Exhibit 10.1

Execution Copy

EIGHTH AMENDMENT TO AMENDED AND RESTATED
FIRST LIEN CREDIT AGREEMENT
 
This EIGHTH AMENDMENT TO AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT
(“Amendment”), dated as of November 17, 2010, is by and among Energy XXI Gulf
Coast, Inc., a Delaware corporation (the “Borrower”), the lenders party to the
First Lien Credit Agreement described below (the “Lenders”), and The Royal Bank
of Scotland plc, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”), and the other parties in the capacities herein
identified.
 
RECITALS
 
WHEREAS, the Borrower, the Lenders, the Administrative Agent and certain other
Persons are parties to the Amended and Restated First Lien Credit Agreement,
dated as of June 8, 2007, as modified by the Consent Regarding Amended and
Restated First Lien Credit Agreement dated as of July 27, 2007, as amended by
that certain First Amendment to Amended and Restated First Lien Credit Agreement
dated effective as of November 19, 2007, as amended by that certain Waiver,
Consent and Second Amendment to Amended and Restated First Lien Credit Agreement
dated effective as of December 1, 2008, as amended by the Third Amendment to
Amended and Restated First Lien Credit Agreement dated as of April 6, 2009, as
modified by the Waiver and Consent to Amended and Restated First Lien Credit
Agreement dated as of June 30, 2009, as amended and modified by the Waiver,
Consent and Fourth Amendment to Amended and Restated First Lien Credit Agreement
dated as of September 11, 2009 and as amended and modified by the Fifth
Amendment to Amended and Restated First Lien Credit Agreement dated as of
December 11, 2009, as amended and modified by the Sixth Amendment to Amended and
Restated First Lien Credit Agreement dated as of February 5, 2010, and as
amended and modified by the Seventh Amendment to Amended and Restated First Lien
Credit Agreement dated as of October 15, 2010 (as so modified, and as amended,
supplemented and amended, herein the “2007 First Lien Credit Agreement”, and the
2007 First Lien Credit Agreement as amended, supplemented, amended and restated
or otherwise modified from time to time, the “First Lien Credit Agreement”); and
 
WHEREAS, pursuant to a Purchase and Sale Agreement, dated on or about November
19, 2010, (as amended, supplemented, amended and restated or otherwise modified
from time to time as permitted under the Loan Documents, the “Exxon Acquisition
Agreement”), by and between EXXI GOM, as buyer, and Exxon Mobil Corporation,
Mobil Oil Exploration & Producing Southeast Inc. and ExxonMobil Pipeline
Company, as sellers (collectively “Exxon”), EXXI GOM intends to acquire from
such sellers, the “Interests” as defined in the Exxon Acquisition Agreement (the
“Exxon Acquisition”);
 
WHEREAS, the Borrower expects to pay fees and expenses in connection with the
Exxon Acquisition;
 
WHEREAS, in order to help consummate the Exxon Acquisition and to pay
transaction costs relating thereto and to financing such acquisition, the
Borrower (i) has requested an increase in the Revolving Loan Commitment Amount
and the Borrowing Base and (ii) expects to incur additional unsecured
indebtedness of an amount up to $1,000,000,000.
 
 

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WHEREAS, the Borrower further intends to use the proceeds of the increase in the
Borrowing Base, the Permitted Unsecured Indebtedness and the proceeds from the
issuance of its Capital Securities to Intermediate Holdco, if any, to (i) pay,
prepay, redeem, defease, purchase, acquire or otherwise retire certain
Indebtedness under the Second Lien Notes and PP Notes (the “Bond Prepayment”)
not paid, prepaid, redeemed, defeased, purchased, acquired or otherwise retired
pursuant to that certain Waiver Regarding Amended and Restated First Lien Credit
Agreement, dated as of November 17, 2010 (the “Waiver”), (ii) prepay certain
Indebtedness under the First Lien Credit Agreement and (iii) pay the fees,
expenses and premiums associated with the foregoing payments, prepayments,
redemptions, defeasance, purchases, acquisitions, and other retirements;
 
WHEREAS, the Borrower has requested that the Administrative Agent, the Swing
Line Lender, the Issuer, and the Lenders amend the First Lien Credit Agreement
in certain respects as set forth herein.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
 
AGREEMENT
 
Section 1.          Definitions.  Capitalized terms used herein but not defined
herein shall have the meanings as given them in the First Lien Credit Agreement,
unless the context otherwise requires.
 
Section 2.          Amendments to First Lien Credit Agreement.
 
(a)           Amendment to the preamble of the First Lien Credit Agreement.  The
preamble to the First Lien Credit Agreement is hereby amended by deleting the
phrase “RBS SECURITIES INC. (“RBS Securities”) and BNP PARIBAS SECURITIES CORP.
(“BNPPSC”), as Lead Arrangers (in such capacity the “Lead Arrangers”), and
BNPPSC as Syndication Agent (in such capacity, the “Syndication Agent”) for the
Lenders” and replacing it in its entirety with the phrase “RBS SECURITIES INC.
(“RBS Securities”), UBS Securities LLC (“UBS Securities”) and BNP PARIBAS
SECURITIES CORP. (“BNPPSC”), as Lead Arrangers (in such capacity the “Lead
Arrangers”), BNPPSC and UBS LOAN FINANCE LLC (“UBS”) as Co-Syndication Agents
(in such capacity, each, a “Syndication Agent” and together, the “Syndication
Agents”) for the Lenders, and CAPITAL ONE, NATIONAL ASSOCIATION and REGIONS
BANK, as Co-Documentation Agents (in such capacity, the “Co-Documentation
Agents”)”.
 
 
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(b)           Amendment to Section 1.1 of the First Lien Credit
Agreement.  Section 1.1 of the First Lien Credit Agreement is hereby amended by
adding the following new defined terms in alphabetical order:
 
“Amendment No. 8” means that certain Eighth Amendment to Amended and Restated
First Lien Credit Agreement, dated as of November 17, 2010, by and among the
Borrower, the Lenders and the Administrative Agent.
 
“Co-Documentation Agents” is defined in the preamble.
 
“Exxon” means, collectively, Exxon Mobil Corporation, Mobil Oil Exploration &
Producing Southeast Inc. and ExxonMobil Pipeline Company.
 
“Exxon Acquisition” means the acquisition of certain properties from Exxon
pursuant to the terms of the Exxon Acquisition Agreement.
 
“Exxon Acquisition Agreement” shall have the meaning ascribed thereto in
Amendment No. 8.
 
“Permitted Unsecured Debt Documents” means one or more indentures, note purchase
agreements, credit agreements or similar financing documents governing the
issuance of Permitted Unsecured Indebtedness.
 
“Permitted Unsecured Indebtedness” shall have the meaning set forth in Section
7.2.2(j) of this Agreement.
 
(c)           Amendment to Section 1.1 of the First Lien Credit
Agreement.  Section 1.1 of the First Lien Credit Agreement is hereby amended by
replacing the following defined terms in their entirety with the following:
 
“Agents” means each of the Administrative Agent, the Syndication Agents, the
Co-Documentation Agents and the Lead Arrangers.
 
“EBITDA” means, for any applicable period and with the respect to the Borrower
and its consolidated Subsidiaries, the sum of (a) Net Income, plus (b) to the
extent deducted in determining Net Income, the sum of (i) amounts attributable
to amortization, depletion and depreciation of assets, (ii) income tax expense,
(iii) Interest Expense for such period, and (iv) reasonable transaction fees and
expenses incurred in connection with negotiation, execution and delivery of this
Agreement, the other Loan Documents and the negotiation, execution and delivery
and consummation of the Exxon Acquisition and any Permitted Unsecured
Indebtedness or refinancing thereof; provided, however, that (A) for the Fiscal
Quarter ending December 31, 2010, EBITDA for such Fiscal Quarter shall be deemed
to be equal to $152,383,974, (B) for the Fiscal Quarter ending September 30,
2010, EBITDA for such Fiscal Quarter shall be deemed to be equal to
$152,383,974, (C) for the Fiscal Quarter ending June 30, 2010, EBITDA for such
Fiscal Quarter shall be deemed to be equal to $169,156,843 and (D) for the
Fiscal Quarter ending March 31, 2010, EBITDA for such Fiscal Quarter shall be
deemed to be equal to $171,664,332; provided, further, that 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 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).
 
 
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“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 its Subsidiaries) of the Borrower and its
Subsidiaries for such applicable period, including the portion of any payments
made in respect of Capitalized Lease Liabilities allocable to interest expense,
but excluding one-time write-offs of unamortized upfront fees and other upfront
fees and expenses associated with this Agreement and the other Loan Documents,
the Existing Credit Agreement and the “Loan Documents” thereunder, the PP Debt
Documents, the Second Lien Note Documents and the Permitted Unsecured Debt
Documents.
 
“Issuer” means, as applicable, RBS, BNP Paribas or UBS AG, Stamford Branch, 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 may issue one or more
Letters of Credit hereunder.
 
“Lead Arranger” means, collectively, RBS Securities, UBS Securities and BNPPSC.
 
“Letter of Credit Commitment Amount” means, on any date, a maximum amount of
$300,000,000, as such amount may be permanently reduced from time to time
pursuant to Section 2.2.
 
“Revolving Loan Commitment Amount” means, on any date, $925,000,000, as such
amount may be reduced from time to time pursuant to Section 2.2 or increased
pursuant to Section 2.8.
 
“Stated Maturity Date” means the last business day of the month which is four
(4) years from the “Effective Date” as defined in Amendment No. 8; provided that
notwithstanding the foregoing, in the event that all or any portion of the PP
Notes remain outstanding ninety (90) days prior to June 15, 2013, then such date
that is ninety (90) days prior to June 15, 2013 shall be the Stated Maturity
Date.
 
 
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“Total Debt” means, on any date and without duplication, the outstanding
principal amount of all Indebtedness of the Borrower and its Subsidiaries of the
type referred to in clause (a) (which, in the case of the Loans, PP Debt, Second
Lien Indebtedness and Permitted Unsecured Indebtedness, shall be deemed to equal
the actual daily amount of the Loans, PP Notes, Second Lien Notes or Permitted
Unsecured Indebtedness, as the case may be, outstanding for such date), clause
(b) (which, in the case of Letter of Credit Outstandings shall be deemed to
equal the actual daily amount of Letter of Credit Outstandings for such date
less the amount of any cash collateral in respect thereof, if any, held in an
account maintained with (or on behalf of) the Administrative Agent, BNP Paribas
and/or UBS AG, Stamford Branch (as the case may be)), clause (c), clause (f)
(but excluding any current non-cash asset or liability (including in respect of
Hedging Agreements) described in or calculated pursuant to the requirements of
Statement of Financial Accounting Standards 133 and 143, in each case as amended
(provided that, for the avoidance of doubt, the calculation of Total Debt shall
include any current assets or liabilities in respect of the termination of any
Hedging Agreement), and clause (g), in each case of the definition of
“Indebtedness” (exclusive of intercompany Indebtedness between the Borrower and
its Subsidiaries but including the Indebtedness in respect of principal
hereunder and under the PP Notes, the Second Lien Notes, and the Permitted
Unsecured Indebtedness, as the case may be) and any Contingent Liability in
respect of any of the foregoing.
 
(d)           Amendment to Section 2.1.2 of the First Lien Credit
Agreement.  Section 2.1.2 of the First Lien Credit Agreement is hereby amended
by replacing the phrase “$20,000,000” with the phrase “$125,000,000”.
 
(e)           Amendment to Section 3.3.2 of the First Lien Credit
Agreement.  Section 3.3.2 of the First Lien Credit Agreement is hereby amended
by deleting the phrase “January 8, 2010” and replacing it in its entirety with
the phrase “November 17, 2010”.
 
(f)           Amendment to Section 5.2.1(b) of the First Lien Credit
Agreement.  Section 5.2.1(b) of the First Lien Credit Agreement is hereby
amended by deleting the phrase “June 30, 2009” and replacing it in its entirety
with the phrase “June 30, 2010”.
 
(g)           Amendment to Section 5.2.1(d) of the First Lien Credit
Agreement.  Section 5.2.1(d) of the First Lien Credit Agreement is hereby
amended by deleting the phrase “the Indenture” and replacing it in its entirety
with the phrase “the PP Debt Documents, the Second Lien Note Documents and the
Permitted Unsecured Debt Documents”.
 
(h)           Amendment to Section 6.6 of the First Lien Credit
Agreement.  Section 6.6 of the First Lien Credit Agreement is hereby amended by
deleting the phrase “June 30, 2009” and replacing it in its entirety with the
phrase “June 30, 2010”.
 
(i)           Amendment to Section 7.1.7(a) of the First Lien Credit
Agreement.  Section 7.1.7(a) of the First Lien Credit Agreement is hereby
amended by adding the phrase “and the Exxon Acquisition” at the end of such
section.
 
 
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(j)           Amendment to Section 7.2.2 of the First Lien Credit
Agreement.  Section 7.2.2 of the First Lien Credit Agreement is hereby amended
by (i) renumbering clause (j) as clause (k), (ii) replacing the phrase “clauses
(c), (e), (g), or (j)” with the phrase “clauses (c), (e), (g), (j) or (k)”, and
(iii) adding the following new clause (j) immediately following clause (i):
 
“(j)          Indebtedness incurred in an amount not to exceed an aggregate
outstanding principal amount of up to $1,000,000,000; and, the refinancing of
all or any applicable portion of such Indebtedness so long as such refinancing
is on terms and conditions that are, taken as a whole, no less favorable to the
Lenders (which, for the avoidance of doubt, shall not be determined by reference
to the specific requirements of the term “No Less Favorable Terms and
Conditions” and may be for an increased principal amount of such refinanced
Indebtedness as long as it otherwise satisfies the terms of this clause (j)),
provided, however, that such Indebtedness (x) is unsecured, (y) does not have a
maturity date that is prior to the date that is six (6) months after the Stated
Maturity Date, and (z) will be used solely to (i) pay for the redemption,
exchange or refinancing, including any premiums associated therewith, of the
Second Lien Notes and the PP Notes that have not been previously paid, prepaid,
redeemed, defeased, purchased, acquired or otherwise retired (provided that such
$1,000,000,000 amount of such Indebtedness shall be reduced by the amount of any
refinancing of the Second Lien Notes or the PP Notes accomplished otherwise
pursuant to the terms of Section 7.2.2(g) of this Agreement), (ii) pay amounts
owed in connection with the consummation of the Exxon Acquisition,  (iii) repay
outstanding Indebtedness under this Agreement, and (iv) pay for the purchase
price and any fees and expenses associated with the Exxon Acquisition and
financings, refinancing and the payments contemplated in this clause (j) (the
“Permitted Unsecured Indebtedness”);”
 
(k)           Amendment to Section 7.2.4(a) of the First Lien Credit
Agreement.  Section 7.2.4(a) is hereby deleted and replaced in its entirety with
the following:
 
“(a)  The Borrower will not permit the Total Leverage Ratio as of the last day
of any Fiscal Quarter to be greater than 3.5 to 1.00.”
 
(l)           Amendment to Section 7.2.11(c) of the First Lien Credit
Agreement.  Section 7.2.11(c) of the First Lien Credit Agreement is hereby
amended by (i) deleting the word “or” immediately preceding clause (ii), and
(ii) adding the phrase “, or (iii) the Permitted Unsecured Debt Documents,
unless the Borrower has provided prior notice of the amendment, supplement,
waiver or other modification to the Administrative Agent and the Administrative
Agent has consented to such amendment, supplement, waiver or other modification”
immediately following the phrase “the Second Lien Note Documents”.
 
(m)           Amendment to Section 7.2.13 of the First Lien Credit
Agreement.  Section 7.2.13 of the First Lien Credit Agreement is hereby amended
by adding the phrase “or in the Permitted Unsecured Debt Documents” immediately
following the phrase “the Second Lien Note Documents”.
 
 
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(n)       Amendment to Section 7.2.20(e) of the First Lien Credit
Agreement.  Section 7.2.20(e) of the First Lien Credit Agreement is hereby
amended by deleting the phrase “$6,000,000” and replacing it with the phrase
“$12,000,000”.
 
(o)       Amendment to Article VII of the First Lien Credit Agreement.  The
First Lien Credit Agreement is hereby amended by adding the following Section
7.2.22 after Section 7.2.21:
 
“SECTION 7.2.22.  No Prepayment of Permitted Unsecured Notes.  The Borrower will
not, and will not permit any of its Subsidiaries to, prior to the date that is
one hundred eighty (180) days after the Stated Maturity Date:
 
(a)  make any payment or prepayment of principal of, or premium or interest on,
any Permitted Unsecured Indebtedness other than:  (i) with respect to interest,
(A) on the stated, scheduled dates for payment of interest set forth in the
Permitted Unsecured Debt Documents or (B) upon any refinancing of Permitted
Unsecured Indebtedness permitted hereunder, or (ii) with respect to principal,
(A) on the date of the stated maturity indicated in the Permitted Unsecured Debt
Documents with respect to the payment of principal on the Permitted Unsecured
Indebtedness, (B) on each scheduled date for payment of principal or as required
in connection with a mandatory prepayment, redemption or defeasance of the
Permitted Unsecured Indebtedness under the Permitted Unsecured Debt Documents,
so long as on the date of such payment (1) no Default or Event of Default or
Borrowing Base Deficiency has occurred and is continuing or would result
therefrom and (2) the Borrower has paid any Obligations required to be paid
hereunder pursuant to the terms of this Agreement, or (C) upon any refinancing
of Permitted Unsecured Indebtedness permitted by this Agreement;
 
(b)  redeem, retire, purchase, defease or otherwise acquire any Permitted
Unsecured Indebtedness (except as set forth in clause (a)); or
 
(c)  make any deposit (including the payment of amounts into a sinking fund or
other similar fund) for any of the foregoing purposes other than, in each case,
in connection with a refinancing of Permitted Unsecured Indebtedness (to the
extent of such Indebtedness being refinanced) permitted by this Agreement.”
 
(p)       Amendment to Section 9.13 of the First Lien Credit Agreement.  Section
9.13 of the First Lien Credit Agreement is hereby amended by deleting the phrase
“neither the Syndication Agent nor either of the Lead Arrangers” and replacing
it with the phrase “none of the Syndication Agents, the Co-Documentation Agents
or the Lead Arrangers”.
 
(q)      Amendment to Schedule II of the First Lien Credit Agreement.  Schedule
II of the First Lien Credit Agreement is hereby deleted and replaced in its
entirety with a new Schedule II attached as Exhibit B hereto.
 
 
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Section 3.         Consent to Prepayment of Second Lien Indebtedness and PP
Debt.  Subject to the terms of this Amendment, and notwithstanding the
prohibitions regarding the PP Debt and the Second Lien Indebtedness in Sections
7.2.15 and 7.2.21, respectively, of the First Lien Credit Agreement and the
Intercreditor Agreement, the Lenders hereby consent to the Borrower paying,
prepaying, redeeming, defeasing, purchasing, acquiring or otherwise retiring
each of the PP Debt and the Second Lien Indebtedness not paid, prepaid,
redeemed, defeased, purchased, acquired or otherwise retired pursuant to the
Waiver and agree that the Borrower’s undertaking of the Bond Prepayment in
accordance with and as contemplated by the terms of this Section 3 shall not
constitute a Default or Event of Default as a result of a violation of such
Sections 7.2.15 and 7.2.21 of the First Lien Credit Agreement.  The consent by
the Lenders described in this Section 3 is limited to the Bond Prepayment and
shall not be construed to be a consent to or a permanent waiver of Sections
7.2.15 or 7.2.21 of the Credit Agreement or any other terms, provisions,
covenants, warranties or agreements contained in any Loan Document.
 
Section 4.         Conditions to Effectiveness.  This Amendment shall be deemed
effective (subject to the conditions herein contained) as of the date (the
“Effective Date”) upon the Administrative Agent’s receipt of counterparts hereof
duly executed by the Borrower, the Administrative Agent, the Swing Line Lender,
the Issuers and all of the Lenders and upon the prior or concurrent satisfaction
of each of the following conditions:
 
(a)           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
 
(1)           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, the execution, delivery
and performance of this Amendment and each other Loan Document to be executed by
such Obligor in connection herewith;
 
(2)           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
this Amendment and each Loan Document to be executed by such Obligor; and
 
(3)           the Organic Documents of such Obligor and the full force and
validity thereof;
 
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.
 
 
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(b)          the Administrative Agent shall have received from each party hereto
counterparts (in such number as may be requested by the Administrative Agent) of
this Amendment signed on behalf of such party;
 
(c)           the Administrative Agent shall have 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 of the First Lien Credit
Agreement, the fees referred to in the letter dated November 17, 2010 between
the Borrower and the Administrative Agent and, if then invoiced, 10.3 of the
First Lien Credit Agreement;
 
(d)          the Administrative Agent shall have received, and each shall be in
form and substance satisfactory to it, a copy of the Exxon Acquisition Agreement
certified by the Borrower as being true, correct and complete copies thereof;
 
(e)           the Lenders shall have received a reserve report with respect to
the interests being acquired pursuant to the Exxon Acquisition dated as of
December 1, 2010;
 
(f)           the Exxon Acquisition pursuant to the Exxon Acquisition Agreement
shall have been, or shall contemporaneously with the Effective Date be,
consummated substantially pursuant to the terms of the Exxon Acquisition
Agreement;
 
(g)          the Administrative Agent shall have received certificates of
insurance coverage of Borrower satisfactory to the Administrative Agent,
including insurance covering the properties acquired pursuant to the Exxon
Acquisition;
 
(h)          the Administrative Agent shall have received title opinions or
other information in form and substance reasonably satisfactory to the
Administrative Agent with respect to the Mortgaged Properties constituting at
least 85% of the total value of the Proved Developed Producing Reserves to be
acquired by the Borrower in connection with the Exxon Acquisition;
 
(i)           the Borrower shall have delivered Mortgages or supplements to
existing Mortgages covering at least 85% of the total value of the Proved
Reserves and Proved Developed Producing Reserves to be acquired pursuant to the
Exxon Acquisition;
 
(j)            after giving effect to all borrowings on the such effective date,
the Borrower shall have unused availability under the Borrowing Base of at least
$100,000,000;
 
(k)           the Borrower shall have delivered to the Administrative Agent the
annual projections for the Borrower for the three year period immediately
following the Effective Date prepared in good faith based on available
information and estimates determined to be reasonable at the time such
projections were prepared;
 
(l)            the commodity hedging agreements the Borrower had in effect on
November 8, 2010 shall remain in effect or have been replaced with hedging
agreements with equal or superior total hedge value.
 
 
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(m)          the Administrative Agent shall have received opinions, dated the
Effective Date and addressed to the Administrative Agent and all Lenders, from
Looper, Reed & McGraw, New York and Texas counsel to the Obligors in form and
substance satisfactory to the Administrative Agent.
 
(n)           the Administrative Agent shall have received a proforma
consolidated balance sheet of the Borrower as of the Effective Date, after
giving effect to the Exxon Acquisition, in a form reasonably acceptable to the
Administrative Agent; and
 
(o)          the Administrative Agent and each Lender shall have received all
Patriot Act disclosures requested by them, if any, prior to execution of this
Amendment.
 
Notwithstanding the foregoing, this Amendment shall not become effective and the
agreements hereunder will be terminated unless each of the foregoing conditions
is satisfied (or waived by all of the Lenders in writing) on or prior to March
31, 2011.
 
Section 5.         Conditions Subsequent.  Within fourteen (14) days following
the Effective Date, but in no event later than December 31, 2010, the Borrower
shall have entered into hedging agreements reasonably satisfactory to the
Administrative Agent.
 
Section 6.         Redetermination of the Borrowing Base.  The Borrower and the
Lenders hereby agree that effective as of the Effective Date, the Borrowing Base
shall be equal to $700,000,000 until such time as the Borrowing Base is
redetermined or otherwise adjusted pursuant to the terms of the First Lien
Credit Agreement.  The Borrower and the Lenders hereby agree that this
determination of the Borrowing Base shall be deemed to be the determination as
required under Section 2.8.5 of the First Lien Credit Agreement.
 
Section 7.          Representations and Warranties.  The Borrower hereby
represents and warrants that after giving effect hereto:
 
(a)           the representations and warranties of the Obligors contained in
the Loan Documents (other than Section 6.17 of the First Lien Credit Agreement
solely with respect to the Lehman Hedging Agreement (as defined in the Second
Amendment)) are true and correct in all material respects, other than those
representations and warranties that expressly relate solely to a specific
earlier date, which shall remain correct in all material respects as of such
earlier date;
 
(b)           the execution, delivery and performance by the Borrower and each
other Obligor of this Amendment and the other Loan Documents have been duly
authorized by all necessary corporate or other action required on their part and
this Amendment, along with the First Lien Credit Agreement as amended hereby and
the other Loan Documents, constitutes the legal, valid and binding obligation of
each Obligor a party thereto enforceable against them in accordance with its
terms, except as its enforceability may be affected by the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights or remedies of creditors generally;
 
 
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(c)           neither the execution, delivery and performance of this Amendment
by the Borrower and each other Obligor, the performance by them of the First
Lien Credit Agreement as amended hereby nor the consummation of the transactions
contemplated hereby does or shall contravene, result in a breach of, or violate
(i) any provision of any Obligor’s certificate or articles of incorporation or
bylaws or other similar documents, or agreements, (ii) any law or regulation, or
any order or decree of any court or government instrumentality, or (iii) any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which any Obligor or any of its Subsidiaries is a party or by which any Obligor
or any of its Subsidiaries or any of their property is bound, except in any such
case to the extent such conflict or breach has been waived by a written waiver
document, a copy of which has been delivered to Administrative Agent on or
before the date hereof;
 
(d)           no Material Adverse Effect has occurred since June 30, 2010; and
 
(e)           no Default or Event of Default or Borrowing Base Deficiency has
occurred and is continuing.
 
Section 8.          Loan Document; Ratification.
 
(a)           This Amendment is a Loan Document.
 
(b)           The Borrower and each other Obligor hereby ratifies, approves and
confirms in every respect all the terms, provisions, conditions and obligations
of the First Lien Credit Agreement as amended hereby and each of the other Loan
Documents (other than the Lehman Hedging Agreement (as defined in the Second
Amendment)), including without limitation all Mortgages, Security Agreements,
Guaranties, Control Agreements and other Security Documents, to which it is a
party.
 
Section 9.         Costs And Expenses.  As provided in Section 10.3 of the First
Lien Credit Agreement, the Borrower agrees to reimburse Administrative Agent for
all fees, costs, and expenses, including the reasonable fees, costs, and
expenses of counsel or other advisors for advice, assistance, or other
representation, in connection with this Amendment and any other agreements,
documents, instruments, releases, terminations or other collateral instruments
delivered by the Administrative Agent in connection with this Amendment.
 
Section 10.      GOVERNING LAW.  THIS AMENDMENT SHALL BE DEEMED A CONTRACT AND
INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK AND THE LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
 
Section 11.       Severability.  Any provision of this Amendment 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 this Amendment
or affecting the validity or enforceability of such provision in any other
jurisdiction.
 
 
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Section 12.       Counterparts.  This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment by signing one or
more counterparts.  Any signature hereto delivered by a party by facsimile or
electronic transmission shall be deemed to be an original signature hereto.
 
Section 13.       No Waiver.  The express waivers set forth herein are limited
to the extent expressly provided in this Amendment and, except as expressly set
forth in this Amendment, the execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any default of the Borrower or any
other Obligor or any right, power or remedy of the Administrative Agent or the
other Secured Parties under any of the Loan Documents, nor constitute a waiver
of (or consent to departure from) any terms, provisions, covenants, warranties
or agreements of any of the Loan Documents.  The parties hereto reserve the
right to exercise any rights and remedies available to them in connection with
any present or future defaults with respect to the First Lien Credit Agreement
or any other provision of any Loan Document.
 
Section 14.       Successors and Assigns.  This Amendment shall be binding upon
the Borrower and its successors and permitted assigns and shall inure, together
with all rights and remedies of each Secured Party hereunder, to the benefit of
each Secured Party and the respective successors, transferees and assigns.
 
Section 15.       Entire Agreement.  THIS AMENDMENT, THE FIRST LIEN CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF 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.
 
[Signature Pages Follow]
 
 
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In Witness Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective duly authorized officers as of the
date first written above.
 

 
BORROWER:
     
ENERGY XXI GULF COAST, INC.
       
By:
/s/ Rick Fox
 
Name:
Rick Fox
 
Title:
Chief Financial Officer

 
 
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ADMINISTRATIVE AGENT, ISSUERS AND LENDERS:
     
THE ROYAL BANK OF SCOTLAND plc, as Administrative Agent, Issuer and Lender
     
By:
/s/ Phillip R. Ballard
 
Name:
Phillip R. Ballard
 
Title:
Managing Director

 
 
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BNP PARIBAS, as Issuer and Lender
     
By:
/s/ Douglas R. Liftman
 
Name:
Douglas R. Liftman
 
Title:
Managing Director
       
By:
/s/ Greg Smothers
 
Name:
Greg Smothers
 
Title:
Director

 
 
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AMEGY BANK NATIONAL ASSOCIATION, as Lender
     
By:
/s/ Charles W. Patterson
 
Name:
Charles W. Patterson
 
Title:
Senior Vice President

 

 
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THE BANK OF NOVA SCOTIA, as Lender
     
By:
/s/ J Frazell
 
Name:
J Frazell
 
Title:
Director

 
 
5

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TORONTO DOMINION (TEXAS) LLC, as Lender
     
By:
/s/ Debbi L. Brito
 
Name:
Debbi L. Brito
 
Title:
Authorized Signatory

 
 
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CAPITAL ONE, NATIONAL ASSOCIATION, as Lender
     
By:
/s/ Peter Shen
 
Name:
Peter Shen
 
Title:
Vice President

 
 
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NATIXIS, as Lender
     
By:
/s/ Donovan C. Broussard
 
Name:
Donovan C. Broussard
 
Title:
Managing Director
       
By:
/s/ Liana Tchernysheva
 
Name:
Liana Tchernysheva
 
Title:
Director

 
 
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ALLIED IRISH BANKS p.l.c., as Lender
     
By:
/s/ Mark Connelly
 
Name:
Mark Connelly
 
Title:
Senior Vice President
       
By:
/s/ Vaughn Buck
 
Name:
Vaughn Buck
 
Title:
Director

 
 
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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Lender
     
By:
/s/ Mikhail Faybusovich
 
Name:
Mikhail Faybusovich
 
Title:
Vice President
       
By:
/s/ Vipul Dhadda
 
Name:
Vipul Dhadda
 
Title:
Associate

 
 
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UBS LOAN FINANCE LLC, as Lender
     
By:
/s/ Irja R. Otsa
 
Name:
Irja R. Otsa
 
Title:
Associate Director Banking Products Services, US
       
By:
/s/ Michael Cerniglia
 
Name:
Michael Cerniglia
 
Title:
Director Banking Products Services, US

 
 
11

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ING CAPITAL LLC, as Lender
     
By:
/s/ Juli Bieser
 
Name:
Juli Bieser
 
Title:
Director

 
 
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REGIONS BANK, as Lender and
 
as Swing Line Lender
     
By:
/s/ Kelly L. Elmore III
 
Name:
Kelly L. Elmore III
 
Title:
Senior Vice President

 
 
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UBS AG, STAMFORD BRANCH, as Issuer
     
By:
/s/ Irja R. Otsa
 
Name:
Irja R. Otsa
 
Title:
Associate Director Banking Products Services, US
       
By:
/s/ April Varner-Nanton
 
Name:
April Varner-Nanton
 
Title:
Director Banking Products Services, US

 
 
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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
     
ENERGY XXI TEXAS ONSHORE, LLC
     
By:
/s/ Rick Fox
 
Name:
Rick Fox
 
Title:
Chief Financial Officer
     
ENERGY XXI ONSHORE, LLC
     
By:
/s/ Rick Fox
 
Name:
Rick Fox
 
Title:
Chief Financial Officer

 
 
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ACKNOWLEDGED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN IN ITS CAPACITY AS
GUARANTOR UNDER ITS LIMITED RECOURSE GUARANTY AND GRANTOR UNDER ITS PLEDGE
AGREEMENT AND IRREVOCABLE PROXY DELIVERED IN CONNECTION WITH THE FIRST LIEN
CREDIT AGREEMENT:
     
ENERGY XXI U.S.A., INC
     
By:
/s/ Rick Fox
 
Name:
Rick Fox
 
Title:
Chief Financial Officer

 
 
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