8-K

Endeavour International Corporation

October 14, 2014

/s/ Catherine Stubbs

Name: Catherine L. Stubbs

Title: Senior Vice President, Chief Financial Officer

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

On October 10, 2014, Endeavour International Corporation (the “Company”) and its subsidiaries listed on Exhibit 99.1 hereto (such subsidiaries, together with the Company, the “Debtors”), which is incorporated herein by reference, filed voluntary petitions for relief (collectively, the “Petitions” and, the cases commenced thereby, the “Bankruptcy Cases”) under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors have filed a motion with the Bankruptcy Court seeking to jointly administer the Bankruptcy Cases under the caption In re Endeavour Operating Corporation, et al.

The Company has entered into a restructuring support agreement (the “RSA”) with respect to the terms of a chapter 11 plan of reorganization with holders of more than two thirds (2/3) of each of its First Priority Notes (defined below), Second Priority Notes (defined below), 7.5% Convertible Bonds (defined below) and Convertible Notes (defined below). Pursuant to the agreed upon term sheet for a chapter 11 plan annexed as an exhibit to the RSA, the Company’s existing debt will be reduced by approximately $568 million including the cancellation of all of the Company’s 12% First Priority Notes, 12% Second Priority Notes, 7.5% Convertible Bonds, 5.5% Convertible Notes (defined below) and 6.5% Convertible Notes (defined below). As consideration for such cancellation, the reorganized Company would issue (a) $262.5 million of new notes to the holders of its 12% First Priority Notes, (b) an aggregate of approximately $237.5 million of new convertible preferred shares to holders of its 12% First Priority Notes and 12% Second Priority Notes, and (c) common shares to holders of its 12% Second Priority Notes, 7.5% Convertible Bonds, 6.5% Convertible Notes and 5.5% Convertible Notes. All of the Company’s existing equity securities, including its shares of common stock and preferred stock, will be cancelled, without receiving any distribution.

The $440 million senior secured term loan incurred by Endeavour Energy UK Limited and certain other of the Company’s foreign subsidiaries, will not be affected by the restructuring.

A copy of the RSA and annexed term sheet are filed herewith as Exhibits 99.2 and 99.3 respectively and are incorporated herein by reference.

No trustee has been appointed and the Company will continue to operate itself and its subsidiaries as “debtors in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. To assure ordinary course operations, the Company is seeking approval from the Bankruptcy Court for a variety of “first day” motions, including authority to maintain bank accounts and other customary relief.

On October 10, 2014, the Company issued a press release announcing the filing of the Bankruptcy Cases. A copy of the press release is filed herewith as Exhibit 99.4 and is incorporated herein by reference.

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation.

The commencement of the Bankruptcy Cases constitutes an event of default that accelerated or, in the case of the Trust Deed listed below, permits the acceleration upon notice, the Company’s obligations under the following debt instruments (collectively, the “Debt Documents”). Any efforts to enforce such payment obligations under the Debt Documents are automatically stayed as a result of the filing of the petitions for relief and the holders’ rights of enforcement in respect of the Debt Documents are subject to the applicable provisions of the Bankruptcy Code.

As noted above, the Debtors have been engaged in discussions with certain holders of debt under the Debt Documents regarding a restructuring of their capital structure. In connection with these discussions, the Debtors provided the financial forecasts (collectively, the “projections”) and other information included in Exhibit 99.5 to certain debt holders in October 2014. The Company and these debt holders are parties to nondisclosure agreements and the disclosure herein is being made in accordance with the terms of such nondisclosure agreements. The projections and other information are included herein only because they were provided to such debt holders. The projections were not prepared with a view toward public disclosure or compliance with the published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants regarding projections or forecasts. The projections do not purport to present financial condition in accordance with accounting principles generally accepted in the United States. The Debtors’ independent accountants have not examined, compiled or otherwise applied procedures to the projections and, accordingly, do not express an opinion or any other form of assurance with respect to the projections. The projections were prepared for internal use, capital budgeting and other management decisions and are subjective in many respects. The projections reflect numerous assumptions made by management of the Debtors with respect to financial condition, business and industry performance, general economic, market and financial conditions, and other matters, all of which are difficult to predict, and many of which are beyond the Debtors’ control. Accordingly, there can be no assurance that the assumptions made in preparing the projections will prove accurate. It is expected that there will be differences between actual and projected results, and the differences may be material, including due to the occurrence of unforeseen events occurring subsequent to the preparation of the projections. The inclusion of the projections herein should not be regarded as an indication that the Debtors or their affiliates or representatives consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such. None of the Debtors or any of their affiliates or representatives has made or makes any representation to any person regarding the ultimate performance of the Debtors compared to the projections, and none of them undertakes any obligation to publicly update the projections to reflect circumstances existing after the date when the projections were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the projections are shown to be in error.

The information contained in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

Certain statements and information included herein may constitute “forward-looking statements,” as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, relating to future events and the financial performance of the Company. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that actual events or performance will differ materially from such predictions as a result of certain risk factors. As such, readers are cautioned not to place undue reliance on forward-looking statements, which speak only to management’s plans, assumptions and expectations as of the date hereof. Please refer to the Company’s Annual Report on Form 10-K for year ended December 31, 2013, filed with the SEC on March 17, 2014, Form 10-K/A filed on March 21, 2014 and other filings for a discussion of material risk factors. The Company disclaims any duty to update or alter any forward-looking statements, except as required by applicable law.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”), dated as of October 10, 2014, is entered into by and among (i) Endeavour International Corporation (the “Company”), (ii) Endeavour Operating Corporation, Endeavour Colorado Corporation, END Management Company, Endeavour Energy New Ventures Inc. and Endeavour Energy Luxembourg S.à.r.l., each such entity a subsidiary of the Company (such entities, together with the Company, the “Endeavour Parties”), (iii) the undersigned beneficial holders, or investment advisors or managers for the account of beneficial holders (the “First Priority Noteholders” and, together with their respective successors and permitted assigns and any subsequent First Priority Noteholder that becomes party hereto in accordance with the terms hereof, the “Consenting First Priority Noteholders”) of the 12% First Priority Notes due 2018 (the “First Priority Notes”) issued by the Company, (iv) the undersigned beneficial holders, or investment advisors or managers for the account of beneficial holders (the “Second Priority Noteholders” and, together with their respective successors and permitted assigns and any subsequent Second Priority Noteholder that becomes party hereto in accordance with the terms hereof, the “Consenting Second Priority Noteholders”) of the 12% Second Priority Notes due 2018 (the “Second Priority Notes”) issued by the Company, (v) the undersigned beneficial holders, or investment advisors or managers for the account of beneficial holders (the “5.5% Convertible Noteholders” and, together with their respective successors and permitted assigns and any subsequent 5.5% Convertible Noteholder that becomes party hereto in accordance with the terms hereof, the “Consenting 5.5% Convertible Noteholders”) of the 5.5% Convertible Senior Notes due 2016 (the “5.5% Convertible Notes”) issued by the Company, (vi) the undersigned beneficial holders, or investment advisors or managers for the account of beneficial holders (the “6.5% Convertible Noteholders” and, together with their respective successors and permitted assigns and any subsequent 6.5% Convertible Noteholder that becomes party hereto in accordance with the terms hereof, the “Consenting 6.5% Convertible Noteholders”) of the 6.5% Convertible Senior Notes due 2017 (the “6.5% Convertible Senior Notes”) issued by the Company, and (vii) the undersigned beneficial holders, or investment advisors or managers for the account of beneficial holders (the “7.5% Convertible Bondholders” and, together with their respective successors and permitted assigns and any subsequent 7.5% Convertible Bondholder that becomes party hereto in accordance with the terms hereof, the “Consenting 7.5% Convertible Bondholders”) of the 7.5% Guaranteed Convertible Bonds due 2016 (the “7.5% Convertible Bonds”) issued by the Company (the Consenting 7.5% Convertible Bondholders, together with the Consenting First Priority Noteholders, the Consenting Second Priority Noteholders, the Consenting 5.5% Convertible Noteholders and the Consenting 6.5% Convertible Noteholders, the “Consenting Creditors”). The Endeavour Parties, each Consenting Creditor and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof are referred herein as the “Parties” and individually as a “Party.”

WHEREAS, the Parties have agreed to undertake a financial restructuring and recapitalization of the Company (the “Restructuring”) which is anticipated to be effected on terms materially consistent with the terms and conditions set forth in the term sheet attached hereto as Exhibit A (the “Term Sheet,” including any schedules and exhibits attached thereto)

through a solicitation of votes for a plan of reorganization by each Endeavour Party pursuant to the Bankruptcy Code (as defined below) (the solicitations for each such plan, collectively, the “Solicitations”) and the commencement by each Endeavour Party of a voluntary case (collectively, the “Endeavour Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

WHEREAS, as of the date hereof, the Consenting First Priority Noteholders hold, in the aggregate, approximately 75.4% of the aggregate outstanding principal amount of the First Priority Notes issued by the Company under that certain Indenture, dated as of February 23, 2012, by and among the Company, as issuer, each of the guarantors named therein and Wells Fargo Bank, National Association, as trustee and collateral agent (as amended, modified or otherwise supplemented from time to time prior to the date hereof, the “First Priority Indenture”).

WHEREAS, as of the date hereof, the Consenting Second Priority Noteholders hold, in the aggregate, approximately 69.88% of the aggregate outstanding principal amount of the Second Priority Notes issued by the Company under that certain Indenture, dated as of February 23, 2012, by and among the Company, as issuer, each of the guarantors named therein, Wilmington Trust, National Association, as trustee and Wells Fargo Bank, National Association, as collateral agent (as amended, modified or otherwise supplemented from time to time prior to the date hereof, the “Second Priority Indenture”).

WHEREAS, as of the date hereof, the Consenting 5.5% Convertible Noteholders hold, in the aggregate, approximately 62.15% of the aggregate outstanding principal amount of the 5.5% Convertible Notes issued by the Company under that certain Indenture, dated as of July 22, 2011, by and among the Company, as issuer, each of the guarantors named therein, and Wilmington Fund for Savings Fund, FSB, as trustee (the “5.5% Trustee”) (as amended, modified or otherwise supplemented from time to time prior to the date hereof, the “5.5% Convertible Indenture”).

WHEREAS, as of the date hereof, the Consenting 6.5% Convertible Senior Noteholders hold, in the aggregate, approximately 100% of the aggregate outstanding principal amount of the 6.5% Convertible Senior Notes issued by the Company pursuant to that certain Indenture, dated as of March 3, 2014, by and among the Company, as issuer, each of the guarantors named therein, and Wilmington Savings Fund Society, FSB, as trustee (“6.5% Trustee”) (as amended, modified or otherwise supplemented from time to time prior to the date hereof, the “6.5% Convertible Indenture”).

WHEREAS, as of the date hereof, the Consenting 7.5% Convertible Bondholders hold, in the aggregate, approximately 99.75% of the aggregate outstanding principal amount of the 7.5% Convertible Bonds issued by the Company pursuant to that certain Trust Deed, dated January 24, 2008, (as amended, modified or otherwise supplemented from time to time prior to the date hereof, the “Trust Deed”).

WHEREAS, the Parties desire to express to each other their mutual support and commitment in respect of the matters discussed in the Term Sheet and hereunder.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

(a) “Class” means any of (i) the Consenting First Priority Noteholders, (ii) the Consenting Second Priority Noteholders and (iii) the Consenting Convertible Noteholders, and (iv) the Consenting 7.5% Convertible Bondholders, as applicable.

(b) “Consenting Class” means any of (i) the Consenting First Priority Holders, (ii) the Consenting Second Priority Holders, (iii) the Consenting Convertible Holders and (iv) the Consenting 7.5% Convertible Bondholders, as applicable.

(c) “Consenting Convertible Noteholders” means, collectively, the Consenting 5.5% Convertible Noteholders and the Consenting 6.5% Convertible Noteholders.

(d) “Convertible Notes” means, collectively, the 5.5% Convertible Notes and the 6.5% Convertible Senior Notes.

(e) “Definitive Documents” means the documents (including any related agreements, instruments, schedules or exhibits) that are contemplated by the Term Sheet and that are otherwise necessary or desirable to implement, or otherwise relate to, the Restructuring and the Term Sheet, including this Agreement, which are in a reasonably satisfactory form to the Requisite Creditors.

(f) “Indentures” means each of the First Priority Indenture, the Second Priority Indenture, the 5.5% Convertible Indenture, the 6.5% Convertible Indenture and the Trust Deed, as applicable.

(g) “Noteholder Claims” means any and all claims arising under the Indentures or the Notes.

(h) “Notes” means the First Priority Notes, the Second Priority Notes, the 5.5% Convertible Notes, the 6.5% Convertible Senior Notes and the 7.5% Convertible Bonds.

(i) “Requisite Convertible Noteholders” means, as of the date of determination, Consenting 5.5% Convertible Noteholders and Consenting 6.5% Convertible Noteholders holding at least a majority of the outstanding principal amount of the Convertible Notes held by such holders, in the aggregate, as of such date.

(j) “Requisite 7.5% Convertible Bondholders” means Consenting 7.5% Convertible Bondholders holding at least a majority of the outstanding principal amount of the 7.5% Convertible Bonds.

(k) “Requisite Creditors” means (i) the Requisite First Priority Noteholders, (ii) the Requisite Second Priority Noteholders, (iii) the Requisite Convertible Noteholders and (iv) the Requisite 7.5% Convertible Bondholders, as applicable.

(l) “Requisite First Priority Noteholders” means, as of the date of determination, Consenting First Priority Noteholders holding at least a majority of the outstanding principal amount of the First Priority Notes held by the Consenting First Priority Holders, in the aggregate, as of such date.

(m) “Requisite Second Priority Noteholders” means, as of the date of determination, Consenting Second Priority Noteholders holding at least a majority of the outstanding principal amount of the Second Priority Notes held by the Consenting Second Priority Noteholders, in the aggregate, as of such date.

(o) “Support Effective Date” means the date on which counterpart signature pages to this Agreement shall have been executed and delivered by: (i) the Endeavour Parties; and (ii) Consenting Creditors holding at least (A) 66.7% in aggregate principal amount outstanding of the First Priority Notes, (B) 66.7% in aggregate principal amount outstanding of the Second Priority Notes, (C) 60% in aggregate principal amount outstanding of the 5.5% Convertible Notes, (D) 66.7% in aggregate principal amount outstanding of the 6.5% Convertible Senior Notes and (E) 66.7% in aggregate principal amount outstanding of the 7.5% Convertible Bonds.

2. Term Sheet. The Term Sheet is expressly incorporated herein and made a part of this Agreement. The general terms and conditions of the Restructuring are set forth in the Term Sheet; provided that the Term Sheet is supplemented by the terms and conditions of this Agreement. In the event of any inconsistencies between the terms of this Agreement and the Term Sheet, this Agreement shall govern.

(a) Commencement of the Endeavour Cases. Each Endeavour Party hereby agrees that, as soon as reasonably practicable, but in no event later than October 10, 2014 (the date on which such filing occurs, the “Commencement Date”), such Endeavour Party shall file with the Bankruptcy Court a voluntary petition for relief under chapter 11 of the Bankruptcy Code and any and all other documents necessary to commence the Endeavour Case of such Endeavour Party.

(b) Filing of the Endeavour Plan. As soon as reasonably practicable after the Commencement Date, the Endeavour Parties shall file the Endeavour Plan and the related Endeavour Disclosure Statement with the Bankruptcy Court. For purposes of this Agreement, with respect to each Endeavour Party, (i) “Endeavour Plan” shall mean a plan of reorganization of Endeavour Parties containing the terms and conditions set forth in the Term Sheet, with such additional terms and conditions, and in a form and substance, reasonably satisfactory to the Requisite Creditors and (ii) “Endeavour Disclosure Statement” shall mean a disclosure statement of the Endeavour Parties in respect to the Endeavour Plan in a form and substance, reasonably satisfactory to the Requisite Creditors.

(c) Confirmation of the Endeavour Plan. The Endeavour Party shall use its commercially reasonable efforts to obtain confirmation of the Endeavour Plan as soon as reasonably practicable following the Commencement Date in accordance with the Bankruptcy Code and on terms consistent with this Agreement, and each Consenting Creditor shall use its commercially reasonable efforts to cooperate fully in connection therewith.

(d) Amendments and Modifications of the Endeavour Plan. The Endeavour Plan may be amended from time to time following the date hereof by written approval of the Endeavour Parties and the Requisite Creditors. Each of the Parties agrees to negotiate in good faith all amendments and modifications to the Endeavour Plan as reasonably necessary and appropriate to obtain Bankruptcy Court confirmation of the Endeavour Plans pursuant to a final order of the Bankruptcy Court; provided that the Parties shall have no obligation to agree to any modification that (i) is inconsistent with the Endeavour Plan (ii) creates any material new obligation on any Party, or (iii) changes or otherwise adversely affects the economic treatment of such Party (it being agreed that, for the avoidance of doubt, any change to the Endeavour Plan that results in a diminution of the value of the property to be received by a Consenting Class of Creditors under the Endeavour Plan or the proportion of the aggregate assets of all Endeavour Parties which a Class of Consenting Creditors will receive under the Endeavour Plan shall be deemed to materially adversely affect such Class) whether such change is made directly to the treatment of a Consenting Class or to the treatment of another Consenting Class or otherwise. Notwithstanding the foregoing, the Endeavour Parties may amend, modify or supplement the Endeavour Plan, from time to time, (x) without the consent of any Consenting Creditor, in order to cure any ambiguity, defect (including any technical defect) or inconsistency, provided that any such amendments, modifications or supplements do not adversely affect the rights, interests or treatment of such Consenting Creditors under such Endeavour Plan or (y) to the extent permitted under Section 11; provided, that, any such amendments, modifications or supplements are provided to the Consenting Creditors upon at least three (3) business days prior written notice, and if no objection is received from any Consenting Class within two (2) business days following receipt, the Consenting Creditors shall be deemed to have consented to such amendments, modifications or supplements.

(e) Endeavour Luxembourg. So long as this Agreement remains in effect, the Endeavour Parties shall not permit any claims entitled to administrative or priority status under section 364 of the Bankruptcy Code to be incurred by Endeavour Luxembourg during its chapter 11 case. So long as this Agreement remains in effect, the Endeavour Parties shall not encumber, pledge, transfer, release, or abandon any assets of Endeavour Luxembourg during its chapter 11 case; provided, without limiting the foregoing, the Endeavour Parties agree during such time period not to (directly or indirectly) pledge, assign, amend, modify or release any intercompany notes or receivables owed to Endeavour Luxembourg by any of its affiliates. The Parties hereto reserve all rights with respect to the incurrence of, or liability for, other administrative or priority claims, including the right to object before the Bankruptcy Court to any relief that would give rise to such claims, regardless of the date of incurrence.

(f) Reporting. The Endeavour Parties shall provide the Consenting Creditors with copies of all reports delivered pursuant to Section 5.01(k) of the Term Loan (as defined in Section 6(a)(xiv)).

(a) Agreement to Vote. So long as this Agreement has not been terminated in accordance with the terms hereof, each Consenting Creditor agrees that it shall, subject to the receipt by such Consenting Creditor of a disclosure statement and other solicitation materials in respect of the applicable Endeavour Plan:

(i) vote its claims against the Endeavour Parties to accept the Endeavour Plans, by delivering its duly executed and completed ballots accepting the Endeavour Plans on a timely basis following the commencement of the Solicitations; provided that such vote shall be immediately revoked and deemed void ab initio upon termination of this Agreement pursuant to the terms hereof;

(ii) not change or withdraw (or cause to be changed or withdrawn) any such vote; and

(iii) not (x) object to, delay, impede or take any other action to interfere with acceptance or implementation of any Endeavour Plan, (y) directly or indirectly solicit, encourage, propose, file, support, participate in the formulation of or vote for, any restructuring, sale of assets, merger, workout or plan of reorganization for any of the Endeavour Parties other than the Endeavour Plans or (z) otherwise take any action that would in any material respect interfere with, delay or postpone the consummation of the Restructuring.

(i) Each Consenting Creditor agrees that, for the duration of the period commencing on the date hereof and ending on the date on which this Agreement is terminated in accordance with Section 6, such Consenting Creditor shall not sell, transfer, loan, issue, pledge, hypothecate, assign or otherwise dispose of (each, a “Transfer”), directly or indirectly, in whole or in part, any of the Noteholder Claims or any option thereon or any right or interest therein or any other claims against or interests in any Endeavour Party (collectively, “Claims”) (including grant any proxies, deposit any Notes or any other claims against or interests in the Company or any other Endeavour Party into a voting trust or entry into a voting agreement with respect to any such Notes or such other claims against or interests), unless the transferee thereof either (i) is a Consenting Creditor or (ii) prior to such Transfer, agrees in writing for the benefit of the Parties to become a Consenting Creditor and to be bound by all of the terms of this Agreement applicable to Consenting Creditors (including with respect to any and all Claims it already may hold against or in the Company or any other Endeavour Party prior to such Transfer) by executing a joinder agreement substantially in the form attached hereto as Exhibit B (a “Joinder Agreement”), and delivering an executed copy thereof within two (2) business days following such execution, to (i) Weil, Gotshal & Manges LLP (“Weil”),

counsel to the Company, (ii) Milbank, Tweed, Hadley & McCloy LLP (“Milbank”), counsel to the ad hoc committee of First Priority Noteholders and Second Priority Noteholders (the “Ad Hoc Committee”), (iii) Brown Rudnick LLP (“Brown Rudnick”), counsel to certain of the 5.5% Convertible Noteholders and the 6.5% Convertible Noteholders and (iv) Ropes & Gray LLP (“Ropes & Gray” and with Milbank and Brown Rudnick, the “Consenting Creditors’ Counsel”), counsel to the 7.5% Convertible Bondholders, in which event (A) the transferee (including the Consenting Creditor transferee, if applicable) shall be deemed to be a Consenting Creditor hereunder to the extent of such transferred rights and obligations and (B) the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement to the extent of such transferred rights and obligations; provided, that this Section 4(b)(i) shall not apply to the grant of any liens or encumbrances in favor of a bank or broker-dealer holding custody of securities in the ordinary course of business and which lien or encumbrance is released upon the Transfer of such securities. Each Consenting Creditor agrees that any Transfer of any Claims that does not comply with the terms and procedures set forth herein shall be deemed void ab initio, and the applicable Endeavour Party and each other Consenting Creditor shall have the right to enforce the voiding of such Transfer.

(ii) Notwithstanding Section 4(b)(i): (A) a Consenting Creditor may Transfer its Notes to an entity that is acting in its capacity as a Qualified Marketmaker without the requirement that the Qualified Marketmaker become a Party; provided that (1) such Qualified Marketmaker must Transfer such right, title or interest within five (5) business days following its receipt thereof, (2) any subsequent Transfer by such Qualified Marketmaker of the right, title or interest in such Notes is to a transferee that is or becomes a Consenting Creditor at the time of such transfer and (3) such Consenting Creditor shall be solely responsible for the Qualified Marketmaker’s failure to comply with the requirements of this Section 4; and (B) to the extent that a Consenting Creditor is acting in its capacity as a Qualified Marketmaker, it may Transfer any right, title or interest in Notes that the Qualified Marketmaker acquires from a holder of the Notes who is not a Consenting Creditor without the requirement that the transferee be or become a Consenting Creditor. For these purposes, a “Qualified Marketmaker” means an entity that (x) holds itself out to the market as standing ready in the ordinary course of its business to purchase from customers and sell to customers claims against the Company (including debt securities or other debt) or enter with customers into long and short positions in claims against the Company (including debt securities or other debt), in its capacity as a dealer or market maker in such claims against the Company, and (y) is in fact regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).

(c) Additional Claims. Each Consenting Creditor agrees that if any Consenting Creditor acquires additional Claims, then (i) such Claims shall be subject to this Agreement (including the obligations of the Consenting Creditors under this Section 4) and (ii) following such acquisition, such Consenting Creditor shall notify Weil of the amount and types of claims it has acquired (A) on no less than a monthly basis and (B) additionally, upon the reasonable request of Weil.

(d) Forbearance. During the period commencing on the date hereof and ending on the termination of this Agreement in accordance with its terms, each Consenting Creditor hereby agrees to forebear from the exercise of any rights or remedies it may have under the Indentures (including any collateral documents referenced therein), and under applicable United States or foreign law or otherwise, in each case, with respect to any defaults or events of default which may arise under the Indentures at any time on or before the termination of this Agreement. For the avoidance of doubt, the forbearance set forth in this Section 4(d) shall not constitute a waiver with respect to any defaults or any events of default under the Indentures (including the Notes) and shall not bar any Consenting Creditor from filing a proof of claim or taking action to establish the amount of such claim. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any right of any Consenting Creditor or the ability of each of the Consenting Creditors to protect and preserve its rights, remedies and interests, including its claims against the Endeavour Parties. If the transactions contemplated hereby are not consummated, or if this Agreement is terminated for any reason, the Parties fully reserve any and all of their rights. The Company hereby confirms that the only Defaults or Events of Default (as such terms are defined in the Indentures) under the Indentures as of the date hereof are those specified in certain forbearance agreements among the Endeavour Parties and certain of the Consenting Creditors.

(e) The agreements of the Consenting Creditors in this Section 4 shall be solely on such Consenting Creditor’s own behalf and not on behalf of any other Consenting Creditors and shall be several and not joint.

(a) Solicitation and Confirmation. Each Endeavour Party agrees to (i) act in good faith and use reasonable best efforts to support and complete successfully the Solicitations in accordance with the terms of this Agreement and (ii) do all things reasonably necessary and appropriate in furtherance of confirming the Endeavour Plans and consummating the Restructuring in accordance with, and within the time frames contemplated by, this Agreement (including within the deadlines set forth in Section 6), in each case to the extent consistent with, upon the advice of counsel, the fiduciary duties of the boards of directors, managers, members or partners, as applicable, of each Endeavour Party; provided that no Endeavour Party shall be obligated to agree to any modification of any document that is inconsistent with the Endeavour Plan.

(b) Certain Additional Chapter 11 Related Matters. Each Endeavour Party, as the case may be, shall provide draft copies of all material motions or applications and other documents (including the Endeavour Plan and Endeavour Disclosure Statement, any proposed amended version of such plan or disclosure statement and all first day pleadings, or any other plan) any Endeavour Party intends to file with the Bankruptcy Court to counsel designated by each of the Requisite First Priority Noteholders, Requisite Second Priority Noteholders, Requisite Convertible Noteholders and the Requisite 7.5% Convertible Bondholders, if reasonably practicable, at least three (3) days prior to the date when the applicable Endeavour Party intends to file any such pleading or other document (and, if not reasonably practicable, as soon as reasonably practicable prior to filing) and shall consult in good faith with such counsel regarding the form and substance of any such proposed filing with the Bankruptcy Court.

Subject to Section 4(a), nothing in this Agreement shall restrict, limit, prohibit or preclude, in any manner not inconsistent with its obligations under this Agreement, any of the Consenting Creditors from appearing in the Bankruptcy Court with respect to any motion, application or other documents filed by the Endeavour Parties and objecting to, or commenting upon, the relief requested therein; provided, that any of the Consenting Creditors retains the right to object to any intercompany transfers or payments of the Endeavour Parties and/or their affiliates, which right shall not be limited in any way by Section 4(a) hereof.

(c) Financial Reporting and Other Diligence. The Endeavour Parties shall comply in all material respects with the reporting requirements contained in the First Priority Indenture and the Second Priority Indenture during the chapter 11 cases. The Endeavour Parties shall deliver, as soon as reasonably practical, such other financial or other diligence as a Consenting Class reasonably requests.

(d) Consenting Classes. In the event the Company becomes aware that any Class is no longer a Consenting Class for purposes of this Agreement because Consenting Creditors in such Class no longer own at least 66.7% of the relevant debt of such Class, the Company shall promptly provide notice thereof to the Consenting Creditors.

This Agreement shall automatically terminate three (3) business days following the delivery of written notice to the other Parties (in accordance with Section 22) from any of the Requisite First Priority Noteholders, the Requisite Second Priority Noteholders, the Requisite Convertible Noteholders or the Requisite 7.5% Convertible Bondholders, as applicable at any time after and during the continuance of any Noteholder Termination Event; provided that termination by any of the Requisite First Priority Noteholders, the Requisite Second Priority Noteholders the Requisite Convertible Noteholders or the Requisite 7.5% Convertible Bondholders shall only be effective as to the applicable Consenting Class. In addition, this Agreement shall automatically terminate in respect to the applicable Consenting Class three (3) business days following delivery of notice from the Company to such Consenting Creditors (in accordance with Section 22) at any time after the occurrence and during the continuance of any Company Termination Event. This Agreement shall terminate automatically without any further required action or notice on the date that the Endeavour Plan becomes effective.

(i) The breach in any material respect by any Endeavour Party of any of the undertakings, representations, warranties or covenants of the Endeavour Parties set forth herein which remains uncured for a period of five (5) business days after the receipt of written notice of such breach from the Requisite First, Priority Noteholders, Requisite Second Priority Noteholders, Requisite 7.5% Convertible Bondholders or Requisite Convertible Noteholders pursuant to Section 6 and in accordance with Section 22 (as applicable).

(ii) On October 10, 2014, unless the Endeavour Parties have commenced the chapter 11 cases.

(iii) On the date that is forty-five (45) days after the Commencement Date, if the Debtors have not filed the Endeavour Plan and Endeavour Disclosure Statement with the Bankruptcy Court.

(iv) On the date that is ninety (90) days after the Commencement Date, if the Bankruptcy Court shall not have entered an order approving the Endeavour Disclosure Statement for the Endeavour Plan.

(v) The Endeavour Parties withdraw the Endeavour Plan or Endeavour Disclosure Statement, file any motion or pleading with the Bankruptcy Court that is not consistent with this Agreement or the Term Sheet and such motion or pleading has not been withdrawn prior to the earlier of (i) two (2) business days after the Endeavour Parties receive written notice from the applicable Class of Requisite Creditors (in accordance with Section 22) that such motion or pleading is inconsistent with this Agreement or the Term Sheet and (ii) entry of an order of the Bankruptcy Court approving such motion or pleading.

(vi) One hundred seventy (170) days after the Commencement Date, if the Bankruptcy Court fails to enter an order confirming the Endeavour Plan in form and substance reasonably satisfactory to the Endeavour Parties and the Requisite Creditors.

(vii) Two hundred (200) days after the Commencement Date, (the “Outside Date”) if the Effective Date for the Endeavour Plan has not occurred.

(viii) Thirty-five (35) days after the Commencement Date, if an order (the “Approval Order”) has not been entered by the Bankruptcy Court approving the assumption of this Agreement by the Endeavour Parties; provided, that this Agreement shall terminate automatically without further notice if the Approval Order has not been entered within forty-five (45) days after the Commencement Date.

(ix) An examiner with expanded powers or a trustee shall have been appointed in the Endeavour Cases.

(x) An order is entered by the Bankruptcy Court invalidating or disallowing, as applicable, either the enforceability, priority or validity of the liens securing the obligations owed under the First Priority Notes and/or the Second Priority Notes or the claims in respect of such notes.

(xi) The Endeavour Parties lose the exclusive right to file and solicit acceptances of a chapter 11 plan.

(xii) The Bankruptcy Court grants relief that is inconsistent with this Agreement or the Term Sheet in any materially adverse respect.

(xiii) The Endeavour Parties file, propound or otherwise support any plan of reorganization other than the Endeavour Plan.

(xiv) The acceleration or exercise of remedies of a party due to the occurrence of an “Event of Default” under that certain Amendment Agreement dated September 30, 2014 amending and restating that certain Credit Agreement (as amended or otherwise modified from time to time, the “Term Loan”) dated as of January 24, 2014, by and among (a) Endeavour International Holding B.V. and End Finco LLC, as borrowers, (b) Endeavour International Corporation, Endeavour Operating Corporation, Endeavour Energy New Ventures, Inc. and END Management Company, Endeavour Energy UK Limited, Endeavour Energy Netherlands B.V., Endeavour North Sea LLC, Endeavour North Sea, L.P., as guarantors, (c) Credit Suisse AG, Cayman Islands Branch, as administrative agent, and (d) certain lenders thereto, as such term is defined in the Term Loan.

(xv) Any Class is no longer a Consenting Class for purposes of this Agreement because Consenting Creditors in such Class no longer own at least 66.7% of the relevant debt of such Class; provided, that such Class shall not have the right to terminate pursuant to this clause (xv).

(xvi) The occurrence of an Other Termination Event (as defined in Section 6(c)).

(i) The breach in any material respect by one or more of the Consenting Creditors in any Class, of any of the undertakings, representations, warranties or covenants of the Consenting Creditors set forth herein in any material respect which remains uncured for a period of five (5) business days after the receipt of written notice of such breach pursuant to Section 6(a) and Section 21 (as applicable), but only if the non-breaching Consenting Creditors in such Class own less than 66.7% of such Class.

(ii) The board of directors of the Company or another Endeavour Party reasonably determines in good faith based upon the advice of outside counsel that continued performance under this Agreement would be inconsistent with the exercise of its fiduciary duties under applicable law; provided, that the Company or another Endeavour Party provides notice of such determination to the Consenting Creditors within five (5) business days after the date thereof.

(i) The issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling, judgment or order enjoining the consummation of or rendering illegal the Restructuring, which ruling, judgment or order has not been not stayed, reversed or vacated within twenty (20) business days after such issuance.

(ii) On the date that the chapter 11 case for the Company or Endeavour Operating Corporation shall have been converted to a case under chapter 7 of the Bankruptcy Code, or such cases shall have been dismissed by order of the Bankruptcy Court (unless caused by a default by any Consenting Creditor of its obligations hereunder, in which event the Consenting Creditors shall not have the right to terminate under this clause (iv).

(iii) On the date that an order is entered by the Bankruptcy Court or a Court of competent jurisdiction denying confirmation of the Endeavour Plan for any of the Endeavour Parties (unless caused by a default by any Consenting Creditor of its obligations hereunder, in which event the Consenting Creditors shall not have the right to terminate under this subsection) or refusing to approve the Endeavour Disclosure Statement, provided, that neither the Endeavour Parties nor any Class of Consenting Creditor shall have the right to terminate this Agreement pursuant to this clause (c)(iii) if the Bankruptcy Court declines to approve the Endeavour Disclosure Statement or denies confirmation of the Endeavour Plan subject only to modifications to the Endeavour Plan or Endeavour Disclosure Statement that would not have a material adverse effect on the recovery or treatment that a Consenting Class of Creditors would receive as compared to the recovery they would have otherwise received pursuant to the Term Sheet attached hereto as of the date hereof.

(iv) On October 10, 2014 at 11:59 p.m. (New York time), if the Support Effective Date shall not have occurred.

Notwithstanding the foregoing, any of the dates set forth in this Section 6(c) may be extended by agreement among the Endeavour Parties and the Requisite Creditors.

(d) Mutual Termination. This Agreement may be terminated by mutual agreement of the Company and the Requisite Creditors upon the receipt of written notice delivered in accordance with Section 22.

(e) Effect of Termination. Subject to the provisions contained in Section 6(a) and to Section 15, upon the termination of this Agreement in accordance with this Section 6, this Agreement shall become void and of no further force or effect in respect to the Class of Consenting Creditors whose rights and obligations have been terminated hereunder and such Class of Consenting Creditors shall, except as otherwise provided in this Agreement, be immediately released from its respective liabilities, obligations, commitments, undertakings and agreements under or related to this Agreement, shall have no further rights, benefits or privileges hereunder, and shall have all the rights and remedies that it would have had and shall be entitled to take all actions, whether with respect to the Restructuring or otherwise, that it would have been entitled to take had it not entered into this Agreement and no such rights or remedies shall be deemed waived pursuant to a claim of laches or estoppel; provided that in no event shall any such termination relieve a Party from liability for its breach or non-performance of its obligations hereunder prior to the date of such termination.

(f) Automatic Stay. The Endeavour Parties acknowledge that after the commencement of the Endeavour Cases, the giving of notice of termination by any Party pursuant to this Agreement shall not be a violation of the automatic stay of section 362 of the Bankruptcy Code; provided that nothing herein shall prejudice any Party’s rights to argue that the giving of notice of termination was not proper under the terms of this Agreement.

7. Definitive Documents; Good Faith Cooperation; Further Assurances. Each Party hereby covenants and agrees to cooperate with each other in good faith in connection with, and shall exercise reasonable best efforts with respect to the pursuit, approval, implementation and consummation of the Restructuring, as well as the negotiation, drafting, execution and delivery of the Definitive Documents. Furthermore, subject to the terms hereof, each of the Parties shall take such action as may be reasonably necessary or reasonably requested by the other Parties to carry out the purposes and intent of this Agreement, and shall refrain from taking any action that would frustrate the purposes and intent of this Agreement.

(a) Each Party, severally (and not jointly), represents and warrants to the other Parties that the following statements are true, correct and complete as of the date hereof (or as of the date a Consenting Creditor becomes a party hereto):

(i) Such Party is validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has all requisite corporate, partnership, limited liability company or similar authority to enter into this Agreement and carry out the transactions contemplated hereby and perform its obligations contemplated hereunder. The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder have been duly authorized by all necessary corporate, limited liability company, partnership or other similar action on its part.

(ii) The execution, delivery and performance by such Party of this Agreement does not and will not (A) violate any material provision of law, rule or regulation applicable to it or any of its subsidiaries or its charter or bylaws (or other similar governing documents), or (B) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it is a party.

(iii) The execution, delivery and performance by such Party of this Agreement does not and will not require any material registration or filing with, consent or approval of, or notice to, or other action, with or by, any federal, state or governmental authority or regulatory body, except such filings as may be necessary or required by the SEC.

(iv) This Agreement is the legally valid and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

(b) Each Consenting Creditor severally (and not jointly) represents and warrants to the Endeavour Parties that, as of the date hereof (or as of the date such Consenting Creditor becomes a party hereto), such Consenting Creditor (i) is the beneficial owner of the aggregate principal amount of Notes set forth below its name on the signature page hereto (or below its name on the signature page of a Joinder Agreement for any Consenting Creditor that becomes a party hereto after the date hereof), and/or (ii) has, with respect to the beneficial owners of such Notes, (A) sole investment or voting discretion with respect to such Notes, (B) full power and authority to vote on and consent to matters concerning such Notes or to exchange, assign and Transfer such Notes, and (C) full power and authority to bind or act on the behalf of, such beneficial owners.

9. Disclosure; Publicity. The Company shall submit drafts to each Consenting Creditors’ Counsel of any press releases, public documents and any and all filings with the SEC that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement at least two (2) business days prior to making any such disclosure. Except as required by applicable law or otherwise permitted under the terms of any other agreement between the Company and any Consenting Creditor, no Party or its advisors shall disclose to any person or entity (including, for the avoidance of doubt, any other Consenting Creditor), other than advisors to the Company, the principal amount or percentage of any Notes held by any Consenting Creditor, in each case, without such Consenting Creditor’s prior written consent; provided that (a) if such disclosure is required by law, subpoena, or other legal process or regulation, the disclosing Party shall afford the relevant Consenting Creditor a reasonable opportunity to review and comment in advance of such disclosure and shall take all reasonable measures to limit such disclosure (the expense of which, if any, shall be borne by the Company), (b) the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Notes (including any series of Notes) held by all the Consenting Creditors collectively and (c) any Party may disclose information requested by a regulatory authority with jurisdiction over its operations to such authority without limitation or notice to any Party or other person. Notwithstanding the provisions in this Section 9, any Party may disclose, to the extent consented to in writing by a Consenting Creditor, such Consenting Creditor’s individual holdings. Any public filing of this Agreement, with the Bankruptcy Court or otherwise, which includes executed signature pages to this Agreement shall include such signature pages only in redacted form with respect to the holdings of each Consenting Creditor (provided, that the holdings disclosed in such signature pages may be filed in unredacted form with the Bankruptcy Court under seal).

10. Creditors’ Committee. Notwithstanding anything herein to the contrary, if any Consenting Creditor is appointed to and serves on an official committee of creditors in the Endeavour Cases, the terms of this Agreement shall not be construed so as to limit such Consenting Creditor’s exercise of its fiduciary duties to any person arising from its service on such committee, and any such exercise of such fiduciary duties shall not be deemed to constitute a breach of the terms of this Agreement; provided that nothing in this Agreement shall be construed as requiring any Consenting Creditor to serve on any official committee in any such chapter 11 case. All Parties agree they shall not oppose the participation of any of the Consenting Creditors or the trustees under their respective indentures, on any official committee of unsecured creditors formed in the Endeavour Cases, and (i) the Consenting Convertible Noteholders further agree to support the participation of the 7.5% Convertible Bondholders or the trustee for the 7.5% Convertible Bonds on such committee and (ii) the Consenting 7.5% Convertible Bondholders further agree to support the participation of the Convertible Noteholders or the trustee for the Convertible Noteholders on such committee.

11. Amendments and Waivers. Except as otherwise expressly set forth herein, this Agreement, including any exhibits or schedules hereto, may not be waived, modified, amended or supplemented except in a writing signed by the Company and the Requisite Creditors; provided that (a) any modification, amendment or change to the definition of Consenting Class Requisite Creditors, Requisite First Priority Noteholders, Requisite Second Priority Noteholders, Requisite Convertible Noteholders or Requisite 7.5% Convertible Bondholders shall require the written consent of each Consenting Creditor affected thereby, and (b) any waiver, change, modification or amendment to this Agreement that adversely affects the economic recoveries or treatment of any Consenting Creditor compared to the recoveries set forth in the Term Sheet attached hereto as of the date hereof (it being agreed that, for the avoidance of doubt, any change to this Agreement that results in a diminution of the value of the property to be received by a Consenting Class under the Endeavour Plan or a Consenting Class’s proportionate share of the aggregate value to be distributed to all creditors under the Endeavour Plan shall be deemed to materially adversely affect such Class, whether such change is made directly to the treatment of a Consenting Class or to the treatment of another class or otherwise), may not be made without the written consent of each such adversely affected Consenting Creditor. In the event that an adversely affected Consenting Creditor (“Non-Consenting Creditor”) does not consent to a waiver, change, modification or amendment to this Agreement requiring the consent of each Consenting Creditor, but such waiver, change, modification or amendment receives the consent of Consenting Creditors owning at least 66.7% of the outstanding relevant debt of the affected Class of which such Non-Consenting Creditor is a member, this Agreement shall be deemed to have been terminated only as to such Non-Consenting Creditors, but this Agreement shall continue in full force and effect in respect to all other members of the Consenting Class who have so consented.

12. Effectiveness. This Agreement shall become effective and binding upon each Party upon the execution and delivery by such Party of an executed signature page hereto; provided that signature pages executed by Consenting Creditors shall be delivered to (a) other Consenting Creditors in a redacted form that removes such Consenting Creditors’ holdings of the Notes and (b) the Company, Weil and the Company’s other advisors in an unredacted form (to be held by Weil and such other advisors on a professionals’ eyes only basis).

(a) This Agreement shall be construed and enforced in accordance with, and the rights of the Parties shall be governed by, the laws of the State of New York, without giving effect to the conflict of laws principles thereof. Each of the Parties irrevocably agrees that any legal action, suit or proceeding arising out of or relating to this Agreement brought by any Party or its successors or assigns shall be brought and determined in any federal or state court in the Borough of Manhattan, the City of New York (the “New York Courts”), and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for itself and with respect to its property, generally and unconditionally, with regard to any such proceeding arising out of or relating to this Agreement and the Restructuring. Each of the Parties agrees not

to commence any proceeding relating hereto or thereto except in the New York Courts, other than proceedings in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any New York Court. Each of the Parties further agrees that notice as provided in Section 22 shall constitute sufficient service of process and the Parties further waive any argument that such service is insufficient. Each of the Parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any proceeding arising out of or relating to this Agreement or the Restructuring, (i) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in the New York Courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (ii) that (A) the proceeding in any New York Court is brought in an inconvenient forum, (B) the venue of such proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Notwithstanding the foregoing, during the pendency of the Endeavour Cases, all proceedings contemplated by this Section 13(a) shall be brought in the Bankruptcy Court.

(b) Each Party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or the transactions contemplated hereby (whether based on contract, tort or any other theory). Each Party (i) certifies that no representative, agent or attorney of any other Party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other Parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this section.

14. Specific Performance/Remedies. It is understood and agreed by the Parties that money damages would not be a sufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief (including attorneys’ fees and costs) as a remedy of any such breach, without the necessity of proving the inadequacy of money damages as a remedy. Each Party hereby waives any requirement for the security or posting of any bond in connection with such remedies.

15. Survival. Notwithstanding the termination of this Agreement pursuant to Section 6, 9, 10 and Sections 13-22 and Section 25 (and any defined terms used therein, as applied to such Sections) shall survive such termination and shall continue in full force and effect in accordance with the terms hereof; provided that any liability of a Party for failure to comply with the terms of this Agreement shall survive such termination.

16. Headings. The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the interpretation hereof or, for any purpose, be deemed a part of this Agreement.

17. Successors and Assigns; Severability. This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors, administrators and representatives; provided, that nothing contained in this Section 17 shall be deemed to permit Transfers of the Notes or any Claims other than in

accordance with the express terms of this Agreement. If any provision of this Agreement, or the application of any such provision to any person or entity or circumstance, shall be held invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision hereof and this Agreement shall continue in full force and effect. Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

18. Several, Not Joint, Obligations. The agreements, representations and obligations of the Parties under this Agreement are, in all respects, several and not joint.

19. Relationship Among Parties. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other person or entity shall be a third-party beneficiary hereof. No Party shall have any responsibility for any trading by any other entity by virtue of this Agreement. No prior history, pattern or practice of sharing confidences among or between the Parties shall in any way affect or negate this understanding and agreement. The Parties have no agreement, arrangement, or understanding with respect to acting together for the purpose of acquiring, holding, voting or disposing of any equity securities of the Company and do not constitute a “group” within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended.

20. Prior Negotiations; Entire Agreement. This Agreement, including the exhibits and schedules hereto (including the Term Sheet), constitutes the entire agreement of the Parties, and supersedes all other prior negotiations, with respect to the subject matter hereof and thereof, except that the Parties acknowledge that any confidentiality agreements (if any) executed between the Company and each Consenting Creditor prior to the execution of this Agreement shall continue in full force and effect.

21. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same agreement. Execution copies of this Agreement delivered by facsimile or PDF shall be deemed to be an original for the purposes of this paragraph.

22. Notices. All notices hereunder shall be deemed given if in writing and delivered, if contemporaneously sent by electronic mail, facsimile, courier or by registered or certified mail (return receipt requested) to the following addresses and facsimile numbers:

(d) If to the Consenting 5.5% Convertible Noteholders or the 6.5% Convertible Noteholders, to:

Any notice given by delivery, mail or courier shall be effective when received. Any notice given by facsimile or electronic mail shall be effective upon oral, machine or electronic mail (as applicable) confirmation of transmission.

23. Settlement Discussions. This Agreement and the Term Sheet are part of a proposed settlement of matters that could otherwise be the subject of litigation among the Parties. Pursuant to Rule 408 of the Federal Rule of Evidence, any applicable state rules of evidence and any other applicable law, foreign or domestic, this Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce its terms.

24. No Solicitation; Adequate Information. This Agreement is not and shall not be deemed to be a solicitation for consents to the Endeavour Plan. The votes of the holders of claims against the Endeavour Parties will not be solicited until such holders who are entitled to vote on the Endeavour Plans have received such Endeavour Plans, the disclosure statements and related ballots, and other required solicitation materials. In addition, this Agreement does not constitute an offer to issue or sell securities to any person or entity, or the solicitation of an offer to acquire or buy securities, in any jurisdiction where such offer or solicitation would be unlawful.

25. Fees. As soon as practicable after entry of the Approval Order and thereafter when due and payable, the Endeavour Parties shall pay all reasonable documented prepetition and postpetition costs and expenses of the advisors to the Ad Hoc Committee, the 7.5% Convertible Bondholders and the Convertible Noteholders, including, without limitation, the costs and expenses of (i) Milbank, (ii) Delaware counsel for the Ad Hoc Committee, and (iii) Houlihan Lokey Capital, Inc, in accordance with the terms of its engagement letter with the Company, (iv) Ropes & Gray LLP, (v) Delaware counsel for the Consenting 7.5% Convertible Bondholders, (vi) the successor trustee for the 7.5% Convertible Bonds (provided, that, if the 7.5% Trustee selects legal counsel other than Ropes & Gray LLP, for so long as this Agreement remains in effect, such fees payable by the Endeavour Parties shall be limited to current pay of up to $200,000 plus out-of-pocket expenses, including, without limitation reasonable fees and expenses of attorneys or other professionals, without prejudice to the rights to seek reimbursement of any additional fees and costs in connection with confirmation of any plan of reorganization or pursuant to any other mechanism for payment under the applicable indenture), (vii) Miller Buckfire & Co., (viii) Brown Rudnick, (ix) Delaware counsel for either (A) the 5.5% Trustee and 6.5% Trustee or (B) the 5.5% Convertible Noteholders and the 6.5% Convertible Noteholders, (x) Hogan Lovells (provided, that for so long as this Agreement remains in effect, such fees payable by the Endeavour Parties shall be limited to current pay of up to $200,000 plus out-of-pocket expenses, including, without limitation reasonable fees and expenses of attorneys or other professionals, without prejudice to the rights to seek reimbursement of any additional

fees and costs in connection with confirmation of any plan of reorganization or pursuant to any other mechanism for payment under the applicable indenture), and (xi) Mesirow Financial Holdings, Inc. The Endeavour Parties agree to cause a non-debtor subsidiary to pay the reasonable documented prepetition costs and expenses of the foregoing advisors within three (3) business days after the date hereof.

26. Change of Trustee for 7.5% Convertible Bonds. Notwithstanding any contrary provision of the Trust Deed, the Endeavour Parties hereby agree to the replacement of BNY Corporate Trustee Services Limited as trustee under the Trust Deed with such replacement trustee as the Requisite 7.5% Convertible Bondholders shall notify to the Company in writing and the Endeavour Parties shall promptly enter into such documentation as the Requisite 7.5% Convertible Bondholders shall reasonably request in order to give effect to such replacement; provided, that such replacement trustee shall be reasonably acceptable to the Company.

27. Interpretation; Rules of Construction; Representation by Counsel. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section, Exhibit or Schedule, respectively, of or attached to this Agreement unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words using the singular or plural number also include the plural or singular number, respectively, (b) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (c) the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation,” and (d) the word “or” shall not be exclusive and shall be read to mean “and/or.” The Parties agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.

28. Acknowledgements. THIS AGREEMENT, THE ENDEAVOUR PLAN, AND THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN, ARE THE PRODUCT OF NEGOTIATIONS BETWEEN THE PARTIES AND THEIR RESPECTIVE REPRESENTATIVES. EACH PARTY HEREBY ACKNOWLEDGES THAT THIS AGREEMENT IS NOT AND SHALL NOT BE DEEMED TO BE A SOLICITATION OF VOTES FOR THE ACCEPTANCE OF THE PLAN OR REJECTION OF ANY OTHER CHAPTER 11 PLAN FOR PURPOSES OF SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE OR OTHERWISE. THE DEBTORS WILL NOT SOLICIT ACCEPTANCES OF THE ENDEAVOUR PLAN FROM ANY PERSON OR ENTITY UNTIL THE PERSON OR ENTITY HAS BEEN PROVIDED WITH A COPY OF THE ENDEAVOUR DISCLOSURE STATEMENT APPROVED BY THE BANKRUPTCY COURT. NOTHING IN THIS AGREEMENT SHALL REQUIRE ANY PARTY TO TAKE ANY ACTION PROHIBITED BY THE BANKRUPTCY CODE, THE SECURITIES ACT OF 1933 (AS AMENDED), THE SECURITIES EXCHANGE ACT OF 1934 (AS AMENDED), ANY RULE OR REGULATIONS PROMULGATED THEREUNDER, OR BY ANY OTHER APPLICABLE LAW OR REGULATION OR BY AN ORDER OR DIRECTION OF ANY COURT OR ANY STATE OR FEDERAL GOVERNMENTAL AUTHORITY.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and delivered by their respective duly authorized officers, solely in their respective capacity as officers of the undersigned and not in any other capacity, as of the date first set forth above.

THIS TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OF ENDEAVOUR INTERNATIONAL CORPORATION OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS TERM SHEET IS AN ADMISSION OF FACT OR LIABILITY OR SHALL BE DEEMED BINDING ON ANY OF THE DEBTORS OR THE RSA CREDITOR PARTIES. THIS TERM SHEET CONTAINS MATERIAL NONPUBLIC INFORMATION AND, THEREFORE, IS SUBJECT TO FEDERAL SECURITIES LAWS.

This non-binding term sheet (the “Term Sheet”) describes the material terms of a proposed chapter 11 plan of reorganization (the “Plan”) for Endeavour International Corporation (“EIC”) and certain of its subsidiaries (collectively, the “Company”). This Term Sheet does not constitute a contractual commitment of any party but merely represents the proposed terms for a restructuring of the Company’s capital structure and is subject in all respects to the negotiation, execution and delivery of definitive documentation, including entry into an acceptable restructuring support agreement (the “RSA”) between the Company and certain of its creditors (collectively, the “RSA Creditor Parties”). This Term Sheet does not include a description of all the relevant terms and conditions of the restructuring contemplated herein.

This Term Sheet shall not constitute an offer to buy, sell or exchange for any of the securities or instruments described herein. It also shall not constitute a solicitation of the same. Further, nothing herein constitutes a commitment to exchange any debt, lend funds to any of the Debtors, vote in a certain way or otherwise negotiate or engage in the transactions contemplated herein.

This Term Sheet is strictly confidential and may not be shared with anyone other than its intended recipients. It is proffered in the nature of a settlement proposal in furtherance of settlement discussions and is intended to be entitled to the protections of Rule 408 of the Federal Rules of Evidence and all other applicable statutes or doctrines protecting the use or disclosure of confidential information and information exchanged in the context of settlement discussions.

Houston, TX – October 10, 2014 — Endeavour International Corporation (NYSE: END) (LSE: ENDV) today announced that the Company has executed a Restructuring Support Agreement (“RSA”) with holders of more than two-thirds (2/3) of its 12% First Priority Notes, 12% Second Priority Notes, 7.5% Convertible Bonds and 5.5% / 6.5% Convertible Notes (collectively, the “Notes”) to restructure the Company’s debt obligations. In connection therewith, the Company and certain of its subsidiaries have each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (“Chapter 11 Proceedings”). The Company’s U.K. subsidiaries and certain other affiliates have not sought bankruptcy protection and will continue to operate outside of any reorganization proceedings. Endeavour and its debtor affiliates will continue to operate as “debtors in possession” in the Chapter 11 Proceedings.

Pursuant to the RSA, the Company’s existing debt will be reduced by approximately $568 million including the cancellation of all of the Company’s Notes and reduce its annual interest burden by 43%. As consideration for such cancellation, the reorganized Company would issue (a) $262.5 million of new 9.75% notes to the holders of its 12% First Priority Notes, (b) an aggregate of approximately $237.5 million of new 3.5% convertible preferred shares to holders of its 12% First Priority Notes and 12% Second Priority Notes, and (c) common shares to holders of its 12% Second Priority Notes, 7.5% Convertible Bonds, 6.5% Convertible Notes and 5.5% Convertible Notes. All of the Company’s existing equity securities, including its shares of common stock and preferred stock, will be cancelled, without receiving any distribution.

The $440 million senior secured term loan incurred by Endeavour Energy UK Limited and certain other of the Company’s foreign subsidiaries will not be affected by the restructuring.

Endeavour expects its oil and gas operations to continue in the ordinary course throughout the Chapter 11 Proceedings. The Company believes that the rights and protections afforded it by a court-supervised reorganization process will provide Endeavour with the time and flexibility it needs to address its financial challenges, delever its balance sheet and position the Company for the longer term.

The filing is principally the result of a series of events during a period of time when the Company was heavily involved in the development of two large assets in the U.K. North Sea. In Endeavour’s circumstances, its two large North Sea developments – Bacchus and Rochelle, were each over a year delayed in coming to first production, which caused cost overruns from the original cost projections. These delays also substantially impacted the cash flow and operating margins the Company would have received had the projects come online as scheduled. To maintain its ownership rights in these valuable assets, Endeavour incurred additional debt at a high cost of capital. As of the filing, the large capital commitment for most of the North Sea assets has been completed and the assets are online.

“Today’s RSA and the required Chapter 11 Proceedings is a step forward for the Company to move expeditiously through the reorganization process,” said William L. Transier, chairman, chief executive officer and president. “It has been a significant accomplishment by the Company and a very long process to get our North Sea developments online. We continue to believe that these are quality long lived assets that can generate substantial returns for the Company’s stakeholders. The RSA and ensuing reorganization process is important to the preservation of these assets for our investors.”

The Company is in process of filing various “first-day” motions seeking customary relief from the U.S. Bankruptcy Court to facilitate its transition into the Chapter 11 Proceedings.

Endeavour International Corporation is an oil and gas exploration and production company focused on the acquisition, exploration and development of oil and natural gas in the North Sea and the United States. For more information, visit www.endeavourcorp.com.

This press release contains certain “forward-looking statements,” as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended, relating to future events and the financial performance of Endeavour. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that actual events or performance will differ materially from such predictions as a result of certain risk factors. As such, readers are cautioned not to place undue reliance on forward-looking statements, which speak only to management’s plans, assumptions and expectations as of the date hereof. Please refer to Endeavour’s Annual Report on Form 10-K for year ended December 31, 2013, filed with the SEC on March 17, 2014, Form 10-K/A filed on March 21, 2014 and other filings for a discussion of material risk factors. Endeavour disclaims any duty to update or alter any forward-looking statements, except as required by applicable law.

Confidential

Subject to FRE 408

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Disclaimer

This presentation (the “Presentation”) regarding Endeavour International Corporation and its subsidiaries (the “Company”) has been prepared by

Blackstone Advisory Partners L.P. (“Blackstone”) and Weil, Gotshal & Manges LLP (“Weil”) solely for informational purposes using certain

information provided by the Company and publicly available information (collectively, the “Sources”). This presentation is illustrative, does not

represent a proposal, and is subject to FRE 408. Blackstone and Weil make no representation or warranty, express or implied, as to the accuracy

or completeness of the information obtained from the Sources, and nothing contained herein is, or should be relied on as a promise or

representation, whether as to the past or the future. Blackstone and Weil have not independently verified information obtained from the Sources.

The Presentation is not a proposal or a solicitation and is non-binding on all parties.

The Presentation includes certain statements, estimates, and projections prepared and provided by the Sources with respect to, among other

things, the anticipated operating performance of the Company. Such statements, estimates, and projections reflect various assumptions by the

Sources concerning anticipated results that are inherently subject to significant economic, competitive, and other uncertainties and contingencies

and have been included solely for illustrative purposes. Blackstone and Weil have relied on the truth, accuracy and completeness of certain

representations of the Sources and disclaims any liability for any misrepresentations or omissions that may be contained herein based on such

statements or contained in the information referenced above. No representations, express or implied, are made as to the accuracy or

completeness of such statements, estimates, or projections or with respect to any other materials herein. Actual results may vary materially from

the estimates and projected results contained herein.

By accepting the Presentation, each recipient agrees that Blackstone and Weil shall have no liability on any basis (including, without limitation, in

contract, tort, under United States or other countries’ federal or state securities laws or otherwise) for any representations, express or implied,

contained in, or for any omissions from, the Presentation or any other written or oral communications transmitted to the recipient by or on behalf

of Weil or Blackstone in the course of the recipient’s evaluation of the Presentation. The information contained herein has been prepared to assist

the recipients in making their own evaluation and does not purport to be all-inclusive or to contain all of the information that may be material.

The information and data contained herein are confidential and may not be divulged to any person or entity or reproduced, disseminated, or

disclosed, in whole or in part, except as required by applicable law or regulation, as requested by regulatory authorities, or with the consent of

Blackstone and Weil.

This Presentation is not intended to furnish regulatory, tax, accounting, investment or other advice to any recipient. This Presentation should be

reviewed by each recipient and its regulatory, tax, accounting, investment and other advisors. Recipients should not regard it as a substitute for

the exercise of their own judgment.

Project North

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U.K. Opportunity and Business Strategy

U.K. North Sea presents large remaining reserves with undeveloped and undiscovered volumes across the

region

•

Stable region with low geopolitical risk

•

Geologically

well

understood

with

decades

experience

drilling

the

region

•

Significant infrastructure in-place to support economics of development for new production

Governmental

and

regulatory

support

for

exploration,

development

and

production

•

Attractive fiscal terms by global standards and improving regulatory environment (Wood Report)

•

After-tax treatment of decommissioning

•

Access to infrastructure

Larger players seeking to re-shape or exit their North Sea positions

•

Increasing availability of personnel

•

Rig market softening

•

Assets on the market

Limited

competition

the

small/mid

cap

space

–

20k

boe/d

threshold

•

Private equity entering the market

The U.K. North Sea presents significant opportunity today for a full-cycle E&P business properly

capitalized, with adequate scale and core producing assets.

Confidential

Subject to FRE 408

Confidential

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U.K. Opportunity and Business Strategy (Cont’d)

Maximize production from existing North Sea assets and pursue realization of upsides

Collaborate with JV partners

Infill drilling opportunities at Alba

Increase Scott platform capacity

Utilize existing tax assets

Explore, develop and monetize contingent resources

Track record of successfully finding new oil and gas reserves more efficiently than any other independent

Pursue new opportunities (Rossini, Mabry, other contingent resources)

Partner through farm-ins to reduce capital need while receiving carry

Share sub surface technical team with business development and operation teams

Opportunistic acquisition of producing North Sea reserves

Diversify portfolio and reduce well concentration

Seek out producing assets with minimal development costs or decommissioning exposure and 3P upside

Potential to buy assets at attractive prices

Monetize selected assets and redeploy proceeds to core

Consider sale of U.S. assets to reduce investment needs and capex costs

Potential opportunities to sell selected U.K. assets

Endeavour is well positioned as a leading pure-play U.K. independent producer. The Company’s

proposed strategy is anchored in existing U.K. assets and aimed at balancing production and lower-

risk growth.

Confidential

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Indicative

Capital to

Realize

Alba

Rochelle

Bacchus

Columbus

Bittern

Enoch

$30 -

$50

million

per year

(1)

________________________________________________

(1)

Based on analysis of the 6/30/14 reserve report.

Mature Low Risk

Assets

The opportunity in the North Sea related to the Endeavour platform presents significant value as a

going concern.

Accelerate drilling at Alba

Potentially debottleneck

Scott Platform

Accelerate drilling at

Rochelle

Indicative

Capital to

Realize

Rossini

Mabry

Rochelle

Jurassic

$10

$15

million

per year

Clear Upside with

Limited Risk

Indicative

Capital to

Realize

Centurion North

Centurion South

Ravel

Mostyn

Buffalo

Rogers

Others

$10

$15

million

per year

Other Contingent

Resources

Endeavour successfully

developed Rochelle, Cygnus,

and other prospects in the

North Sea

Rossini exploration /

appraisal well with partner

(2015)

Mabry exploration well (late

2015 or 2016)

Create value by derisking

existing portfolio of

prospects

Opportunity to farm down

to partially monetize once

derisked

Long term could create

significant value in the

portfolio

Indicative

Capital to

Realize

Various Assets

$30

$40

million

per year

M&A

Majors pulling back

H1 2014 activity implies a

low $/boe for already

producing assets

U.K. Opportunity and Business Strategy (Cont’d)

Confidential

Subject to FRE 408

Confidential

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________________________________________________

(1)

Reflects netting of LC cash collateral that is expected to increase to $105mm on 12/1/14.

(2)

Assumes refinancing of existing UK debt facility in 12 months.

(3)

Cash change driven primarily by $12mm of UK interest, $26mm of capex/decommissioning, net of operating cash flow.

I) Pro Forma Capital Structure Summary

Illustrative

($ in millions)

Principal

Current Rate

PF Rate

Amort

UK Bank Debt

$440.0

11.0%

8.0%

(2)

10.0%

New Notes

200.0

12.0%

8.5%

Total Debt

$640.0

Total Debt Excluding LC

(1)

$535.0

II) Bridge to Starting Cash

Amount

9/30/14 Aprox. Consolidated Cash

$60.0

New UK Facility Liquidity

36.0

Incremental Q4 L/C Need

(15.0)

Q4 Cash Use

(3)

(33.0)

Emergence Costs

(15.0)

Projected Cash at Emergence (Illustrative 12/31/14)

$33.0

Confidential

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Debt Capacity Considerations – Compromise Scenario Assumptions

Confidential

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Debt

Capacity

Considerations

(Cont’d)

–

Compromise

Scenario

Illustrative

Forecast

($ in millions)

Business Plan

Illustrative Run Rate

2014E

2015E

2016E

2017E

2018E

UK EBITDA

$221.0

$281.6

$275.8

$250.0

Less: PRT

11.5

(28.1)

(51.0)

(35.6)

Less: CT Taxes

Less: SCT Taxes

(21.2)

(40.5)

Less: Capex

(68.3)

(71.7)

(45.2)

(80.0)

Less: Abandonment

(59.8)

(56.4)

(37.9)

Less: Provision for LCs

(15.0)

Less: Contingency

UK Unlevered FCF

89.4

$110.4

$126.7

$98.2

$79.0

UK Bank Debt Interest

($48.4)

($33.4)

($29.9)

($26.4)

UK Bank Debt Amortization

(44.0)

Cash Flow to US

$62.0

$49.3

$24.3

$8.6

US Unlevered Cash Flow

($10.0)

$ –

New Note Interest

(17.0)

Total Free Cash Flow

$35.0

$32.3

$7.3

($8.4)

Beginning Cash

$33.0

$68.0

$100.3

$107.5

Total Cash Flow

35.0

32.3

7.3

(8.4)

Ending Cash

$33.0

$68.0

$100.3

$107.5

$99.1

Total Debt

$640.0

$596.0

$552.0

$508.0

Total Debt/ UK EBITDA

2.9x

2.3x

2.2x

2.0x

Total Debt Excl. LCs

535.0

491.0

447.0

403.0

Adj. Debt / UK EBITDA

2.4x

1.9x

1.8x

1.6x

CT NOL Ending Balance

$629.5

$569.5

$478.2

$390.7

$299.7

SCT NOL Ending Balance

358.4

212.8

60.1

–

Confidential

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Debt

Capacity

Considerations

(Cont’d)

–

U.K.

Reserve

Report

Metrics

________________________________________________

Source: Interim Reserve Report (Q2 2014 Roll-Forward).

Production (mboe)

Capital Expenditures ($ in millions)

Adequate capital spend is necessary to maintain and grow production, otherwise existing reserves

will deplete and future production will decline.

Confidential

Subject to FRE 408

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$25

$50

$75

$100

$125

$150

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

1,000

2,000

3,000

4,000

5,000

6,000

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Confidential

Subject to FRE 408

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Debt

Capacity

Considerations

(Cont’d)

–

Rationale

For

Illustrated

Leverage

Provides

cash

flow

for

investment

replace

naturally

declining

asset

base

and

take

advantage

lower

risk growth opportunities

Positions

the

company

attractive

investment

opportunity

take

advantage

U.K.

North

Sea

dynamics

Without

investment,

simple

“blow

down”

the

existing

reserves

will

not

allow

the

company

amortize or retire debt

Without investment, any new equity unlikely to have long-term value

Without a cash cushion, business will be run sub-optimally and at significant risk of unplanned downtime

Confidential

Subject to FRE 408

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Debt

Capacity

Considerations

(Cont’d)

–

Comparable

Company

Credit

Metrics

($ in millions)

________________________________________________

Source: Company filings, Capital IQ, and Company estimates.

Note: Market data as of 9/30/14.

(1)

Endeavour LTM EBITDA as of Q1 2014.

Sample Peer Group

Illustrative Endeavour

EnQuest

Ithaca Energy

Iona Energy

Mean

$200mm US

$445mm US

Market Capitalization

$1,382

$619

$94

Debt

$942

$769

$265

$535

$780

Unrestricted Cash

(216)

(61)

(26)

TEV

$2,108

$1,309

$334

Metrics

LTM EBITDA

(1)

$631

$309

$77

$217

2014E EBITDA

$511

$311

$222

2015E EBITDA

$673

$494

$293

Credit Metrics

Debt / LTM EBITDA

1.5x

2.5x

3.4x

2.5x

3.6x

Debt / 2014E EBITDA

1.8x

2.5x

2.2x

2.4x

3.5x

Debt / 2015E EBITDA

1.4x

1.6x

1.5x

1.8x

2.7x

Debt / Market Capitalization

68%

124%

282%

158%

Confidential

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Existing Capital Structure

________________________________________________

Note: Debt balances as of 9/30/14.

(1)

Excludes $105mm LC Facility.

(2)

As of 9/30/14.

($ in mm)

Terms

Maturity

Interest Rate

Principal

Price

(2)

Market Value

Term Loan

(1)

Jan-17

L+1000

$ 440.0

100.0

$ 440.0

Total EEUK Debt and Claims

$ 440.0

First Priority Notes

Mar-18

12.0%

404.0

72.0

290.9

Second Priority Notes

Jun-18

12.0%

150.0

21.0

31.5

Total Secured Debt

$ 994.0

$ 762.4

Convertible Unsecured Notes

Jul-16

5.5%

$ 135.0

6.0

8.1

Convertible Unsecured Bonds

Nov-17 (Oct-15)

6.5%

17.5

8.3

1.4

Convertible Unsecured Bonds

Jan-16

7.5%

82.9

Total Debt

$ 1,229.4

Series C Preferred

4.5%

$ 37.0

Series B Preferred

4.5%

3.9

Common: $0.30 per share as of 09/30/14

15.1

Total Capitalization

$ 1,285.4

Confidential

Subject to FRE 408

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(2)

Corporate Structure

________________________________________________

$40.9mm Series B & C Preferred

Equity

U.S.-Based Debt

$404.0mm March 2018

12% Notes

$150.0mm June 2018

12% Notes

$135.0mm 5.5% 2016 Converts

$82.9mm 7.5% 2016

Convertible Notes

Endeavour Energy U.K. Limited

(English/Welsh Corp.)

Endeavour International

Corporation (NV)

Endeavour North Sea Limited

(English/Welsh Corp.)

Endeavour Energy

Luxembourg S.à

r.l. (Lux. Corp.)

$440.0mm EEUK Term Loan

Europe-Based Debt

Endeavour Energy North Sea,

L.P. (DE)

Intercompany

Note

($500.0mm)

(2)

Intercompany Note ($82.9mm)

Endeavour Operating

Corporation (DE)

(65% Pledge of Capital Stock)

Secured Issuer/Borrower

Unsecured Issuer/Borrower

Unsecured Guarantor

Lien

Claim Type

Equity

Secured Guarantor

Endeavour International

Holding B.V. (Netherlands)

Intercompany

Note

($440.0mm)

Endeavour Colorado Corp.

(DE)

$17.5mm 6.5% 2017 Converts

End Finco LLC (DE)

Endeavour Energy New

Ventures Inc. (DE)

END Management Company

(DE)

Endeavour Energy North Sea

LLC (DE)

Endeavour Energy Netherlands

B.V. (Netherlands)

99.9%

0.1%

(1)

This chart is for illustrative purposes only. Nothing in the chart is intended to

or shall be construed as an admission as to the validity of any claim against

Endeavour or a waiver of any of Endeavour’s or any party’s rights to dispute

the amount of, basis for, or validity of, any claim against Endeavour.

The guarantee from EOC on account of the EEUK Term Loan excludes the 65% Pledge of Capital Stock of EIHBV, the $500.0mm

intercompany note, and the cash, cash equivalents, and bank accounts of EOC.

The $500.0mm Intercompany Note is subject to payment subordination in favor of the EEUK Term Loan.

Note: Dollar amounts represents face value as of 9/30/14 and excludes any accrued interest or OID.

(1)

Confidential

Subject to FRE 408

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Structure

$440mm term loan to EIHBV

Refinances $365mm existing UK debt

Tenor

Matures January 1, 2017

Pricing

L+1,000; 1.0% floor (11.0%)

2% OID ($8.8mm)

Guarantors / Collateral

US & UK

Does not include US cash

Amortization

None

Pre-Payment

During

year

MWC

equal

interest

due

after

anniversary

until

maturity

plus

After year 1 101%

Covenants / Other

2.75x leverage

1.0x 2P asset coverage ($16 / boe) (e.g. 38.1mboe x $16 = $610mm)

Transfer of $55mm and $19mm cash to US in years 1 and 2 permitted, restrictions on use of

cash in US

Min cash in UK of $10mm to transfer cash to the US

$440mm UK Term Loan Refinancing Summary

INTERCREDITOR AGREEMENT (this “Agreement”) dated as of May 31, 2012, among Wells Fargo Bank, National Association, in its capacity as trustee under the First Priority Indenture (together with its successors and assigns, the “First Priority Trustee”), Wells Fargo Bank, National Association, in its capacity as collateral agent under the First Priority Security Documents (together with its successors and assigns, the “First Priority Collateral Agent”), Wilmington Trust, National Association, in its capacity as trustee under the Second Priority Indenture (together with its successors and assigns, the “Second Priority Trustee”), and Wells Fargo Bank, National Association, in its capacity as collateral agent under the Second Priority Security Documents (together with its successors and assigns, the “Second Priority Collateral Agent”). Capitalized terms used herein but not otherwise defined herein have the meanings set forth in Section 1 below.

A. Endeavour International Corporation, a Delaware corporation (the “Company”), the Guarantors party thereto and the First Priority Trustee are each party to an indenture dated as of February 23, 2012 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “First Priority Indenture”), providing for the issuance of first priority notes (together with any additional first priority notes issued under the First Priority Indenture, the “First Priority Notes”) in an initial principal amount equal to $350.0 million;

B. The Company, the Guarantors party thereto and the Second Priority Trustee are each party to an indenture dated as of February 23, 2012 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Second Priority Indenture” and, together with the First Priority Indenture, the “Indentures”), providing for the issuance of second priority notes (together with any additional second priority notes issued under the Second Priority Indenture, the Second Priority Notes”) in an initial principal amount equal to $150.0 million;

WHEREAS, as of the Escrow Release Date (as defined in the Escrow Agreement referred to in the Indentures) the obligations of the Grantors under the First Priority Indenture and the other First Priority Documents will be secured by certain assets of the Company and certain Subsidiaries pursuant to the terms of the First Priority Security Documents;

WHEREAS, as of the Escrow Release Date (as defined in the Escrow Agreement referred to in the Indentures) the obligations of the Grantors under the Second Priority Indenture will be secured by certain assets of the Company and certain Subsidiaries pursuant to the terms of the Second Priority Security Documents;

WHEREAS, in order to induce the First Priority Secured Parties to consent to the incurrence by the Company and the other Grantors of the Second Priority Notes Obligations, the Second Priority Collateral Agent, on behalf of the Second Priority Secured Parties, has agreed to the provisions set forth in this Agreement; and

WHEREAS, in order to satisfy one of the Escrow Release Conditions referred to in the Escrow Agreement referred to in the Indentures, the parties hereto are entering into this Agreement on the Escrow Release Date.

Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1.1. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Agreement” means this Agreement, as amended, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Bankruptcy Law” means the Bankruptcy Code and any similar Federal, state or foreign law for the relief of debtors.

“Business Day” means any day other than a Saturday, a Sunday or a day that is a legal holiday under the laws of the State of New York or on which banking institutions in the State of New York are required or authorized by law or other governmental action to close.

“Collateral Agents” means the First Priority Collateral Agent and the Second Priority Collateral Agent.

“Common Collateral” means all of the assets of any Grantor, whether real, personal or mixed, constituting both First Priority Collateral and Second Priority Collateral, including without limitation any assets on which the either Collateral Agent is automatically deemed to have a Lien pursuant to the provisions of Section 2.3.

“Comparable Second Priority Security Document” means, in relation to any Common Collateral subject to any Lien created under any First Priority Document, those Second Priority Security Documents that create a Lien on the same Common Collateral, granted by the same Grantor.

“Conforming Plan of Reorganization” means any Plan of Reorganization whose provisions are consistent with the provisions of this Agreement, including those of Sections 2, 4, and 6.

“Discharge of First Priority Notes Obligations” means, except to the extent otherwise provided in Section 5.6, payment in full in cash (except for contingent indemnities and cost and reimbursement obligations to the extent no claim has been made) of all First Priority Notes Obligations.

“Equity Interests” means capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any public or private sale of Capital Stock (other than Disqualified Stock) made for cash on a primary basis by the Company after the date of the applicable indenture.

“First Priority Collateral” means all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted or purported to be granted as security for any First Priority Notes Obligations pursuant to a First Priority Security Document.

“First Priority Collateral Agent” has the meaning set forth in the preamble hereto.

“First Priority Documents” means the credit and security documents governing the First Priority Notes Obligations, including without limitation the First Priority Indenture Documents and the related First Priority Security Documents.

“First Priority Indenture” has the meaning set forth in the recitals hereto.

“First Priority Liens” means Liens securing the First Priority Notes Obligations, which Liens are superior and prior in priority to the Liens securing the Second Priority Notes Obligations.

“First Priority Notes” has the meaning set forth in the recitals hereto.

“First Priority Notes Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Company or any Guarantor arising under the First Priority Indenture, the First Priority Notes (including any additional First Priority Notes issued under the First Priority Indenture) and any exchange notes issued in exchange therefor, any guarantees thereof, the First Priority Security Documents and this Agreement (including all principal, premium, interest, penalties, fees, charges, expenses, indemnification and reimbursement obligations, damages, guarantees and other liabilities or amounts payable or arising thereunder), whether or not direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Company or any Guarantor of any proceeding in bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“First Priority Secured Parties” means, collectively, the First Priority Trustee, the First Priority Collateral Agent, the holders of the First Priority Notes and the holders of any future First Priority Notes Obligations and their respective successors and assigns.

“First Priority Security Documents” means all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust and other agreements, documents and instruments executed and delivered by the Company, a Guarantor or any other obligor under the First Priority Notes creating (or purporting to create) a Lien securing First Priority Notes Obligations or under which rights or remedies with respect to such Liens are governed, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time.

“First Priority Trustee” has the meaning set forth in the preamble hereto.

“Grantors” means the Company and each other Subsidiary of the Company that has executed and delivered a First Priority Document or a Second Priority Document.

“Indebtedness” has the meaning assigned thereto in Section 1.01 of each Indenture.

(1) any case commenced by or against the Company or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company or any other Grantor, any receivership or assignment for the benefit of substantially all creditors relating to the Company or any other Grantor or any similar case or proceeding relative to the Company or any other Grantor or its creditors, as such, in each case whether or not voluntary;

(2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

(3) any other proceeding of any type or nature in which substantially all claims of creditors of the Company or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other than a precautionary financing statement respecting a lease not intended as a security agreement.

“Non-Conforming Plan of Reorganization” means any Plan of Reorganization that purports to alter the provisions of this Agreement, including those of Sections 2, 4, or 6, or to otherwise grant the Second Priority Collateral Agent or any Second Priority Secured Party any right or benefit, directly or indirectly, which is inconsistent with or expressly prohibited by the provisions of this Agreement.

“Obligations” means any principal, premium, if any, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, or for reorganization whether

or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages guarantees, and other liabilities or amounts, payable under the documentation governing any Indebtedness or in respect thereto.

“Officers’ Certificate” has the meaning set forth in the Second Priority Indenture.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, entity or other party, including any government and any political subdivision, agency or instrumentality thereof.

“Plan of Reorganization” means any plan of reorganization, plan of liquidation, agreement for composition, or other type of plan of arrangement proposed in or in connection with any Insolvency or Liquidation Proceeding.

“Pledged Collateral” means the Common Collateral in the possession or control of the First Priority Collateral Agent (or its agents or bailees), to the extent that possession or control thereof perfects a Lien thereon under the UCC.

“Refinance” means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced” and “Refinancing” have correlative meanings.

“Second Priority Bankruptcy Payments” has the meaning set forth in Section 6.4.

“Second Priority Collateral” means all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted or purported to be granted as security for any Second Priority Notes Obligations pursuant to a Second Priority Security Document.

“Second Priority Collateral Agent” has the meaning set forth in the preamble hereto.

“Second Priority Documents” means the credit and security documents governing the Second Priority Notes Obligations, including without limitation the Second Priority Indenture Documents and the related Second Priority Security Documents.

“Second Priority Indenture” has the meaning set forth in the recitals hereto.

“Second Priority Indenture Documents” means the Second Priority Indenture and the guarantee and security documents governing the Second Priority Indenture Obligations, including without limitation the Second Priority Security Documents.

“Second Priority Liens” means the Liens securing the Second Priority Notes Obligations.

“Second Priority Notes” has the meaning set forth in the recitals hereto.

“Second Priority Notes Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Company or any Guarantor arising under the Second Priority Indenture, the Second Priority Notes (including any additional Second Priority Notes issued under the Second Priority Indenture) and any exchange notes issued therefor, any guarantees thereof, the Second Priority Security Documents and this Agreement (including all principal, premium, interest, penalties, fees, charges, expenses, indemnification and reimbursement obligations, damages, guarantees and other liabilities or amounts payable or arising thereunder), whether or not direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Company or any Guarantor of any proceeding in bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Second Priority Secured Parties” means, collectively, the Second Priority Trustee, the Second Priority Collateral Agent, the holders of the Second Priority Notes and the holders of any future Second Priority Notes Obligations, and their respective successors and assigns.

“Second Priority Security Documents” means all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust and other agreements, documents and instruments executed and delivered by the Company, a Guarantor or any other obligor under the Second Priority Notes creating (or purporting to create) a Lien securing Second Priority Notes Obligations or under which rights or remedies with respect to such Liens are governed, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time.

“Secured Party” means any First Priority Secured Party or any Second Priority Secured Party.

“Second Priority Trustee” has the meaning set forth in the preamble hereto.

“Subsidiary” means any “Subsidiary” of the Company as defined in the Indentures.

“UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York.

1.2. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified in accordance with this Agreement, (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections shall be construed to refer to Sections of this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

2.1. Subordination of Liens. Notwithstanding (i) the date, time, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection (including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to the Second Priority Collateral Agent or the Second Priority Secured Parties on the Common Collateral or of any Liens granted to the First Priority Collateral Agent or the First Priority Secured Parties on the Common Collateral, (ii) any provision of the UCC, the Bankruptcy Code, any applicable law, the Second Priority Documents or the First Priority Documents, (iii) whether the First Priority Collateral Agent, either directly or through agents, holds possession of, or has control over, all or any part of the Common Collateral, (iv) the fact that any such Liens may be subordinated, voided, avoided, invalidated or lapsed or (v) any other circumstance of any kind or nature whatsoever, the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, hereby agrees that:

(a) any Lien on the Common Collateral securing any First Priority Notes Obligations now or hereafter held by or on behalf of the First Priority Collateral Agent or any First Priority Secured Party or any agent or trustee therefor, regardless of how acquired, whether by judgments, grant, statute, operation of law, subrogation or otherwise, shall have priority over and be senior in all respects and prior to any Lien on the Common Collateral securing any Second Priority Notes Obligations; and

(b) any Lien on the Common Collateral securing any Second Priority Notes Obligations now or hereafter held by or on behalf of the Second Priority Collateral Agent or any Second Priority Secured Party or any agent or trustee therefor, regardless of how acquired, whether by judgment, grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any First Priority Notes Obligations.

All Liens on the Common Collateral securing any First Priority Notes Obligations shall be and remain senior in all respects and prior to all Liens on the Common Collateral securing any Second

Priority Notes Obligations for all purposes, whether or not such Liens securing any First Priority Notes Obligations are subordinated to any Lien securing any other obligation of the Company, any other Grantor or any other Person. The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, expressly agrees that any Lien purported to be granted on any Common Collateral as security for the First Priority Notes Obligations shall be deemed to be, and shall be deemed to remain, senior in all respects and prior to all Liens on the Common Collateral securing any Second Priority Notes Obligations for all purposes, regardless of whether the Lien purported to be granted is found to be improperly granted, improperly perfected, avoided for any reason (including as a preferential transfer or a fraudulent conveyance), subordinated for any reason by judicial action to the Liens on the Common Collateral securing any Second Priority Obligations, or legally or otherwise deficient in any manner.

2.2. Prohibition on Contesting Liens. The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, agrees that (a) it shall not (and hereby waives any right to) take any action to challenge, contest or support any other Person in contesting or challenging, directly or indirectly, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, perfection, priority or enforceability of a Lien securing any First Priority Notes Obligations held (or purported to be held) by or on behalf of the First Priority Collateral Agent or any First Priority Secured Party or any agent or trustee therefor in any First Priority Collateral or Common Collateral and (b) none of them will oppose or otherwise contest (or support any Person contesting) any other request for judicial relief made in any court by the First Priority Collateral Agent or any First Priority Secured Parties relating to the lawful enforcement of any First Priority Lien on Common Collateral or First Priority Collateral. The First Priority Collateral Agent, on behalf of itself and each First Priority Secured Party, agrees that it shall not (and hereby waives any right to) take any action to challenge, contest or support any other Person in contesting or challenging, directly or indirectly, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, perfection, priority or enforceability of a Lien securing any Second Priority Notes Obligations held (or purported to be held) by or on behalf of the Second Priority Collateral Agent or any Second Priority Secured Party or any agent or trustee therefor on the Common Collateral; provided, however, that nothing in this Agreement shall be construed to prevent or impair the rights of the First Priority Collateral Agent or any First Priority Secured Party to enforce this Agreement (including the priority of the Liens securing the First Priority Notes Obligations as provided in Section 2.1) or any of the First Priority Documents.

2.3. No New Liens. So long as the Discharge of First Priority Notes Obligations has not occurred, (a) neither the Second Priority Collateral Agent nor any Second Priority Secured Party shall acquire or hold any Lien on any assets of the Company or any other Subsidiary (and neither the Company nor any Subsidiary shall grant such a Lien) securing any Second Priority Notes Obligations that are not also subject to a First Priority Lien in respect of the First Priority Notes Obligations under the First Priority Documents, and (b) neither the First Priority Collateral Agent nor any First Priority Secured Party shall acquire or hold a Lien on any assets of the Company of any other Subsidiary (and neither the Company nor any Subsidiary shall grant such a Lien) securing any First Priority Notes Obligations that are not also subject to a Second Priority Lien in respect of the Second Priority Notes Obligations under the Second Priority Documents. If any Collateral Agent or any Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of the Company or any other Subsidiary that is not

also subject to the First Priority Lien or Second Priority Lien, as the case may be, then the Collateral Agent or Secured Party holding such Lien shall, without the need for any further consent of any party and notwithstanding anything to the contrary in any other document, be deemed to also hold and have held such Lien for the benefit of the other Collateral Agent as security for the First Priority Notes Obligations or Second Priority Notes Obligations, as the case may be (subject to the lien priority and other terms hereof), and shall use its commercially reasonable efforts to promptly notify the other Collateral Agent in writing of such Lien.

2.4. Similar Liens and Agreements. The parties hereto agree that it is their intention that the First Priority Collateral and the Second Priority Collateral be identical. In furtherance of the foregoing and of Section 8.9, the parties hereto agree, subject to the other provisions of this Agreement:

(a) upon request by the First Priority Collateral Agent or the Second Priority Collateral Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the First Priority Collateral and the Second Priority Collateral and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the First Priority Documents and the Second Priority Documents; and

(b) that the documents and agreements creating or evidencing the First Priority Collateral and the Second Priority Collateral and guarantees for the First Priority Notes Obligations and Second Priority Notes Obligations shall be in all material respects the same forms of documents other than with respect to (i) the first lien and the second lien nature of the obligations thereunder and (ii) the delivery of Common Collateral, the security interest in which may be perfected only by possession or control by a single Person of such Common Collateral prior to the Discharge of First Priority Notes Obligations.

2.5. Perfection of Liens. Except as expressly set forth in Section 5.5 hereof, neither the First Priority Collateral Agent nor any First Priority Secured Party shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Common Collateral for the benefit of the Second Priority Collateral Agent or any other Second Priority Secured Party. Neither the Second Priority Collateral Agent, nor any Second Priority Secured Party shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Common Collateral for the benefit of the First Priority Collateral Agent or any other First Priority Secured Party. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties and the Second Priority Secured Parties and shall not impose on the First Priority Collateral Agent, the Second Priority Collateral Agent, the First Priority Secured Parties, the Second Priority Secured Parties or any agent or trustee therefor any obligations in respect of the disposition of proceeds of any Common Collateral that would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law.

(a) So long as the Discharge of First Priority Notes Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor,

(i) the Second Priority Collateral Agent and the Second Priority Secured Parties will not (x) exercise or seek to exercise any rights or remedies (including setoff and the right to credit bid debt (except as set forth in Section 3.1(e) below)) with respect to any Common Collateral in respect of any Second Priority Notes Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure); provided that the Second Priority Collateral Agent may exercise any or all such rights and remedies (but not rights the exercise of which is otherwise prohibited by this Agreement including Section 6 hereof) after a period (the “Standstill Period”) of 180 days from the date of delivery of written notice to the First Priority Collateral Agent stating that the existence of any Event of Default as defined under any Second Priority Document has occurred and is continuing thereunder as a result of which Second Priority Notes Obligations were accelerated and stating its intention to exercise its rights to take such actions only so long as (1) the First Priority Collateral Agent and the First Priority Secured Parties have not commenced (or attempted to commence or given notice of intent to commence) the exercise of any of their rights or remedies with respect to the Common Collateral or any material portion thereof or (2) no Insolvency or Liquidation Proceeding involving any Grantor has been commenced; (y) contest, protest or otherwise object to any foreclosure or enforcement proceeding or action brought with respect to the Common Collateral or any other collateral by the First Priority Collateral Agent or any First Priority Secured Party in respect of the First Priority Notes Obligations, the exercise of any right by the First Priority Collateral Agent or any First Priority Secured Party (or any agent or sub-agent on their behalf) in respect of the First Priority Notes Obligations under any control agreement, lockbox agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Second Priority Collateral Agent or any Second Priority Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party, of any rights and remedies as a secured party relating to the Common Collateral or any other collateral under the First Priority Documents or otherwise in respect of First Priority Notes Obligations; or (z) object to any waiver or forbearance by the First Priority Secured Parties from or in respect of bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Common Collateral or any other collateral in respect of the First Priority Notes Obligations, in each case so long as the respective interests of the Second Priority Secured Parties attach to the proceeds thereof subject to the relative priorities described in Section 2 hereof, and

(ii) except as otherwise provided herein (including in the proviso to clause (i)(x) above), the First Priority Collateral Agent and the First Priority Secured Parties shall have the sole and exclusive right to enforce rights, exercise remedies (including setoff and the right to credit bid their debt), marshal, process and make determinations

regarding the release, disposition or restrictions, or waiver or forbearance of rights or remedies with respect to the Common Collateral without any consultation with or the consent of the Second Priority Collateral Agent or any other Second Priority Secured Party; provided, however, that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Company or any other Grantor, the Second Priority Collateral Agent and other Second Priority Secured Parties may file a proof of claim with respect to the Second Priority Obligations, (B) the Second Priority Secured Parties shall be entitled to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Second Priority Secured Parties, including without limitation any claims secured by the Common Collateral, if any, in each case if not otherwise in contravention of the terms of this Agreement, (C) the Second Priority Secured Parties shall be entitled to file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either the Bankruptcy Law or applicable non-bankruptcy law, in each case if not otherwise in contravention of the terms of this Agreement, and (D) the Second Priority Collateral Agent may take any action (not adverse to the prior Liens on the Common Collateral securing the First Priority Notes Obligations, or the rights of the First Priority Collateral Agent or the First Priority Secured Parties to exercise remedies in respect thereof) in order to prove, preserve or protect (but not enforce) its rights in, and perfection and priority of its Lien on, the Common Collateral or to prove the validity and enforceability of the Second Priority Notes Obligations.

In exercising rights and remedies with respect to the Common Collateral, the First Priority Collateral Agent and the First Priority Secured Parties may enforce the provisions of the First Priority Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Common Collateral or other collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

(b) So long as the Discharge of First Priority Notes Obligations has not occurred, the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, agrees that it will not take or receive any Common Collateral or any proceeds of Common Collateral in connection with the exercise of any right or remedy with respect to any Common Collateral. Without limiting the generality of the foregoing, unless and until the Discharge of First Priority Notes Obligations has occurred, except as expressly provided in the provisos in clause (i)(x) and clause (ii) of Section 3.1(a), the sole right of the Second Priority Collateral Agent and the Second Priority Secured Parties with respect to the Common Collateral is to hold a Lien on the Common Collateral pursuant to the Second Priority Security Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of First Priority Notes Obligations has occurred in accordance with the Second Priority Documents.

(c) Subject to the provisos in clause (i)(x) and clause (ii) of Section 3.1(a), (i) the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, agrees that the Second Priority Collateral Agent and the other Second Priority Secured Parties will not take any action that would hinder any exercise of remedies undertaken by the First Priority Collateral Agent or the First Priority Secured Parties with respect to the Common Collateral under the First Priority Documents, including any sale, lease, exchange, transfer or other disposition of the Common Collateral, whether by foreclosure (judicial or non-judicial) or otherwise, and (ii) the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, hereby waives any and all rights it or any Second Priority Secured Party may have as a junior lien creditor or otherwise to object to the manner in which the First Priority Collateral Agent or the First Priority Secured Parties seek to enforce or collect the First Priority Notes Obligations or the Liens granted in any of the Common Collateral, regardless of whether any action or failure to act by or on behalf of the First Priority Collateral Agent or the First Priority Secured Parties is adverse to the interests of the Second Priority Secured Parties.

(d) The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, acknowledges and agrees that no covenant, agreement or restriction contained in any Second Priority Document shall be deemed to restrict in any way the rights and remedies of the First Priority Collateral Agent or the First Priority Secured Parties with respect to the Common Collateral as set forth in this Agreement and the First Priority Documents.

(e) This Section 3.1 shall not be construed to in any way limit or impair the right of any Second Priority Secured Party from exercising a credit bid with respect to the Second Priority Notes Obligations in a sale or other disposition of Common Collateral under Section 363 of the Bankruptcy Code, provided that in connection with and immediately after giving effect to such sale and credit bid there occurs a Discharge of First Priority Notes Obligations.

3.2. Cooperation. Subject to the provisos in clause (i)(x) and clause (ii) of Section 3.1(a), the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, agrees that, unless and until the Discharge of First Priority Notes Obligations has occurred, it will not commence, or join with any Person (other than the First Priority Secured Parties and the First Priority Collateral Agent upon the request thereof) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Common Collateral or any other collateral under any of the Second Priority Documents or otherwise in respect of the applicable Second Priority Notes Obligations.

4.1. Application of Proceeds. So long as the Discharge of First Priority Notes Obligations has not occurred, the Common Collateral and any proceeds thereof received in connection with the sale or other disposition of, or collection on, such Common Collateral upon the exercise of remedies as a secured party, shall be applied by the First Priority Collateral Agent to the First Priority Notes Obligations in such order as specified in the relevant First Priority Documents. Upon the Discharge of First Priority Notes Obligations, the First Priority Collateral Agent shall deliver promptly to the Second Priority Collateral Agent any remaining Common Collateral proceeds thereof held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct and shall be applied by the Second Priority Collateral Agent to the Second Priority Notes Obligations in such order as specified in the relevant Second Priority Documents.

4.2. Payments Over. So long as the Discharge of First Priority Notes Obligations has not occurred, any Common Collateral and any proceeds thereof received by the Second Priority Collateral Agent or any Second Priority Secured Party in connection with the exercise of any right or remedy (including setoff or credit bid) or in any Insolvency or Liquidation Proceeding relating to the Common Collateral not expressly permitted by this Agreement shall be segregated and held in trust for the benefit of and forthwith paid over to the First Priority Collateral Agent (and/or its designees) for the benefit of the First Priority Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Priority Collateral Agent is hereby authorized to make any such endorsements as agent for the Second Priority Collateral Agent or any such Second Priority Secured Party. This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

(a) (x) If, at any time any Grantor or any First Priority Secured Party delivers notice to the Second Priority Collateral Agent with respect to any specified Common Collateral (including for such purpose, in the case of the sale or other disposition of all or substantially all of the equity interests in any Subsidiary, any Common Collateral held by such Subsidiary or any direct or indirect Subsidiary thereof) that:

(A) such specified Common Collateral has been or is being sold, transferred or otherwise disposed of (a “Disposition”) by the owner of such Common Collateral in a transaction permitted under the First Priority Indenture and the Second Priority Indenture; or

(B) the First Priority Liens thereon have been or are being released in connection with a Subsidiary that is released from its guarantee under the First Priority Indenture and the Second Priority Indenture; or

(C) the First Priority Liens thereon have been or are being otherwise released as permitted by the First Priority Documents or by the First Priority Collateral Agent on behalf of the First Priority Secured Parties (unless, in the case of clause (B) or (C) of this Section 5.1(a)(x) such release occurs in connection with, and after giving effect to, a Discharge of First Priority Notes Obligations, which discharge is not in connection with a foreclosure of, or other exercise of remedies with respect to, Common Collateral by the First Priority Secured Parties (such discharge not in connection with any such foreclosure or exercise of remedies, a “Payment Discharge”)),

then the Second Priority Liens upon such Common Collateral will automatically be released and discharged as and when, but only to the extent, such Liens on such Common Collateral securing First Priority Notes Obligations are released and discharged (provided that in the case of a Payment Discharge, the Liens on any Common Collateral disposed of in connection with the satisfaction

in whole or in part of First Priority Notes Obligations shall be automatically released but any proceeds thereof not used for purposes of the Discharge of First Priority Notes Obligations or otherwise in accordance with the First Priority Documents shall be subject to Second Priority Liens and shall be applied pursuant to Section 4.1). Upon delivery to the Second Priority Collateral Agent of a notice from the First Priority Collateral Agent stating that any such release of Liens securing or supporting the First Priority Notes Obligations has become effective (or shall become effective upon the Second Priority Collateral Agent’s release), the Second Priority Collateral Agent will promptly, at the Company’s expense, execute and deliver such instruments, releases, termination statements or other documents confirming such release on customary terms, which instruments, releases and termination statements shall be substantially identical to the comparable instruments, releases and termination statements executed by the First Priority Collateral Agent in connection with such release. In the case of the sale of capital stock of a Subsidiary or any other transaction resulting in the release of such Subsidiary’s guarantee under the First Priority Notes Obligations in accordance with the First Priority Indenture and the Second Priority Indenture, the guarantee in favor of the Second Priority Secured Parties, if any, made by such Subsidiary will automatically be released and discharged as and when, but only to the extent, the guarantee by such Subsidiary of the First Priority Notes Obligations is released and discharged.

(y) Subject to Section 5.6, In the event of a Payment Discharge, the Second Priority Liens on Common Collateral owned by the Company or a Grantor immediately after giving effect to such Payment Discharge shall become first-priority security interests (subject to Liens permitted by the Second Priority Indenture.

(b) Until the Discharge of First Priority Notes Obligations has occurred, the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, hereby irrevocably constitutes and appoints the First Priority Collateral Agent and any officer or agent of the First Priority Collateral Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Second Priority Collateral Agent or such holder or in the First Priority Collateral Agent’s own name, from time to time in the First Priority Collateral Agent’s discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Section 5.1, including any termination statements, endorsements or other instruments of transfer or release.

(c) Unless and until the Discharge of First Priority Notes Obligations has occurred, the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, hereby consents to the application, whether prior to or after a default, of proceeds of Common Collateral or other collateral to the repayment of First Priority Notes Obligations pursuant to the First Priority Documents.

5.2. Insurance. Unless and until the Discharge of First Priority Notes Obligations has occurred, the First Priority Collateral Agent and the First Priority Secured Parties shall have the sole and exclusive right, to the extent permitted by the First Priority Documents and subject in all respects to the rights of the Grantors thereunder, to adjust settlement for any insurance policy covering the Common Collateral in the event of any loss thereunder and to approve

any award granted in any condemnation or similar proceeding affecting the Common Collateral. Unless and until the Discharge of First Priority Notes Obligations has occurred, all proceeds of any such policy and any such award if in respect of the Common Collateral shall be paid (a) first, until the occurrence of the Discharge of First Priority Notes Obligations, to the First Priority Collateral Agent for the benefit of First Priority Secured Parties pursuant to the terms of the First Priority Documents, (b) second, after the occurrence of the Discharge of First Priority Notes Obligations, to the Second Priority Collateral Agent for the benefit of the Second Priority Secured Parties pursuant to the terms of the Second Priority Documents and (c) third, after the occurrence of the Discharge of First Priority Notes Obligations, if no Second Priority Notes Obligations are outstanding, to the owner of the subject property, such other person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If the Second Priority Collateral Agent or any Second Priority Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, such proceeds shall be segregated and held in trust for the benefit of the First Priority Collateral Agent and it shall forthwith pay such proceeds over to the First Priority Collateral Agent in accordance with the terms of Section 4.2.

(a) So long as the Discharge of First Priority Notes Obligations has not occurred, without the prior written consent of the First Priority Collateral Agent, no Second Priority Security Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Second Priority Security Document, would be prohibited by or inconsistent with any of the terms of this Agreement. The Second Priority Collateral Agent agrees that each Second Priority Security Document shall include the following language (or language to similar effect approved by the First Priority Collateral Agent):

“Notwithstanding anything herein to the contrary, the liens and security interests granted to [the Second Priority Collateral Agent] pursuant to this Agreement and the exercise of any right or remedy by [the Second Priority Collateral Agent] hereunder are subject to the limitations and provisions of the Intercreditor Agreement, dated as of February 23, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”) among Wells Fargo, National Association, as First Priority Trustee, Wells Fargo, National Association, as First Priority Collateral Agent, Wilmington Trust, National Association, as Second Priority Trustee, and Wells Fargo, National Association, as Second Priority Collateral Agent, and consented to by Endeavour International Corporation and the Grantors identified therein. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern and control.”

(b) In the event that the First Priority Collateral Agent or the First Priority Secured Parties enter into any amendment, waiver or consent in respect of or replace any of the First Priority Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any First Priority Security Document or changing in any manner the rights of the First Priority Collateral Agent, the First Priority Secured

Parties, the Company or any other Grantor thereunder (including the release of any Liens in Common Collateral in accordance with Section 5.1), then such amendment, waiver or consent shall apply automatically to any comparable provision of each Comparable Second Priority Security Document without the consent of the Second Priority Collateral Agent, or any Second Priority Secured Party and without any action by the Second Priority Collateral Agent, the Company or any other Grantor, in each case so long as such amendment, waiver or consent does not materially adversely affect the rights of the Second Priority Secured Parties or the interests of the Second Priority Secured Parties in the Common Collateral in a manner materially different from that affecting the rights of the First Priority Secured Parties thereunder or therein; provided that the Second Priority Trustee shall not be bound by any such amendment, waiver or consent that adversely affects its rights or protections without its written consent. The First Priority Collateral Agent shall give written notice of such amendment, waiver or consent (along with a copy thereof) to the Second Priority Collateral Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment with respect to the provisions of any Second Priority Security Document as set forth in this Section 5.3(b).

5.4. Rights as Unsecured Creditors. Except as otherwise expressly set forth in this Agreement, each of the Second Priority Collateral Agent and the Second Priority Secured Parties may exercise rights and remedies as an unsecured creditor against the Company or any Subsidiary that has guaranteed the Second Priority Notes Obligations in accordance with the terms of the Second Priority Documents and applicable law. Nothing in this Agreement shall prohibit the receipt by the Second Priority Collateral Agent or any Second Priority Secured Party of required payments of interest and principal so long as such receipt is not the direct or indirect result of the exercise by the Second Priority Collateral Agent or any Second Priority Secured Party of rights or remedies as a secured creditor in respect of Common Collateral or other collateral or enforcement in contravention of this Agreement of any Lien in respect of Second Priority Notes Obligations held by any of them or in any Insolvency or Liquidation Proceeding. In the event the Second Priority Collateral Agent or any Second Priority Secured Party becomes a judgment lien creditor or other secured creditor in respect of Common Collateral or other collateral as a result of its enforcement of its rights as an unsecured creditor in respect of Second Priority Notes Obligations or otherwise, such judgment lien or other lien or encumbrance shall be subordinated to the Liens securing First Priority Notes Obligations on the same basis as the other Liens securing the Second Priority Notes Obligations are so subordinated to the First Priority Liens securing First Priority Notes Obligations under this Agreement.

(a) The First Priority Collateral Agent agrees to hold the Pledged Collateral that is part of the Common Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee for the benefit and on behalf of the Second Priority Collateral Agent and each Second Priority Secured Party and any assignee thereof solely for the purpose of perfecting the security interest granted in such Pledged Collateral pursuant to the Second Priority Security Documents, subject to the terms and conditions of this Section 5.5.

(b) In the event that the First Priority Collateral Agent (or its agent or bailees) has Lien filings against intellectual property that is part of the Common Collateral that are necessary for the perfection of Liens in such Common Collateral, the First Priority Collateral Agent

agrees to act under such filings and hold such Liens as gratuitous bailee for the Second Priority Collateral Agent and each Second Priority Secured Party and any assignee solely for the purpose of perfecting the Liens granted in such Common Collateral pursuant to the Second Priority Security Documents, subject to the terms and conditions of this Section 5.5.

(c) Except as otherwise specifically provided herein (including Sections 3.1 and 4.1), until the Discharge of First Priority Notes Obligations has occurred, the First Priority Collateral Agent shall be entitled to deal with the Pledged Collateral in accordance with the terms of the First Priority Documents as if the Liens under the Second Priority Documents did not exist. The rights of the Second Priority Collateral Agent and the Second Priority Secured Parties with respect to such Pledged Collateral shall at all times be subject to the terms of this Agreement.

(d) The First Priority Collateral Agent shall have no obligation whatsoever to any Second Priority Secured Party to assure that the Pledged Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Common Collateral except as expressly set forth in this Section 5.5. The duties or responsibilities of the First Priority Collateral Agent under this Section 5.5 shall be limited solely to holding the Pledged Collateral as gratuitous bailee for the benefit and on behalf of the Second Priority Collateral Agent and each Second Priority Secured Party for purposes of perfecting the Liens held by the Second Priority Secured Parties.

(e) The First Priority Collateral Agent shall not have by reason of the Second Priority Documents or this Agreement or any other document a fiduciary relationship in respect of the Second Priority Collateral Agent or any Second Priority Secured Party, no Second Priority Secured Party shall have the right to direct the actions of the First Priority Collateral Agent, and each of the Second Priority Collateral Agent and the Second Priority Secured Parties hereby waive and release the First Priority Collateral Agent from all claims and liabilities arising pursuant to any First Priority Collateral Agent’s role under this Section 5.5 or under any other provision of this Agreement, as agent and gratuitous bailee with respect to the Common Collateral.

(f) Upon the Discharge of First Priority Notes Obligations, the First Priority Collateral Agent shall (x) deliver to the Second Priority Collateral Agent written notice of the occurrence thereof (which notice may state that such Discharge of First Priority Notes Obligations is subject to the provisions of this Agreement, including without limitation Sections 5.1(a)(y), 5.6 and 6.3 hereof) (it being understood that until the delivery of such notice to the Second Priority Collateral Agent, the Second Priority Collateral Agent shall not be charged with knowledge of the Discharge of First Priority Notes Obligations or required to take any actions based on such Discharge of First Priority Notes Obligations) and (y) deliver to the Second Priority Collateral Agent, to the extent that it is legally permitted to do so, the remaining Pledged Collateral (if any) together with any necessary endorsements (or otherwise allow the Second Priority Collateral Agent to obtain control of such Pledged Collateral) or as a court of competent jurisdiction may otherwise direct. The Company and each Grantor shall take such further action as is required to effectuate the transfer contemplated hereby and shall indemnify the First Priority Collateral Agent for loss or damage suffered by the First Priority Collateral Agent as a result of such transfer except for loss or damage suffered by the First Priority Collateral Agent as a result of its own willful misconduct, gross negligence or bad faith. The First Priority Collateral Agent has no obligation to follow instructions from the Second Priority Collateral Agent or any Second Priority Secured Party in contravention of this Agreement.

(g) Neither the First Priority Collateral Agent nor any of the First Priority Secured Parties shall be required to marshal any present or future collateral security for the Company’s or its Subsidiaries’ obligations to the First Priority Collateral Agent or the First Priority Secured Parties under the First Priority Documents or any assurance of payment in respect thereof or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.

5.6. No Release if Event of Reinstatement. If at any time in connection with or after the Discharge of First Priority Notes Obligations, the Company either in connection therewith or thereafter enters into any Refinancing of any First Priority Document evidencing a First Priority Notes Obligation, then such Discharge of First Priority Notes Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement, the First Priority Documents and the Second Priority Documents, and the obligations under such Refinancing shall automatically be treated as First Priority Notes Obligations for all purposes of this Agreement (a “Reinstatement”), including for purposes of the Lien priorities and rights in respect of Common Collateral set forth herein, and the related documents shall be treated as First Priority Documents for all purposes of this Agreement and the first priority collateral agent under such Refinanced First Priority Documents shall be the First Priority Collateral Agent for all purposes of this Agreement. Upon receipt of a notice stating that the Company has entered into a new First Priority Document (which notice shall include the identity of the new collateral agent, such agent, the “New Agent”), the Second Priority Collateral Agent shall promptly (at the expense of the Company) (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as the Company or such New Agent shall reasonably request in order to confirm to the New Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement and (b) deliver to the New Agent the Pledged Collateral together with any necessary endorsements (or otherwise allow the New Agent to obtain possession or control of such Pledged Collateral). In connection with any such Reinstatement, in the event that any Liens were granted in favor of the Second Priority Secured Parties on any Common Collateral prior to such Reinstatement, such Liens in favor of the Second Priority Secured Parties shall automatically be subject to this Agreement. The Second Priority Collateral Agent shall not be charged with knowledge of such Reinstatement until it receives written notice from the First Priority Collateral Agent, the New Agent or the Company of the occurrence of such Reinstatement.

6.1. Financing and General Sale Issues. The Second Priority Collateral Agent, on behalf of itself and each other Second Priority Secured Party, agrees that if the Company or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding:

(a) if the First Priority Collateral Agent shall desire to permit the use of cash collateral or to permit the Company or any other Grantor to obtain financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision in any Bankruptcy

Law (a “DIP Financing”), including if such DIP Financing is secured by Liens senior in priority to the Liens securing the Second Priority Notes Obligations, then the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, agrees that it will raise no objection to, and will not support any objection to, and will not otherwise contest such use of cash collateral or DIP Financing and will not request adequate protection or any other relief in connection therewith (except to the extent permitted by Section 6.2) and, to the extent the Liens securing the First Priority Notes Obligations are subordinated or pari passu with such DIP Financing, will subordinate its Liens in the Common Collateral and any other collateral to such DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Second Priority Notes Obligations are so subordinated to the First Priority Liens securing the First Priority Notes Obligations;

(b) none of them will object to, or otherwise contest (or support any other Person contesting), any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of First Priority Notes Obligations made by the First Priority Collateral Agent or any First Priority Secured Party;

(c) none of them will object to, or otherwise contest (or support any other Person contesting), any order relating to a sale of assets of the Company or any Grantor to which the First Priority Collateral Agent has consented that provides, to the extent that sale is to be free and clear of Liens, that the Liens securing the First Priority Notes Obligations and the Second Priority Notes Obligations will attach to the proceeds of the sale on the same basis of priority as the existing Liens in accordance with this Agreement;

(d) none of them will seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Common Collateral, the First Priority Collateral or any other collateral without the prior written consent of the First Priority Collateral Agent;

(e) none of them will object to, or otherwise contest (or support any other Person contesting), (i) any request by the First Priority Collateral Agent or any First Priority Secured Party for adequate protection including adequate protection payments or (ii) any objection by the First Priority Collateral Agent or any First Priority Secured Party to any motion, relief, action or proceeding based on the First Priority Collateral Agent’s or such First Priority Secured Party’s claiming a lack of adequate protection;

(f) none of them will assert or enforce any claim under Section 506(c) of the Bankruptcy Code senior to or on a parity with the Liens securing the First Priority Notes Obligations for costs or expenses of preserving or disposing of any Common Collateral or First Priority Collateral;

(g) none of them will oppose or otherwise contest (or support any Person contesting) any lawful exercise by the First Priority Collateral Agent or any First Priority Secured Party of the right to credit bid First Priority Notes Obligations at any sale of Common Collateral or First Priority Collateral; and

(h) none of them will challenge (or support any other Person challenging) the validity, enforceability, perfection or priority of the First Priority Liens on Common Collateral or First Priority Collateral (and the First Priority Collateral Agent and the First Priority Secured Parties agree not to challenge the validity, enforceability, perfection or priority of the Liens in favor of the Second Priority Collateral Agent and each other Second Priority Secured Party on the Common Collateral).

6.2. Adequate Protection. The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, agrees that it will not file or prosecute in any Insolvency or Liquidation Proceeding any motion for adequate protection (or any comparable request for relief) based upon their respective security interests in the Common Collateral, except that:

(1) any of them may freely seek and obtain relief granting a Second Priority co-extensive in all respects with, but subordinated to, all Liens granted in the Insolvency or Liquidation Proceeding to, or for the benefit of, the First Priority Secured Parties (and the First Priority Collateral Agent and the First Priority Secured Parties will not object to the granting of such a junior Lien); and

(2) any of them may freely seek and obtain any relief upon a motion for adequate protection (or any comparable relief), without any condition or restriction whatsoever, at any time after the Discharge of First Priority Notes Obligations.

6.3. Preference Issues. If any First Priority Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or any other Grantor (or any trustee, receiver or similar person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a “Recovery”), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then as to the Second Priority Collateral Agent and each Second Priority Secured Party, the First Priority Notes Obligations shall be deemed to be reinstated to the extent of such Recovery and to be outstanding as if such payment had not occurred, and such First Priority Secured Party shall be entitled to a reinstatement of First Priority Notes Obligations with respect to all such recovered amounts and shall have all rights hereunder. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. Any Common Collateral or proceeds thereof received by any Second Priority Secured Party prior to the time of such Recovery shall be deemed to have been received prior to the Discharge of First Priority Notes Obligations and subject to the provisions of Section 4.2. The First Priority Collateral Agent shall use commercially reasonable efforts to give written notice to the Second Priority Collateral Agent of the occurrence of any such Recovery (provided that the failure to give such notice shall not affect the First Priority Collateral Agent’s rights hereunder, except it being understood that until the delivery of such notice to the Second Priority Collateral Agent, the Second Priority Collateral Agent shall not be charged with knowledge of such Recovery or required to take any actions based on such Recovery).

6.4. Application. This Agreement shall be applicable prior to and after the commencement of any Insolvency or Liquidation Proceeding. All references herein to any Grantor shall apply to any trustee for such Person and such Person as debtor in possession. The relative rights as to the Common Collateral and other collateral and proceeds thereof shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, any Grantor.

6.5. Reorganization Securities. If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of First Priority Notes Obligations and on account of Second Priority Notes Obligations, then, to the extent the debt obligations distributed on account of the First Priority Notes Obligations and on account of the Second Priority Notes Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

(a) Neither the Second Priority Collateral Agent nor any Second Priority Secured Party shall oppose or challenge any claim by the First Priority Collateral Agent or any First Priority Secured Party for allowance in any Insolvency or Liquidation Proceeding of First Priority Notes Obligations consisting of post-petition interest, fees or expenses.

(b) Neither the First Priority Collateral Agent nor any other First Priority Secured Party shall oppose or seek to challenge any claim by the Second Priority Collateral Agent or any Second Priority Secured Party for allowance in any Insolvency or Liquidation Proceeding of Second Priority Notes Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Lien in favor of the Second Priority Secured Parties on the Common Collateral (after taking into account the Lien in favor of the First Priority Secured Parties).

6.7. Nature of Obligations; Separate Grants of Security; Separate Classification; Post-Petition Interest. Each of the parties hereto, including the Second Priority Collateral Agent, on behalf of itself and the Second Priority Secured Parties, hereby acknowledges and agrees that (i) the Second Priority Secured Parties’ claims against the Company and/or any other Grantor, including in respect of the Common Collateral, constitute claims separate and apart (and of a different nature) from First Priority Notes Obligations against the Company and each other Grantor, including in respect of the Common Collateral; (ii) the grant of Liens to secure the First Priority Notes Obligations constitutes a separate and distinct grant of Liens from any Liens granted to secure the Second Priority Notes Obligations; and (iii) because of, among other things, their differing payment terms, their differing covenant rights, and their differing rights in the Common Collateral (including vis a vis any Grantor and/or in directing the exercise of any rights in and remedies against the Common Collateral), the First Priority Notes Obligations are fundamentally different and distinct from (and substantially dissimilar, within the meaning of Section 1122 of the Bankruptcy Code, to) the Second Priority Notes Obligations and must be separately classified in any Plan of Reorganization proposed or confirmed in an Insolvency or Liquidation Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding

sentence, and without limiting the generality of the other provisions of this Agreement, if it is held that the claims against the Company or any Grantor in respect of the Common Collateral constitute only one secured claim (rather than separate classes of claims), then the Second Priority Collateral Agent, on behalf of itself and the Second Priority Secured Parties, hereby acknowledges and agrees that all distributions pursuant to Section 4.1 or Section 4.2 shall be made as if there were separate classes of senior and junior secured claims against the Company and the Grantors in respect of the Common Collateral (with the effect being that, to the extent that the aggregate value of the Common Collateral is sufficient (for this purpose ignoring all claims held by the Second Priority Collateral Agent on behalf of the Second Priority Secured Parties), the First Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest at the relevant default rate and all reasonable fees, costs, and changes provided for under the First Priority Documents (even though such claims may or may not be allowed in whole or in part in the respective Insolvency or Liquidation Proceeding) before any distribution is made in respect of the claims held by the Second Priority Collateral Agent, on behalf of the Second Priority Secured Parties, with the Second Priority Collateral Agent, on behalf of the Second Priority Secured Parties, hereby acknowledging and agreeing to turn over to the holders of the First Priority Notes Obligations all amounts otherwise received or receivable by them to the extent needed to effectuate the intent of this sentence even if such turnover of amounts has the effect of reducing the amount of (or the distributions on) the claim of the Second Priority Secured Parties).

6.8. Proofs of Claim. Subject to the limitations set forth in this Agreement, the First Priority Collateral Agent may file proofs of claim and other pleadings and motions with respect to any First Priority Notes Obligations, any Second Priority Notes Obligations or the Common Collateral in any Insolvency or Liquidation Proceeding. If a proper proof of claim has not been filed in the form required in such Insolvency or Liquidation Proceeding at least ten (10) days prior to the expiration of the time for filing thereof, the First Priority Collateral Agent shall have the right (but not the duty) to file an appropriate claim for and on behalf of the Second Priority Secured Parties with respect to any of the Second Priority Notes Obligations or any of the Common Collateral. In furtherance of the foregoing, the Second Priority Collateral Agent hereby appoints the First Priority Collateral Agent as its attorney-in-fact, with full authority in the place and stead of the Second Priority Collateral Agent and full power of substitution and in the name of the Second Priority Secured Parties or otherwise, to execute and deliver any document or instrument that the First Priority Collateral Agent is required or permitted to deliver pursuant to this Section 6.8, such appointment being coupled with an interest and irrevocable.

6.9. Plan of Reorganization. Without limiting the generality of any provisions of this Agreement, any vote to accept, and any other act to support the confirmation or approval of, any Non-Conforming Plan of Reorganization shall be inconsistent with and accordingly, a violation of the terms of this Agreement, and the First Priority Collateral Agent shall be entitled to compel the Second Priority Collateral Agent to change such vote or seek to have such vote not counted in determining the acceptance or rejection of such a Non-Conforming Plan and any such support of any Non-Conforming Plan of Reorganization withdrawn.

7.1. Reliance. The consent by the First Priority Secured Parties to the execution and delivery of the Second Priority Documents to which the First Priority Secured Parties have consented and all loans, purchase of securities and other extensions of credit made or deemed made on and after the date hereof by the First Priority Secured Parties to the Company or any Subsidiary shall be deemed to have been given and made in reliance upon this Agreement. The Second Priority Collateral Agent, on behalf of itself and each holder of Second Priority Notes Obligations, acknowledges that it and the holders of Second Priority Notes Obligation-shave, independently and without reliance on any First Priority Collateral Agent or any First Priority Secured Party, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Second Priority Documents, this Agreement and the transactions contemplated hereby and thereby and they will continue to make their own credit decision in taking or not taking any action under the Second Priority Documents or this Agreement.

7.2. No Warranties or Liability. The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, acknowledges and agrees that none of the First Priority Collateral Agent or any of the First Priority Secured Parties has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the First Priority Documents, the ownership or existence of any Common Collateral or the perfection or priority of any Liens thereon. The First Priority Secured Parties will be entitled to manage and supervise their respective extensions of credit under the First Priority Documents in accordance with the provisions of their agreements or applicable law and as they, in their sole discretion, may otherwise deem appropriate, and the First Priority Secured Parties may manage their extensions of credit without regard to any rights or interests that the Second Priority Collateral Agent or any of the Second Priority Secured Parties have in the Common Collateral or otherwise, except as otherwise expressly provided in this Agreement. Neither the First Priority Collateral Agent nor any First Priority Secured Parties shall have any duty to the Second Priority Collateral Agent or any Second Priority Secured Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Company or any Subsidiary thereof (including the Second Priority Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the First Priority Collateral Agent, the First Priority Secured Parties, the Second Priority Collateral Agent and the Second Priority Secured Parties have not otherwise made to each other, nor do they hereby make to each other, any warranties, express or implied, nor do they assume any liability to each other with respect to (a) the enforceability, validity, value or collectability of any of the First Priority Notes Obligations, the Second Priority Notes Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) the Company’s title to or right to transfer any of the Common Collateral or (c) any other matter except as expressly set forth in this Agreement.

7.3. Obligations Unconditional. All rights, interests, agreements and obligations of the First Priority Collateral Agent and the First Priority Secured Parties, and the Second Priority Collateral Agent and the Second Priority Secured Parties, respectively, hereunder shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of any First Priority Documents or any Second Priority Documents;

(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the First Priority Notes Obligations or Second Priority Notes Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any First Priority Document or of the terms of Second Priority Document;

(c) any exchange of any security interest in any Common Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the First Priority Notes Obligations or Second Priority Notes Obligations or any guarantee thereof;

(d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Company or any other Grantor; or

(e) any other circumstances that otherwise might constitute a defense available to, or a discharge of, the Company or any other Grantor in respect of the First Priority Notes Obligations or the Second Priority Notes Obligations in respect of this Agreement.

8.1. Conflicts. Subject to Section 8.20, in the event of any conflict between the provisions of this Agreement and the provisions of any First Priority Document or any Second Priority Document, the provisions of this Agreement shall govern.

8.2. Continuing Nature of This Agreement; Severability. Subject to Section 5.1(a)(y), Section 5.6 and Section 6.3, this Agreement shall continue to be effective until the Discharge of First Priority Notes Obligations shall have occurred or such later time as all the Second Priority Notes Obligations shall have been paid in full. This is a continuing agreement of lien subordination, and the First Priority Secured Parties may continue, at any time and without notice to the Second Priority Collateral Agent or any Second Priority Secured Party, to extend credit and other financial accommodations and lend monies to or for the benefit of the Company or any other Grantor constituting First Priority Notes Obligations in reliance hereon. This Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

8.3. Amendments; Waivers. No amendment, modification or waiver of any of the provisions of this Agreement by the Second Priority Collateral Agent or the First Priority Collateral Agent shall be deemed to be made unless the same shall be in writing signed by or on behalf of the First Priority Collateral Agent and the Second Priority Collateral Agent or their respective authorized agents, and consented to in writing by the Company, and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair

the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. Notwithstanding anything in this Section 8.3 to the contrary, this Agreement may be amended from time to time at the written request of the Company, at the Company’s expense, and without the consent of the First Priority Collateral Agent, any First Priority Secured Party, the Second Priority Collateral Agent, or any Second Priority Secured Party to (i) provide for a replacement First Priority Collateral Agent in accordance with the First Priority Documents, provide for a replacement Second Priority Collateral Agent in accordance with the Second Priority Documents and/or add additional Indebtedness or add other parties holding First Priority Notes Obligations or Second Priority Notes Obligations to the extent that such Indebtedness does not expressly violate the First Priority Documents or the Second Priority Documents and (ii) in the case of such additional First Priority Notes Obligations and Second Priority Notes Obligations, (a) establish that the Liens on the Common Collateral securing such First Priority Notes Obligations shall be senior in all respects to all Liens on the Common Collateral securing any Second Priority Notes Obligations (at least to the same extent as (taken together as a whole) the Liens on the Common Collateral in favor of the First Priority Notes Obligations are senior to the Liens on the Common Collateral in favor of the Second Priority Notes Obligations pursuant to this Agreement immediately prior to the incurrence of such additional First Priority Notes Obligations or Second Priority Notes Obligations), (b) establish that the Liens on the Common Collateral securing such Second Priority Notes Obligations shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any First Priority Notes Obligations (at least to the same extent as (taken together as a whole) the Liens on the Common Collateral in favor of the Second Priority Notes Obligations are junior and subordinate to the Liens on the Common Collateral in favor of the First Priority Notes Obligations pursuant to this Agreement immediately prior to the incurrence of such additional First Priority Notes Obligations or Second Priority Notes Obligations) and (c) provide to the holders of such First Priority Notes Obligations or Second Priority Notes Obligations (or any agent or trustee thereof) the comparable rights and benefits (including, with respect to the Second Priority Notes Obligations, any improved rights and benefits that have been consented to by the First Priority Collateral Agent) as are provided to the First Priority Secured Parties or Second Priority Secured Parties, as applicable, under this Agreement. Such amendments adding replacement agents may be accomplished by delivering to the First Priority Collateral Agent and the Second Priority Collateral Agent an Addendum substantially in the form of Exhibit A hereto, accompanied by an Officers’ Certificate referred to below. Any such additional party and agent shall be entitled to rely on the determination of officers of the Company that such modifications do not expressly violate the First Priority Indenture, the other First Priority Documents, the Second Priority Indenture, the other Second Priority Documents and this Agreement if such determination is set forth in an Officers’ Certificate delivered to such party, the First Priority Collateral Agent and the Second Priority Collateral Agent. The Second Priority Trustee shall not be “bound” by any amendment, modification, or waiver of this Agreement that adversely affects its obligations, rights and protections without its written consent. The written request by the Company to amend this Agreement shall be accompanied by an opinion of counsel that such amendment is authorized or permitted by this Agreement.

8.4. Certain Terms Concerning Collateral Agents and Trustees. None of the First Priority Collateral Agent, the Second Priority Collateral Agent, the First Priority Trustee or the Second Priority Trustee shall have any liability or responsibility for the actions or omissions of any other Secured Party, or for any other Secured Party’s compliance with (or failure to comply

with) the terms of this Agreement. None of the First Priority Collateral Agent, the Second Priority Collateral Agent, the First Priority Trustee or the Second Priority Trustee shall have individual liability to any Person if it shall mistakenly pay over or distribute to any Secured Party (or the Company) any amounts in violation of the terms of this Agreement in the absence of such party’s gross negligence or willful misconduct. Each party hereto hereby acknowledges and agrees that each of the First Priority Collateral Agent, the Second Priority Collateral Agent, the First Priority Trustee and the Second Priority Trustee is entering into this Agreement solely in its capacity as such under the First Priority Documents and the Second Priority Documents, as the case may be, and not in its individual capacity. The First Priority Collateral Agent and the First Priority Trustee shall not be deemed to owe any fiduciary duty to the Second Priority Collateral Agent or any other Second Priority Secured Party, and the Second Priority Collateral Agent and the Second Priority Trustee shall not be deemed to owe any fiduciary duty to the First Priority Collateral Agent or any other First Priority Secured Party.

8.5. Authorization of Secured Agents. By accepting the benefits of this Agreement and the other First Priority Security Documents, each First Priority Secured Party authorizes the First Priority Collateral Agent, to enter into this Agreement and to act on its behalf as collateral agent hereunder and in connection herewith. By accepting the benefits of this Agreement and the other Second Priority Security Documents, each Second Priority Secured Party authorizes the Second Priority Collateral Trustee to enter into this Agreement and to act on its behalf as collateral gent hereunder and in connection herewith.

8.6. Information Concerning Financial Condition of the Company and the Subsidiaries. The First Priority Collateral Agent, the First Priority Secured Parties, the Second Priority Collateral Agent, and the Second Priority Secured Parties shall have no responsibility for keeping any other party to this Agreement informed of (a) the financial condition of the Company and the Subsidiaries and all endorsers and/or guarantors of the First Priority Notes Obligations or the Second Priority Notes Obligations or (b) any other circumstances bearing upon the risk of nonpayment of the First Priority Notes Obligations or the Second Priority Notes Obligations. The First Priority Collateral Agent, the First Priority Secured Parties, the Second Priority Collateral Agent, and the Second Priority Secured Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the First Priority Collateral Agent, any First Priority Secured Party, the Second Priority Collateral Agent, or any Second Priority Secured Party, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it or they shall be under no obligation (w) to make, and the First Priority Collateral Agent, the First Priority Secured Parties, Second Priority Collateral Agent and the Second Priority Secured Parties make no express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

8.7. Subrogation. The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of First Priority Notes Obligations has occurred.

8.8. Application of Payments. Except as otherwise provided herein, all payments received by the First Priority Secured Parties may be applied, reversed and reapplied, in whole or in part, to such part of the First Priority Notes Obligations by the First Priority Secured Parties in a manner consistent with the terms of the First Priority Documents. Except as otherwise provided herein, the Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, assents to any such extension or postponement of the time of payment of the First Priority Notes Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the First Priority Notes Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.

8.9. Consent to Jurisdiction; Waivers. The parties hereto consent to the jurisdiction of any state or federal court located in New York, New York, and consent that all service of process may be made by registered mail directed to such party as provided in Section 8.8 for such party. Service so made shall be deemed to be completed three days after the same shall be posted as aforesaid. The parties hereto waive any objection to any action instituted hereunder in any such court based on forum non conveniens, and any objection to the venue of any action instituted hereunder in any such court. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO IN CONNECTION WITH THE SUBJECT MATTER HEREOF.

8.10. Notices. All notices to the First Priority Secured Parties and the Second Priority Secured Parties permitted or required under this Agreement may be sent to the First Priority Collateral Agent or the Second Priority Collateral Agent, respectively, as provided in the relevant First Priority Document or Second Priority Document, as applicable. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, electronically mailed or sent by courier service or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party’s name on the signature pages hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

8.11. Further Assurances. The First Priority Collateral Agent, on behalf of itself and each First Priority Secured Party, and each First Priority Collateral Agent, on behalf of itself and each First Priority Secured Party, agree that each of them shall take such further action and shall execute and deliver to the First Priority Collateral Agent and the First Priority Secured Parties such additional documents and instruments (in recordable form, if requested) as the First Priority Collateral Agent or the First Priority Secured Parties may reasonably request to effectuate the terms of and the lien priorities contemplated by this Agreement.

8.12. Governing Law. This Agreement has been delivered and accepted at and shall be deemed to have been made at New York, New York and shall be interpreted, and the rights and liabilities of the parties bound hereby determined, in accordance with the laws of the State of New York.

8.13. Binding on Successors and Assigns. This Agreement shall be binding upon the First Priority Collateral Agent, the First Priority Secured Parties, the Second Priority Collateral Agent, the Second Priority Secured Parties, the Company, the Company’s Subsidiaries consenting hereto and their respective permitted successors and assigns.

8.14. Specific Performance. The First Priority Collateral Agent may demand specific performance of this Agreement. The Second Priority Collateral Agent, on behalf of itself and each Second Priority Secured Party, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by the First Priority Collateral Agent.

8.15. Section Titles. The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.

8.16. Counterparts. This Agreement may be executed in one or more counterparts, including by means of facsimile or “pdf” file thereof, each of which shall be an original and all of which shall together constitute one and the same document.

8.17. Authorization. By its signature, each party hereto represents and warrants to the other parties hereto that the Person executing this Agreement on behalf of such party is duly authorized to execute this Agreement. The First Priority Collateral Agent represents and warrants that this Agreement is binding upon the First Priority Secured Parties. The Second Priority Collateral Agent represents and warrants that this Agreement is binding upon the Second Priority Secured Parties.

8.18. No Third Party Beneficiaries. This Agreement and the rights and benefits hereof shall inure to the benefit of, and be binding upon, each of the parties hereto and their respective successors and assigns and shall inure to the benefit of each of, and be binding upon, the holders of First Priority Notes Obligations and Second Priority Notes Obligations. No other Person, including any Grantor, shall have or be entitled to assert rights or benefits hereunder.

8.19. Effectiveness. This Agreement shall become effective when executed and delivered by the parties hereto; provided, however, that this Agreement shall be void and of no legal effect if any of the Escrow Release Date Conditions is not satisfied on or before June 15, 2012.

8.20. No Waiver. Notwithstanding anything in this Agreement to the contrary (except to the extent contemplated by Section 5.3(b)), nothing in this Agreement is intended to or will (a) amend, waive or otherwise modify the provisions of the First Priority Documents or the Second Priority Documents, or permit the Company or any Subsidiary to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, the First Priority Documents or the Second Priority Documents or (b) obligate the

Company or any Subsidiary to take any action, or fail to take any action, if taking or failing to take such action, as the case may be, would otherwise constitute a breach of, or default under, any First Priority Document or any Second Priority Document.

8.21. References. Notwithstanding anything to the contrary in this Agreement, any references contained herein to any Section, clause, paragraph, definition or other provision of any First Priority Document or Second Priority Document (including any definition contained therein) shall be deemed to be a reference to such Section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided that any reference to any such Section, clause, paragraph or other provision shall refer to such Section, clause, paragraph or other provision of the applicable First Priority Document or Second Priority Document (including any definition contained therein) as amended or modified from time to time if such amendment or modification has been made in accordance with the applicable First Priority Document or Second Priority Document.

8.22. Relative Rights. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the First Priority Secured Parties on the one hand and the Second Priority Secured Parties on the other hand. None of the Company, any Grantor or any Subsidiary of the Company or any other creditor thereof shall have any rights hereunder. Nothing in this Agreement is intended to or shall impair the obligations of the Company or any other Grantor to pay the First Priority Notes Obligations and the Second Priority Notes Obligations as and when the same shall become due and payable in accordance with their terms.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.


WELLS FARGO BANK, NATIONAL ASSOCIATION, as First Priority Trustee

By:		/s/ Patrick T. Giordano
Name:		Patrick T. Giordano
Title:		Vice President

Address for notices:

Wells Fargo Bank, National Association, as Trustee 750 N. St. Paul Place, Suite 1750 MAC T9263-170 Dallas, Texas 75201
Attention:		Corporate Trust, Municipal and Escrow Services
Telephone:		(214) 756-7430
Facsimile:		(214) 756-7401


WELLS FARGO BANK, NATIONAL ASSOCIATION, as First Priority Collateral Agent

By:		/s/ Patrick T. Giordano
Name:		Patrick T. Giordano
Title:		Vice President

Address for notices:

Wells Fargo Bank, National Association, as First Priority Collateral Agent 750 N. St. Paul Place, Suite 1750 MAC T9263-170 Dallas, Texas 75201
Attention:		Corporate Trust, Municipal and Escrow Services
Telephone:		(214) 756-7430
Facsimile:		(214) 756-7401


WELLS FARGO BANK, NATIONAL ASSOCIATION, as Second Priority Collateral Agent

By:		/s/ Patrick T. Giordano
Name:		Patrick T. Giordano
Title:		Vice President

Address for notices:

Wells Fargo Bank, National Association, as Collateral Agent 750 N. St. Paul Place, Suite 1750 MAC T9263-170 Dallas, Texas 75201
Attention:		Corporate Trust, Municipal and Escrow Services
Telephone:		(214) 756-7430
Facsimile:		(214) 756-7401

Reference is made to the Intercreditor Agreement dated as of the date hereof between Wells Fargo Bank, National Association, as First Priority Trustee, Wells Fargo Bank, National Association, as First Priority Collateral Agent, Wilmington Trust, National Association, as Second Priority Trustee, and Wells Fargo Bank, National Association, as Second Priority Collateral Agent, as the same may be amended, restated, supplemented, waived, or otherwise modified from time to time (the “Intercreditor Agreement”). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.

The Company and each of the undersigned Grantors have read the foregoing Intercreditor Agreement and consent thereto. The Company and each of the undersigned Grantors agree not to take any action that would be contrary to the express provisions of the Intercreditor Agreement, agree to abide by the requirements specifically expressed as applicable to them under the Intercreditor Agreement and agree that, except as otherwise provided therein, no First Priority Secured Party or Second Priority Secured Party shall have any liability to the Company or any Grantor for acting in accordance with the provisions of the Intercreditor Agreement, the First Priority Documents or the Second Priority Documents. The Company and each Grantor understand that the Intercreditor Agreement is for the sole benefit of the First Priority Secured Parties and the Second Priority Secured Parties and their respective successors and assigns, and that neither the Company nor any Grantor is an intended beneficiary or third party beneficiary thereof except to the extent otherwise expressly provided therein.

Without limitation of the foregoing, the Company and each Grantor agree to take such further action and to execute and deliver such additional documents and instruments (in recordable form, if requested) as the First Priority Collateral Agent or the Second Priority Collateral Agent (or any of their respective agents or representatives) may reasonably request to effectuate the terms of and the lien priorities contemplated by the Intercreditor Agreement.

This Consent shall be governed and construed in accordance with the laws of the State of New York. Notices delivered to the Company or any Grantor pursuant to this Consent shall be delivered in accordance with the notice provisions set forth in the Indentures.

IN WITNESS HEREOF, this Consent is hereby executed by the Company and each of the Grantors as of the date first written above.

[The remainder of this page is intentionally left blank. Signatures continue on the following page.]

Reference is made to the Intercreditor Agreement dated as of February 23, 2012 between Wells Fargo Bank, National Association, as First Priority Trustee, Wells Fargo Bank, National Association, as First Priority Collateral Agent, Wilmington Trust, National Association, as Second Priority Trustee, and Wells Fargo Bank, National Association, as Second Priority Collateral Agent, as the same may be amended, restated, supplemented, waived, or otherwise modified from time to time (the “Intercreditor Agreement”). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.

The undersigned, by execution of this Addendum on [ ], hereby acknowledges and agrees to be bound as a [replacement] [First Priority/Second Priority] Collateral Agent with respect to [specify First Priority Notes Obligations /Second Priority Notes Obligations] by the foregoing provisions of the Intercreditor Agreement as if it were an original party thereto with respect to such obligations. The undersigned represents and warranties that it has received a copy of each of the First Priority Documents and Second Priority Documents and satisfies each and all of the criteria set forth therein for the assumption of this agency. This Addendum shall become effective upon delivery of the Officers’ Certificate contemplated by Section 8.3 of the Intercreditor Agreement [and upon satisfaction of the foregoing conditions:

[In connection with this Addendum, pursuant to Section 8.3 of the Intercreditor Agreement, at the Company’s request as confirmed by its signature below, the Intercreditor Agreement is amended in the following respects: [ ]]

This Addendum shall be governed and construed in accordance with the laws of the State of New York. Notices delivered to the undersigned pursuant to this Addendum shall be delivered in accordance with the notice provisions set forth in the Credit Agreement but to the address set forth below or such other address provided in writing, to the Company and other party to the Intercreditor Agreement.


811 Main Street, Suite 2100, Houston, Texas		77002
(Address of principal executive offices)		(Zip Code)


99.1		List of subsidiaries of the Company that are Debtors

99.2		Release of Private Information – Restructuring Support Agreement

99.3		Release of Private Information – Term Sheet

99.4		Press Release, dated October 10, 2014

99.5		Release of Private Information – Presentation (Reorganization Considerations)

99.6		Release of Private Information – Intercreditor Agreement, dated as of May 31, 2012, among Wells Fargo Bank, National Association, as trustee and collateral agent under the First Priority Indenture, Wilmington Trust, National Association, as trustee under the Second Priority Indenture, and Wells Fargo Bank, National Association, as collateral agent under the Second Priority Indenture


Exhibit No.		Description

99.1		List of subsidiaries of the Company that are Debtors

99.2		Release of Private Information – Restructuring Support Agreement

99.3		Release of Private Information – Term Sheet

99.4		Press Release, dated October 10, 2014

99.5		Release of Private Information – Presentation (Reorganization Considerations)

99.6		Release of Private Information – Intercreditor Agreement, dated as of May 31, 2012, among Wells Fargo Bank, National Association, as trustee and collateral agent under the First Priority Indenture, Wilmington Trust, National Association, as trustee under the Second Priority Indenture, and Wells Fargo Bank, National Association, as collateral agent under the Second Priority Indenture


ENDEAVOUR PARTIES

ENDEAVOUR INTERNATIONAL CORPORATION

By:		/s/ William L. Transier
		Name: William L. Transier
		Title: Chief Executive Officer & President

ENDEAVOUR OPERATING CORPORATION

By:		/s/ William L. Transier
		Name: William L. Transier
		Title: Chief Executive Officer & President

ENDEAVOUR COLORADO CORPORATION

By:		/s/ William L. Transier
		Name: William L. Transier
		Title: Chief Executive Officer & President

END MANAGEMENT COMPANY

By:		/s/ William L. Transier
		Name: William L. Transier
		Title: Chief Executive Officer & President

ENDEAVOUR ENERGY NEW VENTURES INC.

By:		/s/ William L. Transier
		Name: William L. Transier
		Title: Chief Executive Officer & President



ENDEAVOUR ENERGY LUXEMBOURG S.À R.L.

By:		/s/ Andrew Sheu
		Name: Andrew Sheu
		Title: Category A Manager


Transaction Overview

Debtors:		Endeavour International Corporation, Endeavour Operating Corporation (“EOC”), Endeavour Colorado Corporation (“END Colorado”), END Management Company, Endeavour Energy New Ventures Inc. and Endeavour Energy Luxembourg S.à r.l. (“END LuxCo”) (collectively, the “Debtors”).

		Endeavour International Holding B.V. (“BV”) and its subsidiaries (other than END LuxCo) will not file for chapter 11 protection (collectively, the “Non-Debtors”).

Chapter 11 Plan:		The Debtors will propose a chapter 11 plan that implements all of the terms set forth in this Term Sheet.


Debt to be Restructured:		$404 million in principal plus all other amounts outstanding under the 12% First Priority Notes due March 1, 2018 issued pursuant to that certain Indenture dated February 23, 2012 (the “March 2018 Notes Indenture”) between EIC, as issuer, and Wells Fargo, National Association, as trustee (the “March 2018 Notes”; all holders of such March 2018 Notes, the “March 2018 Noteholders”). $150 million in principal plus all other amounts outstanding under the 12% Second Priority Notes due June 1, 2018 issued pursuant to that certain Indenture dated February 23, 2012 (the “June 2018 Notes Indenture”) between EIC, as issuer, and Wilmington Trust, National Association, as trustee (the “June 2018 Notes,” together with the March 2018 Notes, the “2018 Notes”); all holders of such June 2018 Notes, the “June 2018 Noteholders,” and together with the March 2018 Noteholders, the “2018 Noteholders”). $83.7 million in principal plus all other amounts outstanding under the Bonds issued pursuant to that certain Trust Deed (the “7.5% Convertible Bonds Trust Deed”) dated January 24, 2008 for the issuance of $40 million of 11.5% (later reduced to 7.5%) Guaranteed Convertible Bonds due 2014 (later extended to 2016) between END LuxCo, as issuer, and BNY Corporate Trustee Services Limited, as trustee (the “7.5% Convertible Bonds”; all holders of such 7.5% Convertible Bonds, the “7.5% Convertible Bondholders”).

		$135 million in principal plus all other amounts outstanding under the Notes issued pursuant to that certain Indenture (the “5.5% Convertible Notes Indenture”) dated July 22, 2011 for the issuance of 5.5% Convertible Senior Notes due 2016 between EIC, as issuer, and Wilmington Savings Fund Society, FSB, as indenture trustee (the “5.5% Convertible Notes”; all holders of such 5.5% Convertible Notes, the “5.5% Convertible Noteholders”). $17.5 million in principal plus all other amounts outstanding under the Notes issued pursuant to that certain Indenture (the “6.5% Convertible Notes Indenture”) dated March 2, 2014 for the issuance of 6.5% Convertible Senior Notes due 2016 between EIC, as issuer, and Wilmington Savings Fund Society, FSB, as indenture trustee (the “6.5% Convertible Notes”; all holders of such 6.5% Convertible Notes, the “6.5% Convertible Noteholders”).

		None of the indebtedness or other obligations of the Non-Debtors will be affected by the restructuring, including the $440 million in principal plus interest and any other amounts outstanding under the amended and restated term loan facility entered into by and between certain of the Non-Debtors and Credit Suisse AG dated September 30, 2014 (the “EEUK Term Loan”).


Treatment of Claims

Administrative Expense Claims (including 503(b)(9) Claims):		Payable in full in cash on the effective date of a chapter 11 plan of reorganization (the “Effective Date”) or on such other terms as agreed between the Debtors and the holder thereof, subject to the reasonable consent of the requisite majority of each class of RSA Creditor Parties (collectively, the “Requisite Creditors”).

		Unclassified – Non-Voting

Priority Tax Claims:		Payable in deferred cash payments over a period not longer than five (5) years after the Petition Date or on such other terms as agreed between the Debtors and the holder thereof, subject to the reasonable consent of the Requisite Creditors.

		Unclassified – Non-Voting

Other Priority Claims:		Payable in full in cash on the Effective Date or on such other terms as agreed between the Debtors and the holder thereof, subject to the reasonable consent of the Requisite Creditors.

		Unimpaired – Deemed to Accept

Other Secured Claims:		On the Effective Date, all allowed secured claims (“Other Secured Claims”) shall be paid in full in cash, receive delivery of collateral securing any such claim and payment of any interest requested under section 506(b) of the Bankruptcy Code, or be treated on such other terms as agreed between the Debtors and the holder thereof, subject to the reasonable consent of the Requisite Creditors. The aggregate amount of Other Secured Claims shall not exceed an amount to be reasonably agreed upon by the Debtors and the Requisite Creditors.

		Impaired – Entitled to Vote. The Debtors reserve the right to argue at confirmation that the Other Secured Claims are unimpaired.

March 2018 Notes:		On the Effective Date, all of the March 2018 Notes shall be canceled, and each March 2018 Noteholder shall receive, on account of its allowed claim in respect of such March 2018 Notes, such March 2018 Noteholder’s pro rata share of:

		(i) $262.5 million in new notes (the “Reorganized EIC Notes”) due March 31, 2020. The Reorganized EIC Notes shall have the following terms:


		(A) The Reorganized EIC Notes shall be redeemable at par at any time without premium or penalty.

		(B) The Reorganized EIC Notes shall bear interest at the rate of 9.75%, to be paid semi-annually, which interest shall be payable, at the reorganized Debtors’ option, in cash or payment-in-kind and in cash from and after the time the EEUK Term Loan is refinanced.

		(C) The Reorganized EIC Notes shall be guaranteed by (1) the same guarantors that guarantee the March 2018 Notes, (2) any future domestic subsidiary of reorganized EIC and (3) any other subsidiary of reorganized EIC that is not already a guarantor of the Reorganized EIC Notes and which guarantees any other indebtedness of reorganized EIC or any guarantor of the Reorganized EIC Notes.

		(D) The Reorganized EIC Notes shall be secured to the same extent as the March 2018 Notes, including, without limitation, by (1) 65% of the equity interests of any first tier foreign subsidiary and (2) promissory notes or other indebtedness owed by any foreign subsidiary to reorganized EIC or any domestic subsidiary thereof, provided that as to that certain intercompany note dated May 31, 2012, between Endeavour Energy U.K. Limited and EOC (the “Intercompany Note”), the Company may (i) reduce the principal amount of the Intercompany Note to match the principal amount of the Reorganized EIC Notes, (ii) change the interest rate of the Intercompany Note to not less than the interest rate of the Reorganized EIC Notes and/or (iii) change the maturity date of the Intercompany Note to not later than the maturity date of the Reorganized EIC Notes.

		(E) The Reorganized EIC Notes shall (1) prohibit the sale of production payments and incurrence of additional indebtedness by reorganized EIC and its subsidiaries, subject to such exceptions as may be agreed to by the ad hoc committee of 2018 Noteholders (the “Ad Hoc Prepetition Noteholders Group”), and (2) limit forward sales of hydrocarbons to not more than $25 million of forward sales outstanding at any time.

		(F) The Reorganized EIC Notes shall be governed by an indenture and form of note that is substantially similar to the indenture and note governing the March 2018 Notes except as expressly provided in this term sheet and with such other changes (i) as may be agreed by the Ad Hoc Prepetition Noteholders Group and the Company, and (ii) as may be reasonably acceptable to the other Requisite Creditors collateral securing the Reorganized EIC Notes shall be substantially similar to the collateral documents with respect to the March 2018 Notes.


		-and-

		(ii) Such March 2018 Noteholders’ pro rata share of the Series A convertible preferred equity of reorganized EIC and having an aggregate liquidation preference of $196.1 million (the “Series A Convertible Preferred”).

		The Series A Convertible Preferred to be issued to the March 2018 Noteholders shall (i) pay dividends quarterly at a rate of 3.5% per annum in cash or additional Series A Preferred at the option of the Company, (ii) initially be convertible into 66.30% of the common equity of reorganized EIC at the holders’ option within (5) years of the Effective Date, and thereafter if not mandatorily redeemed (in each case without regard to the then current stock price) and (iii) be mandatorily redeemable five (5) years after the Effective Date in cash for an amount equal to the aggregate liquidation preference plus the amount of any accrued and unpaid dividends. If the Company does not mandatorily redeem the Series A Convertible Preferred on the fifth (5) anniversary of the Effective Date, from and after such date, (a) the cumulative dividends shall accrue and be paid (in the manner provided above) at the rate of 5.5% per annum and (b) the holders of the Series A Convertible Preferred shall at all times have the right to appoint an additional member to the Board of Directors.

		For the avoidance of doubt, the distribution to March 2018 Noteholders will be in full satisfaction of all of the March 2018 Noteholders’ claims.

		For the further avoidance of doubt, in the event that additional EIC common equity is issued following the Effective Date that reduces the percentage of common equity held by the June 2018 Noteholders, the 7.5% Convertible Bondholders or the Convertible Noteholders, the percentage of common stock into which the Series A Convertible Preferred shall be converted or by which it can be redeemed shall be proportionately reduced.

		Impaired – Entitled to Vote

June 2018 Notes:		On the Effective Date, all of the June 2018 Notes shall be canceled, and each June 2018 Noteholder shall receive, on account of its allowed claim in respect of such June 2018 Notes:

		(i) such June 2018 Noteholder’s pro rata share of the Series A Convertible Preferred Equity of reorganized EIC having an aggregate liquidation preference of $41.4 million.


		The Series A Convertible Preferred to be issued to the March 2018 Noteholders shall (i) pay dividends quarterly at a rate of 3.5% per annum in cash or additional Series A Preferred at the option of the Company, (ii) initially be convertible into 14.00% of the common equity of reorganized EIC at the holders’ option within (5) years of the Effective Date, and thereafter if not mandatorily redeemed (in each case without regard to the then current stock price) and (iii) be mandatorily redeemable five (5) years after the Effective Date in cash for an amount equal to the aggregate liquidation preference plus the amount of any accrued and unpaid dividends. If the Company does not mandatorily redeem the Series A Convertible Preferred on the fifth (5) anniversary of the Effective Date, from and after such date, (a) the cumulative dividends shall accrue and be paid (in the manner provided above) at the rate of 5.5% per annum and (b) the holders of the Series A Convertible Preferred shall at all times have the right to appoint an additional member to the Board of Directors.

		-and-

		(ii) such June 2018 Noteholder’s pro rata share of 2.74% of the common equity of reorganized EIC.

		For the avoidance of doubt, the distribution to June 2018 Noteholders will be in full satisfaction of all of the June 2018 Noteholders’ claims.

		For the further avoidance of doubt, in the event that additional EIC common equity is issued following the Effective Date that reduces the percentage of common equity held by the June 2018 Noteholders, the 7.5% Convertible Bondholders or the Convertible Noteholders, the percentage of common stock into which the Series A Convertible Preferred shall be converted or by which it can be redeemed shall be proportionately reduced.

		Impaired – Entitled to Vote

7.5% Convertible Bonds:		On the Effective Date, all of the 7.5% Convertible Bonds shall be canceled, and each 7.5% Convertible Bondholder shall receive, on account of its allowed claim in respect of such 7.5% Convertible Bonds, such 7.5% Convertible Bondholder’s pro rata share of 8.72% of the common equity of reorganized EIC on a fully-diluted basis assuming full conversion of the Series A Convertible Preferred into common equity.


		The 7.5% Convertible Bondholders shall also receive customary minority stockholder protections as reasonably agreed to among the RSA Creditor Parties and the right to appoint one (1) director of reorganized EIC. All remaining directors of reorganized EIC will be appointed by the holders of Series A Convertible Preferred.

		For the avoidance of doubt, the distribution to 7.5% Convertible Bondholders will be in full satisfaction of all of the 7.5% Convertible Bondholders’ claims. Impaired – Entitled to Vote

Convertible Notes:		On the Effective Date, all of the 5.5% Convertible Notes and the 6.5% Convertible Notes (collectively, the “Convertible Notes”; all holders of such Convertible Notes, the “Convertible Noteholders”) shall be canceled.

		Each holder of the Convertible Notes shall receive, on account of its allowed unsecured claim in respect of such Convertible Notes (each, a “Convertible Notes Claim”), its pro rata share of 8.24% of the common equity of reorganized EIC on a fully-diluted basis assuming full conversion of the Series A Convertible Preferred.

		The holders of Convertible Notes Claims shall also receive customary minority stockholder protections as reasonably agreed to among the RSA Creditor Parties.

		For the avoidance of doubt, the distribution to Convertible Noteholders will be in full satisfaction of all of the Convertible Noteholders’ claims.

		Impaired – Entitled to Vote

General Unsecured Claims (excluding Convenience Claims):		On the Effective Date, each holder of a general unsecured claim not otherwise specifically classified herein shall receive, on account of its allowed unsecured claim (each, a “General Unsecured Claim”), its pro rata share of a de minimis amount of the common equity of reorganized EIC or such other treatment as may be agreed upon. The aggregate amount of General Unsecured Claims shall not exceed $12,000,000.

		Impaired – Entitled to Vote


Convenience Claims:		On account of their claims, the holders of all non-priority, general unsecured claims allowed in the amount of $[•] or less that are not otherwise classified herein (the “Convenience Claims”) shall receive cash in the amount of their allowed Convenience Claims on the Effective Date.
		Unimpaired – Deemed to Accept

Intercompany Claims:		All intercompany claims between and among EIC and its direct and indirect subsidiary Debtors shall be reinstated or compromised by EIC, as the case may be, consistent with its business plan; provided that each intercompany claim held by a non-debtor shall receive no less favorable treatment than other holders of general unsecured claims.

		Impaired – Entitled to Vote

Preferred Equity Interests:		All existing shares of preferred equity interests in EIC shall be extinguished as of the Effective Date, and owners thereof shall receive no distribution on account of such equity interests.

		Impaired – Deemed to Reject

Equity Interests:		All existing shares of stock, options, warrants and common equity interests in EIC shall be extinguished as of the Effective Date, and owners thereof shall receive no distribution on account of such stock, options, warrants and equity interests.

		Impaired – Deemed to Reject


Corporate Governance

Shareholder Agreement and Other Corporate Organizational Documents:		The 7.5% Convertible Bondholders and the Convertible Noteholders shall also receive customary minority stockholder protections as reasonably agreed to among the RSA Creditor Parties. These minority protections do not represent a concession or agreement that the reorganized debtors will become or remain a private company for any substantial period of time, and the parties will continue to discuss in good faith to create and/or maintain shares registered with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933 (as amended) and the Securities Exchange Act of 1934 (as amended) on terms to be agreed, with an aspiration toward a public listing of such shares within a period of time to be agreed. The RSA Creditor Parties agree to discuss in the negotiations the following minority stockholder protections:

		(a) Information Rights.

		(b) Tag-Along, Drag-Along, Preemptive and Registration Rights.

		(c) Affiliate transaction protections.

		(d) Independent Director requirement and the right of the holders of the common equity to participate in the selection thereof.

Board of Directors of Reorganized EIC:		The 7.5% Convertible Bondholders shall receive the right to appoint one (1) director of reorganized EIC, and all remaining directors of reorganized EIC will be appointed by the holders of Series A Convertible Preferred.

Indemnification of Directors:		The documents describing corporate governance shall provide for the indemnification of the reorganized Company’s directors to the fullest extent permitted by law.


Darcey Matthews		713-307-8711


General Provisions

Allowance of Claims:		The Debtors stipulate to the allowance of claims under (i) the March 2018 Notes Indenture in the principal amount of $404.0 million, plus interest, fees and charges provided for under the March 2018 Notes Indenture, (ii) the June 2018 Notes Indentures in the principal amount of $150.0 million, plus interest, fees and charges provided for under the June 2018 Notes Indenture, (iii) the 7.5% Convertible Bonds Trust Deed in the principal amount of $83.7 million, plus interest, fees and charges provided for under the 7.5% Convertible Bonds Trust Deed, (iv) the 5.5% Convertible Notes Indenture in the principal amount of $135.0 million, plus interest, fees and charges provided for under the 5.5% Convertible Notes Indenture and (v) the 6.5% Convertible Notes Indenture in the principal amount of $17.5 million, plus interest, fees and charges provided for under the 6.5% Convertible Notes Indenture.

Merger or Liquidation:		END Management Company and Endeavour Energy New Ventures Inc. shall be merged or liquidated into EOC, subject to confirming the tax implications of such merger or liquidation.

Management Incentive Plan:		To be decided by the board of directors of reorganized EIC and to be implemented after the Effective Date, a management incentive plan that provides some combination of cash, options, and/or other equity-based compensation to the management of the reorganized EIC of up to [•]% of the common equity of reorganized EIC, which shall dilute all of the equity otherwise contemplated to be issued by this Term Sheet.

Tax Issues:		The Company shall seek to implement the restructuring in a tax efficient manner.

Reincorporation:		EIC shall be reincorporated in Delaware.

Release and Related Provisions

Exculpations:		The Debtors and the RSA Creditor Parties and each of their respective current and former officers and directors, professionals, advisors, accountants, attorneys, investment bankers, consultants, employees, agents and other representatives (each solely in its capacity as such), shall be exculpated from liability for their actions in connection with these chapter 11 cases, with customary carve-outs for gross negligence and willful misconduct.

Releases:		The Debtors and the RSA Creditor Parties and each of their respective current and former officers and directors, professionals, advisors, accountants, attorneys, investment bankers, consultants, employees, agents and other representatives (each solely in its capacity as such), shall be released from liability for all claims or causes of action, known or unknown, relating to any prepetition date acts or omissions.

Director and Officer Indemnification:		Any obligations of the Debtors pursuant to their organizational documents to indemnify current and former officers, directors, agents, and/or employees (i) shall not be discharged or impaired by confirmation of the Plan and (ii) shall be deemed and treated as executory contracts to be assumed by the Debtors under the Plan.


		Director and officer insurance will continue in place for the directors and officers of all of the Debtors during these chapter 11 cases on existing terms. After the Effective Date, the reorganized Debtors shall not terminate or otherwise reduce the coverage under any director and officer insurance policies (including any “tail policy”) then in effect. To the extent permitted under applicable law, current directors and officers are to receive first access to available insurance. Directors and officers shall be indemnified by reorganized EIC to the extent of such insurance.

Discharge:		A full and complete discharge shall be provided in the Plan.

Injunction:		Ordinary and customary injunction provisions shall be included in the Plan.

Conditions

Closing Conditions:		This restructuring shall be subject to (i) the execution of definitive documentation mutually acceptable to the parties to the RSA, (ii) the entry of an order confirming the Plan, which order is not subject to a stay of execution, (iii) all actions, documents and agreements necessary to implement the Plan shall have been effected or executed and, to the extent required, filed with the applicable governmental units in accordance with applicable laws, and (iv) the Debtors shall have received all authorizations, consents, regulatory approvals, rulings, letters, no-action letters, opinions or documents that are determined by the Debtors or the RSA Creditor Parties to be necessary to implement the Plan and that are required by law, regulation or order.


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Second Priority Trustee

By:		/s/ Jane Schweiger
Name:		Jane Schweiger
Title:		Vice President

Address for notices:

Wilmington Trust, National Association, as Trustee 50 South Sixth Street, Suite 1290 Minneapolis, MN 55402
Attention:		Endeavor International Corporation Administrator
Telephone:		612-217-5632
Facsimile:		612-217-5651


ENDEAVOUR INTERNATIONAL CORPORATION, a
Delaware corporation

By:		/s/ J. Michael Kirksey
Name:		J. Michael Kirksey
Title:		Chief Financial Officer

ENDEAVOUR OPERATING CORPORATION, a
Delaware corporation

By:		/s/ J. Michael Kirksey
Name:		J. Michael Kirksey
Title:		Chief Financial Officer


Acknowledged and Agreed:

ENDEAVOUR INTERNATIONAL CORPORATION

By:
Name:
Title: