Facility Agreement Dated September 14, 2007

Exhibit 10.15

		CLIFFORD CHANGE WONG PTE LTD
		EXECUTION COPY
CLIFFORD
CHANGE
WONG

Up to $30,000,000

FACILITY AGREEMENT

dated 14th September 2007

for

PAN-CHINA RESOURCES LTD.

guaranteed by
SUNWING ENERGY LTD.
SUNWING HOLDING CORPORATION
SUNWING ZITONG ENERGY LTD.

arranged by
STANDARD BANK Plc

with

STANDARD BANK Plc
acting as Agent and Security Trustee

and

STANDARD BANK ASIA LIMITED
as Account Bank

CONTENTS

Clause		Page
1. Definitions And Interpretation			1
2. The Facility			22
3. Purpose			22
4. Conditions Of Utilisation			22
5. Borrowing Base Assets			24
6. Borrowing Base Amount			25
7. Utilisation Of Facility			29
8. Repayment			31
9. Prepayment And Cancellation			31
10. Interest			34
11. Interest Periods			35
12. Changes To The Calculation Of Interest			35
13. Fees			36
14. Tax Gross Up And Indemnities			37
15. Increased Costs			39
16. Other Indemnities			40
17. Mitigation By The Lenders			42
18. Costs And Expenses			42
19. Guarantee And Indemnity			44
20. Representations			46
21. Information Undertakings			49
22. Financial Covenants			52
23. General Undertakings			53
24. Events Of Default			58
25. Changes To The Lenders			63
26. Changes To The Hedge Counterparties			66
27. Changes To The Obligors			66
28. The Agent And The Arranger			67
29. The Account Bank			71
30. The Security Trustee			74
31. Change Of Security Trustee And Delegation			80
32. Indemnities And Information			81
33. Conduct Of Business By The Finance Parties			82
34. Security And Priority			83
35. Hedge Counterparties: Rights And Obligations			84
36. Entitlement To Enforce			84

Clause		Page
37. Effect Of Insolvency Event			85
38. Turnover Of Receipts			86
39. Sharing			87
40. Enforcement Of Security			88
41. Disposals And Claims			89
42. Application Of Proceeds			90
43. Payment Mechanics			92
44. Set-Off			94
45. Notices			94
46. Calculations And Certificates			96
47. Partial Invalidity			97
48. Remedies And Waivers			97
49. Amendments And Waivers			97
50. Counterparts			98
51. Facility Agreement Provisions To Prevail			99
52. Governing Law			100
53. Enforcement			100
Schedule 1 The Original Lenders			102
Schedule 2 Conditions Precedent			103
Schedule 3 Utilisation Request			109
Schedule 4 Form Of Transfer Certificate			110
Schedule 5 Form Of Accession Undertaking			112
Schedule 6 Timetables			114
Schedule 7 The Accounts			115
Schedule 8 Subordination Terms			118
Schedule 9 Hedging			121
Part 1 Interest Rate Hedging			121
Part 2 Oil And Gas Hedging			123
Schedule 10 Operating Budgets			124
Schedule 11 Conditions Subsequent			125
Schedule 12 Form Of Payment Invoice			127

THIS AGREEMENT is dated ___ September 2007 and made between:

(1)		PAN-CHINA RESOURCES LTD., a corporation organised and existing under the laws of the British Virgin Islands and having an office at 19th Floor, 101-6th Avenue, S.W., Calgary, Alberta, Canada T2P 3TY (the “Borrower”);
(2)		SUNWING ENERGY LTD., SUNWING HOLDING CORPORATION and SUNWING ZITONG ENERGY LTD. as guarantors (the “Guarantors”);
(3)		STANDARD BANK Plc as arranger (the “Arranger”);
(4)		THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders) as original lenders (the “Original Lenders”);
(5)		STANDARD BANK Plc as agent of the other Finance Parties (the “Agent”);
(6)		STANDARD BANK Plc as security trustee for the other Secured Parties (the “Security Trustee”);
(7)		STANDARD BANK ASIA LIMITED as account bank (the “Account Bank”); and
(8)		STANDARD BANK Plc as hedge counterparty.

IT IS AGREED as follows:

SECTION 1
INTERPRETATION

1.

DEFINITIONS AND INTERPRETATION

1.1		Definitions
		In this Agreement:
		“Accession Undertaking” means an undertaking in substantially the form set out in Schedule 5 (Form of Accession Undertaking).
		“Accounts” means the Revenue Account and the Distribution Account.
		“Accounts Assignment” means the assignment relating to the Revenue Account and the Distribution Account to be entered into between the Borrower and the Security Trustee.
		“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
		“Assumptions” means the Economic Assumptions and the Technical Assumptions used for the Financial Model to produce Financial Projections, as such Assumptions may be changed or subsequently determined pursuant to Clause 6 (Borrowing Base Amount).
		“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
		“Available Commitment” means a Lender’s Commitment minus:

(a)		the amount of its participation in any outstanding Loans; and
(b)		in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date,

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

“Available Facility” means, from time to time, the lower of (a) the aggregate of the Available Commitments, (b) the Maximum Facility and (c) the Borrowing Base Amount.

“Availability Period” means the period from and including the date of this Agreement to the date falling three Months prior to the Termination Date.

“Bank of Montreal Account” means the account numbered 4653-643 in the name of Ivanhoe and held with Bank of Montreal, 595 Burrard Street, Vancouver, B.C., Canada or any other account as ma be agreed between the Borrower and the Agent.

“Bank of Montreal Payment Instructions” means irrevocable payment instructions, in form and substance satisfactory to the Lenders, instructing Bank of Montreal to immediately transfer to the Revenue Account all amounts received in the Bank of Montreal Account.

“Borrower Debenture” means the assignment and fixed and floating charge to be entered into between the Borrower and the Security Trustee in respect of all of the assets of the Borrower.

“Borrower Share Charge” means the charge over shares to be entered into by Sunwing Energy and the Security Trustee in relation to all of the shares in the capital of the Borrower owned by Sunwing Energy.

“Borrowing Base Amount” means the amount calculated pursuant to the Financial Model, and thereafter as determined in accordance with Clause 6 (Borrowing Base Amount), to be equal to the Projected Net Cash Flow on each Redetermination Date referred to in the Financial Model.

“Borrowing Base Asset” means at any time any Field which qualifies as a Borrowing Base Asset at such time as determined by reference to Clause 5 (Borrowing Base Assets).

“Break Costs” means the amount (if any) by which:

(a)

the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the

Business Day following receipt or recovery and ending on the last day of the current Interest Period.

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in London, Singapore, Hong Kong and New York.

“Capital Expenditure” means, for any Obligor and for any period, the sum of, without duplication, all expenditures that are capital in nature made, directly or indirectly, by such Obligor or any of its Subsidiaries during such period in connection with the prospecting, exploration, development and/or production of hydrocarbon reserves or the acquisition or replacement of plant, equipment and fixed assets that have been or should be capitalised on the balance sheet of such Obligor in accordance with GAAP.

“Charged Property” means all the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

“CNPC” means China National Petroleum Corporation.

“Commitment” means:

(a)		in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 (The Original Lenders) and the amount of any other Commitment transferred to it under this Agreement; and
(b)		in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Compensation” means:

(a)		all proceeds of insurance claims received by any member of the Group (net of amounts which the relevant member of the Group must pay to any third party in respect of the relevant claim, and excluding proceeds from any claims which have been advised to the Agent prior to the date of this Agreement and which have been included in the Financial Model); and
(b)		all proceeds from any other form of loss compensation (including in relation to expropriation and liquidated damages) paid to any member of the Group.

“Conditions Subsequent” means each of the documents and evidence listed in Schedule 11 (Conditions Subsequent).

“Consolidated Current Ratio” at any time means the ratio of the Group’s assets to its liabilities, as set out in the most recent financial statements delivered pursuant to Clause 21.1.1.

“Consolidated Net Income” means, for any Measurement Period, the net income (or loss) of the Borrower and its Subsidiaries, excluding any extraordinary items (including any net non-cash gains or losses arising from the sale, exchange, retirement or other disposition of capital assets other than in the ordinary course of business and any write

up or write down of assets during such Measurement Period), all as determined on a consolidated basis in accordance with GAAP.

“Consolidated Tangible Net Worth” means the value of the assets of the Group less the liabilities of the Group (but excluding any Subordinated Indebtedness owed by any member of the Group to any other member of the Group or to Ivanhoe), as set out in the most recent financial statements delivered pursuant to Clause 21.1.1.

“Control” means in respect of a person by another person that that other person has the power to direct the management and policies of such person, whether through the ownership of voting capital, by contract or otherwise.

“Creditors” means the Lenders and the Hedge Counterparties.

“Dagang Field” means the exploration and production area forming part of the Dagang PSC.

“Dagang PSC” means the production sharing contract dated 8 September 1997 between the Borrower and CNPC, as amended from time to time.

“Debt Service” in respect of any period means the amount of principal and interest on any Financial Indebtedness payable by the Group during such period.

“Debt to EBITDA Ratio” means, at any time, the ratio of (a) Total Debt at such time to (b) EBITDA during the immediately preceding twelve (12) months.

“Default” means an Event of Default or any event or circumstance specified in Clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Security Trustee.

“Discounted Projected Net Cash Flow” means, from the relevant date upon which the calculation is made to the relevant date to which the calculation is to refer, the aggregate of all Projected Net Cash Flow arising in such period, discounted annually at the Discount Rate to the date upon which the calculation is made.

“Discount Rate” means, for any calculation period, the discount rate set out in the relevant Financial Projection.

“Disruption Event” means either or both of:

(a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

	(i)		from performing its payment obligations under the Finance Documents; or
	(ii)		from communicating with other Parties in accordance with the terms of the Finance Documents,

(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

“Distribution Account” means the account designated as such bearing the account number to be advised by the Account Bank to the Borrower in the name of the Borrower opened with the Account Bank (as such account may be re-designated, substituted or replaced from time to time).

“Dormant Subsidiary” means a company that has no business operations, employees or material assets or liabilities.

“EBITDA” means, in respect of any Measurement Period and without duplication, Consolidated Net Income for such period plus, to the extent deducted in calculating such Consolidated Net Income, the sum of (a) Interest Expense, (b) income tax expense, (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring non-cash expenses or losses, and (f) any other non-cash charges, minus, to the extent included in calculating such Consolidated Net Income, the sum of (x) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise specified as a separate item in calculating such Consolidated Net Income, gains on the sales of assets outside of the ordinary course of business) and (y) any other non-cash income, all as determined on a consolidated basis in accordance with GAAP.

“Economic Assumptions” means assumptions as to interest rates, inflation rates, exchange rates, crude oil prices, gas prices, tariffs, tax rates (including withholding taxes) and any other inputs relating to amounts due under the Finance Documents, hedging agreements and other agreements under which Financial Indebtedness arises or may arise, and which are inputs to the Financial Model in producing a Financial Projection.

“Enforcement Action” means:

(a)		the acceleration of any Liabilities or any declaration that any Liabilities are prematurely due and payable (other than as a result of it becoming unlawful for a Lender to perform its obligations under, or of any mandatory prepayment arising under, the Finance Documents) or payable on demand or the premature termination or close out of any Hedge Liabilities;
(b)		the taking of any steps to enforce or require the enforcement of any Transaction Security (including the crystallisation of any floating charge forming part of the Transaction Security);

(c)		the making of any demand against an Obligor in relation to any guarantee, indemnity or other assurance against loss in respect of any Liabilities or exercising any right to require an Obligor to acquire any Liability (including exercising any put or call option against an Obligor for the redemption or purchase of any Liability);
(d)		the exercise of any right of set-off against an Obligor in respect of any Liabilities;
(e)		the suing for, commencing or joining of any legal or arbitration proceedings against an Obligor to recover any Liabilities;
(f)		the entering into of any composition, assignment or arrangement with an Obligor; or
(g)		the petitioning, applying or voting for, or the taking of any steps (including the appointment of any liquidator, receiver, administrator or similar officer) in relation to the winding up, dissolution, administration or reorganisation of an Obligor or any suspension of payments or moratorium of any indebtedness of an Obligor, or any analogous procedure or step in any jurisdiction.

“Environmental Claim” means any claim, proceeding or investigation by any person in respect of any Environmental Law.

“Environmental Law” means any applicable law in any jurisdiction in which any member of the Group conducts business which relates to the pollution or protection of the environment or harm to or the protection of human health or the health of animals or plants.

“Environmental Permits” means any permit, licence, consent, approval and other authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by the relevant member of the Group.

“Event of Default” means any event or circumstance specified as such in Clause 24 (Events of Default).

“Facility” means the revolving loan facility made available under this Agreement as described in Clause 2.1 (The Facility).

“Facility Office” means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

“Fee Letter” means any letter or letters dated on or about the date of this Agreement between the Arranger and the Borrower (or the Agent or Security Trustee and the Borrower) setting out any of the fees referred to in Clause 13 (Fees).

“Field” means any field bearing hydrocarbons and other substances (including oil, gas, condensate, natural gas liquids and all components of any of them) in which the Borrower has a working interest.

“Finance Documents” means each of this Agreement, the Security Documents, any Fee Letter, any Hedge Agreement, any Subordination Agreement, any other document designated as such by the Agent and the Borrower and any document that amends, supplements, modifies or waives any provision of any of the foregoing.

“Finance Parties” means the Agent, the Security Trustee, the Account Bank, the Arranger and the Lenders, and “Finance Party” means any of them.

“Financial Indebtedness” means any indebtedness for or in respect of:

(a)		moneys borrowed;
(b)		any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c)		any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)		the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;
(e)		receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)		any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
(g)		any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
(h)		any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;
(i)		any amount raised by the issue of redeemable shares which are capable of being redeemed prior to the Termination Date;
(j)		any amount of any liability under an advance or deferred purchase agreement if one of the primary reasons behind the entry into this agreement is to raise finance; and
(k)		(without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (j) above.

“Financial Model” means the financial model computer programme having the capacity to:

	(a)		input all Assumptions, in order to
	(b)		produce the Financial Projections required pursuant to this Agreement,

each within the time for delivery of each Financial Projection required under this Agreement, as the same may be modified from time to time as permitted by Clause 6.5 (Modification of Financial Model).

“Financial Projection” means a financial projection generated by running the Financial Model and which will set out, inter alia:

	(a)		the Borrowing Base Amount as at the relevant Redetermination Date;
	(b)		the Reserve Tail Date;
	(c)		a statement of the remaining reserves in respect of each Borrowing Base Asset; and
	(d)		the Projected Payments.

		“Fiscal Quarter” means a calendar quarter ending on the last day of March, June, September or December.
		“GAAP” means generally accepted accounting principles in Canada.
		“Group” means Sunwing Holdings and its Subsidiaries.
		“Half-year Date” means the last day of each of the Borrower’s Fiscal Quarters ending in June and December.
		“Hedge Agreement” means an agreement entered into by the Borrower pursuant to Clause 23.13 (Hedging).
		“Hedge Counterparties” means each financial institution named on the signing pages as a Hedge Counterparty and any financial institution which becomes a Hedge Counterparty in accordance with the terms of Clause 35 (Hedge Counterparties: Rights and Obligations) or Clause 26 (Change of Hedge Counterparties).
		“Hedge Liabilities” means the Liabilities owed by the Borrower to the Hedge Counterparties under or in connection with the Hedge Agreements.
		“Hedging Costs” means any payments required to be made to any Hedge Counterparty under any Hedge Agreement during the relevant calculation period.
		“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
		“Independent Engineer” means Gaffney, Cline & Associates or any other independent petroleum engineering consultant approved by the Majority Lenders.

“Independent Reserves Report” means a reserves report, prepared by the Independent Engineer or any other independent advisor acceptable to the Majority Lenders, which includes estimated oil and gas Proved Reserves, Probable Reserves, PDP Reserves, Proved Undeveloped Reserves and PDNP Reserves arising to the Group from the Borrowing Base Assets, production profiles and all costs related to the development and operations at the Borrowing Base Assets.

“Insolvency Event” means, in relation to an Obligor:

	(a)		any resolution is passed or order made for the winding up, dissolution, administration or reorganisation of that Obligor or an administrator is appointed to an Obligor;
	(b)		any composition, assignment or arrangement is made with any of its creditors;
	(c)		the appointment of any liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of the Borrower or any of its assets; or
	(d)		any analogous procedure or step is taken in any jurisdiction.

		“Interest Cover Ratio” means, for any Measurement Period, the ratio of (a) EBITDA for such Measurement Period to (b) Interest Expense for such Measurement Period.
		“Interest Expense” means, for any Measurement Period, the total interest expense of the Borrower and its Subsidiaries accrued for such period (calculated without regard to any limitations on the payment thereof, and including all interest and fees incurred in connection with any Financial Indebtedness, all capitalised interest, all commitment fees, all fees, commissions and discounts owed in respect of bankers’ acceptance financing and net amounts payable under any Hedge Agreement, all as determined on a consolidated basis in accordance with GAAP).
		“Interest Period” means, in relation to a Loan, each period determined in accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 10.3 (Default interest).
		“Ivanhoe” means Ivanhoe Energy Inc, a company incorporated under the laws of the Territory of the Yukon, Canada and having an office at 999 Canada Place, Suite 654, Vancouver, BC, Canada, V6C 3E1.
		“Legal Reservations” means:

	(a)		the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
	(b)		the time barring of claims under applicable law, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of stamp duty may be void and defences of set-off or counterclaim;
	(c)		similar principles, rights and defences under the laws of any Relevant Jurisdiction; and

(d)

any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion delivered to the Agent pursuant to Clause 4.1 (Initial conditions precedent).

“Lender” means:

	(a)		each Original Lender; and
	(b)		each bank, financial institution, trust, fund or other entity which has become a Lender in accordance with Clause 25 (Changes to the Lenders),

		which in each case has not ceased to be a Lender in accordance with the terms of this Agreement.
		“Lenders’ Technical Report” means each technical report prepared for the Lenders by the Independent Engineer, which shall include estimated oil and gas Proved Reserves, Probable Reserves, PDP Reserves, Proved Undeveloped Reserves and PDNP Reserves arising to the Group from the Borrowing Base Assets, production profiles and all costs related to the development and operations at the Borrowing Base Assets.
		“Liabilities” means all present and future liabilities and obligations at any time of the Obligors to any Creditor under or in connection with the Finance Documents, both actual and contingent and whether incurred solely or jointly or in any other capacity together with any of the following matters relating to or arising in respect of those liabilities and obligations:

	(a)		any refinancing, novation, deferral or extension;
	(b)		any claim for damages or restitution; and
	(c)		any claim as a result of any recovery by an Obligor of a payment or discharge on the grounds of preference,

and any amounts which would be included in any of the above but for any discharge, non-provability or unenforceability of those amounts in any insolvency or other proceedings.

“LIBOR” means, in relation to any Loan, and subject to Clause 12.2 (Market Disruption):

	(a)		the applicable Screen Rate; or
	(b)		(if no Screen Rate is available for dollars for the Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

		as of the Specified Time on the Quotation Day for the offering of deposits in dollars and for a period comparable to the Interest Period for that Loan.
		“Loan” means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.

“Majority Lenders” means:

	(a)		if there are no Loans then outstanding, a Lender or Lenders whose Commitments aggregate more than sixty seven per cent. (67%) of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregate more than sixty seven per cent. (67%) of the Total Commitments immediately prior to the reduction); or
	(b)		at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate more than sixty seven per cent. (67%) of all the Loans then outstanding.

		“Margin” means, for any Interest Period, three point seven five per cent (3.75%) per annum.
		“Material Adverse Effect” means a material adverse effect on:

	(a)		the business, operations, property or condition (financial or otherwise) of any Obligor;
	(b)		the ability of an Obligor to perform its material obligations under any Project Document to which it is a party;
	(c)		the ability of an Obligor to perform its obligations under any Finance Document;
	(d)		the validity or enforceability of any Transaction Document or the rights or remedies of any Finance Party under any Finance Document or the rights or remedies of any Obligor under any Project Document; or
	(e)		the priority of any Security granted or purported to be granted under any Security Document.

		“Maximum Facility” means $10,000,000 or such higher amount (not exceeding $30,000,000) as the Agent may notify the Borrower from time to time.
		“Measurement Period” means, on any date of determination, the most recently completed four (4) Fiscal Quarters of the Borrower.
		“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

	(a)		if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; and
	(b)		if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month,

		and “Monthly” will be construed accordingly. The above rules will only apply to the last Month of any period.
		“Obligor” means each of the Borrower and the Guarantors.
		“Onshore Payments Accounts” means:

	(a)		the account numbered 12014876000220005537, maintained with China Construction Bank, Tianjin Branch, Dagang Sub-Branch of No.98, Yingbin Street, Dagang District, Tianjin, PRC, postal code: 300270; and
	(b)		the account numbered 803510958808093014, maintained with Bank of China, Beijing Branch, China World Trade Center Sub-Branch of No.1, Jian Wai Avenue Beijing, China, China World Tower 2. NB 101- NB 102, postal code: 100004,

		into which Permitted Payments may be paid from time to time in accordance with this Agreement.
		“Operating Budget” means, for any year, the operating budget agreed or determined in accordance with Schedule 10 (Operating Budgets).
		“Operational Lock-Up Period” means any period during which the aggregate amounts of the Loans exceed the Borrowing Base Amount.
		“Opex Reserve” has the meaning given in paragraph 6.1(a) of Schedule 7 (The Accounts).
		“Original Financial Statements” means the audited consolidated financial statements of Sunwing Energy prepared in accordance with GAAP for the financial year ended December 2006.
		“Party” means a party to this Agreement.
		“PDNP Reserves” means reserves classified as proved developed non-producing reserves in a Lenders’ Technical Report in accordance with the principles approved by the board of directors of the Society of Petroleum Engineers, Inc. and the executive board of the World Petroleum Congress in March 1997.
		“PDP Reserves” means reserves classified as proved developed producing reserves in a Lenders’ Technical Report in accordance with the principles approved by the board of directors of the Society of Petroleum Engineers, Inc. and the executive board of the World Petroleum Congress in March 1997.
		“Permitted Financial Indebtedness” means any of the following:

	(a)		Financial Indebtedness under the Finance Documents;
	(b)		Subordinated Indebtedness;
	(c)		Financial Indebtedness in respect of bank guarantees, performance bonds, letters of credit or standby letters of credit which have been taken into account in the most recent Financial Projection, in each case arising (i) in the ordinary

			course of trading of any member of the Group or (b) in connection with any sale, lease, transfer or other disposal permitted under Clause 23.5.2 (Negative Pledge) and not to exceed an aggregate in any financial year for all members of the Group of dollars five hundred thousand ($500,000) or its equivalent in other currencies; and
	(d)		Financial Indebtedness from any member of the Group to any other member of the Group.

“Permitted Payments” means (without double counting) all costs incurred by the Borrower during the relevant calculation period which were included in the then current Operating Budget (or, for the period commencing on the date of this Agreement and ending on the first Repayment Date, were included in the Technical Assumptions used in the Financial Model) including:

	(a)		transportation tariffs and sales and marketing costs (if any);
	(b)		other operating costs, whether fixed or variable;
	(c)		Taxes and royalties;
	(d)		capital expenditure and maintenance expenditure;
	(e)		Hedging Costs; and
	(f)		other general and administrative expenses.

		“Probable Reserves” means hydrocarbon reserves classified as such (in a Lenders’ Technical Report) in accordance with the principles approved by the Society of Petroleum Engineers.
		“Project Documents” means:

	(a)		the Dagang PSC and the Zitong PSC;
	(b)		Kongnan Project Turnkey Drilling Contract executed by and between the Borrower and Dagang Second Drilling Engineering Company on 30 March 2007;
	(c)		Zitong Project Drilling Contract executed by and between SZ and First Drilling Company of Sinopec-Zpeb SPA on 28 August 2006;
	(d)		Oil Price and Transportation Fee Agreement executed by and between the Borrower and China National Petroleum Trading Corporation on 25 October 1999;
	(e)		Zao Big Station Facilities Processing and Services Agreement executed by and between the Borrower and Petro-China Dagang Oilfield Company on 6 February 2005;
	(f)		Duan Big Station Facilities Processing and Services Agreement executed by and between the Borrower and Petro-China Dagang Oilfield Company on 15 March 2005;

	(g)		any other document designated as such by the Agent and the Borrower; and
	(h)		any document that amends, supplements, modifies or waives any provision of any of the foregoing.

		“Projected Net Cash Flow” means, in respect of each relevant period for which it is to be calculated, Revenues during such period minus Projected Payments during such period.
		“Projected Payments” means (without double counting) all costs projected to be incurred by the Borrower during the relevant calculation period which are included in the then current Financial Projection, including:

	(a)		transportation tariffs and sales and marketing costs (if any);
	(b)		other operating costs, whether fixed or variable;
	(c)		Taxes and royalties;
	(d)		capital expenditure and maintenance expenditure;
	(e)		Hedging Costs; and
	(f)		other general and administrative expenses.

		“Proved Reserves” means hydrocarbon reserves classified as such (in a Lenders’ Technical Report) in accordance with the principles approved by the Society of Petroleum Engineers.
		“Proved Undeveloped Reserves” means reserves classified as proved undeveloped reserves in a Lenders’ Technical Report in accordance with the principles approved by the Society of Petroleum Engineers.
		“PV10” means net the present value of net future cashflow discounted at a rate of 10% per annum.
		“PV10 Ratio” means the ratio of (1) Financial Indebtedness of the Borrower to (2) the PV10 of the aggregate of:

	(a)		in relation to the Dagang Field, the aggregate of all projected revenues arising from the PDP Reserves, 50% of all projected revenues arising from the Proved Undeveloped Reserves and 80% of all project revenues arising from the PDNP Reserves; and
	(b)		in relation to the Zitong Field:

	(i)		$27,000,000, until such time that the aggregate of all projected revenues arising from the PDP Reserves, 50% of all projected revenues arising from the Proved Undeveloped Reserves and 80% of all projected revenues arising from the PDNP Reserves exceeds $27,000,000; and thereafter
	(ii)		the aggregate of all projected revenues arising from the PDP Reserves, 50% of all projected revenues arising from the Proved Undeveloped

Reserves and 80% of all projected revenues arising from the PDNP Reserves,

		in each case until the Reserve Tail Date and as determined by the Agent by reference to the most recently delivered Lenders’ Technical Report.
		“Quarter Date” means the last day of each of the Borrower’s Fiscal Quarters.
		“Quasi-Security” means any of the arrangements set out in Clause 23.5.2 (Negative Pledge).
		“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market, in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).
		“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.
		“Redetermination Date” means each of the following dates:

	(a)		the Business Day falling one Month prior to the second Repayment Date and every second Repayment Date thereafter;
	(b)		the Business Day falling one Month prior to the date of a proposed addition of a Borrowing Base Asset pursuant to Clause 5.3 (New Fields as Borrowing Base Assets);
	(c)		the Business Day falling one Month prior to the date of a proposed withdrawal of a Borrowing Base Asset pursuant to Clause 5.4.1(b) (Withdrawal of Borrowing Base Assets);
	(d)		any Business Day notified by the Agent to the Borrower by not less than thirty days prior notice following the occurrence and during the continuance of a Default; and
	(e)		any Business Day notified by the Agent to the Borrower by not less than thirty days prior notice following:

	(i)		the occurrence of any event or circumstance which, in the opinion of the Majority Lenders, could reasonably be expected to have a Material Adverse Effect; or
	(ii)		the receipt of Compensation in an amount exceeding $1,000,000 by any member of the Group; or
	(iii)		receipt by the Agent of a written request from an Obligor,

provided that such notification may only be given once in any period between two Redetermination Dates.

		“Reference Banks” means the Agent and/or such other banks as may be appointed by the Agent with the consent of the Borrower.
		“Relevant Interbank Market” means the London interbank market.
		“Repayment Date” means the last day of each Interest Period.
		“Repeating Representations” means each of the representations set out in Clauses 20.1 (Status) to and including 20.4 (Power and authority), Clause 20.6 (Governing law and enforcement), Clause 20.9 (No default) to and including Clause 20.17 (Borrowing Base Assets), sub-clauses 20.18.1(a) and 20.18.2 (Project Documents).
		“Reserve Tail Date” means the date notified by the Agent to the Borrower, as determined and re-calculated in each Financial Projection, as the date on which the aggregate of the remaining Proved Reserves in the Borrowing Base Assets are projected to fall below thirty per cent. (30%) of the aggregate of the Proved Reserves as estimated in, or determined by reference to, the Lenders’ Technical Report delivered under Schedule 2, paragraph 6(g).
		“Revenue Account” means the account designated as such bearing the account number to be advised by the Account Bank to the Borrower in the name of the Borrower opened with the Account Bank (as such account may be re-designated, substituted or replaced from time to time).
		“Revenues” means:

(a)

for the purpose of calculating Projected Net Cash Flow:

	(i)		fifty per cent (50%) of all projected earnings arising from PDP Reserves for the relevant calculation period;
	(ii)		forty per cent (40%) of all projected earnings arising from PDNP Reserves for the relevant calculation period; and
	(iii)		twenty five per cent (25%) of all projected earnings arising from Proved Undeveloped Reserves for the relevant calculation period; and

(b)

for all other purposes, all actual earnings of the Borrower during the relevant calculation period.

		“Scheduled Redetermination Date” means each Redetermination Date referred to in paragraph (a) of the definition of “Redetermination Date”.
		“Scheduled Maturity Date” means the date falling thirty six Months after the date of this Agreement.
		“Screen Rate” means the British Bankers’ Association Interest Settlement Rate for dollars for the relevant period, displayed on the appropriate page of the Telerate screen provided that, if the agreed page is replaced or service ceases to be available, the Agent

		may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders.
		“SE Debenture” means the assignment and fixed and floating charge to be entered into between Sunwing Energy and the Security Trustee in respect of all of the assets of Sunwing Energy.
		“SE Share Charge” means the charge over shares to be entered into by Sunwing Holdings and the Security Trustee in relation to all of the shares in the capital of Sunwing Energy owned by Sunwing Holdings.
		“Secured Obligations” means all obligations at any time due, owing or incurred by any Obligor to any Secured Party under the Finance Documents, whether present or future, actual or contingent (and whether incurred solely or jointly and whether as principal or surety or in some other capacity).
		“Secured Parties” means the Security Trustee, the Agent, the Account Bank and each Creditor from time to time party to this Agreement, and any Receiver or Delegate.
		“Security” means a mortgage, charge, pledge, hypothecation, lien (statutory or other), assignment, encumbrance, deed of trust, deposit arrangement, preference, priority or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
		“Security Documents” means:

	(a)		the Accounts Assignment;
	(b)		the Borrower Debenture;
	(c)		the Borrower Share Charge;
	(d)		the SE Debenture;
	(e)		the SE Share Charge;
	(f)		the SH Debenture;
	(g)		the SH Share Charge;
	(h)		the SZ Debenture;
	(i)		the SZ Share Charge;
	(j)		each notice and/or irrevocable payment instruction to any person, and each acknowledgment executed by any person in favour of the Security Trustee, in relation to any rights of an Obligor over which Security has been granted in favour of the Security Trustee; and
	(k)		any Security entered into by any relevant Group entity pursuant to Clause 5.3.5 (New Fields as Borrowing Base Assets),

		and any document that amends, supplements, modifies or waives any provision of any of the foregoing.
		“SH Debenture” means the assignment and fixed and floating charge to be entered into between Sunwing Holdings and the Security Trustee in respect of all of the assets of Sunwing Holdings.
		“SH Share Charge” means the charge over shares to be entered into by Ivanhoe and the Security Trustee in relation to all of the shares in the capital of Sunwing Holdings owned by Ivanhoe.
		“Specified Time” means a time determined in accordance with Schedule 6 (Timetables).
		“Subordinated Indebtedness” means all unsecured Financial Indebtedness of any member of the Group which is subordinated to the Financial Indebtedness outstanding under this Agreement and all other amounts owing under the Finance Documents on substantially the same terms set out in Schedule 8 (Subordination Terms) or, otherwise, on terms satisfactory to the Majority Lenders (acting reasonably).
		“Subordination Agreement” means:

	(a)		the agreement to be entered into between the Obligors, Ivanhoe and the Security Trustee subordinating the claims of Ivanhoe against the Obligors to the claims of the Secured Parties under the Finance Documents; and
	(b)		any other agreement with any person which subordinates or purports to subordinate, on the terms set out in Schedule 8 (Subordination Terms) or on such other terms as may be acceptable to the Agent, the claims of that person with respect to an Obligor to the claims of the Secured Parties under the Finance Documents.

“Subsidiary” means in relation to any corporation or other entity, a corporation or other entity:

	(a)		which is controlled, directly or indirectly, by the first mentioned corporation or other entity;
	(b)		more than half the issued share capital or other entity interests of which is beneficially owned, directly or indirectly by the first mentioned corporation; or
	(c)		which is a Subsidiary of another Subsidiary of the first mentioned corporation or other entity,

		and for this purpose, a corporation or other entity shall be treated as being controlled by another if that other corporation or other entity is able to direct its affairs and/or to control the composition of its board of directors or equivalent body.
		“Sunwing Energy” means Sunwing Energy Ltd., a company incorporated under the laws of Bermuda and having an office c/o Codan Services Limited, Clarendon House, Church Street, PO Box HM 666, Hamilton, HM CX, Bermuda.

		“Sunwing Holdings” means Sunwing Holding Corporation, a company incorporated under the laws of Barbados and having an office at c/o Trident Corporate Services (Barbados) Limited, Whitepark House, White Park Road, PO Box 836E, Bridgetown, Barbados.
		“Sunwing Zitong” means Sunwing Zitong Energy Ltd., a company incorporated under the laws of the British Virgin Islands and having an office c/o MidOcean Management and Trust Services (BVI) Limited, 9 Columbia Centre, Road Town, Tortola, British Virgin Islands.
		“SZ Debenture” means the assignment and fixed and floating charge to be entered into between Sunwing Zitong and the Security Trustee in respect of all of the assets of Sunwing Zitong.
		“SZ Share Charge” means the charge over shares to be entered into by Sunwing Energy and the Security Trustee in relation to all of the shares in the capital of Sunwing Zitong owned by Sunwing Energy.
		“Tax” means any present or future tax, levy, impost, duty, fee, assessment, deduction, or other charge or withholding of a similar nature imposed or asserted by any jurisdiction or any department, agency, authority or other body thereof or therein (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
		“Technical Assumptions” means assumptions as to the business and operations of the Obligors (that do not constitute Economic Assumptions) and which are inputs to the Financial Model in producing a Financial Projection and which include such statements, projections and estimates determined in accordance with Clause 6 (Borrowing Base Amount).
		“Termination Date” means the day falling on the earlier of:

	(a)		the Scheduled Maturity Date; and
	(b)		the Reserve Tail Date provided that if such date is not a Business Day, the Termination Date shall fall on the Business Day immediately preceding the Reserve Tail Date.

		“Third Party Proceeds” means any proceeds of insurance claims in respect of third party liability or public liability (net of any costs which the relevant member of the Group must pay to any third party in respect of the relevant claim).
		“Total Commitments” means the aggregate of the Commitments.
		“Total Debt” means at any time the aggregate amount of all obligations of the Group for or in respect of Financial Indebtedness, excluding any such obligations owed to any other member of the Group.
		“Transaction Documents” means the Finance Documents and the Project Documents.

		“Transaction Security” means the Security created or expressed to be created in favour of the Security Trustee pursuant to the Security Documents.
		“Transfer Certificate” means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower.
		“Transfer Date” means, in relation to a transfer, the later of:

	(a)		the proposed Transfer Date specified in the Transfer Certificate; and
	(b)		the date on which the Agent executes the Transfer Certificate.

		“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.
		“Unscheduled Redetermination Date” means any Redetermination Date referred to in paragraphs (b) to (e) of the definition of “Redetermination Date”.
		“Utilisation” means a utilisation of the Facility.
		“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made.
		“Utilisation Request” means a notice substantially in the form set out in Schedule 3 (Utilisation Request).
		“VAT” means value added tax and any other tax of a similar nature.
		“Zitong Field” means the exploration and production area forming part of the Zitong PSC.
		“Zitong PSC” means the production and sharing contract dated 19 September 2002 between the Borrower and CNPC, as assigned to Sunwing Zitong and as amended from time to time.

1.2

Construction

1.2.1

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

	(a)		the “Agent”, the “Arranger”, the “Security Trustee”, the “Account Bank”, the “Security Trustee”, any “Finance Party”, any “Lender”, any “Hedge Counterparty”, any “Secured Party”, any “Obligor”, any “Guarantor” or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees;
	(b)		“assets” includes present and future properties, revenues and rights of every description;
	(c)		a “Finance Document” or “Project Document” any other agreement or instrument is a reference to that Finance Document or Project Document other agreement or instrument as amended or novated and includes any agreement or instrument that replaces it;
	(d)		“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

	(e)		a “person” includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) of two or more of the foregoing;
	(f)		a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
	(g)		the words “include”, “includes” and “including” are not limiting;
	(h)		“asset” includes a reference, in respect of a person, to the whole or any part of the present or future business, undertaking, property, assets, rights (including intellectual property rights) and revenues (including any right to receive revenues) of such person;
	(i)		“or”, “other” and “otherwise” shall be construed disjunctively and not as implying similarity (unless the word “similar” or some other word of like meaning is added);
	(j)		a provision of law is a reference to that provision as amended or re-enacted; and
	(k)		unless otherwise indicated, a time of day is a reference to Singapore time.

	1.2.2		Clause and Schedule headings are for ease of reference only.
	1.2.3		Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
	1.2.4		a Default or Event of Default “continuing” or words of similar effect shall mean a Default or Event of Default which has occurred and which has not been:

	(a)		cured or remedied to the satisfaction of the Majority Lenders; or
	(b)		waived in accordance with the terms of the Finance Documents.

1.3		Currency Symbols and Definitions
		“$” and “dollars” denote lawful currency of the United States of America.
1.4		Third party rights

	1.4.1		Unless expressly provided to the contrary in this Agreement, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of any Finance Document.
	1.4.2		Notwithstanding any term of this Agreement, the consent of any person who is not a Party is not required to rescind or vary any Finance Document at any time.

SECTION 2
THE FACILITY

2.		THE FACILITY
2.1		The Facility
		Subject to the terms of this Agreement, the Lenders make available to the Borrower a revolving dollar loan facility in an aggregate amount equal to the Total Commitments.
2.2		Finance Parties’ rights and obligations

	2.2.1		The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
	2.2.2		The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from the Borrower or a Guarantor shall be a separate and independent debt.
	2.2.3		A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

3.		PURPOSE
3.1		Purpose of the Facility
		The Borrower shall apply all amounts borrowed by it under the Facility towards:

	3.1.1		the costs of developing, maintaining, operating and managing the interest of any member of the Group in any Borrowing Base Asset;
	3.1.2		payment of fees, costs, and expenses incurred by the Borrower in connection with the transactions contemplated by the Finance Documents; and
	3.1.3		the general corporate purposes of the Borrower.

3.2		Monitoring
		No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4.		CONDITIONS OF UTILISATION
4.1		Initial Conditions Precedent
		The Lenders will only be obliged to comply with Clause 7.6 (Lenders’ participation) if on the proposed Utilisation Date the Agent has received all of the documents and other evidence listed in Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

4.2		Further Conditions Precedent
		The Lenders will only be obliged to comply with Clause 7.6 (Lenders’ participation) if on the date of the applicable Utilisation Request and on the proposed Utilisation Date:

	4.2.1		no Default is continuing or would result from the proposed Loan; and
	4.2.2		the Repeating Representations to be made by each Obligor are true in all material respects.

SECTION 3
BORROWING BASE AMOUNT

5.		BORROWING BASE ASSETS
5.1		General Rules
		A Field may only be a Borrowing Base Asset to the extent of the working interest of a member of the Group in such Field and if, and for so long as:

	(a)		the Group member’s interest is not subject to any Security (other than Security permitted pursuant to Clause 23.5.3 (Negative Pledge)); and
	(b)		all material Authorisations applicable to it and then required to have been obtained are in full force and effect and have not been revoked.

5.2		Fields as Borrowing Base Assets
		Without prejudice to Clause 5.1 (General Rules), the Dagang Field constitutes the sole Borrowing Base Asset as at the date of this Agreement.
5.3		New Fields as Borrowing Base Assets
		The Borrower may at any time submit a written application to the Agent requesting, by not less than sixty days notice, that a new Field be included as a Borrowing Base Asset, in which event, such Field will become a Borrowing Base Asset with effect from the date that the Agent (acting on the instructions of the Majority Lenders) notifies the Borrower that the Majority Lenders have approved the inclusion of the new Field as a Borrowing Base Asset and that the Majority Lenders are, inter alia, satisfied that:

	5.3.1		all material Authorisations applicable to, and then required to have been obtained for, the development and operation of the new Field have been obtained and are in full force and effect;
	5.3.2		all relevant Field, infrastructure and pipeline information and plans has been reviewed and found satisfactory by the Agent;
	5.3.3		an Independent Reserves Report in relation thereto has been provided to the Agent and approved by the Agent;
	5.3.4		a Financial Projection demonstrating the Borrowing Base Amount (and being prepared using Proved Reserves and Probable Reserves at the discretion of the Agent after inclusion of the new Field) is provided to the Agent; and
	5.3.5		Security acceptable to the Agent in relation to the relevant member of the Group’s interest in the new Field has been granted to the Security Trustee.

5.4

Withdrawal of Borrowing Base Assets

5.4.1

A Field shall cease to be a Borrowing Base Asset:

(a)

on the date the Agent gives notice to the Borrower that such Field fails to satisfy any of the conditions specified in Clause 5.1 (General Rules) (which notice shall specify which conditions are not satisfied); or

(b)

if, following a request from the Borrower giving not less than sixty days’ notice of its intention to withdraw a Field as a Borrowing Base Asset, the Majority Lenders consent to its withdrawal as a Borrowing Base Asset.

	5.4.2		If, within five Business Days of the Agent advising the Borrower that a Field has ceased to be a Borrowing Base Asset in accordance with Clause 5.4.1(a) above, the Borrower produces evidence satisfactory to the Agent, acting reasonably, that the conditions specified in Clause 5.1 (General Rules) have been and continue to be fulfilled in respect of that Field, then such Field shall be immediately reinstated as a Borrowing Base Asset and the provisions of the Finance Documents shall continue to apply as if such Field had not ceased to be a Borrowing Base Asset.
	5.4.3		Within ten Business Days of the Agent advising the Borrower that a Field has ceased to be a Borrowing Base Asset in accordance with Clause 5.4.1(a) above, and provided that the Field has not been reinstated as a Borrowing Base Asset under Clause 5.4.2 above, the Agent shall deliver to the Lenders and the Borrower a Financial Projection reflecting such withdrawal or removal as applicable and the Borrower shall, within three Business Days of receipt of such Financial Projection, make any prepayment or repayment which it becomes obliged to make as a result in accordance with Clause 8 (Repayments).
	5.4.4		Following the cessation or withdrawal of any Field in accordance with this Clause 5.4 (Withdrawal of Borrowing Base Assets), and provided no Default has occurred and prepayment or repayment has been made as required in accordance with this Agreement, the Security created over such Field in favour of the Security Trustee shall be released by the Security Trustee in accordance with the terms of the Security Documents.

6.		BORROWING BASE AMOUNT
6.1		Timing of Financial Projection
		A Financial Projection shall be prepared for each Redetermination Date.
6.2		Preparation of Financial Projection

	6.2.1		Each Financial Projection shall be prepared by the Agent utilising the Financial Model and applying values for each of the Assumptions determined pursuant to this Clause 6 (Borrowing Base Amount) for the purposes of that Financial Projection.
	6.2.2		Each Financial Projection shall be in substantially the same form as the Financial Model.
	6.2.3		The Agent shall, as of each Redetermination Date and no later than five days prior to the relevant Redetermination Date, deliver a Financial Projection prepared and determined in accordance with this Clause 6 (Borrowing Base Amount) to the Borrower and each Finance Party. Each Financial Projection prepared and delivered by the Agent shall (save for manifest error) be final and binding on the Borrower and each Finance Party.

6.2.4

The Agent shall revise any Financial Projection to correct any manifest error agreed between the Agent and the Borrower.

6.3

Determination of Assumptions

	6.3.1		The Agent shall, no later than thirty days prior to a Scheduled Redetermination Date, prepare and deliver to the Borrower the proposed Financial Projection for that Scheduled Redetermination Date together with the Technical Assumptions and the Economic Assumptions used in the preparation thereof. The Technical Assumptions shall be determined by the Agent acting reasonably on the basis of its good faith opinion and by reference to the Lenders’ Technical Report prepared specifically for the proposed Financial Projection and prices in the Economic Assumptions will reflect any Hedge Agreements entered into by the Obligors in respect of the Borrowing Base Assets. The Agent shall at the same time deliver to the Borrower a copy of the relevant Lenders’ Technical Report used for the purposes of the proposed Financial Projection.
	6.3.2		If any of the Technical Assumptions used in the preparation of the proposed Financial Projection is disputed by the Borrower and, following good faith discussions for a period of ten Business Days, the Agent and the Borrower are unable to resolve the dispute and agree on the relevant Technical Assumption, the Agent shall prepare the Financial Projection on the basis of the Technical Assumptions drawn from the relevant Lenders’ Technical Report, as modified to take account of any changes requested by the Borrower and agreed by the Agent (acting reasonably).
	6.3.3		The Economic Assumptions shall be determined by the Agent acting reasonably on the basis of its good faith opinion. If any of the Economic Assumptions used in the preparation of the proposed Financial Projection are disputed by the Borrower and, following good faith discussions for a period of ten Business Days, the Agent and the Borrower are unable to resolve the dispute and agree on the relevant Economic Assumption, the Agent shall prepare the Financial Projection on the basis of the Economic Assumptions determined by it, as modified to take account of any changes requested by the Borrower and agreed by the Agent (acting reasonably).
	6.3.4		In the case of any Financial Projection to be prepared on any Unscheduled Redetermination Date, not later than twenty days prior to such Unscheduled Redetermination Date, the Agent shall notify the Borrower of all Assumptions proposed to be used for preparing the relevant Financial Projection. The Assumptions shall be determined by the Agent acting reasonably on the basis of its good faith opinion following consultation with the Borrower and otherwise, in the case of the Technical Assumptions, by reference to the Lenders’ Technical Report prepared specifically for the relevant Financial Projection (or, at the discretion of the Agent, the last-delivered Lenders’ Technical Report) and, in the case of the Economic Assumptions, prices will reflect any Hedge Agreements entered into by the Obligors in respect of the Borrowing Base Assets.

6.3.5

Subject to this Clause 6 (Borrowing Base Amount), the determination by the Agent of the Technical Assumptions and the Economic Assumptions shall be final and binding on the Borrower and shall be used in preparing the relevant Financial Projection.

6.4

Approval of Borrowing Base Amounts

	6.4.1		The Agent shall, no later than fifteen days prior to a Redetermination Date, deliver the proposed Financial Projection prepared for that Redetermination Date in accordance with the foregoing provisions of this Clause 6 (Borrowing Base Amount) to each of the Lenders. Each Borrowing Base Amount as set out in the proposed Financial Projection shall be deemed approved by the Lenders if, by ten days prior to the relevant Redetermination Date, the Majority Lenders have not objected to the Economic Assumptions in the proposed Financial Projection.
	6.4.2		If, no later than ten days prior to the relevant Redetermination Date, the Agent receives notice that the Majority Lenders object to the Economic Assumptions in the proposed Financial Projection pursuant to Clause 6.4.1, the Agent shall nominate up to two of the Lenders as the Agent acting reasonably considers fit for the purpose to prepare and deliver to the Agent, not later than seven days prior to the relevant Redetermination Date, its proposal as to the Economic Assumptions to apply with respect to the preparation of the Financial Projection by date falling five days prior to the relevant Redetermination Date for the relevant Redetermination Date. In the event that the Agent and the aforementioned nominated Lenders do not reach agreement as to the Economic Assumptions to apply with respect to the preparation of the Financial Projection, the Agent shall determine the Economic Assumptions on the basis of the average of the Economic Assumptions proposed by the Agent and the aforementioned nominated Lenders, save that in the case of any Economic Assumption that cannot be determined on such basis, such Economic Assumption shall be determined by the Agent taking into consideration the views of the aforementioned nominated Lenders. Upon the determination of the Economic Assumptions in accordance with this Clause 6.4.2, the Agent shall apply such Economic Assumptions together with the Technical Assumptions determined pursuant to Clause 6.3 (Determination of Assumptions) in the preparation of the Financial Projection for the relevant Redetermination Date.
	6.4.3		The Assumptions as determined pursuant to this Clause 6.4 (Approval of Borrowing Base Amounts) shall be used in the Financial Projection for the relevant Redetermination Date.

6.5		Modification of Financial Model
		The Agent may from time to time (following consultation with and the approval of the Borrower, such approval not to be unreasonably withheld, conditioned or delayed) modify the computer programme comprising the Financial Model to correct any deficiency in its form or structure.

6.6		Lenders’ Technical Report
		The Agent shall request the Independent Engineer to deliver to the Agent, no later than forty Business Days before a Scheduled Redetermination Date and, in the sole discretion of the Agent, at any other time in relation to any Unscheduled Redetermination Date, a Lenders’ Technical Report. The Agent shall not be liable for any loss or liability incurred by any Party as a result of any delay on the part of the Independent Engineer in delivering any Lenders’ Technical Report in accordance with this Clause.
6.7		Independent Engineer Review
		The Agent shall request the Independent Engineer to visit the site of the Borrowing Base Assets on an annual basis in order to review the Borrowing Base Assets and the Technical Assumptions.

SECTION 4
UTILISATION

7.		UTILISATION OF FACILITY
7.1		Delivery of a Utilisation Request for a Loan
		The Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.
7.2		Completion of a Utilisation Request for a Loan
		Each Utilisation Request relating to a Loan is irrevocable and will not be regarded as having been duly completed unless:

7.2.1

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

7.2.2

the currency and amount of the Utilisation comply with Clause 7.4 (Currency and amount of Loans).

7.3		Deemed Utilisation
		If, by 9.30 a.m. (Singapore time) three Business Days prior to the last day of an Interest Period, the Borrower has not delivered to the Agent a duly completed Utilisation Request in relation to the then existing Loan then, subject to the terms of this Agreement (including the Majority Lenders being satisfied that the provisions of Clause 4.2 (Further conditions precedent) continue to be met) and unless the Borrower informs the Agent otherwise, the Borrower shall be deemed to have issued a Utilisation Request for a Loan equal to the Loan due to be repaid on such last day with a Utilisation Date being such last day.
7.4		Currency and amount of Loans

7.4.1

The currency specified in a Utilisation Request must be dollars and the requested Loan must be a minimum of $1,000,000 (and an integral multiple of $250,000) or, if less, the Available Facility.

7.4.2

The amount of any proposed Loan in a Utilisation Request must be an amount which is not more than the Available Facility.

7.5		Number of Utilisations
		The Borrower may not deliver more than three Utilisation Requests for Loans during each three-month period between Repayment Dates.
7.6		Lenders’ participation

7.6.1

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

7.6.2

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

7.6.3

The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan, in each case by the Specified Time.

SECTION 5
REPAYMENT, PREPAYMENT AND CANCELLATION

8.		REPAYMENT
8.1		Repayment of Loans

8.1.1

The Borrower shall repay each Loan on the last day of its Interest Period provided that, subject to the terms of this Agreement:

(a)

if the Agent has received a Utilisation Request requesting a Loan on such last day of a principal amount equal to the relevant Loan to be repaid or if the Borrower shall be deemed to have issued a Utilisation Request (and having not informed the Agent otherwise) under Clause 7.3 (Deemed Utilisation), then no actual repayment of principal need be made by the Borrower on such day and no actual advance need be made by the Lenders on the relevant Utilisation Date; and

(b)

if the Agent has received a Utilisation Request requesting a Loan on such last day of a principal amount less than the relevant Loan to be repaid, then the repayment of principal required to be made by the Borrower on such day will be the difference between the relevant Loan to be repaid and the Loan requested in the Utilisation Request,

and, in each case, a Loan of the principal amount requested or deemed requested in the Utilisation Request shall be deemed to have been made on such Utilisation Date.

8.1.2

The Borrower shall, on each Repayment Date, effect such repayment of the Loans as will reduce the principal amounts then outstanding under the Facility (after such repayment) to the Available Facility applicable as at that Repayment Date.

8.1.3

Subject to the terms of this Agreement, if, following an Unscheduled Redetermination Date, the Loans exceed the Available Facility as of such Unscheduled Redetermination Date, the Borrower shall, within ten Business Days of such Unscheduled Redetermination Date, repay an amount equal to the difference between the Loans and the Available Facility as at that Unscheduled Redetermination Date.

8.1.4

The Borrower must repay all outstanding Loans on the Termination Date.

8.2		Reborrowing
		Subject to the terms of this Agreement, any Loan repaid or amount prepaid under the Facility shall be capable of being redrawn during the Availability Period.
9.		PREPAYMENT AND CANCELLATION
9.1		Illegality
		If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:

	9.1.1		that Lender shall promptly notify the Agent upon becoming aware of that event;
	9.1.2		upon the Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and
	9.1.3		the Borrower shall repay that Lender’s participation in the Loans made to the Borrower on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

9.2		Voluntary cancellation
		The Borrower may, if it gives the Agent not less than five Business Days (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount and an integral multiple of dollars one million ($1,000,000)) of the Maximum Facility. Any cancellation under this Clause 9.2 shall reduce the Commitments of the Lenders rateably.
9.3		Voluntary prepayment
		The Borrower may, if it gives the Agent not less than five Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of the Loans (but, if in part, being an amount that reduces the aggregate amount of the Loans by a minimum amount and integral multiple of $1,000,000).
9.4		Mandatory prepayment
		Within three Business Days of the permitted disposal of any Borrowing Base Asset following its withdrawal as a Borrowing Base Asset in accordance with Clause 5.4 (Withdrawal of Borrowing Base Assets), the Borrower shall prepay the Loan in an amount equal to the net proceeds of such disposal (after accounting for all liabilities and costs reasonably incurred by the Group in effecting such disposal), except to the extent the Majority Lenders agree that such net proceeds may be applied, within three months of such disposal (or by such later date as Borrower and Agent, acting on instructions of the Majority Lenders, may agree), to acquire a new Field or Fields to be included as a Borrowing Base Asset in accordance with Clause 5.3 (New Fields as Borrowing Base Assets).
9.5		Right of repayment and cancellation in relation to a single Lender

9.5.1

If:

(a)

any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 14.2 (Tax gross-up); or

(b)

any Lender claims indemnification from the Borrower under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs),

the Borrower may, whilst the circumstance giving rise to the requirement or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in the Loans.

9.5.2

On receipt of a notice referred to in sub-clause 9.5.1 above, the Commitment of that Lender shall immediately be reduced to zero.

9.5.3

On the last day of each Interest Period which ends after the Borrower has given notice under sub-clause 9.5.1 above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender’s participation in the Loans, together with all sums payable to it by the Borrower under Clause 15.1 (Increased costs).

9.6

Restrictions

	9.6.1		Any notice of cancellation or prepayment given by any Party under this Clause 9.6 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
	9.6.2		Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
	9.6.3		The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
	9.6.4		No amount of any Commitment cancelled under this Agreement may be subsequently reinstated.
	9.6.5		If the Agent receives a notice under this Clause 9.6 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.

SECTION 6
COSTS OF UTILISATION

10.		INTEREST
10.1		Calculation of interest
		The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of:

	10.1.1		the Margin; and
	10.1.2		LIBOR.

10.2		Payment of interest
		The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period.
10.3		Default interest

10.3.1

If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to sub-clause 10.3.2 below, is two per cent. (2%) higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 10.3 shall be immediately payable by the Obligor, as the case may be, on demand by the Agent.

10.3.2

If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

(a)

the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

(b)

the rate of interest applying to the overdue amount during that first Interest Period shall be two per cent. (2%) higher than the rate which would have applied if the overdue amount had not become due.

10.3.3

Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

10.4		Notification of rates of interest
		The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

11.		INTEREST PERIODS
11.1		Duration of Interest Periods

11.1.1

Subject to this Clause 11, the duration of each Interest Period shall be three Months (or any other period agreed between the Borrower and the Agent acting on the instructions of all the Lenders).

11.1.2

Each Interest Period for a Loan shall start on the Utilisation Date (including a deemed Utilisation Date in accordance with Clause 8.1.1) of that Loan and, notwithstanding any other provision of this Agreement, shall end on the earlier of:

	(a)		the next occurring Repayment Date; and
	(b)		the Termination Date.

	11.1.3		Each Loan shall have one Interest Period only.
	11.1.4		Where two or more Utilisation Requests for Loans are issued, or deemed to have been issued in accordance with Clause 7.3 (Deemed Utilisation), with the same Utilisation Date, then such Loans shall be consolidated into and treated as a single Loan from such date.

11.2		Non-Business Days
		If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the immediately preceding Business Day.
12.		CHANGES TO THE CALCULATION OF INTEREST
12.1		Absence of quotations
		Subject to Clause 12.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.
12.2		Market disruption

12.2.1

If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the LIBOR applicable to each Lender’s share of that Loan for that Interest Period shall be the rate per annum notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.

12.2.2

In this Agreement “Market Disruption Event” means:

(a)

at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for dollars and the relevant Interest Period; or

(b)

before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed thirty five per cent. (35)% of that Loan) that the cost to it of obtaining matching deposits in the Relevant Interbank Market would be in excess of LIBOR.

12.3

Alternative basis of interest or funding

12.3.1

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

12.3.2

Any alternative basis agreed pursuant to sub-clause 12.3.1 above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

12.4

Break Costs

12.4.1

The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

12.4.2

Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

13.		FEES
13.1		General

The Borrower shall pay to the Arranger, the Agent and the Security Trustee all fees in the amounts and at the times agreed in a Fee Letter.

13.2

Commitment fee

The Borrower shall pay to the Agent (for the account of each Lender in the proportion that such Lender’s Available Commitment bears to the Total Commitments) a commitment fee equal to 0.50 per cent. per annum on the Available Facility, which shall be paid to the Agent for the account of the Lenders in arrear on the last day of each period of three Months which falls during the Availability Period and on the last day of the Availability Period.

SECTION 7
ADDITIONAL PAYMENT OBLIGATIONS

14.		TAX GROSS UP AND INDEMNITIES
14.1		Definitions

	14.1.1		In this Agreement:
			“Protected Party” means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
			“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.
			“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment under a Finance Document.
			“Tax Payment” means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).
	14.1.2		Unless a contrary indication appears, in this Clause 14 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

14.2

Tax gross-up

14.2.1

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

14.2.2

The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower.

14.2.3

If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor, as the case may be, shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

14.2.4

If an Obligor is required to make a Tax Deduction, that Obligor, as the case may be, shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

14.2.5

Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been

made or (as applicable) any appropriate payment paid to the relevant taxing authority.

14.3

Tax indemnity

14.3.1

The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

14.3.2

Sub-clause 14.3.1 above shall not apply:

(a)

with respect to any Tax assessed on a Finance Party:

	(i)		under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
	(ii)		under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,
			if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

(b)

to the extent a loss, liability or cost is compensated for by an increased payment under Clause 14.2 (Tax gross-up).

14.3.3

a Protected Party making, or intending to make a claim under sub-clause 14.3.1 above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

14.3.4

A Protected Party shall, on receiving a payment from the Borrower under this Clause 14.3, notify the Agent.

14.4		Tax Credit
		If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

14.4.1

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

	14.4.2		that Finance Party has obtained, utilised and retained that Tax Credit,
			the Finance Party shall pay an amount to the Obligor, as the case may be, which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

14.5		Stamp taxes
		The Borrower shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all

stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

14.6

Value added tax

	14.6.1		All amounts set out, or expressed to be payable, under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly, subject to sub-clause 14.6.2 below, if VAT is chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party).
	14.6.2		Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that neither it nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT.

14.7

Tax exemption or reduction

Any Foreign Finance Party that is entitled to an exemption from or reduction in the rate of a Tax Deduction under the laws of the jurisdiction in which an Obligor is located or resident for tax purposes or under any treaty to which such jurisdiction is a party, with respect to any payments under a Finance Document, shall use reasonable efforts to deliver to that Obligor or to the Agent, and the Agent shall deliver to that Obligor, at the time or times prescribed by applicable law or regulation or reasonably requested by such Obligor or Agent, such properly completed and executed documentation prescribed by applicable law or regulation as will permit such payments to be made without Tax Deduction or at a reduced rate of Tax Deduction. In addition, a Finance Party shall use reasonable efforts to deliver new applicable documentation upon the expiration or obsolescence of any previously delivered documentation or, if requested by an Obligor or Agent, such other documentation prescribed by applicable law or regulation or reasonably requested by that Obligor or Agent as will enable that Obligor or Agent to determine whether or not payments to or in respect of that Finance Party are subject to Tax Deduction or any information reporting requirements.

15.

INCREASED COSTS

15.1

Increased costs

15.1.1

Subject to Clause 15.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made, enacted or imposed after the date of this Agreement.

15.1.2

In this Agreement “Increased Costs” means:

	(a)		a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;
	(b)		an additional or increased cost; or
	(c)		a reduction of any amount due and payable under any Finance Document,
			which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

15.2

Increased cost claims

	15.2.1		A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.
	15.2.2		Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

15.3

Exceptions

15.3.1

Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is:

	(a)		attributable to a Tax Deduction required by law to be made by an Obligor;
	(b)		compensated for by Clause 14.3 (Tax indemnity) (or would have been compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in sub-clause 14.3.2 of Clause 14.3 (Tax indemnity) applied); or
	(c)		attributable to the breach by the relevant Finance Party or its Affiliates of any law or regulation.

	15.3.2		In this Clause 15.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 14.1 (Definitions).
	15.3.3		Clause 15.1 (Increased Costs) does not apply to the extent that any Increased Cost is claimed by a Finance Party and that Finance Party is repaid in full pursuant to Clause 9.5 (Right of repayment and cancellation in relation to a single Lender).

16.

OTHER INDEMNITIES

16.1

Currency indemnity

16.1.1

If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

(a)

making or filing a claim or proof against that Obligor;

	(b)		obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
			that Obligor, as the case may be, shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

16.1.2

Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

16.2

Other indemnities

The Borrower shall, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

	16.2.1		the occurrence of any Event of Default;
	16.2.2		a failure by an Obligor to pay any amount due from it under a Finance Document on its due date, including any cost, loss or liability arising as a result of Clause 38 (Turnover of Receipts) or 39 (Sharing);
	16.2.3		funding, or making arrangements to fund, its participation in a Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party); or
	16.2.4		a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower or as required under Clause 9.4 (Mandatory Prepayment).

16.3

Indemnity to the Agent

The Borrower shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

	(a)		investigating any event which it reasonably believes is a Default;
	(b)		acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.

16.4

Indemnity to the Security Trustee

16.4.1

The Borrower shall promptly indemnify the Security Trustee and any Receiver or Delegate against any cost, loss or liability reasonably incurred by it as a result of:

	(a)		the taking, holding, protection or enforcement of the Transaction Security;
	(b)		the exercise of any of the rights, powers, discretions and remedies vested in them by the Finance Documents or by law;

	(c)		any default by an Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or
	(d)		which otherwise relate to any of the Transaction Security or the performance of the terms of this Agreement (otherwise than as a result of its gross negligence or wilful misconduct).

16.4.2

The Security Trustee may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain from the proceeds of enforcement of the Transaction Security, all sums necessary to give effect to the indemnity in this Clause 16.4.

17.

MITIGATION BY THE LENDERS

17.1

Mitigation

	17.1.1		Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 9.1 (Illegality), Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased costs) including transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
	17.1.2		Sub-clause 17.1.1 above does not in any way limit the obligations of any Obligor under the Finance Documents.

17.2

Limitation of liability

	17.2.1		The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1 (Mitigation).
	17.2.2		A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

18.

COSTS AND EXPENSES

18.1

Transaction expenses

The Borrower shall within three Business Days of demand pay the Agent, the Security Trustee, the Account Bank and the Arranger the amount of all costs and expenses (including legal fees and out of pocket costs and expenses) reasonably incurred by any of them in connection with negotiation, preparation, printing and execution of:

	18.1.1		this Agreement and the other Finance Documents; and
	18.1.2		any other Finance Documents executed after the date of this Agreement,

and in connection with the perfection of all Security granted or purported to be granted pursuant to the Transaction Security.

18.2

Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 43.8 (Change of currency) in each case in relation to a

Finance Document, the Borrower shall, within three Business Days of demand, reimburse the Agent for the amount of all external costs and expenses (including legal fees) reasonably incurred by the Agent in responding to, evaluating, negotiating or complying with that request or requirement.

18.3

Enforcement costs

The Borrower shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement or preservation of any rights under any Finance Document, the Transaction Security and any proceedings instituted by or against any Finance Party as a consequence of taking, holding or enforcing the Transaction Security or of exercising those rights, powers and remedies.

18.4

Independent Engineer’s fees

The Borrower shall, within 15 Business Days of demand, pay to the Agent the amount of all fees and expenses reasonably incurred by the Independent Engineer in carrying out its duties pursuant to Clauses 6.6 (Lenders’ Technical Report) and 6.7 (Independent Engineer Review).

SECTION 8
GUARANTEE

19.

GUARANTEE AND INDEMNITY

19.1

Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

	19.1.1		guarantees to each Finance Party, as principal obligor and not merely as surety, punctual performance by the Borrower of all the Borrower’s obligations under the Finance Documents;
	19.1.2		undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
	19.1.3		indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover, except where the Finance Parties (or the Agent on their behalf) expressly agree otherwise.

19.2

Continuing guarantee

This guarantee is a continuing guarantee and shall extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

19.3

Reinstatement

If any payment by an Obligor or any discharge given by a Finance Party (whether in respect of the obligations of an Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event:

	19.3.1		the liability of each Obligor will continue as if the discharge or arrangement had not occurred; and
	19.3.2		each Finance Party shall be entitled to recover the value or amount of that payment, security or other disposition as if the payment, discharge, avoidance, reduction or restoration had not occurred.

19.4

Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

19.5

Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

	19.5.1		without affecting the liability of any Guarantor under this Clause, refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
	19.5.2		hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 19 (Guarantee and Indemnity).

19.6

Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

	19.6.1		to be indemnified by an Obligor;
	19.6.2		to claim any contribution or indemnity from any other guarantor of any Obligor’s obligations under the Finance Documents;
	19.6.3		to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken or any moneys held, received or receivable pursuant to, or in connection with, the Finance Documents by any Finance Party;
	19.6.4		to claim, rank, prove or vote as a creditor of any Obligor or its estate in competition with any Finance Party (or any trustee or agent on its behalf); or
	19.6.5		to receive, claim or have the benefit of any payment, distribution or security from or on account of any Obligor, or exercise any right of set-off as against any Obligor.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with this Agreement.

19.7

Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

SECTION 9
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

20.

REPRESENTATIONS

Each Obligor makes the representations and warranties set out in this Clause 20 to each Finance Party on the date of this Agreement.

20.1

Status

	20.1.1		It is duly organised and validly existing under the law of its jurisdiction of organisation.
	20.1.2		It has the power to own its assets and carry on its business as it is being conducted.

20.2

Binding obligations

The obligations expressed to be assumed by it in each Transaction Document to which it is a party are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.

20.3

Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents to which it is a party do not and will not conflict with:

			20.3.1 any law or regulation applicable to it;
			20.3.2 its constitutional documents; or
			20.3.3 any agreement or instrument binding upon it or any of its assets.

20.4

Power and authority

	20.4.1		It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated by those Transaction Documents.
	20.4.2		Each of the Borrower and SZ has complied in all material respects with all PRC regulations relevant to the conduct of its business in the PRC and in respect of the Borrowing Base Assets, including all relevant SAFE rules and regulations in respect of its certificates, licenses and permits.

20.5

Validity and admissibility in evidence

All Authorisations required or desirable:

	20.5.1		to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
	20.5.2		to make the Transaction Documents to which it is a party admissible in evidence in its jurisdiction of organisation,

have been obtained or effected and are in full force and effect.

20.6

Governing law and enforcement

Subject to the Legal Reservations:

	20.6.1		the choice of English law as the governing law of this Agreement and any other Finance Documents governed by English law will be recognised and enforced in its jurisdiction of organisation; and
	20.6.2		any judgment obtained in England in relation to this Agreement and any other Finance Documents governed by English law will be recognised and enforced in its jurisdiction of organisation.

20.7

Deduction of Tax

It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document.

20.8

No filing or stamp taxes

Save as specified in any legal opinion delivered pursuant to Clause 4 (Conditions of Utilisation), it is not necessary under the law of its jurisdiction of organisation that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.

20.9

No default

	20.9.1		No Event of Default is continuing or could reasonably be expected to result from the making of any Utilisation.
	20.9.2		No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or to which its assets are subject which has, or could reasonably be expected to have, a Material Adverse Effect.

20.10

No misleading information

To its knowledge, all written information supplied by it to the Lenders is true, complete and accurate in all material respects as at the date it was given, is not misleading in any material respect as of the date such written information was provided to the Lenders and was prepared in good faith and with due care, and, prior to the date of this Agreement, nothing has occurred and no information has been given or withheld that would result in any information provided being untrue or misleading in any material respect.

20.11

Financial statements

	20.11.1		Its financial statements most recently delivered under Clause 21.1.1 (Financial statements) were prepared in accordance with GAAP consistently applied.
	20.11.2		Its financial statements most recently delivered under Clause 21.1.1 (Financial statements) fairly represent its financial condition and operations during the financial year to which such financial statements relate.
	20.11.3		There has been no material adverse change in its business or financial condition since 31 December 2006 or, if later, the date of the most recent audited financial statements delivered under Clause 21.1.1 (Financial statements).

20.12

Pari passu ranking

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

20.13

No proceedings pending or threatened

No litigation, arbitration, administrative or regulatory proceedings of or before any court, arbitral body or agency (or investigation before any Governmental body or agency of which it is aware) which, if adversely determined, could reasonably be expected, by themselves or together with any other such proceedings to have a Material Adverse Effect are current or (to the best of its knowledge and belief) pending or threatened against it.

20.14

Environmental laws

	20.14.1		It is in compliance with Clause 23.9 (Environmental compliance) and to the best of its knowledge and belief no circumstances have occurred which would prevent such compliance in a manner or to an extent which has, or would reasonably be expected to have, a Material Adverse Effect.
	20.14.2		No Environmental Claim has been commenced or (to the best of its knowledge and belief) is threatened against it where that claim would reasonably be expected to have, if determined against it, a Material Adverse Effect.

20.15

Security and Financial Indebtedness

	20.15.1		No Security or Quasi-Security exists over all or any of the present or future assets of it or any member of the Group other than as permitted under Clause 23.5 (Negative Pledge) of this Agreement.
	20.15.2		Subject to the Legal Reservations, the Security Documents create a first priority Security in favour of the Secured Parties.
	20.15.3		It has no Financial Indebtedness outstanding other than Permitted Financial Indebtedness which has been disclosed to the Agent in writing.
	20.15.4		It has good and marketable title to the assets which are subject to the Transaction Security.

20.16

Ranking

The Security under the Security Documents is not and shall not be subject to any prior ranking or pari passu ranking Security, other than Security referred to in Clause 23.5.3.

20.17

Borrowing Base Assets

The Borrower will have and maintain good and merchantable title to the Borrowing Base Assets, in each case to the extent of its working interests, subject to the Transaction Security.

20.18

Project Documents

20.18.1

Each Project Document delivered pursuant to Clause 4.1 (Initial conditions precedent), to its knowledge:

	(a)		is true, complete and correct (and no other agreements or arrangements have been entered into in respect thereof which have not been fully disclosed to the Agent);
	(b)		has not been amended or varied in any way, except as disclosed to the Agent prior to the date of this Agreement; and
	(c)		is not the subject of any material dispute which has not been disclosed to the Agent.

20.18.2

The Transaction Documents constitute all material contracts and agreements:

	(a)		to which the Borrower is a party; and
	(b)		to which any member of the Group is a party which relate to the ownership, operation or management of the Borrower or the Borrowing Base Assets (or any part thereof).

20.19

Dormant Subsidiaries

Each of China Ivanhoe Energy Ltd., Sunwing Management Limited and Dagang Resources Ltd. is a Dormant Subsidiary.

20.20

Repetition

To the extent originally made by such Obligor on the date of this Agreement, the Repeating Representations are deemed to be made by each Obligor to each Finance Party on the date of each Utilisation Request and the first day of each Interest Period (by reference to the facts and circumstances then existing).

21.

INFORMATION UNDERTAKINGS

The undertakings in this Clause 21 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

21.1

Financial statements

The Borrower shall supply to the Agent in sufficient copies for all the Lenders:

21.1.1

except with respect to the Original Financial Statements, which may be provided at any time prior to the first Utilisation, as soon as the same become available, but in any event within one hundred and twenty days after the end of each financial year of the relevant Obligor, commencing with the financial year in which the first Utilisation occurs, the audited financial statements of each Obligor for that financial year; and

21.1.2

as soon as the same become available, but in any event within sixty days after the end of each quarter of each financial year of the relevant Obligor, commencing with the financial quarter in which the first Utilisation occurs, the unaudited financial statements of each Obligor (consisting of balance sheet, profit and loss account and cash flow statement) for that financial quarter.

21.2		Requirements as to financial statements
		The Borrower shall procure that each set of financial statements of an Obligor delivered pursuant to Clause 21.1 (Financial statements) is prepared using GAAP, and accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, or the accounting practices or reference periods and its auditors deliver to the Agent:

	21.2.1		a description of any change necessary for those financial statements to reflect GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and
	21.2.2		sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

21.3		Information: miscellaneous
		The Borrower shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

	21.3.1		all information reasonably requested by the Agent relating to the Borrowing Base Assets;
	21.3.2		all documents dispatched by any Obligor to its shareholders generally (or any class of them) or its creditors generally at the same time as they are dispatched;
	21.3.3		promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which could reasonably be expected, if adversely determined, to have a Material Adverse Effect;
	21.3.4		promptly upon becoming aware, details of any material dispute under any Project Document which could reasonably be expected to have a Material Adverse Effect;
	21.3.5		promptly upon becoming aware, any proposal to enter into any new or replacement, or effect any material amendment, supplement, modification or waiver of any provision of any Project Document;

	21.3.6		promptly upon becoming aware, details of any other matters which are likely materially and adversely to affect the initial or further development, construction, installation or commissioning of any Borrowing Base Asset;
	21.3.7		forthwith upon becoming aware, details of any event of force majeure (however described), or any suspension of production or transportation for a period greater than thirty days, which has occurred in respect of a Borrowing Base Asset and of which any member of the Group is aware;
	21.3.8		forthwith upon becoming aware, details of material defects or material malfunctions in respect of a Borrowing Base Asset which could reasonably be expected to have a Material Adverse Effect, together with a summary detailing the action being taken to remedy such defects or malfunctions; and
	21.3.9		promptly, such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Agent) may reasonably request.

21.4

Notification of default

	21.4.1		Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
	21.4.2		Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate signed by two of its directors on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

21.5		Monthly Reports
		In respect of each Borrowing Base Asset, the Borrower shall supply to the Agent within fifteen days after the end of each calendar month a copy of the operating report prepared by its management relating to such Borrowing Base Asset in respect of that calendar month, such report to include a production summary for that calendar month, details of all drilling conducted in that calendar month and the progress of construction of any surface units during that calendar month.

21.6

Know your customer checks

21.6.1

If:

	(a)		the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
	(b)		any change in the status of an Obligor after the date of this Agreement; or
	(c)		a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

			obliges the Agent or any Lender (or, in the case of sub-clause 21.6.1(c) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in sub-clause 21.6.1(c) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in sub-clause 21.6.1(c) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
	21.6.2		Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

	22.		FINANCIAL COVENANTS
	22.1		Financial covenants
			The Borrower shall ensure that:

	22.1.1		as at each Quarter Date falling more than nine Months after the first Utilisation Date, the Debt to EBITDA Ratio for the preceding Measurement Period does not exceed 2.5:1;
	22.1.2		as at each Half-year Date falling more than six Months after the first Utilisation Date, the Interest Cover Ratio for preceding Measurement Period is not less than 3:1;
	22.1.3		as at each Half-year Date falling more than six Months after the first Utilisation Date, the Consolidated Tangible Net Worth of the Borrower is not less than $35,000,000;
	22.1.4		as at each Half-year Date falling on the last day of each of the Borrower’s financial years, the Consolidated Current Ratio is not less than 1:1; and
	22.1.5		as at each Redetermination Date, the PV10 Ratio is not less than 2:1.

	22.2		Financial testing
			The financial covenants set out in Clause 22.1 (Financial covenants) shall be tested by the Agent pursuant to the then current Financial Projection on each Redetermination Date and at any other time on notice to the Borrower if the Agent reasonably considers a Default under Clause 22.1 (Financial covenants) has occurred.

	23.		GENERAL UNDERTAKINGS
			The undertakings in this Clause 23 (General Undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
	23.1		Authorisations
			Each Obligor shall promptly:

	23.1.1		obtain, comply with and do all that is necessary to maintain in full force and effect; and
	23.1.2		supply certified copies to the Agent of,

any Authorisation required under any law or regulation to enable it to perform its obligations under the Transaction Documents to which it is a party (where the failure to obtain and comply with such Authorisation could reasonably be expected to have a Material Adverse Effect) and each other Authorisation required to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Transaction Document to which it is a party.

	23.2		Compliance with laws
			Each Obligor shall comply in all respects with all laws (including environmental laws) to which it may be subject and shall comply with good oil and gas industry practice, if failure to comply in either case could reasonably be expected to materially impair its ability to perform its obligations under the Transaction Documents to which it is a party or if failure to comply in either case could reasonably be expected to have a Material Adverse Effect.
	23.3		Financial Indebtedness
			The Obligors shall ensure that no member of the Group incurs or allows to remain outstanding any Financial Indebtedness other than Permitted Financial Indebtedness.
	23.4		Capital Expenditure
			No Obligor shall (and the Borrower shall ensure that no other member of the Group will) incur any capital expenditure, save for that which (a) has been taken into account as a Permitted Payment in the most recent Financial Projection or (b) is to be funded from the proceeds of a Loan and has been approved by the Agent or (c) is to be funded from amounts which have been transferred from the Revenue Account to the Distribution Account in accordance with Schedule 7 (The Accounts) or from the proceeds of Subordinated Indebtedness.
	23.5		Negative pledge

	23.5.1		No Obligor shall (and the Borrower shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.
	23.5.2		No Obligor shall (and the Borrower shall ensure that no other member of the Group will):

(a)

sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a member of the Group;

	(b)		sell, transfer or otherwise dispose of any of its receivables on recourse terms;
	(c)		enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
	(d)		enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

23.5.3

Sub-clauses 23.5.1 and 23.5.2 above do not apply to:

	(a)		any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;
	(b)		any materialman’s, mechanic’s, repairman’s, employee’s, contractor’s, operator’s, Tax and other similar liens, privileges or charges arising by operation of law and in the ordinary course of business; and
	(c)		any Security entered into pursuant to any Finance Document.

23.6

Disposals and Acquisitions

	23.6.1		Subject to Sub-clause 23.6.3, the Obligors shall ensure that no member of the Group shall enter into a single transaction or a series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease, transfer or otherwise dispose of any asset without the written consent of Security Trustee.
	23.6.2		No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into a single transaction or a series of transactions (whether related or not and whether voluntary or involuntary) to acquire, purchase, assume or otherwise obtain an interest in any company or any interest in any oil and/or gas acreage (whether by contract or otherwise) without the prior written consent of the Majority Lenders, such consent not to be unreasonably withheld.
	23.6.3		Sub-clause 23.6.1 above does not apply to any sale, lease, transfer or other disposal:

	(a)		made in the ordinary course of business of the disposing entity and on arm’s length terms;
	(b)		of a Group member’s share of production from any Borrowing Base Asset;
	(c)		where the higher of the market value or consideration receivable (when aggregated with the higher of the market value or consideration receivable for any other sale, lease, transfer or other disposal by any member of the Group, other than any permitted under paragraph (a) above) does not exceed $500,000 (or its equivalent in another currency or currencies) in any financial year; or

(d)

where the Borrower has satisfied the Majority Lenders that such sale, lease, transfer or other disposal will not result in:

	(i)		the aggregate outstanding Loans exceeding the aggregate Borrowing Base Amounts;
	(ii)		a Material Adverse Effect;
	(iii)		a concentration of the Lenders’ risk;
	(iv)		a breach of Clause 23.13 (Hedging); or
	(v)		a breach of Clause 22.1 (Financial covenants).

	23.7		Merger
			No Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter into any amalgamation, demerger or merger.
	23.8		Change of business
			The Obligors shall procure that no substantial change is made to the general nature of the business of any Obligor from that carried on at the date of this Agreement.
	23.9		Environmental Compliance
			Each Obligor shall (and shall procure that each member of the Group shall) comply in all material respects with all Environmental Law and obtain and maintain any Environmental Permits where failure to do so would reasonably be expected to have a Material Adverse Effect.
	23.10		Environmental Claims
			The Borrower shall inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same, if any Environmental Claim has been commenced or (to the best of the Borrower’s knowledge and belief) is threatened against any member of the Group, where the claim, if determined against that member of the Group, would reasonably be expected to have a Material Adverse Effect.
	23.11		Loans
			No member of the Group shall make any loans nor shall it grant any credit (save in the ordinary and usual course of business) to or for the benefit of any person other than intercompany loans from any member of the Group to any other member of the Group. Each Obligor hereby agrees that, for the benefit of the Finance Parties, the provisions of Schedule 8 (Subordination Terms) shall be deemed incorporated, mutatis mutandis into any intercompany loan entered into by it with another Obligor and that it will comply with the provisions of Schedule 8 (Subordination Terms).
	23.12		Dividends
			The Borrower shall not make any payment for the purchase, redemption, retirement or acquisition of its own shares or pay, make or declare any dividend or other distribution in respect of any financial year except with funds standing to the credit of the Distribution Account.

23.13

Hedging

	23.13.1		The Borrower shall comply with the requirements of Schedule 9 (Hedging).
	23.13.2		Save in accordance with Schedule 9 (Hedging) the Obligor shall ensure that no member of the Group enters into any hedging transaction.

	23.14		Taxation
			The Borrower shall ensure that each member of the Group will:

	23.14.1		duly and punctually pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties (except to the extent that (a) such payment is being contested in good faith, (b) adequate reserves are being maintained for those Taxes and (c) such payment can be lawfully withheld); and
	23.14.2		maintain its tax residence in a jurisdiction reasonably acceptable to the Majority Lenders.

23.15

Further assurance

	23.15.1		Each Obligor shall promptly take all necessary steps to perfect the Security created or intended to be created by it under or evidenced by the Security Documents or for the exercise of any rights powers and remedies of the Security Trustee provided by or pursuant to the Security Documents to which it is a party or by law.
	23.15.2		Each Obligor shall promptly on request by the Agent take all such action as is available to it, including making all filings and registrations and issuing all notices required to be issued under the Security Documents, as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred by it on the Security Trustee by or pursuant to the Security Documents.

	23.16		The Accounts
			The Accounts shall be maintained and operated in accordance with Schedule 7 (The Accounts).

23.17

Borrowing Base Assets

	23.17.1		The Obligors shall ensure that no member of the Group abandons or takes any action in relation to any change in operator of any Borrowing Base Asset, except with the prior written consent of the Majority Lenders (such consent not to be unreasonably withheld).
	23.17.2		The Obligors shall ensure that each member of the Group which has an interest in a Borrowing Base Asset creates Security over its interest in such Borrowing Base Asset, in favour of the Security Trustee, to the extent this is or becomes possible under applicable law.

23.18

Insurance

23.18.1

The Obligors shall ensure that each member of the Group effects and maintains or causes to be effected and maintained all such insurance over its assets and undertaking as would be maintained in accordance with good oil and gas

			industry practice in the relevant jurisdiction, or as may be required by any applicable law or by the terms of any of the Project Document or any other agreement to which that member of the Group is, at any time, a party.
	23.18.2		The Obligors shall ensure that each member of the Group will, where any insurances are effected by it, promptly take all necessary steps to create and grant to the Security Trustee valid first priority Security over such insurances as may be reasonably acceptable to the Security Trustee and take all necessary steps to perfect such Security created or intended to be created.
	23.18.3		All policies of insurance effected by it pursuant to this Clause 23.18 (Insurances) shall contain non-vitiation language reasonably acceptable to the Security Trustee.

23.19

Project Documents

23.19.1

Each Obligor shall:

	(a)		comply in all respects with its obligations under each Project Document to which it is a party;
	(b)		use reasonable endeavours to enforce its rights under each Project Document to which it is a party;
	(c)		maintain and exercise its rights under each Project Document to which it is a party having regard to the interests of the Finance Parties;
	(d)		promptly take all steps to avoid, remedy and/or mitigate any breaches under any Project Document to which it is a party caused by it or for which it is responsible;
	(e)		not amend, modify or waive any provision of, or terminate, any Project Document to which it is a party, without the consent of the Agent (such consent not to be unreasonably withheld),

in each case to the extent that any failure to comply with any of sub-paragraph (a) to and including (e) might have a Material Adverse Effect.

23.20

Access

	23.20.1		Upon reasonable notice (except where a Default has occurred and is continuing, when no notice need be given) each Obligor shall permit each Finance Party to examine (and copy all or extracts from) its books, accounts, records and other documentation and/or data relating to its business and/or assets; provided that (subject to Clause 23.22 (Confidentiality) the above requirements shall not require any Obligor to breach any applicable laws or confidentiality requirements binding upon it.
	23.20.2		The Borrower shall permit the Independent Engineer such access, to and to examine, its books, accounts, records and other documentation and/or assets as may be necessary to enable the preparation of Lenders’ Technical Reports by the Independent Engineer provided that (subject to Clause 23.22

(Confidentiality)) the above requirements shall not require any Obligor to breach any applicable laws or confidentiality requirements binding on it.

	23.21		Unlawful conduct
			No Obligor shall engage, directly or indirectly, in corrupt or unlawful conduct, including promising or giving any person any undue pecuniary or other reward for the purpose of obtaining or retaining business or any improper advantage.
	23.22		Confidentiality
			Each Obligor shall, at the request of the Agent, promptly use reasonable endeavours to obtain a release from all obligations of confidence that apply in respect of any document, arrangement or information that the Finance Parties may have a bona fide interest in reviewing pursuant to the Finance Documents.
	23.23		Production
			The Borrower shall ensure that, during each three month period commencing on the date hereof and ending on the Termination Date, production from the Borrowing Base
			Assets is consistent with the minimum volumes required in connection with hedging pursuant to Schedule 9 (Hedging).
	23.24		Payment arrangements

	23.24.1		Not later than by the seventh Business Day of a calendar month, the Borrower shall issue a payment invoice in (or in substantially) the form of Schedule 12 (Form of Payment Invoice) to CNPC, instructing CNPC to make all payments due in the immediately preceding calendar month under the Dagang PSC and the Zitong PSC in dollars into the Bank of Montreal Account. The Borrower shall not revoke, terminate or amend any such payment invoice to decrease the amount demanded and shall use all reasonable efforts to ensure that CNPC complies with the terms of the relevant payment invoice and shall not change the bank account details into which such payments are to be made from those set out in Schedule 12 (Form of Payment Invoice).
	23.24.2		The Borrower shall not revoke, terminate or amend the Bank of Montreal Payment Instructions and shall use all reasonable efforts to ensure that the Bank of Montreal complies with the terms of the Bank of Montreal Payment Instructions.

	23.25		Conditions subsequent
			Each Obligor shall (and the Borrower will ensure that each other member of the Group will) ensure that each of the Conditions Subsequent is satisfied in accordance with its terms.
	24.		EVENTS OF DEFAULT
			Each of the events or circumstances set out in Clause 24 (Events of Default) is an Event of Default.

	24.1		Non-payment
			An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

24.1.1

its failure to pay is caused by:

	(a)		administrative or technical error; or
	(b)		a Disruption Event; and

24.1.2

payment is made within three Business Days of its due date.

	24.2		Financial covenants
			Any requirement of Clause 22 (Financial covenants) is not satisfied.
	24.3		Other obligations

	24.3.1		An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 24.1 (Non-payment) and Clause 24.2 (Financial covenant)).
	24.3.2		No Event of Default under sub-clause 24.3.1 above will occur if the failure to comply is capable of remedy and the Agent reasonably believes that the relevant Obligor is taking good faith steps to effect a remedy and if such failure is remedied within ten Business Days of the Agent giving notice to the Borrower or the Borrower becoming aware of the failure to comply.

	24.4		Misrepresentation
			Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

24.5

Cross default

	24.5.1		Any Financial Indebtedness of any Obligor is not paid when due nor within any originally applicable grace period.
	24.5.2		Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity or is placed on demand, in either case as a result of an event of default (however described).
	24.5.3		Any commitment for any Financial Indebtedness of any Obligor is cancelled or suspended by a creditor of such Obligor as a result of an event of default (however described).
	24.5.4		Any creditor of any Obligor becomes entitled to declare any Financial Indebtedness of such Obligor due and payable prior to its specified maturity or to place it on demand or to cancel or suspend any commitment for any such Financial Indebtedness as a result of an event of default (however described).
	24.5.5		No Event of Default will occur under this Clause 24.5 (Cross default) if the aggregate amount of Financial Indebtedness or commitment for Financial

Indebtedness falling within 24.5.1 to 24.5.4 above is less than $100,000 in aggregate (or its equivalent in any other currency or currencies).

	24.6		Insolvency
			Any of the following occurs:

	24.6.1		the Obligors taken as a whole (and without regard to Subordinated Indebtedness owed by any of them to Ivanhoe) are, or are deemed for the purposes of any law to be, unable to pay their debts as they fall due ;
	24.6.2		any Obligor admits its inability to pay its debts as they fall due;
	24.6.3		the value of the assets of the Obligors taken as a whole is less than their liabilities (taking into account contingent and prospective liabilities but without regard to Subordinated Indebtedness owed by any of them to Ivanhoe);
	24.6.4		any Obligor suspends making payments on any of its debts or announces an intention to do so;
	24.6.5		by reason of actual or anticipated financial difficulties, any Obligor commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness; or
	24.6.6		a moratorium is declared in respect of any indebtedness of any Obligor.

	24.7		Insolvency proceedings
			Any corporate action, legal proceedings or other procedure or step is taken in relation to:

	24.7.1		the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Obligor other than a solvent liquidation or reorganisation of any Obligor (as the case may be) to which the Majority Lenders have consented;
	24.7.2		a composition, compromise, assignment or arrangement with any creditor of any Obligor;
	24.7.3		the appointment of a liquidator (other than in respect of a solvent liquidation of such Obligor to which the Majority Lenders have consented), receiver, administrative receiver, administrator, compulsory manager or other similar officer (in each case, whether out of court or otherwise) in respect of any Obligor or any of its assets; or
	24.7.4		enforcement of any Security over any asset of any Obligor,
			or any analogous procedure or step is taken in any jurisdiction.

	24.8		Creditors’ process
			Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of any Obligor having an aggregate value of not less than $100,000 and is not discharged within ten Business Days.

	24.9		Cessation of business
			Any of the following occurs in respect of any Obligor:

24.9.1

it ceases, or threatens to cease, to carry on all or substantially all of its business except:

	(a)		as part of a transaction described in the exceptions in sub-clauses 24.7.1 and 24.7.3 (Insolvency proceedings); or
	(b)		as a result of any disposal allowed under this Agreement; or

24.9.2

any governmental authority expropriates, or threatens to expropriate all or part of its assets.

	24.10		Ownership of the Obligors
			At any time:

	24.10.1		Ivanhoe ceases to own (legally and beneficially) one hundred per cent (100%) of the issued share capital of Sunwing Holdings.
	24.10.2		Sunwing Holdings ceases to own (legally and beneficially) one hundred per cent (100%) of the issued share capital of Sunwing Energy.
	24.10.3		Sunwing Energy ceases to own (legally and beneficially) one hundred per cent (100%) of the issued share capital of the Borrower.
	24.10.4		Sunwing Energy ceases to own (legally and beneficially) one hundred per cent (100%) of the issued share capital of Sunwing Zitong.

24.11

Unlawfulness

	24.11.1		It is or becomes unlawful for an Obligor to perform any of its obligations under the Transaction Documents to which it is a party.
	24.11.2		Any Transaction Document is not effective or is alleged by an Obligor to be ineffective for any reason.

24.12

Repudiation

An Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document or any party to a Project Document repudiates it or evidences an intention to repudiate it.

24.13

Qualification of Accounts

The audited accounts of any Obligor delivered pursuant to Clause 21.1.1 (Financial statements) are qualified by the auditors in any material respect.

24.14

Borrowing Base Assets

All or any part of a Borrowing Base Asset is impaired, abandoned or nationalised, or production from a Borrowing Base Asset is interrupted or impaired, in each case to an extent that the Majority Lenders believe could reasonably be expected to have a Material Adverse Effect.

	24.15		Management and key personnel
			Financial and operational management reasonably satisfactory to the Majority Lenders ceases to be in place in relation to the Borrower and the Borrowing Base Assets.
	24.16		Material adverse change
			Any event or circumstance occurs which the Majority Lenders believe could reasonably be expected to have a Material Adverse Effect.
	24.17		Security
			Any Security Document does not, or ceases to, provide the Finance Parties the Security intended to be created thereby or any part of the Security created pursuant to any Security Document lapses, becomes impaired or ceases to be in full force and effect in accordance with its terms or ceases to constitute, to the extent provided in the Security Documents, valid and perfected Security over the Charged Property.
	24.18		Acceleration
			On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed in accordance with Clause 36 (Entitlement to Enforce), by notice to the Borrower:

	24.18.1		cancel all or any part of the Commitments whereupon they shall immediately be cancelled;
	24.18.2		declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable;
	24.18.3		declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders;
	24.18.4		require the Security Trustee to take action to enforce all or any part of the Security under the Security Documents, whereupon any such action shall be taken; and/or
	24.18.5		exercise all other rights under any Finance Document and/or all other remedies available at law.

SECTION 10
CHANGES TO PARTIES

25.		CHANGES TO THE LENDERS
25.1		Assignments and transfers by the Lenders
		Subject to this Clause 25 (Changes to the Lenders), a Lender (the “Existing Lender”) may:

	25.1.1		assign any of its rights; or
	25.1.2		transfer by novation any of its rights and obligations,

to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).

25.2

Conditions of assignment or transfer

	25.2.1		The consent of the Borrower, any other Obligor or any other person is not required for an assignment of any of its rights or transfer by novation of any of its rights and obligations by a Lender.
	25.2.2		An assignment will only be effective on execution by the Agent and the Security Trustee of an Accession Undertaking delivered by the New Lender and performance by the Agent and the Security Trustee of all “know your customer” or other checks relating to any person that it requires to carry out in relation to such assignment to a New Lender, the completion of which the Agent and the Security Trustee shall promptly notify to the Existing Lender and the New Lender.
	25.2.3		A transfer will only be effective if the procedure set out in Clause 25.5 (Procedure for transfer) is complied with.
	25.2.4		If:

	(a)		a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
	(b)		as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased costs),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.

25.3

Assignment or transfer fee

The New Lender and any new Hedge Counterparty shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of $500.

25.4

Limitation of responsibility of Existing Lenders

25.4.1

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

	(a)		the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
	(b)		the financial condition of any Obligor;
	(c)		the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
	(d)		the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

25.4.2

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

	(a)		has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and their related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
	(b)		will continue to make its own independent appraisal of the creditworthiness of each Obligor and their related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

25.4.3

Nothing in any Finance Document obliges an Existing Lender to:

	(a)		accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause 25 (Changes to the Lenders); or
	(b)		support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

25.5

Procedure for transfer

25.5.1

Subject to the conditions set out in Clause 25.2 (Conditions of assignment or transfer) a transfer is effected in accordance with sub-clause 25.5.2 below when the Agent executes an otherwise duly completed Transfer Certificate delivered by the Existing Lender and the New Lender and the Agent and the Security Trustee execute an otherwise duly completed Accession Undertaking delivered by the new Lender. The Agent (and, in the case of an Accession Undertaking, the Security Trustee) shall as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate and a duly completed Accession Undertaking appearing on its face to comply with the terms of this Agreement

and delivered in accordance with the terms of this Agreement (and after performance of all “know your customer” or other checks relating to any person that it requires to carry out in relation to such transfer to a New Lender) execute that Transfer Certificate and Accession Undertaking. Each Party (other than the Existing Lender, the New Lender (and, in the case of an Accession Undertaking, the Security Trustee)) irrevocably authorises the Agent to execute any such Transfer Certificate and Accession Undertaking on its behalf.

25.5.2

On the Transfer Date:

	(a)		to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “Discharged Rights and Obligations”);
	(b)		each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;
	(c)		the Agent, the Arranger, the Security Trustee, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arranger, the Security Trustee and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
	(d)		the New Lender shall become a Party as a “Lender”.

25.6

Copy of Transfer Certificate to Borrower

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to the Borrower a copy of that Transfer Certificate.

25.7

Disclosure of information

Any Creditor may disclose to any of its Affiliates, any other Finance Party and any other person:

	25.7.1		to (or through) whom that Creditor assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement;
	25.7.2		with (or through) whom that Creditor enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or any Obligor; or

25.7.3

to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation,

any information about any Obligor and the Finance Documents as that Creditor shall consider appropriate if, in relation to sub-clauses 25.7.1 and 25.7.2 above, the person to whom the information is to be given has entered into a confidentiality undertaking.

26.

CHANGES TO THE HEDGE COUNTERPARTIES

A Hedge Counterparty may assign any of its rights and benefits or transfer by novation any of its rights, benefits and obligations in respect of the Hedge Agreements to which it is a party if the conditions set out in Clause 35.1 (Identity of Hedge Counterparties) have been satisfied and the Agent and the Security Trustee have executed an otherwise duly completed Accession Undertaking delivered by the relevant assignee or transferee.

27.

CHANGES TO THE OBLIGORS

No Obligor may assign any of its rights or transfer or otherwise dispose of any of its rights or obligations under the Finance Documents.

SECTION 11
THE FINANCE PARTIES

28.		THE AGENT AND THE ARRANGER
28.1		Appointment of the Agent

	28.1.1		Each other Finance Party appoints the Agent to act as its agent under and in connection with the Finance Documents.
	28.1.2		Each other Finance Party authorises the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

28.2

Duties of the Agent

	28.2.1		The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.
	28.2.2		Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
	28.2.3		If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
	28.2.4		If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties.
	28.2.5		The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

28.3

Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.

28.4

No fiduciary duties

	28.4.1		Nothing in this Agreement constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.
	28.4.2		Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

28.5

Business with the Group

The Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group without consent from any Party.

28.6

Rights and discretions of the Agent and the Arranger