8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 30, 2016

Energy XXI Gulf Coast, Inc.

(Exact name of registrant as specified in its charter)

DELAWARE	333-145639	20-4278595
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 1021 Main, Suite 2626
Houston, Texas 77002

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (713) 351-3000

(Former name or former address, if changed since last report.)

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

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

Chapter 11 Cases

As previously reported by Energy XXI Ltd, a Bermuda exempted company (“EXXI Ltd”), on April 14, 2016 (the “Petition Date”), the Company, Energy XXI Gulf Coast, Inc., an indirect wholly-owned subsidiary of the Company (“EGC”), EPL Oil & Gas, Inc., an indirect wholly-owned subsidiary of EXXI Ltd (“EPL”), and certain other subsidiaries of EXXI Ltd (together with EXXI Ltd, EGC and EPL, the “Debtors”) filed voluntary petitions for reorganization in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) seeking relief under the provisions of chapter 11 of Title 11 (“Chapter 11”) of the United States Code (the “Bankruptcy Code”) under the caption In re Energy XXI Ltd, et al., Case No. 16-31928 (the “Chapter 11 Cases”).

On July 15, 2016, the Bankruptcy Court entered the Order (A) Approving the Disclosure Statement and the Form and Manner of Service Related Thereto, (B) Setting Dates for the Objection Deadline and Hearing Relating to Confirmation of the Plan and (C) Granting Related Relief. On July 18, 2016, the Debtors filed the solicitation version of the Debtors’ Third Amended Disclosure Statement (as amended, modified, or supplemented from time to time, the “Disclosure Statement”).

On November 21, 2016, the Debtors filed the Second Amended Proposed Joint Chapter 11 Plan of Reorganization (as amended, modified, or supplemented from time to time, the “Plan”) and the solicitation version of the Second Supplement to the Disclosure Statement Setting Forth Modifications to the Plan (as amended, modified, or supplemented from time to time, the “Disclosure Statement Supplement”).

On November 21, 2016, the Bankruptcy Court entered the Order (A) Approving the Adequacy of the Disclosure Statement Supplement to the Debtors’ Third Amended Disclosure Statement Setting Forth Modifications to the Debtors’ Plan and the Continued Solicitation of the Plan and (B) Granting Related Relief approving updated solicitation and tabulation procedures with respect to the Plan.

On December 13, 2016, the Bankruptcy Court entered an order (the “Confirmation Order”) pursuant to the Bankruptcy Code, which approved and confirmed the Plan as modified by the Confirmation Order.

In connection with the satisfaction of the conditions to effectiveness as set forth in the Confirmation Order and in the Plan, EXXI Ltd and EGC completed a series of internal reorganization transactions pursuant to which EXXI Ltd transferred all of its remaining assets to reorganized EGC, as the new parent entity (the “New Parent”). On December 30, 2016 (the “Effective Date”), the Debtors satisfied the conditions to effectiveness, the Plan became effective in accordance with its terms and the New Parent and the other reorganized Debtors (with the New Parent, the “Reorganized Debtors”) emerged from the Chapter 11 Cases.

Bermuda Proceeding

Concurrently with the filing of the Bankruptcy Petitions, EXXI Ltd filed a petition seeking an order for liquidation of EXXI Ltd in the Supreme Court of Bermuda (the “Bermuda Court”) (the “Bermuda Proceeding”). On April 15, 2016, John C. McKenna was appointed as provisional liquidator (“Provisional Liquidator”) by the Bermuda Court. In light of the Plan and the emergence of EXXI Ltd, the Bermuda Court will be requested to make a winding up order formally placing EXXI Ltd in liquidation. The liquidation is likely to be completed during the first half of 2017, and EXXI Ltd will, at such conclusion, be dissolved.

Successor Issuer

This Current Report on Form 8-K (this “Form 8-K”) is being filed by the New Parent as the initial report of the New Parent to the Securities and Exchange Commission (the “Commission”) and as notice that the New Parent is the successor issuer to EXXI Ltd under Rule 12g-3 under the Exchange Act. As a result, the shares of common stock of the New Parent, par value $0.01 per share (the “Common Stock”), are deemed to be registered under Section 12(g) of the Exchange Act. The New Parent is thereby deemed subject to the informational requirements of the Exchange Act, and the rules and regulations promulgated thereunder, and in accordance therewith will file reports and other information with the Commission.

References in this Form 8-K to the “New Parent,” “we,” “our” or similar terms when used in reference to the period subsequent to the emergence from the Chapter 11 Cases refer to reorganized Energy XXI Gulf Coast, Inc., the new parent entity and successor issuer pursuant to Rule 12g-3(a) of the Exchange Act. References in this Form 8-K to “EXXI Ltd,” “we,” “our” or similar terms when used in reference to the periods prior to the emergence from the Chapter 11 Cases refer to Energy XXI Ltd, the predecessor and former parent entity that will be dissolved upon the completion of the Bermuda Proceeding. References in this Form 8-K to “EGC” refer to Energy XXI Gulf Coast, Inc. in the periods prior to the emergence from the Chapter 11 Cases during which it was the wholly-owned operating subsidiary of EXXI Ltd. All capitalized terms used herein but not otherwise defined in this Form 8-K have the meanings set forth in the Plan.

Item 1.01 Entry into a Material Definitive Agreement.

Registration Rights Agreement

On the Effective Date, the New Parent entered into a registration rights agreement (the “Registration Rights Agreement”) with parties who received shares of Common Stock upon the Effective Date (the “Holders”) representing 10% or more of the Common Stock outstanding on that date or who acquire 10% or more of the Common Stock outstanding within six months of the Effective Date. The Registration Rights Agreement provides resale registration rights for the Holders’ Registrable Securities (as defined in the Registration Rights Agreement). On or before the date that is 60 days after the Effective Date, the New Parent will file, and will thereafter use its commercially reasonable efforts to cause to be declared effective as promptly as practicable, a registration statement on Form S-1 (or other appropriate form) for the offer and resale of the Common Stock held by the Holders.

Pursuant to the Registration Rights Agreement, the Holders have customary demand, underwritten offering and piggyback registration rights, subject to the limitations set forth in the Registration Rights Agreement. Under their demand registration rights, Holders may request New Parent to register all or a portion of their Registrable Securities, including on a delayed or continuous basis under Rule 415 of the Securities Act of 1933. Holders, as a group, are entitled to five demand registrations. Generally, the New Parent is required to provide notice of a demand request within ten days following the receipt of the demand notice to all additional Holders, who may, in certain circumstances, participate in such demand registration. Under their underwritten offering registration rights, Holders also have the right to demand the New Parent to effectuate the distribution of any or all of such Holders’ Registrable Securities by means of an underwritten offering pursuant to an effective registration statement. Holders, as a group, are entitled to three underwritten offering requests in any twelve-month period. The New Parent is not obligated to effect a demand registration request or an underwritten demand registration request within 180 days of closing either a demand registration or an underwritten offering. The Company is required to use its reasonable best efforts to maintain the effectiveness of any such demand registration statement until the earlier of 270 days (or three years if a “shelf registration” is requested) after the Effective Date and the consummation of the distribution by the participating Holders. Under their piggyback registration rights, if at any time the New Parent proposes to register an offering of Common Stock for its own account, the New Parent must give at least ten business days’ notice to all Holders to allow them to include their shares in the registration statement, subject to certain limitations.

These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in a registration and the New Parent’s right to delay or withdraw a registration statement under certain circumstances. The New Parent will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as blackout periods and, if an underwritten offering is contemplated, limitations on the number of shares to be included in the underwritten offering that may be imposed by the managing underwriter.

The obligations to register shares under the Registration Rights Agreement will terminate with respect to the New Parent and each Holder on the first date upon which such Holder no longer beneficially owns any Registrable Securities.

This summary is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Exit Facility

Pursuant to the Plan, on the Effective Date, the New Parent, as Borrower, and the other Reorganized Debtors entered into a new three-year secured credit facility (the “Exit Facility”). The Exit Facility is comprised of two facilities: (i) a term loan facility (the “Exit Term Loan”) resulting from the conversion of the remaining drawn amount under the Debtors’ existing first lien credit facility (the “Current Revolving Credit Facility”) of approximately $69 million plus accrued default interest, fees and expenses and (ii) a revolving credit facility (the “Exit Revolving Facility”) resulting from the conversion of the former EGC tranche of the Current Revolving Credit Facility which provides, subject to the limitations noted below, for the making of revolving loans and the issuance of letters of credit.

The Exit Term Loan has a maturity of three years. Interest on the outstanding amount of the Exit Term Loan will accrue at an interest rate equal to either: (i) the Alternative Base Rate (as defined in the Exit Facility) plus 3.5% per annum or (ii) the one-month LIBO Rate (as defined in the Exit Facility) plus 4.5% per annum. Interest on the Exit Term Loan bearing interest at the Alternative Base Rate will be payable quarterly; interest on the Exit Term Loan bearing interest at the LIBO Rate will be payable monthly.

On the Effective Date, the aggregate commitments for the Exit Revolving Facility were $227,742,500, all of which will be utilized to maintain in effect outstanding letters of credit, including $225,000,000 of letters of credit issued in favor of Exxon Mobil Corporation (“ExxonMobil”) to secure certain plugging and abandonment obligations. Each existing letter of credit may be renewed or replaced (in each case, in an outstanding amount not to exceed the outstanding amount of the existing letter of credit).

Following the Effective Date, the commitments under the Exit Revolving Facility will be reduced by fifty percent of the amount of the aggregate reduction in the stated amount of all letters of credit outstanding in favor of ExxonMobil. The remaining fifty percent of such aggregate reduction is available for borrowing as revolving loans subject to a maximum for all such loans of (i) $25 million prior to the date the borrowing base is initially determined and (ii) the borrowing base, on and after the date the borrowing base is initially determined. The borrowing base will be initially determined after June 30, 2017, and is redetermined semi-annually thereafter.”

The New Parent must make a mandatory prepayment of the revolving loans and, if necessary, cash collateralize the outstanding letters of credit if a reduction in revolving commitments would cause the revolving credit exposure to exceed the revolving credit commitments. On or after the determination of the borrowing base, the New Parent must also make a mandatory prepayment of the revolving loans and, if necessary, cash collateralize the outstanding letters of credit not in favor of ExxonMobil if a borrowing base deficiency arises. For each fiscal quarter ending on and after March 31, 2018, if the Asset Coverage Ratio (as defined in the Exit Facility) is less than 1.50 to 1.00, the New Parent must make a mandatory prepayment of the Exit Term Loan equal to the lesser of (i) 7.5% of the aggregate outstanding principal amount of the Exit Term Loan on the Effective Date or (ii) the then outstanding principal amount of the Exit Term Loan.

The Exit Revolving Facility has a maturity of three years. Interest on the outstanding amount of revolving loans borrowed under the Exit Revolving Facility will accrue at an interest rate equal to either (i) the Alternative Base Rate plus 3.5% per annum or (ii) the one, three or six month LIBO Rate plus 4.5% per annum. Interest on revolving loans that bear interest at the Alternative Base Rate will be payable quarterly; interest on revolving loans that bear interest at the LIBO Rate will be payable at the end of each interest period or, if an interest period exceeds three months, at the end of every three months. The stated amount of each letter of credit issued under the Exit Revolving Facility accrues fees at the rate of 4.5% per annum. There is an issuance fee of 0.25% per annum charged on the stated amount of each letter of credit issued after the Effective Date.

Unused commitments under the Exit Revolving Facility will accrue a commitment fee of 0.50% payable quarterly in arrears.

The Exit Facility is guaranteed by substantially all of the wholly owned subsidiaries of the New Parent, subject to customary exceptions, and is secured by first priority security interests on substantially all assets of each Reorganized Debtor guarantor.

The Exit Facility contains covenants and events of default customary for reserve-based lending facilities. In addition, for each fiscal quarter ending on and after March 31, 2018, the New Parent must maintain a Current Ratio (as defined in the Exit Facility) of no less than 1.00 to 1.00 and a First Lien Leverage Ratio (as defined in the Exit Facility) of no greater than 4.00 to 1.00 calculated on a trailing four quarter basis.

Upon emergence from the Chapter 11 Cases, the New Parent was required under the Exit Facility to have liquidity of at least $90 million. The Reorganized Debtors may use the proceeds of the Exit Revolving Facility for any permitted purpose, including satisfaction of ongoing working capital needs.

This summary is qualified in its entirety by reference to the full text of the Exit Facility and related Guaranty and First Lien Pledge and Security Agreement and Irrevocable Proxy, which are attached hereto as Exhibits 10.2, 10.3 and 10.4, respectively, and incorporated by reference herein.

Warrant Agreement

On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with Continental Stock Transfer & Trust Company, as Warrant Agent. On the Effective Date, pursuant to the terms of the Plan, the Company issued 2,119,889 warrants (the “Warrants”) to holders of the EGC Unsecured Notes Claims (as defined in Item 3.02) and holders of the EPL Unsecured Notes Claims (as defined in Item 3.02).

The Warrants are exercisable from the date of the Warrant Agreement until 5:00 p.m., New York City time, on December 30, 2021 (the “Expiration Date”). The Warrants are initially exercisable for one share of Common Stock per Warrant (such rate, as adjusted pursuant to the Warrant Agreement, being the “Warrant Exercise Shares”) at an initial exercise price of $43.66 (the “Exercise Price”). The Warrant Exercise Shares and Exercise Price are subject to customary anti-dilution adjustments. No adjustments to the applicable Exercise Price or Warrant Exercise Shares are required unless the cumulative adjustments required would result in an increase or decrease of at least 1.0% in the applicable Exercise Price or the Warrant Exercise Shares. Additionally, if an adjustment in Exercise Price would reduce the Exercise Price to an amount below par value of the Common Stock, then such adjustment in Exercise Price will reduce the Exercise Price to the par value of the Common Stock.

Upon the occurrence of certain events prior to the Expiration Date constituting a recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s equity securities or assets or other transaction, in each case which is effected in such a way that the holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) cash, stock, securities or other assets or property with respect to or in exchange for Common Stock (any such event, “Organic Change”), each holder of Warrants will be entitled to receive, upon exercise of a Warrant, such cash, stock, securities or other assets or property as would have been issued or payable in such Organic Change (as if the holder had exercised such Warrant immediately prior to such Organic Change) with respect to or in exchange, as applicable, for the number of Warrant Exercise Shares that would have been issued upon exercise of such Warrants, if such Warrants had been exercised immediately prior to the occurrence of such Organic Change.

Holders of Warrants are not entitled, by virtue of holding Warrants, to vote, to consent, to receive dividends, to consent or to receive notice as stockholders with respect to any meeting of stockholders for the election of the New Parent’s directors or any other matter, or to exercise any rights whatsoever as the New Parent’s stockholders unless, until and only to the extent such holders become holders of record of shares of Common Stock issuable upon exercise of the Warrants.

The Warrants permit a holder of Warrants to exercise the Warrants for net share or “cashless” settlement in lieu of paying the Exercise Price by authorizing the Company to withhold and not issue to such holder, in payment of the Exercise Price, a number of such Warrant Exercise Shares equal to (i) the number of Warrants Exercise Shares for which the Warrants are being exercised, multiplied by (ii) the Exercise Price, and divided by (iii) the Current Sale Price (as defined in the Warrant Agreement) on the Exercise Date.

The description of the Warrant Agreement is qualified in its entirety by reference to the full text of the Warrant Agreement, which is filed as Exhibit 10.5 and incorporated by reference herein.

CEO Employment Agreement

On the Effective Date, the New Parent entered into an employment agreement with John D. Schiller, Jr. as President and Chief Executive Officer of the New Parent (the “CEO Employment Agreement”). The CEO Employment Agreement supersedes the employment agreement Mr. Schiller had in place with EXXI Ltd prior to the Effective Date. The CEO Employment Agreement has an initial term expiring on December 30, 2019 and provides for an annual base salary of $910,000 (“Base Compensation”) with an annual target bonus of 125% of Mr. Schiller’s Base Compensation (“Target Bonus”).

Should Mr. Schiller be terminated by the New Parent for Cause (as defined in the CEO Employment Agreement) or should Mr. Schiller terminate his employment other than for Good Reason (as defined in the CEO Employment Agreement), the New Parent will make no further payments under the CEO Employment Agreement other than the salary and business expenses to which he is entitled immediately prior to such termination (“Accrued Benefits”).

Should Mr. Schiller be terminated by the New Parent for a reason other than for Cause (other than due to his death or Disability (as defined in the CEO Employment Agreement)) or should Mr. Schiller resign for Good Reason, Mr. Schiller will receive his Accrued Benefits, and subject to Mr. Schiller and the New Parent executing and not revoking a mutual release of claims, Mr. Schiller will be entitled to the following:

· on or prior to the first anniversary of the Effective Date, (i) a lump sum of $2 million and (ii) reimbursement for the monthly cost of maintaining health benefits for Mr. Schiller and his spouse and eligible dependents as of the date of termination of employment for a period of 18 months to the extent Mr. Schiller elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).

· after the first anniversary of the Effective Date, (i) three times his Base Compensation and Target Bonus and (ii) reimbursement for the monthly cost of maintaining health benefits for Mr. Schiller and his spouse and eligible dependents as of the date of termination of employment for a period of 18 months to the extent Mr. Schiller elects COBRA continuation coverage.

In the event of Mr. Schiller’s death or his termination by the New Parent on account of his Disability during the term of the CEO Employment Agreement, the New Parent will be obligated to continue for twelve months after his death or such termination due to Disability to pay the Base Compensation payments to Mr. Schiller or his beneficiary, or if none, his estate, as applicable.

During the term of Mr. Schiller’s employment and for a period of twelve months thereafter, Mr. Schiller cannot: (i) perform services for, or have over a five percent (5%) ownership interest in, or participate in competing business; or (ii) solicit, recruit or hire, or assist any person, or entity in the solicitation, recruitment or hiring of any person engaged by the New Parent as an employee, officer, director or consultant.

This summary is qualified in its entirety by reference to the full text of the CEO Employment Agreement, which is attached hereto as Exhibit 10.6 and incorporated by reference herein.

Long Term Incentive Plan

The Bankruptcy Court approved the adoption of the 2016 LTIP (as defined in Item 5.02) by the New Parent in its approval of the Confirmation Order. The information contained in Item 5.02 of this Form 8-K under the sub-heading “Long Term Incentive Plan” is incorporated herein by reference into this Item 1.01.

Item 1.02 Termination of a Material Definitive Agreement.

Prepetition Notes

In accordance with the Plan, on the Effective Date, all outstanding obligations under the following notes and the related collateral agreements and registration rights, as applicable, were cancelled and the indentures governing such obligations were cancelled:

· 11.0% senior secured second lien notes due March 15, 2020 (the “Second Lien Notes”) issued pursuant to that certain Indenture, dated as of March 12, 2015, among EGC, the guarantors party thereto, and U.S. Bank, N.A., as trustee, and all amendments, supplements or modifications thereto and extensions thereof;

· 6.875% senior unsecured notes due March 15, 2024 (the “EGC 6.875 Senior Notes”) issued pursuant to that certain indenture, dated May 27, 2014, among EGC, the guarantors party thereto, and Wilmington Trust, National Association, as successor to Wells Fargo Bank, National Association, and all amendments, supplements or modifications thereto and extensions thereof;

· 7.50% senior unsecured notes due December 15, 2021 (the “EGC 7.50% Senior Notes”) issued pursuant to that certain indenture, dated September 26, 2013, among EGC, the guarantors party thereto, and Wilmington Trust, National Association, as successor to Wells Fargo Bank, National Association, and all amendments, supplements or modifications thereto and extensions thereof;

· 7.75% senior unsecured notes due June 15, 2019 (the “EGC 7.75% Senior Notes”) issued pursuant to that certain indenture, dated February 25, 2011, among EGC, the guarantors party thereto, and Wilmington Trust, National Association, as successor to Wells Fargo Bank, National Association, and all amendments, supplements or modifications thereto and extensions thereof;

· 9.25% senior unsecured notes due December 15, 2017 (the “EGC 9.25% Senior Notes,” and together with the EGC 6.875% Senior Notes, the EGC 7.50% Senior Notes, the EGC 7.75% Senior Notes and the “EGC Unsecured Notes”) issued pursuant to that certain indenture, dated December 17, 2010, among EGC, the guarantors party thereto, and Wilmington Trust, National Association, as successor to Wells Fargo Bank, National Association, and all amendments, supplements or modifications thereto and extensions thereof;

· 8.25% senior unsecured notes due February 15, 2018 (the “EPL 8.25% Senior Notes”) issued pursuant to that certain indenture, dated as of February 14, 2011, by and EGC, the guarantors party thereto, and U.S. Bank National Association, as trustee, and all amendments, supplements or modifications thereto and extensions thereof; and

· 3.0% senior convertible notes due on December 15, 2018 (the “EXXI 3.0% Senior Convertible Notes”) issued pursuant to that certain indenture dated as of November 22, 2013 among EXXI Ltd and Wilmington Savings Fund Society, FSB, as trustee, and all amendments, supplements or modifications thereto and extensions thereof.

Current Revolving Credit Facility

On the Effective Date, by operation of the Plan, all outstanding obligations under the Current Revolving Credit Facility and the related collateral agreements were cancelled and the credit agreements governing such obligations were cancelled.

Equity Interests

As a result of the Plan, there are no assets remaining in EXXI Ltd, and under Bermuda law, shareholders (including preferred shareholders) of EXXI Ltd will receive no payments. EXXI Ltd will be dissolved at the conclusion of the Bermuda Proceeding, and as such, the shareholders will no longer have any interest in EXXI Ltd as a matter of Bermuda law. The company will cease to have any legal personality.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information regarding the Exit Facility set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

On the Effective Date, the New Parent issued (i) 27,897,739 shares of Common Stock, pro rata, to holders of the claims arising from the Second Lien Notes, (ii) 3,985,391 shares of Common Stock, pro rata, to holders of the claims arising from the EGC Unsecured Notes (the “EGC Unsecured Notes Claims”), (iii) 1,328,464 shares of Common Stock, pro rata, to holders of the claims arising from the EPL 8.25% Senior Notes (the “EPL Unsecured Notes Claims”), (iv) 1,271,933 Warrants, pro rata, to holders of the EGC Unsecured Notes Claims; and (v) 847,956 Warrants, pro rata, to holders of the EPL Unsecured Notes Claims. The Confirmation Order and Plan provide for the exemption of the offer and sale of the shares of Common Stock and the Warrants (including shares of Common Stock issuable upon the exercise thereof) from the registration requirements of the Securities Act of 1933 (the “Securities Act”) pursuant to Section 1145(a)(1) of the Bankruptcy Code. Section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale of securities under the Plan from registration under Section 5 of the Securities Act and state laws if certain requirements are satisfied.

The information provided in Item 1.01 of this Form 8-K is incorporated herein by reference into this Item 3.02.

Item 3.03 Material Modification to Rights of Security Holders.

As provided in the Plan, all notes, stock, agreements, instruments, certificates, and other documents evidencing any claim against or interest in the Debtors were cancelled on the Effective Date (with the exception of the stock of EXXI Ltd as discussed above), and the obligations of the Debtors thereunder or in any way related thereto were fully released. For further information, see Items 1.01, 1.02, 3.02 and 5.03 of this Form 8-K, which are incorporated herein by reference.

Item 5.01 Changes in Control of Registrant.

As previously disclosed, on the Effective Date, the New Parent issued 100% of its shares of Common Stock to certain of the Debtors’ creditors pursuant to the Plan. For further information, see Items 1.01, 1.02, 3.02, 3.03 and Item 5.03 of this Form 8-K, which is incorporated herein by reference into this Item 5.01.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Non-Continuing EXXI Ltd Directors

Pursuant to the Plan, as of the Effective Date, the following directors resigned from EXXI Ltd’s board of directors: William Colvin, Cornelius Dupré II, Hill A. Feinberg, Kevin Flannery, Scott A. Griffiths and James LaChance. On January 3, 2017, John D. Schiller, Jr. also resigned from EXXI Ltd’s board of directors. Following the resignation of all of the directors of EXXI Ltd and in accordance with Bermuda law, the Provisional Liquidator assumed full control of EXXI Ltd’s affairs and will continue to do so until the conclusion of the Bermuda Proceeding.

Departure and Appointment of New Parent Directors

Upon the effectiveness of the Plan, Bruce W. Busmire resigned as director of EGC. On the Effective Date, by operation of the Plan, John D. Schiller, Jr., an existing director of EGC, Michael S. Bahorich, George Kollitides, Steven Pully, Michael S. Reddin, James “Jay” W. Swent III and Charles W. Wampler became members of the board of directors of the New Parent (the “New Parent Board”):

Biographical information about the New Parent’s directors is set forth in the table below.

Name	Age	Position
Michael S. Bahorich	60	Michael S. Bahorich is an award-winning oil and gas executive with broad technical knowledge, deep industry expertise, and Board experience. Skilled in managing operations, research, and technical service at major and independent oil companies, he has recently retired from Apache, where he was one of the five top officers, was a member of the senior team that grew earnings 28 times over 10 years, and served as an executive vice president for 15 years.  Mr. Bahorich is also a recent Director of a publicly traded company, non-profit boards, a Trustee of the Houston Museum of Natural Science, and was a member of academic advisory boards (Yale and Stanford). Previously, Mr. Bahorich served as a director of Global Geophysical Services.  In his tenure at Apache, Mr. Bahorich most recently served as Chief Technology Officer. Prior to joining Apache, Mr. Bahorich worked at Amoco Corporation, which he joined in 1981 as a Geoscientist.  From 2002 to 2003, Mr. Bahorich served as President of the Society of Exploration Geophysicists.  He has a B.S. in Geology from the University of Missouri, Columbia, and an M.S. in Geophysics from Virginia Polytechnic Institute (VPI).  Mr. Bahorich has 10 patents in Geophysics, Engineering, and Electronics, received the Virgil Kauffman Gold Medal from the Society of Exploration Geophysicists, is the author of influential scientific articles, and is an Honorary Member of the Society of Exploration Geophysicists and the Geophysical Society of Houston.
George Kollitides	47	George Kollitides is an experienced transaction, strategy and operations leader and has held principal, board and operational leadership roles, including as a CEO, in public, private and non-profit organizations.  He is currently a Managing Director and co-head of A&M Capital Opportunities (“AMCO”), where he sits on the Investment Committee.  Prior to joining AMCO, Mr. Kollitides was Chairman and CEO of the Remington Outdoor Company and a Managing Director at Cerberus Capital Management, L.P.  Mr. Kollitides joined Cerberus from TenX Capital Management, a special situations private equity firm he co-founded.  Prior to co-founding TenX, he was a Principal at Catterton Partners.  Mr. Kollitides started his career at GE, where he was six sigma trained and focused on turning around under-performing businesses, leveraged finance and private equity.  Mr. Kollitides currently sits on the Boards’ of adMarketplace, Precision Gear, Inc. and Tier 1 Group.  He also serves as the Vice Chairman of the Orthopedic Foundation for Active Lifestyles and is a NY Advisory Board Member for Good Sports.  Mr. Kollitides received an MBA in Finance and Management of Organizations from Columbia Business School in 1998 and a BA in Economics with a Minor in Government and Law from Lafayette College in 1991.
Steven Pully	56	Steven Pully performs consulting and investment banking services for companies and investors in the oil and gas area and serves on boards of public and private oil and gas companies.  Until September of 2014, Mr. Pully was the General Counsel and a partner of Carlson Capital, L.P.  Prior to working at Carlson Capital, Mr. Pully spent six years as the President of Newcastle Capital Management, serving as the Chief Executive Officer of two operating companies.  Mr. Pully was a Senior Managing Director at Bear Stearns, a Managing Director at Bank of America Securities and also worked at Kidder Peabody and Wasserstein Perella.  Prior to this, Mr. Pully was an attorney at Baker & Botts in Houston from 1985 through 1989.  In addition to being a licensed attorney, Mr. Pully is also a CPA and CFA.  Mr. Pully has served on sixteen Boards of Directors of public and private companies, including five public oil and gas companies and two private oil and gas companies.  He was a Director of EPL Oil & Gas for the six years prior to the sale of the company to EXXI Ltd in June 2014.  At the time of the sale, Mr. Pully was the lead Director.  Mr. Pully is currently a Director of two public companies in addition to New Parent, Bellatrix Exploration and VAALCO Energy.  He is also a member of two private company boards.  Mr. Pully earned his undergraduate degree with honors in Accounting from Georgetown University and is also a graduate of The University of Texas School of Law.  Mr. Pully recently was appointed to a three-year term on the Board of Advisors of the McDonough School of Business at Georgetown University.

Michael S. Reddin	56	Michael S. Reddin has over 34 years of upstream oil and gas experience in North America, having served in a wide variety of engineering, commercial and leadership roles with small, medium, and large companies.  From March 2013 to April 2016, Mr. Reddin served as Chairman, Chief Executive Officer and President of Davis Petroleum Acquisition Corp. where he led the sale of Davis’ offshore business (closed in 2014) and the merger of the onshore business with Yuma Energy, Inc.  From August 2009 to March 2013, Mr. Reddin served as President and CEO of Davis.  In 2008 and 2009, Mr. Reddin served as President and CEO of Kerogen Resources, Inc.  From 2001 to 2008, Mr. Reddin served in a variety of executive roles in BP America’s largest upstream unit, the Deepwater Gulf of Mexico, including VP of Developments and VP of Production.  From 1982 to 2000, Mr. Reddin has served in various capacities in management roles and as a reservoir engineer in Vastar Resources and ARCO Oil and Gas.  Mr. Reddin currently serves on the Board of Southcross Holdings GP LLC and Midstates Petroleum Company.  Mr. Reddin’s prior Board experience includes Berry Petroleum Company, Gulfport Energy, Kerogen Resources, Davis Petroleum, and several non-profit roles.  Mr. Reddin graduated magna cum laude from Texas A&M University in 1982 with a bachelor's degree in Mechanical Engineering.
John D. Schiller, Jr.	57	John D. Schiller, Jr. is our President and Chief Executive Officer, and has been since our inception in 2005. Mr. Schiller's career spans more than 35 years in the oil and gas industry. In addition to forming the Company, Mr. Schiller served as: Vice President, Exploration and Development, for Devon Energy from April 2003 to December 2004 with responsibility for domestic and international activities; Executive Vice President, Exploration and Production, for Ocean Energy, Inc. from 1999 to April 2003, overseeing Ocean's worldwide exploration, production and drilling activities; and Senior Vice President of Operations of Seagull Energy. Prior to serving in those offices, Mr. Schiller held various positions at Burlington Resources, including Engineering and Production Manager of the Gulf of Mexico Division and Corporate Acquisition Manager, and at Superior Oil where he began his career in 1981. Mr. Schiller currently serves on the Board of Directors of the Houston Alley Theatre and Escape Family Resource Center, both charitable organizations. He is a registered professional engineer in the State of Texas and is a charter member and past Chairman of the Petroleum Engineering Industry Board, a member of the Look College of Engineering Advisory Council, and a Trustee of the 12th Man Foundation at Texas A&M University. His memberships also include the Independent Petroleum Association of America, the American Petroleum Institute and the Society of Petroleum Engineers. Mr. Schiller graduated with honors from Texas A&M University with a Bachelor of Science in Petroleum Engineering in 1981, and was inducted into the Texas A&M University Harold Vance Department of Petroleum Engineering's Academy of Distinguished Graduates in 2008.
James “Jay” W. Swent III	66	James “Jay” W. Swent III is a proven leader in international business with over 35 years of experience working in North America, Europe, Asia, and Latin America.  He has held senior leadership positions in general management, operations, finance and business development in a diverse range of industries with companies such as Memorex Telex, Rodime, Nortel, Cyrix, and American Pad and Paper and Ensco plc.  He has served on Boards of public companies listed on the NYSE, NASDAQ, and London Stock Exchange.  As a CEO, Mr. Swent has developed and implemented unique strategies to grow and improve under-performing companies but has also led complex operational restructurings, turnarounds and plant rationalizations.  As a CFO and financial executive, he has managed large public company acquisitions, divestitures, joint ventures, large merger integration projects and a major tax redomestication from the U.S. to the UK.  Mr. Swent has served on the board of a non-profit organization addressing social and civic issues in the Cape Cod area and was Chairman of BayTech Federal Credit Union for eight years.  Mr. Swent was the recipient of Institutional Investor’s “2010 Best CFO Award”.  He is an active member of NACD.  Mr. Swent earned both a Master of Business Administration in Finance and a Bachelor of Science degree from the University of California, Berkeley.

Charles W. Wampler 62 Charles W. Wampler currently serves as a director for Swift Energy Company.  Previously, he held roles as Chief Operating Officer of Aspect Holdings, President of Aspect Energy and General Exploration Partners (GEP) from 2007 to 2016 and Board Member for GEP from 2009 to 2012.  Mr. Wampler directed the day to day management of Aspect’s domestic operations in the US Gulf Coast and international operations in Hungary and Kurdistan, Iraq.  Prior to joining Aspect, Mr. Wampler was Chief Operating Officer of Lewis Energy Group and Board member from 2004 to 2007.  Mr. Wampler directed the day to day management of Lewis’s domestic, fully integrated, exploration and production company with drilling, production, and pipeline operations and international operations in Mexico and Colombia.  Prior to joining Lewis Energy, Mr. Wampler was Division Operations Manager and Drilling Manager of EOG Resources from 1984 to 2004.  Prior to joining EOG, Mr Wampler held several Engineering positions with Valero Producing Company and Kerr-McGee.  Mr. Wampler earned his BS in Petroleum Engineering from USL in 1978.

The New Parent Board has appointed Mr. Reddin to serve as Chairman of the New Parent Board.

Committees of the New Parent Board

The standing committees of the New Parent Board consist of an Audit Committee, a Compensation Committee and a Nomination and Governance Committee.

· The New Parent Board has appointed Messrs. Swent, Kollitides, Pully and Wampler as members of the Audit Committee. Mr. Swent will serve as the Audit Committee Chairman.

· The New Parent Board has appointed Messrs. Pully, Bahorich, Kollitides and Swent as members of the Compensation Committee. Mr. Pully will serve as the Compensation Committee Chairman.

· The New Parent Board has appointed Messrs. Wampler, Bahorich, Pully and Reddin as members of the Nomination and Governance Committee. Mr. Wampler will serve as the Nomination and Governance Committee Chairman.

Certain Relations and Related Party Transactions

The transactions described under the heading “Registration Rights Agreement” in Item 1.01 may be deemed to be related party transactions and are incorporated by reference into this Item 5.02.

Appointment of New Parent Officers

In accordance with the Plan, prior to the Effective Date, the following current officers of EXXI Ltd were appointed as officers of the New Parent:

Name	Offices
John D. Schiller, Jr.	Chief Executive Officer and President
Bruce W. Busmire	Chief Financial Officer
Antonio de Pinho	Chief Operating Officer
Hugh Menown	Executive Vice President, Chief Accounting Officer

Biographical information about John D. Schiller, Jr. is included above under the heading “Departure and Appointment of New Parent Directors.” Biographical information about the other New Parent executive officers is set forth in Amendment No. 1 to EXXI Ltd’s Annual Report on Form 10-K for the year ended June 30, 2016, filed with the SEC on October 28, 2016, under the section entitled “Item 10. Directors, Executive Officers and Corporate Governance – Information About Executive Officers,” which information is incorporated by reference herein.

The description of John D. Schiller, Jr.’s employment agreement provided under the heading “CEO Employment Agreement” in Item 1.01 is incorporated by reference into this Item 5.02.

Indemnification of Directors and Officers

As of the Effective Date, the New Parent entered into indemnification agreements with each of its directors and executive officers. The indemnification agreements require the New Parent to (a) indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to the New Parent and (b) advance expenses reasonably incurred as a result of any proceeding against them as to which they could be indemnified. The New Parent may enter into indemnification agreements with any future directors or executive officers.

Each indemnification agreement is in substantially the form included herein as Exhibit 10.7 to this Form 8-K. The description of the indemnification agreements is qualified in its entirety by reference to the full text of the form of indemnification agreement, which is incorporated by reference herein.

Long Term Incentive Plan

On the Effective Date, the New Parent entered into Energy XXI Gulf Coast, Inc. 2016 Long Term Incentive Plan (the “2016 LTIP”), which is a comprehensive equity-based award plan as part of the go-forward compensation for the Reorganized Debtors’ officers, directors, employees and consultants (“Service Providers”). The total number of shares of Common Stock reserved and available for delivery with respect to awards under the 2016 LTIP is 1,859,552 shares (or 5% of the total New Equity). The New Parent Board will determine the types of equity based awards (which may include stock option, stock appreciation rights, restricted stock, restricted stock units, bonus stock awards, performance awards, other stock based awards or cash awards) and the terms and conditions (including vesting and forfeiture restrictions) of such awards. Awards under the 2016 LTIP will be awarded to the Service Providers selected in the discretion of the New Parent Board; provided, however, that 3% of the 5% total New Equity on a fully diluted basis reserved under the 2016 LTIP must be allocated by the New Parent Board no later than 120 days after the Effective Date. This summary is qualified in its entirety by reference to the full text of the 2016 LTIP, which is attached hereto as Exhibit 10.8 and incorporated by reference herein.

Non-Employee Director Compensation Policy

On January 6, 2017, the Board adopted the Non-Employee Director Compensation Policy (the “Director Compensation Policy”), pursuant to which each non-employee director is entitled to receive, or has received, the compensation as set forth in the Director Compensation Policy, which is attached hereto as Exhibit 10.9 and incorporated by reference herein. The Director Compensation Policy provides for annual cash retainers of (i) $75,000 for serving on the Board or $125,000 for serving as the Non-Executive Chairman of the Board; (ii) $25,000 for serving as the Chairman of the Audit Committee and $12,500 for serving as a member of the Audit Committee; (iii) $25,000 for serving as the Chairman of the Compensation Committee and $12,500 for serving as a member of the Compensation Committee; and (iv) $10,000 for serving as the Chairman of the Nomination and Governance Committee and $5,000 for serving as a member of the Nomination and Governance Committee. As set forth in the Director Compensation Policy, each non-employee director is also eligible to receive (a) an initial restricted stock unit award of $200,000 or $300,000 for the Non-Executive Chairman of the Board and (b) $130,000 of annual restricted stock units or $175,000 for the Non-Executive Chairman of the Board. The deemed value utilized by the Board for purposes of the equity awards to be granted in January 2017 pursuant to the Director Compensation Policy is $20 per share. All equity awards granted pursuant to the Director Compensation Policy are subject to the terms and conditions of the 2016 LTIP, to such director’s continued service on the Board, and to acceleration upon the occurrence of specified events.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the Plan, on the Effective Date, the New Parent’s certificate of incorporation and bylaws were amended and restated in their entirety. Each of the New Parent’s Second Amended and Restated Certificate of Incorporation (the “A&R Certificate of Incorporation”) and Second Amended and Restated Bylaws (the “A&R Bylaws”) became effective on the Effective Date. Under the A&R Certificate of Incorporation, the total number of all shares of capital stock that the New Parent is authorized to issue is 110 million shares, consisting of 100 million shares of the New Parent’s common stock, par value $0.01 per share, and 10 million shares of preferred stock, par value $0.01 per share.

Common Stock

Dividends. Subject to the rights granted to any holders of the Preferred Stock, holders of the Common Stock will be entitled to dividends in the amounts and at the times declared by the New Parent Board in its discretion out of any assets or funds of the New Parent legally available for the payment of dividends.

Voting. Each holder of shares of the Common Stock is entitled to one vote for each share of the Common Stock on all matters presented to the stockholders of the New Parent (including the election of directors). The holders of a majority in voting power of the outstanding shares of Common Stock entitled to vote, present in person or represented by proxy, will constitute a quorum. The vote required, when a quorum is present, is the affirmative vote of the majority in voting power of the shares of Common Stock, present in person or represented by proxy, at a meeting of stockholders entitled to vote, unless otherwise required by applicable law, the A&R Certificate of Incorporation or the A&R Bylaws.

Liquidation. Upon the liquidation, dissolution or winding up of the affairs of the New Parent, holders of the Common Stock will share equally, on a per share basis, in the assets thereof that may be available for distribution after satisfaction of creditors and of the preferences of shares of Preferred Stock.

Preemptive Rights. The A&R Certificate of Incorporation provides that each holder of Common Stock that, together with its affiliates, beneficially owns at least 1% of the outstanding Common Stock is granted the right to purchase its pro rata share of any and all issuances of new securities of the New Parent or any of its subsidiaries.

Under the terms of the A&R Certificate of Incorporation, the New Parent is prohibited from issuing any non-voting equity securities to the extent required under Section 1123 of the Bankruptcy Code and only for so long as Section 1123 of the Bankruptcy Code is in effect and applicable to the New Parent.

Limitation of Liability of Directors

The A&R Certificate of Incorporation provides that no director will be personally liable to the New Parent or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL. The effect of this provision is to eliminate the New Parent’s and its stockholders’ rights, through stockholders’ derivative suits on the New Parent’s behalf, to recover monetary damages against a director for a breach of fiduciary duty as a director.

Anti-Takeover Provisions of the A&R Certificate of Incorporation, the A&R Bylaws and the DGCL

The A&R Certificate of Incorporation, the A&R Bylaws and the DGCL contain provisions that may have some anti-takeover effects and may delay, defer or prevent a takeover attempt or a removal of the New Parent’s incumbent officers or directors that a stockholder might consider in his, her or its best interest, including those attempts that might result in a premium over the market price for shares held by the stockholders.

Preferred Stock. The Board is empowered, without further vote or action by the stockholders (except as may otherwise be provided by the terms of any class or series of then-outstanding Preferred Stock), to authorize the issuance of the Preferred Stock in one or more classes or series, and to fix the designations, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof.

The issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of the New Parent without further action by the stockholders and may adversely affect the voting and other rights of the holders of the Common Stock. At present, the New Parent has no plans to issue any of the Preferred Stock.

Written Consent of Stockholders; Calling of Special Meeting of Stockholders

The A&R Bylaws provide that prior to (i) the date the Common Stock is listed on a national securities exchange (a “Listing”) or (ii) the date of the consummation of the first public offering and sale of Common Stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (an “IPO”), any action required or permitted to be taken by the New Parent’s stockholders may be taken by the written consent of the holders of outstanding Common Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present. Following the date on which the New Parent completes a Listing or an IPO, any action required or permitted to be taken by the New Parent’s stockholders may be taken by the written consent of all of the holders of outstanding Common Stock entitled to vote thereon.

Stockholders are only permitted to call a special meeting upon a written request of the holders of a majority of the total voting power of all the shares of the New Parent entitled to vote generally in the election of directors.

Amendment of the A&R Bylaws. Under the DGCL, the power to adopt, amend or repeal A&R Bylaws is conferred upon the stockholders. A corporation may, however, in its Certificate of Incorporation also confer upon the board of directors the power to adopt, amend or repeal its A&R Bylaws. The A&R Certificate of Incorporation and the A&R Bylaws grant to the Board the power to adopt, amend, restate or repeal the A&R Bylaws, provided that no bylaw adopted by the stockholders may be amended, repealed or readopted by the Board if such bylaw so provides. The stockholders may adopt, amend, restate or repeal the A&R Bylaws but only by a vote of holders of a majority in voting power of the outstanding shares of stock entitled to vote thereon, voting together as a single class.

Other Limitations on Stockholder Actions. Advance notice is required for stockholders to nominate directors or to submit proposals for consideration at meetings of stockholders.

Newly Created Directorships and Vacancies on the Board. Under the A&R Bylaws, any vacancies on the New Parent Board for any reason and any newly created directorships resulting from any increase in the number of directors may be filled solely by the Board upon a vote of a majority of the remaining directors then in office, even if they constitute less than a quorum of the Board or by a sole remaining director.

Section 203 of the DGCL. As of the Effective Date, the New Parent has elected in its A&R Certificate of Incorporation to not be subject to Section 203.

In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that such stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation’s outstanding voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

· before the stockholder became interested, the board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

· upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or

· at or after the time the stockholder became interested, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Exclusive Forum. The A&R Certificate of Incorporation provides that, unless the New Parent consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery will not have jurisdiction, another state court located within the state of Delaware, or if no such state court will have jurisdiction, the federal district court for the District of Delaware) will be, to the fullest extent permitted by law, the exclusive forum for (i) any derivative action or proceeding brought on the New Parent’s behalf, (ii) any action asserting a breach of fiduciary duty owed by any director, officer or other employee of the New Parent to the New Parent or its stockholders, (iii) any action asserting a claim arising pursuant to the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the New Parent will be deemed to have notice of and consented to the foregoing forum selection provisions.

This summary is qualified in its entirety by reference to the full text of the A&R Certificate of Incorporation and the A&R Bylaws, which are attached hereto as Exhibits 3.1 and 3.2, respectively, and incorporated by reference herein.

Transfer Agent and Registrar

The transfer agent and registrar for the Common Stock is Continental Stock Transfer & Trust Company, a New York corporation.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The exhibits listed in the following Exhibit Index are filed as part of this Form 8-K.

Exhibit Number	Description
2.1	Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization, dated December 13, 2016 (incorporated by reference to Exhibit 2.1 to Energy XXI Ltd’s Current Report on Form 8-K filed on December 15, 2016)
3.1*	Second Amended and Restated Certificate of Incorporation of Energy XXI Gulf Coast, Inc.
3.2*	Second Amended and Restated Bylaws of Energy XXI Gulf Coast, Inc.
10.1*	Registration Rights Agreement, dated as of December 30, 2016, by and among Energy XXI Gulf Coast, Inc. and the stockholders party thereto
10.2*	First Lien Exit Credit Agreement, dated as of December 30, 2016, by and among, Energy XXI Gulf Coast, Inc., the lenders party thereto, the guarantors party thereto and Wells Fargo Bank, N.A., as Administrative Agent
10.3*	Guaranty, dated as of December 30, 2016, by the guarantors party thereto in favor of Wells Fargo Bank, N.A., as Administrative Agent, and the Secured Parties
10.4*	First Lien Pledge and Security Agreement and Irrevocable Proxy, effective as of December 30, 2016, by Energy XXI Gulf Coast, Inc. and each of the Grantors party thereto in favor of Wells Fargo Bank, N.A., as Administrative Agent, and the Secured Parties
10.5*	Warrant Agreement, dated as of December 30, 2016, by and between Energy XXI Gulf Coast, Inc. and Continental Stock Transfer & Trust Company, as Warrant Agent.
10.6*†	Executive Employment Agreement, dated December 30, 2016, by and between Energy XXI Gulf Coast, Inc. and John D. Schiller, Jr.
10.7*†	Form of Indemnification Agreement between Energy XXI Gulf Coast, Inc. and Indemnitees

10.8*†	Energy XXI Gulf Coast, Inc. 2016 Long Term Incentive Plan
10.9*†	Energy XXI Gulf Coast, Inc. Non-Employee Director Compensation Policy
99.1	Findings of Fact, Conclusion of Law, and Order Confirming the Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization, as entered by the Bankruptcy Court on December 13, 2016 (incorporated by reference to Exhibit 99.1 to Energy XXI Ltd’s Current Report on Form 8-K filed on December 15, 2016)

† Indicates Management Compensatory Plan, Contract or Arrangement.

* Filed herewith.

SIGNATURES

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

	Energy XXI Gulf Coast, Inc.
	By:	/s/ Bruce W. Busmire
		Bruce W. Busmire
January 6, 2017		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
2.1	Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization, dated December 13, 2016 (incorporated by reference to Exhibit 2.1 to Energy XXI Ltd’s Current Report on Form 8-K filed on December 15, 2016)
3.1*	Second Amended and Restated Certificate of Incorporation of Energy XXI Gulf Coast, Inc.
3.2*	Second Amended and Restated Bylaws of Energy XXI Gulf Coast, Inc.
10.1*	Registration Rights Agreement, dated as of December 30, 2016, by and among Energy XXI Gulf Coast, Inc. and the stockholders party thereto
10.2*	First Lien Exit Credit Agreement, dated as of December 30, 2016, by and among, Energy XXI Gulf Coast, Inc., the lenders party thereto, the guarantors party thereto and Wells Fargo Bank, N.A., as Administrative Agent
10.3*	Guaranty, dated as of December 30, 2016, by the guarantors party thereto in favor of Wells Fargo Bank, N.A., as Administrative Agent, and the Secured Parties
10.4*	First Lien Pledge and Security Agreement and Irrevocable Proxy, effective as of December 30, 2016, by Energy XXI Gulf Coast, Inc. and each of the Grantors party thereto in favor of Wells Fargo Bank, N.A., as Administrative Agent, and the Secured Parties
10.5*	Warrant Agreement, dated as of December 30, 2016, by and between Energy XXI Gulf Coast, Inc. and Continental Stock Transfer & Trust Company, as Warrant Agent.
10.6*†	Executive Employment Agreement, dated December 30, 2016, by and between Energy XXI Gulf Coast, Inc. and John D. Schiller, Jr.
10.7*†	Form of Indemnification Agreement between Energy XXI Gulf Coast, Inc. and Indemnitees
10.8*†	Energy XXI Gulf Coast, Inc. 2016 Long Term Incentive Plan
10.9*†	Energy XXI Gulf Coast, Inc. Non-Employee Director Compensation Policy
99.1	Findings of Fact, Conclusion of Law, and Order Confirming the Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization, as entered by the Bankruptcy Court on December 13, 2016 (incorporated by reference to Exhibit 99.1 to Energy XXI Ltd’s Current Report on Form 8-K filed on December 15, 2016)

† Indicates Management Compensatory Plan, Contract or Arrangement.

* Filed herewith.

EX-3.1

Exhibit 3.1

SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

ENERGY XXI GULF COAST, INC.

I, Hugh Menown, being an authorized officer of Energy XXI Gulf Coast, Inc., a corporation organized and existing under the laws of Delaware (together with its predecessor-in-interest, the “Corporation”), do hereby certify as follows:

FIRST: The name of the Corporation is Energy XXI Gulf Coast, Inc.

SECOND: The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of Delaware on February 7, 2006 and the Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on April 13, 2016.

THIRD: On April 14, 2016, the Corporation and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”). On November 21, 2016, the Corporation and certain of its debtor affiliates filed that certain Debtors’ Second Amended Proposed Joint Chapter 11 Plan of Reorganization (as amended or supplemented from time to time, the “Plan”), which was confirmed on December 13, 2016 by order (the “Order”) of the Bankruptcy Court. The Plan, as confirmed by the Order, provides for the amendment and restatement of the Corporation’s Certificate of Incorporation in its entirety to read as set forth in Exhibit A attached hereto and made a part hereof (the “Restated Certificate”).

FOURTH: The Restated Certificate has been duly adopted in accordance with Sections 242, 245 and 303 of the General Corporation Law of the State of Delaware (the “DGCL”), pursuant to the authority granted to the Corporation under Section 303 of the DGCL to put into effect and carry out the Plan, as confirmed by the Order.

FIFTH: The Restated Certificate has been duly executed and acknowledged by an officer of the Corporation designated by the Order in accordance with the provisions of Sections 242, 245 and 303 of the DGCL.

IN WITNESS WHEREOF, the undersigned, for the purpose of amending and restating the Certificate of Incorporation of the Corporation pursuant to the DGCL, under penalties of perjury does hereby declare and certify that this is the act and deed of the Corporation and the facts stated herein are true, and accordingly has hereunto signed this Second Amended and Restated Certificate of Incorporation this 30th day of December, 2016.

ENERGY XXI GULF COAST, INC.
By:	/s/ Hugh Menown
Name:	Hugh Menown
Title:	Executive Vice President &
	Chief Accounting Officer

Signature Page to Second Amended and Restated Certificate of Incorporation of

Energy XXI Gulf Coast, Inc.

EXHIBIT A

SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ENERGY XXI GULF COAST, INC.

ARTICLE I
NAME

The name of the corporation is Energy XXI Gulf Coast, Inc. (hereinafter, the “Corporation”).

ARTICLE II
REGISTERED OFFICE AND AGENT

The address of the Corporation’s registered office in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. The registered office and registered agent of the Corporation may be amended or modified from time to time in accordance with the Bylaws of the Corporation (as may be amended, modified or supplemented from time to time in accordance with the terms thereof, the “Bylaws”).

ARTICLE III
PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (as the same exists or may hereafter be amended from time to time, the “DGCL”).

ARTICLE IV
CAPITAL STOCK

Section 4.1           Authorized Shares. The total number of shares of capital stock that the Corporation shall have authority to issue is 110,000,000 shares, consisting of (i) 100,000,000 shares of common stock, par value $0.01 per share (“Common Stock”), and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”). The number of authorized shares of Preferred Stock or Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), unless the vote of the holders of any of the Common Stock or the Preferred Stock voting separately as a class shall be required therefor pursuant to this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation (as defined below)).

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Section 4.2           Common Stock. Each holder of record of Common Stock shall be entitled to one (1) vote for each share of Common Stock that is registered in such holder’s name on the books of the Corporation. The holders of record of Common Stock shall vote together as a single class on all matters on which holders of the Common Stock are entitled to vote except as otherwise required by applicable law. Holders of shares of Common Stock shall be entitled to receive equally, on a per share basis, such dividends or distributions as are lawfully declared on the Common Stock, to have notice of any authorized meeting of holders of Common Stock, and, upon liquidation, dissolution or winding up of the affairs of the Corporation, to share equally, on a per share basis, in the assets thereof that may be available for distribution after satisfaction of creditors and of the preferences of shares of Preferred Stock. Except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation (as defined below)) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation (as defined below)) or pursuant to the DGCL, provided that such amendment does not alter or change the designations, powers, preferences or rights of the shares of Common Stock so as to affect them adversely.

Section 4.3           Preferred Stock. Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation is hereby authorized, to the fullest extent now or hereafter permitted by the laws of the State of Delaware, to provide for the issuance of shares of Preferred Stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof (any amendment of the certificate of incorporation adopted by the Board of Directors of the Corporation designating the designations, powers, preferences and rights, and qualifications, limitations, or restrictions, of shares of Preferred Stock, a “Preferred Stock Designation”). The authority of the Board of Directors of the Corporation with respect to each series shall include, but not be limited to, determination of the following:

(a)          the designation of the series, which may be by distinguishing number, letter or title;

(b)          the number of shares of the series, which number the Board of Directors of the Corporation may thereafter increase or decrease (but not below the number of shares thereof then outstanding);

(c)          the amounts payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative;

(d)          dates at which dividends, if any, shall be payable;

(e)          the redemption rights and price or prices, if any, for shares of the series;

(f)          the terms and amount of any sinking fund providing for the purchase or redemption of shares of the series;

(g)           the amounts payable on, and the preferences (if any) of, shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;

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(h)          whether the shares of the series shall be convertible or exercisable into or exchangeable for shares of any other class or series, or any other security, of the Corporation or any other corporation or entity, and, if so, the specification of such other class or series or such other security, the conversion, exercise or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible, exercisable or exchangeable and all other terms and conditions upon which such conversion, exercise or exchange may be made;

(i)          restrictions on the issuance of shares of the same series or of any other class or series; and

(j)          subject to Section 4.6, the voting rights and powers of the holders of shares of the series.

Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall be expressly granted thereto by this Second Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation). Except as may be provided in this Second Amended and Restated Certificate of Incorporation or in any Preferred Stock Designation, holders of Preferred Stock shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote.

Section 4.4           Preemptive Rights. Any issuance of New Securities by the Corporation or any of its subsidiaries, other than an issuance of Exempt Securities, shall be subject to the following provisions:

(a)          Right to Purchase New Securities. Except as otherwise provided in this Section 4.4 (including Section 4.4(e) hereof), the Corporation hereby grants to each holder of Common Stock that, together with its Affiliates, beneficially owns (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) at least one percent (1%) of the Outstanding Common Stock (a “Qualified Stockholder”) the right to purchase its pro rata share of any and all issuances or sales of New Securities proposed to be made by the Corporation or any of its subsidiaries as set forth herein.

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(b)          Issuance Notice. The Corporation shall give each Person that on the date of an Issuance Notice is a Qualified Stockholder written notice of the Corporation’s intention to issue or sell New Securities (which notice may be provided by posting the requisite information on a Secure Site and notifying (or causing notification to be delivered to) each of such Qualified Stockholders of such posting in writing) (the “Issuance Notice”), describing the type and terms of the New Securities, the price at which such New Securities will be issued or sold and the general terms upon which the Corporation proposes to issue or sell the New Securities, including the anticipated date of such issuance, sale or distribution, the general use of proceeds thereof, a description of both the business purpose of the offering of such New Securities and the dilutive effects, if any, of such offering, and the record date for determining Qualified Stockholders and the pro rata share of each of them which, if not specified in the Issuance Notice, shall be the date of the Issuance Notice (the “Preemptive Offer Record Date”). Each Qualified Stockholder shall have ten (10) Business Days from the date the Issuance Notice is sent to deliver notice (the “Response Notice”) of its intention to purchase all or any portion of its pro rata share of the New Securities, based on the ratio of the shares of Common Stock held by such Qualified Stockholder on the Preemptive Offer Record Date to the total number of outstanding shares of Common Stock on the Preemptive Offer Record Date, and stating therein the quantity of New Securities it intends to purchase (each Qualified Stockholder who delivers a Response Notice hereunder is a “Purchaser” for purposes of this Section 4.4). Such Response Notice shall constitute the irrevocable agreement of such Purchaser to purchase the quantity of New Securities indicated in the Response Notice at the price and upon the terms stated in the Issuance Notice; provided, however, that if the Corporation is proposing to issue, sell or distribute securities for consideration other than all cash, and subject to the limitations on the rights set forth in this Section 4.4, the Corporation shall accept from such Purchaser either non-cash consideration that is reasonably comparable to the non-cash consideration proposed by the Corporation or the cash value of such non-cash consideration, in each case as determined in good faith by the Board of Directors. Any purchase of New Securities by a Purchaser pursuant to this Section 4.4 shall be consummated on or prior to the later of (x) the date on which all other New Securities described in the applicable Issuance Notice are issued, sold or distributed and (y) the second (2nd) Business Day following delivery of the Response Notice by such Purchaser.

(c)          Sale to Other Persons. The Corporation shall have sixty (60) days from the date of the applicable Issuance Notice to consummate an issuance, sale or distribution of any New Securities which the Qualified Stockholders have not elected to purchase pursuant to Section 4.4(b) to other Persons at a price and on terms and conditions not less favorable to the Corporation than those contained in the Issuance Notice. In the event that the sale of New Securities is not fully consummated within such sixty (60)-day period, then the Corporation shall be obligated once again to offer the purchase rights set forth in this Section 4.4 before it may subsequently sell such New Securities (provided that such sixty (60)-day period shall automatically toll, but not for longer than one hundred and eighty (180) days, to the extent regulatory approval would be required for such Person to acquire such New Securities).

(d)          Exempt Securities. Notwithstanding the foregoing provisions of this Section 4.4, Qualified Stockholders shall not have the right to participate in the issuance of any New Securities which are otherwise authorized to be issued in accordance with this Second Amended and Restated Certificate of Incorporation (i) if such New Securities were issued as consideration in any merger, consolidation or combination of the Corporation or any of its subsidiaries with, or acquisition by the Corporation or any of its subsidiaries of securities or assets of, a third party, (ii) if issued upon conversion or exercise of any rights, convertible securities, options or warrants to purchase Common Stock or other capital stock of the Corporation, (iii) if issued by any subsidiary of the Corporation to the Corporation or any of the Corporation’s direct or indirect wholly owned subsidiaries, (iv) if issued as securities which are the subject of a registration statement being filed under the Securities Act pursuant to an IPO, (v) if issued to directors, officers, employees or consultants of the Corporation or its subsidiaries as compensation pursuant to any equity based compensation or incentive plan approved by the Board of Directors or (vi) such New Securities were issued pursuant to any pro rata stock split or stock dividend (the New Securities described in the foregoing clauses (i) through (vi), “Exempt Securities”).

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(e)          Accelerated Buyer Transactions. Nothing in this Section 4.4 shall prevent the Corporation or its subsidiaries from issuing or selling to any Person (the “Accelerated Buyer”) any New Securities without first complying with the provisions of this Section 4.4; provided that in connection with such issuance or sale (i) the Corporation gives reasonably prompt notice to the Qualified Stockholders of such issuance (after such issuance has occurred), which notice shall describe in reasonable detail the New Securities purchased by the Accelerated Buyer and the purchase price thereof and (ii) the Accelerated Buyer and the Corporation enable the Qualified Stockholders to effectively exercise their respective rights under this Section 4.4 with respect to their purchase of all or any portion of their pro rata share of the New Securities issued to the Accelerated Buyer within fifteen (15) Business Days after receipt of the notice by the Qualified Stockholder of such issuance to the Accelerated Buyer on the terms specified in this Section 4.4, including without limitation, to the extent permitted by applicable law, by (i) providing any Qualified Stockholder that duly exercises its right to purchase, and purchases, such New Securities (a “Post-Closing Buyer”) with the right to receive the economic benefit of any distributions made following the issuance of the New Securities to the Accelerated Buyer but prior to the purchase of the New Securities by such Post-Closing Buyer (the “Interim Period”) (whether by making the distribution or offsetting the value of such distribution against the purchase price) as if such Post-Closing Buyer had purchased the applicable number of New Securities concurrently with the issuance to the Accelerated Buyer and (ii) with respect to any matter subject to a vote of the holders of the New Securities with a record date occurring during the Interim Period, only taking such action if the issuer receives approval from such holders and/or Post-Closing Buyer(s) (by such method as reasonably determined by the Board of Directors) that would constitute the requisite approvals had such Post-Closing Buyer(s) purchased the applicable number of New Securities concurrently with the issuance to the Accelerated Buyer. The Preemptive Offer Record Date for such issuance shall be the date such New Securities are issued to the Accelerated Buyer.

(f)          Notwithstanding anything to the contrary in this Second Amended and Restated Certificate of Incorporation, the provisions of this Section 4.4 shall automatically terminate and be of no further force and effect upon the earlier of the occurrence of a Public Listing or an IPO.

(g)          For purposes of this Section 4.4:

(i)          “Business Day” means any day other than a Saturday, Sunday or date on which commercial banks in New York, New York are authorized by law to close for business.

(ii)         “Derivative Securities” means direct or indirect options, rights, warrants or securities convertible into or exercisable or exchangeable for, any Common Stock or any other capital stock of the Corporation.

(iii)        “New Securities” means Common Stock and other capital stock and rights, convertible securities, options or warrants to purchase Common Stock or other capital stock of the Corporation or any of its subsidiaries issued subsequent to the date of this Second Amended and Restated Certificate of Incorporation, whether or not authorized as of the date of this Second Amended and Restated Certificate of Incorporation.

(iv)        “Outstanding Common Stock” means, as of any given time, the then issued and outstanding Common Stock, excluding any Derivative Securities and any unvested or restricted Common Stock issued pursuant to an Equity Incentive Plan.

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(v)         “Person” means an individual, partnership, limited liability company, corporation, joint venture, trust, business trust, association, or similar entity, whether domestic or foreign, and the heirs, executors, legal representatives, successors and assigns of such entity where the context requires.

(vi)        “Secure Site” means a confidential website such as Intralinks which shall have a system of email notification of new postings.

Section 4.5           Record Holders. The Corporation shall be entitled to treat the person or entity in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person or entity, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law.

Section 4.6           Nonvoting Stock. To the extent prohibited by Section 1123 of Title 11 of the United States Bankruptcy Code (as amended, the “Bankruptcy Code”), the Corporation shall not issue any class or series of nonvoting equity securities; provided, however, that the foregoing (a) will have no force and effect beyond that required under Section 1123 of the Bankruptcy Code and (b) may be amended or eliminated in accordance with applicable law as from time to time in effect. For the purposes of this Section 4.6, any class or series of equity securities that has only such voting rights as are mandated by the DGCL shall be deemed to be nonvoting for purposes of the restrictions of this Section 4.6.

Section 4.7           Action Without a Meeting. Until (i) the date the Common Stock is listed on a national securities exchange in the United States, whether in connection with an initial public offering of the Common Stock or otherwise (a “Public Listing”) or (ii) the first public offering of the Corporation pursuant to an effective Registration Statement under the Securities Act of 1933, as amended from time to time (other than on Forms S-4, S-8 or successors to such forms), covering the offer and sale of capital stock of the Corporation (an “IPO”), any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Following the date on which the Corporation completes a Public Listing or an IPO, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by all the holders of outstanding stock of the Corporation entitled to vote thereon.

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Section 4.8           Approval of Certain Actions. The affirmative vote or consent of the holders of at least two-thirds of the outstanding voting stock entitled to vote thereon shall be required (a) for the adoption of any agreement for the merger or consolidation of the Corporation with or into any other corporation, person or other entity; provided, that, for the avoidance of doubt, Section 4.8(a) shall not apply to the merger or consolidation of any subsidiary of the Corporation with or into any other corporation, person or other entity; (b) to authorize any sale, lease or exchange of all or substantially all of the assets of the Corporation to any other corporation, person or other entity; or (c) to authorize dissolution or liquidation of the Corporation.  Such affirmative vote or consent shall be in addition to the vote or consent of the holders of the stock of the Corporation otherwise required by law or by any agreement between the Corporation and any national securities exchange.

ARTICLE V
PERPETUAL EXISTENCE

The Corporation shall have perpetual existence.

ARTICLE VI
BOARD OF DIRECTORS

Section 6.1           General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors of the Corporation. The Board of Directors of the Corporation shall exercise all of the powers and duties conferred by law except as provided by this Second Amended and Restated Certificate of Incorporation or the Bylaws.

Section 6.2           Number and Term. The total number of directors constituting the entire Board of Directors shall be not less than one (1) nor more than fifteen (15). Initially, the Board of Directors shall be comprised of seven members, including John D. Schiller, Jr. as President and Chief Executive Officer, Michael S. Bahorich, George Kollitides, Steven Pully, Michael S. Reddin, James W. Swent III and Charles W. Wampler. Each director shall hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation, removal or incapacity. The number of directors may be changed from time to time by resolution of a majority of the Board of Directors. Directors need not be stockholders.

Section 6.3           Elections. Unless and except to the extent that the Bylaws of the Corporation shall so require, elections of directors need not be by written ballot.

Section 6.4           Bylaws. In furtherance and not in limitation of the powers conferred by law, the Board of Directors is hereby expressly authorized to make, repeal, alter, amend and rescind the Bylaws by a majority vote at any regular or special meeting of the Board of Directors at which a quorum is present or by written consent, in accordance with the terms of the Bylaws. The stockholders shall also have the power to make, repeal, alter, amend and rescind the Bylaws, including the Bylaws made by the Board of Directors, in accordance with the terms of the Bylaws.

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ARTICLE VII

Indemnification

Section 7.1           Right to Indemnity. Except as otherwise provided in the Plan, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise (hereinafter, a “proceeding”), by reason of the fact that such person, or a person of whom such person is the legal representative, is or was or has agreed to become a director or officer of the Corporation, or while a director or officer of the Corporation is or was serving or has agreed to serve at the request of the Corporation in any capacity, including as a director, officer, employee, fiduciary or agent, of another corporation or of a partnership, joint venture, trust or other enterprise, including, without limitation, service with respect to employee benefit plans maintained or sponsored by the Corporation or any of its subsidiaries (an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, fiduciary or agent or in any other capacity while serving as a director, officer, employee, fiduciary or agent, shall be indemnified and held harmless by the Corporation to the fullest extent which it is empowered to do so by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, to the fullest extent permitted by law, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) against all cost, expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) actually and reasonably incurred by such Indemnitee in connection with a proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe that such person’s conduct was unlawful. The termination of any claim, action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful. Such indemnification shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder, and such indemnification shall inure to the benefit of such person’s heirs, executors and administrators. Notwithstanding the foregoing, except as provided in Section 7.3 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any Indemnitee seeking indemnification in connection with a proceeding initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

Section 7.2           Advancement of Expenses. To the fullest extent to which it is permitted to do so by the DGCL or other applicable law, the Corporation shall, in advance of the final disposition of the matter, pay the expenses and costs (including attorneys’ fees) actually and reasonably incurred by any Indemnitee in defending or otherwise participating in any proceeding and any appeal therefrom for which such person may be entitled to such indemnification under this Article VII or otherwise; provided, however, if required by the DGCL, such payment of expenses and costs in advance of the final disposition of the proceeding shall be made only upon receipt by the Corporation of an undertaking by or on behalf of such Indemnitee to repay all amounts advanced if it should be ultimately determined by final judicial decision from which there is no further right to appeal that such Indemnitee is not entitled to be indemnified for such expenses under this Article VII or otherwise. Expenses incurred by other employees, fiduciaries and agents who are considered Indemnitees hereunder may be so paid upon such terms and conditions, if any, as the Board of Directors of the Corporation deems appropriate.

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Section 7.3           Procedures for Indemnification of Directors and Officers. Any indemnification or advancement of expenses under this Article VII shall be made promptly, and in any event within thirty (30) days, upon the written request of the Indemnitee, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days. If a determination by the Corporation that the Indemnitee is entitled to indemnification pursuant to this Article VII is required, and the Corporation fails to respond within sixty (60) days to a written request for indemnity, the Corporation shall be deemed to have approved the request. If the Corporation denies a written request for indemnification or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty (30) days (or twenty (20) days in the case of a claim for advancement of expenses), the right to indemnification or advancement of expenses as granted by this Article VII shall be enforceable by the Indemnitee in any court of competent jurisdiction. Such Indemnitee’s costs and expenses incurred in connection with successfully establishing the right to indemnification, in whole or in part, in any such action or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the Corporation) that the Indemnitee has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the Indemnitee for the amount claimed, but the burden of such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the Indemnitee is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VII or otherwise, shall be on the Corporation.

Section 7.4           Requested Services. Without limiting the meaning of the phrase “serving at the request of the Corporation” as used herein, any person serving as a director, officer or equivalent executive of (i) another corporation of which a majority of the shares entitled to vote in the election of its directors is owned, directly or indirectly, by the Corporation, or (ii) any employee benefit plan maintained or sponsored by the Corporation or any corporation referred to in clause (i), shall be deemed to be doing so at the request of the Corporation for purposes of Section 7.1.

Section 7.5           Contract Rights. The provisions of this Article VII shall be deemed to be a contract right between the Corporation and each Indemnitee and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee, fiduciary or agent, or if the relevant provisions of the DGCL or other applicable law cease to be in effect. Such contract right shall vest for each Indemnitee who is a director, officer, employee, fiduciary or agent at the time such person is elected or appointed to such position, and no repeal or modification of this Article VII or any such law shall affect any such vested rights or obligations then existing with respect to any state of facts or proceeding arising after such election or appointment and prior to such repeal or modification.

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Section 7.6           Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary or agent of the Corporation or was serving at the request of the Corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the DGCL or this Article VII.

Section 7.7           Employees and Agents. Except as otherwise provided in the Plan, Persons who are not covered by the foregoing provisions of this Article VII and who are or were employees, fiduciaries or agents of the Corporation, or who are or were serving at the request of the Corporation as employees, fiduciaries or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the Board of Directors of the Corporation to the fullest extent of this Article VII.

Section 7.8           Merger or Consolidation. For purposes of this Article VII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including, without limitation, any constituent of a constituent) absorbed in a consolidation or merged in a merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director or officer of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article VII with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

Section 7.9           Non-Exclusivity of Rights. The rights to indemnification and the advancement of expenses and costs conferred under this Article VII shall not be exclusive of any other rights to which those seeking indemnification or advancement of expenses and costs may be entitled under any applicable law, provision of this Second Amended and Restated Certificate of Incorporation, bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors or officers respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or by any other applicable law.

Section 7.10         Amendments. No amendment, repeal or modification of, and no adoption of any provision inconsistent with, any provision of this Article VII shall adversely affect any right or protection of a director or officer of the Corporation existing by virtue of this Article VII at the time of such amendment, repeal, modification or adoption.

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Section 7.11         Jointly Indemnifiable Claims. Given that certain jointly indemnifiable claims (as defined below) may arise due to the service of the Indemnitee as a director and/or officer of the Corporation at the request of the indemnitee-related entities (as defined below), the Corporation shall be fully and primarily responsible for the payment to the Indemnitee in respect of indemnification or advancement of expenses in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article VII, irrespective of any right of recovery the Indemnitee may have from the indemnitee-related entities. Under no circumstance shall the Corporation be entitled to any right of subrogation against or contribution by the indemnitee-related entities and no right of advancement, indemnification or recovery the Indemnitee may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the Indemnitee or the obligations of the Corporation under this Article VII. In the event that any of the indemnitee-related entities shall make any payment to the Indemnitee in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee against the Corporation, and the Indemnitee shall execute all documents and instruments reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents and instruments as may be necessary to enable the indemnitee-related entities effectively to bring suit to enforce such rights. Each of the indemnitee-related entities shall be third-party beneficiaries with respect to this Section 7.11 and entitled to enforce this Section 7.11.

The term “indemnitee-related entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which the Indemnitee has agreed, on behalf of the Corporation or at the Corporation’s request, to serve as a director, officer, employee or agent and which service is covered by the indemnity described herein) from whom an Indemnitee may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation.

The term “jointly indemnifiable claims” shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which the Indemnitee shall be entitled to indemnification or advancement of expenses from both the indemnitee-related entities and the Corporation pursuant to applicable law, any agreement, certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.

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ARTICLE VIII
LIMITED LIABILITY OF DIRECTORS

To the fullest extent permitted by the DGCL, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director (it being understood that, without limiting the foregoing, if in the future the DGCL is amended or modified (including with respect to Section 102(b)(7)) to permit the further limitation or elimination of the personal liability of a director of the Corporation to a greater extent than contemplated above, then the provisions of this Article VIII shall be deemed to provide for the elimination of the personal liability of the directors of the Corporation to such greater extent). This Article VIII shall not eliminate or limit the liability of a director for any act or omission occurring prior to the date when this ArticleVIII becomes effective. Any repeal or amendment or modification of this Article VIII, or the adoption of any provision of this Second Amended and Restated Certificate of Incorporation inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide a broader limitation on a retroactive basis than permitted prior thereto), and will not adversely affect any limitation on the personal liability of any director of the Corporation at the time of such repeal or amendment or modification or adoption of such inconsistent provision.

ARTICLE IX

CERTAIN AFFILIATE TRANSACTIONS

Section 9.1           General. The Corporation shall not engage in any Business Combination with any Person that, together with its Affiliates, owns at least five percent (5%) of the outstanding voting stock of the Corporation, or any Affiliate thereof (collectively, the “Related Parties”), without the affirmative vote of the holders of at least two-thirds of the outstanding voting stock entitled to vote thereon that is not beneficially owned (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) by such Related Parties. Such affirmative vote or consent shall be in addition to the vote or consent of the holders of the stock of the Corporation otherwise required by Section 4.8, by law or by any agreement between the Corporation and any national securities exchange.

Section 9.2           Definitions. For purposes of this Article IX:

(a)          “Affiliate” means, with respect to any Person, (i) any Subsidiary of such Person and (ii) any Person directly controlling or under common control with such Person. For purposes of this Article IX, “control” (including the terms “controlling,” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(b)          “Business Combination” means

(i)          any merger or consolidation of the Corporation;

(ii)         any sale, lease, exchange, mortgage, pledge, transfer, or other disposition of all or substantially all of the assets of the Corporation (including, without limitation, by way of sale, transfer or disposition of securities of one or more of its subsidiaries, by operation of law or otherwise);

(iii)        any reclassification of the Common Stock of the Corporation, or any recapitalization involving the Common Stock of the Corporation, other than a recapitalization of the Corporation in which no Related Party increases its proportionate share of any class or series of the Corporation’s securities;

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(iv)        the adoption of any plan or proposal for the liquidation or dissolution of the Corporation; and

(v)          any agreement, contract, or other arrangement providing for any of the transactions described in this Section 9.2(b).

(c)          “Person” means an individual, partnership, limited liability company, corporation, joint venture, trust, business trust, association, or similar entity, whether domestic or foreign, and the heirs, executors, legal representatives, successors and assigns of such entity where the context requires.

(d)          “Subsidiary” means, with respect to any Person, shall mean, with respect to any Person, any corporation, entity or other organization whether incorporated or unincorporated, of which (i) such first Person directly or indirectly owns or controls at least a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions or (ii) such first Person is a general partner, manager or managing member (including any investment fund the primary investment advisor to which is such first Person or its Affiliate).

ARTICLE X
SECTION 203 ELECTION

The Corporation expressly elects not to be governed by Section 203 of the DGCL.

ARTICLE XI
FORUM

Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware, (or, if the Court of Chancery lacks subject matter jurisdiction, another state or federal court located within the state of Delaware). Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XI.

ARTICLE XII

CORPORATE OPPORTUNITIES

Section 12.1         General. To the greatest extent permitted by law and except as otherwise set forth in this Second Amended and Restated Certificate of Incorporation and except as expressly agreed to by a Dual Role Person (as defined below) in a separate instrument signed by a Dual Role Person with the Corporation or any predecessor thereto:

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(a)          To the extent provided in this Article XII, the Corporation renounces any interest or expectancy of the Corporation or any of its Affiliates in, or in being offered an opportunity to participate in, any Corporate Opportunity about which a Dual Role Person acquires knowledge. Subject to Section 12.1(c), no Dual Role Person or any of their respective Representatives shall owe any fiduciary duty to, nor shall any Dual Role Person or any of their respective Representatives be liable for breach of fiduciary duty to, the Corporation or any of its stockholders in connection with a Corporate Opportunity. No Dual Role Person or any of their respective Representatives shall violate a duty or obligation to the Corporation merely because such person’s conduct furthers such person’s own interest, except as specifically set forth in Section 12.1(c). Any Dual Role Person or any of their respective Representatives may lend money to, and transact other business with, the Corporation and its Representatives. The rights and obligations of any such person who lends money to, contracts with, borrows from or transacts business with the Corporation or any of its Representatives are the same as those of a person who is not involved with the Corporation or any of its Representatives, subject to other applicable law. No transaction between any Dual Role Person or any of their respective Representatives, on the one hand, with the Corporation or any of its Representatives, on the other hand, shall be voidable solely because any Dual Role Person or any of their respective Representatives has a direct or indirect interest in the transaction. Nothing herein contained shall prevent any Dual Role Person or any of their respective Representatives from conducting any other business, including serving as an officer, director, employee, or stockholder of any corporation, partnership or limited liability company, a trustee of any trust, an executor or administrator of any estate, or an administrative official of any other business or not-for-profit entity, or from receiving any compensation in connection therewith.

(b)          No Dual Role Person nor any of their respective Representatives shall owe any duty to refrain from (i) engaging in the same or similar activities or lines of business as the Corporation and its Representatives or (ii) doing business with any of the Corporation’s or its Representatives’ clients or customers. In the event that any Dual Role Person or any of their respective Representatives acquires knowledge of a potential transaction or matter that may be a Corporate Opportunity for any Dual Role Person or any of their respective Representatives, on the one hand, and the Corporation or any of its Representatives, on the other hand, such Dual Role Person or Representatives, as the case may be, shall have no duty to communicate or offer such Corporate Opportunity to the Corporation or any of its Representatives, subject to Section 12.1(c). No Dual Role Person or any of their respective Representatives shall be liable to the Corporation, any of its stockholders or any of its Representatives for breach of any fiduciary duty by reason of the fact that any Dual Role Person or any of their respective Representatives pursues or acquires such Corporate Opportunity for itself, directs such Corporate Opportunity to another person or does not present such Corporate Opportunity to the Corporation or any of its Representatives, subject to Section 12.1(c).

(c)          If a third party presents a Corporate Opportunity to a person who is both a Representative of the Corporation and a Representative of a Dual Role Person, expressly and solely in such person’s capacity as a Representative of the Corporation, and such person acts in good faith in a manner consistent with the policy that such Corporate Opportunity belongs to the Corporation, then such person (i) shall be deemed to have fully satisfied and fulfilled any fiduciary duty that such person has to the Corporation as a Representative of the Corporation with respect to such Corporate Opportunity, (ii) shall not be liable to the Corporation, any of its stockholders or any of its Representatives for breach of fiduciary duty by reason of such person’s action or inaction with respect to such Corporate Opportunity, (iii) shall be deemed to have acted in good faith and in a manner that such person reasonably believed to be in, and not opposed to, the Corporation’s best interests, and (iv) shall be deemed not to have breached such person’s duty of loyalty to the Corporation and its stockholders and not have derived an improper personal benefit therefrom; provided that a Dual Role Person may pursue such Corporate Opportunity if the Corporation shall decide not to pursue such Corporate Opportunity.

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(d)          For purposes of this Article XII:

(i)          “Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of the foregoing definition, the term “controls,” “is controlled by,” or “is under common control with” means the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(ii)         “Corporate Opportunity” means any business opportunity that the Corporation is financially able to undertake that is, from its nature, in the Corporation’s lines of business, is of practical advantage to the Corporation and is one in which the Corporation has an interest or a reasonable expectancy, and in which, by embracing such opportunity, the self-interest of any Dual Role Person or their respective Representatives will be brought into conflict with the Corporation’s self-interest.

(iii)        “Dual Role Person” means any of the following, individually or collectively, other than any person who is an employee of the Corporation or any of its subsidiaries: (A) any stockholder of the Corporation and/or (B) any person elected, appointed or otherwise serving as a director of the Board of Directors of the Corporation (or any committee thereof) in accordance with the terms hereof, and, in each case, any of such entity’s or person’s Affiliates (other than, if applicable, the Corporation and its subsidiaries).

(iv)        “Person” means an individual, partnership, limited liability company, corporation, joint venture, trust, business trust, association, or similar entity, whether domestic or foreign, and the heirs, executors, legal representatives, successors and assigns of such entity where the context requires.

(v)         “Representatives” means, with respect to any person, the directors, officers, employees, general partners or managing member of such person.

(e)          Any person or entity purchasing or otherwise acquiring or obtaining any interest in any capital stock of the Corporation shall be deemed to have notice and to have consented to the provisions of this Article XII.

Section 12.2         Amendment. Neither the alteration, amendment, termination, expiration or repeal of this Article XII nor the adoption of any provision inconsistent with this Article XII shall eliminate or reduce the effect of this Article XII in respect of any matter occurring, or any cause of action that, but for this Article XII, would accrue or arise, prior to such alteration, amendment, termination, expiration, repeal or adoption.

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Section 12.3         Notice of Article. To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article XII.

ARTICLE XIII
AMENDMENTS

The Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Second Amended and Restated Certificate of Incorporation, and any other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law. All rights, preferences and privileges of whatsoever nature conferred upon stockholders by and pursuant to this Second Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article XIII. Notwithstanding any other provision of this Second Amended and Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote, but in addition to any vote required by law and any affirmative vote of the holders of any series of Preferred Stock required by law, by this Second Amended and Restated Certificate of Incorporation or by any Preferred Stock Designation providing for any such Preferred Stock, the affirmative vote of the holders of at least two-thirds of the total voting power of all the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend, alter, change or repeal, or adopt any provision inconsistent with Section 4.4, Section 4.8, Article IX, Article XII or this Article XIII; provided that the definition of Qualified Stockholder may not be amended without the affirmative consent of each corporation, person or other entity that at the time of such amendment is a Qualified Stockholder. Nothing in this Article XIII shall limit the authority of the Board of Directors of the Corporation conferred by Section 6.1 hereof.

ARTICLE XIV
SEVERABILITY

If any provision or provisions of this Second Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, then, to the fullest extent permitted by applicable law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Second Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Second Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby.

* * * *

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EX-3.2

Exhibit 3.2

Final Version

SECOND AMENDED AND RESTATED BYLAWS
OF

ENERGY XXI GULF COAST, INC.

(a Delaware corporation, hereinafter called the “Corporation”)

Effective as of December 30, 2016

ARTICLE I
OFFICES AND RECORDS

Section 1.1         Registered Office. The registered office of the Corporation, and the registered agent of the Corporation at such address, shall be as fixed in the Corporation’s certificate of incorporation (as amended and/or restated from time to time, the “Certificate of Incorporation”). The registered office or registered agent of the Corporation may thereafter be changed from time to time by action of the board of directors of the Corporation (the “Board of Directors”).

Section 1.2          Other Offices. The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or the business of the Corporation may require.

Section 1.3          Books and Records.

(a)          The books and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors.

(b)          The Corporation shall, either at its principal executive office or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws, as may be amended to date, minute books, accounting books and other records.

(c)          Any such records maintained by the Corporation may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time. When records are kept in such manner, a clearly legible paper form produced from or by means of the information storage device or method shall be admissible in evidence, and accepted for all other purposes, to the same extent as an original paper form accurately portrays the record. The Corporation shall so convert any records so kept upon the request of any person or entity entitled to inspect such records pursuant to the provisions of the Certificate of Incorporation, these bylaws or applicable law.

ARTICLE II
STOCKHOLDERS

Section 2.1          Place of Meetings. Meetings of stockholders of the Corporation shall be held at any place, if any, either within or without the State of Delaware, as may be designated from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that a meeting of stockholders of the Corporation shall not be held at any place, but may instead be held solely by means of remote communication. In the absence of notice to the contrary, meetings of the stockholders of the Corporation shall be held at the principal executive office of the Corporation.

Section 2.2          Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date and at such place, if any, and/or by the means of remote communication, and time as may be fixed by resolution of the Board of Directors from time to time. At the annual meeting of the stockholders of the Corporation, directors shall be elected and any other business may be transacted which is properly brought before the annual meeting in accordance with the procedures set forth in Section 2.14 of these bylaws. Failure to hold any annual meeting as aforesaid shall not constitute, be deemed to be or otherwise effect a forfeiture or dissolution of the Corporation nor shall such failure affect otherwise valid corporate acts.

Section 2.3          Special Meetings. Except as otherwise required by law or provided in the instrument of designation of any series of preferred stock of the Corporation, special meetings of stockholders of the Corporation may be called at any time and from time to time only upon the written request (stating the purpose or purposes of the meeting) of (a) the Board of Directors, (b) the Chairman of the Board of Directors, or (c) the holders of a majority of the total voting power of all the shares of the Corporation entitled to vote generally in the election of directors. Special meetings of the stockholders of the Corporation may not be called by any person, group or entity other than those specifically enumerated in this Section 2.3. The Board of Directors or the Chairman of the Board of Directors shall determine the date, time, and place, if any, and/or means of remote communication, of any special meeting, which shall be stated in a notice of meeting delivered by the Board of Directors. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation, or any class or series of thereof, shall be given in the manner provided in these bylaws. No business may be transacted at any special meeting of the stockholders of the Corporation other than the business specified in the notice of such meeting.

Section 2.4          Chairman of the Meeting; Conduct of Meetings; Inspection of Elections.

(a)          Meetings of stockholders of the Corporation shall be presided over by the chairman of the meeting, who shall be the Chairman of the Board of Directors or, in the absence thereof, such person as the Chairman of the Board of Directors shall appoint, or, in the absence thereof or in the event that the Chairman of the Board of Directors shall fail to make such appointment, any officer of the Corporation appointed by the Board of Directors.

(b)          The secretary of any meeting of the stockholders of the Corporation shall be the Secretary or Assistant Secretary, or in the absence thereof, such person as the chairman of the meeting appoints. The secretary of the meeting shall keep the minutes thereof.

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(c)          The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of stockholders of the Corporation as it shall deem necessary, appropriate or convenient from time to time. Subject to such rules and regulations, if any, the chairman of the meeting shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all acts as, in the judgment of such chairman, are necessary, appropriate or convenient (and not inconsistent with the Certificate of Incorporation or these bylaws) for the proper conduct of the meeting, including, without limitation, establishing an agenda of business of the meeting, recognizing stockholders entitled to speak, calling for the necessary reports, stating questions and putting them to a vote, calling for nominations, announcing the results of voting, establishing rules or regulations to maintain order, imposing restrictions on entry to the meeting after the time fixed for commencement thereof and the fixing of the date and time of the opening and closing of the polls for each matter upon which the stockholders of the Corporation will vote at a meeting (and shall announce such at the meeting).

(d)          If required by law, the Board of Directors shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives, to act at a meeting of stockholders of the Corporation and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders of the Corporation, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have such other duties as may be prescribed by law.

Section 2.5          Notice.

(a)          Whenever stockholders of the Corporation are required or permitted to take any action at a meeting (whether special or annual), written notice (unless oral notice is reasonable under the circumstances) stating the place (if any), date, and time of the meeting, the means of remote communication (if any) by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of special meetings, the purpose or purposes of such meeting, shall be given to each stockholder of the Corporation entitled to vote at such meeting not fewer than ten (10) nor more than sixty (60) days before the date of the meeting except as otherwise required by law, the Certificate of Incorporation or these bylaws. In the case of an annual meeting, the notice need not state the purpose or purposes of the meeting unless the Certificate of Incorporation or the General Corporation Law of the State of Delaware (as the same exists or may hereafter be amended from time to time, the “DGCL”) requires the purpose or purposes to be stated in the notice of the meeting.

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(b)          All such notices shall be delivered in writing (unless oral notice is reasonable under the circumstances) or by a form of electronic transmission if receipt thereof has been consented to by the stockholder to whom the notice is given. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. If given by facsimile telecommunication, such notice shall be deemed to be delivered when directed to a number at which the stockholder has consented to receive notice by facsimile. Subject to the limitations of Section 2.6 of these bylaws, if given by electronic transmission, such notice shall be deemed to be delivered: (i) by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate written notice to the stockholder of such specific posting delivered by electronic mail or by United States mail, postage prepaid, addressed to the stockholder at such stockholder’s address as it appears on the records of the Corporation, upon the later of (x) such posting and (y) the giving of such separate notice; and (iii) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the Secretary or an Assistant Secretary, the transfer agent of the Corporation or any other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

(c)          Whenever notice is required to be given under any provisions of the DGCL, the Certificate of Incorporation or these bylaws, a written waiver thereof, signed by the stockholder entitled to notice, or a written waiver by electronic transmission by the person or entity entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting of the stockholders of the Corporation need be specified in any waiver of notice of such meeting.

(d)          Attendance of a stockholder of the Corporation at a meeting of such stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.

(e)          Whenever notice is required to be given under the DGCL, the Certificate of Incorporation or these bylaws to any stockholder with whom communication is unlawful, the giving of such notice to such stockholder shall not be required, and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such stockholder. Any action or meeting which shall be taken or held without notice to any such stockholder with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. Notwithstanding the other provisions of this Section 2.5, no notice of a meeting of the stockholders of the Corporation need be given to any stockholder if (i) (A) an annual report and proxy statement for two consecutive annual meetings of stockholders or (B) all, and at least two, checks and payment of dividends or interest on securities during a twelve-month period, in either case, have been sent by first-class, United States mail, addressed to the stockholder at his or her address as it appears on the share transfer books of the Corporation, and returned undeliverable and (ii) the Corporation does not have either a current facsimile number or, if such stockholder has consented to electronic delivery pursuant to Section 2.6 of these bylaws, means of electronic transmission for such stockholder. In that event, the obligation of the Corporation to give notice of a stockholders meeting to any such stockholder shall be reinstated once the Corporation has received a new address, facsimile number or means of electronic transmission for such stockholder.

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Section 2.6          Notice by Electronic Delivery. Without limiting the manner by which notice otherwise may be given effectively to stockholders of the Corporation pursuant to the DGCL, the Certificate of Incorporation or these bylaws, any notice to stockholders of the Corporation given by the Corporation under any provision of the DGCL, the Certificate of Incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder of the Corporation to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Secretary. Any such consent shall be deemed revoked if: (i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices of meetings or of other business given by the Corporation in accordance with such consent; and (ii) such inability becomes known to the Secretary or an Assistant Secretary or to the transfer agent or other person responsible for the giving of notice. However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. For purposes of these bylaws, except as otherwise limited by applicable law, the term “electronic transmission” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

Section 2.7          Stockholders List. The officer having charge of the stock ledger of the Corporation shall make, at least ten (10) days before every meeting of the stockholders of the Corporation, a complete list of the stockholders entitled to vote at such meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, showing the address of (and any form of electronic transmission consented to by) each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder of the Corporation for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network; provided that the information required to gain access to such list is provided with the notice of the meeting; and/or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof and may be examined by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Refusal or failure to prepare or make available the stockholder list shall not affect the validity of any action taken at a meeting of stockholders of the Corporation.

Section 2.8          Quorum. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders of the Corporation. If a quorum is not present, the chairman of the meeting or the holders of a majority in voting power of the shares of capital stock of the Corporation present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another place, if any, date and time. When a quorum is once present to commence a meeting of the stockholders of the Corporation, it is not broken by the subsequent withdrawal of any stockholders or their proxies.

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Section 2.9          Adjournment and Postponement of Meetings.

(a)          Any meeting of the stockholders of the Corporation, whether or not a quorum is present, may be adjourned to be reconvened at a specific date, time, place (if any) and/or by means of remote communication (if any) by the holders of a majority in voting power of the shares of capital stock present in person or represented by proxy at the meeting and entitled to vote at the meeting or, unless contrary to any provision of the Certificate of Incorporation, these bylaws or applicable law, the Chairman of the Board of Directors or the Board of Directors. When a meeting of the stockholders of the Corporation is adjourned to another date, time, place (if any), and/or by means of remote communication (if any), notice need not be given of the adjourned meeting if the date, time and place (if any) thereof, and/or the means of remote communication (if any) by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record as of the record date so fixed for notice of such adjourned meeting.

(b)          Any previously scheduled meeting of the stockholders of the Corporation may be postponed, and (unless contrary to applicable law or the Certificate of Incorporation) any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public announcement or notice given to the stockholders prior to the date previously scheduled for such meeting of stockholders.

(c)          For purposes of these bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, PR Newswire or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder.

Section 2.10        Vote Required. When a quorum is present, the affirmative vote of the majority in voting power of the shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders of the Corporation, unless the question is one upon which, by express provisions of applicable law, the Certificate of Incorporation, these bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or pursuant to any regulation applicable to the Corporation or its securities, or the instrument of designation of any series of preferred stock of the Corporation, a different or additional vote is required or provided for, in which case such express provision shall govern and control the decision of such question. Where a separate vote by class or series is required or provided for, when a quorum is present, the affirmative vote of a majority in voting power of the shares of capital stock of the Corporation of such class or series present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of such class or series of stockholders, unless the question is one upon which, by express provisions of applicable law, the Certificate of Incorporation, these bylaws, the rules or regulations of any stock exchange applicable to the Corporation, or pursuant to any regulation applicable to the Corporation or its securities, or the designation of any series of preferred stock of the Corporation, a different vote is required or provided for, in which case such express provision shall govern and control the decision of such question.

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Section 2.11        Voting Rights. Except as otherwise provided by applicable law, each stockholder of the Corporation shall be entitled to that number of votes for each share of capital stock of the Corporation held by such stockholder as set forth in the Certificate of Incorporation or, in the case of preferred stock of the Corporation, in the instrument of designation thereof.

Section 2.12       Proxies. Each stockholder entitled to vote at a meeting of stockholders of the Corporation may authorize another person or entity to act for such stockholder by proxy in such manner as prescribed under the DGCL, but no such proxy shall be voted or acted upon after three (3) years from its date unless such proxy expressly provides for a longer period. At each meeting of the stockholders of the Corporation, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the Secretary or a person designated by the Secretary, and no shares may be represented or voted under a proxy that has been found (in the reasonable determination of the Secretary or such designee) to be invalid or irregular. Reference by the Secretary in the minutes of the meeting to the regularity of a proxy shall be received as prima facie evidence of the facts stated for the purpose of establishing the presence of a quorum at such meeting and for all other purposes. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the applicable provisions of the DGCL and, without limiting the foregoing, a duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.

Section 2.13        Record Date.

(a)          In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day immediately preceding the day on which notice is given, or, if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

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(b)          In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not (i) precede the date upon which the resolution fixing the record date is adopted, or (ii) be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

(c)          Unless such action in writing without a meeting is otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Unless such action in writing without a meeting is otherwise restricted by the Certificate of Incorporation, if no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board of Directors, (i) when no prior action of the Board of Directors is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board of Directors is required by law, the record date for such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

Section 2.14        Advance Notice of Stockholder Business.

(a)          Only such business shall be conducted before a meeting of the stockholders of the Corporation as shall have been properly brought before such meeting. To be properly brought before an annual or special meeting of the stockholders of the Corporation, from and after the earlier to occur of (x) the date the Common Stock (as defined in the Certificate of Incorporation) is listed on a national securities exchange in the United States (a “Listing”) or (y) the date of the consummation of the first public offering and sale of Common Stock (other than on Forms S-4 or S-8 or their equivalent) after the date hereof, pursuant to an effective registration statement under the Securities Act of 1933, as amended from time to time (an “IPO”), business must be: (i) with respect to any annual meeting, (A) specified in the notice of meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors or a duly authorized committee of the Board of Directors; (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors or a duly authorized committee of the Board of Directors; or (C) otherwise properly brought before the meeting by any stockholder (1) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.14 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (2) who complies with the notice procedures set forth in this Section 2.14; and (ii) with respect to any special meeting, specified in the notice of meeting (or any supplement or amendment thereto) given to the stockholders of the Corporation by the Board of Directors pursuant to and in accordance with Section 2.3. For the avoidance of doubt, the provisions in this Section 2.14 shall not apply prior to completion of a Listing or an IPO.

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(b)          For such business to be considered properly brought before the meeting by a stockholder of the Corporation, such stockholder must, in addition to any other applicable requirements, have given timely notice thereof in proper written form to the Secretary. To be timely with respect to any annual meeting, a stockholder’s notice to the Secretary must be delivered to or mailed and received by the Secretary at the principal executive office of the Corporation no fewer than ninety (90) and no more than one hundred twenty (120) days prior to the first (1st) anniversary of the immediately preceding annual meeting of the stockholders of the Corporation; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed or public announcement of the date of the annual meeting was made, whichever occurs first. To be timely with respect to any special meeting, a stockholder’s notice to the Secretary must be delivered or mailed and received by the Secretary at the principal executive office of the Corporation not less than sixty (60) days prior to the date of such meeting; provided, however, that in the event that less than seventy (70) days notice of the date of the meeting is given or made to stockholders, to be timely a stockholder’s notice must be delivered or mailed and received by the Secretary at the principal executive office of the Corporation not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice or public announcement of the date of such special meeting is mailed or made (as applicable) by the Corporation. In no event shall the public announcement of an adjournment or postponement of an announced meeting commence a new time period (or extend any time period) for the giving of a stockholders notice as provided in this Section 2.14.

(c)          To be in proper written form, a stockholder’s notice to the Secretary must set forth as to each matter such stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made (A) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (B) the class or series and number of shares of capital stock of the Corporation which are directly or indirectly (including through any derivative arrangement) owned (1) beneficially and (2) of record by such stockholder and by such beneficial owner, (C) a description of all arrangements or understandings between such stockholder or such beneficial owner and any other person or entity (including, without limitation, their names) in connection with the ownership of the capital stock of the Corporation and the proposal of such business by such stockholder and such beneficial owner, and any material interest (financial or otherwise) of such stockholder or such beneficial owner in such business, (D) whether either such stockholder or beneficial owner intends to deliver a form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to approve the proposal and (E) if the Corporation is then subject to Section 14(a) of the Exchange Act, any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filing required to be made in connection with a solicitation of proxies for the proposal pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and (iii) a representation that such stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to introduce the business specified in the notice. As used herein, shares “beneficially owned” by a person (and phrases of similar import) shall mean all shares which such person is deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the Exchange Act, including, without limitation, shares which are beneficially owned, directly or indirectly, by any other person with which such person has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of the capital stock of the Corporation.

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(d)          The chairman of a meeting of the stockholders of the Corporation shall determine and declare at such meeting whether the stockholder proposal was made in accordance with the terms of this Section 2.14. If the chairman of the meeting determines that such proposal was not properly brought before the meeting in accordance with the foregoing procedures, the chairman of the meeting shall declare to the meeting that the proposal was not properly brought before the meeting and the business of such proposal shall not be transacted.

(e)          This provision shall not prevent the consideration and approval or disapproval at any annual or special meeting of reports of officers, directors and committees of the Board of Directors, but in connection with such reports, no new business shall be acted upon at such meeting unless stated, filed and received as herein provided.

(f)          In addition, notwithstanding anything in this Section 2.14 to the contrary, a stockholder of the Corporation intending to nominate one or more persons for election as a director at an annual or special meeting of stockholders must comply with Section 2.15 of these bylaws for such nomination to be properly brought before such meeting.

(g)          For purposes of this Section 2.14, any adjournment(s) or postponement(s) of the original meeting whereby the meeting will reconvene within ninety (90) days from the original date shall be deemed for purposes of notice to be a continuation of the original meeting and no business may be brought before any such reconvened meeting unless pursuant to a notice of such business which was timely for the meeting and properly presented as determined as of the date originally scheduled.

Section 2.15        Advance Notice of Director Nominations.

(a)          Unless otherwise required by applicable law or the Certificate of Incorporation, from and after the date on which the Corporation completes a Listing or an IPO, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the instrument of designation of any series of preferred stock of the Corporation with respect to the right of holders of preferred stock of the Corporation to nominate and elect a specified number of directors of the Corporation, who shall be nominated as provided therein. For the avoidance of doubt, the provisions in this Section 2.15 shall not apply prior to completion of a Listing or an IPO.

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(b)          Nominations of persons for election to the Board of Directors shall be made only at an annual or special meeting of stockholders of the Corporation called for the purpose of electing directors and must be (i) specified in the notice of meeting (or any supplement or amendment thereto) and (ii) made by (A) the Board of Directors or a duly authorized committee of the Board of Directors (or at the direction thereof) or (B) made by any stockholder of the Corporation (1) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.15 and on the record date for the determination of stockholders entitled to vote at such meeting and (2) who complies with the notice procedures set forth in this Section 2.15.

(c)          In addition to any other applicable requirements, for a nomination to be made by a stockholder of the Corporation, such stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be delivered to or mailed and received at the principal executive office of the Corporation: (i) in the case of an annual meeting of the stockholders of the Corporation, no fewer than ninety (90) nor more than one hundred twenty (120) days prior to the first (1st) anniversary of the immediately preceding annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which notice of the date of the annual meeting was mailed or public announcement of the date of the annual meeting was made, whichever occurs first, and (ii) in the case of a special meeting of stockholders of the Corporation called for the purpose of electing directors, not less than sixty (60) days prior to the meeting; provided, however, that in the event that less than seventy (70) days notice of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice or public announcement of the date of the meeting was mailed or made (as applicable). Notwithstanding anything to the contrary in the immediately preceding sentence, in the event that the number of directors to be elected to the Board of Directors is increased, a stockholder’s notice required by this Section 2.15 shall also be considered timely, but only with respect to nominees for any new positions created by such increase and only if otherwise timely notice of nomination for all other directorships was delivered by such stockholder in accordance with the requirements of the immediately preceding sentence, if it shall be delivered to the Secretary at the principal executive office of the Corporation not later than the close of business on the tenth (10th) day following the day on which notice to the stockholders of the Corporation was given or public announcement was made by the Corporation naming all of the nominees for director or specifying the size of the increase in the number of directors to serve on the Board of Directors, even if such tenth (10th) day shall be later than the date for which a nomination would otherwise have been required to be delivered to be timely. In no event shall the public announcement of an adjournment or postponement of an announced meeting commence a new time period (or extend any time period) for the giving of a stockholders notice as provided in this Section 2.15.

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(d)          To be in proper written form, a stockholder’s notice to the Secretary pursuant to this Section 2.15 must set forth (i) as to each person whom the stockholder of the Corporation proposes to nominate for election as a director, (A) the name, age, business address, and residence address of such person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation which are directly or indirectly (including through any derivative arrangement) owned beneficially or of record by the person, and (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with a solicitation of proxies for an election of directors pursuant to the Exchange Act and the rules and regulations promulgated thereunder if the Corporation were a reporting company under the Exchange Act, and (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the director nomination is made (A) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner; (B) the class or series and number of shares of capital stock of the Corporation which are owned (1) beneficially and (2) of record by such stockholder and by such beneficial owner, (C) a description of all arrangements or understandings between such stockholder or such beneficial owner and any other person or entity (including, without limitation, their names) in connection with the ownership of the capital stock of the Corporation and the nomination of such nominee(s), and any material interest of such stockholder or such beneficial owner in such nomination(s), (D) whether either such stockholder or beneficial owner intends to deliver a form of proxy to holders of the Corporation’s voting shares to elect such nominee or nominees, (E) a representation that the stockholder giving the notice is a holder of record of stock of the Corporation entitled to vote at such meeting and that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (F) if the Corporation is then subject to Section 14(a) of the Exchange Act, any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filing required to be made in connection with a solicitation of proxies for an election of directors pursuant to the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to be named as a nominee and to serve as a director if elected. The Corporation may require any nominee to furnish such other information (which may include meeting to discuss the information) as may reasonably be required by the Corporation to determine the eligibility of such nominee to serve as a director of the Corporation.

(e)          If the chairman of a meeting of the stockholders of the Corporation determines that a nomination was not made in accordance with the foregoing procedures, the chairman of the meeting shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

(f)          Nothing in this Section 2.15 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

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Section 2.16        Action Without a Meeting. Until the date on which the Corporation completes a Listing or an IPO, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Following the date on which the Corporation completes a Listing or an IPO, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by all the holders of outstanding stock of the Corporation entitled to vote thereon.

ARTICLE III
DIRECTORS

Section 3.1          General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors. In addition to the powers and authority expressly conferred upon it by these bylaws, the Board of Directors shall exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or any other legal agreement among stockholders of the Corporation, by the Certificate of Incorporation, or by these bylaws directed or required to be exercised or done by the stockholders of the Corporation.

Section 3.2          Number and Election.

(a)          The total number of directors constituting the entire Board of Directors shall be not less than one (1) nor more than fifteen (15). Subject to the limits specified in the immediately preceding sentence, the exact number of directors shall be determined from time to time by the Board of Directors of the Corporation; provided, however, that in no case will a decrease in the number of directors have the effect of removing or shortening the term of any incumbent director.

(b)          Except as provided in Section 3.6 of these bylaws, a plurality of the votes cast at any annual meeting of stockholders of the Corporation or any special meeting of the stockholders of the Corporation properly called for the purpose of electing directors shall elect directors of the Corporation. Except as otherwise set forth in the instrument of designation of any class or series of preferred stock of the Corporation, no stockholder of the Corporation shall be entitled to cumulate votes on behalf of any candidate at any election of directors of the Corporation.

(c)          All elections of directors of the Corporation shall be by written ballot, unless otherwise provided in the Certificate of Incorporation or authorized by the Board of Directors from time to time. If authorized by the Board of Directors, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission; provided, however, that any such electronic transmission must be either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized.

Section 3.3           Term of Office. The term of office of directors shall expire at each annual meeting of stockholders, and in all cases as to each director until his or her successor shall be duly elected and qualified or until his or her earlier resignation, removal from office, death or incapacity.

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Section 3.4          Removal. Subject to the rights, if any, of the holders of shares of any class or series of preferred stock of the Corporation then outstanding to remove directors as set forth in the instrument of designation of such preferred stock applicable thereto, any director or the entire Board of Directors of the Corporation may be removed from office, with or without cause, upon the affirmative vote of the holders of a majority of the total voting power of all the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

Section 3.5          Resignation. Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation. Any resignation shall take effect at the time specified therein or, if the time when it shall become effective is not specified therein, immediately upon receipt. Unless otherwise specified therein, the acceptance of any such resignation shall not be necessary to make it effective.

Section 3.6          Vacancies and Newly Created Directorships. Subject to the rights, if any, of the holders of shares of any class or series of preferred stock of the Corporation then outstanding to designate a director to fill a vacancy as set forth in the instrument of designation of such preferred stock applicable thereto, any vacancy on the Board of Directors resulting from any death, resignation, retirement, disqualification, removal from office, or newly created directorship resulting from any increase in the authorized number of directors or otherwise shall be filled only by the Board of Directors, acting by a majority of the remaining directors then in office, even if less than a quorum, or by a sole remaining director and not by the stockholders. A director elected to fill a vacancy shall hold office for a term expiring at the annual meeting of stockholders and until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal.

Section 3.7          Chairman of the Board of Directors. The Chairman of the Board of Directors shall be chosen from among the directors by a majority vote of the Board of Directors. Any director elected as Chairman in accordance with this Section 3.7 shall hold such office until such director’s earlier death, resignation, retirement, disqualification or removal from office or the election of any successor by the Board of Directors from time to time. The Chairman of the Board of Directors shall preside at all meetings of the stockholders of the Corporation and shall have such other powers and perform such other duties (including, without limitation, as applicable, as an officer of the Corporation) as may be prescribed by the Board of Directors or provided in these bylaws.

Section 3.8          Meetings. Meetings of the Board of Directors may be held at such dates, times and places (if any) and/or by means of remote communication (if any) as shall be determined from time to time by the Board of Directors or as may be specified in a notice regarding a meeting of the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors, the Chief Executive Officer or President of the Corporation, or not less than a majority of the members of the Board of Directors and shall be called by the President or the Secretary if directed by the Chairman of the Board of Directors, the Chief Executive Officer or President of the Corporation or not less than a majority of the members of the Board of Directors.

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Section 3.9          Conduct of Meetings.

(a)          Meetings of the Board of Directors shall be presided over by the chairman of the meeting, who shall be the Chairman of the Board of Directors or, in the discretion of the Board of Directors, such director as a majority of the directors present at such meeting shall appoint.

(b)          The Board of Directors shall be entitled to make such rules or regulations for the conduct of meetings of the Board of Directors as it shall deem necessary, appropriate or convenient.

Section 3.10        Notice.

(a)          Unless the Certificate of Incorporation provides otherwise, (i) regular meetings of the Board of Directors may be held without notice of the date, time, place or purpose of the meeting at any date, time and place (if any) and/or means of remote communication (if any), as shall from time to time be determined by the Board of Directors, and (ii) unless waived by each of the directors entitled to notice thereof, special meetings of the Board of Directors shall be preceded by at least twenty-four (24) hours notice of the date, time and place (if any) and/or means of remote communication (if any). Any notice of a special or regular meeting of the Board of Directors shall be given to each director orally (either in person or by telephone), in writing (either by hand delivery, mail, courier or facsimile), or by electronic or other means of remote communication, in each case, directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Corporation’s records. Any oral notice may be communicated either to the director or to a person at the office of the director who the person giving notice has reason to believe will promptly communicate such notice to the director. If the notice is: (i) delivered personally by hand, by courier, or orally by telephone or otherwise, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If the notice is sent by United States mail or courier service, it shall be deposited in the United States mail or with the courier at least three (3) business days before the time of the holding of the meeting.

(b)          Whenever notice is required to be given under any provisions of the DGCL, the Certificate of Incorporation or these bylaws, a written waiver thereof, signed by the director entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors or committee thereof need be specified in any waiver of notice of such meeting.

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(c)          Attendance of a director at a meeting of the Board of Directors shall constitute a waiver of notice of such meeting, except when the director attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such director shall be conclusively presumed to have assented to any action taken at any such meeting unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the Secretary immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Participation by means of remote communication, including, without limitation, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, shall constitute attendance in person at the meeting.

Section 3.11        Quorum and Adjournment. A majority of the total number of directors shall constitute a quorum for the transaction of business at all meetings of the Board of Directors, except as otherwise provided by law or by the Certificate of Incorporation or these bylaws. If a quorum is not present, the Chairman of the Board of Directors or a majority of the directors present at the meeting may adjourn the meeting to another date, time and place (if any) and/or means of remote communications (if any). When a quorum is once present to commence a meeting of the Board of Directors, it is not broken by the subsequent withdrawal of any directors. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called.

Section 3.12        Vote Required. Subject to the Certificate of Incorporation, these bylaws, the DGCL and the rights, if any, of those directors who may be elected by the holders of any class or series of preferred stock of the Corporation as set forth in the instrument of designation of such preferred stock, the act by affirmative vote of a majority of the directors present at a meeting of the Board of Directors at which there is a quorum shall be an act of the Board of Directors.

Section 3.13        Minutes. The Secretary shall act as secretary of all meetings of the Board of Directors but in the absence of the secretary, the Chairman of the Board of Directors may appoint any other person present to act as secretary of the meeting. The secretary of the meeting shall keep the minutes thereof. Minutes of any regular or special meeting of the Board of Directors shall be prepared and distributed to each director.

Section 3.14        Board Action by Written Consent Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or any committee thereof, may be taken without a meeting if all members of the Board of Directors, or such committee, consent thereto in writing or by electronic transmission, and the writing(s) or electronic transmission(s) reasonably describe the action taken and are filed with the minutes of proceedings of the Board of Directors.

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Section 3.15        Committees.

(a)          The Board of Directors may by resolution create one or more committees (and thereafter, by resolution, dissolve any such committee). Each such committee shall consist of one or more of the directors of the Corporation who serve at the pleasure of the Board of Directors. Committee members may be removed, with or without cause, at any time by resolution of the Board of Directors and may resign from a committee at any time upon written notice to the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

(b)          Any such committee, to the extent provided in these bylaws or in a resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it, to the extent permitted under applicable law. Any duly authorized action and otherwise proper action of a committee of the Board of Directors shall be deemed an action of the Board of Directors for purposes of these bylaws unless the context of these bylaws shall expressly state otherwise.

(c)          Each committee of the Board of Directors shall keep minutes of its meetings and shall report its proceedings to the Board of Directors when requested or required by the Board of Directors.

(d)          Meetings and actions of committees of the Board of Directors shall be governed by, and held and taken in accordance with, the provisions of Section 3.8, Section 3.9, Section 3.10, Section 3.11, Section 3.12 and Section 3.14 of these bylaws, with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its directors and, if there shall be a chairman of the committee, the Chairman of the Board of Directors for the chairman of the committee; provided, however, that: (i) the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee; (ii) special meetings of committees may also be called by resolution of the Board of Directors; and (iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt other rules for the government of any committee not inconsistent with the provisions of these bylaws. Each committee of the Board of Directors may fix its own rules of procedure not inconsistent with the provisions of these bylaws or the rules of such committee adopted by the Board of Directors and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee or as provided in these bylaws.

Section 3.16        Compensation. The Board of Directors, irrespective of any personal interest of any of its members, may establish reasonable compensation of all directors for services to the Corporation as directors, officers, or otherwise, or may delegate such authority to an appropriate committee. Such compensation may be comprised of cash, property, stock, options to acquire stock, or such other assets, benefits or consideration as such directors shall deem, in the exercise of their sole discretion, to be reasonable and appropriate under the circumstances. The Board of Directors also shall have authority to provide for or delegate an authority to an appropriate committee to provide for reasonable pensions, disability or death benefits, and other benefits or payments, to directors, officers, and employees and to their families, dependents, estates, or beneficiaries on account of prior services rendered to the Corporation by such directors, officers, and employees.

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Section 3.17        Corporate Governance.Without otherwise limiting the powers of the Board of Directors set forth in this Article III, if shares of capital stock of the Corporation are listed for trading on either the Nasdaq Stock Market (“NASDAQ”) or the New York Stock Exchange (“NYSE”), the Corporation shall comply with the corporate governance rules and requirements of the NASDAQ or the NYSE, as applicable.

ARTICLE IV
OFFICERS

Section 4.1          Officers. The officers of the Corporation shall be a Chief Executive Officer, a Chief Financial Officer, one or more Presidents (at the discretion of the Board of Directors), a Treasurer, a Secretary and a Controller. The Corporation may also have, at the discretion of the Board of Directors, one or more Vice Presidents, one or more Assistant Treasurers, one or more Assistant Secretaries, and any such other officers as may be appointed from time to time in accordance with the provisions of these bylaws. In addition, the Chairman of the Board of Directors shall exercise powers and perform such other duties as an officer of the Corporation as may be prescribed by the Board of Directors. Unless the Certificate of Incorporation or these bylaws otherwise provide, any number of offices may be held by the same person; provided that the position of Chairman of the Board of Directors shall not be held by the Chief Executive Officer. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except as required by law. The officers of the Corporation need not be stockholders of the Corporation nor, other than the Chairman of the Board of Directors, directors of the Corporation.

Section 4.2          Election of Officers. The Board of Directors shall elect the officers of the Corporation, except such officers as may be elected in accordance with the provisions of Section 4.3 of these bylaws, and subject to the rights, if any, of an officer under any employment contract. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. A failure to elect officers shall not dissolve or otherwise affect the Corporation. Vacancies may be filled or new offices created and filled by the Board of Directors.

Section 4.3          Appointment of Subordinate Officers. The Board of Directors may appoint, or empower the Chief Executive Officer and/or one or more Presidents of the Corporation to appoint, such other officers and agents as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board of Directors may from time to time determine.

Section 4.4          Removal and Resignation.

(a)          Notwithstanding the provisions of any employment agreement, any officer of the Corporation may be removed at any time (i) by the Board of Directors, with or without cause, and (ii) by any other officer of the Corporation upon whom the Board of Directors has expressly conferred the authority to remove another officer, in such case on the terms and subject to the conditions upon which such authority was conferred upon such officer. No elected officer shall have any contractual rights against the Corporation for compensation by virtue of such election beyond the date of the election of his successor, his death, his resignation or his removal from office, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan or as otherwise required by law.

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(b)          Any officer may resign at any time by giving written or electronic notice to the Corporation. Any resignation shall take effect at the time specified therein or, if the time when it shall become effective is not specified therein, immediately upon receipt. Unless otherwise specified therein, the acceptance of any such resignation shall not be necessary to make it effective.

Section 4.5          Vacancies. Any vacancy occurring in any office because of death, resignation, retirement, disqualification, removal from office or otherwise may be filled as provided in Section 4.2 and/or Section 4.3 of these bylaws.

Section 4.6          Chief Executive Officer. Subject to the powers of the Board of Directors, the Chief Executive Officer shall be responsible for the general management of the business, affairs and property of the Corporation and control over its officers, agents and employees, and shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chief Executive Officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these bylaws.

Section 4.7          Chief Financial Officer. Subject to the powers of the Board of Directors, the Chief Financial Officer shall have the responsibility for the financial affairs of the Corporation and shall exercise supervisory responsibility for the performance of the duties of the Treasurer and the Controller of the Corporation. The Chief Financial Officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors or these bylaws.

Section 4.8          President. The President(s) of the Corporation, subject to the powers of the Board of Directors and the Chief Executive Officer, shall act in general executive capacity, subject to the supervision and control of the Board of Directors. The President(s) shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer or these bylaws.

Section 4.9          Vice President. The Vice President(s) shall have such powers and perform such duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President(s) or these bylaws.

Section 4.10        Treasurer. The Treasurer shall: (i) have the custody of the corporate funds and securities; (ii) keep full and accurate accounts of receipts and disbursements of the Corporation in books belonging to the Corporation; (iii) cause all monies and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks as may be authorized by the Board of Directors; and (iv) cause the funds of the Corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements. The Treasurer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer or these bylaws.

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Section 4.11         Secretary. The Secretary shall attend all meetings of the Board of Directors and of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors and, when appropriate, shall cause the corporate seal to be affixed to any instruments executed on behalf of the Corporation. The Secretary shall also perform all duties incident to the office of Secretary and such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President(s) or these bylaws.

Section 4.12         Assistant Treasurers. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and functions, exercise the powers and be subject to all of the restrictions of the Treasurer. The Assistant Treasurer(s) shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Financial Officer, the Treasurer or these bylaws.

Section 4.13         Assistant Secretaries. The Assistant Secretary, or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and functions, exercise the powers and be subject to all of the restrictions of the Secretary. The Assistant Secretary(ies) shall have such other powers and perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the Secretary or these bylaws.

Section 4.14         Controller. The Controller shall keep full and accurate account of receipts and disbursements in the books of the Corporation and render to the Board of Directors, the Chairman of the Board, the President or Chief Financial Officer, whenever requested, an account of all his transactions as Controller and of the financial condition of the Corporation. The Controller shall also perform all duties incident to the office of Controller and such other duties as may be assigned to him by the Board of Directors, the Chairman of the Board, the Chief Financial Officer or these bylaws.

Section 4.15         Delegation of Duties. In the absence, disability or refusal of any officer of the Corporation to exercise and perform his or her duties, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.

ARTICLE V
STOCK

Section 5.1           Stock Certificates. The shares of capital stock of the Corporation shall be represented by certificates; provided, however, that the Board of Directors may provide by resolution that shares of some or all of any or all classes or series of stock of the Corporation shall be uncertificated and shall not be represented by certificates. Any such resolution by the Board of Directors shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Certificates representing shares of capital stock of the Corporation shall be issued in such form as may be approved by the Board of Directors and shall be signed by (i) the Chairman of the Board of Directors, a President or a Vice President and (ii) the Treasurer or Assistant Treasurer or the Secretary or an Assistant Secretary. The name of the person or entity to whom the shares are issued, with the number of shares and date of issue, shall be entered on the books of the Corporation.

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Section 5.2          Facsimile Signatures. Any and all of the signatures on a certificate representing shares of the Corporation may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 5.3          Special Designations of Shares. If the Corporation is authorized to issue more than one class of stock or more than one series of any class, (a) to the extent the shares are represented by certificates, the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise required by law (including, without limitation, Section 202 of the DGCL), in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights; and (b) to the extent the shares are uncertificated, within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation shall send or cause to be sent to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to applicable provisions in the DGCL or a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences, and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 5.4          Transfers of Stock.

(a)          Shares of capital stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such holder’s attorney or legal representative duly authorized in writing and, if the shares are represented by certificates, upon surrender to the Corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably require, and accompanied by all necessary stock transfer stamps. For shares of the Corporation’s capital stock represented by certificates, it shall be the duty of the Corporation to issue a new certificate to the person or entity entitled thereto, cancel the old certificate or certificates and record the transaction on its books. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

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(b)          The Board of Directors shall have power and authority to make such other rules and regulations as it may deem necessary or proper concerning the issue, transfer and registration of certificates for shares of capital stock of the Corporation.

(c)          The Board of Directors shall have the authority to appoint one or more banks or trust companies organized under the laws of the United States or any state thereof to act as its transfer agent or agents or registrar or registrars, or both, in connection with the transfer or registration of any class or series of securities of the Corporation, and may require stock certificates to be countersigned or registered by one or more of such transfer agents and/or registrars.

(d)          The Corporation shall have the authority to enter into and perform any agreement with any number of stockholders of any one or more classes or series of capital stock of the Corporation to restrict the transfer of shares of capital stock of the Corporation of any one or more classes or series owned by such stockholders in any manner permitted by the DGCL.

Section 5.5          Lost, Stolen or Destroyed Certificates. The Board of Directors may direct a new certificate or certificates representing one or more shares of capital stock of the Corporation or uncertificated shares to be issued in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person or entity claiming the certificate of stock to be lost, stolen or destroyed or may otherwise require production of such evidence of such loss, theft or destruction as the Board of Directors may in its discretion require. Without limiting the generality of the foregoing, when authorizing such issue of a new certificate or certificates or such uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s duly authorized attorney or legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 5.6          Dividend Record Date. In order that the Corporation may determine the stockholders of the Corporation entitled to receive payment of any dividend or other distribution or allotment of any rights, or the stockholders entitled to exercise any rights of change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall be determined in the manner set forth in Section 2.13 of these bylaws.

Section 5.7          Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person or entity registered on its books as the owner of shares of capital stock of the Corporation to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner of such shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person or entity, whether or not it shall have express or other notice thereof, except as otherwise required by law.

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ARTICLE VI
INDEMNIFICATION

The Corporation shall indemnify any Indemnitee (as defined in the Certificate of Incorporation) as set forth in the Certificate of Incorporation.

ARTICLE VII
GENERAL PROVISIONS

Section 7.1           Reliance on Books and Records. Each director of the Corporation, each member of any committee of the Board of Directors and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or documents presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person or entity as to matters which such director or committee member reasonably believes are within such other person’s or entity’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 7.2           Dividends. Dividends upon the capital stock of the Corporation, subject to the requirements of the DGCL and the provisions of the Certificate of Incorporation, may be declared by the Board of Directors from time to time at any regular or special meeting of the Board of Directors and may be paid in cash, in property or in shares of the capital stock, or in any combination thereof. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any other proper purpose. The Board of Directors may modify or abolish any such reserve in the manner in which it was created.

Section 7.3           Corporate Funds; Checks, Drafts or Orders; Deposits. The funds of the Corporation shall be kept in such depositories as shall from time to time be prescribed by the Board of Directors. All checks, drafts or other orders for the payment of money by or to the Corporation and all notes and other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer, officers, agent or agents of the Corporation, and in such manner, as shall be determined by resolution of the Board of Directors from time to time. All funds of the Corporation shall be deposited to the credit of the Corporation under such conditions and in such banks, trust companies or other depositories as the Board of Directors may designate or as may be designated by an officer or officers or agent or agents of the Corporation to whom such power may, from time to time, be determined by the Board of Directors.

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Section 7.4           Execution of Contracts and Other Instruments. The Board of Directors, except as otherwise required by law, may authorize from time to time any officer or agent of the Corporation to enter into any contract or to execute and deliver any other instrument in the name of and on behalf of the Corporation. Such authority may be general or confined to specific instances. Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts, promissory notes and other evidences of indebtedness, deeds of trust, mortgages and corporate instruments or documents requiring the corporate seal, and certificates for shares of stock owned by the Corporation shall be executed, signed or endorsed by any President (or any Vice President) and by the Secretary (or any Assistant Secretary) or the Treasurer (or any Assistant Treasurer). The Board of Directors may, however, authorize any one of these officers to sign any of such instruments, for and on behalf of the Corporation, without necessity of countersignature; may designate officers or employees of the Corporation, other than those named above, who may, in the name of the Corporation, sign such instruments; and may authorize the use of facsimile signatures for any of such persons. No officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for damages, whether monetary or otherwise, for any purpose or for any amount except as specifically authorized in these bylaws or by the Board of Directors or an officer or committee with the power to grant such authority.

Section 7.5           Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these bylaws, facsimile or electronic signatures of any director or officer of the Corporation may be used whenever the signature of a director or officer of the Corporation shall be required, except as otherwise required by law or as directed by the Board of Directors from time to time.

Section 7.6           Fiscal Year. The fiscal year of the Corporation shall be fixed, and once fixed, may thereafter be changed from time to time, by the Board of Directors.

Section 7.7           Corporate Seal. The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation, the year of its incorporation and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

Section 7.8           Voting Securities Owned By the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents, and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chief Executive Officer, the President, Treasurer or Secretary, any Vice President, Assistant Treasurer or Assistant Secretary, or any other officer of the Corporation authorized to do so by the Board of Directors. Any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation or other entity in which the Corporation may own securities, and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have possessed and exercised if present.

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Section 7.9          Section Headings. Section headings in these bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 7.10        Inconsistent Provisions. In the event that any provision of these bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the DGCL or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

ARTICLE VIII
AMENDMENTS

Section 8.1          Amendments. In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized and empowered to amend and repeal these bylaws and adopt new bylaws, subject to the power of the stockholders of the Corporation to adopt, amend or repeal any of these bylaws. Notwithstanding any other provision of these bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any series of preferred stock of the Corporation required by law, by the Certificate of Incorporation or by any instrument designating any class or series of preferred stock of the Corporation, the affirmative vote of the holders of a majority of the total voting power of the shares of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders of the Corporation to alter, amend or repeal, or adopt any provision inconsistent with, the provisions of these bylaws.

* * * *

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EX-10.1

Exhibit 10.1

Execution Version

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (including all exhibits hereto and as may be amended, supplemented or amended and restated from time to time in accordance with the terms hereof, this “Agreement”) is made and entered into as of December 30, 2016, by and among Energy XXI Gulf Coast Inc., a Delaware corporation (the “Company”), and the other parties signatory hereto and any additional parties identified on the signature pages of any joinder agreement executed and delivered pursuant hereto.

WHEREAS, the Company and certain affiliated debtors (collectively, the “Debtors”) filed a Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code, on November 21, 2016, which was confirmed by the United States Bankruptcy Court for the Southern District of Texas Houston Division on December 13, 2016 (including all exhibits, schedules and supplements thereto and as amended from time to time, the “Plan”); and

WHEREAS, the Plan provides that any recipient of the shares of Common Stock (as defined below) of the Company that owns at least ten percent (10%) of the Company’s Common Stock or that otherwise reasonably determines that it is an “affiliate” of the Company (as such term is defined in the Securities Act (as defined below)) and that is a party to the Restructuring Support Agreement, will enter into a registration rights agreement in accordance with the terms set forth in the Plan; and

WHEREAS, the Company and the Holders (as defined below) are entering into this Agreement in furtherance of the aforesaid provisions of the Plan.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each of the Holders agree as follows:

1.          Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Plan have the meanings given such terms in the Plan. As used in this Agreement, the following terms shall have the following meanings:

“Advice” has the meaning set forth in Section 15(c).

“Affiliate” means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with, such person. The term “control” (including the terms “controlled by” and “under common control with”) as used in this definition means the possession, directly or indirectly (including through one or more intermediaries), of the power or authority to direct or cause the direction of management, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the Preamble.

“Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the Securities Act, as such definition may be amended from time to time.

“beneficially own” (and related terms such as “beneficial ownership” and “beneficial owner”) shall have the meaning given to such term in Rule 13d-3 under the Exchange Act, and any Person’s beneficial ownership of securities shall be calculated in accordance with the provisions of such Rule.

“Board” means the Board of Directors of the Company.

“Business Day” means any day, other than a Saturday or Sunday or a day on which commercial banks in New York City are required by law to be closed.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any securities into which such shares of common stock may hereinafter be reclassified.

“Company” has the meaning set forth in the Preamble.

“Counsel to the Holders” means (i) with respect to any Demand Registration, the counsel selected by the Holders of a majority of the Registrable Securities initially requesting such Demand Registration and (ii) with respect to any Underwritten Takedown or Piggyback Registration, the counsel selected by the Majority Holders.

“Demand Registration Request” has the meaning set forth in Section 5(a).

“Effective Date” means the date that a Registration Statement filed pursuant to this Agreement is first declared effective by the Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Form S-1” means form S-1 under the Securities Act, or any other form hereafter adopted by the Commission for the general registration of securities under the Securities Act.

“Form S-3” means form S-3 under the Securities Act, or any other form hereafter adopted by the Commission having substantially the same usage as Form S-3.

“Form S-4” means form S-4 under the Securities Act, or any other form hereafter adopted by the Commission having substantially the same usage as Form S-4.

“Form S-8” means form S-8 under the Securities Act, or any other form hereafter adopted by the Commission having substantially the same usage as Form S-8.

“FINRA” has the meaning set forth in Section 10.

“Grace Period” has the meaning set forth in Section 7(a)(B).

“Holder” or “Holders” means the parties signatory to this Agreement, other than the Company, who identify in writing to the Company on or before the date six months after the date of this Agreement that they hold Registrable Securities, and any additional parties identified on the signature pages of any joinder agreement executed and delivered pursuant to this Agreement. A Person shall cease to be a Holder hereunder at such time as it ceases to hold any Registrable Securities.

2

“Indemnified Party” has the meaning set forth in Section 11(c).

“Indemnifying Party” has the meaning set forth in Section 11(c).

“Initial Registrable Securities Number” means the number of Registrable Securities beneficially owned by all Holders as of the Plan Effective Date, appropriately adjusted for any stock splits, reverse stock splits, stock dividends or similar transactions involving the Company’s Common Stock.

“Initial Shelf Expiration Date” has the meaning set forth in Section 2(e).

“Initial Shelf Registration Statement” has the meaning set forth in Section 2(a).

“Losses” has the meaning set forth in Section 11(a).

“Majority Holders” means, with respect to any Underwritten Offering, the holders of a majority of the Registrable Securities to be included in such Underwritten Offering held by all Holders that have made the request requiring the Company to conduct such Underwritten Offering (but not including any Holders that have exercised “piggyback” rights hereunder to be included in such Underwritten Offering).

“Other Holder” has the meaning set forth in Section 8(b).

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Piggyback Notice” has the meaning set forth in Section 8(a).

“Piggyback Offering” has the meaning set forth in Section 8(a).

“Plan” has the meaning set forth in the Preamble.

“Plan Effective Date” shall mean the date on which the Plan becomes effective.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

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“Registrable Securities” means, collectively, (a) as of the Plan Effective Date, all shares of Common Stock issued to any Holder or to any Affiliate or Related Fund of any Holder, either directly or pursuant to a joinder or assignment and any additional shares of Common Stock acquired by any Holder, Affiliate or Related Fund of any Holder in open market or other purchases and issued or issuable to any Holder, Affiliate or Related Fund of any Holder upon the exercise of warrants or otherwise, after the Plan Effective Date and (b) any additional shares of Common Stock paid, issued or distributed in respect of any such shares by way of a stock dividend, stock split or distribution, or in connection with a combination of shares, and any security into which such Common Stock shall have been converted or exchanged in connection with a recapitalization, reorganization, reclassification, merger, consolidation, exchange, distribution or otherwise; provided, however, that as to any Registrable Securities, such securities shall cease to constitute Registrable Securities upon the earliest to occur of: (i) the date on which such securities are disposed of pursuant to an effective Registration Statement; (ii) the date on which such securities are disposed of pursuant to Rule 144 (or any similar provision then in effect) promulgated under the Securities Act; (iii) the date on which (A) the entire amount of the Registrable Securities owned by the relevant Holder may be sold in a single sale, in the opinion of counsel satisfactory to the Company and such Holder, each in their reasonable judgment, pursuant to Rule 144 (or any similar provision then in effect) promulgated under the Securities Act and without any limitation as to volume and (B) such Holder owning such Registrable Securities owns less than 5% of the outstanding shares of Common Stock on a fully diluted basis, and (iv) the date on which such Registrable Securities cease to be outstanding.

“Registration Statement” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation any Shelf Registration Statement), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

“Related Fund” means, with respect to any Person, any fund, account or investment vehicle that is controlled or managed by such Person, by any Affiliate of such Person, or, if applicable, such Person’s investment manager.

“Restructuring Support Agreement” means the Restructuring Support Agreement, dated April 11, 2016, by and among, inter alios the Company and the Holders, as may be further amended, modified, or supplemented, from time to time.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

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“Rule 158” means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Selling Stockholder Questionnaire” means a questionnaire reasonably adopted by the Company from time to time.

“Shelf Registration Statement” means a Registration Statement filed with the Commission in accordance with the Securities Act for the offer and sale of Registrable Securities by Holders on a continuous or delayed basis pursuant to Rule 415.

“Smaller Reporting Company” means a “smaller reporting company” as defined in Item 10(f) of Regulation S-K, as such definition may be amended from time to time.

“Trading Day” means a day during which trading in the Common Stock occurs in the Trading Market, or if the Common Stock is not listed on a Trading Market, a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, OTC Bulletin Board, or OTC Markets Group marketplace on which the Common Stock is listed or quoted for trading on the date in question.

“Transfer” has the meaning set forth in Section 13.

“Underwritten Offering” means an offering Registrable Securities under a Registration Statement in which the Registrable Securities are sold to an underwriter for reoffering to the public.

“Underwritten Takedown” has the meaning set forth in Section 2(g).

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2.            Initial Shelf Registration.

(a)          The Company shall prepare a Shelf Registration Statement (as may be amended from time to time, the “Initial Shelf Registration Statement”), and shall include in the Initial Shelf Registration Statement the Registrable Securities of each Holder who shall request inclusion therein of some or all of their Registrable Securities by checking the appropriate box on the signature page of such Holder hereto or by written notice to the Company no later than 5 business days after the Plan Effective Date. The Company shall file the Initial Shelf Registration Statement with the Commission on or prior to the 60th day following the Plan Effective Date; provided, however, that the Company shall not be required to file or cause to be declared effective the Initial Shelf Registration Statement unless Holders request (and have not by the 5th day after the Plan Effective Date revoked such request by written notice to the Company) the inclusion in the Initial Shelf Registration Statement of Registrable Securities constituting at least fifteen percent (15%) of all Registrable Securities, and such Holders otherwise timely comply with the requirements of this Agreement with respect to the inclusion of such Registrable Securities in the Initial Shelf Registration Statement.

(b)          The Company shall include in the Initial Shelf Registration Statement all Registrable Securities whose inclusion has been timely requested as aforesaid; provided, however, that the Company shall not be required to include an amount of Registrable Securities in excess of the amount as may be permitted to be included in such Registration Statement under the rules and regulations of the Commission and the applicable interpretations thereof by the staff of the Commission.

(c)          Upon the request of any Holder whose Registrable Securities are not included in the Initial Shelf Registration Statement at the time of such request, the Company shall amend the Initial Shelf Registration Statement to include the Registrable Securities of such Holder; provided that the Company shall not be required to amend the Initial Shelf Registration Statement more than once every fiscal quarter of the Company.

(d)          The Initial Shelf Registration Statement shall be on Form S-1; provided, however, that, if the Company becomes eligible to register the Registrable Securities for resale by the Holders on Form S-3 (including without limitation a Form S-3 filed as an Automatic Shelf Registration Statement), the Company shall be entitled to amend the Initial Shelf Registration Statement to a Shelf Registration Statement on Form S-3 or file a Shelf Registration Statement on Form S-3 in substitution of the Initial Shelf Registration Statement as initially filed.

(e)          The Company shall use its reasonable best efforts to cause the Initial Shelf Registration Statement to be declared effective by the Commission as promptly as practicable, and shall use its reasonable best efforts to keep such Shelf Registration Statement continuously effective, and not subject to any stop order, injunction or other similar order or requirement of the Commission, until the earlier of (i) the date the Company (A) is eligible to register the Registrable Securities for resale by Holders on Form S-3 or is a Smaller Reporting Company eligible to incorporate by reference pursuant to Item 12(b) of Form S-1 and (B) has filed such Registration Statement with the Commission and which is effective and (ii) the date that all Registrable Securities covered by the Initial Shelf Registration Statement shall cease to be Registrable Securities (such earlier date, the “Initial Shelf Expiration Date”). In the event of any stop order, injunction or other similar order or requirement of the Commission relating to the Initial Shelf Registration Statement, if any Registrable Securities covered by the Initial Shelf Registration Statement remain unsold, the period during which the Initial Shelf Registration Statement shall be required to remain effective will be extended by the number of days during which such stop order, injunction or similar order or requirement is in effect.

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(f)          If the Initial Shelf Registration Statement is on Form S-1, then for so long as any Registrable Securities covered by the Initial Shelf Registration Statement remain unsold, the Company will file any supplements to the Prospectus or post-effective amendments required to be filed by applicable law in order to incorporate into such Prospectus any Current Reports on Form 8-K necessary or required to be filed by applicable law, any Quarterly Reports on Form 10-Q or any Annual Reports on Form 10-K filed by the Company with the Commission, or any other information necessary so that (i) the Initial Shelf Registration Statement shall not include any untrue statement of material fact or omit to state any material fact necessary in order to make the statements therein not misleading, and (ii) the Company complies with its obligations under Item 512(a)(1) of Regulation S-K; provided, however, that these obligations remain subject to the Company’s rights under Section 7.

(g)          Upon the demand of one or more Holders, the Company shall facilitate a “takedown” of Registrable Securities in the form of an Underwritten Offering (each, an “Underwritten Takedown”), in the manner and subject to the conditions described in Section 6 of this Agreement, provided that (i) the number of shares included in such “takedown” shall equal at least fifteen percent (15%) of the number of Registrable Securities at such time and (ii) the Registrable Securities requested to be sold by the Holders in such “takedown” shall have an anticipated aggregate offering price (before deducting underwriting discounts and commission) of at least $50 million.

3.            Subsequent Shelf Registration Statements

(a)          After (i) the Effective Date of the Initial Shelf Registration Statement and prior to the Initial Shelf Expiration Date and (ii) for so long as any Registerable Securities remain outstanding, the Company shall use its best efforts to (A) ensure that it will be eligible to register the Registrable Securities on Form S-3 after the Initial Shelf Expiration Date, and (B) meet the requirements of General Instruction VII of Form S-1 after the Initial Shelf Expiration Date.

(b)          After the Initial Shelf Expiration Date and for so long as any Registerable Securities remain outstanding, the Company shall use its best efforts to (A) be eligible and/or to maintain its eligibility to register the Registrable Securities on Form S-3, and (B) meet the requirements of General Instruction VII of Form S-1.

(c)          After the Initial Shelf Expiration Date, if there is not an effective Registration Statement which includes the Registrable Securities that is currently outstanding, the Company shall (i) if the Company is eligible to register the Registrable Securities on Form S-3, promptly file a Shelf Registration Statement on Form S-3 and use its reasonable best efforts to cause such Registration Statement to be declared effective, (ii) if the Company is a Smaller Reporting Company eligible to incorporate by reference pursuant to Item 12(b) of Form S-1, promptly file a Shelf Registration Statement on Form S-1 and use its reasonable best efforts to cause such Registration Statement to be declared effective or (iii) promptly file a Shelf Registration Statement on Form S-1 and use its reasonable best efforts to cause such Registration Statement to be declared effective and for so long as any Registrable Securities covered by such Shelf Registration on Form S-1 remain unsold, the Company will file any supplements to the Prospectus or post-effective amendments required to be filed by applicable law in order to incorporate into such Prospectus any Current Reports on Form 8-K necessary or required to be filed by applicable law, any Quarterly Reports on Form 10-Q or any Annual Reports on Form 10-K filed by the Company with the Commission, or any other information necessary so that (x) such Shelf Registration shall not include any untrue statement of material fact or omit to state any material fact necessary in order to make the statements therein not misleading, and (y) the Company complies with its obligations under Item 512(a)(1) of Regulation S-K; provided, however, that these obligations remain subject to the Company’s rights under Section 7.

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4.            Quotation on OTCQB Market

(a)          Until and unless (x) the Common Stock is listed on a “national securities exchange” as defined in Rule 600(b)(45) of Regulation National Market System promulgated by the Commission, as amended or (y) the Common Stock may be sold by any and all Holders without restriction by the Commission pursuant to a Registration Statement in an at-the-market offering, the Company shall use its reasonable best efforts to cause (i) the Common Stock to be quoted on the OTCQB market as promptly as practicable after the Plan Effective Date and shall thereafter use its reasonable best efforts to maintain such quotation and (ii) at any time during which the Company is eligible to have the Common Stock quoted on the OTCQX market, the Company shall use its reasonable best efforts to cause the Common Stock to be quoted on the OTCQX market in lieu of the OTCQB Market as promptly as practicable, provided that at any time the Company is no longer eligible to have the Common Stock quoted on the OTCQX market, the Company will comply with its obligations under clause (i).

5.             Demand Registration

(a)           At any time and from time to time 180 days after the Plan Effective Date, any Holder or group of Holders may request in writing (“Demand Registration Request”) that the Company effect the registration of all or part of such Holder’s or Holders’ Registrable Securities with the Commission under and in accordance with the provisions of the Securities Act. The Company will file a Registration Statement covering such Holder’s or Holders’ Registrable Securities requested to be registered, and shall use its reasonable best efforts to cause such Registration Statement to be declared effective, as promptly as practicable after receipt of such request; provided, however, that the Company will not be required to file a Registration Statement pursuant to this Section 5(a):

(A)         unless (i) the number of Registrable Securities requested to be registered on such Registration Statement equals at least fifteen percent (15%) of the number of Registrable Securities at such time and (ii) the Registrable Securities requested to be sold by the Holders pursuant to such Registration Statement have an anticipated aggregate gross offering price (before deducting underwriting discounts and commission) of at least $50 million;

(B)         if the Registrable Securities requested to be registered are already covered by an existing and effective Registration Statement and such Registration Statement may be utilized for the offer and sale of the Registrable Securities requested to be registered;

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(C)         if a registration statement filed by the Company shall have previously been initially declared effective by the Commission within the one hundred eighty (180) days preceding the date such Demand Registration Request is made; and

(D)         if the number of Demand Registration Requests previously made pursuant to this Section 5(a) shall equal or exceed five (5); provided, however that a Demand Registration Request shall not be considered made for purposes of this clause (D) unless the requested Registration Statement has been declared effective by the Commission for more than 75% of the full amount of Registrable Securities for which registration has been requested.

(b)          A Demand Registration Request shall specify (i) the then-current name and address of such Holder or Holders, (ii) the aggregate number of Registrable Securities requested to be registered, (iii) the total number of Registrable Securities then beneficially owned by such Holder or Holders, and (iv) the intended means of distribution. If at the time the Demand Registration Request is made the Company appears, based on public information available to such Holder or Holders, eligible to use Form S-3 for the offer and sale of the Registrable Securities, the Holder or Holders making such request may request that the registration be in the form of a Shelf Registration Statement (for the avoidance of doubt, the Company shall not be under the obligation to file a Shelf Registration on Form S-3 if, upon the advice of its counsel, it is not eligible to make such a filing).

(c)          The Company may satisfy its obligations under Section 5(a) hereof by amending (to the extent permitted by applicable law) any registration statement previously filed by the Company under the Securities Act, so that such amended registration statement will permit the disposition (in accordance with the intended methods of disposition specified as aforesaid) of all of the Registrable Securities for which a Demand Registration Request has been properly made under Section 5(b) hereof. If the Company so amends a previously filed registration statement, it will be deemed to have effected a registration for purposes of Section 5(a) hereof; provided, however that the Effective Date of the amended registration statement, as amended pursuant to this Section 5(c) shall be the “the first day of effectiveness” of such Registration Statement for purposes of determining the period during which the Registration Statement is required to be maintained effective in accordance with Section 5(e) hereof.

(d)          Within ten (10) days after receiving a Demand Registration Request, the Company shall give written notice of such request to all other Holders of Registrable Securities and shall, subject to the provisions of Section 6(c) in the case of an Underwritten Offering, include in such registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the Company’s giving of such notice, provided that such Registrable Securities are not already covered by an existing and effective Registration Statement that may be utilized for the offer and sale of the Registrable Securities requested to be registered in the manner so requested.

(e)          The Company will use its reasonable efforts to keep a Registration Statement that has become effective as contemplated by this Section 4 continuously effective, and not subject to any stop order, injunction or other similar order or requirement of the Commission:

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(A)         in the case of a Registration Statement other than a Shelf Registration Statement, until all Registrable Securities registered thereunder have been sold pursuant to such Registration Statement, but in no event later than two hundred seventy (270) days from the Effective Date of such Registration Statement; and

(B)         in the case of a Shelf Registration Statement, until the earlier of: (x) three (3) years following the Effective Date of such Shelf Registration Statement; and (y) the date that all Registrable Securities covered by such Shelf Registration Statement shall cease to be Registrable Securities;

provided, however, that in the event of any stop order, injunction or other similar order or requirement of the Commission relating to any Shelf Registration Statement, if any Registrable Securities covered by such Shelf Registration Statement remain unsold, the period during which such Shelf Registration Statement shall be required to remain effective will be extended by the number of days during which such stop order, injunction or similar order or requirement is in effect; provided further, however, that if any Shelf Registration Statement was initially declared effective on Form S-3 and, prior to the date determined pursuant to Section 5(e)(B), the Company becomes ineligible to use Form S-3, the period during which such Shelf Registration Statement shall be required to remain effective will be extended by the number of days during which the Company did not have an effective Registration Statement covering unsold Registrable Securities initially registered on such Shelf Registration Statement.

(f)        The Holder or Holders making a Demand Registration Request may, at any time prior to the Effective Date of the Registration Statement relating to such registration, revoke their request for the Company to effect the registration of all or part of such Holder’s or Holders’ Registrable Securities by providing a written notice to the Company. If, pursuant to the preceding sentence, the entire Demand Registration Request is revoked, then, at the option of the Holder or Holders who revoke such request, either (i) such Holder or Holders shall reimburse the Company for all of its reasonable and documented out-of-pocket expenses incurred in the preparation, filing and processing of the Registration Statement, which out-of-pocket expenses, for the avoidance of doubt, shall not include overhead expenses and which requested registration shall not count as one of the permitted Demand Registration Requests hereunder or (ii) the requested registration that has been revoked will be deemed to have been effected for purposes of Section 5(a).

(g)          If a Registration Statement filed pursuant to this Section 4 is a Shelf Registration Statement, then upon the demand of one or more Holders, the Company shall facilitate a “takedown” of Registrable Securities in the form of an Underwritten Offering, in the manner and subject to the conditions described in Section 6 of this Agreement, provided that (i) the number of shares included in such “takedown” shall equal at least fifteen percent (15%) of the number of Registrable Securities at such time and (ii) the Registrable Securities requested to be sold by the Holders in such “takedown” shall have an anticipated aggregate offering price (before deducting underwriting discounts and commission) of at least $50 million.

6.           Procedures for Underwritten Offerings. The following procedures shall govern Underwritten Offerings pursuant to Section 2(g) or Section 5(g), whether in the case of an Underwritten Takedown or otherwise.

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(a)          (i) The Majority Holders shall select one or more investment banking firm(s) of national standing to be the managing underwriter or underwriters for any Underwritten Offering pursuant to a Demand Registration Request or an Underwritten Takedown with the consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed and (ii) the Company shall select one or more investment banking firms of national standing to be the managing underwriter or underwriters for any other Underwritten Offering with the consent of the Majority Holders, which consent shall not be unreasonably withheld, conditioned or delayed.

(b)          All Holders proposing to distribute their securities through an Underwritten Offering, as a condition for inclusion of their Registrable Securities therein, shall agree to enter into an underwriting agreement with the underwriters; provided, however that the underwriting agreement is in customary form and reasonably acceptable to the Majority Holders and provided, further, however that no Holder of Registrable Securities included in any Underwritten Offering shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding (i) such Holder’s ownership of its Registrable Securities to be sold or transferred, (ii) such Holder’s power and authority to effect such transfer and (iii) such matters pertaining to compliance with securities laws as may be reasonably requested).

(c)          If the managing underwriter or underwriters for an Underwritten Offering pursuant to a Demand Registration or an Underwritten Takedown advises the Holders that the total amount of Registrable Securities or other shares of Common Stock permitted to be registered is such as to materially adversely affect the success of such Underwritten Offering, the number of Registrable Securities or other shares of Common Stock to be registered on such Registration Statement will be reduced as follows: first, the Company shall reduce or eliminate the securities of the Company to be included by any Person other than a Holder or the Company; second, the Company shall reduce or eliminate any securities of the Company to be included by the Company; and third, the Company shall reduce the number of Registrable Securities to be included by Holders on a pro rata basis based on the total number of Registrable Securities requested by the Holders to be included in the Underwritten Offering.

(d)          Within five (5) days after receiving a request for an Underwritten Offering constituting a “takedown” from a Shelf Registration Statement, the Company shall give written notice of such request to all other Holders, and subject to the provisions of Section 6(c) hereof, include in such Underwritten Offering all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within five (5) days after the Company’s giving of such notice; provided, however that such Registrable Securities are covered by an existing and effective Shelf Registration Statement that may be utilized for the offering and sale of the Registrable Securities requested to be registered.

(e)         The Company will not be required to undertake an Underwritten Offering pursuant to Section 2(g) or Section 5(g):

(A)         If the Company has undertaken an Underwritten Offering, whether for its own account or pursuant to this Agreement, within the one hundred eighty (180) days preceding the date of the request for such Underwritten Offering is given to the Company; and

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(B)         if the number of Underwritten Offerings previously made pursuant to Section 2(g) or Section 5(g) in the immediately preceding twelve (12)-month period shall exceed three (3); provided that an Underwritten Offering shall not be considered made for purposes of this clause (B) unless the offering has resulted in the disposition by the Holders of at least 75% of the amount of Registrable Securities requested to be included.

7.            Grace Periods.

(a)           Notwithstanding anything to the contrary herein—

(A)         the Company shall be entitled to postpone the filing or effectiveness of, or, at any time after a Registration Statement has been declared effective by the Commission suspend the use of, a Registration Statement (including the Prospectus included therein) if in the good faith judgment of the Board, such registration, offering or use would reasonably be expected to materially affect in an adverse manner or materially interfere with any bona fide material financing of the Company or any material transaction under consideration by the Company or would require the disclosure of information that has not been, and is not otherwise required to be, disclosed to the public and the premature disclosure of which would materially affect the Company in an adverse manner; provided however, that in the event such Registration Statement relates to a Demand Registration Request or an Underwritten Offering pursuant to Section 2(g) or Section 5(g), then the Holders initiating such Demand Registration Request or such Underwritten Offering shall be entitled to withdraw the Demand Registration Request or request for the Underwritten Offering and, if such request is withdrawn, it shall not count against the limits imposed pursuant to Section 5(a)(D) or Section 6(e)(B) and the Company shall pay all registration expenses in connection with such registration; and

(B)         at any time after a Registration Statement has been declared effective by the Commission and there is no duty to disclose under applicable law, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time would, in the good faith judgment of the Board, adversely affect the Company (the period of a postponement or suspension as described in clause (A) and/or a delay described in this clause (B), a “Grace Period”).

(b)          The Company shall promptly (i) notify the Holders in writing of the existence of the event or material non-public information giving rise to a Grace Period (provided that the Company shall not disclose the content of such material non-public information to any Holder, without the express consent of such Holder) or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use reasonable best efforts to terminate a Grace Period as promptly as practicable and (iii) notify the Holders in writing of the date on which the Grace Period ends.

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(c)          The duration of any one Grace Period shall not exceed sixty (60) days, and the aggregate of all Grace Periods in total during any three hundred sixty-five (365) day period shall not exceed ninety (90) days. For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Holders receive the notice referred to in clause (i) of Section 7(b) and shall end on and include the later of the date the Holders receive the notice referred to in clause (iii) of Section 7(b) and the date referred to in such notice. In the event the Company declares a Grace Period, the period during which the Company is required to maintain the effectiveness of an Initial Shelf Registration Statement or a Registration Statement filed pursuant to a Demand Registration Request shall be extended by the number of days during which such Grace Period is in effect.

8.            Piggyback Registration

(a)          If at any time, and from time to time, the Company proposes to—

(A)         file a registration statement under the Securities Act with respect to an underwritten offering of Common Stock of the Company or any securities convertible or exercisable into Common Stock of the Company (other than with respect to a registration statement (i) on Form S-8 or any successor form thereto, (ii) on Form S-4 or any successor form thereto or (iii) another form not available for registering the Registrable Securities for sale to the public), whether or not for its own account; or

(B)         conduct an underwritten offering constituting a “takedown” of a class of Common Stock or any securities convertible or exercisable into Common Stock registered under a shelf registration statement previously filed by the Company;

the Company shall give written notice (the “Piggyback Notice”) of such proposed filing or underwritten offering to the Holders at least ten (10) Business Days before the anticipated filing date. Such notice shall include the number and class of securities proposed to be registered or offered, the proposed date of filing of such registration statement or the conduct of such underwritten offering, any proposed means of distribution of such securities, any proposed managing underwriter of such securities and a good faith estimate by the Company of the proposed maximum offering price of such securities as such price is proposed to appear on the front cover page of such registration statement (or, in the case of an Underwritten Offering, would appear on the front cover page of a registration statement), and shall offer the Holders the opportunity to register such amount of Registrable Securities as each Holder may request on the same terms and conditions as the registration of the Company’s and/or the holders of other securities of the Company securities, as the case may be (a “Piggyback Offering”). Subject to Section 8(b), the Company will include in each Piggyback Offering all Registrable Securities for which the Company has received written requests for inclusion within five (5) Business Days after the date the Piggyback Notice is given; provided, however, that in the case of the filing of a registration statement, such Registrable Securities are not otherwise registered pursuant to an existing and effective Shelf Registration Statement under this Agreement; provided further, however that, in the case of an underwritten offering in the form of a “takedown” under a shelf registration statement, such Registrable Securities are covered by an existing and effective Shelf Registration Statement that may be utilized for the offering and sale of the Registrable Securities requested to be offered.

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(b)          The Company will cause the managing underwriter or underwriters of the proposed offering to permit the Holders that have requested Registrable Securities to be included in the Piggyback Offering to include all such Registrable Securities on the same terms and conditions as any similar securities, if any, of the Company. Notwithstanding the foregoing, if the managing underwriter or underwriters of such underwritten offering advises the Company and the selling Holders in writing that, in its view, the total amount of securities that the Company, such Holders and any other holders entitled to participate in such offering (“Other Holders”) propose to include in such offering is such as to materially adversely affect the success of such underwritten offering, then:

(A)         if such Piggyback Offering is an underwritten primary offering by the Company for its own account, the Company will include in such Piggyback Offering: (i) first, all securities to be offered by the Company; (ii) second, up to the full amount of securities requested to be included in such Piggyback Offering by the Holders; and (iii) third, up to the full amount of securities requested to be included in such Piggyback Offering by all Other Holders;

(B)         if such Piggyback Offering is an underwritten secondary offering for the account of Other Holders exercising “demand” rights (including pursuant to a Demand Registration Request), the Company will include in such registration: (i) first, all securities of the Other Holder exercising “demand” rights (including pursuant to a Demand Registration Request) requested to be included therein; (ii) second, up to the full amount of securities requested to be included in such Piggyback Offering by the Holders entitled to participate therein, allocated pro rata among such Holders on the basis of the amount of securities requested to be included therein by each such Holder; (C) third, up to the full amount of securities proposed to be included in the registration by the Company; and (D) fourth, up to the full amount of securities requested to be included in such Piggyback Offering by the Other Holders entitled to participate therein, allocated pro rata among such Other Holders on the basis of the amount of securities requested to be included therein by each such Other Holder;

such that, in each case, the total amount of securities to be included in such Piggyback Offering is the full amount that, in the view of such managing underwriter, can be sold without materially adversely affecting the success of such Piggyback Offering.

(c)          If at any time after giving the Piggyback Notice and prior to the time sales of securities are confirmed pursuant to the Piggyback Offering, the Company determines for any reason not to register or delay the registration of the Piggyback Offering, the Company may, at its election, give notice of its determination to all Holders, and in the case of such a determination, will be relieved of its obligation to register any Registrable Securities in connection with the abandoned or delayed Piggyback Offering, without prejudice.

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(d)          Any Holder of Registrable Securities requesting to be included in a Piggyback Offering may withdraw its request for inclusion by giving written notice to the Company, at least three (3) Business Days prior to the anticipated Effective Date of the Registration Statement filed in connection with such Piggyback Offering, or in the case of a Piggyback Offering constituting a “takedown” off of a shelf registration statement, at least three (3) Business Days prior to the anticipated date of the filing by the Company under Rule 424 of a supplemental prospectus (which shall be the preliminary supplemental prospectus, if one is used in the “takedown”) with respect to such offering, of its intention to withdraw from that registration; provided, however, that (i) the Holder’s request be made in writing and (ii) the withdrawal will be irrevocable and, after making the withdrawal, a Holder will no longer have any right to include its Registrable Securities in that Piggyback Offering.

9.            Registration Procedures. If and when the Company is required to effect any registration under the Securities Act as provided in Sections 2(a), 5(a), 6 or 8 of this Agreement, the Company shall use its reasonable best efforts to:

(a)          prepare and file with the Commission the requisite Registration Statement to effect such registration and thereafter use its reasonable best efforts to cause such Registration Statement to become and remain effective, subject to the limitations contained herein;

(b)          prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by such Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the method of disposition set forth in such Registration Statement, subject to the limitations contained herein;

(c)          (i) before filing a Registration Statement or Prospectus or any amendments or supplements thereto, at the Company’s expense, furnish to the Holders whose securities are covered by the Registration Statement copies of all such documents, other than documents that are incorporated by reference into such Registration Statement or Prospectus, proposed to be filed and such other documents reasonably requested by such Holders (which may be furnished by email), and afford Counsel to the Holders a reasonable opportunity to review and comment on such documents; and (ii) in connection with the preparation and filing of each such Registration Statement pursuant to this Agreement, (A) upon reasonable advance notice to the Company, give each of the foregoing such reasonable access to all financial and other records, corporate documents and properties of the Company as shall be necessary, in the reasonable opinion of Counsel to the Holders and such underwriters, to conduct a reasonable due diligence investigation for purposes of the Securities Act and Exchange Act, and (B) upon reasonable advance notice to the Company and during normal business hours, provide such reasonable opportunities to discuss the business of the Company with its officers, directors, employees and the independent public accountants who have certified its financial statements as shall be necessary, in the reasonable opinion of Counsel to the Holders and such underwriters, to conduct a reasonable due diligence investigation for purposes of the Securities Act and the Exchange Act;

(d)          notify each selling Holder of Registrable Securities, promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared effective or a supplement to any Prospectus forming a part of such Registration Statement has been filed;

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(e)          with respect to any offering of Registrable Securities, furnish to each selling Holder of Registrable Securities, and the managing underwriters for such Underwritten Offering, if any, without charge, such number of copies of the applicable Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus, final Prospectus, and any other Prospectus (including any Prospectus filed under Rule 424, Rule 430A or Rule 430B promulgated under the Securities Act and any “issuer free writing prospectus” as such term is defined under Rule 433 promulgated under the Securities Act), all exhibits and other documents filed therewith and such other documents as such seller or such managing underwriters may reasonably request including in order to facilitate the disposition of the Registrable Securities owned by such seller, and upon request, a copy of any and all transmittal letters or other correspondence to or received from, the Commission or any other governmental authority relating to such offer;

(f)          (i) register or qualify all Registrable Securities covered by such Registration Statement under such other securities or blue sky laws of such states or other jurisdictions of the United States of America as the Holders covered by such Registration Statement shall reasonably request in writing, (ii) keep such registration or qualification in effect for so long as such Registration Statement remains in effect and (iii) take any other action that may be necessary or reasonably advisable to enable such Holders to consummate the disposition in such jurisdictions of the securities to be sold by such Holders, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subsection (f) be obligated to be so qualified, to subject itself to taxation in such jurisdiction or to consent to general service of process in any such jurisdiction;

(g)          cause all Registrable Securities included in such Registration Statement to be registered with or approved by such other federal or state governmental agencies or authorities as necessary upon the opinion of counsel to the Company or Counsel to the Holders of Registrable Securities included in such Registration Statement to enable such Holder or Holders thereof to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;

(h)          with respect to any Underwritten Offering, obtain and, if obtained, furnish to each Holder that is named as an underwriter in such Underwritten Offering and each other underwriter thereof, a signed

(A)         opinion of outside counsel for the Company (including a customary 10b-5 statement), dated the date of the closing under the underwriting agreement and addressed to the underwriters, reasonably satisfactory (based on the customary form and substance of opinions of issuers’ counsel customarily given in such an offering) in form and substance to such underwriters, if any, and

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(B)         “comfort” letter, dated the date of the Underwriting Agreement and another dated the date of the closing under the underwriting agreement and addressed to the underwriters and signed by the independent public accountants who have certified the Company’s financial statements included or incorporated by reference in such registration statement, reasonably satisfactory (based on the customary form and substance of “cold comfort” letters of issuers’ independent public accountant customarily given in such an offering) in form and substance to such Holder and such underwriters, if any,

in each case, covering substantially the same matters with respect to such Registration Statement (and the Prospectus included therein) and, in the case of the accountants’ comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ comfort letters delivered to underwriters in such types of offerings of securities;

(i)          notify each Holder of Registrable Securities included in such Registration Statement at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made and for which the Company chooses to suspend the use of the Registration Statement and Prospectus in accordance with the terms of this Agreement, at the written request of any such Holder, promptly prepare and furnish to it a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such Prospectus, as supplemented or amended, shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

(j)          notify the Holders of Registrable Securities included in such Registration Statement promptly of any request by the Commission for the amending or supplementing of such Registration Statement or Prospectus or for additional information;

(k)          advise the Holders of Registrable Securities included in such Registration Statement promptly after the Company receives notice or obtains knowledge of any order suspending the effectiveness of a registration statement relating to the Registrable Securities at the earliest practicable moment and promptly use its reasonable best efforts to obtain the withdrawal;

(l)          otherwise comply with all applicable rules and regulations of the Commission and any other governmental agency or authority having jurisdiction over the offering of Registrable Securities, and make available to its stockholders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not more than eighteen (18) months, beginning with the first (1^st) full calendar month after the Effective Date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder and which requirement will be deemed satisfied if the Company timely files complete and accurate information on Form 10-Q and 10-K and Current Reports on Form 8-K under the Exchange Act and otherwise complies with Rule 158 under the Securities Act;

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(m)          provide and cause to be maintained a transfer agent and registrar for the Registrable Securities included in a Registration Statement no later than the Effective Date thereof;

(n)          enter into such agreements (including an underwriting agreement in customary form) and take such other actions as the Holders beneficially owning a majority of the Registrable Securities included in a Registration Statement or the underwriters, if any, shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, including customary indemnification; and provide reasonable cooperation, including causing at least one (1) executive officer and a senior financial officer to attend and participate in “road shows” and other information meetings organized by the underwriters, if any, as reasonably requested; provided, however, that the Company shall have no obligation to participate in more than two (2) “road shows” in any twelve (12)-month period and such participation shall not unreasonably interfere with the business operations of the Company;

(o)          if requested by the managing underwriter(s) or the Holders beneficially owning a majority of the Registrable Securities being sold in connection with an Underwritten Offering, promptly incorporate in a prospectus supplement or post-effective amendment such information relating to the plan of distribution for such shares of Registrable Securities provided to the Company in writing by the managing underwriters and the Holders of a majority of the Registrable Securities being sold and that is required to be included therein relating to the plan of distribution with respect to such Registrable Securities, including without limitation, information with respect to the number of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters and with respect to any other terms of the Underwritten Offering of the Registrable Securities to be sold in such offering, and make any required filings with respect to such information relating to the plan of distribution as soon as practicable after notified of the information;

(p)          cooperate with the Holders of Registrable Securities included in a Registration Statement and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends, and enable such Registrable Securities to be in such share amounts and registered in such names as the managing underwriters, or, if none, the Holders beneficially owning a majority of the Registrable Securities being offered for sale, may reasonably request at least three (3) Business Days prior to any sale of Registrable Securities to the underwriters; and

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(q)          otherwise use its reasonable best efforts to take all other steps necessary to effect the registration of such Registrable Securities contemplated hereby.

In addition, at least ten (10) Trading Days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder, including any update to or confirmation of the information contained in the Selling Stockholder Questionnaire, if any, which shall be completed and delivered to the Company promptly upon request and, in any event, within five (5) Trading Days prior to the applicable anticipated filing date. Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as described in the previous sentence and, if an Underwritten Offering, entered into an underwriting agreement with the underwriters in accordance with Section 6(b). If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for further information, in either case, after its respective deadline, the Company shall be permitted to exclude such Holder from being a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this Section 9 will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

10.           Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts, fees or selling commissions or broker or similar commissions or fees, or transfer taxes of any Holder) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (B) with respect to compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with the Financial Industry Regulatory Authority (“FINRA”) pursuant to the FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) the reasonable fees and expenses incurred in connection with any road show for underwritten offerings, (vi) Securities Act liability insurance, if the Company so desires such insurance, and (vii) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company will pay the reasonable fees and disbursements of the Counsel to the Holders, including, for the avoidance of doubt, any expenses of Counsel to the Holders in connection with the filing or amendment of any Registration Statement, Prospectus or free writing prospectus hereunder.

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11.           Indemnification.

(a)            Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each Holder, the officers, directors, agents, partners, members, investment manager, managers, stockholders, Affiliates and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), to which any of them may become subject, that arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus or (ii) any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was provided by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto, or (B) in the case of an occurrence of an event of the type specified in Section 9(i), related to the use by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated and defined in Section 15(c) below, but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 11(c)), shall survive the transfer of the Registrable Securities by the Holders, and shall be in addition to any liability which the Company may otherwise have.

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(b)          Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its respective directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statements or omissions are based upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent, but only to the extent, that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was provided by such Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 9(i), to the extent, but only to the extent, related to the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 15(c), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 11(c)), shall survive the transfer of the Registrable Securities by the Holders, and shall be in addition to any liability which the Holder may otherwise have.

(c)        Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that in the reasonable judgment of such counsel a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for the reasonable and documented fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

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Subject to the terms of this Agreement, all reasonable and documented fees and expenses of the Indemnified Party (including reasonable and documented fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 11(c)) shall be paid to the Indemnified Party, as incurred, with reasonable promptness after receipt of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder. The failure to deliver written notice to the Indemnifying Party within a reasonable time of the commencement of any such action shall not relieve such Indemnifying Party of any liability to the Indemnified Party under this Section 11, except to the extent that the Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.

(d)          Contribution. If a claim for indemnification under Section 11(a) or (b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 11(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 11(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

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12.         Rule 144 and Rule 144A; Other Exemptions. With a view to making available to the Holders of Registrable Securities the benefits of Rule 144 and Rule 144A promulgated under the Securities Act and other rules and regulations of the Commission that may at any time permit a Holder of Registrable Securities to sell securities of the Company without registration, until such time as when no Registrable Securities remain outstanding, the Company covenants that it will (i) if it is subject to the reporting requirement of 13 or 15(d) of the Exchange act, file in a timely manner all reports and other documents required, if any, to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted thereunder or (ii) if it is not subject to the reporting requirement of 13 or 15(d) of the Exchange Act, make available information necessary to comply with Rule 144 and Rule 144A, if available with respect to resales of the Registrable Securities under the Securities Act, at all times, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (x) Rule 144 and Rule 144A promulgated under the Securities Act (if available with respect to resales of the Registrable Securities), as such rules may be amended from time to time or (y) any other rules or regulations now existing or hereafter adopted by the Commission. Upon the reasonable request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such information requirements, and, if not, the specific reasons for non-compliance.

13.         Transfer of Registration Rights. Any Holder may freely assign its rights hereunder on a pro rata basis in connection with any sale, transfer, assignment, or other conveyance (any of the foregoing, a “Transfer”) of Registrable Securities to any transferee or assignee; provided that all of the following additional conditions are satisfied: (a) such Transfer is effected in accordance with applicable securities laws; (b) such transferee or assignee agrees in writing to become subject to the terms of this Agreement; and (c) the Company is given written notice by such Holder of such Transfer, stating the name and address of the transferee or assignee and identifying the Registrable Securities with respect to which such rights are being transferred or assigned; and further provided, that (i) any rights assigned hereunder shall apply only in respect of the Registrable Securities that are Transferred and not in respect of any other securities that the transferee or assignee may hold and (ii) any Registrable Securities that are Transferred may cease to constitute Registrable Securities following such Transfer in accordance with the terms of this Agreement.

14.         Further Assurances. Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement.

15.         Miscellaneous.

(a)          Remedies. Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.

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(b)          Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to any Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in each Registration Statement

(c)          Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of a Grace Period or any event of the kind described in Section 9(i), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

(d)          Preservation of Rights. The Company shall not grant any registration rights to third parties which are more favorable than or inconsistent with the rights granted hereunder unless any such more favorable rights are concurrently added to the rights granted hereunder.

(e)          No Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders in this Agreement.

(f)          Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders holding at least a majority of the then outstanding Registrable Securities; provided, however, that any party may give a waiver as to itself; provided further, however that no amendment, modification, supplement, or waiver that disproportionately and adversely affects, alters, or changes the interests of any Holder shall be effective against such Holder without the prior written consent of such Holder; provide further, however that the definition of “Holders” in Section 1 and the provisions of Section 2(c) may not be amended, modified or supplemented, or waived unless in writing and signed by all the signatories to this Agreement; and provided further that the waiver of any provision with respect to any Registration Statement or offering may be given by Holders holding at least a majority of the then outstanding Registrable Securities entitled to participate in such offering or, if such offering shall have been commenced, having elected to participate in such offering. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. No waiver of any terms or conditions of this Agreement shall operate as a waiver of any other breach of such terms and conditions or any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. No written waiver hereunder, unless it by its own terms explicitly provides to the contrary, shall be construed to effect a continuing waiver of the provisions being waived and no such waiver in any instance shall constitute a waiver in any other instance or for any other purpose or impair the right of the party against whom such waiver is claimed in all other instances or for all other purposes to require full compliance with such provision. The failure of any party to enforce any provision of this Agreement shall not be construed as a waiver of such provision and shall not affect the right of such party thereafter to enforce each provision of this Agreement in accordance with its terms.

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(g)          Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be sent by certified or regular mail, by private national courier service (return receipt requested, postage prepaid), by personal delivery, by electronic mail or by facsimile transmission. Such notice or communication shall be deemed given (i) if mailed, two days after the date of mailing, (ii) if sent by national courier service, one Business Day after being sent, (iii) if delivered personally, when so delivered, (iv) if sent by electronic mail, on the Business Day such electronic mail is transmitted, or (v) if sent by facsimile transmission, on the Business Day such facsimile is transmitted, in each case as follows:

(A)         If to the Company:

Energy XXI Gulf Coast, Inc.

Attn: John D. Schiller, Jr.

1021 Main Street, Suite 2626

Houston, Texas 77002

Tel: (713) 351-3000

Fax: (713) 351-3300

E-mail: jschiller@energyxxi.com

with a copy (which shall not constitute notice) to:

Vinson & Elkins LLP

Attn: Sarah Knight Morgan

1001 Fannin Street

Suite 2500

Houston, TX 77002-6760

Tel: (713) 758-2977

Fax: (713) 615-5234

Email: smorgan@velaw.com

(B)         If to the Holders (or to any of them), at their addresses as they appear in the records of the Company or the records of the transfer agent or registrar, if any, for the Common Stock.

If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal holiday in the State of New York or the jurisdiction in which the Company’s principal office is located, the time period shall automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.

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(h)          Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns (including any trustee in bankruptcy). In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the Holders of Registrable Securities (or any portion thereof) as such shall be for the benefit of and enforceable by any subsequent holder of any Registrable Securities (or of such portion thereof); provided, that such subsequent holder of Registrable Securities shall be required to execute a joinder to this Agreement in form and substance reasonably satisfactory to the Company agreeing to be bound by its terms. No assignment or delegation of this Agreement by the Company, or any of the Company’s rights, interests or obligations hereunder, shall be effective against any Holder without the prior written consent of such Holder.

(i)          Execution and Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

(j)          Delivery by Facsimile. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or other electronic means, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or other electronic means to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or other electronic means as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

(k)          Governing Law; Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) to the extent such rules or provisions would cause the application of the laws of any jurisdiction other than the State of New York. Each of the parties to this Agreement consents and agrees that any action to enforce this Agreement or any dispute, whether such dispute arises in law or equity, arising out of or relating to this Agreement shall be brought exclusively in the United States District Court for the Southern District of New York or any New York State Court sitting in New York City. The parties hereto consent and agree to submit to the exclusive jurisdiction of such courts. Each of the parties to this Agreement waives and agrees not to assert in any such dispute, to the fullest extent permitted by applicable law, any claim that (i) such party and such party’s property is immune from any legal process issued by such courts or (ii) any litigation or other proceeding commenced in such courts is brought in an inconvenient forum. The parties hereby agree that mailing of process or other papers in connection with any such action or proceeding to an address provided in writing by the recipient of such mailing, or in such other manner as may be permitted by law, shall be valid and sufficient service thereof and hereby waive any objections to service in the manner herein provided.

26

(l)          Waiver of Jury Trial. Each of the parties to this Agreement hereby agrees to waive its respective rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including contract claims, tort claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into this Agreement, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 15(l) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

(m)          Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

(n)          Descriptive Headings; Interpretation; No Strict Construction. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs shall include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and, if applicable, hereof. The words “include”, “includes” or “including” in this Agreement shall be deemed to be followed by “without limitation”. The use of the words “or,” “either” or “any” shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. All references to laws, rules, regulations and forms in this Agreement shall be deemed to be references to such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor thereto in effect at the time. All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall be deemed to be references to the comparable successors thereto from time to time.

(o)          Entire Agreement. This Agreement and any certificates, documents, instruments and writings that are delivered pursuant hereto, constitutes the entire agreement and understanding of the parties in respect of the subject matter hereof and supersedes all prior understandings, agreements or representations by or among the parties, written or oral, to the extent they relate in any way to the subject matter hereof.

27

(p)          Termination. The obligations of the Company and of any Holder, other than those obligations contained in Section 11 and this Section 15, shall terminate with respect to the Company and such Holder as soon as such Holder no longer beneficially owns any Registrable Securities.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

28

[Signature Pages Redacted.]

EX-10.2

Exhibit 10.2

Execution Version

Published CUSIP No. 29276SAD6

Published CUSIP No. 29276SAE4

FIRST LIEN EXIT CREDIT AGREEMENT

dated as of December 30, 2016,

among

ENERGY XXI GULF COAST, INC.,

as the Borrower,

VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS FROM TIME TO TIME

PARTIES HERETO,

as the Lenders,

and

WELLS FARGO BANK, N.A.

as the Administrative Agent

TABLE OF CONTENTS

		Page
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS		2
Section 1.1.	Defined Terms	2
Section 1.2.	Use of Defined Terms	36
Section 1.3.	Cross-References and Other Provisions Relating to Terms	37
Section 1.4.	Amendment of Defined Instruments	37
Section 1.5.	Accounting and Financial Determinations	37
ARTICLE 2. COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND LETTERS OF CREDIT		38
Section 2.1.	Commitments	38
Section 2.1.1	Revolving Credit Commitment; Term Loans	38
Section 2.1.2	Letter of Credit Commitment	38
Section 2.2.	Termination of Commitments and Reduction of the Commitment Amount	39
Section 2.3.	Borrowing Procedure	40
Section 2.3.1	Borrowing Procedure	40
Section 2.4.	Continuation and Conversion Elections	40
Section 2.5.	Funding	41
Section 2.6.	Issuance Procedures and Provisions	41
Section 2.6.1	Other Lenders Participation	42
Section 2.6.2	Disbursements	42
Section 2.6.3	Reimbursement	43
Section 2.6.4	Deemed Disbursements	43
Section 2.6.5	Nature of Reimbursement Obligations	44
Section 2.6.6	Replacement of an Issuer	45
Section 2.6.7	Cash Collateral	45
Section 2.7.	Register; Notes	45
Section 2.8.	Borrowing Base	46
Section 2.8.1	Initial Borrowing Base	46
Section 2.8.2	Annual Scheduled Determinations of the Borrowing Base	47
Section 2.8.3	Semi-Annual Scheduled Determination of the Borrowing Base	48

 -i-

Section 2.8.4	Discretionary Determination of the Borrowing of the Base by the Lenders	49
Section 2.8.5	Discretionary Determination of the Borrowing Base by the Borrower	49
Section 2.8.6	Other Redeterminations of Borrowing Base	49
Section 2.8.7	[Reserved]	50
Section 2.8.8	General Provisions With Respect to the Borrowing Base	50
Section 2.9.	[Reserved]	50
Section 2.10.	Defaulting Lenders	50
ARTICLE 3. REPAYMENTS, PREPAYMENTS, INTEREST AND FEES		52
Section 3.1.	Repayments and Prepayments; Application	52
Section 3.1.1	Repayments and Prepayments	52
Section 3.1.2	Application	54
Section 3.2.	Interest Provisions	54
Section 3.2.1	Rates	54
Section 3.2.2	Post-Default Rates	54
Section 3.2.3	Payment Dates	54
Section 3.3.	Fees	55
Section 3.3.1	Commitment Fee	55
Section 3.3.2	Administrative Agent’s Fees	55
Section 3.3.3	[Reserved]	55
Section 3.3.4	Letter of Credit Fee	55
Section 3.3.5	Letter of Credit Issuance Fee	56
ARTICLE 4. Certain LIBO Rate and Other Provisions		56
Section 4.1.	LIBO Rate Lending Unlawful.	56
Section 4.2.	Inability to Determine Rates	56
Section 4.3.	Increased LIBO Rate Loan Costs, etc	57
Section 4.4.	Funding Losses	57
Section 4.5.	Increased Capital Costs	58
Section 4.6.	Taxes	58
Section 4.7.	Payments, Computations; Proceeds of Collateral, etc	62
Section 4.8.	Sharing of Payments	63
Section 4.9.	Setoff	63

 -ii-

ARTICLE 5. CONDITIONS TO EFFECTIVENESS AND REVOLVING CREDIT EXTENSIONS		64
Section 5.1.	Effectiveness; Initial Revolving Credit Extension	64
Section 5.1.1	Credit Agreement	64
Section 5.1.2	Secretaries’ Certificates, etc	64
Section 5.1.3	Effective Date Certificate	65
Section 5.1.4	Consents, Licenses, Permits and Approvals	65
Section 5.1.5	Compliance with Warranties, No Default, etc	65
Section 5.1.6	Confirmation Order	65
Section 5.1.7	Delivery of Notes	65
Section 5.1.8	Financial Information	66
Section 5.1.9	Initial Reserve Report	66
Section 5.1.10	[Reserved]	66
Section 5.1.11	Solvency, etc	66
Section 5.1.12	Guarantees	66
Section 5.1.13	Security Agreement	66
Section 5.1.14	[Reserved]	67
Section 5.1.15	Insurance	67
Section 5.1.16	Mortgages	67
Section 5.1.17	Opinions of Counsel	68
Section 5.1.18	Expenses	68
Section 5.1.19	[Reserved]	68
Section 5.1.20	Minimum Emergence Liquidity	68
Section 5.1.21	Closing Fees, Expenses, etc	68
Section 5.1.22	PATRIOT Act Disclosures	68
Section 5.2.	All Revolving Credit Extensions	69
Section 5.2.1	Compliance with Warranties, No Default, etc:	69
Section 5.2.2	Revolving Credit Extension Request, etc	69
Section 5.2.3	Satisfactory Legal Form	69
ARTICLE 6. REPRESENTATIONS AND WARRANTIES		70
Section 6.1.	Organization, etc	70
Section 6.2.	Due Authorization, Non-Contravention, Defaults etc	70
Section 6.3.	Government Approval, Regulation, etc	71

 -iii-

Section 6.4.	Validity, etc	71
Section 6.5.	Financial Information	71
Section 6.6.	No Material Adverse Change	71
Section 6.7.	Litigation, Labor Controversies, etc	71
Section 6.8.	Subsidiaries	71
Section 6.9.	Ownership of Properties, etc	72
Section 6.10.	Taxes	73
Section 6.11.	ERISA; Pension and Welfare Plans	73
Section 6.12.	Environmental Warranties	73
Section 6.13.	Disclosure of Material Information; Accuracy of Information	74
Section 6.14.	Regulations T, U, and X	74
Section 6.15.	Labor Matters	75
Section 6.16.	Compliance with Laws	75
Section 6.17.	Material Contracts	75
Section 6.18.	Solvency	75
Section 6.19.	Deposit Account and Cash Management Accounts	75
Section 6.20.	Insurance	75
Section 6.21.	Restrictions on Liens	76
Section 6.22.	Location of Business and Offices	76
Section 6.23.	Maintenance of Properties	76
Section 6.24.	Gas Imbalances	77
Section 6.25.	Marketing of Production	77
Section 6.26.	Perfected Liens and Security Interests	77
Section 6.27.	Anti-Corruption Laws	77
Section 6.28.	Anti-Money Laundering Laws	77
Section 6.29.	Restricted Parties	78
Section 6.30.	Flood Insurance Provisions	78
ARTICLE 7. COVENANTS		78
Section 7.1.	Affirmative Covenants	78
Section 7.1.1	Financial Information, Reports, Notices, etc	78
Section 7.1.2	Maintenance of Existence; Compliance with Contracts, Laws, etc	83
Section 7.1.3	Operation and Maintenance of Properties	83
Section 7.1.4	Insurance; Casualty Events	84

 -iv-

Section 7.1.5	Books and Records	85
Section 7.1.6	Environmental Law Covenant	85
Section 7.1.7	Use of Proceeds	86
Section 7.1.8	Future Guarantors, Security, etc	86
Section 7.1.9	Cash Management	87
Section 7.1.10	Proceeds Account	87
Section 7.1.11	Maintenance of Liens on Properties	87
Section 7.1.12	Hedging Agreements	88
Section 7.1.13	Title Information	88
Section 7.1.14	Right of Inspection	88
Section 7.1.15	Further Assurances	89
Section 7.1.16	Minimum Liquidity	89
Section 7.1.17	Keepwell	89
Section 7.1.18	Anti-Money Laundering Laws	90
Section 7.1.19	Anti-Hoarding Provision	90
Section 7.2.	Negative Covenants	91
Section 7.2.1	Business Activities; International Operations	91
Section 7.2.2	Indebtedness	91
Section 7.2.3	Liens	92
Section 7.2.4	Financial Condition	94
Section 7.2.5	Investments	94
Section 7.2.6	Restricted Payments; etc	95
Section 7.2.7	[Reserved].	96
Section 7.2.8	Issuance of Capital Securities	96
Section 7.2.9	Consolidation, Merger; Permitted Acquisitions, etc	96
Section 7.2.10	Permitted Dispositions	97
Section 7.2.11	Modification of Certain Agreements	98
Section 7.2.12	Transactions with Affiliates	98
Section 7.2.13	Restrictive Agreements, etc	98
Section 7.2.14	Sale and Leaseback	99
Section 7.2.15	Pension Plans	99
Section 7.2.16	Limitation on Leases	99
Section 7.2.17	Subsidiaries	99

 -v-

Section 7.2.18	Gas Imbalances, Take or Pay or Other Prepayments	99
Section 7.2.19	Restrictions on Hedging Agreements	100
Section 7.2.20	Anti-Corruption Laws	101
Section 7.2.21	Sanctioned Payments	101
ARTICLE 8. EVENTS OF DEFAULT		102
Section 8.1.	Listing of Events of Default	102
Section 8.1.1	Non-Payment of Obligations	102
Section 8.1.2	Breach of Warranty	102
Section 8.1.3	Non-Performance of Certain Covenants and Obligations	102
Section 8.1.4	Non-Performance of Other Covenants and Obligations	102
Section 8.1.5	Default on Other Indebtedness	102
Section 8.1.6	Judgments	103
Section 8.1.7	Pension Plans	103
Section 8.1.8	Change in Control	103
Section 8.1.9	Bankruptcy, Insolvency, etc	103
Section 8.1.10	Impairment of Security, etc	104
Section 8.2.	Action if Bankruptcy	104
Section 8.3.	Action if Other Event of Default	104
ARTICLE 9. THE ADMINISTRATIVE AGENT AND ISSUERS		105
Section 9.1.	Actions	105
Section 9.2.	Funding Reliance, etc	105
Section 9.3.	Exculpation	106
Section 9.4.	Successor	106
Section 9.5.	Revolving Credit Extensions by Administrative Agent and Issuers	107
Section 9.6.	Credit Decisions	107
Section 9.7.	Copies, etc	107
Section 9.8.	Reliance by Administrative Agent and Issuers	107
Section 9.9.	Defaults	108
Section 9.10.	Posting of Approved Electronic Communications	108
Section 9.11.	Proofs of Claim	109
Section 9.12.	Security Matters; Authority of Administrative Agent to Release Collateral	110
Section 9.13.	Withholding Tax	111

 -vi-

ARTICLE 10. MISCELLANEOUS PROVISIONS		112
Section 10.1.	Waivers, Amendments, etc	112
Section 10.2.	Notices; Time	113
Section 10.3.	Payment of Costs and Expenses	113
Section 10.4.	Indemnification	114
Section 10.5.	Survival	116
Section 10.6.	Severability	116
Section 10.7.	Headings	116
Section 10.8.	Execution in Counterparts, Effectiveness, etc	116
Section 10.9.	Governing Law	116
Section 10.10.	Successors and Assigns	117
Section 10.11.	Sale and Transfer of Revolving Credit Extensions; Participations in Revolving Credit Extensions; Notes	117
Section 10.12.	Other Transactions; No Fiduciary Duty	121
Section 10.13.	Forum Selection and Consent to Jurisdiction	122
Section 10.14.	Waiver of Jury Trial	122
Section 10.15.	Confidentiality	123
Section 10.16.	Counsel Representation	123
Section 10.17.	No Oral Agreements	124
Section 10.18.	Maximum Interest	124
Section 10.19.	Collateral Matters; Hedging Agreements; Bank Product Agreements	125
Section 10.20.	Patriot Act	125
Section 10.21.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	125

 -vii-

ANNEX I	–	Term Loans
ANNEX II	–	Subsidiaries
ANNEX III	–	Designated Holders
SCHEDULE I	–	Disclosure Schedule
SCHEDULE II	–	Percentages; LIBOR Office; Domestic Office
SCHEDULE III	–	Effective Date L/Cs
SCHEDULE IV	–	Certain Indebtedness
EXHIBIT A-1	–	Form of Revolving Note
EXHIBIT A-2	–	Form of Term Note
EXHIBIT B-1	–	Form of Borrowing Request
EXHIBIT B-2	–	Form of Issuance Request
EXHIBIT C	–	Form of Continuation/Conversion Notice
EXHIBIT D	–	Form of Lender Assignment Agreement
EXHIBIT E	–	Form of Compliance Certificate
EXHIBIT F	–	Form of Guaranty
EXHIBIT G	–	Form of Pledge and Security
		Agreement and Irrevocable Proxy
EXHIBIT H	–	Form of Solvency Certificate
EXHIBIT I	–	Form of Certificate

 -viii-

FIRST LIEN EXIT CREDIT AGREEMENT

THIS FIRST LIEN EXIT CREDIT AGREEMENT, dated as of December 30, 2016, is among ENERGY XXI GULF COAST, INC., a Delaware corporation (the “Borrower”), the various financial institutions and other Persons from time to time parties hereto (the “Lenders”), WELLS FARGO BANK, NATIONAL ASSOCIATION (“WFBNA”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders, and the Issuers herein identified.

WITNESSETH:

A.           On April 14, 2016 (the “Petition Date”), Energy XXI, Ltd. (“Parent”) and certain of its subsidiaries, including the Borrower and the Subsidiaries listed on Annex II hereto (such Subsidiaries, collectively with Parent and the Borrower, the “Debtors”) filed voluntary petitions with the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”) for relief under Chapter 11 of Title 11 of the United States Code and commenced their chapter 11 proceedings (the “Chapter 11 Cases”).

B.           The Debtors shall emerge from bankruptcy on the date hereof when the Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization (as may be modified, amended, or supplemented from time to time, the “Plan of Reorganization”), which was confirmed by the Bankruptcy Court on December 13, 2016, becomes effective.

C.           The Borrower, EPL Oil & Gas, Inc. (“EPL”), certain lenders (the “Prepetition Lenders”), Wells Fargo Bank, National Association as the administrative agent for the Prepetition Lenders (in such capacity, the “Prepetition Administrative Agent”), certain issuers of letters of credit and certain other parties, are parties to that certain Second Amended and Restated First Lien Credit Agreement, dated as of May 5, 2011 (as amended, supplemented or otherwise modified prior to the date hereof, the “Prepetition Credit Agreement”), pursuant to which the Borrower and EPL owe the outstanding obligations (the “Prepetition Obligations”). Several of the other Debtors are guarantors with respect to certain Prepetition Obligations, and the Prepetition Obligations are secured by certain mortgages, security agreements and other similar documents.

D.           Pursuant to the terms of the Plan of Reorganization, the Prepetition Lenders will receive, among other things, from the Borrower interests in a new Term Loan facility in an aggregate principal amount of $73,996,414.08 (the “Term Loan Amount”). In addition, the Debtors have requested that the Prepetition Lenders (i) agree to participation obligations in respect of Letters of Credit in the aggregate outstanding principal amount of $227,742,500 which were issued for the account of the Borrower under the Prepetition Credit Agreement and shall be deemed re-issued and outstanding under this Agreement; and (ii) provide a revolving credit facility. The Prepetition Lenders have agreed to provide these extensions of credit on the terms set forth herein.

E.           In consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE 1.

DEFINITIONS AND ACCOUNTING TERMS

Section 1.1.          Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

“Account Debtor” means any Person who is or who may become obligated under, with respect to, or on account of, an account, chattel paper, or a general intangible or intangible, as applicable, in each case, as such term is defined under the UCC.

“Adjusted PV9%” shall mean at the time of any determination thereof the sum of (i) the PV9% Value at such time, (ii) an amount equal to 50% of Letter of Credit Outstandings at such time in respect of outstanding Letters of Credit directly related to the Borrower’s and the Subsidiary Guarantors’ plugging and abandonment obligations in connection with their Oil and Gas Properties and (iii) 80% of an amount equal to the Borrower’s and the Subsidiary Guarantors’ cash and cash equivalents pledged to secure bonds, surety or similar assurance obligations or undertakings directly related to the Borrower’s and the Subsidiary Guarantors’ plugging and abandonment obligations in connection with their Oil and Gas Properties.

“Administrative Agent” is defined in the preamble and includes each other Person appointed as the successor Administrative Agent pursuant to Section 9.4.

“Affiliate” of any Person means any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. “Control” of a Person means the power, directly or indirectly,

(a)          to vote 10% or more of the Capital Securities (on a fully diluted basis) of such Person having ordinary voting power for the election of directors, managing members or general partners (as applicable); or

(b)          to direct or cause the direction of the management and policies of such Person (whether by contract or otherwise).

“Affiliated Lender” shall mean a Lender that is a Designated Holder or any Affiliate thereof (other than the Borrower or any Subsidiary of the Borrower).

“Agent Indemnified Parties” is defined in Section 9.3.

“Aggregate Commitment” means from time to time an amount equal to the aggregate of the Revolving Credit Commitments of each Revolving Lender plus the Term Loan Amount.

“Agreement” means, on any date, this First Lien Exit Credit Agreement as originally in effect on the Effective Date and as thereafter from time to time amended, supplemented, amended and restated or otherwise modified from time to time and in effect on such date.

-2-

“Alternate Base Rate” means, on any date and with respect to all Base Rate Loans, a fluctuating rate of interest per annum (rounded upward, if necessary, to the next highest 1/16 of 1%) equal to the highest of the determinable of:

(a)          the Base Rate in effect on such day;

(b)          the Federal Funds Rate in effect on such day plus ½ of 1%;

(c)          the Reference LIBO Rate plus 1%; and

(d)          zero.

Any change in the Alternate Base Rate due to a change in the Base Rate, the Federal Funds Rate or the LIBO Rate (Reserve Adjusted) shall be effective from and including the effective date of such change in the Base Rate, the Federal Funds Rate or the LIBO Rate (Reserve Adjusted), respectively.

“Anti-Corruption Laws” means the FCPA, the UK Bribery Act of 2010 and any related or similar laws, rules, regulations or guidelines, which in each case are issued, administered or enforced by any Governmental Authority having jurisdiction over any member of the Group, or to which any member of the Group is subject.

“Anti-Money Laundering Laws” means all applicable financial recordkeeping and reporting requirements and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, which in each case are issued, administered or enforced by any governmental agency having jurisdiction over any member of the Group, or to which any member of the Group is subject.

“Applicable Commitment Fee Margin” means, at all times, 0.500%.

“Applicable Law” means with respect to any Person or matter, any United States or foreign, federal, state, regional, tribal or local statute, law, code, rule, treaty, convention, application, order, decree, consent decree, injunction, directive, determination or other requirement (whether or not having the force of law) relating to such Person or matter and, where applicable, any interpretation thereof by a Governmental Authority having jurisdiction with respect thereto or charged with the administration or interpretation thereof.

“Applicable Margin” means, for any day and with respect to all Loans maintained as LIBO Rate Loans, 4.50% per annum, and with respect to all Loans maintained as Base Rate Loans, 3.50% per annum.

“Approved Counterparties” means any counterparty to a Hedging Agreement with the Borrower that at the time it enters into such Hedging Agreement (a) is a Lender or an Affiliate of a Lender or (b) has a credit rating of Baa1 or higher from Moody’s or BBB+ or higher from S&P.

-3-

“Approved Engineer” means Netherland, Sewell and Associates, Inc., Ryder Scott Company, L.P., or any other independent petroleum engineer reasonably satisfactory to the Administrative Agent.

“Approved Fund” means any Person (other than a natural Person) that (a) is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business, and (b) is administered or managed by a Lender, an Affiliate of a Lender or a Person or an Affiliate of a Person that administers or manages a Lender.

“ASC” means the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).

“Asset Coverage Ratio” means, at any time of determination thereof, the ratio of (i) the Adjusted PV9% to (ii) the outstanding First Lien Debt.

“Authorized Officer” means, relative to any Obligor, those of its officers, general partners or managing members (as applicable) whose signatures and incumbency shall have been certified to the Administrative Agent, the Lenders and the Issuers pursuant to Section 5.1.1 or pursuant to the other provisions of this Agreement.

“Available Amount” means on any date (i) prior to the Borrowing Base Initiation Date the lesser of (A) $25,000,000 and (B) an amount equal to the product of (1) 0.50 times (2) the L/C Reduction Amount; and (ii) on or after the Borrowing Base Initiation Date, an amount equal to the lesser of (A) the positive amount, if any, of the difference of (x) the Borrowing Base then in effect minus (y) the sum of (1) the aggregate principal amount of outstanding Loans plus (2) the aggregate Letter of Credit Outstandings and (B) an amount equal to the product of (1) 0.50 times (2) the L/C Reduction Amount; provided that the Available Amount shall never be less than zero.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Product” means any one or more of the following financial products or accommodations extended to any Obligor by a Bank Product Provider: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) purchase cards (including so-called “procurement cards” or “P-cards”) or (f) cash management and treasury management services (including controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

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“Bank Product Agreements” means those agreements entered into from time to time by the applicable Obligor with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

“Bank Product Obligations” means all Obligations, liabilities, reimbursement Obligations, fees, or expenses owing by any Obligor to any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

“Bank Product Provider” means any Lender or any of its Affiliates; provided, however, that no such Person (other than Regions Bank and its Affiliates) shall constitute a Bank Product Provider with respect to a Bank Product unless and until Administrative Agent shall have received a written notice from such Person identifying such person as a Bank Product Provider and specifying the applicable Bank Product within 10 days after the provision of such Bank Product to any Obligor; provided further, however, that if, at any time, a Lender ceases to be a Lender under the Agreement, then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Bank Product Providers and the Obligations with respect to Bank Products provided by such former Lender or any of its Affiliates shall no longer constitute Bank Product Obligation.

“Base Rate” means, at any time, the rate of interest then most recently established by the Administrative Agent as its base rate for Dollars loaned in the United States. The Base Rate is not necessarily intended to be the lowest rate of interest determined by the Administrative Agent in connection with extensions of credit.

“Base Rate Loan” means a Loan bearing interest at a fluctuating rate determined by reference to the Alternate Base Rate.

“Borrower” is defined in the preamble.

“Borrowing” means the Loans of the same Type and, in the case of LIBO Rate Loans having the same Interest Period made by all Lenders required to make such Loans on the same Business Day and pursuant to the same Borrowing Request in accordance with Section 2.3 or the Term Loans, as the case may be.

“Borrowing Base” means at any time an amount equal to the amount determined in accordance with Section 2.8, as the same may be adjusted from time to time in accordance with the terms hereof.

“Borrowing Base Deficiency” is defined in Section 3.1.1(c).

“Borrowing Base Initiation Date” means the first date, if any, on which a Borrowing Base is established and is effective pursuant to Section 2.8.1 (other than pursuant to the first sentence thereof).

“Borrowing Request” means a Loan request and certificate duly executed by an Authorized Officer of the Borrower substantially in the form of Exhibit B-1 hereto.

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“Business Day” means (a) any day that is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York, New York and (b) relative to the making, continuing, prepaying or repaying of any LIBO Rate Loans, any day that is a Business Day described in clause (a) above, and that is also a day on which dealings in Dollars are carried on in the London interbank eurodollar market.

“Capital Expenditures” means, for any period, the aggregate amount of (a) all expenditures of the Borrower and its Subsidiaries for fixed or capital assets made during such period that, in accordance with GAAP, would be classified as capital expenditures and (b) Capitalized Lease Liabilities incurred by the Borrower and its Subsidiaries during such period.

“Capital Securities” means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital (including all capital stock, partnership, membership or other equity interests in such Person), whether now outstanding or issued after the Effective Date and whether or not certificated.

“Capitalized Lease Liabilities” means, with respect to the Borrower, all monetary obligations of the Borrower and the Subsidiary Guarantors under any leasing or similar arrangement which have been (or, in accordance with GAAP, should be) classified as capitalized leases, and for purposes of each Loan Document the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a premium or a penalty.

“Cash Collateralize” means, with respect to a Letter of Credit, the deposit of immediately available funds into a cash collateral account maintained with (or on behalf of) the Administrative Agent and/or UBS (as the case may be) on terms reasonably satisfactory to the Administrative Agent in an amount equal to the Stated Amount of such Letter of Credit.

“Cash Equivalent Investment” means, at any time:

(a)          any direct obligation of (or unconditionally guaranteed by) the United States or a State thereof (or any agency or political subdivision thereof, to the extent such obligations are supported by the full faith and credit of the United States or a State thereof) maturing not more than one year after such time;

(b)          commercial paper maturing not more than 270 days from the date of issue, that is issued by (i) a corporation (other than an Affiliate of any Obligor) organized under the laws of any State of the United States or of the District of Columbia, and rated A-1 or higher by S&P or P-1 or higher by Moody’s or (ii) any Lender (or its holding company);

(c)          any certificate of deposit, time deposit or bankers acceptance, maturing not more than one year after its date of issuance, that is issued by (i) any bank organized under the laws of the United States (or any State thereof), and that has (A) a credit rating of A2 or higher from Moody’s or A or higher from S&P and (B) a combined capital and surplus greater than $500,000,000, or (ii) any Lender;

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(d)          shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (c) of this definition;

(e)          money market funds that (i) purport to comply generally with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P or Aaa by Moody’s or carrying an equivalent rating by a national recognized rating agency, and (iii) have portfolio assets of at least $5,000,000,000; or

(f)          any repurchase agreement having a term of 30 days or less entered into with any Lender or any commercial banking institution satisfying the criteria set forth in clause (c)(i) that:

(i)          is secured by a fully perfected security interest in any obligation of the type described in clause (a), and

(ii)         has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such commercial banking institution thereunder.

“Casualty Event” means the damage, destruction or condemnation, as the case may be, of Property of the Borrower or any of the Subsidiary Guarantors.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

“CERCLIS” means the Comprehensive Environmental Response Compensation Liability Information System List.

“CFC” shall mean a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“Change in Control” means after the Effective Date (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) (other than a Designated Holder or any Affiliate thereof), representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower, (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated or approved by the board of directors of the Borrower nor (ii) appointed by directors so nominated or approved or (c) the failure of Borrower to beneficially own, directly or indirectly, 100% of the Equity Interests of any Subsidiary Guarantor other than by reason of a transaction permitted under Section 7.2.9 or Section 7.2.10 of this Agreement.

“Change in Law” is defined in Section 4.5.

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“Code” means the Internal Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified from time to time.

“Collateral” means any “Collateral” or “Mortgaged Property” as defined in any Security Document or any other collateral pledged or encumbered by any Obligor pursuant to the Loan Documents to secure all or part of the Obligations.

“Collections” means all cash, checks, notes, instruments and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds and tax refunds) of the Borrower and the Subsidiary Guarantors.

“Commitment” means, as the context may require, any Revolving Credit Commitment or Letter of Credit Commitment, as adjusted from time to time in accordance with this Agreement.

“Commitment Amount” means, as the context may require, the Revolving Credit Commitment Amount and the Letter of Credit Commitment Amount.

“Commitment Schedule” means Schedule II attached to this Agreement.

“Commitment Termination Date” means, as the context may require, the Letter of Credit Commitment Termination Date or the Revolving Credit Commitment Termination Date.

“Commitment Termination Event” means

(a)          the occurrence of any Event of Default with respect to the Borrower, described in clauses (a) through (d) of Section 8.1.9; or

(b)          the occurrence and continuance of any other Event of Default and either:

(i)          the declaration of all or any portion of the Loans to be due and payable pursuant to Section 8.3, or

(ii)         the giving of notice by the Administrative Agent, acting at the direction of the Required Lenders to the Borrower that the Commitments have been terminated.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Communications” is defined in clause (a) of Section 9.10.

“Compliance Certificate” means a certificate duly completed and executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit E hereto, together with such changes thereto as the Administrative Agent may from time to time reasonably request for the purpose of monitoring the Borrower’s compliance with the financial covenants contained herein.

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“Confirmation Order” is defined in Section 5.1.1.

“Consolidated Cash Balance” means, at any time, the aggregate amount of cash and cash equivalents, marketable securities, treasury bonds and bills, certificates of deposit, investments in money market funds and commercial paper, in each case held by the Borrower and the Subsidiary Guarantors, and not held in a restricted account, a payroll account, tax account, trust account, pension account, royalty account or similar type of account (other than an account that is restricted pursuant to this Agreement or any other Loan Document).

“Consolidated Cash Sweep Date” has the meaning provided in Section 7.1.19.

“Consolidated Net Income” means, for any period, the aggregate of the Net Income of the Borrower and the Subsidiary Guarantors for such period, on a consolidated basis determined in accordance with GAAP; provided that: (1) the Net Income (but not loss) of any Person that is not a Subsidiary Guarantor or that is accounted for by the equity method of accounting will be excluded, except to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Subsidiary of the Person; (2) the Net Income of any Subsidiary Guarantor will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary Guarantor of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary Guarantor or its stockholders, partners or members; (3) the cumulative effect of a change in accounting principles will be excluded; (4) any write-downs of non-current assets will be excluded; provided that any ceiling limitation write-downs under SEC guidelines shall be treated as capitalized costs, as if such write-downs had not occurred; (5) any unrealized non-cash gains or losses or charges in respect of hedge or non-hedge derivatives (including those resulting from the application of ASC 410 or 815, in each case as amended) will be excluded; (6) any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards will be excluded; (7) any item classified as an extraordinary, unusual or nonrecurring gain, loss or charge will be excluded; (8) all deferred financing costs written off and premiums paid or other charges in connection with any early extinguishment of Indebtedness will be excluded; and (9) any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax gain or loss on disposed, abandoned, transferred, closed or discontinued operations will be excluded.

“Contingent Liability” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the Capital Securities of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

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“Continuation/Conversion Notice” means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of the Borrower substantially in the form of Exhibit C hereto.

“Control Agreement” means an agreement in form and substance reasonably satisfactory to the Administrative Agent which provides for the Administrative Agent to have “control” (as defined in Section 8-106 of the UCC, as such term relates to investment property (other than certificated securities or commodity contracts), or as used in Section 9-106 of the UCC, as such term relates to commodity contracts, or as used in Section 9-104(a) of the UCC, as such term relates to deposit accounts).

“Controlled Group” means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control that, together with the Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.

“Covered Properties” is defined in Section 7.1.1(m).

“Current Ratio” means the ratio of:

(a)          an amount equal to the sum of the Borrower’s and the Subsidiary Guarantors’ (i) Unrestricted Cash, (ii) accounts receivable that are not more than 120 days past due, and (iii) prepaid expenses

to

(b)          an amount equal to the sum of the Borrower’s and the Subsidiary Guarantors’ accounts payable and accrued expenses.

“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

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“Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent, that has (a) failed to (i) fund any portion of its Loans within two Business Days, unless such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and with supporting facts) has not been satisfied, or (ii) participations in Letters of Credit within two (2) Business Days of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, or any Issuer in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) failed, within three (3) Business Days after written request by the Administrative Agent, to confirm in writing that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans, or participations in then outstanding Letters of Credit (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent, (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it or has taken any corporate or board or other action seeking or agreeing to the appointment of any such Person, or (iii) become the subject of a Bail-In Action; provided, that a Lender shall not become a Defaulting Lender solely as the result of the acquisition or maintenance of an ownership interest in such Lender or Person controlling such Lender or the exercise of control over a Lender or Person controlling such Lender by a Governmental Authority or an instrumentality thereof. Any determination by the Administrative Agent that a Lender is a Defaulting Lender hereunder shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower, each Issuing Bank, and each Lender.

“Default Rate” is defined in Section 3.2.2.

“Deposit Account” means a “deposit account” as that term is defined in Section 9-102(a) of the UCC.

“Designated Holder” means any Person set forth on Annex III hereto.

“Disbursement” is defined in Section 2.6.2.

“Disbursement Date” is defined in Section 2.6.2.

“Disclosure Schedule” means the Disclosure Schedule attached hereto as Schedule I, as it may be amended, supplemented, amended and restated or otherwise modified from time to time by the Borrower with the written consent of the Required Lenders.

“Disposition” (or similar words such as “Dispose”) means any sale, transfer, lease, contribution or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any of the Borrower’s or its Subsidiaries’ assets (including accounts receivable and Capital Securities of Subsidiaries) to any other Person (other than to another Obligor) in a single transaction or series of transactions.

“Dollar” and the sign “$” mean lawful money of the United States.

“Domestic Office” means the office of a Lender designated as its “Domestic Office” on Schedule II hereto or in a Lender Assignment Agreement, or such other office within the United States as may be designated from time to time by notice from such Lender to the Administrative Agent and the Borrower.

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“EBITDA” means, with respect to the Borrower and the Subsidiary Guarantors, the sum of (a) Consolidated Net Income, plus (b) to the extent deducted in determining Consolidated Net Income, the sum of (i) amounts attributable to amortization, depletion and depreciation of assets and other non-cash charges, (ii) income and franchise tax expense, (iii) interest expense (whether in cash or non-cash form) for such period, (iv) non-cash compensation charges, including any such charges arising from stock options, restricted stock grants or other equity-incentive programs, (v) one-time cash commissions, fees or other expenses incurred in connection with Permitted Acquisitions, Investments and Dispositions, (vi) integration costs, severance costs and expenses and one-time compensation costs in connection with any Permitted Acquisition, (vii) extraordinary losses (excluding extraordinary losses from discontinued operations), and (viii) amounts paid to the Administrative Agent, the Lenders, the Issuers and their respective counsels and consultants for fees, costs and expenses relating to the Chapter 11 Cases and in reimbursement of fees, costs and expenses thereof incurred in connection with negotiation, execution and delivery of this Agreement and the other Loan Documents; provided, however, that (i) any calculation of EBITDA hereunder for any applicable period shall be made using an EBITDA for such applicable period calculated on a pro forma basis (inclusive of any acquisitions and/or Disposition, if any, of assets or Equity Interests made during such applicable period as if such acquisitions or Dispositions had been made at the beginning of such applicable period) and the Borrower shall furnish to the Administrative Agent in a form and in detail reasonably satisfactory to the Administrative Agent the financial support for such pro forma calculation, and (ii) the aggregate amount to be included pursuant to the foregoing clauses (v) through (viii) shall not exceed ten percent (10%) of Consolidated Net Income.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Effective Date” means the date this Agreement becomes effective pursuant to Section 10.8.

“Effective Date Certificate” means the certificate executed and delivered by an Authorized Officer of the Borrower in form and substance reasonably satisfactory to the Administrative Agent pursuant to section 5.1.3.

“Effective Date L/C Outstandings” means the aggregate amount available to be drawn on the Effective Date under the Letters of Credit described on Schedule III on the Effective Date, which amount is $227,742,500.

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“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; or (d) any other Person (other than a natural Person, the Borrower, any Affiliate of the Borrower (other than an Affiliated Lender that complies with the terms of Section 10.11(h) of this Agreement) or any other Person taking direction from, or working in concert with, the Borrower or any of the Borrower’s Affiliates (other than an Affiliated Lender that complies with the terms of Section 10.11(h) of this Agreement) or any Defaulting Lender or any of such Defaulting Lender’s Affiliates).

“Environmental Laws” means all applicable foreign, federal, state, provincial or local statutes, laws, ordinances, codes, rules, regulations and guidelines (including consent decrees and administrative orders) relating to public health and safety and protection of the environment.

“EPL” is defined in recital C.

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

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections thereto.

“ERISA Affiliate” means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control that, together with the Borrower, are treated as a single employer under section 414 (b) or 414 (c) of the Code or section 4001(b)(1) of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Event of Default” is defined in Section 8.1.

“Excess Cash” has the meaning provided in Section 7.1.19.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Securities” means solely in the case of any pledge of Equity Interests of any Foreign Subsidiary or FSHCO (in each case, that is owned directly by the Borrower or a Subsidiary Guarantor) to secure the Obligations, any Equity Interest that is Voting Stock of such Foreign Subsidiary or FSHCO in excess of 65% of the outstanding Equity Interests of such class (such percentages to be adjusted upon any change of law as may be required to avoid adverse U.S. federal income tax consequences to the Borrower or any Subsidiary).

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“Excluded Swap Obligations” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission or any successor entity (or the application or official interpretation of any rule, regulation or order thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 7.1.17 and any other “keepwell, support, or other agreement” for the benefit of such Guarantor and any and all Guarantees of such Guarantor’s Swap Obligations by other Guarantors) at the time the Guaranty of such Guarantor, or a grant by such Guarantor of a security interest, becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

“Exemption Certificate” is defined in clause (e) of Section 4.6.

“EXXI GIGS Services” means Energy XXI GIGS Services, LLC, a Delaware limited liability company.

“EXXI GOM” means Energy XXI GOM, LLC, a Delaware limited liability company.

“EXXI Holdings” means Energy XXI Holdings, Inc., a Delaware corporation.

“EXXI Insurance” means Energy XXI Insurance Limited, a Bermuda company.

“Exxon Letter of Credit Outstandings” means at any time the Letter of Credit Outstandings in respect of Exxon Letters of Credit.

“Exxon Letters of Credit” means Letters of Credit issued for the benefit of Exxon Corporation or one or more of its Subsidiaries or Affiliates in connection with plugging and abandonment obligations in connection with Oil and Gas Properties acquired therefrom by the Borrower and its Subsidiaries.

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, as such price is determined in good faith by the Borrower.

“FATCA” means Section 1471 through 1474 of the Code as of the date hereof (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any applicable Treasury regulations or published administrative guidance promulgated thereunder and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“FCPA” means The United States Foreign Corrupt Practices Act of 1977 (Pub. L. No. 95-213, §§101-104), as amended.

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“Federal Funds Rate” means, for any day, a fluctuating interest rate per annum equal for each day during such day to

(a)          the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or

(b)          if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

In the event that on any day the Federal Funds Rate determined pursuant to foregoing is less than zero, then for purposes of this Agreement the Federal Funds Rate for such day shall be deemed to be zero.

“Fee Letter” means the Fee Letter, dated December 30, 2016, by and among the Borrower and the Administrative Agent.

“Filing Statements” is defined in Section 5.1.13.

“First Lien Debt” means, as determined on any date without duplication, all then outstanding Obligations, including Obligations in respect of the principal amount of the Loans, any past due interest accrued on the Loans and the stated amount of Letters of Credit pursuant to and under this Agreement and any other Loan Document.

“First Lien Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of

(a)          First Lien Debt outstanding on such day

to

(b)          EBITDA computed for the period consisting of such Fiscal Quarter and each of the three immediately preceding Fiscal Quarters;

provided, however, that for purposes of the calculation of First Lien Debt for purposes of this definition, First Lien Debt shall not include Letters of Credit to the extent such Letters of Credit are Cash Collateralized.

“Fiscal Quarter” means any period of three consecutive calendar months ending on the last day of March, June, September or December.

“Fiscal Year” means any period of twelve consecutive calendar months ending on June 30; references to a Fiscal Year with a number corresponding to any calendar year (e.g., the “2016 Fiscal Year”) refer to the Fiscal Year ending on June 30 of such calendar year.

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“Foreign Subsidiary” means a Subsidiary of the Borrower that is not a U.S. Subsidiary.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

“FSHCO” shall mean any U.S. Subsidiary that owns (directly or through its Subsidiaries) no material assets other than the Equity Interests of one or more Foreign Subsidiaries that are CFCs.

“GAAP” is defined in Section 1.5.

“Good Title” means, with respect to any Property, a good and valid title to such Property that is free from reasonable doubt, is superior to any other titles and claims with respect to such Property, and could not be reasonably expected to expose the party who holds such title to the hazards of litigation with respect to the validity and priority of such title.

“Governmental Authority” means the government of the United States or Bermuda, any other nation, or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Government Official” means (a) any officer or employee of, or any Person acting in an official capacity for or on behalf of, any Governmental Authority, any public international organization or any political party or (b) any candidate for public office.

“Granting Lender” is defined in clause (g) of Section 10.11.

“Group” means the Obligors and their respective Subsidiaries.

“Guarantor” means, collectively, each Subsidiary Guarantor and each other Person that executes and delivers a Guaranty.

“Guaranty” means any guaranty executed and delivered by an Authorized Officer of a Subsidiary Guarantor pursuant to the terms of this Agreement, substantially in the form of Exhibit F hereto or otherwise in form and substance reasonably acceptable to the Administrative Agent, as amended, supplemented, amended and restated or otherwise modified from time to time.

“Hazardous Material” means

(a)          any “hazardous substance”, as defined by CERCLA;

(b)          any “hazardous waste”, as defined by the Resource Conservation and Recovery Act, as amended; or

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(c)          any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance (including any petroleum product) within the meaning of any other applicable foreign, federal, state, provincial or local law, regulation, ordinance or requirement (including consent decrees and administrative orders) relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, all as amended.

“Hedging Agreements” means (a) any agreement providing for options, swaps, floors, caps, collars, forward sales or forward purchases involving interest rates, commodities or commodity prices, equities, currencies, bonds, or indexes based on any of the foregoing, (b) any option, futures or forward contract traded on an exchange, and (c) any other hedging contract, derivative agreement or other similar agreement or arrangement.

“Hedging Obligations” means, with respect to any Person, all liabilities of such Person in respect of transactions under Hedging Agreements.

“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in any Loan Document refer to such Loan Document as a whole and not to any particular Section, paragraph or provision of such Loan Document.

“Highest Lawful Rate” is defined in Section 10.18.

“Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.

“IFRS” means the “International Financial Reporting Standards” adopted and promulgated by the International Accounting Standards Board, as amended.

“Impermissible Qualification” means any qualification, exception, explanatory paragraph or paragraph of emphasis to the opinion or certification of any independent public accountant as to any financial statement

(a)          that is of a “going concern” or similar nature;

(b)          that relates to the limited scope of examination of matters relevant to such financial statement; or

(c)          that relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause the Borrower to be in Default.

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“including” and “include” means including without limiting the generality of any description preceding such term, and, for purposes of each Loan Document, the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, that is followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned.

“Indebtedness” of any Person means:

(a)          all obligations of such Person for borrowed money or advances and all obligations of such Person evidenced by bonds, debentures, notes or similar instruments or upon which interest payments are customarily made;

(b)          all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, banker’s acceptances, performance, surety or appeal bonds (or similar obligations) issued for the account of such Person;

(c)          all Capitalized Lease Liabilities of such Person;

(d)          all reimbursement, payment or other obligations or liabilities of such Person created or arising under any conditional sale or title retention agreement with respect to property used or acquired by such Person;

(e)          net Hedging Obligations of such Person;

(f)          whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (including all reimbursement, payment or other obligations or liabilities of such Person created or arising under any conditional sale or title retention agreement with respect to property used or acquired by such Person) (excluding trade accounts payable in the ordinary course of business that are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of such Person), and indebtedness secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on property owned or being acquired by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(g)          obligations arising under Synthetic Leases;

(h)          all Contingent Liabilities of such Person; and

(i)          all obligations referred to in clauses (a) through (i) of this definition of another Person secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien upon property owned by such Person.

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The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such Person, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Liabilities” is defined in Section 10.4.

“Indemnified Parties” is defined in Section 10.4.

“Initial Reserve Report” means the reserve report concerning Oil and Gas Properties of the Borrower and the Subsidiary Guarantors, prepared by the Borrower’s petroleum engineers and then audited by an Approved Engineer dated as of June 30, 2016.

“Interest Expense” means, for any applicable period, the aggregate cash interest expense (both accrued and paid and net of interest income paid during such period to the Borrower and the Subsidiary Guarantors) of the Borrower and the Subsidiary Guarantors for such applicable period, including the portion of any payments made in respect of Capitalized Lease Liabilities allocable to interest expense.

“Interest Period” means, relative to any LIBO Rate Loan, the period beginning on (and including) the date on which such LIBO Rate Loan is made or continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4 and shall end on (but exclude) (i) in the case of Revolving Loans the day that numerically corresponds to such date one, three or six months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month) or (ii) in the case of Term Loans, the day that numerically corresponds to such date one month thereafter (or if such month has no numerically corresponding day, on the last Business Day of such month), in each of the foregoing cases specified in clauses (i) or (ii) of this definition, as the Borrower may select in its relevant notice pursuant to Section 2.3 or Section 2.4; provided, that, (y) the Borrower shall not be permitted to select Interest Periods to be in effect at any one time that have expiration dates occurring on more than six different dates; and (z) no Interest Period for any Loan may end later than the Stated Maturity Date.

“Investment” means, relative to any Person,

(a)          any loan, advance or extension of credit made by such Person to any other Person, including the purchase by such Person of any bonds, notes, debentures or other debt securities of any other Person;

(b)          Contingent Liabilities in favor of any other Person; and

(c)          any Capital Securities held by such Person in any other Person.

The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or capital thereon and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the Fair Market Value of such property at the time of such Investment.

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“ISP Rules” is defined in Section 10.9.

“Issuance Request” means a Letter of Credit request and certificate duly executed by an Authorized Officer of the Borrower substantially in the form of Exhibit B-2 hereto.

“Issuer” means, as applicable, WFBNA or UBS, in its capacity as an issuer of the Letters of Credit pursuant to the terms of this Agreement. At the request of the Administrative Agent and with the Borrower’s consent (not to be unreasonably withheld), another Lender (with such Lender’s consent) may issue one or more Letters of Credit hereunder.

“L/C Reduction Amount” means, at any time of calculation, the positive difference (if any) of (i) the sum of Effective Date L/C Outstandings in respect of Exxon Letters of Credit minus (ii) the sum of the then Exxon Letter of Credit Outstandings.

“Lender Assignment Agreement” means an assignment and assumption agreement substantially in the form of Exhibit D hereto.

“Lenders” as defined in the preamble, and includes, for purposes of the Security Documents only, each Person (other than the Borrower or any Subsidiary of the Borrower) which is entitled to the benefits of Section 10.19 of this Agreement and, in such case, only for the purposes of the applicable Hedging Agreements or Bank Product Agreements entered into by such Person prior to the time such Person ceased to provide any Commitment hereunder.

“Lender’s Environmental Liability” means any and all losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, costs, response action costs, judgments, suits, proceedings, damages, (including natural resources damages and consequential damages), disbursements or expenses of any kind or nature whatsoever (including reasonable attorneys’ fees at trial and appellate levels and experts’ fees and disbursements and expenses incurred in investigating, defending against or prosecuting any litigation, claim or proceeding) that may at any time be imposed upon, incurred by or asserted or awarded against any Agent, any Lender or any Issuer or any of such Person’s Affiliates, shareholders, directors, officers, employees, and agents in connection with or arising from:

(a)          any Hazardous Material on, in, under or affecting all or any portion of any property of the Borrower or any of its Subsidiaries or the groundwater thereunder to the extent caused by Releases from the Borrower’s or any of its Subsidiaries’ or any of their respective predecessors’ properties or any surrounding areas thereof;

(b)          any misrepresentation, inaccuracy or breach of any warranty, contained or referred to in Section 6.12;

(c)          any violation or claim of violation by the Borrower or any of its Subsidiaries of any Environmental Laws; or

(d)          the imposition of any Lien for damages (including natural resources damages) caused by, or the recovery of any costs (including response action costs) with respect to, the cleanup, release or threatened release of Hazardous Material by the Borrower or any of its Subsidiaries, or in connection with any property owned or formerly owned by the Borrower or any of its Subsidiaries.

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“Letter of Credit” is defined in Section 2.1.2.

“Letter of Credit Commitment” means an Issuer’s obligation to issue Letters of Credit pursuant to Section 2.1.2 (including the deemed issuance hereunder of the Letters of Credit on Schedule III) and the extension of any expiry date thereof (including via any renewal), and any Lender’s obligation to participate in Letters of Credit pursuant to Section 2.6.

“Letter of Credit Commitment Amount” means, on any date, a maximum amount of $227,742,500, as such amount may be permanently reduced from time to time pursuant to Section 2.2.

“Letter of Credit Commitment Termination Date” means the date that is five Business Days prior to the Revolving Credit Commitment Termination Date.

“Letter of Credit Outstandings” means, on any date, an amount equal to the sum of (a) the then aggregate amount that is undrawn and available under all issued and outstanding Letters of Credit, and (b) the then aggregate amount of all unpaid and outstanding Reimbursement Obligations. The Letter of Credit Outstandings of any Lender (other than a Defaulting Lender to the extent provided in Section 2.10) at any time shall be its Percentage of the Letter of Credit Outstandings at such time.

“LIBO Rate” means, relative to any Interest Period for LIBO Rate Loans, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of the relevant Interest Period by reference to the London interbank offered rate administered by ICE Benchmark Administration Limited for deposits in Dollars (as set forth by the Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent that has been nominated by ICE Benchmark Administration Limited (or any other successor thereto) as an authorized information vendor for the purpose of displaying such rates (a “Screen Rate”) for a period most closely approximating such Interest Period (and in an amount approximately equal to the amount of the relevant LIBO Rate Loans). In the absence of a period comparable to the Interest Period being available as a Screen Rate, (a “Discontinued Interest Period”), then (provided there are Screen Rates for other Interest Periods for Dollars) the LIBO Rate shall mean the Interpolated Screen Rate as of approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. “Interpolated Screen Rate” means the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate which results from interpolating on a linear basis between: (a) the Screen Rate for the longest period (for which that Screen Rate is available for Dollars) which is less than the relevant Discontinued Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available for Dollars) which exceeds the relevant Discontinued Interest Period, each as of approximately 11:00 a.m. (London time) two Business Days prior to the commencement of the Discontinued Interest Period, provided, if any such rate is below zero, the LIBO Rate will be deemed to be zero.

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“LIBO Rate Loan” means a Loan bearing interest, at all times during an Interest Period applicable to such Loan, at a rate of interest determined by reference to the LIBO Rate (Reserve Adjusted).

“LIBO Rate (Reserve Adjusted)” means, relative to any Loan to be made, continued or maintained as, or converted into, a LIBO Rate Loan for any Interest Period, a rate per annum (rounded (if not equal to any 1/100 of 1%) upward to the nearest 1/100 of 1%) determined pursuant to the following formula:

LIBO Rate	=	LIBO Rate
(Reserve Adjusted)		1.00 - LIBOR Reserve Percentage

The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans will be determined by the Administrative Agent on the basis of the LIBOR Reserve Percentage in effect two Business Days before the first day of such Interest Period.

“LIBOR Office” means the office of a Lender designated as its “LIBOR Office” on Schedule II hereto or in a Lender Assignment Agreement, or such other office designated from time to time by notice from such Lender to the Borrower and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining the LIBO Rate Loans of such Lender.

“LIBOR Reserve Percentage” means, relative to any Interest Period for LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum aggregate reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) specified under regulations issued from time to time by the F.R.S. Board and then applicable to assets or liabilities consisting of or including “Eurocurrency Liabilities”, as currently defined in Regulation D of the F.R.S. Board, having a term approximately equal or comparable to such Interest Period.

“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), privilege, charge against or security interest in property, or other priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale or title retention arrangement, any Capitalized Lease Liability and any assignment, deposit arrangement or financing lease intended as security.

“Liquidity” means at any time an amount equal to the sum of (i) the Available Amount plus (ii) the aggregate amount of all Unrestricted Cash of the Borrower and the Subsidiary Guarantors.

“Loan” means, as the context may require, a Revolving Loan or a Term Loan of any Type.

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“Loan Documents” means, collectively, this Agreement, the Notes, the Letters of Credit, each Hedging Agreement between the Borrower and any Approved Counterparty that is or was a Lender or an Affiliate thereof at the time such Approved Counterparty entered into such Hedging Agreement (but only with respect to transactions thereunder entered into when such Approved Counterparty is a Lender or an Affiliate of a Lender hereunder), each Bank Product Agreement between the Borrower and any Bank Product Provider, the Fee Letter, each Security Document, each Guaranty, each Borrowing Request, each Issuance Request and each other agreement delivered in connection with any Loan Document, whether or not specifically mentioned herein or therein.

“Material Adverse Effect” means, in light of all circumstances prevailing at the time, a material adverse effect on (a) the business, assets, condition (financial or otherwise), operations, performance, or properties of the Borrower and the Subsidiary Guarantors taken as a whole, (b) the rights and remedies of any Secured Party under any Loan Document, (c) the ability of the Obligors, taken as a whole, to perform their Obligations under any Loan Document, (d) the legality, validity or enforceability of this Agreement or any other Loan Document or (e) the validity, perfection or priority of Liens with respect to any material portion of the Collateral in favor of the Administrative Agent for the benefit of the Secured Parties.

“Material Acquisition” means any acquisition of Property or series of related acquisitions of Property that involves the payment of consideration by the Borrower and/or any of the Subsidiary Guarantors in excess of $30,000,000 for any single acquisition or series of related acquisitions of Property together with all other acquisitions consummated during the twelve (12) month period immediately preceding such acquisition.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means each mortgage, deed of hypothecation, debenture, pledge, deed of trust or agreement executed and delivered by any Obligor in favor of the Administrative Agent for itself and as agent for the benefit of the Secured Parties pursuant to the requirements of this Agreement in form and substance reasonably satisfactory to the Administrative Agent, as applicable, under which a Lien is granted on the real property and fixtures described therein, in each case as amended, supplemented, amended and restated or otherwise modified from time to time.

“Mortgaged Properties” is defined in Section 7.1.1(m).

“Net Income” means, with respect to the Borrower and the Subsidiary Guarantors, the aggregate of all amounts that would be included as net income (or loss) on the consolidated financial statements of the Borrower and the Subsidiary Guarantors for such period, but shall exclude effects on net income attributable to any current non-cash income or expense (including in respect of Hedging Agreements) described in or calculated pursuant to the requirements of ASC 410 and 815, in each case as amended; provided that, for the avoidance of doubt, the calculation of Net Income in each instance shall include any income or expense in respect of the termination of any Hedging Agreement.

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“No Less Favorable Terms and Conditions” means, with respect to any Refinancing of any Indebtedness permitted hereunder, terms and conditions that are, taken as a whole, no less favorable to the Lenders in any material respect and evidenced by documentation that shall not (a) increase the principal amount of or interest rate on such outstanding Indebtedness, (b) reduce either the tenor or the average life of such Indebtedness, (c) change the respective primary obligor(s) (in a manner that is more favorable to the obligee(s) thereof) on the Refinanced Indebtedness, (d) change the security, if any, or add any security for the Refinanced Indebtedness (except to the extent that only a subset of existing security is granted to holders of such Refinanced Indebtedness) or (e) afford the holders of such Refinancing Indebtedness other covenants, defaults, rights or remedies, taken as a whole, more burdensome to the obligor(s) than those contained in such Refinanced Indebtedness.

“Non-Consenting Lender” means in connection with any proposed amendment, modification, waiver or termination of a Loan Document requiring the consent of all Lenders, if the consent of at least the Required Lenders is obtained, but the consent of the other Lenders whose consent is required is not obtained, any such Lender whose consent is not obtained.

“Non-Defaulting Lender” means a Lender that is not a Defaulting Lender.

“Non-Excluded Taxes” means any Taxes other than net income, franchise Taxes and branch profits Taxes imposed with respect to any Secured Party by any Governmental Authority under the laws of which such Secured Party is organized or in which it maintains its applicable lending office.

“Non-Exxon Letter of Credit” means any Letter of Credit other than an Exxon Letter of Credit.

“Non-Exxon Letter of Credit Outstandings” means, at any time, Letter of Credit Outstandings in respect of Non-Exxon Letters of Credit.

“Non-U.S. Lender” means any Lender that is not a “United States person”, as defined under Section 7701(a)(30) of the Code.

“Note” means (i) in the case of a Revolving Loan a promissory note (a “Revolving Note”) of the Borrower payable to a Revolving Lender, in the form of Exhibit A-1 hereto (as such promissory note may be amended, recorded or otherwise modified from time to time), evidencing the aggregate Indebtedness of the Borrower to such Revolving Lender resulting from outstanding Revolving Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof and (ii) in the case of a Term Loan a promissory note (a “Term Note”) of the Borrower payable to a Term Lender, in the form of Exhibit A-2 hereto (as such promissory note may be amended, recorded, or otherwise modified from time to time) evidencing the aggregate Indebtedness of the Borrower to such Term Lender resulting from outstanding Term Loans and also means all other promissory notes accepted from time to time in substitution or renewal thereof.

“NYMEX Pricing” means, as of any date of determination with respect to any month (i) for crude oil, the closing settlement price for the Light, Sweet Crude Oil futures contract for such month, and (ii) for natural gas, the closing settlement price for the Henry Hub Natural Gas futures contract for such month, in each case as published by New York Mercantile Exchange (NYMEX) on its website currently located at www.nymex.com, or any successor thereto (as such price may be corrected or revised from time to time by the NYMEX in accordance with its rules and regulations).

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“Obligations” means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Borrower and each other Obligor arising under or in connection with a Loan Document including Reimbursement Obligations and the principal of and premium, if any, and interest (including interest accruing (or which would have accrued) during the pendency of any proceedings of the type described in clause (c) or (d) in Section 8.1.9, whether or not allowed in such proceeding) on the Loans and such obligations. For sake of clarity, (i) the Obligations shall include all Hedging Obligations of any Obligor in respect of transactions under Hedging Agreements and all Bank Product Obligations under Bank Product Agreements entered into with any Lender or Affiliate of any Lender at the time such Lender is a Lender hereunder or in effect between such Obligor and such Lender or such Affiliate of any Lender on the Effective Date, as applicable and (ii) the Bank Product Obligations shall be deemed to be Obligations and “Secured Obligations” under the Security Documents. Notwithstanding the foregoing, with respect to any Obligor (other than Borrower), the term “Obligation” shall not include Excluded Swap Obligations.

“Obligor” means, as the context may require, the Borrower and each other Person that is a Subsidiary of the Borrower that is obligated under any Loan Document.

“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) that may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, that relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and that may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property that may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes, together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.

“Organic Document” means, relative to any Obligor, as applicable, its certificate or articles of incorporation, articles and memorandum of association, by-laws, certificate of partnership, partnership agreement, certificate of formation, limited liability agreement, operating agreement and similar or comparable agreement or certificate, and all shareholder agreements, voting trusts and similar arrangements applicable to any of such Obligor’s Capital Securities.

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“Other Taxes” means any and all stamp, documentary or similar Taxes, or any other excise or property Taxes or similar levies that arise on account of any payment made or required to be made under any Loan Document or from the execution, delivery, registration, recording or enforcement of, or otherwise with respect to, any Revolving Credit Extension, any Term Loan or any Loan Document.

“Participant” is defined in clause (d) of Section 10.11.

“Participant Register” is defined in clause (e) of Section 10.11.

“PATRIOT Act” means the USA PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended and supplemented from time to time.

“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding to any or all of its functions under ERISA.

“Pension Plan” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrower or any corporation, trade or business that is, along with the Borrower, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

“Percentage” means, relative to any Lender, the percentage set forth opposite such Lender in the Commitment Schedule, or, as the case may be, in the Lender Assignment Agreement pursuant to which such Lender became a party to this Agreement.

“Permitted Acquisition” means any acquisition (whether pursuant to an acquisition of Capital Securities, assets or otherwise) by the Borrower or any Subsidiary Guarantor from any Person of a business in which all of the following conditions are satisfied:

(a)          the Borrower shall have submitted to the Administrative Agent at least 15 days (or such shorter period of time as the Administrative Agent may agree to in its sole discretion or such longer period of time as may be required by the Lenders if an increase to the Borrowing Base is requested in connection therewith) prior to the consummation of such acquisition, (i) a business description of the business or assets being acquired, (ii) either (A) with respect to the acquisition of a Person whose primary business or assets involve the exploration or production of Hydrocarbons, reserve reports in form and substance reasonably satisfactory to the Administrative Agent together with lease operating statements and other financial information regarding such Person, all as reasonably requested by the Administrative Agent or (B) with respect to any other acquisition, the most recently available audited financial statements of the business or assets being acquired (or such other financial information as reasonably acceptable to the Administrative Agent), and (iii) an executive overview outlining the rationale for such acquisition and a summary of the terms of the acquisition, all in reasonable detail;

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(b)          the assets, Capital Securities or business being acquired, will be located, incorporated and/or doing business in the United States (or located in the offshore area in the Gulf of Mexico over which the United States of America and the Bureau of Ocean Energy Management, Regulation and Enforcement, United States Department of the Interior assert jurisdiction);

(c)          Borrower shall have delivered a certificate certifying that before and after giving effect to such acquisition, the representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all material respects with the same effect as if then made unless such representation or warranty contains a materiality qualifier in which event such representation or warranty shall be true and correct in all respects (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date unless such representation or warranty contains a materiality qualifier in which event such representation or warranty shall be true and correct in all respects as of such earlier date) and no Event of Default or Borrowing Base Deficiency has occurred and is continuing or would result therefrom;

(d)          to the extent the covenants set forth in Section 7.2.4 are being tested at such time, the Borrower shall have delivered to the Administrative Agent a Compliance Certificate for the period of four full Fiscal Quarters immediately preceding such acquisition (prepared in good faith and in a manner and using such methodology that is consistent with the most recent financial statements delivered pursuant to Section 7.1.1) giving pro forma effect to the consummation of such acquisition as if such Permitted Acquisition had occurred on the first day of the period of four Fiscal Quarters ending on the last day of the most recently ended Fiscal Quarter for which a Compliance Certificate has been delivered pursuant to clause (c) of Section 7.1.1 and evidencing compliance with the covenants set forth in Section 7.2.4, such pro forma adjustments being reasonably satisfactory to the Administrative Agent;

(e)          no proceeds of any Loan or Letter of Credit shall be used to fund such acquisition;

(f)          unless the acquisition is being paid in the form of, or with the proceeds from any issuance of, common Equity Interests of the Borrower, the First Lien Leverage Ratio as of the date of the acquisition (giving effect thereto on a pro forma basis) must not be greater than 3.50 to 1.00 and the Borrower must have Liquidity of at least $50,000,000 as of the date of the acquisition (giving effect thereto);

(g)          if such acquisition is a Material Acquisition, such acquisition is acceptable to the Administrative Agent, acting reasonably; and

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(h)          the Borrower shall deliver within 30 days after such Permitted Acquisition (i) a certificate showing the present discounted value of the Borrower’s and the Subsidiary Guarantors’ Oil and Gas Properties (after giving effect to such Permitted Acquisition) that constitute Mortgaged Properties and, (ii) if necessary for the Borrower and the Subsidiary Guarantors’ to remain in compliance with Section 7.1.11, the Borrower shall deliver counterparts of Mortgages or amendments and/or supplements to the Mortgages, as applicable, in form and substance reasonably satisfactory to the Administrative Agent, duly executed and delivered by the applicable Obligors in a sufficient number of counterparts for the due recording in each applicable recording office, granting to the Administrative Agent (or a trustee appointed by the Administrative Agent) for the benefit of the Secured Parties first and prior Liens (subject to Liens permitted by Section 7.2.3) on the Oil and Gas Properties subject of such Permitted Acquisition, as well as such other agreements, documents and other writings as may be reasonably requested by the Administrative Agent, including, without limitation, UCC-1 financing statements, authorizing resolutions, tax affidavits and applicable department of revenue documentation related thereto.

“Person” means any natural person, corporation, limited liability company, partnership, limited partnership, joint venture, association, trust or unincorporated organization, Governmental Authority or any other legal entity, whether acting in an individual, fiduciary or other capacity.

“Platform” is defined in clause (b) of Section 9.10.

“Pledge and Security Agreement” means the Pledge and Security Agreement and Irrevocable Proxy executed and delivered by an Authorized Officer of the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit G hereto, as amended, supplemented, amended and restated or otherwise modified from time to time.

“Prepetition Credit Agreement” is defined in recital A.

“Proceeds Account” is defined in Section 7.1.10.

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.

“Proposed Borrowing Base” is defined in Section 2.8.1.

“Proved Developed Nonproducing Reserves” means Proved Reserves which are categorized as both “Developed” and “Nonproducing” in the Reserve Definitions.

“Proved Developed Producing Reserves” means Proved Reserves which are categorized as both “Developed” and “Producing” in the Reserve Definitions.

“Proved Reserves” means “Proved Reserves” as defined in the Definitions for Oil and Gas Reserves (the “Reserve Definitions”) promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question.

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“Proved Undeveloped Reserves” means Proved Reserves which are categorized as “Undeveloped” in the Reserve Definitions.

“PV9% Value” means, as of any Test Date the net present value, determined using a discount rate of nine percent (9%) per annum, of the future net revenues expected to accrue to the Borrower’s and the Subsidiary Guarantors’ collective interest in the Proved Reserves attributable to the Borrower’s and the Subsidiary Guarantors’ Oil and Gas Properties described in the then most recent Reserve Report delivered to the Administrative Agent pursuant to this Agreement, for the period commencing on the day after such Test Date through the remaining expected economic lives of such Oil and Gas Properties; provided, however that for purposes of the calculation of Adjusted PV9%, not more than 30% of the Adjusted PV9% shall be attributable to Oil and Gas Properties described in such Reserve Report as Proved Undeveloped Reserves. Each calculation of such expected future net revenues shall be made in accordance with the then existing standards of the Society of Petroleum Engineers, provided that in any event (a) appropriate deductions shall be made for severance and ad valorem taxes and for operating, gathering, transportation and marketing costs, required for the production and sale of Hydrocarbons from such Oil and Gas Properties, (b) the pricing assumptions used in determining PV9% Value for any Oil and Gas Properties shall be based upon the Strip Price, adjusted in a manner reasonably acceptable to the Administrative Agent to reflect the Borrower’s Hedging Agreements with Secured Parties in respect of forecasted production from Proved Reserves from such date after such Test Date and (c) the cash-flows derived from the pricing assumptions set forth in clause (b) above shall be further adjusted to account for the historical basis differential in a manner reasonably acceptable to the Administrative Agent. The amount of PV9% Value at any time shall be calculated on a pro forma basis for  dispositions and acquisitions of Oil and Gas Properties consummated since the date of the Reserve Report most recently delivered pursuant to this Agreement (provided that, in the case of any such acquisition or disposition, as the case may be, the Administrative Agent shall have received a Reserve Report evaluating the Proved Reserves attributable to the Oil and Gas Properties subject thereto and if such acquisition is a Material Acquisition, such Reserve Report shall be prepared by an Approved Petroleum Engineer).

“Qualified ECP Guarantor” means, at any time, each Guarantor with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another person to qualify as an “eligible contract participant” at such time under § 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Quarterly Payment Date” means the last Business Day of each March, June, September and December.

“Reference LIBO Rate” means, as of any day, a rate of interest per annum equal to the quotient of (a) the LIBO Rate (for a one-month Interest Period) on such day or, if such day is not a Business Day, the immediately preceding Business Day, divided by (b) one minus the LIBOR Reserve Percentage (expressed as a decimal) applicable to such Interest Period on such day; provided that for the avoidance of doubt, the Reference LIBO Rate for any day shall be based on the LIBO Rate determined by the Administrative Agent at approximately 11:00 a.m. (London time) on such day by reference to the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other Person which takes over the administration of that rate) for deposits in Dollars as set forth by the Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent that has been nominated by the ICE Benchmark Administration Limited as an authorized information vendor for the purpose of displaying such rates.

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“Refinance, Refinancing or Refinanced” shall mean, with respect to any Indebtedness (the “Refinanced Indebtedness”), any Indebtedness issued or incurred in exchange for, or the net proceeds of which are used to modify, extend, refinance, renew, replace or refund, such Refinanced Indebtedness; provided that such Indebtedness is on No Less Favorable Terms and Conditions than the Indebtedness so Refinanced.

“Register” is defined in clause (a) of Section 2.7.

“Reimbursement Obligation” is defined in Section 2.6.3.

“Release” means a “release”, as such term is defined in CERCLA or any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material in the indoor or outdoor environment, including the movement of Hazardous Material through or in the air, soil, surface water, ground water or property.

“Replacement Lender” is defined in Section 4.6(g).

“Replacement Notice” is defined in Section 4.6(g).

“Required Borrowing Base Lenders” means, at any time, Lenders (that are not at such time Defaulting Lenders) holding not less than 67% of the Total Exposure Amount of all Lenders (that are not at such time Defaulting Lenders); provided that notwithstanding the foregoing, the determination for the initial Borrowing Base pursuant to Section 2.8.1 and for any redetermination of the Borrowing Base thereafter resulting in an increase of the Borrowing Base from the Borrowing Base in effect immediately prior to such redetermination of the Borrowing Base, the Required Borrowing Base Lenders means all of the Lenders.

“Required Lenders” means, at any time, Lenders (that are not at such time Defaulting Lenders) holding not less than 51% of the Total Exposure Amount of all Lenders (that are not at such time Defaulting Lenders).

“Required Percentages” is defined in Section 7.1.11.

“Reserve Report” means the Initial Reserve Report and each other report setting forth, as of each December 31st or June 30th (or such other date as required pursuant to Section 2.8 and the other provisions of this Agreement), the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Subsidiary Guarantors, together with a projection of the rate of production and future net income, severance and ad valorem taxes, operating expenses and capital expenditures with respect thereto as of such date, consistent with SEC reporting requirements at such time provided that each such report hereafter delivered must (a) separately report on the Proved Developed Producing Reserves, Proved Developed Nonproducing Reserves and Proved Undeveloped Reserves of the Borrower and the Subsidiary Guarantors, (b) take into account the Borrower’s actual experiences with leasehold operating expenses and other costs in determining projected leasehold operating expenses and other costs, (c) identify and take into account any “overproduced” or “under-produced” status under gas balancing arrangements, and (d) contain information and analysis comparable in scope to that customarily and ordinarily provided by the Borrower except that there shall be no requirement to include any information regarding probable and possible reserves, any field descriptions, or other information other than the numerical output from the proved reserve calculations and summary information to the reasonable satisfaction of the Administrative Agent.

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“Resource Conservation and Recovery Act” means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.

“Restricted Party” means a Person that is: (i) listed on, or owned or controlled by a Person listed on, or acting on behalf of a Person listed on, any Sanctions List; (ii) located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a Person located in or organized under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or (iii) otherwise a target of Sanctions (“target of Sanctions” signifying a Person with whom a US Person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities).

“Restricted Payment” means (a) the declaration or payment of any dividend (other than dividends payable solely in Capital Securities of the Borrower or any Subsidiary) on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of, any class of Capital Securities of the Borrower or any Subsidiary or any warrants, options or other right or obligation to purchase or acquire any such Capital Securities, whether now or hereafter outstanding, or (b) the making of any other distribution in respect of such Capital Securities, in each case either directly or indirectly, whether in cash, property or obligations of the Borrower or any Subsidiary or otherwise.

“Revolving Credit Commitment” means, as to any Lender, the obligations of such Lender, if any, to make Revolving Loans and participate in Letters of Credit in an aggregate principal and/or face amount not to exceed the amount set forth opposite such Lender’s name under the heading “Revolving Credit Commitment” on the Commitment Schedule, or, as the case may be, in the Lender Assignment Agreement pursuant to which such Lender became a party to this Agreement, as the same may be changed from time to time pursuant to the terms hereof.

“Revolving Credit Commitment Amount” means, at any time, the aggregate of the Revolving Credit Commitments of the Lenders at such time. The Revolving Credit Commitment Amount on the Effective Date is $227,742,500.

“Revolving Credit Commitment Termination Date” means the earliest of

(a)          the Stated Maturity Date;

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(b)          the date on which the Aggregate Commitment is terminated in full or reduced to zero pursuant to the terms of this Agreement; and

(c)          the date on which any Commitment Termination Event occurs.

Upon the occurrence of any event described above, the Revolving Credit Commitments shall terminate automatically and without any further action.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its participations in Letter of Credit Outstandings at such time.

“Revolving Credit Extension” means, as the context may require,

(a)          the making of a Revolving Loan by a Revolving Lender (which shall not include the continuation or conversion of any Type of existing Loan); or

(b)          the issuance of any Letter of Credit (including the deemed issuance hereunder of the Letters of Credit set forth on Schedule III), or the extension or renewal (including by autorenewal) of any Stated Expiry Date of any existing Letter of Credit, by an Issuer.

“Revolving Lender” is defined in clause (a) of Section 2.1.1(a).

“Revolving Loans” is defined in clause (i) of Section 2.1.1(a).

“Revolving Note” has the meaning provided in clause (i) of the definition of Note.

“S&P” means Standard & Poor’s Global Ratings, or any successor thereto.

“Sanctions means the economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States government; (ii) the United Nations; (iii) the European Union or any member state thereof; (iv) the United Kingdom; (v) the respective governmental institutions and agencies of any of the foregoing, including, without limitation, OFAC, the United States Department of State, and Her Majesty's Treasury (“HMT”); or (vi) any jurisdiction in which any member of the Group operates (together, the “Sanctions Authorities”).

“Sanctions List” means the “Specially Designated Nationals and Blocked Persons” list maintained by OFAC, the Consolidated List of Financial Sanctions Targets and the Investment Ban List maintained by HMT, or any similar list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities.

“SEC” means the Securities and Exchange Commission.

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“Secured Parties” means, collectively, (a) the Lenders, (b) the Issuers, (c) the Administrative Agent, and (d) each Approved Counterparty to a Hedging Agreement and each Bank Product Provider party to a Bank Product Agreement with the Borrower (or any of its Subsidiaries that is a Subsidiary Guarantor) that is or was a Lender or an Affiliate thereof at the time such Approved Counterparty entered into such Hedging Agreement or such Bank Product Provider entered into such Bank Product Agreement, as the case may be (provided that such Approved Counterparty or Bank Product Provider, as the case may be, is a Secured Party only for purposes of each such Hedging Agreement or Bank Product Agreement, as the case may be, so entered or such Hedging Agreement or Bank Product Agreement, as the case may be, as was in effect and not for any Hedging Agreement or Bank Product Agreement, as the case may be, entered into after such Approved Counterparty or Bank Product Provider, as the case may be, ceases to be a Lender or Affiliate thereof), and in each case each of their respective successor, transferees and assigns.

“Security Agreement” means the Pledge and Security Agreement, together with any other pledge or security agreements delivered pursuant to the terms of this Agreement, in each case as amended, supplemented, amended and restated or otherwise modified from time to time.

“Security Documents” means each Mortgage and Mortgage supplement, each Security Agreement, each Guaranty, each Control Agreement delivered pursuant to the terms of the Loan Documents, and all other security agreements, deeds of trust, mortgages, chattel mortgages, pledges, guaranties, control agreements, financing statements, continuation statements, extension agreements and other agreements or instruments, supplements, amendments or other modifications to any of the foregoing now, heretofore, or hereafter delivered by any Obligor to the Administrative Agent in connection with this Agreement or any transaction contemplated hereby to secure or guarantee the payment of any part of the Obligations or the performance of any Obligor’s other duties and obligations under the Loan Documents.

“Solvent” means, with respect to any Person and its Subsidiaries on a particular date, that on such date (a) the fair value of the property of such Person and its Subsidiaries on a consolidated basis is greater than the total amount of liabilities, including Contingent Liabilities, of such Person and its Subsidiaries on a consolidated basis, (b) the present fair salable value of the assets of such Person and its Subsidiaries on a consolidated basis is not less than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on a consolidated basis on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it or its Subsidiaries will, incur debts or liabilities beyond the ability of such Person and its Subsidiaries to pay as such debts and liabilities mature, (d) the realizable value of such Person’s assets is equal to or greater than the aggregate of its liabilities and stated capital of all classes of Capital Securities and (e) such Person and its Subsidiaries on a consolidated basis is not engaged in a business or a transaction, and such Person and its Subsidiaries on a consolidated basis is not about to engage in a business or a transaction, for which the property of such Person and its Subsidiaries on a consolidated basis would constitute unreasonably small capital. The amount of Contingent Liabilities at any time shall be computed as the amount that, in light of all the facts and circumstances existing at such time, can reasonably be expected to become an actual or matured liability.

“SPC” is defined in clause (g) of Section 10.11.

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“Specified Loan Party” means any Guarantor that is not an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 7.1.17).

“Stated Amount” means, on any date and with respect to a particular Letter of Credit, the total amount then available to be drawn under such Letter of Credit.

“Stated Expiry Date” is defined in Section 2.6.

“Stated Maturity Date” means December 30, 2019.

“Stipulated Borrowing Base” means at any time the positive difference, if any, of (i) the Borrowing Base then in effect minus (ii) the sum of (A) the aggregate principal amount of outstanding Term Loans plus (B) the aggregate Exxon Letter of Credit Outstandings; provided that notwithstanding the foregoing, (i) at no time during the period from the Borrowing Base Initiation Date to and including the date that is six months following the Borrowing Base Initiation Date shall the Stipulated Borrowing Base be less than the greater of (A) the lesser of (1) $25,000,000 or (2) the then L/C Reduction Amount times 0.50 and (B) the Effective Date L/C Outstandings in respect of Non-Exxon Letters of Credit at such time and (ii) at no other time other than during the period described in the foregoing clause (i) shall the Stipulated Borrowing Base be less than zero.

“Strip Price” shall mean, at any time, (a) for the remainder of the then-current calendar year, the average NYMEX Pricing for the remaining months in such calendar year, (b) for each of the succeeding four complete calendar years, the average NYMEX Pricing for the twelve months in each such calendar year, and (c) for each succeeding complete calendar year thereafter, the average NYMEX Pricing for the twelve months in such fifth calendar year.

“Subsidiary” means, with respect to any Person, any other Person of which more than 50% of the outstanding Voting Stock of such other Person (irrespective of whether at the time Capital Securities of any other class or classes of such other Person shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person. Unless the context otherwise specifically requires, the term “Subsidiary” shall be a reference to a Subsidiary of the Borrower.

“Subsidiary Guarantor” means each Subsidiary of the Borrower that has executed and delivered a Guaranty. For the avoidance of doubt, EXXI Insurance, EXXI GIGS Services and EXXI Holdings are not Subsidiary Guarantors.

“Swap Obligations” means with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Synthetic Lease” means, as applied to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is not a capital lease in accordance with GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for federal income tax purposes, other than any such lease under which that Person is the lessor.

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“Taxes” means all taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties or similar liabilities with respect thereto.

“Tax Related Person” means any Person (including a beneficial owner of an interest in a pass-through entity) whose income is realized through or determined by reference to the Administrative Agent, a Lender or Participant or any Tax Related Person of any of the foregoing.

“Term Loan” has the meaning assigned to such term in Section 2.1(c).

“Term Loan Amount” has the meaning provided in Recital D.

“Term Note” has the meaning provided in clause (ii) of the definition of Note.

“Termination Date” means the date that all Obligations (other than contingent indemnity obligations for which no claim has been made) have been paid in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized), all Hedging Agreements secured or purported to be secured by the Security Documents have been terminated and all Commitments shall have terminated.

“Terrorism Laws” means any of the following (a) Executive Order 13224 issued by the President of the United States, (b) the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), (c) the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal Regulations), (d) the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), (e) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 (as it may be subsequently codified), (f) all other present and future legal requirements of any Governmental Authority applicable to the Borrower or any of its Subsidiaries addressing, relating to, or attempting to eliminate, terrorist acts and acts of war and (g) any regulations applicable to the Borrower or any of its Subsidiaries promulgated pursuant thereto or pursuant to any legal requirements of any Governmental Authority governing terrorist acts or acts of war.

“Test Date” means the last day of each Fiscal Quarter commencing with the Fiscal Quarter ending March 31, 2018.

“Total Exposure Amount” means, on any date of determination (and without duplication), the sum of the outstanding principal amount of all Loans, the aggregate amount of all Letter of Credit Outstandings and unpaid Reimbursement Obligations and the unutilized amount of the Revolving Credit Commitments.

“Type” means, relative to any Loan, the portion thereof, if any, being maintained as a Base Rate Loan or a LIBO Rate Loan.

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“UBS” means UBS AG, Stamford Branch.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if, with respect to any Filing Statement or by reason of any provisions of law, the perfection or the effect of perfection or non-perfection or priority of the security interests granted to the Administrative Agent pursuant to the applicable Loan Document is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Loan Document and any Filing Statement relating to such perfection or effect of perfection or non-perfection or priority.

“United States” or “U.S.” means the United States of America, its fifty states and the District of Columbia.

“Unrestricted Cash” means cash and cash equivalents that are (i) held in an account that is the subject of a Control Agreement in favor of the Administrative Agent, (ii) not subject to any Lien in priority to the Liens of the Secured Parties (other than Liens permitted by Section 7.2.3(f), (h), (j) or (m)) and (iii) not held in a restricted account, a payroll account, tax account, trust account, pension account, royalty account or similar type of account (other than an account that is restricted as required under this Agreement or any other Loan Document).

“U.S. Subsidiary” means any Subsidiary that is incorporated or organized under the laws of the United States, a state thereof or the District of Columbia.

“Voting Stock” shall mean, with respect to any Person, such Person’s Equity Interests having the right to vote for the election of directors, managers or other voting members of the governing body of such Person under ordinary circumstances.

“WFBNA” is defined in the Preamble.

“Welfare Plan” means a “welfare plan”, as such term is defined in Section 3(1) of ERISA.

“Wholly owned Subsidiary” means any Subsidiary all of the outstanding Capital Securities of which (other than any director’s qualifying shares or investments by foreign nationals mandated by Applicable Law) is owned directly or indirectly by the Borrower.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

Section 1.2.          Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in each other Loan Document and the Disclosure Schedule and other schedules and exhibits hereto and thereto.

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Section 1.3.          Cross-References and Other Provisions Relating to Terms. Unless otherwise specified, (a) references in a Loan Document to any Article or Section are references to such Article or Section of such Loan Document, and references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition; (b) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement; (c) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined; (d) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms; (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns, provided such successors and assigns are permitted by the Loan Documents; and (f) any affirmative or negative covenant binding on the Borrower shall also bind the Subsidiaries of the Borrower and any representation or warranty made by or with respect to the Borrower shall include the Borrower’s Subsidiaries.

Section 1.4.          Amendment of Defined Instruments. Unless the context otherwise requires or unless otherwise provided herein the terms defined in this Agreement that refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, modifications, amendments and restatements of such agreement, instrument or document in accordance with the Loan Documents, provided that nothing contained in this section shall be construed to authorize any such renewal, extension, modification, amendment or restatement.

Section 1.5.          Accounting and Financial Determinations.

(a)          Unless otherwise specified, all accounting terms used in each Loan Document shall be interpreted, and all accounting determinations and computations thereunder (including under Section 7.2.4 and the definitions used in such calculations) shall be made, in accordance with those generally accepted accounting principles in effect in the United States (“GAAP”) applied on a consistent basis. Unless otherwise expressly provided, all financial covenants and defined financial terms shall be computed on a consolidated basis for the Borrower and the Subsidiary Guarantors, in each case without duplication.

(b)          As of the date of determination of the Current Ratio or the First Lien Leverage Ratio (and any financial calculations required to be made or included within such ratios, or required for purposes of preparing any Compliance Certificate to be delivered pursuant to the definition of “Permitted Acquisition”), the calculation of such ratios and other financial calculations shall include or exclude, as the case may be, the effect of any domestic assets or businesses that have been acquired or Disposed of by the Borrower or any of its Subsidiaries pursuant to the terms hereof (including through mergers or consolidations) as of such date of determination, as determined by the Borrower on a pro forma basis in accordance with GAAP, which determination may include one-time adjustments or reductions in costs, if any, directly attributable to any such permitted Disposition or domestic acquisition, as the case may be, in each case (i) calculated in accordance with Regulation S-X of the Securities Act of 1933, as amended from time to time, and any successor statute, for the period of four Fiscal Quarters ended on or immediately prior to the date of determination of any such ratios (without giving effect to any cost-savings or adjustments relating to synergies resulting from a domestic acquisition except as the Administrative Agent shall otherwise agree) and (ii) giving effect to any such domestic acquisition or permitted Disposition as if it had occurred on the first day of such four Fiscal Quarter period. For purposes of this Section 1.5(b), “domestic” shall mean in the United States (or located in the offshore area in the Gulf of Mexico over which the United States of America and the Bureau of Ocean Energy Management, Regulation and Enforcement, United States Department of the Interior (including its predecessor agency, the Mineral Management Services) assert jurisdiction.

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ARTICLE 2.

COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND LETTERS OF CREDIT

Section 2.1.          Commitments. On the terms and subject to the conditions of this Agreement, the Lenders and the Issuers severally agree to make Revolving Credit Extensions as set forth below.

Section 2.1.1           Revolving Credit Commitment; Term Loans. (a)  (i) From time to time on any Business Day occurring on or after the Effective Date but prior to the Revolving Credit Commitment Termination Date, each Lender that has a Revolving Credit Commitment (referred to as a “Revolving Lender”) severally agrees that it will make loans (relative to such Lender, its “Revolving Loans”) to the Borrower in an aggregate amount equal to such Lender’s Percentage of the aggregate amount of each Borrowing of the Revolving Loans requested by the Borrower to be made on such day.

(b)          The Borrower may from time to time borrow, prepay and reborrow Revolving Loans. No Revolving Lender shall be permitted or required to make any Revolving Loan if, after giving effect thereto, (i) such Lender’s Revolving Credit Exposure would exceed such Lender’s Revolving Credit Commitment; (ii) such Lender’s Revolving Loans plus its Percentage of the Non-Exxon Letter of Credit Outstandings would exceed such Lenders’ Percentage of the Available Amount then in effect; (iii) the aggregate Revolving Credit Exposures of all Lenders would exceed the Revolving Credit Commitment Amount; or (iv) the aggregate amount of outstanding Revolving Loans plus Non-Exxon Letter of Credit Outstandings would exceed the Available Amount then in effect.

(c)          As of the date hereof, each Lender set forth in Annex I to this Agreement holds a term loan to the Borrower (collectively the “Term Loans”) in the amount set forth opposite its name in Annex I which Term Loans are Base Rate Loans on the Effective Date. No amount paid or prepaid on the Term Loans may be reborrowed (provided that the Borrower may borrow amounts of Revolving Loans that may become available for borrowing pursuant to any such payment of Term Loans).

Section 2.1.2           Letter of Credit Commitment. From time to time on any Business Day occurring from the Effective Date until the Letter of Credit Commitment Termination Date, each Issuer agrees that it will

(a)          issue one or more standby letters of credit (relative to such Issuer, its “Letter of Credit”) for the account of the Borrower (which can be issued in the name of a Subsidiary Guarantor) in the Stated Amount requested by the Borrower on such day; or

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(b)          extend the Stated Expiry Date of an existing standby Letter of Credit previously issued hereunder subject to the provisions of Section 2.6.

All Letters of Credit set forth on Schedule III shall be deemed to have been issued pursuant hereto, and from and after the Effective Date shall be subject to and governed by the terms hereof, but otherwise having the same issuer(s), face amount, maturity date and general terms as previously specified in such outstanding letter(s) of credit issued pursuant to the Prepetition Credit Agreement and outstanding as of the Effective Date. No Issuer shall be permitted or required to extend any Letter of Credit described in Schedule III if, after giving effect thereto, (i) the aggregate amount of all Letter of Credit Outstandings would exceed the Letter of Credit Commitment Amount or (ii) the aggregate Revolving Credit Exposures of all Lenders would exceed the Revolving Credit Commitment Amount. No Issuer shall be permitted or required to issue any Non-Exxon Letter of Credit and no Lender is required to purchase a participation in a Non-Exxon Letter of Credit if, after giving effect thereto (i) the aggregate amount of all Letter of Credit Outstandings would exceed the Letter of Credit Commitment Amount or (ii) the aggregate amount of outstanding Revolving Loans plus Non-Exxon Letter of Credit Outstandings would exceed the Available Amount then in effect. No Issuer shall be required to issue any Letter of Credit if, after giving effect thereto, such Issuer’s Letter of Credit Outstandings would exceed an amount equal to the amount of the Letter of Credit Outstandings on the Effective Date of the Letters of Credit issued by such Issuer.

Section 2.2.          Termination of Commitments and Reduction of the Commitment Amount. Unless previously terminated, the Revolving Credit Commitment shall terminate on the Revolving Credit Commitment Termination Date and on such date the Revolving Credit Commitment shall be zero, and the Letter of Credit Commitment shall terminate on the Letter of Credit Commitment Termination Date and on such date the Letter of Credit Commitment Amount shall be zero. The Borrower may, from time to time on any Business Day occurring after the Effective Date, voluntarily reduce the amount of any Commitment Amount on the Business Day so specified by the Borrower; provided that, (a) all such reductions shall require at least one Business Day’s prior notice to the Administrative Agent and be permanent, (b) any reduction of any Commitment Amount shall be in a minimum amount of $500,000 and in an integral multiple of $500,000 unless such reduction is in the full amount of the remaining available Commitment Amount, (c) the Borrower shall not terminate or reduce (i) the Aggregate Commitment if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Exposure Amount of all Lenders would exceed the Aggregate Commitment, (ii) the Revolving Credit Commitment Amount if, after giving effect thereto and to any concurrent prepayments hereunder, the aggregate Revolving Credit Exposures of all Lenders would exceed the Revolving Credit Commitment Amount or (iii) the Letter of Credit Commitment Amount if, after giving effect thereto, the aggregate amount of all Letter of Credit Outstandings would exceed the Letter of Credit Commitment Amount and (d) all such reductions of the Revolving Commitment Amount shall proportionately reduce the Revolving Credit Commitment of each Lender. On each date that the Exxon Letter of Credit Outstandings is less than the Exxon Letter of Credit Outstandings on the previous day due to the termination or expiration of an Exxon Letter of Credit that is not being renewed, extended or replaced, the Aggregate Commitment and the Revolving Credit Commitment Amount shall automatically and permanently reduce without any further action by the Borrower, the Administrative Agent, the Issuer, any Lender or any other Person by an amount equal to the product of (x) 0.50 times (y) the amount that the Exxon Letter of Credit Outstandings on such day is less than the amount of Exxon Letter of Credit Outstandings on the previous day due to such circumstance. Any optional or mandatory reduction of the Aggregate Commitment pursuant to the terms of this Agreement that reduces the Aggregate Commitment below the Letter of Credit Commitment Amount, shall result in an automatic and corresponding reduction of the Letter of Credit Commitment Amount (as directed by the Borrower in a notice to the Administrative Agent delivered together with the notice of such voluntary reduction in the Aggregate Commitment) to an aggregate amount not in excess of the Aggregate Commitment, as so reduced.

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Section 2.3.          Borrowing Procedure. Loans shall be made by the Lenders in accordance with Section 2.3.1.

Section 2.3.1           Borrowing Procedure. In the case of Revolving Loans, by delivering a Borrowing Request to the Administrative Agent on or before noon, New York time, on a Business Day, the Borrower, may from time to time irrevocably request, on the same Business Day’s notice in the case of Base Rate Loans, or three Business Days’ notice in the case of LIBO Rate Loans, and in either case not more than five Business Days’ notice, that a Borrowing be made, (a) in the case of LIBO Rate Loans, in an aggregate minimum amount of $500,000 and an integral multiple of $500,000, (b) in the case of Base Rate Loans, in an aggregate minimum amount of $500,000 and an integral multiple of $500,000 or, in either case, in the unused amount of the Available Amount; provided, that no LIBO Rate Loans may be advanced when any Default or Borrowing Base Deficiency has occurred and is continuing. Each such irrevocable request may be made by telephone confirmed promptly by hand delivery, electronic mail or facsimile to the Administrative Agent of the applicable Borrowing Request. On the terms and subject to the conditions of this Agreement, each Borrowing shall be comprised of the Type of Loans, and shall be made on the Business Day, specified in such Borrowing Request. In the case of Revolving Loans, on or before 11:00 a.m., New York time, on such Business Day (or 3:00 p.m., New York time, in the case of a Base Rate Loan requested on the same Business Day), each Lender that has a Revolving Credit Commitment shall deposit with the Administrative Agent same day funds in an amount equal to such Revolving Lender’s Percentage of the requested Borrowing. Such deposit will be made to an account which the Administrative Agent shall specify from time to time by notice to the Revolving Lenders. To the extent funds are received from the Revolving Lenders, the Administrative Agent shall make such funds available to the Borrower, by wire transfer to the accounts the Borrower, shall have specified in its Borrowing Request. No Lender’s obligation to make any Loan shall be affected by any other Lender’s failure to make any Loan.

Section 2.4.          Continuation and Conversion Elections. By delivering a Continuation/Conversion Notice to the Administrative Agent on or before noon, New York time, on a Business Day, the Borrower, may from time to time irrevocably elect, on not less than one Business Day’s notice in the case of Loans being converted into Base Rate Loans or three Business Days’ notice in the case of Loans being converted into LIBO Rate Loans, and in either case not more than five Business Days’ notice, that all, or any portion in an aggregate minimum amount of $500,000 and an integral multiple of $500,000 be, in the case of Base Rate Loans, converted into LIBO Rate Loans, or in the case of LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three Business Days (but not more than five Business Days) before the last day of the then current Interest Period with respect thereto, such LIBO Rate Loan shall, on such last day, automatically convert to a Base Rate Loan); provided that, (a) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders that have made such Loans, and (b) no portion of the outstanding principal amount of any Loans may be continued as, or be converted into, LIBO Rate Loans when any Event of Default or Borrowing Base Deficiency has occurred and is continuing. Each such irrevocable request may be made by telephone confirmed promptly by hand delivery, electronic mail or facsimile to the Administrative Agent of the applicable Continuation/Conversion Notice. The conversion of a Base Rate Loan into a LIBO Rate Loan or a LIBO Rate Loan into a Base Rate Loan shall not effect a novation of the Loan so converted.

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Section 2.5.          Funding. Each Lender may, if it so elects, fulfill its obligation to make, continue or convert LIBO Rate Loans hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to make or maintain such LIBO Rate Loan; provided that, such election shall not result in any increased cost or expense to the Borrower, such LIBO Rate Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower, to repay such LIBO Rate Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility. In addition, the Borrower hereby consents and agrees that, for purposes of any determination to be made for purposes of Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that each Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits in its LIBOR Office’s interbank eurodollar market.

Section 2.6.          Issuance Procedures and Provisions. By delivering to the Administrative Agent an Issuance Request on or before noon, New York time, on a Business Day, the Borrower may from time to time irrevocably request on not less than three nor more than ten Business Days’ notice, in the case of an initial issuance of a Letter of Credit and not less than three Business Days’ prior notice, in the case of a request for the extension of the Stated Expiry Date of a standby Letter of Credit (in each case, unless a shorter notice period is agreed to by the applicable Issuer, in its sole discretion), that an Issuer issue, or extend the Stated Expiry Date of, a Letter of Credit in such form as may be requested by the Borrower and approved by such Issuer, solely for the purposes described in Section 7.1.7; provided that no extension shall (i) cause a Letter of Credit to expire on a date that is later than the Letter of Credit Commitment Termination Date or (ii) (unless otherwise agreed to by the applicable Issuer in its sole discretion) be for a period in excess of one year. Each Letter of Credit shall by its terms be stated to expire on a date (its “Stated Expiry Date”) no later than the earlier to occur of (a) the Letter of Credit Commitment Termination Date or (b) (unless otherwise agreed to by an Issuer, in its sole discretion), one year from the date of its issuance; provided, however, that a Letter of Credit may, upon the request of the Borrower and subject to the agreement of the Issuer to the terms thereof, include a provision whereby unless the Issuer shall notify the beneficiary to the contrary such Letter of Credit may be renewed automatically for additional consecutive periods of 12 months or less (but in no event beyond the Letter of Credit Commitment Termination Date). Each Issuer will make available to the beneficiary thereof the original of the Letter of Credit that it issues.

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Section 2.6.1           Other Lenders Participation. Upon the issuance, extension, renewal or replacement of each Letter of Credit, and with respect to outstanding letters of credit under the Prepetition Credit Agreement that became Letters of Credit hereunder, and without further action, each Lender (other than the Issuer) shall be deemed to have irrevocably purchased, to the extent of its Percentage as in effect as applicable at such time and from time to time, a participation interest in such Letter of Credit (including the Contingent Liability and any Reimbursement Obligation with respect thereto). Unless such Reimbursement Obligation has been satisfied through the making of a Loan pursuant to Sections 2.6.2 and 2.6.3 below, such Lender shall, to the extent of its Percentage as in effect as applicable at such time and from time to time, be responsible for paying to each Issuer for Reimbursement Obligations that have not otherwise been reimbursed by the Borrower in accordance with Section 2.6.3 within one Business Day of receiving notice from the Issuer for Reimbursement Obligations that have not been reimbursed by the Borrower in accordance with Section 2.6.3 (with the terms of this Section surviving the termination of this Agreement). In addition, such Lender shall, to the extent of its Percentage as in effect as applicable at such time and from time to time, be entitled to receive a ratable portion of the Letter of Credit fees payable pursuant to Section 3.3.4 with respect to each Letter of Credit and of interest payable pursuant to Section 3.2 with respect to any Reimbursement Obligation. To the extent that any Lender has paid an Issuer for a Disbursement, such Lender shall be entitled to receive its ratable portion of any amounts subsequently received (from the Borrower or otherwise) in respect of such Disbursement.

Section 2.6.2           Disbursements. An Issuer will notify the Borrower and the Administrative Agent promptly of the presentment for payment of any Letter of Credit issued by such Issuer, together with notice of the date (the “Disbursement Date”) such payment shall be made (each such payment, a “Disbursement”). Subject to the terms and provisions of such Letter of Credit and this Agreement, the applicable Issuer shall make such payment to the beneficiary (or its designee) of such Letter of Credit. Prior to 1:00 p.m., New York time, on the Disbursement Date if the Borrower shall have received such notice of such Disbursement on or prior to 10:00 a.m., New York time, or, if the Borrower shall have received such notice of Disbursement after 10:00 a.m., New York time, on the Disbursement Date then not later than 1:00 p.m., New York time, on the first Business Day following the Disbursement Date, the Borrower will pay to the Administrative Agent for the account of the applicable Issuer, all amounts that such Issuer has disbursed under such Letter of Credit, together with interest thereon at a rate per annum equal to the rate per annum then in effect for Base Rate Loans (with the then Applicable Margin for Loans accruing on such amount) pursuant to Section 3.2 for the period from the Disbursement Date through the date of such reimbursement. Without limiting in any way the foregoing and notwithstanding anything to the contrary contained herein or in any separate application for any Letter of Credit, the Borrower hereby acknowledges and agrees that it shall be obligated to reimburse the applicable Issuer upon each Disbursement of a Letter of Credit, and it shall be deemed to be the obligor for purposes of each such Letter of Credit issued hereunder (whether the account party on such Letter of Credit is the Borrower or a Subsidiary Guarantor).

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Section 2.6.3           Reimbursement. The obligation (a “Reimbursement Obligation”) of the Borrower under Section 2.6.2 to reimburse the applicable Issuer with respect to each Disbursement (including interest thereon), and, upon the failure of the Borrower to reimburse the applicable Issuer, each Lender’s obligation under Section 2.6.1, to pay such amounts to such Issuer, shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or such Lender, as the case may be, may have or have had against such Issuer or any Lender, including any defense based upon the failure of any Disbursement to conform to the terms of the applicable Letter of Credit (if, in such Issuer’s good faith opinion, such Disbursement is determined to be appropriate) or any non-application or misapplication by the beneficiary of the proceeds of such Letter of Credit; provided that, after paying in full its Reimbursement Obligation hereunder, nothing herein shall adversely affect the right of the Borrower or such Lender, as the case may be, to commence any proceeding against the applicable Issuer for any wrongful Disbursement made by such Issuer under a Letter of Credit as a result of acts or omissions constituting gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable judgment) on the part of such Issuer.

Section 2.6.4           Deemed Disbursements. Upon the occurrence and during the continuation of any Event of Default under clauses (a) through (d) of Section 8.1.9 or upon notification by the Administrative Agent (acting at the direction of the Required Lenders) to the Borrower of its obligations under this Section, following the occurrence and during the continuation of any other Event of Default,

(a)          the aggregate Stated Amount of all Letters of Credit shall, without demand upon or notice to the Borrower or any other Person, be deemed to have been paid or disbursed by the Issuers of such Letters of Credit (notwithstanding that such amount may not in fact have been paid or disbursed); and

(b)          the Borrower shall be immediately obligated to reimburse the Issuers for the amount deemed to have been so paid or disbursed by such Issuers.

Amounts payable by the Borrower pursuant to this Section shall be deposited in immediately available funds in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Secured Parties, and held as collateral security for the Obligations. The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuers and the Lenders, an exclusive first priority and continuing perfected security interest in and Lien on such account and all cash, checks, drafts, certificates and instruments, if any, from time to time deposited or held in such account, all deposits or wire transfers made thereto, any and all investments purchased with funds deposited in such account, all interest, dividends, cash, instruments, financial assets and other Property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing, and all proceeds, products, accessions, rents, profits, income and benefits therefrom, and any substitutions and replacements therefor. The Borrower’s obligation to deposit amounts pursuant to this Section 2.6.4 shall be absolute and unconditional, without regard to whether any beneficiary of any such Letter of Credit has attempted to draw down all or a portion of such amount under the terms of a Letter of Credit, and, to the fullest extent permitted by Applicable Law, shall not be subject to any defense or be affected by a right of set-off, counterclaim or recoupment that the Borrower or any of its Subsidiaries may now or hereafter have against any such beneficiary, the Issuers, the Administrative Agent, the Lenders or any other Person for any reason whatsoever. Such deposit shall be held as collateral securing the payment and performance of the Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Interest, if any, on such deposit shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the applicable Issuer for Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the Reimbursement Obligations of the Borrower at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other Obligations of the Borrower and the Guarantors under this Agreement or the other Loan Documents. When all Events of Default giving rise to the deemed disbursements under this Section have been cured or waived the Administrative Agent shall return to the Borrower all amounts then on deposit with the Administrative Agent pursuant to this Section that have not been applied to the satisfaction of the Reimbursement Obligations or the Obligations.

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Section 2.6.5           Nature of Reimbursement Obligations. The Borrower, each other Obligor and, to the extent set forth in Section 2.6.1, each Lender shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. No Issuer (except to the extent of its own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable judgment) shall be responsible for:

(a)          the form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or any document submitted by any party in connection with the application for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged;

(b)          the form, validity, sufficiency, accuracy, genuineness or legal effect of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or the proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason;

(c)          failure of the beneficiary to comply fully with conditions required in order to demand payment under a Letter of Credit;

(d)          errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise; or

(e)          any loss or delay in the transmission or otherwise of any document or draft required in order to make a Disbursement under a Letter of Credit.

None of the foregoing shall affect, impair or prevent the vesting of any of the rights or powers granted to any Issuer or any Lender hereunder. In furtherance and not in limitation or derogation of any of the foregoing, any action taken or omitted to be taken by an Issuer in good faith (and not constituting gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable judgment) shall be binding upon each Obligor and each such Lender, and shall not put such Issuer under any resulting liability to any Obligor or any Lender, as the case may be. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, AND SPECIFICALLY WITH REFERENCE TO THE PROVISIONS OF SECTIONS 2.6.3 AND 2.6.5, IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH ISSUER BE REIMBURSED OR INDEMNIFIED IN THE CASE OF, AND NOT BE LIABLE FOR, ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL.

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Section 2.6.6           Replacement of an Issuer. Any Issuer may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuer and the successor Issuer. The Administrative Agent shall notify the Lenders of any such replacement of an Issuer. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuer pursuant to Section 3.3. From and after the effective date of any such replacement, (a) the successor Issuer shall have all the rights and obligations of the replaced Issuer under this Agreement with respect to Letters of Credit to be issued thereafter and (b) references herein to the term “Issuer” shall be deemed to refer to such successor or to any previous Issuers, or to such successor and all previous Issuers, as the context shall require. After the replacement of an Issuer hereunder, the replaced Issuer shall remain a party hereto and shall continue to have all the rights and obligations of the Issuer under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

Section 2.6.7           Cash Collateral. The Borrower shall Cash Collateralize all Letter of Credit Outstandings to the extent required by the terms of this Agreement, including without limitation, Sections 3.1.1, 4.7, 7.1.4, 7.1.19, 7.2.10, 8.2 and 8.3. The Borrower hereby grants to the Administrative Agent, for the benefit of the Issuers and the Lenders, a security interest in all cash and deposit account balances provided in connection with such Cash Collateralization and all proceeds of the foregoing. Such cash and deposit account balances with respect to Letters of Credit shall be maintained in blocked, non-interest bearing deposit accounts with (or on behalf of) the Administrative Agent and/or the Issuer (as the case may be). Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under Applicable Law, to reimburse the appropriate Issuer.

Section 2.7.          Register; Notes. The Register shall be maintained on the following terms.

(a)          The Borrower hereby designates the Administrative Agent to serve as its agent, solely for the purpose of this clause, to maintain a register (the “Register”) on which the Administrative Agent will record each Lender’s Commitments, the Loans made by each Lender and each repayment in respect of the principal amount (and stated interest) of the Loans, annexed to which the Administrative Agent shall retain a copy of each Lender Assignment Agreement delivered to the Administrative Agent pursuant to Section 10.11. Failure to make any recordation, or any error in such recordation, shall not affect any Obligor’s Obligations. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person in whose name a Loan is registered as the owner thereof for the purposes of all Loan Documents, notwithstanding notice or any provision herein to the contrary. Any assignment or transfer of a Commitment or the Loans made pursuant hereto shall be registered in the Register only upon delivery to the Administrative Agent of a Lender Assignment Agreement that has been executed by the requisite parties pursuant to Section 10.11. No assignment or transfer of a Lender’s Commitment or Loans shall be effective unless such assignment or transfer shall have been recorded in the Register by the Administrative Agent as provided in this Section.

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(b)          The Borrower agrees that, upon the request of any Lender, the Borrower will execute and deliver to such Lender a Revolving Note or Term Note, as applicable, evidencing the Loans made by, and payable to, such Lender in a maximum principal amount equal to such Lender’s Percentage of the applicable Commitment Amount or the aggregate principal amount of outstanding Term Loans, as applicable. The Borrower hereby irrevocably authorizes each Lender to make (or cause to be made) appropriate notations on the grid attached to such Lender’s Note (or on any continuation of such grid), which notations, if made, shall evidence, inter alia, the date of, the outstanding principal amount of, and the interest rate and Interest Period applicable to the Loans evidenced thereby. Such notations shall, to the extent not inconsistent with notations made by the Administrative Agent in the Register, be conclusive and binding on each Obligor absent manifest error; provided that, the failure of any Lender to make any such notations shall not limit or otherwise affect any Obligations of any Obligor.

Section 2.8.          Borrowing Base.

Section 2.8.1           Initial Borrowing Base. As of the Effective Date, the parties hereto agree that, until such time as the Borrowing Base is otherwise determined in accordance with the terms and provisions of this Section 2.8, the Borrowing Base shall be an amount equal to the lesser of (A) $25,000,000 and (B) an amount equal to the product of 0.50 times the L/C Reduction Amount. The Borrower shall have the right to request that the Administrative Agent and the Lenders establish the initial Borrowing Base under this Agreement by providing a written request that the Administrative Agent and the Lenders establish a Borrowing Base pursuant to this Section 2.8.1. In connection with such request the Borrower shall furnish to the Administrative Agent and the Lenders such data and other information and engineering and geological data reasonably requested by the Administrative Agent. Within fifteen (15) days after the receipt of such information, the Administrative Agent shall make an initial determination of a Borrowing Base (the “Proposed Borrowing Base”), based upon the most recent Reserve Report delivered pursuant hereto and the other information and data delivered pursuant hereto and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the Proposed Borrowing Base. Such initial determination made by the Administrative Agent shall be so made by the Administrative Agent in the exercise of its sole discretion in accordance with the Administrative Agent’s customary practices and standards for oil and gas lending as they exist at the particular time. In no event shall the Proposed Borrowing Base exceed the Aggregate Commitment. After having received notice of such proposal by the Administrative Agent, each Lender shall have fifteen (15) days to approve or disapprove such proposal. If, at the end of such fifteen (15) days, any Lender has not communicated to the Administrative Agent its approval or disapproval, such failure to respond shall be deemed to be an approval of the Proposed Borrowing Base. If the Required Borrowing Base Lenders fail to approve such determination of the Proposed Borrowing Base made by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to the Required Borrowing Base Lenders for purposes of this Section 2.8.1 (it being understood that each Lender is deemed to have agreed to any and all Borrowing Base amounts that are lower than the amount actually agreed to by such Lender) and, subject to the last sentence of this Section 2.8.1, such amount shall become the Borrowing Base effective immediately. Upon agreement by the Administrative Agent and the Required Borrowing Base Lenders of the Borrowing Base, the Administrative Agent shall, by written notice to the Borrower and the Lenders, designate the Borrowing Base available to the Borrower. Such Borrowing Base shall remain in effect until the next determination or redetermination or adjustment of the Borrowing Base in accordance with this Agreement.

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Section 2.8.2           Annual Scheduled Determinations of the Borrowing Base.

(a)          Promptly after June 30 of each calendar year, (whether before or after the Borrowing Base Initiation Date) commencing June 30, 2017, and in any event prior to September 1, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, prepared by an Approved Engineer^, which Reserve Report shall set forth the proven and producing oil and gas reserves attributable to the Oil and Gas Properties owned directly by the Borrower and the Subsidiary Guarantors and a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based on pricing assumptions consistent with SEC reporting requirements at the time, together with additional data concerning pricing, hedging, quantities and purchasers of production, and other information and engineering and geological data as the Administrative Agent or any Lender may reasonably request.

(b)          If such June 30 of any calendar year is on or after the Borrowing Base Initiation Date, within fifteen (15) days after receipt of such Reserve Report and all such information, the Administrative Agent shall make an initial determination of a Borrowing Base, and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Such initial determination made by the Administrative Agent shall be so made by the Administrative Agent in the exercise of its sole discretion in accordance with the Administrative Agent’s customary practices and standards for oil and gas lending as they exist at the particular time. In no event shall the Proposed Borrowing Base exceed the sum of (x) the aggregate of the Revolving Loan Commitments of the Lenders plus (y) the aggregate outstanding principal amount of the Term Loans. After having received notice of such proposal by the Administrative Agent, each Lender shall have fifteen (15) days to approve or disapprove such proposal. If, at the end of such fifteen (15) days, any Lender has not communicated to the Administrative Agent its approval or disapproval, such failure to respond shall be deemed to be an approval of the new or reaffirmed Borrowing Base proposed by the Administrative Agent. If the Required Borrowing Base Lenders fail to approve on any such determination of the proposed Borrowing Base made by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to the Required Borrowing Base Lenders for purposes of this Section 2.8.2 (it being understood that each Lender is deemed to have agreed to any and all Borrowing Base amounts that are lower than the amount actually approved to by such Lender) and, subject to the last sentence of this Section 2.8.2, such amount shall become the new Borrowing Base effective on the date specified in this Section 2.8. Upon agreement by the Administrative Agent and the Required Borrowing Base Lenders of the Borrowing Base, the Administrative Agent shall, by written notice to the Borrower and the Lenders, designate the Borrowing Base available to the Borrower. Such designation shall be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such Borrowing Base shall remain in effect until the next determination or redetermination or adjustment of the Borrowing Base in accordance with this Agreement. Anything herein contained to the contrary notwithstanding, any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the approval of the Required Borrowing Base Lenders in their sole discretion in accordance with their respective customary practices and standards for oil and gas lending as they exist at the particular time.

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Section 2.8.3           Semi-Annual Scheduled Determination of the Borrowing Base.

(a)          Promptly after December 31 of each calendar year, commencing December 31, 2016, and in any event prior to March 1 of each calendar year, (whether before or after the Borrowing Base Initiation Date) the Borrower will make available for review by the Administrative Agent a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, prepared by the Borrower’s petroleum engineers, which report shall be dated as of December 31 of such calendar year and shall set forth the proven and producing oil and gas reserves attributable to the Oil and Gas Properties owned directly by the Borrower and the Subsidiary Guarantors and a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based on pricing assumptions consistent with SEC reporting requirements at the time, together with additional data concerning pricing, hedging, quantities and purchasers of production, and other information and engineering and geological data as the Administrative Agent or any Lender may reasonably request.

(b)          If such December 31 of any calendar year is on or after the Borrowing Base Initiation Date, within fifteen (15) days after receipt of such Reserve Report and all such information the Administrative Agent shall make an initial determination of a Proposed Borrowing Base, and upon such initial determination shall promptly notify the Lenders in writing of initial determination of the proposed Borrowing Base. Such initial determination shall be made in the same manner and be subject to the same approvals as prescribed above with respect to the annual review, and likewise the Administrative Agent shall communicate the results of such initial determination to the Lenders. After having received notice of such proposal by the Administrative Agent, each Lender shall have fifteen (15) days to approve or disapprove such proposal. If, at the end of such fifteen (15) days, any Lender has not communicated to the Administrative Agent its approval or disapproval, such failure to respond shall be deemed to be an approval of the new or reaffirmed Borrowing Base proposed by the Administrative Agent. If the Required Borrowing Base Lenders fail to approve any such determination of the proposed Borrowing Base made by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Borrowing Base Lenders for purposes of this Section 2.8.3 (it being understood that each Lender is deemed to have agreed to any and all Borrowing Base amounts that are lower than the amount actually approved to by such Lender) and, subject to the last sentence of this Section 2.8.3, such amount shall become the new Borrowing Base, effective on the date specified in this Section 2.8. Upon agreement by the Administrative Agent and the Required Borrowing Base Lenders of the amount of credit to be made available to the Borrower hereunder, the Administrative Agent shall, by written notice to the Borrower and the Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination or adjustment of the Borrowing Base in accordance with this Agreement. Anything herein contained to the contrary notwithstanding, any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the approval of the Required Borrowing Base Lenders in their sole discretion in accordance with their respective customary practices and standards for oil and gas lending as they exist at the particular time.

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Section 2.8.4           Discretionary Determination of the Borrowing of the Base by the Lenders. In addition to the foregoing scheduled annual and semi-annual determinations of the Borrowing Base, at any time on or after the Borrowing Base Initiation Date, the Required Borrowing Base Lenders shall have the right to redetermine the Borrowing Base at their sole discretion at any time and from time to time but not more often than two (2) times every calendar year. If the Required Borrowing Base Lenders shall elect to make a discretionary redetermination of the Borrowing Base pursuant to the provisions of this Section 2.8.4, the Borrower shall within thirty (30) days of receipt of a request therefor from the Administrative Agent, deliver to the Administrative Agent a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, prepared by the Borrower's petroleum engineers containing information similar to the Reserve Reports delivered pursuant to Section 2.8.3, together with such updated engineering, production, operating and other data as the Administrative Agent, any Issuer or any Lender may reasonably request. The Administrative Agent shall have fifteen (15) days following receipt of such requested information to make an initial redetermination of the Borrowing Base, and the Administrative Agent and the Required Borrowing Base Lenders shall approve and designate the new Borrowing Base in accordance with the procedures and standards described in Section 2.8.2.

Section 2.8.5           Discretionary Determination of the Borrowing Base by the Borrower. In addition to the foregoing determinations of the Borrowing Base, at any time on or after the Borrowing Base Initiation Date, the Borrower may request a redetermination of the Borrowing Base at any time and from time to time but not more often than two (2) times every calendar year, by delivering a written request to the Administrative Agent, together with (a) an engineering fee in the aggregate amount of $2,500 for the account of the Administrative Agent in immediately available funds, and (b) a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, prepared by the Borrower’s petroleum engineers containing information similar to the Reserve Reports delivered pursuant to Section 2.8.3, together with such other updated engineering, production, operating and other data as the Administrative Agent, any Issuer or any Lender may reasonably request. Each such discretionary redetermination of the Borrowing Base shall be made in the same manner and in accordance with the procedures and standards set forth above by adjusting the Borrowing Base then in effect. The Administrative Agent shall have fifteen (15) days following receipt of such requested information to make an initial redetermination of the Borrowing Base, and the Administrative Agent and the Required Borrowing Base Lenders shall approve and designate the new Borrowing Base in accordance with the procedures and standards described in Section 2.8.2.

Section 2.8.6           Other Redeterminations of Borrowing Base. Notwithstanding anything to the contrary contained herein, at any time on or after the Borrowing Base Initiation Date, the Borrowing Base will also be redetermined or adjusted in accordance with the provisions of Section 7.2.10.

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Section 2.8.7            [Reserved]

Section 2.8.8           General Provisions With Respect to the Borrowing Base. Notwithstanding anything herein the contrary, in the event that at any time on or after the Borrowing Base Initiation Date the Borrower does not furnish all required Reserve Reports or other information in a timely manner, the Administrative Agent and the Required Borrowing Base Lenders may nonetheless designate the Borrowing Base from time to time thereafter until the Administrative Agent and the Lenders receive all such Reserve Reports and information, whereupon the Administrative Agent and the Required Borrowing Base Lenders shall designate a new Borrowing Base in accordance with the general procedures outlined in Section 2.8.2. Anything herein contained to the contrary notwithstanding, any determination or redetermination of the Borrowing Base, including any discretionary redetermination of the Borrowing Base, resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the approval of the Borrowing Base Required Lenders in their sole discretion in accordance with their respective customary practices and standards for oil and gas lending as they exist at the particular time.

Section 2.9.            [Reserved].

Section 2.10.         Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)          fees shall cease to accrue on the unfunded portion of the Commitments of such Defaulting Lender pursuant to Section 3.3.1;

(b)          in the event that such Defaulting Lender shall fail to respond to any request for any waiver, consent, amendment or modification requested hereunder within twenty (20) days of written request from the Administrative Agent, such Defaulting Lender shall be deemed to have consented or agreed to such requested waiver, consent, amendment or modification, as the case may be, solely for purposes of determining whether all Lenders (as opposed to the Required Lenders) have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.1);

(c)          if any Letter of Credit Outstandings exist at the time a Lender becomes a Defaulting Lender then:

(i)          all or any part of such Letter of Credit Outstandings of such Defaulting Lender shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Percentages but only to the extent that as a result thereof (x) the sum of all Non-Defaulting Lenders’ Revolving Credit Exposure plus such Defaulting Lender’s Letter of Credit Outstandings would not exceed an amount equal to the Non-Defaulting Lenders’ Percentage of the Revolving Credit Commitment Amount, (y) the sum of each Non-Defaulting Lender’s Revolving Credit Exposure plus such Non-Defaulting Lender’s share under this clause (i) of such Defaulting Lender’s Letter of Credit Outstandings would not exceed an amount equal to such Non-Defaulting Lender’s Percentage of the Revolving Credit Commitment Amount then in effect and (z) the conditions set forth in Section 5.2 are satisfied at such time; and

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(ii)         if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent Cash Collateralize such Defaulting Lender’s Letter of Credit Outstandings (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.6.4(b) for so long as such Letter of Credit Outstandings are outstanding; and

(iii)        if the Borrower Cash Collateralizes any portion of such Defaulting Lender’s Letter of Credit Outstandings pursuant to this Section 2.10(c), the Borrower shall not be required to pay any fees in respect of the interest of such Defaulting Lender pursuant to Section 3.3.4 with respect to such Defaulting Lender’s Letter of Credit Outstandings during the period such Defaulting Lender’s Letter of Credit Outstandings are Cash Collateralized; and

(iv)        if the Letter of Credit Outstandings of the Non-Defaulting Lenders are reallocated pursuant to this Section 2.10(c), then the fees payable to the Lenders pursuant to Section 3.3.1 and Section 3.3.4 shall be adjusted to give effect to such reallocations in accordance with such Non-Defaulting Lenders’ Percentages;

(d)          so long as any Lender is a Defaulting Lender, no Issuer shall be required to issue, amend, extend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Revolving Credit Commitments of the Non-Defaulting Lenders and/or Cash Collateralized in accordance with this Section 2.10(c) (and, if applicable, Section 2.6.4), and participating interests in any such newly issued, extended or increased Letter of Credit shall be allocated among Non-Defaulting Lenders in a manner consistent with Section 2.10(c)(i) (and Defaulting Lenders shall not participate therein); and

(e)          any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 4.8) shall, in lieu of being distributed to such Defaulting Lender, subject to any applicable requirements of law, be applied (i) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata, to the payment of any amounts then owing by such Defaulting Lender to any Lender or Issuer hereunder, and (iii) third, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction.

In the event that the Administrative Agent, the Borrower, and the Issuers each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Revolving Credit Exposure of the Lenders shall be readjusted and reallocated to reflect the inclusion of such Lender’s Revolving Commitment and on such date such Lender shall purchase at par such of the Revolving Loans and participations in Letters of Credit of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Revolving Loans and participations in Letters of Credit in accordance with its applicable Percentage after giving effect to such reallocation; provided that notwithstanding the foregoing, the Borrower must comply with Section 2.6.4.

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ARTICLE 3.

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

Section 3.1.          Repayments and Prepayments; Application. The Borrower agrees that the Loans shall be repaid and prepaid pursuant to the following terms.

Section 3.1.1           Repayments and Prepayments. The Borrower shall repay in full the unpaid principal amount of each Loan upon the applicable Stated Maturity Date therefor. Prior thereto, payments and prepayments of the Loans shall or may be made as set forth below. No amount paid or prepaid on a Term Loan may be reborrowed (provided that the Borrower may borrow amounts of Revolving Loans that may become available for borrowing pursuant to any such payment of Term Loans).

(a)          (i) From time to time on any Business Day, the Borrower may make a voluntary prepayment, in whole or in part, of the outstanding principal amount of any Loans; provided that, (1) all such voluntary prepayments shall require, in the case of Base Rate Loans at least the same Business Day’s prior notice (such notice to be delivered before noon on such day), and in the case of LIBO Rate Loans at least three Business Days’ prior notice (such notice to be delivered before noon on such day), and in either case not more than five Business Days’ prior irrevocable notice to the Administrative Agent (which notice may be telephonic so long as such notice is confirmed in writing within 24 hours thereafter and such notice to be delivered before noon on such day); and (2) all such voluntary partial prepayments shall be, in the case of LIBO Rate Loans, in an aggregate minimum amount of $500,000 and an integral multiple of $500,000 and, in the case of Base Rate Loans, in an aggregate minimum amount of $500,000 and an integral multiple of $500,000 (unless such prepayment is for the entire amount of all outstanding LIBO Rate Loans or Base Rate Loans, as the case may be). Each notice of prepayment sent pursuant to this clause shall specify the prepayment date, the principal amount of each Borrowing (or portion thereof) to be prepaid, whether such Loans are Revolving Loans or Term Loans and the scheduled installment or installments of principal to which such prepayment is to be applied. Each such notice shall be irrevocable and shall commit the Borrower to prepay such Borrowing by the amount stated therein on the date stated therein ; provided that a notice of prepayment may state that such notice is conditioned upon the effectiveness of other credit facilities and funding thereunder, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. All prepayments under this clause (other than prepayments of Loans that are Base Rate Loans that are not made in connection with the termination or permanent reduction of the Revolving Credit Commitment Amount) shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment; and

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(b)          On each date when, after giving effect to any termination or reduction of applicable Commitments pursuant to Section 2.2, the aggregate of the Lenders’ Revolving Credit Exposure exceeds the Revolving Credit Commitment Amount then in effect, the Borrower shall make a mandatory prepayment of Revolving Loans and, if necessary, Cash Collateralize the Letter of Credit Outstandings, in an aggregate amount equal to such excess.

(c)          If at any time on or after the Borrowing Base Initiation Date the sum of (i) the aggregate outstanding principal amount of all Revolving Loans and (ii) the aggregate amount of all Non-Exxon Letter of Credit Outstandings exceeds the then Stipulated Borrowing Base (a “Borrowing Base Deficiency”), then the Borrower shall (A) prepay the outstanding Revolving Loans in an aggregate principal amount equal to such excess, and (B) if any excess remains after prepaying all of the outstanding Revolving Loans as a result of Non-Exxon Letter of Credit Outstandings, Cash Collateralize such Non-Exxon Letter of Credit Outstandings, in an aggregate amount equal to such excess. The Borrower shall be obligated to make such prepayment and/or deposit of cash collateral within forty-five (45) days following its receipt of the written designation of the Borrowing Base in accordance with Section 2.8 or the date the adjustment occurs; provided that all payments required to be made pursuant to this clause (c) must be made on or prior to the Termination Date.

(d)          Upon any adjustments to the Borrowing Base pursuant to Section 7.2.10, if a Borrowing Base Deficiency exists, then the Borrower shall (i) prepay the outstanding Revolving Loans in an aggregate principal amount equal to such excess, and (ii) if any excess remains after prepaying all of the outstanding Revolving Loans as a result of Non-Exxon Letter of Credit Outstandings, Cash Collateralize such Non-Exxon Letter of Credit Outstandings, in an aggregate amount equal to such excess. The Borrower shall be obligated to make such prepayment and/or deposit of cash collateral on the date it or any Subsidiary receives cash proceeds as a result of any sale or Disposition under Section 7.2.10; provided that all payments required to be made pursuant to this sentence must be made on or prior to the Termination Date.

(e)          Immediately upon any acceleration of the Stated Maturity Date of any Loans pursuant to Section 8.2 or Section 8.3, the Borrower shall repay all the Loans, unless, pursuant to Section 8.3, only a portion of all the Loans is so accelerated (in which case the portion so accelerated shall be so repaid).

(f)          If on any Test Date, the Asset Coverage Ratio shall be less than 1.50 to 1.00, then within ten (10) days after the delivery of the information required by Section 7.1.1(q) for the Fiscal Quarter ending on such Test Date, the Borrower shall make a mandatory prepayment on the Term Loans in an amount equal to the lesser of (i) 7.5% of the aggregate outstanding principal amount of the Term Loans on the Effective Date or (ii) the then outstanding principal amount of the Term Loans.

Each prepayment of any Loans made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4, and shall be accompanied by all interest then accrued and unpaid on the principal so prepaid. Each prepayment or repayment of outstanding Loans shall be applied (i) if pursuant to the foregoing clause (a) as directed by the Borrower, (ii) if pursuant to the foregoing clause (b), (c) or (d) as provided therein, and (iii) if pursuant to the foregoing clause (e), as directed by the Administrative Agent.

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Notwithstanding the foregoing, if the Borrower is required to Cash Collateralize Non-Exxon Letter of Credit Outstandings pursuant to this Section 3.1.1, as soon as such Borrowing Base Deficiency no longer exists (assuming for purposes of the determination thereof that there is no Cash Collateralization of any Non-Exxon Letter of Credit Outstandings), the Borrower shall no longer be required to Cash Collateralize Non-Exxon Letter of Credit Outstandings pursuant to this Section and such cash shall be released from the blocked account(s) (unless and until a new Borrowing Base Deficiency may exist and such new Borrowing Base Deficiency cannot be cured by prepayment of outstanding Revolving Loans).

Section 3.1.2           Application. Each prepayment or repayment of the principal of the Loans shall be applied, to the extent of such prepayment or repayment, first, to the principal amount thereof being maintained as Base Rate Loans and second, subject to the terms of Section 4.4, to the principal amount thereof being maintained as LIBO Rate Loans, in each case in a manner that to the extent practical minimizes the amount of any payments required to be made by the Borrower pursuant to Section 4.4.

Section 3.2.          Interest Provisions. Interest on the outstanding principal amount of the Loans shall accrue and be payable in accordance with the terms set forth below.

Section 3.2.1           Rates. Subject to Section 2.3.2, pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice, the Borrower may elect that the Loans comprising a Borrowing accrue interest at a rate per annum:

(a)          on that portion maintained from time to time as a Base Rate Loan, equal to the sum of the Alternate Base Rate, from time to time in effect plus the Applicable Margin; and

(b)          on that portion maintained as a LIBO Rate Loan, during each Interest Period applicable thereto, equal to the sum of the LIBO Rate (Reserve Adjusted) for such Interest Period plus the Applicable Margin.

All LIBO Rate Loans shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to such LIBO Rate Loan.

Section 3.2.2           Post-Default Rates. After the date any Event of Default has occurred and for so long as such Event of Default is continuing, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on all outstanding Obligations under this Agreement at a rate per annum equal to the following (the “Default Rate”) (a) in the case of principal on any Loan, subject to Applicable Law, the rate of interest that otherwise would be applicable to such Loan plus 2% per annum; and (b) in the case of overdue interest, fees, and other monetary Obligations under this Agreement, the Base Rate from time to time in effect, plus the Applicable Margin for Loans accruing interest at the Base Rate, plus a margin of 2% per annum.

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Section 3.2.3           Payment Dates. Interest accrued on each Loan shall be payable, without duplication:

(a)          on the Stated Maturity Date therefor;

(b)          on the date of any payment or prepayment, in whole or in part, of principal outstanding on such Loan on the principal amount so paid or prepaid;

(c)          with respect to Base Rate Loans on each Quarterly Payment Date occurring after the Effective Date;

(d)          with respect to LIBO Rate Loans, on the last day of each applicable Interest Period (and, if such Interest Period shall exceed three months, on the date occurring on each three-month interval occurring after the first day of such Interest Period);

(e)          with respect to any Base Rate Loans converted into LIBO Rate Loans on a day when interest would not otherwise have been payable pursuant to clause (c), on the date of such conversion; and

(f)          on that portion of any Loans the Stated Maturity Date of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

Interest accrued on Loans or other monetary Obligations under this Agreement after the date such amount is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon demand.

Section 3.3.          Fees. The Borrower agrees to pay the fees set forth below. All such fees shall be non-refundable.

Section 3.3.1           Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Lender, for the period (including any portion thereof when any of its Commitments are suspended by reason of the Borrower’s inability to satisfy any condition of Article V) commencing on the Effective Date and continuing through the Revolving Credit Commitment Termination Date, a commitment fee in an amount equal to the Applicable Commitment Fee Margin, in each case on such Lender’s Percentage of the sum of the average daily unused portion of an amount equal to the Available Amount. The commitment fees payable pursuant to this Section shall be calculated on a year comprised of 360 days and payable by the Borrower in arrears on the Effective Date and thereafter on each Quarterly Payment Date, commencing with the first Quarterly Payment Date following the Effective Date, and on the Revolving Credit Commitment Termination Date.

Section 3.3.2           Administrative Agent’s Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, the fees in the amounts and on the dates set forth in the Fee Letter.

Section 3.3.3            [Reserved]

Section 3.3.4           Letter of Credit Fee. The Borrower agrees to pay to the Administrative Agent, for the pro rata account of the applicable Issuer and each Lender, a Letter of Credit fee in a per annum amount equal to the then effective Applicable Margin for Loans maintained as LIBO Rate Loans, multiplied by the Stated Amount of each such Letter of Credit, such fees being payable quarterly in arrears on each Quarterly Payment Date following the date of issuance of each Letter of Credit and on the Revolving Credit Commitment Termination Date.

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Section 3.3.5           Letter of Credit Issuance Fee. The Borrower agrees to pay to each Issuer for its own account an issuance fee for each Letter of Credit issued by such Issuer after the Effective Date equal to 0.25% per annum of the Stated Amount of such Letter of Credit. Such fee shall be payable by the Borrower on the date of issuance (and renewal or extension, as applicable) of such Letter of Credit. The Borrower also agrees to pay such Issuer’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder, which fees shall be payable to such Issuer within ten (10) days after demand.

ARTICLE 4.

Certain LIBO Rate and Other Provisions

Section 4.1.          LIBO Rate Lending Unlawful. If any Lender shall determine (which determination shall, upon notice thereof to the Borrower and the Administrative Agent, be conclusive and binding on the Borrower) that the introduction of or any change in or in the interpretation of any law makes it unlawful, or any Governmental Authority asserts that it is unlawful, for such Lender to make or continue any Loan as, or to convert any Loan into, a LIBO Rate Loan, the obligations of such Lender to make, continue or convert any such LIBO Rate Loan shall, upon such determination, forthwith be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all outstanding LIBO Rate Loans payable to such Lender shall automatically convert into Base Rate Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion.

Section 4.2.          Inability to Determine Rates. If the Administrative Agent or the Required Lenders shall have determined that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such LIBO Rate Loan; (b) adequate and reasonable means do not exist for determining the LIBO Rate for any requested Interest Period with respect to a proposed LIBO Rate Loan; or (c) the LIBO Rate (Reserve Adjusted) for any requested Interest Period with respect to a proposed LIBO Rate Loan does not adequately and fairly reflect the cost of funding such LIBO Rate Loan, then the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice, the obligation of the Lenders to make or continue (or convert any Base Rate Loans into) LIBO Rate Loans shall be suspended, and any pending Borrowing Request or Continuation/Conversion Notice requesting the making or continuation of (or conversion of Base Rate Loans into) LIBO Rate Loans will be deemed to have been converted into a Borrowing Request or Continuation/Conversion Notice with respect to Base Rate Loans in the amount specified therein.

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Section 4.3.          Increased LIBO Rate Loan Costs, etc. The Borrower agrees to reimburse each Lender and each Issuer for any increase in the cost to such Lender or Issuer of, or any reduction in the amount of any sum receivable by such Secured Party in respect of, such Secured Party’s Commitments and the making of Revolving Credit Extensions and Term Loans hereunder (including the making, continuing or maintaining (or of its obligation to make or continue) any Loans as, or of converting (or of its obligation to convert) any Loans into, LIBO Rate Loans) that arise in connection with any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase in after the Effective Date of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any Governmental Authority; provided, however, that any such changes with respect to increased capital costs and Taxes shall be subject to (including the rights of the Borrower in respect thereof) and governed by the terms of Sections 4.5 and 4.6, respectively. Each affected Secured Party shall promptly notify the Administrative Agent and the Borrower in writing of the occurrence of any such event, stating the reasons therefor and the additional amount required fully to compensate such Secured Party for such increased cost or reduced amount. Such additional amounts shall be payable by the Borrower directly to such Secured Party within five days of its receipt of such notice, provided that such Secured Party shall not be entitled to such additional amounts for the period prior to one hundred eighty (180) days prior to the date of such notice of the occurrence of the event giving rise to the increased cost or reduced amount, provided that if the circumstance giving rise to such additional amount is retroactive, then such 180 day period shall be extended to include the period of retroactive effect thereof, and such notice shall, in the absence of manifest error, be conclusive and binding on the Obligors; provided, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by any Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted or issued.

Section 4.4.          Funding Losses. In the event any Lender shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to make or continue any portion of the principal amount of any Loan as, or to convert any portion of the principal amount of any Loan into, a LIBO Rate Loan) as a result of

(a)          any conversion or repayment or prepayment of the principal amount of any LIBO Rate Loan on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to Article 3 or otherwise;

(b)          any Loans not being made as LIBO Rate Loans in accordance with the Borrowing Request therefor;

(c)          any Loans not being continued as, or converted into, LIBO Rate Loans in accordance with the Continuation/Conversion Notice therefor; or

(d)          any LIBO Rate Loans not being prepaid in accordance with any notice delivered pursuant to clause (a) of Section 3.1.1 (as a result of a revocation of such notice or as a result of such payment not being made);

then, upon the written notice of such Lender to the Borrower (with a copy to the Administrative Agent), the Borrower shall, within five (5) days of its receipt thereof, pay directly to such Lender such amount as will (in the reasonable determination of such Lender) reimburse such Lender for such loss or expense. Such written notice shall, in the absence of manifest error, be conclusive and binding on the Obligors.

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Section 4.5.          Increased Capital Costs. If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any Governmental Authority, in each case after the Effective Date (“Change in Law”), affects or would affect the amount of capital or liquidity required or expected to be maintained by any Secured Party or any Person controlling such Secured Party, and such Secured Party determines (in good faith but in its sole and absolute discretion) that the rate of return on its or such controlling Person’s capital as a consequence of the Commitments or the Revolving Credit Extensions or Term Loans made, or the Letters of Credit participated in, by such Secured Party is reduced to a level below that which such Secured Party or such controlling Person could have achieved but for the occurrence of any such Change in Law, then upon notice from time to time by such Secured Party to the Borrower, the Borrower shall within five days following receipt of such notice, provided that such Secured Party shall not be entitled to such additional amounts for the period prior to one hundred eighty (180) days prior to the date of such notice of the occurrence of the applicable Change in Law, provided that if the circumstance giving rise to such additional amount is retroactive, then such 180 day period shall be extended to include the period of retroactive effect thereof, pay directly to such Secured Party additional amounts sufficient to compensate such Secured Party or such controlling Person for such reduction in rate of return; provided, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by any Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted or issued. A statement of such Secured Party as to any such additional amount or amounts shall, in the absence of manifest error, be conclusive and binding on the Obligors. In determining such amount, such Secured Party may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable.

Section 4.6.          Taxes. The Borrower covenants and agrees as follows with respect to Taxes.

(a)          Any and all payments by the Borrower and each other Obligor under each Loan Document shall be made without setoff, counterclaim or other defense, and free and clear of, and without deduction or withholding for or on account of, any Taxes except as may be required by Applicable Law. In the event that any Taxes are imposed and required to be deducted or withheld from any payment required to be made to or on behalf of any Secured Party under any Loan Document, then:

(i)          subject to clause (f), if such Taxes are Non-Excluded Taxes, the Borrower and each Obligor shall increase the amount of such payment so that each Secured Party receives an amount sufficient to put it and its Tax Related Persons in the same after-Tax position they would have been in, after withholding and deduction and payment of all Taxes (including income Taxes) had no such deduction or withholding been made; and

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(ii)         the Borrower or the Administrative Agent (as applicable) shall withhold the full amount of such Taxes from such payment (as increased pursuant to clause (a)(i)) and shall pay such amount to the Governmental Authority imposing such Taxes in accordance with Applicable Law.

(b)          In addition, the Borrower shall pay all Other Taxes imposed to the relevant Governmental Authority imposing such Other Taxes in accordance with Applicable Law.

(c)          As promptly as practicable after the payment of any Taxes that the Borrower is required to pay on account of any payment made or required to be made under any Loan Document, and in any event within 45 days of any such payment being due, the Borrower shall furnish to the Administrative Agent an official receipt (or a certified copy thereof) or other proof of payment satisfactory to the Administrative Agent, acting reasonably, evidencing the payment of such Taxes or Other Taxes. The Administrative Agent shall make copies thereof available to any Lender upon request therefor.

(d)          Subject to clause (f), the Borrower shall indemnify each Secured Party for any Non-Excluded Taxes and Other Taxes levied, imposed or assessed on (and whether or not paid directly by) such Secured Party whether or not such Non-Excluded Taxes or Other Taxes are correctly or legally asserted by the relevant Governmental Authority. In addition, the Borrower shall indemnify each Secured Party for any Taxes that may become payable by such Secured Party or its Tax Related Persons as a result of indemnification payments (net of any reduction in Taxes resulting from the losses being indemnified) or as a result of any failure of the Borrower to pay any Taxes when due to the appropriate Governmental Authority or to deliver to the Administrative Agent, pursuant to clause (c), documentation evidencing the payment of Taxes or Other Taxes. With respect to indemnification for Non-Excluded Taxes and Other Taxes actually paid by any Secured Party or the indemnification provided in the immediately preceding sentence, such indemnification shall be made within 30 days after the date such Secured Party makes written demand therefor. The Borrower and each other Obligor acknowledges that any payment made to any Secured Party or to any Governmental Authority in respect of the indemnification obligations of the Borrower or other Obligor provided in this clause shall constitute a payment in respect of which the provisions of clause (a) and this clause shall apply.

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(e)          Each Non-U.S. Lender making Loans to the Borrower, on or prior to the date on which such Non-U.S. Lender becomes a Lender hereunder (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only for so long as such non-U.S. Lender is legally entitled to do so), shall deliver to the Borrower and the Administrative Agent either (i) two duly completed copies of either (x) Internal Revenue Service Form W-8BEN or Form W-8BEN-E claiming eligibility of the Non-U.S. Lender for benefits of an income tax treaty to which the United States is a party or (y) Internal Revenue Service Form W-8ECI, or in either case an applicable successor form; (ii) in the case of a Non-U.S. Lender that is not legally entitled to deliver either form listed in clause (e)(i), (x) a certificate to the effect that such Non-U.S. Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a controlled foreign corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code (referred to as an “Exemption Certificate”) and (y) two duly completed copies of Internal Revenue Service Form W-8BEN, W-8BEN-E W-8EXP, W-8ECI or W-8IMY, as appropriate, or applicable successor form, or (iii) in the case of a Lender that is not a Non-U.S. Lender, two duly completed copies of Internal Revenue Service form W-9 or applicable successor form. Each Lender, Eligible Assignee or Participant, as the case may be, agrees to promptly notify the Borrower and the Administrative Agent of any change in circumstances that would modify or render invalid any claimed exemption or reduction. In addition, each Lender, Eligible Assignee or Participant, as the case may be, shall timely deliver to the Borrower and the Administrative Agent two further copies of such Form W-8BEN, W-8BEN-E, W-8EXP, W-8IMY, W-8ECI or W-9 or successor forms on or before the date that any previously executed form expires or becomes obsolete, or after the occurrence of any event requiring a change in the most recent form delivered by such Person to the Borrower. In addition to the foregoing, each Non-U.S. Lender shall deliver to the Administrative Agent and the Borrower any documents as shall be prescribed by Applicable Law or otherwise reasonably requested to demonstrate that payments to such Lender under this Agreement and the other Loan Documents are exempt from any United States federal withholding tax imposed pursuant to FATCA, to the extent applicable. Notwithstanding anything to the contrary in this Agreement, none of the Borrower or the Administrative Agent shall be required to pay additional amounts or indemnify any Lender with respect to any withholding taxes imposed by reason of FATCA.

(f)          The Borrower shall not be obligated to pay any additional amounts to any Lender pursuant to clause (a)(i), or to indemnify any Lender pursuant to clause (d), in respect of United States federal withholding taxes to the extent imposed as a result of (i) the failure of such Lender to deliver to the Borrower the form or forms and/or an Exemption Certificate, as applicable, to such Lender, pursuant to clause (e), (ii) such form or forms and/or Exemption Certificate not establishing a complete exemption from U.S. federal withholding tax or the information or certifications made therein by the Lender being untrue or inaccurate on the date delivered in any material respect, or (iii) the Lender designating a successor lending office at which it maintains its Loans that has the effect of causing such Lender to become obligated for tax payments in excess of those in effect immediately prior to such designation; provided that, the Borrower shall be obligated to pay additional amounts to any such Lender pursuant to clause (a)(i), and to indemnify any such Lender pursuant to clause (d), in respect of United States federal withholding taxes if (i) any such failure to deliver a form or forms or an Exemption Certificate or the failure of such form or forms or Exemption Certificate to establish a complete exemption from U.S. federal withholding tax or inaccuracy or untruth contained therein resulted from a change in any applicable statute, treaty, regulation or other Applicable Law or any interpretation of any of the foregoing occurring after the Effective Date, which change rendered such Lender no longer legally entitled to deliver such form or forms or Exemption Certificate or otherwise ineligible for a complete exemption from U.S. federal withholding tax, or rendered the information or certifications made in such form or forms or Exemption Certificate untrue or inaccurate in a material respect, (ii) the redesignation of the Lender’s lending office was made at the request of the Borrower or (iii) the obligation to pay any additional amounts to any such Lender pursuant to clause (a)(i) or to indemnify any such Lender pursuant to clause (d) is with respect to an Assignee Lender that becomes an Assignee Lender as a result of an assignment made at the request of the Borrower.

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(g)          If any Lender makes a demand upon the Borrower for amounts pursuant to Section 4.3, Section 4.5 or this Section 4.6 (and the payment of such amounts are, and are likely to continue to be, materially more onerous in the reasonable judgment of the Borrower than with respect to the other Lenders), becomes a Defaulting Lender or becomes a Non-Consenting Lender (in each case, an “Affected Lender”), the Borrower may, within 45 days of receipt by the Borrower of such demand or such event causing such Lender to become an Affected Lender, give notice (a “Replacement Notice”) in writing to the Administrative Agent and such Affected Lender of its intention to cause such Affected Lender to sell all of its Loans, Commitments and/or Notes to an Eligible Assignee (a “Replacement Lender”) designated in such Replacement Notice; provided, however, that no Replacement Notice may be given by the Borrower and no Lender may be replaced pursuant to this clause (g) if (i) such replacement conflicts with any Applicable Law or regulation, (ii) any Event of Default shall have occurred and be continuing at the time of such replacement or (iii) prior to any such replacement, such Affected Lender shall have taken any necessary action under Section 4.3, Section 4.5 or Section 4.6 (as applicable) so as to eliminate the continued need for payment of amounts owing pursuant to Section 4.3, Section 4.5 or Section 4.6 (as the case may be) or shall have waived its right to payment of the specific amounts that give rise or would give rise to such Replacement Notice or ceases to be a Defaulting Lender pursuant to Section 2.10 (it being understood for sake of clarity that the Affected Lender shall be under no obligation to waive such rights to payment and that such Affected Lender, if it is replaced in accordance with this clause (g), shall be entitled to be reimbursed for all breakage losses in connection with such replacement). If the Administrative Agent shall, in the exercise of its reasonable discretion and within 30 days of its receipt of such Replacement Notice, notify the Borrower and such Affected Lender in writing that the Replacement Lender is satisfactory to the Administrative Agent (such consent not being required where the Replacement Lender is already a Lender or an Affiliate of a Lender), then such Affected Lender shall, subject to the payment of any amounts due pursuant to Section 4.4, assign, in accordance with Section 10.11, all of its Commitments, Loans, Notes (if any), and other rights and obligations under this Agreement and all other Loan Documents (including Reimbursement Obligations, if applicable) designated in the replacement notice to such Replacement Lender; provided, however, that (A) such assignment shall be without recourse, representation or warranty and shall be on terms and conditions reasonably satisfactory to such Affected Lender and such Replacement Lender, (B) the purchase price paid by such Replacement Lender shall be in the amount of such Affected Lender’s Loans designated in the Replacement Notice, and/or its Percentage of outstanding Reimbursement Obligations, as applicable, together with all accrued and unpaid interest and fees in respect thereof, plus all other amounts (including the amounts demanded and unreimbursed under Section 4.3, Section 4.5 and Section 4.6), owing to such Affected Lender hereunder and (C) the Borrower shall pay to the Affected Lender and the Administrative Agent all reasonable out-of-pocket expenses incurred by the Affected Lender and the Administrative Agent in connection with such assignment and assumption (including the processing fees described in Section 10.11). Upon the effective date of an assignment described above, the Replacement Lender shall become a “Lender” for all purposes under the Loan Documents. Each Lender hereby grants to the Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender as assignor, any assignment agreement necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated by this Section.

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Section 4.7.          Payments, Computations; Proceeds of Collateral, etc. (a)  Unless otherwise expressly provided in a Loan Document, all payments required to be made by the Borrower pursuant to each Loan Document shall be made by the Borrower to the Administrative Agent for the pro rata account of the Secured Parties entitled to receive such payment. All payments shall be made without setoff, deduction or counterclaim not later than 11:00 a.m. on the date due in same day or immediately available funds to such account as the Administrative Agent shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day. The Administrative Agent shall promptly remit in same day funds to each Secured Party its share, if any, of such payments received by the Administrative Agent for the account of such Secured Party. All interest (including interest on LIBO Rate Loans) and fees (including all fees in respect of Letters of Credit) shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days (or, in the case of interest on a Base Rate Loan (calculated at other than the Federal Funds Rate or the Reference LIBO Rate), 365 days or, if appropriate, 366 days). Payments due on other than a Business Day shall (except as otherwise required by clause (b) of the proviso in the definition of “Interest Period”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment.

(b)          After the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and upon direction from the Required Lenders, shall, apply all amounts received under the Loan Documents (including from the proceeds of collateral securing the Obligations) or under Applicable Law upon receipt thereof to the Obligations as follows: (i) first, to the payment of all Obligations in respect of fees, expense reimbursements, indemnities and other amounts owing to the Administrative Agent, in its capacity as the Administrative Agent (including the fees and expenses of counsel to the Administrative Agent), (ii) second, after payment in full in cash of the amounts specified in clause (b)(i), to the ratable payment of all interest (including interest accruing (or which would accrue) after the commencement of a proceeding in bankruptcy, insolvency or similar law, whether or not permitted as a claim under such law) and fees owing under the Loan Documents, and all costs and expenses owing to the Secured Parties pursuant to the terms of the Loan Documents, until paid in full in cash, (iii) third, after payment in full in cash of the amounts specified in clauses (b)(i) and (b)(ii), to the ratable payment of the principal amount of the Loans then outstanding, the aggregate Reimbursement Obligations then owing, the Cash Collateralization for contingent liabilities under Letter of Credit Outstandings and amounts owing to Secured Parties in respect of early termination of Hedging Agreements, (iv) fourth, after payment in full in cash of the amounts specified in clauses (b)(i) through (b)(iii), to the ratable payment of all other Obligations owing to the Secured Parties, and (v) fifth, after payment in full in cash of the amounts specified in clauses (b)(i) through (b)(iv), and following the Termination Date, to each applicable Obligor or any other Person lawfully entitled to receive such surplus.

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Section 4.8.          Sharing of Payments. If any Secured Party shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan, Revolving Credit Extension or Reimbursement Obligation (other than payments pursuant to the terms of Sections 4.3, 4.4, 4.5 or 4.6) in excess of its pro rata share of payments obtained by all Secured Parties, then such Secured Party receiving such excess portion shall purchase from the other Secured Parties such participations in, or assignments of, (in each case at par value), Loans and Revolving Credit Extensions made by them as shall be necessary to cause such purchasing Secured Party to share the excess payment or other recovery ratably (to the extent such other Secured Parties were entitled to receive a portion of such payment or recovery) with each of them; provided that, if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Secured Party, the purchase shall be rescinded and each Secured Party that has sold a participation or an assignment to the purchasing Secured Party shall repay to the purchasing Secured Party the purchase price to the ratable extent of such recovery together with an amount equal to such selling Secured Party’s ratable share (according to the proportion of (a) the amount of such selling Secured Party’s required repayment to the purchasing Secured Party to (b) total amount so recovered from the purchasing Secured Party) of any interest or other amount paid or payable by the purchasing Secured Party in respect of the total amount so recovered and each Secured Party that has so purchased an assignment in such Loans and Revolving Credit Extensions shall make an assignment of such portion of such Loans and Revolving Credit Extensions to each such selling Secured Party. The Borrower agrees that any Secured Party purchasing a participation from another Secured Party pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 4.9) with respect to such participation as fully as if such Secured Party were the direct creditor of the Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law any Secured Party receives a secured claim in lieu of a setoff to which this Section applies, such Secured Party shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Secured Parties entitled under this Section to share in the benefits of any recovery on such secured claim.

Section 4.9.          Setoff. Each Secured Party shall, upon the occurrence and during the continuance of any Event of Default described in clauses (b) through (d) of Section 8.1.9 or upon the occurrence and during the continuance of any other Event of Default, have the right to appropriate and apply to the payment of the Obligations under this Agreement owing to it (whether or not then due), and (as security for such Obligations) the Borrower hereby grants to each Secured Party a continuing security interest in, any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Secured Party; provided that, any such appropriation and application shall be subject to the provisions of Section 4.8. Each Secured Party agrees promptly to notify the Borrower and the Administrative Agent after any such appropriation and application made by such Secured Party; provided that, the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Secured Party under this Section are in addition to other rights and remedies (including other rights of setoff under Applicable Law or otherwise) which such Secured Party may have.

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ARTICLE 5.

CONDITIONS TO EFFECTIVENESS AND REVOLVING CREDIT EXTENSIONS

Section 5.1.          Effectiveness; Initial Revolving Credit Extension. The effectiveness of this Agreement and obligations of the Lenders and any Issuer to make the initial Revolving Credit Extension (including as constituted by the continuation of the outstanding letters of credit under the Prepetition Credit Agreement as Letters of Credit under this Agreement) shall be subject to the prior or concurrent satisfaction (or waiver by the Required Lenders) of each of the conditions precedent set forth in this Article 5.

Section 5.1.1           Credit Agreement. The Administrative Agent (or its counsel) shall have received from each party hereto (or intended to become a party hereto) either (a) a counterpart of this Agreement signed on behalf of such party or (b) written evidence satisfactory to the Administrative Agent (which may include facsimile or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement, provided, however, for the avoidance of doubt, failure by any Lender to provide an executed counterpart hereof shall not change the fact that such Lender shall be bound by this Agreement on the Effective Date pursuant to Paragraph 84 of the Findings of Fact, Conclusions of Law, and Order Confirming the Debtors’ Joint Plan of Reorganization dated December 13, 2016 [Docket No. 1809] (the “Confirmation Order”) and the condition of this Section 5.1.1 shall be deemed satisfied as to any such Lender.

Section 5.1.2           Secretaries’ Certificates, etc. The Administrative Agent shall have received from each Obligor, as applicable, (a) a copy of a good standing certificate, dated a date reasonably close to the Effective Date, for such Obligor from the jurisdiction in which such Obligor is organized and each other jurisdiction in which such Obligor is qualified to do business and (b) a certificate, dated as of the Effective Date, duly executed and delivered by such Obligor’s Secretary or Assistant Secretary, managing member or general partner, as applicable, as to

(i)              resolutions of such Obligor’s Board of Directors (or other managing body, in the case of an Obligor that is not a corporation) then in full force and effect authorizing, to the extent relevant, all aspects of the transactions contemplated by the Loan Documents applicable to such Obligor and the execution, delivery and performance of each Loan Document to be executed by such Obligor and the transactions contemplated hereby and thereby;

(ii)             the incumbency and signatures of those of its officers, managers, managing member or general partner (or officers or managers of its managing member or general partner), as applicable, authorized to act with respect to each Loan Document to be executed by such Obligor; and

(iii)            the Organic Documents of such Obligor and the full force and validity thereof;

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upon which certificates each Secured Party may conclusively rely until it shall have received a further certificate of the Secretary, Assistant Secretary, managing member or general partner (or Secretary or Assistant Secretary of the managing member or general partner), as applicable, of any such Obligor canceling or amending the prior certificate of such Obligor.

Section 5.1.3           Effective Date Certificate. The Administrative Agent shall have received the Effective Date Certificate, dated as of the Effective Date and duly executed and delivered by an Authorized Officer of the Borrower, in which certificate the Borrower shall agree and acknowledge that the statements made therein shall be deemed to be true and correct representations and warranties of the Borrower as of such date, and, at the time each such certificate is delivered, such statements shall in fact be true and correct. All documents and agreements required to be appended to the Effective Date Certificate shall be in form and substance reasonably satisfactory to the Administrative Agent, shall have been executed and delivered by the requisite parties, and shall be in full force and effect.

Section 5.1.4           Consents, Licenses, Permits and Approvals. The Administrative Agent shall have received a certificate of an Authorized Officer of the Borrower dated as of the Effective Date either (i) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by each Obligor and the validity against such Obligor of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (ii) stating that no such consents, licenses or approvals are so required (except as have already been obtained by the appropriate Obligor).

Section 5.1.5           Compliance with Warranties, No Default, etc. The following statements shall be true and correct:

(a)          the representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date except for any representations and warranties which are qualified by a materiality qualifier, which shall be true and correct in all respects as of such earlier date;

(b)          no Material Adverse Effect has occurred since June 30, 2016 other than as a result of the commencement and pendency of the Chapter 11 Cases and the circumstances, events and transactions occurring as part thereof; and

(c)          no Default shall have then occurred and be continuing or shall result therefrom.

Section 5.1.6           Confirmation Order. The Bankruptcy Court shall have entered the final Confirmation Order, the Confirmation Order shall not be subject to any stay, and all conditions to the Effective Date (as defined in the Plan of Reorganization) of the Plan of Reorganization (other than the effectiveness of this Agreement) shall have been satisfied or waived.

Section 5.1.7           Delivery of Notes. The Administrative Agent shall have received, for the account of each Lender that has requested a Note, a Revolving Note or Term Note, or both, payable to such Lender duly executed and delivered by an Authorized Officer of the Borrower.

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Section 5.1.8            Financial Information. The Administrative Agent shall have received:

(a)          a copy of the consolidated balance sheet of the Borrower and its Subsidiaries, and the related consolidated statements of income and cash flow of the Borrower and its Subsidiaries for the Fiscal Year ended June 30, 2016, audited by independent public accountants and filed with the SEC;

(b)          a copy of an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of September 30, 2016, and consolidated statements of income and cash flow of the Borrower and its Subsidiaries for the three-month period ending on such date, certified as complete and correct in all material respects by the chief financial or accounting Authorized Officer of the Borrower (subject to normal year-end audit adjustments); and

(c)          financial and operational projections for the Borrower, by month, for the period immediately following the Effective Date through the Stated Maturity Date prepared in good faith based on available information and estimates determined to be reasonable at the time such projections were prepared.

Section 5.1.9            Initial Reserve Report. The Lenders shall have received the Initial Reserve Report.

Section 5.1.10          [Reserved].

Section 5.1.11         Solvency, etc. The Administrative Agent shall have received a solvency certificate duly executed and delivered by the chief financial or accounting Authorized Officer of the Borrower, dated as of the Effective Date, substantially in the form of Exhibit H.

Section 5.1.12         Guarantees. The Administrative Agent shall have received the Guaranty, dated as of the Effective Date, duly executed and delivered by an Authorized Officer of each Subsidiary (other than EXXI Insurance, EXXI Holdings and EXXI GIGS Services).

Section 5.1.13         Security Agreement. The Administrative Agent shall have received executed counterparts of the Security Agreement, dated as of the Effective Date, duly executed and delivered by the Borrower and each Subsidiary of the Borrower (other than EXXI Insurance, EXXI Holdings and EXXI GIGS Services), together with:

(a)          certificates (in the case of Capital Securities that are certificated securities (as defined in the UCC)) evidencing all of the issued and outstanding Capital Securities owned by each Obligor in its U.S. Subsidiaries and all of the issued and outstanding Capital Securities (other than the Excluded Securities) owned by each Obligor in its Foreign Subsidiaries, which certificates in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Capital Securities are uncertificated securities (as defined in the UCC), confirmation and evidence reasonably satisfactory to the Administrative Agent that the security interest therein has been transferred to and perfected by the Administrative Agent for the benefit of the Secured Parties in accordance with Articles 8 and 9 of the UCC and all laws otherwise applicable to the perfection of the pledge of such Capital Securities; and

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(b)          Uniform Commercial Code Form UCC-1 financing statements (“Filing Statements”), as appropriate, suitable in form for naming the Borrower and each Subsidiary Guarantor as a debtor and the Administrative Agent as the secured party, or other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the security interests of the Administrative Agent pursuant to such Security Agreement.

(c)          Uniform Commercial Code Form UCC-3 termination statements, if any, necessary to release all Liens and other rights of any Person in any collateral described in any Security Agreement previously granted by any Person, together with such other Uniform Commercial Code UCC-3 termination statements as the Administrative Agent may reasonably request from such Obligors.

Section 5.1.14          [Reserved].

Section 5.1.15         Insurance. The Administrative Agent shall have received (a) a certificate, reasonably satisfactory to the Administrative Agent, from the Borrower’s and its Subsidiaries’ insurance broker(s), dated as of (or a date reasonably near) the Effective Date relating to each insurance policy required to be maintained pursuant to Section 7.1.4, identifying types of insurance and the insurance limits of each such insurance policy and naming the Administrative Agent as loss payee, and each of the Secured Parties as an additional insured, as appropriate, to the extent required under Section 7.1.4 and stating that such insurance is in full force and effect and that all premiums due have been paid, together with evidence in form and substance reasonably satisfactory to the Administrative Agent that the Oil and Gas Properties are covered under the Borrower’s existing insurance policies (with the same coverages and deductions); and (b) to the extent not provided in (i) above, a summary of casualty, property and other insurance policies currently in effect and maintained by the Borrower’s Subsidiaries provided by an insurance broker and stating that such insurance is in full force and effect and that all premiums due have been paid, in form and substance reasonably satisfactory to the Administrative Agent.

Section 5.1.16         Mortgages. The Administrative Agent shall have received counterparts of Mortgages, each dated as of the Effective Date, in form and substance reasonably satisfactory to the Administrative Agent, duly executed and delivered by the applicable Obligors in a sufficient number of counterparts for the due recording in each applicable recording office (including each office specified in any opinions described in Section 5.1.17), granting to the Administrative Agent (or a trustee appointed by the Administrative Agent) for the benefit of the Secured Parties first and prior Liens (subject to Liens permitted by Section 7.2.3) on Oil and Gas Properties such that as of the Effective Date, the Mortgaged Properties constitute at least ninety percent (90%) of the total value of the Proved Reserves of the Borrower and the Subsidiary Guarantors and at least ninety percent (90%) of the total value of the Proved Developed Producing Reserves of the Borrower and the Subsidiary Guarantors, as well as such other agreements, documents, legal opinions, and other writings as may be reasonably requested by the Administrative Agent, including, without limitation, UCC-1 financing statements, authorizing resolutions, tax affidavits and applicable department of revenue documentation, together with evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of such Mortgages as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to create a valid, perfected first priority Lien (subject to Liens permitted by Section 7.2.3) against the properties purported to be covered thereby.

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Section 5.1.17         Opinions of Counsel. The Administrative Agent shall have received opinions, dated the Effective Date and addressed to the Administrative Agent and all Lenders, from

(a)          Gray Reed & McGraw, P.C., special New York and Texas counsel to the Obligors in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent; and

(b)          Phelps Dunbar LLP, local Louisiana counsel to the Obligors in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

Section 5.1.18         Expenses. The Borrower shall have deposited $2,500 with Willkie Farr & Gallagher LLP, counsel for the Administrative Agent, to be held by such counsel and applied toward payment of costs and expenses for recordation of the Security Documents, as provided pursuant to Section 10.3. If such deposit exceeds the amount of such costs and expenses, the excess shall be returned to the Borrower. If such deposit is less than such costs and expenses, the deficit shall be paid by Borrower pursuant to Section 10.3.

Section 5.1.19          [Reserved]

Section 5.1.20         Minimum Emergence Liquidity. The Administrative Agent shall have received evidence reasonably satisfactory to it that, as of the Effective Date, the sum of the aggregate amount of all Unrestricted Cash of the Borrower and the Subsidiary Guarantors shall equal or exceed $90,000,000.

Section 5.1.21         Closing Fees, Expenses, etc. The Administrative Agent shall have received the Fee Letter, duly executed by the Borrower. The Administrative Agent shall have also received for its own account, or for the account of each Lender, as the case may be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and, if then invoiced, 10.3.

Section 5.1.22         PATRIOT Act Disclosures. The Administrative Agent and each Lender shall have received all PATRIOT Act disclosures requested by them prior to execution of this Agreement.

For purposes of determining compliance with the conditions specified in this Section 5.1, each Lender or Issuer that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender or the Issuers unless the Administrative Agent shall have received notice from such Lender or Issuer prior to the Effective Date specifying its objection thereto.

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Section 5.2.          All Revolving Credit Extensions. The obligation of each Lender and each Issuer to make any Revolving Credit Extension shall be subject to the satisfaction of each of the conditions precedent set forth below.

Section 5.2.1           Compliance with Warranties, No Default, etc. Both before and after giving effect to any Revolving Loans after the Effective Date the following statements shall be true and correct:

(a)          the representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all material respects with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date except for representations and warranties which are qualified by a materiality qualifier, which shall be true and correct in all respects as of such earlier date);

(b)          other than the pendency of the Chapter 11 Cases and the circumstances, events and transactions occurring as part thereof, no Material Adverse Effect has occurred since the later of (1) June 30, 2016 and (2) the Fiscal Year end date for which financial statements have been delivered by the Borrower pursuant to Section 7.1.1(b);

(c)          no Default or Event of Default shall have then occurred and be continuing; and

(d)          after giving effect to any Revolving Loan, the Borrower and the Subsidiary Guarantors (i) shall not maintain a Consolidated Cash Balance in excess of $10,000,000 (or if during the period from July 1^st to October 31^st of any calendar year, not in excess of $15,000,000) for a period of more than five (5) days after the Borrowing and (ii) shall be in compliance with Section 7.1.19(a).

Section 5.2.2           Revolving Credit Extension Request, etc. Subject to Section 2.3.1, the Administrative Agent shall have received a Borrowing Request if Revolving Loans are being requested, or an Issuance Request if a Letter of Credit is being requested or extended (but does not include renewals, including, without limitation, autorenewals). The delivery of a Borrowing Request or Issuance Request and the acceptance by the Borrower of the proceeds of such Revolving Credit Extension shall constitute a representation and warranty by the Borrower that on the date of such Revolving Credit Extension (both immediately before and after giving effect to such Revolving Credit Extension and the application of the proceeds thereof) the statements made in Section 5.2.1 are true and correct.

Section 5.2.3           Satisfactory Legal Form. All documents executed or submitted pursuant hereto by or on behalf of any Obligor shall be reasonably satisfactory in form and substance to the Administrative Agent.

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ARTICLE 6.

REPRESENTATIONS AND WARRANTIES

In order to induce the Secured Parties to enter into this Agreement and to make Revolving Credit Extensions hereunder, the Borrower represents and warrants to each Secured Party as set forth in this Article.

Section 6.1.          Organization, etc. The Borrower and each of its Subsidiaries is validly organized and existing and in good standing under the laws of the state or jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing as a foreign entity in each jurisdiction where the nature of its business requires such qualification, except for such jurisdictions where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect, and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its Obligations under each Loan Document to which it is a party, to own and hold under lease its property and to conduct its business substantially as currently conducted by it, except for those licenses, permits or other approvals, the absence of which could not reasonably be expected to have a Material Adverse Effect.

Section 6.2.          Due Authorization, Non-Contravention, Defaults etc. The execution, delivery and performance by each Obligor of each Loan Document executed or to be executed by it are within such Person’s powers, have been duly authorized by all necessary action, and do not

(a)          contravene any (i) Obligor’s Organic Documents, (ii) court decree or order binding on or affecting any Obligor or (iii) law or governmental regulation binding on or affecting any Obligor, except with respect to clauses (ii) and (iii) as could not reasonably be expected to have a Material Adverse Effect; or

(b)          result in (i) or require the creation or imposition of, any Lien on any Obligor’s properties (except as permitted by this Agreement), (ii) a default under any material contractual restriction binding on or affecting any Obligor or (iii) any noncompliance, suspension, impairment, forfeiture or nonrenewal of any material license, permit or other governmental approval, except as could not reasonably be expected to have a Material Adverse Effect.

No Obligor is in default under any agreement, instrument or undertaking to which it is a party or by which it or any of its property is bound that could reasonably be expected to have a Material Adverse Effect. No Obligor is a party to any agreement or instrument or subject to any other obligation or any charter or corporate restriction or any provision of any Applicable Law, rule or regulation that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

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Section 6.3.          Government Approval, Regulation, etc. Except for filings to perfect and maintain the perfection of the Liens arising pursuant to the Security Documents, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person (other than those that have been, or on the Effective Date will be, duly obtained or made and that are, or on the Effective Date will be, in full force and effect) is required for the due execution, delivery or performance by any Obligor of any Loan Document to which it is a party. Neither the Borrower nor any of its Subsidiaries is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

Section 6.4.          Validity, etc. Each Loan Document to which any Obligor is a party constitutes the legal, valid and binding obligations of such Obligor, enforceable against such Obligor in accordance with their respective terms (except, in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity).

Section 6.5.          Financial Information. The financial statements furnished to the Administrative Agent and each Lender pursuant to Section 5.1.8 present fairly in all material respects the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended. All balance sheets, all statements of income and of cash flow and all other financial information of each of the Borrower and its Subsidiaries furnished pursuant to Section 7.1.1 have been and will for periods following the Effective Date be prepared in accordance with GAAP consistently applied, and do or will present fairly in all material respects the consolidated financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended.

Section 6.6.          No Material Adverse Change. There has been no material adverse change in the business, condition (financial or otherwise), operations, performance, or properties of the Borrower and the Subsidiary Guarantors taken as a whole since June 30, 2016 (other than the pendency of the Chapter 11 Cases and the circumstances, events and transactions occurring as part thereof) or such more recent date for which the financial information required under Section 7.1.1(b) shall have been provided by the Borrower.

Section 6.7.          Litigation, Labor Controversies, etc. There is no pending or, to the knowledge of the Borrower or any of its Subsidiaries, threatened litigation, action, proceeding, investigation or labor controversy

(a)          except as disclosed in Item 6.7 of the Disclosure Schedule, affecting the Borrower or any of its Subsidiaries, or any of their respective properties, businesses, assets or revenues, which could reasonably be expected to have a Material Adverse Effect, and no adverse development has occurred in any labor controversy, litigation, arbitration or governmental investigation or proceeding disclosed in Item 6.7 which could reasonably be expected to have a Material Adverse Effect; or

(b)          which purports to affect the legality, validity or enforceability of any Loan Document.

Section 6.8.          Subsidiaries. The Borrower has no Subsidiaries, except those Subsidiaries that are identified in Item 6.8 of the Disclosure Schedule, or that are permitted to have been organized or acquired in accordance with Sections 7.2.5 or 7.2.9.

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Section 6.9.          Ownership of Properties, etc. (a)  Each of the Borrower and the Subsidiary Guarantors have Good Title to the Oil and Gas Properties evaluated in the most recently delivered Reserve Report and good title to all its personal Properties, in each case, free and clear of all Liens except Liens permitted by Section 7.2.3. After giving full effect to the such permitted Liens, the Borrower or such Subsidiary Guarantor specified as the owner owns the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate the Borrower or such Subsidiary Guarantor to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount in excess of the working interest of each Property set forth in the most recently delivered Reserve Report that is not offset by a corresponding proportionate increase in the Borrower’s or such Subsidiary Guarantor’s net revenue interest in such Property.

(b)          All material leases and agreements necessary for the conduct of the business of the Borrower and its Subsidiaries are valid and subsisting, in full force and effect, and there exists no default or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default under any such lease or leases, that could reasonably be expected to have a Material Adverse Effect.

(c)          The rights and Properties presently owned, leased or licensed by the Borrower and its Subsidiaries including, without limitation, all easements and rights of way, include all rights and Properties necessary to permit the Borrower and its Subsidiaries to conduct their business in all material respects in the same manner as its business has been conducted immediately prior to the date hereof.

(d)          All of the Properties of the Borrower and its Subsidiaries that are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards with the exception of certain Properties that are the subject of repair which Borrower or an applicable Subsidiary is diligently pursuing (provided that such damaged Properties could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect).

(e)          The Borrower and each of its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual Property material to its business, and the use thereof by the Borrower and such Subsidiary does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower and its Subsidiaries either own or have valid licenses or other rights to use all databases, geological data, geophysical data, engineering data, seismic data, maps, interpretations and other technical information used in their businesses as presently conducted, subject to the limitations contained in the agreements governing the use of the same, which limitations are customary for companies engaged in the business of the exploration and production of Hydrocarbons, with such exceptions as could not reasonably be expected to have a Material Adverse Effect.

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Section 6.10.         Taxes. The Borrower and each of its Subsidiaries has filed all tax returns and reports required by law to have been filed by it and has paid all Taxes thereby shown to be due and owing and has paid all Taxes shown to be due on any assessment received to the extent that such Taxes have become due and payable (except any such Taxes that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books), except where the failure to file any such returns or reports or to pay any such Taxes would not give rise to a Material Adverse Effect.

Section 6.11.         ERISA; Pension and Welfare Plans. The Borrower, its Subsidiaries and each ERISA Affiliate have complied in all material respects with ERISA and, where applicable, the Code regarding each Pension or Welfare Plan. During the twelve-consecutive-month period prior to the Effective Date and prior to the date of any Revolving Credit Extension hereunder, no steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan that might result in the incurrence by the Borrower or any member of the Controlled Group of any material liability, fine or penalty. Except as disclosed in Item 6.11 of the Disclosure Schedule, neither the Borrower nor any member of the Controlled Group has any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA.

Section 6.12.         Environmental Warranties. Except as set forth in Item 6.12 of the Disclosure Schedule:

(a)          all facilities and property owned, operated or leased by the Borrower or any of its Subsidiaries have been, and continue to be, in material compliance with all Environmental Laws;

(b)          there are no pending or, to the Borrower’s knowledge, threatened (i) claims, complaints, notices or governmental requests for information received by the Borrower or any of its Subsidiaries with respect to any alleged material violation of any Environmental Law, or (ii) written complaints, notices or inquiries to the Borrower or any of its Subsidiaries regarding material potential liability of the Borrower or any of its Subsidiaries under any Environmental Law;

(c)          there have been no Releases of Hazardous Materials at, on or under any property now or previously owned, operated, or leased by the Borrower or any of its Subsidiaries that have, or could reasonably be expected to have, a Material Adverse Effect;

(d)          the Borrower and its Subsidiaries have been issued and are in material compliance with all permits, certificates, approvals, licenses, registrations and other authorizations relating to environmental matters;

(e)          no property currently, or to the knowledge of the Borrower previously, owned, operated or leased by the Borrower or any of its Subsidiaries is listed, or proposed for listing in the Federal Register or similar governmental publication (with respect to owned property only), on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar foreign, federal, state or provincial list of sites requiring investigation or clean-up under Environmental Laws;

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(f)           there are no underground storage tanks, active or abandoned, including petroleum storage tanks, on or under any property now or previously owned, operated or leased by the Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or could reasonably be expected to have, a Material Adverse Effect;

(g)          to the knowledge of the Borrower, neither the Borrower nor any of its Subsidiaries has directly transported or directly arranged for the transportation of any Hazardous Material to any location that is listed or proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar federal, provincial or state list or that is the subject of federal, state, provincial or local enforcement actions or other investigations that could reasonably be expected to result in material claims against the Borrower or such Subsidiary for any remedial work, damage to natural resources or personal injury, including claims under CERCLA or Environmental Laws;

(h)          there are no polychlorinated biphenyls or friable asbestos present at any property now or previously owned or leased by the Borrower or any of its Subsidiaries that could reasonably be expected to result in any liability, claims, or costs having, individually or in the aggregate, a Material Adverse Effect; and

(i)          no conditions exist at, on or under any property now or previously owned or leased by the Borrower or any of its Subsidiaries that, with the passage of time or the giving of notice or both, could reasonably be expected to result in any material liability, claims, or costs under any Environmental Law.

Section 6.13.         Disclosure of Material Information; Accuracy of Information. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the factual information heretofore or contemporaneously furnished in writing to any Secured Party by or on behalf of any Obligor in connection with any Loan Document or any transaction contemplated hereby contains any untrue statement of a material fact, or omits to state any material fact necessary to make any information not misleading, and no other factual information hereafter furnished in connection with any Loan Document by or on behalf of any Obligor to any Secured Party will contain any untrue statement of a material fact or will omit to state any material fact necessary to make any information not misleading on the date as of which such information is dated or certified.

Section 6.14.         Regulations T, U, and X. No Obligor is engaged in the business of extending credit for the purpose of buying or carrying margin stock, and no proceeds of any Revolving Credit Extensions or the Term Loans will be used to purchase or carry margin stock or otherwise for a purpose that violates, or would be inconsistent with, F.R.S. Board Regulations T, U or X. Terms for which meanings are provided in F.R.S. Board Regulations T, U or X or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.

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Section 6.15.         Labor Matters. Except as set forth on Item 6.15 of the Disclosure Schedule, as of the date hereof no Obligor is subject to any labor or collective bargaining agreement. Except as set forth on Item 6.15 of the Disclosure Schedule, there are no existing or threatened strikes, lockouts or other labor disputes involving any Obligor that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked by and payments made to employees of each Obligor are not in violation of the Fair Labor Standards Act or any other Applicable Law, rule or regulation dealing with such matters where such violation could reasonably be expected to have a Material Adverse Effect.

Section 6.16.         Compliance with Laws. The Borrower and each of its Subsidiaries is in compliance in all material respects with the requirements of all Applicable Law and all orders, writs, injunctions and decrees applicable to it or to its properties (except for Environmental Laws that are the subject of Section 6.12), and possesses all licenses, permits, franchises, exemptions, approvals and other governmental authorizations necessary for the ownership of its Property (including its Oil and Gas Properties) and the conduct and operation of its business, except in such instances in which the failure to comply therewith, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

Section 6.17.         Material Contracts. Each of the Borrower’s and its Subsidiaries’ material contracts (a) are in full force and effect and are binding upon and enforceable against each such Borrower or Subsidiary that is a party thereto and, to the best knowledge of the Borrower and its Subsidiaries, all other parties thereto in accordance with its terms (except, in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity), and (b) is not in default due to the action of such Borrower or Subsidiary.

Section 6.18.         Solvency. The Borrower and the Guarantors, taken as a whole, on a consolidated basis, both before and after giving effect to any Revolving Credit Extensions and the Term Loans, are Solvent.

Section 6.19.         Deposit Account and Cash Management Accounts. Set forth on Item 6.19(a) of the Disclosure Schedule is a complete and accurate list of all Deposit Accounts of the Borrower and each Subsidiary Guarantor and set forth on Item 6.19(b) of the Disclosure Schedule is a complete and accurate list of all Securities Accounts (as defined in the UCC) of the Borrower and each Subsidiary Guarantor, if any, each as updated in accordance with Section 7.1.9.

Section 6.20.         Insurance. The Borrower and each of its Subsidiaries keeps its property adequately insured in accordance with Section 7.1.4 and maintains (a) insurance to such extent and against such risks, including fire, as is customary with companies of similar size and in the same or similar businesses, (b) workmen’s compensation insurance in the amount required by Applicable Law, (c) public liability insurance, which shall include product liability insurance, in the amount customary with companies of similar size and in the same or similar business against claims for personal injury or death on properties owned, occupied or controlled by it, and (d) such other insurance as may be required by Applicable Law. All such insurance is in full force and effect and all premiums that are due and payable with respect thereto have been paid.

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Section 6.21.         Restrictions on Liens. Neither the Borrower nor any of its Subsidiaries (other than EXXI Holdings and EXXI GIGS Services) is a party to any material agreement or arrangement or subject to any order, judgment, writ or decree, that either restricts or purports to restrict its ability to grant Liens to the Administrative Agent and the Lenders on or in respect of their Properties to secure the Obligations and the Loan Documents.

Section 6.22.         Location of Business and Offices. The Borrower’s jurisdiction of organization is Delaware; the name of the Borrower as listed in the public records of its jurisdiction of organization is Energy XXI Gulf Coast, Inc.; and the organizational identification number of the Borrower in its jurisdiction of organization is 4106697 (or, as set forth in a notice delivered to the Administrative Agent pursuant to Section 10.2). The Borrower’s principal place of business and chief executive offices are located at the address specified in Section 10.2 (or as set forth in a notice delivered pursuant to Section 10.2). The jurisdiction of organization, name as listed in the public records of its jurisdiction of organization, organizational identification number in its jurisdiction of organization, and the location of its principal place of business and chief executive office of each Subsidiary of the Borrower is stated on Item 6.22 of the Disclosure Schedule (or as set forth in a notice delivered pursuant to Section 10.2).

Section 6.23.         Maintenance of Properties. Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and Properties unitized therewith) of the Borrower and the Subsidiary Guarantors have been maintained, operated and developed by the Borrower and the Subsidiary Guarantors (as the case may be) in a good and workmanlike manner and in conformity with all Applicable Law and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties of the Borrower and the Subsidiary Guarantors. Specifically in connection with the foregoing, except for those as could not be reasonably expected to have a Material Adverse Effect, (a) no Oil and Gas Property of the Borrower or any Subsidiary Guarantor is subject to having allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) and (b) none of the wells comprising a part of the Oil and Gas Properties (or Properties unitized therewith) of the Borrower or any Subsidiary Guarantor is deviated from the vertical more than the maximum permitted by Applicable Law, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, such unitized Properties) of the Borrower or such Subsidiary Guarantor. All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by the Borrower or any of the Subsidiary Guarantors that are necessary to conduct normal operations are being maintained by the Borrower or such applicable Subsidiary Guarantor in a state adequate to conduct normal operations, and with respect to such of the foregoing that are operated by the Borrower or any of the Subsidiary Guarantors, in a manner consistent with the Borrower’s or the Subsidiary Guarantors’ past practices (other than those the failure of which to maintain in accordance with this Section 6.23 could not reasonably be expected to have a Material Adverse Effect).

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Section 6.24.         Gas Imbalances. Except as set forth on the most recent certificate of the Borrower delivered in connection with a Reserve Report, on a net basis there are no gas imbalances, take or pay or other prepayments that would require the Borrower or any of its Subsidiaries to deliver Hydrocarbons produced from the Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor exceeding 1.5 bcf of gas (on an mcf equivalent basis) in the aggregate.

Section 6.25.         Marketing of Production. Except for contracts listed and in effect on the date hereof on Item 6.25 of the Disclosure Schedule, and thereafter either disclosed in writing to the Administrative Agent or included in the most recently delivered Reserve Report (with respect to all of which contracts the Borrower represents that it or the relevant Subsidiary Guarantor is receiving a price for all production sold thereunder that is computed substantially in accordance with the terms of the relevant contract and are not having deliveries curtailed substantially below the subject Property’s delivery capacity), its and its respective Subsidiary Guarantor’s material agreements are cancelable on 60 days’ notice or less without penalty or detriment for the sale of production from the Borrower’s or its respective Subsidiary Guarantor’s Hydrocarbons (including, without limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the date hereof.

Section 6.26.         Perfected Liens and Security Interests. The Obligations are and shall be at all times secured by valid, perfected first priority Liens (subject to Liens permitted pursuant to Section 7.2.3) in favor of the Administrative Agent, covering and encumbering all collateral granted or purported to be granted by the Security Documents, to the extent perfection has or will occur, by the recording of a Mortgage or other Security Document or amendment or supplement or modification thereto, the filing of a UCC financing statement, or by possession or control.

Section 6.27.         Anti-Corruption Laws. None of the Borrower or any of its Subsidiaries nor, to the knowledge of Borrower, any director, officer, agent, employee or Affiliate of the Borrower or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) offered, paid, given, promised to pay, authorized the payment of, or taken any action in furtherance of the payment of anything of value directly or indirectly to a Government Official or any other person to improperly influence the recipient’s action or otherwise to obtain or retain business or to secure an improper business advantage; (iii) violated or is in violation of any provision of any Anti-Corruption Laws, including the U.S. Foreign Corrupt Practices Act of 1977 or the Bribery Act 2010 of the United Kingdom or similar law of the European Union or any European Union Member State or similar law of a jurisdiction in which the applicable Obligor conducts its business and to which it is lawfully subject or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

Section 6.28.         Anti-Money Laundering Laws. The operations of each member of the Group are and have been conducted at all times in compliance with all Anti-Money Laundering Laws and no action, suit or proceeding by or before any Governmental Authority or any arbitrator involving a member of the Group with respect to Anti-Money Laundering Laws is pending and, to the knowledge of each member of the Group, no such actions, suits or proceedings are threatened.

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Section 6.29.         Restricted Parties. No member of the Group, nor any of their respective joint ventures, directors, or officers nor, to the knowledge of the Obligors, employees or any Persons acting on any of their behalf (i) is a Restricted Party or (ii) has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.

Section 6.30.         Flood Insurance Provisions. Notwithstanding any provision in this Agreement or any other Loan Document to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) included in the definition of “Mortgaged Property” and no Building or Manufactured (Mobile) Home is hereby encumbered by this Agreement or any other Loan Document. As used herein, “Flood Insurance Regulations” means (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.) as the same may be amended or recodified from time to time, (d) the Flood Insurance Reform Act of 2004 and (e) the Biggert Waters Flood Reform Act of 2012 and, in each case, any regulations promulgated thereunder.

ARTICLE 7.

COVENANTS

Section 7.1.          Affirmative Covenants. The Borrower agrees with each Lender, each Issuer and the Administrative Agent that until the Termination Date has occurred, the Borrower will, and will cause its Subsidiaries to, perform or cause to be performed the obligations set forth below.

Section 7.1.1           Financial Information, Reports, Notices, etc. The Borrower will furnish the Administrative Agent and each Lender, copies of the following financial statements, reports, notices and information:

(a)          as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, an unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of income and cash flow of the Borrower and its Subsidiaries for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and including (in each case), in comparative form the figures for the corresponding Fiscal Quarter in, and year to date portion of, the immediately preceding Fiscal Year, in each case, certified as complete and correct by the chief financial or accounting Authorized Officer of the Borrower (subject to normal year-end audit adjustments);

(b)          as soon as available and in any event within 120 days after the end of each Fiscal Year, a copy of the consolidated balance sheet of the Borrower and its Subsidiaries, and the related consolidated statements of income and cash flow of the Borrower and its Subsidiaries for such Fiscal Year, setting forth in comparative form the figures for the immediately preceding Fiscal Year, audited (without any Impermissible Qualification) by independent public accountants reasonably acceptable to the Administrative Agent, that shall include a calculation of the financial covenants set forth in Section 7.2.4 and stating that, in performing the examination necessary to deliver the audited financial statements of the Borrower, no knowledge was obtained of any Event of Default;

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(c)          concurrently with the delivery of the financial information pursuant to clauses (a) and (b), a Compliance Certificate, executed by the chief financial or accounting Authorized Officer of the Borrower, (i) commencing with the Fiscal Quarter ending September 30, 2017, showing compliance with the financial covenants set forth in Section 7.2.4, (ii) stating that no Default or Event of Default has occurred and is continuing (or, if a Default or an Event of Default has occurred, specifying the details of such Default or Event of Default and the action that the Borrower or an Obligor has taken or proposes to take with respect thereto), (iii) certifying that the Borrower and its Subsidiaries are in compliance with the requirements of Section 7.1.4 as of the date of such certificate either (A) through a third party insurer or (B) through an Affiliate of the Borrower and stating the level of capitalization of such Affiliate as of the date of such certificate and the dollar amount of the coverages insured by such Affiliate on the date of such certificate and (iv) stating that no Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate (or, if a Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate, a statement that such Subsidiary has complied with Section 7.1.8);

(d)          as soon as possible and in any event within five days after the Borrower or any other Obligor obtains knowledge of the occurrence of a Default or an Event of Default, a statement of an Authorized Officer of the Borrower setting forth details of such Event of Default and the action that the Borrower or such Obligor has taken and proposes to take with respect thereto;

(e)          as soon as possible and in any event within five days after the Borrower or any other Obligor obtains knowledge of (i) the occurrence of any material adverse development with respect to any litigation, action, proceeding or labor controversy described in Item 6.7 of the Disclosure Schedule, (ii) the commencement of any litigation, action, proceeding or labor controversy of the type and materiality described in Section 6.7 or (iii) the filing or commencement of, or the threat in writing of, any material action, suit, proceeding, investigation or arbitration by or before any arbitrator or Governmental Authority (including under Environmental Laws or with respect to ERISA matters) against or affecting the Borrower or any Subsidiary thereof not previously disclosed in writing to the Lenders that could reasonably be expected to have a Material Adverse Effect, notice thereof and, to the extent the Administrative Agent requests, copies of all documentation relating thereto;

(f)          promptly after the sending or filing thereof, copies of all material reports, notices, prospectuses and registration statements that any Obligor files with the SEC, or any national securities exchange; provided that such reports, notices, prospectuses and registration statements shall be deemed delivered pursuant to this Section if posted on the SEC’s EDGAR filing system;

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(g)          promptly upon becoming aware of (i) the institution of any steps by any Person to terminate any Pension Plan, (ii) the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA, (iii) the taking of any action with respect to a Pension Plan that could result in the requirement that any Obligor furnish a bond or other security to the PBGC or such Pension Plan, or (iv) the occurrence of any event with respect to any Pension Plan that could result in the incurrence by any Obligor of any liability, fine or penalty, notice thereof and copies of all documentation relating thereto;

(h)          promptly upon receipt thereof, copies of all “management letters” or reports submitted to Borrower or any other Obligor by the independent public accountants referred to in clause (b) in connection with each audit made by such accountants or any other interim or special audit conducted by them;

(i)            [Reserved]

(j)            promptly (i) if the Borrower obtains knowledge that the Borrower or any Person that owns, directly or indirectly, any Capital Securities of the Borrower, or any other holder at any time of any direct or indirect equitable, legal or beneficial interest therein is the subject of any of the Terrorism Laws, the Borrower will notify the Administrative Agent and (ii) upon the request of any Lender, the Borrower will provide any information such Lender believes is reasonably necessary to be delivered to comply with the Patriot Act;

(k)           concurrently with any delivery of financial statements under clause (b) above, or within five days following any change to any existing insurance policy that could reasonably be expected to have an adverse effect on the Lender Parties, a certificate of insurance coverage from each insurer with respect to the insurance required by Section 7.1.4, in form and substance reasonably satisfactory to the Administrative Agent, and, if reasonably requested by the Administrative Agent or any Lender, all copies of the applicable policies;

(l)            concurrently with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 2.8, a list of Persons who purchase (or did purchase in the last six months) at least 50% of the Hydrocarbons from the Borrower or any Subsidiary Guarantor;

(m)          concurrently with the delivery of any Reserve Report, the Borrower shall provide to the Administrative Agent and each Lender a certificate, signed by an Authorized Officer of the Borrower, certifying that, to the best of his knowledge and in all material respects: (i) the information contained in such Reserve Report and any other information delivered in connection therewith is true and correct, (ii) the Borrower and the Subsidiary Guarantors, as applicable, own Good Title to the Oil and Gas Properties evaluated in such Reserve Report (in this Section called the “Covered Properties”) and are free of all Liens except for Liens permitted by Section 7.2.3, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments with respect to its Oil and Gas Properties evaluated in such Engineering Report (other than those permitted by the Security Documents) that would require Borrower or any Subsidiary Guarantor, as applicable, to deliver hydrocarbons produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) none of the Covered Properties has been Disposed since the date of the last Reserve Report, except as set forth on an exhibit to the certificate, which certificate shall list all of such properties Disposed and in such detail as reasonably required by the Administrative Agent, (v) set forth on a schedule attached to the certificate is the present discounted value of all Covered Properties that are part of the Oil and Gas Properties that are encumbered by the Mortgages (the “Mortgaged Properties”), (vi) Oil and Gas Properties of the Borrower and the Subsidiary Guarantors that comprise at least ninety percent (90%) of the total value of the Proved Reserves of the Borrower and the Subsidiary Guarantors that are included within the Covered Properties are part of the Mortgaged Properties and (vii) Oil and Gas Properties of the Borrower and the Subsidiary Guarantors that comprise at least ninety percent (90%) of the total value of the Proved Developed Producing Reserves of the Borrower and the Subsidiary Guarantors are included within the Covered Properties are part of the Mortgaged Properties;

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(n)          in the event the Borrower or any Subsidiary Guarantor intends to sell or otherwise Dispose of any Oil or Gas Properties or any Capital Securities in any Subsidiary Guarantor with an aggregate value of $2,500,000 or more in accordance with this Agreement, prior written notice of such Disposition, the price thereof and the anticipated date of closing;

(o)          prompt written notice, and in any event within five Business Days, of the occurrence of any Casualty Event or the commencement of any action or proceeding that could reasonably be expected to result in a Casualty Event, in each case, that could reasonably be expected to result in a claim exceeding $2,500,000;

(p)          prompt written notice (and in any event within fifteen (15) days prior thereto) of any change (i) in the Borrower or any Guarantor’s corporate name, (ii) in the location of the Borrower or any Guarantor’s chief executive office or principal place of business, (iii) in the Borrower or any Guarantor’s identity or corporate structure or in the jurisdiction in which such Person is incorporated or formed, (iv) in the Borrower’s or any Guarantor’s jurisdiction of organization or such Person’s organizational identification number in its jurisdiction of organization, and (v) in the Borrower or any Guarantor’s federal taxpayer identification number;

(q)          with the delivery of financial statements under Section 7.1.1(a) and (b) and in any event, no later than 60 days after the end of each fiscal quarter, (i) a report setting forth, for each calendar month during the then current fiscal year to date on a production date basis, the volume of production and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for each such calendar month from the Oil and Gas Properties, and setting forth the related ad valorem, severance and production taxes and lease operating expenses attributable thereto and incurred for each such calendar month, including, without limitation, transportation, gathering and marketing costs, and all categories of applicable expenses (at a level of detail reasonably acceptable to the Administrative Agent) charged to the Borrower or the Subsidiary Guarantors under the relevant operating agreements, (ii) a report, in form and substance reasonably acceptable to the Administrative Agent, regarding the ongoing drilling programs of the Borrower and the Subsidiary Guarantors, which report will specify (A) the wells drilled by the Borrower and the Subsidiary Guarantors on their Oil and Gas Properties during such recently ended fiscal quarter, (B) the status of such wells as producing, shut-in, waiting-on-connection or otherwise, and the categorization of such wells as Proved Developed Producing Reserves, Proved Developed Nonproducing Reserves, Proved Undeveloped Reserves or unproved reserves as of the most recent Reserve Report delivered pursuant to Section 2.8 or Section 5.1.9, as applicable, (C) the total number of successful wells for such fiscal quarter on a gross and net basis and (D) the Capital Expenditures incurred in connection with such wells during such fiscal quarter, and (iii) a certificate of an Authorized Officer of the Borrower substantially in the form of Exhibit I showing compliance with Section 3.1.1(f);

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(r)          promptly, but in any event within five (5) Business Days after the execution thereof, copies of any amendment, modification or supplement to the certificate or articles of incorporation, by-laws, any preferred stock designation or any other organic document of the Borrower or any Subsidiary;

(s)          (i) concurrently with any delivery of financial statements under Section 7.1.1(a) or (b), a certificate of an Authorized Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent, (A) setting forth as of the last Business Day of such Fiscal Quarter, a true and complete list of all Hedging Agreements of the Borrower and each Subsidiary Guarantor, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net mark-to-market value thereof, any new credit support agreements relating thereto not listed on Item 7.1.12 of the Disclosure Schedule or not previously provided to the Administrative Agent, any margin required or supplied under any credit support document, and the Approved Counterparty to each such agreement, and (B) providing information and calculations as to (x) any notional volumes (for the absence of doubt, notional volumes related to puts that are not executed in conjunction with any other Hedging Agreements are excluded) covering Oil and Gas Properties of the Obligors to the extent the same exceed 100% for crude oil or for natural gas or for natural gas liquids, as the case may be, of the reasonably estimated projected crude oil, natural gas and natural gas liquids production, respectively, for any month from the Obligors’ Proved Developed Producing Reserves in respect of such Oil and Gas Properties and (y) the Borrower’s good faith estimate (with reasonably detailed calculations and based on such hedging positions as the Borrower may deem appropriate provided such hedging positions are in compliance with the terms of the Loan Documents) of the cost to modify or unwind the Obligors’ hedging positions so that such volumes would not exceed 100% of such reasonably estimated projected crude oil, natural gas and natural gas liquids production, respectively, from the Obligors’ Proved Developed Producing Reserves in respect of such Oil and Gas Properties for any month and (ii) within five days after any execution of any new Hedging Agreements or any assignment, termination or unwinding of any existing Hedging Agreements, notice thereof to the Administrative Agent, which notice shall be in form and substance and with details reasonably acceptable to the Administrative Agent;

(t)          in conjunction with the delivery of quarterly financial statements pursuant to Section 7.1.1, commencing with the Fiscal Quarter ended December 31, 2016, a cash flow forecast of the Borrower and the Subsidiary Guarantors for the next four (4) Fiscal Quarters showing cash flow on a monthly basis; provided, however, that if any such cash flow forecast indicates Liquidity is projected to fall below $30,000,000 during such four (4) Fiscal Quarters, or if such cash flow does fall below $30,000,000 during such four (4) Fiscal Quarters, Borrower shall, beginning with the following month, deliver on or before the tenth (10^th) Business Day of each month, a cash flow forecast of the Borrower and the Subsidiary Guarantors for the next twelve (12) months (until such time as the forecast indicates Liquidity is projected to remain at $30,000,000 or above for the following twelve (12) months, at which point Borrower may return to delivering the cash flow forecast quarterly); and

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(u)          such other financial and other information as any Lender or Issuer through the Administrative Agent may from time to time reasonably request (including information and reports in such detail as the Administrative Agent may reasonably request with respect to the terms of and information provided pursuant to the Compliance Certificate).

Section 7.1.2           Maintenance of Existence; Compliance with Contracts, Laws, etc. The Borrower will, and will cause each of its Subsidiaries to, preserve and maintain its and their respective legal existence (except as otherwise permitted by Section 7.2.9), perform in all material respects their obligations under material agreements to which the Borrower or a Subsidiary is a party, and comply in all material respects with all Applicable Law, including the payment (before the same become delinquent), of all Taxes, imposed upon the Borrower or its Subsidiaries or upon their property except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been set aside on the books of the Borrower or its Subsidiaries, as applicable. The Borrower shall take all reasonable and necessary actions to ensure that no portion of the Loans will be used, disbursed or distributed for any purpose, or to any Person, directly or indirectly, in violation of any of the Terrorism Laws and shall take all reasonable and necessary action to comply in all material respects with all Terrorism Laws with respect thereto.

Section 7.1.3           Operation and Maintenance of Properties. The Borrower will, and will cause each of the Subsidiary Guarantors to,

(a)          maintain, preserve, protect and keep its and their respective properties in good repair, working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by the Borrower and the Subsidiary Guarantors may be properly conducted at all times, unless the Borrower or such Subsidiary Guarantor determines in good faith that the continued maintenance of such property is no longer economically desirable, necessary or useful to the business of the Borrower or any Subsidiary Guarantor or the Disposition of such property is otherwise permitted by Sections 7.2.9 or 7.2.10;

(b)          operate its Oil and Gas Properties and other material Properties or cause such Oil and Gas Properties and other material Properties to be operated in a careful and efficient manner in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in compliance with all Applicable Law, including, without limitation, applicable proration requirements and Environmental Laws, and all Applicable Law, rules and regulations of every other Governmental Authority from time to time constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom, except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect;

(c)          promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and indebtedness accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder;

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(d)          promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties; and

(e)          to the extent the Borrower or a Subsidiary Guarantor is not the operator of any Property, the Borrower shall use reasonable efforts to cause the operator to comply with this Section 7.1.3.

Section 7.1.4           Insurance; Casualty Events. The Borrower will, and will cause each Subsidiary to maintain:

(a)          except as otherwise expressly provided below in regards to a reinsurance program (in which such case such reinsurance shall be in accordance with the terms of this clause (a)), insurance on its property with financially sound and reputable insurance companies against loss and damage in at least the amounts (and with only those deductibles) customarily maintained, and against such risks as are typically insured against in the same general area, by Persons of comparable size engaged in the same or similar business as the Borrower and its Subsidiaries; and

(b)          all worker’s compensation, employer’s liability insurance or similar insurance as may be required under the laws of any state or jurisdiction in which it may be engaged in business, in each case to the reasonable satisfaction of the Administrative Agent; provided that the Borrower will maintain, and will cause each Subsidiary Guarantor to maintain, coverage for named windstorms with respect to their respective properties with limits of not less than $100,000,000 per occurrence and in the annual aggregate and with deductibles that are reasonably acceptable to the Administrative Agent. Notwithstanding the foregoing, Borrower and its Subsidiaries may maintain the insurance identified above through EXXI Insurance; provided that (1) the costs of and coverage by such insurance are fair and reasonable and no less favorable to the Borrower and its Subsidiaries than they could obtain in an arm’s-length transaction with a Person that is not an Affiliate, and in no event shall the premiums and costs of such insurance exceed in the aggregate an amount equal to $50,000,000 per calendar year unless previously approved by the Administrative Agent in its sole and reasonable discretion, (2) EXXI Insurance is duly organized and existing and is in good standing under the laws of its jurisdiction of formation, (3) the coverage of such insurance shall be subject to reinsurance otherwise in accordance with the terms of this Section 7.1.4 (except such coverage as the Administrative Agent may have agreed is not required) and (4) EXXI Insurance maintains reinsurance with (x) financially sound and reputable reinsurance companies and otherwise in compliance with the terms of clause (a) above and (y) in such amounts and on such other terms and conditions as reasonably required by the Administrative Agent; provided that EXXI Insurance shall be required to obtain reinsurance only on coverages that, in the aggregate, exceed the lesser of (i) the amount of EXXI Insurance’s net capital and (ii) $15,000,000, in the aggregate for all such coverages.

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Without limiting the foregoing, all insurance policies required to be maintained by Subsidiary Guarantors and the Borrower pursuant to this Section shall (i) (A) name the Administrative Agent on behalf of the Secured Parties as loss payee (in the case of property insurance) and name the Administrative Agent and other Secured Parties as additional insured (in the case of liability insurance), as applicable, and (B) provide that no cancellation or modification of the policies will be made without thirty days’ prior written notice to the Administrative Agent and (ii) be in addition to any requirements to maintain specific types of insurance contained in the other Loan Documents.

If no Borrowing Base Deficiency exists and no Event of Default has occurred and is continuing, (a) the Borrower and the Administrative Agent will cause all proceeds of insurance in connection with a Casualty Event to be deposited into a Deposit Account or Securities Account maintained at the Administrative Agent or as to which a Control Agreement has been executed in favor of the Administrative Agent granting “control” to the Administrative Agent under the UCC and (b) the Borrower may use such insurance proceeds to, at its option, repair or rebuild the affected property or pay or prepay any outstanding Loans or other Obligations or for any other lawful purpose not otherwise restricted by the Loan Documents. If a Borrowing Base Deficiency exists, such insurance proceeds deriving from Collateral shall be used to cure such Borrowing Base Deficiency by prepaying the Revolving Loans and/or Cash Collateralizing the Non-Exxon Letters of Credit to the extent of the deficiency. If an Event of Default exists, such insurance proceeds deriving from Collateral shall be used to repay Loans and/or Cash Collateralize Letters of Credit.

Section 7.1.5           Books and Records. The Borrower will, and will cause each Subsidiary to, keep books and records in accordance with IFRS reconciled to GAAP or alternatively, in accordance with GAAP, that accurately reflect all of its business affairs and transactions.

Section 7.1.6           Environmental Law Covenant. The Borrower will, and will cause each Subsidiary to,

(a)          use and operate all of its and their facilities and properties in material compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Environmental Laws; and

(b)          promptly notify the Administrative Agent and provide copies upon receipt of all material written claims, complaints, notices or inquiries relating to the condition of its owned, operated and leased facilities and properties in respect of, or as to compliance with, Environmental Laws, and shall promptly resolve any material non-compliance with Environmental Laws and keep its owned property free of any Lien imposed by any Environmental Law.

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Section 7.1.7           Use of Proceeds. The Borrower has and will apply the proceeds of the Revolving Credit Extensions and Term Loans as follows:

(a)          in the case of Revolving Loans and Term Loans, for working capital and general corporate purposes of the Borrower and the Subsidiary Guarantors;

(b)          for issuing Letters of Credit for the account of the Borrower and the Subsidiary Guarantors; and

(c)          to pay transaction costs in connection with this Agreement and the other Loan Documents.

Section 7.1.8           Future Guarantors, Security, etc. The Borrower will, and will cause each of its Subsidiaries (other than EXXI Insurance, any other CFC, EXXI Holdings or EXXI GIGS Services) to, execute any documents, Filing Statements, agreements and instruments, and take all further action (including filing Mortgages and Mortgage supplements) that may be required under Applicable Law, or that the Administrative Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority (subject to Liens permitted by Section 7.2.3) of the Liens created or intended to be created by the Loan Documents. The Borrower will promptly and in any event within five (5) Business Days notify the Administrative Agent of the creation or acquisition of any Subsidiary and will cause any subsequently acquired or organized Subsidiary (other than EXXI Insurance, any other CFC, EXXI Holdings or EXXI GIGS Services) to execute, within 30 days (or such longer period as the Administrative Agent may agree) of its acquisition or organization, a supplement (in form and substance reasonably satisfactory to the Administrative Agent) to the Guaranty and each other applicable Loan Document in favor of the Secured Parties. In addition, from time to time, the Borrower will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, perfected Liens with respect to such of its assets and properties as the Administrative Agent or the Required Lenders shall designate, it being agreed that it is the intent of the parties that (a) the Obligations shall be secured by, among other things, substantially all the assets of the Borrower and its U.S. Subsidiaries (including real and personal property acquired subsequent to the Effective Date) other than EXXI Holdings and EXXI GIGS Services, and the Capital Securities of its Subsidiaries (other than the Excluded Securities of EXXI Insurance or any other CFC). Without limiting the foregoing, the Borrower for itself and on behalf of its Subsidiaries agrees that the Administrative Agent is hereby authorized to file, at such times as the Administrative Agent deems necessary or desirable, Filing Statements naming the Borrower or any Subsidiary Guarantor as debtor and describing the collateral as “all personal property” or “all assets” of such debtor whether now or hereafter acquired, or words of like import.

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Section 7.1.9           Cash Management. The Borrower will keep all of its operating accounts, Deposit Accounts, Securities Accounts (as such term is defined in the UCC) and other bank accounts separate from, and will not co-mingle any of its cash or money with, those of other Persons other than its Subsidiary Guarantors. The Borrower will and will cause the Subsidiary Guarantors at all times to maintain all of its and their respective Deposit Accounts, Securities Accounts and other bank accounts, including the accounts set forth in Item 6.19(a) or 6.19(b) of the Disclosure Schedule, subject of a Control Agreement. Notwithstanding the foregoing, the accounts set forth in Item 7.1.9 of the Disclosure Schedule (which may be updated from time to time by the Borrower with the consent of the Administrative Agent) shall not be required to be subject to a Control Agreement. The Borrower will, and will cause each Subsidiary Guarantor to: (a) ensure that such Person’s Account Debtors forward payment of all amounts owed by them to such Person to one of the Deposit Accounts of such Person that is the subject of a Control Agreement, and (b) deposit, or cause to be deposited, promptly, and in any event no later than the second Business Day after the date of receipt thereof, all of such Person’s Collections in one of the Deposit Accounts of such Person that is the subject of a Control Agreement. The Borrower will use commercially reasonable efforts to ensure, prior to any termination or expiration of a Control Agreement relating to the Deposit Accounts initially set forth on Item 6.19(a) of the Disclosure Schedule or the Securities Accounts initially set forth on Item 6.19(b) of the Disclosure Schedule, that such Deposit Accounts or Securities Accounts and amounts therein are replaced with Deposit Accounts or Securities Accounts subject to a Control Agreement. The Borrower shall close or cause to be closed any of such Deposit Accounts or Securities Account (and establish replacement (or utilize existing) Deposit Accounts or Securities Accounts in accordance with the foregoing sentence) promptly and in any event within 30 days after notice from the Administrative Agent that the creditworthiness of any depository institution holding such Deposit Account or Securities Account is no longer acceptable in the Administrative Agent’s reasonable judgment, or as promptly as practicable and in any event within 60 days after notice from the Administrative Agent that the operating performance, funds transfer, or availability procedures or performance of the depository institution holding such Deposit Account or Securities Account is no longer acceptable in the Administrative Agent’s reasonable judgment.

Section 7.1.10         Proceeds Account. The Mortgages contain an assignment to the Administrative Agent by the Borrower and the Subsidiary Guarantors, as applicable, of all Production and Production Proceeds (in each case as defined in the Mortgages). Notwithstanding such assignment, the Borrower or such Subsidiary Guarantor, as applicable, may, until the Administrative Agent shall give notice to the contrary, as provided in Section 3.1 of the Mortgages, receive such Production and Production Proceeds. Thereafter, all Production and Production Proceeds shall be paid directly into an account of the Borrower maintained with the Administrative Agent (as applicable, a “Proceeds Account”). The Borrower hereby grants to the Administrative Agent for the benefit of the Secured Parties, subject to the prior assignment in favor of the Administrative Agent of such Production and Production Proceeds, a security interest in each Proceeds Account and all proceeds thereof.

Section 7.1.11         Maintenance of Liens on Properties. The Borrower shall cause the Mortgaged Properties to constitute at least ninety percent (90%) of the total value of the Proved Reserves of the Borrower and the Subsidiary Guarantors and at least ninety percent (90%) of the total value of the Proved Developed Producing Reserves of the Borrower and the Subsidiary Guarantors (in this Section called the “Required Percentages”). Within thirty (30) days following (i) in the event that the Borrowing Base Initiation Date shall not have occurred, the delivery of a Reserve Report pursuant to Section 2.8.2 or Section 2.8.3 and (ii) in the event that the Borrowing Base Initiation Date shall have occurred, each determination or redetermination of the Borrowing Base, the Borrower will execute and deliver documentation in form and substance reasonably satisfactory to the Administrative Agent, granting to the Administrative Agent first perfected Liens (subject to Liens permitted by Section 7.2.3) on Oil and Gas properties that are not then part of the Mortgaged Properties, sufficient to cause the Mortgaged Properties to include the Required Percentages. In addition, the Borrower will furnish to the Administrative Agent title due diligence in form and substance reasonably satisfactory to the Administrative Agent and will furnish all other documents and information relating to such properties as the Administrative Agent may reasonably request.

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Section 7.1.12         Hedging Agreements. Except to the extent the Borrower has complied in all respects with the requirements provided in Section 7.2.10(e) hereof in respect of any cancellation, termination, modification, offset or unwinding of any hedging position of any Obligor, the Borrower shall not and shall not permit any of its Subsidiaries to, assign, terminate or unwind any of the Hedging Agreements reflected in the hedging positions set forth on a certificate delivered pursuant to Section 7.1.1(s)(i) or sell any of such Hedging Agreements.

Section 7.1.13         Title Information. On or before the delivery to the Administrative Agent and the Lenders of each Reserve Report required by Section 2.8, the Borrower will deliver title information in form and substance reasonably acceptable to the Administrative Agent covering enough of the Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that the Administrative Agent shall have received together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 90% of the total value of the Proved Reserves evaluated by such Reserve Report. If the Borrower has provided title information for additional Properties under the preceding sentence, the Borrower shall, within 90 days of notice from the Administrative Agent that title defects or exceptions exist with respect to such additional Properties, either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) that are not permitted by Section 7.2.3 raised by such information, (ii) substitute acceptable Mortgaged Properties with no title defects or exceptions except for Liens permitted by Section 7.2.3 having an equivalent value or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 90% of the total value of the Proved Reserves evaluated by such Reserve Report.

Section 7.1.14         Right of Inspection. The Borrower will permit, and will cause each of its Subsidiaries to permit, any officer, employee or agent of the Administrative Agent or of any Secured Party to visit and inspect any of the assets of any such Person, examine each such Person’s books of record and accounts, take copies and extracts thereof and therefrom, and discuss the affairs, finances and accounts of each such Person with each such Person’s officers, accountants and auditors, all upon prior written notice to the Borrower at such reasonable times during the Borrower’s or such Person’s normal business hours (and in a manner so as, to the extent practicable, not to interfere with the normal business operations of the Borrower or such Person) and as often as the Administrative Agent or any Lender may reasonably request. Notwithstanding the foregoing, as long as no Default or Event of Default has occurred and is continuing, the Borrower will not be required to bear the expense of more than (x) four (4) inspections by the Administrative Agent and the Secured Parties during any twelve (12) month period prior to the Test Date and (y) two (2) inspections by the Administrative Agent and the Secured Parties during any twelve (12) month period after the Test Date; provided that if a Default or an Event of Default has occurred and is continuing, the Administrative Agent and Secured Parties shall be entitled to conduct more frequent inspections at the expense of the Borrower. The Borrower shall pay any fees of such independent public accountant of the Borrower incurred in connection with any Secured Party’s exercise of its rights pursuant to this Section.

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Section 7.1.15         Further Assurances. The Borrower at its expense will, and will cause each Subsidiary to, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any Subsidiary, as the case may be, in the Loan Documents, including the Notes, if requested, or to further evidence and more fully describe the collateral intended as security for the Indebtedness, or to correct any omissions in this Agreement or the Security Instruments, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate, in the sole discretion of the Administrative Agent, in connection therewith. The Borrower hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of any Mortgaged Property or any part thereof or any other collateral without the signature of the Borrower or any other Guarantor where permitted by law. A carbon, photographic or other reproduction of the Security Documents or any financing statement covering the Mortgaged Property or any part thereof or any other collateral shall be sufficient as a financing statement where permitted by law. The Borrower shall notify the Administrative Agent of any name change of any of the Borrower’s Subsidiaries in accordance with the Pledge and Security Agreement.

Section 7.1.16         Minimum Liquidity. During each period from July 1^st to October 31^st of each calendar year, the Borrower will at all times maintain Liquidity of at least $10,000,000; provided, however, that in the event that during such calendar year the Borrower’s or any Guarantor’s Oil and Gas Properties shall suffer hurricane damage, the Administrative Agent, upon the request of the Borrower, is authorized to reduce such $10,000,000 for such calendar year to an amount (not less than zero) consented to by the Administrative Agent.

Section 7.1.17         Keepwell. Each Obligor that is a Qualified ECP Guarantor at the time the Guaranty or the grant of the security interest under the Loan Documents, in each case, by any Specified Loan Party, becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to such Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its payment obligations under its Guaranty and the other Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Section 7.1.17 voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 7.1.17 shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Qualified ECP Guarantor intends this Section 7.1.17 to constitute, and this Section 7.1.17 shall be deemed to constitute a “keepwell, support, or other agreement” for the benefit of each Specified Loan Party for all purposes of the Commodity Exchange Act.

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Section 7.1.18         Anti-Money Laundering Laws. The Borrower shall and shall cause each of its Subsidiaries to, conduct its operations at all times in compliance with all Anti-Money Laundering Laws.

Section 7.1.19         Anti-Hoarding Provision.

(a)          From such time as Revolving Loans have been made hereunder, the Borrower shall not, and shall not permit any of its Subsidiaries to, use the proceeds of any Revolving Loan to accumulate or maintain cash or cash equivalents in any Deposit Account, Securities Account or other bank or investment account outside the ordinary course of business and its working capital requirements.

(b)          If (i) an Event of Default described in Section 8.1.1, Section 8.1.3 (but only as the result of non-compliance with Section 7.2.4) or clauses (c) or (d) of Section 8.1.9 shall have occurred and be continuing or (ii)  the Borrower shall fail to use the proceeds of any Revolving Loan as provided in clause (a) of the fifth paragraph of any Borrowing Request delivered pursuant to Section 5.2.2 within five days, the Borrower and the Subsidiary Guarantors’ shall prepay, first, Revolving Loans and, then, Term Loans and Cash Collateralize Letters of Credit as follows: (x) at the close of business on any Wednesday except during the period described in clause (y) following (each a “Consolidated Cash Sweep Date”), if the Borrower and the Subsidiary Guarantors have a Consolidated Cash Balance in excess of $10,000,000 or (y) at the close of business on any Wednesday during the period from July 1^st to October 31^st of each calendar year, if the Borrower and the Subsidiary Guarantors have a Consolidated Cash Balance in excess of the positive difference, if any, between (a) $15,000,000 minus (B) the Available Amount) (in each such case, the amount determined pursuant to (x) or (y) the “Excess Cash”), then on the next Business Day the Borrower will prepay Revolving Loans (if any) in an amount equal to such Excess Cash and, to the extent such Excess Cash is in an amount greater than the total outstanding principal amount of Revolving Loans, the Borrower will prepay the Term Loans in an amount equal to such Excess Cash not used to so prepay Revolving Loans and, to the extent such Excess Cash is in an amount greater than the total outstanding principal amount of the outstanding Loans, the Borrower shall use such cash to Cash Collateralize Letter of Credit Outstandings as provided in Section 2.6.7. Each prepayment of Loans pursuant to this Section 7.1.19(b) will be applied as directed by the Borrower, provided that if the Borrower does not provide instructions for the application of such prepayment, such prepayment shall be applied first, ratably to any Base Rate Loans then outstanding, and, second to any LIBO Rate Loans then outstanding, and if more than one LIBO Rate Loan is then outstanding, to each such LIBO Rate Loan in order of priority beginning with the LIBO Rate Loan with the least number of days remaining in the Interest Period applicable thereto and ending with the LIBO Rate Loan with the most number of days remaining in the Interest Period applicable thereto. Each prepayment of Loans pursuant to this Section 7.1.19 shall be applied ratably to the Revolving Loans and/or Term Loans (as the case may be) included in the prepaid Loans.

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Section 7.2.          Negative Covenants. The Borrower covenants and agrees with each Lender, each Issuer and the Administrative Agent that until the Termination Date has occurred, the Borrower will, and will cause its Subsidiaries to, perform or cause to be performed the obligations set forth below.

Section 7.2.1           Business Activities; International Operations. The Borrower will not, and will not permit any of its Subsidiaries to, engage in any business activity except those business activities in which it has historically engaged and activities reasonably incidental thereto (which such activities include the making of any Investment as permitted pursuant to Section 7.2.5). From and after the date hereof, the Borrower and its Subsidiaries will not acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas Properties or businesses not located within the geographical boundaries of the United States or the offshore area in the Gulf of Mexico over which the United States of America asserts jurisdiction or otherwise purchase, make, incur, assume or permit to exist any Investment in any Person (other than EXXI Insurance) not organized under the laws of the United States or one of the States thereof.

Section 7.2.2           Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except:

(a)          the Obligations;

(b)          Hedging Obligations incurred in compliance with Section 7.2.19;

(c)          [Reserved];

(d)          unsecured Indebtedness (i) for open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services (including insurance premium payables in the ordinary course) that are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of the Borrower or such Subsidiary) and (ii) in respect of performance, surety or appeal bonds or similar assurance undertakings provided in the ordinary course of business or as required by Applicable Law, but excluding (in each case), funded Indebtedness incurred through the borrowing of money or Contingent Liabilities in respect thereof;

(e)          Indebtedness (i) incurred to finance the acquisition of equipment of the Borrower and the Subsidiary Guarantors (pursuant to purchase money mortgages or otherwise, whether owed to the seller or a third party) used in the ordinary course of business of the Borrower and the Subsidiary Guarantors (provided that, such Indebtedness is incurred within 60 days of the acquisition of such property) and (ii) in respect of Capitalized Lease Liabilities; provided that, the aggregate amount of all Indebtedness outstanding pursuant to this clause shall not at any time exceed $2,500,000;

(f)          Indebtedness of any Subsidiary Guarantor owing to the Borrower or any other Subsidiary Guarantor;

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(g)          Indebtedness of EXXI Holdings and EXXI GIGS Services set forth on Schedule IV;

(h)          [Reserved];

(i)          Indebtedness of a Person existing at the time such Person became a Subsidiary of the Borrower, but only if such Indebtedness was not created or incurred in contemplation of such Person becoming a Subsidiary;

(j)          endorsements of negotiable instruments for collection in the ordinary course of business; and

(k)         unsecured Indebtedness in an aggregate principal amount not to exceed $2,500,000 at any time outstanding;

provided, that no Indebtedness otherwise permitted by clauses (e), (i) or (l) shall be incurred, assumed, created, Refinanced or otherwise incurred if an Event of Default, or a Borrowing Base Deficiency has occurred and is then continuing or would result therefrom.

Section 7.2.3           Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien upon any of its property (including Capital Securities of any Person), revenues or assets, whether now owned or hereafter acquired, except:

(a)          Liens securing payment of the Obligations;

(b)          Liens on the Property of EXXI Holdings and EXXI GIGS Services, respectively, securing the Indebtedness of such Subsidiaries described in Section 7.2.2(g);

(c)          [Reserved];

(d)          Liens securing Indebtedness of the type permitted under clause (e) of Section 7.2.2; provided that, (i) such Lien is granted within 60 days after such Indebtedness is incurred, (ii) the Indebtedness secured thereby does not exceed the lesser of the cost or the Fair Market Value of the applicable property, improvements or equipment at the time of such acquisition (or construction) and (iii) such Lien secures only the assets that are the subject of the Indebtedness referred to in such clause;

(e)          Liens securing Indebtedness permitted by clause (i) of Section 7.2.2; provided that, such Liens existed prior to such Person becoming a Subsidiary, were not created in anticipation thereof and attach only to specific tangible assets of such Person (and not assets of such Person generally);

(f)          Liens in favor of carriers, warehousemen, mechanics, contractors, laborers, suppliers, operators, non-operators, materialmen and landlords granted in the ordinary course of business for amounts not overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

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(g)          Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, bids, leases or other similar obligations (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety and appeal bonds or performance bonds or similar assurance undertakings;

(h)          judgment Liens in existence for less than 45 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies and which do not otherwise result in an Event of Default under Section 8.1.6;

(i)          easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect with the value or use of the property to which such Lien is attached;

(j)          Liens for Taxes not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(k)          [Reserved];

(l)          any zoning or similar law or right reserved or vested in any Governmental Authority to control or regulate the use of any real property or retaining rights of ownership therein;

(m)          Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution;

(n)          easements, restrictions, servitudes, permits, conditions, covenants, exceptions or reservations in any Property of the Borrower or any Subsidiary for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real estate, rights of way, facilities and equipment, that do not secure any monetary obligations and which in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Borrower or any Subsidiary or materially impair the value of such Property subject thereto;

(o)          royalties, overriding royalties, reversionary interests, production payments and similar burdens granted by the Borrower or any Subsidiary Guarantor with respect to its Oil and Gas Properties to the extent such burdens do not reduce the Borrower’s or such Subsidiary Guarantor’s net interests in production in its Oil and Gas Properties below the interests reflected in each Reserve Report or the interests warranted under this Agreement or the applicable Mortgage and do not operate to deprive the Borrower or any Subsidiary Guarantors of any material rights in respect of its assets or properties (except for rights customarily granted with respect to such interests);

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(p)          Liens on any leased real property granted to landlords under any leases;

(q)          Liens arising from the filing of precautionary UCC financing statements relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Borrower and its Subsidiaries;

(r)          Liens on cash earnest money deposited pursuant to the terms of an agreement to acquire assets used in, or Persons engaged in, the oil and gas business, as permitted by this Agreement;

(s)          licenses of intellectual property, none of which, in the aggregate, interfere in any material respect with the business of the Borrower or any Subsidiary or materially detract from the value of the relevant assets of the Borrower or such Subsidiary;

(t)          Liens permitted under the Loan Documents; and

(u)         Liens not otherwise permitted under this Section 7.2.3 in an aggregate principal amount at any time outstanding not to exceed $1,000,000.

Section 7.2.4           Financial Condition. The Borrower will not permit any of the events set forth below to occur.

(a)          The Borrower will not permit the Current Ratio as of the last day of any Fiscal Quarter commencing with the Fiscal Quarter ending March 31, 2018, to be less than 1.00 to 1.00.

(b)          The Borrower will not permit the First Lien Leverage Ratio as of the last day of any Fiscal Quarter (commencing with the Fiscal Quarter ending March 31, 2018, to be greater than 4.00 to 1.00.

Section 7.2.5           Investments. The Borrower will not, and will not permit any Subsidiary to, purchase, make, incur, assume or permit to exist any Investment in any other Person, except:

(a)          Investments existing on the Effective Date and identified in Item 7.2.5(a) of the Disclosure Schedule;

(b)          Cash Equivalent Investments;

(c)          Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(d)          Investments consisting of any deferred portion of the sales price received by the Borrower or any Subsidiary Guarantor in connection with any Disposition permitted under Section 7.2.10;

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(e)          Investments by way of contributions to capital or purchases of Capital Securities (i) by the Borrower in any Subsidiaries (other than EXXI Insurance, EXXI Holdings or EXXI GIGS Services) or by any Subsidiary in other Subsidiaries (other than EXXI Insurance, EXXI Holdings or EXXI GIGS Services), or (ii) by any Subsidiary in the Borrower;

(f)          Investments constituting (i) accounts receivable arising, (ii) trade debt granted, or (iii) deposits made in connection with the purchase price of goods or services, in each case in the ordinary course of business;

(g)          Investments made as part of the acquisition of Capital Securities constituting Permitted Acquisitions permitted under clause (d) of Section 7.2.9; provided that, such Investments shall result in the acquisition of a wholly owned Subsidiary;

(h)          intercompany loans, advances or guaranties among the Borrower and the Subsidiary Guarantors, all to the extent permitted by clause (f) of Section 7.2.2, clause (e) of this Section 7.2.5 and Section 7.2.12;

(i)          [Reserved];

(j)          loans or advances to employees, officers or directors in the ordinary course of business of the Borrower or any Subsidiaries, in each case only as permitted by Applicable Law, including, if applicable, Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $100,000 in the aggregate at any time;

(k)          [Reserved]

(l)          other Investments made by the Borrower and the Subsidiary Guarantors in an amount not to exceed $1,000,000 at any time outstanding; and

(m)          [Reserved]

provided that,

(n)          any Investment that when made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; and

(o)          no Investment otherwise permitted by clauses (g), (j), or (l) shall be permitted to be made if any Event of Default or Borrowing Base Deficiency has occurred and is continuing or would result therefrom.

Section 7.2.6           Restricted Payments; etc. The Borrower will not, and will not permit any Subsidiary Guarantor to, declare or make a Restricted Payment, or make any deposit for any Restricted Payment, except:

(a)          Restricted Payments made by Subsidiaries to the Borrower or wholly owned Subsidiaries (other than to EXXI Insurance, EXXI Holdings, or EXXI GIGS Services); and

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(b)          Restricted Payments made by the Borrower and/or a Subsidiary Guarantor to EXXI Insurance for the payment of premiums for insurance and other costs related to the operation of EXXI Insurance; provided, that such Restricted Payments shall not exceed the amount that Borrower or such Subsidiary Guarantor would pay as a premium in an arm’s-length transaction with a Person that is not an Affiliate and otherwise in accordance with Section 7.1.4.

Section 7.2.7            [Reserved].

Section 7.2.8           Issuance of Capital Securities. The Borrower will not permit any of its Subsidiaries to issue any Capital Securities (whether for value or otherwise) to any Person other than (in the case of Subsidiaries other than EXXI Insurance, EXXI Holdings and EXXI GIGS Services) to the Borrower or another wholly owned Subsidiary (other than to EXXI Insurance, EXXI Holdings or EXXI GIGS Services).

Section 7.2.9           Consolidation, Merger; Permitted Acquisitions, etc. The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge or amalgamate into or with, any other Person, or purchase or otherwise acquire all or substantially all of the assets of any Person (or any division thereof), except:

(a)          any Subsidiary may liquidate or dissolve voluntarily into, and may merge or amalgamate with and into, the Borrower or any other Subsidiary (other than EXXI Insurance, EXXI Holdings or EXXI GIGS Services), provided that, in any merger involving the Borrower, the Borrower is the surviving Person and a Subsidiary Guarantor may only merge with and into another Subsidiary Guarantor;

(b)          the assets or Capital Securities of any Subsidiary (other than EXXI Insurance) may be purchased or otherwise acquired by the Borrower or any other Subsidiary (other than EXXI Insurance, EXXI Holdings or EXXI GIGS Services); provided that, the assets or Capital Securities of any Subsidiary Guarantor may only be purchased or otherwise acquired by the Borrower or another Subsidiary Guarantor; provided, further, that in no event shall any Subsidiary consolidate with or merge with and into any other Subsidiary unless after giving effect thereto, the Administrative Agent shall have a perfected pledge of, and security interest in and to, at least the same percentage of the issued and outstanding interests of Capital Securities (on a fully diluted basis) and other assets of the surviving Person as the Administrative Agent had immediately prior to such merger or consolidation in form and substance reasonably satisfactory to the Administrative Agent and its counsel, pursuant to such documentation and opinions as shall be reasonably necessary in the opinion of the Administrative Agent to create, perfect or maintain the collateral position of the Secured Parties therein;

(c)          Investments made in accordance with Section 7.2.5;

(d)          the Borrower or any of its Subsidiary Guarantors may purchase all or substantially all of the assets of any Person (or any division thereof), or acquire such Person by merger or otherwise, in each case, if:

(i)          no Event of Default or Borrowing Base Deficiency has occurred and is continuing or would occur after giving effect thereto; and

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(ii)         such purchase or acquisition constitutes a Permitted Acquisition.

Section 7.2.10         Permitted Dispositions. The Borrower will not, and will not permit any of its Subsidiaries to, Dispose of any of the Borrower’s or such Subsidiaries’ assets (including accounts receivable and Capital Securities of Subsidiaries) to any Person in one transaction or series of transactions unless such Disposition is:

(a)          inventory or obsolete, damaged, worn out or surplus property Disposed of in the ordinary course of its business, or the discounted sale of defaulted or delinquent trade receivables written off and reserved in the ordinary course of business;

(b)          the sale of Hydrocarbons in the ordinary course of business;

(c)          farmouts of undeveloped acreage and assignments in connection with such farmouts and reassignments of acreage pursuant to farm in agreements entered into in the ordinary course of business on customary industry terms, provided that in the reasonable determination of the Administrative Agent such reassigned acreage does not have a PV 9% Value attributable thereto in excess of $250,000 or $1,000,000 in the aggregate for all such acreage so reassigned during any calendar year;

(d)          an Investment made in accordance with Section 7.2.5 and Restricted Payments made in accordance with Section 7.2.6;

(e)          the assignment, termination, modification, offset or unwinding of any hedging position of any Obligor unless the cash proceeds of such transaction shall be used to pay outstanding Loans and, if such proceeds are in excess of the total outstanding principal amount of the Loans, Borrower shall use such cash to Cash Collateralize Letter of Credit Outstandings as provided in Section 2.6.7; provided that the Borrowing Base, if any, shall automatically without further action by any Person reduce by the value attributed to such hedging position by the Administrative Agent in setting such Borrowing Base;

(f)          the sale or other Disposition (including Casualty Events) of any Oil and Gas Property or any interest therein or any Subsidiary Guarantor (other than EXXI GOM) owning Oil and Gas Properties; provided that (i) 100% of the consideration received in respect of such sale or other Disposition shall be cash, (ii) the consideration received in respect of such sale or other Disposition shall be equal to or greater than the Fair Market Value of the interests that are the subject of such sale or other Disposition (as reasonably determined by the board of directors of the Borrower and, if requested by the Administrative Agent, the Borrower shall deliver a certificate of an Authorized Officer of the Borrower certifying to that effect), (iii) the net proceeds of such sale or other Dispositions (net of (w) reasonable and customary costs and expenses of such sale or other Dispositions, (x) taxes paid or payable as a result thereof and (y) any amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustments associated with such Disposition) shall be used to pay outstanding Loans (with such payments applied in accordance with Section 3.1) and, if the net proceeds are in excess of the total outstanding principal amount of the Loans Borrower shall use such cash to Cash Collateralize Letter of Credit Outstandings as provided in Section 2.6.7 and (iv) the Borrowing Base, if any, shall automatically and immediately without further action by any Person reduce by the amount of such net proceeds from such sale or Disposition but not to less than zero;

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(g)          licenses of intellectual property, none of which, in the aggregate, materially impair the operation of the business of the Borrower or any Subsidiary Guarantor;

(h)          the abandonment of intellectual property that is no longer material to the operation of the business of the Borrower or any Subsidiary Guarantor; and

(i)           sales and other Dispositions of Properties not otherwise expressly permitted by Section 7.2.10(a) to (h) having a Fair Market Value not to exceed $2,500,000 during any 12-month period.

Section 7.2.11         Modification of Certain Agreements. The Borrower will not, and will not permit any Subsidiary Guarantor to, consent to any amendment, supplement, waiver or other modification of, or enter into any forbearance from exercising any rights with respect to the terms or provisions contained in the Organic Documents of the Borrower or any Subsidiary Guarantor, if the result would have an adverse effect on the rights or remedies of any Secured Party.

Section 7.2.12         Transactions with Affiliates. The Borrower will not, and will not permit any of its Subsidiaries to, enter into or cause or permit to exist any arrangement, transaction or contract (including for the purchase, lease or exchange of property or the rendering of services) with any of its other Affiliates, unless such arrangement, transaction or contract (i) is on fair and reasonable terms no less favorable to the Borrower or such Subsidiary than it could obtain in an arm’s-length transaction with a Person that is not an Affiliate and (ii) is of the kind that would be entered into by a prudent Person in the position of the Borrower or such Subsidiary Guarantor with a Person that is not one of its Affiliates other than:

(a)          transactions among the Obligors otherwise permitted hereunder (advances by the Borrower and/or Subsidiary Guarantors to EXXI Insurance for purposes of obtaining insurance policies are expressly permitted hereunder so long as such transactions satisfy clause (i) above);

(b)          reasonable fees and compensation (including employee benefits) paid to, an indemnity provided for the benefit of, officers, directors, board members, employees or consultants of the Borrower or any Subsidiary as determined in good faith by the Borrower’s board of directors;

(c)          the payment of Restricted Payments as provided under Section 7.2.6; and

(d)          the leases set forth in Item 7.2.16 of the Disclosure Schedule.

Section 7.2.13         Restrictive Agreements, etc. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement prohibiting or restricting:

(a)          the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired;

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(b)          the ability of any Obligor to amend or otherwise modify any Loan Document; or

(c)          the ability of any Subsidiary to make any payments, directly or indirectly, to the Borrower, including by way of dividends, advances, repayments of loans, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments.

The foregoing prohibitions shall not apply to restrictions contained (i) in any Loan Document, (ii) in the case of clause (a), any agreement governing any Indebtedness permitted by clause (e) of Section 7.2.2 as to the assets financed with the proceeds of such Indebtedness, or (iii) any agreements of EXXI Holdings and EXXI GIGS Services in effect on the Effective Date, as the case may be.

Section 7.2.14         Sale and Leaseback. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly enter into any agreement or arrangement providing for the sale or transfer by it of any property (now owned or hereafter acquired) to a Person and the subsequent lease or rental of such property or other similar property from such Person.

Section 7.2.15         Pension Plans. The Borrower will not, and will not permit any of its Subsidiaries to make any contribution in respect of any Pension Plan in any Fiscal Year in excess of the maximum amount recommended to be contributed by the Borrower and its Subsidiaries as determined by a valuation provided to the Borrower by a nationally recognized agency providing such valuations for purposes of complying with ERISA, the Code and Internal Revenue Service rules and regulations.

Section 7.2.16         Limitation on Leases. Except for the leases set forth in Item 7.2.16 of the Disclosure Schedule, neither the Borrower nor any of its Subsidiaries will create, incur, assume or suffer to exist any obligation for the payment of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases and leases of Hydrocarbon Interests and short term operating leases having a term of not more than six months incurred in the ordinary course of business), under leases or lease agreements that would cause the aggregate amount of all payments made by the Borrower and its Subsidiaries pursuant to all such leases or lease agreements, including, without limitation, any residual payments at the end of any lease, to exceed $1,000,000 in annual payments of rent for any period of twelve consecutive calendar months during the life of such leases.

Section 7.2.17         Subsidiaries. The Borrower will not, and will not permit any Subsidiary to, create or acquire any additional Subsidiary unless the Borrower gives written notice to the Administrative Agent of such creation or acquisition and complies with Section 7.1.8. The Borrower shall not, and shall not permit any of its Subsidiaries to, sell, assign or otherwise dispose of any Capital Securities in any of its Subsidiaries except in compliance with Section 7.2.5(e) or Section 7.2.10(f).

Section 7.2.18         Gas Imbalances, Take or Pay or Other Prepayments. The Borrower will not allow gas imbalances, take-or-pay or other prepayments with respect to the Oil and Gas Properties of the Borrower or any Subsidiary Guarantor that would require the Borrower or such Subsidiary Guarantor to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor to exceed 1.5 bcf of gas (on an mcf equivalent basis) in the aggregate.

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Section 7.2.19         Restrictions on Hedging Agreements. (a)  Neither the Borrower nor any Subsidiary will enter into or maintain any Hedging Agreements with any Person except that the Borrower may enter into or maintain (i) commodity Hedging Agreements with Lenders or Affiliates thereof; (ii) Hedging Agreements in respect of interest rates with Lenders or Affiliates thereof effectively converting interest rates from floating to fixed, the notional amounts of which (when aggregated with all other Hedging Agreements of the Borrower and the Subsidiary Guarantors then in effect effectively converting interest rates from floating to fixed) do not exceed 50% of the then outstanding principal amount of the Borrower’s Indebtedness for borrowed money which bears interest at a floating rate; and (iii) Hedging Agreements required under Section 7.1.12.

(b)          With respect to any commodity Hedging Agreements permitted hereunder, as at any date, notional volumes (for the absence of doubt, notional volumes related to puts that are not executed in conjunction with any other Hedging Agreements are excluded) shall not exceed as of the date such Hedging Agreement is entered into, 75% of the reasonably anticipated projected production from the Obligors’ Proved Developed Producing Reserves determined by reference to the Reserve Report most recently delivered pursuant to this Agreement and such other supplemental reserve information as has been provided to the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent for each month during the period during which such Hedging Agreement is in effect for each of crude oil, natural gas and natural gas liquids, calculated separately, and the tenor of which is not more than 60 months from the date such Hedging Agreement is entered into.

(c)          As at any date, notional volumes corresponding to basis swaps covering Oil and Gas Properties of the Obligors shall not exceed as of the date such Hedging Agreement is entered into, 75% of the reasonably anticipated projected production from the Obligors’ Proved Developed Producing Reserves determined by reference to the Reserve Report most recently delivered pursuant to this Agreement and such other supplemental reserve information as has been provided to the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent for each month during the period during which such Hedging Agreement is in effect for each of crude oil, natural gas and natural gas liquids, calculated separately and the tenor of which is not more than 60 months from the date such Hedging Agreement is entered into.

(d)          Notwithstanding anything in this Section to the contrary, by no later than July 1st of each calendar year, notional volumes (for the absence of doubt, notional volumes related to puts that are not executed in conjunction with any other Hedging Agreements are excluded) shall not exceed 55% of the reasonably anticipated projected production from the Obligors’ Proved Developed Producing Reserves determined by reference to the Reserve Report most recently delivered pursuant to this Agreement and such other supplemental reserve information as has been provided to the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent for each month for each of crude oil, natural gas and natural gas liquids, calculated separately for the delivery period from July 1 of such calendar year through October 31 of such calendar year, provided that all calculations of reasonably estimated projected crude oil, natural gas, and natural gas liquids production made by the Borrower shall be made in a manner consistent with oil and gas production and reserve estimating techniques of, and reserve category definitions provided by, the Society of Petroleum Engineers.

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(e)          [Reserved]

(f)          Notwithstanding anything herein to the contrary, the Borrower will not enter into any Hedging Agreements other than in the ordinary course of business for the purpose of protecting against fluctuations in interest rates, commodity prices and/or basis risk and not for the purpose of speculation.

(g)          Notwithstanding anything in this Section to the contrary, an Obligor’s maintenance of Hedging Agreements or hedging positions in violation of clauses (b) through (d) above is not a Default or an Event of Default under this Section 7.2.19 if: (i) such Obligor was in compliance with the requirements of this Section 7.2.19 at the time of the entering into of any such Hedging Agreements or hedging positions; and (ii) after the time of the entering into of any such Hedging Agreements or hedging positions, a decrease in the reasonably estimated projected crude oil, natural gas and natural gas liquids production, respectively, determined by reference to the Reserve Report most recently delivered pursuant to this Agreement from the Obligors’ Proved Developed Producing Reserves causes such Obligor to no longer be in compliance with Section 7.2.19 and such non-compliance lasts for a period of not longer than five (5) Business Days.

Section 7.2.20         Anti-Corruption Laws. None of the members of the Group nor any director, officer, employee, or agent acting on behalf of any of the foregoing shall (i) use any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) offer, pay, give, promise to pay, authorize the payment of, or take any action in furtherance of the payment of anything of value directly or indirectly to a Government Official or any other person to improperly influence the recipient’s action or otherwise to obtain or retain business or to secure an improper business advantage or (iii) by act or omission, violate any Anti-Corruption Laws.

Section 7.2.21         Sanctioned Payments. The Borrower and its Subsidiaries shall not, and shall not authorize any other Person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of any Loan or other transaction(s) contemplated by this Agreement to fund any trade, business or other activities: (i) involving or for the benefit of any Restricted Party, or (ii) in any other manner that would reasonably be expected to result in any member of the Group or any Lender being in breach of any Sanctions (if and to the extent applicable to either of them) or becoming a Restricted Party.

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ARTICLE 8.

EVENTS OF DEFAULT

Section 8.1.          Listing of Events of Default. Each of the following events or occurrences described in this Article shall constitute an “Event of Default”.

Section 8.1.1           Non-Payment of Obligations. The Borrower shall default in the payment or prepayment when due of

(a)          any principal of any Loan or any Reimbursement Obligation; or

(b)          any interest, any fee described in Article 3 or any other monetary Obligation and such default shall continue unremedied for a period of three (3) Business Days after such amount was due.

Section 8.1.2           Breach of Warranty. Any representation or warranty of any Obligor made or deemed to be made in any Loan Document (including any certificates delivered pursuant to Article 5) is or shall be incorrect when made or deemed to have been made in any material respect (or if such representation or warranty contains a materiality qualifier, such representation or warranty is or shall be incorrect when made or deemed to have been made).

Section 8.1.3           Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance or observance of any of its obligations under Section 7.1.1(a)-(e) and (p)(iii), Section 7.1.7, Section 7.1.18, Section 7.1.19 or Section 7.2, or any Guarantor shall default under any payment or guarantee obligation under a Guaranty, or, except as expressly permitted by this Agreement, the Borrower or any Guarantor shall fail to preserve and maintain its legal existence.

Section 8.1.4           Non-Performance of Other Covenants and Obligations. Any Obligor shall default in the due performance and observance of any other agreement contained in any Loan Document executed by it, and such default shall continue unremedied for a period of 30 days after the earlier of (a) the date of such default or the date that any Obligor has knowledge of such Default, or (b) the date notice thereof is given to the Borrower by the Administrative Agent or any Lender.

Section 8.1.5           Default on Other Indebtedness. A default shall occur in the payment of any amount when due (subject to any applicable grace period), whether by acceleration or otherwise, of any principal or stated amount of, or interest or fees on, any Indebtedness (other than Indebtedness described in Section 8.1.1) of the Borrower or any of its Subsidiaries having a principal or stated amount, individually or in the aggregate, in excess of $5,000,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause or declare such Indebtedness to become due and payable or to require such Indebtedness to be prepaid, redeemed, purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity.

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Section 8.1.6           Judgments. Any judgment or order for the payment of money individually or in the aggregate in excess of $5,000,000 (exclusive of (i) any amounts fully covered by insurance (less any applicable deductible) and as to which the insurer has acknowledged its responsibility to cover such judgment or order and (ii) any judgment or order arising as part of, or subject to payment pursuant to, the Chapter 11 Cases) shall be rendered against the Borrower or any other Obligor and such judgment shall not have been vacated or discharged or stayed or bonded pending appeal within 30 days after the entry thereof or enforcement proceedings shall have been commenced by any creditor upon such judgment or order.

Section 8.1.7           Pension Plans. Any of the following events shall occur with respect to any Pension Plan:

(a)          the institution of any steps by the Borrower, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination, the Borrower or any such member could be required to make a contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan, in excess of $1,000,000; or

(b)          a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA.

Section 8.1.8           Change in Control. Any Change in Control shall occur.

Section 8.1.9           Bankruptcy, Insolvency, etc. The Borrower or any of its Subsidiaries shall:

(a)          become insolvent or generally fail to pay, or admit in writing its inability or unwillingness generally to pay, its debts as they become due;

(b)          apply for, consent to, or acquiesce in the appointment of a trustee, receiver, sequestrator or other custodian for any substantial part of the property of any thereof, or make a general assignment for the benefit of creditors;

(c)          in the absence of such application, consent or acquiescence in or permit or suffer to exist the appointment of a trustee, receiver, receiver manager, sequestrator or other custodian for a substantial part of the property of any thereof, and such trustee, receiver, receiver manager, sequestrator or other custodian shall not be discharged within 60 days; provided that, the Borrower and each Subsidiary hereby expressly authorizes each Secured Party to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents;

(d)          permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding, in respect thereof, and, if any such case or proceeding is not commenced by the Borrower or any Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary, as the case may be, or shall result in the entry of an order for relief or shall remain for 60 days undismissed; provided that, the Borrower or each Subsidiary hereby expressly authorizes each Secured Party to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; or

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(e)          take any action authorizing, or in furtherance of, any of the foregoing.

Section 8.1.10         Impairment of Security, etc. Any Loan Document shall (except (i) in accordance with its terms or (ii) Bank Product Agreements or Hedging Agreements), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Obligor party thereto; any Lien shall (except in accordance with the terms of any Loan Document), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Obligor subject thereto in respect of any material portion of the Collateral; any Obligor or any other party shall contest in any manner such effectiveness, validity, binding nature or enforceability; or, except as permitted under any Loan Document, any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien with respect to any material portion of the Collateral.

Section 8.2.          Action if Bankruptcy. If any Event of Default described in clauses (c) through (d) of Section 8.1.9 occurs with respect to the Borrower, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other Obligations (other than those arising under Bank Product Agreements or Hedging Agreements) shall automatically be and become immediately due and payable, without notice or demand to any Person and each Obligor shall automatically and immediately be obligated to Cash Collateralize all Letter of Credit Outstandings.

Section 8.3.          Action if Other Event of Default. If any Event of Default (other than any Event of Default described in clauses (c) through (d) of Section 8.1.9 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare all or any portion of the outstanding principal amount of the Loans and other Obligations (other than those arising under Bank Product Agreements or Hedging Agreements) (including Reimbursement Obligations) to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of such Loans and other Obligations (other than those arising under Bank Product Agreements or Hedging Agreements) that shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate and the Borrower and each other Obligor shall automatically and immediately be obligated to Cash Collateralize all Letter of Credit Outstandings.

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ARTICLE 9.

THE ADMINISTRATIVE AGENT AND ISSUERS

Section 9.1.          Actions. Each Lender and each Issuer hereby appoints WFBNA as its Administrative Agent under and for purposes of each Loan Document. Each Lender authorizes the Administrative Agent to act on behalf of such Lender under each Loan Document and to appoint other agents or sub-agents to assist in its actions under the Loan Documents and, in the absence of other written instructions from the Required Lenders received from time to time by the Administrative Agent (with respect to which the Administrative Agent agrees that it will comply, except as otherwise provided in this Section or as otherwise advised by counsel in order to avoid contravention of Applicable Law), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof, together with such powers as may be incidental thereto (including the release of Liens on assets Disposed of in accordance with the terms of the Loan Documents). Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) the Administrative Agent, pro rata according to such Lender’s proportionate Total Exposure Amount, from and against any and all liabilities, obligations, losses, damages, claims, costs or expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against, the Administrative Agent in any way relating to or arising out of any Loan Document, (including reasonable attorneys’ fees), and as to which the Administrative Agent, is not reimbursed by the Borrower, and without limiting Borrower’s obligations to do so; provided that, no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, claims, costs or expenses that are determined by a court of competent jurisdiction in a final proceeding to have resulted from the Administrative Agent’s gross negligence or willful misconduct. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. If any indemnity in favor of the Administrative Agent shall be or become, in the Administrative Agent’s determination, inadequate, the Administrative Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given. The Administrative Agent shall in all cases be fully protected in acting, or refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Secured Parties; provided that the Administrative Agent shall not be required to take any action that, in its opinion or in the opinion of its counsel, may expose it to liability or that is contrary to any Loan Document or applicable requirements of law.

Section 9.2.          Funding Reliance, etc. Unless the Administrative Agent shall have been notified in writing by any Lender by 3:00 p.m. on the Business Day prior to a Borrowing of Loans that such Lender will not make available the amount that would constitute its Percentage of such Borrowing of Loans on the date specified therefor, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent and, in reliance upon such assumption, make available to the Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to the Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable at the time to Loans comprising such Borrowing of Loans and (in the case of a Lender), at the Federal Funds Rate (for the first two Business Days after which such amount has not been repaid), and thereafter at the interest rate applicable to Loans comprising such Borrowing.

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Section 9.3.          Exculpation. None of the Administrative Agent or any Issuer or any of their respective Affiliates or any of their respective directors, officers, employees or agents (each, an “Agent Indemnified Party”) shall be liable to any Secured Party for any action taken or omitted to be taken by it under any Loan Document, or in connection therewith, except for its own willful misconduct or gross negligence (as determined by a court of competent jurisdiction in a final and non-appealable judgment), nor responsible for any recitals or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of any Loan Document, nor for the creation, perfection or priority of any Liens purported to be created by any of the Loan Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance by any Obligor of its Obligations. Any such inquiry that may be made by the Administrative Agent or any Issuer shall not obligate any of them to make any further inquiry or to take any action. The Administrative Agent and any Issuer shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement or writing that it believes to be genuine and to have been presented by a proper Person. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, AND SPECIFICALLY WITH REFERENCE TO THE PROVISIONS OF SECTIONS 9.1, 9.3, 9.5 AND 9.10, IT IS THE INTENTION OF THE PARTIES HERETO THAT THE ADMINISTRATIVE AGENT AND EACH ISSUER INDEMNIFIED PARTY BE REIMBURSED OR INDEMNIFIED IN THE CASE OF, AND NOT BE LIABLE FOR, ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL.

Section 9.4.          Successor. The Administrative Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders. If the Administrative Agent at any time shall resign, the Required Lenders may appoint another Lender as a successor Administrative Agent that shall thereupon become the Administrative Agent hereunder. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders or a commercial banking institution organized under the laws of the United States (or any State thereof) or a United States branch or agency of a commercial banking institution, and having a combined capital and surplus of at least $250,000,000; provided that, if, such retiring Administrative Agent is unable to find a commercial banking institution that is willing to accept such appointment and that meets the qualifications set forth in above, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor as provided for above. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the retiring Administrative Agent such documents of transfer and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After any retiring Administrative Agent’s resignation hereunder as the Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under the Loan Documents, and Section 10.3 and Section 10.4 shall continue to inure to its benefit.

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Section 9.5.          Revolving Credit Extensions by Administrative Agent and Issuers. The Administrative Agent and each Issuer shall have the same rights and powers with respect to (a) the Revolving Credit Extensions made by it or any of its Affiliates, and (b) the Notes held by it or any of its Affiliates as any other Lender and may exercise the same as if it were not the Administrative Agent or an Issuer, as the case may be. The Administrative Agent or any Issuer and their Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or Affiliate of the Borrower as if such Administrative Agent were not the Administrative Agent hereunder or as if such Issuer were not Issuer hereunder, as the case may be.

Section 9.6.          Credit Decisions. Each Lender acknowledges that it has, independently of the Administrative Agent, the Issuers and each other Lender, and based on such Lender’s review of the financial information of the Borrower, the Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitments. Each Lender also acknowledges that it will, independently of the Administrative Agent, the Issuers and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under the Loan Documents. In this regard, each Lender and Issuer acknowledges, agrees and consents that Willkie Farr & Gallagher LLP is acting in this transaction as special counsel to the Administrative Agent only. Each other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein.

Section 9.7.          Copies, etc. The Administrative Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to the Administrative Agent by the Borrower pursuant to the terms of the Loan Documents (unless concurrently delivered to the Lenders by the Borrower). The Administrative Agent will distribute to each Lender each document or instrument received (other than Borrowing Requests, Issuance Requests and other notices delivered pursuant to Articles 2 and 3) for its account and copies of all other communications received by the Administrative Agent from the Borrower for distribution to the Lenders by the Administrative Agent in accordance with the terms of the Loan Documents.

Section 9.8.          Reliance by Administrative Agent and Issuers. The Administrative Agent and each Issuer shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telecopy, telegram, email or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent or such Issuer. As to any matters not expressly provided for by the Loan Documents, the Administrative Agent and each Issuer shall in all cases be fully protected in acting, or in refraining from acting, thereunder in accordance with instructions given by the Required Lenders or all of the Lenders as is required in such circumstance, and such instructions of such Lenders and any action taken or failure to act pursuant thereto shall be binding on all Secured Parties. For purposes of applying amounts in accordance with this Section, the Administrative Agent shall be entitled to rely upon any Secured Party that has entered into a Hedging Agreement or Bank Product Agreement with any Obligor for a determination (which such Secured Party agrees to provide or cause to be provided upon request of the Administrative Agent) of the outstanding Obligations owed to such Secured Party under any Hedging Agreement or Bank Product Agreement, as the case may be. Unless it has actual knowledge evidenced by way of written notice from any such Secured Party and the Borrower to the contrary, the Administrative Agent, in acting in such capacity under the Loan Documents, shall be entitled to assume that no Hedging Agreements or Obligations in respect thereof or Bank Product Agreement or Bank Product Obligations are in existence or outstanding between any Secured Party and any Obligor.

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Section 9.9.          Defaults. Neither the Administrative Agent nor any Issuer shall be deemed to have knowledge or notice of the occurrence of a Default or Borrowing Base Deficiency unless it has received a written notice from a Secured Party or the Borrower specifying such Default and stating that such notice is a “Notice of Default”. In the event that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to Section 10.1) take such action with respect to such Default as shall be directed by the Required Lenders; provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Borrowing Base Deficiency as it shall deem advisable in the best interest of the Secured Parties except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Required Lenders or all Lenders.

Section 9.10.         Posting of Approved Electronic Communications. (a)  In addition to providing the Administrative Agent with all originals or copies of all Communications (as defined below) in the manner specified by Section 10.2, the Borrower hereby also agrees, unless directed otherwise by the Administrative Agent or unless the electronic mail address referred to below has not been provided by the Administrative Agent to the Borrower, that it will, or will cause its Subsidiaries to, provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent pursuant to the Loan Documents or to the Lenders under Section 7.1.1, including all notices, requests, financial statements, financial and other reports, certificates and other information materials (all such communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium that is properly identified in a format acceptable to the Administrative Agent to an electronic mail address as directed by the Administrative Agent.

(b)          The Borrower further agrees that the Administrative Agent may make the Communications available to the Lenders by posting the Communications on Intralinks or a substantially similar electronic transmission system (the “Platform”).

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(c)          THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE INDEMNIFIED PARTIES DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE INDEMNIFIED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE INDEMNIFIED PARTIES HAVE ANY LIABILITY TO ANY OBLIGOR, ANY LENDER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY OBLIGOR’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY INDEMNIFIED PARTY IS FOUND IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(d)          The Administrative Agent agrees that the receipt of the Communications by the Administrative Agent at its e-mail address set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender agrees that receipt of notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender agrees to notify the Administrative Agent in writing (including by electronic communication) from time to time of such Lender’s e-mail address to which the foregoing notice may be sent by electronic transmission and that the foregoing notice may be sent to such e-mail address.

(e)          Nothing herein shall prejudice the right of the Administrative Agent or any Lender to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

Section 9.11.         Proofs of Claim. The Secured Parties and the Borrower hereby agree that after the occurrence of an Event of Default pursuant to Section 8.1.9, in case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any of the Obligors, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand on any of the Obligors) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a)          to file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Loans and any other Obligations that are owing and unpaid and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Administrative Agent and other Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Administrative Agent and its agents and counsel and all other amounts due the Administrative Agent and other Secured Parties) allowed in such judicial proceeding; and

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(b)          to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Secured Parties, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent hereunder. Nothing herein contained shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Secured Party or to authorize Administrative Agent to vote in respect of the claim of any Secured Party in any such proceeding. Further, nothing contained in this Section shall affect or preclude the ability of any Secured Party to (i) file and prove such a claim in the event that the Administrative Agent has not acted within ten days prior to any applicable bar date and (ii) require an amendment of the proof of claim to accurately reflect such Secured Party’s outstanding Obligations.

Section 9.12.         Security Matters; Authority of Administrative Agent to Release Collateral. (a)  Each Lender and each Issuer and other Secured Party (by their acceptance of the benefits of any Collateral) acknowledges and agrees that the Administrative Agent has entered into the Security Documents on behalf of itself and the Secured Parties, and the Secured Parties hereby agree to be bound by the terms of such Security Documents, acknowledge receipt of copies of such Security Documents and consent to the rights, powers, remedies, indemnities and exculpations given to the Administrative Agent thereunder. All rights, powers and remedies available to the Administrative Agent and the Secured Parties with respect to the Collateral, or otherwise pursuant to the Security Documents, shall be subject to the provisions of such Security Documents. In the event of any conflict or inconsistency between the terms and provisions of this Agreement and the terms and provisions of such Security Documents, the terms and provisions of such Security Documents shall govern and control except that this Agreement shall govern and control the rights, powers, duties, immunities and indemnities of the Administrative Agent. The Administrative Agent may, without the consent of the Issuers or Lenders, (i) amend, supplement, restate or otherwise modify any Control Agreement and other Security Documents in order to cure any defect or inconsistency therein, to make any change not inconsistent with the provisions thereof or to cure any ambiguity or correct any mistake therein, provided that such amendment, supplement, restatement or modification does not adversely affect the interests of any Secured Parties and (ii) agree to such replacements, updates and supplements of any exhibit or schedule to a Control Agreement and the exhibits and schedules to the Security Documents as the Administrative Agent deems reasonable, including without limitation to update any supplemental information, add additional accounts or replace or terminate existing accounts; provided that clauses (i) and (ii) above shall not be construed to permit the Administrative Agent to agree to changes of the type described in clauses (a) through (g) of Section 10.1 unless the Administrative Agent shall have obtained the requisite consents as specified in Section 10.1.

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(b)          Each Lender, Issuer and other Secured Party (by their acceptance of the benefits of any Collateral) hereby authorizes the Administrative Agent to release any collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents. Each Lender, Issuer and other Secured Party hereby authorizes the Administrative Agent to execute and deliver to the Borrower, at the Borrower’s sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower in connection with any sale or other Disposition of Property to the extent such sale or other Disposition is permitted by the terms of this Agreement or is otherwise authorized by the terms of the Loan Documents.

(c)          Any Secured Party may assign or otherwise transfer (in whole or in part) its interest pursuant to any Hedging Agreement with the Borrower (or a Subsidiary Guarantor) to an Approved Counterparty that is or becomes a Lender or an Affiliate of a Lender at the time of such transfer and such Hedging Agreement shall remain secured by the Loan Documents to the same extent that such Hedging Agreement was secured hereunder when the original Secured Party was the counterparty to such Hedging Agreement.

Section 9.13.         Withholding Tax. To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender or Issuer an amount equivalent to any applicable withholding tax. Without limiting the provisions of Section 4.6, each Lender and the Issuer shall, and does hereby, indemnify the Administrative Agent, and shall make payable in respect thereof within 30 days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Administrative Agent) incurred by or asserted against the Administrative Agent by the Internal Revenue Service or any other Governmental Authority as a result of the failure of the Administrative Agent to properly withhold Tax from amounts paid to or for the account of any Lender for any reason (including, without limitation, because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding tax ineffective). A certificate as to the amount of such payment or liability delivered to any Lender or Issuer by the Administrative Agent shall be conclusive absent manifest error. Each Lender and Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or Issuer under this Agreement or any other Loan Document against any amount due the Administrative Agent under this Section 9.13. The agreement in this Section 9.13 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

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ARTICLE 10.

MISCELLANEOUS PROVISIONS

Section 10.1.         Waivers, Amendments, etc. The provisions of each Loan Document (other than Hedging Agreements, Letters of Credit or the Fee Letter, which shall be modified only in accordance with their respective terms, or as otherwise permitted under Section 9.12 hereof) may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided, that no other such amendment, modification or waiver shall:

(a)              modify clause (b) of Section 4.7, Section 4.8 (as it relates to sharing of payments) or this Section 10.1, in each case, without the consent of all Lenders;

(b)             increase the aggregate amount of any Revolving Credit Extensions required to be made by a Lender pursuant to its Commitments, extend the Commitment Termination Date of Revolving Credit Extensions made (or participated in) by a Lender or extend the final Stated Maturity Date for any Lender’s Loans, in each case without the consent of such Lender (it being agreed, however, that any vote to rescind any acceleration made pursuant to Section 8.3 of amounts owing with respect to the Loans and other Obligations shall only require the vote of the Required Lenders);

(c)             reduce the principal amount of or reduce the rate of interest on any Lender’s Loan, reduce any fees described in Article 3 payable to any Lender or extend the date on which principal, interest or fees are payable in respect of such Lender’s Loans, in each case without the consent of such Lender (provided that, the vote of Required Lenders shall be sufficient to waive the payment, or reduce the increased portion, of interest accruing under Section 3.2.2);

(d)             reduce the percentage set forth in the definition of “Required Lenders” or “Required Borrowing Base Lenders” or modify any requirement hereunder that any particular action be taken by all Lenders without the consent of all Lenders;

(e)             increase the Stated Amount of any Letter of Credit unless consented to by the Issuer of such Letter of Credit;

(f)              except as otherwise expressly provided in a Loan Document, release (i) the Borrower from its Obligations under the Loan Documents or any Guarantor from its obligations under the Guaranty or any Security Document to which it is a party or (ii) all or substantially all of the collateral under the Loan Documents, in each case without the consent of all Lenders; or

(g)             affect adversely the interests, rights or obligations of the Administrative Agent (in its capacity as the Administrative Agent) or any Issuer (in its capacity as Issuer), unless consented to by the Administrative Agent or such Issuer, as the case may be.

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No failure or delay on the part of any Secured Party in exercising any power or right under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on any Obligor in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by any Secured Party under any Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions or events. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.

Section 10.2.          Notices; Time. All notices and other communications provided under each Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted, if to the Borrower, the Administrative Agent, a Lender or an Issuer, to the applicable Person at its address or facsimile number or e-mail address set forth on Schedule II hereto or set forth in the Lender Assignment Agreement, or at such other address or facsimile number or e-mail address as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile or by electronic mail, shall be deemed given when the confirmation of transmission thereof is received by the transmitter. Electronic mail and Internet and intranet websites may also be used to distribute routine communications by the Administrative Agent to each Lender, such as financial statements and other information as provided in Section 7.1.1 and for the distribution and execution of Loan Documents for execution by the parties thereto. The parties hereto agree that delivery of an executed counterpart of a signature page to this Agreement and each other Loan Document by facsimile (or electronic transmission) shall be effective as delivery of an original executed counterpart of this Agreement or such other Loan Document. Unless otherwise indicated, all references to the time of a day in a Loan Document shall refer to New York time. Any notice received by a recipient after its normal business hours shall be deemed received upon the opening of such recipient’s next Business Day.

Section 10.3.          Payment of Costs and Expenses. The Borrower agrees to pay on demand all reasonable out-of-pocket expenses of the Lead Arrangers and the Administrative Agent (including the reasonable and documented fees and out-of-pocket expenses of Willkie Farr & Gallagher LLP, counsel to the Administrative Agent, and of local counsel, if any, who may be retained by or on behalf of the Administrative Agent and including, without limitation, the reasonable and documented fees, charges and disbursements of other outside consultants (including technical and financial advisors) for the Administrative Agent, the reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, including all Intralinks expenses, and the cost of environmental audits and surveys and appraisals) in connection with:

(a)           the review, negotiation, preparation, execution and delivery of each Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to any Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated; and

(b)           the filing or recording of any Loan Document (including the Filing Statements) and all amendments, supplements, amendment and restatements and other modifications to any thereof, searches made following the Effective Date in jurisdictions where Filing Statements (or other documents evidencing Liens in favor of the Secured Parties) have been recorded and any and all other documents or instruments of further assurance required to be filed or recorded by the terms of any Loan Document; and

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(c)            the preparation and review of the form of any document or instrument relevant to any Loan Document.

The Borrower further agrees to pay, and to save each Secured Party harmless from all liability for, any stamp or other taxes that may be payable in connection with the execution or delivery of each Loan Document, the Revolving Credit Extensions or the issuance of the Notes. The Borrower also agrees to reimburse the Secured Parties upon demand for all reasonable and documented out-of-pocket expenses (including reasonable and documented attorneys’ fees and legal expenses of one counsel for the Lenders and the reasonable and documented fees and expenses of outside consultants) and settlement costs incurred in connection with (x) the negotiation of any restructuring or “work-out” with the Borrower, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.

Section 10.4.          Indemnification. In consideration of the execution and delivery of this Agreement by each Secured Party, the Borrower hereby indemnifies, exonerates and holds each Secured Party, the Affiliates of each Secured Party and each of their respective officers, directors, employees and agents (collectively, the “Indemnified Parties”) free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys’ fees and disbursements, whether incurred in connection with actions between or among the parties hereto or the parties hereto and third parties (collectively, the “Indemnified Liabilities”), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to

(a)           any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Revolving Credit Extension or Term Loan;

(b)           the entering into and performance of any Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of the Borrower as the result of any determination by the Required Lenders pursuant to Article V not to fund any Revolving Credit Extension, provided that, any such action is resolved in favor of such Indemnified Party);

(c)           the Loan Documents, the Revolving Credit Extensions, the Term Loans and the extension of the Commitments, the failure of any Obligor to comply with the terms of the Loan Documents or Applicable Law, the inaccuracy of any representation or warranty of any Obligor set forth in the Loan Documents or in a certificate, instrument or document delivered in connection therewith, and the use by any Obligor of the proceeds of any Revolving Credit Extension or Term Loan;

(d)           any investigation, litigation or proceeding related to any acquisition or proposed acquisition by any Obligor or any Subsidiary thereof of all or any portion of the Capital Securities or assets of any Person, whether or not an Indemnified Party is party thereto;

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(e)           any investigation, litigation or proceeding related to any environmental cleanup, audit, compliance or other matter relating to the protection of the environment or the Release by any Obligor or any Subsidiary thereof of any Hazardous Material;

(f)            the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any real property owned or operated by any Obligor or any Subsidiary thereof of any Hazardous Material (including any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental Law), regardless of whether caused by, or within the control of, such Obligor or Subsidiary; or

(g)           each Lender’s Environmental Liability (the indemnification herein shall survive repayment of the Obligations and any transfer of the property of any Obligor or its Subsidiaries by foreclosure or by a deed in lieu of foreclosure for any Lender’s Environmental Liability, regardless of whether caused by, or within the control of, such Obligor or such Subsidiary);

provided that the Borrower shall not be required to indemnify any Indemnified Party to the extent the applicable Indemnified Liability (i) arises by reason of such Indemnified Party’s gross negligence or willful misconduct, (ii) resulted from a claim brought by the Borrower against any Indemnified Party of any material breach in bad faith of such Indemnified Party’s funding obligations under this Agreement or (iii) is on account of a dispute solely among Indemnified Parties (other than the Administrative Agent in its role as such) to the extent such dispute does not involve and is not related to any act, omission or representation on the part of, or any information provided by or on behalf of any Obligor, in each case, as determined by a court of competent jurisdiction in a final and non-appealable judgment. Each Obligor and its successors and assigns hereby waive, release and agree not to make any claim or bring any cost recovery action against, any Indemnified Party under CERCLA or any state, provincial or foreign equivalent, or any similar law now existing or hereafter enacted, except for liabilities arising from an Indemnified Party’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable judgment). It is expressly understood and agreed that to the extent that any Indemnified Party is strictly liable under any Environmental Laws, each Obligor’s obligation to such Indemnified Party under this indemnity shall likewise be without regard to fault on the part of any Obligor with respect to the violation or condition that results in liability of an Indemnified Party. If and to the extent that the foregoing undertaking may be unenforceable for any reason, each Obligor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under Applicable Law. To the extent permitted by Applicable Law, the Obligors shall not assert, and hereby waive, any claim against any Indemnified Party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, any Loan or Letter of Credit or the use of the proceeds thereof. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. No Indemnified Party referred to above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

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Section 10.5.         Survival. The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under Section 9.1, shall in each case survive any assignment from one Lender to another (in the case of Sections 10.3 and 10.4), until the occurrence of the Termination Date. The representations and warranties made by each Obligor in each Loan Document shall survive the execution and delivery of such Loan Document.

Section 10.6.         Severability. Any provision of any Loan Document that is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 10.7.          Headings. The various headings of each Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of such Loan Document or any provisions thereof.

Section 10.8.          Execution in Counterparts, Effectiveness, etc. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be an original (whether such counterpart is originally executed or an electronic copy of an original and each party hereto expressly waives its rights to receive originally executed documents other than with respect to any Notes) and all of which shall constitute together but one and the same agreement. This Agreement shall become effective when the conditions in Section 5.1 have been satisfied or waived in accordance with the provisions hereof and of the Confirmation Order. The parties hereto agree that delivery of a counterpart of a signature page to this Agreement and each other Loan Document by facsimile or electronic transmission shall be effective as delivery of an original executed counterpart of this Agreement or such other Loan Document.

Section 10.9.          Governing Law. EACH LOAN DOCUMENT (OTHER THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY PRACTICES (ISP98 INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 590 (THE “ISP RULES”)) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

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Section 10.10.        Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that, the Borrower may not assign or transfer its rights or obligations hereunder without the consent of all Lenders.

Section 10.11.       Sale and Transfer of Revolving Credit Extensions; Participations in Revolving Credit Extensions; Notes. Each Lender may assign, or sell participations in, its Loans, Letters of Credit and Commitments to one or more other Persons in accordance with the terms set forth below.

(a)            Any Lender may, with the consent of the Administrative Agent, each Issuer and, so long as no Event of Default has occurred and is continuing, the Borrower (such consent not to be unreasonably withheld or delayed and shall not be required for an assignment to any other Lender, or Affiliate thereof), assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments or Loans at the time owing to it); provided that:

(i)          the aggregate amount of the Commitments (which for this purpose includes Loans outstanding thereunder), principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Lender Assignment Agreement with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000, unless (A) the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); (B) such assignment is an assignment of the entire remaining amount of the assigning Lender’s Commitments and Loans at the time owing to it, (C) such assignment is an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, or (D) such assignment is to one or more Eligible Assignees managed by an Affiliate of such Eligible Assignee(s) and the aggregate amount of such assignments is not less than $1,000,000;

(ii)         each assignment (whether a partial or complete assignment) shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans (including the Revolving Loans and the Term Loans), the Revolving Credit Commitments, and the Letter of Credit Commitments assigned and any assignment that does not include the same Percentage of the Revolving Loans, the Revolving Credit Commitments, the Letter of Credit Commitments and the Term Loans shall be null and void and of no effect; and

(iii)        the parties to each assignment shall (A) electronically execute and deliver to the Administrative Agent a Lender Assignment Agreement via an electronic settlement system acceptable to the Administrative Agent or (B) with the consent of the Administrative Agent, manually execute and deliver to the Administrative Agent a Lender Assignment Agreement, together with, in either case, a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Administrative Agent) and if the Eligible Assignee is not a Lender, administrative details information with respect to such Eligible Assignee and applicable tax forms.

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(b)          Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c), from and after the effective date specified in each Lender Assignment Agreement, (i) the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Lender Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and (ii) the assigning Lender thereunder shall, to the extent of the interest assigned by such Lender Assignment Agreement, subject to Section 10.5, be released from its obligations under this Agreement (and, in the case of a Lender Assignment Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto, but shall continue to be entitled to the benefits of any provisions of this Agreement that by their terms survive the termination of this Agreement). If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment that does not meet the minimum assignment thresholds specified in this Section), the Borrower shall be deemed to have given its consent ten days after the date notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such tenth day.

(c)          The Administrative Agent shall record each assignment made in accordance with this Section 10.11 or in accordance with Section 2.9 in the Register pursuant to clause (a) of Section 2.7 and periodically give the Borrower notice of such assignments. The Register shall be available for inspection by the Borrower and any Lender, as to its Commitments only, at any reasonable time and from time to time upon reasonable prior notice.

(d)          Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to any of the items set forth in clauses (a) through (d) or (f) of Section 10.1, in each case except as otherwise specifically provided in a Loan Document. Subject to clause (e), the Borrower agrees that each Participant shall be entitled to the benefits of Sections 4.3, 4.4, 4.5, 4.6, 7.1.1, 10.3 and 10.4 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b). To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 4.9 as though it were a Lender, provided such Participant agrees to be subject to Section 4.8 as though it were a Lender; provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.

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(e)          A Participant shall not be entitled to receive any greater payment under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, as of the time of the sale of such participation, than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 4.6 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower to comply with the requirements set forth in Section 4.6 as though it were a Lender. In addition, if at the time of the sale of such participation, any greater Taxes subject to payment under Section 4.6 would apply to the Participant than applied to the applicable Lender, then such Participant shall not be entitled to any payment under Section 4.6 with respect to the portion of such Taxes as exceeds the Taxes applicable to the Lender at the time of the sale of the participation unless the Participant’s request for the Borrower’s prior written consent for the Participation described in the first sentence of this clause states that such greater Taxes would be applicable to such Participant, it being understood that the Participant shall be entitled to additional payments under Section 4.6 to the extent such Lender selling the participation would be entitled to any payment resulting from a Change in Law occurring after the time the participation was sold. Each Lender that sells a participation or makes a grant to a SPC shall, acting solely for this purpose as a non-fiduciary agent of the Borrower maintain a register on which it enters the name and address of each Participant and SPC and the principal amounts (and stated interest) of each Participant’s or SPC’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(f)          Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or central bank having jurisdiction over such Lender; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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(g)          Notwithstanding anything to the contrary contained herein, any Lender (“Granting Lender”) may grant to a special purpose funding vehicle (a “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (x) nothing herein shall constitute a commitment by any SPC to make any Loans and (y) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the corresponding Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this clause, any SPC may (i) with notice to, but without the prior written consent of, the Borrower or the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower, and the Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC. This Section may not be amended without the written consent of the SPC. The Borrower acknowledges and agrees, subject to the next sentence, that, to the fullest extent permitted under Applicable Law, each SPC, for purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a Lender. The Borrower shall not be required to pay any amount under Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than the amount that it would have been required to pay had no grant been made by a Granting Lender to a SPC.

(h)          Notwithstanding anything to the contrary contained herein, but subject to the provisions of Section 10.11(a), any Lender may, at any time, assign all or a portion of its rights and obligations under this Agreement in respect of its Loans and Commitments to an Affiliated Lender; provided that an Affiliated Lender shall make a representation and warranty to the assigning Lender that at the time of the assignment, the Affiliated Lender is not in possession of any material non-public information (within the meaning of United States securities laws) with respect to the Borrower and its Subsidiaries that has not been disclosed to such assigning Lender or the Lenders generally (other than because any such Lender has elected not to receive such material non-public information); provided further that, by its acquisition of Loans and Commitments, an Affiliated Lender shall be deemed to have acknowledged and agreed that:

(i)          it shall not have any right to (A) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent or any Lender to which representatives of the Borrower are not then present, (B) receive any information or material prepared by the Administrative Agent, or any Lender or any communication by or among Administrative Agent and one or more Lenders, except to the extent such information or materials have been made available to the Borrower or its representatives (and in any case, other than the right to receive notices of prepayments and other administrative notices in respect of its Loans required to be delivered to Lenders pursuant to Section 2), or (C) make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against the Administrative Agent, or any other Lender with respect to any duties or obligations or alleged duties or obligations of the Administrative Agent or any other such Lender under the Loan Documents;

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(ii)         except with respect to any amendment, modification, waiver, consent or other action that (a) alters an Affiliated Lender’s pro rata share of any payments given to all Lenders, (b) disproportionately affects such Affiliated Lender or (c) extends or postpones the final maturity, reduces the principal, interest or fees that are payable or releases all or substantially all the value of the Guarantees or releases Liens on all or substantially all of the Collateral, the Loans held by an Affiliated Lender shall be disregarded in both the numerator and denominator in the calculation of any Lender vote (and shall be deemed to have been voted in the same percentage as all other applicable Lenders that are not Affiliated Lenders voted if necessary to give legal effect to this paragraph) under any Loan Document;

(iii)        the aggregate principal amount of Loans held by Affiliated Lenders at the time of such assignment may not exceed 25% of the aggregate principal amount of all Loans outstanding at such time under this Agreement; and

(iv)        any such Loans acquired by an Affiliated Lender may, with the consent of the Borrower, be contributed to the Borrower and exchanged for debt or equity securities that are otherwise permitted to be issued at such time (and such contribution and/or exchange shall be permitted hereunder notwithstanding the non-pro rata reduction and repayment of such Lender’s Loans and Commitments hereunder as a result thereof).

Section 10.12.        Other Transactions; No Fiduciary Duty. Nothing contained herein shall preclude the Administrative Agent, any Issuer or any other Lender from engaging in any transaction, in addition to those contemplated by the Loan Documents, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person. No Secured Party shall have any fiduciary duty or obligation to the Borrower or any other Obligor with respect to any Loan Document or any transaction contemplated thereby.

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Section 10.13.       Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER, THE BORROWER OR ANY OTHER OBLIGOR IN CONNECTION HEREWITH OR THEREWITH SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT, ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER AND THE OTHER OBLIGORS IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 10.2. THE BORROWER AND THE OTHER OBLIGORS HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER AND THE OTHER OBLIGORS HAVE OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER AND THE OTHER OBLIGORS HEREBY IRREVOCABLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

Section 10.14.       Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER, EACH ISSUER, THE BORROWER AND THE OTHER OBLIGORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER, THE BORROWER OR SUCH OBLIGOR IN CONNECTION THEREWITH. THE BORROWER AND THE OTHER OBLIGORS EACH ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH ISSUER ENTERING INTO THE LOAN DOCUMENTS.

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Section 10.15.        Confidentiality. (a)  Subject to the provisions of clause (b) of this Section, each Lender agrees that it will follow its customary procedures in an effort not to disclose without the prior consent of the Borrower (other than to its employees, agents, auditors, advisors or counsel or to another Lender if the Lender or such Lender’s holding or parent company in its sole discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section to the same extent as such Lender) any information that is now or in the future furnished pursuant to this Agreement or any other Loan Document, provided that any Lender may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this clause by the respective Lender or any other Person to whom such Lender has provided such information as permitted by this Section, (ii) as may be required or appropriate in any report, statement or testimony or other disclosure submitted to any municipal, state, provincial or Federal regulatory body having or claiming to have jurisdiction over such Lender (including any self-regulatory body) or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or appropriate in respect to any summons or subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the Administrative Agent or any Issuer, (vi) to any pledgee referred to in clause (f) of Section 10.11 or any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments or any interest therein by such Lender, provided that such prospective transferee agrees to be bound by the confidentiality provisions contained in this Section, (vii) to any direct or indirect contractual counterparty in swap agreements or such contractual counterparty’s professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty agrees to be bound by the provisions of this Section), (viii) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender and (ix) in connection with the enforcement of any rights or remedies under this Agreement or any other Loan Document.

(b)           The Borrower hereby acknowledges and agrees that each Lender may share with any of its Affiliates, and such Affiliates may share with such Lender, any information related to the Borrower or any of its Subsidiaries, provided such Persons shall be subject to the provisions of this Section to the same extent as such Lender.

Notwithstanding the foregoing paragraphs of this Section, any party to this Agreement (and each Affiliate, director, officer, employee, agent or representative of the foregoing or such Affiliate) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated herein and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment or tax structure. The foregoing language is not intended to waive any confidentiality obligations otherwise applicable under this Agreement except with respect to the information and materials specifically referenced in the preceding sentence. This authorization does not extend to disclosure of any other information, including (a) the identity of participants or potential participants in the transactions contemplated herein, (b) the existence or status of any negotiations, or (c) any financial, business, legal or personal information of or regarding a party or its affiliates, or of or regarding any participants or potential participants in the transactions contemplated herein (or any of their respective affiliates), in each case to the extent such other information is not related to the tax treatment or tax structure of the transactions contemplated herein.

Section 10.16.     Counsel Representation. THE BORROWER AND THE OTHER OBLIGORS EACH ACKNOWLEDGE AND AGREE THAT IT HAS BEEN REPRESENTED BY COMPETENT COUNSEL IN THE NEGOTIATION OF THIS AGREEMENT, AND THAT ANY RULE OR CONSTRUCTION OF LAW ENABLING THE BORROWER AND THE OTHER OBLIGORS TO ASSERT THAT ANY AMBIGUITIES OR INCONSISTENCIES IN THE DRAFTING OR PREPARATION OF THE TERMS OF THIS AGREEMENT SHOULD DIMINISH ANY RIGHTS OR REMEDIES OF THE ADMINISTRATIVE AGENT OR THE OTHER SECURED PARTIES ARE HEREBY WAIVED BY THE BORROWER AND THE OTHER OBLIGORS.

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Section 10.17.       No Oral Agreements. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

Section 10.18.        Maximum Interest. It is the intention of the parties hereto to conform strictly to applicable usury laws and, anything herein to the contrary notwithstanding, the Obligations of the Borrower and the other Obligors to each Lender and the other Secured Parties under this Agreement and the other Loan Documents shall be subject to the limitation that payments of interest shall not be required to the extent that receipt thereof would be contrary to provisions of law applicable to such Lender limiting rates of interest that may be charged or collected by such Lender or Secured Party, as applicable. Accordingly, if the transactions contemplated hereby would be usurious under Applicable Law (including the Federal and state laws of the United States of America, or of any other jurisdiction whose laws may be mandatorily applicable) with respect to a Lender, then, in that event, notwithstanding anything to the contrary in this Agreement, it is agreed as follows: (a) the provisions of this Section 10.18 shall govern and control; (b) the aggregate of all consideration that constitutes interest under Applicable Law that is contracted for, charged or received under this Agreement, or under any other Loan Document or otherwise in connection with this Agreement by such Lender or Secured Party, as applicable, shall under no circumstances exceed the maximum amount of interest allowed by Applicable Law (such maximum lawful interest rate, if any, with respect to such Lender or Secured Party, as applicable herein called the “Highest Lawful Rate”), and any excess shall be credited to the Borrower by such Lender or Secured Party, as applicable (or, if such consideration shall have been paid in full, such excess promptly refunded to the Borrower); (c) all sums paid, or agreed to be paid, to such Lender or Secured Party, as applicable for the use, forbearance and detention of the indebtedness of the Borrower to such Lender or Secured Party, as applicable hereunder shall, to the extent permitted by Applicable Law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest is uniform throughout the full term thereof; and (d) if at any time the interest provided pursuant to Section 3.2, together with any other fees and expenses payable pursuant to this Agreement and the other Loan Documents and deemed interest under Applicable Law, exceeds that amount that would have accrued at the Highest Lawful Rate, then the amount of interest and any such fees to accrue to such Lender or Secured Party, as applicable pursuant to this Agreement and the other Loan Documents shall be limited, notwithstanding anything to the contrary in this Agreement, to that amount that would have accrued at the Highest Lawful Rate, but any subsequent reductions, as applicable, shall not reduce the interest to accrue to such Lender or Secured Party, as applicable pursuant to this Agreement below the Highest Lawful Rate until the total amount of interest accrued pursuant to this Agreement and the other Loan Documents and such fees deemed to be interest equals the amount of interest that would have accrued to such Lender or Secured Party, as applicable, if a varying rate per annum equal to the interest provided pursuant to Section 3.2 had at all times been in effect, plus the amount of fees that would have been received but for the effect of this Section 10.18.

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Section 10.19.       Collateral Matters; Hedging Agreements; Bank Product Agreements. The benefit of the Security Documents and of the provisions of this Agreement relating to the Collateral shall also extend to and be available to (i) each Approved Counterparty to a Hedging Agreement with the Borrower (or any Subsidiary Guarantor) that is or was a Lender or an Affiliate thereof at the time such Approved Counterparty entered into any transactions under any Hedging Agreement or if such Hedging Agreement and such transaction under such Hedging Agreement was in effect on the Effective Date (but only for purposes of each such Hedging Agreement and any transactions thereunder so entered or in effect and not for Hedging Agreements or any hedging transactions entered into after such Approved Counterparty ceased to be a Lender or Affiliate thereof) and (ii) each Bank Product Provider under Bank Product Agreements; provided that it is the intention of the parties hereto that repayment of the Hedging Obligations of the Borrower (or any Subsidiary Guarantor) under any qualifying Hedging Agreement with any such Approved Counterparty or the Bank Product Obligations of the Borrower (or any Subsidiary Guarantor) under any Bank Product Agreement with any such Bank Product Provider from realization of any Collateral shall be subject to the terms of the Security Documents. No Person shall have any voting or consent rights under any Loan Document solely as a result of the existence of Obligations owed to it under any Hedging Agreement or Bank Product Agreement.

Section 10.20.        Patriot Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Patriot Act.

Section 10.21.        Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)          the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)          the effects of any Bail-in Action on any such liability, including, if applicable:

(i)          a reduction in full or in part or cancellation of any such liability;

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(ii)         a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

(Signature pages follow)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

ENERGY XXI GULF COAST, INC.
By:	/s/ Hugh Menown
	Name:	Hugh Menown
	Title:	Executive Vice President, Chief Accounting Officer

S-1

WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Administrative Agent, an Issuer and a Lender
By:	/s/ Catherine K. Cook
	Name:	Catherine K. Cook
	Title:	Director

S-2

CITIGROUP FINANCIAL PRODUCTS,
as Lender
By:	/s/ Brian S. Broyles
	Name:	Brian S. Broyles
	Title:	Authorized Signatory

S-3

ZB, N.A. DBA AMEGY BANK, as Lender
By:	/s/ G. Scott Collins
	Name:	G. Scott Collins
	Title:	Senior Vice President

S-4

THE BANK OF NOVA SCOTIA, as Lender
By:	/s/ Marc Graham
	Name:	Marc Graham
	Title:	Director

S-5

TORONTO DOMINION (TEXAS) LLC, as Lender
By:	/s/ Annie Dorval
	Name:	Annie Dorval
	Title:	Authorized Signatory

S-6

CAPITAL ONE, NATIONAL ASSOCIATION, as Lender
By:	/s/ Stephen Hartman
	Name:	Stephen Hartman
	Title:	Assistant Vice President

S-7

NATIXIS, New York Branch, as Lender
By:	/s/ Timothy Polvado
	Name:	Timothy Polvado
	Title:	Senior Managing Director
By:	/s/ Leila Zomorrodian
	Name:	Leila Zomorrodian
	Title:	Director

S-8

BARCLAYS BANK PLC, as Lender
By:	/s/ Ronnie Glenn
	Name:	Ronnie Glenn
	Title:	Vice President

S-9

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender
By:	/s/ Bryan J. Matthews
	Name:	Bryan J. Matthews
	Title:	Authorized Signatory
By:	/s/ Julia Bykhovskaia
	Name:	Julia Bykhovskaia
	Title:	Authorized Signatory

S-10

ING CAPITAL LLC, as Lender
By:	/s/ Juli Bieser
	Name:	Juli Bieser
	Title:	Managing Director
By:	/s/ Charles Hall
	Name:	Charles Hall
	Title:	Managing Director

S-11

REGIONS BANK, as Lender
By:	/s/ J. Richard Baker
	Name:	J. Richard Baker
	Title:	Senior Vice President

S-12

CITIBANK, N.A., as Lender
By:	/s/ Michael Smolow
	Name:	Michael Smolow
	Title:	Director

S-13

UBS AG, STAMFORD BRANCH, as Issuer and Lender
By:	/s/ Darlene Arias
	Name:	Darlene Arias
	Title:	Director
By:	/s/ Houssem Daly
	Name:	Houssem Daly
	Title:	Associate Director
		Banking Products Services, US

S-14

DEUTSCHE BANK AG NEW YORK BRANCH, as Lender
By:
	Name:
	Title:
By:
	Name:
	Title:

S-15

COMMONWEALTH BANK OF AUSTRALIA, as Lender
By:	/s/ Sanjay Remond
	Name:      Sanjay Remond
	Title:        Director

S-16

COMERICA BANK, as Lender
By:	/s/ Brandon M. White
	Name:      Brandon M. White
	Title:        Vice President

S-17

FIFTH THIRD BANK, as Lender
By:	/s/ David R. Garcia
	Name:      David R. Garcia
	Title:        Vice President

S-18

ABN AMRO CAPITAL USA LLC, as Lender
By:	/s/ Richard Klompjan
	Name:      Richard Klompjan
	Title:        Executive Director

By:	/s/ Urvashi Zutshi
	Name:      Urvashi Zutshi
	Title:        Managing Director

S-19

SUMITOMO MITSUI BANKING CORPORATION, as Lender
By:	/s/ Ryo Suzuki
	Name:      Ryo Suzuki
	Title:        General Manager

S-20

KEYBANK NATIONAL ASSOCIATION, as Lender
By:	/s/ John Dravenstott
	Name:      John Dravenstott
	Title:        Vice President

S-21

SANTANDER BANK, N.A., as Lender
By:	/s/ Mark Connelly
	Name:      Mark Connelly
	Title:        Senior Vice President

By:	/s/ David O’Driscoll
	Name:      David O’Driscoll
	Title:        Senior Vice President

S-22

WHITNEY BANK, as Lender
By:	/s/ Liana Tchernysheva
	Liana Tchernysheva
	Senior Vice President

S-23

CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, as Lender
By:	/s/ Eric J. De Santis
	Name:      Eric J. De Santis
	Title:        Executive Director

S-24

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Lender
By:	/s/ Ronald E. Spitzer
	Name:      Ronald E. Spitzer
	Title:        Managing Director

By:	/s/ Pierre Bennaim
	Name:      Pierre Bennaim
	Title:        Managing Director

S-25

IBERIABANK, as Lender
By:	/s/ Moni Collins
	Name:      Moni Collins
	Title:        Senior Vice President

S-26

PNC BANK, NATIONAL ASSOCIATION, as Lender
By:	/s/ John K. Easton, III
	Name:      John K. Easton, III
	Title:        Senior Vice President

S-27

ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:
ENERGY XXI GOM, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

ENERGY XXI TEXAS ONSHORE, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

ENERGY XXI ONSHORE, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

ENERGY XXI PIPELINE, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

ENERGY XXI LEASEHOLD, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

S-28

ENERGY XXI PIPELINE II, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

MS ONSHORE, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

ENERGY XXI INSURANCE LIMITED
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer, Treasurer & Corporate Secretary

M21K, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

SOILEAU CATERING, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

S-29

EPL OIL & GAS, INC.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

ANGLO-SUISSE OFFSHORE PIPELINE PARTNERS, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

DELAWARE EPL OF TEXAS, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

ENERGY PARTNERS LTD., LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

EPL OF LOUISIANA, L.L.C.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

S-30

EPL PIONEER HOUSTON, INC.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

EPL PIPELINE, L.L.C.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

NIGHTHAWK, L.L.C.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

Energy XXI Offshore Services, Inc.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

S-31

Energy XXI Natural Gas Holdings, Inc.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer

Energy XXI Services LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

Energy XXI Holdings, Inc.
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

Energy XXI GIGS Services, LLC
By:	/s/ Rick Fox
	Name:      Rick Fox
	Title:        Chief Financial Officer & Treasurer

S-32

ANNEX I

TERM LOANS

Lender	Effective Date Term Loan Commitment
Wells Fargo Bank NA	$	3,453,166.02
Citigroup Financial Products	$	3,453,165.98
UBS AG, Stamford Branch	$	3,453,165.98
The Bank of Nova Scotia	$	3,305,173.15
Capital One NA	$	3,305,173.15
Citibank	$	3,305,173.15
ING Capital LLC	$	3,305,173.15
Natixis	$	3,305,173.15
Regions	$	3,305,173.15
Toronto Dominion (Texas) LLC	$	3,305,173.15
ABN AMRO Capital USA LLC	$	2,935,191,09
Comerica	$	2,935,191,09
Commonwealth Bank of Australia	$	2,935,191,09
Credit Suisse Cayman Islands	$	2,935,191,09
Deutsche Bank AG, New York Branch	$	2,935,191,09
Fifth Third Bank	$	2,935,191,09
Keybank, N.A.	$	2,935,191,09
Santander Bank NA	$	2,935,191,09
Sumitomo Mitsui Banking Corporation	$	2,935,191,09
Barclays Bank PLC - US	$	2,226,058.79
Canadian Imperial Bank of Commerce	$	2,226,058.79
Credit Agricole Corporate	$	2,226,058.79
Whitney Bank	$	2,226,058.79
Iberiabank	$	1,726,583.00
PNC Bank	$	1,726,583.00
ZB, National Association	$	1,726,583.00
Total	$	73,996,414.08

Annex I

ANNEX II

SUBSIDIARIES

Energy XXI GOM, LLC

Energy XXI Leasehold, LLC

Energy XXI Onshore, LLC

Energy XXI Pipeline, LLC

Energy XXI Pipeline II, LLC

Energy XXI Texas Onshore, LLC

MS Onshore, LLC

M21K, LLC

Soileau Catering, LLC

EPL Oil & Gas, Inc.

Anglo-Suisse Offshore Pipeline Partners, LLC

Delaware EPL of Texas, LLC

Energy Partners Ltd., LLC

EPL Pipeline, L.L.C.

Energy XXI Offshore Services, Inc.

Energy XXI Natural Gas Holdings, Inc.

Natural Gas Acquisition Company I, LLC

Energy XXI Services, LLC

Energy XXI Holdings, Inc.

EPL Pioneer Houston, Inc.

EPL of Louisiana, L.L.C.

Nighthawk, L.L.C.

Annex II

ANNEX III

DESIGNATED HOLDERS

[Omitted.]

Annex III

EXHIBIT A-1

FORM OF REVOLVING NOTE

$__________ _____________, 20__

FOR VALUE RECEIVED, ENERGY XXI GULF COAST, INC., a Delaware corporation (the “Borrower”), promises to pay to [Name of Lender] (the “Lender”) on the Stated Maturity Date the principal sum of [_______________________] ($[___________]) or, if less, the aggregate unpaid principal amount of all Revolving Loans shown in the Register or, if appropriate, on the schedule attached hereto (and any continuation thereof) made (or continued) by the Lender pursuant to the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto, as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified. Terms used in this Revolving Note, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

The Borrower also promises to pay interest on the unpaid principal amount hereof in accordance with, and at the rates per annum and on the dates specified in, the First Lien Credit Agreement.

Payments of both principal and interest are to be made in Dollars in same day or immediately available funds to the account designated by the Administrative Agent pursuant to the First Lien Credit Agreement.

This Revolving Note is one of the Revolving Notes referred to in, and evidences Indebtedness incurred under, the First Lien Credit Agreement, to which reference is made for a description of the security for this Revolving Note and for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments, in whole or in part, of principal of the Indebtedness evidenced by this Revolving Note and on which such Indebtedness may be declared to be immediately due and payable.

Notwithstanding anything in this Revolving Note to the contrary, in no event shall the interest payable hereon, whether before or after maturity, exceed the maximum amount of interest which, under Applicable Law, may be contracted for, charged, or received on this Revolving Note, and this Revolving Note is expressly made subject to the provisions of the First Lien Credit Agreement which more fully set out the limitations on how interest accrues hereon.

If this Revolving Note is placed in the hands of an attorney for collection after default, or if all or any part of the indebtedness represented hereby is proved, established or collected in any court or in any bankruptcy, receivership, debtor relief, probate or other court proceedings, Borrower and all endorsers, sureties and guarantors of this Revolving Note jointly and severally agree to pay reasonable attorneys’ fees and collection costs to the holder hereof in addition to the principal and interest payable hereunder.

Revolving Note

Borrower and all endorsers, sureties and guarantors of this Revolving Note hereby severally waive demand, presentment, notice of demand and of dishonor and nonpayment of this Revolving Note, protest, notice of protest, notice of intention to accelerate the maturity of this Revolving Note, declaration or notice of acceleration of the maturity of this Revolving Note, diligence in collecting, the bringing of any suit against any party and any notice of or defense on account of any extensions, renewals, partial payments or changes in any manner of or in this Revolving Note or in any of its terms, provisions and covenants, or any releases or substitutions of any security, or any delay, indulgence or other act of any trustee or any holder hereof, whether before or after maturity.

Revolving Note

2

THIS REVOLVING NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	ENERGY XXI GULF COAST, INC.
By:
	Name:
	Title:

Revolving Note

3

EXHIBIT A-2

FORM OF TERM NOTE

$__________ _____________, 20__

FOR VALUE RECEIVED, ENERGY XXI GULF COAST, INC., a Delaware corporation (the “Borrower”), promises to pay to [Name of Lender] (the “Lender”) on the Stated Maturity Date the principal sum of [_______________________] ($[___________]) or, if less, the aggregate unpaid principal amount of all Term Loans shown in the Register or, if appropriate, on the schedule attached hereto (and any continuation thereof) made (or continued) by the Lender pursuant to the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto, as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified. Terms used in this Term Note, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

The Borrower also promises to pay interest on the unpaid principal amount hereof in accordance with, and at the rates per annum and on the dates specified in, the First Lien Credit Agreement.

Payments of both principal and interest are to be made in Dollars in same day or immediately available funds to the account designated by the Administrative Agent pursuant to the First Lien Credit Agreement.

This Term Note is one of the Term Notes referred to in, and evidences Indebtedness incurred under, the First Lien Credit Agreement, to which reference is made for a description of the security for this Term Note and for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments, in whole or in part, of principal of the Indebtedness evidenced by this Term Note and on which such Indebtedness may be declared to be immediately due and payable.

Notwithstanding anything in this Term Note to the contrary, in no event shall the interest payable hereon, whether before or after maturity, exceed the maximum amount of interest which, under Applicable Law, may be contracted for, charged, or received on this Term Note, and this Term Note is expressly made subject to the provisions of the First Lien Credit Agreement which more fully set out the limitations on how interest accrues hereon.

If this Term Note is placed in the hands of an attorney for collection after default, or if all or any part of the indebtedness represented hereby is proved, established or collected in any court or in any bankruptcy, receivership, debtor relief, probate or other court proceedings, Borrower and all endorsers, sureties and guarantors of this Term Note jointly and severally agree to pay reasonable attorneys’ fees and collection costs to the holder hereof in addition to the principal and interest payable hereunder.

Term Note

Borrower and all endorsers, sureties and guarantors of this Term Note hereby severally waive demand, presentment, notice of demand and of dishonor and nonpayment of this Term Note, protest, notice of protest, notice of intention to accelerate the maturity of this Term Note, declaration or notice of acceleration of the maturity of this Term Note, diligence in collecting, the bringing of any suit against any party and any notice of or defense on account of any extensions, renewals, partial payments or changes in any manner of or in this Term Note or in any of its terms, provisions and covenants, or any releases or substitutions of any security, or any delay, indulgence or other act of any trustee or any holder hereof, whether before or after maturity.

Term Note

2

THIS TERM NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

ENERGY XXI GULF COAST, INC.
By:
	Name:
	Title:

Term Note

3

EXHIBIT B-1

FORM OF BORROWING REQUEST

Wells Fargo Bank, N.A.

as Administrative Agent

[WELLS FARGO ADDRESS FOR LOAN ADMINISTRATION]
Attention:______________________

[Energy XXI Gulf Coast, Inc.]

Ladies and Gentlemen:

This Borrowing Request is delivered to you pursuant to Section 2.3 of the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto, as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified. Terms used herein, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

The Borrower hereby requests that a Loan be made in the aggregate principal amount of $______________ on ____________ ___, 20__ as a [Base Rate Loan] [LIBO Rate Loan having an Interest Period of [1][3][6] months].

The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the First Lien Credit Agreement, each of the delivery of this Borrowing Request and the acceptance by the Borrower of the proceeds of the Loans requested hereby constitutes a representation and warranty by the Borrower that, on the date of the making of such Loans, and both before and after giving effect thereto and to the application of the proceeds therefrom, all statements set forth in Section 5.2.1 of the First Lien Credit Agreement are true and correct in all material respects unless such statements contain a materiality qualifier in which case such statements shall be true and correct in all respects (unless stated to relate solely to an earlier date, in which case such statements shall be true and correct in all material respects as of such earlier date unless such statements contain a materiality qualifier in which case such representations and warranties shall be true and correct in all respects on such earlier date.)

The Borrower agrees that if prior to the time of the Borrowing requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the Borrowing requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such Borrowing as if then made unless such matter certified to shall contain a materiality qualifier in which case such certification shall be deemed once again to be certified as true and correct in all respects as if then made.

Borrowing Request

The Borrower hereby certifies that if after giving effect to such Revolving Loan the Borrower shall maintain a Consolidated Cash Balance in excess of $10,000,000 (or if during the period from July 1st through October 31st of any calendar year, in excess of $15,000,000), then (a) the proceeds of the Revolving Loan will be used as set forth on an exhibit to this Borrowing Request within five days of the date of such Revolving Loan and (b) after giving effect to such use of such Revolving Loan the Borrower and the Subsidiary Guarantors will not have a Consolidated Cash Balance in excess of $10,000,000 (or if during the period from July 1st through October 31^st $15,000,000) unless a subsequent Borrowing Request has been made during such five day period (a “Subsequent Borrowing Request”) that will cause the Consolidated Cash Balance to be in  excess of such amount notwithstanding such use of such Revolving Loan as provided in the foregoing clause (a), in which event the Borrower will comply with the foregoing clause (a) and with such clause (a) in the Subsequent Borrowing Request.

Please wire transfer the proceeds of the Borrowing to the accounts of the following persons at the financial institutions indicated respectively:

Amount to	Person to be Paid		Name, Address, etc.
be Transferred	Name	Account No.	Of Lender
$____________	____________	__________	____________________ ____________________ Attention: ____________
$____________	____________	__________	____________________ ____________________ Attention: ____________
$____________	____________	__________	____________________ ____________________ Attention: ____________
Balance of such proceeds	The Borrower		____________________ ____________________ Attention: ____________

Borrowing Request

2

IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to be executed and delivered, and the certifications and warranties contained herein to be made, by its duly Authorized Officer this _____ day of ____________, 20___.

ENERGY XXI GULF COAST, INC.
By
	Name:
	Title:

Borrowing Request

3

EXHIBIT B-2

FORM OF ISSUANCE REQUEST

Wells Fargo Bank, N.A.

as Administrative Agent and Issuer

[WELLS FARGO ADDRESS FOR LOAN ADMINISTRATION and L/C ADMINISTRATION]

Attention:______________________

[UBS AG, Stamford Branch

as an Issuer

[UBS ADDRESS FOR L/C ADMINISTRATION]

Attention:______________________]

ENERGY XXI GULF COAST, INC.

Ladies and Gentlemen:

This Issuance Request is delivered to you pursuant to Section 2.6 of the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto, as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified. Terms used herein, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

The Borrower hereby requests that on ____________ ___, 20___ (the “Date of Issuance”) [Name of Applicable Issuer] (the “Issuer”) [issue a Letter of Credit in the initial Stated Amount of $____________ with a Stated Expiry Date (as defined therein) of ____________ ___, 20___] [extend the Stated Expiry Date (as defined under Letter of Credit No. ___, issued on ____________ ___, 20___, in the initial Stated Amount of $____________) to a revised Stated Expiry Date (as defined therein) of ____________ ___, 20___].

The beneficiary of the requested Letter of Credit will be _________________________, and such Letter of Credit will be in support of _________________________.

The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the First Lien Credit Agreement, each of the delivery of this Issuance Request and the acceptance by the Borrower of the [issuance] [extension] of the Letter of Credit requested hereby constitutes a representation and warranty by the Borrower that, on the date of such [issuance] [extension], and both before and after giving effect thereto and to the application of the proceeds or benefits of the Letter of Credit [issued] [extended] in accordance herewith, all statements set forth in Section 5.2.1 of the First Lien Credit Agreement are true and correct in all material respects unless such statements contain a materiality qualifier in which case such statements are true and correct in all respects (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date unless such statements contain a materiality qualifier in which case such representations and warranties shall be true and correct in all respects.)

Issuance Request

The Borrower agrees that if prior to the time of the [issuance] [extension] of the Letter of Credit requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the [issuance] [extension] of the Letter of Credit requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such [issuance] [extension] as if then made unless such matter certified to shall contain a materiality qualifier in which case such certification shall be deemed once again to be certified as true and correct in all respects as if then made.

Issuance Request

2

IN WITNESS WHEREOF, the Borrower has caused this Issuance Request to be executed and delivered, and the certifications and warranties contained herein to be made, by its duly Authorized Officer this _____ day of ____________, 20___.

ENERGY XXI GULF COAST, INC.
By
	Name:
	Title:

Issuance Request 

3

EXHIBIT C

FORM OF CONTINUATION/CONVERSION NOTICE

Wells Fargo Bank, N.A.

as Administrative Agent

[WELLS FARGO ADDRESS FOR LOAN ADMINISTRATION]
Attention:______________________

ENERGY XXI GULF COAST, INC.

Ladies and Gentlemen:

This Continuation/Conversion Notice is delivered to you pursuant to Section 2.4 of the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto, as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified. Terms used herein, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

The Borrower hereby requests that on ____________ ___, 20___,

(1)       $____________ of the presently outstanding principal amount of the [Revolving Loans originally made on ____________ ___, 20___,] [Term Loans] presently being maintained as [Base Rate Loans] [LIBO Rate Loans],

(2)       be [converted into] [continued as],

(3)       [LIBO Rate Revolving Loans having an Interest Period of [1][3][6] months] [Term Loans having an Interest Period of 1 month] [Base Rate Loans].

The Borrower hereby:

(a)       certifies and warrants that no Event of Default has occurred and is continuing; and

(b)       agrees that if prior to the time of the [continuation] [conversion] requested hereby any matter certified to herein by it will not be true and correct in all material respects at such time as if then made or unless such statements contain a materiality qualifier in which case such representations and warranties shall be true and correct in all respects as if then made, it will immediately so notify the Administrative Agent.

Except to the extent, if any, that prior to the time of the [continuation] [conversion] requested hereby the Administrative Agent shall receive written notice to the contrary from the Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such [continuation] [conversion] as if then made unless such matter certified to shall contain a materiality qualifier in which case such certification shall be deemed once again to be certified as true and correct in all respects as if then made.

Continuation/Conversion Notice

IN WITNESS WHEREOF, the Borrower has caused this Continuation/Conversion Notice to be executed and delivered, and the certifications and warranties contained herein to be made, by its duly Authorized Officer this _____ day of ____________, 20___.

ENERGY XXI GULF COAST, INC.
By
	Name:
	Title:

Continuation/Conversion Notice

2

EXHIBIT D

FORM OF LENDER ASSIGNMENT AGREEMENT

_____________ ___, 20___

To: Wells Fargo Bank, N.A.
as Administrative Agent
[WELLS FARGO ADDRESS FOR SYNDICATIONS]

Attention:______________________

[Energy XXI Gulf Coast, Inc.

as the Borrower

[EXXI ADDRESS]

Attention: ]¹

ENERGY XXI GULF COAST, INC.

Gentlemen and Ladies:

This Lender Assignment Agreement (the “Assignment and Acceptance”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the First Lien Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the First Lien Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights, benefits, obligations, liabilities and indemnities in its capacity as a Lender under (and in connection with) the First Lien Credit Agreement and any other Loan Documents to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the facilit(ies) identified below (including without limitation any letters of credit and guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the First Lien Credit Agreement, the other Loan Documents or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by the Assignor.

¹ Address to Borrower only if Borrower’s consent is required by the terms of the First Lien Credit Agreement.

Lender Assignment Agreement

3

1. Assignor:	______________________________
2. Assignee:	______________________________
	[and is an Affiliate/Approved Fund of [identify Lender]2]
3. Borrower:	Energy XXI Gulf Coast, Inc.
4. Administrative Agent:	Wells Fargo Bank, N.A. (“Wells Fargo”), as the administrative agent under the First Lien Credit Agreement
5. First Lien Credit Agreement:	First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified.
6. Assigned Interest:

Facility Assigned	Aggregate Amount of Commitment/Loans for all Lenders	Amount of Commitment/Loans Assigned3	Percentage Assigned of Commitment/Loans
Revolving4	$________________	$________________	______________%
_____________	$________________	$________________	______________%

² Select as applicable.

³ Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

⁴ Fill in the appropriate terminology for the types of facilities under the First Lien Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Credit Commitment”, “Term Loans”, etc.), but only to extent that First Lien Credit Agreement has more than one type of facility.

Lender Assignment Agreement

4

[7. Trade Date: ____________________]⁵

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

⁵ To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

Lender Assignment Agreement

5

The terms set forth in this Assignment and Acceptance are hereby agreed to as of the Effective Date:

ASSIGNOR
[NAME OF ASSIGNOR]
By:
	Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
	Title:

Lender Assignment Agreement

6

[Consented to and Accepted:
WELLS FARGO BANK, N.A.,
as the Administrative Agent
By:
	Name:
	Title:
By:
	Name:
	Title:]6
[Consented to:
ENERGY XXI GULF COAST, INC.
By:
	Name:
	Title:]7
[Consented to:
_____________________, as Issuer
By:
	Name:
	Title:]8

⁶ Add only if the consent of the Administrative Agent is required by the terms of the First Lien Credit Agreement.

⁷ Add only if consent of the Borrower is required pursuant to the terms of the First Lien Credit Agreement.

⁸ Add only if consent of Issuer is required pursuant to the terms of the First Lien Credit Agreement.

Lender Assignment Agreement

7

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE

1.      Representations and Warranties.

1.1    Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim created by Assignor and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) except as provided in clause (a) above, assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the First Lien Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2    Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the First Lien Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the First Lien Credit Agreement (subject to receipt of such consents as may be required under the First Lien Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the First Lien Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the First Lien Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.1.8 or 7.1.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Lender, attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the First Lien Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.      Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

Lender Assignment Agreement

8

3.      General Provisions. This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be deemed to be a contract made under, governed by, and construed in accordance with, the laws of the State of New York (including for such purposes Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York) without regard to conflicts of laws principles.

Lender Assignment Agreement

9

EXHIBIT E

FORM OF COMPLIANCE CERTIFICATE

ENERGY XXI GULF COAST, INC.

The undersigned hereby certifies that he/she is the [          ] of the Borrower, and that as such he/she is authorized to execute this certificate on behalf of the Borrower. This Compliance Certificate is delivered pursuant to clause (c) of Section 7.1.1 of the First Lien Exit Credit Agreement, dated as of December 30, 2016] (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, Wells Fargo Bank, National Association, as the Administrative Agent, and the various financial institutions and other Persons from time to time parties thereto, as lenders, and the other Persons party thereto in the capacities therein specified. Terms used herein, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

Pursuant to clause (c) of Section 7.1.1 of the First Lien Credit Agreement, the undersigned hereby certifies, represents and warrants that, as of ______ __, 20__ (the “Computation Date”):

1. No Event of Default has occurred and is continuing [or specify the details of the Event of Default and describe the action that the Borrower proposes to take with respect thereto].

2. The representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all material respects with the same effect as if then made unless such statements contain a materiality qualifier in which case such representations and warranties shall be true and correct in all respects (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date unless such statements contain a materiality qualifier in which case such representations and warranties shall be true and correct in all respects).

3. The Borrower has performed and complied with all agreements and conditions contained in the First Lien Credit Agreement and in the Loan Documents required to be performed or complied with by it prior to or at the time of delivery hereof [or specify default and describe].

4. Since [__________], or such more recent date for which the financial information required under Section 7.1.1(b) of the First Lien Credit Agreement have been provided by the Borrower, no change has occurred, either in any case or in the aggregate, in the condition, financial or otherwise, of the Borrower or any Subsidiary which could reasonably be expected to have a Material Adverse Effect [or specify event].

5. Financial Covenants:

a. The minimum Current Ratio permitted pursuant to clause (a) of Section 7.2.4 of the First Lien Credit Agreement on the Computation Date was 1.00 to 1.00. The actual Current Ratio was ___ to 1.00, as computed on Attachment I hereto, and, accordingly, the covenant [has][has not] been complied with.

Guaranty

-2-

b. The maximum First Lien Leverage Ratio of the Borrower and the Subsidiary Guarantors permitted pursuant to clause (b) of Section 7.2.4 of the First Lien Credit Agreement on the Computation Date was 4.00 to 1.00. The actual First Lien Leverage Ratio of the Borrower and the Subsidiary Guarantors was ___ to 1.00, as computed on Attachment II hereto, and, accordingly, the covenant [has][has not] been complied with.

6. Insurance. The Borrower and its Subsidiaries [are][are not] in compliance with the requirements of Section 7.1.4 of the First Lien Credit Agreement as of the date of this Compliance Certificate. [If an Affiliate of the Borrower is providing insurance, the Borrower must state the level of capitalization of such Affiliate and the dollar amount of the coverages insured by such Affiliate, in each case, as of the date of the Compliance Certificate.]

7. Subsidiaries. No Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate [or if a Subsidiary has been formed or acquired since the delivery of the last Compliance Certificate, the Borrower must identify the Subsidiary and certify that such Subsidiary has complied with Section 7.1.8 of the First Lien Credit Agreement].

(Signature page follows)

Compliance Certificate

-3-

IN WITNESS WHEREOF, the Borrower has caused this Certificate to be executed and delivered, and the certifications and warranties contained herein to be made on behalf of the Borrower, by the [chief financial Authorized Officer] [chief accounting Authorized Officer] of the Borrower as of ______ __, 20__.

ENERGY XXI GULF COAST, INC.
By
	Name:
	Title:

Compliance Certificate

-4-

Attachment I
(to __/__/__ Compliance
Certificate)

CURRENT RATIO
as of the last day of the Fiscal Quarter ending on or
immediately preceding the Computation Date

1)	Unrestricted Cash of Borrower and its Subsidiaries	$_______
	less Unrestricted Cash of EXXI Insurance	$_______
	less Unrestricted Cash of EXXI Holdings	$_______
	less Unrestricted Cash of EXXI GIGS Services	$_______
	plus accounts receivable that are not more than 120 days past due	$_______
	less EXXI Insurance’s accounts receivable that are not more than 120 days past due	$_______
	less EXXI Holdings’ accounts receivable that are not more than 120 days past due	$_______
	less EXXI GIGS Services’ accounts receivable that are not more than 120 days past due	$_______
	plus prepaid expenses of Borrower and its Subsidiaries	$_______
	less EXXI Insurance’s prepaid expenses	$_______
	less EXXI Holdings prepaid expenses	$_______
	less EXXI GIGS Services prepaid expenses	$_______
	Total	$_______
2)	Borrowers and its Subsidiaries’ accounts payable	$_______
	less EXXI Insurance’s accounts payable	$_______
	less EXXI Holdings accounts payable	$_______
	less EXXI GIGS Services accounts payable	$_______
	plus Borrower’s and its Subsidiaries’ accrued expenses	$_______
	less EXXI Insurance’s accrued expenses	$_______
	less EXXI Holdings accrued expenses	$_______
	less EXXI GIGS Services accrued expenses	$_______
	Total	$_______
	CURRENT RATIO:  the ratio of Item 1 to Item 2	___: 1.00

Compliance Certificate

-5-

Attachment II
(to __/__/__ Compliance
Certificate)

FIRST LIEN LEVERAGE RATIO
as of the last day of the Fiscal Quarter ending on or
immediately preceding the Computation Date

1)	First Lien Debt:
	without duplication, all Obligations pursuant to and under the First Lien Credit Agreement and any other Loan Document	$ _________.
2)	EBITDA as of the last day of the Fiscal Quarter ending on or immediately preceding the Computation Date and each of the three immediately preceding Fiscal Quarters9 for the Borrower and the Subsidiary Guarantors the sum of:
a)	Consolidated Net Income:
	(i)      the aggregate of all amounts that would be included as net income (or loss) on the consolidated financial statements of the Borrower and its Subsidiaries for such period, but shall exclude effects on net income attributable to any current non-cash income or expense (including in respect of Hedging Agreements) described in or calculated pursuant to the requirements of ASC 410 and 815, in each case as amended (including any income or expense in respect of the termination of any Hedging Agreement)	$ _________
	(ii)     less the aggregate of all amounts that would be included as net income (or loss) on the financial statements of EXXI Insurance for such period	$ _________
	(iii)    less the aggregate of all amounts that would be included as net income (or loss) on the financial statements of EXXI Holdings for such period	$ _________
	(iv)    less the aggregate of all amounts that would be included as net income (or loss) on the financial statements of EXXI GIGS Services for such period	$ _________
	(v)     Item (a)(i) less Items (a)(ii) through (a)(iv)	$ _________

⁹ EBITDA for any applicable period shall be made using an EBITDA for such applicable period calculated on a pro forma basis (inclusive of any acquisitions and/or divestitures, if any, of assets or equity interests made during such applicable period as if such acquisitions or divestitures had been made at the beginning of such applicable period).

Compliance Certificate

-6-

	plus, to the extent deducted in determining Consolidated Net Income for the Borrower and its Subsidiaries, the sum of:
b)	amounts attributable to amortization, depletion and depreciation of assets and other non-cash charges	$ _________, plus
c)	Income and franchise tax expense	$ _________, plus
d)	interest expense (whether in cash or non-cash form) for such period	$ _________, plus
e)	one-time cash commissions, fees or other expenses incurred in connection with Permitted Acquisitions, Investments and Dispositions	$ _________, plus
f)	integration costs, severance costs and expenses and one-time compensation costs in connection with any Permitted Acquisition	$ _________, plus
g)	extraordinary losses (excluding extraordinary losses from discontinued operations)	$ _________, plus
h)	amounts paid to the Administrative Agent, the Lenders, the Issuers and their respective counsels and consultants for fees, costs and expenses relating to the Chapter 11 Cases and in reimbursement of fees, costs and expenses thereof incurred in connection with negotiation, execution and delivery of the Credit Agreement and the other Loan Documents10	$ _________, plus
	less, to the extent added in the sum of the foregoing Items 2(a)(v) through (h):
i)	amounts attributable to amortization, depletion and depreciation of assets and other non-cash charges for EXXI Insurance	$ _________, less
j)	Income and franchise tax expense for EXXI Insurance	$ _________, less
k)	interest expense (whether in cash or non-cash form) for such period for EXXI Insurance	$ _________, less
l)	one-time cash commissions, fees or other expenses incurred in connection with Permitted Acquisitions, Investments and Dispositions by EXXI Insurance	$ _________, less

¹⁰ The aggregate amount to be included pursuant to clauses (e) through (h) shall not exceed ten percent (10%) of Consolidated Net Income.

Compliance Certificate

-7-

m)	extraordinary losses (excluding extraordinary losses from discontinued operations) for EXXI	$ _________, less
	less, to the extent added in the sum of the foregoing Items 2(a)(v) through (h):
n)	Amounts attributable to amortization, depletion and depreciation of assets and other non-cash charges for EXXI Holdings	$ _________, less
o)	Income and franchise tax expense for EXXI Holdings	$ _________, less
p)	interest expense (whether in cash or non-cash form) for such period for EXXI Holdings	$ _________, less
q)	one-time cash commissions, fees or o ther expenses incurred in connection with Permitted Acquisitions, Investments and Dispositions by EXXI Holdings	$ _________, less
r)	extraordinary losses (excluding extraordinary losses from discontinued operations) for EXXI Holdings	$ _________, less
	less, to the extent added in the sum of the foregoing Items 2(a)(v) through (h):
s)	amounts attributable to amortization, depletion and depreciation of assets and other non-cash charges for EXXI GIGS SERVICES	$ _________, less
t)	income and franchise tax expense for EXXI GIGS SERVICES	$ _________, less
u)	interest expense (whether in cash or non-cash form) for such period for EXXI GIGS SERVICES	$ _________, less
v)	one-time cash commissions, fees or other expenses incurred in connection with Permitted Acquisitions, Investments and Dispositions by EXXI GIGS SERVICES	$ _________, less
w)	extraordinary losses (excluding extraordinary losses from discontinued operations) for EXXI GIGS SERVICES	$ _________, less
3)	The sum of Items 2(a)(v) through 2(h) less the sum of Items 2(i) through 2(w):	$ _________
	TOTAL LEVERAGE RATIO:  ratio of Item 1 to Item 3, as applicable	___: 1.00

Compliance Certificate 

-8-

EXHIBIT F

FORM OF GUARANTY

(See Attached)

Guaranty

EXHIBIT G

FORM OF PLEDGE AND SECURITY

AGREEMENT AND IRREVOCABLE PROXY

(See Attached)

Pledge and Security Agreement
and Irrevocable Proxy

EXHIBIT H

FORM OF SOLVENCY CERTIFICATE

This Solvency Certificate (this “Certificate”), dated as of ________ __, 20__, is delivered pursuant to Section 5.1.11 of that certain First Lien Exit Credit Agreement, dated as of _________, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, the various financial institutions and other Persons from time to time parties thereto, as lenders, Wells Fargo Bank, N.A., as the Administrative Agent, and the other persons parties thereto in the capacities therein specified. Terms used herein, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

I, in my capacity as the [chief financial Authorized Officer][chief accounting Authorized Officer] of the Borrower, hereby certify to the Administrative Agent and each other Secured Party, in good faith and to my knowledge and belief after due inquiry, as follows:

1. I am the duly appointed and acting [chief financial Authorized Officer][chief accounting Authorized Officer] of the Borrower and have been employed in positions involving responsibility for the management of the financial affairs and the preparation of financial statements of the Borrower. I have, together with other officers of the Borrower, acted on behalf of the Borrower in connection with the transactions contemplated by the First Lien Credit Agreement and the other Loan Documents.

2. I have carefully reviewed the contents of this Certificate and have conferred with legal counsel for the Borrower for the purpose of discussing the meaning of its contents.

3. In connection with preparing for the transactions contemplated by the First Lien Credit Agreement and the other Loan Documents, I have assisted in the preparation of and have reviewed the financial information delivered pursuant to Section 5.1.8 of the First Lien Credit Agreement (the “Financial Information”).

4. In connection with the issuance of this Certificate and the preparation of the Financial Information, I have assisted in the preparation of and have reviewed the financial statements upon which the Financial Information was based. The Financial Information is a fair and reasonable presentation prepared in good faith on the basis of the assumptions stated therein as of the date hereof of the projected financial condition of the Borrower and each of its Subsidiaries, after giving effect to all the transactions contemplated by the First Lien Credit Agreement and the other Loan Documents to be effective as of the Effective Date, it being understood that such projected financial condition is a business plan and there is no assurance that such business plan can be obtained. The assumptions stated in the Financial Information are fair and reasonable in light of the conditions existing on the date hereof. Based upon the foregoing, and given the reasonableness of the Financial Information, I have concluded, in good faith and to my knowledge and belief, that as of the date hereof and after giving effect to all the transactions contemplated by the First Lien Credit Agreement and the other Loan Documents, as follows:

Solvency Certificate

(a) The fair saleable value (as defined below) of the Borrower’s and each of its Subsidiaries assets on a consolidated basis exceeds the total amount of liabilities (including contingent, subordinated, unmatured and unliquidated liabilities, in each case valued at the probable liability of the Borrower and each of its Subsidiaries with respect thereto) of the Borrower and each of its Subsidiaries on a consolidated basis and, therefore, the Borrower and each of its Subsidiaries, on a consolidated basis, are “solvent”.

(b) The present fair salable value of the assets of the Borrower and each of its Subsidiaries on a consolidated basis is not less than the amount that will be required to pay their probable liabilities as such liabilities become absolute and matured.

(c) The Borrower and each of its Subsidiaries on a consolidated basis will be able to realize upon their assets and will have sufficient cash flow from operations to enable them to pay their debts, other liabilities and contingent obligations as such debts, liabilities and obligations mature in the ordinary course of its business.

(d) The Borrower and each of its Subsidiaries on a consolidated basis do not have unreasonably small capital with which to engage in their anticipated businesses. In reaching this conclusion, I understand that “unreasonably small capital” depends upon the nature of the particular business or businesses conducted or to be conducted, and I have reached my conclusion based on the needs and anticipated needs for capital of the business conducted or anticipated to be conducted by the Borrower and each of its Subsidiaries.

(e) The Borrower and each of its Subsidiaries on a consolidated basis have not incurred any obligation or liabilities under the First Lien Credit Agreement or any other Loan Document, or made any conveyance or granted any Lien pursuant to or in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of the Borrower and each of its Subsidiaries.

For purposes of this Certificate, the “fair salable value” of the Borrower’s and each of its Subsidiaries’ assets and investments has been determined on the basis of the amount which I have concluded, in good faith and to my knowledge and belief after due inquiry, may be realized within a reasonable time, either through collection or sale of such investments and other assets at the regular market value, conceiving the latter as the amount which could be obtained for the property in question within such period by a capable and diligent business person from an interested buyer who is willing to purchase under ordinary selling conditions.

For purposes of the foregoing, the amount of contingent liabilities have been computed as the amount that, in light of all the facts and circumstances existing at the time hereof, can reasonably be expected to become an actual or matured liability.

I understand that the Secured Parties are relying on the truth and accuracy of this Certificate and that the delivery of this Certificate is a material inducement for the Administrative Agent and the Lenders to enter into the First Lien Credit Agreement and consummate the transactions contemplated thereby, and the undersigned, in his capacity as [chief financial Authorized Officer][chief accounting Authorized Officer] of the Borrower and on behalf of the Borrower and each of its Subsidiaries, hereby consents to such reliance.

Solvency Certificate

-2-

I represent, in my capacity as [chief financial Authorized Officer][chief accounting Authorized Officer] of the Borrower the foregoing information to be, in good faith and to my knowledge and belief after due inquiry, true and correct and have executed this Certificate as of the date first above written.

ENERGY XXI GULF COAST, INC.
By
	Name:
	Title:

Solvency Certificate

-3-

EXHIBIT I

FORM OF CERTIFICATE

ENERGY XXI gULF COAST, INC.

The undersigned hereby certifies that he/she is the [          ] of the Borrower, and that as such he/she is authorized to execute this certificate on behalf of the Borrower. This Compliance Certificate is delivered pursuant to clause (u) of Section 7.1.1 of the First Lien Exit Credit Agreement, dated as of _______, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, Wells Fargo Bank, National Association, as the Administrative Agent, and the various financial institutions and other Persons from time to time parties thereto, as lenders, and the other Persons party thereto in the capacities therein specified. Terms used herein, unless otherwise defined herein, have the meanings provided in the First Lien Credit Agreement.

Pursuant to clause (u) of Section 7.1.1 of the First Lien Credit Agreement, the undersigned hereby certifies, represents and warrants that, as of ______ __, 20__ (the “Computation Date”):

The minimum Asset Coverage Ratio Required in order for the Borrower not to be required to make a payment on the Term Loans pursuant to Section 3.1.1(f) is 1.50 to 1.00. The actual Asset Coverage Ratio was _____ to 1.00 computed as follows:

Ratio of (A) Adjusted PV9% which is the sum of:

	1.	PV9% Value on such date	$_______
	2.	50% of Letter of Credit Outstandings on such date in respect of Letter of Credit directly related to Borrower’s and its Subsidiaries’ obligations to plug and abandon Oil and Gas Properties	$_______
	3.	80% of cash and cash equivalents pledged to bonds, surety or similar obligations for plugging and abandonment obligations	$_______
	4.	Adjusted PV9% (total of lines 1, 2 and 3)	$_______
(B)	First Lien Debt on such date		$_______
	Asset Coverage Ratio (ratio of A to B) _____ to 1

(Signature Page Follows)

Certificate

-1-

PV9% Value by reserve category as of the Computation Date:
Proved Developed Producing Reserves	$_________
Proved Developed Nonproducing Reserves	$_________
Proved Undeveloped Reserves (not to exceed 30% of Adjusted PV9%)	$_________
Total PV9% Value (after Proved Undeveloped Reserves adjustment, if any)	$_________

IN WITNESS WHEREOF, the Borrower has caused this Compliance Certificate to be executed and delivered, and the certifications and warranties contained herein to be made on behalf of the Borrower, by the [chief financial Authorized Officer] [chief accounting Authorized Officer] of the Borrower as of ______ __, 20__.

ENERGY XXI GULF COAST, INC.
By
	Name:
	Title:

Certificate

-2-

EX-10.3

Exhibit 10.3

Execution Version

GUARANTY

THIS GUARANTY (as amended, supplemented, amended and restated or otherwise modified from time to time, this “Guaranty”), effective as of December 30, 2016, is made by each of the undersigned (each, a “Guarantor” and, together with each of the other signatories hereto and any other entities from time to time that become a party hereto, the “Guarantors”), in favor of the Administrative Agent and each of the Secured Parties (each as defined below).

WITNESSETH:

WHEREAS, reference is made to the First Lien Exit Credit Agreement, dated as of December 30, 2016, by and among Energy XXI Gulf Coast, Inc., a Delaware corporation (“Borrower”), the lenders party thereto (the “Lenders”), Wells Fargo Bank, N.A., as administrative agent for the Lenders (the “Administrative Agent”), and the other parties party thereto (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”);

WHEREAS, each Guarantor has duly authorized the execution, delivery and performance of this Guaranty; and

WHEREAS, each Guarantor is a wholly owned Subsidiary of Borrower and it is in the best interests of each Guarantor to execute this Guaranty inasmuch as each such Guarantor will derive substantial direct and indirect benefits from the First Lien Credit Agreement.

NOW THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, each Guarantor agrees, for the benefit of each Secured Party, as follows:

ARTICLE 1. DEFINITIONS

SECTION 1.1.         Certain Terms. The following terms (whether or not underscored) when used in this Guaranty, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

“Administrative Agent” shall mean Wells Fargo Bank, N.A. in its capacity as “Administrative Agent” under the First Lien Credit Agreement and the other Loan Documents, together with any successor(s) and assign(s) thereto.

“Borrower” is defined in the first recital.

“First Lien Credit Agreement” is defined in the first recital.

“Guarantor” is defined in the preamble.

“Guaranty” is defined in the preamble.

“Junior Liabilities” is defined in the Section 2.7(a).

“Liabilities” is defined in the Section 2.7(a).

“Maximum Liability” is defined in the Section 2.1(b).

“Secured Hedging Agreements” means Hedging Agreements between the Borrower and any Approved Counterparty that is or was a Lender or an Affiliate thereof at the time such Approved Counterparty entered into such Hedging Agreement (but only for purposes of such Hedging Agreements so entered into and not for Hedging Agreements entered into after such Approved Counterparty ceased to be a Lender or Affiliate thereof).

“Senior Liabilities” is defined in the Section 2.7(a).

“UCC” means the Uniform Commercial Code, as in effect in the State of New York, as the same may be amended from time to time.

SECTION 1.2.         First Lien Credit Agreement Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Guaranty, including its preamble and recitals, have the meanings provided in the First Lien Credit Agreement.

SECTION 1.3.         UCC Definitions. Unless otherwise defined herein or the context otherwise requires, terms for which meanings are provided in the UCC are used in this Guaranty, including its preamble and recitals, with such meanings.

ARTICLE 2. GUARANTY PROVISIONS

SECTION 2.1.         Guaranty. Each Guarantor hereby absolutely, unconditionally and irrevocably:

(a)          guarantees (i) the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations of the Borrower and each other Obligor now or hereafter existing under the First Lien Credit Agreement, the Notes, the Letters of Credit, the Bank Product Agreements with Bank Product Providers and each other Loan Document (including, without limitation, the payment and performance of any and all present or future obligations of the Borrower according to the terms of any present or future Secured Hedging Agreements or Bank Product Agreements permitted by and pursuant to the First Lien Credit Agreement now existing or hereafter entered into between the Borrower and one or more of the then current Lenders or Affiliates of then current Lenders) to which the Borrower or such other Obligor is or may become a party, whether for principal, interest, fees, expenses or otherwise, and (ii) all renewals, rearrangements, increases, extensions for any period, substitutions, modification, amendments or supplements in whole or in part of any of the above Loan Documents or Bank Product Agreements or obligations, (in each case including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)); and

- 2 - EXXI Obligor Guaranty

(b)          indemnifies and holds harmless each Secured Party for any and all costs and expenses (including reasonable attorney’s fees and expenses) incurred by such Secured Party in enforcing any rights under this Guaranty, except for costs and expenses resulting from such Secured Party’s gross negligence or willful misconduct (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT SUCH SECURED PARTY BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL); provided, however, that each Guarantor shall be liable under this Guaranty for the maximum amount of such liability that can be hereby incurred without rendering this Guaranty, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount (such highest amount determined hereunder being such Guarantor’s “Maximum Liability”). This Section 2.1(b) with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Administrative Agent hereunder to the maximum extent not subject to avoidance under Applicable Law, and no Guarantor nor any other Person or entity shall have any right or claim under this Section 2.1(b) with respect to the Maximum Liability, except to the extent necessary so that the obligations of each Guarantor hereunder shall not be rendered voidable under Applicable Law. Each Guarantor agrees that the Obligations guaranteed hereunder may at any time and from time to time exceed such Guarantor’s Maximum Liability without impairing this Guaranty or affecting the rights and remedies of the Administrative Agent hereunder. This Guaranty constitutes a guaranty of payment when due and not of collection, and each Guarantor specifically agrees that it shall not be necessary or required that any Secured Party exercise any right, assert any claim or demand or enforce any remedy whatsoever against the Borrower or any other Obligor (or any other Person) before or as a condition to the obligations of each Guarantor hereunder. All payments hereunder are to be made in the currency in which they are due under the First Lien Credit Agreement.

SECTION 2.2.       Acceleration of Guaranty. Each Guarantor agrees that if an Event of Default occurs under clauses (c) or (d) contained in Section 8.1.9 of the First Lien Credit Agreement at a time when any of the Obligations of the Borrower, any Guarantor, or any other Obligor may not then be due and payable, each Guarantor will pay to the Secured Parties forthwith the full amount which would be payable hereunder by each such Guarantor as if all such Obligations were then due and payable.

SECTION 2.3.       Guaranty Absolute, etc. This Guaranty shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until the Termination Date. Each Guarantor guarantees that the Obligations of the Borrower and each other Obligor will be paid strictly in accordance with the terms of the First Lien Credit Agreement and each other Loan Document or Bank Product Agreement under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Secured Party with respect thereto. The liability of each Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of:

(a)          (i) any lack of validity, legality or enforceability of the First Lien Credit Agreement, any Note, any Letter of Credit, or any other Loan Document, Bank Product Agreement or any portion of any thereof or (ii) the First Lien Credit Agreement, any Note, any Letter of Credit or any other Loan Document, Bank Product Agreement or any portion of any thereof being void or voidable;

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(b)          the failure of any Secured Party or any holder of any Note, any Issuer of or participant in a Letter of Credit or holder of an interest therein (i) to assert any claim or demand or to enforce any right or remedy against the Borrower, any other Obligor or any other Person (including any other guarantor) under the provisions of the First Lien Credit Agreement, any Note, any Letter of Credit, any other Loan Document, Bank Product Agreement or otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any Obligations of the Borrower or any other Obligor;

(c)          any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower or any other Obligor, or any other extension, increase, compromise or renewal of any Obligation of the Borrower or any other Obligor;

(d)          any reduction, limitation, impairment or termination of any Obligations of the Borrower or any other Obligor for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and each Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Obligations of the Borrower, any other Obligor or otherwise;

(e)          any amendment to, extension, variance, alteration, rescission, waiver, increase, or other modification of, or any consent to departure from, any of the terms of the First Lien Credit Agreement, any Note, any Letter of Credit, or any other Loan Document or Bank Product Agreement including, without limitation, any increase or reduction to the rate of interest on all or any of the Obligations;

(f)          any addition, exchange, release, surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition of, or consent to departure from, any other guaranty, held by any Secured Party or any holder of any Note, any Issuer of or participant in a Letter of Credit or holder of an interest therein securing any of the Obligations of the Borrower or any other Obligor; or

(g)          any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, the Borrower, any other Obligor, any surety or any guarantor.

SECTION 2.4.         Reinstatement. Each Guarantor agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations guaranteed hereby is rescinded or must otherwise be restored by any Secured Party or any holder of any Note, any Issuer of or participant in a Letter of Credit or a holder of an interest therein, upon the insolvency, bankruptcy or reorganization of the Borrower, or any other Obligor or otherwise, all as though such payment had not been made.

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SECTION 2.5.         Waiver. Each Guarantor hereby expressly waives:

(a)          promptness, diligence, presentment, notice of acceptance and any other notice with respect to any of the Obligations of the Borrower or any other Obligor and this Guaranty and any requirement that the Administrative Agent, any Lender or any other Secured Party, protect, secure, perfect or insure any security interest or Lien, or any property subject thereto, or exhaust any right or take any action against the Borrower, any other Obligor or any other Person (including any other guarantor) or entity or any collateral securing the Obligations of the Borrower or any other Obligor, as the case may be. Each Guarantor hereby further waives all rights that it may have now or in the future under any statute, or at common law, or in law or equity, or otherwise, to compel any Secured Party to marshall assets or to proceed in respect of Obligations guaranteed hereunder or under any Loan Document or Bank Product Agreement against any other Obligor, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition to proceeding against, such Guarantor; and

(b)          each and every right to which it may be entitled by virtue of the suretyship under any Applicable Law.

SECTION 2.6.         Waiver of Subrogation. Until one year and one day after the Termination Date, each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Borrower or any other Obligor that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under this Guaranty or any other Loan Document or Bank Product Agreement, including any right of subrogation, reimbursement, contribution, exoneration, or indemnification, any right to participate in any claim or remedy of the Secured Parties against the Borrower or any other Obligor or any collateral which the Administrative Agent now has or hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including the right to take or receive from the Borrower or any other Obligor, directly or indirectly, in cash or other property or by set-off or in any manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Obligations shall not have been indefeasibly paid in cash in full and the Commitments have not been terminated and all Letters of Credit have not been terminated or expired, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for, the Secured Parties, and shall forthwith be paid to the Secured Parties to be credited and applied upon the Obligations, whether matured or unmatured. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the First Lien Credit Agreement and that the waiver set forth in this Section 2.6 is knowingly made in contemplation of such benefits.

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SECTION 2.7.         Subordination of Obligations of Guarantors.

(a)          Definitions. All obligations of each Guarantor, howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or hereafter existing, or due or to become due, are hereinafter collectively called the “Liabilities”. All Liabilities to the Administrative Agent and the Secured Parties under or in connection with this Guaranty are hereinafter called the “Senior Liabilities”; and all Liabilities to the Borrower or any other Obligor are hereinafter collectively called the “Junior Liabilities”; it being expressly understood and agreed that the term “Senior Liabilities”, as used herein, shall include, without limitation, any and all interest accruing on any of the Senior Liabilities after the commencement of any bankruptcy, insolvency, receivership, liquidation, dissolution or similar circumstance, notwithstanding any provision or rule of law which might restrict the rights of the Administrative Agent or any other Secured Party, as against the Borrower, any Guarantor or anyone else, to collect such interest.

(b)          Subordination. Except as otherwise expressly provided in this Guaranty or in the First Lien Credit Agreement, or as Administrative Agent and the Secured Parties may hereafter otherwise expressly consent in writing, the payment of all Junior Liabilities shall be postponed and subordinated to the payment in full of the Senior Liabilities and the indefeasible payment in cash in full of the Obligations, and the termination of the Commitments and the termination or expiration of any and all Letters of Credit, and no payments or other distributions whatsoever in respect of any Junior Liabilities shall be made, nor shall any properties or assets of any Guarantor be applied to the purchase or other acquisition or retirement of any Junior Liabilities; provided, however, except as otherwise expressly provided in the First Lien Credit Agreement that until such time as the Administrative Agent shall have notified each Guarantor and the Borrower to the contrary, or any Guarantor shall be in default in the payment when due, whether by acceleration or otherwise, of any amount payable in respect of the Senior Liabilities, payments made to third parties in the ordinary course of business are excepted from the terms of the foregoing provisions of this Section 2.7(b).

(c)          Payments Held in Trust. Any amounts paid in violation of this Section 2.7 shall be received in trust for the Secured Parties and shall be promptly turned over to the Administrative Agent. Each Guarantor will mark its books and records, and cause its respective Subsidiaries to mark their books and records, so as to indicate that the Junior Liabilities are subordinated in accordance with the terms of this Guaranty, and will cause to be clearly inserted in any promissory note or other instrument which at any time evidences any of the Junior Liabilities a statement to the effect that the payment thereof is subordinated in accordance with the terms of this Guaranty. Each Guarantor shall execute such further documents or instruments and take such further action as the Administrative Agent may reasonably from time to time request to carry out the intent of this Guaranty.

SECTION 2.8.         Successors, Transferees and Assigns; Transfers of Notes. This Guaranty shall (a) be binding upon each Guarantor, and their respective successors, transferees and assigns (provided, however, that no Guarantor may assign any of its obligations hereunder without the prior written consent of all Lenders), and (b) inure to the benefit of the Administrative Agent and each other Secured Party and be enforceable by the Administrative Agent. Without limiting the generality of the foregoing clause (b), any Lender may assign or otherwise transfer (in whole or in part) any Note, Loan or Letter of Credit held by it to any other Person or entity, and such other Person or entity shall thereupon become vested with all rights and benefits in respect thereof granted to such Lender under any Loan Document (including this Guaranty) or otherwise, subject, however, to any contrary provisions in such assignment or transfer, and to the provisions of Article 9 and Section 10.11 of the First Lien Credit Agreement.

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SECTION 2.9.         Election of Remedies. Except as otherwise provided in the First Lien Credit Agreement, if the Administrative Agent may, under applicable law, proceed to realize its benefits under any of this Guaranty or the other Loan Documents giving the Administrative Agent a lien upon any Collateral, either by judicial foreclosure or by non judicial sale or enforcement, the Administrative Agent may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Guaranty. If, in the exercise of any of its rights and remedies, the Administrative Agent shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Obligor or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Guarantor hereby consents to such action by the Administrative Agent and waives any claim based upon such action, even if such action by the Administrative Agent shall result in a full or partial loss of any rights of subrogation that any Guarantor might otherwise have had but for such action by the Administrative Agent. Any election of remedies that results in the denial or impairment of the right of the Administrative Agent to seek a deficiency judgment against the Borrower shall not impair the Guarantors’ obligation to pay the full amount of the Obligations.

SECTION 2.10.         Contribution by Guarantors. All Guarantors desire to allocate among themselves (collectively, the “Contributing Guarantors”), in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly, in the event any payment or distribution is made on any date by a Guarantor (a “Funding Guarantor”) under this Guaranty such that its Aggregate Payments exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution from each of the other Contributing Guarantors in an amount sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding Guarantors under this Guaranty in respect of the obligations guaranteed. “Fair Share Contribution Amount” means, with respect to a Contributing Guarantor as of any date of determination, the maximum aggregate amount of the obligations of such Contributing Guarantor under this Guaranty that would not render its obligations hereunder or thereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable applicable provisions of state law; provided, solely for purposes of calculating the Fair Share Contribution Amount with respect to any Contributing Guarantor for purposes of this Section 2.10, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Contributing Guarantor. “Aggregate Payments” means, with respect to a Contributing Guarantor as of any date of determination, an amount equal to (1) the aggregate amount of all payments and distributions made on or before such date by such Contributing Guarantor in respect of this Guaranty (including in respect of this Section 2.10), minus (2) the aggregate amount of all payments received on or before such date by such Contributing Guarantor from the other Contributing Guarantors as contributions under this Section 2.10. The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Guarantor. The allocation among Contributing Guarantors of their obligations as set forth in this Section 2.10 shall not be construed in any way to limit the liability of any Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution agreement set forth in this Section 2.10.

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ARTICLE 3. REPRESENTATIONS AND WARRANTIES

Each Guarantor hereby represents and warrants to each Secured Party as set forth in this Article 3.

SECTION 3.1.         Representations and Warranties. All of the representations and warranties made by the Borrower or any other Obligor regarding such Guarantor or its Subsidiaries in the First Lien Credit Agreement or in any other Loan Document are true and correct in all respects as if such representations and warranties were incorporated herein in their entirety and made by such Guarantor.

SECTION 3.2.         No Defaults or Violations of Law. No Default or Event of Default has occurred and is continuing. Except the pendency of the Chapter 11 Cases and the circumstances, events and transactions occurring as part thereof, no default (or event or circumstance which, but for the passage of time or the giving of notice, or both, would constitute a default) has occurred and is continuing with respect to any note, indenture, loan agreement, mortgage, lease, deed or other material agreement to which any Guarantor is a party or by which it or its properties is bound, except for such defaults that will not have a Material Adverse Effect. No Guarantor is in violation of any Applicable Law, except for such violations that will not have a Material Adverse Effect.

SECTION 3.3.         Informed on Financial Condition. Each Guarantor has knowledge of the Borrower’s and each other Obligor’s financial condition and affairs and has adequate means to obtain from the Borrower and each other Obligor on an ongoing basis information relating thereto and to the Borrower’s and such Obligor’s ability to pay and perform the Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect. Each Guarantor acknowledges and agrees that the Secured Parties shall have no obligation to investigate the financial condition or affairs of any Obligor for the benefit of any Guarantor nor to advise any Guarantor of any fact respecting, or any change in, the financial condition or affairs of the Borrower or any other Obligor that might become known to any Secured Party at any time, whether or not such Secured Party knows or believes or has reason to know or believe that any such fact or change is unknown to any Guarantor, or might (or does) materially increase the risk of any Guarantor as guarantor, or might (or would) affect the willingness of any Guarantor to continue as a guarantor of the Obligations.

SECTION 3.4.         Benefit to Guarantors. Each Guarantor represents that it is in the best interests of such Guarantor to execute this Guaranty inasmuch as each such Guarantor will derive substantial direct and indirect benefits from the Loans made from time to time to, and the Letters of Credit issued on behalf of, the Borrower by the Lenders and/or Issuers pursuant to the First Lien Credit Agreement, and the financial accommodations made from time to time to the Borrower and Guarantors by the Secured Parties pursuant to any other Loan Document or Bank Product Agreement, each Guarantor is willing to guarantee the obligations of the Borrower and the other Obligors under the First Lien Credit Agreement and any other Loan Document or Bank Product Agreement, and each Guarantor agrees that the Secured Parties are relying on this representation in agreeing to make Credit Extensions to the Borrower.

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ARTICLE 4. COVENANTS

SECTION 4.1.         Affirmative Covenants. Each Guarantor covenants and agrees that, until the Termination Date, each Guarantor shall and shall cause any Subsidiaries to, unless the Lenders or the Required Lenders, as applicable, shall otherwise consent in writing in accordance with the First Lien Credit Agreement, perform each of the obligations set forth in Section 7.1 of the First Lien Credit Agreement, to the extent such obligations pertain to each such Guarantor or its assets, as if such obligations were set forth in full in this Guaranty.

SECTION 4.2.         Negative Covenants. Each Guarantor covenants and agrees that, until the Termination Date, no Guarantor shall, and no Guarantor shall cause any Subsidiary to, without the prior written consent of the Lenders or the Required Lenders, as applicable, in accordance with the First Lien Credit Agreement, do anything prohibited by Section 7.2 of the First Lien Credit Agreement, to the extent such obligations pertain to any Guarantor or its assets, as if each such prohibition was set forth in full in this Guaranty.

SECTION 4.3.         Non-Petition Covenant. Prior to the date that is one year and one day after the Termination Date, no Guarantor will, and no Guarantor will allow any Subsidiary to, directly or indirectly, commence, join any other person in commencing, or authorize a trustee or other person acting on its behalf or on behalf of others to commence, any bankruptcy, reorganization, arrangement, insolvency, liquidation, or receivership proceeding under the laws of the United States or any state of the United States against any other Guarantor or the Borrower, or any other their respective Subsidiaries.

ARTICLE 5. MISCELLANEOUS PROVISIONS

SECTION 5.1.         Waiver of Fraudulent Conveyance Claims. Each Guarantor hereby waives the right to assert any claim or cause of action to avoid any transfer to the Administrative Agent or to any other Secured Party contemplated by and made pursuant to the First Lien Credit Agreement or any other Loan Document that may exist by virtue of any federal or state statute providing for such avoidance.

SECTION 5.2.         Loan Document. This Guaranty is a Loan Document executed pursuant to the First Lien Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof.

SECTION 5.3.        Binding on Successors, Transferees and Assigns; Assignment. In addition to, and not in limitation of, Section 2.8, this Guaranty shall be binding upon each Guarantor and their respective successors, transferees and assigns and shall inure to the benefit of and be enforceable by each Secured Party and their respective successors, transferees and assigns (to the full extent provided pursuant to Section 2.9); provided, however, that no Guarantor may assign any of its obligations hereunder without the prior written consent of all Lenders.

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SECTION 5.4.        Amendments. No amendment to or waiver of any provision of this Guaranty nor consent to any departure by any Guarantor from its obligations under this Guaranty shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent (on behalf of the Lenders or the Required Lenders, as the case may be, pursuant to Section 10.1 of the First Lien Credit Agreement) and such Guarantor and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 5.5.        Notices. Except as otherwise provided in this Guaranty, all notices and other communications provided for hereunder shall be in writing or by facsimile and addressed, delivered or transmitted to the appropriate party at the address or facsimile number of (a) each Guarantor, as specified on the signature pages of this Guaranty, (b) the Administrative Agent or a Secured Party, as specified pursuant to Section 10.2 of the First Lien Credit Agreement, or (c) at such other address or facsimile number as may be designated by such party in a prior written notice to the other party. Except as otherwise provided in this Guaranty, any notice or other communication, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any such notice or other communication, if transmitted by facsimile, shall be deemed given when transmitted and electronically confirmed.

SECTION 5.6.        No Waiver; Remedies. In addition to, and not in limitation of, Section 2.3 and Section 2.5, no failure on the part of any Secured Party or any holder of a Note, an Issuer of or participant in a Letter of Credit or holder of an interest therein to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 5.7.        Section Captions. The various headings of this Guaranty are inserted for convenience only and shall not affect the meaning or interpretation of this Guaranty or any provisions thereof.

SECTION 5.8.        Setoff. In addition to, and not in limitation of, any rights of any Secured Party under applicable law, each Secured Party shall, upon the occurrence of any Default described in clauses (b) through (d) of Section 8.1.9 of the First Lien Credit Agreement or any other Event of Default, have the right to appropriate and apply to the payment of the obligations of the Guarantors owing to it hereunder, whether or not then due, and each Guarantor hereby grants to each Secured Party a continuing security interest in, any and all balances, credits, deposits, accounts or moneys of such Guarantor then or thereafter maintained with such Secured Party and any and all property of every kind or description of or in the name of such Guarantor now or hereafter, for any reason or purpose whatsoever, in the possession or control of, or in transit to, such Secured Party, such holder or any agent or bailee for such Secured Party; provided, however, that any such appropriation and application shall be subject to the provisions of Section 4.8 of the First Lien Credit Agreement.

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SECTION 5.9.        Severability. Any provision of this Guaranty which is prohibited, inoperative, invalid or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition, non-operation, invalidity or unenforceability without invalidating the remaining provisions of this Guaranty or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 5.10.        Counterparts. This Guaranty may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Guaranty by facsimile shall be effective as delivery of a manually executed counterpart of this Guaranty.

SECTION 5.11.        Governing Law, Entire Agreement. THIS GUARANTY SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICT OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). THIS GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

SECTION 5.12.        Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER, ANY OTHER SECURED PARTY OR ANY GUARANTOR IN CONNECTION HEREWITH SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT, ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 5.5. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.

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SECTION 5.13.        Waiver of Jury Trial. EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, ANY LENDER, ANY ISSUER, ANY OTHER SECURED PARTY OR ANY GUARANTOR IN CONNECTION THEREWITH. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH LENDER, EACH ISSUER AND EACH OTHER SECURED PARTY ENTERING INTO THE LOAN DOCUMENTS.

SECTION 5.14.        Additional Guarantors.  Each Subsidiary of the Borrower that is required to become a party to this Guaranty pursuant to Section 7.1.8 of the First Lien Credit Agreement shall become a Guarantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of a Joinder Agreement substantially in the form of Annex I hereto.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

GUARANTORS
ENERGY XXI GOM, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY XXI TEXAS ONSHORE, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY XXI ONSHORE, LLC
By:	/s/ Rick Fox
	Name:  Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY XXI PIPELINE, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY XXI LEASEHOLD, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
Title:	Chief Financial Officer & Treasurer

S-1 Signature Page to EXXI Obligor Guaranty

ENERGY XXI PIPELINE II, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
MS ONSHORE, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
M21K, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
SOILEAU CATERING, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
EPL OIL & GAS, INC.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer

S-2 Signature Page to EXXI Obligor Guaranty

ANGLO-SUISSE OFFSHORE PIPELINE PARTNERS, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
DELAWARE EPL OF TEXAS, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY PARTNERS LTD., LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
EPL OF LOUISIANA, L.L.C.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
EPL PIONEER HOUSTON, INC.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer

S-3 Signature Page to EXXI Obligor Guaranty

EPL PIPELINE, L.L.C.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
NIGHTHAWK, L.L.C.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY XXI OFFSHORE SERVICES, INC.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
ENERGY XXI NATURAL GAS HOLDINGS, INC.
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
NATURAL GAS ACQUISITION COMPANY I, LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer

S-4 Signature Page to EXXI Obligor Guaranty

ENERGY XXI SERVICES LLC
By:	/s/ Rick Fox
	Name: Rick Fox
	Title: Chief Financial Officer & Treasurer
Notice Address for each Guarantor:
1021 Main (One City Centre), Suite 2626
Houston, Texas  77002
Attention:  Bruce Busmire
Telephone:  (713) 351-3033
Facsimile: (713) 351-3333

S-5 Signature Page to EXXI Obligor Guaranty

Annex I to
Guaranty

[FORM OF] JOINDER AGREEMENT

JOINDER AGREEMENT (this “Joinder Agreement”), dated as of [ ], 20[ ], made by [ ] (the “Additional Guarantor”), in favor of Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (the “Lenders”) parties to the First Lien Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such First Lien Credit Agreement.

WITNESSETH :

WHEREAS, Energy XXI Gulf Coast, Inc. (the “Borrower”), the Lenders and the Administrative Agent have entered into an First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”);

WHEREAS, in connection with the First Lien Credit Agreement the Borrower and certain of its Subsidiaries (other than the Additional Guarantor) have entered into the Guaranty dated as of December 30, 2016 (as amended, supplemented or otherwise modified from time to time, the “Guaranty”) in favor of the Administrative Agent for the ratable benefit of the Secured Parties;

WHEREAS, the First Lien Credit Agreement requires the Additional Guarantor to become a party to the Guaranty; and

WHEREAS, the Additional Guarantor has agreed to execute and deliver this Joinder Agreement in order to become a party to the Guaranty;

NOW, THEREFORE, IT IS AGREED:

1.          Guaranty. By executing and delivering this Joinder Agreement, the Additional Guarantor, as provided in Section 5.14 of the Guaranty, hereby becomes a party to the Guaranty as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly (a) assumes all obligations and a Guarantor; and (b) guarantees the Obligations pursuant to Article 2 of the Guaranty. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Article 3 of the Guaranty, as they relate to the Additional Guarantor, is true and correct on and as the date hereof (after giving effect to this Joinder Agreement) as if made on and as of such date.

Annex I - 1

2.          Governing Law. THIS JOINDER AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS JOINDER AGREEMENT AND ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATED TO THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

3.          Acceptance. The Additional Guarantor hereby expressly waives notice of acceptance of this Joinder Agreement, acceptance on the part of the Administrative Agent and the other Secured Parties being conclusively presumed by their request for this Joinder Agreement and delivery of the same to the Administrative Agent.

IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GUARANTOR]
By:
	Name:
	Title:

Annex I - 2

EX-10.4

Exhibit 10.4

Execution Version

FIRST LIEN PLEDGE AND SECURITY AGREEMENT
AND IRREVOCABLE PROXY

This FIRST LIEN PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY, effective as of December 30, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, this “Security Agreement”), is made by ENERGY XXI GULF COAST, INC. and each of its undersigned subsidiaries (each, a “Grantor” and, together with each of the other signatories hereto and any other entities from time to time party hereto, the “Grantors”), in favor of the Administrative Agent and each of the Secured Parties (each as defined below).

WITNESSETH:

WHEREAS, reference is made to the First Lien Exit Credit Agreement, dated as of December 30, 2016, by and among Energy XXI Gulf Coast, Inc., a Delaware corporation (“Borrower”), the lenders party thereto (the “Lenders”), Wells Fargo Bank, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), and the other parties party thereto (as amended, supplemented, amended and restated or otherwise modified from time to time, the “First Lien Credit Agreement”);

WHEREAS, each Grantor has duly authorized the execution, delivery and performance of this Security Agreement; and

WHEREAS, each Grantor (other than Borrower) is a wholly owned Subsidiary of Borrower and it is in the best interests of each Grantor to execute this Security Agreement inasmuch as each Grantor will derive substantial direct and indirect benefits from the First Lien Credit Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor agrees, for the benefit of each Secured Party, as follows:

ARTICLE I.

DEFINITIONS

SECTION 1.1.          Certain Terms. The following terms (whether or not underscored) when used in this Security Agreement, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

“Administrative Agent” means Wells Fargo Bank, N.A., in its capacity as “Administrative Agent” under the First Lien Credit Agreement and the other Loan Documents, together with any successor(s) and assign(s) thereto.

“Collateral” is defined in Section 2.1.

“Collateral Account” is defined in Section 4.3(b).

“Computer Hardware and Software Collateral” means (a) all computer and other electronic data processing hardware, integrated computer systems, central processing units, memory units, display terminals, printers, features, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories and all peripheral devices and other related computer hardware, including all operating system software, utilities and application programs in whatsoever form, (b) software programs (including both source code, object code and all related applications and data files), designed for use on the computers and electronic data processing hardware described in clause (a) above, (c) all firmware associated therewith, (d) all documentation (including flow charts, logic diagrams, manuals, guides, specifications, training materials, charts and pseudo codes) with respect to such hardware, software and firmware described in the preceding clauses (a) through (c), and (e) all rights with respect to all of the foregoing, including copyrights, licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications and any substitutions, replacements, improvements, error corrections, updates, additions or model conversions of any of the foregoing.

“Control Agreement” means an authenticated record in form and substance reasonably satisfactory to the Administrative Agent, that provides for the Administrative Agent to have “control” (as defined in the UCC) over certain Collateral.

“Copyright Collateral” means all copyrights of any Grantor, registered or unregistered and whether published or unpublished, now or hereafter in force throughout the world including all of such Grantor’s rights, titles and interests in and to all copyrights registered in the United States Copyright Office or anywhere else in the world, including without limitation those copyrights referred to in Item C of Schedule III hereto, and registrations and recordings thereof and all applications for registration thereof, whether pending or in preparation, all copyright licenses, the right to sue for past, present and future infringements of any of the foregoing, all rights corresponding thereto, all extensions and renewals of any thereof and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and Proceeds of suit, which are owned or licensed by such Grantor.

“Distributions” means all cash, cash dividends, stock dividends, other distributions, liquidating dividends, shares of stock resulting from (or in connection with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends, mergers, consolidations, and all other distributions or payments (whether similar or dissimilar to the foregoing) on or with respect to, or on account of, any Pledged Share or Pledged Interest or other rights or interests constituting Collateral.

“Equipment” is defined in Section 2.1(a).

“First Lien Credit Agreement” is defined in the first recital.

“General Intangibles” means all “general intangibles” and all “payment intangibles”, each as defined in the UCC, and shall include all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and all Intellectual Property Collateral (in each case, regardless of whether characterized as general intangibles under the UCC).

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“Governmental Approval” is defined in Section 2.1(f).

“Grantor” is defined in the preamble.

“Indemnified Parties” is defined in Section 6.5(a).

“Intellectual Property Collateral” means, collectively, the Computer Hardware and Software Collateral, the Copyright Collateral, the Patent Collateral, the Trademark Collateral and the Trade Secrets Collateral.

“Inventory” is defined in Section 2.1(b).

“Patent Collateral” means (a) all inventions and discoveries, whether patentable or not, all letters patent and applications for letters patent throughout the world, including without limitation those patents referred to in Item A of Schedule III hereto, and any patent applications in preparation for filing, (b) all reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the items described in clause (a), (c) all patent licenses, and other agreements providing any Grantor with the right to use any items of the type referred to in clauses (a) and (b) above, and (d) all Proceeds of, and rights associated with, the foregoing (including licenses, royalties income, payments, claims, damages and Proceeds of infringement suits), the right to sue third parties for past, present or future infringements of any patent or patent application, and for breach or enforcement of any patent license.

“Permitted Liens” means all Liens permitted by Section 7.2.3 of the First Lien Credit Agreement or any other Loan Document.

“Pledged Interests” means all Capital Securities or other ownership interests of any Pledged Interests Issuer described in Item A of Schedule I hereto; all registrations, certificates, articles, by-laws, regulations, limited liability company agreements or constitutive agreements governing or representing any such interests; all options and other rights, contractual or otherwise, at any time existing with respect to such interests, as such interests are amended, modified, or supplemented from time to time, and together with any interests in any Pledge Interests Issuer taken in extension or renewal thereof or substitution therefor.

“Pledged Interests Issuer” means each Person identified in Item A of Schedule I hereto as the issuer of the Pledged Shares or the Pledged Interests identified opposite the name of such Person.

“Pledged Note Issuer” means each Person identified in Item B of Schedule I hereto as the issuer of the Pledged Notes identified opposite the name of such Person.

“Pledged Notes” means all promissory notes of any Pledged Note Issuer evidencing Indebtedness incurred pursuant to of Section 7.2.2(f) of the First Lien Credit Agreement in form and substance reasonably satisfactory to the Administrative Agent delivered by any Grantor to the Administrative Agent as Pledged Property hereunder, as such promissory notes, in accordance with Section 7.3 hereof, are amended, modified or supplemented from time to time and together with any promissory note of any Pledged Note Issuer taken in extension or renewal thereof or substitution therefor.

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“Pledged Property” means all Pledged Notes, Pledged Interests, Pledged Shares, all assignments of any amounts due or to become due with respect to the Pledged Interests or the Pledged Shares, all other instruments which are now being delivered by any Grantor to the Administrative Agent or may from time to time hereafter be delivered by any Grantor to the Administrative Agent for the purpose of pledge under this Security Agreement or any other Loan Document, and all proceeds of any of the foregoing.

“Pledged Shares” means all Capital Securities of any Pledged Interests Issuer identified under Item A of Schedule I which are delivered by any Grantor to the Administrative Agent as Pledged Property hereunder.

“Receivables” is defined in Section 2.1(c).

“Related Contracts” is defined in Section 2.1(c).

“Secured Obligations” is defined in Section 2.2.

“Securities Act” is defined in Section 6.2(a).

“Security Agreement” is defined in the preamble.

“Trademark Collateral” means (a) (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, certification marks, collective marks, logos and other source or business identifiers, and all goodwill of the business associated therewith, now existing or hereafter adopted or acquired, including without limitation those trademarks referred to in Item B of Schedule III hereto, whether currently in use or not, all registrations and recordings thereof and all applications in connection therewith, whether pending or in preparation for filing, including registrations, recordings and applications in the United States Patent and Trademark Office or in any office or agency of the United States of America, or any State thereof or any other country or political subdivision thereof or otherwise, and all common-law rights relating to the foregoing, and (ii) the right to obtain all reissues, extensions or renewals of the foregoing (collectively referred to as the “Trademark”), (b) all trademark licenses for the grant by or to any Grantor of any right to use any trademark, (c) all of the goodwill of the business connected with the use of, and symbolized by the items described in, clause (a), and to the extent applicable clause (b), (d) the right to sue third parties for past, present and future infringements of any Trademark Collateral described in clause (a) and, to the extent applicable, clause (b), and (e) all Proceeds of, and rights associated with, the foregoing, including any claim by any Grantor against third parties for past, present or future infringement or dilution of any Trademark, Trademark registration or Trademark license, or for any injury to the goodwill associated with the use of any such Trademark or for breach or enforcement of any Trademark license and all rights corresponding thereto throughout the world.

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“Trade Secrets Collateral” means all common law and statutory trade secrets and all other confidential, proprietary or useful information and all know-how obtained by or used in or contemplated at any time for use in the business of any Grantor, (all of the foregoing being collectively called a “Trade Secret”), including all Documents and things embodying, incorporating or referring in any way to such Trade Secret, all Trade Secret licenses, and including the right to sue for and to enjoin and to collect damages for the actual or threatened misappropriation of any Trade Secret and for the breach or enforcement of any such Trade Secret license.

“UCC” means the Uniform Commercial Code, as in effect in the State of New York, as the same may be amended from time to time.

SECTION 1.2.          First Lien Credit Agreement Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Security Agreement, including its preamble and recitals, have the meanings provided in the First Lien Credit Agreement.

SECTION 1.3.          UCC Definitions. Unless otherwise defined herein or the context otherwise requires, terms for which meanings are provided in the UCC are used in this Security Agreement, including its preamble and recitals, with such meanings.

ARTICLE II.

SECURITY INTEREST

SECTION 2.1.          Grant of Security Interest. Each Grantor hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and transfers to the Administrative Agent, for its benefit and the ratable benefit of each of the Secured Parties, and hereby grants to the Administrative Agent, for its benefit and the ratable benefit of each of the other Secured Parties, a continuing security interest in all of such Grantor’s following property, whether now or hereafter existing, owned or acquired by such Grantor, and wherever located (collectively for all Grantors, the “Collateral”):

(a)          all equipment in all of its forms of such Grantor, wherever located, and all machinery, apparatus, installation facilities and other tangible personal property, and all parts thereof and all accessions, additions, attachments, improvements, substitutions, replacements and proceeds thereto and therefor (any and all of the foregoing being the “Equipment”);

(b)          all inventory in all of its forms of such Grantor, wherever located, including (i) all oil, gas, or other hydrocarbons and all products and substances derived therefrom, all raw materials and work in process therefore, finished goods thereof, and materials used or consumed in the manufacture or production thereof, (ii) all goods in which such Grantor has an interest in mass or a joint or other interest or right of any kind (including goods in which such Grantor has an interest or right as consignee), and (iii) all goods which are returned to or repossessed by such Grantor, and all accessions thereto, products thereof and documents therefore (any and all such inventory, materials, goods, accessions, products and documents being the “Inventory”);

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(c)          all accounts, money, payment intangibles, deposit accounts (including, without limitation, each Deposit Account of Borrower and its Subsidiaries identified on Item 6.19(a) of the Disclosure Schedule attached to the First Lien Credit Agreement and the Collateral Accounts and all amounts on deposit therein and all cash equivalent investments carried therein and all proceeds thereof), contracts, contract rights, all rights constituting a right to the payment of money, chattel paper, documents, documents of title, instruments, letters of credit, letter-of-credit rights and General Intangibles of such Grantor, whether or not earned by performance or arising out of or in connection with the sale or lease of goods or the rendering of services, including all moneys due or to become due in repayment of any loans or advances, and all rights of such Grantor now or hereafter existing in and to all security agreements, guaranties, leases, agreements and other contracts securing or otherwise relating to any such accounts, money, payment intangibles, deposit accounts, contracts, contract rights, rights to the payment of money, chattel paper, documents, documents of title, instruments, letters of credit, letter-of-credit rights and General Intangibles (any and all such accounts, money, payment intangibles, deposit accounts, contracts, contract rights, rights to the payment of money, chattel paper, documents, documents of title, instruments, letters of credit, letter-of-credit rights and General Intangibles being the “Receivables”, and any and all such security agreements, guaranties, leases, agreements and other contracts being the “Related Contracts”);

(d)          all Intellectual Property Collateral of such Grantor;

(e)          all books, correspondence, credit files, records, invoices, tapes, cards, computer runs, writings, data bases, information in all forms, paper and documents and other property relating to, used or useful in connection with, evidencing, embodying, incorporating or referring to, any of the foregoing in this Section 2.1;

(f)          all governmental approvals, permits, licenses, authorizations, consents, rulings, tariffs, rates, certifications, waivers, exemptions, filings, claims, orders, judgments and decrees (each a “Governmental Approval”), to the extent a security interest may be granted therein; provided that any Governmental Approval that by its terms or by operation of law would be void, voidable, terminable or revocable if mortgaged, pledged or assigned hereunder is expressly excepted and excluded from the Liens and terms of this Security Agreement, including the grant of security interest in this Section 2.1;

(g)          all interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Grantor against fluctuations in interest rates or currency exchange rates and all commodity hedge, commodity swap, exchange, forward, future, floor, collar or cap agreements, fixed price agreements and all other agreements or arrangements designed to protect such Grantor against fluctuations in commodity prices (including, without limitation, any Hedging Agreement);

(h)          to the extent not included in the foregoing, all bank accounts, investment property, fixtures and supporting obligations;

(i)          all Pledged Interests, Pledged Notes, Pledged Shares and any other Pledged Property whether now or hereafter delivered to the Administrative Agent in connection with this Security Agreement and all Distributions, interest, and other payments and rights with respect to such Pledged Property;

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(j)          all insurance and insurance policies;

(k)          all accessions, substitutions, replacements, products, offspring, rents, issues, profits, returns, income and proceeds of and from any and all of the foregoing Collateral (including proceeds which constitute property of the types described in clauses (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) and proceeds deposited from time to time in any lock boxes of such Grantor, and, to the extent not otherwise included, all payments and proceeds under insurance (whether or not the Administrative Agent is the loss payee thereof), or any condemnation award, indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the Collateral); and

(l)          all of such Grantor’s other property and rights of every kind and description and interests therein, including without limitation, all other “Accounts”, “Certificated Securities”, “Chattel Paper”, “Commercial Tort Claims”, “Commodity Accounts”, “Commodity Contracts”, “Deposit Accounts”, “Documents”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter of Credit Rights”, “Letters of Credit”, “Money”, “Proceeds”, “Securities”, “Securities Account”, “Security Entitlements”, “Supporting Obligations” and “Uncertificated Securities” as such terms are defined in the UCC.

Notwithstanding anything in the foregoing to the contrary, the term “Collateral” shall not include any Excluded Securities.

SECTION 2.2.          Security for Obligations. This Security Agreement, and the Collateral in which the Administrative Agent for the benefit of the Secured Parties is granted a security interest hereunder by each Grantor, secures the prompt and indefeasible payment in full and performance of all Obligations of such Grantor and each other Obligor now or hereafter existing under the First Lien Credit Agreement, the Guaranties and each other Loan Document and each Bank Product Agreement with a Bank Product Provider, whether for principal, interest, costs, fees, expenses or otherwise, and any and all other obligations of such Grantor and each other Obligor to the Secured Parties, howsoever created, arising or evidenced, whether direct or indirect, primary or secondary, fixed or absolute or contingent, joint or several, or now or hereafter existing under this Security Agreement and each other Loan Document and Bank Product Agreement to which it is or may become a party (all such Obligations and other obligations of the Borrower and such Grantor being the “Secured Obligations”). Notwithstanding the foregoing, with respect to any Obligor (other than the Borrower) the term Secured Obligations shall not include Excluded Swap Obligations.

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SECTION 2.3.          Continuing Security Interest; Transfer of Loans. This Security Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the Termination Date, (b) be binding upon each Grantor and its successors, transferees and assigns, and (c) inure, together with the rights and remedies of the Administrative Agent hereunder, to the benefit of the Administrative Agent and each other Secured Party and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause (c), any Lender may assign or otherwise transfer (in whole or in part) any Note or any Loan held by it as provided in Section 10.11 of the First Lien Credit Agreement and any Secured Party may assign or otherwise transfer (in whole or in part) its interest pursuant to any Hedging Agreement or any Bank Product Agreement, and any successor or assignee thereof shall thereupon become vested with all the rights and benefits in respect thereof granted to such Secured Party under any Loan Document (including this Security Agreement), or otherwise, subject, however, to any contrary provisions in such assignment or transfer, and as applicable to the provisions of Section 10.11 and Article 9 of the First Lien Credit Agreement, and, with respect to the Hedging Agreements and the Bank Product Agreements, the limitation on rights in collateral pursuant to the Security Documents. Upon the Termination Date, the security interest granted herein shall terminate and all rights to the Collateral shall revert to the applicable Grantor. Upon any such payment and termination or expiration, the Administrative Agent will, at the Grantors’ sole expense, deliver to each applicable Grantor, without any representations, warranties or recourse of any kind whatsoever, all certificates and instruments representing or evidencing all Pledged Notes, Pledged Shares and Pledged Interests, together with all other Collateral held by the Administrative Agent hereunder, and execute and deliver to any Grantor such documents as such Grantor shall reasonably request to evidence such termination. If at any time all or any part of any payment theretofore applied by the Administrative Agent or any Secured Party to any of the Secured Obligations is or must be rescinded or returned by the Administrative Agent or any such Secured Party for any reason whatsoever (including, without limitation, the insolvency, bankruptcy, reorganization or other similar proceeding of any Grantor or any other Person), such Secured Obligations shall, for purposes of this Security Agreement, to the extent that such payment is or must be rescinded or returned, be deemed to have continued to be in existence, notwithstanding any application by the Administrative Agent or such Secured Party or any termination agreement or release provided to any Grantor, and this Security Agreement shall continue to be effective or reinstated, as the case may be, as to such Secured Obligations, all as though such application by the Administrative Agent or such Secured Party had not been made.

SECTION 2.4.          Grantor Remains Liable. Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under the contracts and agreements included in the Collateral to the extent set forth therein, and will perform all of its duties and obligations under such contracts and agreements to the same extent as if this Security Agreement had not been executed, (b) the exercise by the Administrative Agent of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under any such contracts or agreements included in the Collateral, and (c) neither the Administrative Agent nor any other Secured Party shall have any obligation or liability under any contracts or agreements included in the Collateral by reason of this Security Agreement, nor shall the Administrative Agent nor any Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

SECTION 2.5.          Delivery of Pledged Property.

(a)          All certificates or instruments representing or evidencing any Collateral, including all Pledged Shares and Pledged Notes, shall be delivered to and held by or on behalf of (or in the case of the Pledged Notes, endorsed to the order of) the Administrative Agent pursuant hereto, shall be in suitable form for transfer by delivery, and shall be accompanied by all necessary indorsements or instruments of transfer or assignment, duly executed in blank.

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(b)          To the extent any of the Collateral constitutes an “uncertificated security” (as defined in Section 8-102(a)(18) of the UCC) or a “security entitlement” (as defined in Section 8-102(a)(17) of the UCC), the applicable Grantor shall take and cause the appropriate Person (including any issuer, entitlement holder or securities intermediary thereof) to take all actions necessary to grant “control” (as defined in 8-106 of the UCC) to the Administrative Agent over such Collateral.

SECTION 2.6.          Distributions on Pledged Shares. In the event that any Distribution with respect to any Pledged Shares or Pledged Interests pledged hereunder is permitted to be paid (in accordance with Section 7.2.6 of the First Lien Credit Agreement), such Distribution or payment may be paid directly to the applicable Grantor. If any Distribution is made in contravention of Section 7.2.6 of the First Lien Credit Agreement, the applicable Grantor shall hold the same segregated and in trust for the Administrative Agent until paid to the Administrative Agent in accordance with Section 4.1(e).

SECTION 2.7.          Security Interest Absolute, etc. This Security Agreement shall in all respects be a continuing, absolute, unconditional and irrevocable grant of security interest, and shall remain in full force and effect until the Termination Date. All rights of the Secured Parties and the security interests granted to the Administrative Agent (for its benefit and the ratable benefit of each other Secured Party) hereunder, and all obligations of the Grantors hereunder, shall, in each case, be absolute, unconditional and irrevocable irrespective of (a) any lack of validity, legality or enforceability of any Loan Document or Bank Product Agreement, (b) the failure of any Secured Party (i) to assert any claim or demand or to enforce any right or remedy against any Grantor or any other Obligor or any other Person under the provisions of any Loan Document or Bank Product Agreement or otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any Secured Obligations, (c) any change in the time, manner or place of payment of, or in any other term of, all or any part of the Secured Obligations, or any other extension, compromise or renewal of any Secured Obligations, (d) any reduction, limitation, impairment or termination of any Secured Obligations (except in the case of the occurrence of the Termination Date) for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and each Grantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Secured Obligations or otherwise, (e) any amendment to, rescission, waiver, or other modification of, or any consent to or departure from, any of the terms of any Loan Document or Bank Product Agreement, (f) any addition, exchange or release of any Collateral for the Secured Obligations, or any surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition to, or consent to or departure from, any other guaranty held by any Secured Party securing any of the Secured Obligations, or (g) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of any Grantor or any other Obligor, any surety or any other guarantor.

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SECTION 2.8.          Waiver of Subrogation. Until the Termination Date, each Grantor (other than Borrower) hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Borrower or any other Obligor that arise from the existence, payment, performance or enforcement of such Grantor’s obligations under this Security Agreement or any other Loan Document or Bank Product Agreement, including any right of subrogation, reimbursement, exoneration or indemnification, any right to participate in any claim or remedy of any Secured Party against the Borrower or any other Obligor or any collateral which any Secured Party now has or hereafter acquires, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including the right to take or receive from the Borrower or any other Obligor, directly or indirectly, in cash or other property or by set-off or in any manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Grantor in violation of the preceding sentence and the Secured Obligations shall not have been indefeasibly paid in full in cash or all Commitments and all other commitments by any Secured Party to the Borrower have not been terminated or all Letters of Credit have not terminated or expired, then such amount shall be deemed to have been paid to such Grantor for the benefit of, and held in trust for, the Administrative Agent (on behalf of the Secured Parties), and shall forthwith be paid to the Administrative Agent to be credited and applied upon the Secured Obligations, whether matured or unmatured. Each Grantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the First Lien Credit Agreement and that the waiver set forth in this Section 2.8 is knowingly made in contemplation of such benefits.

SECTION 2.9.          Election of Remedies. Except as otherwise provided in the First Lien Credit Agreement, if the Administrative Agent may, under applicable law, proceed to realize its benefits under any of this Security Agreement or the other Loan Documents giving the Administrative Agent a lien upon any Collateral, either by judicial foreclosure or by non-judicial sale or enforcement, the Administrative Agent may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Security Agreement. If, in the exercise of any of its rights and remedies, the Administrative Agent shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Grantor or any other Obligor or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Grantor hereby consents to such action by the Administrative Agent and waives any claim based upon such action, even if such action by the Administrative Agent shall result in a full or partial loss of any rights of subrogation that such Grantor might otherwise have had but for such action by the Administrative Agent.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

Each Grantor hereby represents and warrants to the Administrative Agent and each other Secured Party as of the date hereof, as follows.

SECTION 3.1.          Government Approval, Regulation, etc. Except for filings to perfect and maintain the perfection of the Liens arising pursuant to the Security Documents, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person (other than those that have been duly obtained or made and that are in full force and effect) is required (a) for the due execution, delivery or performance by such Grantor of this Security Agreement or any Loan Document or Bank Product Agreement to which it is a party, (b) for the grant by such Grantor of the security interest granted hereby, (c) for the perfection or maintenance of the security interests hereunder including the first priority (subject to Permitted Liens) nature of such security interest or the exercise by the Administrative Agent of its rights and remedies hereunder, or (d) for the exercise by the Administrative Agent of the rights of control, possession, voting or other rights provided for in this Security Agreement, except (i) with respect to any Pledged Shares or Pledged Interests, as may be required in connection with a disposition of such Pledged Shares or Pledged Interests by laws affecting the offering and sale of securities generally, the remedies in respect of the Collateral pursuant to this Security Agreement and (ii) any “change of control” or similar filings required by state licensing agencies.

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SECTION 3.2.          Ownership, No Liens, etc. Such Grantor is the legal and beneficial owner of, and has good and defensible title to (and has full right and authority to pledge, grant and assign) the Collateral, free and clear of all Liens or options, except for any Lien (a) granted pursuant to this Security Agreement in favor of the Administrative Agent, or (b) that is a Permitted Lien. No effective UCC financing statement or other filing similar in effect covering all or any part of the Collateral is on file in any recording office, except those filed in favor of the Administrative Agent relating to this Security Agreement or the Loan Documents, Permitted Liens or as to which a duly authorized termination statement relating to such UCC financing statement or other instrument was delivered to the Administrative Agent on or before the Effective Date. This Security Agreement creates a valid security interest in the Collateral, securing the payment of the Secured Obligations, and, except for the proper filing of the applicable Filing Statements with the Secretary of State of the State of Delaware, all filings and other actions necessary to perfect and protect such security interest have been duly taken and such security interest shall be a first priority security interest.

SECTION 3.3.          As to Capital Securities of the Subsidiaries, Investment Property.

(a)          With respect to the Pledged Shares, all such Pledged Shares are duly authorized and validly issued, fully paid and non-assessable, and represented by a certificate.

(b)          With respect to the Pledged Interests, no such Pledged Interests (i) are dealt in or traded on securities exchanges or in securities markets, (ii) expressly provide that such Pledged Interests are securities governed by Article 8 of the UCC, or (iii) are held in a Securities Account, except, with respect to this clause (b), Pledged Interests (A) for which the Administrative Agent is the registered owner or (B) with respect to which the Pledged Interests Issuer has agreed in an authenticated record with the applicable Grantor and the Administrative Agent to comply with any instructions of the Administrative Agent without the consent of such Grantor.

(c)          Such Grantor delivered all Certificated Securities constituting Collateral held by such Grantor on or prior to the Effective Date to the Administrative Agent, together with duly executed undated blank stock powers, or other equivalent instruments of transfer reasonably acceptable to the Administrative Agent.

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(d)          With respect to Uncertificated Securities constituting Collateral owned by such Grantor, such Grantor has caused the Pledged Interests Issuer or other issuer thereof either (i) to register the Administrative Agent as the registered owner of such security, or (ii) to agree in an authenticated record with such Grantor and the Administrative Agent that such Pledged Interests Issuer or other issuer will comply with instructions with respect to such security originated by the Administrative Agent without further consent of such Grantor.

(e)          The percentage of the issued and outstanding Pledged Shares and Pledged Interests of each Pledged Interests Issuer pledged by such Grantor hereunder is as set forth on Schedule I. All of the Pledged Shares and Pledged Interests constitute one hundred percent (100%) (or, in the case of Exergy XXI Insurance Limited, 65%) of such Grantor’s interest in the applicable Pledged Interests Issuer and the percentage of the total membership, partnership and/or other equity interests in the Pledged Interests Issuer indicated on Schedule I.

(f)          Such Grantor has no outstanding rights, rights to subscribe, options, warrants or convertible securities outstanding or any other rights outstanding whereby any Person would be entitled to acquire shares, member interests or units of any Pledged Interest Issuer.

(g)          In the case of each Pledged Note, all of such Pledged Notes have been duly authorized, executed, endorsed, issued and delivered, and are the legal, valid and binding obligation of the issuers thereof, and are not in default.

SECTION 3.4.          Each Grantor’s Name, Location, etc.

(a)          (i) the jurisdiction in which such Grantor is located for purposes of Sections 9-301 and 9-307 of the UCC is set forth in Item A-1 of Schedule II hereto (as such schedule may be amended or supplemented from time to time), (ii) the place of business of such Grantor or, if such Grantor has more than one place of business, the chief executive office of such Grantor and the office where such Grantor keeps its records concerning the Receivables, and all originals of all chattel paper which evidence Receivables, is set forth in Item A-2 of Schedule II hereto (as such schedule may be amended or supplemented from time to time with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed)), and (iii) such Grantor’s federal taxpayer identification number is set forth in Item A-3 of Schedule II hereto (as such schedule may be amended or supplemented from time to time with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed)).

(b)          All of the Equipment, Inventory and Goods of such Grantor are located at the places specified in Item B, Item C and Item D, respectively, of Schedule II hereto (as such schedule may be amended or supplemented from time to time with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed)).

(c)          Such Grantor does not have any trade names.

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(d)          During the period beginning on the date that is five years prior to the Effective Date, such Grantor has not been known by any legal name different from the one set forth on the signature page hereto, nor has such Grantor been the subject of any merger or other corporate reorganization, except as set forth in Item E of Schedule II hereto (as such schedule may be amended or supplemented from time to time with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed)).

(e)          [Reserved].

(f)          Such Grantor does not maintain any Deposit Accounts, Securities Accounts or Commodity Accounts with any Person, in each case, except as set forth on Item G of Schedule II (as such schedule may be amended or supplemented from time to time with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed)).

(g)          None of the Receivables is evidenced by a promissory note or other instrument other than a promissory note or instrument that has been delivered to the Administrative Agent (with appropriate endorsements) or that has a face amount less than $500,000.

(h)          Such Grantor is not the beneficiary of any Letters of Credit, except as set forth on Item H of Schedule II (as such schedule may be amended or supplemented from time to time) hereto and such Grantor has obtained the consent of each Issuer of any material Letter of Credit to the assignment of the proceeds of the Letter of Credit to the Administrative Agent.

(i)          Such Grantor does not have Commercial Tort Claims (i) in which a suit has been filed by the Grantor, and (ii) where the amount of damages reasonably expected to be claimed exceeds $500,000, except as set forth on Item I of Schedule II (as such schedule may be amended or supplemented from time to time with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed)).

(j)          As of the Effective Date, the name set forth on the signature page attached hereto is the true and correct legal name (as defined in the UCC) of such Grantor.

(k)          Such Grantor has obtained a legal, valid and enforceable consent of each issuer of any Letter of Credit with a stated amount in excess of $1,000,000 to the assignment of the Proceeds of such Letter of Credit to the Administrative Agent and has not consented to, and is otherwise aware of, any Person (other than the Administrative Agent pursuant hereto) having control (within the meaning of Section 9-104 of the UCC) over, or any other interest in any of such Grantor’s rights in respect thereof.

SECTION 3.5.          Possession of Inventory, Control, etc. Such Grantor (a) has exclusive possession and control of the Equipment and Inventory, and (b) is the sole entitlement holder of its Deposit Accounts, Securities Accounts and other bank accounts and no other Person (other than the Administrative Agent pursuant to this Security Agreement or any other Person with respect to Permitted Liens) has “control” or “possession” of, or any other interest in, any of its Accounts (other than those set forth on Item 7.1.9 of the Disclosure Schedule to the First Lien Credit Agreement) or any other securities or property credited thereto except as permitted pursuant to this Security Agreement.

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SECTION 3.6.          Negotiable Documents, Instruments and Chattel Paper. Such Grantor has, contemporaneously herewith, delivered to the Administrative Agent possession of all originals of all Documents, Instruments, Promissory Notes, Pledged Notes and tangible Chattel Paper owned or held by such Grantor (duly endorsed, in blank, if requested by the Administrative Agent).

SECTION 3.7.          Intellectual Property Collateral. Such Grantor represents that except for any Patent Collateral, Trademark Collateral, and Copyright Collateral specified in Item A, Item B and Item C, respectively, of Schedule III hereto, and any and Trade Secrets Collateral, such Grantor owns and has no interests in any Intellectual Property Collateral as of the date hereof, other than the Computer Hardware and Software Collateral. Such Grantor further represents and warrants that, with respect to all Intellectual Property Collateral (a) such Intellectual Property Collateral is valid, subsisting, unexpired and enforceable and has not been abandoned or adjudged invalid or unenforceable, in whole or in part except as could not reasonably be expected to have a Material Adverse Effect, (b) such Grantor is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to such Intellectual Property Collateral and no claim has been made that the use of such Intellectual Property Collateral does or may, conflict with, infringe, misappropriate, dilute, misuse or otherwise violate any of the rights of any third party, (c) such Grantor has made all necessary filings and recordations to protect its interest in such material Intellectual Property Collateral, including recordations of any of its interests in the Patent Collateral and Trademark Collateral in the United States Patent and Trademark Office and in corresponding offices throughout the world, and its claims to the Copyright Collateral in the United States Copyright Office and in corresponding offices throughout the world, and, to the extent necessary, has used proper statutory notice in connection with its use of any material patent, Trademark and copyright in any of the Intellectual Property Collateral, (d) such Grantor has taken all reasonable steps to safeguard its Trade Secrets and to its knowledge (i) none of the Trade Secrets of such Grantor has been used, divulged, disclosed or appropriated for the benefit of any other Person other than such Grantor, (ii) no employee, independent contractor or agent of such Grantor has misappropriated any Trade Secrets of any other Person in the course of the performance of his or her duties as an employee, independent contractor or agent of such Grantor, and (iii) no employee, independent contractor or agent of such Grantor is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment of inventions agreement or similar agreement or contract relating in any way to the protection, ownership, development, use or transfer of such Grantor’s Intellectual Property Collateral, (e) to such Grantor’s knowledge, no third party is infringing upon any material Intellectual Property owned or used by such Grantor in any material respect, or any of its respective licensees, (f) no settlement or consents, covenants not to sue, nonassertion assurances, or releases have been entered into by such Grantor or to which such Grantor is bound that adversely affects its rights to own or use any Intellectual Property except as would not reasonably have a Material Adverse Effect, (g) such Grantor has not made a previous assignment, sale, transfer or agreement constituting a present or future assignment, sale or transfer of any Intellectual Property for purposes of granting a security interest or as Collateral that has not been terminated or released, (h) such Grantor uses adequate standards of quality in the manufacture, distribution, and sale of all products sold and in the provision of all services rendered under or in connection with any Trademarks and has taken all commercially reasonable action necessary to insure that any licensees of any Trademarks owned by such Grantor use such adequate standards of quality, (i) the consummation of the transactions contemplated by the First Lien Credit Agreement and this Security Agreement will not result in the termination or material impairment of any material portion of the Intellectual Property Collateral, and (j) such Grantor owns directly or is entitled to use by license or otherwise, any Patents, Trademarks, Trade Secrets, Copyrights, mask works, licenses, technology, know-how, processes and rights with respect to any of the foregoing used in, necessary for the conduct of such Grantor’s business.

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SECTION 3.8.          Best Interests. It is in the best interests of each Grantor to execute this Security Agreement in as much as each Grantor will derive substantial direct and indirect benefits from the Loans and other Credit Extensions made from time to time pursuant to the First Lien Credit Agreement, and each Grantor agrees that the Secured Parties are relying on this representation in agreeing to make such Loans and other Credit Extensions pursuant to the First Lien Credit Agreement.

SECTION 3.9.          Reaffirmation of Representations and Warranties. All of the representations and warranties made by the Borrower or any other Obligor regarding such Grantor or any of its Subsidiaries in the First Lien Credit Agreement or in any other Loan Document are true and correct in all respects as if such representations and warranties were incorporated herein in their entirety and made by such Grantor.

ARTICLE IV.

COVENANTS

Each Grantor covenants and agrees that, until the Termination Date, it will perform, comply with and be bound by the obligations set forth below.

SECTION 4.1.          As to Investment Property, etc.

(a)          Capital Securities of Subsidiaries. No Grantor shall allow or permit any of its Subsidiaries (i) that is a corporation, business trust, joint stock company or similar Person, to issue Uncertificated Securities, unless such Person promptly takes the actions set forth in Section 4.1(b)(ii) with respect to any such Uncertificated Securities, (ii) that is a partnership or limited liability company, to (A) issue Capital Securities that are to be dealt in or traded on securities exchanges or in securities markets, (B) expressly provide in its Organic Documents that its Capital Securities are securities governed by Article 8 of the UCC, or (C) place such Subsidiary’s Capital Securities in a Securities Account, unless such Person promptly takes the actions set forth in Section 4.1(b)(ii) with respect to any such Capital Securities, and (iii) to issue Capital Securities in addition to or in substitution for the Pledged Property or any other Capital Securities pledged hereunder, except for additional Capital Securities issued to such Grantor; provided that (A) such Capital Securities are immediately pledged and delivered to the Administrative Agent, and (B) such Grantor delivers a supplement to Schedule I to the Administrative Agent identifying such new Capital Securities as Pledged Property, in each case pursuant to the terms of this Security Agreement. No Grantor shall permit any of its Subsidiaries to issue any warrants, options, contracts or other commitments or other securities that are convertible to any of the foregoing or that entitle any Person to purchase any of the foregoing, and except for this Security Agreement or any other Loan Document shall not, and shall not permit any of its Subsidiaries to, enter into any agreement creating any restriction or condition upon the transfer, voting or control of any Pledged Property.

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(b)          Investment Property (other than Certificated Securities). With respect to (i) any Deposit Accounts, Securities Accounts, Commodity Accounts, Commodity Contracts or Security Entitlements constituting Investment Property owned or held by any Grantor (other than any of such Accounts listed on Item 7.1.9 of the Disclosure Schedule to the First Lien Credit Agreement), such Grantor will, upon the Administrative Agent’s request, cause the intermediary maintaining such Investment Property to execute a Control Agreement relating to such Investment Property pursuant to which such intermediary agrees to comply with the Administrative Agent’s instructions with respect to such Investment Property without further consent by such Grantor, or (ii) any Uncertificated Securities (other than Uncertificated Securities credited to a Securities Account) constituting Investment Property owned or held by such Grantor, such Grantor will cause the Pledged Interests Issuer or other issuer of such securities to either (A) register the Administrative Agent as the registered owner thereof on the books and records of the issuer, or (B) execute a Control Agreement relating to such Investment Property pursuant to which the Pledged Interests Issuer or other issuer agrees to comply with the Administrative Agent’s instructions with respect to such Uncertificated Securities without further consent by such Grantor.

(c)          Certificated Securities (Stock Powers). Each Grantor agrees that all Pledged Shares (and all other certificated shares of Capital Securities constituting Collateral) delivered by such Grantor pursuant to this Security Agreement will be accompanied by duly endorsed undated blank stock powers, or other equivalent instruments of transfer acceptable to the Administrative Agent. Each Grantor will, from time to time upon the request of the Administrative Agent, promptly deliver to the Administrative Agent such stock powers, instruments and similar documents, satisfactory in form and substance to the Administrative Agent, with respect to the Collateral as the Administrative Agent may reasonably request and will, from time to time upon the request of the Administrative Agent after the occurrence of any Default, promptly transfer any Pledged Shares, Pledged Interests or other shares of Capital Securities constituting Collateral into the name of any nominee designated by the Administrative Agent.

(d)          Continuous Pledge. Each Grantor will (subject to the terms of the First Lien Credit Agreement) deliver to the Administrative Agent and at all times keep pledged to the Administrative Agent pursuant hereto, on a first-priority, perfected basis all Pledged Property, Investment Property, all Payment Intangibles to the extent they are evidenced by a Document, Instrument, Promissory Note or Chattel Paper, and, from and after an Event of Default while it is continuing, all interest and principal with respect to such Payment Intangibles, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral. Each Grantor agrees that it will, promptly (but in any event no later than seven Business Days) following receipt thereof, deliver to the Administrative Agent possession of all originals of Pledged Interests, Pledged Shares, Pledged Notes and any other Pledged Property, negotiable Documents, Instruments, Promissory Notes and Chattel Paper that it acquires following the Effective Date and shall deliver to the Administrative Agent a supplement to Schedule I identifying any such new Pledged Interests, Pledged Shares, Pledged Notes or other Pledged Property.

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(e)          Voting Rights, Dividends, etc. Each Grantor agrees:

(i)          that promptly upon receipt of notice of the occurrence and continuance of an Event of Default from the Administrative Agent and without any request therefor by the Administrative Agent, so long as such Event of Default shall continue, to deliver (properly endorsed where required hereby or requested by the Administrative Agent) to the Administrative Agent all Distributions with respect to Investment Property, all interest principal and other cash payments on Payment Intangibles, the Pledged Property and all Proceeds of the Pledged Property or any other Collateral, in case thereafter received by such Grantor, all of which shall be held by the Administrative Agent as additional Collateral;

(ii)         that, with respect to Pledged Property or any other Collateral consisting of general partner interests or limited liability company interests, promptly upon receipt of notice of the occurrence and continuance of an Event of Default from the Administrative Agent and of the Administrative Agent’s intention to exercise its voting power under Section 4.1(e)(iii) such Grantor shall modify the applicable Organic Documents to admit the Administrative Agent as a general partner or member, as applicable; and

(iii)        if an Event of Default shall have occurred and be continuing and the Administrative Agent has notified such Grantor of the Administrative Agent’s intention to exercise its voting power under this Section 4.1(e)(iii),

(A)         the Administrative Agent may exercise (to the exclusion of such Grantor) the voting power and all other incidental rights of ownership with respect to any Pledged Shares, Investment Property or other Capital Securities constituting Collateral EACH GRANTOR HEREBY GRANTS THE ADMINISTRATIVE AGENT AN IRREVOCABLE PROXY (WHICH IRREVOCABLE PROXY SHALL CONTINUE IN EFFECT UNTIL THE TERMINATION DATE) EXERCISABLE UNDER SUCH CIRCUMSTANCES, TO VOTE THE PLEDGED SHARES, PLEDGED INTERESTS, INVESTMENT PROPERTY AND SUCH OTHER COLLATERAL; AND

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(B)         promptly to deliver to the Administrative Agent such additional proxies and other documents as may be necessary to allow the Administrative Agent to exercise such voting power.

All Distributions, interest, principal, cash payments, Payment Intangibles and Proceeds that may at any time and from time to time be held by any Grantor but which such Grantor is then obligated to deliver to the Administrative Agent, shall, until delivery to the Administrative Agent, be held by such Grantor separate and apart from its other property in trust for the Administrative Agent. The Administrative Agent agrees that unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given the notice referred to in Section 4.1(e), each Grantor shall have the exclusive voting power, and is granted a proxy, with respect to any Capital Securities (including any of the Pledged Shares) constituting Collateral. Administrative Agent shall, upon the written request of any Grantor, promptly deliver such proxies and other documents, if any, as shall be reasonably requested by such Grantor which are necessary to allow such Grantor to exercise that voting power with respect to any such Capital Securities (including any of the Pledged Shares) constituting Collateral; provided, however, that no vote shall be cast, or consent, waiver, or ratification given, or action taken by such Grantor that would violate any provision of the First Lien Credit Agreement or any other Loan Document (including this Security Agreement).

SECTION 4.2.          Organic Documents, Change of Name, etc. No Grantor will change its state of incorporation, formation or organization or its name, identity, organizational identification number or corporate structure unless such Grantor shall have (a) given the Administrative Agent at least fifteen (15) days’ prior written notice of such change, (b) obtained the consent of the requisite Secured Parties, if such consent is so required by the Loan Documents, and (c) taken all actions necessary or as requested by the Administrative Agent to ensure that the Liens on the Collateral granted in favor of the Administrative Agent for the benefit of the Lender Parties remain perfected, first-priority Liens.

SECTION 4.3.          As to Accounts.

(a)          Each Grantor shall have the right to collect all Accounts so long as (i) no Event of Default shall have occurred and be continuing and (ii) the Administrative Agent has not delivered the notice referred to in clause (b)(ii) below.

(b)          Upon (i) the occurrence and continuance of an Event of Default and (ii) the delivery of notice by the Administrative Agent to the applicable Grantor, all Proceeds of Collateral received by such Grantor shall be delivered in kind to the Administrative Agent for deposit in a Deposit Account of such Grantor (A) maintained with the Administrative Agent or (B) maintained at a depositary bank other than the Administrative Agent to which such Grantor, the Administrative Agent and the depositary bank have entered into a Control Agreement in form and substance acceptable to the Administrative Agent in its sole discretion providing that the depositary bank will comply with the instructions originated by the Administrative Agent directing disposition of the funds in the account without further consent by such Grantor (any such Deposit Accounts, together with any other Accounts pursuant to which any portion of the Collateral is deposited with the Administrative Agent, a “Collateral Account,” and collectively, the “Collateral Accounts”), and such Grantor shall not commingle any such Proceeds, and shall hold separate and apart from all other property, all such Proceeds in express trust for the benefit of the Administrative Agent until delivery thereof is made to the Administrative Agent.

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(c)          Following the delivery of notice pursuant to clause (b)(ii), the Administrative Agent shall have the right to apply any amount in the Collateral Account to the payment of any Secured Obligations which are due and payable or in accordance with the Loan Documents.

(d)          With respect to each of the Collateral Accounts, it is hereby confirmed and agreed that (i) deposits in such Collateral Account are subject to a security interest as contemplated hereby, (ii) such Collateral Account shall be under the control of the Administrative Agent and (iii) the Administrative Agent shall have the sole right of withdrawal over such Collateral Account once the Administrative Agent has delivered the notice referred to in clause (b)(ii) above.

(e)          Following the occurrence and during the continuance of an Event of Default, at the request of the Administrative Agent or the Required Lenders, such Grantor will maintain all of its Deposit Accounts only with the Administrative Agent or with any depositary institution that has entered into a Control Agreement in favor of the Administrative Agent.

SECTION 4.4.          As to Grantors’ Use of Collateral.

(a)          Subject to clause (b), such Grantor (i) may in the ordinary course of its business, at its own expense, sell, lease or furnish under the contracts of service any of the Inventory normally held by such Grantor for such purpose, and use and consume, in the ordinary course of its business, any raw materials, work in process or materials normally held by such Grantor for such purpose, (ii) shall, at its own expense, endeavor to collect, as and when due, all amounts due with respect to any of the Collateral, including the taking of such action with respect to such collection as the Administrative Agent may request following the occurrence and during the continuance of an Event of Default or, in the absence of such request, as such Grantor may deem advisable, and (iii) may grant, in the ordinary course of business, to any party obligated on any of the Collateral, any rebate, refund or allowance to which such party may be lawfully entitled, and may accept, in connection therewith, the return of Goods, the sale or lease of which shall have given rise to such Collateral.

(b)          At any time following the occurrence and during the continuance of an Event of Default, whether before or after the maturity of any of the Secured Obligations, the Administrative Agent may (i) revoke any or all of the rights of such Grantor set forth in clause (a), (ii) notify any parties obligated on any of the Collateral to make payment to the Administrative Agent of any amounts due or to become due thereunder, and (iii) enforce collection of any of the Collateral by suit or otherwise and surrender, release, or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder or evidenced thereby.

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(c)          Upon request of the Administrative Agent following the occurrence and during the continuance of an Event of Default, each Grantor will, at its own expense, notify any parties obligated on any of the Collateral to make payment to the Administrative Agent of any amounts due or to become due thereunder.

(d)          At any time following the occurrence and during the continuation of an Event of Default, the Administrative Agent may endorse, in the name of any Grantor, any item, howsoever received by the Administrative Agent, representing any payment on or other Proceeds of any of the Collateral.

SECTION 4.5.          As to Equipment and Inventory and Goods. Each Grantor hereby agrees that it shall keep all of the Equipment and Inventory (other than Inventory sold in the ordinary course of business) and Goods located at the places therefore specified in Section 3.7(b) or, upon ten (10) days’ prior written notice to the Administrative Agent, at such other places in a jurisdiction within the United States of America where all representations and warranties set forth in Article III shall be true and correct, and all action required pursuant to the second sentence of Section 4.12 shall have been taken with respect to the Equipment and Inventory and Goods.

SECTION 4.6.          As to Intellectual Property Collateral. Each Grantor covenants and agrees to comply with the following provisions as such provisions relate to any Intellectual Property Collateral material to the operations or business of such Grantor:

(a)          such Grantor will not (i) do or fail to perform any act whereby any of the Patent Collateral may lapse or become abandoned or dedicated to the public or unenforceable, (ii) permit any of its licensees to (A) fail to continue to use any of the Trademark Collateral in order to maintain all of the Trademark Collateral in full force free from any claim of abandonment for non-use, (B) fail to maintain as in the past the quality of products and services offered under all of the Trademark Collateral, (C) fail to employ all of the Trademark Collateral registered with any federal or state or foreign authority with an appropriate notice of such registration, (D) adopt or use any other Trademark which is confusingly similar or a colorable imitation of any of the Trademark Collateral, (E) use any of the Trademark Collateral registered with any federal, state or foreign authority except for the uses for which registration or application for registration of all of the Trademark Collateral has been made, or (F) do or permit any act or knowingly omit to do any act whereby any of the Trademark Collateral may lapse or become invalid or unenforceable, or (iii) do or permit any act or knowingly omit to do any act whereby any of the Copyright Collateral or any of the Trade Secrets Collateral may lapse or become invalid or unenforceable or placed in the public domain except upon expiration of the end of an unrenewable term of a registration thereof, unless, in the case of any of the foregoing requirements in clauses (i), (ii) and (iii), such Grantor shall either (x) reasonably and in good faith determine that any of such Intellectual Property Collateral is of negligible economic value to such Grantor, or (y) the loss of the Intellectual Property Collateral would not be reasonably likely to have a Material Adverse Effect on the business;

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(b)          such Grantor shall promptly notify the Administrative Agent if it knows, or has reason to know, that any application or registration relating to any material item of the Intellectual Property Collateral may become abandoned or dedicated to the public or placed in the public domain or invalid or unenforceable, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any foreign counterpart thereof or any court) regarding such Grantor’s ownership of any of the Intellectual Property Collateral, its right to register the same or to keep and maintain and enforce the same;

(c)          in no event will such Grantor or any of its agents, employees, designees or licensees file an application for the registration of any Intellectual Property Collateral with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, unless it promptly informs the Administrative Agent, and upon request of the Administrative Agent (subject to the terms of the First Lien Credit Agreement), executes and delivers all agreements, instruments and documents as the Administrative Agent may reasonably request to evidence the Administrative Agent’s security interest in such Intellectual Property Collateral;

(d)          such Grantor will take all necessary steps, including in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or (subject to the terms of the First Lien Credit Agreement) any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue any application (and to obtain the relevant registration) filed with respect to, and to maintain any registration of, the Intellectual Property Collateral, including the filing of applications for renewal, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and the payment of fees and taxes (except to the extent that dedication, abandonment or invalidation is permitted under the foregoing clause (a) or (b));

(e)          following the obtaining of an interest in any material Intellectual Property by such Grantor shall deliver a supplement to Schedule III identifying such new Intellectual Property; and

(f)          following the obtaining of an interest in any material Intellectual Property by such Grantor or, following the occurrence and during the continuance of an Event of Default, upon the request of the Administrative Agent, such Grantor shall deliver all agreements, instruments and documents the Administrative Agent may reasonably request to evidence the Administrative Agent’s security interest in such Intellectual Property Collateral and as may otherwise be required to acknowledge or register or perfect the Administrative Agent’s interest in any part of such item of Intellectual Property Collateral unless such Grantor shall determine in good faith (with the consent of the Administrative Agent) that any Intellectual Property Collateral is of negligible economic value to such Grantor.

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SECTION 4.7.          As to Letter-of-Credit Rights.

(a)          Each Grantor, by granting a security interest in its Letter-of-Credit Rights to the Administrative Agent, intends to (and hereby does) collaterally assign to the Administrative Agent its rights (including its contingent rights) to the Proceeds of all Letter-of-Credit Rights of which it is or hereafter becomes a beneficiary or assignee. Promptly following the date on which any Grantor obtains any Letter of Credit Rights after the date hereof, such Grantor shall (i) deliver a supplement to Schedule II identifying such new Letter-of-Credit Right and (ii) with respect to each Letter of Credit having a stated amount in excess of $500,000, cause the issuer of such Letter of Credit and each nominated person (if any) with respect thereto to consent to such assignment of the Proceeds thereof in a consent agreement in form and substance reasonably satisfactory to the Administrative Agent and deliver written evidence of such consent to the Administrative Agent.

(b)          Upon the occurrence and during the continuation of an Event of Default, each Grantor will, promptly upon request by the Administrative Agent, (i) notify (and each Grantor hereby authorizes the Administrative Agent to notify) the issuer and each nominated person with respect to each of the Letters of Credit that the Proceeds thereof have been assigned to the Administrative Agent hereunder and any payments due or to become due in respect thereof are to be made directly to the Administrative Agent and (ii) arrange for the Administrative Agent to become the transferee beneficiary Letter of Credit.

SECTION 4.8.          As to Commercial Tort Claims. Each Grantor covenants and agrees that, until the Termination Date, with respect to any Commercial Tort Claim in excess of $500,000 individually or in the aggregate hereafter arising, it shall deliver to the Administrative Agent a supplement to Schedule II in form and substance reasonably satisfactory to the Administrative Agent, identifying such new Commercial Tort Claims.

SECTION 4.9.          Electronic Chattel Paper and Transferable Records. If any Grantor at any time holds or acquires an interest in any electronic chattel paper or any “transferable record,” as that term is defined in Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the U.S. Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, with a value in excess of $500,000, such Grantor shall promptly notify the Administrative Agent thereof and, at the request of the Administrative Agent, shall take such action as the Administrative Agent may request to vest in the Administrative Agent control under Section 9-105 of the UCC of such electronic chattel paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Administrative Agent agrees with the Grantors that the Administrative Agent will arrange, pursuant to procedures reasonably satisfactory to the Administrative Agent and so long as such procedures will not result in the Administrative Agent’s loss of control, for such Grantor to make alterations to the electronic chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the U.S. Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the U.S. Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such electronic chattel paper or transferable record.

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SECTION 4.10.         Transfers and Other Liens. No Grantor shall: (a) sell, assign (by operation of law or otherwise) or otherwise dispose of any of the Collateral, except Inventory in the ordinary course of business or as permitted by the First Lien Credit Agreement, or (b) create or suffer to exist any Lien or other charge or encumbrance upon or with respect to any of the Collateral to secure Indebtedness of any Person or entity, except for the security interest created by this Security Agreement and the other Loan Documents and except for Liens and other charges or encumbrances specifically permitted by the First Lien Credit Agreement.

SECTION 4.11.         Taxes. Each Grantor agrees to pay promptly when due all Taxes imposed upon such Grantor or any of its direct or indirect Subsidiaries or upon their property except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been set aside on the books of such Grantor or such Subsidiaries, as applicable.

SECTION 4.12.         Further Assurances, etc. Each Grantor shall warrant and defend the right and title herein granted unto the Administrative Agent in and to the Collateral (and all right, title and interest represented by the Collateral) against the claims and demands of all Persons whomsoever. Each Grantor agrees that, from time to time at its own expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that the Administrative Agent may reasonably request, in order to perfect, preserve and protect any security interest granted or purported to be granted hereby or to enable the Administrative Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Each Grantor agrees that, upon the acquisition after the date hereof by such Grantor of any Collateral, with respect to which the security interest granted hereunder is not perfected automatically upon such acquisition, to take such actions with respect to such Collateral or any part thereof as required by the Loan Documents. Without limiting the generality of the foregoing, each Grantor will:

(a)          from time to time upon the request of the Administrative Agent, promptly deliver to the Administrative Agent such stock powers, instruments and similar documents, reasonably satisfactory in form and substance to the Administrative Agent, with respect to such Collateral as the Administrative Agent may reasonably request and will, from time to time upon the request of the Administrative Agent, after the occurrence and during the continuance of any Event of Default, promptly transfer any securities constituting Collateral into the name of any nominee designated by the Administrative Agent; if any Collateral shall be evidenced by an Instrument, negotiable Document, Promissory Note or tangible Chattel Paper, deliver and pledge to the Administrative Agent hereunder such Instrument, negotiable Document, Promissory Note, Pledged Note or tangible Chattel Paper duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance reasonably satisfactory to the Administrative Agent;

(b)          file (and hereby authorize the Administrative Agent to file) such Filing Statements or continuation statements, or amendments thereto, and such other instruments or notices (including any assignment of claim form under or pursuant to the federal assignment of claims statute, 31 U.S.C. § 3726, any successor or amended version thereof or any regulation promulgated under or pursuant to any version thereof), as may be necessary or that the Administrative Agent may request in order to perfect and preserve the security interests and other rights granted or purported to be granted to the Administrative Agent hereby. The authorization contained in this Section 4.12 shall be irrevocable and continuing until the Termination Date;

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(c)          deliver to the Administrative Agent and at all times keep pledged to the Administrative Agent pursuant hereto, on a first-priority, perfected basis, at the request of the Administrative Agent, all Investment Property constituting Collateral (except for Permitted Liens), and, from and after an Event of Default and during the continuation thereof, all Distributions with respect thereto, and all interest and principal with respect to Promissory Notes, and all Proceeds and rights from time to time received by or distributable to such Grantor in respect of any of the foregoing Collateral;

(d)          not take or omit to take any action the taking or the omission of which would result in any impairment or alteration of any obligation of the maker of any Payment Intangible or other Instrument constituting Collateral, except as provided in Section 4.4;

(e)          not create any tangible Chattel Paper without placing a legend on such tangible Chattel Paper reasonably acceptable to the Administrative Agent indicating that the Administrative Agent has a security interest in such Chattel Paper;

(f)          furnish to the Administrative Agent, from time to time at the Administrative Agent’s request, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail; and

(g)          do all things reasonably requested by the Administrative Agent in accordance with this Security Agreement in order to enable the Administrative Agent to have and maintain control over the Collateral consisting of Investment Property and/or Deposit Accounts (except for those that are listed in Item 7.1.9 of the Disclosure Schedule to the First Lien Credit Agreement), Letter-of-Credit-Rights and Electronic Chattel Paper.

With respect to the foregoing and the grant of the security interest hereunder, each Grantor hereby authorizes the Administrative Agent to file one or more financing or continuation statements, any amendments thereto, and other similar documents necessary or desirable in the opinion of the Administrative Agent to perfect or maintain the perfection of the Administrative Agent’s or any Secured Party’s security interest in the Collateral or any portion thereof, in each of the foregoing cases, without the signature and without further authorization of such Grantor. Each Grantor agrees that a carbon, photographic or other reproduction of this Security Agreement or any UCC financing statement covering the Collateral or any part thereof shall be sufficient as a UCC financing statement where permitted by law. Each Grantor hereby authorizes the Administrative Agent to file financing statements describing as the collateral covered thereby “all of the debtor’s personal property or assets” or words to that effect, notwithstanding that such wording may be broader in scope than the Collateral described in this Security Agreement.

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SECTION 4.13.         Performance of Covenants in Loan Documents. Each Grantor will perform, comply with, observe and fulfill, and will cause each of its Subsidiaries to perform, comply with, observe and fulfill, each of the covenants, agreements and obligations contained in the First Lien Credit Agreement and the other Loan Documents pertaining to or otherwise applicable to such Grantor or any of its Subsidiaries.

ARTICLE V.

THE ADMINISTRATIVE AGENT

SECTION 5.1.          Administrative Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints the Administrative Agent its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in the Administrative Agent’s discretion, following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Administrative Agent may deem necessary or advisable to accomplish the purposes of this Security Agreement, including (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral, (b) to receive, endorse, and collect any drafts or other Instruments, Documents and Chattel Paper, in connection with clause (a) above, (c) to file any claims or take any action or institute any proceedings which the Administrative Agent may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Administrative Agent with respect to any of the Collateral, and (d) to perform the affirmative obligations of such Grantor hereunder. EACH GRANTOR HEREBY ACKNOWLEDGES, CONSENTS AND AGREES THAT THE POWER OF ATTORNEY GRANTED PURSUANT TO THIS SECTION 5.1 IS IRREVOCABLE AND COUPLED WITH AN INTEREST AND SHALL BE EFFECTIVE UNTIL THE TERMINATION DATE.

SECTION 5.2.          Administrative Agent May Perform. If any Grantor fails to perform any agreement contained herein, the Administrative Agent may itself perform, or cause performance of, such agreement, and the expenses of the Administrative Agent incurred in connection therewith shall be payable by such Grantor pursuant to Section 6.5 hereof and Section 10.3 of the First Lien Credit Agreement and the Administrative Agent may from time to time take any other action which the Administrative Agent reasonably deems necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein.

SECTION 5.3.          Administrative Agent Has No Duty. The powers conferred on the Administrative Agent hereunder are solely to protect its interest (on behalf of the Secured Parties) in the Collateral and shall not impose any duty on it to exercise any such powers. Except for reasonable care of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Administrative Agent shall have no duty as to any Collateral or responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Investment Property and any other Pledged Property, whether or not the Administrative Agent has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

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SECTION 5.4.          Reasonable Care. The Administrative Agent is required to exercise reasonable care in the custody and preservation of any of the Collateral in its possession; provided, that the Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of any of the Collateral (a) if such Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own personal property, or (b) if the Administrative Agent takes such action for that purpose as any Grantor reasonably requests in writing at times other than upon the occurrence and during the continuance of an Event of Default; provided, further, that failure of the Administrative Agent to comply with any such request at any time shall not in itself be deemed a failure to exercise reasonable care.

ARTICLE VI.

REMEDIES

SECTION 6.1.          Certain Remedies. If any Event of Default shall have occurred and be continuing:

(a)          The Administrative Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected Collateral) and also may (i) take possession of any Collateral not already in its possession without demand and without legal process, (ii) require any Grantor to, and each Grantor hereby agrees that it will, at its expense and upon request of the Administrative Agent forthwith, assemble all or part of the Collateral as directed by the Administrative Agent and make it available to the Administrative Agent at a place to be designated by the Administrative Agent that is reasonably convenient to both parties, (iii) enter onto the property where any Collateral is located and take possession thereof without demand and without legal process, (iv) without notice except as specified below, lease, license, sell or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Administrative Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’ prior notice to such Grantor of the time and place of any public sale or the time of any private sale is to be made shall constitute reasonable notification; provided, however, that with respect to Collateral that is (x) perishable or threatens to decline speedily in value, or (y) is of a type customarily sold on a recognized market (including but not limited to, Investment Property), no notice of sale or disposition need be given. For purposes of this Article VI, notice of any intended sale or disposition of any Collateral may be given by first-class mail, hand-delivery (through a delivery service or otherwise), facsimile or email, and shall be deemed to have been “sent” upon deposit in the U.S. Mails with adequate postage properly affixed, upon delivery to an express delivery service or upon electronic submission through telephonic or internet services, as applicable. The Administrative Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.

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(b)          Each Grantor agrees and acknowledges that a commercially reasonable disposition of Inventory, Equipment, Goods, Computer Hardware and Software Collateral, or Intellectual Property may be by lease or license of, in addition to the sale of, such Collateral. Each Grantor further agrees and acknowledges that the following shall be deemed a reasonable commercial disposition: (i) a disposition made in the usual manner on any recognized market, (ii) a disposition at the price current in any recognized market at the time of disposition, and (iii) a disposition in conformity with reasonable commercial practices among dealers in the type of property subject to the disposition.

(c)          All cash Proceeds received by the Administrative Agent in respect of any sale of, collection from, or other realization upon, all or any part of the Collateral shall be applied by the Administrative Agent against, all or any part of the Obligations as set forth in Section 4.7 of the First Lien Credit Agreement. The Administrative Agent shall not be obligated to apply or pay over for application noncash proceeds of collection or enforcement unless (i) the failure to do so would be commercially unreasonable, and (ii) the affected party has provided the Administrative Agent with a written demand to apply or pay over such noncash proceeds on such basis.

(d)          The Administrative Agent may do any or all of the following: (i) transfer all or any part of the Collateral into the name of the Administrative Agent or its nominee, with or without disclosing that such Collateral is subject to the Lien hereunder, (ii) notify the parties obligated on any of the Collateral to make payment to the Administrative Agent of any amount due or to become due thereunder, (iii) withdraw, or cause or direct the withdrawal, of all funds with respect to the Collateral Account, (iv) enforce collection of any of the Collateral by suit or otherwise, and surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligations of any nature of any party with respect thereto, (v) endorse any checks, drafts, or other writings in any Grantor’s name to allow collection of the Collateral, (vi) take control of any Proceeds of the Collateral, or (vii) execute (in the name, place and stead of any Grantor) endorsements, assignments, stock powers and other instruments of conveyance or transfer with respect to all or any of the Collateral.

SECTION 6.2.          Securities Laws. If the Administrative Agent shall determine to exercise its right to sell all or any of the Collateral that are Capital Securities pursuant to Section 6.1, each Grantor agrees that, upon request of the Administrative Agent, such Grantor will, at its own expense:

(a)          execute and deliver, and cause (or, with respect to any issuer which is not a Subsidiary of such Grantor, use its reasonable efforts to cause) each Pledged Interests Issuer or other issuer of the Collateral contemplated to be sold and the directors and officers thereof to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts and things, as may be necessary or, in the reasonable opinion of the Administrative Agent, advisable to register such Collateral under the provisions of the Securities Act of 1933, as from time to time amended (the “Securities Act”), and cause the registration statement relating thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make all amendments and supplements thereto and to the related prospectus which, in the reasonable opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto;

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(b)          use its reasonable efforts to exempt the Collateral under the state securities or “Blue Sky” laws and to obtain all necessary Governmental Approvals for the sale of the Collateral, as requested by the Administrative Agent;

(c)          cause (or, with respect to any issuer that is not a Subsidiary of such Grantor, use its reasonable efforts to cause) each such Pledged Interests Issuer or other issuer to make available to its security holders, as soon as practicable, an earnings statement that will satisfy the provisions of Section 11(a) of the Securities Act; and

(d)          do or cause to be done all such other acts and things as may be reasonably necessary to make such sale of the Collateral or any part thereof valid and binding and in compliance with applicable law.

Each Grantor acknowledges the impossibility of ascertaining the amount of damages that would be suffered by the Administrative Agent or the Secured Parties by reason of the failure by such Grantor to perform any of the covenants contained in this Section and consequently agrees that, if such Grantor shall fail to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value (as reasonably determined by the Administrative Agent in good faith) of such Collateral on the date the Administrative Agent shall demand compliance with this Section 6.2; provided that in no event shall the Grantors be obligated in respect hereof for an amount that exceeds the sum of Total Exposure Amount plus all interest, fees and expenses owing in respect thereof.

SECTION 6.3.          Compliance with Restrictions. Each Grantor agrees that in any sale of any of the Collateral whenever an Event of Default shall have occurred and be continuing, the Administrative Agent is hereby authorized to comply with any limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that such prospective bidders and purchasers have certain qualifications, and restrict such prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral), or in order to obtain any required approval of the sale or of the purchaser by any Governmental Authority or official, and each Grantor further agrees that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall the Administrative Agent be liable nor accountable to such Grantor for any discount allowed by the reason of the fact that such Collateral is sold in compliance with any such limitation or restriction.

SECTION 6.4.          Protection of Collateral. The Administrative Agent may from time to time, at its option, perform any act which any Grantor fails to perform after being requested in writing so to perform (it being understood that no such request need be given after the occurrence and during the continuance of an Event of Default) and the Administrative Agent may from time to time take any other action which the Administrative Agent deems reasonably necessary for the maintenance, preservation or protection of any of the Collateral or of its security interest therein.

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SECTION 6.5.          Indemnity and Expenses.

(a)          Without limiting the generality of the provisions of Section 10.4 of the First Lien Credit Agreement, each Grantor hereby indemnifies and holds harmless the Administrative Agent, each Secured Party and each of their respective officers, directors, employees and agents (the “Indemnified Parties”) from and against any and all claims, losses and liabilities arising out of or resulting from this Security Agreement or any other Loan Document (including, without limitation, enforcement of this Security Agreement), except claims, losses or liabilities resulting from any Indemnified Party’s gross negligence, willful misconduct or unlawful acts; PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. If and to the extent that the foregoing undertaking may be unenforceable for any reason, each Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of each of the foregoing which is permissible under applicable law.

(b)          Each Grantor will upon demand pay to the Administrative Agent and any local counsel the amount of any and all reasonable expenses, including the reasonable fees and disbursements of its counsel and of any experts and agents, which the Administrative Agent and any local counsel may incur in connection herewith, including without limitation in connection with (i) the administration of this Security Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Administrative Agent and any local counsel or any of the Secured Parties hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.

SECTION 6.6.          Warranties. The Administrative Agent may sell the Collateral without giving any warranties or representations as to the Collateral. The Administrative Agent may disclaim any warranties of title or the like. Each Grantor agrees that this procedure will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

ARTICLE VII.

MISCELLANEOUS PROVISIONS

SECTION 7.1.          Loan Document. This Security Agreement is a Loan Document executed pursuant to the First Lien Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof, including Article 10 thereof.

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SECTION 7.2.          Binding on Successors, Transferees and Assigns; Assignment. This Security Agreement shall remain in full force and effect until the Termination Date has occurred, shall be binding upon each Grantor and its successors, transferees and assigns and shall inure to the benefit of and be enforceable by each Secured Party and its successors, transferees and assigns; provided, that no Grantor shall (unless otherwise permitted under the terms of the First Lien Credit Agreement or this Security Agreement) assign any of its obligations hereunder without, subject to the First Lien Credit Agreement, the prior written consent of the Required Lenders.

SECTION 7.3.          Amendments, etc. No amendment to or waiver of any provision of this Security Agreement, nor consent to any departure by any Grantor from its obligations under this Security Agreement, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent (on behalf of the Lenders or the Required Lenders, as the case may be, pursuant to Section 10.1 of the First Lien Credit Agreement) and each Grantor and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 7.4.          Notices. Except as otherwise provided in this Security Agreement, all notices and other communications provided for hereunder shall be in writing or by facsimile and addressed, delivered or transmitted to the appropriate party at the address or facsimile number of such party specified on the signature pages of this Security Agreement or at such other address or facsimile number as may be designated by such party in a notice to the other party. Except as otherwise provided in this Security Agreement, any notice or other communication, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any such notice or other communication, if transmitted by facsimile, shall be deemed given when transmitted and electronically confirmed.

SECTION 7.5.          Release of Liens. Upon (a) the Disposition of Collateral in accordance with the First Lien Credit Agreement or (b) the occurrence of the Termination Date, the security interests granted herein shall automatically terminate with respect to (i) such Collateral (in the case of clause (a)) or (ii) all Collateral (in the case of clause (b)). Upon any such Disposition or termination, the Administrative Agent will, at the Grantors’ sole expense, deliver to the Grantors, without any representations, warranties or recourse of any kind whatsoever, all Collateral held by the Administrative Agent hereunder, and execute and deliver to the Grantors such documents as the Grantors shall reasonably request to evidence such termination.

SECTION 7.6.          No Waiver; Remedies. In addition to, and not in limitation of Section 2.7, no failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

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SECTION 7.7.          Headings. The various headings of this Security Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Security Agreement or any provisions thereof.

SECTION 7.8.          Severability. Any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Security Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 7.9.          Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION, AND PRIORITY OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

SECTION 7.10.         Counterparts. This Security Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page to this Security Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Security Agreement.

SECTION 7.11.         Additional Grantors; Additional Pledged Securities. Each Subsidiary of the Borrower that is required to become a party to this Security Agreement pursuant to Section 7.1.8 of the First Lien Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement substantially in the form of Annex I hereto. Each Grantor that is required to pledge additional Equity Interests pursuant to the First Lien Credit Agreement shall execute and deliver to the Administrative Agent a Supplement.

(Signatures Begin on Following Page)

- 31 - EXXI Pledge and Security Agreement

IN WITNESS WHEREOF, each of the parties hereto has caused this Security Agreement to be duly executed and delivered by its Authorized Officer as of the date first above written.

GRANTORS
ENERGY XXI GULF COAST, INC.
By:	/s/ Hugh Menown
	Name:	Hugh Menown
	Title:	Executive Vice President,
		Chief Accounting Officer
ENERGY XXI GOM, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI TEXAS ONSHORE, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI ONSHORE, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI PIPELINE, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer

S-1 Signature Page to EXXI Pledge
and Security Agreement

ENERGY XXI LEASEHOLD, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI PIPELINE II, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
MS ONSHORE, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
M21K, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
SOILEAU CATERING, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer

S-2 Signature Page to EXXI Pledge
and Security Agreement

EPL OIL & GAS, INC.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ANGLO-SUISSE OFFSHORE PIPELINE PARTNERS, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
DELAWARE EPL OF TEXAS, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY PARTNERS LTD., LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
EPL OF LOUISIANA, L.L.C.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer

S-3 Signature Page to EXXI Pledge
and Security Agreement

EPL PIONEER HOUSTON, INC.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
EPL PIPELINE, L.L.C.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
NIGHTHAWK, L.L.C.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI OFFSHORE SERVICES, INC.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI NATURAL GAS HOLDINGS, INC.
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer

S-4 Signature Page to EXXI Pledge
and Security Agreement

NATURAL GAS ACQUISITION COMPANY I, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer
ENERGY XXI SERVICES, LLC
By:	/s/ Rick Fox
	Name:	Rick Fox
	Title:	Chief Financial Officer & Treasurer

Notice Address for each Grantor:

1021 Main (One City Centre), Suite 2626

Houston, Texas 77002

Attention: Bruce Busmire

Telephone: (713) 351-3033

Facsimile: (713) 351-3333

S-5 Signature Page to EXXI Pledge
and Security Agreement

ADMINISTRATIVE AGENT:
WELLS FARGO BANK, N.A.
By:	/s/ Catherine K. Cook
	Name:	Catherine K. Cook
	Title:	Director

Notice Address:

Wells Fargo Bank, N.A.

1525 West W.T. Harris Blvd.

MAC D1109-019

Charlotte, NC 28262

Attention: Agency Services

Telephone: (704) 590-2760

Facsimile: (704) 590-2790

With a copy to:

Wells Fargo Bank, N.A.

1000 Louisiana Street, 9th Floor

Houston, TX 77002

Attention: Nina Milligan

Telephone: (713) 319-1838

Facsimile: (713) 319-1925

S-6 Signature Page to EXXI Pledge
and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Gulf Coast, Inc.

ITEM A — PLEDGED INTERESTS

						Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares		Authorized Shares		Outstanding Shares		% of Shares Pledged
EPL Oil & Gas, Inc.	ZQ00000668		1,000		1,000		1,000		100	%
Energy XXI Offshore Services, Inc.	N/A		1,000,000		1,000,000		1,000,000		100	%
Energy XXI Natural Gas Holdings, Inc.	N/A		1,000,000		1,000,000		1,000,000		100	%
Energy XXI Insurance Limited	N/A		120,000		120,000		120,000		65	%

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged			Type of Limited Liability Company Interests Pledged
1)  Energy XXI GOM, LLC		100	%	Membership Interest
2)  MS Onshore, LLC		100	%	Membership Interest
3)  Energy XXI Services, LLC		100	%	Membership Interest

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-1 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI GOM, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged			Type of Limited Liability Company Interests Pledged
1)  Energy XXI Onshore, LLC		100	%	Membership Interest
2)  Energy XXI Texas Onshore, LLC		100	%	Membership Interest
3)  Energy XXI Pipeline, LLC		100	%	Membership Interest
4)  Energy XXI Pipeline II, LLC		100	%	Membership Interest
5)  Energy XXI Leasehold, LLC		100	%	Membership Interest
6)  M21K, LLC		100	%	Membership Interest
7)  Soileau Catering, LLC		100	%	Membership Interest

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-2 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Leasehold, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-3 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Onshore, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-4 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Pipeline, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-5 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Pipeline II, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-6 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Texas Onshore, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-7 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

MS Onshore, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-8 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

M21K, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-9 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Soileau Catering, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-10 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

EPL Oil & Gas, Inc.

ITEM A — PLEDGED INTERESTS

						Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares		Authorized Shares		Outstanding Shares		% of Shares Pledged
EPL Pioneer Houston, Inc.	6		1,000		1,000		1,000		100	%

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged			Type of Limited Liability Company Interests Pledged
1)  Anglo-Suisse Offshore Pipeline Partners, LLC		100	%	Membership Interest
2)  Delaware EPL of Texas, LLC		100	%	Membership Interest
3)  Energy Partners Ltd., LLC		100	%	Membership Interest
4)  EPL of Louisiana, L.L.C.		100	%	Membership Interest
5)  EPL Pipeline, L.L.C.		100	%	Membership Interest
6)  Nighthawk, L.L.C.		100	%	Membership Interest

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-11 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Anglo-Suisse Offshore Pipeline Partners, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-12 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Delaware EPL of Texas, LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-13 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy Partners Ltd., LLC

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-14 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

EPL of Louisiana, L.L.C.

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-15 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

EPL Pioneer Houston, Inc.

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-16 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

EPL Pipeline, L.L.C.

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-17 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Nighthawk, L.L.C.

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-18 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Offshore Services, Inc.

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged
N/A

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-19 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Natural Gas Holdings, Inc.

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged
N/A

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged			Type of Limited Liability Company Interests Pledged
1)  Natural Gas Acquisition Company I, LLC		100	%	Membership Interest
2)  Energy XXI M21K, LLC		20	%	Membership Interest

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-20 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE I
to Security Agreement

Energy XXI Services, LLC

ITEM A — PLEDGED INTERESTS

						Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares		Authorized Shares		Outstanding Shares		% of Shares Pledged
Energy XXI Holdings, Inc.	N/A		100,000		100,000		100,000		100	%

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged			Type of Limited Liability Company Interests Pledged
1)  Energy XXI GIGS Services, LLC		100	%	Membership Interest

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned
N/A

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

N/A

Schedule I-21 Schedule I to EXXI Pledge and Security Agreement

SCHEDULE II
to Security Agreement

Item A-1. Location of each Grantor for purposes of UCC.

Delaware:	Energy XXI Gulf Coast, Inc. (“EXXI”)
	Energy XXI GOM, LLC (“EXXI GOM”)
	Energy XXI Leasehold, LLC (“EXXI Leasehold”)
	Energy XXI Onshore, LLC (“EXXI Onshore”)
	Energy XXI Pipeline, LLC (“EXXI Pipeline”)
	Energy XXI Pipeline II, LLC (“EXXI Pipeline II”)
	Energy XXI Texas Onshore, LLC (“EXXI Texas”)
	MS Onshore, LLC (“MS Onshore”)
	M21K, LLC (“M21K”)
	Soileau Catering, LLC (“Soileau”)
	EPL Oil & Gas, Inc. (“EPL”)
	Anglo-Suisse Offshore Pipeline Partners, LLC (“Anglo-Suisse”)
	Delaware EPL of Texas, LLC (“Delaware EPL”)
	Energy Partners Ltd., LLC (“Energy Partners”)
	EPL Pipeline, L.L.C.  (“EPL Pipeline”)
	Energy XXI Offshore Services, Inc. (“Offshore Services”)
	Energy XXI Natural Gas Holdings, Inc. (“Natural Gas Holdings”)
	Natural Gas Acquisition Company I, LLC (“Natural Gas Acquisition”)
	Energy XXI Services, LLC (“EXXI Services”)
Texas:	EPL Pioneer Houston, Inc. (“EPL Pioneer”)
Louisiana:	EPL of Louisiana, L.L.C. (“EPL Louisiana”)
Nighthawk, L.L.C.	(“Nighthawk”)

Item A-2. Grantor’s place of business or principal office.

1021 Main Street, Suite 2626
Houston, TX 77002

Item A-3. Taxpayer ID number.

EXXI:	20-4278595
EXXI GOM:	56-2140027
EXXI Leasehold:	45-3948121
EXXI Onshore:	20-0650308
EXXI Pipeline:	27-4165863
EXXI Pipeline II:	45-3938238
EXXI Texas:	20-0650294
MS Onshore:	37-1708573
M21K:	90-0793978
Soileau:	47-4972767

Schedule II-1 Schedule II to EXXI Pledge and Security Agreement

EPL:	72-1409562
Anglo-Suisse:	72-1409562
Delaware EPL:	72-1409562
Energy Partners:	72-1409562
EPL Pipeline:	72-1471048
Offshore Services:	47-2054711
Natural Gas Holdings:	45-3137517
Natural Gas Acquisition:	90-0800956
EXXI Services:	20-4583999
EPL Pioneer:	75-2129749
EPL Louisiana:	72-1409562
Nighthawk:	72-1409562

Item B. Equipment.

EXXI:	Texas
EXXI GOM:	Texas and Louisiana
EXXI Leasehold:	Texas and Louisiana
EXXI Onshore:	Louisiana
EXXI Pipeline:	Louisiana
EXXI Pipeline II:	Louisiana
EXXI Texas:	Texas
MS Onshore:	Texas and Mississippi
M21K:	Texas and Louisiana
Soileau:	Texas and Louisiana
EPL:	Texas and Louisiana
Anglo-Suisse:	Louisiana and Texas
Delaware EPL:	Texas
Energy Partners:	N/A
EPL Pipeline:	Louisiana
Offshore Services:	N/A
Natural Gas Holdings:	Texas and Louisiana
Natural Gas Acquisition	N/A
EXXI Services:	Texas, Louisiana and Mississippi
EPL Pioneer:	Texas
EPL Louisiana:	Louisiana
Nighthawk:	N/A

SCHEDULE II
to Security Agreement

Item C. Inventory.

EXXI:	Texas
EXXI GOM:	Texas and Louisiana
EXXI Leasehold:	Texas and Louisiana
EXXI Onshore:	Louisiana
EXXI Pipeline:	Louisiana

Schedule II-2 Schedule II to EXXI Pledge and Security Agreement

EXXI Pipeline II:	Louisiana
EXXI Texas:	Texas
MS Onshore:	Texas and Mississippi
M21K:	Texas and Louisiana
Soileau:	Texas and Louisiana
EPL:	Texas and Louisiana
Anglo-Suisse:	Louisiana and Texas
Delaware EPL:	Texas
Energy Partners:	N/A
EPL Pipeline:	Louisiana
Offshore Services:	N/A
Natural Gas Holdings:	Texas and Louisiana
Natural Gas Acquisition	N/A
EXXI Services:	Texas, Louisiana and Mississippi
EPL Pioneer:	Texas
EPL Louisiana:	Louisiana
Nighthawk:	N/A

Item D. Goods

EXXI:	Texas
EXXI GOM:	Texas and Louisiana
EXXI Leasehold:	Texas and Louisiana
EXXI Onshore:	Louisiana
EXXI Pipeline:	Louisiana
EXXI Pipeline II:	Louisiana
EXXI Texas:	Texas
MS Onshore:	Texas and Mississippi
M21K:	Texas and Louisiana
Soileau:	Texas and Louisiana
EPL:	Texas and Louisiana
Anglo-Suisse:	Louisiana and Texas
Delaware EPL:	Texas
Energy Partners:	N/A
EPL Pipeline:	Louisiana
Offshore Services:	N/A
Natural Gas Holdings:	Texas and Louisiana
Natural Gas Acquisition	N/A
EXXI Services:	Texas, Louisiana and Mississippi
EPL Pioneer:	Texas
EPL Louisiana:	Louisiana
Nighthawk:	N/A

Schedule II-3 Schedule II to EXXI Pledge and Security Agreement

Item E. Merger or other corporate reorganization.

Description of Merger:

EXXI:	N/A
EXXI GOM:	N/A
EXXI Leasehold:	N/A
EXXI Onshore:	N/A
EXXI Pipeline:	N/A
EXXI Pipeline II:	N/A
EXXI Texas:	N/A
MS Onshore:	N/A
M21K:	Previous Name: Energy XXI Natural Gas Partners Assets, LLC (name changed 2/17/2012)
	Previous Name: Natural Gas Partners Assets, LLC (name changed 11/30/2012)
Soileau:	N/A
EPL:	Merger with Clyde Merger Sub, Inc. on June 3, 2014 (wholly-owned subsidiary of EXXI)
	Previous Name: Energy Partners of Delaware, Ltd. (name changed 9/1/2012 through short-form merger)
Anglo-Suisse:	N/A
Delaware EPL:	N/A
Energy Partners:	Previous name: EPL Acquisition Corp. LLC (name changed 8/28/2012)
EPL Pipeline:	N/A
Offshore Services:	N/A
Natural Gas Holdings:	N/A
Natural Gas Acquisition:	N/A
EXXI Services:	N/A
EPL Pioneer:	N/A
EPL Louisiana:	N/A
Nighthawk:	N/A

Item F. [Reserved].

Item G. Deposit Accounts and Securities Accounts.

Deposit Accounts
EXXI:
Account Description	Account Number
Regions Bank	0114820374
Regions Bank	0114821192
Texas Capital Bank	176000177
US Bank	001050987955

Schedule II-4 Schedule II to EXXI Pledge and Security Agreement

EXXI GOM:
Account Description	Account Number
Regions Bank	0114820390
M21K:
Account Description	Account Number
Regions Bank	0128195620
Soileau:
Account Description	Account Number
Regions Bank	0114821303
EPL:
Account Description	Account Number
Regions Bank	0197711462
EXXI Services:
Account Description	Account Number
Regions Bank	0114820404
Frost Bank	020614998
Frost Bank	020615013
Citi Bank	30943077

EXXI Leasehold:	N/A
EXXI Onshore:	N/A
EXXI Pipeline:	N/A
EXXI Pipeline II:	N/A
EXXI Texas:	N/A
MS Onshore:	N/A
Anglo-Suisse:	N/A
Delaware EPL:	N/A
Energy Partners:	N/A
EPL Pipeline:	N/A
Offshore Services:	N/A
Natural Gas Holdings:	N/A
Natural Gas Acquisition:	N/A
EPL Pioneer:	N/A
EPL Louisiana:	N/A
Nighthawk:	N/A

Securities Accounts

N/A

Item H. Letter of Credit Rights.

Description of Letter of Credit Rights: N/A

Item I. Commercial Tort Claims.

Description of Commercial Tort Claims:

Schedule II-5 Schedule II to EXXI Pledge and Security Agreement

EXXI:	N/A
EXXI GOM:	N/A
EXXI Leasehold:	N/A
EXXI Onshore:	N/A
EXXI Pipeline:	N/A
EXXI Pipeline II:	N/A
EXXI Texas:	N/A
MS Onshore:	N/A
M21K:	N/A
Soileau:	N/A
EPL:	N/A
Anglo-Suisse:	N/A
Delaware EPL:	N/A
Energy Partners:	N/A
EPL Pipeline:	N/A
Offshore Services:	N/A
Natural Gas Holdings:	N/A
Natural Gas Acquisition:	N/A
EXXI Services:	N/A
EPL Pioneer:	N/A
EPL Louisiana:	N/A
Nighthawk:	N/A

Schedule II-6 Schedule II to EXXI Pledge and Security Agreement

SCHEDULE III -A
to Security Agreement

INTELLECTUAL PROPERTY COLLATERAL

Item A. Patent Collateral.

Issued Patents

Country	Patent No.	Issue Date	Inventor(s)	Title
None

Pending Patent Applications

Country	Serial No.	Filing Date	Inventor(s)	Title
None

Patent Applications in Preparation

Country	Docket No.	Expected Filing Date	Inventor(s)	Title
None

Schedule III-A Schedule III to EXXI Pledge and Security Agreement

SCHEDULE III -B
to Security Agreement

Item B. Trademark Collateral.

Registered Trademarks

Country	Trademark	Registration No.	Registration Date
USA	Energy XXI (Design plus words, letters, and/or numbers)	3372707	1/22/2008
USA	Energy XXI (Standard character mark)	3372705	1/22/2008

Pending Trademark Applications

Country	Trademark	Serial No.	Filing Date
None

Trademark Applications in Preparation

Country	Trademark	Docket No.	Expected Filing Date	Products/Services
None

Schedule III-B Schedule III to EXXI Pledge and Security Agreement

SCHEDULE III -C
to Security Agreement

Item C. Copyright Collateral.

Registered Copyrights/Mask Works

Country	Registration No.	Registration Date	Author(s)	Title
None

Copyright/Mask Work Pending Registration Applications

Country	Serial No.	Filing Date	Author(s)	Title
None

Copyright/Mask Work Registration Applications In Preparation

Country	Docket No.	Expected Filing Date	Inventor(s)	Title
None

Schedule III-C Schedule III to EXXI Pledge and Security Agreement

[FORM OF] ASSUMPTION AGREEMENT

Annex I to
First Lien Pledge and Security Agreement and Irrevocable Proxy

ASSUMPTION AGREEMENT (this “Assumption Agreement”), dated as of [ ], 20[ ], made by [ ] (the “Additional Grantor”), in favor of Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (the “Lenders”) parties to the First Lien Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such First Lien Credit Agreement.

WITNESSETH :

WHEREAS, Energy XXI Gulf Coast, Inc. (the “Borrower”), the Lenders and the Administrative Agent have entered into the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”);

WHEREAS, in connection with the First Lien Credit Agreement the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into the First Lien Pledge and Security Agreement and Irrevocable Proxy, dated as of December 30, 2016 (as amended, supplemented or otherwise modified from time to time, the “Security Agreement”) in favor of the Administrative Agent for the ratable benefit of the Secured Persons;

WHEREAS, the First Lien Credit Agreement requires the Additional Guarantor to become a party to the Security Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Security Agreement;

NOW, THEREFORE, IT IS AGREED:

1.            First Lien Pledge and Security Agreement and Irrevocable Proxy. By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 7.11 of the Security Agreement, hereby becomes a party to the Security Agreement as a Grantor thereunder with the same force and effect as if originally named therein as a Grantor and, without limiting the generality of the foregoing, hereby expressly (a) assumes all obligations and liabilities of a Grantor thereunder; and (b) grants to the Administrative Agent, for the ratable benefit of the Secured Persons, a security interest in such Additional Grantor’s right, title and interest in and to the Collateral, wherever located and whether now owned or at any time hereafter acquired by the Additional Grantor or in which the Additional Grantor now has or at any time in the future may acquire any right, title or interest, as security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Additional Grantor’s Secured Obligations. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules II and III to the Security Agreement. The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Article III of the Security Agreement, as they relate to the Additional Grantor and its Collateral, is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date.

Annex I - 1

2.            Governing Law. THIS ASSUMPTION AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS ASSUMPTION AGREEMENT AND ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATED TO THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

3.            Acceptance. The Additional Grantor hereby expressly waives notice of acceptance of this Assumption Agreement, acceptance on the part of the Administrative Agent and the other Secured Persons being conclusively presumed by their request for this Assumption Agreement and delivery of the same to the Administrative Agent.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GRANTOR]
By:
	Name:
	Title:

Annex I - 2

Annex I-A
Schedule I to Security Agreement

[GRANTOR]

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

Annex I-A

Schedule I to Security Agreement

Annex I-A
Schedule II to Security Agreement

Item A-1. Location of each Grantor for purposes of UCC.

[State:]

Item A-2. Grantor’s place of business or principal office.

1021 Main Street, Suite 2626
Houston, TX 77002

Item A-3. Taxpayer ID number.

Item B. Equipment.

Annex I-A

Schedule II to Security Agreement

Annex I-A
Schedule II to Security Agreement

Item C. Inventory.

Item D. Goods

Item E. Merger or other corporate reorganization.

Annex I-A

Schedule II-B to Security Agreement

Annex I-A
Schedule II to Security Agreement

Item F. [Reserved].

Item G. Deposit Accounts and Securities Accounts.

Deposit Accounts

Securities Accounts

Item H. Letter of Credit Rights.

Description of Letter of Credit Rights:

Item I. Commercial Tort Claims.

Description of Commercial Tort Claims:

Annex I-A

Schedule II-C to Security Agreement

Annex I-A
Schedule III-B to Security Agreement

INTELLECTUAL PROPERTY COLLATERAL

Item A. Patent Collateral.

Issued Patents

Country	Patent No.	Issue Date	Inventor(s)	Title
None

Pending Patent Applications

Country	Serial No.	Filing Date	Inventor(s)	Title
None

Patent Applications in Preparation

Country	Docket No.	Expected Filing Date	Inventor(s)	Title
None

Annex I-A

Schedule III-B to Security Agreement

Annex I-A
Schedule III-B to Security Agreement

Item B. Trademark Collateral.

Registered Trademarks

Country	Trademark	Registration No.	Registration Date
None

Pending Trademark Applications

Country	Trademark	Serial No.	Filing Date
None

Trademark Applications in Preparation

Country	Trademark	Docket No.	Expected Filing Date	Products/Services
None

Annex I-A

Schedule III-B to Security Agreement

Annex I-A
Schedule III-C to Security Agreement

Item C. Copyright Collateral.

Registered Copyrights/Mask Works

Country	Registration No.	Registration Date	Author(s)	Title
None

Copyright/Mask Work Pending Registration Applications

Country	Serial No.	Filing Date	Author(s)	Title
None

Copyright/Mask Work Registration Applications In Preparation

Country	Docket No.	Expected Filing Date	Inventor(s)	Title
None

Annex I-A

Schedule III-C to Security Agreement

[FORM OF] SUPPLEMENT

Annex II to
First Lien Pledge and Security Agreement and Irrevocable Proxy

SUPPLEMENT (this “Supplement”), dated as of [ ], 20[ ], made by [        ] (the “Grantor”), in favor of Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions or entities (the “Lenders”) parties to the First Lien Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such First Lien Credit Agreement.

WITNESSETH :

WHEREAS, Energy XXI Gulf Coast, Inc. (the “Borrower”), the Lenders and the Administrative Agent have entered into the First Lien Exit Credit Agreement, dated as of December 30, 2016 (as amended, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”);

WHEREAS, in connection with the First Lien Credit Agreement, the Borrower and certain of its Affiliates (including the Grantor) have entered into the First Lien Pledge and Security Agreement and Irrevocable Proxy, dated as of December 30, 2016 (as amended, supplemented or otherwise modified from time to time, the “Security Agreement”) in favor of the Administrative Agent for the ratable benefit of the Secured Parties;

WHEREAS, the First Lien Credit Agreement requires the Grantor to pledge the Equity Interests described in Annex 1-A hereto; and

WHEREAS, the Grantor has agreed to execute and deliver this Supplement in order to pledge such Equity Interests;

NOW, THEREFORE, IT IS AGREED:

1.         First Lien Pledge and Security Agreement and Irrevocable Proxy. By executing and delivering this Supplement, the information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule I to the Security Agreement. The Grantor hereby represents and warrants that each of the representations and warranties contained in Article 3 of the Security Agreement is true and correct on and as the date hereof (after giving effect to this Supplement) as if made on and as of such date.

2.         Governing Law. THIS SUPPLEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT AND ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATED TO THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Annex II - 1

3.         Acceptance. The Grantor hereby expressly waives notice of acceptance of this Supplement, acceptance on the part of the Administrative Agent and the other Secured Parties being conclusively presumed by their request for this Supplement and delivery of the same to the Administrative Agent.

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly executed and delivered as of the date first above written.

[GRANTOR]
By:
	Name:
	Title:

Annex II - 2

Annex II-A
Schedule I to Security Agreement

[GRANTOR]

ITEM A — PLEDGED INTERESTS

				Common Stock
Pledged Interests Issuer (corporate)	Cert. #	# of Shares	Authorized Shares	Outstanding Shares	% of Shares Pledged

	Limited Liability Company Interests
Pledged Interests Issuer (limited liability company)	% of Limited Liability Company Interests Pledged	Type of Limited Liability Company Interests Pledged

	Partnership Interests
Pledged Interests Issuer (partnership)	% of Partnership Interests Owned	% of Partnership Interests Owned

ITEM B — PLEDGED NOTES

1. Pledged Note Issuer Description:

Annex II-A

EX-10.5

Exhibit 10.5

Execution Version

WARRANT AGREEMENT

THIS WARRANT AGREEMENT (this “Agreement”), dated as of December 30, 2016, is by and among reorganized Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation (together with its successors and assigns, the “Warrant Agent”).

WHEREAS, on April 14, 2016, Energy XXI Ltd and its affiliated debtors (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (as amended, the “Bankruptcy Code”), in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), Case No. 16-31928;

WHEREAS, on November 21, 2016, the Debtors filed the Debtors’ Second Amended Proposed Joint Chapter 11 Plan of Reorganization (as amended or supplemented from time to time, the “Plan of Reorganization”);

WHEREAS, on December 13, 2016, the Bankruptcy Court entered an order confirming the Plan of Reorganization, and the Debtors emerged from their chapter 11 cases on the date first written above (the “Effective Date”);

WHEREAS, pursuant to the Plan of Reorganization, the Company will issue or cause to be issued, on or as soon as reasonably practicable after the Effective Date, warrants (the “Warrants”) (a) to purchase 1,271,933 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), representing an aggregate total of 3.6% of the total number of shares of Common Stock issuable pursuant to the Plan of Reorganization (subject to dilution from the Management Incentive Plan, as defined in the Plan of Reorganization) to holders of EGC Unsecured Notes Claims (as defined in the Plan of Reorganization) and (b) to purchase 847,956 shares of Common Stock, representing an aggregate total of 2.4% of the total number of shares of Common Stock issuable pursuant to the Plan of Reorganization (subject to dilution from the Management Incentive Plan, as defined in the Plan of Reorganization) to holders of EPL Unsecured Notes Claims (as defined in the Plan of Reorganization);

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants;

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, call, exercise and cancellation of the Warrants; and

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when issued, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:

Article I

DEFINITIONS

Section 1.1           Definition of Terms. As used in this Agreement, the following capitalized terms shall have the following respective meanings:

(a)          “Additional Common Stock” has the meaning set forth in Section 5.1 hereof.

(b)          “Adjustment Event” has the meaning set forth in Section 5.2 hereof.

(c)          “Affiliate” has the meaning set forth in Rule 12b-2 of the Exchange Act.

(d)          “Appropriate Officer” has the meaning set forth in Section 3.2(a) hereof.

(e)          “Bankruptcy Code” has the meaning set forth in the Recitals.

(f)          “Beneficial Holders” means, with respect to any Warrants represented by a Global Warrant Certificate, any person or entity that “beneficially owns” (as such term is defined and determined pursuant to Rule 13d-3 promulgated under the Exchange Act) such Warrants.

(g)          “Board of Directors” means the Board of Directors of the Company.

(h)          “Book-Entry Warrants” has the meaning set forth in Section 3.1(c) hereof.

(i)           “Business Day” means any day other than a Saturday, Sunday or any other day on which the New York Stock Exchange is closed for trading.

(j)           “Certificated Warrant” has the meaning set forth in Section 3.1(c) hereof.

(k)          “Common Stock” has the meaning set forth in the Recitals, and shall include any successor security as a result of any recapitalization, reorganization, reclassification or similar transaction involving the Company.

(l)           “Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

(m)         “Current Sale Price” of the Common Stock on any date of determination means:

2

(i)          if the Common Stock is listed on the New York Stock Exchange or The NASDAQ Stock Market on such date, the average closing sale price per share of the Common Stock (or if no closing sale price is reported, the average of the closing bid and closing ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) for the ten (10) consecutive trading days immediately prior to such date of determination, as reported by the New York Stock Exchange or The NASDAQ Stock Market, as applicable;

(ii)         if the Common Stock is not listed on the New York Stock Exchange or The NASDAQ Stock Market on such date, but is listed on another U.S. national or regional securities exchange, the average closing sale price per share of the Common Stock (or if no closing sale price is reported, the average of the high bid and low asked prices or, if more than one in either case, the average of the average high bid and low asked prices) for the ten (10) consecutive trading days immediately prior to such date of determination, as reported in composite transactions for such securities exchange (or, if more than one, the principal securities exchange on which the Common Stock is traded);

(iii)        if the Common Stock is not listed on a U.S. national or regional securities exchange, but is traded on an over-the-counter market, the average last quoted sale price for the Common Stock (or, if no sale price is reported, the average of the high bid and low asked price for such date) for the ten (10) consecutive trading days immediately prior to such date of determination, in the over-the-counter market as reported by OTC Markets Group Inc. or other similar organization; or

(iv)        in all other cases, the fair market value per share of the Common Stock, which the Board of Directors shall determine in good faith (subject to the rights of the Holders set forth in Section 9.13), taking into account any recent fairness opinion or other valuation report obtained by the Board of Directors or the Company (it being understood that neither the Board of Directors nor the Company shall have any obligation hereunder to obtain such an opinion or report).

The Current Sale Price shall be determined without reference to early hours, after hours or extended market trading.

The Current Sale Price shall be appropriately adjusted by the Board of Directors in good faith if the “ex date” (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) occurs during the ten (10) consecutive trading days immediately prior to the day as of which the Current Sale Price is being determined.

For these purposes the term “ex date”, when used:

(i)          with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the sale price or bid and ask prices, as applicable, were obtained without the right to receive such issuance or distribution;

3

(ii)         with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective; and

(iii)        with respect to any tender or exchange offer, means the first date on which the Common Stock trades regular way on such exchange or in such market after the expiration time of such offer.

The foregoing adjustments shall be made to the Current Sale Price in accordance with the terms hereof, as may be necessary or appropriate to effectuate the intent of this Agreement and to avoid unjust or inequitable results as determined in good faith by the Board of Directors.

(n)          “Date of Issuance” has the meaning set forth in Section 3.1(a) hereof.

(o)          “Depositary” has the meaning set forth in Section 3.1(c) hereof.

(p)          “Direct Registration Warrants” has the meaning set forth in Section 3.1(c) hereof.

(q)          “Effective Date” has the meaning set forth in the Recitals.

(r)          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s)          “Exercise Date” means any date, on or prior to the expiration of the Exercise Period, on which the Holder exercises the right to purchase the Warrant Exercise Shares, in whole or in part, pursuant to and in accordance with the terms and conditions described herein.

(t)          “Exercise Form” has the meaning set forth in Section 4.3(d) hereof.

(u)          “Exercise Price” has the meaning set forth in Section 4.1 hereof.

(v)         “Exercise Period” has the meaning set forth in Section 4.2 hereof.

(w)         “Fully Diluted” means all Common Stock outstanding as of the applicable measurement date together with all Common Stock then issuable upon (i) the conversion of Convertible Securities at the then applicable conversion rate, and (ii) the exercise of any Options; provided, that, for purposes of clauses (i) and (ii), all conditions to the convertibility and/or exercisability of Convertible Securities and Options of the Company, shall be deemed to have been satisfied.

(x)          “Global Warrant Certificates” has the meaning set forth in Section 3.1(c) hereof.

4

(y)          “Governmental Authority” means any (i) government, (ii) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal) or (iii) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, in each case, whether federal, state, local, municipal, foreign, supranational or of any other jurisdiction.

(z)          “Holder” has the meaning set forth in Section 4.1 hereof.

(aa)        “Law” means all laws, statutes, rules, regulations, codes, injunctions, decrees, orders, ordinances, registration requirements, disclosure requirements and other pronouncements having the effect of law of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any Governmental Authority.

(bb)        “Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

(cc)        “Organic Change” means any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s equity securities or assets or other transaction, in each case which is effected in such a way that the holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) cash, stock, securities or other assets or property with respect to or in exchange for Common Stock, other than a transaction which triggers an adjustment pursuant to Sections 5.1, 5.2 or 5.3.

(dd)        “Person” means any individual, firm, corporation, partnership, limited partnership, limited liability company, association, indenture trustee, organization, joint stock company, joint venture, estate, trust, governmental unit or any political subdivision thereof, or any other entity (as such term is defined in the Bankruptcy Code).

(ee)        “Plan of Reorganization” has the meaning set forth in the Recitals.

(ff)        “Pro Rata Repurchase Offer” means any offer to purchase shares of Common Stock by the Company or any Affiliate thereof pursuant to (i) any tender offer or exchange offer subject to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (ii) any other offer available to all or substantially all holders of Common Stock (subject to satisfaction of any conditions to participation therein such as those relating to minimum holding percentages or accredited status) to purchase or exchange their shares of Common Stock, in the case of both (i) or (ii), whether for cash, shares of capital stock of the Company, other securities of the Company, evidences of indebtedness of the Company or any other Person, or any other property (including, without limitation, shares of capital stock, other securities or evidences of indebtedness of a Subsidiary), or any combination thereof, effected while the Warrants are outstanding. The “effective date” of a Pro Rata Repurchase Offer shall mean the date of acceptance of shares for purchase or exchange by the Company under any tender or exchange offer which is a Pro Rata Repurchase Offer or the date of purchase with respect to any Pro Rata Repurchase Offer that is not a tender or exchange offer.

5

(gg)        “Registered Holder” has the meaning set forth in Section 3.3(d) hereof.

(hh)        “Requisite Holders” means Registered Holders of Warrants exercisable for a majority of the Common Stock issuable upon exercise of all Warrants then outstanding; provided that, in the case of the Book Entry Warrants, the Requisite Holders shall be the respective customers of the street name holders thereof, as set forth on the books of such street name holders.

(ii)          “SEC” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.

(jj)          “Securities Act” means the Securities Act of 1933, as amended.

(kk)        “Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company or other business entity (other than a corporation), a majority of the partnership, limited liability company or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, limited liability company or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company or other business entity gains or losses or shall be or control the general partner, the managing member or entity performing similar functions of such partnership, limited liability company or other business entity.

(ll)          “Transfer” means any transfer, sale, assignment or other disposition.

(mm)       “Warrant Agent” has the meaning set forth in the preamble and shall include any successor to the Warrant Agent pursuant to Section 8.1 hereof.

(nn)        “Warrant Certificate” has the meaning set forth in Section 3.1(c) hereof.

(oo)        “Warrant Exercise Shares” means the shares of Common Stock issued upon the exercise of a Warrant.

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(pp)        “Warrant Register” has the meaning set forth in Section 3.3(c) hereof.

(qq)        “Warrant Restrictions” has the meaning set forth in Section 3.1(c) hereof.

(rr)          “Warrant Statements” has the meaning set forth in Section 3.1(c) hereof.

(ss)        “Warrants” has the meaning set forth in the Recitals.

Section 1.2           Rules of Construction.

(a)          The singular form of any word used herein, including the terms defined in Section 1.1 hereof, shall include the plural, and vice versa. The use herein of a word of any gender shall include correlative words of all genders.

(b)          Unless otherwise specified, references to Articles, Sections and other subdivisions of this Agreement are to the designated Articles, Sections and other subdivision of this Agreement as originally executed. The words “hereof,” “herein,” “hereunder” and words of similar import refer to this Agreement as a whole.

(c)          References to “$” are to dollars in lawful currency of the United States of America.

(d)          The Exhibits attached hereto are an integral part of this Agreement.

Article II

APPOINTMENT OF WARRANT AGENT

Section 2.1           Appointment. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants in accordance with the express terms and subject to the conditions set forth in this Agreement (and no implied terms or conditions), and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and subject to the conditions set forth in this Agreement.

Article III

WARRANTS

Section 3.1           Issuance of Warrants.

(a)          On the terms and subject to the conditions of this Agreement and in accordance with the terms of the Plan of Reorganization, on or as soon as reasonably practicable after the Effective Date (such date, the “Date of Issuance”), the Company will issue the Warrants to holders of EGC Unsecured Notes Claims and EPL Unsecured Notes Claims, as set forth in the Plan of Reorganization.

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(b)          The maximum number of shares of Common Stock issuable pursuant to exercise of the Warrants shall be 2,119,889 shares, as such amount may be adjusted from time to time pursuant to this Agreement.

(c)          Unless otherwise provided in this Agreement, the Warrants (such Warrants being referred to as “Book-Entry Warrants”) shall be issued through the book-entry facilities of The Depository Trust Company, as depositary (the “Depositary”), in the form of one or more global warrant certificates (“Global Warrant Certificates”), duly executed on behalf of the Company and countersigned, either by manual or facsimile signature, by the Warrant Agent, in the manner set forth in Section 3.2(b) below, which the Company shall deliver, or cause to be delivered to the Depositary, on or as soon as reasonably practicable after the Effective Date. Notwithstanding the foregoing, any Warrants which are not issuable through the mandatory reorganization function of the Depositary shall either be (x) represented by certificates (together with the Global Warrant Certificates, “Warrant Certificates”; and any Warrant represented by a Warrant Certificate, other than a Global Warrant Certificate, being referred to as a “Certificated Warrant”) or (y) issued by electronic entry registration on the books of the Warrant Agent (“Direct Registration Warrants”) and shall be reflected on statements issued by the Warrant Agent from time to time to the holders thereof (the “Warrant Statements”); provided, that any Certificated Warrants or Direct Registration Warrants that are not subject to any restriction on transfer or exercise, or are not subject to any vesting requirements (such restrictions or requirements, “Warrant Restrictions”), may be exchanged at any time for a corresponding number of Book-Entry Warrants, in accordance with Section 6.1(c) and the applicable procedures of the Depositary and the Warrant Agent.

Section 3.2           Form of Warrant; Execution of Warrant Certificates.

(a)          Subject to Section 6.1 of this Agreement, the Global Warrant Certificates shall be in substantially the form set forth in Exhibit A-1 attached hereto. The certificates for Certificated Warrants, with the forms of election to exercise and of assignment printed on the reverse thereof, shall be in substantially the form set forth in Exhibit A-2 attached hereto. The Warrant Certificates may bear such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Agreement, may have such letters, numbers or other marks of identification or designation and such legends or endorsements placed thereon as may be required by the Depositary (including as provided in Section 3.2(b)) and as are consistent with the provisions of this Agreement, or as may be required to comply with any Law or with any rules or regulations made pursuant thereto or with any rules of any securities exchange or as may be determined (in a manner consistent with the provisions of this Agreement) by the Chief Executive Officer or Chief Financial Officer of the Company (each, an “Appropriate Officer”) executing such Warrant Certificates, as evidenced by their execution of the Warrant Certificates. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced on the Warrant Certificates.

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(b)          In case any Appropriate Officer of the Company who shall have signed any of the Warrant Certificates (either manually or by facsimile signature) shall cease to be such Appropriate Officer before the Warrant Certificates so signed shall have been countersigned (either manually or by facsimile signature) by the Warrant Agent or delivered or disposed of by or on behalf of the Company, such Warrant Certificates nevertheless may be countersigned and delivered or disposed of with the same force and effect as though such Appropriate Officer had not ceased to be such Appropriate Officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper Appropriate Officer of the Company to sign such Warrant Certificate, although at the date of the execution of this Agreement any such person was not such Appropriate Officer.

(c)          The Global Warrant Certificates shall bear a legend substantially in the form indicated therefor on Exhibit A-1. The Global Warrant Certificates shall be deposited on or after the Date of Issuance with the Warrant Agent and registered in the name of Cede & Co., as the nominee of the Depositary. Each Global Warrant Certificate shall represent such number of the outstanding Warrants as specified therein, and each shall provide that it shall represent the aggregate amount of outstanding Warrants from time to time endorsed thereon and that the aggregate amount of outstanding Warrants represented thereby may from time to time be reduced or increased, as appropriate, in accordance with the terms of this Agreement.

(d)          A Warrant Certificate shall be, and shall remain, subject to the provisions of this Agreement until such time as all of the Warrants evidenced thereby shall have been duly exercised or shall have expired or been cancelled in accordance with the terms hereof.

Section 3.3           Registration and Countersignature.

(a)          Upon receipt of a written order of the Company signed by an Appropriate Officer instructing the Warrant Agent to do so, the Warrant Agent (i) shall upon receipt of Warrant Certificates, including the Global Warrant Certificates, duly executed on behalf of the Company, countersign, either by manual or facsimile signature, such Global Warrant Certificates evidencing Warrants, and record such Warrant Certificates, including the Registered Holders thereof, in the Warrant Register, and (ii) shall register in the Warrant Register any Direct Registration Warrants in the names of the initial Registered Holders thereof. Such written order of the Company shall specifically state the number of Warrants that are to be issued as Certificated Warrants or Direct Registration Warrants and the name of the Registered Holders thereof, and the number of Warrants that are to be issued as Book-Entry Warrants, and the Warrant Agent may rely conclusively on such written order. Notwithstanding the foregoing or anything else in this Agreement to the contrary, the Company shall not instruct the Warrant Agent to register any Direct Registration Warrants unless and until the Warrant Agent shall confirm to the Company in writing that it has the capabilities to accommodate Direct Registration Warrants.

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(b)          No Warrant Certificate shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the manual or facsimile signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence that such Warrant Certificate so countersigned has been duly issued hereunder.

(c)          The Warrant Agent shall keep or cause to be kept, at an office designated for such purpose, books (the “Warrant Register”) in which, subject to such reasonable regulations as it may prescribe, it shall register the Certificated Warrants or Direct Registration Warrants, and the Warrants represented by Global Warrant Certificates, and exercises, exchanges, cancellations and transfers of outstanding Warrants in accordance with the procedures set forth in Section 6.1 of this Agreement, all in a form reasonably satisfactory to the Company and the Warrant Agent. No service charge shall be made for any exchange or registration of transfer of the Warrants, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other charge that may be imposed on any Registered Holder in connection with any such exchange or registration of transfer. The Warrant Agent shall have no obligation to effect an exchange or register a transfer unless and until it is satisfied that any payments required by the immediately preceding sentence have been made.

(d)          Prior to due presentment for registration of transfer or exchange of any Warrants in accordance with the procedures set forth in this Agreement, the Company and the Warrant Agent may deem and treat the person in whose name such Warrants are registered upon the Warrant Register (the “Registered Holder” of such Warrants) as the absolute owner of such Warrants, for all purposes including, without limitation, for the purpose of any exercise thereof (subject to Section 4.3(d)(z)), any distribution to the Holder thereof and for all other purposes (subject to Section 4.1(ii)), and neither the Warrant Agent nor the Company shall be affected by notice to the contrary. Neither the Company nor the Warrant Agent will be liable or responsible for any registration or transfer of any Warrants that are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary.

Article IV

TERMS AND EXERCISE OF WARRANTS

Section 4.1           Exercise Price. Each Warrant shall entitle (i) in the case of the Certificated Warrants or Direct Registration Warrants, the Registered Holder thereof and (ii) in the case of Book-Entry Warrants, the Beneficial Holder thereof ((i) and (ii) collectively, the “Holder”), subject to the provisions of this Agreement and applicable law, the right to purchase from the Company one share of Common Stock (subject to adjustment from time to time as provided in Article V hereof), at the price of $43.66 per share (subject to adjustment from time to time as provided in Article V, the “Exercise Price”).

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Section 4.2           Exercise Period. Warrants may be exercised by the Holder thereof, in whole or in part (but not as to a fractional share of Common Stock), at any time and from time to time after the Date of Issuance and prior to 5:00 P.M., New York time on December 30, 2021 (the “Exercise Period”). To the extent that a Warrant or portion thereof is not exercised prior to the expiration of the Exercise Period, it shall be automatically cancelled with no action by any Person, and with no further rights thereunder, upon such expiration.

Section 4.3           Method of Exercise.

(a)          In connection with the exercise of any Warrant, (i) the Holder shall surrender such Warrant (or portion thereof) to the Warrant Agent for the number of Warrant Exercise Shares being exercised, up to the aggregate number of Warrant Exercise Shares for which the Warrants are exercisable and (ii) the Exercise Price shall be paid, at the option of the Holder, (x) in United States dollars by personal, certified or official bank check payable to the Warrant Agent, or by wire transfer to an account specified in writing by the Company or the Warrant Agent to such Holder, or by any means established for such purpose by the Depositary, in any such case in immediately available funds in an amount equal to the aggregate Exercise Price for such Warrant Exercise Shares as specified in the Exercise Form or (y) by cashless exercise as set forth in Section 4.3(b).

(b)          In lieu of paying the Exercise Price by the means specified in Section 4.3(a)(ii)(x), any Holder may elect to exercise Warrants by authorizing the Company to withhold and not issue to such Holder, in payment of the Exercise Price thereof, a number of such Warrant Exercise Shares equal to (x) the number of Warrant Exercise Shares for which the Warrants are being exercised, multiplied by (y) the Exercise Price, and divided by (z) the Current Sale Price on the Exercise Date (and such withheld shares shall no longer be issuable under such Warrants, and the Holder shall not have any rights or be entitled to any payment with respect to such withheld shares).

(c)          Upon exercise of any Warrants, the Warrant Agent will as promptly as practicable, within a reasonable time period to enable the Company to meet its obligations under Section 4.4(a), deliver written notice to the Company to confirm the number of shares of Common Stock issuable in connection with such exercise. The Company shall calculate and transmit to the Warrant Agent in a written notice, and the Warrant Agent shall have no duty, responsibility or obligation to calculate, the number of shares of Common Stock issuable in connection with any exercise. The Warrant Agent shall be entitled to rely conclusively on any such written notice provided by the Company, and the Warrant Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with such written instructions or pursuant to this Agreement. Such written notice from the Company shall also set forth the cost basis for such shares of Common Stock issued pursuant to such exercise.

(d)          Subject to the terms and conditions of this Agreement, the Holder of any Warrants may exercise, in whole or in part, such Holder’s right to purchase the Warrant Exercise Shares issuable upon exercise of such Warrants by: (x) in the case of Certificated Warrants, properly completing and duly executing the exercise form for the election to exercise such Warrants (including the exercise forms referred to in clauses (y) and (z) below, an “Exercise Form”) substantially in the form of Exhibit B-1, (y) in the case of Direct Registration Warrants, providing an Exercise Form substantially in the form of Exhibit B-2 hereto, properly completed and duly executed by the Registered Holder thereof, to the Warrant Agent, and (z) in the case of Book-Entry Warrants, providing an Exercise Form in compliance with the practices and procedures of the Depositary and its direct and indirect participants, as applicable.

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(e)          Any exercise of Warrants pursuant to the terms of this Agreement shall be irrevocable as of the date of delivery of the Exercise Form and shall constitute a binding agreement between the Holder and the Company, enforceable in accordance with the terms of this Agreement.

(f)          In the case of Certificated Warrants, upon receipt of the Warrant Certificate with the properly completed and duly executed Exercise Form, or in the case of Direct Registration Warrants, upon receipt of an Exercise Form, in each case pursuant to Section 4.3(d), the Warrant Agent shall:

(i)          examine the Exercise Form and all other documents delivered to it by or on behalf of Holders as contemplated hereunder to ascertain whether or not, on their face, such Exercise Form and any such other documents have been executed and completed in accordance with their terms and the terms hereof;

(ii)         if an Exercise Form or other document appears, on its face, to have been improperly completed or executed or some other irregularity in connection with the exercise of the Warrants exists, endeavor to inform the appropriate parties (including the person submitting such instrument) of the need for fulfillment of all requirements, specifying those requirements which appear to be unfulfilled;

(iii)        inform the Company of and cooperate with and assist the Company in resolving any reconciliation problems between the information provided on any Exercise Form received and the information on the Warrant Register;

(iv)        advise the Company as promptly as practicable after receipt of an Exercise Form (within a reasonable time period to enable the Company to meet its obligations under Section 4.4(a)) of (A) the receipt of such Exercise Form and the number of Warrant Exercise Shares in respect of which the Warrants are requested to be exercised in accordance with the terms and conditions of this Agreement, (B) the instructions with respect to delivery of the Common Stock deliverable upon such exercise, subject to timely receipt of such information by the Warrant Agent, and (C) such other information as the Company shall reasonably request; and

(v)         subject to Common Stock being made available to the Warrant Agent by or on behalf of the Company, and written instructions from the Company, liaise with the transfer agent for the Common Stock for the issuance and registration of the number of shares of Common Stock issuable upon exercise of the Warrants in accordance with the Exercise Form.

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The Company reserves the right reasonably to reject any and all Exercise Forms that it determines are not in proper form or for which any corresponding agreement by the Company to exchange would, in the opinion of the Company, be unlawful. Any such determination by the Company shall be final and binding on the Holders of the Warrants, absent manifest error. Moreover, the Company reserves the absolute right to waive any of the conditions to any particular exercise of Warrants or any defects in the Exercise Form(s) with regard to any particular exercise of Warrants. The Company shall provide prompt written notice to the Warrant Agent of any such rejection or waiver.

(g)          In the case of Book-Entry Warrants, the Company and the Warrant Agent shall cooperate with the Depositary and its direct and indirect participants in order to effectuate the exercise of such Warrants, in accordance with the applicable practices and procedures of the Depositary and such participants, including the manner of delivery of notice of exercise by the Beneficial Holders thereof, in such form as shall be prescribed by such participants, as applicable.

(h)          The Warrant Agent shall forward funds received for warrant exercises in a given month by the fifth business day of the following month by wire transfer to an account designated by the Company.

Section 4.4           Issuance of Common Stock.

(a)          Upon the effectiveness of any exercise of any Warrants pursuant to Section 4.3, the Company shall, subject to Section 4.6, promptly at its expense, and in no event later than five (5) Business Days after the Exercise Date, cause to be issued as directed by the Holder of such Warrants the total number of whole shares of Common Stock for which such Warrants are being exercised (as the same may be hereafter adjusted pursuant to Article V) in such denominations as are requested by the Holder as set forth below: (i) in the case of the exercise of any Certificated Warrants or Direct Registration Warrants by the Registered Holder thereof, registered as directed by the Holder, (ii) in the case of the exercise of any Book-Entry Warrants by the Beneficial Holder thereof, by same day or next day credit to the Depositary in accordance with the practices and procedures of the Depositary and its respective participants, delivered to such account as directed by the Holder.

(b)          The Warrant Exercise Shares shall be deemed to have been issued at the time at which all of the conditions to such exercise have been fulfilled, and the Holder, or other person to whom the Holder shall direct the issuance thereof, shall be deemed for all purposes to have become the holder of such Warrant Exercise Shares at such time.

Section 4.5           Reservation of Shares.

(a)          During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of issuance upon the exercise of the Warrants, a number of shares of Common Stock equal to the aggregate Warrant Exercise Shares issuable upon the exercise of all outstanding Warrants. The Company shall take all such actions as shall be necessary to assure that all such shares of Common Stock may be so issued without violating the Company’s governing documents, any agreements to which the Company is a party on the date hereof, any requirements of any national securities exchange upon which shares of Common Stock may be listed or any applicable Laws. The Company shall not take any action which would cause the number of authorized but unissued shares of Common Stock to be less than the number of such shares required to be reserved hereunder for issuance upon exercise of the Warrants.

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(b)          The Company covenants that it will take such actions as may be necessary or appropriate in order that all Warrant Exercise Shares issued upon exercise of the Warrants will, upon issuance in accordance with the terms of this Agreement, be fully paid and non-assessable and free from any and all (i) security interests created by or imposed upon the Company and (ii) taxes, liens and charges with respect to the issuance thereof. If at any time prior to the expiration of the Exercise Period the number and kind of authorized but unissued shares of the Company’s capital stock shall not be sufficient to permit exercise in full of the Warrants, the Company will promptly take such corporate action as may, in the opinion of its counsel, be reasonably necessary (including seeking stockholder approval, if required) to increase its authorized but unissued shares to such number of shares as shall be sufficient for such purposes. The Company agrees that its issuance of Warrants shall constitute full authority to its officers who are charged with the issuance of Warrant Exercise Shares to issue Warrant Exercise Shares upon the exercise of Warrants. Without limiting the generality of the foregoing, the Company will not increase the stated or par value per share, if any, of the Common Stock without the prior written consent of Requisite Holders.

(c)          The Company represents and warrants to the Holders that the issuance of the Warrants and the issuance of shares of Common Stock upon exercise thereof in accordance with the terms hereof will not constitute a breach of, or a default under, any other material agreements to which the Company is a party on the date hereof.

Section 4.6           Fractional Shares. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to issue any fraction of a share of its capital stock in connection with the exercise of any Warrants, and in any case where a Holder of Warrants would, except for the provisions of this Section 4.6, be entitled under the terms thereof to receive a fraction of a share upon the exercise of such Warrants, the Company shall, upon the exercise of such Warrants, issue or cause to be issued only the largest whole number of Warrant Exercise Shares issuable upon such exercise (and such fraction of a share will be disregarded, and the Holder shall not have any rights or be entitled to any payment with respect to such fraction of a share); provided, that the number of whole Warrant Exercise Shares which shall be issuable upon the contemporaneous exercise of any Warrants by a Holder shall be computed on the basis of the aggregate number of Warrant Exercise Shares issuable upon exercise of all such Warrants by such Holder.

Section 4.7           Close of Books. The Company shall not close its books against the transfer of any Warrants or any Warrant Exercise Shares in any manner which interferes with the timely exercise of such Warrants.

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Section 4.8           Payment of Taxes. In connection with the exercise of any Warrants, the Company shall not be required to pay any tax or other charge imposed in respect of any transfer involved in the Company’s issuance and delivery of shares of Common Stock (including certificates therefor) (or any payment of cash or other property in lieu of such shares) to any recipient other than the Holder of the Warrants being exercised, and in case of any such tax or other charge, the Warrant Agent and the Company shall not be required to issue or deliver any such shares (or cash or other property in lieu of such shares) until (x) such tax or charge has been paid or an amount sufficient for the payment thereof has been delivered to the Warrant Agent or the Company or (y) it has been established to the Company’s and the Warrant Agent’s satisfaction that any such tax or other charge that is or may become due has been paid. For the avoidance of doubt, the Warrant Agent shall not have any duty or obligation to take any action under any section of this Agreement that requires the payment of taxes or charges, unless and until the Warrant Agent is satisfied that all such taxes and/or charges have been paid.

Article V

ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT EXERCISE SHARES

In order to prevent dilution of the rights granted under the Warrants, the Exercise Price shall be subject to adjustment from time to time as provided in this Article V, and the number of shares of Common Stock issuable upon exercise of each Warrant shall be subject to adjustment from time to time as provided in this Article V; provided, that if more than one subsection of this Article V is applicable to a single event, the subsection shall be applied that produces the largest adjustment and no single event shall cause an adjustment under more than one subsection of this Article V so as to result in duplication.

Section 5.1           Subdivision or Combination of Common Stock. In the event that the amount of outstanding Common Stock is increased or decreased by combination (by reverse stock split or reclassification) or subdivision (by any stock split or reclassification) of the Common Stock or any distribution by the Company with respect to the Common Stock in the form of additional Common Stock (“Additional Common Stock”), then, on the effective date of such combination, subdivision or distribution, the number of Warrant Exercise Shares issuable on exercise of the Warrants shall be increased or decreased, as applicable, in proportion to such increase or decrease, as applicable, in the outstanding Common Stock. Whenever the number of Warrant Exercise Shares purchasable upon the exercise of the Warrants is adjusted pursuant to this Section 5.1, the Exercise Price shall be adjusted (to the nearest cent ($0.01)) by multiplying such Exercise Price immediately prior to such adjustment by a fraction (a) the numerator of which shall be the number of Warrant Exercise Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment and (b) the denominator of which shall be the number of Warrant Exercise Shares so purchasable immediately thereafter.

Section 5.2           Distributions. If the Company at any time after the issuance of the Warrants but prior to the expiration of the Exercise Period fixes a record date for the making of a distribution to all holders of shares of the Common Stock of securities, evidences of indebtedness, assets, cash, rights or warrants (excluding (i) dividends or distributions referred to in Section 5.1 and (ii) regular cash dividends paid out of earnings or earned surplus, determined in accordance with generally accepted accounting principles), then, in each such case, the Exercise Price in effect prior to such record date shall be adjusted thereafter to the price determined by the following formula:

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EP₁ = EP₀ x (CP₀ - FV)/CP₀

where

EP1	=	the Exercise Price in effect immediately following the application of the adjustments in this Section 5.2;
EP0	=	the Exercise Price in effect immediately prior to the application of the adjustments in this Section 5.2;
CP0	=	the Current Sale Price of the Common Stock on the last trading day preceding the first date on which the Common Stock trades regular way without the right to receive such distribution, or, if the Common Stock is not traded on a on a U.S. national or regional securities exchange or an over-the-counter market, the Current Sale Price of the Common Stock without otherwise taking into account the effects of such distribution; and
FV	=	the amount of cash and/or the fair market value of the securities, evidences of indebtedness, assets, rights or warrants to be so distributed in respect of one share of Common Stock, which the Board of Directors shall determine in good faith (subject to the rights of the Holders set forth in Section 9.13), taking into account any recent fairness opinion or other valuation report obtained by the Board of Directors or the Company (it being understood that neither the Board of Directors nor the Company shall have any obligation hereunder to obtain such an opinion or report).

Such adjustment shall be made successively whenever such a record date is fixed (an “Adjustment Event”). In such Adjustment Event, the number of Warrant Exercise Shares issuable upon the exercise of each Warrant shall be increased to the number obtained by dividing (x) the product of (1) the number of Warrant Exercise Shares issuable upon the exercise of each Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the adjustment by (y) the new Exercise Price immediately following such adjustment.

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In the event that such distribution is not so made, the Exercise Price and the number of Warrant Exercise Shares issuable upon exercise of the Warrants then in effect shall be readjusted, effective as of the date when the Board of Directors determines not to distribute such securities, evidences of indebtedness, assets, cash, rights or warrants, as the case may be, to the Exercise Price that would then be in effect and the number of Warrant Exercise Shares that would then be issuable upon exercise of the Warrants if such record date had not been fixed.

Section 5.3           Pro Rata Repurchase Offer of Common Stock. If at any time after the issuance of the Warrants but prior to the expiration of the Exercise Period the Company consummates a Pro Rata Repurchase Offer of Common Stock, then the Exercise Price shall be reduced to the price determined by the following formula:

EP₁ = EP₀ x(OS₀ x CP₀) – AP

  (OS₀ – SP) x CP₀

where

EP1	=	the Exercise Price in effect immediately following the application of the adjustments in this Section 5.3 (but in no event greater than EP0);
EP0	=	the Exercise Price in effect immediately prior to the application of the adjustments in this Section 5.3;
OS0	=	the number of Fully Diluted shares of Common Stock outstanding immediately before consummation of such Pro Rata Repurchase Offer;
CP0	=	the Current Sale Price of a share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase Offer;
AP	=	the aggregate purchase price (including the fair market value, as determined in good faith by the Board of Directors, of any non-cash consideration included therein) paid for the shares of Common Stock in the Pro Rata Repurchase Offer; and
SP	=	the number of shares of Common Stock so repurchased in the Pro Rata Repurchase Offer.

In such event, the Warrant Exercise Shares issuable upon the exercise of each Warrant shall be increased to the number obtained by dividing (x) the product of (1) the Warrant Exercise Shares issuable upon the exercise of each Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the adjustment by (y) the new Exercise Price immediately following such adjustment. For the avoidance of doubt, no increase to the Exercise Price or decrease in the Warrant Exercise Shares issuable upon exercise of the Warrants shall be made pursuant to this Section 5.3.

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Section 5.4           Reorganization, Reclassification, Consolidation, Merger or Sale. In connection with any Organic Change prior to the expiration of the Exercise Period, the Holders’ right to receive shares of Common Stock upon exercise of a Warrant shall be converted into the right to acquire and receive, upon exercise of such Warrants, such cash, stock, securities or other assets or property as would have been issued or payable in such Organic Change (as if the Holder had exercised such Warrant immediately prior to such Organic Change) with respect to or in exchange, as applicable, for the number of Warrant Exercise Shares that would have been issued upon exercise of such Warrants, if such Warrants had been exercised immediately prior to the occurrence of such Organic Change. The Company shall not effect any Organic Change unless, prior to the consummation thereof, the surviving Person (if other than the Company) resulting from such Organic Change, shall assume, by written instrument substantially similar in form and substance to this Agreement in all material respects (including with respect to the provisions of Article V), the obligation to deliver to the Holders such cash, stock, securities or other assets or property which, in accordance with the foregoing provision, the Holders shall be entitled to receive upon exercise of the Warrants. The provisions of this Section 5.4 shall similarly apply to successive Organic Changes.

Section 5.5           Notice of Adjustments. Whenever the number and/or kind of Warrant Exercise Shares or the Exercise Price is adjusted as herein provided, the Company shall (i) prepare and deliver, or cause to be prepared and delivered, forthwith to the Warrant Agent a written statement setting forth the adjusted number and/or kind of shares issuable upon the exercise of Warrants and the Exercise Price of such shares after such adjustment, the facts requiring such adjustment and the computation by which adjustment was made, and (ii) cause the Warrant Agent to give written notice to each Holder in the manner provided in Section 9.2 below, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. The Warrant Agent shall be fully protected in relying upon any such written notice delivered in accordance with this Section 5.5, and on any adjustment therein contained, and shall not be deemed to have knowledge of any such adjustment unless and until it shall have received such written notice. Notwithstanding anything to the contrary contained herein, the Warrant Agent shall have no duty or obligation to investigate or confirm whether the information contained in any such written notice complies with the terms of this Agreement or any other document. The Warrant Agent shall have no duty to determine when an adjustment under this Article V should be made, how any such adjustment should be calculated, or the amount of any such adjustment.

Section 5.6           Deferral or Exclusion of Certain Adjustments; Par Value. No adjustment to the Exercise Price or the number of Warrant Exercise Shares shall be required hereunder unless such adjustment together with other adjustments carried forward as provided below, would result in an increase or decrease of at least one percent (1%) of the applicable Exercise Price or the number of Warrant Exercise Shares; provided, that any adjustments which by reason of this Section 5.6 are not required to be made shall be carried forward and taken into account in any subsequent adjustment and in any Organic Change. Subject to Section 4.5(b), no adjustment need be made for a change in the par value of the shares of Common Stock. All calculations under this Section shall be made to the nearest one one-thousandth (1/1,000) of one cent ($0.01) or to the nearest one one-thousandth (1/1,000) of a share, as the case may be. Without limiting Section 4.5(b), if an adjustment in Exercise Price made hereunder would reduce the Exercise Price to an amount below par value of the Common Stock, then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par value of the Common Stock.

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Section 5.7           Form of Warrant After Adjustments. The form of Warrant Certificate need not be changed because of any adjustments in the Exercise Price or the number and/or kind of shares issuable upon exercise of the Warrants, and Warrant Certificates theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated therein, as initially issued; provided, that such adjustments in the Exercise Price or the number and/or kind of shares issuable upon exercise of the Warrants pursuant to the terms of this Agreement shall nonetheless have effect upon exercise of the Warrants. The Company, however, may at any time in its sole discretion make any change in the form of Warrant Certificate that it may deem appropriate to give effect to such adjustments and that does not affect the substance of the Warrant Certificate or this Agreement (including the rights, duties, liabilities or obligations of the Warrant Agent), and any Warrant Certificate thereafter issued, whether in exchange or substitution for an outstanding Warrant Certificate, may be in the form so changed.

Section 5.8           Determination Final. Any determination that the Company or the Board of Directors must make pursuant to this Article V shall be made in good faith and shall be conclusive in the absence of manifest error or bad faith.

Article VI

TRANSFER AND EXCHANGE
OF WARRANTS

Section 6.1           Registration of Transfers and Exchanges.

(a)          Transfer and Exchange of Book-Entry Warrants. The Transfer and exchange of Book-Entry Warrants shall be effected through the Depositary and its direct and indirect participants, in accordance with the practices and procedures therefor of the Depositary and such participants.

(b)          Exchange of Book-Entry Warrants for Certificated Warrants or Direct Registration Warrants. If at any time:

(i)          the Depositary for the Global Warrant Certificates notifies the Company that the Depositary is unwilling or unable to continue as Depositary for the Global Warrant Certificates and a successor Depositary for the Global Warrant Certificates is not appointed by the Company within 90 days after delivery of such notice; or

(ii)         the Company, in its sole discretion, notifies the Warrant Agent in writing that it elects to exclusively cause the issuance of Certificated Warrants or Direct Registration Warrants under this Agreement,

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then upon written instructions signed by an Appropriate Officer of the Company, the Warrant Agent shall register and issue Certificated Warrants, or shall register Direct Registration Warrants, in an aggregate number equal to the number of Book-Entry Warrants represented by the Global Warrant Certificates, in accordance with such written instructions. Such written instructions provided by the Company shall state that the Certificated Warrants or Direct Registration Warrants issued in exchange for Book-Entry Warrants pursuant to this Section 6.1(b) shall be registered in such names and in such amounts as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Warrant Agent.

(c)          Transfer and Exchange of Certificated Warrants or Direct Registration Warrants. When Certificated Warrants or Direct Registration Warrants are presented to the Warrant Agent with a written request:

(i)          to register the Transfer of such Certificated Warrants or Direct Registration Warrants; or

(ii)         to exchange such Certificated Warrants or Direct Registration Warrants for an equal number of Certificated Warrants or Direct Registration Warrants, respectively, of other authorized denominations,

the Warrant Agent shall register the Transfer or make the exchange, and in the case of Certificated Warrants shall issue such new Warrant Certificates, as requested if its customary requirements for such transactions are met, provided, that (A) the Warrant Agent shall have received (x) a written instruction of Transfer in form satisfactory to the Warrant Agent, duly executed by the Registered Holder thereof or by his attorney, duly authorized in writing along with evidence of authority that may be required by the Warrant Agent, including but not limited to, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, (y) a written order of the Company signed by an Appropriate Officer authorizing such exchange and (z) in the case of Certificated Warrants, surrender of the Warrant Certificate or Certificate(s) representing same duly endorsed for Transfer or exchange, and (B) if reasonably requested by the Company, the Company shall have received a written opinion of counsel reasonably acceptable to the Company that such transfer is in compliance with the Securities Act.

(d)          Exchange of Certificated Warrants or Direct Registration Warrants for Book-Entry Warrants. Certificated Warrants or Direct Registration Warrants that are not subject to any Warrant Restrictions may be exchanged for Book-Entry Warrants upon satisfaction of the requirements set forth below. Upon receipt by the Warrant Agent of appropriate written instruments of transfer with respect to such Certificated Warrants or Direct Registration Warrants, in form satisfactory to the Warrant Agent, and in the case of Certificated Warrants, surrender of the Warrant Certificate(s) representing same duly endorsed for Transfer or exchange, together with written instructions directing the Warrant Agent to make, or to direct the Depositary to make, an endorsement on the Global Warrant Certificate to reflect an increase in the number of Warrants represented by the Global Warrant Certificate equal to the number of Warrants represented by such Certificated Warrants or Direct Registration Warrants, then the Warrant Agent shall cancel such Certificated Warrants or Direct Registration Warrants on the Warrant Register and cause or direct the Depositary to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Warrant Agent, the number of Book-Entry Warrants represented by the Global Warrant Certificate to be increased accordingly. If no Global Warrant Certificates are then outstanding, or if the Global Warrant Certificates then outstanding cannot be used for such purposes, the Company shall issue and the Warrant Agent shall countersign (by either manual or facsimile signature), a new Global Warrant Certificate representing the appropriate number of Book-Entry Warrants. Any such transfer shall be subject to the Company’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed.

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(e)          Restrictions on Transfer and Exchange of Global Warrant Certificates. Notwithstanding any other provisions of this Agreement (other than the provisions set forth in Section 6.1(f)), unless and until it is exchanged in whole for Certificated Warrants or Direct Registration Warrants, a Global Warrant Certificate may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(f)          Restrictions on Transfer. No Warrants or Warrant Exercise Shares shall be sold, exchanged or otherwise Transferred in violation of the Securities Act or state securities Laws or the Company’s articles of incorporation. If any Holder purports to Transfer Warrants to any Person in a transaction that would violate the provisions of this Section 6.1(f), such Transfer shall be void ab initio and of no effect.

(g)          Exchange of Global Warrant Certificate. A Global Warrant Certificate may be exchanged for another Global Warrant Certificate of like or similar tenor for purposes of complying with the practices and procedures of the Depositary.

(h)          Cancellation of Global Warrant Certificate. At such time as all beneficial interests in a Global Warrant Certificate have either been exchanged for Certificated Warrants or Direct Registration Warrants, redeemed, repurchased or cancelled, the Global Warrant Certificate shall be returned to, or retained and cancelled pursuant to applicable Law by, the Warrant Agent, upon written instructions from the Company satisfactory to the Warrant Agent.

Section 6.2           Obligations with Respect to Transfers and Exchanges of Warrants.

(a)          All Certificated Warrants or Direct Registration Warrants issued upon any registration of Transfer or exchange of Certificated Warrants or Direct Registration Warrants, respectively, shall be the valid obligations of the Company, entitled to the same benefits under this Agreement as the Certificated Warrants or Direct Registration Warrants surrendered upon such registration of Transfer or exchange. No service charge shall be made to a Registered Holder for any registration, Transfer or exchange of any Certificated Warrants or Direct Registration Warrants, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other charge that may be imposed on the Registered Holder in connection with any such exchange or registration of Transfer. The Warrant Agent shall have no obligation to effect an exchange or register a Transfer unless and until it is satisfied that all such taxes and/or charges have been paid.

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(b)          So long as the Depositary, or its nominee, is the registered owner of a Global Warrant Certificate, the Depositary or such nominee, as the case may be, shall be considered by the Company, the Warrant Agent, and any agent of the Company or the Warrant Agent as the sole owner or holder of the Warrants represented by such Global Warrant Certificate for all purposes under this Agreement (subject to Sections 4.1(ii) and 4.3(d)(z)). Neither the Company nor the Warrant Agent, in its capacity as registrar for such Warrants, will have any responsibility or liability for any aspect of the records relating to beneficial interests in a Global Warrant Certificate or for maintaining, supervising or reviewing any records relating to such beneficial interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy, or other authorization furnished by the Depositary or impair the operation of customary practices of the Depositary governing the exercise of the rights of a holder of a beneficial interest in a Global Warrant Certificate.

(c)          Subject to Section 6.1(c), and this Section 6.2, the Warrant Agent shall:

(i)          in the case of Certificated Warrants, upon receipt of all information required to be delivered hereunder, from time to time register the Transfer of any outstanding Certificated Warrants in the Warrant Register, upon delivery by the Registered Holder thereof, at the Warrant Agent’s office designated for such purpose, of the Warrant Certificate representing such Certificated Warrants, properly endorsed for transfer, by the Registered Holder thereof or by the duly appointed legal representative thereof or by a duly authorized attorney; and upon any such registration of Transfer, a new Warrant Certificate shall be issued to the transferee.

(ii)         in the case of Direct Registration Warrants, upon receipt of all information required to be delivered hereunder, from time to time register the Transfer of any outstanding Direct Registration Warrants in the Warrant Register, upon delivery by the Registered Holder thereof, at the Warrant Agent’s office designated for such purpose, of a form of assignment substantially in the form of Exhibit C hereto, properly completed and duly executed by the Registered Holder thereof or by the duly appointed legal representative thereof or by a duly authorized attorney; and upon any such registration of Transfer, a new Direct Registration Warrant shall be issued to the transferee.

Section 6.3           Fractional Warrants. The Warrant Agent shall not effect any registration of Transfer or exchange which will result in the issuance of a fraction of a Warrant.

Section 6.4           Restricted Warrants; Legends. Notwithstanding anything contained in this Agreement, the Company will cause any Warrants that are distributed or issued under the Plan of Reorganization to any Person that the Company, in its sole discretion, determines may be deemed an “underwriter” under section 1145(b) of the Bankruptcy Code, to be issued as Certificated Warrants represented by Warrant Certificates bearing a legend in substantially the following form, or as Direct Registration Warrants with a notation to a similar effect on the Warrant Register:

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THE WARRANTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OR OTHER APPLICABLE SECURITIES LAWS. THESE WARRANTS (AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE THEREOF) MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, OR OTHERWISE DISPOSED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.

The Warrant Exercise Shares issued upon exercise of any such Warrants shall be issued in the form of registered stock certificates bearing a legend indicating that transfer may be restricted under United States federal and state securities laws or in the form of an electronic entry on the stock register maintained by the transfer agent for the Common Stock with a notation to a similar effect.

The Holder (or its transferee, as applicable) of any such Warrants or Warrant Exercise Shares, as applicable, shall be entitled to receive from the Company, without expense, new securities of like tenor not bearing the restrictive legend set forth above when (a) all such Warrants or Warrant Exercise Shares, as applicable, shall have been (i) effectively registered under the Securities Act and disposed of in accordance with a registration statement covering such securities or (ii) disposed of pursuant to the provisions of Rule 144 or any comparable rule under the Securities Act or (b) when, in the written reasonable opinion of independent counsel for such Holder (which counsel shall be experienced in Securities Act matters and which counsel and opinion shall be reasonably satisfactory to the Company), such restrictions are no longer required in order to insure compliance with the Securities Act (including, without limitation, when all such Warrants or Warrant Exercise Shares, as applicable, could be sold in a single transaction pursuant to Rule 144 without restriction as to volume or manner of sale).

Article VII

OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS

Section 7.1           No Rights or Liability as Stockholder. Nothing contained herein shall be construed as conferring upon the Holder or his, her or its transferees the right to vote or to receive dividends or to consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election of directors of the Company or of any other matter, or any rights whatsoever as stockholders of the Company. The vote or consent of any Holder shall not be required with respect to any action or proceeding of the Company and no Holder shall have any right not expressly conferred hereunder or under, or by applicable Law with respect to, the Warrants held by such Holder. No Holder, by reason of the ownership or possession of a Warrant, shall have any right to receive any cash dividends, stock dividends, allotments or rights or other distributions paid, allotted or distributed or distributable to the holders of Common Stock prior to, or for which the relevant record date preceded, the date of the exercise of such Warrant. No provision thereof and no mere enumeration therein of the rights or privileges of the Holder shall give rise to any liability of such Holder for the Exercise Price hereunder or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

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Section 7.2           Notice to Registered Holders. The Company shall give notice to Registered Holders by regular mail, and prompt written notice thereof to the Warrant Agent, if at any time prior to the expiration or exercise in full of the Warrants, any of the following events shall occur:

(a)           the payment of any dividend payable in any securities upon shares of Common Stock or the making of any distribution (other than a regular quarterly cash dividend) to all holders of Common Stock;

(b)           the issuance to all holders of Common Stock of any additional shares of Common Stock or of rights, options or warrants to subscribe for or purchase Common Stock or of any other subscription rights, options or warrants;

(c)           a Pro Rata Repurchase Offer;

(d)           an Organic Change;

(e)           a dissolution, liquidation or winding up of the Company; or

(f)           any the occurrence of any other event that would result in an adjustment to the Exercise Price or the number of Warrant Exercise Shares issuable upon exercise of the Warrants under Article V.

Such giving of notice shall be initiated at least ten (10) days prior to the date fixed as the record date or the date of closing of the Company’s stock transfer books for the determination of the stockholders entitled to such dividend, distribution or subscription rights, or of the stockholders entitled to vote on such Organic Change, dissolution, liquidation or winding up or the proposed effective date of a Pro Rata Repurchase Offer or any other event that would result in an adjustment to the Exercise Price or the number of Warrant Exercise Shares issuable upon exercise of the Warrants under Article V. Such notice shall specify such record date or the date of closing the stock transfer books or proposed effective date, as the case may be. Failure to provide such notice shall not affect the validity of any action taken. For the avoidance of doubt, no such notice (or the failure to provide it to any Holder) shall supersede or limit any adjustment called for by Article V by reason of any event as to which notice is required by this Section.

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Section 7.3           Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If any Warrant Certificate is lost, stolen, mutilated or destroyed, the Company may issue, and upon written request by the Company, the Warrant Agent shall countersign (either by manual or facsimile signature), and deliver, in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and substitution for the Warrant Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor in accordance with written instructions from the Company. In the case of Warrant Certificates other than Global Warrant Certificates, the Warrant Agent shall require evidence reasonably satisfactory to it of the loss, theft or destruction of such Warrant Certificate, and an open penalty surety bond satisfactory to it and holding the Company and the Warrant Agent harmless, absent notice to Warrant Agent that such certificates have been acquired by a bona fide purchaser. Applicants for such substitute Warrant Certificates shall also comply with such other regulations and pay such other charges as the Company or the Warrant Agent may require.

Section 7.4           Cancellation of Warrants

. If the Company shall purchase or otherwise acquire Warrants, such Warrants shall be cancelled and retired, in the case of Certificated Warrants or Direct Registration Warrants, by appropriate notation on the Warrant Register, and, in the case of Book-Entry Warrants, in accordance with the practices and procedures of the Depositary, including if required by such practices and procedure by appropriate notation on the applicable Global Warrant Certificate.

Article VIII

CONCERNING THE WARRANT AGENT AND OTHER MATTERS

Section 8.1           Resignation, Removal, Consolidation or Merger of Warrant Agent.

(a)           Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of sixty (60) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the Registered Holder of a Warrant, then the Registered Holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. The Company may, at any time and for any reason at no cost to the Holders, remove the Warrant Agent and appoint a successor Warrant Agent by written instrument signed by the Company and specifying such removal and the date when it is intended to become effective, one copy of which shall be delivered to the Warrant Agent being removed and one copy to the successor Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a Person organized and existing under the Laws of the United States of America, or any state thereunder, in good standing. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers, rights, immunities, duties and obligations of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent, the Company shall make, execute, acknowledge and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties and obligations.

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(b)           Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall (i) give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment, and (ii) cause written notice thereof to be delivered to each Registered Holder at such Registered Holder’s address appearing on the Warrant Register. Failure to give any notice provided for in this Section 8.1(b) or any defect therein shall not affect the legality or validity of the removal of the Warrant Agent or the appointment of a successor Warrant Agent, as the case may be.

(c)           Merger, Consolidation or Name Change of Warrant Agent.

(i)           Any Person into which the Warrant Agent may be merged or with which it may be consolidated or any Person resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement, without any further act or deed, if such person would be eligible for appointment as a successor Warrant Agent under the provisions of Section 8.1(a). If any of the Warrant Certificates have been countersigned but not delivered at the time such successor to the Warrant Agent succeeds under this Agreement, any such successor to the Warrant Agent may adopt the countersignature of any previous Warrant Agent; and if at that time any of the Warrant Certificates shall not have been countersigned, any successor to the Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

(ii)           If at any time the name of the Warrant Agent is changed and at such time any of the Warrant Certificates have been countersigned but not delivered, the Warrant Agent whose name has changed may adopt the countersignature under its prior name; and if at that time any of the Warrant Certificates have not been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

Section 8.2           Fees and Expenses of Warrant Agent.

(a)           Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as Warrant Agent as set forth in the fee proposal between the Company and the Warrant Agent dated December 21, 2016 and will reimburse the Warrant Agent upon demand for all reasonable and documented out-of-pocket expenses (including reasonable counsel fees and expenses), taxes and governmental charges and other charges of any kind and nature incurred by the Warrant Agent in connection with the negotiation, preparation, delivery, administration, execution, modification, waiver, delivery, enforcement or amendment of this of this Agreement and the exercise and performance of its duties hereunder.

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(b)           Further Assurances. The Company agrees to perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

Section 8.3           Duties of Warrant Agent

(a)           Covered Persons. References to the Warrant Agent in this Section 8.3 shall include the Warrant Agent and its affiliates, principles, directors, officers, employees, agents, representatives, attorneys, accountants, advisors and other professionals.

(b)           Liability.

(i)           The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement, the Warrant Statements or in the Warrant Certificates (except, in each case, its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. The Warrant Agent shall not be under any responsibility in respect of the validity or sufficiency of this Agreement or the execution and delivery hereof or in respect of the validity or execution of any Warrant Certificate (except, in each case, its countersignature therefor); nor shall the Warrant Agent be responsible for any breach by the Company of any covenant or condition contained in this Agreement; nor shall the Warrant Agent be responsible for the making of any adjustment in the Exercise Price or the number and/or kind of shares issuable upon the exercise of Warrants required under the provisions of Article V or be responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such change; nor shall the Warrant Agent by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Warrant Exercise Shares to be issued pursuant to this Agreement or any Warrant or as to whether any Warrant Exercise Shares will, when issued, be validly issued and fully paid and non-assessable. The Warrant Agent shall not be accountable or under any duty or responsibility for the application by the Company of the proceeds of the issue and sale, or exercise, of the Warrants.

(ii)          The Warrant Agent shall have no liability under, and no duty to inquire as to, the provisions of any agreement, instrument or document other than this Agreement.

(iii)         The Warrant Agent may rely on and shall incur no liability or responsibility to the Company, any Holder, or any other Person for any action taken, suffered or omitted to be taken by it upon any notice, instruction, request, resolution, waiver, consent, order, certificate, affidavit, statement, or other paper, document or instrument furnished to the Warrant Agent hereunder and believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. The Warrant Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such notice, instruction, request, resolution, waiver, consent, order, certificate, affidavit, statement, or other paper, document or instrument. The Warrant Agent shall not take any instructions or directions except those given in accordance with this Agreement.

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(iv)         The Warrant Agent shall act hereunder solely as agent for the Company and in a ministerial capacity and does not assume any obligation or relationship of agency or trust with any of the Holders, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable for any action taken, suffered or omitted to be taken in connection with this Agreement except to the extent that a court of competent jurisdiction determines that its own gross negligence, willful misconduct or bad faith (as each is determined by a final, nonappealable judgment) was the primary cause of any loss.

(v)         Anything in this Agreement to the contrary notwithstanding, in no event shall the Warrant Agent be liable for any special, incidental, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Warrant Agent has been advised of the likelihood of such loss or damage. Notwithstanding anything contained in this Agreement to the contrary, any liability of the Warrant Agent under this Agreement, whether in contract, or in tort, or otherwise, shall be limited in the aggregate to, and shall not exceed, an amount equal to the fees and charges, but not including reimbursable expenses, paid by the Company to the Warrant Agent hereunder during the twelve (12) months immediately preceding the event for which recovery from the Warrant Agent is being sought.

(vi)         All rights and obligations contained in this Section 8.3 shall survive the termination of this Agreement and the resignation, replacement, incapacity or removal of the Warrant Agent. All fees and expenses incurred by the Warrant Agent prior to the resignation, replacement, incapacity or removal of the Warrant Agent shall be paid by the Company in accordance with this Section 8.3 of this Agreement notwithstanding such resignation, replacement, incapacity or removal of the Warrant Agent.

(vii)        The Warrant Agent shall not be under any liability for interest on any monies at any time received by it pursuant to the provisions of this Agreement.

(viii)       In no event shall the Warrant Agent be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

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(ix)           In the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request or other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent, may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to the Company or any Holder or other person or entity for refraining from taking such action, unless the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the satisfaction of Warrant Agent.

(c)           Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by an Appropriate Officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered by it pursuant to the provisions of this Agreement. The Company will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing by the Warrant Agent of the provisions of this Agreement.

(d)           Indemnity. The Company agrees to indemnify, defend, protect and save the Warrant Agent and hold it harmless from and against any and all losses, damages, claims, liabilities, penalties, judgments, settlements, actions, suits, proceedings, litigation, investigations, costs or expenses, including without limitation reasonable fees and disbursements of counsel, that may be imposed on, incurred by, or asserted against such Person, at any time, and in any way relating to or arising out of or in connection with, directly or indirectly, the execution, delivery or performance of this Agreement, the enforcement of any rights or remedies under or in connection with this Agreement, or as may arise by reason of any act, omission or error of such Person; provided, that no such Person shall be entitled to be so indemnified, defended, protected, saved and kept harmless to the extent such loss was caused by its own gross negligence, bad faith or willful misconduct, each as determined by a final judgment of a court of competent jurisdiction. Notwithstanding the foregoing, the Company shall not be responsible for any settlement made without its written consent, which written consent shall not be unreasonably conditioned, withheld or delayed.

(e)           Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except, in each case, its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement; nor shall it be responsible to make any adjustments required under the provisions of Article V hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any Common Stock will, when issued, be valid and fully paid and non-assessable. The Warrant Agent will not be under any duty or responsibility to ensure compliance with any applicable federal or state securities Laws in connection with the issuance, transfer or exchange of Warrants.

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(f)           The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys, agents or employees, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys, agents or employees or for any loss to the Company resulting from such neglect or misconduct, provided, that the Warrant Agent acts without gross negligence, willful misconduct or bad faith (each as determined by a final judgment of a court of competent jurisdiction) in connection with the selection of such attorneys, agents or employees.

(g)           The Warrant Agent may consult at any time with legal counsel satisfactory to it (who may be legal counsel for the Company) and the advice of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by such parties in accordance with such advice.

(h)           The Warrant Agent may buy, sell, or deal in any of the Warrants or other securities of the Company freely as though it was not Warrant Agent under this Agreement. Nothing contained herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other Person.

(i)           The Warrant Agent shall not be required to use or risk its own funds in the performance of any of its obligations or duties or the exercise of any of its rights or powers, and shall not be required to take any action which, in the Warrant Agent’s sole and absolute judgment, could involve it in expense or liability unless furnished with security and indemnity satisfactory to it.

Article IX

MISCELLANEOUS PROVISIONS

Section 9.1           Binding Effects; Benefits. This Agreement shall inure to the benefit of and shall be binding upon the Company, the Warrant Agent and the Holders and their respective heirs, legal representatives, successors and assigns. Nothing in this Agreement, expressed or implied, is intended to or shall confer on any person other than the Company, the Warrant Agent and the Holders, or their respective heirs, legal representatives, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 9.2           Notices. Any notice or other communication by any of the Company, the Warrant Agent or the Registered Holders to the other(s) which may be, or is required to be, given hereunder shall be in writing and shall be sent by certified or regular mail (return receipt requested, postage prepaid), by private national courier service, by personal delivery or by facsimile transmission. Such notice or communication shall be deemed given (i) if mailed, two (2) days after the date of mailing, (ii) if sent by national courier service, one (1) Business Day after being sent, (iii) if delivered personally, when so delivered, or (iv) if sent by facsimile transmission, on the Business Day after such facsimile is transmitted, in each case as follows:

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if to the Warrant Agent, to:

Continental Stock Transfer & Trust Company
New York, New York 10004

17 Battery Place
Facsimile: (212) 616-7616

Attention: Margaret Villani & Steven Vacante

if to the Company, to:

Energy XXI Gulf Coast, Inc.

1021 Main Street, Suite 2626

Houston, Texas 77002

Facsimile: (713) 351-3300

Attention: John D. Schiller, Jr.

with copies (which shall not constitute notice) to:

Vinson & Elkins LLP
1001 Fannin Street

Suite 2500

Houston, TX 77002-6760
Facsimile: (713) 615-5234
Attention: Sarah K. Morgan

if to Registered Holders, at their addresses as they appear in the Warrant Register and, if different, at the addresses appearing in the records of the transfer agent or registrar for the Common Stock.

Section 9.3           Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the Holders, any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto, their successors and assigns and the Holders.

Section 9.4           Examination of this Agreement. A copy of this Agreement, and of the entries in the Warrant Register relating to such Registered Holder’s Warrants, shall be available at all reasonable times at an office designated for such purpose by the Warrant Agent, for examination by the Registered Holder of any Warrant.

Section 9.5           Counterparts. This Agreement may be executed in any number of original or facsimile or electronic PDF counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

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Section 9.6           Effect of Headings. The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation hereof.

Section 9.7           Supplements, Amendments and Waivers.

(a)           Subject to Section 9.7(b) below, this agreement may not be amended except in writing signed by the Company and the Warrant Agent.

(b)           The Company and the Warrant Agent may from time to time supplement or amend this Agreement or the Warrants without the approval of any Holder in order to (i) cure any manifest error or other mistake in this Agreement or the Warrants, or to correct any provision contained herein or in the Warrants that may be defective, (ii) evidence and provide for the acceptance of an appointment hereunder by a successor Warrant Agent or (iii) make any other provisions in regard to matters or questions arising hereunder that the Company may deem necessary or desirable and that shall not adversely affect, alter or change the interests of the Holders in any material respect, or

(c)           The Company and the Warrant Agent may from time to time supplement or amend this Agreement or the Warrants or waive compliance by the Company with any provision of this Agreement or the Warrants with the prior written consent of Requisite Holders; provided, that the consent of each Holder adversely affected thereby shall be required for any amendment that (i) reduces the term of the Warrants (or otherwise modifies any provisions pursuant to which the Warrants may be terminated or cancelled), (ii) increases the Exercise Price and/or decreases the number of Warrant Exercise Shares (or, as applicable, the amount of cash or such other securities and/or assets or other property) deliverable upon exercise of the Warrants, other than such increases and/or decreases that are made pursuant to Article V or (iii) modifies, in a manner adverse to the Holders generally, the material anti-dilution provisions set forth in Article V. In addition, any term of a specific Warrant may be supplemented, amended or waived with the written consent of the Company and the Holder of such Warrant.

(d)           It is not necessary for Holders to approve the particular form of any proposed supplement, amendment or waiver, but is sufficient if their consent approves the substance thereof. Notwithstanding anything to the contrary herein, upon the delivery of a certificate from an Appropriate Officer which states that the proposed supplement, amendment or waiver is in compliance with the terms of this Section 9.7, the Warrant Agent shall execute such supplement, amendment or waiver; provided, that the Warrant Agent may, but shall not be obligated to, execute any amendment, supplement or waiver that affects Warrant Agent’s rights, duties, immunities, liabilities or obligations hereunder. Any supplement, amendment or waiver effected pursuant to and in accordance with the provisions of this Section 9.7 shall be binding upon all Holders and upon each future Holder, the Company and the Warrant Agent. In the event of any supplement, amendment or waiver, the Company shall give prompt notice thereof to all Registered Holders. Any failure of the Company to give such notice or any defect therein shall not, however, in any way impair or affect the validity of any such amendment.

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Section 9.8           No Inconsistent Agreements; No Impairment. The Company shall not, on or after the date hereof, enter into any agreement with respect to its securities which conflicts with the rights granted to the Holders in this Agreement. The Company represents and warrants to the Holders that the rights granted hereunder do not in any way conflict with the rights granted to holders of the Company’s securities under any other agreements. The Company shall not, by amendment of its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of the Warrants and in the taking of all such action as may be necessary in order to preserve the exercise rights of the Holders against impairment.

Section 9.9           Integration/Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Company, the Warrant Agent and the Holders in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the Warrants. This Agreement supersedes all prior agreements and understandings between the parties with respect to the Warrants.

Section 9.10         Governing Law; Exclusive Jurisdiction. This Agreement and each Warrant issued hereunder shall be deemed to be a contract made under the Laws of the State of New York and for all purposes shall be governed by and construed in accordance with the Laws of such State. Each party hereto consents and submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and of the U.S. federal courts located in the Southern District of New York in connection with any action or proceeding brought against it that arises out of or in connection with, that is based upon, or that relates to this Agreement or the transactions contemplated hereby. In connection with any such action or proceeding in any such court, each party hereto hereby waives personal service of any summons, complaint or other process and hereby agrees that service thereof may be made in accordance with the procedures for giving notice set forth in Section 9.2 hereof. Each party hereto hereby waives any objection to jurisdiction or venue in any such court in any such action or proceeding and agrees not to assert any defense based on forum non conveniens or lack of jurisdiction or venue in any such court in any such action or proceeding.

Section 9.11          Termination. This Agreement will terminate on the earlier of (i) such date when all Warrants have been exercised with respect to all shares subject thereto, or (ii) the expiration of the Exercise Period. The provisions of Section 8.3 and this Article IX shall survive such termination and the resignation, replacement or removal of the Warrant Agent.

Section 9.12         Waiver of Trial by Jury. Each party hereto, including each Holder by its receipt of a Warrant, hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement and the transactions contemplated hereby.

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Section 9.13         Remedies. The Company hereby agrees that, in the event that the Company violates any provisions of the Warrants (including the obligation to deliver shares of Common Stock upon the exercise thereof), the remedies at law available to the Holder of such Warrant may be inadequate. In such event, the Requisite Holders and, other than in the event the Company fails to deliver Warrant Exercise Shares upon a Holder’s exercise of its Warrants or any other violation of Section 9.7(c) with respect to such Holder (which shall not require the consent of the Requisite Holders), with the prior written consent of the Requisite Holders, the Holder of such Warrants, shall have the right, in addition to all other rights and remedies any of them may have, to specific performance and/or injunctive or other equitable relief to enforce the provisions of this Agreement and the Warrants.

Section 9.14        Bank Accounts. All funds received by the Warrant Agent under this Agreement that are to be distributed or applied by the Warrant Agent in the performance of Services (the “Funds”) shall be held by the Warrant Agent as agent for the Company and deposited in one or more bank accounts to be maintained by the Warrant Agent in its name as agent for the Company. Until paid pursuant to the terms of this Agreement, the Warrant Agent will hold the Funds through such accounts in: deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). The Warrant Agent shall have no responsibility or liability for any diminution of the Funds that may result from any deposit made by the Warrant Agent in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other third party. The Warrant Agent may from time to time receive interest, dividends or other earnings in connection with such deposits. The Warrant Agent shall not be obligated to pay such interest, dividends or earnings to the Company, any holder or any other party.

Section 9.15         Severability. In the event that any one or more of the provisions contained in this Agreement, or the application thereof in any circumstances, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provisions in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby; provided, that if any such excluded provision shall adversely affect the rights, immunities, duties or obligations of the Warrant Agent, the Warrant Agent shall be entitled to immediately resign.

Section 9.16         Confidentiality

. The Warrant Agent and the Company agree that the Warrant Register and personal, non-public warrant holder information, which are exchanged or received pursuant to the negotiation or carrying out of this Agreement, shall remain confidential and shall not be voluntarily disclosed to any other person, except as may be required by law, including, without limitation, pursuant to subpoenas from state or federal government authorities (e.g., in divorce and criminal actions), or pursuant to the requirements of the SEC.

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Section 9.17         Warrantholder Actions.

(a)           Any notice, consent to amendment, supplement or waiver provided by this Agreement to be given by a Holder (an “act”) may be evidenced by an instrument signed by the Holder delivered to the Warrant Agent.

(b)           Any act by the Holder of any Warrant binds that Holder and every subsequent Holder of a Warrant certificate that evidences the same Warrant of the acting Holder, even if no notation thereof appears on the Warrant certificate. Subject to paragraph (c), a Holder may revoke an act as to its Warrants, but only if the Warrant Agent receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective.

(c)           The Company may, but is not obligated to, fix a record date for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard. If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date.

[Signature Page Follows]

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IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned parties hereto as of the date first above written.

Energy XXI Gulf Coast, inc.
By:	/s/ Hugh A. Menown
Name:	Hugh A. Menown
Title:	Executive Vice President, Chief Accounting Officer

[Signature Page to Warrant Agreement]

Continental stock transfer & trust company,as Warrant Agent
By:	/s/ Michael Mullings
Name:	Michael Mullings
Title:	Vice President

[Signature Page to Warrant Agreement]

EXHIBIT A-1

FACE OF GLOBAL WARRANT CERTIFICATE

VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 30, 2021

This Global Warrant Certificate is held by The Depository Trust Company (the “Depositary”) or its nominee in custody for the benefit of the beneficial owners hereof, and is not transferable to any person under any circumstances except that (i) this Global Warrant Certificate may be exchanged in whole but not in part pursuant to Section 6.1(g) of the Warrant Agreement, (ii) this Global Warrant Certificate may be delivered to the Warrant Agent for cancellation pursuant to Section 6.1(h) of the Warrant Agreement and (iii) this Global Warrant Certificate may be transferred to a successor Depositary with the prior written consent of the Company.

Unless this Global Warrant Certificate is presented by an authorized representative of the Depositary to the Company or the Warrant Agent for registration of transfer, exchange or payment and any certificate issued is registered in the name of Cede & Co. or such other entity as is requested by an authorized representative of the Depositary (and any payment hereon is made to Cede & Co. or to such other entity as is requested by an authorized representative of the Depositary), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful because the registered owner hereof, Cede & Co., has an interest herein.

Transfers of this Global Warrant Certificate shall be limited to transfers in whole, but not in part, to nominees of the Depositary or to a successor thereof or such successor’s nominee.

No registration or transfer of the securities issuable pursuant to the Warrant will be recorded on the books of the Company until such provisions have been complied with.

THE SECURITIES REPRESENTED BY THIS GLOBAL WARRANT CERTIFICATE (INCLUDING THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANT) ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT DATED AS OF DECEMBER 30, 2016, BY AND BETWEEN THE COMPANY AND THE WARRANT AGENT (THE “WARRANT AGREEMENT”).

THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 30, 2021

WARRANT TO PURCHASE

2,119,889 SHARES OF COMMON STOCK OF

ENERGY XXI GULF COAST, INC.*

CUSIP # 29276K 119
ISSUE DATE: December 30, 2016

No. W-1

This certifies that, for value received, Cede & Co. and its registered assigns (collectively, the “Registered Holder”), is entitled to purchase from reorganized Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), subject to the terms and conditions hereof, at any time before 5:00 p.m., New York time, on December 30, 2021, the number of fully paid and non-assessable shares of Common Stock, par value $0.01 per share (“Common Stock”) of the Company set forth above at the Exercise Price (as defined in the Warrant Agreement). The Exercise Price and the number and kind of shares purchasable hereunder are subject to adjustment from time to time as provided in Article V of the Warrant Agreement. The initial Exercise Price shall be $43.66.

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.

* Exercisable for 2,119,889 shares of Common Stock for all Warrants in the aggregate, subject to adjustment in accordance with Article V of the Warrant Agreement.

IN WITNESS WHEREOF, this Warrant has been duly executed by the Company under its corporate seal as of the 30th day of December, 2016.

ENERGY XXI GULF COAST, INC.
By:
Print Name:	Hugh A. Menown
Title:	Executive Vice President, Chief Accounting Officer
Attest:

Continental Stock Transfer & Trust Company, as Warrant Agent
By:
	Name: Michael Mullings
	Title: Vice President

Address of Registered Holder for Notices (until changed in accordance with this Warrant):
Cede & Co.
55 Water Street
New York, New York 10041

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL WARRANT CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.

FORM OF REVERSE OF GLOBAL WARRANT CERTIFICATE

The Warrant evidenced by this Global Warrant Certificate is a part of a duly authorized issue of Warrants to purchase 2,119,889¤ shares of Common Stock issued pursuant to the Warrant Agreement, a copy of which may be inspected at the office of the Warrant Agent designated for such purpose. The Warrant Agreement hereby is incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the Registered Holders of the Warrants. All capitalized terms used on the face of this Warrant herein but not defined that are defined in the Warrant Agreement shall have the meanings assigned to them therein.

The Company shall not be required to issue fractions of Common Stock or any certificates that evidence fractional Common Stock.

No Warrants may be sold, exchanged or otherwise transferred in violation of the Securities Act or state securities laws.

This Warrant does not entitle the Registered Holder to any of the rights of a stockholder of the Company.

The Company and Warrant Agent may deem and treat the Registered Holder hereof as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof (subject to Section 4.3(d)(z) of the Warrant Agreement) and for all other purposes (subject to Section 4.1(ii) of the Warrant Agreement), and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

¤ Exercisable for 2,119,889 shares of Common Stock for all Warrants in the aggregate, subject to adjustment in accordance with Article V of the Warrant Agreement.

EXHIBIT A-2

THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE (INCLUDING THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANT) ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT DATED AS OF DECEMBER 30, 2016, BY AND BETWEEN THE COMPANY AND THE WARRANT AGENT (THE “WARRANT AGREEMENT”).

Certificate Number  ________________	Warrants ___________
	CUSIP  29276K 119
This certifies that
is the holder of

WARRANTS TO PURCHASE COMMON STOCK OF
ENERGY XXI GULF COAST, INC.

transferable on the books of the Company by the holder hereof in person or by duly authorized attorney upon surrender of the certificate properly endorsed. Each Warrant entitles the holder and its registered assigns (collectively, the “Registered Holder”) to purchase by exercise from reorganized Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), subject to the terms and conditions hereof, at any time before 5:00 p.m., New York time, on December 30, 2021, one fully paid and non-assessable share of common stock, par value $0.01 per share (“Common Stock”) of the Company at the Exercise Price (as defined in the Warrant Agreement). The Exercise Price and the number and kind of shares purchasable hereunder are subject to adjustment from time to time as provided in Article V of the Warrant Agreement. The initial Exercise Price shall be $43.66.

This certificate is not valid unless countersigned and registered by the Warrant Agent.

WITNESS the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

	DATED
Authorized Officer
Attest:	COUNTERSIGNED AND REGISTERED CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS WARRANT AGENT
	By
Secretary	AUTHORIZED SIGNATURE

FORM OF REVERSE OF WARRANT

ENERGY XXI GULF COAST, INC.

The Warrants evidenced by this Warrant Certificate are a part of a duly authorized issue of Warrants to purchase 2,119,889 shares of Common Stock issued pursuant to the Warrant Agreement, as dated December 30, 2016 between reorganized Energy XXI Gulf Coast, Inc. and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (together with its successors and assigns, the “Warrant Agent” and the agreement, the “Warrant Agreement”), a copy of which may be inspected at the office of the Warrant Agent designated for such purpose. The Warrant Agreement is incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the Company and the Registered Holders of the Warrants. All capitalized terms used in this Warrant Certificate but not defined that are defined in the Warrant Agreement shall have the meanings assigned to them therein.

The Company shall not be required to issue fractions of Common Stock or any certificates that evidence fractional Common Stock. No Warrants may be sold, exchanged or otherwise transferred in violation of the Securities Act or state securities laws. The Warrants represented by this Warrant Certificate do not entitle the Registered Holder to any of the rights of a stockholder of the Company. The Company and Warrant Agent may deem and treat the Registered Holder hereof as the absolute owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone) for the purpose of any exercise hereof and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

EXHIBIT B-1

EXERCISE FORM FOR REGISTERED HOLDERS HOLDING WARRANT CERTIFICATES

(To be executed upon exercise of Warrants)

The undersigned Registered Holder of this Warrant Certificate, being the holder of Warrants of reorganized Energy XXI Gulf Coast, Inc. (the “Company”), issued pursuant to that certain Warrant Agreement, as dated December 30, 2016 (the “Warrant Agreement”), by and among the Company, and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (together with its successors and assigns, the “Warrant Agent”) hereby irrevocably elects to exercise the number of Warrants indicated below, for the purchase of the number of shares of Common Stock, par value $0.01 per share (“Common Stock”) indicated below and (check one):

¨ herewith tenders payment for _______ of the Warrant Exercise Shares to the order of the Company in the amount of $_________ in accordance with the terms of the Warrant Agreement; or

¨ herewith tenders _______ Warrants pursuant to the cashless exercise provisions of Section 4.3(b) of the Warrant Agreement. This exercise and election shall be immediately effective.

The undersigned requests that the Warrant Exercise Shares, or the net number of shares of Common Stock issuable upon exercise of the Warrants pursuant to the cashless exercise provisions of Section 4.3(b) of the Warrant Agreement, be issued in the name of the undersigned Holder or as otherwise indicated below:

Name

Address

If said number of Warrant Exercise Shares shall not be all the Warrant Exercise Shares issuable upon exercise of the Warrant, the undersigned requests that a new Warrant Certificate representing the balance of such Warrant shall be issued in the name of the undersigned Holder or as otherwise indicated below and be delivered to the address indicated below:

Name

Address

Delivery Address (if different)

Dated: ____________, 20___           HOLDER

[___________________]

By ____________________

Name:

Title:

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EXHIBIT B-2

EXERCISE FORM FOR REGISTERED HOLDERS HOLDING DIRECT REGISTERED WARRANTS

(To be executed upon exercise of Warrants)

The undersigned Holder, being the holder of Warrants of reorganized Energy XXI Gulf Coast, Inc. (the “Company”), issued pursuant to that certain Warrant Agreement, as dated December 30, 2016 (the “Warrant Agreement”), by and among reorganized the Company, and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (together with their respective successors and assigns, the “Warrant Agent”), hereby irrevocably elects to exercise the number of Warrants indicated below, for the purchase of the number of shares of Common Stock, par value $0.01 per share (“Common Stock”) indicated below and (check one):

¨ herewith tenders payment for _______ of the Warrant Exercise Shares to the order of the Company in the amount of $_________ in accordance with the terms of the Warrant Agreement; or

¨ herewith tenders _______ Warrants pursuant to the cashless exercise provisions of Section 4.3(b) of the Warrant Agreement. This exercise and election shall be immediately effective.

The undersigned requests that the Warrant Exercise Shares, or the net number of shares of Common Stock issuable upon exercise of the Warrants pursuant to the cashless exercise provisions of Section 4.3(b) of the Warrant Agreement, be issued in the name of the undersigned Holder or as otherwise indicated below:

Name

Address

If said number of Warrant Exercise Shares shall not be all the Warrant Exercise Shares issuable upon exercise of the Warrant, the undersigned requests that a new Warrant representing the balance of such Warrant shall be issued in the name of the undersigned Holder or as otherwise indicated below and that a Warrant Statement reflecting such balance be delivered to the address indicated below:

Name

Address

Delivery Address (if different)

Dated: ____________, 20___	HOLDER
	[___________________]
	By
	Name:
	Title:

EXHIBIT C

FORM OF ASSIGNMENT
FOR REGISTERED HOLDERS
HOLDING DIRECT REGISTRATION WARRANTS
(To be executed only upon assignment of Warrants)

For value received, the undersigned Holder of Warrants of reorganized Energy XXI Gulf Coast, Inc. (the “Company”), issued pursuant to that certain Warrant Agreement, as dated December 30, 2016 (the “Warrant Agreement”), by and among reorganized the Company, and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (together with its successors and assigns, the “Warrant Agent”), hereby sells, assigns and transfers unto the Assignee(s) named below the number of Warrants listed opposite the respective name(s) of the Assignee(s) named below, and all other rights of the Holder under said Warrants, and does hereby irrevocably constitute and appoint _____________________________ attorney, to transfer said Warrants, as and to the extent set forth below, on the Warrant Register maintained for the purpose of registration thereof, with full power of substitution in the premises:

Name(s) of Assignee(s) Address of Assignee(s) Number of Warrants

Dated:  ______ , 20__	Signature:  ____________________________
	Name:  _______________________________

Note: The above signature and name should correspond exactly with the name of the Holder of the Warrants as it appears on the Warrant Register.

EX-10.6

Exhibit 10.6

Execution Version

ENERGY XXI GULF COAST, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) by and between Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), and John D. Schiller, Jr. (“Executive”) is entered into effective as of December 30, 2016 (the “Effective Date”).

WHEREAS, Executive is currently employed by the Company; and

WHEREAS, the Company desires to continue to employ Executive in an executive capacity, and Executive likewise desires to continue to be employed by the Company;

NOW, THEREFORE, in consideration the mutual promises, covenants, representations, obligations and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1.          Employment-at-will. The Company agrees to employ Executive, and Executive hereby agrees to be employed by the Company. Employment of Executive shall be at will and may be terminated by either party on the terms and conditions set forth in this Agreement.

2.          Term of Employment. Subject to the provisions for termination provided in this Agreement, the term of this Agreement (the “Term”) shall commence on the Effective Date and shall continue through the third anniversary of the Effective Date.

3.          Executive’s Duties.

(a)          Positions. During the Term, Executive shall serve as President and Chief Executive Officer of the Company (and/or in such other positions as the parties mutually may agree), with such customary duties and responsibilities as may from time to time be assigned to him by the Company’s Board of Directors (the “Board”), provided that such duties are at all times consistent with the duties of such positions. Executive agrees to serve without additional compensation, if elected or appointed thereto, in one or more offices or as a director of the Company or any of the Company’s Affiliates. For purposes of this Agreement, the term “Affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, the Company. Executive agrees to serve in the positions referred to herein and to perform all duties relating thereto diligently and to the best of his ability.

(b)          Other Interests. Executive agrees, during the period of his employment by the Company, to devote his business time, energy and best efforts to the business and affairs of the Company and its Affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of the Company, except with the prior written consent of the Board. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in personal investments and other corporate, civic and charitable activities that do not conflict with the business and affairs of the Company or interfere with Executive’s performance of his duties hereunder without the necessity of obtaining the consent of the Board, provided, however, that Executive agrees that if the Board determines that continued service with one or more of these entities is inconsistent with Executive’s duties hereunder and gives written notice of such to Executive, Executive will promptly resign from such position(s).

(c)          Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty, fidelity, and allegiance to use his reasonable best efforts to act at all times in the best interests of the Company. In keeping with these duties, Executive shall make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning the subject matter of the fiduciary relationship.

4.          Compensation.

(a)          Base Compensation. For services rendered by Executive under this Agreement, the Company shall pay to Executive a minimum base salary (“Base Compensation”) of $900,000 per annum payable in accordance with the Company’s customary payroll practice for its senior executive officers. The amount of Base Compensation shall be reviewed periodically by the Compensation Committee of the Board (the “Committee”) and may be adjusted from time to time as the Committee may deem appropriate. References in this Agreement to Base Compensation shall refer to annual base salary so increased. Base Compensation, as in effect at any time, may not be decreased without the prior written consent of Executive.

(b)          Annual Bonus. In addition to his Base Compensation, Executive shall be eligible to receive each year during the Term, a cash incentive payment (“Bonus”) in an amount determined by the Committee based on performance goals established by the Committee. The Target Bonus shall be an amount equal to 125% of Executive’s Base Compensation in effect at the time the Bonus is determined by the Committee (“Target Bonus”). Such Bonus, if any, shall be paid not later than the fifteenth day of the second calendar month following the last day of the Company’s fiscal year in which the Bonus was earned ends.

(c)          Equity Compensation. During this Agreement, Executive shall be eligible to participate in any equity compensation arrangement or plan offered by the Company to senior executives on such terms and conditions as the Committee shall determine. Nothing herein shall be construed to give Executive any rights to any amount or type of awards, or rights as a shareholder pursuant to any such plan, grant or award except as provided in such award or grant to Executive provided in writing and authorized by the Committee.

5.          Other Benefits.

(a)          During this Agreement, Executive shall be eligible to participate in benefit and additional incentive compensation plans generally offered by the Company to similarly situated executives, as in effect from time to time, including, without limitation, participation in the various health, retirement, life insurance, short-term and long-term disability insurance, parking and other executive benefit plans or programs provided to the executives of the Company in general, subject to the regular eligibility requirements with respect to each of such benefit plans or programs, and such other benefits or perquisites as may be approved by the Committee during the Term, all on a basis at least as favorable to Executive as may be provided to similarly situated senior executive officers of the Company. Executive shall be entitled to vacation in accordance with the Company’s plans, policies, programs and practices as in effect from time to time.

(b)          Business Expenses. The Company shall reimburse Executive for all reasonable business expenses incurred by Executive in the performance of his duties, which expenses will be subject to the oversight of the Audit Committee of the Board in the normal course of business and will be compliant with the applicable Reimbursement Plan (as defined below) of the Company. It is understood that Executive is authorized to incur reasonable business expenses for promoting the business of the Company, including reasonable expenditures for travel, lodging, meals and client or business associate entertainment. Request for reimbursement for such expenses must be accompanied by appropriate documentation.

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(c)          Automobile. The Company shall provide Executive with an automobile (or an automobile allowance) that is determined by the Committee or the Board to be appropriate for the needs and requirements of Executive’s employment, and the Company shall reimburse Executive for, or pay on behalf of Executive, reasonable and appropriate expenses incurred by Executive for maintaining and operating such automobile, as determined by the Committee or the Board. Such reimbursements shall comply with all requirements of the applicable Reimbursement Plan (as defined below) of the Company. Such automobile shall be available to Executive and his spouse for personal use.

(d)          Life Insurance. During Executive’s employment hereunder, the Company shall maintain one or more policies of life insurance on the life of Executive providing an aggregate death benefit in an amount not less than $4 million; provided that the Company shall be under no obligation to incur costs exceeding $30,000 per year in connection with satisfying the provisions of this Section. Executive shall have the right to designate the beneficiary or beneficiaries of the death benefit payable pursuant to such policy or policies. The provisions of this Section can be satisfied in whole or in part by any group life insurance policy provided by the Company in accordance with this Section. Executive shall (i) furnish any and all information reasonably requested by the Company or the insurer to facilitate the issuance of the life insurance policy or policies described in this Section or any adjustment to any such policy, and (ii) take such physical examinations as the Company or the insurer deems necessary. If Executive refuses to cooperate or makes any material misstatement of information or nondisclosure of medical history, then the Company shall have no further obligation to provide the benefit described in this Section.

6.          Termination and Effect on Compensation.

(a)          Resignation by Executive.

(i)          Executive may terminate his employment under this Agreement and resign his position(s) with the Company at any time, for any reason whatsoever, or for no reason, in Executive’s sole discretion, by delivering a Notice of Termination (defined in Section 6(d) below). In the event of such termination, except as otherwise provided below, Executive shall not be entitled to further compensation pursuant to this Agreement except as may be provided by the terms of any benefit plans of the Company in which Executive may be a participant, and the terms of any outstanding equity grants, and for salary accrued but unpaid through the Date of Termination (defined in Section 6(e) below) and reimbursement of business expenses properly incurred but unreimbursed (to the extent reimbursable) prior to Date of Termination.

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(ii)         Notwithstanding the provisions of Section 6(a)(i), in the event that Executive terminates this Agreement by resigning for Good Reason (defined in Section 6(h) below), subject to Executive’s compliance with the provisions of Section 7, (A) the Company shall pay Executive on the 60^th day following the Date of Termination (subject to satisfaction of the requirements of Section 6(j) hereof) a lump sum equal to three (3) times the sum of the Base Compensation and the Target Bonus; and (B) the Company shall reimburse Executive for the monthly cost of maintaining health benefits for Executive (and Executive’s spouse and eligible dependents) as of the date of termination of employment under a group health plan of the Company for purposes of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), excluding any short-term or long-term disability insurance benefits, for a period of 18 months following the date of the termination of employment, to the extent Executive properly elects COBRA. Notwithstanding the foregoing, in the event that Executive resigns for Good Reason on or prior to the first anniversary of the Effective Date, subject to Executive’s compliance with the provisions of Section 7, the Company shall (A) pay Executive a lump sum equal to $2,000,000 on the 60^th day following the Date of Termination and (B) reimburse Executive for the monthly cost of maintaining health benefits for Executive (and Executive’s spouse and eligible dependents) as of the date of termination of employment under a group health plan of the Company for purposes of COBRA, excluding any short-term or long-term disability insurance benefits, for a period of 18 months following the date of the termination of employment, to the extent Executive properly elects COBRA, and the Company shall have no further obligations to Executive except for salary accrued but unpaid through the Date of Termination and reimbursement of business expenses properly incurred but unreimbursed (to the extent reimbursable) prior to Date of Termination.

(b)          Death or Disability of Executive. If Executive dies during the term of this Agreement or if Executive’s employment is terminated by the Company on account of Executive’s Disability (as defined below), then the Company will be obligated to continue for twelve (12) months after the Date of Termination to pay the Base Compensation payments under Section 4(a) of this Agreement and Executive will be entitled to no further compensation or benefits hereunder (other than those set forth in Section 6(a)(i).

“Disability” means Executive’s absence from the full-time performance of Executive’s duties with the Company for 180 business days during any twelve-month period as a result of Executive’s incapacity due to accident, physical or mental illness, or other circumstance which renders him mentally or physically incapable of performing the duties and services required of him hereunder on a full-time basis as determined by Executive’s physician.

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(c)         Other Terminations.

(i)          By the Company for Reason Other than Cause. The Company may terminate this Agreement and Executive’s employment for any reason whatsoever, or for no reason, in the Board’s sole discretion, upon Notice of Termination. For purposes of this Agreement, acceptance by the Company of Executive’s resignation upon request or by mutual agreement shall be deemed to be a termination by the Company. Except as otherwise provided below, in the event that Executive’s employment is terminated by the Company for any reason other than Cause (defined in Section 6(c)(ii) below), other than due to Executive’s death or Disability, then in addition to any compensation or benefits to which Executive may be entitled through the Date of Termination, subject to Executive’s compliance with the provisions of Section 7: (A) the Company shall pay Executive on the 60^th day following the Date of Termination (subject to satisfaction of the requirements of Section 6(j) hereof) a lump sum equal to three (3) times the sum of the Base Compensation and the Target Bonus; and (B) the Company shall reimburse Executive for the monthly cost of maintaining health benefits for Executive (and Executive’s spouse and eligible dependents) as of the date of termination of employment under a group health plan of the Company for purposes of COBRA, excluding any short-term or long-term disability insurance benefits, for a period of 18 months following the date of the termination of employment, to the extent Executive properly elects COBRA. Notwithstanding the foregoing, in the event that the Company terminates Executive’s employment on or prior to the first anniversary of the Effective Date other than for Cause, Executive’s death or Executive’s Disability, the Company, subject to Executive’s compliance with the provisions of Section 7, shall (A) pay Executive a lump sum equal to $2,000,000 on the 60th day following the Date of Termination and (B) reimburse Executive for the monthly cost of maintaining health benefits for Executive (and Executive’s spouse and eligible dependents) as of the date of termination of employment under a group health plan of the Company for purposes of COBRA, excluding any short-term or long-term disability insurance benefits, for a period of 18 months following the date of the termination of employment, to the extent Executive properly elects COBRA, and the Company shall have no further obligations to Executive except for salary accrued but unpaid through the Date of Termination and reimbursement of business expenses properly incurred but unreimbursed (to the extent reimbursable) prior to Date of Termination.

(ii)         By the Company for Cause. Notwithstanding the foregoing provisions of this Section 6, in the event Executive is terminated for Cause, the Company shall have no obligations pursuant to this Agreement after the Date of Termination other than for salary accrued but unpaid through the Date of Termination and reimbursement of business expenses properly incurred but unreimbursed (to the extent reimbursable) prior to Date of Termination. For purposes herein, “Cause” means (A) Executive’s embezzlement, fraud, gross negligence, gross neglect or willful misconduct in the performance of the duties required hereunder, (B) Executive’s commission of a felony, (C) Executive’s material breach of this Agreement or any other agreement with the Company or its Affiliates, or (D) Executive’s failure to follow any lawful directive of the Board or other refusal to perform his duties hereunder. Notwithstanding the foregoing, prior to any termination for Cause under clauses (A), (C)  or (D) of the preceding sentence, (X) the Company must provide Executive with reasonable notice detailing the failure or conduct on which the termination is to be based, (Y) the Company must provide Executive a reasonable opportunity to cure such failure or conduct (to the extent curable), and (Z) after such notice and an opportunity to cure, the Committee must reasonably determine that Executive has not cured such failure or conduct. Executive shall not be deemed to have been terminated for Cause unless and until Executive shall have been provided an opportunity to be heard in person by the Committee (with the assistance of Executive’s counsel if Executive so desires) on at least five business days’ advance notice, and the Committee must approve the termination of Executive for Cause by a two-thirds vote.

(iii)        If Executive is a “specified employee” (as defined within Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the accompanying regulations to Section 409A of the Code (the “Nonqualified Deferred Compensation Rules”) at the time that Executive incurs a “separation from service” (as defined in the Nonqualified Deferred Compensation Rules), payments or benefits that would be considered deferred compensation under Section 409A of the Code shall not be provided in accordance with the time periods described in the applicable Sections, but shall be delayed for a period of six months. Such amounts that would otherwise be payable upon separation from service shall be paid to Executive as of the earlier of: (1) the first day of the seventh month following Executive’s separation from service; or (2) Executive’s date of death.

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(iv)        With respect to reimbursements and in-kind benefits provided pursuant to this Agreement: (1) the amounts reimbursed and in-kind benefits under this Agreement during Executive’s taxable year may not affect the amounts reimbursed or in-kind benefits provided in any other taxable year, (2) the reimbursement of an eligible expense shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred, (3) the right to reimbursement or an in-kind benefit is not subject to liquidation or exchange for another benefit, and (4) any expenses reimbursed/in-kind benefits will not affect the expenses eligible for reimbursement/in-kind benefits provided in any other year (any such reimbursement or in-kind benefit arrangement to be referred to herein as a “Reimbursement Plan”).

(d)        Notice of Termination. Any purported termination of Executive’s employment by the Company or by Executive and any purported termination of this Agreement shall be communicated by written notice of termination (“Notice of Termination”) to the other party hereto in accordance with Section 11 hereof. Notice of Termination shall include the effective Date of Termination of this Agreement. Any Notice of Termination shall be deemed to also be Executive’s resignation as director and/or officer of any Affiliate of the Company and from all other positions Executive holds with the Company or its Affiliates. Executive agrees to execute any and all documentation of such resignations upon request by the Company, but he shall be treated for all purposes as having so resigned upon the Date of Termination, regardless of when or whether he executes any such documentation.

(e)        Date of Termination. “Date of Termination” shall mean in the case of Executive’s death, his date of death, and in all other cases, the date specified in the Notice of Termination as the effective date on which this Agreement shall be terminated, provided that for purposes of determining the date of payment pursuant to Executive’s termination for any reason Executive’s separation of service in accordance with Treasury Regulation 1.409A-1(h) shall be used.

(f)         No Duty to Mitigate. Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation or benefit earned by Executive as a result of employment by another employer, self-employment earnings, or by retirement benefits.

(g)        Section 280G.

(i)          Notwithstanding any other provisions in this Agreement, in the event that any payment or benefit received or to be received by Executive (including any payment or benefit received in connection with a change of control of the Company or the termination of Executive’s employment, whether pursuant to the terms of this Agreement or any other plan, program, arrangement or agreement) (all such payments and benefits, together, the “Total Payments”) would be subject (in whole or part), to any excise tax imposed under Section 4999 of the Code, or any successor provision thereto (the “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, program, arrangement or agreement, the Company will reduce the Total Payments to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (but in no event to less than zero); provided that the Total Payments will only be reduced if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state, municipal and local income and employment taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state, municipal and local income and employment taxes on such Total Payments and the amount of Excise Tax to which Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

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(ii)         In the case of a reduction in the Total Payments, the Total Payments will be reduced in the following order: (1) payments that are payable in cash that are valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a) will be reduced (if necessary, to zero), with amounts that are payable last reduced first; (2) payments and benefits due in respect of any equity valued at full value under Treasury Regulation Section 1.280G-1, Q&A 24(a), with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24), will next be reduced; (3) payments that are payable in cash that are valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with amounts that are payable last reduced first, will next be reduced; (4) payments and benefits due in respect of any equity valued at less than full value under Treasury Regulation Section 1.280G-1, Q&A 24, with the highest values reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24), will next be reduced; and (5) all other non-cash benefits not otherwise described in clauses (2) or (4) will be next reduced pro-rata. Any reductions made pursuant to each of clauses (1)-(4) above will be made in the following manner: first, a pro-rata reduction of cash payment and payments and benefits due in respect of any equity not subject to Section 409A of the Code, and second, a pro-rata reduction of cash payments and payments and benefits due in respect of any equity subject to Section 409A of the Code as deferred compensation.

(iii)        For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax: (A) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code will be taken into account; (B) no portion of the Total Payments will be taken into account which, in the opinion of the Company, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments will be taken into account which, in the opinion of the Company, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as set forth in Section 280G(b)(3) of the Code) that is allocable to such reasonable compensation; and (C) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Company in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

(h)         Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following circumstances, without Executive’s written consent:

(i)          the change of Executive’s title or the assignment to Executive of any duties that materially adversely alter the nature or status of Executive’s office, title, responsibilities, including reporting responsibilities, or action by the Company that results in the material diminution of Executive’s position, duties or authorities, from those in effect immediately prior to such change in title, assignment or action;

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(ii)         any material reduction in Executive’s Base Compensation or Target Bonus opportunity;

(iii)        the Company’s requiring Executive to permanently relocate anywhere outside the greater Houston, Texas metropolitan area, except for required travel on the Company’s business to an extent substantially consistent with Executive’s obligations under this Agreement; or

(iv)        the Company’s material breach of this Agreement.

Executive is required to provide notice to the Company of the existence of the conditions described above in this Section 6(h) within a period not to exceed 90 days from the initial existence of the condition, upon the notice of which the Company must be provided a period of at least 30 days during which it may remedy the condition. Any resignation for Good Reason must occur after the Company’s failure to remedy, and in all events must occur within 150 days following the initial existence of the condition.

(i)          Reimbursements for Expenses. The Company shall reimburse Executive for business expenses properly incurred prior to the Date of Termination, regardless of the circumstances of termination, and in accordance with the Company’s Reimbursement Plans.

(j)          Post-Termination Release. Notwithstanding any other provisions of this Agreement, it shall be a condition to Executive’s right to receive the amounts provided for in Sections 6(a)(ii), 6(b), 6(c)(i) and 8 of this Agreement that Executive (or Executive’s estate, as applicable) will execute and deliver to the Company an effective release of claims in the form attached hereto as Exhibit A (the “Release”) within the time period set forth therein (and in all events within 59 days following the Date of Termination) with all periods for revocation thereof having expired. The form of the Release may be modified by the Company to reflect changes in the applicable law or regulations.

7.          Restrictive Covenants.

(a)          General. The parties acknowledge that during the Term, the Company will disclose to Executive or provide Executive with access to trade secrets or confidential information (“Confidential Information”) of the Company or its Affiliates; and/or place Executive in a position to develop business goodwill on behalf of the Company or its Affiliates; and/or entrust Executive with business opportunities of the Company or its Affiliates. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and Confidential Information of the Company and its Affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of the Company and its Affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by the Company and its Affiliates; and as an additional incentive for the Company to enter into this Agreement, the Company and Executive agree to the following obligations relating to unauthorized disclosures, non-competition and non-solicitation.

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(b)          Confidential Information; Unauthorized Disclosure. (i) Executive shall not, whether during the period of his employment hereunder or thereafter, without the written consent of the Board or a person authorized thereby, disclose to any person, other than an executive of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by Executive of his duties as an executive of the Company, any Confidential Information, including but not limited to technology, know-how, processes, maps, geological and geophysical data, other proprietary information and any information whatsoever of a confidential nature; provided, however, that Confidential Information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by Executive) or any information which Executive may be required to disclose by any applicable law, order, or judicial or administrative proceeding, provided that Executive first notifies the Company to facilitate a possible protective order and thereafter discloses only the minimum amount of Confidential Information required. Within fourteen (14) days after the termination of Executive’s employment for any reason, Executive shall return to the Company all documents and other tangible items containing Company information which are in Executive’s possession, custody or control. Executive agrees that all Confidential Information of the Company exclusively belongs to the Company, and that any work of authorship relating to the Company’s business, products or services, whether such work is created solely by Executive or jointly with others, and whether or not such work is Confidential Information, shall be deemed exclusively belonging to the Company.

(ii)         Nothing in this Agreement will prohibit or restrict Executive from responding to any inquiry, or otherwise communicating with, any federal, state or local administrative or regulatory agency or authority or participating in an investigation conducted by any governmental agency or authority. Executive cannot be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; or that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. As a result, the Company and Executive shall have the right to disclose trade secrets in confidence to Federal, State, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. Each of the Company and Executive also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with that right or to create liability for disclosures of trade secrets that are expressly allowed by the foregoing.

(c)          Non-Competition. During the Term and for a period of 12 months thereafter, Executive shall not in any geographic area or market where the Company or any of its Affiliates are conducting any Business (defined below) or have during the previous 12 months conducted such Business, directly or indirectly for Executive or for others, engage in or become interested financially in as a principal, executive, partner, shareholder, agent, manager, owner, advisor, lender, guarantor of any person engaged in any business substantially identical to the Business (defined below), or otherwise; provided, however, that Executive may invest in stock, bonds or other securities in any such business (without participating in such business) if: (A) such stock, bonds or other securities are listed on any United States securities exchange or are publicly traded in an over the counter market and (B) aggregate investment does not exceed, in the case of any capital stock of any one issuer, 5% of the issued and outstanding capital stock, or in the case of bonds or other securities, 5% of the aggregate principal amount thereof issued and outstanding. The term “Business” shall mean the exploration, development and production of crude petroleum and natural gas.

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(d)          Non-Solicitation. Executive undertakes toward the Company and is obligated, during the Term and for a period of 12 months thereafter, in any geographic area or market where the Company or any of its Affiliates are conducting any Business or have during the previous 12 months conducted such Business, not to solicit or hire, directly or indirectly for Executive or for others, in any manner whatsoever, in the capacity of employee, executive, consultant or in any other capacity whatsoever, one or more of the employees, executives, directors or officers or other persons (hereinafter collectively referred to as “Company Executives”) who at the time of solicitation or hire, or in the one-year  period prior thereto, are or were working full-time or part-time for the Company or any of its Affiliates and not to endeavor, directly or indirectly, in any manner whatsoever, to encourage any of said Company Executives to leave his or her job with the Company or any of its Affiliates and not to endeavor, directly or indirectly, and in any manner whatsoever, to incite or induce any client of the Company or any of its Affiliates to terminate, in whole or in part, its business relations with the Company or any of its Affiliates.

(e)          Enforcement and Reformation. It is the desire and intent of the parties that the provisions of this Section 7 shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Section 7 shall be adjudicated to be invalid or unenforceable, such provision shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable. Such deletion shall apply only with respect to the operation of such provisions of this Section 7 in the particular jurisdiction in which such adjudication is made. In addition, if the scope of any restriction contained in this Section 7 is too broad to permit enforcement thereof to its fullest extent, then such restriction shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that such scope may be judicially modified in any proceeding brought to enforce such restriction.

(f)          Remedies. In the event of a breach or threatened breach by Executive of the provisions of this Section 7, Executive acknowledges that money damages would not be sufficient remedy, and the Company shall be entitled to specific performance, injunction and such other equitable relief as may be necessary or desirable to enforce the restrictions contained herein, without providing any bond and irrespective of any requirement of necessity or other showing. Nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available for such breach or threatened breach or any other breach of this Agreement.

(g)          Nondisparagement. Executive shall refrain from any criticisms or disparaging comments about the Company or its Affiliates, or any of their respective directors, officers, employees, advisors or stakeholders, or in any way relating to Executive’s employment or separation from employment; provided, however, that nothing in this Agreement shall apply to or restrict in any way the communication of information by Executive to any state or federal law enforcement agency or require notice to the Company thereof, and Executive will not be in breach of the covenant contained above solely by reason of testimony or disclosure which is compelled by applicable law or regulation or process of law. The Company shall, and shall instruct its directors and senior executive officers to, refrain from making any formal public statements containing any criticisms or disparaging comments about Executive, including any criticisms or disparaging comments that in any way relate to Executive’s employment or separation from employment; provided, however, that nothing in this Agreement shall apply to or restrict in any way the communication of information to any state or federal law enforcement agency or require notice to Executive thereof, and none of the Company or any of its Affiliates will be in breach of the covenant contained above solely by reason of testimony or disclosure which is compelled by applicable law or regulation or process of law. A violation or threatened violation of these prohibitions may be enjoined by the courts. The rights afforded under this provision are in addition to any and all rights and remedies otherwise afforded by law.

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8.          Board Evaluation Right. Until the first anniversary of the Effective Date, the Board will have the right, in its sole discretion, to reevaluate this Agreement to ensure that the terms contained herein are consistent with market practices. To the extent the Board determines that the terms of this Agreement are inconsistent with market practices, the Board will provide to Executive a notice (the “Evaluation Notice”) and the parties will negotiate in good faith to revise this Agreement as necessary. If the parties are unable to reach an agreement within 30 days of the Evaluation Notice, the Board may terminate this Agreement and Executive’s employment, and, subject to Executive’s compliance with the provisions of Section 7 and Executive’s execution of the Release, the Company shall (A) pay Executive a lump sum equal to $2,000,000 on the 60^th day following the date of such termination and (B) reimburse Executive for the monthly cost of maintaining health benefits for Executive (and Executive’s spouse and eligible dependents) as of the date of termination of employment under a group health plan of the Company for purposes of COBRA, excluding any short-term or long-term disability insurance benefits, for a period of 18 months following the date of the termination of employment, to the extent Executive properly elects COBRA, and the Company shall have no further obligations to Executive (notwithstanding any other provisions of this Agreement) except for salary accrued but unpaid through the date of termination and reimbursement of business expenses properly incurred but unreimbursed (to the extent reimbursable) prior to date of termination.

9.          Release. Executive hereby, for himself, his heirs, executors, successors and assigns, releases and forever discharges the Company, Energy XXI Ltd. and their affiliates (the “EXXI Parties”) from any and all claims he may have, or now has, against any of the EXXI Parties (including, without limitation, any claims arising from the employment agreement, dated as of September 10, 2008 by and between Energy XXI (Bermuda) Limited and Executive (as amended, the “Employment Agreement”), or any of the EXXI Parties’ rejection of the Employment Agreement). Executive agrees not to assert any of the foregoing claims against any of the EXXI Parties; provided, however, that Executive may assert and receive a recovery on any prepetition indemnification claims as Class 11 General Unsecured Claims in accordance with the terms of the Debtors’ Second Amended Proposed Joint Chapter 11 Plan of Reorganization [Docket No. 1638] (as amended).

10.         Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company or any of its Affiliates and for which Executive may qualify, nor shall anything herein limit or otherwise adversely affect such rights as Executive may have under any stock option or other agreements with the Company or any of its Affiliates.

11.         Non-assignability by Executive. The obligations of Executive hereunder are personal and may not be assigned or delegated by him or transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer, except by will or the laws of descent and distribution.

12.         Method of Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, sent by overnight courier or by facsimile with confirmation of receipt or on the third business day after being mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Company at its principal office address and facsimile number, directed to the attention of the Board with a copy to the Secretary of the Company, and to Executive at Executive’s residence address and facsimile number on the records of the Company or to such other address as either party may have furnished to the other in writing in accordance herewith except that notice of change of address shall be effective only upon receipt.

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13.         Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

14.         Successors and Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise), and this Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor by operation of law or otherwise and any successor to its business and/or assets as aforesaid which assumes this Agreement.

15.         Indemnification. The Company agrees to indemnify Executive with respect to any acts or omissions he may in good faith commit during the period during which he is an officer, director and/or employee of the Company or any Affiliate thereof, and to provide him with coverage under any directors’ and officers’ liability insurance policies, in each case on terms not less favorable than those provided to its other directors and officers generally, as in effect from time to time.

16.         Withholding. Anything to the contrary notwithstanding, all payments required to be made by the Company hereunder to Executive, his spouse, his estate or beneficiaries, shall be subject to withholding of such amounts relating to taxes as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts in whole or in part, the Company may, in its sole discretion, accept other provisions for payment of taxes as required by law, provided it is satisfied that all requirements of law affecting its responsibilities to withhold such taxes have been satisfied.

17.         Waiver and Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and such officer as may be specifically authorized by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

18.         Applicable Law. This Agreement is entered into under, and the validity, interpretation, construction and performance of this Agreement shall be governed by, the laws of the State of Texas.

19.         Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

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20.         Entire Agreement. Except as provided herein, this Agreement is an integration of the parties’ agreement; no agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement; and this Agreement contains the entire understanding of the parties in respect of the subject matter and supersedes and replaces in full all prior written or oral agreements and understandings between the parties with respect to such subject matters. Without limiting the scope of the preceding sentence, all prior understandings and agreements among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect. Notwithstanding the foregoing, all of Executive’s restrictive covenant obligations herein are in addition to all of Executive’s other similar obligations to the Company (whether by separate agreement, Company policy, or applicable law).

21.         Representation by Executive. Executive hereby represents and warrants to the Company that, as of the Effective Date, he is not a party to any employment or other agreement with any third party which would preclude him from continuing employment with the Company and performing his obligations under this Agreement.

22.         Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement and all other provisions shall remain in full force and effect.

23.         Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

24.         Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

25.         Cooperation. Executive agrees, during and after the Term, without limitation as to time, to provide information, assistance and cooperation to the Company and its Affiliates, including but not limited to the transition of his most recent role and his attendance and truthful testimony with respect to the Company’s or its Affiliates’ investigation, analysis, resolution, defense and/or prosecution of any existing and/or future claims, disputes or disagreements with respect to any and all matters about which Executive has knowledge, or should have knowledge, by virtue of his employment with the Company or otherwise. Such assistance and cooperation shall be provided by Executive without fee or charge. The Company will take reasonable steps to ensure that such assistance shall be given during regular business hours at locations and times mutually agreed upon by Executive and the Company, except with respect to mandated court appearances for which Executive will make himself available upon reasonable notice. Executive shall be entitled to receive prompt reimbursement for all reasonable travel expenses incurred by him in accordance with such cooperation, provided that Executive properly accounts for such expenses in accordance with the Company’s policies and procedures.

26.         Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to Executive pursuant to this Agreement or any other agreement or arrangement with the Company or its Affiliates, which is subject to recovery under any law, government regulation, stock exchange listing requirement or applicable Company policy, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Company policy.

27.         Survival. The obligations of the Company and Executive under this Agreement which by their nature may require either partial or total performance after the expiration or termination of the Term or this Agreement (including those under Sections 7 and 25) will survive any termination or expiration of this Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of December 30, 2016 effective for all purposes as provided above on the Effective Date.

Energy XXI Gulf Coast, inc.

By:	/s/ Hugh A. Menown
Name:	Hugh A. Menown
Title:	Executive Vice President, Chief Accounting Officer

EXECUTIVE

/s/ John D. Schiller, Jr.

John D. Schiller, Jr.

[Signature Page to Employment Agreement - Schiller]

Exhibit A

WAIVER AND RELEASE OF CLAIMS Agreement

John D. Schiller , Jr. (“Executive”) hereby acknowledges that Energy XXI Gulf Coast, Inc. (“Employer”) is offering Executive certain payments in connection with Executive’s termination of employment pursuant to the employment agreement entered into between Employer and Executive, as amended (the “Employment Agreement”), in exchange for Executive’s promises in this Waiver and Release of Claims Agreement (this “Agreement”).

Severance Payments

1.          Executive agrees that Executive will be entitled to receive the applicable severance payments under the Employment Agreement (the “Severance Payments”) only if Executive accepts and does not revoke this Agreement, which requires Executive to release both known and unknown claims.

2.          Executive agrees that the Severance Payments tendered under the Employment Agreement constitute fair and adequate consideration for the execution of this Agreement. Executive further agrees that Executive has been fully compensated for all wages and fringe benefits, including, but not limited to, paid and unpaid leave, due and owing, and that the Severance Payments are in addition to payments and benefits to which Executive is otherwise entitled.

Claims That Are Being Released

3.          Executive agrees that this Agreement constitutes a full and final release by Executive and Executive’s descendants, dependents, heirs, executors, administrators, assigns, and successors, of any and all claims, charges, and complaints, whether known or unknown, that Executive has or may have to date against Employer and any of its parents, subsidiaries, or affiliated entities and their respective officers, directors, shareholders, partners, joint venturers, employees, consultants, insurers, agents, predecessors, successors, and assigns, arising out of or related to Executive’s employment or the termination thereof, or otherwise based upon acts or events that occurred on or before the date on which Executive signs this Agreement. To the fullest extent allowed by law, Executive hereby waives and releases any and all such claims, charges, and complaints in return for the Severance Payments. This release of claims is intended to be as broad as the law allows, and includes, but is not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith or fair dealing, express or implied, any tort or common law claims, any legal restrictions on Employer’s right to terminate employees, and any claims under any federal, state, municipal, local, or other governmental statute, regulation, or ordinance, including, without limitation:

(a) claims of discrimination, harassment, or retaliation under equal employment laws such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Rehabilitation Act of 1973, and any and all other federal, state, municipal, local, or foreign equal opportunity laws;

(b) if applicable, claims of wrongful termination of employment; statutory, regulatory, and common law “whistleblower” claims, and claims for wrongful termination in violation of public policy;

(c) claims arising under the Employee Retirement Income Security Act of 1974, except for any claims relating to vested benefits under Employer’s employee benefit plans;

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(d) claims of violation of wage and hour laws, including, but not limited to, claims for overtime pay, meal and rest period violations, and recordkeeping violations; and

(e) claims of violation of federal, state, municipal, local, or foreign laws concerning leaves of absence, such as the Family and Medical Leave Act.

Claims That Are Not Being Released

4.          This release does not include any claims that may not be released as a matter of law, and this release does not waive claims or rights that arise after Executive signs this Agreement. Further, this release will not prevent Executive from doing any of the following:

(a) obtaining unemployment compensation, state disability insurance, or workers’ compensation benefits from the appropriate agency of the state in which Executive lives and works, provided Executive satisfies the legal requirements for such benefits (nothing in this Agreement, however, guarantees or otherwise constitutes a representation of any kind that Executive is entitled to such benefits);

(b) asserting any right that is created or preserved by this Agreement, such as Executive’s right to receive the Severance Payments;

(c) filing a charge, giving testimony or participating in any investigation conducted by the Equal Employment Opportunity Commission (the “EEOC”) or any duly authorized agency of the United States or any state (however, Executive is hereby waiving the right to any personal monetary recovery or other personal relief should the EEOC (or any similarly authorized agency) pursue any class or individual charges in part or entirely on Executive’s behalf); or

(d) challenging or seeking determination in good faith of the validity of this waiver under the Age Discrimination in Employment Act (nor does this release impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law).

Additional Executive Covenants

5.          To the extent applicable, Executive confirms and agrees to Executive’s continuing obligations under the Employment Agreement, including, without limitation, following termination of Executive’s employment with Employer. This includes, without limitation, Executive’s continuing obligations under Sections 7 and 24 of the Employment Agreement.

Voluntary Agreement And Effective Date

6.          Executive understands and acknowledges that, by signing this Agreement, Executive is agreeing to all of the provisions stated in this Agreement, and has read and understood each provision.

7.          The parties understand and agree that:

(a) Executive will have a period of 21 calendar days in which to decide whether or not to sign this Agreement, and an additional period of seven calendar days after signing in which to revoke this Agreement. If Executive signs this Agreement before the end of such 21-day period, Executive certifies and agrees that the decision is knowing and voluntary and is not induced by Employer through (i) fraud, misrepresentation, or a threat to withdraw or alter the offer before the end of such 21-day period or (ii) an offer to provide different terms in exchange for signing this Agreement before the end of such 21-day period.

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(b) In order to exercise this revocation right, Executive must deliver written notice of revocation to [_____________________] on or before the seventh calendar day after Executive executes this Agreement. Executive understands that, upon delivery of such notice, this Agreement will terminate and become null and void.

(c) The terms of this Agreement will not take effect or become binding, and Executive will not become entitled to receive the Severance Payments, until that seven-day period has lapsed without revocation by Executive. If Executive elects not to sign this Agreement or revokes it within seven calendar days of signing, Executive will not receive the Severance Payments.

(d) All amounts payable hereunder will be paid in accordance with the applicable terms of the Employment Agreement.

Governing Law

8.          This Agreement will be governed by the substantive laws of the State of Texas, without regard to conflicts of law, and by federal law where applicable.

9.          If any part of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will not be affected in any way.

Consultation With Attorney

10.         Executive is hereby encouraged and advised to confer with an attorney regarding this Agreement. By signing this Agreement, Executive acknowledges that Executive has consulted, or had an opportunity to consult with, an attorney or a representative of Executive’s choosing, if any, and that Executive is not relying on any advice from Employer or its agents or attorneys in executing this Agreement.

11.         This Agreement was provided to Executive for consideration on [INSERT DATE THIS AGREEMENT PROVIDED TO EXECUTIVE].

PLEASE READ THIS AGREEMENT CAREFULLY; IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Executive certifies that Executive has read this Agreement and fully and completely understands and comprehends its meaning, purpose, and effect. Executive further states and confirms that Executive has signed this Agreement knowingly and voluntarily and of Executive’s own free will, and not as a result of any threat, intimidation or coercion on the part of Employer or its representatives or agents.

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	EXECUTIVE
Date:

EX-10.7

Exhibit 10.7

Execution Version

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of December 30, 2016, by and between Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), and                                  (“Indemnitee”).

RECITALS:

WHEREAS, directors, officers and other persons in service to corporations or business enterprises are subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

WHEREAS, highly competent persons have become more reluctant to serve as directors, officers or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, (i) the Second Amended and Restated Certificate of Incorporation of the Company (as may be amended, the “Certificate of Incorporation”) and the Second Amended and Restated Bylaws of the Company (as may be amended, the “Bylaws”) require indemnification of the officers and directors of the Company, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the Certificate of Incorporation, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor or to diminish or abrogate any rights of Indemnitee thereunder; and

WHEREAS, (i) Indemnitee does not regard the protection available under the Certificate of Incorporation, the Bylaws and insurance as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as a director or officer of the Company without adequate protection, (iii) the Company desires Indemnitee to serve in such capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.          Definitions. (a) As used in this Agreement:

“Affiliate” of any specified Person shall mean any other Person controlling, controlled by or under common control with such specified Person.

“Chapter 11 Plan” shall mean the “Plan,” as defined in the Certificate of Incorporation (as the Certificate of Incorporation is in effect on the date hereof).

“Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of (i) the Company or (ii) any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.

“Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

“Emergence Date” shall mean the “Effective Date,” as defined in the Chapter 11 Plan.

“Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Expenses” shall include all costs, expenses, fees and charges, including attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees and expenses, fees and expenses of accountants and other advisors, travel expenses, retainers and disbursements and advances thereon, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, or in respect of or relating to, any Proceeding, (ii) the premium, security for, and other costs relating to any bond obtained in connection with any Proceeding, including cost bonds, supersedes bonds, other appeal bonds or their equivalent, (ii) for purposes of Section 12(d) hereof only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and (iv) any interest, assessments or other charges in respect of the foregoing. “Expenses” shall not include “Liabilities.”

“Indemnity Obligations” shall mean all obligations of the Company to Indemnitee under this Agreement, including the Company’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

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“Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, Indemnitee shall have reasonably concluded may have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

“Liabilities” shall mean all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

“Proceeding” shall mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal judicial, administrative or arbitration hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened or completed judicial, administrative or arbitration proceeding (including any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought by or in the right of the Company or otherwise, including any and all appeals, and whether of a civil, criminal, administrative, legislative, investigative or other nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of the fact of Indemnitee’s Corporate Status, by reason of any actual or alleged action taken by or inaction of Indemnitee or of any action or inaction on Indemnitee’s part in any such capacity, or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement can be provided under this Agreement.

(b)          For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

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(c)          For purposes of this Agreement: (i) all references to Sections, subsections or paragraphs are to be Sections, subsections or paragraphs of this Agreement; (ii) words in the singular include the plural and vice versa; (iii) the pronoun “his” refers to the masculine, feminine and neuter, the words “herein,” “hereby,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, Article or other subdivision; (iv) the term “including” means “including, without limitation”; (v) all references to “$” or dollar amounts will be to lawful currency of the United States; and (vi) to the extent the term “day” or “days” is used, it will mean calendar days unless otherwise specified.

Section 2.          Indemnity in Third-Party Proceedings. The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or reasonably incurred (and, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding (other than any Proceeding brought by or in the right of the Company to procure a judgment in its favor), or any claim, issue or matter therein.

Section 3.          Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding brought by or in the right of the Company to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that the Indemnitee is liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to such indemnification.

Section 4.          Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement (but subject to Section 7), and without limiting the rights of Indemnitee under any other provision hereof, including any rights to indemnification pursuant to Section 2 or 3 hereof or the rights to advancement of Expenses pursuant to Section 8 hereof, to the fullest extent permitted by applicable law, to the extent that Indemnitee is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, including the dismissal of any action without prejudice, or if it is ultimately determined, by final judicial decision of a court of competent jurisdiction, that the Indemnitee is otherwise entitled to be indemnified against Expenses, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved Proceeding, claim, issue or matter. For purposes of this Section 4 and without limitation, the termination of any Proceeding or claim, issue or matter in such a Proceeding (x) by dismissal, summary judgment, judgment on the pleading or final judgment, with or without prejudice, or (y) by agreement without payment or assumption or admission of liability by the Indemnitee, shall be deemed to be a successful result as to such claim, issue or matter.

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For the avoidance of doubt, if the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expense or Liability suffered or actually and reasonably incurred in connection with any Proceeding, claim, issue or matter, or in connection with any judicial proceeding or arbitration pursuant to Section 12(d) hereof the enforce rights under this Agreement, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such Expense and Liability suffered or actually and reasonably incurred to which the Indemnitee is entitled hereunder.

Section 5.          Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement (but subject to Section 7), to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise a participant or incurs legal expenses as a result of or related to any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses suffered or incurred (or, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection therewith.

Section 6.          Additional Indemnification. Notwithstanding any limitation in Section 2, 3 or 4 hereof (but subject to Section 7), the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Liabilities and Expenses suffered or reasonably incurred by Indemnitee in connection with such Proceeding, including:

(a)          the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and

(b)          the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 7.          Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to indemnify or hold harmless Indemnitee:

(a)          for which payment has actually been made to or on behalf of Indemnitee under any valid and collectible insurance policy obtained by the Company except with respect to any excess beyond the amount paid under such insurance policy;

(b)          for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law;

(c)          except for any proceeding by Indemnitee to enforce its rights under this Agreement, as provided in Section 12(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law;

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(d)          if and to the extent arising out of, in connection with, in respect of or relating to (x) any actual or alleged action taken by or inaction of Indemnitee or of any action or inaction on Indemnitee’s part prior to the Emergence Date or (y) Indemnitee’s Corporate Status prior to the Emergence Date; or

(e)          if it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that such indemnification is not lawful.

For the avoidance of doubt, and notwithstanding any provision in this Agreement, the DGCL, the Certificate of Incorporation, the Bylaws or otherwise, Indemnitee shall not be entitled to any indemnification, contribution, expense advancement or other right that constitutes an “Indemnification Obligation” (within the meaning of the Chapter 11 Plan) that was rejected pursuant to the Chapter 11 Plan.

Section 8.          Advancement. In accordance with the pre-existing requirements of the Certificate of Incorporation and the Bylaws, and notwithstanding any provision of this Agreement to the contrary (but subject to Section 7), the Company shall advance, to the extent not prohibited by applicable law, the Expenses reasonably incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within twenty (20) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all Expenses reasonably incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed, in addition to those Expenses incurred in connection with any Proceeding by Indemnitee seeking an adjudication or award in arbitration pursuant to Section 12(d) of this Agreement. Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that Indemnitee undertakes to repay the amounts advanced to the extent that it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that Indemnitee is not entitled to be indemnified for such Expenses by the Company as provided by this Agreement. This Section 8 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to paragraph (b), (c), (d) or (e) of Section 7 hereof or pursuant to the final paragraph of Section 7 hereof.

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Section 9.          Procedure for Notification and Defense of Claim.

(a)          Indemnitee shall promptly notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement hereunder following the receipt by Indemnitee of written notice thereof (the date of such notification, the “Submission Date”). The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Any delay or failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

(b)          In the event Indemnitee is entitled to indemnification and/or advancement with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Company to defend Indemnitee in such Proceeding, at the sole expense of the Company (which approval shall not be unreasonably withheld, conditioned or delayed), or (ii) have the Company assume the defense of Indemnitee in such Proceeding, in which case the Company shall assume the defense of such Proceeding with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Company’s receipt of written notice of Indemnitee’s election to cause the Company to do so. If the Company is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Company shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense. Such legal counsel may represent both Indemnitee and the Company (and any other party or parties entitled to be indemnified by the Company with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a conflict of interest between Indemnitee and the Company (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Company (or any such other party or parties). Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense. The party having responsibility for defense of a Proceeding shall provide the other party and its counsel with all copies of pleadings and material correspondence relating to the Proceeding. Indemnitee and the Company shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Company or Indemnitee assumes the defense thereof. Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. The Company may not settle or compromise any Proceeding without the prior written consent of Indemnitee.

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Section 10.         Procedure Upon Application for Indemnification.

(a)          Upon written request by Indemnitee for indemnification pursuant to Section 9(a) hereof, if any determination by the Company is required by applicable law with respect to Indemnitee’s entitlement thereto, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel, and (ii) in all other circumstances, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (D) if so directed by the Board, by the stockholders of the Company ; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made promptly, and in any event within thirty (30) days after the Submission Date, except in the case of a claim for an advancement of expenses in accordance with Section 8, in which case the applicable period shall be twenty (20) days after the Submission Date. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Company will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a determination as to Indemnitee’s entitlement to such indemnification described in this Section 10(a) has been made. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Liabilities and Expenses arising out of or relating to this Agreement or its engagement pursuant hereto.

(b)          In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 10(a) hereof, the Independent Counsel shall be selected by the Company within ten (10) days of the Submission Date (the cost of such Independent Counsel to be paid by the Company) and the Company shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected; provided, however, that if a change in control has occurred and results in individuals who were directors prior to the circumstances giving rise to the change in control ceasing for any reason to constitute a majority of the Board, such Independent Counsel shall be selected by the Indemnitee within ten (10) days of the Submission Date (the cost of such Independent Counsel to be paid by the Company) and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either case, Indemnitee or the Company, as applicable, may, within ten (10) days after such written notice of selection shall have been given, deliver to the other a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel selected does not meet the requirements of “Independent Counsel” as defined in this Agreement. If such written objection is made and substantiated, the Independent Counsel selected shall not serve as Independent Counsel unless and until Indemnitee or the Company, as applicable, withdraws the objection or a court has determined that such objection is without merit. Absent a timely objection, the person so selected shall act as Independent Counsel. If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the later of the Submission Date and (ii) ten (10) days after the final disposition of the Proceeding, each of the Company and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

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Section 11.         Presumptions and Effect of Certain Proceedings.

(a)          In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall, to the fullest extent not prohibited by applicable law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by applicable law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b)          Subject to Section 12(e) hereof, if the person, persons or entity empowered or selected under Section 10 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by applicable law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent actual fraud in the request for indemnification; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by Independent Counsel and either the Company or Indemnitee, as applicable, objects to the selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation or information relating thereto; provided further that such 60-day period may also be extended for a reasonable time, not to exceed an additional sixty (60) days, if the determination of entitlement to indemnification is to be made by the stockholders of the Company.

(c)          The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

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(d)          Reliance as Safe Harbor. For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e)          Actions of Others. The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Section 12.         Remedies of Indemnitee.

(a)          Subject to Section 12(e) hereof, in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within sixty (60) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 4 or 5 or the last sentence of Section 10(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other Person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication, by a court of competent jurisdiction, of Indemnitee’s entitlement to such indemnification or advancement. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b)          In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.

(c)          If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a prohibition of such indemnification under applicable law.

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(d)          The Company shall, to the fullest extent not prohibited by applicable law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of the Company that Indemnitee not be required to incur Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. The Company shall indemnify Indemnitee against any and all such Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by applicable law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement or insurance recovery, as the case may be.

(e)          Notwithstanding anything in this Agreement to the contrary (but subject to Section 7), no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided, however, that, in absence of any such determination with respect to such Proceeding, the Company shall advance Expenses with respect to such Proceeding.

Section 13.         Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

(a)          The rights of indemnification and to receive advancement as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Certificate of Incorporation, the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

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(b)          The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated. The Company hereby acknowledges and agrees that (i) the Company shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnity Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated to indemnify Indemnitee or advance Expenses or Liabilities to Indemnitee in respect of any Proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses or Liabilities to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases any other Person with whom or which Indemnitee may be associated from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Company hereunder. In the event any other Person with whom or which Indemnitee may be associated or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any Company insurance policy, the payor shall have a right of subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation by any other Person with whom or which Indemnitee may be associated or their insurers affect the obligations of the Company hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated. Any indemnification, insurance or advancement provided by any other Person with whom or which Indemnitee may be associated with respect to any Liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Company or valid and any collectible insurance (including to any malpractice insurance or professional errors and omissions insurance) provided by the Company under this Agreement.

(c)          To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies and such policies shall provide for and recognize that the insurance policies are primary to any rights to indemnification, advancement or insurance proceeds to which Indemnitee may be entitled from one or more Persons with whom or which Indemnitee may be associated to the same extent as the Company’s indemnification and advancement obligations set forth in this Agreement. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

(d)          In the event of any payment under this Agreement, the Company shall not be subrogated to the rights of recovery of Indemnitee, including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated; provided, however, that the Company shall be subrogated to the extent of any such payment of all rights of recovery of Indemnitee under insurance policies of the Company or any of its subsidiaries.

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(e)          The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

Section 14.         Duration of Agreement; Not Employment Contract. This Agreement shall continue during the period the Indemnitee is a director, officer, employee or agent of the Company or any other Enterprise, and shall continue thereafter with respect to any possible claims based on the fact that the Indemnitee was a director, officer, employee or agent of the Company or any other Enterprise. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.

Section 15.         Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by applicable law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 16.         Enforcement.

(a)          The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director, officer, employee or agent of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer, employee or agent of the Company.

(b)          This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefor, nor diminish or abrogate any rights of Indemnitee thereunder.

(c)          The Company shall not seek from a court, or agree to, a “bar order” that would have the effect of prohibiting or limiting the Indemnitee's rights to receive advancement of expenses under this Agreement.

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Section 17.         Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Agreement nor shall any waiver constitute a continuing waiver.

Section 18.         Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

(a)          If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b)          If to the Company to

Energy XXI Gulf Coast, Inc.
1021 Main Street, Suite 2626

Houston, Texas 77002
Attention: Board of Directors

or to any other address as may have been furnished to Indemnitee by the Company.

Section 19.         Contribution.

(a)          Regardless of whether the indemnification provided in this Agreement is available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be jointly liable, if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any Liability from such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be jointly liable, if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

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(b)          Without diminishing or impairing the obligations of the Company set forth in Section 19(a), if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any Liability in any Proceeding in which the Company is jointly liable with Indemnitee (or would be jointly liable, if joined in such Proceeding), the Company shall contribute to the amount of Expenses and Liabilities actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be jointly liable, if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction or events from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be jointly liable, if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such Expenses and Liabilities, as well as any other equitable considerations that applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be jointly liable, if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c)          The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution that may be brought by officers, directors, or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d)          To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Liabilities or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and transaction(s) giving cause to such Proceeding; and (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and transaction(s).

Section 20.         Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

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Section 21.         Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 22.         Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the Sections, subsections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

ENERGY XXI GULF COAST, INC.   INDEMNITEE

By:	By:
Name:	Name:
Title:	Title:

Address:

Signature Page to Indemnification Agreement

EX-10.8

Exhibit 10.8

ENERGY XXI GULF COAST, INC.

2016 Long Term Incentive Plan

1.          Purpose. The purpose of the Energy XXI Gulf Coast, Inc. 2016 Long Term Incentive Plan (the “Plan”) is to provide a means through which (a) Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), and its Affiliates may attract and retain able persons as employees, directors and consultants, thereby enhancing the profitable growth of the Company and its Affiliates and (b) persons upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributions to the welfare of the Company and its Affiliates are of importance, can acquire and maintain stock ownership or awards the value of which is tied to the performance of the Company, thereby strengthening their concern for the welfare of the Company and its Affiliates. Accordingly, the Plan provides for the grant of Incentive Stock Options, Nonstatutory Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Stock Awards, Dividend Equivalents, Other Stock-Based Awards, Cash Awards, Substitute Awards, Performance Awards, or any combination of the foregoing.

2.          Definitions. For purposes of the Plan, the following terms shall be defined as set forth below:

(a)           “Affiliate” means any corporation, partnership, limited liability company, limited liability partnership, association, trust or other organization that, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization, or (ii) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities, by contract, or otherwise.

(b)          “Award” means any Option, SAR, Restricted Stock Award, Restricted Stock Unit, Stock Award, Dividend Equivalent, Other Stock-Based Award, Cash Award, Substitute Award or Performance Award, together with any other right or interest, granted under the Plan.

(c)          “Award Agreement” means any written instrument (including any employment, severance or change of control agreement) that sets forth the terms, conditions, restrictions and/or limitations applicable to an Award, in addition to those set forth under the Plan.

(d)          “Board” means the Board of Directors of the Company.

(e)          “Cash Award” means an Award denominated in cash granted under Section 6(i).

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(f)          “Change of Control” means, except as otherwise provided in an Award Agreement, the occurrence of any of the following events:

(i)          A “change in the ownership” of the Company within the meaning of Treasury Regulation § 1.409A-3(i)(5)(v), whereby any one person, or more than one person acting as a “group” (for purposes of this Section 2(f), as such term is defined in Treasury Regulation § 1.409A-3(i)(5)(vi)), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company.

(ii)         A “change in the effective control” of the Company within the meaning of Treasury Regulation § 1.409A-3(i)(5)(vi), whereby either (A) any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company; or (B) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.

(iii)        A “change in the ownership of a substantial portion” of the Company’s assets within the meaning of Treasury Regulation § 1.409A-3(i)(5)(vii), whereby any one person, or more than one person acting as a group, acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets of the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of the Company immediately prior to such acquisition or acquisitions.

In addition, for purposes of this Section 2(f) and except as otherwise provided in an Award Agreement, “Company” includes (x) the Company, (y) the entity for whom a Participant performs the services for which an Award is granted, and (z) an entity that is a shareholder owning more than 50% of the total fair market value and total voting power (a “Majority Shareholder”) of the Company or the entity identified in (y) above, or any entity in a chain of entities in which each entity is a Majority Shareholder of another entity in the chain, ending in the Company or the entity identified in (y) above.

(g)          “Change of Control Price” means the amount determined in the following clause (i), (ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the price per share offered to holders of Stock in any merger or consolidation, (ii) the per share Fair Market Value of the Stock immediately before the Change of Control without regard to assets sold in the Change of Control and assuming the Company has received the consideration paid for the assets in the case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolution transaction, (iv) the price per share offered to holders of Stock in any tender offer or exchange offer whereby a Change of Control takes place, or (v) if such Change of Control occurs other than pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Section 2(g), the value per share of the Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards. In the event that the consideration offered to shareholders of the Company in any transaction described in this Section 2(g) or in Section 8(e) consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash and such determination shall be binding on all affected Participants to the extent applicable to Awards held by such Participants.

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(h)          “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.

(i)          “Committee” means a committee of one or more directors designated by the Board to administer the Plan; provided, however, that, unless otherwise determined by the Board, the Committee shall consist solely of two or more Qualified Members.

(j)          “Covered Employee” means an Eligible Person who is designated by the Committee, at the time of grant of a Performance Award, as likely to be a “covered employee” within the meaning of section 162(m) of the Code for a specified fiscal year.

(k)          “Dividend Equivalent” means a right, granted to an Eligible Person under Section 6(g), to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.

(l)          “Effective Date” means December 30, 2016.

(m)          “Eligible Person” means all officers and employees of the Company or of any of its Affiliates, and other persons who provide services to the Company or any of its Affiliates, including directors of the Company; provided, that, on and after the date that the Company is subject to the reporting requirements of the Exchange Act, any such individual must be an “employee” of the Company or any of its parents or subsidiaries within the meaning of General Instruction A.1(a) to Form S-8 if such individual is granted an Award that may be settled in Stock. An employee on leave of absence may be considered as still in the employ of the Company or its Affiliates for purposes of eligibility for participation in the Plan.

(n)          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.

(o)          “Fair Market Value” means, as of any specified date and except as otherwise determined by the Committee, (i) if the Stock is listed on a national securities exchange, the closing sales price of the Stock, as reported on the stock exchange composite tape on the last date preceding the date of determination on which such sales of the Stock are so reported or, if so determined by the Committee, any other method utilizing actual sales of Stock; (ii) if the Stock is not traded on a national securities exchange but is traded over the counter at the time a determination of its fair market value is required to be made under the Plan, the average between the reported high and low bid and asked prices of Stock on the most recent date on which Stock was publicly traded or, if so determined by the Committee, any other method utilizing actual sales of Stock; or (iii) regardless of whether the Stock is listed on a national securities exchange or traded over the counter at the time of such determination, the amount determined by the Committee in its discretion in such manner as it deems appropriate, taking into account all factors the Committee deems appropriate including, without limitation, the Nonqualified Deferred Compensation Rules.

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(p)          “Incentive Stock Option” or “ISO” means any Option intended to be and designated as an “incentive stock option” within the meaning of section 422 of the Code.

(q)          “Nonqualified Deferred Compensation Rules” means the limitations or requirements of section 409A of the Code, as amended from time to time, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.

(r)          “Nonstatutory Option” means any Option that is not intended to be an “incentive stock option” within the meaning of section 422 of the Code.

(s)          “Option” means a right, granted to an Eligible Person under Section 6(b), to purchase Stock or other Awards at a specified price during specified time periods.

(t)          “Other Stock-Based Award” means an Award granted to an Eligible Person under Section 6(h).

(u)          “Participant” means a person who has been granted an Award under the Plan that remains outstanding, including a person who is no longer an Eligible Person.

(v)         “Performance Award” means an award granted to an Eligible Person under Section 6(k), the grant, vesting, exercisability and/or settlement of which (and/or the timing or amount thereof) is subject to the achievement of one or more performance goals specified by the Committee.

(w)          “Qualified Member” means a member of the Board who is (i) a “nonemployee director” within the meaning of Rule 16b-3(b)(3), (ii) following expiration of the Transition Period (as defined below), an “outside director” within the meaning of Treasury Regulation § 1.162-27 under section 162(m) of the Code, and (iii) “independent” under the listing standards or rules of the securities exchange upon which the Stock is traded, but only to the extent such independence is required in order to take the action at issue pursuant to such standards or rules.

(x)          “Qualifying Public Offering” means a firm commitment underwritten public offering of Stock for cash where the shares of Stock registered under the Securities Act are listed on a national securities exchange.

(y)          “Restricted Stock” means Stock granted to an Eligible Person under Section 6(d), that is subject to certain restrictions and to a risk of forfeiture.

(z)          “Restricted Stock Unit” means a right, granted to an Eligible Person under Section 6(e), to receive Stock, cash or a combination thereof at the end of a specified period (which may or may not be coterminous with the vesting schedule of the Award).

(aa)         “Rule 16b-3” means Rule 16b-3, promulgated by the Securities and Exchange Commission under section 16 of the Exchange Act.

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(bb)         “Section 162(m) Award” means a Performance Award granted under Section 6(k)(i) to a Covered Employee that is intended to satisfy the requirements for “performance-based compensation” within the meaning of section 162(m) of the Code.

(cc)         “Securities Act” means the Securities Act of 1933, as amended from time to time, including rules thereunder and successor provisions and rules thereto.

(dd)         “Stock” means the Company’s Common Stock, par value $0.01 per share, and such other securities as may be substituted (or re-substituted) for Stock pursuant to Section 8.

(ee)         “Stock Appreciation Right” or “SAR” means a right granted to an Eligible Person under Section 6(c).

(ff)         “Stock Award” means unrestricted shares of Stock granted to an Eligible Person under Section 6(f).

(gg)         “Substitute Award” means an Award granted under Section 6(j) in substitution for a similar award as a result of certain business transactions.

(hh)          “Transition Period” means, the period beginning on the date that the Stock is required to be registered under section 12 of the Exchange Act and ending on the earliest to occur of (i) the material modification of the Plan within the meaning of Treasury Regulation § 1.162-27(h)(1)(iii); (ii) the delivery of the total number of shares of Stock set forth in Section 4(a); or (iii) the first meeting of shareholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which an initial public offering of the Stock occurs or, in the event the Company becomes publicly held without an initial public offering, the first calendar year following the calendar year in which the Company first becomes publicly held.

3.          Administration.

(a)          Authority of the Committee. The Plan shall be administered by the Committee except to the extent the Board elects to administer the Plan, in which case references herein to the “Committee” shall be deemed to include references to the “Board.” Subject to the express provisions of the Plan, and, to the extent applicable, Rule 16b-3 and other laws, the Committee shall have the authority, in its sole and absolute discretion, to: (i) designate Eligible Persons as Participants; (ii) determine the type or types of Awards to be granted to an Eligible Person; (iii) determine the number of shares of Stock or amount of cash to be covered by Awards; (iv) determine the terms and conditions of any Award, including whether, to what extent and under what circumstances Awards may be vested, settled, exercised, cancelled or forfeited; (v) modify, waive or adjust any term or condition of an Award that has been granted, which may include the acceleration of vesting, waiver of forfeiture restrictions, modification of the form of settlement of the Award (for example, from cash to Stock or vice versa) or modification of any other condition or limitation regarding an Award; (vi) interpret and administer the Plan and any Award Agreement; (vii) establish, amend, suspend, or waive rules and regulations used to administer the Plan; (viii) correct any defect, supply any omission or reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement; and (ix) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. Any action of the Committee shall be final, conclusive and binding on all persons, including the Company, its Affiliates, shareholders, Participants, beneficiaries, and permitted transferees under Section 7(a) or other persons claiming rights from or through a Participant.

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(b)          Exercise of Committee Authority. At any time that the Committee consists of fewer than two members or of members that are not each a Qualified Member, any action of the Committee relating to (A) an Award granted or to be granted to an Eligible Person who is then subject to section 16 of the Exchange Act in respect of the Company where such action is not taken by the full Board, or (B) a Section 162(m) Award, may be taken either (i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided, however, that upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan. For the avoidance of doubt, the full Board may take any action relating to an Award granted or to be granted to an Eligible Person who is then subject to section 16 of the Exchange Act in respect of the Company, provided that such award is not a Section 162(m) Award.

(c)          Delegation of Authority. The Committee may delegate any or all of its powers and duties under the Plan to a subcommittee of directors or to any officer of the Company, including the power to perform administrative functions and grant Awards under the Plan; provided, however, that such delegation does not (i) violate state or corporate law, (ii) result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to section 16 of the Exchange Act in respect of the Company, or (iii) cause Section 162(m) Awards to fail to so qualify. Upon any such delegation, all references in the Plan to the “Committee,” other than in Section 8, shall be deemed to include any subcommittee or officer of the Company to whom such powers have been delegated by the Committee. Any such delegation shall not limit the right of such subcommittee members or such an officer to receive Awards under the Plan; provided, however, that such subcommittee members and any such officer may not grant Awards to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate, or take any action with respect to any Award previously granted to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate. The Committee may also appoint agents to assist it in administering the Plan that are not executive officers of the Company or members of the Board, provided that such individuals may not be delegated the authority to (i) grant or modify any Awards that will, or may, be settled in Stock or (ii) take any action that would cause Section 162(m) Awards to fail to so qualify, if applicable.

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(d)          Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any of its Affiliates, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or any of its Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.

4.          Stock Subject to Plan.

(a)          Overall Number of Shares Available for Delivery. Subject to adjustment in a manner consistent with any adjustment made pursuant to Section 8, the total number of shares of Stock reserved and available for delivery with respect to Awards under the Plan is 1,859,552 shares, and such total number of shares of Stock shall be available for the issuance of ISOs.

(b)          Application of Limitation to Grants of Awards. Subject to Section 4(c), no Award may be granted if the number of shares of Stock to be delivered in connection with such Award exceeds the number of shares of Stock remaining available under the Plan minus the number of shares of Stock issuable in settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or Substitute Awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.

(c)          Availability of Shares Not Delivered under Awards. Shares of Stock subject to an Award under the Plan that expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated (including (i) shares forfeited with respect to Restricted Stock, and (ii) the number of shares withheld or surrendered to the Company in payment of any exercise or purchase price of an Award or taxes relating to Awards) shall not be considered “delivered shares” under the Plan and shall again be available for delivery with respect to Awards under the Plan, except that if any such shares could not again be available for Awards to a particular Participant under any applicable law or regulation, such shares shall be available exclusively for Awards to Participants who are not subject to such limitation. If an Award may be settled only in cash, such Award need not be counted against any share limit under this Section 4, but will remain subject to the limitations in Section 5 to the extent required to preserve the status of any Award intended to be a Section 162(m) Award.

(d)          Stock Offered. The shares of Stock to be delivered under the Plan shall be made available from (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company, or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on the open market.

5.          Eligibility; Per Person Award Limitations. Awards may be granted under the Plan only to persons who are Eligible Persons at the time of grant thereof. Beginning with the calendar year in which the Transition Period expires and for each calendar year thereafter, a Covered Employee may not be granted Awards intended to be Section 162(m) Awards (a) to the extent such Award is based on a number of shares of Stock (other than such an Award designated to be paid only in cash) relating to more than 929,776 shares of Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Section 8, and (b) to the extent such Award is designated to be paid only in cash, having a value determined on the date of grant in excess of $10,000,000.

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6.          Specific Terms of Awards.

(a)          General. Awards may be granted on the terms and conditions set forth in this Section 6. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with any other Award. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine.

(b)          Options. The Committee is authorized to grant Options, which may be designated as either ISOs or Nonstatutory Options, to Eligible Persons on the following terms and conditions:

(i)          Exercise Price. Each Award Agreement evidencing an Option shall state the exercise price per share of Stock (the “Exercise Price”); provided, however, that except as provided in Section 6(j) or in Section 8, the Exercise Price of an Option shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, 110% of the Fair Market Value per share of the Stock on the date of grant). Notwithstanding the foregoing, the Exercise Price of a Nonstatutory Option that (1) does not provide for a deferral of compensation by reason of satisfying the short-term deferral exception set forth in the Nonqualified Deferred Compensation Rules or (2) provides for a deferral of compensation and is compliant with the Nonqualified Deferred Compensation Rules, in each case, may be less than 100% of the Fair Market Value per share of Stock as of the date of grant of the Option as determined by the Committee at the time the Option is granted.

(ii)         Time and Method of Exercise; Other Terms. The Committee shall determine the number of shares of Stock to which the Option relates, the time or times at which or the circumstances under which an Option may be vested and/or exercised in whole or in part (including based on achievement of one or more performance goals pursuant to Section 6(k) and/or future service requirements), the methods by which such Exercise Price may be paid or deemed to be paid, the form of such payment, including without limitation, cash or cash equivalents, Stock (including previously owned shares or through a cashless or broker-assisted exercise, net settlement or other reduction of the amount of shares otherwise issuable pursuant to the Option), other Awards or awards granted under other plans of the Company or any Affiliate, other property, or any other legal consideration the Committee deems appropriate (including notes or other contractual obligations of Participants to make payment on a deferred basis), the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants, including, but not limited to, the delivery of Restricted Stock subject to Section 6(d), and any other terms and conditions of any Option. In the case of an exercise whereby the Exercise Price is paid with Stock, such Stock shall be valued as of the date of exercise. No Option may be exercisable for a period of more than ten (10) years following the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, for a period of more than five (5) years following the date of grant of the ISO).

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(iii)        ISOs. The terms of any ISO granted under the Plan shall comply in all respects with the provisions of section 422 of the Code. ISOs may only be granted to Eligible Persons who are employees of the Company or employees of a parent or any subsidiary corporation of the Company. Except as otherwise provided in Section 8, no term of the Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification. ISOs shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Company’s shareholders. Notwithstanding the foregoing, the Fair Market Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) subject to any other “incentive stock option” (within the meaning of section 422 of the Code) of the Company or a parent or subsidiary corporation (within the meaning of sections 424(e) and (f) of the Code) that first becomes purchasable by a Participant in any calendar year may not (with respect to that Participant) exceed $100,000, or such other amount as may be prescribed under section 422 of the Code. As used in the previous sentence, Fair Market Value shall be determined as of the date the “incentive stock option” is granted. Failure to comply with this provision shall not impair the enforceability or exercisability of any Option, but shall cause the excess amount of shares to be reclassified in accordance with the Code.

(c)          Stock Appreciation Rights. The Committee is authorized to grant SARs to Eligible Persons on the following terms and conditions:

(i)          Right to Payment. An SAR is a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.

(ii)         Grant Price. Each Award Agreement evidencing an SAR shall state the grant price per share of Stock; provided, however, that except as provided in Section 6(j) or in Section 8, the grant price per share of Stock subject to an SAR shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the SAR. Notwithstanding the foregoing, the grant price of an SAR that (1) does not provide for a deferral of compensation by reason of satisfying the short-term deferral exception set forth in the Nonqualified Deferred Compensation Rules or (2) provides for a deferral of compensation and is compliant with the Nonqualified Deferred Compensation Rules, in each case, may be less than 100% of the Fair Market Value per share of Stock subject to an SAR as of the date of grant of the SAR and shall be determined by the Committee at the time the SAR is granted.

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(iii)        Time and Method of Exercise; Other Terms. The Committee shall determine the number of shares of Stock to which the SAR relates, the time or times at which and the circumstances under which an SAR may be vested and/or exercised in whole or in part (including based on achievement of one or more performance goals pursuant to Section 6(k) and/or future service requirements), the form of consideration payable upon settlement, the method by or forms in which Stock (if any) will be delivered or deemed to be delivered to Participants, and any other terms and conditions of any SAR. SARs may be either free-standing or in tandem with other Awards. No SAR may be exercisable for a period of more than ten (10) years following the date of grant of the SAR.

(iv)        Rights Related to Options. An SAR granted in connection with an Option shall entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount determined by multiplying (A) the difference obtained by subtracting the Exercise Price with respect to a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of the SAR, by (B) the number of shares as to which that SAR has been exercised. The Option shall then cease to be exercisable to the extent surrendered. SARs granted in connection with an Option shall be subject to the terms and conditions of the Award Agreement governing the Option, which shall provide that the SAR is exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable except to the extent that the related Option is transferrable.

(d)          Restricted Stock. The Committee is authorized to grant Restricted Stock to Eligible Persons on the following terms and conditions:

(i)          Grant and Restrictions. Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of one or more performance goals pursuant to Section 6(k) and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. During the restricted period applicable to the Restricted Stock, the Restricted Stock may not be sold, transferred, pledged, hedged, hypothecated, margined or otherwise encumbered by the Participant.

(ii)         Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the Committee may allow a Participant to elect, or may require, that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock, applied to the purchase of additional Awards under the Plan or deferred without interest to the date of vesting of the associated Award of Restricted Stock. Unless otherwise determined by the Committee and specified in the applicable Award Agreement, Stock distributed in connection with a Stock split or Stock dividend, and other property (other than cash) distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.

(e)          Restricted Stock Units. The Committee is authorized to grant Restricted Stock Units to Eligible Persons on the following terms and conditions:

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(i)          Award and Restrictions. Restricted Stock Units shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of one or more performance goals pursuant to Section 6(k) and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine.

(ii)         Settlement. Settlement of vested Restricted Stock Units shall occur upon expiration of the deferral period specified for such Restricted Stock Units by the Committee (or, if permitted by the Committee, as elected by the Participant). Settlement of Restricted Stock Units shall be made by delivery of (A) a number of shares of Stock equal to the number of Restricted Stock Units for which settlement is due, or (B) cash in an amount equal to the Fair Market Value of the specified number of shares of Stock covered by such Restricted Stock Units, or a combination thereof, as determined by the Committee at the date of grant or thereafter.

(f)          Stock Awards. The Committee is authorized to grant Stock Awards under the Plan to Eligible Persons as a bonus, as additional compensation, or in lieu of cash compensation any such Eligible Person is otherwise entitled to receive, in such amounts and subject to such other terms as the Committee in its discretion determines to be appropriate.

(g)          Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to Eligible Persons, entitling any such Eligible Person to receive cash, Stock, other Awards, or other property equal in value to dividends or other distributions paid with respect to a specified number of shares of Stock, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award (other than an Award of Restricted Stock or a Stock Award). The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or at a later specified date and, if distributed at a later date, may be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles or accrued in a bookkeeping account without interest, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify. With respect to Dividend Equivalents granted in connection with another Award, absent a contrary provision in the Award Agreement, such Dividend Equivalents shall be subject to the same restrictions and risk of forfeiture as the Award with respect to which the dividends accrue and shall not be paid unless and until such Award has vested and been earned.

(h)          Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Eligible Persons such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified Affiliates of the Company. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Stock delivered pursuant to an Other-Stock Based Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine.

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(i)          Cash Awards. The Committee is authorized to grant Cash Awards, on a free-standing basis or as an element of or supplement to, or in lieu of, any other Award under the Plan to Eligible Persons in such amounts and subject to such other terms (including the achievement of one or more performance goals pursuant to Section 6(k) and/or future service requirements) as the Committee in its discretion determines to be appropriate.

(j)          Substitute Awards; No Repricing. Awards may be granted under the Plan in substitution for similar awards held by individuals who become Eligible Persons as a result of a merger, consolidation or acquisition of another entity or the assets of another entity by or with the Company or an Affiliate of the Company. Such Substitute Awards referred to in the immediately preceding sentence that are Options or Stock Appreciation Rights may have an exercise price that is less than the Fair Market Value of a share of Stock on the date of the substitution if such substitution complies with the Nonqualified Deferred Compensation Rules and other applicable laws and exchange rules. Except as provided in this Section 6(j) or in Section 8, the terms of outstanding Awards may not be amended to reduce the Exercise Price or grant price of outstanding Options or SARs or to cancel outstanding Options and SARs in exchange for cash, other Awards or Options or SARs with an Exercise Price or grant price that is less than the Exercise Price or grant price of the original Options or SARs without the approval of the shareholders of the Company.

(k)          Performance Awards. The Committee is authorized to designate any of the Awards granted under the foregoing provisions of this Section 6 as Performance Awards. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance goals applicable to a Performance Award, and may exercise its discretion to reduce or increase the amounts payable under any Performance Award, except as limited under Section 6(k)(i). Performance goals may differ for Performance Awards granted to any one Participant or to different Participants. The performance period applicable to any Performance Award shall be set by the Committee in its discretion but shall not exceed ten (10) years.

(i)          Section 162(m) Awards. If the Committee determines in its discretion that a Performance Award granted to a Covered Employee shall be designated as a Section 162(m) Award, the grant, exercise, vesting and/or settlement of such Performance Award shall be contingent upon achievement of a pre-established performance goal or goals and other terms set forth in this Section 6(k)(i); provided, however, that nothing in this Section 6(k) or elsewhere in the Plan shall be interpreted as preventing the Committee from granting Performance Awards or other Awards to Covered Employees that are not intended to constitute Section 162(m) Awards or from determining that it is no longer necessary or appropriate for a Section 162(m) Award to qualify as such.

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(A)         Performance Goals Generally. The performance goals for Section 162(m) Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria as specified by the Committee. Performance goals shall be objective and shall otherwise meet the requirements of section 162(m) of the Code (including Treasury Regulation § 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee must be “substantially uncertain” at the time the Committee actually establishes the performance goal or goals.

(B)         Business Criteria for Performance Goals. One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries, business or geographical units or operating areas of the Company (except with respect to the total shareholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for Section 162(m) Awards: (1) revenues or other income; (2) cash flow, discretionary cash flow, cash flows from operations, cash flows from investing activities, or cash flows from financing activities; (3) return on net assets, return on assets, return on investment, return on capital, return on capital employed or return on equity; (4) income, operating income or net income; (5) earnings before any one or more of depletion, depreciation and amortization expense; exploration and abandonments; impairment of oil and gas properties; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; net gain or loss on the disposition of assets; income or loss from discontinued operations, net of tax; noncash derivative related activity; amortization of stock-based compensation; income taxes; or other items; (6) equity; net worth; tangible net worth; book capitalization; debt; debt, net of cash and cash equivalents; capital budget or other balance sheet goals; (7) debt or equity financings or improvement of financial ratings; (8) production volumes, production growth, or debt-adjusted production growth, which may be of oil, gas, natural gas liquids or any combination thereof; (9) general and administrative expenses; (10) proved reserves, reserve replacement, drillbit reserve replacement or reserve growth; (11) exploration and development costs, capital expenditures, finding and development costs, drillbit finding and development costs, operating costs (including, but not limited to, lease operating expenses, severance taxes and other production taxes, gathering and transportation and other components of operating expenses), base operating costs, or production costs; (12) net asset value; (13) Fair Market Value of the Stock, share price, share price appreciation, total shareholder return or payments of dividends; (14) achievement of savings from business improvement projects and achievement of capital projects deliverables; (15) working capital or working capital changes; (16) operating profit or net operating profit; (17) internal research or development programs; (18) geographic business expansion; (19) corporate development (including, without limitation, licenses, innovation, research or establishment of third party collaborations); (20) performance against environmental, ethics or sustainability targets; (21) safety performance and/or incident rate; (22) human resources management targets, including medical cost reductions, employee satisfaction or retention, workforce diversity and time to hire; (23) satisfactory internal or external audits; (24) consummation, implementation or completion of a Change of Control or other strategic partnerships, transactions, projects, processes or initiatives or other goals relating to acquisitions or divestitures (in whole or in part), joint ventures or strategic alliances; (25) regulatory approvals or other regulatory milestones; (26) legal compliance or risk reduction; and (27) drilling results. Any of the above goals may be determined pre-tax or post-tax, on an absolute or relative basis, as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable companies, as a ratio with other business criteria, as a ratio over a period of time or on a per unit of measure (such as per day, or per barrel, a volume or thermal unit of gas or a barrel-of-oil equivalent), on a per-share basis (basic or diluted), and on a basis of continuing operations only. The terms above may, but shall not be required to be, used as applied under generally accepted accounting principles, as applicable.

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(C)         Effect of Certain Events. The Committee may, at the time the performance goals in respect of a Section 162(m) Award are established, provide for the manner in which actual performance and performance goals with regard to the business criteria selected will reflect the impact of specified events during the relevant performance period, which may mean excluding the impact of any or all of the following events or occurrences for such performance period: (1) asset write-downs or impairments to assets; (2) litigation, claims, judgments or settlements; (3) accruals for reorganization and restructuring programs; (4) any unusual or infrequent items; (5) any gain or loss from a discontinued operation; (6) goodwill impairment charges; (7) operating results for any business, asset or property (or interest therein) acquired or sold; (8) third party expenses associated with any investment or acquisition by the Company or any Subsidiary; (9) any amounts accrued by the Company or its Subsidiaries pursuant to management bonus plans or cash profit sharing plans and related employer payroll taxes for the fiscal year; (10) any discretionary or matching contributions made to a savings and deferred profit-sharing plan or deferred compensation plan for the fiscal year; (11) interest, expenses, taxes, depreciation and depletion, amortization and accretion charges; (12) mark-to-market adjustments for financial instruments; and (13) changes in business strategy impacting timing and magnitude of financial operating goals, including, but not limited to, expenses, operating cash flow, and balance sheet goals. Unless the Committee otherwise elects, the performance goals in respect of a Section 162(m) Award shall be deemed to exclude the impact of the following events or occurrences for such performance period: (i) the effect of changes in tax law or other such laws or regulations affecting reported results; (ii) any change in accounting principles; and (iii) events of force majeure beyond the Company’s control, such as acts of God, wars (declared or undeclared), insurrections, hostilities, strikes, lockouts, riots, floods, fires, storms, industrial disturbances, acts of the public enemy, sabotage, blockades, landslides, lightning, earthquakes, washouts, arrests and restraints of rulers and peoples, civil disturbances, explosions, breakage or accidents to machinery, equipment, facilities or lines of pipe and subsequent repairs, freezing of wells, pipe or other facilities, partial or entire failure of wells, pipe or other facilities, and action or restraint by court order or public or governmental authority. In addition, a Section 162(m) Award may be adjusted by the Committee in accordance with the provisions of Section 8. The adjustments described in this paragraph shall only be made, in each case, to the extent that such adjustments in respect of a Section 162(m) Award would not cause the Section 162(m) Award to fail to qualify as “performance-based compensation” under section 162(m) of the Code.

(D)         Timing for Establishing Performance Goals. No later than 90 days after the beginning of any performance period applicable to a Section 162(m) Award, or at such other date as may be required or permitted for “performance-based compensation” under section 162(m) of the Code, the Committee shall establish (i) the Eligible Persons who will be granted Section 162(m) Awards, and (ii) the objective formula used to calculate the amount of cash or Stock payable, if any, under such Section 162(m) Awards, based upon the level of achievement of a performance goal or goals with respect to one or more of the business criteria selected by the Committee from the list set forth in Section 6(k)(i)(B).

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(E)         Performance Award Pool. The Committee may establish an unfunded pool, with the amount of such pool calculated using an objective formula based upon the level of achievement of one or more performance goals with respect to business criteria selected from the list set forth in Section 6(k)(i)(B) during the given performance period, as specified by the Committee in accordance with Section 6(k)(i)(D). The Committee may specify the amount of the pool as a percentage of any of such business criteria, a percentage in excess of a threshold amount with respect to such business criteria, or as another amount which need not bear a direct relationship to such business criteria but shall be objectively determinable and calculated based upon the level of achievement of pre-established goals with regard to the business criteria.

(F)         Settlement or Payout of Awards; Other Terms. Except as otherwise permitted under section 162(m) of the Code, after the end of each performance period and before any Section 162(m) Award is settled or paid, the Committee shall certify the level of performance achieved with regard to each business criteria established with respect to each Section 162(m) Award and shall determine the amount of cash or Stock, if any, payable to each Participant with respect to each Section 162(m) Award. The Committee may, in its discretion, reduce the amount of a payment or settlement otherwise to be made in connection with a Section 162(m) Award, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Section 162(m) Award.

(G)         Written Determinations. With respect to each Section 162(m) Award, all determinations by the Committee as to (1) the establishment of performance goals and performance period with respect to the selected business criteria, (2) the establishment of the objective formula used to calculate the amount of cash or Stock payable, if any, based on the level of achievement of such performance goals, and (3) the certification of the level of performance achieved during the performance period with regard to each business criteria selected, shall each be made in writing.

(H)         Options and SARs. Notwithstanding the foregoing provisions of this Section 6(k)(i), Options and SARs with an Exercise Price or grant price not less than the Fair Market Value on the date of grant awarded to Covered Employees are intended to be Section 162(m) Awards even if not otherwise contingent upon achievement of one or more pre-established performance goal or goals with respect to business criteria listed above.

(ii)         Status of Section 162(m) Awards. The terms governing Section 162(m) Awards shall be interpreted in a manner consistent with section 162(m) of the Code, in particular the prerequisites for qualification as “performance-based compensation,” and, if any provision of the Plan as in effect on the date of adoption of any Award Agreement relating to a Section 162(m) Award does not comply or is inconsistent with the requirements of section 162(m) of the Code, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements. During the Transition Period, Awards to Covered Employees shall only be required to comply with the transition relief described in Treasury Regulation § 1.162-27(f).

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7.          Certain Provisions Applicable to Awards.

(a)          Limit on Transfer of Awards.

(i)          Except as provided in Sections 7(a)(iii) and (iv), each Option and SAR shall be exercisable only by the Participant during the Participant’s lifetime, or by the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution. Notwithstanding anything to the contrary in this Section 7(a), an ISO shall not be transferable other than by will or the laws of descent and distribution.

(ii)         Except as provided in Sections 7(a)(iii) and (iv), no Award other than a Stock Award, and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.

(iii)        To the extent specifically provided by the Committee, an Award may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.

(iv)         An Award may be transferred pursuant to a domestic relations order entered or approved by a court of competent jurisdiction upon delivery to the Company of a written request for such transfer and a certified copy of such order.

(b)          Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or any of its Affiliates upon the exercise or settlement of an Award may be made in such forms as the Committee shall determine in its discretion, including without limitation cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis (which may be required by the Committee or permitted at the election of the Participant on terms and conditions established by the Committee); provided, however, that any such deferred or installment payments will be set forth in the Award Agreement and/or otherwise made in a manner that will not result in additional taxes under the Nonqualified Deferred Compensation Rules. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. The Plan shall not constitute an “employee benefit plan” for purposes of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

(c)          Evidencing Stock. The Stock or other securities of the Company delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including, but not limited to, in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise and shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Stock or other securities are then listed, and any applicable federal, state or other laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, related to the Restricted Stock.

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(d)          Consideration for Grants. Awards may be granted for such consideration, including services, as the Committee shall determine, but shall not be granted for less than the minimum lawful consideration.

(e)          Additional Agreements. Each Eligible Person to whom an Award is granted under the Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Eligible Person’s termination of employment or service to a general release of claims and/or a noncompetition or other restrictive covenant agreement in favor of the Company and its Affiliates, with the terms and conditions of such agreement(s) to be determined in good faith by the Committee.

(f)          Termination of Service. Except as provided herein, the treatment of an Award upon a termination of employment or any other service relationship by and between a Participant and the Company or any Affiliate shall be specified in the applicable Award Agreement.

8.          Subdivision or Consolidation; Recapitalization; Change of Control; Reorganization.

(a)          Existence of Plans and Awards. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Company, the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.

(b)          Subdivision or Consolidation of Shares. The terms of an Award and the share limitations under the Plan shall be subject to adjustment by the Committee from time to time, in accordance with the following provisions:

(i)          If at any time, or from time to time, the Company shall subdivide as a whole (by reclassification, by a Stock split, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number of shares of Stock then outstanding into a greater number of shares of Stock or in the event the Company distributes an extraordinary cash dividend, then, as appropriate (A) the maximum number of shares of Stock available for the Plan or in connection with Awards as provided in Sections 4 and 5 shall be increased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be increased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

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(ii)         If at any time, or from time to time, the Company shall consolidate as a whole (by reclassification, by reverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lesser number of shares of Stock, then, as appropriate (A) the maximum number of shares of Stock available for the Plan or in connection with Awards as provided in Sections 4 and 5 shall be decreased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be decreased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

(iii)        Whenever the number of shares of Stock subject to outstanding Awards and the price for each share of Stock subject to outstanding Awards are required to be adjusted as provided in this Section 8(b), the Committee shall promptly prepare a notice setting forth, in reasonable detail, the event requiring adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the change in price and the number of shares of Stock, other securities, cash, or property purchasable subject to each Award after giving effect to the adjustments. The Committee shall promptly provide each affected Participant with such notice.

(c)          Recapitalization. If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”) without the occurrence of a Change of Control, the number and class of shares of Stock covered by an Award theretofore granted shall be adjusted so that such Award shall thereafter cover the number and class of shares of Stock and securities to which the holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the holder had been the holder of record of the number of shares of Stock then covered by such Award and the share limitations provided in Sections 4 and 5 shall be adjusted in a manner consistent with the recapitalization.

(d)          Additional Issuances. Except as expressly provided herein, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to Awards theretofore granted or the purchase price per share of Stock, if applicable.

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(e)          Change of Control and Other Events. Except to the extent otherwise provided in any applicable Award Agreement, vesting of any Award shall not occur solely upon the occurrence of a Change of Control and, in the event of a Change of Control or other changes in the outstanding Stock by reason of a recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant change in capitalization occurring after the date of the grant of any Award and not otherwise provided for by this Section 8, the Committee, acting in its sole discretion without the consent or approval of any holder, may effect one or more of the following alternatives, which may vary among individual holders and which may vary among Options, SARs or other Awards held by any individual holder: (i) remove any applicable forfeiture restrictions on any Award; (ii) accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of holders thereunder shall terminate; (iii) provide for a cash payment with respect to outstanding Awards by requiring the mandatory surrender to the Company by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then vested or exercisable pursuant to the Plan) as of a date, specified by the Committee, in which event the Committee shall thereupon cancel such Awards (with respect to all shares subject to such Awards) and pay to each holder an amount of cash (or other consideration including securities or other property) per Award (other than a Dividend Equivalent or Cash Award) equal to the Change of Control Price, less the Exercise Price with respect to an Option and less the grant price with respect to a SAR, as applicable to such Awards; provided, however, that to the extent the Exercise Price of an Option or the grant price of an SAR exceeds the Change of Control Price, such Award may be canceled for no consideration; or (iv) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change of Control or other such event (including, but not limited to, (x) the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof for new awards, and (y) the adjustment as to the number and price of shares of Stock or other consideration subject to such Awards); provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding.

9.          General Provisions.

(a)          Restricted Securities. Prior to a Qualifying Public Offering, the Stock to be issued under this Plan, which may be issued in reliance on the exemption from registration set forth in Rule 701, shall be deemed to be “restricted securities” as defined in Rule 144, promulgated by the Securities and Exchange Commission under the Securities Act as from time to time in effect and applicable to the Plan and Participants. Resales of such Stock by the holder thereof shall be in compliance with the Securities Act or an exemption therefrom. Such Stock may bear a legend if determined necessary by the Committee in substantially the following form:

“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO ENERGY XXI GULF COAST, INC. (WHICH, IN THE DISCRETION OF ENERGY XXI GULF COAST, INC., MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO ENERGY XXI GULF COAST, INC.) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.”

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(b)          Right of First Refusal. If any Participant (“Transferor”), regardless of whether such Participant is the original holder of the Award contemplated in this Section 9(b), proposes to sell, transfer, assign, hypothecate, make gifts of or in any manner dispose of, encumber, or alienate (each individually constituting a “Transfer”) to a transferee, any Stock, obtained in connection with any Award held by such Transferor, either pursuant to a bona fide offer (“Offer”) from a potential transferee (“Offeror”) or by effecting a gift of the Stock (“Gift”) to a donee (“Donee”) without consideration, then the Transferor must comply with the provisions of this Section 9(b), including, without limitation, acknowledging and allowing the applicable time periods to lapse with respect to the rights of the Company as provided herein, before accepting any such Offer or otherwise affecting the Transfer of any Stock pursuant to such Offer, or affecting any such Gift.

(i)          Statement of Offer. Before accepting any Offer or affecting any Gift, the Transferor shall obtain from the Offeror or Donee, as the case may be, a statement (“Statement”) in writing addressed to the Transferor and signed by the Offeror or Donee, setting forth: (A) the date of the Statement (the “Statement Date”); (B) the number of shares of Stock covered by the Offer or Gift and, in the case of an Offer, the price per share to be paid by the Offeror and the terms of payment of such price; (C) the Offeror’s or Donee’s willingness to be bound by the terms of this Section 9(b) and execute and deliver to the Company such documentation as required under this Section 9(b); (D) the Offeror’s or Donee’s name, address and telephone number; and (E) the Offeror’s or Donee’s willingness to supply any additional information about himself or herself as may be reasonably requested by the Company. Promptly upon receipt of a Statement, and before accepting the Offer or affecting the Gift to which the Statement relates, the Transferor shall deliver to the Company (1) a copy of the Statement, and (2) in the case of an Offer, evidence reasonably satisfactory to the Company as to the Offeror’s financial ability to consummate the proposed purchase.

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(ii)         Company Rights. Subject to the provisions of Section 9(b)(i), upon receipt of a copy of the Statement, the Company shall have the exclusive right and option (the “Right”), but not the obligation, to purchase all of the shares of Stock that the Offeror proposes to purchase from the Transferor or, in the case of a Gift, that the Transferor proposes to give to the Donee (collectively, “Subject Securities”) (A) in the case of an Offer, for the per share price and on the terms as set forth in the Statement; provided, however, that if the purchase price is payable in whole or in part in property (which term shall include the securities of any issuer other than the Company) other than cash, the Company may pay, in lieu of such property, a sum of cash equal to the fair market value of such property as determined by the Transferor and the Company in good faith or, if the Transferor and the Company do not agree on the fair market value of such property within five days after the Company delivers written notice (as described below) of its intention to exercise the Right, then the Transferor and the Company shall select one independent appraiser (with each of the Transferor and the Company jointly bearing one-half of the expense of the appraiser) to determine the fair market value of that property and the appraised fair market value of that property as determined by such appraiser shall be deemed the fair market value of that property for purposes of this Section 9(b)(ii), or (B) in the case of a Gift, the Fair Market Value of the Subject Securities, as determined in good faith by the Company; provided that the Transferor may elect to retain the Subject Securities rather than sell the Subject Securities at the Fair Market Value as determined by the Company by giving written notice thereof to the Company within five days after such determination by the Company is received in writing by the Transferor. The Company shall exercise the Right by giving written notice thereof to the Transferor. Upon exercising the Right, the Company shall have the obligation, to the extent it lawfully may do so, to purchase the Subject Securities within 30 days after the date of the Company’s receipt of its copy of the Statement on and subject to the terms and conditions hereof. If the terms of the purchase include the Transferor’s release of any pledge or encumbrance on the Subject Securities and the Transferor shall have failed to obtain the release of the pledge or encumbrance by the purchase date, at the Company’s option the purchase shall occur on the scheduled date with the purchase price reduced to the extent of all unpaid indebtedness for which the Subject Securities are then pledged or encumbered. Failure by the Company to exercise the Right, or failure by the Company to otherwise perform its obligations under this Section 9(b)(ii), within the 30 day period herein prescribed shall be deemed an election by the Company not to exercise the Right. If the Company exercises the Right and is unable for any reason to perform its obligations thereunder in accordance with this Section 9(b), the Company may assign all or a portion of its rights under the Right to any one or more of the Company’s stockholders (other than the Transferor) (“Assignee Stockholder”), as the Board shall determine, in its sole and absolute discretion.

(iii)        Purchase of Less Than All Shares. Anything in Section 9(b) to the contrary notwithstanding, the Company and any Assignee Stockholder individually may, pursuant to the exercise of the Right, purchase fewer than all of the Subject Securities provided that such Persons in the aggregate purchase all, and not less than all, of the Subject Securities, and it shall be a condition precedent to the obligation of any of such Persons to purchase any Subject Securities, that all, and not less than all, of the Subject Securities have been elected to be purchased pursuant to the exercise of the Right.

(iv)         Failure to Exercise Right or Consummate Transaction. If the Company elects not to exercise the Right, or if the Right is exercised and the obligations to be performed thereunder by the Company are not performed in accordance with this Section 9(b), or if the Company’s rights are assigned to an Assignee Stockholder and such Assignee Stockholder fails to perform his or her obligations under the assigned Right in accordance with this Section 9(b), then, subject to the application of any applicable state or federal securities laws, the Transferor may dispose of all of the Subject Securities within 90 days after the date of the Statement at the per share price and on the terms, if any, as set forth in the Statement free and clear of the terms of this Section 9(b); provided, however, that (A) any subsequent transfer by the Offeror or Donee, as applicable, shall once again be subject to this Section 9(b) and (B) if the sale or gift of the Subject Securities is not consummated within such 90-day period, then the Transfer of any such Stock shall once again be subject to the terms of this Section 9(b).

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(v)          Legend. To assure the enforceability of the Company’s rights under this Section 9(b), until the date of a Qualifying Public Offering, each certificate or instrument representing Stock or an Award held by him, her, or it may, in the Committee’s discretion, bear a conspicuous legend in substantially the following form:

“THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO THIS AGREEMENT] ARE SUBJECT TO A RIGHT OF FIRST REFUSAL IN FAVOR OF ENERGY XXI GULF COAST, INC. IN THE CASE OF A TRANSFER AS PROVIDED UNDER THE ENERGY XXI GULF COAST, INC. 2016 LONG TERM INCENTIVE PLAN AND/OR AN AWARD AGREEMENT ENTERED INTO PURSUANT THERETO. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO ENERGY XXI GULF COAST, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES.”

(vi)         Expiration. The rights and obligations pursuant to this Section 9(b) hereof will terminate upon the date of a Qualifying Public Offering.

(c)          Purchase Option.

(i)          Except as otherwise expressly provided in any particular Award, (A) if a Participant ceases to be employed by or perform services for the Company or its Subsidiaries for any reason at any time or (B) upon the occurrence of a Change in Control, the Company (and/or its designee(s)) shall have the option (the “Purchase Option”) to purchase, and the Participant (or the Participant’s executor or the administrator of the Participant’s estate in the event of the Participant’s death, or the transferee of the Stock or Award in the case of any disposition, or the Participant’s legal representative in the event of the Participant’s incapacity) (hereinafter, collectively with such Participant, the “Grantor”) shall sell to the Company and/or its designee(s), all or any portion (at the Company’s option) of the shares of Stock issued pursuant to this Plan and held by the Grantor (such shares of Stock herein referred to as the “Purchasable Shares”).

(ii)         The Company shall give notice in writing to the Grantor of the exercise of the Purchase Option within (a) one year following, as applicable, the date of the termination of the Participant’s employment or service relationship or the date of the Change in Control or (b) with respect to an Option exercised following a Participant’s termination of employment or service relationship, one year following the date of such exercise. Such notice shall state the number of Purchasable Shares to be purchased and the determination of the Board of the Fair Market Value per share of such Purchasable Shares, or the Change in Control Price, if applicable. If no notice is given within the time limit specified above, the Purchase Option shall terminate.

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(iii)        The purchase price to be paid for the Purchasable Shares purchased pursuant to the Purchase Option shall be, the Fair Market Value per share, or the Change in Control Price if applicable, as of the date of the notice of exercise of the Purchase Option times the number of shares being purchased. The purchase price shall be paid in cash. The closing of such purchase shall take place at the Company’s principal executive offices within ten (10) days after the purchase price has been determined. At such closing, the Grantor shall deliver to the purchasers the certificates or instruments evidencing the Purchasable Shares being purchased free and clear of all liens and encumbrances (if any), duly endorsed (or accompanied by duly executed stock powers) and otherwise in good form for delivery, against payment of the purchase price by check of the purchasers. In the event that, notwithstanding the foregoing, the Grantor shall have failed to obtain the release of any pledge or other encumbrance on any Purchasable Shares by the scheduled closing date, at the option of the purchasers, the closing shall nevertheless occur on such scheduled closing date, with the cash purchase price being reduced to the extent of all unpaid indebtedness for which such Purchasable Shares are then pledged or encumbered.

(iv)         To assure the enforceability of the Company’s rights under this Section 9(c), until the date of a Qualifying Public Offering, each certificate or instrument representing Stock or an Award held by him, her, or it may, in the Committee’s discretion, bear a conspicuous legend in substantially the following form:

“THE SHARES [REPRESENTED BY THIS CERTIFICATE] [ISSUABLE PURSUANT TO THIS AGREEMENT] ARE SUBJECT TO AN OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE ENERGY XXI GULF COAST, INC. 2016 LONG TERM INCENTIVE PLAN AND/OR AN AWARD AGREEMENT ENTERED INTO PURSUANT THERETO. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE AVAILABLE UPON WRITTEN REQUEST TO ENERGY XXI GULF COAST, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES.”

(d)          The Company’s rights under this Section 9(c) shall terminate upon the date of a Qualifying Public Offering.

(e)          Tax Withholding. The Company and any of its Affiliates are authorized to withhold from any Award granted, or any payment relating to an Award under the Plan, including from a distribution of Stock, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, its Affiliates and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. The Committee shall determine, in its sole discretion, the form of payment acceptable for such tax withholding obligations, including, without limitation, the delivery of cash or cash equivalents, Stock (including previously owned shares, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to the Award), other property, or any other legal consideration the Committee deems appropriate. Any determination made by the Committee to allow a Participant who is subject to Rule 16b-3 to pay taxes with shares of Stock through net settlement or previously owned shares shall be approved by either a committee made up of solely two or more Qualified Members or the full Board. If such tax obligations are satisfied through net settlement or previously owned shares, the maximum number of shares of Stock that may be so withheld (or surrendered) shall be the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment with respect to such Award, as determined by the Committee.

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(f)          Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or any of its Affiliates, (ii) interfering in any way with the right of the Company or any of its Affiliates to terminate any Eligible Person’s or Participant’s employment or service relationship at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and/or employees and/or other service providers, or (iv) conferring on a Participant any of the rights of a shareholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award.

(g)          Governing Law; Submission to Jurisdiction. All questions arising with respect to the provisions of the Plan and Awards shall be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law. The obligation of the Company to sell and deliver Stock hereunder is subject to applicable federal and state laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock. With respect to any claim or dispute related to or arising under the Plan, the Company and each Participant who accepts an Award hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in Houston, Texas.

(h)          Severability and Reformation. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. To the fullest extent possible, the grant of any Awards to, or other transaction by, a Participant who is subject to section 16 of the Exchange Act shall be exempt from such section pursuant to an applicable exemption (except for transactions acknowledged in writing to be non-exempt by such Participant). If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible Persons who are subject to section 16 of the Exchange Act), section 162(m) of the Code (with respect to any Section 162(m) Award) or section 422 of the Code (with respect to ISOs), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 or section 162(m) of the Code (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3 or section 162(m) of the Code) or section 422 of the Code. With respect to ISOs, if the Plan does not contain any provision required to be included herein under section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, further, that, to the extent any Option that is intended to qualify as an ISO cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory Option for all purposes of the Plan.

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(i)          Unfunded Status of Awards; No Trust or Fund Created. The Plan is intended to constitute an “unfunded” plan for certain incentive awards. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or such Affiliate.

(j)          Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable, including incentive arrangements and awards which do not constitute “performance-based compensation” under section 162(m) of the Code. Nothing contained in the Plan shall be construed to prevent the Company or any of its Affiliates from taking any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any of its Affiliates as a result of any such action.

(k)          Fractional Shares. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine in its sole discretion whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock or whether such fractional shares of Stock or any rights thereto shall be canceled, terminated, or otherwise eliminated with or without consideration.

(l)          Interpretation. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural. In the event of any conflict between the terms and conditions of an Award Agreement and the Plan, the provisions of the Plan shall control.

(m)          Facility of Payment. Any amounts payable hereunder to any individual under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial affairs, may be paid to the legal representative of such individual, or may be applied for the benefit of such individual in any manner that the Committee may select, and the Company shall be relieved of any further liability for payment of such amounts.

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(n)          Conditions to Delivery of Stock. Nothing herein or in any Award Agreement shall require the Company to issue any shares with respect to any Award if that issuance would, in the opinion of counsel for the Company, constitute a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, as then in effect. In addition, each Participant who receives an Award under the Plan shall not sell or otherwise dispose of Stock that is acquired upon grant or vesting of an Award in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations or other requirements of the Securities and Exchange Commission or any stock exchange upon which the Stock is then listed. At the time of any exercise of an Option or Stock Appreciation Right, or at the time of any grant of any other Award the Company may, as a condition precedent to the exercise of such Option or Stock Appreciation Right or settlement of any other Award, require from the Participant (or in the event of his or her death, his or her legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the holder’s intentions with regard to the retention or disposition of the shares of Stock being acquired pursuant to the Award and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Company, may be necessary to ensure that any disposition by that holder (or in the event of the holder’s death, his or her legal representatives, heirs, legatees, or distributees) will not involve a violation of the Securities Act or any similar or superseding statute or statutes, any other applicable state or federal statute or regulation, or any rule of any applicable securities exchange or securities association, as then in effect. Stock or other securities shall not be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including, without limitation, any Exercise Price, grant price, or tax withholding) is received by the Company.

(o)          Section 409A of the Code. It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the Nonqualified Deferred Compensation Rules, and Awards will be operated and construed accordingly. Neither this Section 9(o) nor any other provision of the Plan is or contains a representation to any Participant regarding the tax consequences of the grant, vesting, exercise, settlement, or sale of any Award (or the Stock underlying such Award) granted hereunder, and should not be interpreted as such. In no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with the Nonqualified Deferred Compensation Rules. Notwithstanding any provision in the Plan or an Award Agreement to the contrary, in the event that a “specified employee” (as defined under the Nonqualified Deferred Compensation Rules) becomes entitled to a payment under an Award that would be subject to additional taxes and interest under the Nonqualified Deferred Compensation Rules if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (i) the date of the Participant’s death, or (ii) the date that is six months after the Participant’s “separation from service,” as defined under the Nonqualified Deferred Compensation Rules (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date. The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith.

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(p)          Clawback. The Plan is subject to any written clawback policies that the Company, with the approval of the Board or an authorized committee thereof, may adopt either prior to or following the Effective Date, including any policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the Securities and Exchange Commission and that the Company determines should apply to Awards under the Plan. Any such policy may subject a Participant’s Awards and amounts paid or realized with respect to Awards under the Plan to reduction, cancelation, forfeiture or recoupment if certain specified events or wrongful conduct occur, including but not limited to an accounting restatement due to the Company’s material noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such clawback policy.

(q)          Plan Effective Date and Term. The Plan was adopted by the Board to be effective on the Effective Date. No Awards may be granted under the Plan on and after the tenth anniversary of the Effective Date, which is December 30, 2026. However, any Award granted prior to such termination, and the authority of the Board or Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award in accordance with the terms of the Plan, shall extend beyond such termination date until the final disposition of such Award.

10.         Amendments to the Plan and Awards. The Committee may amend, alter, suspend, discontinue or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of shareholders or Participants, except that any amendment or alteration to the Plan, including any increase in any share limitation, shall be subject to the approval of the Company’s shareholders not later than the annual meeting next following such Committee action if such shareholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Committee may otherwise, in its discretion, determine to submit other such changes to the Plan to shareholders for approval; provided, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan; provided, however, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under such Award. For purposes of clarity, any adjustments made to Awards pursuant to Section 8 will be deemed not to materially and adversely affect the rights of any Participant under any previously granted and outstanding Award and therefore may be made without the consent of affected Participants.

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EX-10.9

Exhibit 10.9

Non-Employee Director Compensation Policy

(Effective January 6, 2017)

Annual Cash Retainer:	$75,000 ($125,000 for Non-Executive Chairman)
Meeting Attendance Fees:	Upon a Committee of the Board of Directors or the Board of Directors meeting more than ten times in one calendar year, the Board of Directors may, in its discretion, award an additional $1,000 per Committee meeting after the initial ten meetings and $1,500 per Board of Directors meeting after the initial ten meetings, as applicable
Committee Annual Cash Fees (Chair):	Audit: $25,000
	Compensation: $25,000
	Governance: $10,000
Committee Annual Cash Fees (Non-Chair):	Audit: $12,500
	Compensation: $12,500
	Governance: $5,000
Annual Restricted Stock Unit Award:	$130,000 of restricted stock units ($175,000 for Non-Executive Chairman)
	one-half vests immediately; one-half vests in one year from the date of grant
Initial Restricted Stock Unit Award:	$200,000 of restricted stock units ($300,000 for Non-Executive Chairman)
	Vests one-third on each December 31 following the date of grant or upon a change of control