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.

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    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;

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     

    (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.

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    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]

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    

     

    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

              


      

    

     

    
      
         


      

      
        1

        
          

        

      

      
         


      

    

     


    
      
        	 
      	
                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

              


      

    

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

            


    

     

    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     


    
      	 
      	
              AMEGY
      BANK NATIONAL ASSOCIATION, as Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Charles W. Patterson

            
	 
      	
              Name:

            	
              Charles
      W. Patterson

            
	 
      	
              Title:

            	
              Senior
      Vice President

            


    

     


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     


    
      	 
      	
              THE
      BANK OF NOVA SCOTIA, as Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ J Frazell

            
	 
      	
              Name:

            	
              J
      Frazell

            
	 
      	
              Title:

            	
              Director

            


    

     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     


    
      	 
      	
              TORONTO
      DOMINION (TEXAS) LLC, as Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Debbi L. Brito

            
	 
      	
              Name:

            	
              Debbi
      L. Brito

            
	 
      	
              Title:

            	
              Authorized
      Signatory

            


    

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     


    
      	 
      	
              CAPITAL
      ONE, NATIONAL ASSOCIATION, as Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Peter Shen

            
	 
      	
              Name:

            	
              Peter
      Shen

            
	 
      	
              Title:

            	
              Vice
      President

            


    

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    

     


    
      	 
      	
              NATIXIS,
      as Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Donovan C. Broussard

            
	 
      	
              Name:

            	
              Donovan
      C. Broussard

            
	 
      	
              Title:

            	
              Managing
      Director

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Liana Tchernysheva

            
	 
      	
              Name:

            	
              Liana
      Tchernysheva

            
	 
      	
              Title:

            	
              Director

            


    

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

            


    

     

    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

            


    

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

        
          

        

      

      
         


      

    

     


    
      	 
      	
              ING
      CAPITAL LLC, as Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Juli Bieser

            
	 
      	
              Name:

            	
              Juli
      Bieser

            
	 
      	
              Title:

            	
              Director

            


    

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    

     


    
      	 
      	
              REGIONS
      BANK, as Lender and

            
	 
      	
              as
      Swing Line Lender

            
	 
      	 
      
	 
      	
              By:

            	
              /s/ Kelly L. Elmore III

            
	 
      	
              Name:

            	
              Kelly
      L. Elmore III

            
	 
      	
              Title:

            	
              Senior
      Vice President

            


    

     

    
      
         


      

      
        13

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

            


    

     

    
      
         


      

      
        14

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

            


    

     

    
      
         


      

      
        15

        
          

        

      

      
         


      

    

     


    
      	 
      	
              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

            


    

     

    
      
         


      

      
        16