Document:

Execution
Version

     

    REGISTRATION
RIGHTS AGREEMENT

     

    Dated
as of December 17, 2010

     

    Among

     

    Energy
XXI Gulf Coast, Inc.,

     

    The
Guarantors

     

    listed on
the signature pages hereto,

     

    and

     

    RBS
Securities Inc.

    BNP
Paribas Securities Corp.

    and

    UBS
Securities LLC

     

    as
representatives of the Initial Purchasers

     

    9.25%
Senior Initial Notes due 2017

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        
          
            	 
      	 
      	 
      	 
      	
                    Page

                  
	 
      	 
      	 
      	 
      	 
      
	
                    Section
      1.

                  	 
      	
                    Definitions.

                  	 
      	
                    1

                  
	
                    Section
      2.

                  	 
      	
                    Exchange
      Offer.

                  	 
      	
                    4

                  
	
                    Section
      3.

                  	 
      	
                    Shelf
      Registration.

                  	 
      	
                    7

                  
	
                    Section
      4.

                  	 
      	
                    Liquidated
      Damages and Specific Performance.

                  	 
      	
                    8

                  
	
                    Section
      5.

                  	 
      	
                    Registration
      Procedures.

                  	 
      	
                    10

                  
	
                    Section
      6.

                  	 
      	
                    Registration
      Expenses.

                  	 
      	
                    18

                  
	
                    Section
      7.

                  	 
      	
                    Indemnification.

                  	 
      	
                    18

                  
	
                    Section
      8.

                  	 
      	
                    Rules
      144 and 144A.

                  	 
      	
                    21

                  
	
                    Section
      9.

                  	 
      	
                    Underwritten
      Registrations.

                  	 
      	
                    21

                  
	
                    Section
      10.

                  	
                      

                  	
                    Miscellaneous.

                  	
                      

                  	
                    22

                  

          

        

      

    

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    REGISTRATION
RIGHTS AGREEMENT

     

    This
Registration Rights Agreement, dated as of December 17, 2010 (this “Agreement”),
is entered into among Energy XXI Gulf Coast, Inc., a Delaware corporation (the
“Company”), the guarantors listed on the signature pages hereto (the
“Guarantors”) and the initial purchasers named on Schedule A (collectively, the
“Initial Purchasers”) to the Purchase Agreement (as defined below).

     

    The
Company, the Guarantors and the Initial Purchasers are parties to the Purchase
Agreement dated December 3, 2010 (the “Purchase Agreement”) which provides for
the sale by the Company to the Initial Purchasers of $750,000,000 aggregate
principal amount of the Company’s 9.250% Senior Notes due 2017 (the “Notes”),
fully and unconditionally guaranteed by the Guarantors (the
“Guarantees”).  The Notes and the Guarantees are herein collectively
referred to as the “Initial Notes.”

     

    This
Agreement is entered into in connection with the Purchase Agreement by and among
the Company, the Guarantors and the Initial Purchasers, dated December 3, 2010
(the “Purchase Agreement”), (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders from time to time of Securities, including
the Initial Purchasers.  In order to induce the Initial Purchasers to
purchase the Initial Notes, the Issuers have agreed to provide the registration
rights set forth in this Agreement.  The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 5(i) of the Purchase Agreement.

     

    The
parties hereby agree as follows:

     

    Section
1.          Definitions.

     

    As used
in this Agreement, the following terms shall have the following
meanings:

     

    “Action”
shall have the meaning set forth in Section 7(c) hereof.

     

    “Advice”
shall have the meaning set forth in Section 5 hereof.

     

    “Agreement”
shall have the meaning set forth in the first introductory paragraph
hereto.

     

    “Applicable
Period” shall have the meaning set forth in Section 2(b) hereof.

     

    “Board of
Directors” shall have the meaning set forth in Section 5 hereof.

     

    “Business
Day” shall mean a day that is not a Legal Holiday.

     

    “Company”
shall have the meaning set forth in the first introductory paragraph
hereto.

     

    “Commission”
shall mean the United States Securities and Exchange Commission.

     

    “Day”
shall mean a calendar day.

     

    “Damages
Payment Date” shall have the meaning set forth in Section 4(b)
hereof.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Default
Period” shall have the meaning set forth in Section 4(a) hereof.

     

    “Delay
Period” shall have the meaning set forth in Section 5 hereof.

     

    “Effectiveness
Period” shall have the meaning set forth in Section 3(b) hereof.

     

    “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder.

     

    “Exchange
Notes” shall have the meaning set forth in Section 2(a) hereof.

     

    “Exchange
Offer” shall have the meaning set forth in Section 2(a) hereof.

     

    “Exchange
Offer Registration Statement” shall have the meaning set forth in Section 2(a)
hereof.

     

    “Filing
Date” shall have the meaning set forth in Section 3(a) hereof.

     

    “FINRA”
The Financial Industry Regulatory Authority, Inc., an independent regulatory
organization (formerly National Association of Securities Dealers or
NASD).

     

    “Holder”
shall mean any holder of a Registrable Note or Registrable Notes.

     

    “Indenture”
shall mean the Indenture, dated as of December 17, 2010, among the Company, the
Guarantors and Wells Fargo Bank, National Association, as trustee, pursuant to
which the Initial Notes are being issued, as amended or supplemented from time
to time in accordance with the terms thereof.

     

    “Initial
Notes” shall have the meaning set forth in the preamble hereof.

     

    “Initial
Purchasers” shall have the meaning set forth in the preamble
hereof.

     

    “Inspectors”
shall have the meaning set forth in Section 5(n) hereof.

     

    “Issue
Date” shall mean December 17, 2010.

     

    “Issuer”
shall mean the Company and the Guarantors, such that the obligations of the
Company and the Guarantors under this Agreement shall be joint and several
obligations in every respect including but not limited to the obligations to pay
any Liquidated Damages, other amounts and any indemnification and contribution
obligations, in each case, as set forth in this Agreement, and shall also
include such parties’ permitted successors and assigns.

     

    “Legal
Holiday” shall mean a Saturday, a Sunday or a day on which banking institutions
in New York, New York are required by law, regulation or executive order to
remain closed.

     

    “Liquidated
Damages” shall have the meaning set forth in Section 4(a) hereof.

     

    “Losses”
shall have the meaning set forth in Section 7(a) hereof.

    
      
         

      

      
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    “Notes”
shall have the meaning set forth in the preamble hereof.

     

    “Participant”
shall have the meaning set forth in Section 7(a) hereof.

     

    “Participating
Broker-Dealer” shall have the meaning set forth in Section 2(b)
hereof.

     

    “Person”
shall mean an individual, corporation, partnership, joint venture association,
joint stock company, trust, unincorporated limited liability company, government
or any agency or political subdivision thereof or any other entity.

     

    “Prospectus”
shall mean the prospectus included in any Registration Statement (including,
without limitation, any prospectus subject to completion and a prospectus that
includes any information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus supplement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.

     

    “Purchase
Agreement” shall have the meaning set forth in the preamble hereof.

     

    “Records”
shall have the meaning set forth in Section 5(n) hereof.

     

    “Registrable
Notes” shall mean (x) each Initial Note upon its original issuance and at all
times subsequent thereto, and (y) each Exchange Note as to which Section 2(c)(4)
hereof is applicable upon original issuance and at all times subsequent thereto,
in each case until (i) a Registration Statement (other than, with respect to any
Exchange Note as to which Section 2(c)(4) hereof is applicable, the Exchange
Offer Registration Statement) covering such Initial Note or Exchange Note has
been declared effective by the Commission and such Initial Note or Exchange
Note, as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Initial Note has been exchanged pursuant to
the Exchange Offer for an Exchange Note or Exchange Notes that may be resold
without restriction under state and federal securities laws, (iii) such Initial
Note or Exchange Note, as the case may be, ceases to be outstanding or (iv) such
Initial Note or Exchange Note has been sold in compliance with Rule
144.

     

    “Registration
Default” shall have the meaning set forth in Section 4(a) hereof.

     

    “Registration
Statement” shall mean any appropriate registration statement of the Issuer
covering any of the Registrable Notes filed with the Commission under the
Securities Act, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.

     

    “Requesting
Participating Broker-Dealer” shall have the meaning set forth in Section 2(b)
hereof.

    
      
         

      

      
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    “Rule
144” shall mean Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.

     

    “Rule
144A” shall mean Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.

     

    “Rule
415” shall mean Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.

     

    “Securities
Act” shall have the meaning set forth in the preamble hereof.

     

    “Shelf
Filing Date” shall have the meaning set forth in Section 4(a)(4)
hereof.

     

    “Shelf
Filing Event” shall have the meaning set forth in Section 2(c)
hereof.

     

    “Shelf
Registration” shall have the meaning set forth in Section 3(a)
hereof.

     

    “Shelf
Registration Statement” shall mean a Registration Statement filed in connection
with a Shelf Registration.

     

    “TIA”
shall mean the Trust Indenture Act of 1939, as amended.

     

    “Trustee”
shall mean the trustee under the Indenture and the trustee (if any) under any
indenture governing the Exchange Notes .

     

    “Underwritten
registration or underwritten offering” shall mean a registration in which
securities of the Issuer are sold to an underwriter for reoffering to the
public.

     

    Section
2.          Exchange
Offer.

     

    (a)        To
the extent not prohibited by any applicable law or applicable interpretation of
the Commission, the Issuer shall use its reasonable best efforts to cause to be
declared effective under the Securities Act within 270 days after the Issue Date
a Registration Statement (the “Exchange Offer Registration Statement”) on an
appropriate registration form with respect to a registered offer (the “Exchange
Offer”) to exchange any and all of the Registrable Notes for a like aggregate
principal amount of Notes, including the Guarantees thereof (the “Exchange
Notes”) that are identical in all material respects to the Initial Notes (except
that the Exchange Notes shall not contain terms with respect to transfer
restrictions or Liquidated Damages upon a Registration Default).  Upon
the Exchange Offer Registration Statement being declared effective by the
Commission, the Issuer will: (i) commence the Exchange Offer as soon as
practicable after the Exchange Offer Registration Statement is declared
effective, (ii) keep the Exchange Offer open for not less than 30 days (or
longer if required by applicable law) after the date notice of the Exchange
Offer is mailed to Holders, and (iii) consummate the Exchange Offer within 40
days after the date on which the Exchange Offer Registration Statement is
declared effective.

    
      
         

      

      
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    Each
Holder that participates in the Exchange Offer will be required to represent to
the Issuer in writing that (i) any Exchange Notes to be received by it will be
acquired in the ordinary course of its business, (ii) it has no arrangement or
understanding with any Person to participate in the distribution (within the
meaning of the Securities Act) of the Exchange Notes in violation of the
provisions of the Securities Act, (iii) if such Holder is not a broker-dealer,
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes, (iv) if such Holder is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Initial Notes that were
acquired as a result of market-making or other trading activities, it will
comply with the applicable provisions of the Securities Act in connection with
any resale of such Exchange Notes, (v) such Holder has full power and authority
to transfer the Initial Notes in exchange for the Exchange Notes and that the
Issuer will acquire good and unencumbered title thereto free and clear of any
liens, restrictions, charges or encumbrances and not subject to any adverse
claims; and (vi) such Holder is not an “affiliate” (as defined in Rule 405
promulgated under the Securities Act) of the Issuer.

     

    (b)       The
Issuer and the Initial Purchasers acknowledge that the staff of the Commission
has taken the position that any broker-dealer that elects to exchange Initial
Notes that were acquired by such broker-dealer for its own account as a result
of market-making or other trading activities for Exchange Notes in the Exchange
Offer (a “Participating Broker-Dealer”) may be deemed to be an “underwriter”
within the meaning of the Securities Act and must deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Notes (other than a resale of an unsold allotment resulting from the
original offering of the Initial Notes).

     

    The
Issuer and the Initial Purchasers also acknowledge that the staff of the
Commission has taken the position that if the Prospectus contained in the
Exchange Offer Registration Statement includes a plan of distribution containing
a statement to the above effect and the means by which Participating
Broker-Dealers may resell the Exchange Notes, without naming the Participating
Broker-Dealers or specifying the amount of Exchange Notes owned by them, such
Prospectus may be delivered by Participating Broker-Dealers to satisfy their
prospectus delivery obligations under the Securities Act in connection with
resales of Exchange Notes for their own accounts, so long as the Prospectus
otherwise meets the requirements of the Securities Act.

     

    In light
of the foregoing, if requested by a Participating Broker-Dealer (a “Requesting
Participating Broker-Dealer”), the Issuer agrees to use its reasonable best
efforts to keep the Exchange Offer Registration Statement continuously effective
for a period of 180 days after the date on which the Exchange Registration
Statement is declared effective, or such longer period if extended pursuant to
the last paragraph of Section 5 hereof (such period, the “Applicable Period”),
or such earlier date as all Requesting Participating Broker-Dealers shall have
notified the Issuer in writing that such Requesting Participating Broker-Dealers
have resold all Exchange Notes acquired in the Exchange Offer.  The
Issuer shall include a plan of distribution in such Exchange Offer Registration
Statement that meets the requirements set forth in the preceding
paragraph.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    For each
Initial Note surrendered in the Exchange Offer, the Holder will receive an
Exchange Note having a principal amount equal to that of the surrendered Initial
Note.  Interest on each Exchange Note issued pursuant to the Exchange
Offer will accrue from the last interest payment date on which interest was paid
on the Initial Notes surrendered in exchange therefor or, if no interest has
been paid on the Initial Notes, from the Issue Date.

     

    Upon
consummation of the Exchange Offer in accordance with this Section 2, the Issuer
shall have no further registration obligations other than the Issuer’s
continuing registration obligations with respect to (i) Exchange Notes held by
Participating Broker-Dealers and (ii) Initial Notes or Exchange
Notes  as to which clause (c)(3) of this Section 2
applies.

     

    In
connection with the Exchange Offer, the Issuer shall:

     

    (1)       mail
or cause to be mailed to each Holder entitled to participate in the Exchange
Offer a copy of the Prospectus forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of transmittal and related
documents;

     

    (2)        utilize
the services of a depositary for the Exchange Offer with an address in the
Borough of Manhattan, The City of New York;

     

    (3)        permit
Holders to withdraw tendered Initial Notes at any time prior to the close of
business, New York time, on the last Business Day on which the Exchange Offer
shall remain open; and

     

    (4)        otherwise
comply in all material respects with all applicable laws, rules and
regulations.

     

    As soon
as practicable after the close of the Exchange Offer, if any, the Issuer
shall:

     

    (1)        accept
for exchange all Initial Notes validly tendered and not validly withdrawn by the
Holders pursuant to the Exchange Offer, if any;

     

    (2)        deliver
or cause to be delivered to the Trustee for cancellation all Initial Notes so
accepted for exchange; and

     

    (3)        cause
the Trustee to authenticate and deliver promptly to each such Holder of Initial
Notes or Exchange Notes, as the case may be, Exchange Notes equal in principal
amount to the Registrable Notes of such Holder so accepted for
exchange.

     

    The
Exchange Offer shall not be subject to any conditions, other than that (i) the
Exchange Offer does not violate applicable law or any applicable interpretation
of the staff of the Commission, (ii) no action or proceeding shall have been
instituted or threatened in any court or by any governmental agency which might
materially impair the ability of the Issuer to proceed with the Exchange Offer,
and no material adverse development shall have occurred in any existing action
or proceeding with respect to the Issuer and (iii) all governmental approvals
shall have been obtained, which approvals the Issuer deems necessary for the
consummation of the Exchange Offer.

    
      
         

      

      
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    The
Exchange Notes shall be issued under (i) the Indenture or (ii) an indenture
identical in all material respects to the Indenture (in either case, with such
changes as are necessary to comply with any requirements of the Commission to
effect or maintain the qualification thereof under the TIA) and which, in either
case, has been qualified under the TIA and shall provide that the Exchange Notes
shall not be subject to the transfer restrictions set forth in the
Indenture.  The Indenture or such indenture shall provide that the
Exchange Notes and the Initial Notes shall vote and consent together on all
matters as one class and that neither the Exchange Notes nor the Initial Notes
will have the right to vote or consent as a separate class on any
matter.

     

    (c)        In
the event that:

     

    (1)        any
changes in law or the applicable interpretations of the staff of the Commission
do not permit the Issuer to effect the Exchange Offer;

     

    (2)        for
any reason the Exchange Offer is not consummated within 310 days of the Issue
Date;

     

    (3)        a
Holder notifies the Company following consummation of the Exchange Offer that
Initial Notes held by it are not eligible to be exchanged for Exchange Notes in
the Exchange Offer; or

     

    (4)        any
Holder is prohibited by law or the applicable interpretations of the staff of
the Commission from participating in the Exchange Offer or does not receive
Exchange Notes on the date of the exchange that may be sold without restriction
under state and federal securities laws (other than due solely to the status of
such holder as an affiliate of the Issuer within the meaning of the Securities
Act).

     

    (each
such event referred to in clauses (1) through (4) of this sentence, a “Shelf
Filing Event”), then the Issuer shall undertake a Shelf Registration pursuant to
Section 3 hereof; provided, however, that the filing of a Shelf Registration
Statement as a result of a Shelf Filing Event pursuant to clause (2) of this
sentence shall not affect the Issuer’s obligation to consummate the Exchange
Offer as promptly as practicable.

     

    Section
3.           Shelf
Registration.

     

    If at any
time a Shelf Filing Event shall occur, then:

     

    (a)        The
Issuer shall file promptly, but in any event within 30 days of notice of the
Shelf Filing Event (the “Filing Date”), with the Commission a Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415
covering all of the Registrable Notes not exchanged in the Exchange Offer and
Exchange Notes as to which Section 2(c)(3) is applicable (the “Shelf
Registration”).  The Shelf Registration shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings).  The Issuer
shall not permit any securities other than the Registrable Notes to be included
in the Shelf Registration.

     

    (b)        The
Issuer shall use its reasonable best efforts:

    
      
         

      

      
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    (1)        in
the case of Section 2(c)(1) above, to cause the Shelf Registration Statement to
be declared effective under the Securities Act on or prior to the 270th day
after the Issue Date;

     

    (2)        in
the case of Sections 2(c)(2), (3) or  (4) above, to cause the Shelf
Registration Statement to be declared effective under the Securities Act on or
prior to the 180th day after Filing Date; and

     

    (3)        to
keep the Shelf Registration Statement effective until the earliest of (A) the
time when the Initial Notes covered by the Shelf Registration Statement can be
sold pursuant to Rule 144 without any limitation under clause (c), (e), (f) and
(h) of Rule 144, (B) two years from the Issue Date and (c) the date on which all
Initial Notes registered thereunder are disposed of in accordance therewith
subject to extension pursuant to the penultimate paragraph of Section 5 hereof
(the “Effectiveness Period”); provided, however, that (i) the Effectiveness
Period in respect of the Shelf Registration shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174 under the Securities Act and as otherwise provided
herein and (ii) the Issuer may suspend the effectiveness of the Shelf
Registration Statement by written notice to the Holders solely as a result of
the filing of a post-effective amendment to the Shelf Registration Statement to
incorporate annual audited financial information with respect to the Issuer
where such post-effective amendment is not yet effective and needs to be
declared effective to permit Holders to use the related Prospectus, provided
that the Effectiveness Period in respect of the Shelf Registration shall be
extended by such number of days for which effectiveness is suspended under this
clause (ii).

     

    (c)        Supplements and
Amendments.  The Issuer agrees to supplement or make amendments
to the Shelf Registration Statement as and when required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, or if reasonably requested by the Holders of
a majority in aggregate principal amount of the Registrable Notes covered by
such Registration Statement or by any underwriter of such Registrable
Notes.

     

    Section
4.          Liquidated Damages and
Specific Performance.

     

    (a)        The
Issuer and the Initial Purchasers agree that the Holders will suffer damages if
the Issuer fails to fulfill its obligations under Section 2 or Section 3 hereof
and that it would not be feasible to ascertain the extent of such damages with
precision.  Accordingly, the Issuer agrees that, in addition to the
remedies set forth in Section 4(c) hereof, if:

     

    (1)        the
Exchange Offer Registration Statement is not declared effective by the
Commission on or prior to the 270th day following the Issue Date or, if that day
is not a Business Day, the next day that is a Business Day;

     

    (2)        the
Exchange Offer is not consummated on or prior to the 40th day following the date
on which the Exchange Offer Registration Statement is declared
effective;

    
      
         

      

      
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    (3)        a
Shelf Registration Statement required to be filed pursuant to Section 2(c)(2),
(3) or (4) is not filed on or prior to the 90th day following the Shelf Filing
Event (the “Shelf Filing Date”), or, if that day is not a Business Day, the next
day that is a Business Day;

     

    (4)        a
Shelf Registration Statement that is either (x) required to be filed pursuant to
Section 2(c)(1) is not declared effective by the 270th day after the Issue Date
(or if such day is not a Business Day, the next day that is a Business Day), or
(y) required to be filed pursuant to Section 2(c)(2), (3) or (4) is not declared
effective by the 90th day after the Shelf Filing Date (or, if such day is not a
Business Day, the next day that is a Business Day) or (z) in the case of (x) or
(y) of this clause is declared effective by such date but thereafter ceases to
be effective or usable, except if the Shelf Registration ceases to be effective
or usable as specifically permitted by the penultimate paragraph of Section 5
hereof in respect of Delay Periods, as defined in such paragraph;
or

     

    (5)        the
Shelf Registration Statement does not remain continuously effective for the
Effectiveness Period (save and except for any Delay Periods)

     

    (each
such event referred to in clauses (1) through (6) a “Registration Default”),
liquidated damages in the form of additional cash interest (“Liquidated
Damages”) will accrue on the affected Initial Notes and the affected Exchange
Notes, as applicable.  The rate of Liquidated Damages will be 0.25%
per annum for the first 90-day period immediately following the occurrence of a
Registration Default, increasing by an additional 0.25% per annum with respect
to each subsequent 90-day period up to a maximum amount of additional interest
of 1.00% per annum, during the period (the “Default Period”) from and including
the date on which any such Registration Default shall occur to, but excluding,
the earlier of (1) the date on which all Registration Defaults have been cured
or (2) the date on which all the Initial Notes and Exchange Notes otherwise
become freely transferable by Holders other than affiliates of the Issuer
without further registration under the Securities Act; provided that if, after
the Liquidated Damages cease to be payable in accordance with clause (2) above
as a result of the Initial Notes and Exchange Notes becoming freely
transferable, the Initial Notes or Exchange Notes cease to be freely
transferable by such Holders for any reason, Liquidated Damages shall
immediately become payable again, subject to a new Default Period beginning from
and including the day on which the Initial Notes or Exchange
Notes  became subject to such restrictions and continuing until the
occurrence of either (1) or (2) above.

     

    Notwithstanding
the foregoing, (1) the amount of Liquidated Damages payable shall not increase
more than by the foregoing rates because more than one Registration Default has
occurred and is pending and (2) a Holder of Initial Notes or Exchange Notes who
is not entitled to the benefits of the Shelf Registration Statement (i.e., such Holder has not
elected to include information) shall not be entitled to Liquidated Damages with
respect to a Registration Default that pertains to the Shelf Registration
Statement.

    
      
         

      

      
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    (b)        So
long as Initial Notes remain outstanding, the Issuer shall notify the Trustee
within five Business Days after each and every date on which an event occurs in
respect of which Liquidated Damages is required to be paid.  Any
amounts of Liquidated Damages due pursuant to clauses (a)(1), (a)(2) or (a)(3)
of this Section 4 will be payable in cash semi-annually on each June 1 and
December 1 (each a “Damages Payment Date”), commencing with the first such date
occurring after any such Liquidated Damages commence to accrue, to Holders to
whom regular interest is payable on such Damages Payment Date with respect to
Initial Notes that are Registrable Notes.  The amount of Liquidated
Damages for Registrable Notes will be determined by multiplying the applicable
rate of Liquidated Damages by the aggregate principal amount of all such
Registrable Notes outstanding on the Damages Payment Date following such
Registration Default in the case of the first such payment of Liquidated Damages
with respect to a Registration Default (and thereafter at the next succeeding
Damages Payment Date until the cure of such Registration Default), multiplied by
a fraction, the numerator of which is the number of days such Liquidated Damages
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed), and the denominator of which is
360.

     

    Section
5.          Registration
Procedures.

     

    In
connection with the filing of any Registration Statement pursuant to Section 2
or 3 hereof, the Issuer shall effect such registrations to permit the sale of
the securities covered thereby in accordance with the intended method or methods
of disposition thereof, and pursuant thereto and in connection with any
Registration Statement filed by the Issuer hereunder, the Issuer
shall:

     

    (a)        Prepare
and file with the Commission the Registration Statement or Registration
Statements prescribed by Section 2 or 3 hereof, and use its reasonable best
efforts to cause each such Registration Statement to become effective and remain
effective as provided herein; provided, however, that if (1) such filing is
pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange
Offer Registration Statement filed pursuant to Section 2 hereof is required to
be delivered under the Securities Act by any Participating Broker-Dealer who
seeks to sell Exchange Notes during the Applicable Period relating thereto,
before filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Issuer shall furnish to and afford the Holders of the
Registrable Notes covered by such Registration Statement or each such
Participating Broker-Dealer, as the case may be, its counsel (if such counsel is
known to the Issuer) and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed (in each case at least five Business Days prior to such
filing or such later date as is reasonable under the
circumstances).  The Issuer shall not file any Registration Statement
or Prospectus or any amendments or supplements thereto if the Holders of a
majority in aggregate principal amount of the Registrable Notes covered by such
Registration Statement, or any such Participating Broker-Dealer, as the case may
be, its counsel, or the managing underwriters, if any, shall reasonably object
on a timely basis.

     

    (b)       Prepare
and file with the Commission such amendments and post-effective amendments to
each Shelf Registration Statement or Exchange Offer Registration Statement, as
the case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable Period, as
the case may be, subject to any Delay Periods; cause the related Prospectus to
be supplemented by any Prospectus supplement required by applicable law, and as
so supplemented to be filed pursuant to Rule 424 (or any similar provisions then
in force) promulgated under the Securities Act; and comply with the provisions
of the Securities Act and the Exchange Act applicable to it with respect to the
disposition of all securities covered by such Registration Statement as so
amended or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus, in each case, in accordance with the intended
methods of distribution set forth in such Registration Statement or Prospectus,
as so amended.

    
      
         

      

      
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    (c)        If
(1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto from whom the Issuer has received written
notice that such Broker-Dealer will be a Participating Broker-Dealer in the
applicable Exchange Offer, notify the selling Holders of Registrable Notes, or
each such Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, as promptly as possible, and, if requested by any
such Person, confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole expense
of the Issuer, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits), (ii) of
the issuance by the Commission of any stop order suspending the effectiveness of
a Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that purpose,
(iii) if at any time when a Prospectus is required by the Securities Act to be
delivered in connection with sales of the Registrable Notes or resales of
Exchange Notes by Participating Broker-Dealers, the representations and
warranties of the Issuer contained in any agreement (including any underwriting
agreement) contemplated by Section 5(m)(i) hereof cease to be true and correct
in all material respects, (iv) of the receipt by the Issuer of any notification
with respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable Notes or the
Exchange Notes  for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition or any information
becoming known to the Issuer that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in or amendments or supplements to such
Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Issuer’s determination that a
post-effective amendment to a Registration Statement would be
appropriate.

    
      
         

      

      
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    (d)       If
(1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Notes
or the Exchange Notes, as the case may be, for sale in any jurisdiction, and, if
any such order is issued, to use its reasonable best efforts to obtain the
withdrawal of any such order at the earliest practicable moment.

     

    (e)        If
(1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period and if reasonably requested by the managing underwriter or
underwriters (if any), the Holders of a majority in aggregate principal amount
of the Registrable Notes covered by such Registration Statement or any
Participating Broker-Dealer, as the case may be, (i) promptly incorporate in
such Registration Statement or Prospectus a prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters (if any), such Holders or any Participating Broker-Dealer, as the
case may be (based upon advice of counsel), determine is reasonably necessary to
be included therein and (ii) make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the
Issuer has received notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment; provided, however, that the
Issuer shall not be required to take any action hereunder that would, in the
written opinion of counsel to the Issuer, violate applicable laws.

     

    (f)        If
(1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, furnish to each selling Holder of Registrable Notes or each
such Participating Broker-Dealer, as the case may be, who so requests, its
counsel and each managing underwriter, if any, at the sole expense of the
Issuer, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits.

     

    (g)       If
(1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, deliver to each selling Holder of Registrable Notes or each
such Participating Broker-Dealer, as the case may be, its respective counsel,
and the underwriters, if any, at the sole expense of the Issuer, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request; and,
subject to the last paragraph of this Section 5, the Issuer hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and
dealers (if any), in connection with the offering and sale of the Registrable
Notes covered by, or the sale by Participating Broker-Dealers of the Exchange
Notes  pursuant to, such Prospectus and any amendment or supplement
thereto.

    
      
         

      

      
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    (h)       Prior
to any public offering of Registrable Notes or Exchange Notes or any delivery of
a Prospectus contained in the Exchange Offer Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its reasonable best efforts to register or qualify, and
to cooperate with the selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing underwriter or
underwriters, if any, and its respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes or Exchange Notes , as the case may be,
for offer and sale under the securities or state “blue sky” laws of such
jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters reasonably request;
provided, however, that where Exchange Notes or Registrable Notes are offered
other than through an underwritten offering, the Issuer agrees to use its
reasonable best efforts to cause the Issuer’s counsel to perform Blue Sky
investigations and file registrations and qualifications required to be filed
pursuant to this Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of such
Exchange Notes or Registrable Notes covered by the applicable Registration
Statement; provided, however, that the Issuer shall not be required to (A)
qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C) subject
itself to taxation in excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.

     

    (i)         If
a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the
selling Holders of Registrable Notes and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Notes to be sold, which certificates shall
not bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and enable such Registrable Notes to be in
such denominations and registered in such names as the managing underwriter or
underwriters, if any, or selling Holders may request at least five Business Days
prior to any sale of such Registrable Notes or Exchange Notes.

     

    (j)         Use
its reasonable best efforts to cause the Registrable Notes or Exchange
Notes  covered by any Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be reasonably
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable Notes or
Exchange Notes, except as may be required solely as a consequence of the nature
of such selling Holder’s business, in which case the Issuer will cooperate in
all reasonable respects with the filing of such Registration Statement and the
granting of such approvals.

    
      
         

      

      
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    (k)        If
(1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, upon the occurrence of any event contemplated by Section
5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to
Section 5(a) and the penultimate paragraph of this Section 5) file with the
Commission, at the sole expense of the Issuer, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Notes being sold thereunder or to the
purchasers of the Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

     

    (l)        
Prior to the effective date of the first Registration Statement relating to the
Registrable Notes, (i) provide the Trustee with certificates for the Registrable
Notes in a form eligible for deposit with The Depository Trust Company and (ii)
provide CUSIP numbers for the Registrable Notes.

     

    (m)       In
connection with any underwritten offering of Registrable Notes pursuant to a
Shelf Registration, enter into an underwriting agreement as is customary in
underwritten offerings of debt securities similar to the Initial Notes and take
all such other actions as are reasonably requested by the managing underwriter
or underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Notes and, in such connection, (i) make such
representations and warranties to, and covenants with, the underwriters with
respect to the business of the Issuer and its subsidiaries, as then conducted
(including any acquired business, properties or entity, if applicable), and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are customarily made
by issuers to underwriters in underwritten offerings of debt securities similar
to the Initial Notes, and confirm the same in writing if and when requested;
(ii) use its reasonable best efforts to obtain the written opinions of counsel
to the Issuer and written updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by the managing underwriter or underwriters; (iii) use its reasonable
best efforts to obtain “cold comfort” letters and updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the Issuer
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Issuer or of any business acquired by the Issuer for which
financial statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in “cold comfort” letters in connection with
underwritten offerings; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement and the managing
underwriter or underwriters or agents) with respect to all parties to be
indemnified pursuant to said Section; provided that the Issuer shall not be
required to provide indemnification to any underwriter selected in accordance
with the provisions of Section 9 hereof with respect to information relating to
such underwriter furnished in writing to the Issuer by or on behalf of such
underwriter expressly for inclusion in such Registration
Statement.  The above shall be done at each closing under such
underwriting agreement, or as and to the extent required
thereunder.

    
      
         

      

      
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    (n)       If
(1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant
to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, make available for inspection by any selling Holder of such
Registrable Notes being sold or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent retained
by any such selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the “Inspectors”), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and instruments of the Issuer and its
subsidiaries (collectively, the “Records”) as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Issuer and its subsidiaries to
supply all information reasonably requested by any such Inspector in connection
with such Registration Statement and Prospectus.  Each Inspector shall
agree in writing that it will keep the Records confidential and that it will not
disclose, or use in connection with any market transactions in violation of any
applicable securities laws, any Records that the Issuer determines, in good
faith, to be confidential and that it notifies the Inspectors in writing are
confidential unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration Statement or Prospectus,
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (iii) disclosure of such
information is necessary or advisable in the opinion of counsel for an Inspector
in connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and arising out
of, based upon, relating to, or involving this Agreement or the Purchase
Agreement, or any transactions contemplated hereby or thereby or arising
hereunder or thereunder, or (iv) the information in such Records has been made
generally available to the public; provided, however, that (i) each Inspector
shall agree to use reasonable best efforts to provide notice to the Issuer of
the potential disclosure of any information by such Inspector pursuant to clause
(i), (ii) or (iii) of this sentence to permit the Issuer to obtain a protective
order (or waive the provisions of this paragraph (n)) and (ii) each such
Inspector shall take such actions as are reasonably necessary to protect the
confidentiality of such information (if practicable) to the extent such action
is otherwise not inconsistent with, an impairment of or in derogation of the
rights and interests of the Holder or any Inspector.

     

    (o)       Provide
an indenture trustee for the Registrable Notes or the Exchange Notes , as the
case may be, and cause the Indenture or the indenture provided for in Section
2(a) hereof to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the
Registrable Notes; and in connection therewith, cooperate with the trustee under
any such indenture and the Holders of the Registrable Notes or Exchange Notes,
as applicable, to effect such changes to such indenture as may be required for
such indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use its reasonable best efforts to cause such trustee to execute,
all documents as may be required to effect such changes, and all other forms and
documents required to be filed with the Commission to enable such indenture to
be so qualified in a timely manner.

    
      
         

      

      
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    (p)       Comply
with all applicable rules and regulations of the Commission and make generally
available to the Issuer’s security holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of any fiscal
quarter in which Registrable Notes or Exchange Notes  are sold to
underwriters in a firm commitment or best efforts underwritten offering and (ii)
if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Issuer after the effective date of a
Registration Statement, which statements shall cover said 12-month periods
consistent with the requirements of Rule 158.

     

    (q)       If
the Exchange Offer is to be consummated, upon delivery of the Registrable Notes
by Holders to the Issuer (or to such other Person as directed by the Issuer) in
exchange for the Exchange Notes, mark, or cause to be marked, on such
Registrable Notes that such Registrable Notes are being cancelled in exchange
for the Exchange Notes; provided that in no event shall such Registrable Notes
be marked as paid or otherwise satisfied.

     

    (r)        Cooperate
with each seller of Registrable Notes covered by any Registration Statement and
each underwriter, if any, participating in the disposition of such Registrable
Notes and their respective counsel in connection with any filings required to be
made with FINRA.

     

    (s)        Use
its reasonable best efforts to take all other steps reasonably necessary or
advisable to effect the registration of the Exchange Notes and/or Registrable
Notes covered by a Registration Statement contemplated hereby.

     

    The
Issuer may require each seller of Registrable Notes or Exchange Notes as to
which any registration is being effected to furnish to the Issuer such
information regarding such seller and the distribution of such Registrable Notes
or Exchange Notes  as the Issuer may, from time to time, reasonably
request.  The Issuer may exclude from such registration the
Registrable Notes of any seller so long as such seller fails to furnish such
information within a reasonable time after receiving such request and in the
event of such an exclusion, the Issuer shall have no further obligation under
this Agreement (including, without limitation, the obligations under Section 4)
with respect to such seller or any subsequent Holder of such Registrable
Notes.  Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Issuer all information required to be
disclosed in order to make any information previously furnished to the Issuer by
such seller not materially misleading.

     

    If any
such Registration Statement refers to any Holder by name or otherwise as the
holder of any securities of the Issuer, then such Holder shall have the right to
require (i) the insertion therein of language, in form and substance reasonably
satisfactory to such Holder, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation by such Holder of the
investment quality of the securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Issuer, or (ii) in the event that such reference to such
Holder by name or otherwise is not required by the Securities Act or any similar
federal statute then in force, the deletion of the reference to such Holder in
any amendment or supplement to the applicable Registration Statement filed or
prepared subsequent to the time that such reference ceases to be
required.

    
      
         

      

      
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    Each
Holder of Registrable Notes and each Participating Broker-Dealer agrees by
acquisition of such Registrable Notes or Exchange Notes  that, upon
actual receipt of any notice from the Issuer (x) of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv), or 5(c)(v)
hereof, or (y) that the Board of Directors of the Issuer (the “Board of
Directors”) has resolved that the Issuer has a bona fide business purpose for
doing so, then the Issuer may delay the filing or the effectiveness of the
Exchange Offer Registration Statement or the Shelf Registration Statement (if
not then filed or effective, as applicable) and shall not be required to
maintain the effectiveness thereof or amend or supplement the Exchange Offer
Registration Statement or the Shelf Registration, in all cases, for a period (a
“Delay Period”) expiring upon the earlier to occur of (i) in the case of the
immediately preceding clause (x), such Holder’s or Participating Broker-Dealer’s
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(k) hereof or until it is advised in writing (the “Advice”) by the
Issuer that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto or (ii) in the case of
the immediately preceding clause (y), the date which is the earlier of (A) the
date on which such business purpose ceases to interfere with the Issuer’s
obligations to file or maintain the effectiveness of any such Registration
Statement pursuant to this Agreement or (B) 60 days after the Issuer notifies
the Holders of such good faith determination.  There shall not be more
than 60 days of Delay Periods during any 12-month period.  Each of the
Effectiveness Period and the Applicable Period, if applicable, shall be extended
by the number of days during any Delay Period.

     

    In the
event of any Delay Period pursuant to clause (y) of the preceding paragraph,
notice shall be given as soon as practicable after the Board of Directors makes
such a determination of the need for a Delay Period and shall state, to the
extent practicable, an estimate of the duration of such Delay Period and shall
advise the recipient thereof of the agreement of such Holder provided in the
next succeeding sentence.  Each Holder, by his acceptance of any
Registrable Note, agrees that during any Delay Period, each Holder will
discontinue disposition of such Initial Notes or Exchange Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be.

    
      
         

      

      
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    Section
6.          Registration
Expenses.

     

    All fees
and expenses incident to the performance of or compliance with this Agreement by
the Issuer (other than any underwriting discounts or commissions and transfer
taxes) shall be borne by the Issuer, whether or not the Exchange Offer
Registration Statement or the Shelf Registration is filed or becomes effective
or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with FINRA in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of an Exchange Offer, or (y) as provided in Section 5(h) hereof, in the
case of a Shelf Registration or in the case of Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing
expenses, including, without limitation, expenses of printing certificates for
Registrable Notes or Exchange Notes in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by the managing underwriter or underwriters, if any,
or by the Holders of a majority in aggregate principal amount of the Registrable
Notes included in any Registration Statement or in respect of Exchange Notes to
be sold by any Participating Broker-Dealer during the Applicable Period, as the
case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Issuer and reasonable fees and disbursements of
one special counsel for all of the sellers of Registrable Notes (which shall be
reasonably acceptable to the Issuer) (exclusive of any counsel retained pursuant
to Section 7 hereof), (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(m)(iii) hereof (including, without
limitation, the expenses of any special audit and “cold comfort” letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Issuer desires such insurance, (vii) fees and expenses of all
other Persons retained by the Issuer, (viii) internal expenses of the Issuer
(including, without limitation, all salaries and expenses of officers and
employees of the Issuer performing legal or accounting duties), (ix) the expense
of any annual audit, (x) the fees and expenses incurred in connection with the
listing of the securities to be registered on any securities exchange, and the
obtaining of a rating of the securities, in each case, if applicable, and (xi)
the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, indentures and any other
documents necessary in order to comply with this
Agreement.  Notwithstanding the foregoing or anything to the contrary,
each Holder shall pay all underwriting discounts and commissions of any
underwriters with respect to any Registrable Notes sold by or on behalf of
it.

     

    Section
7.          Indemnification.

     

    (a)        The
Issuer agrees to indemnify and hold harmless, to the extent permitted by law,
each Holder of Registrable Notes and each Participating Broker-Dealer selling
Exchange Notes  during the Applicable Period, each Person, if any, who
controls any such Person within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, the agents, employees, officers and
directors of each Holder and each such Participating Broker-Dealer and the
agents, employees, officers and directors of any such controlling Person (each,
a “Participant”) from and against any and all losses, liabilities, claims,
damages and expenses (including, but not limited to, reasonable attorneys’ fees
and any and all reasonable out-of-pocket expenses actually incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable amounts paid in
settlement of any claim or litigation (in the manner set forth in clause (c)
below)) (collectively, “Losses”) to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise insofar as such Losses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) or Prospectus (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by, arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the case of
the Prospectus, in the light of the circumstances under which they were made,
not misleading, provided that (i) the foregoing indemnity shall not be available
to any Participant insofar as such Losses are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to such Participant furnished to the Issuer
in writing by or on behalf of such Participant expressly for use therein, and
(ii) that the foregoing indemnity with respect to any Prospectus shall not inure
to the benefit of any Participant from whom the Person asserting such Losses
purchased Registrable Notes if (x) it is established in the related proceeding
that such Participant failed to send or give a copy of the Prospectus (as
amended or supplemented if such amendment or supplement was furnished to such
Participant prior to the written confirmation of such sale) to such Person with
or prior to the written confirmation of such sale, if required by applicable
law, and (y) the untrue statement or omission or alleged untrue statement or
omission was completely corrected in the Prospectus (as amended or supplemented
if amended or supplemented as aforesaid) and such Prospectus does not contain
any other untrue statement or omission or alleged untrue statement or omission
that was the subject matter of the related proceeding.  This indemnity
agreement will be in addition to any liability that the Issuer may otherwise
have, including, but not limited to, liability under this
Agreement.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    (b)       Each
Participant agrees, severally and not jointly, to indemnify and hold harmless
(in the same manner and to the same extent set forth in subsection 7(a)) the
Issuer, each Person, if any, who controls the Issuer within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and each
of its agents, employees, officers and directors and the agents, employees,
officers and directors of any such controlling Person from and against any
Losses to which they or any of them may become subject under the Securities Act,
the Exchange Act or otherwise insofar as such Losses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any
amendment thereto) or Prospectus (as amended or supplemented if the Issuer shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the case of the Prospectus, in the
light of the circumstances under which they were made, not misleading, in each
case to the extent, but only to the extent, that any such Loss arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information
relating to such Participant furnished in writing to the Issuer by or on behalf
of such Participant expressly for use therein.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (c)        Promptly
after receipt by an indemnified party under subsection 7(a) or 7(b) above of
notice of the commencement of any action, suit or proceeding (collectively, an
“action”), such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement of
such action (but the failure so to notify an indemnifying party shall not
relieve such indemnifying party from any liability that it may have under this
Section 7 except to the extent that it has been prejudiced in any material
respect by such failure).  In case any such action is brought against
any indemnified party, and it notifies an indemnifying party of the commencement
of such action, the indemnifying party will be entitled to participate in such
action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense of such action with counsel
satisfactory to such indemnified party.  Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such action, but the reasonable fees and expenses of
such counsel shall be at the expense of such indemnified party or parties unless
(i) the employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) the named parties to such action (including any impleaded
parties) include such indemnified party and the indemnifying party or parties
(or such indemnifying parties have assumed the defense of such action), and such
indemnified party or parties shall have reasonably concluded, that counsel
selected by the indemnifying party has a conflict of interest in representing
both the indemnifying party and the indemnified party (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such reasonable fees and expenses of counsel shall be borne by the indemnifying
parties.  In no event shall the indemnifying party be liable for the
fees and expenses of more than one counsel (together with appropriate local
counsel) at any time for all indemnified parties in connection with any one
action or separate but substantially similar or related actions arising in the
same jurisdiction out of the same general allegations or
circumstances.  Any such separate firm for the Participants shall be
designated in writing by Participants who sold a majority in interest of
Registrable Notes sold by all such Participants and shall be reasonably
acceptable to the Issuer and any such separate firm for the Issuer, its
affiliates, officers, directors, representatives, employees and agents and such
control Person of the Issuer shall be designated in writing by the Issuer and
shall be reasonably acceptable to the Holders.  An indemnifying party
shall not be liable for any settlement of any claim or action effected without
its written consent, which consent may not be unreasonably
withheld.  No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.

     

    (d)        In
order to provide for contribution in circumstances in which the indemnification
provided for in this Section 7 is for any reason held to be unavailable from the
indemnifying party, or is insufficient to hold harmless a party indemnified
under this Section 7, each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such aggregate Losses
(i) in such proportion as is appropriate to reflect the relative benefits
received by each indemnifying party, on the one hand, and each indemnified
party, on the other hand, from the sale of the Initial Notes to the Initial
Purchasers or the resale of the Registrable Notes by such Holder, as applicable,
or (ii) if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnified party, on
the one hand, and each indemnifying party, on the other hand, in connection with
the statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations.  The relative benefits received by
the Issuer, on the one hand, and each Participant, on the other hand, shall,
with respect to the Initial Notes, be deemed to be in the same proportion as (x)
the total proceeds from the sale of the Initial Notes to the Initial Purchasers
(net of discounts and commissions but before deducting expenses) received by the
Issuer are to (y) the total net profit received by such Participant in
connection with the sale of the Registrable Notes.  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
Issuer or such Participant and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission
or alleged statement or omission.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    (e)        The
parties agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to above.  Notwithstanding the provisions of this Section 7,
(i) in no case shall any Participant be required to contribute any amount in
excess of the amount by which the net profit received by such Participant in
connection with the sale of the Registrable Notes exceeds the amount of any
damages that such Participant has otherwise been required to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission and (ii)
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.  Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made against another party or parties under this Section 7, notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise, except to the extent that it has been prejudiced in any
material respect by such failure; provided, however, that no additional notice
shall be required with respect to any action for which notice has been given
under this Section 7 for purposes of indemnification.  Anything in
this section to the contrary notwithstanding, no party shall be liable for
contribution with respect to any action or claim settled without its written
consent, provided, however, that such written consent was not unreasonably
withheld.

     

    Section
8.          Rules 144 and
144A.

     

    The
Issuer covenants that it will file the reports required, if any, to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Issuer is not required to file such reports, it will, upon the request of any
Holder or beneficial owner of Registrable Notes, make available such information
necessary to permit sales pursuant to Rules 144 and 144A under the Securities
Act.  The Issuer further covenants that for so long as any Registrable
Notes remain outstanding it will take such further action as any Holder of
Registrable Notes may reasonably request from time to time to enable such Holder
to sell Registrable Notes without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 and Rule 144A under
the Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission.

     

    Section
9.          Underwritten
Registrations.

     

    If any of
the Registrable Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will manage the offering will be selected by the Holders of a
majority in aggregate principal amount of such Registrable Notes included in
such offering and shall be reasonably acceptable to the Issuer.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    No Holder
of Registrable Notes may participate in any underwritten registration hereunder
if such Holder does not (a) agree to sell such Holder’s Registrable Notes on the
basis provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) complete and execute all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting
arrangements.

     

    Section
10.        Miscellaneous.

     

    (a)        No Inconsistent
Agreements.  The Issuer has not, as of the date hereof, and
shall not have, after the date of this Agreement, entered into any agreement
with respect to any of its securities that is inconsistent with the rights
granted to the Holders of Registrable Notes in this Agreement or otherwise
conflicts with the provisions hereof.  The rights granted to the
Holders hereunder do not conflict with and are not inconsistent with, in any
material respect, the rights granted to the holders of any of the Issuer’s other
issued and outstanding securities under any such agreements.  The
Issuer has not entered and will not enter into any agreement with respect to any
of its securities which will grant to any Person piggy-back registration rights
with respect to any Registration Statement.

     

    (b)       Adjustments Affecting
Registrable Notes.  The Issuer shall not, directly or
indirectly, take any action with respect to the Registrable Notes as a class
that would adversely affect the ability of the Holders of Registrable Notes to
include such Registrable Notes in a registration undertaken pursuant to this
Agreement.

     

    (c)        Amendments and
Waivers.  The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given except pursuant to a written agreement duly
signed and delivered by (1) the Issuer and (2)(A) the Holders of not less than a
majority in aggregate principal amount of the then outstanding Registrable Notes
and (B) in circumstances that would adversely affect the Participating
Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Notes held by all
Participating Broker-Dealers; provided, however, that Section 7 and this Section
10(c) may not be amended, modified or supplemented except pursuant to a written
agreement duly signed and delivered by the Issuer and each Holder and each
Participating Broker-Dealer (including any Person who was a Holder or
Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case
may be, disposed of pursuant to any Registration Statement) affected by any such
amendment, modification, supplement or waiver.  Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable
Notes whose securities are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect, impair, limit or compromise the
rights of other Holders of Registrable Notes may be given by Holders of at least
a majority in aggregate principal amount of the Registrable Notes being sold
pursuant to such Registration Statement.

     

    (d)       Notices.  All
notices and other communications (including, without limitation, any notices or
other communications to the Trustee) provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, next-day air
courier or telecopier:

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    (1)        if
to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the
most current address of such Holder or Participating Broker-Dealer, as the case
may be, set forth on the records of the registrar under the
Indenture.

     

    
      (2)        if to the
Issuer, at the address as follows:

    

     

     
Energy XXI Gulf Coast, Inc.

      Suite
2626

      1021
Main

      Houston,
Texas 77002

      Telephone:
713-351-3000

      Facsimile:
713-351-3300

      Attention:
David West Griffin, Chief Financial Officer

     

    
      (3)        if to the
Initial Purchasers, at the address set forth in the Purchase
Agreement.

    

     

    All such
notices and communications shall be deemed to have been duly
given:  when delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by the recipient’s telecopier machine, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.

     

    Copies of
all such notices, demands or other communications shall be concurrently
delivered by the Person giving the same to the Trustee at the address and in the
manner specified in such Indenture.

     

    (e)        Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto, the
Holders and the Participating Broker-Dealers; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign holds
Registrable Notes.

     

    (f)        Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

     

    (g)       Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    (h)       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.

     

    (i)         Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction.  It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.

     

    (j)         Securities Held by the
Issuer or Its Affiliates.  Whenever the consent or approval of
Holders of a specified percentage of Registrable Notes is required hereunder,
Registrable Notes held by the Issuer or any of its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.

     

    (k)        Third-Party
Beneficiaries.  Holders and beneficial owners of Registrable
Notes and Participating Broker-Dealers are intended third-party beneficiaries of
this Agreement, and this Agreement may be enforced by such
Persons.  No other Person is intended to be, or shall be construed as,
a third-party beneficiary of this Agreement.

     

    (l)         Attorneys’
Fees.  As between the parties to this Agreement, in any action
or proceeding brought to enforce any provision of this Agreement, or where any
provision hereof is validly asserted as a defense, the successful party shall be
entitled to recover reasonable attorneys’ fees actually incurred in addition to
its costs and expenses and any other available remedy.

     

    (m)       Remedies.  The
Issuers acknowledge and agree that any failure by the Issuers to comply with
their respective obligations under this Agreement may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Issuers’ obligations under this
Agreement.  The Issuers further agree to waive the defense in any
action for specific performance that a remedy at law would be
adequate.  Notwithstanding the foregoing, the parties agree that the
sole monetary damages payable for a violation of the terms of this Agreement
shall be such Liquidated Damages.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (n)       Entire
Agreement.  This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuer on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.

     

    [remainder
of page intentionally left blank]

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.

     

    
      
        
          
            
              
                
                  
                    	 
      	
                            ENERGY
      XXI GULF COAST, INC., as Issuer

                          
	 
      	 
      	 
      
	 
      	
                            By:

                          	
                              /s/ Rick Fox

                          
	 
      	 
      	
                            Name:
      Rick Fox

                          
	 
      	 
      	
                            Title:  
      Chief Financial Officer

                          
	 
      	 
      	 
      
	 
      	
                            ENERGY
      XXI (BERMUDA) LIMITED, as

                            Guarantor

                          
	 
      	 
      	 
      
	 
      	
                            By:

                          	
                              /s/ David West
    Griffin

                          
	 
      	 
      	
                            Name:
      David West Griffin

                          
	 
      	 
      	
                            Title:   Chief
      Financial Officer

                          
	 
      	 
      	 
      
	 
      	
                            ENERGY
      XXI GOM, LLC,

                          
	 
      	
                            ENERGY
      XXI TEXAS ONSHORE, LLC,

                            ENERGY
      XXI ONSHORE, LLC,

                          
	 
      	
                            ENERGY
      XXI PIPELINE, LLC, as Guarantors

                          
	 
      	 
      	 
      
	 
      	
                            By:

                          	
                              /s/ Rick Fox

                          
	 
      	 
      	
                            Name:
      Rick Fox

                          
	 
      	 
      	
                            Title:  
      Chief Financial
Officer

                          

                  

                

              

            

          

        

      

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	
                      REPRESENTATIVES
      OF THE INITIAL

                      PURCHASERS

                    
	 
      	 
      	 
      
	 
      	
                      RBS
      SECURITIES INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                        /s/ Michael F. Newcomb
      II

                    
	 
      	 
      	
                      Name:
      Michael F. Newcomb II

                    
	 
      	 
      	
                      Title:   Managing
      Director

                    

            

          

        

      

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    BNP
      PARIBAS SECURITIES CORP.

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                      /s/ Richard
Murphy

                  
	 
      	 
      	
                    Name:  Richard
      Murphy

                  
	 
      	 
      	
                    Title:   
      Managing
Director

                  

          

        

      

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    UBS
      SECURITIES LLC

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Suzanne
    M.  Rode

                  
	 
      	 
      	
                    Name:
      Suzanne M.  Rode

                  
	 
      	 
      	
                    Title:  
      Leveraged Capital Markets Director

                  
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Michael Lawton

                  
	 
      	 
      	
                    Name:
      Michael Lawton

                  
	 
      	 
      	
                    Title:  
      Director

                  

          

        

      

    

     

    
      
        
        

      

      
        29Unassociated Document

     

    EXHIBIT
10.1

     

    
      
        		

                6295
      Northam Drive, Unit 8

                Mississauga,
      Ontario L4V 1W8

                T:
      905.673.8501 • F:
905.673.9865

              

      

    

     

    
      
        

      

    

    

    

    December
21, 2010

    

    Chandra
Panchal

    303
Baffin, Dollard Des-Ormeaux

    Quebec
H9A 3G4 Canada

    

    
      	
              Re:

            	
              Lock-Up
      Agreement Dated March 23, 2010 between CardioGenics Holdings Inc. and
      Chandra Panchal (the “Lock-up
      Agreement”)

            

    

     

    
      Dear
Chandra:

       

    

    This will
confirm our understanding that the Lock-Up Agreement, pursuant to which you
agreed to lock-up 125,742 shares of CardioGenics common stock held by you in
accordance with the terms of the Lock-Up Agreement, is hereby terminated as of
the date of this letter.

    

    If the
foregoing accurately reflects our understanding regarding the termination of the
Lock-Up Agreement, please indicate your agreement and acceptance by signing in
the space provided below and returning the signed copy of this letter to
me.

     

    
      
        	Very
      truly yours,	 	 	 	 
	CARDIOGENICS
      HOLDINGS INC.	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
                /s/ Yahia
      Gawad

              	 	 	
                 

              	 
	 	
                Name: Yahia
      Gawad

              	 	 	
                 

              	 
	 	
                Title: Chief Executive
      Officer

              	 	 	
                 

              	 
	 	Date: December 21,
      2010	 	 	 	 

      

       

      
        
          	AGREED
      AND ACCEPTED:	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
                  /s/ Chandra
      Panchal

                	 	 	
                   

                	 
	 	
                  Chandra
      Panchal

                	 	 	
                   

                	 
	 	
                  Date: December 21,
      2010

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