (405) (133) (1,122) 295


Comprehensive loss $ (44,893) $ (36,383) $ (96,332) $ (98,339)








See accompanying notes.


8





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KOSMOS ENERGY LTD.





CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY








(In thousands)





(Unaudited)








Accumulated


Additional Other


Common Shares Paid-in Accumulated Comprehensive Treasury


Shares Amount Caoital Deficit Income Stock Total


Balance as of December 31,2012 391.424 3 3.914 $ 1,712,880 $ (683.176) $ 3,685 j : (8,397) $ 1,028,906


Equity-based compensation 50.792 50.792


(1,122) (1,122)


Restricted stock awards and units 532 6 (6)


6


Purchase of treasury stock (445) (12,624) (13.069)


Net loss (95.210) (95.210)


Balance as of September 30, 2013 391.956 3 3.920 $ 1.763.227 $ (778.386) $ 2.563 J : (21.027) $ 970.297


See accompanying notes.


9


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KOSMOS ENERGY LTD.


CONSOLIDATED STATEMENTS OF CASH FLOWS








(In thousands)





(Unaudited)





Nine Months Ended September 30,


2013 2012


Operating activities


Net loss $ (95,210) $ (98,634)


Adjustments to reconcile net loss to net cash provided by operating activities:


Depletion, depreciation and amortization 183,847 135,024


Deferred income taxes 62,757 51,867


Unsuccessful well costs 98,912 19,357


Change in fair value of derivatives 4,752 13,847


Cash settlements on derivatives (18,658) (18,755)


Equity-based compensation 50,792 58,215


Other 4,468 7,739


Changes in assets and liabilities:


(Increase) decrease in receivables (56,725) 89,102


Increase in inventories (2,419) (7,812)


(Increase) decrease in prepaid expenses and other (1,126) 4,112


Decrease in accounts payable (30,037) (127,025)


Increase in accrued liabilities 79,996 23,073


Net cash provided by operating activities 281,349 150,110





Investing activities


Oil and gas assets (244,452) (272,681)


Other property (3,712) (9,030)


Restricted cash 7,214 (23,089)


Net cash used in investing activities (240,950) (304,800)





Financing activities


Payment on long-term debt (100,000) (110,000)


Purchase of treasury stock (13,069) (8,378)


Deferred financing costs (2,227) (374)


Net cash used in financing activities (115,296) (118,752)





Net decrease in cash and cash equivalents (74,897) (273,442)


Cash and cash equivalents at beginning of period _515,164 _673,092


Cash and cash equivalents at end of period $ 440,267 $ 399,650





Supplemental cash flow information





Cash paid for:


Interest $ 27,046 $ 30,247


Income taxes $ 49,716 $ 16,620





See accompanying notes.





10


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KOSMOS ENERGY LTD.





Notes to Consolidated Financial Statements


(Unaudited)





1. Organization


Kosmos Energy Ltd. was incorporated pursuant to the laws of Bermuda in January 2011 to become a holding company for Kosmos Energy


Holdings. Kosmos Energy Holdings is a privately held Cayman Islands company that was formed in March 2004. As a holding company, Kosmos


Energy Ltd.’s management operations are conducted through a wholly owned subsidiary, Kosmos Energy, LLC. The terms “Kosmos,” the “Company,”


“we,” “us,” “our,” “ours,” and similar terms refer to Kosmos Energy Ltd. and its wholly owned subsidiaries, unless the context indicates otherwise.


We are a leading independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margin. Our


asset portfolio includes existing production and other major project developments offshore Ghana, as well as exploration licenses with significant hydrocarbon


potential offshore Ireland, Mauritania, Morocco (including Western Sahara) and Suriname. Kosmos is listed on the New York Stock Exchange and is traded


under the ticker symbol KOS.


We have one reportable segment, which is the exploration and production of oil and natural gas. Substantially all of our long-lived assets and product


sales are currently related to production located offshore Ghana.


2. Accounting Policies


General





The interim-period financial information presented in the consolidated financial statements included in this report is unaudited and, in the opinion of


management, includes all adjustments of a normal recurring nature necessary to present fairly the consolidated financial position as of September 30, 2013,


the changes in the consolidated statements of shareholders’ equity for the nine months ended September 30, 2013, the consolidated results of operations for the


three and nine months ended September 30, 2013 and 2012, and consolidated cash flows for the nine months ended September 30, 2013 and 2012. The results


of the interim periods shown in this report are not necessarily indicative of the final results to be expected for the full year. The consolidated financial


statements were prepared in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under


those mles, certain notes or other financial information that are normally required by Generally Accepted Accounting Principles (“GAAP”) have been


condensed or omitted from these interim consolidated financial statements. These consolidated financial statements and the accompanying notes should be read


in conjunction with our audited consolidated financial statements for the year ended December 31, 2012, included in our annual report on Form 10-K.


Reclassifications


Certain prior period amounts have been reclassified to conform with the current year presentation. Such reclassifications had no impact on our


reported net loss, current assets, total assets, current liabilities, total liabilities or shareholders’ equity.


Restricted Cash


In accordance with our commercial debt facility, we are required to maintain a restricted cash balance that is sufficient to meet the payment of interest


and fees for the next six-month period. As of September 30, 2013 and December 31, 2012, we had $ 19.4 million and $21.3 million, respectively, in current


restricted cash to meet this requirement. In addition, in accordance with certain of our petroleum contracts, we have posted letters of credit related to


performance guarantees for our minimum work obligations. These letters of credit are cash collateralized in accounts held by us and as such are classified as


restricted cash. Upon completion of the minimum work obligations and/or entering into the next phase of the petroleum contract, the requirement to post letters


of credit will be satisfied and the cash collateral will be released. As of September 30, 2013 and December 31, 2012, we had $24.6 million and $29.9 million,


respectively, of long-term restricted cash used to cash collateralize performance guarantees related to our petroleum contracts.





11


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Inventories


Inventories consisted of $32.3 million and $33.1 million of materials and supplies and $0.8 million and $0.2 million of hydrocarbons as of


September 30, 2013 and December 31, 2012, respectively. The Company’s materials and supplies inventory primarily consists of casing and wellheads and


is stated at the lower of cost, using the weighted average cost method, or market.


Hydrocarbon inventory is carried at the lower of cost, using the weighted average cost method, or market. Hydrocarbon inventory costs include


expenditures and other charges directly and indirectly incurred in bringing the inventory to its existing condition. Selling expenses and general and


administrative expenses are reported as period costs and excluded from inventory costs.


Variable Interest Entity


Our wholly owned subsidiary, Kosmos Energy Finance International, is a variable interest entity (“VIE”). The Company is the primary beneficiary


of this VIE, which is consolidated in these financial statements.


Kosmos Energy Finance International’s following assets and liabilities are shown separately on the face of the consolidated balance sheet as of


September 30, 2013 and December 31,2012: current restricted cash; long-term derivatives assets; long-term debt; and current and long-term derivatives


liabilities. At September 30, 2013, Kosmos Energy Finance International had $36.9 million in cash and cash equivalents; $0.4 million in prepaid expenses


and other; $0.9 million current derivative assets; $36.2 million deferred financing costs, net; $1.5 million in accrued liabilities and $7.6 million in other


long-term liabilities, which are included in the amounts shown on the face of the consolidated balance sheet. At December 31, 2012, Kosmos Energy Finance


International had $118.8 million in cash and cash equivalents; $0.2 million in prepaid expenses and other; $42.2 million deferred financing costs, net;


$0.5 million in accrued liabilities and $6.6 million in other long-term liabilities, which are included in the amounts shown on the face of the consolidated


balance sheet.


3. Property and Equipment


Property and equipment is stated at cost and consisted of the following:





September 30, December 31,


2013 2012


(In thousands)


Oil and gas properties:


Proved properties $ 767,288 $ 682,276


Unproved properties 489,874 454,391


Support equipment and facilities 712,415 687,835


Total oil and gas properties 1,969,577 1,824,502


Less: accumulated depletion (483,353) (314,190)


Oil and gas properties, net 1,486,224 1,510,312





Other property 30,978 27,316


Less: accumulated depreciation (15,488) (11,866)


Other property, net 15,490 15,450





Property and equipment, net $ 1,501,714 $ 1,525,762





We recorded depletion expense of $56.1 million and $61.9 million for the three months ended September 30, 2013 and 2012, respectively and


$169.2 million and $123.3 million for the nine months ended September 30, 2013 and 2012, respectively.





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4. Suspended Well Costs


The following table reflects the Company’s capitalized exploratory well costs on completed wells as of and during the nine months ended





September 30, 2013. The table excludes $69.8 million in costs that were capitalized and subsequently expensed during the same period.


Nine Months


Ended


September 30,


2013


(In thousands)


Beginning balance $ 372,492


Additions to capitalized exploratory well costs pending the determination of proved reserves 30,415


Reclassification due to determination of proved reserves ---


Capitalized exploratory well costs charged to expense (26,997)


Ending balance $ 375,910





The following table provides an aging of capitalized exploratory well costs based on the date drilling was completed and the number of projects for


which exploratory well costs have been capitalized for more than one year since the completion of drilling:


September 30,2013_December 31,2012





(In thousands, except well counts)


Exploratory well costs capitalized for a period of one year or less $ 11,470 $ 106,635


Exploratory well costs capitalized for a period one to two years 228,842 179,933


Exploratory well costs capitalized for a period three to four years 135,598 85,924


Ending balance $ 375,910 $ 372,492


Number of projects that have exploratory well costs that have been capitalized for a


period greater than one year 8 7





As of September 30, 2013, the projects with exploratory well costs capitalized for more than one year since the completion of drilling are related to the


Mahogany, Teak-1, Teak-2 and Akasa discoveries in the West Cape Three Points (“WCTP”) Block and the Tweneboa, Enyenra, Ntomme and Wawa


discoveries in the Deepwater Tano (“DT”) Block, which are all in Ghana.


Mahogany---Mahogany, a combined area covering parts of the Mahogany East discovery and the Mahogany Deep discovery, was declared


commercial in September 2010, and a PoD was submitted to Ghana’s Ministry of Energy as of May 2, 2011. In a letter dated May 16, 2011, the Ministry of


Energy did not approve the PoD and requested that the WCTP Block partners take certain steps regarding notifications of discovery and commerciality; and


requested other information. The WCTP Block partners believe the combined submission was proper and have held meetings with Ghana National Petroleum


Corporation (“GNPC”) which resolved issues relating to the PoD work program. From May 2011, the Ministry of Energy, GNPC and the WCTP Block


partners continued working to resolve other differences; however, the WCTP Petroleum Agreement (“PA”) contains specific timelines for PoD approval and


discussions, which expired at the end of June 2011. On June 30,2011, we, as Operator of the WCTP Block and on behalf of the WCTP Block partners,


delivered a Notice of Dispute to the Ministry of Energy and GNPC as provided under the WCTP PA, which is the initial step in triggering the formal dispute


resolution process under the WCTP PA with the government of Ghana regarding approval of the Mahogany PoD. This Notice of Dispute establishes a process


for negotiation and consultation for a period of 30 days (or longer if mutually agreed) among senior representatives from the Ministry of Energy, GNPC and the


WCTP Block partners to resolve the matter. We and the WCTP Block partners are in discussions with the Ministry of Energy and GNPC to resolve


differences on the PoD.


Teak-1 Discovery---Two appraisal wells have been drilled. Following additional appraisal and evaluation, a decision regarding commerciality of the


Teak-1 discovery is expected to be made by the WCTP Block partners in 2014. Within six months of such a declaration, a PoD would be prepared and


submitted to Ghana’s Ministry of Energy, as required under the WCTP PA.


Teak-2 Discovery---We have performed a gauge installation on the well and are reprocessing seismic data. Following additional appraisal and


evaluation, a decision regarding commerciality of the Teak-2 discovery is expected to be made by the WCTP Block partners in 2014. Within six months of


such a declaration, a PoD would be prepared and submitted to Ghana’s Ministry of Energy, as required under the WCTP PA.


Akasa Discovery---We have performed a drill stem test and gauge installation on the discovery well and are currently drilling the Akasa-2A


appraisal well (see Note 13---Subsequent Events). Following additional appraisal and evaluation, a decision regarding commerciality of the Akasa discovery is


expected to be made by the WCTP Block partners in 2014. Within six months of such a declaration, a PoD would be prepared and submitted to Ghana’s


Ministry of Energy, as required under the WCTP PA.





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Tweneboa, Enyenra and Ntomme (“TEN”) Discoveries---In May 2013, the government of Ghana approved the PoD over the TEN discoveries.


Development of TEN will include the drilling and completion of up to 24 development wells, half of the wells are designed as producers and the remainder are


for water and gas injection to support ultimate field recoveries. The TEN project is expected to deliver first oil in 2016. The costs associated with the TEN


development will remain as unproved property pending the determination of whether the discoveries are associated with proved reserves.


Wawa Discovery---We are currently reprocessing seismic data and plan to acquire a high resolution seismic survey over the discovery area in 2014.


Following additional evaluation and potential appraisal activities, a decision regarding commerciality of the Wawa discovery is expected to be made by the DT


Block partners in 2014. Within six months of such declaration, a PoD would be prepared and submitted to Ghana’s Ministry of Energy, as required under the


DTPA.


5. Accounts Payable and Accrued Liabilities


At September 30, 2013 and December 31, 2012, accounts payable of $98.8 million and $128.9 million, respectively, were recorded for invoices


received but not paid. Accmed liabilities consisted of the following:





September 30, December 31,


2013 2012


(In thousands)


Accrued liabilities:


Accrued exploration, development and production $ 65,561 $ 20,616


Accrued general and administrative expenses 14,896 5,089


Accmed taxes other than income 15,667 11,124


Accmed derivative settlements 1,465 ---


Income taxes 18,277 4,192


$ 115,866 $ 41,021





6. Debt





Facility





In March 2011, the Company secured a $2.0 billion commercial debt facility (the “Facility”) from a number of financial institutions and


extinguished the then existing commercial debt facilities. The Facility was syndicated to certain participants of the existing facilities, as well as new


participants. The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. As part of an amendment in


November 2012, the total commitments for the Facility were reduced to $1.5 billion.


The Facility provides a revolving-credit and letter of credit facility. The availability period for the revolving-credit facility, as amended in April 2013,


expires on December 15, 2014 and the letter of credit sublimit expires on the final maturity date. The available facility amount is subject to borrowing base


constraints and, beginning on December 15,2014, outstanding borrowings will also be constrained by an amortization schedule. The final maturity date is


March 29, 2018.


In September 2013, as part of the normal borrowing base determination process, the availability under the facility was reduced by $89.6 million to


$1.2 billion. As of September 30, 2013, borrowings under the Facility totaled $900.0 million, the undrawn availability under the Facility was $309.5 million,


and there were no letters of credit drawn under the facility.


Corporate Revolver


In November 2012, we secured a revolving credit facility (the “Corporate Revolver”). In April 2013, the availability under the Corporate Revolver was


increased from $260.0 million to $300.0 million due to additional commitments received from existing and new financial institutions. As of September 30,


2013, there were no borrowings outstanding under the Corporate Revolver and the undrawn availability under the Corporate Revolver was $300.0 million.





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Revolving Letter of Credit Facility


In July 2013, we entered into a revolving letter of credit facility agreement (“LC Facility”). The size of the LC Facility is $100.0 million, with





additional commitments up to $50.0 million being available if the existing lender increases its commitment or if commitments from new financial institutions


are added. The LC Facility provides that we maintain cash collateral in an amount equal to at least 75% of all outstanding letters of credit under the LC


Facility, provided that during the period of any breach of certain financial covenants, the required cash collateral amount shall increase to 100%. The fees


associated with outstanding letters of credit issued will be 0.5% per annum. The LC Facility has an availability period which expires on June 1, 2016. We


may voluntarily cancel any commitments available under the LC Facility at any time. As of September 30, 2013, there were four outstanding letters of credit


totaling $29.0 million under the LC Facility.





At September 30, 2013, the estimated repayments of debt during the five fiscal year periods and thereafter are as follows:





Payments Due by Year


2013(1) 2014 2015 2016 2017 Thereafter


(In thousands)


Facility(2) $ --- $ --- $ 346,693 $ 149,428 $ 292,768 $ 111,111








(1) Represents payments for the period October 1, 2013 through December 31, 2013.


(2) The scheduled maturities of debt are based on the level of borrowings and the available borrowing base as of


September 30, 2013. Any increases or decreases in the level of borrowings or decreases in the available borrowing base would impact the scheduled


maturities of debt during the next five years and thereafter.


7. Derivative Financial Instruments


We use financial derivative contracts to manage exposures to commodity price and interest rate fluctuations. We do not hold or issue derivative


financial instruments for trading purposes. We manage market and counterparty credit risk in accordance with our policies and guidelines. In accordance with


these policies and guidelines, our management determines the appropriate timing and extent of derivative transactions.


Oil Derivative Contracts


The following table sets forth the volumes in barrels underlying the Company’s outstanding oil derivative contracts and the weighted average Dated


Brent prices per Bbl for those contracts as of September 30, 2013.





Weighted Average Dated Brent Price per Bbl


Deferred


Premium


Receivable/


Term(l) Type of Contract MBbl (Payable) Floor Ceiling Call


2013:


October - December Three-way collars 375 $ (4.82) $ 95.00 $ 105.00 $ 125.00


October - December Three-way collars 253 --- 87.50 115.00 135.00


October - December Three-way collars 250 --- 90.00 115.39 135.00


October - December Three-way collars 250 --- 90.08 115.00 135.00


2014:


January - December Three-way collars 1,500 0.22) 85.00 115.00 140.00


January - December Three-way collars 1,000 --- 85.00 115.01 140.00


January - December Three-way collars 1,000 --- 88.09 110.00 125.00


January - December Three-way collars 1,500 1.15 90.00 113.00 135.00





(1) In October 2013, we entered into put contracts for 1.7 MMBbl from January 2015 through December 2015 with a floor price of $85.00


per Bbl. The put contracts arc indexed to Dated Brent prices and have a weighted average deferred premium payable of $3.78 per Bbl.


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Interest Rate Swaps Derivative Contracts


The following table summarizes our open interest rate swaps as of September 30, 2013, whereby we pay a fixed rate of interest and the counterparty





pays a variable LIBOR-based rate:





Weighted Average Weighted Average


Term Notional Amount Fixed Rate Floating Rate


(In thousands)


October 2013 --- December 2013 $ 200,617 1.99% 6-month LIBOR


January 2014 December 2014 133,434 1.99% 6-month LIBOR


January 2015 --- - December 2015 45,319 2.03% 6-month LIBOR


January 2016 - June 2016 12,500 2.27% 6-month LIBOR





The following tables disclose the Company’s derivative instruments as of September 30, 2013 and December 31, 2012 and gain/(loss) from


derivatives during the three and nine months ended September 30, 2013 and 2012, respectively:





Estimated Fair Value


Asset (Liability)


September 30, December 31,


Type of Contract_ _Balance Sheet Location_ _2013_2012_


(In thousands)


Derivatives not designated as hedging instruments:


Derivative assets:


Commodity! 1) Derivatives assets---current $ 917 $ 1,061


Commodity(2) Derivatives assets---long-term 1,583 ---





Derivative liabilities:


Commodity(3) Derivatives liabilities---current (6,284) (17,005)


Interest rate Derivatives liabilities---current (3,174) (3,372)


Commodity(4) Derivatives liabilities---long-term (319) (659)


Interest rate Derivatives liabilities---long-term (1,016) (2,567)


Total derivatives not designated as hedging instruments $ (8,293) $ (22,542)








(1) The commodity derivative asset represents $0.9 million of our oil derivative contracts as of September 30, 2013 and $1.1 million of our provisional


oil sales contract as of December 31, 2012. Includes deferred premiums receivable of $1.1 million and zero related to commodity derivative contracts


as of September 30, 2013 and December 31, 2012, respectively.


(2) Includes deferred premiums receivable of $0.6 million related to commodity derivative contracts as of September 30, 2013.





(3) Includes zero and $3.4 million, as of September 30, 2013 and December 31, 2012, respectively of cash settlements made on our commodity


derivative contracts which were settled in the month subsequent to period end. Also, includes deferred premiums payable of $3.0 million and


$7.6 million related to commodity derivative contracts as of September 30, 2013 and December 31, 2012, respectively.


(4) Includes deferred premiums payable of $0.6 million and $2.4 million related to commodity derivative contracts as of September 30, 2013 and





December 31, 2012, respectively.





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Amount of Gain/(Loss) Amount of Gain/(Loss)


Three Months Ended Nine Months Ended


_September 30, _September 30,


Type of Contract Location of Gain/(Loss) 2013 2012 2013 2012


(In thousands)


Derivatives in cash flow hedging relationships: 405 $ 133 $ 1,122 $ (295)


Interest rate(l) Interest expense


Total derivatives in cash flow hedging


relationships 405 $ 133 $ 1,122 $ (295)





Derivatives not designated as hedging instruments:


Commodity! 2) Oil and gas revenue $ (554) $ 11,494 $ (5,220) $ 15,221


Commodity Derivatives, net (7,585) (24,529) (386) (26,407)


Interest rate Interest expense (318) (931) (268) (2,366)


Total derivatives not designated as hedging


instruments $ (8,457) $ (13,966) $ (5,874) $ (13,552)








{1) Amounts were reclassified from AOCI into earnings upon settlement.


(2) Amounts represent the mark-to-market portion of our provisional oil sales contracts.





In accordance with the mark-to-market method of accounting, the Company recognizes changes in fair values of its derivative contracts as gains or


losses in earnings during the period in which they occur. The fair value of the effective portion of the interest rate derivative contracts on May 31, 2010, is


reflected in AOCI and is being transferred to interest expense over the remaining term of the contracts. The Company expects to reclassify $1.5 million of gains


from AOCI to interest expense within the next 12 months. See Note 8---Fair Value Measurements for additional information regarding the Company’s


derivative instruments.





Offsetting of Derivative Assets and Derivative Liabilities


Our derivative instruments subject to master netting arrangements with our counterparties only have the right of offset when there is an event of


default. As of September 30, 2013 and December 31, 2012, there was not an event of default and, therefore, the associated gross asset or gross liability


amounts related to these arrangements are presented on the consolidated balance sheets. Additionally, there were no material rights of offset available, if an


event of default occurred, as of September 30, 2013 and December 31, 2012.


8. Fair Value Measurements





In accordance with ASC 820---Fair Value Measurements and Disclosures, fair value measurements are based upon inputs that market participants


use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market


data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are


not reasonably available without undue cost and effort. We prioritize the inputs used in measuring fair value into the following fair value hierarchy:


• Level 1---quoted prices for identical assets or liabilities in active markets.


• Level 2---quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets





that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs derived principally from or


corroborated by observable market data by correlation or other means.





• Level 3---unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement in its


entirety falls is determined based on the lowest level input that is significant to the measurement in its entirety.


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The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2013 and


December 31, 2012, for each fair value hierarchy level:





Fair Value Measurements Using:


Quoted Prices in


Active Markets for Significant Other Significant


Identical Assets Observable Inputs Unobservable Inputs


(Level 1) (Level 2) (Level 3) Total


(In thousands)


September 30, 2013


Assets:


Commodity derivatives $ --- $ 2,500 $ --- $ 2,500


Liabilities:


Commodity derivatives --- (6,603) --- (6,603)


Interest rate derivatives --- (4,190) --- (4,190)


Total $ --- $ (8,293) $ --- $ (8,293)





December 31, 2012


Assets:


Commodity derivatives $ --- $ 1,061 $ --- $ 1,061


Liabilities:


Commodity derivatives --- (17,664) --- (17,664)


Interest rate derivatives --- (5,939) --- (5,939)


Total $ --- $ (22,542) $ --- $ (22,542)





The book values of cash and cash equivalents and restricted cash approximate fair value based on Level 1 inputs. Joint interest billings, oil sales


and other receivables, and accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The carrying


values of our debt approximates fair value since they are subject to short-term floating interest rates that approximate the rates available to us for those periods.


Our long-term receivables, if any, after any allowances for doubtful accounts approximate fair value. The estimates of fair value of these items are based on


Level 2 inputs.


Commodity Derivatives





Our commodity derivatives represent crude oil three-way collars for notional barrels of oil at fixed Dated Brent oil prices. The values attributable to


the our oil derivatives are based on (i) the contracted notional volumes, (ii) independent active futures price quotes for Dated Brent, (iii) a credit-adjusted yield


curve applicable to each counterparty by reference to the CDS market and (iv) an independently sourced estimate of volatility for Dated Brent. The volatility


estimate was provided by certain independent brokers who are active in buying and selling oil options and was corroborated by market-quoted volatility


factors. The deferred premium is included in the fair market value of the puts and compound options. See Note 7---Derivative Financial Instruments for


additional information regarding the Company’s derivative instruments.


Provisional Oil Sales





The value attributable to the provisional oil sales derivative is based on (i) the sales volumes subject to provisional pricing and (ii) an independently


sourced forward curve over the term of the provisional pricing period.


Interest Rate Derivatives





We have interest rate swaps, whereby the Company pays a fixed rate of interest and the counterparty pays a variable LIBOR-based rate. The values


attributable to the Company’s interest rate derivative contracts are based on (i) the contracted notional amounts, (ii) LIBOR yield curves provided by


independent third parties and corroborated with forward active market-quoted LIBOR yield curves and (iii) a credit-adjusted yield curve as applicable to each


counterparty by reference to the CDS market.


9. Equity-based Compensation





Restricted Stock Awards and Restricted Stock Units





We record compensation expense equal to the fair value of share-based payments over the vesting periods of the Long-Term Incentive Plan (“LTIP”)


awards. We recorded compensation expense from awards granted under our LTIP of $13.8 million and $19.4 million during the three months ended


September 30,2013 and 2012, respectively, and $50.8 million and $58.2 million during the nine months ended September 30,2013 and 2012, respectively.


The tax benefit resulting from equity-based compensation expense





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for the three months ended September 30, 2013 and 2012 was $4.8 million and $6.7 million, respectively, and for the nine months ended September 30, 2013


and 2012 was $17.4 million and $20.2 million, respectively. Additionally, we expensed a tax shortfall (the difference between the estimated tax deduction on


the grant date and the actual tax deduction on the vest date) of $6.9 million and $7.4 million during the nine months ended September 30, 2013 and 2012,


respectively. No shortfall occurred during the three months ended September 30, 2013 and 2012.


The following table reflects the outstanding restricted stock awards as of September 30, 2013:





Weighted- Market / Service Weighted-


Service Vesting Average Vesting Average


Restricted Stock Grant-Date Restricted Stock Grant-Date


Awards Fair Value Awards Fair Value


(In thousands) (In thousands)


Outstanding at December 31,2012 9,898 $ 16.92 3,534 $ 12.93


Granted 351 10.73 --- ---


Forfeited (462) 16.51 (93) 12.45


Vested (3,358) 17.26 --- ---


Outstanding at September 30, 2013 6,429 16.44 3,441 12.94


The following table reflects the outstanding restricted stock units as of September 30, 2013:


Weighted- Market / Service Weighted-


Service Vesting Average Vesting Average


Restricted Stock Grant-Date Restricted Stock Grant-Date


Units Fair Value Units Fair Value


(In thousands) (In thousands)


Outstanding at December 31, 2012 1,023 $ 10.59 825 $ 15.81


Granted 1,512 10.80 1,074 15.44


Forfeited (133) 10.53 (73) 15.74


Vested (225) 10.51 --- ---


Outstanding at September 30, 2013 2,177 10.75 1,826 15.60





As of September 30, 2013, total equity-based compensation to be recognized on unvested restricted stock awards and restricted stock units is


$144.7 million over a weighted average period of 2.20 years. At September 30, 2013, the Company had approximately 5.5 million shares that remain available


for issuance under the LTIP.





For restricted stock awards with a combination of market and service vesting criteria, the number of common shares to be issued is determined by


comparing the Company’s total shareholder return with the total shareholder return of a predetermined group of peer companies over the performance period


and can vest in up to 100% of the awards granted. The grant date fair value of these awards ranged from $6.70 to $13.57 per award. The Monte Carlo


simulation model used to estimate the grant-date fair value utilizes multiple input variables that determine the probability of satisfying the market condition


stipulated in the award grant and calculates the fair value of the award. The expected volatility utilized in the model was estimated using our historical


volatility and the historical volatilities of our peer companies and ranged from 41.3% to 56.7%. The risk-free interest rate was based on the U .S. treasury rate


for a term commensurate with the expected life of the grant and ranged from 0.5% to 1.1%.


For restricted stock units with a combination of market and service vesting criteria, the number of common shares to be issued is determined by


comparing the Company’s total shareholder return with the total shareholder return of a predetermined group of peer companies over the performance period


and can vest in up to 200% of the awards granted. The grant date fair value of these awards ranged from $15.44 to $15.81 per award. The Monte Carlo


simulation model used to estimate the grant-date fair value utilizes multiple input variables that determine the probability of satisfying the market condition


stipulated in the award grant and calculates the fair value of the award. The expected volatility utilized in the model was estimated using our historical


volatility and the historical volatilities of our peer companies and ranged from 53.0% to 54.0%. The risk-free interest rate was based on the U.S. treasury rate


for a term commensurate with the expected life of the grant and ranged from 0.5% to 0.7%.


10. Income Taxes





Income tax expense was $34.2 million and $25.9 million for the three months ended September 30, 2013 and 2012, respectively, and was $124.6


million and $64.7 million for the nine months ended September 30, 2013 and 2012, respectively. The income tax provision consists of U.S. and Ghanaian


income and Texas margin taxes.





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The components of income (loss) before income taxes were as follows:





Three Months Ended September 30. Nine .Months Ended September 30.


2013 2012 2013 2012


(In thousands)


Bermuda $ (5,880) $ (2,316) $ (19,320) $ (8,735)


United States 2,740 3,145 8,014 9,492


Foreign---other (7,124) (11,156) 40,664 (34,661)


Income (loss) before income taxes $ (10,264) $ (10,327) $ 29,358 $ (33,904)





Our effective tax rate for the three months ended September 30, 2013 and 2012 is (333)% and (251)%, respectively. For the nine months ended,


September 30, 2013 and 2012, our effective tax rate is 424% and (191)%. The effective tax rate for the United States is approximately 42% and 43% for the


three months ended September 30, 2013 and 2012, respectively, and 125% and 116% for the nine months ended September 30, 2013 and 2012, respectively.


The high effective tax rates in the United States are due to the effect of tax shortfalls related to equity-based compensation. The effective tax rate for Ghana is


approximately 36% and 39% for the three months ended September 30, 2013 and 2012, respectively, and 36% and 37% for the nine months ended


September 30, 2013 and 2012, respectively. Our other foreign jurisdictions have a 0% effective tax rate because they reside in countries with a 0% statutory


rate, or we have experienced losses in those countries and have a full valuation allowance reserved against the corresponding net deferred tax assets.


The Company has no material unrecognized income tax benefits.





A subsidiary of the Company files a U S. federal income tax return and a Texas margin tax return. In addition to the United States, the Company


files income tax returns in the countries in which the Company operates. The Company is open to U.S. federal income tax examinations for tax years 2009


through 2012 and to Texas margin tax examinations for the tax years 2008 through 2012. In addition, the Company is open to income tax examinations for


years 2004 through 2012 in Ghana.





As of September 30, 2013, the Company had no material uncertain tax positions. The Company’s policy is to recognize potential interest and


penalties related to income tax matters in income tax expense, but has not accrued any material amounts to date.





11. Net Income (Loss) Per Share





The following table is a reconciliation between net income (loss) and the amounts used to compute basic and diluted net income (loss) per share and


the weighted average shares outstanding used to compute basic and diluted net income (loss) per share:


Three Months Ended Nine Months Ended





September 30, September 30,


2013 2012 2013 20I2


(In thousands, except per share data)


Numerator:


Net income (loss) $ (44,488) $ (36,250) $ (95,210) $ (98,634)


Less: Basic income allocable to participating securities(l) --- --- --- ---


Basic net income (loss) allocable to common shareholders (44,488) (36,250) (95,210) (98,634)


Diluted adjustments to income allocable to participating securities(l) --- --- --- ---


Diluted net income (loss) allocable to common shareholders $ (44,488) $ (36,250) $ (95,210) $ (98,634)


Denominator:


Weighted average number of shares used to compute net income (loss) per


share:


Basic 377,654 373,448 376,509 371,140


Restricted stock awards and units) 1 )(2) --- --- --- ---


Diluted 377,654 373,448 376,509 371,140


Net income (loss) per share:


Basic $ (0.12) $ (0.10) $ (0.25) $ (0.27)


Diluted $ (0.12) $ (0.10) $ (0.25) $ (0.27)








(1) Our service vesting restricted stock awards represent participating securities because they participate in nonforfeitable dividends with common


equity owners. Income allocable to participating securities represents the distributed and


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undistributed earnings attributable to the participating securities. Our restricted stock awards with market and service vesting criteria and all


restricted stock units are not considered to be participating securities and, therefore, are excluded from the basic net income (loss) per common share


calculation. Our service vesting restricted stock awards do not participate in undistributed net losses and, therefore, are excluded from the basic net


income (loss) per common share calculation in periods we are in a net loss position.


(2) We excluded outstanding restricted stock awards and units of 13.9 million and 17.1 million for the three months ended September 30, 2013 and


2012, respectively, and 13.9 million and 17.1 million for the nine months ended September 30, 2013 and 2012, respectively, from the computations


of diluted net income per share because the effect would have been anti-dilutive.


12. Commitments and Contingencies





We are involved in litigation, regulatory examinations and administrative proceedings primarily arising in the ordinary course of our business in


jurisdictions in which we do business. Although the outcome of these matters cannot be predicted with certainty, management believes none of these matters,


either individually or in the aggregate, would have a material effect upon the Company’s consolidated financial statements; however, an unfavorable outcome


could have a material adverse effect on our results from operations for a specific interim period or year.


In June 2013, we signed a long-term rig agreement with a subsidiary of Atwood Oceanics, Inc. for the new build drillship “Atwood Achiever.”


Currently under construction, the rig is scheduled for completion in June 2014 and expected to commence drilling operations in the second half of 2014. The


rig agreement covers an initial period of three years at a day rate of approximately $0.6 million, with an option to extend the agreement for an additional three-


year term.


The estimated future minimum commitments under this contract as of September 30, 2013, are:


Payments Due By Year(l)


Total 2013(2) 2014 201S 2016 2017 Thereafter


(In thousands)


Atwood Achiever drilling rig contract (3) $651,525 $ --- $ 90,440 $ 217,175 $ 217,770 $ 126,140 $ ---








(1) Does not include purchase commitments for jointly owned fields and facilities where we are not the operator, excludes commitments for development


activities under our petroleum contracts where we are not the operator and excludes commitments for exploration activities, including well


commitments, in our petroleum contracts and farm-in agreements


(2) Represents payments for the period from October 1, 2013 through December 31, 2013.


(3) Commitments calculated using a day rate of $595,000 and an estimated rig delivery date of August 1, 2014.


13. Subsequent Events


In October 2013, we entered into three farm-out agreements with BP pic (“BP”) covering three blocks in the Agadir Basin, offshore Morocco. Under


the terms of the agreements, BP will acquire a non-operating interest in each of the Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore


blocks. BP will fund Kosmos’ share of the cost of one exploration well in each of the three blocks, subject to a maximum spend of $ 120.0 million per well,


and pay its proportionate share of any well costs above the maximum spend. In the event a second exploration well is drilled in any block, BP will pay 150%


of its share of costs subject to a maximum spend of $120.0 million per well. BP shall also pay $36.3 million for their share of past costs. Completion of the


transactions is subject to customary closing conditions, including Moroccan Government approvals. After completing the transaction, our participating


interests will be 30.0%, 29.925% and 30.0% in the Essaouira, Foum Assaka and Tarhazoute Offshore blocks, respectively, and we will remain the operator.


In October 2013, we entered into a farm-out agreement with Capricorn Exploration & Development Company Limited, a wholly owned subsidiary of


Caim Energy PLC (“Cairn”), covering the Cap Boujdour Contract Area, offshore Western Sahara. Under the terms of the agreement, Caim will acquire a 20%


non-operated interest in the exploration permits comprising the Cap Boujdour Contract Area. Caim will pay 150% of its share of costs of a 3D seismic survey


and one exploration well capped at $125.0 million. In the event the exploration well is successful, Caim will pay 200% of its share of costs on two appraisal


wells capped at $100.0 million per well. Additionally, Caim will contribute $12.3 million towards our future costs. Completion of the transaction is subject to


customary closing conditions, including Moroccan Government approvals. After completing the transaction, our participating interest in the Cap Boujdour


Contract Area will be 55.0% and we will remain the operator.


Drilling of the Akasa-2A appraisal well on the WCTP Block was completed in October 2013. The Akasa-2A appraisal well did not encounter oil or


gas reserves sufficient to be utilized as a producing well. Accounting rules require that the costs associated with the Akasa-2A appraisal well be impaired,


which are $ 11.5 million and included in exploration expenses in the accompanying consolidated statement of operations. We estimate we will incur an


additional $8.9 million of related well costs, which will be expensed as incurred.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations


The following discussion and analysis should he read in conjunction with our consolidatedfinancial statements and notes thereto contained


herein and our annual financial statements for the year ended December 31, 2012, included in our annual report on Form 10-K along with the section


Management's Discussion and Analysis offinancial condition and Results of Operations contained in such annual report. Any terms used hut not


defined in the following discussion have the same meaning given to them in the annual report. Our discussion and analysis includes forward-looking


information that involves risks and uncertainties and should he read in conjunction with “Risk Factors" under Item 1A of this report and in the annual


report, along with “Forward-Looking Information ” at the end of this section for information about the risks and uncertainties that could cause our


actual results to he materially different than our forward-looking statements.


Overview


We are a leading independent oil and gas exploration and production company focused on frontier and emerging areas along the Atlantic Margin. Our


asset portfolio includes existing production and other major project developments offshore Ghana, as well as exploration licenses with significant hydrocarbon


potential offshore Ireland, Mauritania, Morocco (including Western Sahara) and Suriname.


We were incorporated pursuant to the laws of Bermuda as Kosmos Energy Ltd. in January 2011 to become a holding company for Kosmos Energy


Holdings. Pursuant to the terms of a corporate reorganization that was completed immediately prior to the closing of Kosmos Energy Ltd.’s IPO on May 16,


2011, all of the interests in Kosmos Energy Holdings were exchanged for newly issued common shares of Kosmos Energy Ltd. As a result, Kosmos Energy


Holdings became wholly owned by Kosmos Energy Ltd.


Recent Developments


Debt





Our $2.0 billion commercial debt facility ( “Facility”) provides a revolving-credit and letter of credit facility. The availability period for the revolving-


credit facility, as amended in April 2013, expires on December 15, 2014 and the letter of credit sublimit expires on the final maturity date. The available


facility amount is subject to borrowing base constraints and, beginning on December 15, 2014, outstanding borrowings will also be constrained by an


amortization schedule. The final maturity date is March 29, 2018.


In September 2013, as part of the normal borrowing base determination process, the availability under the facility was reduced $89.6 million to





$1.2 billion. As of September 30, 2013, borrowings under the Facility totaled $900.0 million, the undrawn availability under the Facility was $309.5 million


and there were no letters of credit drawn under the facility.





In July 2013, we entered into a revolving letter of credit facility agreement (“LC Facility”). The size of the LC Facility is $100.0 million, with


additional commitments up to $50.0 million being available if the existing lender increases its commitments or if commitments from new financial institutions


are added. The LC Facility provides that we shall maintain cash collateral in an amount equal to at least 75% of all outstanding letters of credit under the LC


Facility, provided that during the period of any breach of certain financial covenants, the required cash collateral amount shall increase to 100%. The fees


associated with outstanding letters of credit issued will be 0.5% per annum. The LC Facility has an availability period which expires on June 1, 2016. We


may voluntarily cancel any commitments available under the LC Facility at any time. As of September 30, 2013, there were four outstanding letters of credit


totaling $29.0 million under the LC Facility.





Ghana





We previously received an approval for the Phase 1A PoD of the Jubilee Field, and production from Phase 1A commenced in late 2012. The


Phase 1A program includes the drilling of up to eight additional wells consisting of up to five production wells and three water injection wells. Four wells, three


producers and one injector, are online. Program execution is expected to be completed in the latter part of 2014.


Drilling of the Akasa-2A appraisal well on the WCTP Block was completed in October 2013. We believe that the well successfully identified the


down dip water contact associated with the Akasa-1 discovery as intended. Should the Akasa discovery progress to a development, the Akasa-2A appraisal


well is expected to be utilized in the development as a water injector well. However, since the Akasa-2A appraisal well did not encounter oil or gas reserves


sufficient to be utilized as a producing well, accounting mles require that the costs associated with the Akasa-2A appraisal well be impaired. As such, $11.5


million is included in exploration expenses in the accompanying consolidated statement of operations for the three and nine months ended September 30,


2013. We estimate we will incur an additional $8.9 million of related well costs, which will be expensed as incurred.





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Cameroon


In July 2013, we informed the government of Cameroon that we do not intend to enter into the next phase of our petroleum contracts in Cameroon and


expect to relinquish our rights to the blocks.


Ireland








In July 2013, Ireland granted us Frontier Exploration Licenses 1-13, 2-13, and 3-13 pursuant to Licensing Options 11/5, 11/7 and 11/8. We


commenced a 3D seismic program of approximately 5,000 square kilometers over these blocks in July 2013, which was completed in October 2013.


Mauritania


In June 2013, we commenced a 3D seismic program of approximately 10,300 square kilometers over portions of Blocks C8 and C12 which is





expected to be completed in the fourth quarter of 2013.


Morocco





In January 2013, we closed on an agreement to acquire an additional 37.5% participating interest in the Essaouira Offshore Block from Canamens


Energy Morocco SARL, one of our block partners. Certain governmental approvals and processes are still required to be completed before this acquisition is


effective.





In August 2013, final government approvals and processes were completed for the acquisition of the additional 18.75% participating interest in the


Foum Assaka Block in the Agadir Basin offshore Morocco from Pathfinder, a wholly owned subsidiary of Fastnet, one of our block partners.


In October 2013, Kosmos executed a petroleum agreement with the Office National des Hydrocarbures et des Mines (“ONHYM”), the national oil


company of the Kingdom of Morocco, covering the Tarhazoute Offshore block, to which the Company previously held certain exploration rights under a 2011


reconnaissance contract. Under the terms of the petroleum contract, the Company is the operator of the Tarhazoute Offshore block. ONHYM holds a 25%


carried interest in the block through the exploration period. The initial exploration period will last for two years and six months and will commence from the


date specified in the exploration permits, which have yet to be finalized with the Government of Morocco and ONHYM. The exploration period may be


extended for additional exploration extension periods of two years and six months and three years respectively. In the event of commercial success, the


Company has the right to develop and produce oil or gas for a period of 25 years from the grant of an exploitation concession from the Government of


Morocco, which may be extended for an additional period of 10 years under certain circumstances. The petroleum contract is subject to customary government


approvals.


We are filing our new petroleum contract for the Tarhazoute Offshore block as well as our existing petroleum contracts to which we are a party and


which have not otherwise been previously filed as exhibits to this Quarterly Report on Form 10-Q.


In October 2013, we entered into three farm-out agreements with BP pic (“BP”) covering three blocks in the Agadir Basin, offshore Morocco. Under


the terms of the agreements, BP will acquire a non-operating interest in each of the Essaouira Offshore, Foum Assaka Offshore and Tarhazoute Offshore


blocks. BP will fund Kosmos’ share of the cost of one exploration well in each of the three blocks, subject to a maximum spend of $120.0 million per well,


and pay its proportionate share of any well costs above the maximum spend. In the event a second exploration well is drilled in any block, BP will pay 150%


of its share of costs subject to a maximum spend of $120.0 million per well. BP shall also pay $36.3 million for their share of past costs. Completion of the


transactions is subject to customary closing conditions, including Moroccan Government approvals. After completing the transaction, our participating


interests will be 30.0%, 29.925% and 30.0% in the Essaouira, Foum Assaka and Tarhazoute Offshore blocks, respectively, and we will remain the operator.


In October 2013, we entered into a farm-out agreement with Capricorn Exploration & Development Company Limited, a wholly owned subsidiary of


Cairn Energy PLC (“Cairn”), covering the Cap Boujdour Contract Area, offshore Western Sahara. Under the terms of the agreement, Cairn will acquire a 20%


non-operated interest in the exploration permits comprising the Cap Boujdour Contract Area. Cairn will pay 150% of its share of costs of a 3D seismic survey


and one exploration well capped at $125.0 million. In the event the exploration well is successful, Cairn will pay 200% of its share of costs on two appraisal


wells capped at $100.0 million per well. Additionally, Cairn will contribute $12.3 million towards our future costs. Completion of the transaction is subject to


customary closing conditions, including Moroccan Government approvals. After completing the transaction, our participating interest in the Cap Boujdour


Contract Area will be 55.0% and we will remain the operator.





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Suriname





In August 2013, we completed a 2D seismic program of approximately 1,400 line kilometers over a portion of Block 42, outside of the existing 3D


seismic survey.





Results of Operations





All of our production-related results, as presented in the table below, represent operations from the Jubilee Field in Ghana. Certain operating results


and statistics for the three and nine months ended September 30, 2013 and 2012, are included in the following table:





Three Months Ended Nine Months Ended


September 30, September 30,


2013 2012 2013 2012


(In thousands, except per barrel data)


Sales volumes:


MBbl 1,912 1,985 5,847 3,913





Revenues:


Oil sales 215,169 222,375 636,648 450,360


Average sales price per Bbl 112.52 112.01 108.88 115.08





Costs:


Oil production, excluding workovers 13,026 16.936 39,145 33,595


Oil production, workovers 19,550 27.937 40,506 38,196


Total oil production costs 32,576 44,873 79,651 71,791


Depletion 56,094 61,913 169,163 123,256








Average cost per Bbl:


Oil production, excluding workovers $ 6.82 $ 8.53 $ 6.69 $ 8.58


Oil production, workovers _10.22 _14£7 _^93 _9J6


Total oil production costs 17.04 22.60 13.62 18.34





Depletion _29.33 _31.18 _28,93 _31.50


Oil production cost and depletion costs $_46.37 $_53,78 $_42,55 $_49.84





The following table shows the number of wells in the process of being drilled or are in active completion stages, and the number of wells suspended


or waiting on completion as of September 30, 2013:





Wells Suspended or


Actively Drilling or Completing Waiting on Completion


Exploration Development Exploration Development


Gross Net Gross Net Gross Net Gross Net


Ghana


West Cape Three Points 1 0.31 --- --- 8 2.47 --- ---


Deepwater Tano --- --- --- --- 1 0.18 --- ---


TEN --- --- --- --- 12 2.16 --- ---


Jubilee Unit --- --- 1 0.24 --- --- 1 0.24


Total 1 0.31 1 0.24 21 4.81 1 0.24





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The discussion of the results of operations and the period-to-period comparisons presented below analyze our historical results. The following


discussion may not be indicative of future results.





Three months ended September 30, 2013 compared to three months ended September 30, 2012





Three Months Ended


September 30, Increase


2013 2012 (Decrease)


(In thousands)


Revenues and other income:


Oil and gas revenue $ 215,169 $ 222,375 $ (7,206)


Interest income 77 137 (60)


Other income 133 725 (592)


Total revenues and other income 215,379 223,237 (7,858)


Costs and expenses:


Oil and gas production 32,576 44,873 (12,297)


Exploration expenses 78,038 38,127 39,911


General and administrative 35,646 39,898 (4,252)


Depletion and depreciation 58,367 63,794 (5,427)


Amortization---deferred financing costs 2,786 2,194 592


Interest expense 8,781 20,213 (11,432)


Derivatives, net 7,585 24,529 (16,944)


Other expenses, net 1,864 (64) 1,928


Total costs and expenses 225,643 233,564 (7,921)


Loss before income taxes (10,264) (10,327) 63


Income tax expense 34,224 25,923 8,301


Net loss $ (44,488) $ (36,250) $ (8,238)





Oil and gas revenue. Oil and gas revenue decreased by $7.2 million during the three months ended September 30, 2013 as compared to the three


months ended September 30, 2012. The decrease is primarily due to the slight decrease in sales volumes during the three months ended September 30,2013 as


compared to three months ended September 30, 2012.


Oil and gas production. Oil and gas production costs decreased by $ 12.3 million during the three months ended September 30, 2013 as compared





to the three months ended September 30, 2012. The decrease is primarily due to a reduction in well workover costs and non-routine operating costs in the three


months ended September 30, 2013 as compared to the three months ended September 30, 2012.


Exploration expenses. Exploration expenses increased by $39.9 million during the three months ended September 30, 2013, as compared to the


three months ended September 30, 2012. During the three months ended September 30, 2013, we incurred $59.9 million for seismic costs primarily for


Mauritania and Ireland and $13.2 million for unsuccessful well for the Ghana Akasa-2 appraisal well and the Cameroon Sipo-1 exploration well. During the


three months ended September 30, 2012, we incurred $32.8 million for seismic costs primarily for Suriname.


General and administrative. General and administrative costs decreased by $4.3 million during the three months ended September 30, 2013, as





compared to the three months ended September 30, 2012. Total non-cash general and administrative costs were $13.8 million and $19.4 million for the three


months ended September 30, 2013 and 2012, respectively, which was primarily related to equity-based compensation.


Depletion and depreciation. Depletion and depreciation decreased $5.4 million during the three months ended September 30, 2013, as compared


with the three months ended September 30, 2012 primarily due to the slight decrease in barrels lifted.





Interest expense. Interest expense decreased $11.4 million during the three months ended September 30, 2013, as compared with the three months


ended September 30, 2012, primarily due to an accrual for transaction taxes during the three months ended September 30, 2012 and decreases in our


outstanding debt balance and in the mark-to-market loss on our interest rate swaps during the three months ended September 30, 2013.


Derivatives, net. During the three months ended September 30, 2013 and 2012, we recorded losses of $7.6 million and $24.5 million, respectively,





on our outstanding hedge positions. The losses recorded were a result of an increase in oil prices during the respective periods.


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Income tax expense. The Company’s effective tax rates for the three months ended September 30, 2013 and 2012 were (333)% and (251)%,


respectively. The large effective tax rates for the periods presented are due to losses incurred in jurisdictions in which we are not subject to taxes and, therefore,


do not generate any income tax benefits and losses incurred in jurisdictions in which we have valuation allowances against our deferred tax assets and therefore


we do not realize any tax benefit on such losses. Income tax expense increased $8.3 million during the three months ended September 30, 2013, as compared


with September 30, 2012, primarily due to an increase in pre-tax income from our Ghanaian subsidiary.


Nine months ended September 30, 2013 compared to nine months ended September 30, 2012





Nine Months Ended


September 30,_ Increase


2013 2012 (Decrease)


(In thousands)


Revenues and other income:


Oil and gas revenue $ 636,648 $ 450,360 $ 186,288


Interest income 191 1,165 (974)


Other income 708 930 (222)


Total revenues and other income 637,547 452,455 185,092


Costs and expenses:


Oil and gas production 79,651 71,791 7,860


Exploration expenses 194,384 96,134 98,250


General and administrative 118,787 112,558 6,229


Depletion and depreciation 175,578 128,442 47,136


Amortization---deferred financing costs 8,269 6,582 1,687


Interest expense 27,789 43,717 (15,928)


Derivatives, net 386 26,407 (26,021)


Other expenses, net 3,345 728 2,617


Total costs and expenses 608,189 486,359 121,830


Income (loss) before income taxes 29,358 (33,904) 63,262


Income tax expense 124,568 64,730 59,838


Net loss $ (95,210) $ (98,634) $ 3,424





Oil and gas revenue. Oil and gas revenue increased $186.3 million during the nine months ended September 30, 2013, as compared with the nine


months ended September 30, 2012. The increase is primarily due to having six liftings of oil during the nine months ended September 30, 2013 as compared to


having four liftings of oil during the nine months ended September 30, 2012. This increase is partially offset by a lower realized price per barrel during the


nine months ended September 30, 2013.


Oil and gas production. Oil and gas production costs increased $7.9 million during the nine months ended September 30, 2013, as compared with





the nine months ended September 30, 2012. The increase is primarily due to an increase in routine operating expenses related to the increase in production


volumes and liftings during the nine months ended September 30, 2013 as compared to the nine months ended September 30, 2012. In addition, higher


workover and rig equipment costs were incurred during 2013 as compared to 2012.





Exploration expenses. Exploration expenses increased $98.3 million during the nine months ended September 30, 2013, as compared with the nine


months ended September 30, 2012. During the nine months ended September 30, 2013, the Company incurred $97.2 million of unsuccessful well and other


related costs primarily related to the Cameroon Sipo-1 exploration well, the Ghana Sapele-1 exploration well, and the Ghana Akasa-2 appraisal well and $84.9


million for seismic costs primarily for Mauritania, Ireland, Morocco and new ventures. During the nine months ended September 30, 2012, we incurred


$66.2 million for seismic costs for Suriname, Morocco, Ghana and Cameroon and $19.4 million of unsuccessful well costs, primarily related to the Ghana


Teak-4A appraisal well.


General and administrative. General and administrative costs increased $6.2 million during the nine months ended September 30, 2013, as





compared with the nine months ended September 30, 2012, due to an increase in headcount. Total non-cash general and administrative costs were $50.8


million and $58.2 million for the nine months ended September 30,2013 and 2012, respectively, which was primarily related to equity-based compensation.


Depletion and depreciation. Depletion and depreciation increased $47.1 million during the nine months ended September 30, 2013, as compared


with the nine months ended September 30, 2012. The increase is primarily due to depletion recognized related to the sale of six liftings of oil during the nine


months ended September 30, 2013 as compared to four liftings of oil during the nine months ended September 30, 2012.


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Interest expense. Interest expense decreased $15.9 million during the nine months ended September 30, 2013, as compared with the nine months


ended September 30, 2012, primarily due to reduced transaction taxes during the nine months ended September 30, 2012, decreases in our outstanding debt


balance and in the mark-to-market loss on our interest rate swaps during the nine months ended September 30, 2013.


Derivatives, net. During the nine months ended September 30, 2013 and 2012, we recorded a loss of $0.4 million and $26.4 million, respectively,


on our outstanding hedge positions. The losses recorded were a result of an increase in oil prices during the respective periods.





Income tax expense. The Company’s effective tax rates for the nine months ended September 30, 2013 and 2012 were 424% and (191%),


respectively. The large effective tax rates for the periods presented are due to losses incurred in jurisdictions in which we are not subject to taxes and, therefore,


do not generate any income tax benefits as well as losses incurred in jurisdictions in which we have valuation allowances against our deferred tax assets and


therefore we do not realize any tax benefit on such losses. Income tax expense increased $59.8 million during the nine months ended September 30,2013, as


compared with September 30, 2012, primarily due to an increase in pre-tax income from our Ghanaian subsidiary.





Liquidity and Capital Resources


We are actively engaged in an ongoing process of anticipating and meeting our funding requirements related to exploring for and developing oil and


natural gas resources along the Atlantic Margin. We have historically met our funding requirements through cash flows generated from our operating activities


and secured funding from issuances of equity and commercial debt facilities to meet our ongoing liquidity requirements.


Significant Sources of Capital





Facility





In March 2011, the Company secured a $2.0 billion commercial debt facility (the “Facility”) from a number of financial institutions and


extinguished the then existing commercial debt facilities. The Facility was syndicated to certain participants of the existing facilities, as well as new


participants. The Facility supports our oil and gas exploration, appraisal and development programs and corporate activities. As part of an amendment in


November 2012, the total commitments for the Facility were reduced to $1.5 billion.


The Facility provides a revolving-credit and letter of credit facility. The availability period for the revolving-credit facility, as amended in April 2013,


expires on December 15, 2014 and the letter of credit sublimit expires on the final maturity date. The available facility amount is subject to borrowing base


constraints and, beginning on December 15,2014, outstanding borrowings will also be constrained by an amortization schedule. The final maturity date is


March 29, 2018.


In September 2013, as part of the normal borrowing base determination process, the availability under the facility was reduced $89.6 million to


$1.2 billion. As of September 30, 2013, borrowings under the Facility totaled $900.0 million, the undrawn availability under the Facility was $309.5 million


and there were no letters of credit drawn under the facility.


Corporate Revolver


In November 2012, we secured the Corporate Revolver from a number of financial institutions. In April 2013, the availability under the Corporate


Revolver was increased from $260.0 million to $300.0 million by additional commitments from existing and new financial institutions. As of September 30,


2013, there were no borrowings outstanding under the Corporate Revolver and the undrawn availability under the Corporate Revolver was $300.0 million.


Revolving Letter of Credit Facility


In July 2013, we entered into a revolving LC Facility. The size of the LC Facility is $100.0 million, with additional commitments up to $50.0 million


being available if the existing lender increases its commitments or if commitments from new financial institutions are added. The LC Facility provides that we


shall maintain cash collateral in an amount equal to at least 75% of all outstanding letters of credit under the LC Facility, provided that during the period of


any breach of certain financial covenants, the required cash collateral amount shall increase to 100%. The fees associated with outstanding letters of credit


issued will be 0.5% per annum. The LC Facility has an availability period which expires on June 1, 2016. We may voluntarily cancel any commitments


available under the LC Facility at any time. As of September 30, 2013, there were four outstanding letters of credit totaling $29.0 million under the LC Facility.





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Table of Contents





Capital Expenditures and Investments


We expect to incur substantial costs as we continue to develop our oil and natural gas prospects and as we:


• complete our 2013 exploration and appraisal drilling program in our license areas;


• develop our discoveries that we determine to be commercially viable;


• purchase and analyze seismic and other geological and geophysical data to identify future prospects; and


• invest in additional oil and natural gas leases and licenses.


We have relied on a number of assumptions in budgeting for our future activities. These include the number of wells we plan to drill, our


participating interests in our prospects, the costs involved in developing or participating in the development of a prospect, the timing of third-party projects,


and the availability of suitable equipment and qualified personnel. These assumptions are inherently subject to significant business, political, economic,


regulatory, environmental and competitive uncertainties, contingencies and risks, all of which are difficult to predict and many of which are beyond our


control. We may need to raise additional funds more quickly if one or more of our assumptions proves to be incorrect or if we choose to expand our


hydrocarbon asset acquisition, exploration, appraisal, development efforts or any other activity more rapidly than we presently anticipate. We may decide to


raise additional funds before we need them if the conditions for raising capital are favorable. We may seek to sell equity or debt securities or obtain additional


bank credit facilities. The sale of equity securities could result in dilution to our shareholders. The incurrence of additional indebtedness could result in


increased fixed obligations and additional covenants that could restrict our operations.


2013 Capital Program


Our estimate for the 2013 capital program remains at $560.0 million. The 2013 capital expenditure budget consists of:


• approximately 50% for developmental related expenditures offshore Ghana; and


• approximately 50% for exploration and appraisal related expenditures, including new venture opportunities.


The ultimate amount of capital we will spend may fluctuate materially based on market conditions and the success of our drilling results. Our future


financial condition and liquidity will be impacted by, among other factors, our level of production of oil and the prices we receive from the sale of these


commodities, the success of our exploration and appraisal drilling program, the number of commercially viable oil and natural gas discoveries made and the


quantities of oil and natural gas discovered, the speed with which we can bring such discoveries to production, and the actual cost of exploration, appraisal


and development of our oil and natural gas assets.


The following table presents our liquidity and financial position as of September 30, 2013:


September 30,


2013


(In thousands)


Cash and cash equivalents $ 440,267


Drawings under the Facility 900,000


Net debt 459,733





Availability under the Facility $ 309,504


Availability under the Corporate Revolver 300,000


Available borrowings plus cash and cash equivalents 1,049,771





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Cash Flows





Nine Months Ended September 30,


2013 2012


(In thousands)


Net cash provided by (used in):


Operating activities $ 281,349 $ 150,110


Investing activities (240,950) (304,800)


Financing activities (115,296) (118,752)





Operating activities. Net cash provided by operating activities for the nine months ended September 30, 2013 was $281.3 million compared with


net cash provided by operating activities for the nine months ended September 30, 2012 of $ 150.1 million. The increase in cash provided by operating


activities in the nine months ended September 30, 2013 when compared to the same period in 2012 was primarily due to an increase in oil and gas revenues


offset by a negative change in working capital items.


Investing activities. Net cash used in investing activities for the nine months ended September 30, 2013 was $241.0 million compared with net


cash used in investing activities for the nine months ended September 30, 2012 of $304.8 million. The decrease in cash used in investing activities in the nine


months ended September 30, 2013 when compared to the same period in 2012 was primarily attributable to a decrease in expenditures for oil and gas assets


and the release of restricted cash during 2013.





Financing activities. Net cash used in financing activities for the nine months ended September 30, 2013 was $115.3 million compared with net


cash used in financing activities for the nine months ended September 30, 2012 of $ 118.8 million. The cash used in financing activities in the nine months


ended September 30,2013 was consistent with the prior period.


Contractual Obligations








The following table summarizes by period the payments due for our estimated contractual obligations as of September 30, 2013:





Payments Due By Year(3)


Total 2013(4) 2014 2015 2016 2017 Thereafter


(In thousands)


Facility(l) $ 900,000 $ --- $ ; --- $ 346,693 $ 149,428 $ 292,768 $ 111,111


Interest payments on long-term debt(2) 147,468 11,237 47,858 39,494 25,167 21,957 1,755


Operating leases 22,205 1,562 4,306 3,502 3,158 3,223 6,454


Atwood Achiever drilling rig contract(5) 651,525 --- 90,440 217,175 217,770 126,140 ---





(1) The estimated repayments of debt are based on the level of borrowings and the available borrowing base as of September 30, 2013. Any increases or


decreases in the level of borrowings or increases or decreases in the available borrowing base would impact the scheduled maturities of debt during


the next five years and thereafter. As of September 30, 2013, there were no borrowings under the Corporate Revolver.





(2) Based on outstanding borrowings as noted in (1) above and the LIBOR yield curves at the reporting date and commitment fees related to the Facility


and Corporate Revolver.





(3) Does not include purchase commitments for jointly owned fields and facilities where we are not the operator and excludes commitments for


exploration activities, including well commitments, in our petroleum contracts and farm-in agreements.


(4) Represents payments for the period from October 1, 2013 through December 31, 2013.





(5) Commitments calculated using a day rate of $595,000 and an estimated rig delivery date of August 1, 2014.





The following table presents maturities by expected maturity dates under the Facdity, the weighted average interest rates expected to be paid on the


Facility given current contractual terms and market conditions, and the debt’s estimated fair value. Weighted-average interest rates are based on implied


forward rates in the yield curve at the reporting date. This table does not take into account amortization of deferred financing costs.





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Table of Contents





October 1 Liability


Through Fair Value at


December 31, Years Ending December 31, September 30,


2013(1) 2014 2015 2016 2017 Thereafter 2013


(In thousands, except percentages)


Variable rate debt:


Facility(2) $ --- $ --- $ 346,693 $ 149,428 $ 292,768 $ 111,111 $ (900,000)


Weighted average interest rate(3) 3.43% 3.94% 4.56% 5.70% 7.05% 7.68%


Interest rate swaps:


Notional debt amount! 4) $ --- $ 47,033 $ 16,875 $ 6,250 $ --- $ --- $ (1,746)


Fixed rate payable 2.22% 2.22% 2.22%


Variable rate receivable(5) 0.47% 0.83% 1.46%


Notional debt amount! 4) $ --- $ 47,033 $ 16,875 $ 6,250 $ --- $ --- $ (1,846)


Fixed rate payable 2.31% 2.31% 2.31%


Variable rate receivable!5) 0.47% 0.83% 1.46%


Notional debt amount! 4) $ --- $ 1,868 $ --- $ --- $ --- $ --- $ (74)


Fixed rate payable 0.98%


Variable rate receivable!5) 0.53%


Notional debt amount! 4) $ --- $ 38,434 $ 23,137 $ --- $ --- $ --- $ (524)


Fixed rate payable 1.34% 1.34%


Variable rate receivable!5) 0.47% 0.68%








(1) The interest rate swaps’ variable rate receivable for the period October 1 through December 31, 2013 locked on June 26, 2013, therefore the notional


amounts are not subject to changes in interest rates.


(2) The amounts included in the table represent principal maturities only. The scheduled maturities of debt are based on the level of borrowings and the


available borrowing base as of September 30, 2013. Any increases or decreases in the level of borrowings or increases or decreases in the available


borrowing base would impact the scheduled maturities of debt during the next five years and thereafter. As of September 30, 2013, there were no


borrowings under the Corporate Revolver.


(3) Based on outstanding borrowings as noted in (1) above and the LIBOR yield curves plus applicable margin at the reporting date. Excludes


commitment fees related to the Facility and Corporate Revolver.


(4) Represents weighted average notional contract amounts of interest rate derivatives. In the final year of maturity, represents notional amount from





January --- June.


(5) Based on implied forward rates in the yield curve at the reporting date.





Off-Balance Sheet Arrangements


We may enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations. As of September 30,


2013, our material off-balance sheet arrangements and transactions include operating leases and undrawn letters of credit. There are no other transactions,


arrangements, or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect Kosmos’ liquidity or


availability of or requirements for capital resources.


Critical Accounting Policies





We consider accounting policies related to our revenue recognition, exploration and development costs, receivables, income taxes, derivatives and


hedging activities, estimates of proved oil and natural gas reserves, asset retirement obligations and impairment of long-lived assets as critical accounting


policies. The policies include significant estimates made by management using information available at the time the estimates are made. However, these


estimates could change materially if different information or assumptions were used. These policies are summarized in “Item 7. Management’s Discussion and


Analysis of Financial Condition and Results of Operations section in our annual report on Form 10-K, for the year ended December 31, 2012.


Cautionary Note Regarding Forward-looking Statements





This quarterly report on Form 10-Q contains estimates and forward-looking statements, principally in “Management’s Discussion and Analysis of


Financial Condition and Results of Operations.” Our estimates and forward-looking statements are mainly based on our current expectations and estimates of


future events and trends, which affect or may affect our businesses and operations. Although we believe that these estimates and forward-looking statements


are based upon reasonable assumptions, they are subject to





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several risks and uncertainties and are made in light of information currently available to us. Many important factors, in addition to the factors described in


our quarterly report on Form 10-Q and our annual report on Form 10-K, may adversely affect our results as indicated in forward-looking statements. You


should read this quarterly report on Form 10-Q, the annual report on Form 10-K and the documents that we have filed with the Securities and Exchange


Commission completely and with the understanding that our actual future results may be materially different from what we expect. Our estimates and forward-


looking statements may be influenced by the following factors, among others:


• our ability to find, acquire or gain access to other discoveries and prospects and to successfully develop our current discoveries and prospects;


• uncertainties inherent in making estimates of our oil and natural gas data;


• the successful implementation of our and our block partners’ prospect discovery and development and drilling plans;


• projected and targeted capital expenditures and other costs, commitments and revenues;


• termination of or intervention in concessions, rights or authorizations granted by the governments of Ghana, Cameroon, Ireland, Mauritania,


Morocco or Suriname (or their respective national oil companies) or any other federal, state or local governments or authorities, to us;


• our dependence on our key management personnel and our ability to attract and retain qualified technical personnel;


• the ability to obtain financing and to comply with the terms under which such financing may be available;


• the volatility of oil and natural gas prices;


• the availability, cost, function and reliability of developing appropriate infrastructure around and transportation to our discoveries and


prospects;


• the availability and cost of drilling rigs, production equipment, supplies, personnel and oilfield services;


• other competitive pressures;


• potential liabilities inherent in oil and natural gas operations, including drilling risks and other operational and environmental hazards;


• current and future government regulation of the oil and gas industry;


• cost of compliance with laws and regulations;


• changes in environmental, health and safety or climate change laws, greenhouse gas regulation or the implementation, or interpretation, of those


laws and regulations;


• environmental liabilities;


• geological, technical, drilling, production and processing problems;


• military operations, civil unrest, terrorist acts, wars or embargoes:


• the cost and availability of adequate insurance coverage;


• our vulnerability to severe weather events;


• our ability to meet our obligations under the agreements governing our indebtedness;


• the availability and cost of financing and refinancing our indebtedness;


• the amount of collateral, if any, required to be posted from time to time in our hedging transactions;


• our success in risk management activities, including the use of derivative financial instruments to hedge commodity and interest rate risks; and


• other risk factors discussed in the “Item 1A. Risk Factors” section of this quarterly report on Form 10-Q and our annual report on Form 10-K.


The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and similar words are intended to


identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and, except to the


extent required by law, we undertake no obligation to update or to review any estimate and/or forward-looking statement because of new information, future


events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. As a result of


the risks and uncertainties described above, the estimates and forward-looking statements discussed in this quarterly report on Form 10-Q might not occur,


and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, including, but not limited


to, the factors mentioned above. Because of these uncertainties, you should not place undue reliance on these forward-looking statements.


Item 3. Qualitative and Quantitative Disclosures About Market Risk


The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential


exposure to market risks. The term “market risks” as it relates to our currently anticipated transactions refers to the risk of loss arising from changes in


commodity prices and interest rates. These disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably


possible losses. This forward-looking information provides indicators of





31


Table of Contents





how we view and manage ongoing market risk exposures. We enter into market-risk sensitive instruments for purposes other than to speculate.





We manage market and counterparty credit risk in accordance with policies and guidelines. In accordance with these policies and guidelines, our


management determines the appropriate timing and extent of derivative transactions. See “Item 8. Financial Statements and Supplementary Data---Note 2


---Accounting Policies, Note 10---Derivative Financial Information and Note 11---Fair Value Measurements” section of our annual report on Form 10-K. for a


description of the accounting procedures we follow relative to our derivative financial instruments.


The following table reconciles the changes that occurred in fair values of our open derivative contracts during the nine months ended September 30,


2013:





Derivative Contracts Assets (Liabilities)


Commodities Interest Rates Total


(In thousands)


Fair value of contracts outstanding as of December 31, 2012 $ (16,603) $ (5,939) $ (22,542)


Changes in contract fair value (5,606) (268) (5,874)


Contract maturities 18,106 2,017 20,123


Fair value of contracts outstanding as of September 30, 2013 $ (4,103) $ (4,190) $ (8,293)





Commodity Derivative Instruments


We enter into various oil derivative contracts to mitigate our exposure to commodity price risk associated with anticipated future oil production. These


contracts currently consist of three-way collars.


Commodity Price Sensitivity


The following table provides information about our oil derivative financial instalments that were sensitive to changes in oil prices as of


September 30, 2013:





Weighted Average Dated Brent Price per Bbl


Deferred Asset (Liability)


Premium Fair Value at


Receivable/ September 30,


Term (1) Type of Contract MBbl (Payable) Floor Ceiling Call 2013(2)


2013:


October---December Three-way collars 375 $ (4.82) $ 95.00 $ 105.00 $ 125.00 $ (3,245)


October---December Three-way collars 253 --- 87.50 115.00 135.00 (115)


October---December Three-way collars 250 --- 90.00 115.39 135.00 (91)


October---December Three-way collars 250 --- 90.08 115.00 135.00 (102)


2014:


January---December Three-way collars 1,500 (1.22) 85.00 115.00 140.00 (1,999)


January---December Three-way collars 1,000 --- 85.00 115.01 140.00 (131)


January---December Three-way collars 1,000 --- 88.09 110.00 125.00 (535)


January---December Three-way collars 1,500 1.15 90.00 113.00 135.00 2,115





{1) In October 2013, we entered into put contracts for 1.7 MMBbl from January 2015 through December 2015 with a floor price of $85.00 per Bbl.


The put contracts are indexed to Dated Brent prices and have a weighted average deferred premium payable of $3.78 per Bbl.


(2) Fair values are based on the average forward Dated Brent oil prices on September 30, 2013 which by year are: 2013---$107.57, 2014---$102.77 and


2015 --- $97.38. These fair values are subject to changes in the underlying commodity price. The average forward Dated Brent oil prices based on


October 28, 2013 market quotes by year are: 2013---$109.05, 2014---$105.31 and 2015 --- $99.30.


Interest Rate Derivative Instruments


See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations---Contractual Obligations” section of our


annual report on Form 10-K for specific information regarding the terms of our interest rate derivative instruments that are sensitive to changes in interest rates.


32


Table of Contents





Interest Rate Sensitivity


At September 30, 2013, we had indebtedness outstanding under the Facility of $900.0 million, of which $699.4 million bore interest at floating


rates. The interest rate on this indebtedness as of September 30, 2013 was approximately 3.4%. If LIBOR changed by 10% at this level of floating rate debt, our


cash paid for interest would increase or decrease by $0.1 million per year on the Facility. We pay commitment fees on the $309.5 million of undrawn


availability and $290.5 million of unavailable commitments under the Facility and on the $300.0 million of undrawn availability under the Corporate


Revolver, which are not subject to changes in interest rates.


As of September 30, 2013, the fair market value of our interest rate swaps was a net liability of approximately $4.2 million. If LIBOR increased by


10%, we estimate the liability would decrease to approximately $4.1 million, and if LIBOR decreased by 10%, we estimate the liability would increase to


approximately $4.3 million.


Item 4. Controls and Procedures


Evaluation of Disclosure Controls and Procedures


As of the end of the period covered by this report, an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls


and procedures ( as defined in Rule 13a-15( e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was performed under the


supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer. This evaluation


considered the various processes carried out under the direction of our disclosure committee in an effort to ensure that information required to be disclosed in


the SEC reports we file or submit under the Exchange Act is accurate, complete and timely. However, a control system, no matter how well conceived and


operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The design of a control system must reflect the


fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Consequently, no evaluation of controls can


provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. Based upon this evaluation, our


Chief Executive Officer and our Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30,


2013, in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded,


processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including that such information is accumulated and


communicated to the Company’s management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding


required disclosure.


Evaluation of Changes in Internal Control over Financial Reporting


There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that materially affected, or


are reasonably likely to materially affect, our internal control over financial reporting.





33


Table of Contents





PART II. OTHER INFORMATION





Item 1. Le

There have been no material changes from the information concerning legal proceedings discussed in the “Item 3. Legal Proceedings” section of our


annual report on Form 10-K.


Item 1A. Risk Factors





There have been no material changes from the risk factors disclosed in “Item 1A. Risk Factors” section of our annual report on Form 10-K.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


There have been no material changes from the information concerning the use of proceeds from our IPO discussed in the “Item 5. Market for


Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” section of our annual report on Form 10-K.


Item 3. Defaults Upon Senior Securities


None.


Item 4. Mine Safety Disclosures


Not applicable.


Item 5. Other Information.


There have been no material changes required to be reported under this Item that have not previously been disclosed in the annual report on Form 10-


K, other than as follows:


Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934


Under the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Exchange Act, we are required to include


certain disclosures in our periodic reports if we or any of our “affiliates” (as defined in Rule 12b-2 under the Exchange Act) knowingly engaged in certain


specified activities during the period covered by the report Because the Securities and Exchange Commission (“SEC”) defines the term “affiliate” broadly, it


includes any entity controlled by us as well as any person or entity that controls us or is under common control with us (“control” is also construed broadly


by the SEC).


We are not presently aware that we and our consolidated subsidiaries have knowingly engaged in any transaction or dealing reportable under


Section 13(r) of the Exchange Act during the fiscal quarter ended September 30, 2013. In addition, except as described below, at the time of filing this quarterly


report on Form 10-Q, we are not aware of any such reportable transactions or dealings by companies that may be considered our affiliates as to whether they


have knowingly engaged in any such reportable transactions or dealings during such period. Upon the filing of periodic reports by such other companies for


the fiscal quarter or fiscal year ended September 30, 2013, as the case may be, additional reportable transactions may be disclosed by such companies.


As of April 1, 2013, funds affiliated with The Blackstone Group (“Blackstone”) held approximately 29% of our outstanding common shares. We are


also a party to a shareholders agreement with Blackstone pursuant to which, among other things, Blackstone currently has the right to designate three


members of our board of directors. Accordingly, Blackstone may be deemed an “affiliate” of us, both currently and during the fiscal quarter ended


September 30, 2013.


Blackstone informed us of the information reproduced below (the “Travelport Disclosure”) regarding Travelport Limited (“Travelporf’), a company that


may be considered one of Blackstone’s affiliates. Because both we and Travelport are controlled by Blackstone, we may be considered an “affiliate” of


Travelport for the purposes of Section 13(r) of the Exchange Act.





34


Table of Contents





Travelport Disclosure:


Quarter ended September 30. 2013


“As part of our global business in the travel industry, we provide certain passenger travel related GDS and Airline IT Solutions services to Iran


Air. We also provide certain Airline IT Solutions services to Iran Air Tours. All of these services are either exempt from applicable sanctions


prohibitions pursuant to a statutory exemption in the International Emergency Economic Powers Act permitting transactions ordinarily incident to


travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control (“OFAC”). Subject to any changes


in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the


arrangement of travel for individuals.


Quarter ended June 30, 2013


“As part of our global business in the travel industry, we provide certain passenger travel related GDS and airline IT Solutions services to Iran


Air. We also provide certain airline IT Solutions services to Iran Air Tours. All of these services are either exempt from applicable sanctions


prohibitions pursuant to a statutory exemption in the International Emergency Economic Powers Act permitting transactions ordinarily incident to


travel or, to the extent not otherwise exempt, specifically licensed by the U.S. Office of Foreign Assets Control (“OFAC”). Subject to any changes


in the exempt/licensed status of such activities, we intend to continue these business activities, which are directly related to and promote the


arrangement of travel for individuals.


Prior to and during the reporting period, we also provided airline IT Solutions services to Syrian Arab Airlines. These services were generally


understood to be permissible under the same statutory travel exemption. The services were terminated following the May 2013 action by OFAC to


designate this airline as a Specially Designated Global Terrorist pursuant to the Global Terrorism Sanctions Regulations.


The gross revenue and net profit attributable to these activities in the quarter ended June 30, 2013 were approximately $248,000 and $176,000,


respectively.”


The Travelport Disclosure relates solely to activities conducted by Travelport and do not relate to any activities conducted by us. We have no


involvement in or control over the activities of Travelport, any of its predecessor companies or any of its subsidiaries. Other than as described above, we have


no knowledge of the activities of Travelport with respect to transactions with Iran, and we have not participated in the preparation of the Travelport Disclosure.


We have not independently verified the Travelport Disclosure, are not representing to the accuracy or completeness of the Travelport Disclosure and undertake


no obligation to correct or update the Travelport Disclosure.


Item 6. Exhibits





The information required by this Item 6 is set forth in the Index to Exhibits accompanying this quarterly report on Form 10-Q.





35


Table of Contents





SIGNATURES


Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,


thereunto duly authorized.





Kosmos Energy Ltd.


(Registrant)


Date November 5, 2013_ /s/ W. GREG DUNLEVY_


W. Greg Dunlevy


Executive Vice President and Chief Financial Officer


(Principal Financial Officer)





36


Table of Contents





INDEX OF EXHIBITS


Exhibit


Number Description of Document


10.1* Multi-Currency Revolving Letter of Credit Facility Agreement, dated as of July 3, 2013, among Kosmos Energy Credit International,


as Original Borrower, Kosmos Energy Ltd., as Original Guarantor, and Societe Generale, London Branch, as Original Lender,


Facility Agent, Security Agent and Account Bank.


10.2* Charge on Cash Deposits and Account Bank Agreement, dated as of July 3, 2013, among Kosmos Energy Credit International and


Societe Generale, London Branch, as Security Agent.


10.3* Letter of Resignation from John R. Kemp III, dated as of July 18, 2013.


10.4* Amendment No. 2, effective as of January 1, 2013, to Consulting Agreement between Kosmos Energy Ltd. and John R. Kemp 111


10.5* Amendment No. 3, effective as of October 1, 2013, to Consulting Agreement between Kosmos Energy Ltd. and John R. Kemp 111


10.6* Offer Letter, dated November 22, 2011, between Kosmos Energy, LLC and Darrell McKenna


10.7* Offer Letter, dated March 2, 2012, between Kosmos Energy, LLC and Tyner Gaston


10.8* Offer Letter, dated May 16, 2012, between Kosmos Energy, LLC and Paul Nobel


10.9* Form of RSU Award Agreement (Directors --- Service-Vesting)


10.10* Form of RSU Award Agreement (Employees ---Service-Vesting)


10.11* Form of RSU Award Agreement (Employees ---Performance-Vesting)


10.12* Petroleum Agreement Regarding the Exploration for Exploitation of Hydrocarbons among Office National Des Hydrocarbures Et Des


Mines acting on behalf of the Kingdom of Morocco, Kosmos Energy Deepwater Morocco and Canamens Energy Morocco SARL in


the area of interest named “Essaouira Offshore” dated September 9, 2011


10.13* Deed of Assignment in Petroleum Agreement for the Exploration for and Exploitation of Hydrocarbons in the zone of interest named


“Essaouira Offshore” between Canamens Energy Morocco SARL and Kosmos Energy Deepwater Morocco dated December 19, 2012


10.14* Petroleum Agreement Regarding the Exploration for Exploitation of Hydrocarbons among Office National Des Hydrocarbures Et Des


Mines acting on behalf of the Kingdom of Morocco, Kosmos Energy Deepwater Morocco and Pathfinder Hydrocarbon Ventures


Limited in the area of interest named “Foum Assaka Offshore” dated May 4, 2011


10.15* Deed of Assignment in Petroleum Agreement for the Exploration for and Exploitation of Hydrocarbons in the zone of interest named


“Foum Assaka Offshore” between Pathfinder Hydrocarbon Ventures Limited and Kosmos Energy Deepwater Morocco dated June 11,


2012


10.16* Petroleum Agreement Regarding the Exploration for Exploitation of Hydrocarbons among Office National Des Hydrocarbures Et Des


Mines acting on behalf of the Kingdom of Morocco and Kosmos Energy Deepwater Morocco in the area of interest named “Tarhazoute


Offshore” dated October 10, 2013


10.17* Exploration and Production Contract between The Islamic Republic of Mauritania and Kosmos Energy Mauritania (Bloc C8) dated


April 5, 2012


10.18* Exploration and Production Contract between The Islamic Republic of Mauritania and Kosmos Energy Mauritania (Bloc Cl2) dated


April 5, 2012





37


Table of Contents





10.19* Exploration and Production Contract between The Islamic Republic of Mauritania and Kosmos Energy Mauritania (Bloc C13) dated


April 5, 2012


10.20* Production Sharing Contract for Petroleum Exploration, Development and Production relating to Block 42 Offshore Suriname between


Staatsolie Maatshappij Suriname N.V. and Kosmos Energy Suriname dated December 13, 2011


10.21* Production Sharing Contract for Petroleum Exploration, Development and Production relating to Block 45 Offshore Suriname between


Staatsolie Maatshappij Suriname N.V. and Kosmos Energy Suriname dated December 13, 2011


10.22* Deed of Assignment and Transfer relating to Blocks 42 and 45 Offshore Suriname between Kosmos Energy Suriname and Chevron


Suriname Exploration Limited dated May 31, 2012


10.23* Irish Continental Shelf--- Petroleum Exploration License No. 1/13 (Frontier) between the Minister for Communications, Energy and


Natural Resources, Ireland, and Kosmos Energy Ireland and Antrim Exploration (Ireland) Ltd dated August 28, 2013


10.24* Irish Continental Shelf--- Petroleum Exploration License No. 2/13 (Frontier) between the Minister for Communications, Energy and


Natural Resources, Ireland, and Kosmos Energy Ireland and Europa Oil and Gas (Holdings) Pic. dated August 23,2013


10.25* Irish Continental Shelf--- Petroleum Exploration License No. 3/13 (Frontier) between the Minister for Communications, Energy and


Natural Resources, Ireland, and Kosmos Energy Ireland and Europa Oil and Gas (Holdings) Pic. dated August 23,2013


10.26* Licensing Terms for Offshore Oil and Gas Exploration, Development and Production 2007, relating to the Petroleum Exploration


Licenses No. 1/13, No. 2/13 and No. 3/13 offshore Ireland


10.27* Petroleum Agreement Regarding the Exploration for Exploitation of Hydrocarbons between Office National Des Hydrocarbures Et Des


Mines acting on behalf of the State and Kosmos Energy Offshore Morocco HC in the area of interest named “Cap Boujdour Offshore”


dated July 7, 2011


31.1* Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


31.2* Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1** Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2** Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101. INS* XBRL Instance Document


101.SCH* XBRL Taxonomy Extension Schema Document


101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document


101.LAB* XBRL Taxonomy Extension Label Linkbase Document


101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document


101.DEF* XBRL Taxonomy Extension Definition Linkbase Document








Filed herewith.


Furnished herewith.





38


 Exhibit 10.1





CONFORMED COPY





DATED 3 JULY 2013 AND AMENDED AND RESTATED ON 29 JULY 2013


KOSMOS ENERGY CREDIT INTERNATIONAL


as Original Borrower





- and -


KOSMOS ENERGY LTD.


as Original Guarantor





- and -


SOCIETE GENERALE, LONDON BRANCH


as Facility Agent, Security Agent and Account Bank





- and -


THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1


as Original Lender











UP TO LSD 150,000,000 MULTICURRENCY REVOLVING


LETTER OF CREDIT FACILITY AGREEMENT











Slaughter and May


One Bunhill Row


London


EC1Y 8YY


(SRG/TXI)


516578965


 CONTENTS





Page





PART 1 INTERPRETATION 3





1. Definitions and Interpretation 3


PART 2 CONDITIONS PRECEDENT 25


2. Conditions Precedent 25


PART 3 OPERATION OF THE FACILITY 26


3. The Facility 26


4. Finance Parties’ Rights and Obligations 28


5. Purpose 29


6. Utilisation 29


PART 4 PAYMENTS,CANCELLATION, INTEREST AND FEES 40


7. Repayment 40


8. Prepayment and Cancellation 40


9. Interest 44


10. Fees 44


PART 5 TAXES, INCREASED COSTS AND INDEMNITIES 46


11. Tax Gross-Up and Indemnities 46


12. Increased costs 48


13. Other Indemnities 50


14. Mitigation by the Lenders 51


PART 6 FINANCIAL INFORMATION 52


15. Information Undertakings 52


PART 7 GUARANTEE 57


16. Guarantee and Indemnity 57


PART 8 REPRESENTATIONS,COVENANTS, EVENTS OF DEFAULT 60


17. Representations 60


18. Financial Covenants 63


19. General Undertakings 64


20. Events ofDefault 66





PART 9 CHANGES TO LENDERS AND OBLIGORS AND ROLES 72





21. Changes to the Lenders 72


22. Changes to the Obligors 77


23. Role of the Facility Agent and the Arranger 78


24. The Security Agent 83


25. Change of Security Agent and Delegation 90


PART 10 ADMINISTRATION, COSTS AND EXPENSES 92


26. Bank Accounts 92


27. Payment Mechanics 92


28. Set-Off 9 5


29. Costs and Expenses 9 5


30. Indemnities 9 6


31. Notices 97


32. Calculations and Certificates 100


33. Disclosure To Numbering Service Providers 101


34. Partial Invalidity 102


35. Remedies and Waivers 102


36. Amendments and Waivers 102


37. Counterparts 104


PART 11 GOVERNING LAW ANDENFORCEMENT 105


38. Governing Law 105


39. Jurisdiction 105


40. Service of Process 105


Schedule 1 The Original Lender 107


Schedule 2 Conditions Precedent 108


Part I Conditions Precedent to First Utilisation 108


Part II Conditions Precedent Required to be Delivered by an Additional Obligor 109


Schedule 3 Utilisation Request 110


Schedule 4 Form of Transfer Certificate 113


Schedule 5 Form of Compliance Certificate 115


Schedule 6 Form of Confidentiality Undertaking 117


Schedule 7 Form of Lender Accession Notice 122


Schedule 8 Form of Letter of Credit 124





Schedule 9 Form of Renewal or Extension Request 128


Schedule 10 Pre-existing Letters of Credit 130


THIS AGREEMENT is dated 3 July, 2013 and amended and restated on 29 July 2013 and made between:


(1) KOSMOS ENERGY CREDIT INTERNATIONAL, a company incorporated in the Cayman Islands, with registered number 256364 and


whose registered office is at PO Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue. George Town, Grand Cayman, KY1 -1209,


Cayman Islands (the “Original Borrower" or the “Company” or “KEC1”);


(2) KOSMOS ENERGY LTD., a company incorporated under the laws of Bermuda with registered number 45011 and having its registered office at


Clarendon House, 2 Church Street. Hamilton, HM11, Bermuda (the “ Original Guarantor”);


(3) SOCIETE GENERA IK. LONDON BRANCH as Original Lender (the "Original Lender'); and


(4) SOCIETE GENERALE, LONDON BRANCH as facility agent of the Finance Parties under this Agreement (the “ Facility Agent”), as the


security agent for the Secured Parties (the “ Security Agent”) and as the account bank for any Cash Collateral provided by the Original Borrower (the


“Account Bank”).


INTRODUCTION





(1) The Original Lender has agreed to provide a secured revolving letter of credit facility for up to USD 150 million.


(2) The parties have agreed to enter into this Agreement for the purpose of setting out the provisions on which such facility will be provided.


2


 PART 1


INTERPRETATION





I. DEFINITIONS AND INTERPRETATION


I. I Definitions


Each of the defined terms and interpretative provisions set out below and in the above list of parties to this Agreement shall apply to this Agreement


and each Finance Document, unless an express contrary intention appears in that Finance Document.


“Account Bank” means the Account Bank under the Charge from time to time being, on the date of this Agreement, Socictc Generale, London


Branch.


“Accounting Reference Date” means 31 December of each year.


“Additional Commitment Date” has the meaning given to that term in clause 3.2 ( Additional Commitments).


“Additional Commitment Notice” has the meaning given to it in clause 3.2 ( Additional Commitments).


“Additional Debt” means, in relation to any debt, any money, debt or liability due, owing or incurred under or in connection with:


(A) any refinancing, deferral, novation or extension of that debt:


( B) any further advance which may be made under any document, agreement or instrument supplemental to any relevant Finance Document


together with any related interest, fees and costs:


(C) any claim for damages or restitution in the event of rescission of that debt or otherwise in connection with any relevant Finance


Document;


(ID) any claim against the Company flowing from any recovery by the Company or any liquidator, receiver, administrator, administrative


receiver, compulsory manager or other similar officer of a payment or discharge in respect of that debt on the grounds of preference or


otherwise; and


(F.) any amount (such as post-insolvency interest) which would be included in any of the above but for any discharge, non-provability,


unenforceability or non-allowability of the same in any insolvency or other proceedings.


“Additional Guarantor” means any Group member which becomes an additional guarantor in accordance with clause 22.2 ( . ldditional


Guarantor).


“Additional Lender” has the meaning given to that term in clause .3.2 (Additional Commitments).





3


“Additional Obligor” means an Additional Guarantor.


“Affected Facility Agent” has the meaning given to that term in clause 23.11 ( Replacement of Administrative parties ) of this Agreement.


“Affiliate” means, in relation to any person, a subsidiary of that person or a holding company of that person or any other subsidiary of that holding


company.


“Agent” means each of the Facility Agent and the Security Agent and “ Agents” shall be construed accordingly.


“Agreement” means this facility agreement as amended, supplemented or otherwise varied from time to time.


“Approved Accounting Principles” means US generally accepted accounting principles to the extent applicable to the relevant financial statements.


“Approved Auditor” means any one of Deloitte LLP, Ernst & Young, PrieewaterhouseCoopers LLP or such other internationally recognised auditor


as the Majority Lenders may approve from time to time (acting reasonably).


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


“Authorised Signatory” means, in relation to a company or other legal person:


(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.


“Authority” means any governmental, provincial or local government, department, authority, court, tribunal or other judicial or regulatory body,


instrumentality or agency in any of the countries where the Borrower operates its business.


“Availability Period” means the period from and including the date of this Agreement to and including the date falling one month before the


Termination Date.


“Available Commitment" means a Lender’s Commitment minus:


(A) the amount (in the Base Currency) of its participation in any outstanding Letter of Credit; and


(B) in relation to any proposed Utilisation, the amount (in the Base Currency) of its participation in any Letter oi Credit that is due to be issued


on or before the proposed Utilisation Date,





4


other than that Lender’s participation in any Letter of Credit that is due to be repaid or prepaid on or before the proposed Utilisation Date.


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


“Base Currency” means US Dollars.


“Base Currency Amount” means, in relation to a Letter of Credit, the amount specified in the Utilisation Request delivered by a Borrower for that


Letter of Credit (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the facility


Agent’s Spot Rate of Exchange on the date which is three Business Days before the Utilisation Date or, if later, on the date the Facility Agent receives


the Utilisation Request).


“Basel 11” has the meaning given to it in clause 12.3 ( Exceptions).


“Basel III” means 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 on 16 December 2010.


“Beneficiary” means any person to whom any Letter of Credit is issued in favour of.


“Borrower” means the Original Borrower.


“Business Day” means a day (other than a Saturday or Sunday) when banks are open for business in London. Paris and. in the case of a Letter of


Credit which is not governed by English law, in the principal banking city of such jurisdiction.


“Calculation Date” means:


(A) 31 March and 30 September in each year commencing on and from 30 September 2013; and


( B) a date (selected by the Company) which is within 30 days before the occurrence of each of the following events:


(i) the issuance of HY Notes:


(ii) any increase of the “Total Available Facility Amount” (as defined in the RBL Facility Agreement) or any refinancing of the RBL


Facility Agreement:


(iii) any increase of the amount available under the Facility or any refinancing of the Facility, provided that any increase in the Total


Commitments pursuant to clause 3.2 (Additional Commitments) shall





5


not trigger a Calculation Date if the Additional Commitment Notice has been given within 90 days of a previous occurrence of a


Calculation Date;


(iv) the incurrence by any member of the Group of any new Financial Indebtedness (but, for the avoidance of doubt, not including the


refinancing of any existing Financial Indebtedness, except as provided for in paragraphs (ii) and (iii) above); or


(v) a Ghana Petroleum Agreement Small Sale Event.


“Calculation Trigger Event” means any event listed in paragraphs (B)(i) to (v) of the definition of" Calculation Date”.


“Cash Collateral” means the cash denominated in US Dollars deposited in the LC Cash Collateral Accounts in accordance with clause 6.14 ( Cash


collateralisation) or 20.15(C) (Acceleration).


“Change of Control” has the meaning given to that term in clause 8.2 ( Change of Control) ofthis Agreement.


“Charge” means the charge on cash deposits and the account bank agreement dated on or about the date of this Agreement between the Company, the


Security Agent and the Account Bank.


“Charged Property” means all of the assets which from time to time are, or are expressed to be. the subject of the Transaction Security.


“Committed Additional Participation ” has the meaning given to it in elause 3.2 (Additional Commitments ).


“Commitment” means:


(A) in relation to an Original Lender, the amount in Base Currency set opposite its name under the heading “Commitment” in Schedule 1 ( The


Original Lender) of this Agreement, the amount of any other Commitment transferred to it and the amount of any Committed Additional


Participation assumed by it pursuant to clause 3.2 ( Additional Commitments)', and


(B) in relation to any other Lender, the amount in Base Currency of any Commitment transferred to it and the amount of any Committed


Additional Participation assumed by it pursuant to clause 3.2 ( Additional Commitments).


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


“Compliance Certificate” means a certificate substantially in the form set out in Schedule 5 ( Form of Compliance Certificate) ofthis Agreement.





6


“Conditions Precedent" means the conditions precedent to initial Utilisation of the Facility as set out in Schedule 2 ( Conditions Precedent) of this


Agreement.


“Confidentiality Undertaking” means a confidentiality undertaking substantially in the form of Schedule 6 ( Form of Confidentiality


Undertaking) of this Agreement or in any other form agreed between the Company and the Facility Agent.


“Consolidated Cash and Cash Equivalents" means, in relation to the Group, at any time:


(A) cash in hand or on deposit including, for the avoidance of doubt, restricted cash;


(B) 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:


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


(D) 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 and Poor’s (or its equivalent by Moody’s);


(F.) any other instrument, security or investment approved in writing by the Majority Lenders.


“Consolidated Total Borrowings” means, in relation to the Group, at any time the aggregate of the following:


(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,


including any interest treated as capitalised under applicable Approved Accounting Principles but without double-counting and, for the avoidance of


doubt, excluding any such amount or indebtedness owed by one member of the Group to another member of the Group.


“Consolidated Tolal Net Borrowings” means, for any Measurement Period. Consolidated Total Borrowings less Consolidated Cash and Cash


Equivalents each as at the last day of that Measurement Period.


“Contractor” means the contractor under the WCTP PA and the DWT PA respectively from time to time.


7


"Default" means an Event of Default or event which, with the giving of notice, lapse of time, or fulfilment of any condition, would constitute an


Event of Default.


"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Agent.


"Deposit Agreements" means the agreements signed on or about the date of this Deed (or any future date providing the agreements are in


substantially the same form as those signed on the date of this Deed) between K.HCI and Societe Generale. London Branch which detail the terms and


conditions which apply to the Accounts (as defined in the Charge).


“Derivative Agreement” means an ISDA Master Agreement or similar agreement pursuant to which Derivative Transactions are entered into by the


Borrower with a counterparty.


“Derivative Transaction" means any transaction entered into under a Derivative Agreement, including (but not limited to) any transaction which is


a forward rate agreement, option, future, swap, cap. floor and any combination of the foregoing.


"Discharge Date" means the first date on which all liabilities (whether actual or contingent) owed to the Finance Parties have finally been discharged


and such Finance Parties are under no further obligation to provide financial accommodation under the Finance Documents.


"Discharged Rights and Obligations" has the meaning given to it in clause 21.6 ( Procedure for transfer).


"Dispute" has the meaning given to it in clause 39.1 ( Submission).


"Disruption Event" means either or both of:


(A) a material disruption to those payment or communications systems or to those financial markets which are. in each case, required to


operate in order for payments to be made in connection with the 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,





8


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


DWT Block" means the Deep Water Tano area offshore Ghana, being the area described in Annex 1 of the DWT PA, but excluding any portions of


such area in respect of which the Contractor’s rights thereunder are from time to time relinquished or surrendered pursuant to the DWT PA.


DWT PA means the petroleum agreement dated 10 March 2006 between the Government of Ghana, represented by the Minister, the GNPC,


Tullow Ghana Limited, Sabre Oil and Gas Limited and KEG in respect of the DW'T Block (and all amendments and supplements thereto).


“EBITDAX” means, in relation to the Group for any Measurement Period, its consolidated income on ordinary activities before Tax for that period,


but adjusted by:


(A) adding back Nel Interest Payable;


(B) adding back depletion and depreciation charged to the consolidated pro 111 and loss account of the Group;


( 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;


(F) adding back any amount attributable lo a loss and deducting any amount attributable to a gain against book value on (lie disposal of any


non-current asset and any amount attributable to an impairment charge relating to a non-current asset;


(G) adding back (lie amount attributable lo any compensation which is paid by way of equity instruments in KEL;


(H) adding back or deducting (as applicable) the arnounl attributable (o any other material item of an unusual or non-recurring nature which


represent gains or losses, including (but not limited (o) 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,





9


for that Measurement Period. In addition, for the purposes of the calculation of the financial covenant contained in clause 1X ( Financial


Covenants), EBITDAX in relation to the Group for any Measurement Period shall be adjusted by:


(I) including the EBITDAX of a subsidiary of the Company or attributable to a business or asset acquired during that Measurement Period


for the part of the Measurement Period when it was not a member of the Group and/or the business or asset was not owned by a member of


the Group; and


(J) excluding the EBITDAX attributable to any subsidiary of the Company or to any business or asset sold during that Measurement Period.


“Enforcement Action” shall have the meaning given to that term in the Intercreditor Agreement.


“EO” means EO Group Limited, a Cayman Islands company with registered company number 219175 whose registered place of business is at


PMB CT 123, Cantonments, 112A Adole Crescent Way, Airport, Accra, Ghana (formerly known as the KG Group Limited).


“Euro” means the single currency of the Participating Member States.


“Event of Default” means any event or circumstance specified as such in clause 20 ( Events of Default) of this Agreement.


“Excess Cash Collateral” has the meaning given to it in clause 6.14(F) ( Cash Collateralisation).


“Existing Lender” has the meaning given to it in clause 21.1 (Assignments and transfers and changes in Facility Office by the Lenders ).


“Facility” means the revolving letter of credit facility made available under this Agreement as described in elause 3 ( The Facility) of this Agreement.


“Facility Agent’s Spot Rate of Exchange” means the Facility Agent’s spot rate of exchange for the purchase of the relevant currency with the Base


Currency in the London foreign exchange market at or about 11:00 a.m. on a particular day.


“Facility Office” means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or,


following that date, by not less than five Business Days’ written notice where notice is required under clause 23.13 ( Facility Agent relationship w ith


the Lenders)) as the office or offices through which it will perform its obligations under this Agreement.


“Fee Letter” means:


(A) any letter or letters dated after the date of this Agreement between any Finance Party and the Company which are required following any


syndication of the Facility and which set out any of the fees referred to in clause 10 ( Fees) of this





10


Agreement and any other fees payable by the Company to a Finance Party pursuant to a Finance Document or payable under the Facility;


and


( B) the letter dated on or around the date of this Agreement between Societe Generale, London Branch and KECI which details the fee payable in


respect of the arrangement of the Facility.


“Finance Document" means this Agreement, each Security Document, any Fee Letter and any other document designated as such by the Facility


Agent and the Company.


“Finance Party" means each of the Lenders, the Facility Agent and the Security Agent and “ Finance Parties” shall be construed accordingly.


"Financial Covenants” means the financial covenants listed under clause 18 (Financial Covenants) of this Agreement.


"Financial Indebtedness" means any indebtedness for or in respect of:


(A) moneys borrowed;


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


(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:


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


(F) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when


calculating the value of any derivative transaction, only the market 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;


(II) 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





11


(l) 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).


“First Currency” has the meaning given to it in clause 13.1 ( CCurrency indemnity).


“Ghana Petroleum Agreements” means, together, the DWT I’A and Ihe WCTP I’A (and all other amendments and supplements thereto).


“Ghana Petroleum Agreement Seller” means KEI and/or ICED and/or KEG, as applicable.


“Ghana Petroleum Agreement Small Sale Event” means any event which reduces a Ghana Petroleum Agreement Seller’s indirect or direct


interest in the Ghana Petroleum Agreements and where, following such reduction, a Ghana Petroleum Agreement Seller has an indirect or direct


interest in the Ghana Petroleum Agreements which (before and after such reduction) is (i) 100 per cent, or less; and (ii) more than 66 2/3 per cent.


“Ghana Petroleum Agreement Small Sale Percentage Reduction ” means the reduction of a Ghana Petroleum Agreement Seller’s indirect or


direct interest in the Ghana Petroleum Agreements, expressed as a percentage of such Ghana Petroleum Agreement Seller’s indirect or direct interest in


the Ghana Petroleum Agreements as at the first date of this Agreement, which occurs as a result of a Ghana Petroleum Agreement Small Sale Event.


“Ghana Obligor” means KEO, KEI, KEFI, KED, KEG and an “Obligor” from time to time, as defined under the RBL Facility Agreement.


“GNPC” means the Ghana National Petroleum Corporation, a public corporation established by Provisional National Defence Council Law 64 of


1983.


“Government” means the government of any country in which assets of the Group are situated.


“Group” means the Original Guarantor or any Additional Guarantor and its direct and indirect subsidiaries.


“Guarantor” means the Original Guarantor.


“HY Notes” means any debenture, bond (other than performance bonds, bid bonds, retention bonds, advance payments bonds, letters of credit or


trade credit related bonds), note, loan stock or other similar security issued by KEL.


“Illegality Lender” has the meaning given to that term in clause 8.1 (Illegality) of this Agreement.


“Increased Costs” has the meaning given to that term in clause 12.1 (Increased costs) of this Agreement.





12


“Intercreditor Agreement” means the KEFI Intercreditor Agreement;


“IPO” means in relation to a company, a transaction in which shares in that company are sold or issued to investors and in connection with such


sale or issue are admitted to trading on a regulated market or other stock exchange.


“IPO Reorganisation” means any Reorganisation implemented by the Company, or any of its Subsidiaries from time to time (or any group of


them), which is undertaken for the purpose of facilitating an IPO.


“KED” means Kosmos Energy Development, a company incorporated under the laws of the Cayman Islands with registered number 225879 and


having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1 -1209,


Cayman Islands.


“KEFI” means Kosmos Energy Finance International, a company incorporated under the laws of the Cayman Islands with registered number


253656 and having its registered office at P.O. Box 32322. 4th Floor. Century Yard. Cricket Square, Elgin Avenue, George Town, Grand Cayman


KYI-1209, Cayman Islands.


“KEFI Intercreditor Agreement” means the intercreditor agreement dated 23 Nov ember 2012 between, inter alios. (1) KEFI. (2) KF.L,


(3) Standard Chartered Bank, and (4) BNP Paribas.


“KEG” means Kosmos Energy Ghana HC’, a company incorporated under the laws of the Cayman Islands with registered number 135710 and


having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY 1 -1209,


Cayman Islands.


“KEI” means Kosmos Energy International, a company incorporated under the laws of the Cayman Islands with registered number 218274 and


having its registered office at P.O. Box 32322, 4th Floor. Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KYI-1209,


Cayman Islands.


“KEL” means Kosmos Energy Ltd., a company incorporated under the laws of Bermuda with registered number 45011 and having its registered


office at Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda.


“KEO” means Kosmos Energy Operating, a company incorporated under the laws of the Cayman Islands with registered number 231417 and


having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY 1 -1209,


Cayman Islands.


“LC Cash Collateral Accounts” means the bank accounts which are established and maintained by the Original Borrower pursuant to clause 26


{.Bank Accounts) of this Agreement with the Account Bank and which are secured in favour of the Security Agent, details of which are set out at


Schedule 11 (Details of the LC Cash Collateral Accounts).





13


“LC Issuing Bank” means the Original Lender and such of its global facility offices as are required to fulfil a Utilisation requested by the Borrower.


“Lender” means:


(A) the Original Lender; and


(B) any bank or financial institution which has become a Party as a lender in accordance with clause 3.2 ( Additional Commitments) or


clause 21 ( Changes to the Lenders) of this Agreement,


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


“Lender Accession Notice ” means a notice substantially in the form set out under Schedule 7 ( Form of Lender Accession Notice) to be delivered by


a New" Lender pursuant to and in accordance with clause 21.6 ( Procedure for transfer) or by an Additional Lender pursuant to and in accordance


with clause 3.2 (Additional Commitments).


"Letter of Credit” means a letter of credit:


(A) issued in substantially the form set out in Schedule S ( Form of Letter of Credit) of this Agreement;


(B) in such form as already issued under this Agreement; or


(C) in any other form requested by the Borrower and agreed to by the LC Issuing Bank and the Facility Agent.


“Letter or Credit Fee” has the meaning given to that term in clause 10.1 ( Letter of Credit fee).


“Letter of Credit Rate” has the meaning given to that term in clause 10.1 ( Letter of Credit fee).


“Liabilities” means all present and future liabilities and obligations at any time of any Obligor to any Lender under the Finance Documents, both


actual and contingent and whether incurred solely or jointly or in any other capacity together with any of the following matters relating to or arising in


respect of those liabilities and obligations:


(A) any refinancing, novation, deferral or extension;


( B) any claim for breach of representation, warranty or undertaking or on an event of default or under any indemnity given under or in


connection with any document or agreement evidencing or constituting any other liability or obligation falling within this definition;


( C) any claim for damages or restitution; and





14


(D) any claim as a result of any recovery by any Obligor of a Payment on the grounds of preference or otherwise,


and any amounts which would be included in any of the above but for any discharge, non-provability, unenforceability or non-allowance of those


amounts in any insolvency or other proceedings.


“Majority Lenders” means, as applicable, those Lenders whose Commitments then aggregate at least 66 2 i per cent, of the Total Commitments


under the Facility.


“Margin” means 50 basis points per annum.


“Material Adverse Effect” means, in relation to any event (or series of events) or circumstance which occurs or arises, that event (or events) or


circumstance (or any effect or consequence thereof) which, in the opinion of the Majority Lenders, would reasonably be expected materially and


adversely to affect the financial condition, operations, or business of any Obligor or the ability of any Obligor to perform its obligations under the


Finance Documents in full and on the basis contemplated therein in a way which is materially prejudicial to the interests of the Lenders or results in


the Obligors being unable to pay any amounts when due and payable under the Finance Documents.


“Measurement Period” means in respect of a Calculation Date, a period of 12 months ending on the Calculation Date in question.


“Minister” means the Government’s Minister for Energy.


“Moody’s” means Moody’s Investors Service, Inc., a Delaware corporation and any successor thereto and if such corporation shall for any reason


no longer perform the functions of a securities rating agency. Moody’s shall be deemed to refer to any other internationally recognised rating agency


agreed by the Facility Agent and the Company (both acting reasonably).


“Net Interest Payable” means, in relation to the Group for any Measurement Period, Total Interest Payable less Total Interest Receivable for the


Group during that Measurement Period.


“New Commitment Rebalancing” has the meaning given to it in clause 3.2 ( Additional Commitments) of this Agreement.


“New Lender” has the meaning given to it in clause 21.1 (Assignments and transfers and changes in Facility Office by the Lenders ) of this


Agreement.


“Non-Borrower Entity” has the meaning given to it in clause 6.16 ( Letter of Credit issued on behalf of a Non-Borrower Entity).





15


 ‘Non-Funding Lender” means:





(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 repudiated its obligations under the Facility; or


(D) any Lender in respect of which or in respect of whose holding company any of the events specified in clause 20.7 ( Insolvency) or


clause 20.X (Insolvency proceedings) of this Agreement (disregarding paragraph (B) of clause 20.8 ( Insolvency proceedings)) applies or


has occurred.


“Obligor” means the Borrower and each Guarantor.


“Ongoing Letter of Credit” has the meaning given to that term in clause 6.14 ( Cash collateralisation ) of this Agreement.


“Optional Currency” means a currency (other than the Base Currency) which is approved by the LC Issuing Bank in accordance with clause 6.7


(Conditions relating to Optional Currencies).


“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in accordance with


legislation of the European Union relating to Economic and Monetary Union.


“Party” means a party to a Finance Document.


“Payment” means, in respect of any Liabilities (or any other liabilities or obligations), a payment, prepayment, repayment, redemption, defeasance


or discharge of those Liabilities (or other liabilities or obligations).


“Permitted Party” has the meaning given to it in clause 21.8 ( Disclosure of information).


“Permitted Transferee” shall have the meaning given to that term in clause 8.2 ( Change of Control).


“Person” has the meaning given to it in clause 17.15 ( OFAQ.


“Pre-existing Letter of Credit" has the meaning given to it in clause 6.15 ( Transfer of existing Letters of Credit).


“Process Agent” has the meaning given to it in clause 40 ( Service of Process).


“Qualifying Bank" means an internationally recognised bank:





16


(A) which is not subject to Sanctions; or


(B) which does not have its principal place of business in a country which is subject to Sanctions; or


(C) which is not a bank whose principal place of business is in a country notified by the Company to the Facility Agent prior to signing of this


Agreement; or


(D) whose long-term unguaranteed, unsecured securities or debt is rated at least Baa3 (Moody’s) or a comparable rating from an internationally


recognised credit rating agency (except that tins shall not be a requirement if an Event of Default is continuing).


“RBL Facility Agreement” means the facility agreement dated 28 March 2011 between, amongst others, KEFI as original borrower, KEO, KEI,


ICED and KEG as original guarantors, BNP Paribas as facility agent and the Original Lender named therein, as amended on 17 February 2012.


“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.


“Renewal or Extension Request" has the meaning given to that term in clause 6.8(A) (Renewal or extension of a Letter of Credit).


“Reorganisation” means (without limitation) any transaction, deemed transaction, step, procedure or agreement, including (but without limitation)


the transfer, distribution, contribution or settlement of assets and/or liabilities.


“Repeating Representations” means the representations set out under:


(A) clauses 17.1 (Status), 17.2 (Legal validity), 17.3 (Non-conflict) and I 7.4 (Powers and authority) of this Agreement, each as at the time


the power or authority was exercised only; and


(B) clauses 17.5 (Authorisations), 17.8 (Financial statements and other factual information ), 17.9 (Proceedings pending or threatened).


17.10 (Breach of laws), 17.11 (Ranking of security), 17.12 (Pari passu ranking), I 7.13 (No immunity) and 17.15 (OFAO of this


Agreement.


“Replacement Lender” has the meaning given to that term in clause 8.5 ( Right of repayment and cancellation in relation to a single Lender ) of


this Agreement.


“Requested Additional Commitment” has the meaning given to it in clause 3.2 (Additional Commitments).


“Required Approvals” means all material approvals, licences, consents and authorisations necessary in connection with the execution, delivery,


perfonnance or enforcement of any Finance Document.





17


“Revised Termination Date” has the meaning given to it in clause 20.1 7 ( Lender's Termination);


“Sanctions” has the meaning given to it in clause 17.15 ( OFAQ.


“Second Currency” has the meaning given to it in clause 13.1 ( Currency indemnity).


“Secured Liabilities” means at any time and without double counting, all present and future obligations and liabilities (actual or contingent) of each


Obligor ( whether or not for the payment of money and including any obligation to pay damages for breach of contract) which are, or are expressed to


be, or may become due, owing or payable to any or all of the Secured Parties under or in connection with any of the Finance Documents, together


with all costs, charges and expenses incurred by the Security Agent or any Secured Part}' which any Obligor is obliged to pay under any Finance


Document.


"Secured Party" means each of the Lenders, the Facility Agent and the Security Agent.


"Secured Property” means:


(A) the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that


Transaction Security;


(B) all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Liabilities to the Security Agent as trustee for the


Secured Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by an


Obligor in favour of the Security Agent as trustee for the Secured Parties; and


(C) any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is


required by the terms of the Finance Documents to hold as trustee on tmst for the Secured Parties.


"Security Document” means:


(A) the Charge;


(B) any other document entered into at any time by any of the Obligors creating any guarantee, indemnity, Security Interest or other assurance


against financial loss in favour of any of the Secured Parties as security for any of the Secured Liabilities; and


(C) any Security Interest granted under any covenant for further assurance in any of the documents set out in paragraphs (A) and (B) above.


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





18


“Service Document” has the meaning given to it in clause 40 (Service of Process).


“Shareholder” means any funds affiliated with Warburg Pincus and Blackstone Capital Partners or the Blackstone Group.


“Shareholder Affiliate” means any Affiliate of a Shareholder, any trust of which a Shareholder or any of ils Affiliates is a trustee, any partnership


of which a Shareholder or any of its Affiliates is a partner and any trust, fund or other entity which is managed by, or is under the control of, a


Shareholder or any of its Affiliates, provided that any such trust, fund or other entity which has been established for at least six months solely for


the purpose of making, purchasing or investing in loans or debt securities and which is managed or controlled independently from all other trusts,


funds or other entities managed or controlled by a Shareholder or any of its Affiliates which have been established for the primary or main purpose of


investing in the share capital of companies shall constitute a Shareholder Affiliate.


“Shareholder Distribution” means the declaration, making or payment of a distribution to a shareholder (which shall include the payment of any


loans provided by a shareholder).


“Signing Date” means the date on which each of the Finance Documents have been signed, as applicable.


“Sterling” means the lawful currency of the United Kingdom.


“Stock Exchange” means an organised and regulated financial market for the buying and selling of interests in financial instruments where any


securities issued by any Obligor are listed from time to time.


“Subsidiary Beneficiary” Iras the meaning given to it in clause 6.6 (Issue of Letters of Credit).


“Suspension Period End Date” has the meaning given to it in clause 20.17(A) ( Lender's Termination).


“Sum” has the meaning given to it in clause 13.1 ( Currency indemnity).


“Tax” means any tax. levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection


with any failure to pay or any delay in paying any of the same).


“Termination Date” means the earlier of:


(A) the date falling three years from the date of this Agreement or. if not a Business Day, the immediately preceding Business Day; or


( B) if applicable, the Revised Termination Date calculated in accordance with clause 20.17 ( Lender '.v Termination).





19


“Third Parties Act" means the Contracts (Rights ofThird Parties Act) 1999.


“Total Commitments" means the aggregate of the Commitments of the Lenders.


“Total Interest Payable" means, in relation to the Group for any Measurement Period, all interest and other financing charges paid or payable and


incurred by the Group during that Measurement Period.


“Total Interest Receivable" means, in relation to the Group for any Measurement Period, all interest and other financing charges received or


receivable by the Group during that Measurement Period.


"Trade Letter of Credit" means a letter of credit which is not a standby letter of credit and operates as the primary method of payment for specified


goods and or services, instead of a payment obligation of the entity on whose behalf the letter of credit is issued.


"Transaction Security” means the security created or evidenced or expressed to be created or evidenced under or pursuant to the Security


Documents.


“Transfer Certificate" means a certificate substantially in the form set out in Schedule 4 ( Form of Transfer Certificate) of this Agreement or any


other form agreed between the Facility Agent and the Company.


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


(A) the proposed Transfer Date specified in the Transfer Certificate; and


(B) the date on which the Facility Agent executes the Transfer Certificate.


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


“USD” or “US Dollar” means the lawful currency of the United States of America.


“Utilisation” means a utilisation of the Facility by way of a Letter of Credit.


“Utilisation Date” means the date of a Utilisation, being the date on which a Letter of Credit is issued.


“Utilisation Request” means a notice substantially in the form set out in Schedule 3 ( Utilisation Request) of this Agreement.


“VAT’ means value added tax as provided for in the Value Added Tax Act 1994 or any regulations promulgated thereunder and any other tax of a


similar nature.


“WCTP Block” means West Cape Three Points area offshore Ghana, being the area described in Annex 1 to the WCTP PA, but excluding any


portions of such area in





20


respect of which the Contractor’s rights thereunder are from time to time relinquished or surrendered pursuant to the WCTP PA.


“WCTP PA means the petroleum agreement dated 22 July 2004 between the Government of Ghana, represented by the Minister, the GNPC. KEG


and EO in respect of the West Cape Three Points Block Off-shore Ghana (and all amendments and supplements thereto).


1.2 Construction of particular terms


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


(A) “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;


(B) a reference to "assets” includes properties, revenues and rights of every description;


(C) an “authorisation” or “consent” shall be construed as including any authorisation, consent, approval, resolution, licence, exemption,


permission, recording, notarisation, filing or registration:


(D) 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 the


Company shall not create for that authorised officer any personal liability to the Finance Parties;


(E) 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;


(F) 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;


(G) 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;


(H) “continuing” shall, in relation to any Default or Event of Default, be constmed as meaning that sueh Default or Event of Default has not


been remedied or waived;


(I) 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





21


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;


(.1) 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;


(K.) 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;


(L) “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;


(M) 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 ease 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 i f 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):


(N) 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:


(O) 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 the Company would comply) of any governmental body, agency, department or regulatory, self-regulatory


or other authority or organisation;


(I’) the Borrower "repaying” or “prepaying” a Letter of Credit means:


(i) the Borrower providing Cash Collateral for that Letter of Credit:


(ii) the maximum amount payable under that Letter of Credit being reduced in accordance with its terms; or





22


(iii) llic LC Issuing Bank being satisfied that it has no further liability under that Letter of Credit,


and the amount by which a Letter of Credit is repaid or prepaid under paragraphs (P)(i) and (ii) above is the amount of the relevant Cash


Collateral or reduction;


(Q) 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;


(R) 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;


(S) a “subsidiary” of a company or corporation means a subsidiary undertaking within the meaning of section 1162 of the Companies Act


2(1(16 which shall be construed as a reference to any company or corporation:


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


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


corporation; or


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


and, for these purposes, a company or corporation shall be treated as being controlled by another if that other company or corporation is


able to direct its affairs and/or to control the composition of its board of directors or equivalent body;


(T) (lie “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; and


(U) 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





23


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).


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 term 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) such agreement or document or any other agreement or document shall be construed as a reference to each such agreement or


document or, as the case may be, such other agreement or document as the same may have been, or may from time to time be.


amended, varied, novated or supplemented, in each case to the extent permitted under the Finance Documents; 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) A person who is not a patty to this Agreement has no right under the Third Parties Act to enforce or enjoy the benefit of any term of this


Agreement.


(B) 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.





24


 PART 2


CONDITIONS PRECEDENT





CONDITIONS PRECEDENT


Conditions Precedent to first Utilisation


The Company may not deliver a Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Schedule


2 ( Conditions Precedent) in form and substance satisfactory to the Facility Agent (acting reasonably), or their delivery has otherwise been waived.


The Facility Agent (acting reasonably) shall notify the Company and the Lenders promptly upon being so satisfied.


Conditions Precedent to each Utilisation


The Lenders will only be obliged to comply with clause 6.5 ( Lenders 'participation) if. on the proposed Utilisation Date, disregarding for the


purposes of paragraph (A) below the effect of clause 20(A) and 20(B) ( Events of Default)'.


(A) in the case of a Letter of Credit renewed or extended in accordance with clause 6.8 ( Renewal or extension of a Letter of Credit), no Event


of Default is continuing or would result from the proposed Utilisation and. in the case of any other Utilisation, no Default is continuing or


would result from the proposed Utilisation; and


(B) an Authorised Signatory of the Company certifies that 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).


 PART 3


OPERATION OF THE FACILITY





3. THE FACILITY


3.1 Facility Commitment amounts


(A) Subject to the terms of the Finance Documents, the Lenders have agreed to make available to the Borrower a secured multicurrency


revolving letter of credit facility on the terns and conditions set out in this Agreement (the “ Facility”) in an aggregate amount equal to the


Total Commitments.


( B) The Facility may only be utilised by way of Letters of Credit.


3.2 Additional Commitments


(A) KECI may request that the Total Commitments be increased by the provision of additional commitments under the Facility (each such


increase being a “Requested Additional Commitment ”), by providing written notice to the Facility Agent (such notice being an


“Additional Commitment Notice”! provided that,


(i) the Additional Commitment Notice shall be delivered prior to the expiry of the Availability Period:


(ii) the increase in and or. as the ease may be, assumption of Requested Additional Commitments is to take effect before the expiry of


the Availability Period and the maximum aggregate amount of Requested Additional Commitments (including all previous increases


in and/or assumptions of Requested Additional Commitments) shall not exceed US$50,000,000; and


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


(Tv) the terms of the Requested 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 clause 3.2(A) above are fulfilled; and


(ii) specify the date upon which the Requested Additional Commitment is anticipated to be made available to the Borrower (the


“Additional Commitment Date”).


( C) Upon receipt of any notice pursuant to clause 3.2(A) above, the Facility Agent shall promptly notify the Lenders of such request, and on or


before the





26


Additional Commitment Date, each Lender shall inform the Facility Agent of the amount in the Base Currency of the Requested Additional


Commitment which il will make available on a committed basis (each a “ Committed Additional Participation”). The Facility Agent


shall promptly notify K.ECI of the details of each Committed Additional Participation.


(D) If, on the Additional Commitment Date, the aggregate amount of the Committed Additional Participation is less than the Requested


Additional Commitment, the Borrower may agree with any bank or financial institution which is not a Lender (each an “ Additional


Lender”) that they will participate in the Facility provided that:


(i) any such Additional Lender agrees to become a Lender under this Agreement and make available a Commitment on the terms and


conditions of this Agreement and the Borrower notifies the Facility Agent of the same, on or prior to the Additional Commitment


Dale; and


(ii) KEO shall procure that on or prior to the Additional Commitment Date, such Additional Lender delivers a Lender Accession


Notice in the form set out in Schedule 1 (The Original Lender) duly completed and signed on behalf of the Additional Lender and


specifying its Committed Additional Participation to the Facility Agent.


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


(i) the Additional Lender shall make available the relevant Committed Additional Participation for Utilisation under the Facility in


accordance with the terms of this Agreement (as amended):


(ii) the Committed Additional Participation shall rank pari passu with respect to existing Commitments; and


(iii) any necessary rebalancing of the Commitments and outstandings under the Facility and the Committed Additional Participation


provided by the Additional Lender to ensure that they are pro rata (the “ New Commitment Rebalancing") will be made, at the


Borrower’s election, by the Facility Agent making utilisations from the Committed Additional Participation in priority to


utilisations from Commitments under the Facility to procure, as far as practicable, any New Commitment Rebalancing, following


which all utilisations shall be made pro rata.


(F) Each Additional Lender shall become a party to the Finance Documents (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 accedes to the Finance Documents in


accordance with the Finance Documents.


(G) Each party (other than the relevant Additional Lender) irrevocably authorises and instructs the Facility Agent to execute on its behalf any


Lender Accession





27


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 must promptly sign any such Lender Accession Notice (and in any event within three Business Days of


receipt).


(H) The Facility Agent shall only be obliged to execute a Lender Accession Notice delivered to it by an Additional Lender once the Facility Agent


(and LC Issuing Bank) (acting reasonably) has, to the extent that the necessary information is not already available to it. received all


required information to comply with all (i) “know your customer” requirements or (ii) other similar checks required, in each case by law,


regulation or the LC Issuing Bank’s mandatory internal policy (as consistently applied) regarding environmental issues, cat'll in relation to


the accession of such Additional Lender.


(I) 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 Committed Additional Participation; and


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


(.1) Clause 21.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this clause 3.2 in relation to an


Additional Lender as if references in that clause to:


(i) an “Existing Lender” were references to all the Lenders immediately prior to the relevant increase:


(ii) the “New Lender” were references to that “Additional Lender”; and


(iii) a “re-transfer” and “re-assignment” were references to respectively a “transfer” and “assignment”.


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





28


debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.


(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


The Facility shall be used for the purpose of the issue of Letters of Credit in support of documented performance obligations (including payment


obligations), except for any Trade Letters of Credit, or as otherwise agreed by the Parties.


5.2 Monitoring


No Finance Party is bound to monitor or verify the application of any Letter of Credit made pursuant to the Finance Documents.


6. UTILISATION


6.1 Availability Period


Subject to the satisfaction of the relevant Conditions Precedent, the Facility shall be available for drawing during the Availability Period.


6.2 Delivery of a Utilisation Request for Letters of Credit


(A) Subject to clause 6.6(K) (Issue of Letters ofC redit), the Borrower may request a Letter of C redit to be issued by delivery to the Facility


Agent of a duly completed Utilisation Request substantially in the form of Schedule 3 ( Utilisation Request) not later than five Business


Days prior to the proposed Utilisation Date. The Utilisation Request shall attach the form of the proposed Letter of Credit including


confirmation as to whether such form falls within paragraph (A), (B) or (C) of the definition of “Letter of Credit” in clause 1.1


(Definitions).


(B) If the form of the proposed Letter of Credit requires the agreement of the LC Issuing Bank and the Facility Agent pursuant to


paragraph (C) of the definition of “Letter of Credit" in clause 1.1 ( Definitions), in the event that either the LC Issuing Bank or the Facility


Agent does not approve the form, then:


(i) the objecting party shall inform the Borrower of the grounds for its objection and confirm what changes would reasonably need to


be made to make the form of the Letter of Credit acceptable; and


(ii) the Utilisation Request shall be deemed to be revoked (but without the Borrower incurring any eost or liability to any Finance


Party whatsoever as a consequence of sueh revocation).





29


6.3 Completion of a Utilisation Request for Letters of Credit





Each Utilisation Request for a Letter of Credit is irrevocable (except where otherwise provided for in this Agreement) and will not be regarded as


having been duly completed unless:


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


(B) the term of the Letter of Credit requested is not more than five years;


(C) the currency and amount of the Letter of Credit requested complies with clauses 6.4 ( Amount). 6.6 (Issue of Letters of Credit) and 6.7


(Conditions relating to Optional Currencies) respectively;


(D) the form of the Letter of Credit is in the form set out in paragraph (A) or (B) of the definition of “Letter of Credit” in clause 1.1


(Definitions). or is approved by the LC' Issuing Bank pursuant to clause 6.2 ( Delivery of a Utilisation Request for Letters of Credit):


and


(E) the delivery instructions for the Letter of Credit are specified; and


(F) it is accompanied by extracts of those underlying documents related to the Letter of Credit which are reasonably required and requested by


the LC Issuing Bank to facilitate the negotiation and issuance of the Letter of Credit.





6.4 Amount


(A) The amount of any proposed Letter of Credit under the Facility must be a minimum of USD 250.000 (or the equivalent in any Optional





Currency at the Facility Agent's Spot Rate of Exchange) (or such lower amount as agreed between the Parties acting reasonably).


(B) The maximum amount of any single Letter of Credit cannot exceed USD 75.000.000 (or the equivalent in any Optional Currency at the





Facility Agent's Spot Rate of Exchange) (or such higher amount as agreed between the Parties acting reasonably).


(C) The maximum amount of all Letters of Credit issued in favour of a single beneficiary or any number of beneficiaries in a single





jurisdiction cannot at any time exceed USD 75.000.000 (or the equivalent in any Optional Currency at the Facility Agent's Spot Rate of


Exchange) (or such higher amount as agreed between the Parties acting reasonably).


6.5 Lenders’ participation


(A) If the conditions set out in this Agreement have been met, each Lender shall make its participation in the relevant Letter of Credit available


by the Utilisation Date through its Facility Office in accordance with the terms of this Agreement.





30


( B) The amount of a Lender’s participation in that Letter of Credit will be equal to the proportion borne by its Available Commitment to the


Available Facility immediately prior to the making of the relevant [.otter of Credit.


(C) Upon notification of a Utilisation to the Facility Agent pursuant to clause 6.2 ( Delivery of a Utilisation Request for Letters of Credit),


the Facility Agent shall notify each Lender of the Base Currency Amount of each Letter of Credit registered and the Base Currency Amount


of its participation in each such Letter of Credit.


6.6 Issue of Letters of Credit


(A) If the conditions sot out in this Agreement have been met, the LC Issuing Bank shall issue each Letter of Credit on the relevant Utilisation


Date proposed in the Utilisation Request.


(B) The LC Issuing Bank will only be obliged to comply with paragraph (A) above if on the date of the Utilisation Request or Renewal or


Extension Request and on the proposed Utilisation Date:


(i) the making of the proposed Utilisation wouldnot result in the total outstanding Letters of Credit exceeding 40;


(ii) the making of the proposed Utilisation would not result in the aggregate of all outstanding Letters of Credit issued by the


LC Issuing Banks exceeding the Tolal Commitments;


(iii) the LC Issuing Bank and the Lenders have completed all applicable (1) know-your-customer requirements and (ii) compliance


requirements, in each ease as required by law, regulation or the LC Issuing Bank’s mandatory’ internal policy’ (as consistently’


applied) regarding environmental issues, each in relation to the Beneficiary of the Letter of Credit.


(C) Subject to clause 6.14(B) ( Cash collateralisation), the Borrower may request a Utilisation which requires a Letter ofCredit to be issued


by the LC Issuing Bank which has a term greater than the Availability Period under the Facility.


(D) The Borrower may request a Utilisation which requires a Letter of Credit to be issued by the LC Issuing Bank’s Facility Office (or branch)


in any particular country, and the LC Issuing Bank shall, unless prevented from doing so by mandatory internal policy requirements (as


applied consistently) or by applicable law or regulation, satisfy any such request. For the avoidance of doubt, this clause 6.6(D) shall not


apply to any Letter ofCredit required lo be issued by the LC Issuing Bank’s London branch.


(E) If the Borrower requests a Utilisation which requires a Letter ofCredit:





31


(i) to be issued by a financial institution in a country in which the LC Issuing Bank does not have a facility office (or branch); or


(ii) where clause 6.6(D) applies;


the LC Issuing Bank will use ils best efforts, subject to the Borrower’s prior written consent, to procure that such Letter of Credit is issued


through a correspondent bank. In the event that the LC Issuing Bank is requested to issue any Letter ol'Credit through a correspondent


bank then ii shall promptly, and in any event within 15 Business Days of the date of any Utilisation Request, advise the Borrower of any


reasonable additional and documented costs associated with the issue of the Letter of Credit by ils correspondent bank (and the LC Issuing


Bank shall provide the Borrower with copies of any agreement and any documentation providing for and evidencing the payment of such


costs). For the avoidance of doubt the 15 Business Days during which the LC Issuing Bank is required to advise the Borrower of


reasonable additional and documented costs shall have no impact or effect on the Utilisation Date. The LC Issuing Bank shall take all


reasonable steps to minimise any such additional costs. In no event may the LC Issuing Bank increase the Margin or Letter of Credit Fee


payable by the Borrower hereunder or charge any additional amount for its own account as a consequence of the issue of a Letter of Credit


through a correspondent bank which it would not otherwise have been able to charge had the Letter of Credit been issued by it under this


Agreement. Any additional costs properly incurred and payable to the correspondent bank by the LC Issuing Bank in respect of the issue


of the Letter of Credit shall be borne by the Borrower. If the Borrower does not agree to the payment of such costs and/or the identity of the


correspondent bank, it may revoke the Utilisation Request (without incurring any cost or liability to any Finance Party whatsoever for so


doing).


(F) The Borrower may request that a Letter of Credit is issued in the Base Currency or, subject to clause 6.7 ( Conditions relating to


Optional Currencies), in an Optional Currency.


((I) For the avoidance of doubt, subject to clause 6.16 (Letters of Credit issued on behalf of a Non-Borrower Entity) the Borrower may


request that a Letter of Credit is issued on behalf of any member of the Group (and the LC Issuing Bank shall comply with any such


request).


(H) The Borrower may request that a Letter of Credit is issued which is governed by the governing law of any jurisdiction (and the LC Issuing


Bank shall comply with any such request ). Where a Letter of Credit is to be governed by law which is not the law of England, the


Borrower shall, if so requested by the LC Issuing Bank, pay the reasonable legal costs of the LC Issuing Bank incurred in relation to


instructing external advisers to provide it and the Finance Parties with such advice as may reasonably be required in relation to that Letter of


Credit.


(I) In the event that the rating of the LC Issuing Bank’s long-term unguaranteed, unsecured securities or debt falls below A3 (Moody’s) or falls


below a





32


comparable rating from any other internationally recognised credit rating agency, then in any such case the LC Issuing Bank shall, without


imposing any cost or penalty of any kind (arising under this Agreement or otherwise), at the direction of the Borrower novate any Letter of


Credit identified by the Borrower to a person willing to accept the rights and obligations thereunder, subject to:


(i) the Borrower obtaining the prior consent and cooperation of the relevant Beneficiary in relation to the novation of the Letter of


Credit; and;


(ii) the LC Issuing Bank completing all (i) know-your-customer requirements and (ii) compliance requirements which are. in each


case required by law or regulation, each in relation to such person.


In both cases the LC Issuing Bank will, at the Borrower’s cost, cooperate with the Borrower and sign such documents as may be necessary


to effect the relevant transaction provided the LC Issuing Bank is satisfied that such documents release it from all obligations under the


relevant Letter of Credit. The LC Issuing Bank shall have no obligation to procure a person willing to issue replacement Letters of Credit or


have Letters of Credit novated to it.


(.1) The Facility Agent shall notify the LC Issuing Bank and each Lender of the details of each requested Letter of Credit and its participation


in that Letter of Credit within live Business Days.


(K) If the Borrower requests a Utilisation which requires a Letter of Credit to be issued in accordance with clauses 6.6 (D), (E) or (H) above,


the LC Issuing Bank shall not be required lo issue such Letter of Credit or procure that such Letter of Credit is issued unless the Borrower


provides 10 Business Days’ advance notice of such request.


6.7 Conditions relating lo Optional Currencies


The Borrower shall select the currency of a Letter of Credit in the relevant Utilisation Request or Renewal or Extension Request. A Letter of Credit


may be issued in the Base Currency or any currency which is freely convertible into the Base Currency and approved by the LC Issuing Bank


acting reasonably (such currency being an “Optional Currency”). In the event that such currency is not approved by the LC Issuing Bank, the LC


Issuing Bank shall notify the Facility Agent and the Borrower in writing not less than three Business Days prior to the proposed Utilisation Date,


and the relevant Utilisation Request shall be deemed to be revoked upon the delivery of such notice (without the Borrower incurring any cost or


liability to any Finance Party whatsoever).


6.8 Renewal or extension of a Letter of Credit


(A) The Borrower may request any Letter of Credit issued under this Agreement be renewed or extended by delivery to the Facility Agent of a


renewal or extension request in the form set out in Schedule 9 ( Form of Renewal or Extension





33


Request) by the fifth Business Day before the date of the proposed renewal (a “ Renewal or Extension Request”).


( B) The Lenders shall treat any Renewal or Extension Request in the same way as a Utilisation Request for a Letter of Credit.


(C) The terms of each renewed or extended Letter of Credit shall be the same as those of the relevant Letter of Credit immediately prior to its


renewal or extension, except that:


(i) its amount may be less than the amount of the Letter of Credit;


(ii) (in relation to a renewal only) its Term shall start on the date which was the expiry date of the Letter of Credit immediately prior to


its renewal and shall end on the proposed expiry date specified in the Renewal or Extension Request; and


(iii) (in relation to an extension only) its Term shall start on the date which was the start date of the Letter of Credit immediately prior


to its extension, and shall end on the proposed expiry date specified in the Renewal or Extension Request.


(D) If the conditions set out in this Agreement have been met, the LC Issuing Bank shall re-issue and/or amend any Letter of Credit pursuant to


a Renewal or Extension Request.


6.9 Claims under a Letter of Credit


(A) The Borrower irrevocably and unconditionally authorises the LC Issuing Bank to pay any claim made or purported to be made under a


Letter of Credit and which appears on its face to be in order (a “ Claim”).


(B) Subject to paragraph (C) below, the Borrower shall within five Business Days on written demand by the Facility Agent pay to the


LC Issuing Bank for the account of each Lender an amount equal to the amount of any Claim. The Borrower irrevocably authorises the


use by the Facility Agent, the Security Agent and the Account Bank, of amounts standing to the credit of the LC Cash Collateral Accounts


in making such payment and each of the Facility Agent and the Security Agent shall take all such steps (and procure that the Account Bank


takes all such steps) as may reasonably be required (at the cost of the Borrower) for the Borrower to make such payment.


(C) The Borrower acknowledges that the LC Issuing Bank:


(i) is not obliged to carry out any investigation or seek any confirmation from any other person before paying a Claim; and





34


(ii) deals in documents only and will not be concerned with the legality of a Claim or any underlying transaction or any available set¬


off. counterclaim or other defence of any person.


(D) The obligations of the Borrower under this clause will not be affected by:


(i) the sufficiency, accuracy or genuineness of any Claim or any other document; or


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


6.10 Indemnities


(A) Subject to clause 6.9 ( Claims under a Letter of Credit), the Borrower shall immediately on demand indemnify the LC Issuing Bank


against any cost, loss or liability incurred by such LC Issuing Bank in acting as LC Issuing Bank hereunder (otherwise than by reason of


such LC Issuing Bank’s gross negligence or wilful misconduct).


( B) Each Lender shall (according to its portion of the Available Facility), immediately on demand by the Facility Agent (acting on the


instructions of the LC Issuing Bank), indemnify the LC Issuing Bank against any cost, loss or liability incurred by the LC Issuing Bank


(otherwise than by reason of such LC Issuing Bank’s gross negligence or wilful misconduct) in acting as such LC Issuing Bank under any


Letter of Credit (unless that LC Issuing Bank lias been reimbursed by the Borrower pursuant to a Finance Document).


(C) Subject to clause 6.9 ( C '/aims under a Letter of Credit), the Borrower shall immediately on demand reimburse any Lender for any


payment it makes to the LC Issuing Bank under this clause 6.10 (Indemnities).


(D) The obligations of each Lender and the Borrower under this clause are continuing obligations and will extend to the ultimate balance of


sums payable by that Lender or, as (lie case may be, the Borrower in respect of any Letter of Credit, regardless of any intermediate payment


or discharge in whole or in part.


(E) The obligations of a Lender or a Borrower under this clause will not be affected by any act. omission, matter or tiling which, but for this


clause, would reduce, release or prejudice any of its obligations under this clause (without limitation and whether or not known to it or any


other person) including:


(i) any time, waiver or consent granted to. or composition with, any Obligor, any beneficiary under a Letter of Credit or any other


person;


(ii) the release of any other Obligor or any other person under the terms of any composition or arrangement;





35


(iii) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights


against, or security over assets of, any Obligor, any beneficiary under a Letter of Credit or other person or any non-presentation or


non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any


security;


(iv) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor,


any beneficiary under a Letter of Credit or any other person;


(v) any amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit or any other document or


security;


(vi) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Letter of Credit or


any other document or security; or


(vii) any insolvency or similar proceedings.


6.11 Role of the LC Issuing Bank


(A) Nothing in this Agreement designates the LC Issuing Bank as a tmstee or fiduciary of any other person.


( B) The LC Issuing Bank shall not be bound to account to any Lender for any sum, or the profit element of any sum received by it for its own


account.


( C) The LC Issuing Bank may accept deposits from, lend money to and generally engage in any kind of banking or other business with any


member of the Group.


(D) The LC Issuing Bank may rely on:


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


(ii) any statement made by a director, Authorised Signatory or employee of any person regarding any matters which may reasonably


be assumed to be within his knowledge or within his power to verify.


(E) The LC Issuing Bank may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.


(F) The LC Issuing Bank may act in relation to the Finance Documents through its personnel and agents.


(G) The LC Issuing Bank is not responsible for:





36


(i) the adequacy, accuracy and or completeness of any information (whether oral or written) provided by any Party (including itself),


or any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents


or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any


Finance Document: or


(ii) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or


document entered into, made or executed in anticipation of, under or in connection with any Finance Document.


6.12 Credit appraisal by the Lenders


Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each


Lender confirms to the LC Issuing Bank that it has been, and will continue to be. solely responsible for making its own independent appraisal and


investigation of all risks arising under or in connection with any Finance Document including, but not limited to. those listed in paragraphs


(A) to (D) of clause 23.14 (Credit appraisal by the Lenders ).


6.13 Amendments and Waivers


Notwithstanding any other provision of any Finance Document, an amendment or waiver which relates to the rights or obligations of the LC Issuing


Bank may not be effected without the consent of the LC Issuing Bank.


6.14 Cash collateralisation


(A) The Borrower shall deposit and maintain C ash Collateral in the LC C ash Collateral Accounts which is in aggregate at least equal to


73 per cent, of the aggregate USD face value of all outstanding Letters of Credit issued under the Facility at any time.


(B) If any Letter of Credit has an expiry date which is after the Termination Date (an “ Ongoing Letter of Credit") and if the Facility has not


been extended or otherwise replaced, then during the period between the Termination Date and the expiry date of any Ongoing Letter of


Credit, the Borrower shall, for each such Ongoing Letter of Credit, deposit and maintain Cash Collateral in the LC Cash Collateral


Accounts which is at least equal to 100 per cent, of the USD face value of each Ongoing Letter of Credit. For the avoidance of doubt, this


obligation shall survive the occurrence of the Termination Date.


(C) Within five Business Days after a breach of any of the Financial Covenants in clause 18 ( Financial Covenants) the Borrower shall, until


such breach is no longer continuing, deposit and maintain Cash Collateral in the LC Cash Collateral Accounts at least equal to 100 per cent,


of the aggregate USD face value of all current outstanding Letters of Credit drawn under the Facility.





37


(D) The LC Issuing Bank shall (i) every six months from the date of this Agreement. (ii) following notification from the LC Issuing Bank of a


significant currency disruption event, or (iii) at the reasonable request of the Lenders (and to the extent that such day is not a Business Day,


on the immediately following Business Day), the LC Issuing Bank shall determine and inform the Borrower within five Business Days of


the USD face value of the Cash Collateral in the LC Cash Collateral Accounts and the USD face value of each current outstanding Letter of


Credit (the “Forex Calculation”), such amount to he least equal to 75 per cent, of the aggregate USD face value of such current


outstanding Letter of Credit issued under the Facility based on the Facility Agent's Spot Rate of Exchange on the Business Day on which the


Forex Calculation is made.


(F.) If at any time there is insufficient Cash Collateral standing to the credit of the LC Cash Collateral Accounts pursuant to either


clause 6.14(A), 6.14(B), 6.14(C), 6.14(D) or clause 8.2(A)(iii) ( Change of Control), the Borrower shall be required to deposit and


maintain the required additional Cash Collateral in the LC Cash Collateral Accounts within five Business Days of being notified in writing


by the Facility Agent of such insufficiency.


(F) The Borrower may at any time instruct the Facility Agent to instruct the Security Agent and the Account Bank to release any Cash


Collateral standing to the credit of the LC Cash Collateral Accounts (subject to the terms of the Deposit Agreements) which is not then


required to be maintained in that account in accordance with the terms of this Agreement (such amount as calculated and confirmed by the


Facility Agent in each case) (including, if necessary, by releasing any security held over such amount) and for such amount to be paid to


the Borrower or as the Borrower shall instruct (and the Facility Agent and the Security Agent shall comply and shall procure that the


Account Bank complies with such instructions). For the avoidance of doubt, where the Borrower has deposited an amount into the LC


Cash Collateral Accounts to cure or to prevent an Event of Default from occurring or continuing pursuant to clause 20.3 ( Breach of


Financial Covenants), then on and from the date upon which such Event of Default has been (and remains) cured or waived the Borrower


shall be entitled to withdraw any excess amount above the amount which w ould otherwise be required to be deposited into the LC Cash


Collateral Accounts pursuant to clause 6.14(A).


6.15 Transfer of existing Letters of Credit


Upon request by the Borrower, the LC Issuing Bank and the Facility Agent will consult with the Borrower with a view to procuring that any letters of


credit issued by any member of the Group prior to the date of this Agreement (“ Pre-existing Letters of Credit”) become letters of credit issued under


and subject to the terms and conditions of this Agreement. Each such party shall act in good faith and shall use all reasonable endeavours and enter


into such documentation as may reasonably be required to give effect to this clause. If any such existing letter of credit was issued by the LC Issuing


Bank, then the form of such Letter of Credit shall be deemed to be acceptable to both the LC Issuing Bank and the Facility Agent.





38


6.16 Letters of Credit issued on behalf of a Non-Borrower Entity





If the Borrower requests that a Letter of Credit is issued on behalf of a member of the Group (other than the Borrower itself) (a “ Non-Borrower


Entity”) in accordance with clause 6.6(G) (Issue of Letters of Credit) the following conditions shall apply:


(A) the LC Issuing Bank shall have no obligation to issue such a Letter of Credit unless the Borrower has supplied to the LC Issuing Bank


such documentation and other evidence as is requested by the LC Issuing Bank in order for the LC Issuing Bank to carry out and be


satisfied it has complied with all (i) “know your customer” requirements; or (ii) other similar checks, in each case as required under all


applicable laws and regulations in respect of the relevant Non-Borrower Entity;


( B) for the avoidance of doubt, notwithstanding that there may be no mention of the Borrower in the terms of the Letter of Credit, once issued


such Letter of Credit shall be a Letter of Credit under this Agreement and shall be for the account of the Borrower;


(C) the LC Issuing Bank may act in accordance with the proper instructions of a Non-Borrower Entity without reference to. or the approval of.


the Obligors;


(D) neither the LC Issuing Bank nor the Facility Agent shall har e any obligation to inform or deliver to the Obligors any notice or declaration


given to it by any Non-Borrower Entity: and


(E) for the avoidance of doubt, all of the terms of this Agreement shall apply to any Letter of Credit issued on behalf of a Non-Borrower Entity.


39


 P ART 4


PAYMENTS, CANCELLATION, INTEREST AND FEES





7. REPAYMENT


Subject to clause 6.9 ( Claims under a Letter of Credit), if a Claim is made under a Letter of Credit, the Borrower shall repay an amount equal to


the Claim within five Business Days of written demand by the LC Issuing Bank.


8. PREPAYMENT AND CANCELLATION


8.1 Illegality


(A) If it becomes unlawful 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:


(i) that Lender shall promptly notify the Facility Agent upon becoming aware of that event:


(ii) the Borrower shall to the extent possible and at the sole discretion of the Borrower, implement arrangements whereby all of the


Illegality Lender's Commitment is transferred to a Lender or a New Lender and the affected Illegality Lender will provide all


reasonable assistance to facilitate such transfer; and


(iii) where the process described at paragraph (ii) above is not possible, the Commitment of that Lender will be immediately cancelled


and the Borrower shall repay the Illegality Lender's participations in the Utilisations made to the Borrower on the date specified by


the Illegality Lender in the notice delivered to the Facility Agent.


( B) If it becomes unlawful 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) with all reasonable assistance of the Lenders the Borrower shall endeavour to cancel all outstanding Letters of Credit within


00 days of the notice provided under clause 8. l(B)(i) (Illegality).


8.2 Change of Control


(A) Upon a Change of Control:





40


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


(ii) the LC Issuing Bank shall not be obliged to issue any Letter of Credit except pursuant to a Renewal or Extension Request:


(iii) if the Majority Lenders so require, the Borrower shall, as soon as practicable (and in any event within 30 Business Days) deposit


and maintain in the LC Cash Collateral Accounts an amount equal to the aggregate face value of all outstanding Letters of Credit at


that time.


(B) For the purpose of paragraph (A) above, "Change of Control" means any person (or persons with whom they act in concert) other than a


Permitted Transferee acquiring, directly or indirectly, more than 50 per cent, of the ordinary share capital in the Obligor carrying a right to


rote in general meetings of that company. For the avoidance of doubt, a Change of Control shall not occur on an IPO of any shareholder


(directly or indirectly) in the Borrower.


(C) For the purposes of paragraph (B) above, any persons includes more than one person acting in concert and a “ Permitted Transferee”


means:


(i) a Shareholder;


(ii) a Shareholder Affiliate:


(iii) a member of the Group: or


(iv) a person who is otherwise approved by the Majority Lenders (acting reasonably) provided that any Lender which does not grant


its approval may. on not less than 30 days’ written notice to the Facility Agent and the Company, demand that its participation in


the Facility be prepaid in full and that its Commitment be immediately cancelled, provided that the Company may, in accordance


with paragraph (BI of clause 8.5 (Right of repayment and cancellation in relation to a single Lender ). procure the replacement


of that Lender or the transfer of its participation and Commitment to another Lender (with that Lender's consent) rather than such


prepayment and cancellation provided that such replacement or transfer is completed within the relevant notice period given by the


relevant Lender. If such replacement or transfer does not occur within the relevant period, that Lender’s participation in the


Facility shall be immediately due and payable in full by the Borrower and its Commitment immediately cancelled.


8.3 Automatic cancellation


At the close of business in London on the last Business Day of the Availability Period for the Facility, the undrawn Commitment of each Lender


under the Facility at that time shall be automatically cancelled.





41


8.4 Voluntary cancellation





(A) The Company may, by giving not less than 10 Business Days’ (or such shorter period as the Majority Lenders may agree) prior written


notice to the Facility Agent, without penalty, cancel the Available Facility in whole or in part (but if in part, in a minimum amount of


USD 1 million or. if less, the relevant Commitments in the Available Facility). The relevant Commitments in respect of the Facility will be


cancelled on a date specified in such notice, being a date not earlier than 10 Business Days after the relev ant notice is received by the


Facility Agent.


(B) Any valid notice of cancellation will be irrevocable and will specify the date on which the cancellation shall take effect. No part of any


Commitment which has been cancelled or which is the subject of a notice of cancellation may subsequently be utilised.


(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 Facility (at that time).


8.5 Right of repayment and cancellation in relation to a single Lender


(A) If:


(i) the Company reasonably believes that the sum payable to any Lender by an Obligor is required to be increased under clause 11.2


i Tax gross-up);


(ii) the Company receives a notice from the Facility Agent under clause 1 1.3 ( Tax Indemnity) or clause 12.1 (Increased costs):


(iii) any Lender is or becomes a Non-Funding Lender;


(iv) the rating of any Lender’s long-term unguaranteed, unsecured securities or debt is reduced to below A3 (Moody’s) or a comparable


rating from an internationally recognised credit rating agency,


the Company may, while (in the case of paragraphs (i) and (ii) above) the circumstance giving rise to the belief or notice continues or (in the


case of (iii) or (iv) above) the relevant circumstance continues:


(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





42


Lender in relation to the Facility and reinstate all or part of such Available Commitment in accordance with paragraph (B) below;


ot¬


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


(B) The Company may:


(i) in the circumstances set out in paragraph (A) above or pursuant to clause 8.1 ( Illegality) or clause 8.2(A)(ii) ( Change of


Control), replace an Existing Lender (as defined in clause 21 ( 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 lo an assignment or transfer in accordance


with the provisions of clause 21 ( Changes to the Lenders)', or


(ii) in the circumstances set out in paragraph (A)( iv)(a) of this clause 8.5. 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 nol exceeding the Available Commitment of the relevant Non-Funding Lender or Illegality


Lender in relation to the Facility,


in each case on condition that:


(a) each assignment or transfer under this paragraph (B) shall be arranged by the Company (with such reasonable assistance from


the Existing Lender as the Company may reasonably request ); and


(b) no Existing Lender shall be obliged to make any assignment or transfer pursuant lo this paragraph (B) unless and until 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 and fees


and all other amounts payable to the Existing Lender under this Agreement.


(C) On receipt of a notice from the Company referred to in paragraph (A) above, the Commitment of that Lender shall immediately be reduced


to zero.


(D) Within 90 days of the Company having given notice of cancellation under paragraph (A) above (or, if earlier, the date specified by the


Company in that notice), (he Company shall repay that 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 14.1 ( Mitigation).





43


9. INTEREST





9.1 Default interest


(A) Other than Cash Collateral, 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 1 per cent, higher than the rate which would have been payable if the overdue amount had, during the period of


non-payment, constituted a Letter of Credit in the currency of the overdue amount issued for a period equal to the period during which the


overdue amount remains outstanding. Any interest accruing under this clause shall be immediately payable by the Obligor on written


demand by the Facility Agent.


(B) Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each 90-day period


but will remain immediately due and payable.


10. FEES


10.1 Letter of Credit fee


(A) The Borrower shall pay to the LC Issuing Bank, for the account of the Lenders to share rateably in accordance with their participation in


each Letter of Credit, a letter of credit fee at a rate equal to the Margin (the LL Letter of Credit Rate") on the outstanding amount of each


Letter of Credit from the period starting from the Utilisation Date in respect of that Letter of Credit until its expiry date or such earlier date


upon which it is terminated (the “Letter or Credit Fee”).


(B) The Letter of Credit Fee shall continue to be payable on the full outstanding balance of each Letter of Credit. The outstanding balance shall


not be reduced by any amount of Cash Collateral deposited in the LC Cash Collateral Accounts.


(C) The accrued Letter of Credit Fee on each Letter of Credit is payable quarterly in arrears and on the expiry date or such earlier termination


date of each Letter of Credit.


10.2 Arrangement fee


I'lie Borrower shall pay to the Facility Agent (for its own account) an arrangement fee in the amount and at the time agreed in the Fee Letter.


10.3 Security Agent and Facility Agent fee


If the Original Lender ceases to be the sole Lender under the Facility, the Parties shall, acting reasonably, agree fees payable to the Security Agent and


the Facility Agent (the “Security Agent Fee” and the “Facility Agent Fee” respectively). The Borrower shall





44


 pay to the Security Agent and the Facility Agent the Security Agent Fee and the Facility Agent Fee in the amount and at the times agreed in a Fee Letter.





10.4 LC Issuing Bank fee





Where the Original Lender ceases to be the sole lender under the Facility the Parties shall, acting reasonably, agree the LC Issuing Bank fee. The


Borrower shall pay to the LC Issuing Bank the LC Issuing Bank fee in the amount and at the times agreed in a Fee Letter.


45


 PART 5


TAXES, INCREASED COSTS AND INDEMNITIES





11. TAX GROSS-UP AND INDEMNITIES


11.1 Definitions


(A) In this Agreement:


"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.


"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document.


"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under clause 11.2 ( Tax gross-up) or a


payment under clause 11.3 ( Tax Indemnity).


11.2 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 Company shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or


the basis of a Tax Deduction) notify the 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 har e 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.





46


11.3 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,


if in either such case that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum


deemed to be received or receivable) by that Finance Party or that Finance Party’s Facility Office; or


(ii) to the extent a loss, liability or cost is compensated for by an increased payment under clause 11.2 ( Tax gross-up); or


(iii) with respect to any Tax assessed prior to the date which is 180 days prior to the date on which the relevant Finance Party requests


such a payment from the Borrower, unless a determination of the amount claimed could only be made on or after the first of those


dates.


(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 Company 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. The Finance Parties will


undertake to use reasonable endeavours to obtain reliefs and remissions for taxes and deductions and to reimburse the Company for reliefs,


remissions or credits obtained (but without any obligation to arrange its Tax affairs other than as it sees fit nor to disclose any information


about its Tax affairs).


11.4 Tax Credit


(A) If:





47


(i) an Obligor makes a Tax Payment, and


(ii) a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment, and


(iii) that Finance Party has obtained, utilised and retained that Tax Credit.


the Finance Party shall pay an amount to the Obligor which that Finance Party reasonably determines will leave it (after that payment) in the


same after-Tax position as it would have been in but for its utilisation of the 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 lit; or


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


11.5 Stamp taxes


The Company shall, within five Business Days of demand, pay and indemnify each Finance Party against any cost, loss or liability that Finance


Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document other than in respect of an


assignment or transfer by a Lender.


11.6 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 lo and at the same time as paying the consideration) an amount equal lo 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.


12. INCREASED COSTS


12.1 Increased costs


(A) Subject to clause 12.3 (Exceptions) the Borrower shall, within five Business Days of a demand by the Facility Agent, pay for the account


of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its





48


Affiliates as a result of the introduction of or any change in (or in the interpretation, administration or application by any governmental


body or regulatory Authority of) any law or regulation (whether or not having the force of law, but if not, being of a type with which that


Finance Party or Affiliate is expected or required to comply), or as a result of the implementation or application of, or compliance with,


Basel III or any law or regulation that implements or applies Basel III.


(B) In this Agreement “Increased Costs” means:


(i) a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;


(ii) an additional or increased cost; or


(iii) a reduction of any amount due and payable under any Finance Document,


which is (a) material and (b) incurred or suffered by a Finance Party or any of its Affiliates but only to the extent that it is attributable lo that Finance


Party having entered into its Commitment or funding or performing its obligations under any Finance Document.


12.2 Increased cost claims


(A) A Finance Party intending to make a claim pursuant to clause 12.1 (Increased costs) shall notify the Facility Agent of the event giving rise


to the claim, following which the Facility Agent shall promptly notify the Company.


(B) Each Finance Party shall provide a certificate confirming the amount of its Increased Costs.


12..I Exceptions


(A) Clause 12.1 (Increased costs) does not apply to the extent any Increased Cost is:


(i) attributable to a Tax Deduction required by law to be made by an Obligor provided that this clause is without prejudice to any


rights which the affected Lender may have under clause 11.2 ( Tax gross-up) to receive a grossed up payment;


(ii) the subject of a claim under clause 11.3 ( Tax Indemnity) (or might be or have been the subject of a claim under clause 11.3 ( Tax


Indemnity) but for any of the exclusions in paragraph (B) of clause 11.3 ( Tax Indemnity))',


(iii) incurred prior to the date which is 180 days prior to the date on which the Finance Party makes a claim in accordance with


clause 12.2





49


(Increased cost claims), unless a determination of the amount incurred could only be made on or after the first of those dates;


(iv) attributable to the wilful breach by the relevant Finance Party or any of its Affiliates of any law or regulation; or


(v) attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement


and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the


form existing on the date ol'this Agreement (but excluding any amendment contained in Basel III) (“ Basel II") or any other law or


regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator,


Finance Part}- or any of its Affiliates).


(B) In this clause 12.3 (Exceptions), a reference to a "Tax Deduction” has the same meaning given to the term in clause 11.1 ( Definitions).


13. OTHER INDEMNITIES


13.1 Currency indemnity


(A) If any sum due from an Obligor under the Finance Documents (a “ Sum”), or any order, judgment or award given or made in relation to a


Sum. has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the " Second


Currency”) for the purpose of:


(i) making or filing a claim or proof against that Obligor; or


(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,


that Obligor shall as an independent obligation, within five Business Days of demand, indemnify each Finance Party to whom that Sum is


due against any cost, loss or liability arising out of or as a result oi'the conversion including any discrepancy between (a) the rate of


exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that


person at the time of its receipt of that Sum.


(B) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency


unit other than that in which it is expressed to be payable.


13.2 Other indemnities


Each Obligor shall, within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability- incurred by that Finance


Party as a result of:


(A) the occurrence of any Event of Default;





50


( B) a failure by an Obligor to pay any amount due under a Finance Document on its due date.


13.3 Indemnity to the Facility Agent


Each Obligor shall promptly on demand, indemnity the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting


reasonably) as a direct result of:


(A) investigating any event which it reasonably believes is a Default; and


( B) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised by an


Obligor.


14. MITIGATION BY THE LENDERS


14.1 Mitigation


(A) Each Finance Party shall, in consultation with the Company, rise all reasonable endeavours to mitigate or remove any circumstances which


arise and which would result in any facility ceasing to be available or any amount becoming payable tinder or pursuant to. or cancelled


pursuant to, any of clause 8.1 (Illegality!), clause I 1.2 (Tax gross-up) or clause 12.1 (Increased costs) including (but not limited to)


transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.


(B) Paragraph (A) above does not in any way limit the obligations of any Obligor under the Finance Documents.


( C) Each Finance Party shall notify the Facility Agent as soon as it becomes aware that any circumstances of the kind described in


paragraph (A) above have arisen or may arise. The Facility Agent shall notify the Company promptly of any such notification from a


Finance Party.


14.2 Limitation of liability


(A) Each Obligor shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result


of steps taken by it tmder clause 14.1 (Mitigation).


(B) A Finance Party is not obliged to take any steps under clause 14.1 ( Mitigation) if. in the bona fide opinion of that Finance Party (acting


reasonably), to do so might in any way be prejudicial to it.





51


 PART 6


FINANCIAL INFORMATION





15. INFORMATION UNDERTAKINGS


The undertakings in this clause remain in force from the date of this Agreement until the Discharge Date.


15.1 Books of account and auditors


Each Obligor shall:


(A) keep proper books of account relating to its business: and


(B) appoint and maintain as its auditors any Approved Auditor.


15.2 Financial statements


(A) The Borrower shall supply to the Facility Agent (in sufficient copies as most recently notified by the Facility Agent as being sufficient to


allow one copy for each Lender):


(i) as soon as they become available, but in any event within 180 days of the end of each financial year, the audited financial


statements of the Original Guarantor for that financial year, and within 90 days of the end of each financial year, the annual


management reports of the Borrower; and


(ii) within 90 days of the end of each quarter, the unaudited quarterly consolidated financial statements of the Original Guarantor for


that period.


( B) If during any financial year of the Original Guarantor there is a material change in the nature and extent of the accounting transactions


which the Original Guarantor enters into, the Borrower shall promptly inform the Facility Agent thereof and the Borrower shall, if


instructed to do so by the Facility Agent (acting on the instructions of the Majority Lenders (acting reasonably)), supply to the Facility Agent


(in sufficient copies for each Lender), as soon as they become available, but in any event within 180 days of request, the audited financial


statements of the Original Guarantor for its last financial year.


15.5 Year-end


The Borrower shall not change its financial year-end from the Accounting Reference Date without the consent of the Majority Lenders.





52


15.4 Form of financial statements





(A) The Borrower must ensure that each set of financial statements supplied under this Agreement:


(i) is certified by an Authorised Signatory of the Borrower as a true and correct copy; and


(ii) gives (if audited) a tme and fair view of, or (if unaudited) fairly represents, the financial condition of the relevant Borrower for


the period to the date on which those financial statements were drawn up.


(B) Unless otherwise agreed with the Facility Agent, all financial statements delivered under this Agreement shall be prepared in accordance


with the Approved Accounting Principles.


(C) The Borrower must notify the Facility Agent of any material change to the manner in which any audited or unaudited financial statements


delivered tinder this Agreement are prepared.


(D) If requested by the Facility Agent, the Borrower must supply to the Facility Agent:


(i) a full description of any change notified under paragraph (B) above and the adjustments which would be required to be made to


those financial statements in order to cause them to use the accounting policies, practices, procedures and reference period upon


which such financial statements were prepared prior to such change; and


(ii) sufficient information, in such detail and format as may be required by the Facility Agent (aeting reasonably), to enable the


Lenders to make a proper comparison between the financial position shown by the set of financial statements prepared on the


changed basis and its most recent audited or unaudited financial statements delivered to the Facility Agent under this Agreement


prior to such change.


15.5 Compliance Certificate


(A) The Borrower must supply to the Facility Agent a Compliance Certificate with each set of financial statements sent to the Facility Agent


under clause 15.2 (Financial statements), above certifying the matters specified in clause 15.4(A) ( Form of financial statements) above


and compliance with the financial covenants in clauses 18.1 ( Debt cover ratio) and 18.2 (Interest cover ratio) below.


(B) A Compliance Certificate supplied in accordance with paragraph (A) above must be signed by two Authorised Signatories of the Borrower.





53


15.6 Information: miscellaneous





Each Obligor shall supply to the Facility Agent, in sufficient copies for all the Lenders, if the Facility Agent so requests:


(A) all documents dispatched by each Obligor to its Shareholders (or any class of them) or its creditors generally, at the same time as they are


dispatched;


(B) promptly after becoming aware of them, the details of any material litigation, arbitration or administrative proceedings which are currently


threatened or pending against the Guarantor or any member of the Group;


(C) promptly upon them being becoming available, (!) each annual work program and each budget to be delivered to any governmental


ministry or analogous governmental body, in connection with any underlying licence which a Letter of Credit has been granted in relation to


and (ii) any other analogous document or information as reasonably required by the LC Issuing Bank for any Letters of Credit issued for


any purpose which is not related to exploration licences.


(D) promptly, such further information regarding the financial condition, assets, business and operations of the Guarantor or any member of


the Group as the Facility Agent may reasonably request.


15.7 Notification of Default


Each Obligor must notify the Facility Agent of any Default (and the steps, if any. being taken to remedy it) promptly upon becoming aware of its


occurrence.


15.8 “know your customer” and “customer due diligence” requirements


(A) If:


(i) the introduction of or any change in (or in the interpretation, administration or application by any government or regulatory


Authority of) any law or regulation (having the force of law) made after the date of this Agreement;


(ii) any change in the ownership of an Obligor after the date of this Agreement; or


(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a


Lender prior to such assignment or transfer,


obliges the Facility Agent or any Lender (or, in the case of paragraph (C) below, any prospective new Lender) to comply with “know your


customer”, “customer due diligence” or similar identification procedures in circumstances where the necessary information is not already


available to it (or, in the case of paragraph ( C) below, cannot be provided by the transferring Lender from





54


information already provided to it), the Company shall, as soon as reasonably practicable upon the request of the Facility Agent or the


relevant Lender, supply, or procure the supply of. such reasonable documentation and other evidence as is within an Obligor’s possession


and control to enable the Facility Agent or such Lender to comply with all necessary “know your customer”, “customer due diligence” or


other similar checks required under the relevant laws and regulations including using its reasonable efforts to provide any updated or


additional information as may be reasonably requested by the Facility Agent or Lenders to maintain such compliance.


(B) F.ach Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other


evidence as is reasonably requested by the Facility Agent ( for itself) in order for the Facility Agent, as the case may be, to carry out and be


satisfied it has complied with all (i) “know your customer” requirements or (ii) other similar checks, in each case as required under all


applicable laws and regulations, in each case pursuant to the transactions contemplated in the Finance Documents.


(C) The Borrower shall, by not less than 10 Business Days’ prior written notice to the Facility Agent, notify the Facility Agent (which shall


promptly notify the Lenders) of its intention to request that a member of its Group becomes an Additional Guarantor pursuant to this


Agreement.


(D) Following the giving of any notice pursuant to paragraph (C) above, if the accession of such Additional Guarantor obliges the Facility


Agent or any Lender, by law or applicable regulation, to comply with “know your customer” or similar identification procedures in


circumstances where the necessary information is not already available to it. the Borrower shall promptly upon the request of the Facility


Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility


Agent ( for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility


Agent or such Lender or any prospective new Lender to carry out and be satislied it has complied with all necessary “know your customer”


or other similar checks under all applicable laws and regulations pursuant to the accession of such subsidiary to this Agreement as an


Additional Guarantor.


15.9 Use of websites


(A) Except as provided below, each Obligor may deliver any infonnation under the Facility Agreement to the Facility Agent by posting it on to


an electronic website ill


(i) it maintains or has access to an electronic website for this purpose and provides the Facility Agent with the details and password


to access the website and the information; and





55


(ii) the information posted is in a format required by this Agreement or is otherwise agreed between each Obligor and the Facility


Agent (whose approval shall not be unreasonably withheld or delayed).


The Facility Agent must supply each relevant Lender with the address of and password for the website.


(B) Notwithstanding the above, the Company must supply to the Facility Agent within 10 Business Days of request, in paper form a copy of


any information posted on the website together with sufficient copies for any Lender, if that Lender so requests.


( C) Each Obligor must, promptly upon becoming aware of its occurrence, notify' the Facility Agent if:


(i) the website cannot be accessed;


(ii) the website or any information on the website is infected by any electronic virus or similar software;


(iii) the password for the website is changed; or


(iv) any information to be supplied under the Facility Agreement is posted on the website or amended after being posted.


If the circumstances in sub-paragraph (C)(i) or (ii) above occur, an Obligor must supply any information required under this Agreement in paper


form until the circumstances giving rise to the notification are no longer continuing and the information can be provided in accordance with


paragraph ( A) above.





56


 PART 7


GUARANTEE





16. GUARANTEE AND INDEMNITY


16.1 Guarantee and indemnity


Subject to clause I (>.5 ( Limitation on liability), each Guarantor irrevocably and unconditionally jointly and severally:


(A) guarantees to each Finance Party punctual performance by each Borrower of all that Borrower’s obligations under the Finance Documents:


( B) undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance


Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and


( C) indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party if any obligation


guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which


that Finance Party would otherwise have been entitled to recover.


16.2 Continuing guarantee


This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents,


regardless of any intermediate payment or discharge in whole or in part.


16.3 Reinstatement


If any payment by an Obligor or any discharge given by a Finance Party ( whether in respect of the obligations of any Obligor or any security for


those obligations or otherwise) is avoided or reduced as a resnlt of insolvency or any similar event:


(A) the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and


(B) each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment,


discharge, avoidance or reduction had not occurred.


16.4 Waiver of defences


The obligations of each Guarantor under this clause 16 will not be affected by an act. omission, matter or thing which, but for this clause, would


reduce, release or prejudice any of its obligations under this clause 16 (without limitation and whether or not known to it or any Finance Party)


including:





57


(A) any time, waiver or consent granted to, or composition with, any Obligor or other person;


(B) the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of


the Group;


(C) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or


security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in


respect of any instrument or any failure to realise the full value of any security;


(D) any incapacity or lack of power, authority or legal personality or dissolution or change in the members or status of an Obligor or any other


person;


(E) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of


any Finance Document or any other document or security including without limitation any change in the purpose of. any extension of or


any increase in any facility or the addition of any new facility under any Finance Document or other document or security;


(F) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or


security; or


(G) any insolvency or similar proceedings.


16.5 Limitation on liability


No Guarantor shall have any liability under this clause 16 nor shall any Guarantor otherwise be required to make any payment to any Finance Party


or to any trustee or agent on its behalf in respect of any liability of the Borrower which may, at that time, be satisfied by amounts standing to the


credit of the LC Cash Collateral Accounts. Subject to the foregoing, each Guarantor waives any right it may have of first requiring any Finance


Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person claiming from


that Guarantor under this clause 16. This waiver applies, subject to the foregoing, irrespective of any law or any provision of a Finance Document


to the contrary.


16.6 Appropriations


Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents har e been irrevocably paid


in full, each Finance Party (or any trustee or agent on its behalf) may:


(A) subject to clause 6.9 (Claims under a Leila- oft redit). refrain from applying or enforcing any other moneys, security or rights held or


received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such


manner and order as it sees tit (whether





58


 against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and





(B) hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under


this clause 16.


16.7 Deferral of Guarantors’ rights


(A) Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been


irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may har e by reason


of performance by it of its obligations under the Finance Documents:


(i) to be indemnified by an Obligor;


(ii) to claim any contribution lfom any other guarantor of any Obligor’s obligations under the Finance Documents; and or


(lii) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under


the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by


any Finance Party.


(B) I I'a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to


the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection


with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or


as the Agent may direct for application in accordance with clause 27 ( Payment Mechanics ) of this Agreement.


16.8 Additional security


This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.


5 9


 P ART 8


REPRESENTATIONS, COVENANTS, EVENTS OF DEFAULT





17. REPRESENTATIONS


Each Obligor makes the representations and warranties set out in this clause to each Finance Party and acknowledges that each Finance Party lias


entered into the Finance Documents in full reliance on those representations and warranties.


17.1 Status


(A) It is a limited liability or, as the case may be, an exempted company, duly incorporated and validly existing under the laws of its


jurisdiction of incorporation.


< B) It has the power to own its assets and carry on its business as it is being conducted.


17.2 Legal validity


Each Finance Document to which it is a party constitutes, or will constitute when executed, its valid, legally binding and enforceable obligations in


accordance with its terms (subject to any limitation on enforcement under law or general principles of equity or qualifications which are specifically


set out in any legal opinion delivered as a Condition Precedent) and that, so far as it is aware having made all due and careful enquiries, each Finance


Document is in full force and effect.


17.3 Non-conflict


The entry into and performance by it of, and the transactions contemplated by, the Finance Documents to which it is a party do not conflict with:


(A) any applicable law or regulation;


(B) its constitutional documents; or


(C) any agreement binding upon it,


to the extent which has, or could reasonably be expected to have, a Material Adverse Effect.


17.4 Powers and authority


It has (or had at the relevant time) the power and authority to execute and deliver the Finance Documents to which it is a party and it has the power


and authority to perform its obligations under the Finance Documents to which it is a party and the transactions contemplated thereby.





60


17.5 Authorisations





All Required Approvals (except to the extent already provided as a Condition Precedent, or where required by any Authority in respect of any Security


Interest granted (or to be granted) under the Security Documents) have been obtained or effected and are in full force and effect (where a failure to do


so has or could reasonably be expected to have a Material Adverse Effect).


17.6 Stamp and registration duties


Except for registration fees, if any, payable in relation to the Charge, there is no stamp or registration duty or similar Tax or charge in respect of any


Finance Document, which has not been made or paid within applicable time periods (where a failure to do so has. or could reasonably be expected to


have, a Material Adverse Effect).


17.7 No Default


No Default has occurred and is outstanding.


17.8 Financial statements and other factual information


(A) The most recent audited financial statements and interim financial statements delivered to the Facility Agent in accordance with clause 15.2


(Financial statements):


(i) have been prepared in accordance with the Approved Accounting Principles (if relevant); and


(ii) (if audited) give a true and fair view of, or (if unaudited) fairly represent, its financial condition for the relevant period.


( B) All factual information provided by or under the express direction of the Borrower to the Finance Parties in connection with the Facility was


believed by the Borrower at the time it was so provided to be true in all material respects.


17.9 Proceedings pending or threatened


Except as disclosed to the Facility Agent in writing prior to the Signing Date, no litigation, arbitration or administrative proceeding is pending or


threatened which could reasonably be expected to be adversely determined against it and which, if so determined, has, or could reasonably be


expected to have, a Material Adverse Effect.


17.10 Breach of laws


(A) It has not breached any law or regulation which has. or could reasonably be expected to har e, a Material Adverse Effect.


(B) It is in compliance with all environmental laws, a breach of which could reasonably be expected to give rise to a liability on it which has. or


could





61


reasonably be expected to have, a Material Adverse Effect and, so far as it is aware having made due and careful enquiry, there is no


environmental claim outstanding against it which, if adversely determined, would give rise to a liability on it which has, or could


reasonably be expected to have, a Material Adverse Effect.


17.11 Ranking of security


Subject to any limitations on enforcement under law or general principles of equity or qualifications set out in any legal opinion delivered as a


Condition Precedent, each Security Document when executed confers the Security Interests it purports to confer over the assets referred to in that


document and those assets are not subject to any other Security Interest.


17.12 Pari passu ranking


Its payment obligations under the Finance Documents rank at least pari passu with all its other present unsecured obligations, except for obligations


mandatorily preferred by law applying to companies generally.


17.13 No immunity


In any proceedings taken in any relevant jurisdiction in relation to the Finance Documents (or any of them), it shall not be entitled to claim for itself


or any of its assets immunity from suit, execution or attachment or other legal process.


17.14 Ownership of Obligors


(A) The Guarantor beneficially owns, indirectly, all of the issued share capital of the Company.


( B) The issued share capital of the Company is fully paid up and, to the extent applicable, beneficially owned by the Guarantor, free of all


encumbrances or other third party rights.


17.15 OF AC


Each Obligor represents that neither it nor any of its subsidiaries or, to its knowledge, any director, officer, employee, agent or representative of it or


any of its subsidiaries is an individual or entity (“ Person”) currently the subject of any sanctions administered or enforced by the United States


Government, including, without limitation, the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security


Council, the European Union, Fler Majesty’s Treasury, or other relevant sanctions authority (collectively, ''Sanctions"), nor is it or any of its


subsidiaries located, organised or resident in a country or territory that is the subject of Sanctions.





62


17.16 Times for making representations


(A) The representations set out in this clause 17 (other than the representations in clauses 17.4 ( Powers and authority) and 17.5


(Authorisations)) are made by each Obligor on the date of this Agreement. The representation in clause 17.4 ( Powers and authority) will be


made as at the time that the power or authority is exercised only. Each Repeating Representation is deemed to be repeated by each Obligor on


the date of each Utilisation Request, each Utilisation Date and any date when the Letter of Credit Fee is paid by the Borrower.


( B) When a representation is repeated, it is applied to the facts and circumstances existing at the time of repetition.


18. FINANCIAL COVENANTS


18.1 Debt cover ratio


The Company undertakes that on each Calculation Date the ratio of Consolidated Total Net Borrowings to EB1TDAX of the Group for the


Measurement Period shall be less than or equal to 3.50 : 1.00.


18.2 Interest cover ratio


The Company undertakes that on each Calculation Date the ratio of EB1TDAX of the Group to the Net Interest Payable of the Group for the


Measurement Period shall be greater than or equal to 2.25 : 1.00.


18.3 Calculation of ratios on Calculation Date


(A) The Company will give written notice to the Facility Agent of the anticipated occurrence of any Calculation Date together with pro forma


calculations of the ratio of Consolidated Total Net Borrowings to EBITDAX of the Group and EBITDAX of the Group to the Net Interest


Payable of the Group for the relevant Measurement Period.


(B) T he pro forma calculations referred to in paragraph (A) above will:


(i) incorporate all debt and interest of the Group, ignoring any debt that must be mandatorily prepaid as a result of the relevant


Calculation Trigger Event (and also ignoring any related interest) and including any debt envisaged to be incurred (and including


any interest that would have been payable had that debt been incurred at the beginning of the relevant Measurement Period) by the


Group pursuant to the relevant Calculation Trigger Ev ent as though that debt had been incurred at the beginning of the relevant


Measurement Period; and.


(ii) ignore, in instances where the relevant Calculation Trigger Event is a Ghana Petroleum Agreement Small Sale Event, the Ghana


Petroleum Agreement Small Sale Percentage Reduction and any amounts payable





63


to the Group in connection with a Ghana Petroleum Agreement Small Sale Event.


(C) The Company may only proceed with a Calculation Trigger Event which is listed in paragraph (B)(iv) or (B)(v) of the definition of


Calculation Date if the pro forma calculations referred to in paragraph (A) above show that the financial covenants in clause 18.1 ( Debt


cover ratio) and in clause 18.2 (Interest cover ratio) would he met for the relevant Measurement Period, or otherwise only with the consent


of the Majority Lenders.


(D) The Company may only proceed with a Calculation Trigger Event which is listed in paragraph (B)(i), (B)(ii) or (B)(iii) of the definition of


Calculation Date in clause 1.1 ( Definitions) if the pro forma calculations referred to in paragraph (A) above show that the financial


covenants in clause 18.1 (Debt cover ratio) and in clause 18.2 (Interest cover ratio) would be met for the relevant Measurement Period, or


otherwise only with the consent of each Lender.


19. GENERAL UNDERTAKINGS


The undertakings in this clause shall remain in force from the date of this Agreement until the Discharge Date.


19.1 Corporate existence


Each Obligor shall maintain its corporate existence.


19.2 Authorisations


Each Obligor shall promptly obtain and comply with Required Approvals where a failure to do so would have a Material Adverse Effect.


19.3 Compliance with laws


Each Obligor shall comply with all laws and regulations (including compliance with environmental laws, permits and licences) applicable to it where


failure to do so would have a Material Adverse Effect.


19.4 Pari passu ranking


Each Obligor shall ensure that at all times its payment obligations to the Finance Parties under the Finance Documents rank at least pari passu as to


priority of payment with all its other present and future unsecured and unsubordinated Financial Indebtedness, except for claims mandatorily


preferred by operation of law applying generally.


19.5 Security


Each Obligor shall undertake all actions reasonably necessary (including the making or delivery of filings and payment of fees) to maintain the


Security Interests under the





64


Security Documents to which it is party in full force and effect (including the priority thereof).


19.6 Change of business


KEL shall procure that no substantial change is made to the general nature of the business of the Obligors or the Group taken as a whole from that


carried on by the Group as at the date of this Agreement.


19.7 Disposals


Each Obligor shall not, either in a single transaction or in a series of transactions and whether related or not, dispose of all or a material part of its


assets.


19.8 Mergers


No Obligor may enter into any amalgamation, consolidation, demerger, merger or reconstruction or winding-up without the consent of the Majority


Lenders, except on a solvent basis and in circumstances where the Obligor remains the legal entity following such amalgamation, consolidation,


demerger, merger or reconstruction or winding-up.


19.9 Tax affairs


Each Obligor must promptly file all tax returns required by law within the requisite time limits except to the extent contested in good faith and subject


to adequate reserve or provision.


19.10 Distributions


(A) Each Obligor may make, declare or pay a Shareholder Distribution, subject to there being no Default or Event of Default outstanding and


provided that no Default or Event of Default would occur by making such Shareholder Distribution.


( B) For the avoidance of doubt, nothing in paragraph (A) above shall restrict an Obligor from making a Shareholder Distribution at any time


(including at a time when a Default or an Event of Default is continuing) to the extent that the payment of such Shareholder Distribution is


mandatory under the rules of any Stock Exchange.


19.11 OF AC


Each Obligor represents and covenants that neither it nor any of its subsidiaries will, directly or. to such Obligor’s knowledge, indirectly, use the


proceeds of the Facility, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person, to


fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, or in


any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, adviser,


investor or otherwise) of





6 5


Sanctions. Furthermore, each Obligor represents and covenants that it and each of its subsidiaries is in compliance with Council Regulation (EU) No


961/2(11(1 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007.


19.12 Restricted Entity


The Borrower undertakes that it shall not nominate as a Beneficiary any person currently the subject of Sanctions, or located, organised or resident


in a country or territory that is the subject of Sanctions.


19.13 Insurance


The Obligors shall maintain insurances, with reputable independent insurance companies or underwriters , on and in relation to their respective


business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.


19.14 Constitutional documents


Each Obligor shall notify the Facility Agent of any amendment to any of its constitutional documents in a manner that has, or could reasonably be


expected to have, a Material Adverse Effect.


20. EVENTS OF DEFAULT


Subject to the following, each of the events or circumstances set out in this clause is an Event of Default unless otherwise stated. Notwithstanding


any other provision of any Finance Document:


(A) no Event of Default will or may occur under this Agreement or be continuing where (and for so long as) Cash Collateral has been deposited


into the LC Cash Collateral Accounts which is at least equal to 100 per cent, of the aggregate face value of all outstanding Letters of Credit;


and


(B) any Event of Default which has occurred will be fully and effectively remedied and shall be deemed not to be continuing if and when Cash


Collateral which is at least equal to 100 per cent, of the aggregate face value of all outstanding Letters of Credit is deposited into the LC Cash


Collateral Accounts.


20.2 Non-payment


An Obligor does not pay any amount payable by it to any Finance Party (or to the Facility Agent for its own account) under the Finance Documents


in the manner and on the date required under the Finance Documents within fir e Business Days of its due date.





6 6


20.3 Breach of financial covenant


The Borrower does not comply with the provisions of the Financial Covenants, provided that where the debt cover ratio or interest cover ratio has


been breached, the Borrower shall have 45 days within which to remedy any breach of the relevant financial covenant by means of a prepayment


and/or a cancellation of the Facility where any prepayment is funded by the provision of Additional Debt subordinated on terms acceptable to the


Majority Lenders (acting reasonably), or by the contribution of equity to the capital of the Borrower or by taking such other remedial action as may


be approved by the Majority Lenders provided always that the Borrower shall be entitled to remedy any such breach not more than twice in total and


not more than once in any 12-month period.


20.4 Breach of other obligations


An Obligor does not comply with any other provision of the Finance Documents to which it is a party (other than in respect of non-payment or breach


of a Financial Covenant), unless the non-compliance is:


(A) capable of remedy; and


(B) remedied within 30 days of the earlier of the Facility Agent giving notice or the Obligor becoming aware of the non-compliance.


20.5 Misrepresentation


Any representation or statement made or deemed to be made by an Obligor in the Finance Documents is or proves to have been incorrect or misleading


in any material respect when made or deemed to be made (or. in the case of a representation or statement that contains a materiality concept, is or


proves to have been incorrect or misleading in any respect when made or deemed to be made), unless the misrepresentation is:


(A) capable of remedy; and


(B) remedied within 30 days of the earlier of the Facility Agent giving notice or the relevant Obligor becoming aware of the misrepresentation.


20.6 Cross-default


(A) Any Financial Indebtedness of any Obligor is not paid when due nor within any applicable grace period.


(B) Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result


of an event of default (however described) and such amount is not paid w hen due.


(C) Notwithstanding paragraphs (A) and (B) above, no Event of Default will occur under this clause if the aggregate amount of Financial


Indebtedness or commitment for Financial Indebtedness is less than USD 100 million (or its





67


equivalent in any other currency or currencies) or if the relevant event or default has been waived, or if such event or default is caused by a


Disruption Event, provided that, in the case of a Disruption Event the requisite payment is made within five Business Days.


20.7 Insolvency


Any of the following occurs in respect of an Obligor:


(A) it is, or is deemed for the purposes of any law to be. unable to, or admits its inability to, pay its debts as they fall due or is or becomes


insolvent or a moratorium is declared in relation to its indebtedness generally; or


(B) it stops or suspends or threatens to suspend, or atnrorurces an intention to stop or suspend making payment of all or any class of its debts


as they fall due in default of the obligation to make the relevant payment


20.8 Insolvency proceedings


(A) Except as provided in paragraph (B) below, any of the following occurs in respect of an Obligor:


(i) a written resolution is passed or a resolution is passed at a meeting of its shareholders, directors or other officers to petition for or


to file documents with a court or any registrar for its winding-up, administration or dissolution:


(ii) any person presents a petition, or files documents with a court or any registrar for its winding-up, administration or dissolution;


(i i i) an order for its winding-up, administration or dissolution is made;


(iv) any liquidator, provisional liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative


receiver, administrator or similar officer is appointed in respect of it or any material part of its assets;


(v) a moratorium is declared in relation to the indebtedness of an Obligor:


(vi) its shareholders, directors or other officers request the appointment of. or give notice of their intention to appoint a liquidator,


trustee in bankruptcy, judicial custodian, compulsory manager, provisional liquidator, receiver, administrative receiver,


administrator or similar officer;


(vii) any composition, compromise, assignment or arrangement is made with any of its creditors; or


(viii) any other analogous step or procedure is taken in any jurisdiction.





68


 (B) Paragraph ( A) docs not apply to:





(i) any step or procedure which is part of a re-organisation of an Obligor on a solvent basis with the consent of the Majority Lenders


(acting reasonably); or


(ii) an IPO Reorganisation: or


(iii) in the case of sub-paragraph (ii) or (iv) (or any slop or procedure under sub-paragraph (vi) that is analogous to sub-


paragraph (ii) or (iv)). if the relevant step, petition or filing is made by a person other than an Obligor, shareholder or their


respective officers or directors and the relevant Obligor is taking steps in good faith and with due diligence for such proceedings or


action to be stayed, discontinued, revoked or set aside and the same is stayed, discontinued, revoked or set aside within a period


of 60 days; or


(iv) any Enforcement Action that applies to assets having an aggregate value of less than USD 100 million.


20.9 Creditors’ process


Any attachment, sequestration, distress, execution or analogous event affects any asset(s) of an Obligor, having an aggregate value of at least


USD 16 million, and is not discharged within 46 days.


20.10 Unlawfulness and invalidity of the Finance Docu incuts


I fall or any part of a Finance Document is not, or ceases to be, a legal, valid, binding and enforceable obligation of an Obligor, and:


(A) the Company fails, within 30 days of becoming aware of the matter, to procure the execution of a substitute agreement or agreements on


substantially the same terms and with a commercially qualified party or parties acceptable to the Majority Lenders (acting reasonably); or


( B) the matter is not otherwise remedied within 30 days of an Obligor becoming aware of the matter.


20.11 Cessation of business


An Obligor ceases, or threatens to cease, all or a substantia] part of its business (as carried on at the date of this Agreement).


20.12 Repudiation of Finance Documents


Any Finance Document is repudiated or rescinded by an Obligor.





6 9


20.13 Material litigation


Any material litigation, arbitration or administrative proceedings are commenced, threatened or pending against an Obligor which could reasonably


be expected to be adversely determined against it and which, if so determined, has, or would have, a Material Adverse Effect.


20.14 Material Adverse Effect


Any event which, in the opinion of the Majority Lenders (acting reasonably), has a Material Adverse Effect but only following consultation between


the Facility Agent and the Company over a period of not less than 30 days with a view to agreeing steps of mitigation (each Party acting reasonably


with a view to appropriate remedial action being taken).


20.15 Acceleration


On and at any time after the occurrence of an Event of Default which is continuing, the Facility Agent may, and shall if so directed by the Majority


Lenders, by notice to the Borrower:


(A) cancel the Total Commitments whereupon they shall immediately be cancelled:


(B) declare that all accrued fees, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable-


las applicable);


(C) require the Borrower to provide 100% Cash Collateral to the relevant LC Issuing Bank in respect of any outstanding uncollateralised


liabilities under each Letter of Credit; and/or


(D) exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under any of the Finance Documents.


20.16 Notification of Event of Default


The Facility Agent shall notify the Security Agent of the occurrence of any Event of Default.


20.17 Lender’s Termination


(A) On the occurrence of an event or circumstance set out in clause 20 which, but for the operation of clause 20(A) and or 20(B) would be an


Event of Default, and which continues for an uninterrupted period until the date which is at least 90 days after the Borrower first received


notice or became aware of the event or circumstance in question (such date being the " Suspension Period End Date"), the Facility Agent


may, on any date selected by it falling after the Suspension Period End Date (provided that on such selected date the event or circumstance


in question is still continuing) provide written notice of the revised Termination Date for the Facility ( the “ Revised Termination Date”),


which





70


written notice shall be delivered to the Borrower in accordance with the terms of this Agreement no later than five Business Days prior to


such Revised Termination Date.


During the period beginning on the date upon which the Borrower first receives notice or becomes aware of an event or circumstance which,


but for the operation of clause 2()( A) and/or 20(B) would be an Event of Default, and ending on the Suspension Period End Date relating to


that event or circumstance, the Borrower, the LC Issuing Bank and the Facility Agent shall negotiate in good faith with a view to resolving


the cause of the event or circumstance in question.


 PART 9


CHANGES TO LENDERS AND OBLIGORS AND ROLES





21. CHANGES TO THE LENDERS


21.1 Assignments and transfers and changes in Facility Office by the Lenders


Subject to this clause and to clause 21.2 ( Transfer ofLC Issuing Bank role), a Lender (the "Existing Lender”) may:


(A)


(i) assign any of its rights; or


(ii) transfer by novation any of its rights and obligations,


to an Affiliate, another Lender, an Affiliate of another Lender or a Qualifying Bank, another bank or financial institution or to a trust or other entity


which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets or such


other institution as the Borrower may agree in writing (the “ New Lender”), or


( B) change its Facility Office.


21.2 Transfer of LC Issuing Bank role


The Original Lender, who at the Signing Date holds the role of LC Issuing Bank, may not, without the prior written consent of the Borrower, assign,


novate or otherwise transfer its rights or obligations as LC Issuing Bank.


21.3 Conditions of assignment and transfer or change in Facility Office


(A) The consent of the Company is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is (i) to. or


in favour of, another Lender, an Affiliate of a Lender or a Qualifying Bank, or (ii) made at a time when an Event of Default is continuing.


(B) The consent of the Company is required for a change in Facility Office to a different jurisdiction. In the case of a change of Facility Office


for which the Company’s consent is not required, the Lender must notify the Company of the new Facility Office promptly on the change


taking effect.


( C) The consent of the Company to an assignment or transfer or change in Facility Office must not be unreasonably withheld or delayed (and


will be deemed to have been given five Business Days after the relevant Lender has requested it unless consent is expressly refused by the


Company within that time).


(D) An assignment will only be effective on:





72


(i) receipt by the Facility Agent of written confirmation from the New Lender (in form and substance satisfactory to the Facility


Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an


Original Lender; and


(ii) the New Lender entering into the documentation required for it to accede as a party to the relevant Finance Documents.


(E) A transfer will only be effective if the procedure set out in clause 21.6 ( Procedure for transfer) is complied with.


(F) If:


(i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and


(ii) as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a


payment to the New Lender or Lender acting through its new Facility Office under clause 11 ( Tax Cross-Up and Indemnities) or


clause 12 (Increased costs),


then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same


extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had


not occurred.


(G) Each New Lender, by executing the relevant Transfer Certificate confirms, for the avoidance of doubt, that the Facility Agent has authority


to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance


witli the Finance Documents on or prior to the date on which the transfer or assignment becomes effective in accordance with this


Agreement.


(II) Any assignment or transfer of part of the Existing Lender’s rights and/or obligations must be a minimum of USD 5 million (or, if less, the


entire Commitment of the Existing Lender) and must not result in the Existing Lender retaining less than USD 5 million, unless the


assignment or transfer is made at a time when an Event of Default is continuing.


21.4 Assignment or transfer fee


The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent I for its own account) a fee of


USD 2,500.


21.5 Limitation of responsibility of Existing Lenders


(A) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New


Lender for:





73


(i) the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;


(ii) the financial condition of any Obligor;


(iii) the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or


(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other


document,


and any representations or warranties implied by law are excluded.


( B) Each New Lender confirms to the Existing Lender and the other Finance Parties that it:


(i) has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of


each Obligor and its related entities in connection with its participation in the Facility and has not relied exclusively on any


information provided to it by the Existing Lender in connection with any Finance Document; and


(ii) will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any


amount is or may be outstanding under the Finance Documents or any Commitment is in force.


(C) Nothing in any Finance Document obliges an Existing Lender to:


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


clause; or


(ii) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its


obligations under the Finance Documents or otherwise.


21.6 Procedure for transfer


(A) Subject to the conditions set out in clause 21.3 ( Conditions of assignment and transfer or change in Facility Office ) a transfer is effected


in accordance with paragraph (B) below when the Facility Agent exeeutes an otherwise duly completed Transfer Certificate and Lender


Accession Notice delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, as soon as reasonably practicable


after receipt by it of a duly completed Transfer Certificate and Lender Accession Notice appearing on its face to comply with the terms of


this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and Lender Accession Notice


on behalf of the other Finance Parties and the Obligors as well as itself, and notify the Company of the date of the transfer and name of the


New Lender. Each Finance Party





74


 and each Obligor irrevocably authorises the Facility Agent to sign such a Transfer Certificate and Lender Accession Notice on its behalf.





(B) On the Transfer Date:


(i) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the


Finance Documents, each of the Obligors and the Existing Lender shall be released from further obligations towards one another


under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled


(being the “Discharged Rights and Obligations ”);


(ii) each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another


which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or


acquired the same in place of that Obligor and the Existing Lender;


(iii) the Facility Agent, the New Lender and the other Finance Parties shall acquire the same rights and assume the same obligations


between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or


obligations acquired or assumed by it as a result of the transfer and to that extent such Finance Parties and the Existing Lender


shall each be released from further obligations to each other under the Finance Documents; and


(iv) the New Lender shall become a Party as a “ Lender”.


21.7 Copy of Transfer Certificate and Lender Accession Notice to Borrower


The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate and Lender Accession Notice, send to the


Company a copy of that Transfer Certificate and Lender Accession Notice.


21.8 Disclosure of information


Any Lender, its officers and agents may disclose to any of its Affiliates (including its head office, representative and branch offices in any


jurisdiction) (each a “Permitted Party”) and:


(A) to any person (or through) whom that Lender assigns or transfers (or may potentially assign or transfer) all or any of its rights and


obligations under this Agreement (or any adviser on a need-to-know basis advising such person on any of the foregoing);


(B) to a professional adviser or a service provider of the Permitted Parties on a need-to-know basis advising such person on the rights and


obligations under





75


the Finance Documents or to an auditor of any Permitted Party on a need-to-know basis;


(C) with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to. or any other transaction


under which payments are to be made by reference to. this Agreement or any Obligor (or any adviser of any of the foregoing on a need-to-


know basis advising such person on the rights and obligations under the Finance Documents);


(D) to any rating agency (provided only general terms are disclosed in relation to the rating of a portfolio of assets), insurer or insurance broker,


a direct or indirect provider of credit protection in respect of the Lender’s participation in the Facility only on a need-to know-basis;


(E) to any court or tribunal or regulatory, supervisory, governmental or quasi-govemmental authority with jurisdiction over the Permitted


Parties who requires disclosure of that information (where the Permitted Party has a legal obligation to provide that information or, if not, is


customarily obligated or required to comply with such requirement);


(F) to whom, and to the extent that, information is required to be disclosed by any applicable law" or regulation; or


(G) to any person who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any


transaction referred to in paragraph (A) or (C) above,


any information about any Obligor, the Group and the Finance Documents as that Lender shall consider appropriate if. in relation to paragraphs


(A) to (C) above, the person to whom the information is to be given has entered into a Confidentiality Undertaking (unless such person is already


subject to professional confidentiality requirements which are no less stringent than those which are set out in a Confidentiality Undertaking) and


provided that it shall itself ensure that all such information is kept confidential and is protected with security measures and a degree of care that


would apply to its ow n confidential information.


21.9 Security over Lenders' rights


In addition to the other rights provided to Lenders under this clause 21. each Lender may without consulting with or obtaining consent lfom any


Obligor, at any time charge, assign or otherwise create any Security Interest in or over (whether by way of collateral or otherwise) all or any of its


rights under any Finance Document to secure obligations of that Lender including, without limitation:


(A) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and


(B) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or


representatives of





76


 holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,





except that no such charge, assignment or Security Interest shall:


(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge,


assignment or Security Interest for the Lender as a party to any of the Finance Documents; or


(ii) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than,


those required to be made or granted to the relevant Lender under the Finance Documents.


22. CHANGES TO THE OBLIGORS


22.1 Assignments and transfers by Obligors


No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.


22.2 Additional Guarantor


(A) Subject to compliance with the provisions of paragraphs (C) and (D) of clause 15.8 ( "Know your customer" and "customer due


diligence " requirements), the Borrower may request that any member of the Group becomes an Additional Guarantor. That Group


member shall become an Additional Guarantor if:


(i) the Company delivers to the Facility Agent an Accession Letter duly completed and executed by that Additional Guarantor and the


Company; and


(ii) the Facility Agent has received all of the documents and other evidence listed in Part II of Schedule 2 ( Conditions Precedent) in


relation to that Additional Guarantor, each in form and substance satisfactory to the Facility Agent.


( B) The Facility Agent shall notify the Company and the Lenders promptly upon being satisfied (aeting reasonably) that it has received (in


form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 ( Conditions Precedent).


77


23. ROLE OF THE FACILITY AGENT AND THE ARRANGER





23.1 Appointment of the Facility Agent


(A) Each Finance Party (other than the Facility Agent) appoints the Facility Agent to act in that capacity under and in connection with the


Finance Documents.


(B) Each other Finance Party authorises the Facility Agent to exercise the rights, powers, authorities and discretions specifically given to it


under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.


23.2 Duties of the Facility Agent


(A) The Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that


Party by any other Party.


( B) Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy,


accuracy or completeness of any document it forwards to another Party.


(C) If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance


described is a Default, it shall promptly notify the Finance Parties.


(D) If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other


than to an Agent) under this Agreement, it shall promptly notify the other Finance Parties.


(F.) The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.


23.3 No fiduciary duties


(A) Except as specifically provided in the Finance Documents, nothing in this Agreement constitutes the Facility Agent as a trustee or fiduciary


of any other person.


( B) The Facility Agent shall not be bound to account to any Lender for any sum or the profit element of any sum received by it for its own


account.


23.4 Business with the Group


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


Group.





7

23.5 Rights and discretions of the Facility Agent





(A) The Facility Agent may rely on:


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


(ii) any statement made by a director, Authorised Signatory or employee of any person regarding any matters which may reasonably


be assumed to be within his knowledge or within his power to verify.


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


(i) no Default has occurred (unless it has actual knowledge of a Default arising under clause 2(1.2 ( Non-payment));


(ii) any right, power, authority or discretion vested in any Party or the Lenders (or any consistent majority of Lenders) lias not been


exercised; and


(iii) any notice or request made by the Company (other than a Utilisation Request) is made on behalf of and with the consent and


knowledge of all the Obligors.


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


(D) The Facility Agent may act in relation to the Finance Documents through its personnel and agents.


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


(F) Notwithstanding any other provision of any Finance Document to the contrary, the Facility Agent is obliged to do or omit to do anything if


it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of


confidentiality.


23.6 Lenders’ instructions


(A) Unless a contrary indication appears in a Finance Document, the Facility Agent shall (i) exercise any right, power, authority or discretion


vested in it as Facility Agent in accordance with any instructions given to it by the Lenders in accordance with this Agreement (or, if so


instructed, refrain from exercising any right, power, authority or discretion vested in it as Facility Agent) and (ii) not be liable for any act (or


omission) if it acts (or refrains from taking any action) in accordance with such instructions.





79


(B) The Facility Agent may refrain from acting in accordance with instructions given to it by the Lenders in accordance with this Agreement


until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in


complying with the instructions.


(C) In the absence of instructions in accordance with this Agreement the Facility Agent may act (or refrain from taking action) as it considers to


be in the best interest of the Lenders.


(D) The Facility Agent is not authorised to act on behalf of a Lender ( without first obtaining that Lender’s consent) in any legal or arbitration


proceedings relating to any Finance Document.


2.1.7 Responsibility for documentation


The Facility Agent:


(A) is not responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Facility


Agent, an Obligor or any other person given in or in connection with any Finance Document; or


(B) is not responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement,


arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.


2.1.8 Exclusion of liability


(A) Without limiting paragraph ( B) below (and without prejudice to the provisions of paragraph (E) of clause 27.9 ( Disruption to Payment


Systems etc.), the Facility Agent shall not be liable (including, without limitation, for negligence or any other category of liability


whatsoever) for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or


wilful misconduct.


(B) No Party (other than the Facility Agent) may take any proceedings against any officer, employee or agent of the Facility Agent in respect of


any claim it might have against it or in respect of any act or omission of any kind by that officer, employee or agent in relation to any


Finance Document and any officer, employee or agent of the Facility Agent may rely on this clause.


(C) The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the


Finance Documents to be paid by it if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the


regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.





80


23.9 Lenders’ indemnity to the Facility Agent





Each Lender shall (in proportion to its share of the Total Commitments or. if the Total Commitments are then zero, to its share of the Total


Commitments immediately prior to their reduction to zero) indemnify' the Facility Agent within three Business Days of demand, against any cost,


loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by it (otherwise than by reason of


the Facility Agent’s gross negligence or wilful misconduct) (or. in the case of any cost, loss or liability pursuant to clause 27.9 ( Disruption to


Payment Systems etc.) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not


including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has


been reimbursed by an Obligor pursuant to a Finance Document).





23.10 Resignation of the Facility Agent





(A) The Facility Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving


notice to the other Finance Parties and the Company.


(B) Alternatively, the Facility Agent may resign by giving notice to the other Finance Parties and the Company, in which case the Majority


Lenders may appoint a successor Facility Agent.


(C) If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (B) above within 30 days after notice of





resignation was given, the Facility Agent may (with the prior written consent of the Company) appoint a successor Facility Agent (acting


through an office in the United Kingdom).


(D) The retiring Facility Agent shall, at its own cost, make available to the successor Facility Agent such documents and records and provide





such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under


the Finance Documents. This obligation shall not apply in the event the Facility Agent is required to resign pursuant to


paragraph (G) below.


(E) The Facility Agent’s resignation notice shall only take effect upon the appointment of a successor.





(F) Upon the appointment of a successor, a retiring Facility Agent shall be discharged from any further obligation in respect of the Finance


Documents but shall remain entitled to the benefit of this clause 23.10. Its successor and each of the other Parties shall have the same rights


and obligations amongst themselves as they would have had if such successor had been an original Party.


(G) After consultation with the Company, the Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with


paragraph (B) above.





SI


23.11 Replacement of Administrative parties





(A) If:


(i) in relation to the Facility Agent (or its holding company), clause 20.7 ( Insolvency) or clause 20.8 (Insolvency proceedings)


(disregarding paragraph (B) of that clause) applies or lias occurred; or


(ii) if the Facility Agent or any of its Affiliates repudiates its obligations under the Facility or ( in its capacity as Lender) becomes a


Non-Funding Lender,


the Company shall be entitled to request that Majority Lenders appoint within 10 Business Days either a co-Facility Agent or a replacement


Facility Agent from one of their number or (subject to reasonable consultation with the Company), from outside the Lender group.


(B) The Facility Agent to which either of the circumstances described in (A)(i) or (A)( ii) above applies (an “ Affected Facility Agent”) shall


cease to be entitled to fees in respect of its role upon becoming an Affected Facility Agent.


(C) The Affected Facility Agent shall provide all assistance and documentation reasonably required to the Company and the other Lenders to


enable the uninterrupted administration of the Facility. This shall include the provision to the Company on request and in any event, within


five Business Days, of an up to date list of participants in the Facility including names and contact details.


23.12 Confidentiality


(A) In acting as agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division performing the role


which shall be treated as a separate entity from any other of its divisions or departments.


(B) If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or


department and the Facility Agent shall not be deemed to have notice of it.


23.13 Facility Agent relationship with the Lenders


The Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has


received not less than five Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement


23.14 Credit appraisal by the Lenders


Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each


Lender confirms to the Facility Agent that it has been, and will continue to be, solely responsible for making its own





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independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:


(A) the financial condition, status and nature of the Guarantor and each member of the Group;


(B) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document


entered into, made or executed in anticipation of. under or in connection with any Finance Document:


(C) whether that Lender has recourse, and the nature and extent of that recourse, against any Part}' or any of its respective assets under or in


connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or


document entered into, made or executed in anticipation of. under or in connection with any Finance Document; and


(D) the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any Party or by any other person under or


in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or


document entered into, made or executed in anticipation of, under or in connection with any Finance Document.


23.15 Deductions from amounts payable by Agents


If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an


amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance


Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents, that Party


shall be regarded as having received any amounts so deducted.


24. THE SECURITY AGENT


24.1 Trust


(A) The Security Agent declares that it shall hold the Secured Property on trust for the Secured Parties on the terms contained in this Agreement.


(B) Each of the Secured Parties to this Agreement agrees that the Security Agent shall have only those duties, obligations and responsibilities


expressly specified in this Agreement or in the Security Documents to which the Security Agent is expressed to be a party (and no others


shall be implied).





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24.2 No independent power





The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any rights or


powers arising under the Security Documents except through the Security Agent.


24.4 Instructions to Security Agent and exercise of discretion


(A) Subject to paragraphs (D) and (E) below, the Security Agent shall act in accordance with any instructions given to it by the Majority


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


Security Agent and shall be entitled to assume that (!) any instructions received by it from the Facility Agent or a group of Lenders are duly


given in accordance with the terms of the Finance Documents and (ii) unless it has received actual notice of revocation, that those


instructions or directions have not been revoked.


(B) The Security Agent shall be entitled to request instructions, or clarification of any direction, from the Majority Lenders as to whether, and


in what manner, il should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Agenl may


refrain from acting unless and until those instructions or clarification are received by it.


(C) Any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties.


(D) Paragraph (A) above shall not apply:


(i) where a contrary indication appears in this Agreement;


(ii) where this Agreement requires the Security Agent to act in a specified manner or to take a specified action;


(iii) in respect of any provision which protects the Security Agent’s own position in its personal capacity as opposed to its role of


Security Agent for the Secured Parties.


(E) In exercising any discretion to exercise a right, power or authority under this Agreement where either:


(i) it has not received any instructions from the Majority Lenders as to the exercise of that discretion: or


(ii) the exercise of that discretion is subject to paragraph (D)(iii) above,


the Security Agent shall do so having regard to the interests of all the Secured Parties.





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24.4 Security Agent’s actions


Without prejudice to the provisions of clause 24.3 (Instructions to Security Agent and exercise of discretion ). the Security Agent may (but shall not


be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance


Documents as it considers in its discretion to be appropriate.


24.5 Security Agent’s discretions


The Security Agent may:


(A) assume (unless it has received actual notice to the contrary from the Facility Agent) that (i) no Default has occurred and no Obligor is in


breach of or in default of its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested by


any Finance Document in any person has not been exercised;


( B) engage, pay for and rely on the advice or services of any legal advisers, accountants, tax advisers, surveyors or other experts (whether


obtained by the Security Agent or by any other Secured Party) whose advice or services may at any time seem necessary, expedient or


desirable;


(C) rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected


to be within the knowledge of a Secured Party, any Lender or an Obligor, upon a certificate signed by or on behalf of that person; and


(D) refrain from acting in accordance with the instructions of any Secured Party (including bringing any legal action or proceeding arising out


of or in connection with the Finance Documents) until it has received any indemnification and/or Security that it may in its discretion


require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in so acting.


24.6 Security Agent’s obligations


The Security Agent shall promptly:


(A) copy to the Facility Agent the contents of any notice or document received by it from any Obligor under any Finance Document; and


( B) forward to a Secured Party the original or a copy of any document which is delivered to the Security Agent for that Secured Party by any


other Party provided that, except where a Finance Document expressly provides otherwise, the Security Agent is not obliged to review or


check the adequacy, accuracy or completeness of any document it forwards to another Party.





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24.7 Excluded obligations





Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent shall not:


(A) be bound to enquire as to (i) whether or not any Default has occurred or (ii) the performance, default or any breach by an Obligor of its


obligations under any of the Finance Documents;


< B) be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;


(C) be bound to disclose to any other person (including but not limited to any Secured Party) (i) any confidential information or (ii) any other


information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty; or


(D) have or be deemed to have any relationship of trust or agency with any Obligor.


24.8 Exclusion of liability


None of the Security Agent, any Receiver nor any Delegate shall accept responsibility or be liable for:


(A) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Security Agent or any other person in


or in connection with any Finance Document or the transactions contemplated in the Finance Documents, or any other agreement,


arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;


( B) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Secured Property or any other agreement,


arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the


Secured Property;


(C) any losses to any person or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance


Documents, the Secured Property or otherwise, whether in accordance with an instruction from the Facility Agent or otherwise unless


directly caused by its gross negligence or wilful misconduct;


(D) the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance


Documents, the Secured Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under


or in connection with, the Finance Documents or the Secured Property; or


(E) any shortfall which arises on the enforcement or realisation of the Secured Property.





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24.9 No proceedings





No Party (other than the Security Agent, that Receiver or that Delegate) may take any proceedings against any officer, employee or agent of the


Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any


act or omission of any kind by that officer, employee or agent in relation lo any Finance Document or any Secured Property and any officer,


employee or agent of the Security Agent, a Receiver or a Delegate may rely on this clause subject to the provisions of the Third Parties Rights Act.


24.10 Own responsibility


Without affecting the responsibility of any Obligor for information supplied by il or on its behalf in connection with any Finance Document, each


Secured Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal


and investigation of all risks arising under or in connection with any Finance Document including but not limited to:


(A) the financial condition, status and nature of each Obligor;


< B) the legality, validity, effectiveness, adequacy and enforceability of any Finance Document, the Secured Property and any other agreement,


arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the


Secured Property;


(C) whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under


or in connection with any Finance Document, the Secured Property, the transactions contemplated by the Finance Documents or any other


agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or


the Secured Property;


(D) the adequacy, accuracy and/or completeness of any information provided by the Security Agent or by any other person under or in


connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or


document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and


(F) the right or title of any person in or to. or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction


Security or the existence of any Security affecting the Charged Property,


and each Secured Party warrants to the Security Agent that it has not relied on and will not at any time rely on the Security Agent in respect of any of


these matters.





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24.11 No responsibility to perfect Transaction Security


The Security Agent shall not be liable for any failure to:


(A) require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged


Property;


(B) obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any


of the Finance Documents or the Transaction Security:


(C) register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any


applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of the Transaction


Security;


(D) take, or to require any of the Obligors to take, any steps to perfect its title to any of the Charged Property or to render the Transaction


Security effective or to secure the creation of any ancillary Security under the law's of any jurisdiction; or


(E) require any further assurances in relation to any of the Security Documents.


24.12 Insurance by Security Agent


(A) The Security Agent shall not be under any obligation to insure any of the Charged Property, to require any other person to maintain any


insurance or to verify any obligation to arrange or maintain insurance contained in the Finance Documents. The Security Agent shall not be


responsible for any loss which may be suffered by any person as a result of the lack of or inadequacy of any such insurance.


( B) Where the Security Agent is named on any insurance policy as an insured party, it shall not be responsible for any loss which may be


suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such


insurers or any other information of any kind, unless the Facility Agent shall har e requested it to do so in writing and the Security Agent


shall have failed to do so within 14 days after receipt of that request.


24.13 Custodians and nominees


The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the


Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created


under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by


reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the


proceedings or acts of any person.





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24.14 Acceptance of title


The Security Agent shall he entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors may


har e to any of the Charged Property and shall not be liable for or bound to require any Obligor or Group Company to remedy any defect in its right


or title.


24.15 Refrain front illegality


Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent may refrain from doing anything which


in its opinion will or may be contrary to any relevant law. directive or regulation of any jurisdiction and the Security Agent may do anything which


is. in its opinion, necessary to comply with any such law. directive or regulation.


24.16 Business with the Obligors


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


Obligors.


24.17 Winding up of trust


If the Security Agent, with the approval of the Facility Agent, determines that (a) all of the Liabilities and all other obligations secured by the Security


Documents have been fully and finally discharged and (b) none of the Secured Parties is under any commitment, obligation or liability (actual or


contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents:


(A) the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the


Transaction Security and the rights of the Security Agent under each of the Security Documents; and


(B) any Retiring Security Agent shall release, without recourse or warranty, all of its rights under each of the Security Documents.


24.18 Perpetuity period


The perpetuity period under the rule against perpetoities. if applicable to this Agreement, shall be the period of 125 years from the date of this


Agreement.


24.19 Powers supplemental


The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the


Trustee Act 2000 and in addition to any which may be vested in the Security Agent by general law" or otherwise.





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24.20 T rustee division separate


(A) In acting as trustee for the Secured Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated


as a separate entity from any of its other divisions or departments.


(B) If information is received by another division or department of the Security Agent, it may be treated as confidential to that division or


department and the Security Agent shall not be deemed to have notice of it.


24.21 Disappliciition


Section I of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement Where there


are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement


shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall


constitute a restriction or exclusion for the purposes of that Act.


24.22 Obligors: Power of Attorney


Each Obligor by way of security for its obligations under this Agreement irrevocably appoints the Security Agent to be its attorney to do anything


which that Obligor has authorised the Security Agent or any other Party to do under this Agreement or is itself required to do under this Agreement but


has failed to do (and the Security Agent may delegate that power on such terms as it sees fit).


25. CHANGE OF SEC IIRITY AGENT AND DELEGATION


25.1 Resignation of the Security Agent


(A) The Security Agent may resign and appoint one of its affiliates as successor by giving notice to the Company and the Lenders.


(B) Alternatively the Security Agent may resign by giving notice to the other Lenders in which case the Majority Lenders may appoint a


successor Security Agent.


(C) If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (B) above within 30 days after the


notice of resignation was given, the Security Agent (after consultation with the Facility Agent) may appoint a successor Security Agent.


(D) The retiring Security Agent (the “ Retiring Security Agent") shall, at its own cost, make available to the successor Security Agent such


documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing


its functions as Security Agent under the Finance Documents.


(E) The Security Agent’s resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer of all of the


Secured Property to that successor.





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(F) Upon the appointment of a successor, the Retiring Security Agent shall be discharged from any further obligation in respect of the Finance


Documents (other than its obligations under paragraph 24.17(B) ( Winding up of trust) and under paragraph (D) above) but shall, in respect


of any act or omission by it whilst it was the Security Agent, remain entitled to the benefit of clause 24 ( The Security Agent), clause 30.1


tObligors ' indemnity) and clause 30.3 (Lenders ' indemnity). Its successor and each of the other Parties shall have the same rights and


obligations amongst themselves as they would have had if that successor had been an original Party.


(G) The Majority Lenders may. by notice to the Security Agent, require it to resign in accordance with paragraph (B) above. In this event, the


Security Agent shall resign in accordance with paragraph (B) above but the cost referred to in paragraph (D) above shall be for the account


of the Company.


25.2 Delegation


(A) F.ach of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for


any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.


(B) That delegation may be made upon any terms and conditions (including the power to sub-delegate) and subject to any restrictions that the


Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties and


it shall not be bound to supervise, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of


any such delegate or sub-delegate.


25.3 Additional Security Agents


(A) The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with


it (I) if it considers that appointment to be in the interests of the Secured Parties or (ii) for the purposes of conforming to any legal


requirements, restrictions or conditions which the Security Agent deems to be relevant or (iii) for obtaining or enforcing any judgment in any


jurisdiction, and the Security Agent shall give prior notice to the Company and the Facility Agent of that appointment.


( B) Any person so appointed shall have the rights, powers and discretions (not exceeding those conferred on the Security Agent by this


Agreement) and the duties and obligations that are conferred or imposed by the instrument of appointment.


(C) The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred


by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and


expenses incurred by the Security Agent.





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 PART 10


ADMINISTRATION, COSTS AND EXPENSES





26. BANK ACCOUNTS


26.1 LC Cash Collateral Accounts


The borrower shall establish and maintain the LC Cash Collateral Accounts with the Account Bank.


27. PAYMENT MECHANICS


27.1 Payments to the Facility Agent


(A) On any date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make


the same available to the Facility Agent in US Dollars (unless a contrary indication appears in a Finance Document) for value on the due-


date at the time specified by the Facility Agent as being customary at the time for settlement of transactions in the place of payment.


(B) Payment shall be made to such account in London (or. as the ease may be. Paris or New York) as the Facility Agent specifies.


27.2 Distributions by the Facility Agent


Each payment received by the Facility Agent under the Finance Documents for another Party shall be made available by the Facility Agent as soon as


practicable after receipt to the Party entitled to receive payment (in the case of a Lender, for the account of its Facility Office), to such account as that


Party may notify to the Facility Agent by not less than five Business Days’ notice with a bank in London (or, as the case may be. Paris or New


York).


27.3 Clawback


(A) Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that


sum to that other Party (or enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has


actually received that sum.


( B) If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that


amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on


demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the


Facility Agent, calculated by the Facility Agent to reflect its cost of funds.





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27.4 Partial payments





(A) If the Facility Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to


discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Facility Agent shall apply that payment


towards the obligations of that Obligor under the Finance Documents in the following order:


(i) first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent under the Finance Documents;


(ii) secondly, iu or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;


(iii) thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and


(iv) fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.


< B) The Facility Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (A)( ii) to (iv) above.





(C) Paragraphs (A) and (B) above will override any appropriation made by an Obligor.


27.5 No set-off by Obligors


All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction


for) set-off or counterclaim.


27.6 Business Days


(A) Subject to paragraph (C) below, any payment which is due to be made on a day that is not a Business Day shall be made on the next


Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).


( B) During any extension of the due date for payment of any Unpaid Sum under the Finance Documents, interest is payable on the Unpaid


Sum at the rate payable on the original due date.


(C) Notwithstanding paragraph ( A) above, a payment due on the Termination Date shall be made on the Termination Date.





27.7 Currency of account


The default currency for any sum due from an Obligor under any Finance Document is the US Dollar.





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27.8 Change of currency





(A) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central hank of any


country as the lawful currency of that country, then:


(i) any reference in the Finance Documents to. and any obligations arising under the Finance Documents in. the currency of that


country shall be translated into, or paid in. the currency or currency unit of that country designated by the Facility Agent acting


reasonably (after consultation with the Company); and


(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central


bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting


reasonably).


(B) If a change in any currency of a country occurs, the Parties will enter negotiations in good faith with a view to agreeing any amendments


which may be necessary to this Agreement to comply with any generally accepted conventions and market practice in the London interbank


market and otherwise to reflect the change in currency.


27.9 Disruption to Payment Systems etc.


If the Facility Agent determines (acting reasonably) that a Disruption Event has occurred or the Facility Agent is notified by the Company that a


Disruption Event has occurred:


(A) the Facility Agent may, and shall if requested to do so by the Company, consult with the Company with a view to agreeing with the


Company such changes to the operation or administration of the Facility (including, without limitation, changes to the timing and


mechanics of payments due under the Finance Documents) as the Facility Agent may deem necessary in the circumstances;


( B) the Facility Agent shall not be obliged to consult with the Company in relation to any changes mentioned in paragraph (A) above if. in its


reasonable opinion, it is not practicable to do so in the circumstances and. in any event, shall har e no obligation to agree to such changes;


(C) the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (A) above but shall not be obliged


to do so if, in its opinion, it is not practicable to do so in the circumstances:


(D) any such changes agreed upon by the Facility Agent and the Company shall (whether or not it is finally determined that a Disruption Event


lias occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents,


notwithstanding the provisions of clause 36 (Amendments and Waivers);





94


(E) the Facility Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross


negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a


result of its taking, or failing to take, any actions pursuant to or in connection with this clause; and


(F) the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (D) above.


28. SET-OFF


Without prejudice to the rights of the Finance Parties at law, at any time after an Event of Default has occurred which is continuing, a Finance Party


(other than a Non-Funding Lender) may, on giving notice to the Obligor, set off any matured obligation due from an Obligor under the Finance


Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor,


regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party


may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.


29. COSTS AND EXPENSES


29.1 Transaction expenses


The Company shall, within 15 Business Days of written demand, pay the Facility Agent the amount of all costs and expenses (including legal fees)


reasonably incurred by any of them in connection with the negotiation, preparation, printing, and execution of:


(A) this Agreement and any other documents referred to in this Agreement: and


( B) any other Finance Documents executed after the date of this Agreement.


29.2 Amendment costs


If:


(A) an Obligor requests an amendment, waiver or consent; or


( B) an amendment is required pursuant to clause 27.8 ( Change of currency).


the Company shall, within 15 Business Days of written demand, reimburse the Facility Agent for the amount of all costs and expenses (including


legal fees) reasonably incurred by the Facility Agent in responding to. evaluating, negotiating or complying with that request or requirement





9 5


29.3 Enforcement costs





The Company shall, within five Business Days of written demand, pay to each Finance Party the amount of all costs and expenses (including legal


fees) incurred by that Finance Party in connection with the enforcement or attempted enforcement of. or the preservation of any rights under, any


Finance Document.


30. INDEMNITIES


30.1 Obligors’ indemnity


Each Obligor shall promptly indemnify' the Security Agent and every Receiver and Delegate against any cost, loss or liability (together with any


applicable VAT) incurred by any of them:


(A) in relation to or as a result of:


(i) any failure by the Company to comply with obligations under clause 29 ( Costs and Expenses );


(ii) the taking, holding, protection or enforcement of the Transaction Security;


(iii) the exercise of any of the rights, powers, discretions and remedies vested in the Security Agent, each Receiver and each Delegate


by the Finance Documents or by law; or


(iv) any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;


or


(B) which otherwise relates to any of the Secured Property or the performance of the terms of this Agreement (otherwise than as a result of its


gross negligence or wilful misconduct).


30.2 Priority of indemnity


The Security Agent and every Receiver and Delegate may. in priority to any payment to the Secured Parties, indemnify itself out of the Charged


Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in clause 30.1 ( Obligors ' indemnity) and shall have a


lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.


30.3 Lenders’ indemnity


Each Lender shall (in the proportion that the Liabilities due to it bears to the aggregate of the Liabilities due to all the Lenders for the time being (or. if


the Liabilities due to each of those Lenders is zero, immediately prior to their being reduced to zero)), indemnify the Security Agent and every Receiver


and every Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by





9 6


reason of the relevant Security Agent's, Receiver’s or Delegate's gross negligence or wilful misconduct in acting as Security Agent, Receiver or Delegate


under the Finance Documents (unless the Security Agent. Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document)


and the Obligors shall jointly and severally indemnify each Lender against any payment made by it under this 30.


31. NOTICES


31.1 Communications in writing


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


made by fax or letter or. as appropriate, electronic mail.


31.2 Addresses


The address and fax number (and the department or officer, if any. for whose attention the communication is to be made) of each Party for any


communication or document to be made or delivered under or in connection with the Finance Documents is:


(A) in the ease of the Obligors, that identified with its name below;


(B) in the ease of each Lender or any other Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a


Party; and


(C) in the ease of the Facility Agent, that identified with its name below.


or any substitute address or fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the


other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.


Contact details of the Original Borrower





P.O. Box 32322 c o Kosrnos Energy LLC


4th Floor, Century Yard 8176 Park Lane


Cricket Square Suite 500


Elgin Avenue Dallas


George Town Texas 75231


Grand Cayman USA


KYI-1209


Cayman Islands


Fax: (345)946 4090 Fax: +1 214 445 9705


Attention: Andrew Johnson Attention: General Counsel





97


Contact details of the Guarantor





Clarendon House c o Kosmos Energy LLC


2 Church Street 8176 Park Lane


I lamilton Suite 500


HM11 Dallas


Bermuda Texas 75231


USA





Fax: (345)946 4090 Fax: -1 214 445 9705





Attention: Andrew Johnson Attention: General Counsel





Contact details of the Facility Agent


SG House





41 Tower Hill


London


F.C3N 4SG


Fax: ■44 207676 6661





Attention: Mirela Kubicka and Muzaffar Khalmirzaev





Contact details of the Security Agent


SG House





41 Tower Hill


London


EC3N 4SG


Fax: +44 207676 6661





Attention: Mirela Kubicka and Muzaffar Khalmirzaev





Contact details of the Account Bank





SG House


41 Tower Hill


London


EC3N 4SG


Fax: +44 207676 6661





Email: Mirela.kubicka@sgcib.com;


Muzaffar.Khalmirzaev@sgcib.com; and


par-oper-tsu-mm@,sgcib.com





98


 Attention: Mirela Kubicka and Muzaffar Khalmirzaev





31.3 Delivery


(A) Subject to clause 31.5 (Electronic communication), any communication or document made or delivered by one person to another under or


in connection with the Finance Documents will only be effective:


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


(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post with


postage prepaid in an envelope addressed to it at that address;


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


that department or officer.


( B) Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility


Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent’s signature below


(or any substitute department or officer as the Facility Agent shall specif.' for this purpose).


(C) All notices from or to an Obligor shall be sent through the Facility Agent.


(D) Any communication or document made or delivered to the Company in accordance with this clause will be deemed to have been made or


delivered to each of the Obligors.


31.4 Notification of address and fax number


Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to clause 31.2 ( Addresses) or


changing its own address or fax number, the Facility Agent shall notify the other Parties.


31.5 Electronic communication


(A) Any communication to be made between the Facility Agent and a Lender under or in connection with the Finance Documents may be made


by electronic mail or other electronic means, if the Facility Agent and the relevant Lender:


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





99


(ii) notify each other in writing of their electronic mail address and or any other information required to enable the sending and receipt


of information by that means; and


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


< B) Any electronic communication made between the Facility Agent and a Lender will be effective only when actually received in readable form


and in the case of any electronic communication made by a Lender to the Facility Agent only if it is addressed in such a manner as the


facility Agent shall specify for this purpose.


31.6 English language


(A) Any notice given under or in connection with any Finance Document must be in English.


(B) All other documents provided under or in connection with any Finance Document must be:


(i) in English; or


(ii) if not in English, and if so required by the Facility Agent, accompanied by a certified English translation and. in this ease, the


English translation will prevail unless the document is a constitutional, statutory or other official document.


( C) The Security Agent and/or receiving party shall be entitled to assume the accuracy of and rely upon any English translation of any


document provided pursuant to this clause 31.6 and the English translation shall prevail unless the document is a statutory or other official


document. Translation costs are for the account of the Obligors.


32. CALCULATIONS AND CERTIFICATES


32.1 Accounts


In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a


Finance Party are prima facie evidence of the matters to which they relate.


32.2 Certificates and determinations


Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest or proven error,


prima facie evidence of the matters to which it relates.





100


32.3 Day count convention


Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number


of days elapsed and a year of 360 days.


33. DISCLOSURE TO NUMBERING SERVICE PROVIDERS


(A) Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide


identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:


(i) names of Obligors;


(i i) country of domicile of Obligors;


(i i i) place of incorporation of Obligors;


(i v) date of this Agreement;


(v) the name of the Facility Agent:


(vi) date of each amendment and restatement of this Agreement;


(vii) amount of Total Commitments:


(viii) currencies of the Facility:


(ix) type of Facility;


(x) ranking of Facility;


(xi) Termination Date for the Facility;


(xii) changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and


(xiii) such other information agreed between such Finance Party and the Company.


to enable such numbering service provider to provide its usual syndicated loan numbering identification services.


(B) The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and or one or more Obligors by


a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance


with the standard terms and conditions of that numbering service provider.





101


 (C) The Company represents that none of the information set out in paragraphs (i) to (xiii) of paragraph (A) above is, nor will at any time be.


unpublished price-sensitive information.





(D) The Facility Agent shall notify the Company and the other Finance Parties of:


(i) the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and or one


or more Obligors; and


(ii) the number or, as the case may be. numbers assigned to this Agreement, the Facility and or one or more Obligors by such


numbering service provider.


.14. PARTIAL INVAI 11)1 I V


If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any


jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision


under the law of any other jurisdiction will in any way be affected or impaired.


35. REMEDIES AND WAIVERS


No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate


as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or


remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.


36. AMENDMENTS AND WAIVERS


36.1 Required consents


(A) Subject to clause 36.2 (Exceptions) below, any term of the Finance Documents may be amended or waived only with the consent of the


Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.


< B) The consent of the Security Agent shall be required in relation to any proposed amendment or waiver of clause 24 ( The Security Agent).


clause 25 (Change of Security . lgent and Delegation ) or clause 30 (Indemnities).


( C) The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause.


36.2 Exceptions


(A) The following may not be effected without the consent of all the Lenders:





102


(i) amending the definition of “Majority Lenders”;


(ii) amending, varying or waiving clause 4 ( Finance Parlies ' Rights and Obligations) and/or any other term of any Finance


Document which relates to the rights and or obligations of each Finance Party being several;


(iii) varying the date for. or altering the amount or currency of, any payment to Lenders under the Finance Documents;


(iv) extending the Commitment of a Lender (except in relation to clause 8.1 ( Illegality)):


(v) amending varying or waiving a term of any Finance Document which expressly requires the consent of all the Lenders;


(vi) amending, varying or waiving this clause: or


(vii) any release of Security Interests granted pursuant to any Security Document.


(B) An amendment or waiver which relates to the rights or obligations of the Facility Agent may not be effected without the consent of the


Facility Agent.


(C) If a Lender (I) becomes a Non-Funding Lender or (ii) does not accept or reject a request for an amendment, waiver, consent or approval


within 15 Business Days (or such longer period as the Company may specify) of such request being made, that Lender’s Commitment


shall not be included for the purposes of calculating Total Commitments under the Facility when ascertaining whether a certain percentage of


Total Commitments has been obtained to approve the amendment, waiver, consent or approval, provided that (other than in the ease of


(i) above) no more than 25 per cent, of Lender votes (by Commitment) may be disregarded in such a way.


36.3 Exclusions


Subject to clause 36.2 ( Exceptions), if a Lender does not accept or reject a request for an amendment or waiver within 10 Business Days of receipt of


such request (or such longer period as the Company and the Facility Agent may agree), or abstains from accepting or rejecting a request for an


amendment or waiver, or if the Lender is a Non-Funding Lender, its Commitments shall not be included for the purpose of calculating the Total


Commitments when ascertaining whether the consent of a Lender or Lenders whose Commitments aggregate more than the required percentage of the


Total Commitments lias been obtained in respect of such request.


36.4 Disenfranchisement of Shareholder Affiliates


Notwithstanding any other provisions of this Agreement, for so long as a Shareholder Affiliate is a Lender and/or to the extent that a Shareholder


Affiliate beneficially owns a





103


Commitment or has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially


similar economic effect and such agreement or arrangement has not been terminated, such Shareholder Affiliate shall not be entitled to exercise any


rights to vote as Lender in respect of any matters requiring decision by the Lenders under the terms of this Agreement or any of the Finance


Documents. Each such Shareholder Affiliate acknowledges and agrees that:


(A) in the event that a matter requires decision by one or more Lenders under this Agreement or any of the Finance Documents,


(i) the Commitment of such Shareholder Affiliate and any associated participation of such Shareholder Affiliate in a Loan shall be


deemed to be zero; and


(ii) such Shareholder Affiliate shall be deemed not to be a Lender;


( B) in relation to any meeting or conference call to which all or any number of Lenders are invited to attend or participate, it shall not attend or


participate in the same if so requested by the Facility Agent or, unless the Facility Agent otherwise agrees, be entitled to receive the agenda or


any minutes of the same; and


(C) it shall not. unless the Facility Agent otherwise agrees, be entitled to receive any report or other document prepared at the behest of, or on the


instructions of. the Facility Agent or one or more of the Lenders.


37. COUNTERPARTS


(A) This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until


each Party has executed at least one counterpart.


(B) Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same


instrument.





104


 PART 11


GOVERNING LAW AND ENFORCEMENT





.18. GOVERNING I.AW


This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with


English law.


39. JURISDICTION


39.1 Submission


The parties hereby irrevocably agree for the exclusive benefit of the Secured Parties that the courts of England shall have exclusive jurisdiction to


settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this


Agreement, or any non-contractual obligations arising out of or in connection with it) (a “ Dispute”).


39.2 Forum convenience


The parties hereby irrevocably agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly


irrevocably agree not lo argue to the contrary.


39.3 Concurrent jurisdiction


T his clause 39 is for the benefit of the Secured Parties only. As a result, no Secured Party shall be prevented from taking proceedings relating to a


Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of


jurisdictions.


40. SERVICE OF PROCESS


(A) Without prejudice to any other mode of service allowed under any relevant law, each of the Obligors:


(i) irrevocably appoints Trusec Limited of 2 Lambs Passage, London, EC1Y 8BB (the “ Process Agent”) as its agent for service of


process in relation to any Dispute before the English courts in connection with any Finance Document;


(ii) irrevocably agrees that any Service Document may be sufficiently and effectively served on it in connection with any Dispute in


England and Wales by service on the Process Agent (or any replacement agent appointed pursuant to paragraph (B) of this


clause 40; and


(iii) irrevocably agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings


concerned.





105


(B) If the agent referred to in paragraph (A) of this clause 40 (or any replacement agent appointed pursuant to this paragraph (B)) at any time


ceases for any reason to act as such, as the case may he. each Obligor shall as soon as reasonably practicable appoint a replacement agent to


accept service haring an address for service in England or Wales and shall notify the Facility Agent of the name and address of the


replacement agent. F ailing such appointment and notification, the agent referred to in paragraph (A) of this clause 40 (or any replacement


agent appointed pursuant to this paragraph (B)) shall continue to he authorised to act as agent for service of process in relation to any


proceedings before the English courts on behalf of the relevant party and shall constitute good service.


(C) Any document addressed in accordance with paragraph (A) of this clause 40 shall he deemed to have been duly served if:


(i) left at the specified address, when it is left; or


(ti) sent by first class post, two clear Business Days after posting.


(D) For the purposes of this clause 40 ( Sen ice of Process). “Service Document" means a writ, summons, order, judgment or other document


relating to or in connection with any Dispute. Nothing contained herein shall affect the right to serve process in any other manner permitted


by law.


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


106


 Schedule 1


The Original Lender





Original Lender Commitment (USD)


Societe Generale, London Branch 100,000,000





107


 Schedule 2


Conditions Precedent


Part I


Conditions Precedent to First Utilisation


1. Provision of each of the following Finance Documents, duly executed by each of the parties to them:


(i) this Agreement;


(ii) the Charge.


2. Provision of certified copies of each Obligor’s (excluding the Original Guarantor) constitutional documents and the director and shareholder corporate


resolutions authorising entry into and performance of the Finance Documents to which they are a party and certification as to solvency.


3. Provision by each Obligor (excluding the Original Guarantor) of the specimen signatures of the persons authorised by each of the Obligor’s corporate


resolutions referred to at paragraph 2 above to execute the Finance Documents and all other documents and notices required in connection with such


Finance Documents.


4. Receipt by the Facility Agent of appropriate legal opinions from Maples and ( 'aider (Cayman Islands Counsel to the Original Borrower) in relation to


the Original Borrower and Conyers Dill & Pearman Limited in relation to the Original Guarantor (special Bermuda legal Counsel to the Original


Guarantor).


5. The Charge entered into pursuant to condition precedent 1 above is perfected and fully valid.


6. Provision of a certificate from the Borrower that all Required Approvals on the date of the proposed Utilisation hare been obtained (including a


schedule of all such Required Approvals).


7. Provision of such documentation and other evidence to the satisfaction by the Facility Agent and the Lenders of their respective “know your


customer” checks or similar identification procedures.


8. Provision by the (Iriginal Borrower of a schedule detailing all Pre-existing Letters of Credit which it anticipates will be migrated to the Facility


(included at Schedule 10 (Pre-existing Leila s of Credit)).


9. Provision by the Original Borrower of a duly signed and executed Fee Letter detailing the arrangement lee for the Facility.


10. Evidence that all sums required to be deposited into the LC Cash Collateral Accounts pursuant to clause 6.14 (Cash Collateralisation) have been


deposited.


I I. Provision of a certificate from the Borrower that the Repeating Representations to be made by each Obligor are, in the light of the facts and


circumstances then existing, true





10S


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).


Part II


Conditions Precedent Required to be Delivered by an Additional Obligor


1. Provision of an Accession Letter, duly executed by the Additional Obligor and the Borrower.


2. Provision of certified copies of the Additional Obligor’s constitutional documents and certificates of incorporation (or equivalent).


3. A copy of a resolution of the board of directors of the Additional Obligor approving the terms of, and the transactions contemplated by. the


Accession Letter and the Finance Documents and resolving that one or more specified persons execute the Accession Letter and any other documents


and notices in connection with the Finance Documents.


4. A specimen signature of each person authorised to execute the Accession Letter and any other documents and notices in connection with the Finance


Documents.


5 . A certificate of the Additional Obligor (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total


Commitments would not cause any borrowing, guarantee, security or similar limit binding on it to be exceeded.


6. A certificate of an Authorised Signatory of the Additional Obligor certifying that each copy document listed in this Part II of Schedule 2 ( Conditions


Precedent) is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.


7. A copy of any Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection


with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance


Document.


8. If available, the latest audited financial statements of the Additional Obligor.


9. Receipt by the Facility Agent of any appropriate legal opinions.


10. If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the process agent specified in


clause 40 (Service of Process), if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor.


I I. Evidence that all sums required to be deposited into the LC Cash Collateral Accounts pursuant to clause 6.14 (Cash Collateralisation) have been


deposited.





109


 Schedule 3


Utilisation Request





From: KOSMOS ENERGY CREDIT INTERNATIONAL (the "Borrower”)


To: SOCIETE GENERALE, LONDON BRANCH (the "Facility Agent”)





Dated:


Dear Sirs





KOSMOS ENERGY CREDIT INTERNATIONAL --- Facility Agreement


dated [ ] (the “Agreement”)








1. We refer to the Agreement. This is a Utilisation Request in respect of a Utilisation under the Facility. Terms defined in the Agreement have the same


meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.


2. We wish for a Letter of Credit to be issued under the Facility in the form attached in the Schedule to this Utilisation Request and on the following


terms:


Proposed Utilisation Date


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


Amount: [ ]


Currency: [ ]


Issued on behalf of:


3. We hereby certify that:





(a) no Default or Event of Default is continuing or will result from the proposed Letter of Credit being issued:


(b) the making of the Utilisation would not result in the aggregate amount outstanding under the Facility exceeding the Total Commitment: and


(c) the Repeating Representations are, in the light of the facts and circumstances existing on the date hereof, tme and correct in all material


respects (or, in the case of a Repeating Representation that contains a materiality concept, tme and correct in all respects).





I 10


5. This Utilisation Request is irrevocable and is a Finance Document.





Yours faithfully

















Authorised Signatory for


KOSMOS ENERGY CREDIT INTERNATIONAL





111





 SCHEDULE


Form of Letter of Credit








[Attach form of Letter of Credit]





112


 Schedule 4


Form of Transfer Certificate


To: SOCIETE GENERALE, LONDON BRANCH as the ' Facility Agent


From: [the Existing Lender] (the “Existing Lender”) and [the New Lender] (the “New Lender")


Dated:


Dear Sirs





KOSMOS ENERGY CREDIT INTERNATIONAL --- Facility Agreement


dated [ ] (the “Agreement”)


1. We refer to the Agreement. This is a Transfer Certifieate. Terms defined in the Agreement har e the same meaning in this Transfer Certificate unless


given a different meaning in this Transfer Certificate.


2. We refer to clause 21.6 (Procedure for transfer)-.


(a) The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing


Lender’s Commitment, rights and obligations referred to in the Schedule in accordance with clause 21.6 ( Procedure for transfer).


(b) The proposed Transfer Date is [ ].


(e) The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 31.2


(Addresses) are set out in the Schedule.


3. The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (C) of clause 21.5 ( Limitation of


responsibility of Existing Lenders).


4. The New Lender confirms that it is a Qualifying Bank.


5. The New Lender confirms that it has validly executed a Lender Accession Notice in the form set out at Schedule 7 ( Form of Lender Accession


Notice) to this Agreement.


6. This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were


on a single copy of this Transfer Certificate.


7. This Transfer Certificate is governed by English law.





113


THE SCHEDULE


Commitments/rights and obligations to be transferred


[Insert relevant details]


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


[Existing Lender] [New Lender]


By: By:


This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [ ].


Societe Generate, London Branch


By:


114


 Schedule 5


Form or Compliance Certificate


To: SOCIETE GENERALE, LONDON BRANCH (the Facility Agent )


From: KOSMOS ENERGY CREDIT INTERNATIONAL (the "Borrower”)


Dated:


Dear Sirs


KOSMOS ENERGY CREDIT INTERNATIONAL Facility Agreement


dated [ ] (the “Agreement”)


1. We refer to the Agreement. T his is a Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate


unless given a different meaning in this Compliance Certificate.


2. We confirm that the financial statements supplied to the Facility Agent pursuant to clause 17.8 ( Financial statements and other factual


information) of the Agreement:


(A) are certified by an Authorised Signatory of the Borrower as a true and correct copy; and


( B) [give a true and fair view of](l) / [fairly represent] (2) the financial condition of the Borrower for the period to the date on which those


financial statements were drawn up.


3. We confirm that as at [ ], being the last occurring Calculation Date:


(A) the debt cover ratio was [ |;and


(B) the interest cover ratio was | ].


4. We set out below the calculations establishing the figures in paragraph 2 above:


[ ]


5. We confirm that as at | ], so far as we are aware having made diligent enquiries, no Default has occurred or is continuing. (3)


(1) Insert if audited.


(2) Insert if unaudited.


(3) Note --- If this statement cannot be made, the certificate should identify any Default that has occurred or is continuing and the action taken, or proposed


to be taken, to remedy it.





115


 Yours faithfully











Authorised Signatory for Authorised Signatory for


KOSMOS ENERGY CREDIT INTERNATIONAL KOSMOS ENERGY CREDIT INTERNATIONAL





116


 Schedule 6


Form of Confidentiality Undertaking





To: | Purchaser's details]








KOSMOS ENERGY CREDIT INTERNATIONAL (the "Company”) and ils up to USD 150 million revolving letter of credit facility dated | ]


2013 (the "Facility”)


| insert date]


Dear Sirs


We understand that you are considering participating in the Facility. In consideration of us agreeing to make available to you certain information, by your


signature of a copy of this letter you agree as follows:


1. Confidentiality Undertaking: You undertake:


(A) to keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below and to ensure


that the Confidential Information is protected with security measures with a degree of care not less than that which you would apply to your


own confidential information;


( B) to keep confidential and not disclose to anyone except as provided for by paragraph 2 below the fact that the Confidential Information lias


been made available or that discussions or negotiations are taking place or have taken place between us;


(C) to use the Confidential Information only for the Permitted Purpose;


(D) to ensure that any person to whom you pass any Confidential Information in accordance with paragraph 2 (unless disclosed under


paragraph 2( B) below) acknowledges and complies with the provisions of this letter as if that person were also a party to it; and


(F.) not to make enquiries in relation to the Confidential Information of any other person, whether a third party or any member of the Group or


any of their officers, directors, employees or professional advisers, save for such officers, directors, employees or professional advisers as


may be expressly nominated by us for this purpose, provided that this paragraph shall not prevent or restrict you from conducting and


completing all necessary and appropriate due diligence in accordance with your normal credit and underwriting approval processes and as


required to be performed in order to obtain any requisite credit or underwriting approvals in relation to your possible participation in the


Facility.





117


2. Permitted Disclosure: We agree that you may disclose Confidential Information:


(A) to members of the Participant Group and their officers, directors, employees, consultants and professional advisers but only to the extent


necessary for the proper fulfilment of the Permitted Purpose, provided that:


(i) such information is disclosed strictly on a need-to-know basis and provided that the Confidential Information may not be


disclosed to any person in the Participant Group who is not working directly on matters concerning your participation in the


Facility; and


(ii) appropriate information barriers or other procedures as may be necessary are in place to ensure there can be no unauthorised


disclosure of. or access to, the Confidential Information to any such person referred to in subparagraph (i) above;


(B) (i) where required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body.


(ii) where required by the rules of any stock exchange on which the shares or other securities of any member of the Participant Group are


listed or (iii) where required by the laws or regulations of any country with jurisdiction over the affairs of any member of the Participant


Group; or


(C) with our prior written consent.


3. Notification of Required or Unauthorised Disclosure: You agree (to the extent permitted by law) to inform us of the full circumstances of any


disclosure under paragraph 2(B) (in advance where reasonable and practicable) or immediately upon becoming aware that Confidential Information


has been disclosed in breach of this letter.


4. Return of Copies: If we so request in writing, you shall return all Confidential Information supplied to you by us or any member of the Group and


destroy or pemranently erase all copies of Confidential Information made by you and use all reasonable endeavours to ensure that anyone to whom


you have supplied any Confidential Information destroys or permanently erases such Confidential Information and any copies made by them, in


each case save to the extent that you or the recipients are required to retain any such Confidential Information by any applicable law, rule or regulation


or by any competent judicial, governmental, supervisory or regulatory body, or where the Confidential Information has been disclosed in accordance


with paragraph 2(B) above.


5. Continuing Obligations: The obligations in the preceding paragraphs of this letter are continuing and. in particular, shall survive the termination


of any discussions or negotiations between you and us. irrespective of their outcome. Notwithstanding the previous sentence, the obligations in this


letter shall cease 12 months after you have returned all Confidential Information and destroyed or permanently erased all copies of Confidential


Information made by you to the extent required pursuant to paragraph 4 above.





118


6. No Representation; Consequences of Breach, etc: You acknowledge and agree that:


(A) neither we nor any of our officers, employees or advisers, and no other member of the Group and none of the officers, employees or


advisers of any member of the Group ( each a “ Relevant Person”), (i) make any representation or warranty, express or implied, as to, or


assume any responsibility for, the accuracy, reliability or completeness of any of the Confidential Information or any other information


supplied by us or any member of the Group or the assumptions on which it is based or (ii) shall be under any obligation to update or


correct any inaccuracy in the Confidential Information or any other information supplied by us or any other member of the Group or be


otherwise liable to you or any other person in respect of the Confidential Information or any such information; and


(B) we and other members of the Group may be irreparably harmed by the breach of the terms of this letter and damages may not be an


adequate remedy; each Relevant Person may be granted an injunction or specific performance for any threatened or actual breach of the


provisions of this letter by you or any other person.


7. Inside Informal ion: You acknowledge that some or all of the Confidential Information is or may be price-sensitive information and that the use of


such information may be regulated or prohibited by applicable legislation relating to insider dealing and you undertake not to use any Confidential


Information for any unlawful purpose. As a result of being given the Confidential Information you may well become insiders and, therefore, be


unable to take certain actions which you would otherwise be able to take.




exercising any right, power or privilege under this letter will operate as a waiver thereof nor will any single or partial exercise of any right, power or


privilege preclude any further exercise thereof or the exercise of any other right, power or privileges under this letter. The tenns of this letter and your


obligations under this letter may only be amended or modified by written agreement between us and you.


9. Nature of Undertakings: The undertakings and acknowledgements given by you under this letter are given to us and (without implying any


fiduciary obligations on our part) are also given for the benefit of each other member of the Group.


10. Third party rights:


(A) Each other member of the Group and each Relevant Person (each a “ Third Party") may enforce the terms of this letter by virtue of the


Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”). This paragraph 10(A) confers a benefit on each Third Party, and,


subject to the remaining provisions of this paragraph 10. is intended to be enforceable by each Third Party by virtue of the Third Parties


Act.





119


(B) Subject to paragraph 10(A), a person who is not a party to this letter has no right under the Third Parties Act to enforce or enjoy the benefit


of any term of this letter.


(C) Notwithstanding any provisions of this letter, the parties to this letter do not require the consent of any person to rescind or vary this letter


at any time.


11. Counterparts: This letter may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective


until each party has executed at least one counterpart. Each counterpart shall constitute an original of this letter, but all the counterparts shall together


constitute one and the same instrument.


12. Governing Law and Jurisdiction: Any matter, claim or dispute, whether contractual or non-contractual, arising out of or in connection with this


letter (including the agreement constituted by your acknowledgement of its terms), is to be governed by and determined in accordance with English


law, and the parties submit to the non-exclusive jurisdiction of the English courts.


13. Definitions and Construction: In this letter (including the acknowledgement set out below):


“Confidential Information" means any and all information relating to the Company, the Group and the Facility, provided to you by us or any


member of the Group or any of our affiliates or advisers, in whatever form, and includes information given orally and any document, electronic file


or any other way of representing or recording information which contains or is derived or copied from such information and information regarding all


discussions and negotiations between us (including information regarding the outcome of such discussions or negotiations), but excludes information


that (a) is or becomes public knowledge other than as a direct or indirect result of any breach of this letter or (b) is known by you before the date the


information is disclosed to you by us or any member of the Group or any of our affiliates or advisers or is lawfully obtained by you after that date,


other than from a source which is connected with the Group and which, in either ease, as far as you are aware, has not been obtained in violation of.


and is not otherwise subject to, any obligation of confidentiality;


“Group” means, in respect of a person, that person and that person’s Elolding Companies and each of their respective Subsidiaries;


Holding Company” means, in relation to a company, any other company in respect of which it is a Subsidiary;


“Participant Group” means you and each of your Holding Companies and Subsidiaries;


“Permitted Purpose” means considering and evaluating whether to enter into contracts with us in relation to your participation in the Facility; and


“Subsidiary” means a subsidiary within the meaning of section 1159 of the Companies Act 2006.





120


Please acknowledge your agreement to the above by signing and returning the enclosed copy.





Yours faithfully








For and on behalf of [Seller’s details]





To: [Seller’s details]





We acknowledge and agree to the above:











For and on behalf of [Purchaser’s details]


121


 Schedule 7


Form of Lender Accession Notice





To: SOCIETE GENERALE, LONDON BRANCH as Facility Agent


From: [New Lender / Additional Lender]


Dated:


Dear Sirs


Kosmos Energy Credit International - Facility Agreement


dated [ ] 2013 (the “Facility Agreement”)


1. We refer to the Facility Agreement. This is a Lender Accession Notice. Terms defined in the Facility Agreement have the same meaning in this


Lender Accession Notice unless given a different meaning in this Lender Accession Notice.


2. [New Lender / Additional Lender] agrees:


(a) to be bound by the terms ofthe Finance Documents as a Lender pursuant to clause [21.6 ( Procedure for transfer)] [3.2 {Additional


Commitments)] ofthe Facility Agreement.


3. [New Lender’s / Additional Lender’s] Commitment is USD [ ].


4. [New Lender’s / Additional Lender’s] administrative details are as follows:


Account details: | ]


Facility Office address: [ ]


Telephone no.: [ ]


Fax no.: [ ]


Attention: | |


5. This Lender Accession Notice may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts


were on a single copy of this Lender Accession Notice.


6. This Lender Accession Notice is governed by English law.


7. This Lender Accession Notice has been delivered as a deed on the date stated at the beginning of this Lender Accession Notice.





122


[New Lender / Additional Lender]





By:


This Lender Accession Notice is accepted by the Facility Agent and the [Transfer Date / Additional Commitment Date] is confirmed as [ ].


Societe Generale, London Branch


By:





123


 Schedule 8


Form of Letter of Credit





To: [Beneficiary] (the “Beneficiary”)


Date:





Irrevocable Standby Letter of Credit no. [ |


At the request and for the account of [ ], [LC Issuing Bank] (the “ LC Issuing Bank") hereby establishes in your favour this irrevocable


standby letter of credit (“Letter of Credit”) not exceeding the Total L/C Amount on the following terms and conditions:


1. Definitions


In this Letter of Credit:


"Business Day" means a day (other than a Saturday or a Sunday) on which banks are open for general business in London.


"Demand" means a demand for a payment under this Letter of Credit in the form of the schedule to this Letter of Credit.


"Expiry Date" means [ ].


"Restricted Entity" means any director, officer, employee, agent or representative of it or any of its subsidiaries is an individual or entity (


"Person") currently the subject of any Sanctions administered or enforced by the United States Government, including, without limitation, the LLS.


Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty's Treasury, or


other relevant sanctions authority (collectively, "Sanctions"), nor is it or any of its subsidiaries located, organised or resident in a country or territory


that is the subject of Sanctions.


“Total L/C Amount” means an aggregate amount not to exceed (USD [ •] [insert amount in words \ only).


2. LC Issuing Bank’s agreement


(A) The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the LC Issuing Bank a duly completed


Demand. A Demand must be received by the LC Issuing Bank by [ ] p.m. (London time) on the Expiry Date. Multiple drawings arc


permitted.


( B) Subject lo the terms of this Letter of Credit, the LC Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that,


within [10] Business Days of receipt by it of a Demand, it shall pay to the Beneficiary the amount demanded in that Demand.





124


 (C) The LC Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by


it under this Letter of Credit would exceed the Total L C Amount.





3. Expiry


The LC Issuing Bank will be released from its obligations under this Letter of Credit on the date (if any) notified by the Beneficiary to the


(A)


LC Issuing Bank as the date upon which the obligations of the LC Issuing Bank under this Letter of Credit are released.


(B) Unless previously released under paragraph (A) above, on [ ] p.m. ([London | time) on the Expiry Date the obligations of the





LC Issuing Bank under this Letter of Credit will cease with no further liability on the part of the LC Issuing Bank except for any Demand


(C) validly presented under the Letter of Credit that remains unpaid.


The cancellation/release of this Letter of Credit can be indicated by return of the original to the LC Issuing Bank or by way of a formal


release letter issued by the Beneficiary. In any case it will be rendered null and void after the Expiry Date whether or not it is returned to the


(D) LC Issuing Bank.


[The Letter of Credit shall be deemed to be automatically extended from year to year, without amendment, for successive periods of one


year each from the present or any future Expiry Date hereof unless, not less than 90 days prior to the present or any future Expiry Date, the


LC Issuing Bank shall notify the Beneficiary (at the address set out above or such other address as the Beneficiary may advise the Bank


by notice in writing to the address set out above) in writing by courier that the LC Issuing Bank elects not to consider this Letter of Credit


renewed for any such additional period. Upon receipt by the Beneficiary of such notice, the Beneficiary may draw the Total L/C Amount


by means of a Demand accompanied by the original of this Letter of Credit.]


4. Payments


All payments under this Letter of Credit shall be made in [ ] and for value on the due date to the account of the Beneficiary specified in the


Demand.


5. Delivery of demand





Each Demand shall be in writing, and, unless otherwise stated, may be made by letter, sent by registered mail or by courier on your letterhead, with


the blanks appropriately completed, purportedly signed by your authorised officers bearing oiiginal handwritten signatures and must be received in


legible form by the LC Issuing Bank at its address and by the particular department or officer (if any) as follows:


[ ]





125


6. Assignment


The Beneficiary’s rights under this Letter of Credit may not he assigned or transferred.


7. Amendment


The Letter of Credit may be amended only by written instrument signed by the LC Issuing Bank and the Beneficiary.


8. ISP 98


Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the International Standby


Practices (ISP 98). International Chamber of Commerce Publication No. 590.


9. Restricted Entity


For the avoidance of doubt, the LC issuing bank shall be under no obligation to make any payment or pay any compensation to a Restricted Entity.


9. Governing law


This Letter of Credit is governed by [English law],


10. Jurisdiction


The courts of [England] have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit.


Yours faithfully


[LC Issuing Bank]


By:





126


 SCHEDULE





FORM OE DEMAND


To: [LC'Issuing Bank \


Date:


Dear Sirs


Standby Letter of Credit no. | ] issued in favour of [BENEFICIARY] (the “Letter of Credit”)


We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand.


1. We certify that (lie sum of [ ] is due [and has remained unpaid for at least [ ] Business Days] [under [set out underlying contract or


agreement]]. We therefore demand payment of the sum of [ ].


2. fhe amount specified in paragraph 1 is not in excess of the Total L/C Amount.


3. Payment should be made to the following account:


Name:


Account number:


Bank:


4. The date of this Demand is not later than the Expiry Date.


Yours faithfully


(Authorised Signatory) (Authorised Signatory)


For


[BENEFICIARY]


127


 Schedule 9


Form of Renewal or Extension Request





From: KOSMOS ENERGY CREDIT INTERNATIONAL (the “Borrower”)





To: SOCIETE GENERALE, LONDON BRANCH (the “Facility Agent”)


Dated:





Dear Sirs





KOSMOS ENERGY CREDIT INTERNATIONAL - Facility Agreement


dated [ ] (the “Agreement”)





1. We refer to the Agreement. This is a Renewal or Extension Request in respect of a Letter of Credit under the Facility. Terms defined in the Agreement


have the same meaning in this Renewal or Extension Request unless given a different meaning in this Renewal or Extension Request.


2. We wish for a Letter of Credit to be issued under the Facility on the following terms:





Current Beneficiary: [ 1


Current expiry date: [ 1


Current amount: [


Letter of Credit number: [


Proposed expiry date: [ ] (or. if that is not a Business Day. the next Business Day)


Proposed Amount: [ ] or. if less, the Total Available Commitment


Proposed Currency: [ ]


To be issued on behalf of: [ ]





3. We hereby certify that:


(a) no Event of Default is continuing or will result from the proposed Letter of Credit being issued;


(b) the making of the Utilisation would not result in the aggregate principal amount outstanding under the Facility exceeding the T otal


Commitments; and





(e) the Repeating Representations are, in the light of the facts and circumstances existing on the date hereof, true and correct in all material


respects (or, in the





I 2

 case of a Repeating Representation that contains a materiality concept, true and correct in all respects).





5. This Renewal or Extension Request is irrevocable and is a Finance Document.





Yours faithfully




















Authorised Signatory for


KOSMOS ENERGY CREDIT INTERNATIONAL


129





 Schedule 10


Pre-existing Letters of Credit





Issuing Beneficiary Amount Expiry Reference/ Entity Entity


Bank and Date Details originally issued on


Currency issued on behalf of


behalf of going


forward


Societe A Monsieur le Ministre USD 9,000,000 15/12/2016 Block C8 Kosmos Energy Kosmos Energy


Generale, charge des Mauritania Mauritania


London Branch Hydrocarbures Bruts,


Republique Islamique


de Mauritainie


Societe A Monsieur le Ministre USD 9,000,000 15/12/2016 Block C12 Kosmos Energy Kosmos Energy


Generale, charge des Mauritania Mauritania


London Branch Hydrocarbures Bruts,


Republique Islamique


de Mauritainie


Societe A Monsieur le Ministre USD 9,000,000 15/12/2016 Block C13 Kosmos Energy Kosmos Energy


Generale, charge des Mauritania Mauritania


London Branch Hydrocarbures Bruts,


Republique Islamique


de Mauritainie





130


 Schedule 11


Details of the LC Cash Collateral Accounts





Name: Kosmos Energy Credit International


Number: 10172726661








Name: Kosmos Energy Credit International


Number: 10272726661








Name: Kosmos Energy Credit International


Number: 10372726661








Name: Kosmos Energy Credit International


Number: 10472726661








Name: Kosmos Energy Credit International


Number: 10572726661








Name: Kosmos Energy Credit International


Number: 10672726661








Name: Kosmos Energy Credit International


Number: 10772726661








131


Name: Kosmos Energy Credit International


Number: 10872726661








Name: Kosmos Energy Credit International


Number: 10972726661








Name: Kosmos Energy Credit International


Number: 11072726661








Name: Kosmos Energy Credit International


Number: 11172726661








Name: Kosmos Energy Credit International


Number: 11272726661








Name: Kosmos Energy Credit International


Number: 11372726661








Name: Kosmos Energy Credit International


Number: 11472726661





132


Name: Kosmos Energy Credit International


Number: 11572726661





Name: Kosmos Energy Credit International


Number: 11672726661





Name: Kosmos Energy Credit International


Number: 11772726661





Name: Kosmos Energy Credit International


Number: 11872726661





Name: Kosmos Energy Credit International


Number: 11972726661





Name: Kosmos Energy Credit International


Number: 12072726661





Name: Kosmos Energy Credit International


Number: 12172726661





Name: Kosmos Energy Credit International


Number: 12272726661








133


Name: Kosmos Energy Credit International


Number: 12372726661








Name: Kosmos Energy Credit International


Number: 12472726661








Name: Kosmos Energy Credit International


Number: 12572726661





134


 SIGNATURES





Original Borrower





KOSMOS ENERGY CREDIT INTERNATIONAL





EXECUTED as a DEED by KOSMOS ENERGY CREDIT )


INTERNATIONAL )


acting by Neal Shah expressly authorised in accordance with a power of )


attorney dated 28 June 2013 )


in the presence of: )


) Per: /s/ NEAL SHAH


) Title: ATTORNEY-IN-FACT


)


) Name: NEAL SHAH


)


/s/ PHILLIP B. FEINER_)


Witness’s signature )


Name: PHILLIP B. FEINER








Address: 8176 PARK LANE, SUITE 500, DALLAS, TEXAS 75231


USA








Occupation: ATTORNEY





135


Guarantor





KOSMOS ENERGY LTD.





EXECUTED as a DEED by KOSMOS ENERGY LTD. )


acting by Neal Shah expressly authorised in accordance with a power of )


attorney dated )


in the presence of: )


) Per: /s/ NEAL SHAH


) Title: ATTORNEY-IN-FACT


)


) Name: NEAL SHAH


)


/s/ PHILLIP B. FEINER )


Witness’s signature )


Name: PHILLIP B. FEINER








Address: 8176 PARK LANE, SUITE 500, DALLAS, TEXAS 75231


USA








Occupation: ATTORNEY





The Original Lender





SOCIETE GENERALE, LONDON BRANCH





By: MARIA MARTIN


/s/ MARIA MARTIN








Name: MARIA MARTIN


Title: VICE PRESIDENT


Facility Agent





SOCIETE GENERALE, LONDON BRANCH


By: MARIA MARTIN


/s/ MARIA MARTIN_


Name: MARIA MARTIN


Title: VICE PRESIDENT


Security Agent


SOCIETE GENERALE, LONDON BRANCH


By: MARIA MARTIN


/s/ MARIA MARTIN_


Name: MARIA MARTIN


Title: VICE PRESIDENT


Account Bank


SOCIETE GENERALE, LONDON BRANCH


By: MARIA MARTIN


/s/ MARIA MARTIN_


Name: MARIA MARTIN


Title: VICE PRESIDENT


 Exhibit 10.2





EXECUTION VERSION


DATED 3 July 2013


KOSMOS ENERGY CREDIT INTERNATIONAL


- and -


SOCIETE GENERALE, LONDON BRANCH








CHARGE ON CASH DEPOSITS


AND ACCOUNT BANK AGREEMENT








Slaughter and May


One Bunhill Row


London


EC1Y 8YY


(SRG/JKW/TXI)





515738674


 CONTENTS





PAGE





PART 1 INTERPRETATION 2





1. Definitions and interpretation 2


PART 2 CHARGE ON CASH DEPOSITS AND THE ACCOUNTS 7


2. Obligation to pay the secured obligations 7


3. Charge 7


4. Perfection of security 7


5. Nature and protection of security 8


6. Dealing with secured assets 11


7. Restrictions 11


8. Release 11


9. Enforcement 12


10. Certificates and determinations 13


11. Covenant To Pay 13


PART 3 ACCOUNT BANK AGREEMENT 14


12. The Accounts 14


13. Operation of the Accounts 14


14. Default 19


15. Access to books and records 20


16. Confidentiality 20


17. Account Bank exoneration 21


18. Custody of documents 22


19. Liability 22


PART 4MISCEUUANEOUS 24


20. Stamp Taxes 24


21. Costs and Expenses 24


22. Power of Attorney 24


23. Assignment 25


24. Amendments 25


25. Remedies and waivers 25


26. Execution as a deed 26


27. Counterparts 26


28. Jurisdiction 26


29. Governing Law 26





30. Service of process 26


Schedule 1 Details of the Accounts 28


Schedule 2 Details and Enforcement Notices 32


Part I Default Notice 32


Part II Default Revocation Notice 34


Part III Notice of an Enforcement Event 36


CHARGE ON CASH DEPOSITS





Date: 3 July, 2013


PARTIES:


(1) KOSMOS ENERGY CREDIT INTERNATIONAL a company incorporated in the Cayman Islands whose registered number is 256364 and


whose registered office is at PO Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman, KYI-1209,


Cayman Islands (the “Company” or “KEC1”); and


(2) SOCIETE GENERALE, LONDON BRANCH located at SG House, 41 Tower Hill, London, EC2N 4SG (the “Security Agent” or “Account


Bank” or “Facility Agent”).


 PART 1


INTERPRETATION





1. DEFINITIONS AND INTERPRETATION


1.1 Definitions


Terms defined in clause 1.1 (Definitions) of the letter of credit facility agreement dated on or about the date of this Deed and made by Kosmos Energy


Credit International, Kosmos Energy Ltd., the Original Lenders, the Security Agent, the Facility Agent and the Account Bank (the “ Facility


Agreement”), shall, unless otherwise defined herein, have the same meaning when used in this Deed.


1.2 Additional definitions


In this Deed, unless otherwise specified:


“Accounts” means the interest-bearing US Dollar deposit accounts held with the Account Bank, details of which are provided in Schedule 1 ( Details


of the Accounts).


“Account Bank Liability” means any liability or obligation of IvECI to indemnify the Account Bank or pay any amount under this Deed or in


respect of any failure to perform, or breach of, KECI’s obligations under this Deed or for any liability in contract, tort or otherwise connected with


the performance of KECI’s obligations under this Deed.


“Affiliate” means, in relation to any person, a subsidiary of that person or a holding company of that person or any other subsidiary of that holding


company.


“Authorised Signatory” means, in relation to any entity entitled to give or countersign an Instruction, an entity notified pursuant to


clause 13.2( E) (Instructions) to the Account Bank by such first-mentioned entity from time to time as being authorised to sign or, as the case may


be, countersign an Instruction on behalf of such first-mentioned entity, and in respect of whom a certified copy of the authorising resolution and


specimen signature have been provided to the Account Bank.


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


“Cash Collateral” has the meaning given to this term in the Facility Agreement.


“Charge” means the security interests constituted or expressed to be constituted in favour of the Security Agent by or pursuant to this Deed.


“Costs and Expenses” means costs, charges, losses, liabilities, expenses and other sums (including legal, accountants’ and other professional fees)


and any taxes thereon.


“Default Notice” means a notice in writing given by the Facility Agent to the Account Bank and KECI substantially in the form of Part I of


Schedule 2 (Details and Enforcement Notices).





2


“Default Revocation Notice" means a notice in writing given by the Facility Agent to the Account Bank and KJEC1 substantially in the form of


Part II of Schedule 2 (Details and Enforcement Notices).


"Deposit" means all credit balances now or at any time in the future on the Accounts, all debts from time to time represented by such credit balances


and all other rights of the Company accruing or arising in relation to the Accounts.


“Deposit Agreements” means the agreements signed on or about the date of this Deed (or on any future date provided that they are in substantially


the same form as those signed on the date of this Deed) between KECI and Societe Generale, London Branch which detail the terms and conditions


which apply to the Accounts (as defined in the Charge).


"Dissolution" means an event or circumstance as described in clause 20.8 (Insolvency Proceedings) of the Facility Agreement.


“Dispute” has the meaning given to it in clause 28 (Jurisdiction).


“Enforcement Event” means:


(A) any Event of Default in respect of which a written notice has been given to the Company pursuant to clause 20.15 ( Acceleration) of the


Facility Agreement; or


(B) (i) where at any time the Borrower has failed to pay to the LC Issuing Bank lor the account of each Lender an amount due under


clause 6.9(B) (Claims under a Letter of Credit) of the Facility Agreement; and


(ii) the LC Issuing Bank (acting reasonably), is unable to recover the amount due from the LC Cash Collateral Accounts (either at the


instruction of the Borrower or otherwise) within three Business Days of such non-payment pursuant to clause 6.9(B) of the


Facility Agreement.


“Event of Default” means any event or circumstance specified as such in the Facility Agreement.


“Group” means the Original Guarantor or any Additional Guarantor and its direct and indirect subsidiaries.


“Instruction” means:


(a) an instruction transmitted in accordance with operating procedures agreed in accordance w ith clause 13.3 ( Operating procedures); or


(b) a Default Notice; or


(c) a Default Revocation Notice; or


(d) a Notice of an Enforcement Event





3


“Notice of an Enforcement Event” means a notice in writing from the Security Agent to the Account Bank and KECI substantially in the form of


Part III of Schedule 2 (Details and Enforcement Notices).


“Secured Obligations” means all present and future obligations and liabilities of the Company ( whether actual or contingent and whether owed


jointly or severally or in any other capacity whatever) which are, or are expressed to be, or may become, due, owing or payable to the Secured Parties


under or in connection with the Finance Documents (as such documents may be varied, amended, waived, released, novated, supplemented,


extended, restated or replaced from time to time, in each case, however fundamentally), together with all costs, charges and expenses incurred by the


Secured Parties which are, or are expressed to be, or may become due, owing or payable by the Company under or in connection with the Facility


Agreement.


“Tax” includes any present or future tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest in


connection with any failure to pay or delay in paying any of the same) and “ Taxes” shall be construed accordingly.


1.3 Construction of Particular Terms


Unless a contrary intention appears, in this Deed the provisions of clause 1.2 ( Construction) of the Facility Agreement shall apply as if set out in


full in this Deed, save that references to the Facility Agreement shall be construed as references to this Deed and in addition:


Unless otherwise specified, any reference to:


(A) “assets” includes properties, revenues and rights of every kind, present, future and contingent, and whether tangible or intangible;


( B) a “company” includes any company, corporation or other body corporate, wherever and however incorporated or established;


(C) “this Deed” or any other agreement or instrument is a reference to this deed or other agreement or instrument as it may har e been amended,


supplemented, replaced or novated from time to time and includes a reference to any document which amends, supplements, replaces,


novates or is entered into, made or given pursuant to or in accordance with any of the terms of this Deed or, as the case may be, the relevant


deed, agreement or instrument;


(ID) “law” includes any present or future common or customary law, principles of equity and any constitution, decree, judgment, decision,


legislation, statute, order, ordinance, regulation, bye-law or other legislative measure in any jurisdiction or any present or future official


directive, regulation, guideline, request, rule, code of practice, treaty or requirement (in each case, whether or not haring the force of law


but, if not having the force of law. the compliance with which is in accordance with the general practice of a person to whom the directive,


regulation, guideline, request, rule, code of practice, treaty or requirement is intended to apply) of any governmental, intergovernmental or





4


supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;


(E) "rights" includes all rights, title, benefits, powers, privileges, interests, claims, authorities, discretions, remedies, liberties, easements,


quasi-easements and appurtenances (in each case, of every kind, present, future and contingent): and


(F) “security” includes any mortgage, charge, pledge, lien, security assignment, hypothecation or trust arrangement for the purpose of


providing security and any other encumbrance or security interest of any kind har ing the effect of securing any obligation of any person


(including the deposit of moneys or property with a person with the intention of affording such person a right of hen. set-off. combination


or counter-claim) and any other agreement or any other type of arrangement having a similar effect (including any “flawed asset" or “hold


back" arrangement) and “security interest" shall be construed accordingly.


1.4 Interpretation of this Deed


(A) Unless a contrary indication appears, a reference to any party or person shall be construed as including its and any subsequent successors


in title, permitted transferees and permitted assigns, in each case in accordance with their respective interests.


(B) Unless a contrary indication appears, a reference to a time of day shall be construed as referring to London time.


(C) The terms “include”, “includes” and “including” shall be construed without limitation.


(D) References in this Deed to any Clause or Schedule shall be to a clause or schedule contained in this Deed.


(F.) Clause and Schedule headings are for ease of reference only and shall be ignored in construing this Deed.


(F) Unless a contrary indication appears, references to any provision of any law are to be construed as referring to that provision as it may


har e been, or may from time to time be. amended or re-enacted, and as referring to all bye-laws, instruments, orders, decrees, ordinances


and regulations for the time being made under or deriving validity from that provision.


((I) An Enforcement Event is “continuing” if it has not been remedied or waived.


1.5 Third party rights


(A) Save as otherwise provided in this Deed, a person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties)


Act 1999 to enforce or enjoy the benefit of any term of this Deed.





5


(B) Notwithstanding any term of this Deed, the consent of any person who is not a party is not required to rescind or vary this Deed at any


time.








6


 PART 2


CHARGE ON CASH DEPOSITS AND THE ACCOUNTS





2. OBLIGATION TO PAY THE SECURED OBLIGATIONS


The Company undertakes to the Security Agent as trustee for the Secured Parties to perform, observe, pay and discharge all Secured Obligations


when due and payable and. upon demand by the Security Agent, pay those Secured Obligations which are due in accordance with the Finance


Documents but remain unpaid.


3. CHARGE


As continuing security for the full and puncUial payment, performance and discharge of the Secured Obligations, but without prejudice to any other


rights of the Security Agent under this Deed, the Company. with full title guarantee and free of any other security interest, charges all its right, title


and interest from time to time in and to the Deposit and the Accounts by way of first fixed charge in favour of the Security Agent.


4. PERFECTION OF SECURITY


4.1 Notice of charge


The execution of this Deed by the Company and the Security Agent shall constitute notice to the Security Agent of the charge over the Deposit and


Accounts.


4.2 Further assurances


The Company shall (at its own cost) promptly take all action necessary or desirable to:


(A) ensure that the Charge is and remains valid, legally binding and enforceable;


( B) perfect, preserve or protect the Charge and its priority; and


(C) facilitate the exercise of any and all of the rights, powers and discretions vested or intended to be rested in the Security Agent by or


pursuant to this Deed and to facilitate the realisation of the Deposit,


including the execution of all such documents, transfers, conveyances, assignments and assurances in respeet of the Deposit, and the giving of all


such notices, orders, instructions and directions as the Security Agent may reasonably consider necessary from time to time. The obligations of the


Company under this clause 4.2 (Further assurances) shall be in addition to and not in substitution for the covenants for further assurance deemed


to be included in this Deed by virtue of the Law of Property (Miscellaneous Provisions) Act 1994.





7


5. NATURE AND PROTECTION OF SECURITY





5.1 Continuing security


The Charge is continuing and extends to the ultimate balance of the Secured Obligations from time to time unless and until discharged by the


Security Agent in accordance with clause 8 (Release) or clause 24.17 ( Winding up of trust) of the Facility Agreement, regardless of any intermediate


payment, discharge or satisfaction in whole or part.


5.2 Additional security





The security created by this Deed and the rights given to the Security Agent under this Deed shall be cumulative and in addition to and shall not


prejudice, or be prejudiced by, any other security or guarantee or any other right, power or remedy which the Security Agent has or may at any time


hold in respect of or in connection with any or all of the Secured Obligations. All such rights, powers and remedies may be exercised from time to


time as often as the Security Agent may deem expedient.


5.5 Immediate recourse





The Security Agent need not, before exercising any of the rights, title, benefit and interest conferred upon it by this Deed or by law:


(A) take action or obtain judgment against the Company or any other person in any court; or


( B) make or file any claim or proof on the rehabilitation, administration, custodianship, receivership, liquidation, winding-up or dissolution





of the Company or any other person; or


(C) enforce or seek to enforce the recovery of the moneys and liabilities hereby secured or enforce or seek to enforce any other security or


guarantee.


5.4 W aiver of defences





Without prejudice to the other provisions of this clause 5 (Nature and protection of security). neither this Deed nor Charge, its priority, the rights of


the Security Agent under or pursuant to this Deed nor the liability of the Company for the Secured Obligations under this Deed shall be prejudiced or


affected by:


(A) any variation, amendment, novation, extension (whether of maturity or not), supplementation or replacement of, or waiver or release


granted under or in connection with any Finance Document or other document or any Security Obligations, guarantee or indemnity; or


(B) any time, waiver, consent or other indulgence or concession granted, by the Company or other person; or





8


(C) the taking, holding, failure to take or hold, variation, realisation, non-enforcement, non-perfection or release by the Security Agent or any


other person of any other security obligation or any guarantee or indemnity or other right; or


(D) any corporate, legal proceeding or other procedure or step taken for or with a view to the rehabilitation, administration, custodianship,


receivership, liquidation, winding-up or dissolution of the Company or any other person; or


(E) any change in the constitution of the Company; or


(F) any amalgamation, merger or reconstruction that may be effected by the Security Agent with any other person or any sale or transfer of the


whole or any part of the assets of the Security Agent to any other person; or


(G) the existence of any claim, set-off or other right which the Company may have at any time against the Security Agent or other person; or


(FI) the making or absence of any demand for payment or discharge of the Security Agent on the Company or any other person, whether by the


Security Agent or any other person; or


(I) any arrangement or compromise entered into by the Security Agent with the Company or any other person; or


(.1) any incapability or lack of power, authority or legal personality of or dissolution or change in the numbers or status of the Company or any


other person; or


(I<) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or


security; or


(L) any other thing done or omitted or neglected to be done by the Security Agent or any other person or any other dealing, fact, matter or thing


which, but for this provision, might operate to prejudice or affect any of the security created under this Deed or the liability of the Company


for the Secured Obligations.


5.5 Deferral of rights


(A) Until such time as the Charge has been released in accordance with clause 8 ( Release), the Company will not exercise any rights which it


may have by reason o f performance by it of its obligations under this Deed:


(i) to claim, rank, prove or vote as a creditor of any other party to any of the Finance Documents; or


(ii) to receive, claim or have the benefit of any payment, guarantee, indemnity, contribution or security from or on account of any


such party (in whole or in part or whether by way of subrogation or otherwise); and/or





9


(iii) of set-off, combination or counter-claim or in relation to any “flawed-asset” or “hold back” arrangement as against any such


party.


(B) The Company shall hold on trust for, and immediately pay or transfer to, the Security Agent an amount equal to any payment or benefit


received by it contrary to paragraph (A) above.


( C) If the Company exercises any right of set-off, combination or counter-claim or any rights in relation to any “flawed-asset” or “hold back


arrangement” contrary to paragraph (A)(iii) above, it will immediately pay or transfer to the Security Agent an amount equal to the amount


set-off, combined or counterclaimed.


(D) The Security Agent shall apply all amounts received pursuant to paragraph (B) and paragraph (C) above iu or towards payment of the


Secured Obligations or any part thereof in such order in such manner as the Security Agent shall (in its absolute discretion) determine and


thereafter in payment of any surplus to the Company or other person entitled to it.


5.6 New account


At any time after:


(A) the Security Agent receives, or is deemed to be affected by, notice (either actual or constructive) of any subsequent security interest or any


disposition affecting the Deposit or Accounts or part thereof or interest therein; or


( B) any corporate, legal proceeding or other procedure or step taken for or with a view to the rehabilitation, administration, custodianship,


receivership, liquidation, winding-up or dissolution of the Company,


the Security Agent may open a new account in the name of the Company (whether or not it permits any existing account to continue). If the Security


Agent does not open such a new account, it shall nevertheless be treated as if it had done so at the time when the notice was received or was deemed to


have been received or, as the case may be, the corporate, legal proceeding or other procedure or step was taken. As from that time, all payments made


by the Company to the Security Agent or received shall be credited or treated as having been credited to the new account and will not operate to reduce


the amount secured by this Deed at any time.


5.7 Further advances


The Charge created by this Deed is intended to secure further advances.





10


6. DEALING WITH SECURED ASSETS





6.1 Negative pledge


The Company shall not, without the prior written consent of the Security Agent, at any time during the subsistence of this Deed, create or permit to


exist any security (other than the Charge) over the Deposit or the Accounts.


6.2 Disposal of assets


The Company shall not enter into a single transaction or a series of transactions ( whether related or not) and whether voluntary or involuntary to sell,


transfer, assign, lease, licence or otherwise dispose of any interest in the Deposit or the Accounts (otherwise than pursuant to this Deed or the Facility


Agreement).


7. RESTRICTIONS


Upon the occurrence of an Enforcement Event which is continuing, or as otherwise prohibited under the Facility Agreement, the Company shall not


be entitled to receive, withdraw or otherwise transfer all or any part of the credit balance from time to time on the Accounts and Deposit:


(A) except with the prior written consent of the Security Agent; or


( B) unless there are no remaining Secured Obligations and the Security has been discharged in full in accordance with clause 8 ( Release).


8. RELEASE


8.1 Release of deposit


If the Security Agent is satisfied that:


(A) all Secured Obligations have been unconditionally and irrevocably paid or discharged in full and the Facility Agreement has been


terminated and the Security Agent and the Secured Parties have no further actual or contingent obligations to make advances or provide


other financial accommodation to the Borrower or any other party under the Facility Agreement; or


(B) security or a guarantee for the Secured Obligations, in each case acceptable to the Security Agent, has been provided in substitution for this


Deed, or


then, subject to the remainder of this clause 8 ( Release), the Security Agent shall at the request and cost of the Company take whatever action is


necessary to release the Deposit and Accounts from the Charge.





1 1


8.2 Reinstatement





If the Security Agent reasonably considers, on the basis of independent legal advice, that any payment to, or security or guarantee provided in relation


to the Secured Obligations to it is capable of being avoided, reduced or invalidated by virtue of applicable law, notwithstanding any re-assignment or


discharge of the Deposit, the liability of the Company under this Deed and the Charge shall continue as if such amounts had not been paid or as if


any such security or guarantee had not been provided.


9. ENFORCEMENT


9.1 Appropriation


(A) Immediately upon and at any time after the occurrence of an Enforcement Event which is continuing, or as otherwise permitted under the


Facility Agreement, the Security Agent shall be entitled, and is hereby irrevocably and unconditionally authorised, without giving prior


notice to the Company or obtaining the consent of the Company but at the cost of the Company, to apply, set-off or transfer the whole or


any part of the Deposit ( whether or not then payable) in or towards payment or other satisfaction of the Secured Obligations or any part


thereof in such order as the Security Agent shall ( in its absolute discretion) determine and thereafter in payment of any surplus to the


Company or other person entitled to it.


( B) On exercising its rights under this clause 9.1 (Appropriation) the Security Agent shall serve a Notice of an Enforcement Event on the


Account Bank and shall copy any such notice to KECI.


( C) The Account Bank agrees, immediately upon receipt of a Notice of an Enforcement Event:


(i) to comply with all directions for or in connection with the Accounts whatsoever given by the Authorised Signatories of the


Security Agent and as more specifically set out in the Notice of an Enforcement Event ( without reference to and regardless of any


inconsistent request or Instruction from KECI); and


(ii) not to comply with the terms of any Instruction or other demand, direction or request in relation to any of the Accounts from any


person other than the Security Agent unless it has been approved in writing by the Security Agent.


9.2 Financial collateral regulations


(A) To the extent that any of the Accounts and the Deposit, this Deed and the rights and obligations of the parties under this Deed, constitute a


“security financial collateral arrangement” (as defined in and for the purposes of, the Financial Collateral Arrangements (No. 2) Regulations


2003 (SI 2003/3226) (the





12


“Regulations”)), the Security Agent shall have the benefit of all of the rights of a collateral taker conferred upon it by the Regulations,


ineluding the right to appropriate all or any part of the financial collateral (as defined in the Regulations) in or towards discharge of the


Secured Obligations in such order as the Security Agent shall (in its absolute discretion) determine and thereafter in payment of any surplus


to the Company or other person entitled to it.


(B) The parties agree that the value of the financial collateral (as defined in the Regulations) so appropriated shall be the amount standing to the


credit of the Accounts (or any new account opened pursuant to clause 5.6 ( New account), together with any accrued but unposted interest,


at the time the right of appropriation is exercised. The parties agree that the method of valuation provided for in this Deed is a commercially


reasonable method of valuation for the purposes of the Regulations.


Section 93 Law of Property Act 1925


Section 93 of the Law of Property Act 1925 shall not apply to this Deed.


CERTIFICATES AND DETERMINATIONS


For all pruposes. including any legal proceedings:


(A) a determination by the Security Agent: or


( B) a copy of a certificate signed by an officer of the Security Agent,


of the amount of any indebtedness comprised in the Secured Obligations and/or the amount standing to the credit of the Accounts for the time being or


at any time shall, in the absence of manifest error, be conclusive evidence against the Company as to such amount.


COVENANT TO PAY


The Company shall pay and discharge all Secured Obligations in accordance with the Facility Agreement or. as the case may be, this Deed.


 PART 3


ACCOUNT BANK AGREEMENT





12. THE ACCOUNTS


(A) The Accounts shall be maintained at an office of the Account Bank in London or such other jurisdiction approved by the Facility Agent


(acting reasonably). For the avoidance of doubt, nothing in this clause 12(A) shall create any obligation on the Account Bank to establish


an account in another location other than in London.


( B) The Accounts shall be denominated in US Dollars. Any sum constituting interest paid in respect of the credit balance of the Accounts


shall be treated in the same manner as any other sum credited to the Accounts.


(C) The Account Bank is hereby notified that pursuant to this Deed KECI has charged to the Security Agent all its rights, title and interests in


and to the Deposit and the Accounts from time to time.


(D) The Accounts shall be maintained by KECI at all times prior to the Discharge Date at which time the Facility Agent will notify the Account


Bank in writing that the Accounts are no longer required to be maintained.


13. OPERATION OF THE ACCOUNTS


13.1 Compliance with the Facility Agreement


(A) KECI shall operate the Accounts in accordance with the provisions of the Facility Agreement and shall not:


(i) request withdrawals from the Accounts except where expressly permitted under the provisions of the Facility Agreement; or


(ii) pay any moneys into the Accounts except in accordance with the provisions of the Facility" Agreement.


13.2 Instructions


(A) Except as required by applicable law. the Account Bank shall not accept or act upon any Instruction or request to make any payment or


transfer to or from, or otherwise to transact any other dealing in relation to the Accounts:


(i) from any person other than KECI. the Facility Agent or the Security Agent, as specified by this Deed; and


(ii) unless such Instruction or request from either the Facility Agent, the Security Agent or KECI is in written format.





14


( B) Subject to the terms of this Deed and so long as no Default Notice has been issued by the Facility Agent which has not been revoked by a


Default Revocation Notice, KECI may give, and the Account Bank may accept and act upon, Instructions regarding the operation of the


Accounts in accordance with the customary banking practice of the Account Bank in the jurisdiction concerned, subject to the terms of this


Deed, the Deposit Agreements or any other Finance Document.


(C) Withdrawals or transfers may, subject to clause 14 (Default) and clause 9 (Enforcement), be made from the Accounts provided that:


(i) the withdrawal or transfer is in compliance with the terms of this Deed, the Deposit Agreements or any other Finance Document;


(ii) the withdrawal or transfer is based on cleared funds; and


(iii) the Accounts may not be overdrawn at any time.


(D) KECI shall not exercise any right which it may have under any applicable law to instruct the Account Bank to transfer any amount


standing to the credit of the Accounts to KECI or to its order in any manner which is or would be inconsistent with any of the provisions of


this Deed, the Deposit Agreements or any other Finance Document.


(E) KEC I, the Facility Agent and the Security Agent shall each, from time to time by letter addressed to the other parties and, in the ease of


KECI, signed by a director of KECI duly authorised to sign:


(i) designate in writing the individuals authorised to sign Instructions, notices, communications or documents to be made, given or


delivered under this Deed on its behalf;


(ii) supply to (he other parties specimen signatures of those individuals; and


(iii) it is acknowledged by the parties that KECI has given a notice (to the Account Bank only) for the purpose of this clause 13.2


< Instructions) prior to the date of this Deed.


(F) The Account Bank shall be entitled to rely on any Instruction, notice, communication or document believed by it in good faith to be


genuine, correct and duly authorised, and to have been communicated or signed by the person by or on behalf of whom it purports to be


communicated or signed and shall not be liable to any of the parties to this Deed for any of the consequences of such reliance.


(G) The Account Bank shall not have any responsibility to any of the parties to this Deed if any Instruction which should be given by the


Facility Agent to the Account Bank under or in connection with this Deed is not received by the Account Bank or is not made at the time it


should be made.





15


(H) Without prejudice to paragraph (F). where the Account Bank receives any Instruction in accordance with the terms of this clause 13.2


(Instructions) which it believes to be genuine, correct and duly authorised, and to have been communicated or signed by the person by or


on behalf of whom it purports to be communicated or signed, the Account Bank shall not have any responsibility to:


(i) ensure that the information set out therein is correct:


(ii) check or enquire as to whether any condition contained therein has been met or will be fulfilled:


(iii) check or enquire as to whether such Instruction has been properly given; or


(iv) enquire as to the purpose or nature of any request for a withdrawal from the Accounts contained therein.


ill The Account Bank and KECI confirm that the Accounts will be operated in a manner that provides a written statement of all transactions


carried out on such Accounts including, for the avoidance of doubt, all transactions for which Instructions were given to the Account Bank


via the Account Bank's electronic banking system and. as at any given date, of the balance standing to the credit of the Accounts, and the


Account Bank confirms that such statements will be made available to KECI and the Security Agent at the end of each calendar month and


as may otherwise reasonably be requested from time to time.


(.1) The Account Bank shall be entitled to deal with money paid to it by KECI for the purposes of this Deed in the same manner as other


money paid to a banker by its customers, except that (a) it acknowledges that it is not entitled to, and undertakes not to claim or exercise


any lien, right of set-off, combination or other similar right with respect to moneys standing to the credit of the Accounts are held or are in


the course of being credited to it; and ( b) it shall not be liable to account to KECI for any interest or other amounts in respect of the money,


save for interest borne under clause 13.5 (Interest).


(K) The Account Bank confirms that it has not received any other notice of any Security Interest, nor is it otherwise aware of any Security


Interest, in respect of the Accounts in favour of any person other than the Security Agent.


13.3 Operating procedures


(A) Detailed operating procedures for the Accounts shall, subject to clause 13.3(B)(iii) ( Operating procedures), be agreed front time to time


between KEC’I and the Account Bank.


(B) Each of the parties to this Deed agrees and acknowledges that:


(i) there shall be no operation of the Accounts except in accordance with the provisions of this Deed and the Facility Agreement;





16


 (ii) the operating procedures shall be amended from time to time as agreed in writing between KECI, the Account Bank and the


Security Agent (each acting reasonably); and


(iii) in the event of inconsistency between the operating procedures agreed in accordance with clause 13.3(A) ( Operating procedures)


and the terms of this Deed, the latter shall prevail.





13.4 Fees


(A) Subject to the Facility Agreement, KECI shall pay to the Account Bank such transaction charges and other fees, costs and expenses





(including value added tax where applicable) as the Account Bank and KECI shall separately agree in writing for carrying out the relevant


transactions and are payable from time to time by KECI.


(B) KECI will pay to the Account Bank, within fifteen Business Days of demand, the amount of all charges, costs and expenses payable by





KECI to the Account Bank pursuant to clause 13.4(A) ( Fees).


( C) The fees, commissions and expenses payable to the Account Bank for services rendered and the performance of its obligations under this


Deed shall not be abated by any remuneration or other amounts or profits receivable by the Account Bank (or to its knowledge by any of its


associates) in connection with any transaction effected by the Account Bank with or for KECI.





13.5 Interest


Each sum credited to the Accounts from time to time shall, from the time it is credited until the time it is withdrawn from the Accounts,


(A)


bear interest at such commercially appropriate rate as may be agreed from time to time by the Account Bank and KECI provided that the


Account Bank may. at any time, apply a new rate of interest to the Accounts, which new rate shall be effective on a date no less than 30


Business Days after the Account Bank has giv en written notice to KECI of the same.


(B) Subject to KECI maintaining Cash Collateral in the Accounts in compliance with its obligations under the Facility Agreement and providing


an Enforcement Event has not occurred and is continuing, all interest earned on the balance standing to the credit of the Accounts shall be


credited to the account (which is not secured under this Deed) as notified by KECI to the Account Bank.


13.6 Information


KECI irrevocably instructs and authorises the Account Bank to disclose to the Facility Agent or the Security Agent (as the case may be), without any


reference to or further authority from KECI and without any inquiry by the Account Bank as to the justification for such disclosure, such


information relating to the Accounts as the Facility Agent, or the Security Agent (as the case may be) may request from time to time. All such





17


information provided by the Account Bank shall be deemed to have been provided on behalf of KECI and each Secured Party is subject to the


confidentiality undertaking contained in Schedule 6 (Form of Confidentiality Undertaking) of the Facility Agreement hi relation to such


information.


13.7 Terms of appointment of the Account Bank


(A) The Account Bank is authorised and regulated by the Financial Services Authority. Nothing in this Deed shall require the Account Bank to


carry on an activity of the kind specified by any provision of Part II (other than article 5 (accepting deposits)) of the Financial Services and


Markets Act 2000 (Regulated Activities) Order 2001, or to lend money to KECI.


( B) The Account Bank shall be obliged to perform such duties and only such duties as are expressly set out in this Deed and no implied duties


or obligations of any kind (including without limitation duties or obligations of a fiduciary or equitable nature) shall be read into this Deed


against the Account Bank.


(C) Any of the Account Bank, its officers, directors and employees may accept deposits from, lend money to and generally engage or be


interested in any kind of lending, financial or other business with KECI and any other party to any Finance Documents.


(D) The Account Bank shall be entitled to take any action or to refuse to take any action which the Account Bank regards as necessary for the


Account Bank to comply with any applicable law, regulation or fiscal requirement, or the rules, operating procedures or market practice of


any relevant stock exchange or other market or clearing system.


(E) The Account Bank may collect, use and disclose personal data about KECI and/or other transaction parties (if any are an individual) or


individuals associated with KECI and/or other transaction parties, so that the Account Bank can carry out its obligations to KECI and for


other related purposes, including auditing, monitoring and analysis of its business, fraud and crime prevention, money laundering, legal


and regulatory compliance and the marketing by the Account Bank or members of the Account Bank's corporate group of other services.


The Account Bank will keep the personal data up to date. The Account Bank may also transfer the personal data to any country (including


countries outside the European Economic .Area where there may be less stringent data protection laws) to process information on the Account


Bank’s behalf. Wherever it is processed, the personal data will be protected by a strict code of secrecy and security to which all members


of the processing agent’s corporate group, their staff and any third parties are subject, and will only be used in accordance with the Account


Bank’s instructions.


(F) The Account Bank may consult with legal and other professional advisers and the opinion of the advisers shall be full and complete


protection in respect of any action taken, omitted or suffered under this Deed in good faith and in accordance with the opinion of the


advisers.





IX


(G) The Account Bank shall not be under any obligation to take any action under this Deed which it expects will result in any expense or


liability accruing to it. the payment of which within a reasonable time is not, in its opinion, assured to it.


(II) Any corporation into which the Account Bank may be merged or converted, or any corporation with which the Account Bank may be


consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Account Bank shall be a party, or any


corporation to which the Account Bank shall sell or otherwise transfer all or substantially all of its assets shall, on the date when the


merger, conversion, consolidation or transfer becomes effective and to the extent permitted by any applicable laws, become the successor


Account Bank under this Deed without the execution or filing of any paper or any further act on the part of the parties to this Deed, unless


otherwise required by KECI, and after the said effective date all references in this Deed to the Account Bank shall be deemed to be references


to such successor corporation. Written notice of any such merger, conversion, consolidation or transfer shall immediately be given to the


KECI by the Account Bank.


14. DEFAULT


14.1 Default Notice


(A) The Facility Agent shall only be entitled to serve a Default Notice to the Account Bank where a Default or an Event of Default has occurred


and is continuing and has not been waived under the Facility Agreement.


( B) Upon receipt by the Account Bank of a Default Notice, KECI and the Account Bank agree that no amount may be withdrawn or


transferred from the Account and the Account Bank shall not comply with any Instruction or other demand, direction or request for such a


withdrawal or transfer ( except a Default Revocation Notice, Notice of an Enforcement Event or as ordered by any court) in respect of the


Accounts unless and until the Account Bank has received a Default Revocation Notice (revoking the corresponding Default Notice).


(C) Once a Default Notice has been given, it will continue in force and the provisions of clause 14.1(B) ( Default Notice) will apply until the


Account Bank receives a Default Revocation Notice from the Facility Agent.


(D) The Facility Agent shall copy each notice given pursuant to this clause 14.1 ( Default Notice) forthwith to KECI.


(E) To the extent permitted under this clause 14 (Default'), during the period between receipt by KECI of the copy of a Default Notice and


receipt of a copy of a corresponding Default Revocation Notice. KECI shall present all Instructions or other directions or requests and all


certificates given by KECI regarding the operation of the Accounts in a timely fashion to the Facility Agent for information.


(F) Where the Account Bank has received a Default Notice, which has not been the subject of a corresponding Default Revocation Notice, the


Account Bank shall





19


make withdrawals from the Accounts and take all other action in relation to the Accounts solely as instructed by the Security Agent (or as


ordered by any court).


14.2 Default Revocation Notice


(A) The Facility Agent shall give a Default Revocation Notice to the Account Bank (copied to KECI) promptly after being satisfied that no


Default or Event of Default is continuing under the Facility Agreement.


(B) For the avoidance of doubt, if any waiver given in respect of any Default expires, or if any condition relating to such waiver is not or ceases


to be satisfied, or if such waiver is revoked or otherwise ceases to apply, the Facility Agent shall not be restricted from serving a further


Default Notice in respect of the relevant Default.


15. ACCESS TO BOOKS AND RECORDS


The Account Bank shall provide to the Facility Agent and KECI. not less than five Business Days after the end of each calendar year quarter, a full


statement of all payments (including the relevant account balance) into and from the Accounts.


16. CONFIDENTIALITY


The Account Bank shall keep confidential all information made available to it by. or by any person on behalf of. any other party to this Deed and


shall not disclose any such information to any third party without the prior written consent of KECI. the Security Agent and the Facility Agent unless


such disclosure is:


(A) made to a sub-custodian for the purpose of arrangements made in accordance with this Deed;


( B) made to an Affiliate of the Account Bank and is necessary for such Affiliate to comply with any law provided that prior to such disclosure


the relevant Affiliate has given an undertaking to be bound by the confidentiality provisions of this clause 16 ( Confidentiality)',


(C) made in connection with any proceedings, claims or suits arising out of or in connection with this Deed, to the extent that the Account Bank


reasonably considers it necessary to protect its interests;


(D) required by an order of a court of competent jurisdiction;


(E) made or required pursuant to any law in accordance with which the Account Bank is required to act:


(F) made to its auditors for the purpose of enabling them to undertake any audit or to its legal advisers when seeking bona tide legal advice in


connection with this Deed; or





20


((I) limited to information which has been published or announced in conditions free from confidentiality or has otherwise entered the public


domain without default on the part of the Account Hank or has become known by the Account Bank before being disclosed by or on behalf


of KECI, the Security Agent or either Facility Agent or has lawfully been obtained after that date other than from a source connected with


KECI, the Security Agent or the Facility Agent.


17. AC COUNT BANK EXONERATION


17.1 Exoneration


(A) The Account Bank may rely on the provisions of clause 23.2 ( Duties of the Facility. Igent), clause 23.3 (No fiduciary duties), clause


23.4 (Business with the Croup), clause 23.5 (Rights and discretions of Agents), clause 23.7 (Responsibility for documentation ) and


clause 23.8 (Exclusion of liability) of the Facility Agreement individually, as if such provisions were set out in full in this Deed,


substituting references to the Facility Agent or the Agent with references to the Account Bank.


(B) The Account Bank shall not be liable to KECI or any other person for any action it may properly take in reliance in good faith upon any


written notice or request given to it by KECI or the Security Agent or the Facility Agent (including any withdrawals made pursuant to


clause 13.2 (Instructions)), including where such notice or request causes the Accounts to become overdrawn.


(C) The Account Bank does not have and does not accept any responsibility for:


(i) the accuracy and/or completeness of any information (other than statements provided in accordance with clause 15 ( . iccess to


books and records); or


(ii) the legality, validity, effectiveness, adequacy or enforceability of any document made or executed in connection with this Deed.


(D) KECI agrees that it shall not assert or seek to assert against any director, officer or employee of the Account Bank any claim it might have


against the Account Bank in respect of the matters referred to in this clause 17 (Account Bank exoneration).


17.2 Excluded obligation of Account Bank


(A) Subject to clause 19 ( Liability) and exercising the banker’s duty of care, the Account Bank shall not:


(i) be bound to enquire as to the occurrence or otherwise of a Default;


(ii) be bound to enquire as to the performance by any other party to this Deed of its obligations hereunder;





21


 (Ill) be bound to account to any other party hereto for any sum or the profit element of any sum received by it for its own account; or





(iv) be under any fiduciary duty towards any other party hereto or under any obligations other than those for which express provision


is made in this Deed or in any operating procedures determined under clause 13.3 ( Operating procedures).


17.3 Indemnity


KECI shall indemnify the Account Bank on demand against any cost. loss, liability, claim, action, damages, expenses or demands (together,


"Losses") incurred by or made against the Account Bank in acting as the Account Bank under this Deed, except to the extent that any Losses result


from its own wilful default, gross negligence or fraud or that of its officers, directors or employees.


18. CUSTODY OF DOCUMENTS


(A) The Account Bank, the Facility Agent and the Security Agent undertake that they shall not deliver this Deed into a country that would


result in this Deed (or any party to it) becoming subject to (or liable for payment of) any stamp duty, documentary taxes or any other


similar tax, charge or impost (or any obligation upon a member of the Group to reimburse any other person for such a payment).


(B) Paragraph (A) above shall not apply to the Account Bank, the Facility Agent or the Security Agent at any time at which such party either


(i) has a right to take Enforcement Action; or (ii) has the written consent of KECI.


19. LIABILITY


(A) The Account Bank will only be liable to KECI for losses, liabilities, costs, expenses and demands arising directly from the performance of


its obligations under this Deed suffered by or occasioned to KECI (“ Liabilities") to the extent that the Account Bank has been negligent,


fraudulent or in wilful default (including any wilful breach of the terms of this Deed) in respect of its obligations under this Deed. The


Account Bank shall not otherwise be liable or responsible for any Liabilities or inconvenience which may result from anything done or


omitted to be done by it in connection with this Deed.


(B) Liabilities arising under clause 19(A) ( Liability) shall be limited to the amount of KECI’s actual loss. Such actual loss shall be determined


(i) as at the date of default of the Account Bank or, if later, the date on which the loss arises as a result of such default, and (ii) without


reference to any special conditions or circumstances known to the Account Bank at the time of entering into the Agreement, or at the time of


accepting any relevant instructions, which increase the amount of the loss. In no event shall the Account Bank be liable for any loss of


profits, goodwill, reputation, business opportunity or anticipated saving, or for





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special, punitive or consequential damages, whether or not the Account Bank has been advised of the possibility of such loss or damages.


The liability of the Account Bank under clause 19(A) ( Liability) will not extend to any Liabilities arising through any acts, events or


circumstances not reasonably within its control, or resulting from the general risks of investment in or the holding of assets in any


jurisdiction, including, but not limited to, Liabilities arising from: nationalisation, expropriation or other governmental actions; any law,


order or regulation of a governmental, supranational or regulatory body; regulation of the banking or securities industry including changes


in market rules or practice, currency restrictions, devaluations or fluctuations; market conditions affecting the execution or settlement of


transactions or the value of assets; breakdown, failure or malfunction of any third party transport, telecommunications, computer services


or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; and strikes or industrial action.


 TART 4


MISCELLANEOUS





20. STAMP TAXES


The Company shall, within five Business Days of demand, pay and indemnify the Security Agent and the Account Bank against any cost, loss or


liability that the Security Agent or the Account Bank incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of


this Deed (other than in respect of an assignment or transfer by a Security Agent) in accordance with clause 11.5 ( Stamp taxes) of the Facility


Agreement.


21. COSTS AND EXPENSES


21.1 Transaction Expenses


The Company shall within fifteen Business Days of written demand pay to the Security Agent (or other relevant Finance Party) all costs and


expenses (including legal fees) reasonably incurred:


(A) in connection with the negotiation, preparation, printing and execution of this Deed: and


(B) in responding to evaluating, negotiating, preparing, printing, execution of or complying with, an amendment, waiver or consent requested


by the Company relating to this Deed.


21.2 Enforcement Costs


The Company shall within five Business Days of written demand pay to the Security Agent and each of the Secured Parties the amount of all


documented costs and expenses (including legal fees) incurred by the Security Agent or the relevant Secured Party in connection with the enforcement


or attempted enforcement of. or the preservation of rights under, this Deed.


2 2. POWER OF ATTORNEY


22.1 Appointment


The Company hereby appoints as its attorney, irrevocably (within the meaning of section 4 of the Powers of Attorney Act 1971) and by way of


security for the performance of its obligations under this Deed, the Security Agent and any person nominated in writing by the Security Agent


severally (with full powers of substitution and delegation), on its behalf and in its name or otherwise and as its act and deed, at such time and in


such manner as the attorney may think fit:


(A) to take any action which it is obliged to take under this Deed but has not taken; and





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( B) to take any action required to enable the Security Agent to exercise all or any of the rights, powers, authorities and discretions conferred on


it by or pursuant to this Deed or by law,


and the taking of action by the attorney or attorneys shall (as between the attorney and any third party) be conclusive evidence to any third party of


its right to take such action.


22.2 Ratification


The Company undertakes to ratify and confirm everything that any attorney does or purports to do in the exercise or purported exercise of the power


of attorney in clause 22.1 (Appointment).


23. ASSIGNMENT


23.1 Assignment by the security agent


The Security Agent may at any time, without the consent of the Company, assign or transfer any of its rights and obligations under this Deed to any


person to whom its rights and obligations under the Facility Agreement may be assigned or transferred.


23.2 Assignment by the Company


The Company shall not assign or transfer, or attempt to assign or transfer, any of its rights or obligations under or in respect of this Deed.


23.3 Assignment by the Account Bank


The Account Bank shall not assign or transfer, or attempt to assign or transfer, any of its rights or obligations under or in respect of this Deed.


24. AMENDMENTS


T his Deed may not be amended, modi lied or waived in any respect, without the prior written consent of the Security Agent and the Account Bank


given with express reference to this clause 24 (. 1 mendments) (such consent not to be unreasonably withheld or delayed).


25. RE M E DIES AN D WAIVERS


No delay or omission on the part of the Security Agent or the Account Bank in exercising any right provided by law or under this Deed shall impair,


affect or operate as a waiver of that or any other right. The single or partial exercise by the Security Agent or the Account Bank of any right shall not.


unless otherwise expressly stated, preclude or prejudice any other or further exercise of that, or the exercise of any other, right. The rights of the


Security Agent and the Account Bank under this Deed are in addition to and do not affect any other rights available to it by law.





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26. EXECUTION AS A DEED





Each of the parties intends this Deed to be a deed and confirms that it is executed and delivered as a deed, notwithstanding the fact that any one of the


parties may only execute il under hand.


27. COUNTERPARTS


This Deed may be executed in any number of counterparts, and by the parties to this Deed on separate counterparts, but will not be effective until


each such party has executed at least one counterpart. Each counterpart shall constitute an original of this Deed, but all the counterparts will together


constitute one and the same instrument.


28. JURISDICTION


(A) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute


regarding the existence, validity or termination of this Deed) (a “ Dispute”).


(B) The parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no party will


argue to the contrary.


(C) This clause 2

Account Bank shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent


allowed by law', the Security Agent and the Account Bank may take concurrent proceedings in any number of jurisdictions.


29. GOVERNING l.AW


This Deed is governed by and is to be construed in accordance with English law.


30. SERVIC E OF PROCESS


(A) Without prejudice to any other mode of service allowed under any relevant law, the Company:


(i) irrevocably appoints Trusec Limited of2 Lambs Passage, London EC1Y XBB (the “Process Agent") as its agent for service of


process in relation to any Dispute before the English courts in connection with this Deed;


(ii) irrevocably agrees that any Service Document may be sufficiently and effectively served on it in connection with any dispute in


England by service on the Process Agent for any replacement agent appointed pursuant to paragraph (B) of this clause 30 ( Service


of process)-, and





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(iii) irrevocably agrees that failure by a process agent to notify the Company of the process will not invalidate the proceedings


concerned.


(B) If the agent referred to in paragraph (A) of this clause 30 ( Service of process) (or any replacement agent appointed pursuant to this


paragraph (B11 at any time ceases for any reason to act as such, as the case may be, the Company shall as soon as reasonably practicable


appoint a replacement agent to accept service having an address for scivice in England and shall notify the Security Agent of the name and


address of the replacement agent; failing such appointment and notification, the agent referred to in paragraph (A) of this clause 30 ( Service


of process) (or any replacement agent appointed pursuant to this paragraph (B)) shall continue to be authorised to act as agent for service of


process in relation to any proceedings before the English courts on behalf of the relevant party and shall constitute good service.


(C) Any document addressed in accordance with clause 30(A) ( Service of process) shall be deemed to have been duly served if:


(i) left at the specified address, when it is left; or


(ii) sent by first class post, two clear Business Days after posting.


(D) For the purposes of this elaus