ENERGY
      XXI GULF COAST, INC.


     

    10%
      Senior Notes due 2013

    


    REGULATION
      S PURCHASE AGREEMENT


     

    June
      5,
      2007

     

    JEFFERIES
      & COMPANY, INC.

    GREENWICH
      CAPITAL MARKETS, INC.

    BNP
      PARIBAS SECURITIES CORP.

    BMO
      CAPITAL MARKETS CORP. 

    CAPITAL
      ONE SOUTHCOAST, INC.

    NATEXIS
      BLEICHROEDER INC.

     

    c/o
      

     

    JEFFERIES
      & COMPANY, INC.

    520
      Madison Avenue

    New
      York,
      New York 10022

     

    Ladies
      and Gentlemen:

     

    Energy
      XXI Gulf Coast, Inc., a Delaware corporation (the “Company”),
      Energy XXI (Bermuda Limited), a Bermuda company and the Company’s ultimate
      parent (“Parent”),
      and
      the other Guarantors (as defined below) (the Company and the Guarantors,
      collectively the “Company
      Parties”)
      hereby
      agree with you effective as of May 24, 2007, as follows:

     

    Introductory.
      The
      Company proposes to issue and sell $750,000,000 in aggregate principal amount
      of
      its 10% Senior Notes due 2013 (the “Notes”).
      The
      Notes will be offered and sold (i) in the United States (the
      “Regulation
      D Notes”)
      directly
      to certain purchasers of the Notes (the “Regulation
      D Purchasers”) in
      a
      private placement (the “Regulation
      D Placement”)
      without being registered under the Securities Act of 1933, as amended, and
      the
      rules and regulations of the Securities and Exchange Commission (the
“Commission”)
      thereunder (collectively, the “Securities
      Act”)
      in
      reliance upon Section 4(2) thereof and/or Regulation D thereunder (“Regulation
      D”)
      and
      (ii) outside the United States (the “Regulation
      S Notes”
and,
      together with the Regulation D Notes, the “Notes”)
      to the
      initial purchasers named herein (the “Initial
      Purchasers”)
      in a
      transaction exempt from the registration requirements of the Securities Act
      (the
“Regulation
      S Offering”)
      in
      reliance upon Regulation S of the Securities Act (“Regulation
      S”).
      

     

    Each
      of
      the Initial Purchasers has agreed to act as placement agents in connection
      with
      the Regulation D Placement (in such capacity, each, a “Placement
      Agent”
and,
      collectively, the “Placement
      Agents”)
      subject to the terms and conditions and other provisions of a placement agency
      agreement (the “Placement
      Agency Agreement”)
      to
      be
      entered into among the Placement Agents and the Company Parties. The
      Company Parties will enter into a note purchase agreement with the Regulation
      D
      Purchasers of the Regulation D Notes (the “Regulation
      D Purchase Agreement”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Prior
      to
      or concurrently with the closing of the Regulation S Offering and the Regulation
      D Placement, the Company Parties will enter into an Amended and Restated First
      Lien Credit Agreement with the Lenders party thereto and The Royal Bank of
      Scotland plc, as Administrative Agent of the Lenders (such agreement and all
      related loan documents, collectively, the “Credit
      Agreement”).
      Proceeds from the sale of the Notes, and borrowing under the Credit Agreement
      will be used to finance the acquisition (the “Pogo
      Acquisition”)
      of
      certain of the offshore Gulf of Mexico oil and natural gas properties (the
      “Pogo
      Assets”)
      of
      Pogo Producing Company (“Pogo”)
      pursuant to the Purchase and Sale Agreement (the “Purchase
      and Sale Agreement”)
      dated
      as of April 24, 2007 between Pogo and Energy XXI GOM, LLC, a wholly-owned
      subsidiary of the Company (“Buyer”),
      and
      to repay certain debt and to pay fees and expenses of these transactions as
      summarized in the Preliminary CIM (as defined below). The closing of the Pogo
      Acquisition under the Purchase and Sale Agreement will occur concurrently with
      the closing of the Regulation S Offering, the Regulation D Placement and the
      borrowing under the Credit Agreement (the “Closing
      Date”).

     

    The
      Notes
      will be issued pursuant to an indenture (the “Indenture”),
      to be
      entered between the Company, Parent, and the other guarantors named therein
      (the
“Subsidiary
      Guarantors,”
and
      together with Parent, the “Guarantors”)
      and
      Wells Fargo Bank, National Association, as trustee (the “Trustee”).
      Pursuant to the Indenture, the Guarantors shall fully and unconditionally
      guarantee, on a senior basis, to each holder of the Notes and the Trustee,
      the
      payment and performance of the Company’s obligations under the Indenture and the
      Notes (each such guarantee being referred to herein as a “Guarantee.”

     

    Holders
      of the Notes will be entitled to the benefits of a registration rights agreement
      (the “Registration
      Rights Agreement”)
      to be
      entered into among the Company Parties, the Initial Purchasers and the
      Regulation D Purchasers pursuant to which the Company Parties will agree,
      among other things to (i) file a registration statement (the “Registration
      Statement")
      with
      the Commission for a registered offer (the “Exchange
      Offer”)
      to
      exchange any and all of the Notes for a like aggregate principal amount of
      notes
      that are identical in all material respects to the Notes (the “Exchange
      Notes”),
      except for that the Exchange Notes will not contain terms with respect to
      transfer restrictions or liquidated damages, (ii) use their reasonable efforts
      to cause the Registration Statement to be declared effective under the
      Securities Act and (iii) use their reasonable best efforts to consummate the
      Exchange Offer, in each case, within the timeframe, and subject to the
      provisions contained therein. 

     

    The
      Company, Jefferies & Company, Inc., as closing agent (the “Closing
      Agent”),
      and
      Wells Fargo Bank, National Association, as escrow agent, will enter into an
      escrow agreement (the “Escrow
      Agreement”)
      to
      provide for the escrow of the proceeds for the purchase of the Notes and the
      payment of such proceeds on the Closing Date pursuant to the terms of the Escrow
      Agreement and as set forth in this Agreement and the Regulation D Purchase
      Agreement.

     

    This
      Agreement, the Credit Agreement, the Purchase and Sale Agreement, the Indenture,
      the Registration Rights Agreement, the Escrow Agreement and the Engagement
      Letter dated as of March 15, 2007 (the “Engagement
      Letter”)
      between Parent and Jefferies & Company, Inc., are referred to herein
      collectively as the “Transaction
      Documents,”
and
      the transactions contemplated hereby and thereby are referred to herein
      collectively as the “Transactions.”
This
      Agreement, the Registration Rights Agreement and the Indenture are referred
      herein collectively as the “Regulation
      S Purchase Documents.”
Nothing
      in this Agreement should be read to limit or otherwise modify the terms and
      other provisions of the Engagement Letter, provided
      that, in
      the event any terms of the Engagement Letter are inconsistent with or contradict
      any terms of this Agreement, this Agreement shall govern.

     

    
      
        
        

      

      
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    The
      Company has prepared a preliminary confidential information memorandum, dated
      May 12, 2007 (the “Preliminary
      CIM”),
      relating to the Regulation D Placement and the Regulation S Offering, (ii)
      a
      pricing term sheet attached hereto as Schedule I, which includes pricing terms
      and other information with respect to the Notes (the “Pricing
      Supplement”
and,
      together with the Preliminary CIM, the “Time
      of Sale Document”)
      and
      (iii) a final confidential information memorandum dated the date hereof relating
      to the Regulation D Placement and the Regulation S Offering, as the same may
      be
      amended or supplemented (the “CIM”).
“CIM”
      means, as of any date or time referred to in this Agreement, the most recent
      information memorandum (whether the Time of Sale Document or the CIM, and any
      amendment or supplement to either such document), including exhibits and
      schedules thereto. 

     

    1.  Terms
      of Offering.
      Subject
      to the terms and conditions herein contained, the Company proposes to issue
      and
      sell to Jefferies & Company, Inc. (the “Lead
      Initial Purchaser”)
      and
      Greenwich Capital Markets, Inc., BNP Paribas Securities Corp., BMO Capital
      Markets Corp., Capital One Southcoast, Inc. and Natexis Bleichroeder Inc. (each,
      an “Initial
      Purchaser”
and,
      collectively, the “Initial
      Purchasers”)
      $320,915,000 aggregate
      principal amount of Regulation S Notes. Upon original issuance thereof, and
      until such time as the same is no longer required under the applicable
      requirements of the Securities Act, the Regulation S Notes shall bear the
      legends set forth in the CIM. The Initial Purchasers have advised the Company,
      and the Company understands, that the Initial Purchasers will make offers to
      sell (the “Exempt
      Resales”)
      some
      or all of the Regulation S Notes purchased by the Initial Purchasers hereunder
      on the terms set forth or to be set forth in the CIM to persons (the
“Subsequent
      Purchasers”)
      whom
      the Initial Purchasers reasonably believe to be non-“U.S. persons” or non-“U.S.
      purchasers” (as defined in Regulation S) in reliance upon Regulation S.


     

    2.  Purchase
      and Sale of Regulation S Notes.
      On
      the
      basis of the representations, warranties, agreements and covenants herein
      contained and subject to the terms and conditions herein set forth, the Company
      agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers
      agree to purchase from the Company, the Regulation S Notes at a purchase price
      of 98% of the aggregate principal amount thereof. Delivery to the Initial
      Purchasers of and payment for the Regulation S Notes shall be made at a Closing
      (the “Closing”)
      to be
      held at 10:00 a.m., New York City time, on the Closing Date (as defined in
      the
      Regulation D Purchase Agreement) at the Houston offices of Vinson & Elkins
      LLP, First City Tower, 1001 Fannin Street, Suite 2500, Houston, Texas
      77002-6760.

     

    The
      Company shall deliver to the Initial Purchasers one or more certificates
      representing the Regulation S Notes in definitive form, registered in such
      names
      and denominations as the Initial Purchasers may request, against payment by
      the
      Initial Purchasers of the purchase price therefor by immediately available
      Federal funds bank wire transfer to such bank account or accounts as the Company
      shall designate to the Initial Purchasers at least two business days prior
      to
      the Closing. The certificates representing the Regulation S Notes in definitive
      form shall be made available to the Initial Purchasers for inspection at the
      Houston offices of Vinson & Elkins LLP, First City Tower, 1001 Fannin
      Street, Suite 2500, Houston, Texas 77002-6760 (or such other place as shall
      be
      reasonably acceptable to the Initial Purchasers) not later than 10:00 a.m.
      one
      business day immediately preceding the Closing Date. Regulation S Notes to
      be
      represented by one or more definitive global securities in book-entry form
      will
      be deposited on the Closing Date, by or on behalf of the Company, with The
      Depository Trust Company (“DTC”)
      or its
      designated custodian, and registered in the name of Cede & Co. 

     

    
      
        
        

      

      
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    3.  Representations
      and Warranties of the Company Parties.
      In
      addition to the other representations, warranties and agreements contained
      in
      the Agreement, each of the Company Parties hereby jointly represents, warrants
      and agrees with, the Initial Purchasers as follows:

     

    (a)  No
      Material Misstatement or Omission.
      (i)
      Neither the Time of Sale Document, nor any amendment or supplement thereto,
      as
      of the date thereof and at all times subsequent thereto up to the Closing Date,
      did not and does not contain any untrue statement if a material fact, or omitted
      or omits to state a material fact necessary to make the statements therein,
      in
      the light of the circumstances under which they were made, not misleading and
      (ii) the CIM, and at the time of each sale of the Regulation S Notes and at
      the
      Closing Date, as then amended or supplemented, if applicable, did not and will
      not, contain any untrue statement of a material fact, or omitted or omits to
      state a material fact necessary to make the statements therein, in the light
      of
      the circumstances under which they were made, not misleading, except that the
      representations and warranties set forth in this Section 3(a) do not apply
      to statements or omissions made in reliance upon and in conformity with
      information relating to the Initial Purchasers and furnished to the Company
      in
      writing by the Initial Purchasers expressly for use in the Time of Sale Document
      or the CIM or any amendment or supplement thereto. No
      injunction or order has been issued that either (i) asserts that any of the
      transactions contemplated by the Regulation S Purchase Documents is subject
      to the registration requirements of the Securities Act or (ii) would prevent
      or
      suspend the issuance or sale of any of the Regulation S Notes or the use of
      the
      Time of Sale Document, the CIM or any amendment or supplement thereto, in any
      jurisdiction. No statement of material fact included or to be included in the
      CIM has omitted from the Time of Sale Document and no statement of material
      fact
      included in the Time of Sale Document that is required to be included in the
      CIM
      has been omitted or will be omitted therefrom.

     

    (b)  The
      Transaction Documents.
      Each of
      the Company Parties has all necessary power and authority to execute and deliver
      the Transaction Documents to which they are a party and to perform its
      respective obligations thereunder; each of the Transaction Documents has been
      duly authorized by the Company Parties, as the case may be, and, when executed
      and delivered by the Company Parties, as the case may be, will constitute a
      valid and binding agreement of the Company Parties, as the case may be,
      enforceable against the Company Parties in accordance with its terms; and the
      Indenture, when executed and delivered by the Company Parties, will meet the
      requirements for qualification under the Trust Indenture Act of 1939, as
      amended, and the rules and regulations of the Commission thereunder
      (collectively, the “Trust
      Indenture Act”).

     

    
      
        
        

      

      
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    (c)  Acquisition
      of Pogo Assets.
      After
      giving effect to the Transactions contemplated or to be contemplated by the
      CIM,
      the Company will have acquired the Pogo Assets as contemplated or to be
      contemplated by the CIM.

     

    (d)  The
      Regulation S Notes.
      The
      Company has all necessary power and authority to execute, issue and deliver
      the
      Regulation S Notes; the Regulation S Notes have been duly authorized for
      issuance and sale by the Company, will be in the form contemplated by the
      Indenture and, when executed, authenticated and issued in accordance with the
      terms of the Indenture and delivered to and paid for by the Initial Purchasers
      pursuant to this Agreement, will constitute valid and binding obligations of
      the
      Company, entitled to the benefits of the Indenture, enforceable against the
      Company in accordance with their terms. The Regulation S Notes and the
      Guarantees will conform, in all material respects to the description thereof
      contained or to be contained in the CIM.

     

    (e)  The
      Guarantees.
      Each of
      the Guarantors has all necessary power and authority to execute, issue and
      deliver its respective Guarantee; the Guarantees have been duly authorized
      for
      issuance and sale by each of the Guarantors, will be in the form contemplated
      by
      the Indenture and, when executed and the Guarantees issued in accordance with
      the terms of the Indenture, will constitute valid and binding obligations of
      each of the Guarantors, entitled to the benefits of the Indenture, enforceable
      against each of the Guarantors in accordance with their terms.

     

    (f)  The
      Exchange Notes and Related Guarantees.
      Each of
      the Company Parties has all necessary power and authority to execute, issue
      and
      deliver the Exchange Notes and the related Guarantees; the Exchange Notes and
      the related Guarantees to which they are a party have been duly authorized
      for
      issuance and sale by the Company Parties, as the case may be, will be in the
      form contemplated by the Indenture and, when executed, authenticated and issued
      in accordance with the terms of the Indenture and delivered to and exchanged
      for
      the Notes and the related Guarantees, as the case may be, will constitute valid
      and binding obligations of the Company Parties, as the case may be, entitled
      to
      the benefits of the Indenture, enforceable against the Company Parties, as
      the
      case may be, in accordance with their terms.

     

    (g)  No
      Material Adverse Change.
      Except
      as otherwise disclosed or to be disclosed in the CIM, and for the period from
      and after the date hereof and prior to the Closing Date, except as otherwise
      disclosed or to be disclosed in the CIM: (i) there has been no material adverse
      change, or any development that could reasonably be expected to result in a
      material adverse change, in the condition, financial or otherwise, or in the
      earnings, business or operations, whether or not arising from transactions
      in
      the ordinary course of business, of the Company and its subsidiaries, considered
      as one entity, Parent or the Pogo Assets (any such change is called a
“Material
      Adverse Change”);
      (ii)
      Parent, or the Company and its subsidiaries, considered as one entity, have
      not
      incurred any material liability or obligation (including any off-balance sheet
      obligation), indirect, direct or contingent, not in the ordinary course of
      business nor entered into any material transaction or agreement not in the
      ordinary course of business; (iii) there has been no dividend or distribution
      of
      any kind declared, paid or made by the Company or Parent, except for dividends
      paid to the Company or other subsidiaries, any of the Company’s subsidiaries on
      any class of capital stock or repurchase or redemption by the Company or Parent
      or any of its subsidiaries of any class of capital stock; and (iv) there has
      not
      occurred any downgrading from the Caa2 rating by Moody’s Investors Service, Inc
      and the CCC rating by Standard & Poor’s Rating Services accorded to any
      securities of the Parent of the Company, nor has any notice been given of any
      intended or potential downgrading or of any review for a possible change that
      does not indicate the direction of the possible change, in the rating accorded
      any securities of the Parent or the Company or any of its subsidiaries by any
      “nationally recognized statistical rating organization” (as such term is defined
      for purposes of Rule 436(g)(2) under the Securities Act).

     

    
      
        
        

      

      
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    (h)  Going
      Concern of Company.
      On the
      Closing Date, after giving effect to the offering and sale of the Notes and
      the
      application of the proceeds thereof as described or to be described in the
      CIM,
      (i) the fair value and present fair saleable value of the assets of the Company
      and its subsidiaries on a going concern basis will exceed the sum of its stated
      liabilities and identified contingent liabilities; and (ii) each of the Company
      and its subsidiaries will not be (a) left with unreasonably small capital with
      which to carry on its business as it is proposed to be conducted, (b) unable
      to
      pay its debts (contingent or otherwise) as they mature or (c) otherwise
      insolvent. In computing the amount of such contingent liabilities at any time,
      such liabilities will be computed at the amount that, in the light of all the
      facts and circumstances existing at such time, represent the amount that can
      reasonably be expected to become an actual or matured liability.

     

    (i)  Independent
      Accountants.
      (i)
      UHY, LLP, who have expressed their opinion with respect to the financial
      statements of the Company and, the carve-out financial statements for Castex
      Energy, Inc. (which, in each case, includes the related notes thereto) included
      or to be included in the CIM and (ii) Grant Thornton LLP, who have expressed
      their opinion with respect to the financial statements of Marlin Energy Offshore
      L.L.C., Marlin Texas GP, L.L.C. and Marlin Texas L.L.C. (which term includes
      the
      related notes thereto) included or to be included in the CIM, are each (i)
      independent public or certified public accountants as required by the Securities
      Exchange Act of 1934 as amended (the “Exchange
      Act”),
      (ii)
      in compliance with the applicable requirements relating to the qualification
      of
      accountants under Rule 2-01 of Regulation S-X and (iii) a registered public
      accounting firm as defined by the Public Company Accounting Oversight Board
      whose registration has not been suspended or revoked and who has not requested
      such registration to be withdrawn.

     

    (j)  Preparation
      of the Financial Statements.
      As of
      the date hereof, the financial statements contained in the Time of Sale Document
      and contained or to be contained in the CIM, present fairly in all material
      respects the consolidated financial position of (i) the Company and its
      subsidiaries, (ii) Marlin Energy Offshore L.L.C., Marlin Texas GP L.L.C., and
      Marlin Texas L.L.C., (iii) the assets acquired from Castex Energy, Inc., and
      (iv) the Pogo Assets, in each case, as of and at the dates indicated and the
      results of each of their respective operations and cash flows for the periods
      specified. All such financial statements have been prepared in conformity in
      all
      material respects with generally accepted accounting principles applied on
      a
      consistent basis throughout the periods involved, except as contemplated or
      to
      be contemplated by the CIM. As of the date hereof, the financial data set forth
      or to be set forth in the CIM, and the financial data set forth or to be set
      forth in the CIM will as of its date, fairly present the information set forth
      therein on a basis consistent with that of the audited and unaudited financial
      statements contained or to be contained in the CIM. 

     

    
      
        
        

      

      
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    (k)  Pro
      Forma Financial Information.
      The pro
      forma financial information of the Company and its subsidiaries and the related
      notes thereto included or to be included under the captions Summary - Energy
      XXI
      Summary Historical and Pro Forma Financial Data,” “Summary - Summary Unaudited
      Consolidated Pro Forma Financial Statements” and “Capitalization” under the
      column “As Adjusted” and elsewhere in the CIM, as of its date, presented fairly
      the information contained therein, and the assumptions used in the preparation
      thereof are reasonable and the adjustments used therein are appropriate to
      give
      effect to the Transactions and circumstances referred to therein. 

     

    (l)  Engineer
      Reports.
      The
      Company has heretofore delivered to the Initial Purchasers true, correct and
      complete copies of the engineering reports of (i) Netherland, Sewell &
Associates, (ii) Miller & Lents, Ltd., and (iii) Ryder Scott
      Company LP (collectively, the “Engineer
      Reports”).
      There
      have been no material adverse developments concerning the matters reported
      in
      such Engineering Reports since their respective dates.

     

    (m)  Incorporation
      and Good Standing of the Company Parties.
      Each of
      the Company Parties has been duly incorporated or organized and is validly
      existing as a corporation, partnership or limited liability company, as
      applicable, in good standing under the laws of the jurisdiction of its
      incorporation or organization and has the power and authority (corporate or
      other) to own, lease and operate its properties and to conduct its business
      as
      described or to be described in the CIM as of its date, and to enter into and
      perform its obligations under each of the Transaction Documents to which it
      is a
      party. Each of the Company Parties is duly qualified as a foreign corporation,
      partnership or limited liability company, as applicable, to transact business
      and is in good standing in each jurisdiction in which such qualification is
      required, whether by reason of the ownership or leasing of property or the
      conduct of business, except where the failure to be so qualified would not,
      individually or in the aggregate, have a material adverse effect on the
      financial position, stockholders’ equity, results of operations or business of
      the Company, Parent or the Pogo Assets (a “Material
      Adverse Effect”).
      All
      of the issued and outstanding capital stock or other equity or ownership
      interest of each of the Subsidiary Guarantors has been duly authorized and
      validly issued, is fully paid and nonassessable and is owned by the Company,
      directly or through subsidiaries, free and clear of any security interest,
      mortgage, pledge, lien, charge, encumbrance or adverse claim, except as
      disclosed or to be disclosed in the CIM. Parent does not, directly or
      indirectly, own any securities of any entity other than the Energy XXI, (US
      Holdings) Limited, Energy XXI USA, Inc., the Company and its subsidiaries.
      As of
      the date hereof, the Company does not own or control, and as of the Closing
      Date, the Company will not own or control, directly or indirectly, any
      corporation, association or other entity other than (i) the subsidiaries listed
      on Exhibit
      A
      hereto
      and (ii) such other entities omitted from Exhibit
      A
      hereto,
      which, when such omitted entities are considered in the aggregate as a single
      subsidiary, would not constitute a “significant subsidiary” within the meaning
      of Rule 1-02(w) of Regulation S-X.

     

    (n)  Capitalization
      and Other Capital Stock Matters.
      As of
      the date hereof, the capitalization of the Company and its subsidiaries
      presented on a consolidated basis in the CIM under the caption “Capitalization”
under the column “Actual” is a fair summary of such capitalization in all
      material respects.

     

    
      
        
        

      

      
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    (o)  Non-Contravention
      of Existing Instruments; No Further Authorizations or Approvals
      Required.
      None of
      the Company Parties (i) is in violation of its charter or by laws, (ii) is
      in
      default (or, with the giving of notice or lapse of time, would be in default
      or
      constitute a default) (“Default”)
      under
      any indenture, mortgage, loan or credit agreement, note, contract, franchise,
      lease or other instrument to which any of the Company Parties is a party or
      by
      which it or any of them may be bound, or to which any of the property or assets
      of the Company Parties is subject (each, an “Existing
      Instrument”),
      or
      (iii) is in violation of any law, administrative regulation or administrative
      or
      court decree applicable to any of the Company Parties’ except with respect to
      clauses (ii) and (iii) of this sentence, for such Defaults or violations as
      would not, individually or in the aggregate, result in a Material Adverse
      Effect. Each of the Company Parties’ execution, delivery and performance of the
      Transaction Documents to which it is a party and the consummation of the
      Transactions, including the issuance and sale of the Notes, (i) will not result
      in any violation of the provisions of the charter or bylaws of any of the
      Company Parties, (ii) will not conflict with or constitute a breach of, or
      Default or a Debt Repayment Triggering Event (as defined below) under, or result
      in the creation or imposition of any security interest, mortgage, pledge, lien,
      charge, encumbrance or adverse claim upon any property or assets of any of
      the
      Company Parties pursuant to, or require the consent of any other party to any
      Existing Instrument or other third party and (iii) will not result in any
      violation of any law, administrative regulation or administrative or court
      decree applicable to any of the Company Parties except with respect to clauses
      (ii) and (iii) of this sentence, for such conflicts, breaches, Defaults, Debt
      Repayment Triggering Events or violations as would not, individually or in
      the
      aggregate, result in a Material Adverse Effect. As used herein, a “Debt
      Repayment Triggering Event”
means
      any event or condition that gives, or with the giving of notice or lapse of
      time
      would give, the holder of any note, debenture or other evidence of indebtedness
      (or any person acting on such holder’s behalf) the right to require the
      repurchase, redemption or repayment of all or a portion of such indebtedness
      by
      any of the Company Parties.

     

    (p)  Regulatory
      Approval.
      No
      consent, approval, authorization or other order of, or registration or filing
      with, any court or other governmental or regulatory authority or agency, is
      required for each of the Company Parties’ execution, delivery and performance of
      the Transaction Documents to which it is a party and consummation of the
      Transactions, except (i) with respect to the transactions contemplated by the
      Registration Rights Agreement or the filing of a Current Report on Form 8-K
      with
      the Commission as may be required under the Securities Act and the Exchange
      Act,
      as the case may be, (ii) as required by the state securities or “blue sky” laws,
      and (iii) for such consents, approvals, authorizations, orders, filings or
      registrations that have been obtained or made and are in full force and effect
      except would not have a Market Adverse Effect.

     

    (q)  No
      Material Actions or Proceedings.
      Except
      as otherwise disclosed in the CIM, there are no legal or governmental actions,
      suits or proceedings pending or, to the best of the Company’s knowledge, (i)
      threatened against or affecting any of the Company Parties, (ii) which has
      as
      the subject thereof any officer or director of, or property owned or leased
      by,
      any of the Company Parties or (iii) relating to environmental or discrimination
      matters, where in any such case (A) any such action, suit or proceeding, if
      so
      determined adversely, would reasonably be expected to result in a Material
      Adverse Effect or adversely affect the consummation of the Transactions or
      (B)
      any such action, suit or proceeding is or would be material in the context
      of
      the offer and sale of Notes. No material labor dispute with the employees of
      any
      of the Company Parties, or with the employees of any principal supplier of
      the
      Company Parties, exists or, to the best of the Company’s knowledge, is
      threatened or imminent.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (r)  Intellectual
      Property Rights.
      Except
      as otherwise disclosed or to be disclosed in the CIM, the Company Parties own
      or
      possess, and as of the closing of the Transaction will own and possess,
      sufficient trademarks, service marks, trade names, patents, patent rights,
      copyrights, domain names, licenses, approvals, trade secrets, inventions,
      know-how (including unpatented and/or unpatentable proprietary or confidential
      information, systems or procedures), licenses and other similar rights
      (collectively, “Intellectual
      Property Rights”)
      reasonably necessary to conduct their businesses as now conducted and as to
      be
      conducted as described or to be described in the CIM, except where the failure
      to own or possess such Intellectual Property Rights would not have a Material
      Adverse Effect.

     

    (s)  All
      Necessary Permits, etc.
      Except
      as otherwise disclosed in the CIM, each of the Company Parties possess such
      valid and current certificates, authorizations or permits issued by the
      appropriate state, federal or other applicable regulatory agencies or bodies
      and
      such valid licenses or other rights to use all databases, geological data,
      geophysical data, engineering data, seismic data, maps and other technical
      information, in each case, necessary to conduct their respective businesses,
      and
      neither the Company Parties nor any Guarantor has received, or has any reason
      to
      believe that it has received or will receive, any notice of proceedings relating
      to the revocation or modification of, or non-compliance with, any such
      certificate, authorization or permit which, singly or in the aggregate, if
      the
      subject of an unfavorable decision, ruling or finding, would result in a
      Material Adverse Effect.

     

    (t)  Title
      to Properties.
      Each of
      the Company Parties has (i) generally satisfactory title to its oil and gas
      properties, title investigations having been carried out by the Company Parties
      in accordance with the practice in the oil and gas industry in the areas in
      which the Company Parties operate except as, in each case, would not result
      in a
      Material Adverse Effect, (ii) good and marketable title to all other real
      property owned by it to the extent necessary to carry on its business and (iii)
      good and marketable title to all personal property owned by it, in each case
      free and clear of all liens, encumbrances and defects except such as are
      described or to be described in the CIM or such as do not materially affect
      the
      value of the properties of the Company Parties, considered as one enterprise,
      and do not interfere with the use made and proposed to be made of such
      properties, by the Company Parties, considered as one enterprise; and all of
      the
      leases and subleases material to the business of the Company Parties, considered
      as one enterprise, and under which any of the Company Parties holds properties
      described or to be described in the CIM, are in full force and effect, and
      none
      of the Company Parties has any notice of any material claim of any sort that
      has
      been asserted by anyone adverse to the rights of any of the Company Parties
      under any of the leases or subleases mentioned above, or affecting or
      questioning the rights of the Company Parties to the continued possession of
      the
      leased or subleased premises under any such lease or sublease.

     

    (u)  Gas
      Imbalances; Prepayments.
      On a
      net basis there are no gas imbalances, take-or-pay or other prepayments that
      would require the Company or any of its subsidiaries to deliver Hydrocarbons
      produced from the Oil and Gas Properties at some future time without then or
      thereafter receiving full payment therefor exceeding one-half bcf of gas (on
      an
      mcf equivalent basis) in the aggregate, other than as disclosed or to be
      disclosed in the CIM or as would not result in a Material Adverse
      Effect.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (v)  Tax
      Law Compliance.
      Except
      as disclosed or to be disclosed in the CIM, the Company Parties have filed
      all
      necessary federal and state income and franchise tax returns and have paid
      all
      taxes required to be paid by any of them and, if due and payable, any related
      or
      similar assessment, fine or penalty levied against any of them except as may
      be
      being contested in good faith and by appropriate proceedings, except as would
      not result in a Material Adverse Effect. The Company has made adequate charges,
      accruals and reserves in the applicable financial statements referred to in
      Sections
      3(j)
      above in
      respect of all federal and state and income and franchise taxes for all periods
      as to which the tax liability of the Company or any of its subsidiaries has
      not
      been finally determined, other than as disclosed or to be disclosed in the
      CIM
      or as would not result in a Material Adverse Effect.

     

    (w)  Company’s
      Accounting System.
      The
      Company makes and keeps accurate books and records and maintains a system of
      accounting controls sufficient to provide reasonable assurances that (i)
      transactions are executed in accordance with management’s general or specific
      authorization; (ii) transactions are recorded as necessary to permit preparation
      of financial statements in conformity with generally accepted accounting
      principles as applied in the United States and to maintain accountability for
      assets; (iii) access to assets is permitted only in accordance with management’s
      general or specific authorization; and (iv) the recorded accountability for
      assets is compared with existing assets at reasonable intervals and appropriate
      action is taken with respect to any differences in each case, other than as
      disclosed or to be disclosed in the CIM or as would not result in a Material
      Adverse Effect.

     

    (x)  Insurance.
      Each of
      the Company Parties is insured by recognized, financially sound and reputable
      institutions with policies in such amounts and with such deductibles and
      covering such risks as are generally deemed adequate and customary for their
      businesses including, but not limited to, policies covering real and personal
      property owned or leased by the Company Parties against theft, damage,
      destruction, acts of vandalism, earthquakes and hurricanes, other than as
      disclosed or to be disclosed in the CIM or as would not result in a Material
      Adverse Effect. The Company has no reason to believe that it or any Guarantor
      will not be able (i) to renew its existing insurance coverage as and when such
      policies expire or (ii) to obtain comparable coverage from similar institutions
      as may be necessary or appropriate to conduct its business as now conducted
      and
      at a cost that would not result in a Material Adverse Change. Except as
      described or to be described in the CIM and except as would not result in a
      Material Adverse Effect, none of the Company Parties has been denied any
      insurance coverage which it has sought or for which it has applied.

     

    (y)  No
      Unlawful Contributions or Other Payments.
      Neither
      the Company Parties nor, to the best of the Company’s knowledge, any employee or
      agent of any of the Company Parties, has made any contribution or other payment
      to any official of, or candidate for, any federal, state or foreign office
      in
      violation of any law.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (z)  Disclosure
      Controls and Procedures; Deficiencies in or Changes to Internal Control Over
      Financial Reporting.
      Parent
      has established and maintains disclosure controls and procedures (as defined
      in
      Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
      amended), which (i) are designed to ensure that material information relating
      to
      the Parent, including its consolidated subsidiaries, is made known to the
      Parent’s principal executive officer and its principal financial officer by
      others within those entities and are effective in all material respects to
      perform the functions for which they were established. Based on the most recent
      evaluation of its disclosure controls and procedures, Parent is not aware of
      (i)
      any significant deficiencies or material weaknesses in the design or operation
      of internal control over financial reporting which are reasonably likely to
      adversely affect its ability to record, process, summarize and report financial
      information or (ii) any fraud, whether or not material, that involves management
      or other employees who have a significant role in Parent’s internal control over
      financial reporting. Parent is not aware of any change in its internal control
      over financial reporting that has occurred during its most recent fiscal quarter
      that has materially affected, or is reasonably likely to materially affect
      its
      internal control over financial reporting.

     

    (aa)  Compliance
      with Environmental Laws.
      Except
      as described or to be described in the CIM or as would not, singly or in the
      aggregate, result in a Material Adverse Effect, (i) neither the Company nor
      any of its subsidiaries is in violation of any federal, state or local statute,
      law, rule, regulation, ordinance, code, policy or rule of common law or any
      judicial or administrative interpretation thereof, including any judicial or
      administrative order, consent, decree or judgment, relating to pollution or
      protection of human health, the environment (including, without limitation,
      ambient air, surface water, groundwater, land surface or subsurface strata)
      or
      wildlife, including, without limitation, laws and regulations relating to the
      release or threatened release of chemicals, pollutants, contaminants, wastes,
      toxic substances, hazardous substances, petroleum or petroleum products
      (collectively, “Hazardous
      Materials”)
      or to
      the manufacture, processing, distribution, use, treatment, storage, disposal,
      transport or handling of Hazardous Materials (collectively, “Environmental
      Laws”),
      (ii) the Company Parties have all permits, authorizations and approvals
      required under any applicable Environmental Laws and are each in compliance
      with
      their requirements, (iii) there are no pending or threatened administrative,
      regulatory or judicial actions, suits, demands, demand letters, claims, liens,
      notices of noncompliance or violation, investigation or proceedings relating
      to
      any Environmental Law against any of the Company Parties and (iv) there are
      no
      events or circumstances that might reasonably be expected to form the basis
      of
      an order for clean-up or remediation, or an action, suit or proceeding by any
      private party or governmental body or agency, against or affecting any of the
      Company Parties relating to Hazardous Materials or any Environmental
      Laws.

     

    (bb)  Compliance
      with Laws.
      The
      Company has not been advised, and has no reason to believe, that it and each
      of
      the Guarantors are not conducting business in compliance with all applicable
      laws, rules and regulations of the jurisdictions in which it is conducting
      business, except where failure to be so in compliance would not result in a
      Material Adverse Effect.

     

    (cc)  Company
      Parties Not an “Investment Company.”
      Neither the Company nor any Guarantor is, and after receipt of payment for
      the
      Notes, will be, an “investment company” within the meaning of Investment Company
      Act of 1940, as amended, and the rules and regulations of the Commission
      thereunder.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (dd)  Brokers.
      Except
      for the Initial Purchasers there is no broker, finder or other party that is
      entitled to receive from the Company any brokerage or finder’s fee or other fee
      or commission as a result of the Regulation S Offering or the transactions
      contemplated thereby.

     

    (ee)  No
      Registration Required Under the Securities Act.
      Assuming the accuracy of the representations and warranties of the Initial
      Purchasers contained in this Agreement and the compliance of such parties with
      the agreements set forth herein and therein, it is not necessary, in connection
      with the issuance and sale of the Regulation S Notes, in the manner contemplated
      by the Transaction Documents and the CIM, to register the Regulation S Notes
      under the Securities Act or to qualify the Indenture under the Trust Indenture
      Act. 

     

    (ff)  No
      U.S. Persons.
      The
      Company will not offer or sell any of the Regulation S Notes to any person
      whom
      it reasonably believes is not (i) a non-“U.S. person” or non-“U.S.
      Purchaser” (as defined in Regulation S of the Securities Act.

     

    (gg)  No
      Directed Selling Efforts.
      To the
      knowledge of the Company, none of the Company Parties or any of their respective
      Affiliates have engaged, or will engage, directly or indirectly in any form
      of
“directed selling efforts” in connection with the offering of the Regulation S
      Notes (as those terms are used in Regulation S under the Securities Act) or
      in
      any manner involving a public offering within the meaning of Section 4(2) of
      the
      Securities Act. To the knowledge of the Company, none of the Company Parties
      has
      entered, and will enter, into any arrangement or agreement with respect to
      the
      distribution of the Regulation S Notes, except for this Agreement, the
      Indenture, the Escrow Agreement, the Engagement Letter and the Registration
      Rights Agreement, and the Company agrees not to enter into any such arrangement
      or agreement. 

     

    The
      Company acknowledges that the Initial Purchasers and, for purposes of the
      opinion to be delivered pursuant to Section 7 hereof, counsel to the Company,
      will rely upon the accuracy and truthfulness of the foregoing representations
      and hereby consents to such reliance.

     

    4.  Covenants
      of the Company Parties.
      Each of
      the Company Parties jointly and severally agrees:

     

    (a)  To
      (i)
      advise the Initial Purchasers promptly after obtaining knowledge (and, if
      requested by the Initial Purchasers, confirm such advice in writing) of (A)
      the
      issuance by any U.S. or non-U.S. federal or state securities commission of
      any
      stop order suspending the qualification or exemption from qualification of
      any
      of the Regulation S Notes for offer or sale in any jurisdiction, or the
      initiation of any proceeding for such purpose by any state securities commission
      or other regulatory authority, or (B) the happening of any event that makes
      any
      statement of a material fact made in the Time of Sale Document or the CIM untrue
      or that requires the making of any additions to or changes in the CIM in order
      to make the statements therein, in the light of the circumstances under which
      they were made, not misleading, (ii) use its reasonable best efforts to prevent
      the issuance of any stop order or order suspending the qualification or
      exemption from qualification of any of the Regulation S Notes under any U.S.
      state securities or Blue Sky laws (or their equivalent in non-U.S.
      jurisdictions), and (iii) if, at any time, any U.S. or non-U.S. federal or
      state
      securities commission or other regulatory authority shall issue an order
      suspending the qualification or exemption from qualification of any of the
      Regulation S Notes under any such laws, use its reasonable best efforts to
      obtain the withdrawal or lifting of such order at the earliest possible
      time.

     

    
      
        
        

      

      
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    (b)  To
      (i)
      furnish the Initial Purchasers, without charge, as many copies of the Time
      of
      Sale Document and the CIM, and any amendments or supplements thereto, as the
      Initial Purchasers may reasonably request, and (ii) promptly prepare, upon
      the
      Initial Purchasers’ reasonable request, any amendment or supplement to the Time
      of Sale Document and the CIM that the Initial Purchasers, upon advice of legal
      counsel, determines may be necessary in connection with Exempt Resales (and
      the
      Company hereby consents to the use of the Time of Sale Document and the CIM,
      and
      any amendments and supplements thereto, by the Initial Purchasers in connection
      with Exempt Resales).

     

    (c)  Not
      to
      amend or supplement the Time of Sale Document or the CIM prior to the Closing
      Date, or at any time prior to the completion of the resale by the Initial
      Purchasers of all the Regulation S Notes purchased by the Initial Purchasers,
      unless the Initial Purchasers shall previously have been advised thereof and
      shall have provided its written consent thereto.

     

    (d)  So
      long
      as the Initial Purchasers shall hold any of the Regulation S Notes, (i) if
      any
      event shall occur as a result of which, in the reasonable judgment of the
      Company or the Lead Initial Purchaser, it becomes necessary or advisable to
      amend or supplement the Time of Sale Document or the CIM in order to make the
      statements therein, in the light of the circumstances under which they were
      made, not misleading, or if it is necessary to amend or supplement the Time
      of
      Sale Document or the CIM to comply with any Federal, state, local or foreign
      statute, law (including, without limitation, common law) or ordinance, or any
      judgment, decree, rule, regulation or order (collectively, “Applicable
      Law”)
      of any
      federal, state, local and other governmental authority, governmental or
      regulatory agency or body, court, arbitrator or self-regulatory organization,
      domestic or foreign (each, a “Governmental
      Authority”),
      to
      prepare, at the expense of the Company, an appropriate amendment or supplement
      to the Time of Sale Document and the CIM (in form and substance reasonably
      satisfactory to the Initial Purchasers) so that (A) as so amended or
      supplemented, the Time of Sale Document and the CIM will not include an untrue
      statement of material fact or omit to state a material fact necessary in order
      to make the statements therein, in the light of the circumstances under which
      they were made, not misleading, and (B) the Time of Sale Document and the CIM
      will comply with Applicable Law and (ii) if, following the filing by the Company
      or Parent of the information required by the SEC on Current Report on Form
      8-K
      under 1.02, 2.01 and 9.01 regarding the closing of the Pogo Acquisition, in
      the
      reasonable judgment of the Company, it becomes necessary or advisable to amend
      or supplement the Time of Sale Document or the CIM so that the Time of Sale
      Document and the CIM will contain all of the information specified in, and
      meet
      the requirements of, Rule 144A(d)(4) of the Securities Act, to prepare an
      appropriate amendment or supplement to the Time of Sale Document or the CIM
      (in
      form and substance reasonably satisfactory to the Initial Purchasers) so that
      the Time of Sale Document or the CIM, as so amended or supplemented, will
      contain the information specified in, and meet the requirements of, such
      Rule.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (e)  To
      cooperate with the Initial Purchasers and the Initial Purchasers’ counsel in
      connection with the qualification of the Regulation S Notes under the U.S.
      and
      non-U.S. securities or Blue Sky laws of such jurisdictions as the Initial
      Purchasers may request and continue such qualification in effect so long as
      reasonably required for Exempt Resales. 

     

    (f)  Whether
      or not any of the Transactions contemplated under the Regulation S Purchase
      Documents are consummated or this Agreement is terminated, to pay (i) all costs,
      expenses, fees and taxes incident to and in connection with: (A) the
      preparation, printing and distribution of the Time of Sale Document and the
      CIM
      and all amendments and supplements thereto (including, without limitation,
      financial statements and exhibits), and all other agreements, memoranda,
      correspondence and other documents prepared and delivered in connection
      herewith, (B) the negotiation, printing, processing and distribution (including,
      without limitation, word processing and duplication costs) and delivery of,
      each
      of the Regulation S Purchase Documents, (C) the preparation, issuance and
      delivery of the Regulation S Notes, (D) the qualification of the Regulation
      S
      Notes for offer and sale under any applicable Non-U.S. securities laws
      (including, without limitation, the fees and disbursements of the Initial
      Purchasers’ counsel relating to such registration or qualification, if any), (E)
      furnishing such copies of the Time of Sale Document and the CIM, and all
      amendments and supplements thereto, as may reasonably be requested for use
      by
      the Initial Purchasers and (F) the performance of the obligations of the Company
      Parties under the Regulation S Purchase Agreements, including the Registration
      Rights Agreement), (ii) all fees and expenses of the counsel, accountants and
      any other experts or advisors retained by the Company, (iii) all expenses and
      listing fees in connection with the application for quotation of the Regulation
      S Notes on the Private Offerings, Resales and Trading Automated Linkages market
      (“PORTAL”)
      and
      with the listing of the Regulation S Notes on the Luxembourg Stock Exchange
      and
      any other non-U.S. securities exchange, (iv) all fees and expenses (including
      fees and expenses of counsel) of the Company in connection with approval of
      the
      Regulation S Notes by DTC for “book-entry” transfer and (v) all fees charged by
      rating agencies in connection with the rating of the Regulation S Notes. In
      addition, and in addition to any fees that may be paid to the Initial Purchasers
      hereunder, whether or not any Regulation S Offering occurs (unless the Initial
      Purchasers are unwilling to proceed with the Regulation S Offering with full
      cooperation by the Company and willingness by the Company to proceed with the
      Regulation S Offering and in the absence of fraud or material violation of
      law
      by the Company), the Company will reimburse the Initial Purchasers, promptly
      upon receipt of an invoice therefor, for all out-of-pocket expenses (including
      reasonable fees and expenses of its counsel, including, for the avoidance of
      doubt, the reasonable fees and expenses of any other independent experts
      retained by the Initial Purchasers and the expenses of BNP Paribas Securities
      Corp. in connection with the roadshow and investor meetings in Europe) incurred
      by the Initial Purchasers in connection with the engagement contemplated
      hereunder. This clause (f) shall not prejudice the payment of commissions,
      fees
      and expenses due to the Placement Agents under the terms of the Placement Agency
      Agreement; provided,
      however
      the
      Company shall not be obligated to pay the same commissions, fees and expenses
      twice. 

     

    (g)  To
      apply
      the net proceeds from the sale of the Notes will be used by the Company in
      the
      manner described in the Preliminary CIM and described or to be described in
      the
      CIM under the caption titled “Use of Proceeds.”. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (h)  To
      not
      invest, or otherwise use the proceeds received by the Company from its sale
      of
      the Notes in such a manner as would require the Company or any of the Guarantors
      to register as an investment company under the Investment Company Act of 1940,
      as amended, and the rules and regulations of the Commission
      thereunder.

     

    (i)  Not
      to
      will take, directly or indirectly, any action designed to or that might be
      reasonably expected to cause or result in stabilization or manipulation of
      the
      price of the Notes or any other reference security, whether to facilitate the
      sale or resale of the Notes or otherwise.

     

    (j)  To
      use
      its reasonable best efforts to timely do and perform all things required to
      be
      done and performed under the Transaction Documents prior to and after the
      Closing Date.

     

    (k)  Not
      to,
      and to ensure that no affiliate (as defined in Rule 501(b) of the Securities
      Act) of the Company will, sell, offer for sale or solicit offers to buy or
      otherwise negotiate in respect of any “security” (as defined in the Securities
      Act) that would be integrated with the sale of the Notes in a manner that would
      require the registration under the Securities Act of the sale to the Initial
      Purchasers or to the Subsequent Purchasers of the Notes. 

     

    (l)  Following
      the filing by the Company or Parent of the information required by the SEC
      on
      Current Report on Form 8-K under 1.02, 2.01 and 9.01 regarding the closing
      of
      the Pogo Acquisition and for so long as any of the Regulation S Notes remain
      outstanding, during any period in which the Company is not subject to Section
      13
      or 15(d) of the Exchange Act, to make available, upon request, to any owner
      of
      the Regulation S Notes in connection with any sale thereof and any prospective
      Subsequent Purchasers of such Regulation S Notes from such owner, the
      information required by Rule 144A(d)(4) under the Securities Act.

     

    (m)  To
      comply
      with the representation letter of the Company to DTC relating to the approval
      of
      the Regulation S Notes by DTC for “book entry” transfer; and to use its
      reasonable efforts to effect the inclusion of the Regulation S Notes in PORTAL
      and to list the Regulation S Notes on the Luxembourg Stock Exchange or another
      European stock exchange.

     

    (n)  For
      so
      long as any of the Regulation S Notes remain outstanding, the Company will
      furnish to the Initial Purchasers copies of all reports and other communications
      (financial or otherwise) furnished by Parent or the Company to the Trustee
      or to
      the holders of the Regulation S Notes and, as soon as available, copies of
      any
      reports or financial statements furnished to or filed by Parent or the Company
      with the SEC or any U.S. or non-U.S. securities exchange on which any class
      of
      securities of Parent or the Company may be listed; provided
      that
      this covenant shall not apply with respect to any reports or other
      communications that are publicly available on the EDGAR system of the SEC or
      are
      posted on Parent’s or the Company’s website.

     

    (o)  Except
      in
      connection with the Exchange Offer or the filing of the Shelf Registration
      Statement, not to, and not to authorize or permit any person acting on its
      behalf to, (i) distribute any offering material in connection with the offer
      and
      sale of the Regulation S Notes other than the Time of Sale Document and the
      CIM
      and any amendments and supplements to the CIM prepared in compliance with this
      Agreement and the Regulation D Purchase Agreement, without the prior written
      approval of the Initial Purchasers, or (ii) solicit any offer to buy or offer
      to
      sell the Regulation S Notes by means of any form of directed selling efforts
      (including, without limitation, as such terms are used in Regulation S under
      the
      Securities Act) or in any manner involving a public offering within the meaning
      of Section 4(2) of the Securities Act.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (p)  During
      the two year period after the Closing Date (or such shorter period as may be
      provided for in Rule 144(k) under the Securities Act, as the same may be in
      effect from time to time), to not, and to not permit any current or future
      Subsidiaries of either the Company or any other affiliates (as defined in Rule
      144A under the Securities Act) controlled by the Company to, resell any of
      the
      Regulation S Notes which constitute “restricted securities” under Rule 144 that
      have been reacquired by the Company, any current or future Subsidiaries or
      any
      other “affiliates” (as defined in Rule 144A under the Securities Act) controlled
      by the Company, except pursuant to an effective registration statement under
      the
      Securities Act. 

     

    (q)  The
      Company shall pay all stamp, documentary and transfer taxes and other duties,
      if
      any, which may be imposed by any U.S. or non-U.S. federal, state or local taxing
      authority thereof or therein with respect to the issuance of the Regulation
      S
      Notes or the sale thereof to the Initial Purchasers.

     

    5.  Representations
      and Warranties of the Initial Purchasers.
      Each
      Initial Purchaser severally represents and warrants that:

     

    (a)  It
      is a
      QIB as defined in Rule 144A under the Securities Act and it will offer the
      Regulation S Notes for resale only upon the terms and conditions set forth
      in
      this Agreement and in the Time of Sale Document and the CIM.

     

    (b)  It
      is not
      acquiring the Regulation S Notes with a view to any distribution thereof that
      would violate the Securities Act or the securities laws of any state of the
      United States or any other applicable jurisdiction. In connection with the
      Exempt Resales, it will solicit offers to buy the Regulation S Notes only from,
      and will offer and sell the Regulation S Notes only to non-U.S. persons
      reasonably believed by the Initial Purchasers to be a purchaser referred to
      in
      Regulation S under the Securities Act; provided,
      however,
      that in
      purchasing such Regulation S Notes, such persons are deemed to have represented
      and agreed as provided under the caption “Notice to Investors” contained in the
      Time of Sale Document and the CIM.

     

    (c)  No
      directed selling efforts has or will be made by the Initial Purchasers or any
      of
      its representatives in connection with the offer and sale of any of the
      Regulation S Notes within the meaning of Regulation S.

     

    6.  Conditions.
      The
      obligations of the Initial Purchasers to purchase the Regulation S Notes under
      this Agreement are subject to the performance by each of the Company Parties
      of
      their respective covenants and obligations hereunder and the satisfaction of
      each of the following conditions:

     

    (a)  All
      the
      representations and warranties of the Company Parties contained in this
      Agreement and in each of the Regulation S Purchase Documents shall be true
      and
      correct as of the date hereof and at the Closing Date. On or prior to the
      Closing Date, the Company and each other party to the Regulation S Purchase
      Documents (other than the Initial Purchasers) shall have performed or complied
      with all of the agreements and satisfied all conditions on their respective
      parts to be performed, complied with or satisfied pursuant to the
      Regulation S Purchase Documents (other than conditions to be satisfied by
      such other parties, which the failure to so satisfy would not, individually
      or
      in the aggregate, have a Material Adverse Effect).  

     

    
      
        
        

      

      
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    (b)  No
      action
      shall have been taken and no statute, rule, regulation or order shall have
      been
      enacted, adopted or issued by any federal, state or foreign governmental or
      regulatory authority of competent jurisdiction that would, as of the Closing
      Date, render impossible the issuance or sale of the Regulation S Notes; and
      no
      injunction or order of any federal, state or foreign court shall have been
      issued that would, as of the Closing Date, prevent the issuance or sale of
      the
      Regulation S Notes.

     

    (c)  No
      Proceeding shall be pending or, to the knowledge of the Company after due
      inquiry, threatened other than Proceedings that (A) if adversely determined
      would not, individually or in the aggregate, adversely affect the issuance
      or
      marketability of the Regulation S Notes that are the subject of this Agreement,
      and (B) would not, individually or in the aggregate, have a Material Adverse
      Effect.

     

    (d)  Subsequent
      to the respective dates as of which data and information is given in the Time
      of
      Sale Document and the CIM, there shall not have been any Material Adverse
      Change.  

     

    (e)  On
      or
      after the date hereof, (i) there shall not have occurred any downgrading,
      suspension or withdrawal of, nor shall any notice have been given of any
      potential or intended downgrading, suspension or withdrawal of, or of any review
      (or of any potential or intended review) for a possible change that does not
      indicate the direction of the possible change in, any rating of the Company
      or
      any securities of the Company (including, without limitation, the placing of
      any
      of the foregoing ratings on credit watch with negative or developing
      implications or under review with an uncertain direction) by any “nationally
      recognized statistical rating organization” as such term is defined for purposes
      of Rule 436(g)(2) under the Securities Act, (ii) there shall not have occurred
      any change, nor shall any notice have been given of any potential or intended
      change, in the outlook for any rating of the Company or any securities of the
      Company by any such rating organization and (iii) no such rating organization
      shall have given notice that it has assigned (or is considering assigning)
      a
      lower rating to the Regulation S Notes than that on which the Regulation S
      Notes
      were marketed.  

     

    (f)  The
      Initial Purchasers shall have received on the Closing Date:

     

    (i)  certificates
      dated the Closing Date, signed by (1) the Chief Executive Officer and (2) the
      principal financial or accounting officer of the Company, on behalf of the
      Company, to the effect that (a) the representations and warranties set forth
      in
      Section 3 hereof, in each of the Regulation S Purchase Documents are true
      and correct with the same force and effect as though expressly made at and
      as of
      the Closing Date, (b) the Company Parties have performed and complied with
      all
      agreements and satisfied all conditions in all material respects on their part
      to be performed or satisfied at or prior to the Closing Date, (c) at the Closing
      Date, since the date hereof or since the date of the most recent financial
      statements in the Time of Sale Document and the CIM (exclusive of any amendment
      or supplement thereto after the date hereof), no event or events have occurred,
      no information has become known nor does any condition exist that, individually
      or in the aggregate, would have a Material Adverse Effect, (d) since the date
      of
      the most recent financial statements in the Time of Sale Document and the CIM
      (exclusive of any amendment or supplement thereto after the date hereof), other
      than as described in the Time of Sale Document and the CIM or contemplated
      hereby, neither the Company nor any Subsidiary of the Company has incurred
      any
      liabilities or obligations, direct or contingent, not in the ordinary course
      of
      business, that are material to the Company and the Subsidiaries, taken as a
      whole, or entered into any transactions not in the ordinary course of business
      that are material to the business, condition (financial or otherwise) or results
      of operations or prospects of the Company and the Subsidiaries, taken as a
      whole, and there has not been any change in the capital stock or long-term
      indebtedness of the Company or any Subsidiary of the Company that is material
      to
      the business, condition (financial or otherwise) or results of operations of
      the
      Company and the Subsidiaries, taken as a whole, and (e) the sale of the
      Regulation S Notes has not been enjoined (temporarily or
      permanently).

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (ii)  a
      certificate, dated the Closing Date, executed by the Secretary of the Company
      and each Guarantor, certifying such matters as the Initial Purchasers may
      reasonably request.

     

    (iii)  The
      Company Parties shall have each delivered to the Purchasers or the Closing
      Agent
      (on behalf of the Purchasers) a certificate evidencing qualification by such
      entity as a foreign corporation and good standing issued by the Secretaries
      of
      State (or comparable office) of each of the jurisdictions in which the Company
      Parties operate as of a date within 30 days prior to the Closing
      Date.

     

    (iv)  the
      opinion of Vinson & Elkins LLP, U.S. counsel to the Company and Subsidiary
      Guarantors, and Appleby Hunter Bailhache, Bermuda counsel for Parent, in each
      case dated as of the Closing Date, substantially to the effect set forth on
      Exhibit B;
      and

     

    (v)  an
      opinion, dated the Closing Date, of Jones Day, counsel to the Initial
      Purchasers, in form satisfactory to the Initial Purchasers covering such matters
      as are customarily covered in such opinions. 

     

    (g)  The
      terms
      of each Transaction Document shall conform in all material respects to the
      description thereof in the Time of Sale Document and the CIM. Each of the
      Company Parties shall have executed and delivered, or caused to be delivered,
      to
      the Purchasers or the Closing Agent (i) each of the Transaction Documents
      to which it is a party and (ii) the Regulation S Notes being purchased by the
      Initial Purchasers at the Closing pursuant to this Agreement, in each case
      in
      form and substance reasonably satisfactory to the Initial
      Purchasers.

     

    (h)  All
      conditions to closing of each of the Transaction Documents shall be satisfied
      or, where applicable, waived; and the Transactions shall have been consummated
      in accordance with their terms and in accordance with the applicable Transaction
      Documents and as described in the Preliminary CIM and as described or to be
      described in the CIM.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (i)  At
      least
      $750.00 million in aggregate principal amount of Notes shall have been sold
      by
      the Company to the Regulation D Purchasers and Initial Purchasers and an amount
      shall have been borrowed by the Company under the Credit Agreement sufficient
      to
      repay all outstanding borrowings under the Amended and Restated Second Lien
      Credit Agreement, dated as of July 28, 2006 among the Company, various lenders
      named therein, BNP Paribas, and RBS Securities Corporation (the “Second
      Lien Facility”).

     

    (j)  The
      Regulation S Notes shall have been designated for trading on PORTAL, to the
      extent so eligible, and shall be eligible for clearance and settlement through
      DTC.

     

    7.  Indemnification
      and Contribution.
      

     

    (a)  Each
      of
      the Company Parties jointly and severally agree to indemnify and hold harmless
      the Initial Purchasers, each of their directors, officers and employees, and
      each person, if any, who controls the Initial Purchasers within the meaning
      of
      the Securities Act or the Exchange Act, against any losses, claims, damages
      or
      liabilities of any kind to which the Initial Purchasers, director, officer,
      employee or such controlling person may become subject under the Securities
      Act,
      the Exchange Act or other federal or state statutory law or regulation, or
      at
      common law or otherwise (including in settlement of any litigation, if such
      settlement is effected with the written consent of the Company (not to be
      unreasonably withheld, delayed or conditioned), insofar as any such losses,
      claims, damages or liabilities (or actions in respect thereof) arise out of
      or
      are based upon:

     

    (i)  any
      untrue statement or alleged untrue statement of a material fact contained in
      the
      Time of Sale Document or the CIM, or any amendment or supplement
      thereto;

     

    (ii)  the
      omission or alleged omission to state, in the Time of Sale Document or the
      CIM
      or any amendment or supplement thereto, a material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading; or

     

    (iii)  any
      breach by any of the Company Parties of their respective representations,
      warranties and agreements set forth herein or breach of applicable
      law;

     

    and,
      subject to the provisions hereof, will reimburse, as incurred, the Initial
      Purchasers, director, officer, employee and each such controlling person for
      any
      legal or other expenses incurred by the Initial Purchasers or such controlling
      person in connection with investigating, defending against or appearing as
      a
      third-party witness in connection with any such loss, claim, damage, liability
      or action in respect thereof; provided,
      however,
      the
      Company Parties will not be liable in any such case to the extent (but only
      to
      the extent) that a court of competent jurisdiction shall have determined by
      a
      final, unappealable judgment that such loss, claim, damage or liability resulted
      solely from any untrue statement or alleged untrue statement or omission or
      alleged omission made in the Time of Sale Document or the CIM or any amendment
      or supplement thereto in reliance upon and in conformity with written
      information concerning the Initial Purchasers furnished to the Company by the
      Initial Purchasers specifically for use therein,
      it being
      understood and agreed that the only such information furnished by the Initial
      Purchasers to the Company consists of the information described in subsection
      (b) below.
      The
      indemnity agreement set forth in this Section 7 shall be in addition to any
      liability that the Company and the Guarantors may otherwise have to the
      indemnified parties.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (b)  The
      Initial Purchasers agree to indemnify and hold harmless each of the Company
      Parties and their respective directors, officers and each person, if any, who
      controls the Company within the meaning of Section 15 of the Securities Act
      or
      Section 20 of the Exchange Act against any losses, claims, damages or
      liabilities to which the Company or any such director, officer or controlling
      person may become subject under the Securities Act, the Exchange Act or
      otherwise, insofar as a court of competent jurisdiction shall have determined
      by
      a final, unappealable judgment that such losses, claims, damages or liabilities
      (or actions in respect thereof) have resulted solely from (i) any untrue
      statement or alleged untrue statement of any material fact contained in the
      Time
      of Sale Document or the CIM or any amendment or supplement thereto or (ii)
      the
      omission or the alleged omission to state therein a material fact required
      to be
      stated in the Time of Sale Document or the CIM or any amendment or supplement
      thereto or necessary to make the statements therein not misleading, in each
      case
      to the extent (but only to the extent) that such untrue statement or alleged
      untrue statement or omission or alleged omission was made in reliance upon
      and
      in conformity with written information concerning such Initial Purchasers,
      furnished to the Company or its agents by the Initial Purchasers specifically
      for use therein as set forth in Section 11; and, subject to the limitation
      set
      forth immediately preceding this clause, will reimburse, as incurred, any legal
      or other expenses incurred by the Company Parties or any such director, officer
      or controlling person in connection with any such loss, claim, damage, liability
      or action in respect thereof. This indemnity agreement will be in addition
      to
      any liability that the Initial Purchasers may otherwise have to the indemnified
      parties.

     

    (c)  As
      promptly as reasonably practicable after receipt by an indemnified party under
      this Section 7 of notice of the commencement of any action for which such
      indemnified party is entitled to indemnification under this Section 7, such
      indemnified party will, if a claim in respect thereof is to be made against
      the
      indemnifying party under this Section 7, notify the indemnifying party of the
      commencement thereof in writing; but the omission to so notify the indemnifying
      party (i) will not relieve such indemnifying party from any liability under
      paragraph (a) or (b) above unless and only to the extent it is materially
      prejudiced as a result thereof and (ii) will not, in any event, relieve the
      indemnifying party from any obligations to any indemnified party other than
      the
      indemnification obligation provided in paragraphs (a) and (b) above. In case
      any
      such action is brought against any indemnified party, and it notifies the
      indemnifying party of the commencement thereof, the indemnifying party will
      be
      entitled to participate therein and, to the extent that it may elect,
      jointly
      with any other indemnifying party similarly notified, to assume the defense
      thereof, with counsel reasonably satisfactory to such indemnified party;
provided,
      however,
      that if
      (i) the use of counsel chosen by the indemnifying party to represent the
      indemnified party would present such counsel with a conflict of interest, (ii)
      the defendants in any such action include both the indemnified party and the
      indemnifying party, and the indemnified party shall
      have concluded that a conflict may arise between the positions of the
      indemnifying party and the indemnified party in conducting the defense of any
      such action or that
      there may be one or more legal defenses available to it and/or other indemnified
      parties that are different from or additional to those available to the
      indemnifying party, or (iii) the indemnifying party shall not have employed
      counsel reasonably satisfactory to the indemnified party to represent the
      indemnified party within a reasonable time after receipt by the indemnifying
      party of notice of the institution of such action, then, in each such case,
      the
      indemnifying party shall not have the right to direct the defense of such action
      on behalf of such indemnified party or parties and such indemnified party or
      parties shall have the right to select separate counsel to defend such action
      on
      behalf of such indemnified party or parties at the expense of the indemnifying
      party. After notice from the indemnifying party to such indemnified party of
      its
      election so to assume the defense thereof and approval by such indemnified
      party
      of counsel appointed to defend such action, the indemnifying party will not
      be
      liable to such indemnified party under this Section 7 for any legal or other
      expenses, other than reasonable costs of investigation, subsequently incurred
      by
      such indemnified party in connection with the defense thereof, unless (i) the
      indemnified party shall have employed separate counsel in accordance with the
      proviso to the immediately preceding sentence (it being understood, however,
      that in connection with such action the indemnifying party shall not be liable
      for the expenses of more than one separate counsel (in addition to local
      counsel) in any one action or separate but substantially similar actions in
      the
      same jurisdiction arising out of the same general allegations or circumstances,
      designated by the Initial Purchasers in the case of paragraph (a) of this
      Section 7 or the Company in the case of paragraph (b) of this Section 7,
      representing the indemnified parties under such paragraph (a) or paragraph
      (b),
      as the case may be, who are parties to such action or actions), (ii) the
      indemnifying party has authorized in writing the employment of counsel for
      the
      indemnified party at the expense of the indemnifying party or (iii) the
      indemnifying party shall not have employed counsel satisfactory to the
      indemnified party to represent the indemnified party within a reasonable time
      after notice of commencement of the action, in each of which cases the fees
      and
      expenses of counsel shall be at the expense of the indemnifying party and shall
      be paid as they are incurred.
      After
      such notice from the indemnifying party to such indemnified party, the
      indemnifying party will not be liable for the costs and expenses of any
      settlement of such action effected by such indemnified party without the prior
      written consent of the indemnifying party (which consent shall not be
      unreasonably withheld), unless such indemnified party waived in writing its
      rights under this Section 7, in which case the indemnified party may effect
      such
      a settlement without such consent.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (d)  No
      indemnifying party shall be liable under this Section 7 for any settlement
      of
      any claim or action (or threatened claim or action) effected without its written
      consent, which shall not be unreasonably withheld, but if a claim or action
      settled with its written consent, or if there be a final judgment for the
      plaintiff with respect to any such claim or action, each indemnifying party
      jointly and severally agrees, subject to the exceptions and limitations set
      forth above, to indemnify and hold harmless each indemnified party from and
      against any and all losses, claims, damages or liabilities (and legal and other
      expenses as set forth above) incurred by reason of such settlement or judgment.
      No indemnifying party shall, without the prior written consent of the
      indemnified party (which consent shall not be unreasonably withheld), effect
      any
      settlement or compromise of any pending or threatened proceeding in respect
      of
      which the indemnified party is or could have been a party, or indemnity could
      have been sought hereunder by the indemnified party, unless such settlement
      (A)
      includes an unconditional written release of the indemnified party, in form
      and
      substance satisfactory to the indemnified party, from all liability on claims
      that are the subject matter of such proceeding and (B) does not include any
      statement as to an admission of fault, culpability or failure to act by or
      on
      behalf of the indemnified party.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (e)  In
      circumstances in which the indemnity agreement provided for in the preceding
      paragraphs of this Section 7 is unavailable to, or insufficient to hold
      harmless, an indemnified party in respect of any losses, claims, damages or
      liabilities (or actions in respect thereof), each indemnifying party, in order
      to provide for just and equitable contributions, shall contribute to the amount
      paid or payable by such indemnified party as a result of such losses, claims,
      damages or liabilities (or actions in respect thereof) in such proportion as
      is
      appropriate to reflect (i) the relative benefits received by the indemnifying
      party or parties, on the one hand, and the indemnified party, on the other,
      from
      the Offering or (ii) if the allocation provided by the foregoing clause (i)
      is
      not permitted by applicable law, not only such relative benefits but also the
      relative fault of the indemnifying party or parties, on the one hand, and the
      indemnified party, on the other, in connection with the statements or omissions
      or alleged statements or omissions that resulted in such losses, claims, damages
      or liabilities (or actions in respect thereof). The relative benefits received
      by the Company, on the one hand, and the Initial Purchasers, on the other,
      shall
      be deemed to be in the same proportion as the total proceeds from the Offering
      (before deducting expenses) received by the Company bear to the total discounts
      and commissions received by the Initial Purchasers. The relative fault of the
      parties shall be determined by reference to, among other things, whether the
      untrue or alleged untrue statement of a material fact or the omission or alleged
      omission to state a material fact relates to information supplied by the
      Company, on the one hand, or the Initial Purchasers, on the other, the parties’
relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such statement or omission or alleged statement or omissions, and any
      other equitable considerations appropriate in the circumstances.

     

    (f)  The
      Company Parties and the Initial Purchasers agree that it would not be equitable
      if the amount of such contribution determined pursuant to the immediately
      preceding paragraph (e) were determined by pro rata or per capita allocation
      or
      by any other method of allocation that does not take into account the equitable
      considerations referred to in the first sentence of the immediately preceding
      paragraph (e). Notwithstanding any other provision of this Section 7, the
      Initial Purchasers shall not be obligated to make contributions hereunder that
      in the aggregate exceed the total discounts, commissions and other compensation
      (exclusive of the reimbursement of any out-of-pocket expenses) received by
      such
      Initial Purchasers under this Agreement, less the aggregate amount of any
      damages that such Initial Purchasers have otherwise been required to pay by
      reason of the untrue or alleged untrue statements or the omissions or alleged
      omissions to state a material fact. No person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution from any person who was not guilty of such
      fraudulent misrepresentation. For purposes of the immediately preceding
      paragraph (e), each person, if any, who controls the Initial Purchasers within
      the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
      Act shall have the same rights to contribution as the Initial Purchasers, and
      each director of the Company Parties, each officer of the Company Parties and
      each person, if any, who controls any of the Company Parties within the meaning
      of Section 15 of the Securities Act or Section 20 of the Exchange Act, shall
      have the same rights to contribution as the Company Parties.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    8.  Termination.
      The
      Initial Purchasers may terminate this Agreement at any time prior to the Closing
      Date by written notice to the Company if any of the following has
      occurred:

     

    (a)  since
      the
      date hereof, any Material Adverse Effect or development involving or expected
      to
      result in a prospective Material Adverse Effect that could, in the Initial
      Purchasers’ reasonable judgment, be expected to (i) make it impracticable or
      inadvisable to proceed with the offering or delivery of the Regulation S Notes
      on the terms and in the manner contemplated in the Time of Sale Document and
      the
      CIM, or (ii) materially impair the investment quality of any of the Regulation
      S
      Notes;

     

    (b)  the
      failure of the Company Parties to satisfy the conditions contained in Section
      6(a) hereof on or prior to the Closing Date;

     

    (c)  any
      outbreak or escalation of hostilities or other national or international
      calamity or crisis, including acts of terrorism, or material adverse change
      or
      disruption in economic conditions in, or in the financial markets of, the United
      States (it being understood that any such change or disruption shall be relative
      to such conditions and markets as in effect on the date hereof), if the effect
      of such outbreak, escalation, calamity, crisis, act or material adverse change
      in the economic conditions in, or in the financial markets of, the United States
      could be reasonably expected to make it, in the Initial Purchasers’ judgment,
      impracticable or inadvisable to market or proceed with the offering or delivery
      of the Notes on the terms and in the manner contemplated in the Time of Sale
      Document and the CIM or to enforce contracts for the sale of any of the
      Regulation S Notes;

     

    (d)  the
      suspension or limitation of trading generally in securities on the New York
      Stock Exchange, the American Stock Exchange or the NASDAQ National Market or
      any
      setting of limitations on prices for securities on any such
      exchange;

     

    (e)  the
      enactment, publication, decree or other promulgation after the date hereof
      of
      any Applicable Law that in the Initial Purchasers’ counsel’s reasonable opinion
      materially and adversely affects, or could be reasonably expected to materially
      and adversely affect, the properties, business, operations, earnings, assets,
      liabilities or condition (financial or otherwise) of the Company and the
      Subsidiaries, taken as a whole;

     

    (f)  any
      securities of the Company shall have been downgraded or placed on any “watch
      list” for possible downgrading by any “nationally recognized statistical rating
      organization,” as such term is defined for purposes of Rule 436(g)(2) under the
      Securities Act; or

     

    (g)  the
      representation and warranty contained in Section 3(a) of this Agreement is
      incorrect in any way; or 

     

    (h)  the
      declaration of a banking moratorium by any Governmental Authority; or the taking
      of any action by any Governmental Authority after the date hereof in respect
      of
      its monetary or fiscal affairs that in the Initial Purchasers’ opinion could
      reasonably be expected to have a material adverse effect on the financial
      markets in the United States or elsewhere.

     

    
      For
        the
        avoidance of doubt, this Section 8 shall not alter Jefferies
        & Company, Inc.’s
        right to
        a Tail Fee (as defined in the Engagement Letter) pursuant to the Engagement
        Letter.

    

     

    
      
        
        

      

      
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    9.  Survival
      of Representations and Indemnities.
      The
      representations and warranties, covenants, indemnities and contribution and
      expense reimbursement provisions and other agreements, representations and
      warranties of the Company Parties set forth in or made pursuant to this
      Agreement shall remain operative and in full force and effect, and will survive,
      regardless of (i) any investigation, or statement as to the results thereof,
      made by or on behalf of the Initial Purchasers, (ii) acceptance of the
      Regulation S Notes, and payment for them hereunder, and (iii) any termination
      of
      this Agreement.

     

    10.  Default
      by the Initial Purchasers.
      If any
      Initial Purchaser shall breach its obligations to purchase the Regulation S
      Notes that it has agreed to purchase hereunder on the Closing Date and
      arrangements satisfactory to the Company for the purchase of such Regulation
      S
      Notes are not made within 36 hours after such default, this Agreement shall
      terminate with respect to such Initial Purchaser without liability on the part
      of the Company or other such Initial Purchasers. Nothing herein shall relieve
      such defaulting Initial Purchaser from liability for its default.

     

    11.  Information
      Supplied by the Initial Purchasers.
      The
      statements set forth on the cover page with respect to price and in the first
      sentence of the seventh paragraph and in the tenth paragraph under the heading
      “Private Placement” in the Time of Sale Document and the CIM (to the extent such
      statements relate to the Initial Purchasers) constitute the only information
      furnished by the Initial Purchasers to the Company or the Subsidiaries for
      the
      purposes of Sections
      4(a)
      and
8
      hereof.


     

    12.  No
      Fiduciary Relationship.
      The
      Company Parties hereby acknowledge that, in connection with the Transactions,
      (i) the Regulation S Offering, including the determination of the offering
      price
      of the Regulation S Notes and any related discounts, commissions and fees,
      shall
      be an arm’s-length commercial transaction between the Company and the Initial
      Purchasers, (ii) the Initial Purchasers will be acting as an independent
      contractors and will not be the agent or fiduciary of the Company or its
      stockholders, creditors, employees, Subsequent Purchasers or any other party,
      (iii) the Initial Purchasers shall not assume any advisory or fiduciary
      responsibility in favor of the Company (irrespective of whether the Initial
      Purchasers have advised or are currently advising the Company on other matters)
      and the Initial Purchasers shall have no obligation to the Company Parties
      with
      respect to the Transactions except as may be set forth expressly herein or
      in
      the Transactions Documents, (iv) the Initial Purchasers and their respective
      affiliates may be engaged in a broad range of transactions that involve
      interests that differ from those of the Company Parties and (v) the Initial
      Purchasers shall not provide any legal, accounting, regulatory or tax advice
      with respect to the Transactions and the Company Parties shall consult their
      own
      legal, accounting, regulatory and tax advisors to the extent they deem
      appropriate. The Company hereby waives and releases, to the fullest permitted
      by
      law, any claims that either of the Company may have against the Initial
      Purchasers with respect to any breach or alleged breach of any fiduciary or
      similar duty to the Company in connection with the transactions contemplated
      by
      this Agreement or any matters leading up to such transactions. 

     

    13.  Miscellaneous.

     

    (a)  Notices.
      Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one Business Day after deposit with an overnight courier service,
      in
      each case properly addressed to the party to receive the same. The addresses
      and
      facsimile numbers for such communications shall be:

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    If
      to the
      Initial Purchasers:

     

    Jefferies
      & Company, Inc.

    520
      Madison Avenue, 12th Floor

    New
      York,
      New York 10022

    Facsimile:
      (212) 284-2280

    Attention:
      General Counsel

     

    BNP
      Paribas Securities Corp.

    787
      Seventh Avenue

    New
      York,
      New York 10019

    Facsimile:
      (212) 841-3183

    Attention:
      Debt Capital Markets

     

    BMO
      Capital Markets Corp.

    3
      Times
      Square, 27th Floor

    New
      York,
      New York 10036

    Telephone:
      (212) 702-1268

    Attention:
      Paul H. Phaneuf, Managing Director

     

    Greenwich
      Capital Markets, Inc.

    600
      Steamboat Road

    Greenwich,
      Connecticut 06830

    Facsimile:
      (203) 427-4534

    Attention:
      Debt Capital Market Syndicate

     

    Capital
      One Southcoast, Inc. 

    909
      Poydras Street. Suite 1000 

    New
      Orleans, Louisiana 70112

    Facsimile:
      (504)
      523-1925

    Attention:
      Patrick Mooney, Senior Vice President

    


    Natexis
      Bleichroeder Inc.

    1345
      Avenue of the Americas, 44th Floor

    New
      York,
      NY 10105

    Facsimile:
      (212) 333 4710

    Attention:
      Capital Markets


     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    with
      a
      copy to:

    


    Jones
      Day

    222
      East
      41st Street

    New
      York,
      New York 10017

    Facsimile:
      (212) 755-7306

    Attention:
      Christopher M. Kelly, Esq.

    Alex
      Gendzier, Esq.

    


    If
      to
      Company:

    


    Energy
      XXI Gulf Coast, Inc.

    Suite
      2626

    1021
      Main

    Houston,
      Texas 77002

    Facsimile:
      (713) 351-3300

    Attention:
      David West Griffin, Director

     

    with
      a
      copy to:

     

    Vinson
      & Elkins LLP

    First
      City Tower

    1001
      Fannin Street

    Suite
      2500

    Houston,
      Texas 77002-6760

    Facsimile:
      713-758-2346

    Attention:
      T. Mark Kelly, Esq.

    


    Written
      confirmation of receipt (A) given by the recipient of such notice, consent,
      waiver or other communication, (B) mechanically or electronically generated
      by
      the sender’s facsimile machine containing the time, date, recipient facsimile
      number and an image of the first page of such transmission or (C) provided
      by an
      overnight courier service shall be rebuttable evidence of personal service,
      receipt by facsimile or receipt from an overnight courier service in accordance
      with clause
      (A),
      (B)
      or
(C)
      above,
      respectively. Any party hereto may change the address for receipt of
      communications by giving written notice to the others. 

     

    (b)  Governing
      Law; Jurisdiction; Jury Trial.
      This
      Agreement shall be governed by, and construed in accordance with, the laws
      of
      the State of New York. Any legal suit, action or proceeding arising out of
      or
      based upon this Agreement or the transactions contemplated hereby may be
      instituted in the federal courts of the United States of America located in
      the
      Borough of Manhattan in the City of New York or the courts of the State of
      New
      York in each case located in the Borough of Manhattan in the City of New York.
      Each party hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      Each party hereby irrevocably waives any right it may have, and agrees not
      to
      request, a jury trial for the adjudication of any dispute hereunder or in
      connection with or arising out of this Agreement or any transaction contemplated
      hereby. 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (c)  Successors.
      This
      Agreement has been and is made solely for the benefit of and shall be binding
      upon the Company Parties, the Initial Purchasers and, to the extent provided
      in
      Section 8 hereof, the controlling persons, officers, directors, partners,
      employees, representatives and agents referred to in Section 8, and their
      respective heirs, executors, administrators, successors and assigns, all as
      and
      to the extent provided in this Agreement, and no other person shall acquire
      or
      have any right under or by virtue of this Agreement. The term “successors and
      assigns” shall not include a purchaser of any of the Regulation S Notes from the
      Initial Purchasers merely because of such purchase. Notwithstanding the
      foregoing, it is expressly understood and agreed that each purchaser who
      purchases the Regulation S Notes from the Initial Purchasers is intended to
      be a
      beneficiary of the covenants of the Company Parties contained in the
      Registration Rights Agreement to the same extent as if the Regulation S Notes
      were sold and those covenants were made directly to such purchaser by the
      Company Parties, and each such purchaser shall have the right to take action
      against the Company Parties to enforce, and obtain damages for any breach of,
      those covenants. 

     

    (d)  Partial
      Unenforceability.
      The
      invalidity or unenforceability of any Section, paragraph or provision of this
      Agreement shall not affect the validity or enforceability of any other Section,
      paragraph or provision hereof. If any Section, paragraph or provision of this
      Agreement is for any reason determined to be invalid or unenforceable, there
      shall be deemed to be made such minor changes (and only such minor changes)
      as
      are necessary to make it valid and enforceable.

     

    (e)  Entire
      Agreement.
      This
      Agreement, together with the Engagement Letter, constitutes the entire agreement
      of the parties to this Agreement and supersedes all prior written or oral and
      all contemporaneous oral agreements, understandings and negotiations with
      respect to the subject matter hereof. 

     

    (f)  Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided,
      that a
      facsimile signature shall be considered due execution and shall be binding
      upon
      the signatory thereto with the same force and effect as if the signature were
      an
      original, not a facsimile signature. 

     

    (g)  Amendment.
      This
      Agreement may not be amended or modified unless in writing by all of the parties
      hereto, and no condition herein (express or implied) may be waived unless waived
      in writing by each party whom the condition is meant to benefit. The failure
      by
      any party to exercise any right or remedy under this Agreement or otherwise,
      or
      delay by a party in exercising such right or remedy, shall not operate as a
      waiver thereof. 

     

    (h)  Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    Please
      confirm that the foregoing correctly sets forth the agreement between the
      Company, the Guarantors and the Initial Purchasers.


     

    
      	 	Very
              truly yours,
	 	 	 
	 	
              ENERGY
                XXI GULF COAST, INC.

            
	 
 	 
 	 
 
	
            	By:  	 
	 	
              
Name:
	 	Title:
              Chief Executive Officer


    

     

    
      
        	 	 	 
	 	
                
                  ENERGY
                    XXI (BERMUDA) LIMITED

                

              
	 
 	 
 	 
 
	
              	By:  	 
	 	
                
Name:
	 	Title:
                


      

       

    

    
      
        
          	 	 	 
	 	
                  
                    ENERGY
                      XXI TEXAS, LP

                  

                
	 
 	 
 	 
 
	
                	By:  	  
	 	
                  
Name:
	 	Title:
                  


        

        
           

          
            
              
                
                  	 	 	 
	 	
                          
                            
                              ENERGY
                                XXI TEXAS GP, LLC

                            

                          

                        
	 
 	 
 	 
 
	
                        	By:  	  
	 	
                          
Name:
	 	Title:
                          


                

                
                   

                

              

            

          

          
            
              
                	 	 	 
	 	
                        
                          ENERGY
                            XXI GOM, LLC

                        

                      
	 
 	 
 	 
 
	
                      	By:  	  
	 	
                        
Name:
	 	Title:


              

               

              
                
                  
                  

                

                
                  28

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    Accepted
      and Agreed to:

    


    
      	
              JEFFERIES
                & COMPANY, INC.

            	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
              
Name:
	 	 	
            
	 	
              Title:
                

            	 	 	 


    

     

    
      
        	
                
                  GREENWICH
                    CAPITAL MARKETS, INC.

                

              	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
                
Name:
	 	 	
              
	 	
                Title:
                  

              	 	 	 


      

       

    

    
      
        
          	
                  
                    BNP
                      PARIBAS SECURITIES CORP.

                  

                	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
                  
Name:
	 	 	
                
	 	
                  Title:
                    

                	 	 	 


        

         

      

    

    
      
        
          
            	
                    
                      
                        BMO
                          CAPITAL MARKETS CORP.

                      

                    

                  	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
                    
Name:
	 	 	
                  
	 	
                    Title:
                      

                  	 	 	 


          

           

        

      

    

    
      
        
          
            	
                    
                      
                        CAPITAL
                          ONE SOUTHCOAST, INC.

                      

                    

                  	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
                    
Name:
	 	 	
                  
	 	
                    Title:
                      

                  	 	 	 


          

           

        

      

    

    
      
        
          
            	
                    
                      NATEXIS
                        BLEICHROEDER INC.

                    

                  	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
                    
Name:
	 	 	
                  
	
                  	
                    Title:

                  	 	 	 


          

           

          
            
              
              

            

            
              29

              
                

              

            

            
              
              

            

          

        

      

    

     

    Schedule
      I

    


    Pricing
      Supplement


     

    [attached]

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    Exhibit
      A

     

    List
      of Subsidiaries

     

    Energy
      XXI Texas, LP

    


    Energy
      XXI Texas GP, LLC

    


    Energy
      XXI GOM, LLC

    


    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    Exhibit
      B

     

    Opinion
      of Vinson & Elkins, as U.S. counsel for Parent and the Company, and Appleby
      Hunter Bailhache, as Bermuda counsel for Parent, to be delivered pursuant to
      Section 6(f) of this Agreement.
      [To
      be
      allocated among counsel]

     

    References
      to the Preliminary CIM in this Exhibit include any supplements thereto at the
      Closing Date.

     

    1.  Each
      of
      the Company and the Guarantors is a corporation duly incorporated, validly
      existing and in good standing under the laws of its jurisdiction of formation,
      with limited liability power and corporate power, as the case may be, and
      authority to own, lease and operate its properties and to conduct its business
      as described in the CIM and to enter into and perform its respective obligations
      under the Regulation S Purchase Agreement, the Placement Agency Agreement,
      the
      Indenture and the Registration Rights Agreement (the “Regulation
      S Purchase Documents”),
      as the
      case may be.

     

    2.  Each
      of
      the Company and the Guarantors has all necessary corporate power and authority
      to execute and deliver the Note Purchase Documents, to perform its obligations
      thereunder to issue the Regulation S Notes.

     

    3.  The
      Regulation S Purchase Agreement has been duly authorized, executed and delivered
      by each of the Guarantors and the Company.

     

    4.  Each
      of
      the Indenture, Escrow Agreement, and the Registration Rights Agreement has
      been
      duly authorized, executed and delivered by the Company and each of the
      Guarantors, as the case may be, and constitutes a valid and binding agreement
      of
      the Company and each of the Guarantors, as the case may be, enforceable against
      each of the Company and each of the Guarantors, as the case may be, in
      accordance with its terms. The Indenture is in sufficient form for qualification
      under the Trust Indenture Act. 

     

    5.  The
      Regulation S Notes, when executed, authenticated and issued in accordance with
      the terms of the Indenture and delivered to and paid for by the Initial
      Purchasers pursuant to the Regulation S Purchase Agreement, will constitute
      valid and binding obligations of the Company, entitled to the benefits of the
      Indenture, enforceable against the Company in accordance with their
      terms.

     

    6.  The
      Guarantees, when the Regulation S Notes have been executed, authenticated and
      issued in accordance with the terms of the Indenture and delivered to and paid
      for by the Initial Purchasers pursuant to the Purchase Agreement, will
      constitute valid and binding obligations of the Guarantors, entitled to the
      benefits of the Indenture, enforceable against the Guarantors in accordance
      with
      their terms.

     

    7.  The
      Exchange Notes and the related Guarantees have been duly authorized by the
      Company and the Guarantors, as the case may be.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    8.  The
      execution and delivery of the Note Purchase Documents by Parent, the Company
      and
      the subsidiaries of the Company, the performance by such companies of their
      respective obligations thereunder, including the issuance and sale of the Notes
      and the Guarantees, (i) will not result in any violation of the provisions
      of
      the charter, by-laws or equivalent constituent documents of Parent, the Company
      or any Guarantor; (ii) will not constitute a breach of, or default or a Debt
      Repayment Triggering Event under, or result in the creation or imposition of
      any
      security interest, mortgage, pledge, lien, charge, encumbrance or adverse claim
      upon any property or assets of Parent, the Company or any Guarantor, pursuant
      to
      any material Existing Instrument listed on identified on the annexed schedule
      furnished to us by the Company, and which the Company has represented lists
      all
      material agreements and instruments to which the Company or any of its
      subsidiaries is a party or by which the Company or any of its subsidiaries
      is
      bound or to which any of the property or assets of the Company or any of its
      subsidiaries is subject; (iii) will not result in any violation of any federal,
      Delaware or New York law or, to the best knowledge of such counsel any
      administrative regulation or administrative or court decree, applicable to
      Parent, the Company or any of the subsidiaries of the Company (provided no
      opinion is given with respect to federal or state securities laws); or (v)
      will
      not require any consent, approval, authorization or other order of, or
      registration (provided no opinion is given with respect to federal or state
      securities laws), or filing with, any court or other governmental or regulatory
      authority or agency, except (i) with respect to the transaction contemplated
      by
      the Registration Rights Agreement and may be required under the Securities
      Act
      and the Exchange Act, (ii) as required by federal or state securities or “blue
      sky” laws and (iii) for such consents, approvals, authorizations, orders,
      filings or registrations which have been obtained or made.

     

    9.  Assuming
      the accuracy of the representations and warranties of Parent, the Company and
      the Initial Purchasers contained in the Regulation S Purchase Agreement and
      the compliance of such parties with the agreements set forth herein and therein,
      it is not necessary, in connection with the issuance and sale of the Regulation
      S Notes to the Initial Purchasers, in the manner contemplated by
      Regulation S Purchase Documents and the CIM, to register the initial sale
      of the Regulation S Notes under the Securities Act or to qualify the Indenture
      under the Trust Indenture Act it being understood no opinion is given with
      respect to subsequent resales of the Regulation S Notes.

     

    10.  Neither
      the Parent nor the Company is, and after receipt of payment for the Notes,
      will
      be, an “investment company” within the meaning of, and subject to registration
      under, Investment Company Act.

     

    
      
        
        

      

      
        33