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