Exhibit 10.1


 





Execution
Version


 


 





 



 


ENERGY
XXI LTD


 


FIFTH
AMENDMENT TO RESTRUCTURING SUPPORT AGREEMENT


 


September
13, 2016


 





 



 


 


This
Fifth Amendment to the Restructuring Support Agreement1
(this “Amendment”), is entered into by and among: (i) the Debtors; and (ii) the Restructuring
Support Parties. This Agreement collectively refers to the Debtors and the Restructuring Support Parties as the “Parties”
and each individually as a “Party.”


 


RECITALS


 


WHEREAS,
the Parties desire to amend the Restructuring Support Agreement to modify certain Milestones;


 


WHEREAS,
Section 4 of the Restructuring Support Agreement permits the extension of a Milestone with the express prior written consent of
the Majority Restructuring Support Parties;


 


WHEREAS,
Section 28 of the Restructuring Support Agreement permits modifications, amendments, or supplements to the Restructuring Support
Agreement with the prior written consent of the Debtors and the Majority Restructuring Support Parties; and


 


WHEREAS,
on July 15, 2016, the Court entered the Order (A) Approving the Disclosure Statement and the Form and Manner of Service Related
Thereto, (B) Setting Dates for the Objection Deadline and Hearing Relating to Confirmation of the Plan, and (C) Granting Related
Relief [Docket No. 805] (the “Disclosure Statement Order”);


 


WHEREAS,
on July 18, 2016, the Debtors filed the solicitation version of the Third Amended Disclosure Statement for the Debtors’
Proposed Joint Chapter 11 Plan of Reorganization [Docket No. 809] (the “Disclosure Statement”) and
the Debtors’ Proposed Joint Chapter 11 Plan of Reorganization [Docket No. 810] (the “Plan”);


 


WHEREAS,
following the filing of the Disclosure Statement and the Plan, the independent directors of EGC and EPL (together, the “Independent
Directors”) have continued to review all material pleadings filed in the Debtors’ chapter 11 cases in connection
with confirmation of the Plan, all expert reports submitted in connection with confirmation of the Plan, and to engage in extensive
discussions with their respective advisors and the Debtors’ advisors with respect to the foregoing;


 





 






		1	“Restructuring
                                         Support Agreement” means that certain Restructuring Support Agreement,
                                         dated April 11, 2016, by and among the Debtors and the Restructuring Support Parties,
                                         as amended by the First Amendment to the Restructuring Support Agreement, dated May 16,
                                         2016, the Second Amendment to the Restructuring Support Agreement, dated June 28, 2016,
                                         the Third Amendment to the Restructuring Support Agreement dated July 28, 2016, the Fourth
                                         Amendment to the Restructuring Support Agreement dated August 19, 2016, and as may be
                                         further amended, modified, or supplemented, from time to time. Unless otherwise noted,
                                         capitalized terms used but not defined herein are used as defined in the Restructuring
                                         Support Agreement.


 






     


     


    

 


WHEREAS,
on September 8, 2016, the Debtors, the first lien agent, the ad hoc committee of Second Lien Noteholders, the ad hoc committee
of EGC Unsecured Noteholders, the indenture trustee for the EGC Unsecured Noteholders, the ad hoc group of EPL Unsecured Noteholders,
the indenture trustee for the EPL Unsecured Noteholders, and the official committee of unsecured creditors attended an in-person
settlement meeting during which no agreement was reached to amend the Plan;


 


WHEREAS,
following the filing of the Disclosure Statement and the Plan, the Debtors, in consultation with the Independent Directors and
their respective Boards, have continued to engage in extensive, good-faith, arms’ length negotiations with the Restructuring
Support Parties on the terms of the Plan;


 


WHEREAS,
as a result of these negotiations, the Parties decided to amend the Restructuring Support Agreement as set forth in this Amendment;


 


WHEREAS,
this Amendment has the support of the Parties and the Independent Directors;


 


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


 


AGREEMENT


 


1.           Amendment
Effective Date. This Amendment shall become effective, and the obligations contained herein shall become binding upon
the Parties, upon the first date that this Agreement has been executed by all of the Parties. Following the effective date of
this Amendment, whenever the Restructuring Support Agreement is referred to in any agreements, documents, and instruments, such
reference shall be deemed to be to the Restructuring Support Agreement as amended by this Amendment.


 


2.           Amendment
to the Restructuring Support Agreement.


 


		(a)	Section
                                         4(g) of the Restructuring Support Agreement is hereby deleted and replaced in its entirety
                                         with the following:



 


no
later than October 13, 2016, the Bankruptcy Court shall have entered an order authorizing the assumption of this Agreement (the
“RSA Assumption Order”);


 


		(b)	Section
                                         4(i) of the Restructuring Support Agreement is hereby deleted and replaced in its entirety
                                         with the following:



 


no
later than October 7, 2016, the Bankruptcy Court shall have commenced the Confirmation Hearing;


 






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		(c)	Section
                                         4(j) of the Restructuring Support Agreement is hereby deleted and replaced in its entirety
                                         with the following:



 


no
later than October 13, 2016, the Bankruptcy Court shall have entered the Confirmation Order; and


 


		(d)	Section
                                         4(k) of the Restructuring Support Agreement is hereby deleted and replaced in its entirety
                                         with the following:



 


no
later than October 27, 2016, the Debtors shall consummate the transactions contemplated by the Plan (the date of such consummation,
the “Effective Date”), it being understood that the satisfaction of the conditions precedent to the
Effective Date (as set forth in the Plan and the Term Sheet) shall be conditions precedent to the occurrence of the Effective
Date.


 


3.           Amendment
to the Plan. No later than September 14, 2016 at 11:59 p.m. (Central Time), the Debtors will file with the Court an amended
Plan, which will reflect the terms of the term sheet attached hereto as Exhibit A (the “Plan Modification
Term Sheet”).


 


4.           Ratification.
Except as specifically provided for in this Amendment, no changes, amendments, or other modifications have been made on or
prior to the date hereof or are being made to the terms of the Restructuring Support Agreement or the rights and obligations of
the arties thereunder, all of which such terms are hereby ratified and confirmed and remain in full force and effect. Notwithstanding
the effective date of this Amendment, this Amendment constitutes a valid amendment of the applicable Milestones set forth in Section
4 of the Restructuring Support Agreement, in accordance with the final paragraph of Section 4 of the Restructuring Support Agreement.


 


5.           Waiver
of Certain Termination Rights. Nothing in this Amendment shall constitute a Restructuring Support Party Termination Event
pursuant to Sub-Clause (a) of Section 7 the Restructuring Support Agreement or an individual termination right pursuant to Section
9 of the Restructuring Support Agreement, or any other breach by any of the Debtors or the Restructuring Support Parties under
the Restructuring Support Agreement, including, without limitation, a breach of the Debtors’ commitments under Section 6
of the Restructuring Support Agreement.


 


[Signatures
and exhibits follow.]


 






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[Signatures
Pages Redacted.]


 






     


     


    







 





EXHIBIT
A


 


Plan Modification
Term Sheet


 






     


     


    

 









Execution Version


 





EXXI –
Plan Modification Term Sheet1


 


		I.	Changes
                                         to Current Plan Treatment:



 


		·	Trade
                                         Claims Settlement Distribution increases from $.75 to $.90.



 


		·	General
                                         Unsecured Claims Distribution increases from $410,000 to $850,000.



 


		·	Each
                                         holder of a Second Lien Notes Claim receives such holder’s Pro Rata share of:



 


		o	on
                                         account of such holder’s Secured Second Lien Notes Claim, (a) on the Effective
                                         Date, 86.9% of the New Equity under the Plan, subject to dilution by the Management Incentive
                                         Plan and (b) the EGC Intercompany Note Trust Distribution (as defined herein), if applicable;



 


		o	on
                                         account of such holder’s Second Lien Notes Guaranty Claim and based on the value
                                         of purportedly unencumbered assets at EXXI (net of administrative expenses), on the Effective
                                         Date, .7% of the New Equity under the Plan, subject to dilution by the Management
                                         Incentive Plan; and



 


		o	on
                                         account of such holder’s Second Lien Notes Deficiency Claim and based on the value
                                         of purportedly unencumbered assets at EGC and the other grantors under the Second Lien
                                         Notes (net of administrative expenses), (a) on the Effective Date, .2% of the New Equity
                                         under the Plan, subject to dilution by the Management Incentive Plan and (b) the EGC
                                         Intercompany Note Trust Distribution, if applicable.



 


		·	Each
                                         holder of an EGC Unsecured Notes Claim receives such holder’s Pro Rata share of:



 


		o	on
                                         account of such holder’s EGC Unsecured Notes Guaranty Claim and based on the value
                                         of purportedly unencumbered assets at EXXI (net of administrative expenses), on the Effective
                                         Date, .3% of the New Equity, subject to dilution by the Management Incentive Plan;



 


		o	based
                                         on the value of purportedly unencumbered assets at EGC and the other grantors under the
                                         Second Lien Notes (net of administrative expenses), on the Effective Date, .1% of
                                         the New Equity under the Plan, subject to dilution by the Management Incentive Plan;
                                         and



 


		o	the
                                         EGC Intercompany Note Trust Distribution.



 


		·	Each
                                         holder of an EPL Unsecured Notes Claim receives such holder’s Pro Rata share of:



 


		o	the
                                         EGC Intercompany Note Trust Distribution.





 





 






		1	Capitalized
                                         terms used but not defined herein are used as defined in the Debtors’ Proposed
                                         Joint Chapter 11 Plan of Reorganization [Docket No. 810] (the “Plan”).


 






     


     


    

 


		·	Each
                                         holder of an EXXI Convertible Notes Claim receives such holder’s Pro Rata share
                                         of, on the Effective Date, .2% of the New Equity under the Plan, subject to dilution
                                         by the Management Incentive Plan.



 


		II.	EGC
                                         Intercompany Note Trust:



 


		·	Definitions:



 


		o	“EGC
                                         Intercompany Note Dispute” means all Causes of Action, as well as all applicable
                                         defenses and counterclaims, challenging: (a) the validity and enforceability of the EGC
                                         Intercompany Note and the security interests securing the EGC Intercompany Note on the
                                         grounds of: preference; recharacterization; equitable subordination; and/or fraudulent
                                         transfer; and (b) the validity and enforceability of the intercompany payables between
                                         EGC and EPL other than the EGC Intercompany Note, and with respect to clauses (a) and
                                         (b) of this paragraph, solely to the extent of Causes of Action specifically delineated
                                         in the standing motions previously filed with the Court [Docket Nos. 951 and 1035]; provided,
                                         however, that the EGC Intercompany Note Dispute shall not include any Causes of
                                         Action against any of the Released Parties.



 


		o	“EGC
                                         Intercompany Note Trust Distribution” means the allocation of New Equity
                                         among holders of Secured Second Lien Notes Claims, Second Lien Notes Deficiency Claims,
                                         EGC Unsecured Notes Claims, and/or EPL Unsecured Notes Claims, as applicable, as determined
                                         pursuant to a Final Order entered by the Court resolving the EGC Intercompany Note Dispute.
                                         For the avoidance of doubt, the repurchased bonds shall constitute Allowed EGC Unsecured
                                         Notes Claims and Allowed EPL Unsecured Notes Claims, as applicable, and adjusted to reflect
                                         potential litigation risk, shall participate in any EGC Intercompany Note Trust Distribution,
                                         and any distributions on account thereof shall be distributed Pro Rata to the Second
                                         Lien Noteholders. Notwithstanding anything contained herein to the contrary, the EGC
                                         Intercompany Note Trust Distribution allocated to holders of Second Lien Notes Claims,
                                         EGC Unsecured Notes Claims, and/or EPL Unsecured Notes Claims may be modified, as applicable,
                                         to account for the New Equity distributed to such holders under the Plan, solely to ensure
                                         that the aggregate percentage of New Equity distributed to (i) holders of Second Lien
                                         Notes Claims does not exceed 93.2%, (ii) holders of EGC Unsecured Notes Claims does not
                                         exceed 6.6%, and (iii) holders of EPL Unsecured Notes Claims does not exceed 11.6%. For
                                         the avoidance of doubt, the EGC Intercompany Note Trust Distribution shall be subject
                                         to dilution by the Management Incentive Plan. In the event that EGC is entitled to receive
                                         any portion of the EGC Intercompany Note Trust Distribution in connection with the EGC
                                         Intercompany Note Dispute (whether by settlement, as a result of litigation, or otherwise),
                                         holders of Second Lien Notes Claims shall receive their Pro Rata share of 46.6% of the
                                         EGC Intercompany Note Trust Distribution allocable to EGC and holders of EGC Unsecured
                                         Notes Claims shall receive their Pro Rata share of 53.4% of the EGC Intercompany Note
                                         Trust Distribution allocable to EGC.



 






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		·	11.6%
                                         of the New Equity will be deposited into a trust (the “EGC Intercompany Note
                                         Trust”) and distributed in accordance with the EGC Intercompany Note Trust
                                         Distribution.



 


		o	Governance:
                                          Three trustees (the “Trustees”), one each appointed prior
                                         to the Effective Date by the EGC Unsecured Notes Trustee, the Second Lien Notes Trustee,
                                         and the EPL Unsecured Notes Trustee. Trustees will be indemnified solely to the extent
                                         of the assets of the EGC Intercompany Note Trust.



 


		o	Standing
                                         to Pursue the EGC Intercompany Note Dispute: The Plan will grant derivative standing
                                         solely to (a) the trustee (the “EPL Trustee”) appointed by
                                         the EPL Unsecured Notes Trustee to commence an adversary proceeding to litigate or resolve
                                         the EGC Intercompany Note Dispute, (b) the trustee (the “EGC Trustee”)
                                         appointed by the EGC Unsecured Notes Trustee to defend this proceeding, and (c) the trustee
                                         appointed by the Second Lien Notes Trustee (the “Second Lien Trustee”)
                                         to defend this proceeding. The EGC Trustee shall be authorized to lead the litigation
                                         on behalf of the EGC Unsecured Notes Trustee and the Second Lien Notes Trustee; provided,
                                         however, that in the event the EGC Trustee elects not to lead the litigation or
                                         fails to diligently prosecute the litigation, the Second Lien Trustee shall be authorized
                                         to lead the litigation on behalf of the EGC Unsecured Notes Trustee and the Second Lien
                                         Notes Trustee.



 


		o	Funding:
                                         On the Effective Date, $500,000 in Cash (the “Initial Trust Funding”)
                                         will be deposited in equal amounts into two separate, non-interest bearing escrow accounts
                                         to fund the respective fees and expenses of the advisors to the EGC Trustee and the EPL
                                         Trustee. Advisors to the Trustees may seek reimbursement for all reasonable services
                                         rendered and expenses incurred in excess of the Initial Trust Funding by filing applications
                                         for substantial contribution claims in accordance with the applicable provisions of the
                                         Bankruptcy Code promptly following the conclusion of the litigation (but in no event
                                         later than 30 days after the conclusion of such litigation); provided, however,
                                         that the allowance of such substantial contribution claims (a) shall reduce on a dollar
                                         for dollar basis the applicable EGC Intercompany Note Trust Distribution at Plan value
                                         and (b) shall not exceed 20% of the applicable party’s EGC Intercompany Note Trust
                                         Distribution. Section 4(d) of the Final Cash Collateral Order shall be assumed by the
                                         reorganized Debtors and applicable to the Second Lien Notes Trustee solely to the extent
                                         necessary to reimburse the advisors to the Second Lien Notes Trustee for fees and expenses
                                         incurred in connection with the EGC Intercompany Note Dispute.



 


		o	Milestones:
                                         The Plan will establish milestones for the commencement of an adversary complaint
                                         by the EPL Trustee and for the filing of a response by the EGC Trustee or the Second
                                         Lien Trustee, as applicable, to ensure an expeditious litigation schedule and facilitate
                                         timely distributions to the holders of Allowed Claims. For the avoidance of doubt, all
                                         discovery matters and briefing shall be completed by November 15, 2016 unless such other
                                         date is established by the Court.



 






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		o	Settlement
                                         of the EGC Intercompany Note Dispute: Unanimous consent of the three Trustees will
                                         be required to settle the EGC Intercompany Note Dispute.  Any settlement in respect
                                         of the EGC Intercompany Note Dispute cannot dilute, waive, or otherwise affect the Secured
                                         Second Lien Notes Claim or the Second Lien Notes Deficiency Claim without the written
                                         consent of the Second Lien Notes Trustee.



 


		III.	Settlements
                                         under the Plan:



 


		·	Settlement
                                         of all issues in respect of the Second Lien Noteholders, including, without limitation,
                                         the following:



 


		o	valuation
                                         of the Reorganized Debtors’ enterprise, including the value of any unencumbered
                                         assets;



 


		o	any
                                         dispute regarding the application of the equities of the case exception under section
                                         552(b) in respect of the Second Lien Prepetition Indebtedness;



 


		o	amount
                                         of the Second Lien Prepetition Indebtedness and such holders’ Allowed Claims;



 


		o	amount
                                         of adequate protection claims held by the Second Lien Noteholders and/or the First Lien
                                         Lenders under the Final Cash Collateral Order;



 


		o	any
                                         dispute regarding the appropriate allocation of general and administrative costs across
                                         the Debtors’ Estates;



 


		o	any
                                         challenges to cash transfers and the EPL note interest;



 


		o	any
                                         challenges to transfers made by the Debtors to any related entities;



 


		o	the
                                         releases, exculpations, and injunctions provided in the Plan;



 


		o	Second
                                         Lien Noteholders agree not to assert any adequate protection claim; and



 


		o	EPL
                                         funds 33% of the $90 million minimum cash requirement under the Debtors’ Exit Facility.



 


		IV.	Additional
                                         Plan Changes:



 


		·	The
                                         commercial tort claims held by EGC and EPL, respectively, shall constitute retained Causes
                                         of Action under the Plan and shall inure to the benefit of the Reorganized Debtors.



 


		·	The
                                         Management Incentive Plan shall be capped at 5%.



 


		·	The
                                         death trap shall be eliminated.



 






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		V.	Restructuring
                                         Support Agreement



 


		·	The
                                         Restructuring Support Agreement shall be amended promptly to provide that the Court shall
                                         have entered the Confirmation Order no later than October 13, 2016.



 


		VI.	Support
                                         for Plan Modifications:



 


		·	The
                                         EPL Special Committee, the EGC Special Committee, and the Ad Hoc Committee support the
                                         foregoing modifications to the Plan.





 


 






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