Document:

Unassociated Document

    

    
      
        

      

       

    

    ENERGY
XXI GULF COAST, INC.

     

    AND
EACH OF THE GUARANTORS PARTY HERETO

     

    16%
SECOND LIEN JUNIOR SECURED NOTES DUE 2014

     

    
      

    

    
      

    

    INDENTURE

     

    Dated
as of November 12, 2009

     

    
      
        
 

    

    WILMINGTON
TRUST FSB,

     

    as
Trustee

     

    
      
        

      

       

      
        

        

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

    

    CROSS-REFERENCE
TABLE*

     

    
      
        
          
            	
                    Trust Indenture

                    Act Section

                  	
                    Indenture Section

                  
	
                    310(a)(1)

                  	
                    7.10

                  
	
                    (a)(2)

                  	
                    7.10

                  
	
                    (a)(3)

                  	
                    N.A.

                  
	
                    (a)(4)

                  	
                    N.A.

                  
	
                    (a)(5)

                  	
                    7.10

                  
	
                    (b)

                  	
                    7.08; 7.10

                  
	
                    (c)

                  	
                    N.A.

                  
	
                    311(a)

                  	
                    7.11

                  
	
                    (b)

                  	
                    7.11

                  
	
                    (c)

                  	
                    N.A.

                  
	
                    312(a)

                  	
                    2.06

                  
	
                    (b)

                  	
                    11.03

                  
	
                    (c)

                  	
                    11.03

                  
	
                    313(a)

                  	
                    7.06

                  
	
                    (b)(1)

                  	
                    N.A.

                  
	
                    (b)(2)

                  	
                    7.06; 7.07

                  
	
                    (c)

                  	
                    7.06; 11.02

                  
	
                    (d)

                  	
                    7.06

                  
	
                    314(a)                      

                  	
                    4.03; 4.04; 11.02; 11.05

                  
	
                    (b)

                  	
                    4.20; 13.05

                  
	
                    (c)(1)

                  	
                    9.06; 11.04

                  
	
                    (c)(2)

                  	
                    9.06; 11.04

                  
	
                    (c)(3)

                  	
                    N.A.

                  
	
                    (d)

                  	
                    13.04, 13.05

                  
	
                    (e)

                  	
                    11.05

                  
	
                    (f)

                  	
                    N.A.

                  
	
                    315(a)

                  	
                    7.01; 7.02

                  
	
                    (b)

                  	
                    7.05; 11.02

                  
	
                    (c)

                  	
                    7.01

                  
	
                    (d)

                  	
                    6.05; 7.01; 7.02

                  
	
                    (e)

                  	
                    6.11

                  
	
                    316(a) (last sentence)

                  	
                    2.10

                  
	
                    (a)(1)(A)

                  	
                    6.05

                  
	
                    (a)(1)(B)

                  	
                    6.04

                  
	
                    (a)(2)

                  	
                    N.A.

                  
	
                    (b)

                  	
                    6.07

                  
	
                    (c)

                  	
                    2.13

                  
	
                    317(a)(1)

                  	
                    6.08

                  
	
                    (a)(2)

                  	
                    6.09

                  
	
                    (b)

                  	
                    2.05

                  
	
                    318(a)

                  	
                    11.01

                  
	
                    (b)

                  	
                    N.A.

                  
	
                    (c)

                  	
                    11.01

                  

          

        

      

    

     

    
      
        
N.A.
means not applicable.

    

    *  This
Cross Reference Table is not part of this Indenture.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	 
      	
                                        Page

                                      
	 
      	 
      	 
      
	
                                        ARTICLE 1

                                      	 
      
	
                                        DEFINITIONS AND INCORPORATION

                                      	 
      
	
                                        BY REFERENCE

                                      	 
      
	 
      	 
      	 
      
	
                                        Section 1.01

                                      	
                                        Definitions.

                                      	
                                        1

                                      
	
                                        Section 1.02

                                      	
                                        Other Definitions.

                                      	
                                        32

                                      
	
                                        Section 1.03

                                      	
                                        Incorporation by Reference of Trust Indenture Act.

                                      	
                                        32

                                      
	
                                        Section 1.04

                                      	
                                        Rules of Construction.

                                      	
                                        33

                                      
	 
      	 
      	 
      
	
                                        ARTICLE 2

                                      	 
      
	
                                        THE NOTES

                                      	 
      
	 
      	 
      	 
      
	
                                        Section 2.01

                                      	
                                        Amount of Notes.

                                      	
                                        33

                                      
	
                                        Section 2.02

                                      	
                                        Form and Dating.

                                      	
                                        34

                                      
	
                                        Section 2.03

                                      	
                                        Execution and Authentication.

                                      	
                                        35

                                      
	
                                        Section 2.04

                                      	
                                        Registrar and Paying Agent.

                                      	
                                        36

                                      
	
                                        Section 2.05

                                      	
                                        Paying Agent to Hold Money in Trust.

                                      	
                                        36

                                      
	
                                        Section 2.06

                                      	
                                        Holder Lists.

                                      	
                                        37

                                      
	
                                        Section 2.07

                                      	
                                        Transfer and Exchange.

                                      	
                                        37

                                      
	
                                        Section 2.08

                                      	
                                        Replacement Notes.

                                      	
                                        46

                                      
	
                                        Section 2.09

                                      	
                                        Outstanding Notes.

                                      	
                                        46

                                      
	
                                        Section 2.10

                                      	
                                        Treasury Notes.

                                      	
                                        47

                                      
	
                                        Section 2.11

                                      	
                                        Temporary Notes.

                                      	
                                        47

                                      
	
                                        Section 2.12

                                      	
                                        Cancellation.

                                      	
                                        47

                                      
	
                                        Section 2.13

                                      	
                                        Defaulted Interest.

                                      	
                                        47

                                      
	
                                        Section 2.14

                                      	
                                        CUSIP Number.

                                      	
                                        48

                                      
	 
      	 
      	 
      
	
                                        ARTICLE 3

                                      	 
      
	
                                        REDEMPTION AND PREPAYMENT

                                      	 
      
	 
      	 
      	 
      
	
                                        Section 3.01

                                      	
                                        Notices to Trustee.

                                      	
                                        48

                                      
	
                                        Section 3.02

                                      	
                                        Selection of Notes to Be Redeemed or Purchased.

                                      	
                                        48

                                      
	
                                        Section 3.03

                                      	
                                        Notice of Redemption.

                                      	
                                        49

                                      
	
                                        Section 3.04

                                      	
                                        Effect of Notice of Redemption.

                                      	
                                        50

                                      
	
                                        Section 3.05

                                      	
                                        Deposit of Redemption or Purchase Price.

                                      	
                                        50

                                      
	
                                        Section 3.06

                                      	
                                        Notes Redeemed or Purchased in Part.

                                      	
                                        50

                                      
	
                                        Section 3.07

                                      	
                                        Optional Redemption.

                                      	
                                        51

                                      
	
                                        Section 3.08

                                      	
                                        Mandatory Redemption.

                                      	
                                        51

                                      
	
                                        Section 3.09

                                      	
                                        Offer to Purchase by Application of Excess Proceeds.

                                      	
                                        51

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
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                                    ARTICLE 4

                                  	 
      
	
                                    COVENANTS

                                  	 
      
	 
      	 
      	 
      
	
                                    Section 4.01

                                  	
                                    Payment of Notes.

                                  	
                                    54

                                  
	
                                    Section 4.02

                                  	
                                    Maintenance of Office or Agency.

                                  	
                                    54

                                  
	
                                    Section 4.03

                                  	
                                    Reports.

                                  	
                                    54

                                  
	
                                    Section 4.04

                                  	
                                    Compliance Certificate.

                                  	
                                    55

                                  
	
                                    Section 4.05

                                  	
                                    Taxes.

                                  	
                                    56

                                  
	
                                    Section 4.06

                                  	
                                    Stay, Extension and Usury Laws.

                                  	
                                    56

                                  
	
                                    Section 4.07

                                  	
                                    Restricted Payments.

                                  	
                                    56

                                  
	
                                    Section 4.08

                                  	
                                    Dividend and Other Payment Restrictions Affecting Subsidiaries.

                                  	
                                    59

                                  
	
                                    Section 4.09

                                  	
                                    Incurrence of Indebtedness and Issuance of Preferred Stock.

                                  	
                                    61

                                  
	
                                    Section 4.10

                                  	
                                    Asset Sales.

                                  	
                                    64

                                  
	
                                    Section 4.11

                                  	
                                    Transactions with Affiliates.

                                  	
                                    66

                                  
	
                                    Section 4.12

                                  	
                                    Liens.

                                  	
                                    68

                                  
	
                                    Section 4.13

                                  	
                                    Business Activities.

                                  	
                                    68

                                  
	
                                    Section 4.14

                                  	
                                    Corporate Existence.

                                  	
                                    68

                                  
	
                                    Section 4.15

                                  	
                                    Offer to Repurchase Upon Change of Control.

                                  	
                                    68

                                  
	
                                    Section 4.16

                                  	
                                    Payments for Consent.

                                  	
                                    70

                                  
	
                                    Section 4.17

                                  	
                                    Additional Guarantees.

                                  	
                                    70

                                  
	
                                    Section 4.18

                                  	
                                    Designation of Restricted and Unrestricted Subsidiaries.

                                  	
                                    71

                                  
	
                                    Section 4.19

                                  	
                                    Sale and Leaseback Transactions

                                  	
                                    71

                                  
	
                                    Section 4.20

                                  	
                                    Impairment of Security Interest; Liens on Additional Property.

                                  	
                                    72

                                  
	
                                    Section 4.21

                                  	
                                    Repurchases of Notes.

                                  	
                                    73

                                  
	 
      	 
      	 
      
	
                                    ARTICLE 5

                                  	 
      
	
                                    SUCCESSORS

                                  	 
      
	 
      	 
      	 
      
	
                                    Section 5.01

                                  	
                                    Merger, Consolidation, or Sale of Assets.

                                  	
                                    73

                                  
	
                                    Section 5.02

                                  	
                                    Successor Corporation Substituted.

                                  	
                                    74

                                  
	 
      	 
      	 
      
	
                                    ARTICLE 6

                                  	 
      
	
                                    DEFAULTS AND REMEDIES

                                  	 
      
	 
      	 
      	 
      
	
                                    Section 6.01

                                  	
                                    Events of Default.

                                  	
                                    75

                                  
	
                                    Section 6.02

                                  	
                                    Acceleration.

                                  	
                                    77

                                  
	
                                    Section 6.03

                                  	
                                    Other Remedies.

                                  	
                                    77

                                  
	
                                    Section 6.04

                                  	
                                    Waiver of Past Defaults.

                                  	
                                    78

                                  
	
                                    Section 6.05

                                  	
                                    Control by Majority.

                                  	
                                    78

                                  
	
                                    Section 6.06

                                  	
                                    Limitation on Suits.

                                  	
                                    78

                                  
	
                                    Section 6.07

                                  	
                                    Rights of Holders of Notes to Receive Payment.

                                  	
                                    79

                                  
	
                                    Section 6.08

                                  	
                                    Collection Suit by Trustee.

                                  	
                                    79

                                  
	
                                    Section 6.09

                                  	
                                    Trustee May File Proofs of Claim.

                                  	
                                    79

                                  
	
                                    Section 6.10

                                  	
                                    Priorities.

                                  	
                                    80

                                  
	
                                    Section 6.11

                                  	
                                    Undertaking for Costs.

                                  	
                                    80

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
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                                                          ARTICLE 7

                                                        	 
      
	
                                                          TRUSTEE

                                                        	 
      
	 	 
	
                                                          Section 7.01

                                                        	
                                                          Duties of Trustee.

                                                        	
                                                          80

                                                        
	
                                                          Section 7.02

                                                        	
                                                          Rights of Trustee.

                                                        	
                                                          81

                                                        
	
                                                          Section 7.03

                                                        	
                                                          Individual Rights of Trustee.

                                                        	
                                                          83

                                                        
	
                                                          Section 7.04

                                                        	
                                                          Trustee’s Disclaimer.

                                                        	
                                                          83

                                                        
	
                                                          Section 7.05

                                                        	
                                                          Notice of Defaults.

                                                        	
                                                          83

                                                        
	
                                                          Section 7.06

                                                        	
                                                          Reports by Trustee to Holders of the Notes.

                                                        	
                                                          83

                                                        
	
                                                          Section 7.07

                                                        	
                                                          Compensation and Indemnity.

                                                        	
                                                          84

                                                        
	
                                                          Section 7.08

                                                        	
                                                          Replacement of Trustee.

                                                        	
                                                          85

                                                        
	
                                                          Section 7.09

                                                        	
                                                          Successor Trustee by Merger, etc.

                                                        	
                                                          86

                                                        
	
                                                          Section 7.10

                                                        	
                                                          Eligibility; Disqualification.

                                                        	
                                                          86

                                                        
	
                                                          Section 7.11

                                                        	
                                                          Preferential Collection of Claims Against Company.

                                                        	
                                                          86

                                                        
	
                                                          Section 7.12

                                                        	
                                                          No Representations of Trustee.

                                                        	
                                                          86

                                                        
	 
      	 
      	 
      
	
                                                          ARTICLE 8

                                                        	 
      
	
                                                          LEGAL DEFEASANCE AND COVENANT DEFEASANCE

                                                        	 
      
	 
      	 
      	 
      
	
                                                          Section 8.01

                                                        	
                                                          Option to Effect Legal Defeasance or Covenant Defeasance.

                                                        	
                                                          86

                                                        
	
                                                          Section 8.02

                                                        	
                                                          Legal Defeasance and Discharge.

                                                        	
                                                          87

                                                        
	
                                                          Section 8.03

                                                        	
                                                          Covenant Defeasance.

                                                        	
                                                          87

                                                        
	
                                                          Section 8.04

                                                        	
                                                          Conditions to Legal or Covenant Defeasance.

                                                        	
                                                          88

                                                        
	
                                                          Section 8.05

                                                        	
                                                          Deposited Money and Government Securities to be Held in Trust;
      Other Miscellaneous Provisions.

                                                        	
                                                          89

                                                        
	
                                                          Section 8.06

                                                        	
                                                          Repayment to Company.

                                                        	
                                                          90

                                                        
	
                                                          Section 8.07

                                                        	
                                                          Reinstatement.

                                                        	
                                                          90

                                                        
	 
      	 
      	 
      
	
                                                          ARTICLE 9

                                                        	 
      
	
                                                          AMENDMENT, SUPPLEMENT AND WAIVER

                                                        	 
      
	 
      	 
      	 
      
	
                                                          Section 9.01

                                                        	
                                                          Without Consent of Holders of Notes.

                                                        	
                                                          90

                                                        
	
                                                          Section 9.02

                                                        	
                                                          With Consent of Holders of Notes.

                                                        	
                                                          91

                                                        
	
                                                          Section 9.03

                                                        	
                                                          Compliance with Trust Indenture Act.

                                                        	
                                                          92

                                                        
	
                                                          Section 9.04

                                                        	
                                                          Revocation and Effect of Consents.

                                                        	
                                                          93

                                                        
	
                                                          Section 9.05

                                                        	
                                                          Notation on or Exchange of Notes.

                                                        	
                                                          93

                                                        
	
                                                          Section 9.06

                                                        	
                                                          Trustee to Sign Amendments, etc.

                                                        	
                                                          93

                                                        
	
                                                          Section 9.07

                                                        	
                                                          Additional Voting Terms; Calculation of Principal Amount.

                                                        	
                                                          93

                                                        
	 
      	 
      	 
      
	
                                                          ARTICLE 10

                                                        	 
      
	
                                                          SATISFACTION AND DISCHARGE

                                                        	 
      
	 
      	 
      	 
      
	
                                                          Section 10.01

                                                        	
                                                          Satisfaction and Discharge.

                                                        	
                                                          94

                                                        
	
                                                          Section 10.02

                                                        	
                                                          Application of Trust Money.

                                                        	
                                                          95

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
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                                        ARTICLE 11

                                      	 
      
	
                                        MISCELLANEOUS

                                      	 
      
	 
      	 
      	 
      
	
                                        Section 11.01

                                      	
                                        Trust Indenture Act Controls.

                                      	
                                        95

                                      
	
                                        Section 11.02

                                      	
                                        Notices.

                                      	
                                        95

                                      
	
                                        Section 11.03

                                      	
                                        Communication by Holders of Notes with Other Holders of Notes.

                                      	
                                        96

                                      
	
                                        Section 11.04

                                      	
                                        Certificate and Opinion as to Conditions Precedent.

                                      	
                                        96

                                      
	
                                        Section 11.05

                                      	
                                        Statements Required in Certificate or Opinion.

                                      	
                                        97

                                      
	
                                        Section 11.06

                                      	
                                        Rules by Trustee and Agents.

                                      	
                                        97

                                      
	
                                        Section 11.07

                                      	
                                        No Personal Liability of Directors, Officers, Employees and Stockholders.

                                      	
                                        97

                                      
	
                                        Section 11.08

                                      	
                                        Governing Law.

                                      	
                                        97

                                      
	
                                        Section 11.09

                                      	
                                        Intercreditor Agreement.

                                      	
                                        98

                                      
	
                                        Section 11.10

                                      	
                                        No Adverse Interpretation of Other Agreements.

                                      	
                                        98

                                      
	
                                        Section 11.11

                                      	
                                        Successors.

                                      	
                                        98

                                      
	
                                        Section 11.12

                                      	
                                        Severability.

                                      	
                                        98

                                      
	
                                        Section 11.13

                                      	
                                        Counterpart Originals.

                                      	
                                        98

                                      
	
                                        Section 11.14

                                      	
                                        Table of Contents, Headings, etc.

                                      	
                                        98

                                      
	 
      	 
      	 
      
	
                                        ARTICLE 12

                                      	 
      
	
                                        GUARANTEES

                                      	 
      
	 
      	 
      	 
      
	
                                        Section 12.01

                                      	
                                        Guarantee.

                                      	
                                        98

                                      
	
                                        Section 12.02

                                      	
                                        Limitation on Guarantor Liability.

                                      	
                                        100

                                      
	
                                        Section 12.03

                                      	
                                        Execution and Delivery of Guarantee.

                                      	
                                        100

                                      
	
                                        Section 12.04

                                      	
                                        Guarantors May Consolidate, etc., on Certain Terms.

                                      	
                                        100

                                      
	
                                        Section 12.05

                                      	
                                        Releases.

                                      	
                                        101

                                      
	 
      	 
      	 
      
	
                                        ARTICLE 13

                                      	 
      
	
                                        COLLATERAL

                                      	 
      
	 
      	 
      	 
      
	
                                        Section 13.01

                                      	
                                        Security Documents.

                                      	
                                        102

                                      
	
                                        Section 13.02

                                      	
                                        Collateral Agent.

                                      	
                                        102

                                      
	
                                        Section 13.03

                                      	
                                        Authorization of Actions to Be Taken.

                                      	
                                        104

                                      
	
                                        Section 13.04

                                      	
                                        Release of Liens.

                                      	
                                        105

                                      
	
                                        Section 13.05

                                      	
                                        Filing, Recording and Opinions

                                      	
                                        106

                                      
	
                                        Section 13.06

                                      	
                                        Powers Exercisable by Receiver or Trustee.

                                      	
                                        107

                                      
	
                                        Section 13.07

                                      	
                                        Release Upon Termination of the Company’s Obligations.

                                      	
                                        107

                                      
	
                                        Section 13.08

                                      	
                                        Designations.

                                      	
                                        107

                                      
	
                                        Section 13.09

                                      	
                                        Relative Rights.

                                      	
                                        107

                                      
	 
      	 
      	 
      
	
                                        EXHIBITS

                                      	 
      
	 
      	 
      	 
      
	
                                        Exhibit A

                                      	
                                        Form of Note

                                      	
                                        A-1

                                      
	
                                        Exhibit B

                                      	
                                        Form of Certificate of Transfer

                                      	
                                        B-1

                                      
	
                                        Exhibit C

                                      	
                                        Form of Certificate of Exchange

                                      	
                                        C-1

                                      
	
                                        Exhibit D

                                      	
                                        Form of Certificate from Acquiring Institutional Accredited Investor

                                      	
                                        D-1

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
         

      

      
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                Exhibit E

              	
                Form of Notation of Guarantee

              	
                E-1

              
	
                Exhibit F

              	
                Form of Supplemental Indenture to Be Delivered by Subsequent Guarantors

              	
                F-1

              

      

    

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    INDENTURE
dated as of November 12, 2009 among Energy XXI Gulf Coast, Inc., a Delaware
corporation, the Guarantors (as defined herein) and Wilmington Trust FSB and any
and all successors thereto, as Trustee (the “Trustee”).

     

    The
Company, the Guarantors and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders (as defined) of
the  16% Second
Lien Junior Secured Notes due 2014, Series A (the “Series A Notes”) and the 16%
Second Lien Junior Secured Notes due 2014, Series B (the “Series B Notes” and, together
with the Series A Notes, the “Notes”):

     

    ARTICLE
1

    DEFINITIONS
AND INCORPORATION

    BY
REFERENCE

     

    Section
1.01         Definitions.

     

    “ACNTA” (Adjusted Consolidated
Net Tangible Assets) means (without duplication), as of the date of
determination:

     

    (1)          the
sum of:

     

    (a)           discounted
future net revenue from proved crude oil and natural gas reserves of the Company
and its Restricted Subsidiaries calculated in accordance with SEC guidelines
before any state or federal income taxes, as estimated in a reserve report
prepared as of the end of the Company’s most recently completed fiscal year,
which reserve report is prepared or reviewed or audited by an independent
petroleum engineer as to reserves accounting for at least 80% of all such
discounted future net revenue and by the Company’s petroleum engineers with
respect to any other such reserves covered by such report, as increased by, as
of the date of determination, the discounted future net revenue
from:

     

    (1)           estimated
proved crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries attributable to acquisitions consummated since the date of such
year-end reserve report, and

     

    (2)           estimated
crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries attributable to extensions, discoveries and other additions and
upward determinations of estimates of proved crude oil and natural gas reserves
(including previously estimated development costs incurred during the period and
the accretion of discount since the prior year end) due to exploration,
development or exploitation, production or other activities which reserves were
not reflected in such year-end reserve report,

     

    in each
case calculated in accordance with SEC guidelines (utilizing the prices utilized
in such year-end reserve report), and decreased by, as of the date of
determination, the discounted future net revenue attributable
to

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (3)           estimated
proved crude oil and natural gas reserves of the Company and its Restricted
Subsidiaries reflected in such year-end reserve report produced or disposed of
since the date of such year-end reserve report and

     

    (4)           reductions
in the estimated proved crude oil and natural gas reserves of the Company and
its Restricted Subsidiaries reflected in such year-end reserve report since the
date of such year-end reserve report attributable to downward determinations of
estimates of proved crude oil and natural gas reserves due to exploration,
development or exploitation, production or other activities conducted or
otherwise occurring since the date of such year-end reserve report,

     

    in each
case calculated in accordance with SEC guidelines (utilizing the prices utilized
in such year-end reserve report); provided, however, that, in the case of
each of the determinations made pursuant to clauses (1) through (4), such
increases and decreases shall be as estimated by the Company’s engineers, except
that if as a result of such acquisitions, dispositions, discoveries, extensions
or revisions, there is a Material Change, then such increases and decreases in
the discounted future net revenue shall be confirmed in writing by an
independent petroleum engineer;

     

    (b)           the
capitalized costs that are attributable to crude oil and natural gas properties
of the Company and its Restricted Subsidiaries to which no proved crude oil and
natural gas reserves are attributed, based on the Company’s books and records as
of a date no earlier than the date of the Company’s latest annual or quarterly
financial statements;

     

    (c)           the
Net Working Capital on a date no earlier than the date of the Company’s latest
annual or quarterly financial statements; and

     

    (d)           the
greater of (I) the net book value on a date no earlier than the date of the
Company’s latest annual or quarterly financial statements and (II) the appraised
value, as estimated by independent appraisers, of other tangible assets of the
Company and its Restricted Subsidiaries as of a date no earlier than the date of
the Company’s latest audited financial statements;

     

    (2)          minus,
to the extent not otherwise taken into account in the immediately preceding
clause (1), the sum of:

     

    (a)           minority
interests;

     

    (b)           any
net gas balancing liabilities of the Company and its Restricted Subsidiaries
reflected in the Company’s latest audited financial statements;

     

    (c)           the
discounted future net revenue, calculated in accordance with SEC guidelines
(utilizing the same prices utilized in the Company’s year-end reserve report),
attributable to reserves subject to participation interests, overriding royalty
interests or other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or which
otherwise are required to be delivered to third parties;

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (d)           the
discounted future net revenue, calculated in accordance with SEC guidelines
(utilizing the same prices utilized in the Company’s year-end reserve report),
attributable to reserves that are required to be delivered to third parties to
fully satisfy the obligations of the Company and its Restricted Subsidiaries
with respect to Volumetric Production Payments on the schedules specified with
respect thereto; and

     

    (e)           the
discounted future net revenue, calculated in accordance with SEC guidelines,
attributable to reserves subject to Dollar-Denominated Production Payments that,
based on the estimates of production included in determining the discounted
future net revenue specified in the immediately preceding clause (1)(a)
(utilizing the same prices utilized in the Company’s year-end reserve report),
would be necessary to satisfy fully the obligations of the Company and its
Restricted Subsidiaries with respect to Dollar-Denominated Production Payments
on the schedules specified with respect thereto.

     

    If the
Company changes its method of accounting for its oil and gas properties from the
full cost method to the successful efforts method or a similar method of
accounting, ACNTA will continue to be calculated as if the Company were still
using the full cost method of accounting.

     

    For the avoidance of doubt, for
purposes of this definition, “the Company’s
year-end end reserve report” shall mean the Company’s most recent
reserve report or reports prepared by one or more of the Company’s independent
petroleum engineers as of the last date of the Company’s most recent fiscal
year.

     

    “Acquired Debt” means, with
respect to any specified Person:

     

    (1)           Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Subsidiary of, such specified Person;
and

     

    (2)           Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.

     

    “Additional Assets”
means:

     

    (1)           any
assets used or useful in the Oil and Gas Business;

     

    (2)           the
Capital Stock of a Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock by the Company or another Restricted
Subsidiary; or

     

    (3)           Capital
Stock constituting a minority in any Person that at such time is a Restricted
Subsidiary;

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    provided, however, that any
such Restricted Subsidiary described in clause (2) or (3) is primarily
engaged in the Oil and Gas Business.

     

    “Affiliate” of any specified
Person means any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified
Person.  For purposes of this definition, “control,” as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise; provided
that beneficial ownership of 10% or more of the Voting Stock of a Person will be
deemed to be control.  For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with”
have correlative meanings.  For the avoidance of doubt, the Parent and
any of its existing or future Subsidiaries in addition to the Company and its
Restricted Subsidiaries will be considered Affiliates of the
Company.

     

    “Agent” means any Registrar,
co-registrar, Paying Agent or additional paying agent.

     

    “Applicable Premium” means,
with respect to a Note at any redemption date, the greater of (x) 1.0% of the
principal amount of such Note and (y) the excess of (A) the present value at
such time of (1) redemption price of such Note as of June 15, 2011 (without
regard to accrued and unpaid interest) plus (2) all required interest payments
due on such Note through June 15, 2011, computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (B) the principal amount of such
Note.

     

    “Applicable Procedures” means,
with respect to any transfer or exchange of or for, or crediting of or to,
beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer, exchange or
credit.

     

    “Asset Sale”
means:

     

    (1)           the
sale, lease, conveyance or other disposition of any properties or assets
(including by way of a Production Payment or sale and leaseback transaction);
provided that the disposition of all or substantially all of the properties or
assets of the Company and its Restricted Subsidiaries taken as a whole will be
governed by Section 4.15 hereof, and/or Section 5.01 hereof, and not by Section
4.10 hereof;

     

    (2)           the
issuance of Equity Interests in any of the Company’s Restricted Subsidiaries or
the sale of Equity Interests in any of its Restricted Subsidiaries;
and

     

    (3)           any
Collateral Disposition, subject to the proviso in clause (1) above.

     

    Notwithstanding
the preceding, the following items will not be deemed to be Asset
Sales:

     

    (1)           any
single transaction or series of related transactions that involves properties or
assets having a Fair Market Value of less than $2.5 million;

     

    (2)           a
transfer of assets between or among any of the Company and its Restricted
Subsidiaries,

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (3)           an
issuance or sale of Equity Interests by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary;

     

    (4)           the
sale, lease or other disposition of hydrocarbons, equipment, inventory, accounts
receivable or other properties or assets in the ordinary course of business,
including, without limitation, any abandonment, farm-in, farm-out, lease or
sublease of any oil and gas properties or the forfeiture or other disposition of
such properties pursuant to standard form operating agreements, in each case in
a manner customary in the Oil and Gas Business;

     

    (5)           the
sale or other disposition of cash or Cash Equivalents;

     

    (6)           a
Restricted Payment that is permitted in accordance with Section 4.07 or a
Permitted Investment;

     

    (7)           any
trade or exchange by the Company or any Restricted Subsidiary of oil and gas
properties or other properties or assets for oil and gas properties or other
properties or assets owned or held by another Person, provided that the Fair
Market Value of the properties or assets traded or exchanged by the Company or
such Restricted Subsidiary (together with any cash) is reasonably equivalent to
the fair market value of the properties or assets (together with any cash) to be
received by the Company or such Restricted Subsidiary, and provided further that any net
cash or other assets or property received must be applied in accordance with
Section 4.10, including the granting and perfecting of liens or such assets or
property so received.

     

    (8)           the
creation or perfection of a Lien (but not the sale or other disposition of the
properties or assets subject to such Lien); and

     

    (9)           surrender
or waiver of contract rights or the settlement, release or surrender of
contract, tort or other claims of any kind.

     

    “Attributable Debt” means, in respect of a sale and
leaseback transaction, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.

     

     “Bankruptcy Law” means Title
11, U.S. Code or any similar federal or state law for the relief of
debtors.

     

    “Beneficial Owner” has the
meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that in calculating the beneficial ownership of any particular
“person” (as that term
is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition.  The terms “Beneficially Owns” and “Beneficially Owned” have
correlative meanings.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Board of Directors”
means:

     

    (1)           with
respect to a corporation, the board of directors of the
corporation;

     

    (2)           with
respect to a partnership, the board of directors of the general partner of the
partnership; and

     

    (3)           with
respect to any other Person, the board or committee of such Person serving a
similar function.

     

    “Business Day” means any day
other than a Saturday, Sunday, or any day on which banks in Houston, Texas or in
New York, New York are authorized or required by law to close.

     

    “Capital Lease Obligation”
means, at the time any determination is to be made, the amount of the liability
in respect of a capital lease that would at that time be required to be
capitalized on a balance sheet prepared in accordance with GAAP.

     

    “Capital Stock”
means:

     

    (1)           in
the case of a corporation, corporate stock;

     

    (2)           in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;

     

    (3)           in
the case of a partnership or limited liability company, partnership interests or
membership interests (whether general or limited); and

     

    (4)           any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

     

    “Cash Equivalents”
means:

     

    (1)           United
States dollars;

     

    (2)           securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality of the United States government
(provided that the full
faith and credit of the United States is pledged in support of those securities)
having maturities of not more than six months from the date of
acquisition;

     

    (3)           certificates
of deposit and Eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers’ acceptances with maturities not exceeding
six months and overnight bank deposits, in each case, with any lender party to
the Credit Agreement or with any domestic commercial bank having capital and
surplus in excess of $250.0 million and a Thomson Bank Watch Rating of “B” or
better;

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (4)           repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (2) and (3) above entered into with any financial
institution meeting the qualifications specified in clause (3)
above;

     

    (5)           commercial
paper having one of the two highest ratings obtainable from Moody’s Investors
Service, Inc. or Standard & Poor’s Ratings Services and, in each case,
maturing within one year after the date of acquisition; and

     

    (6)           money
market funds at least 95% of the assets of which constitute Cash Equivalents of
the kinds described in clauses (1) through (5) of this definition.

     

    “Cash Interest” means interest
paid entirely in cash.

     

    “Change of Control” means the
occurrence of any of the following:

     

    (1)           the
direct or indirect sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets (including
Capital Stock) of (a) the Parent and its Subsidiaries taken as a whole, (b) the
Company or (c) the Company’s Restricted Subsidiaries taken as a whole, to any
“person” (as that term
is used in Section 13(d)(3) of the Exchange Act);

     

    (2)           the
adoption of a plan relating to the liquidation or dissolution of the Parent or
the Company;

     

    (3)           the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” or “group” (as that term is used
in Section 13(d)(3) of the Exchange Act) becomes the Beneficial Owner, directly
or indirectly, of more than 50% of the Voting Stock of the Parent or the
Company, measured by voting power rather than number of shares, other than
beneficial ownership by the Parent or any Subsidiary thereof, directly or
indirectly, of Voting Stock of the Company, other than any such transaction in
which a majority of the members of the Board of Directors of the Parent and the
Company are Continuing Directors for at least one year following the
consummation of such transaction, provided that such transaction satisfies the
Credit Criteria (as defined below);

     

    (4)           the
first day on which a majority of the members of the Board of Directors of the
Parent or the Company are not Continuing Directors, other than as a result of
any transaction with another company primarily engaged in the Oil and Gas
Business, the result of which is that a majority of the members of the Board of
Directors of the Parent or the Company are not Continuing Directors, provided
that as a result of such  transaction no “person” or “group” (other
than Parent or any Subsidiaries thereof) becomes the Beneficial Owner, directly
or indirectly, of more than 50% of the Voting Stock of the Parent or the
Company, measured by voting power rather than number of shares, and provided
further that such transaction satisfies the Credit Criteria; or

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (5)           the
Parent or the Company (or any parent thereof) consolidates with, or merges with
or into, any Person, or any Person consolidates with, or merges with or into the
Parent or the Company (or any parent thereof) in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Parent or the
Company (or any parent thereof), as the case may be, is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company (or any parent thereof)
outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (or any parent thereof) immediately after
giving effect to such issuance; provided, however, that the
consolidation or merger of any Subsidiary of the Parent (other than the Company
and its Subsidiaries) shall not constitute a Change of Control if the Voting
Stock of the Company continues to be owned directly or indirectly (through one
or more Subsidiaries) by the Parent.

     

    For
purposes of clauses (3) and (4) of the foregoing definitions, the “Credit Criteria” are as
follows:  (i) no Ratings Decline Event shall have occurred prior to
closing of the transaction, (ii) on the date of the transaction, after giving
effect thereto on a pro forma basis, each of the Specified Ratios would have
improved over those immediately prior to such transaction (for purposes of
calculating the Company’s Fixed Charge Coverage Ratio, excluding from the
calculation of Fixed Charges any Fixed Charges on unsecured Indebtedness), and
(iii) other than Indebtedness under the Credit Facilities and Notes under this
Indenture, in no event shall any Funded Indebtedness of the Company or any
Subsidiary be repurchased or prepaid in connection with the consummation of the
underlying transaction.

     

    “Clearstream” means
Clearstream Banking, S.A.

     

    “Collateral” means all
property mortgaged under the Mortgages and any assets or other rights or other
property, whether now owned or hereafter acquired, upon which a Lien securing
the Obligations under this Indenture, the Notes or the applicable Guarantees is
granted or purported to be granted under a Security Agreement or any other
Security Document.

     

    “Collateral Agent” means
Wilmington Trust FSB until a successor replaces it in accordance with the
provisions of a collateral agency agreement and thereafter means such
successor.

     

    “Collateral Disposition” means
any sale, transfer or other disposition to the extent involving assets or other
rights or property that constitute Collateral under the Security
Documents.  The sale or issuance of Equity Interests in a Restricted
Subsidiary that owns Collateral such that it thereafter is no longer a
Restricted Subsidiary shall be deemed to be a Collateral Disposition of the
Collateral owned by such Restricted Subsidiary.

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Company” means Energy XXI
Gulf Coast, Inc., a Delaware corporation, and any and all successors
thereto.

     

    “Confidential Offering
Circular” means the Company’s Confidential Offering Circular and Consent
Solicitation Statement, dated September 4, 2009, regarding the issuance and
exchange of the Series A Notes, forming a part of the Confidential Information
Memorandum dated the date thereof, regarding the issuance and sale of the
Initial Series B Notes.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    
      

      “Consolidated Cash Flow”
means, with respect to any specified Person for any period, the Consolidated Net
Income of such Person for such period plus:

       

      (1)           provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus

       

      (2)           consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued and whether or not capitalized (excluding any interest
attributable to Dollar-Denominated Production Payments but including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers’ acceptance financings), and net of the effect of all
payments made or received pursuant to interest rate Hedging Obligations, to the
extent that any such expense was deducted in computing such Consolidated Net
Income; plus

       

      (3)           depreciation,
depletion and amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period),
impairment, exploration expense, and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, depletion and
amortization, impairment and other non-cash expenses were deducted in computing
such Consolidated Net Income; plus

       

      (4)           unrealized
non-cash losses resulting from foreign currency balance sheet adjustments
required by GAAP to the extent such losses were deducted in computing such
Consolidated Net Income; minus

       

      (5)           non-cash
items increasing such Consolidated Net Income for such period, other than items
that were accrued in the ordinary course of business; minus (to the extent included
in determining Consolidated Net Income):

       

      (6)           the
sum of (x) the amount of deferred revenues that are amortized during such period
and are attributable to reserves that are subject to Volumetric Production
Payments and (y) amounts recorded in accordance with GAAP as repayments of
principal and interest pursuant to Dollar-Denominated Production
Payments,

       

      in each
case, on a consolidated basis and determined in accordance with
GAAP.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      “Consolidated Net Income”
means, with respect to any specified Person for any period, the aggregate of the
Net Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided
that:

       

      (1)           the
Net Income (but not loss) of any Person that is not a Restricted Subsidiary or
that is accounted for by the equity method of accounting will be excluded,
except to the extent of the amount of dividends or distributions paid in cash to
the specified Person or a Restricted Subsidiary of the Person;

       

      (2)           the
Net Income of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders,
partners or members;

       

      (3)           the
cumulative effect of a change in accounting principles will be
excluded;

       

      (4)           income
resulting from transfers of assets (other than cash) between the Company or any
of its Restricted Subsidiaries, on the one hand, and an Unrestricted Subsidiary,
on the other hand, will be excluded;

       

      (5)           any
write-downs of non-current assets will be excluded; provided that any ceiling
limitation write-downs under Commission guidelines shall be treated as
capitalized costs, as if such write-downs had not occurred;

       

      (6)           any
unrealized non-cash gains or losses or charges in respect of hedge or non-hedge
derivatives (including those resulting from the application of FAS 133) will be
excluded;

       

      (7)           any
non-cash compensation charge arising from any grant of stock, stock options or
other equity-based awards will be excluded;

       

      (8)           any
item classified as an extraordinary, unusual or nonrecurring gain, loss or
charge will be excluded;

       

      (9)           all
deferred financing costs written off and premiums paid in connection with any
early extinguishment of Indebtedness will be excluded; and

       

      (10)           all
Permitted Payments to Parent will be excluded.

       

      In
addition, notwithstanding the preceding, for the purposes of Section 4.07 only,
there shall be excluded from Consolidated Net Income any nonrecurring charges
relating to any premium or penalty paid, write off of deferred finance costs or
other charges in connection with redeeming or retiring any Indebtedness prior to
its Stated Maturity.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      “Continuing Directors” means,
as of any date of determination, any member of the Board of Directors of the
Parent or the Company, as applicable, who:

       

      (1)           was
a member of such Board of Directors on the Issue Date; or

       

      (2)           was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.

       

      “Corporate Trust Office of the
Trustee” will be at the address of the Trustee specified in Section 11.02
hereof or such other address as to which the Trustee may give notice to the
Company.

       

      “Credit Agreement” means the Amended and
Restated First Lien Credit Agreement entered into as of June 8, 2007 among the
Company, as borrower, the various lenders named therein, and The Royal Bank of
Scotland plc, as administrative agent, and the other financial institutions,
providing for revolving credit borrowings, including any related Notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, restated, modified, renewed,
refunded, replaced or refinanced from time to time.

       

      “Credit Facilities” means one
or more debt facilities (including, without limitation, the Credit Agreement),
commercial paper facilities or secured capital markets financings, in each case
with banks or other institutional lenders or institutional investors providing
for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed to
borrow from (or sell receivables to) such lenders against such receivables),
letters of credit or secured capital markets financings, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced
(including refinancing with any capital markets transaction) in whole or in part
from time to time.

       

      “Custodian” means the Trustee,
as custodian with respect to the Notes in global form, or any successor entity
thereto.

       

      “Default” means any event that
is, or with the passage of time or the giving of notice or both would be, an
Event of Default.

       

      “Definitive Note” means a
certificated Note registered in the name of the Holder thereof and issued in
accordance with Section 2.07 hereof, substantially in the form of Exhibit A
hereto except that such Note shall not bear the Global Note Legend and shall not
have the “Schedule of
Exchanges of Interests in the Global Note” attached thereto.

       

      “Depositary” means, with
respect to the Notes issuable or issued in whole or in part in global form, the
Person specified in Section 2.04 hereof as the Depositary with respect to the
Notes, and any and all successors thereto appointed as depositary hereunder and
having become such pursuant to the applicable provision of this
Indenture.

       

      “Direct Parent” means Energy
XXI USA, Inc., a Delaware corporation, and the direct parent of the Company, and
any and all successors thereto.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      “Disqualified Stock” means any
Capital Stock that, by its terms (or by the terms of any security into which it
is convertible, or for which it is exchangeable, in each case, at the option of
the holder of the Capital Stock), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the holder of the Capital Stock, in whole or in
part, on or prior to the date that is 91 days after the date on which the Notes
mature.  Notwithstanding the preceding sentence, any Capital Stock
that would constitute Disqualified Stock solely because the holders of the
Capital Stock have the right to require the Company to repurchase or redeem such
Capital Stock upon the occurrence of a change of control or an asset sale will
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with Section 4.07
hereof.

       

      “Dollar-Denominated Production
Payments” means production
payment obligations recorded as liabilities in accordance with GAAP, together
with all undertakings and obligations in connection therewith.

       

      “Domestic Subsidiary” means
any Restricted Subsidiary of the Company other than a Foreign
Subsidiary.

       

      “Equity Interests” means Capital Stock and
all warrants, options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for, Capital
Stock).

       

       “Equity Offering” means any
public or private sale of Capital Stock (other than Disqualified Stock) made for
cash on a primary basis by the Company after the Issue Date.

       

       “Euroclear” means Euroclear
Bank, S.A./N.V., as operator of the Euroclear system.

       

      “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

       

      “Exchange Notes” means notes
issued in exchange for the Initial Series A Notes or the Initial Series B Notes
in a Registered Exchange Offer pursuant to the Registration Rights
Agreement.  Subject to Section 2.14 hereof, the Exchange Notes issued
in exchange for the Initial Series A Notes and Initial Series B Notes may
consist of a single series or separate series.

       

      “Existing Indebtedness” means
the aggregate principal amount of Indebtedness of the Company and its Restricted
Subsidiaries (other than Indebtedness under the Credit Agreement which is
considered incurred under Section 4.09(a)) in existence on the Issue Date, until
such amounts are repaid.

       

      “Existing Notes” means the
Company’s 10% Senior Notes due 2013.

       

      “Fair Market Value” means the value that
would be paid by a willing buyer to an unaffiliated willing seller in a
transaction not involving distress or necessity of either party, as such price
is determined in good faith by the Company (unless otherwise provided in this
Indenture).

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      “First Lien Agent” means the
Administrative Agent and any successor designated as such by the holders of
First Lien Claims.

       

      “First Lien Claims” means (1)
Indebtedness under the Credit Agreement permitted pursuant to clause (1) of the
definition of the term “Permitted Debt,” (2) First Lien Hedging Obligations, and
(3) all other Obligations under the documents relating to Indebtedness described
in clauses (1) and (2) above.

       

      “First Lien Hedging
Obligations” means all Hedging Obligations secured by any Collateral
under the documents that secure Obligations under the Credit
Agreement.

       

      “Fixed Charge Coverage Ratio”
means with respect to any specified Person for any four-quarter reference
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period.  In the event
that the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the applicable four-quarter reference period
and on or prior to the date on which the event for which the calculation of the
Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the
Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such
incurrence, assumption, guarantee, repayment, repurchase or redemption of
Indebtedness, or such issuance, repurchase or redemption of preferred stock, and
the use of the proceeds therefrom as if the same had occurred at the beginning
of such period.

       

      In
addition, for purposes of calculating the Fixed Charge Coverage
Ratio:

       

      (1)           acquisitions
that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, subsequent to the commencement of the applicable
four-quarter reference period and on or prior to the Calculation Date will be
given pro forma effect as if they had occurred on the first day of such period,
including any Consolidated Cash Flow, provided that any cost savings or
operating improvements may be given such pro forma effect only if they are
permitted by Regulation S-X promulgated under the Securities Act or any other
regulation or policy of the Commission related thereto);

       

      (2)           the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and assets, operations or businesses disposed of prior to
the Calculation Date, will be excluded;

       

      (3)           the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and assets, operations or businesses disposed of prior to
the Calculation Date, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Restricted Subsidiaries following the Calculation
Date;

       

      “Fixed Charges” means, with
respect to any specified Person for any period, the sum, without duplication,
of:

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (1)           the
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued, including, without limitation,
amortization of debt issuance costs (excluding, however, prepayment penalties
associated with repayment of debt from the proceeds of the sale of the Notes)
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers’ acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations in
respect of interest rates; plus

       

      (2)           the
consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus

       

      (3)           any
interest expense on Indebtedness of another Person that is guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries, whether or not such guarantee
or Lien is called upon; plus

       

      (4)           the
product of (a) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, determined on a consolidated basis in
accordance with GAAP.

       

      “Foreign Subsidiary” means any Restricted
Subsidiary of the Company that was not formed under the laws of the United
States or any state of the United States or the District of Columbia and that
conducts substantially all of its operations outside the United
States.

       

      “Funded Indebtedness” means
all Indebtedness (including Indebtedness incurred under any revolving credit,
letter of credit or working capital facility) that matures by its terms, or that
is renewable at the option of any obligor thereon to a date, more than one year
after the date on which such Indebtedness is originally incurred.

       

      “GAAP” means generally
accepted accounting principles in the United States, which are in effect from
time to time.

       

      “Global Note Legend” means the
legend set forth in Section 2.07(f)(1)(B) hereof, which is required to be placed
on all Global Notes issued under this Indenture.

       

      “Global Notes” means,
individually and collectively, each of the Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A hereto and that bears the Global Note
Legend and that has the “Schedule of Exchanges of Interests
in the Global Note” attached thereto, issued in accordance with Sections
2.02 and 2.07(b)(3) hereof.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      “Government Securities” means
direct obligations of, or obligations guaranteed by, the United States of
America, and the payment for which the United States pledges its full faith and
credit.

       

      “guarantee” means a guarantee
other than by endorsement of negotiable instruments for collection in the
ordinary course of business, direct or indirect, in any manner including,
without limitation, by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.  When used as a verb, “guarantee” has a correlative
meaning.

       

      “Guarantee” means the
Guarantee by each Guarantor of the Company’s obligations under this Indenture
and the Notes, executed pursuant to the provisions of this
Indenture.

       

      “Guarantors” means the Parent,
the Direct Parent and each Restricted Subsidiary of the Company that executes
this Indenture as an initial Guarantor or that becomes a Guarantor in accordance
with the provisions of this Indenture, in each case, together with their
respective successors and assigns.

       

      “Hedging Obligations” means,
with respect to any specified Person, the obligations of such Person incurred in
the normal course of business and consistent with past practices and not for
speculative purposes under:

       

      (1)           interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements entered into with one of more financial institutions and designed to
protect the Person or any of its Restricted Subsidiaries entering into the
agreement against fluctuations in interest rates with respect to Indebtedness
incurred and not for purposes of speculation;

       

      (2)           foreign
exchange contracts and currency protection agreements entered into with one of
more financial institutions and designed to protect the Person or any of its
Restricted Subsidiaries entering into the agreement against fluctuations in
currency exchanges rates with respect to Indebtedness incurred and not for
purposes of speculation;

       

      (3)           any
commodity futures contract, commodity option or other similar agreement or
arrangement designed to protect against fluctuations in the price of oil,
natural gas or other commodities used, produced, processed or sold by that
Person or any of its Restricted Subsidiaries at the time; and

       

      (4)           other
agreements or arrangements designed to protect such Person or any of its
Restricted Subsidiaries against fluctuations in interest rates, commodity prices
or currency exchange rates.

       

      “Holder” means a Person in
whose name a Note is registered.

       

      “Hydrocarbon Interests” means
all rights, titles, interests and estates now or hereafter acquired in and to
oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous
hydrocarbon leases, mineral fee interests, overriding royalty and royalty
interests, net profit interests and Production Payments interests, including any
reserved or residual interests of whatever nature.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      “Hydrocarbons” means oil, gas,
casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons and all products refined or separated
therefrom.

       

      “IAI Global Note” means a
Global Note representing Initial Series A Notes or Initial Series B Notes
substantially in the form of Exhibit A hereto bearing the Global Note Legend,
the Private Placement Legend and the Intercreditor Legend and deposited with or
on behalf of and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Initial Series A Notes or Initial Series B Notes sold to Institutional
Accredited Investors.

       

      “Indebtedness” means, with
respect to any specified Person, without duplication,

       

      (1)          all
obligations of such Person, whether or not contingent, in respect
of:

       

      (a)           the
principal of and premium, if any, in respect of outstanding (A) Indebtedness of
such Person for money borrowed and (B) Indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable;

       

      (b)           all
Capital Lease Obligations of such Person and all Attributable Debt in respect of
sale and leaseback transactions entered into by such Person;

       

      (c)           the
deferred purchase price of property, which purchase price is due more than six
months after the date of taking delivery of title to such property, including
all obligations of such Person for the deferred purchase price of property under
any title retention agreement, but excluding accrued expenses and trade accounts
payable arising in the ordinary course of business; and

       

      (d)           the
reimbursement obligation of any obligor for the principal amount of any letter
of credit, banker’s acceptance or similar transaction (excluding obligations
with respect to letters of credit securing obligations (other than obligations
described in clauses (a) through (c) above) entered into in the ordinary course
of business of such Person to the extent such letters of credit are not drawn
upon or, if and to the extent drawn upon, such drawing is reimbursed no later
than the tenth Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit);

       

      (2)          all
net obligations in respect of Hedging Obligations except to the extent such net
obligations are otherwise included in this definition;

       

      (3)          all
liabilities of others of the kind described in the preceding clause (1) or (2)
that such Person has Guaranteed or that are otherwise its legal
liability;

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      (4)          with
respect to any Production Payment, any warranties or guaranties of production or
payment by such Person with respect to such Production Payment but excluding
other contractual obligations of such Person with respect to such Production
Payment;

       

      (5)          Indebtedness
(as otherwise defined in this definition) of another Person secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person, the amount of such obligations being deemed to be the lesser
of

       

      (a)           the
full amount of such obligations so secured, and

       

      (b)           the
fair market value of such asset as determined in good faith by such specified
Person;

       

      (6)          Disqualified
Stock of such Person or a Restricted Subsidiary in an amount equal to the
greater of the maximum mandatory redemption or repurchase price (not including,
in either case, any redemption or repurchase premium) or the liquidation
preference thereof;

       

      (7)          the
aggregate preference in respect of amounts payable on the issued and outstanding
shares of preferred stock of any of the Company’s Restricted Subsidiaries that
are not Guarantors in the event of any voluntary or involuntary liquidation,
dissolution or winding up (excluding any such preference attributable to such
shares of preferred stock that are owned by such Person or any of its Restricted
Subsidiaries; provided,
that if such Person is the Company, such exclusion shall be for such preference
attributable to such shares of preferred stock that are owned by the Company or
any of its Restricted Subsidiaries); and

       

      (8)          any
and all deferrals, renewals, extensions, refinancings and refundings (whether
direct or indirect) of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (1), (2), (3),
(4), (5), (6), (7) or this clause (8), whether or not between or among the same
parties.

       

      Subject
to clause (4) of the preceding sentence, Production Payments shall not be deemed
to be Indebtedness.

       

      “Indenture” means this
Indenture, as amended or supplemented from time to time.

       

      “Indenture Documents” means,
collectively, this Indenture, the Notes, the Guarantees and the Security
Documents.

       

      “Indirect Participant” means a
Person who holds a beneficial interest in a Global Note through a
Participant.

       

      “Initial Series A Notes” means
the Series A Notes issued under this Indenture on the Issue Date.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      “Initial Series B Notes” means
the Series B Notes issued under this Indenture on the Issue Date.

       

      “Institutional Accredited
Investor” means an institution that is an “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.

       

      “Intercreditor Agreement”
means the Intercreditor Agreement to be entered into concurrently with this
Indenture, among the First Lien Agent, the Trustee and the Collateral Agent, the
Company, the Direct Parent and the Subsidiary Guarantors, as the same may be
amended, supplemented, restated or modified or replaced from time to
time.

       

      “Intercreditor Legend” means
the legend set forth in Section 2.07(f)(3) hereof to be placed on all Notes
issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.

       

      “Investments” means, with
respect to any Person, all direct or indirect investments by such Person in
other Persons (including Affiliates) in the forms of loans (including Guarantees
or other obligations), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.  If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Company, the Company will be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Restricted Subsidiary that were not sold or disposed of
in an amount determined as provided in Section 4.07(c) hereof.

       

      “Issue Date” means the date on which
Notes are first issued under this Indenture.

       

      “Lien” means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law, including any conditional sale or
other title retention agreement, any lease in the nature thereof, any option or
other agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction other than a precautionary financing
statement not intended as a security agreement.

       

      “Material Change” means an increase or
decrease (excluding changes that result solely from changes in prices and
changes resulting from the incurrence of previously estimated future development
costs) of more than 25% during a fiscal quarter in the discounted future net
revenues from proved crude oil and natural gas reserves of the Company and its
Restricted Subsidiaries, calculated in accordance with clause (1)(a) of the
definition of ACNTA; provided, however, that the following
will be excluded from the calculation of Material Change:

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (1)           any
acquisitions during the fiscal quarter of oil and gas reserves that have been
estimated by a nationally recognized firm of independent petroleum engineers and
with respect to which a report or reports of such engineers exist;
and

       

      (2)           any
disposition of properties existing at the beginning of such fiscal quarter that
have been disposed of in compliance with the Section 4.10 hereof.

       

      “Material Domestic
Subsidiary” means any Domestic
Subsidiary that is not a Guarantor, when taken together with all other Domestic
Subsidiaries that are not Guarantors, that at the time of determination has
either assets or quarterly revenues in excess of 3.0% of the consolidated assets
or quarterly revenues of the Company and its Restricted Subsidiaries, in each
case based upon the most recent quarterly financial statements available to the
Company.

       

      “Moody’s” means Moody’s
Investors Service, Inc. or any successor to the rating agency business
thereof.

       

      “Mortgages” means the
mortgages, deeds of trust, deeds to secure Indebtedness or other similar
documents granting Liens on the Company’s and its Restricted Subsidiaries’ Oil
and Gas Properties to secure the Notes and the Guarantees.

       

      “Net Income” means, with
respect to any specified Person, the net income (loss) of such Person,
determined in accordance with GAAP and before any reduction in respect of
preferred stock dividends, excluding, however:

       

      (1)           any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale or (b) the
disposition of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Subsidiaries;
and

       

      (2)           any
extraordinary gain (but not loss), together with any related provision for taxes
on such extraordinary gain (but not loss).

       

      “Net Proceeds” means the
aggregate cash proceeds received by the Company or any of its Restricted
Subsidiaries in respect of any Asset Sale (including, without limitation, any
cash received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of, without duplication:

       

      (1)           the
direct costs relating to such Asset Sale, including, without limitation, legal,
accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale,

       

      (2)           taxes
paid or payable as a result of the Asset Sale, in each case, after taking into
account any available tax credits or deductions and any tax sharing
arrangements,

       

      (3)           amounts
required to be applied to the repayment of Indebtedness, other than under the
Credit Facilities, secured by a Lien on the properties or assets that were the
subject of such Asset Sale, and

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (4)           any
reserve for adjustment in respect of the sale price of such properties or assets
established in accordance with GAAP.

       

      “Net Working Capital”
means:

       

      (5)           all
current assets of the Company and its Restricted Subsidiaries,
minus

       

      (6)           all
current liabilities of the Company and its Restricted Subsidiaries, except
current liabilities included in Indebtedness;

       

      in each
case, on a consolidated basis and determined in accordance with
GAAP.

       

      “Non-Recourse Debt” means
Indebtedness:

       

      (1)           as
to which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable as a
guarantor or otherwise, or (c) constitutes the lender;

       

      (2)           no
default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness (other than the Notes) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment of the Indebtedness to be accelerated or payable prior to its Stated
Maturity; and

       

      (3)           as
to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.

       

      “Notes” has the meaning
assigned to it in the preamble to this Indenture.  The Series A Notes
and Series B Notes shall be treated as a single class for all purposes under
this Indenture, and unless the context otherwise requires, all references to the
“Notes” shall include
the Notes issued on the Issue Date, any PIK Notes or PIK Payment and any
Exchange Notes.

       

      “Obligations” means any
principal, premium, if any, interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization, whether or not a
claim for post-filing interest is allowed in such proceeding), penalties, fees,
charges, expenses, indemnifications, reimbursements, damages, guarantees and
other liabilities or amounts payable under the documentation governing any
Indebtedness or in respect thereto.

       

      “Officer” means, with respect
to any Person, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person.

       

      “Officers’ Certificate” means
a certificate signed on behalf of the Company by two Officers of the Company,
one of whom must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company, that
meets the requirements of Section 11.05 hereof.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      “Oil and Gas Business”
means:

       

      (1)           the
acquisition, exploration, development, operation and disposition of interests in
oil, natural gas and other hydrocarbon properties;

       

      (2)           the
gathering, marketing, treating, processing (but not refining), storage, selling
and transporting of any production from those interests, including any hedging
activities related thereto; and

       

      (3)           any
activity necessary, appropriate, incidental or reasonably related to the
activities described above.

       

      “Oil and Gas Properties”
means:

       

      (1)           Hydrocarbon
Interests;

       

      (2)           the
Properties now or hereafter pooled or unitized with Hydrocarbon
Interests;

       

      (3)           all
presently existing or future unitization, pooling agreements and declarations of
pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any governmental authority)
that may affect all or any portion of the Hydrocarbon Interests;

       

      (4)           all
operating agreements, contracts and other agreements, including production
sharing contracts and agreements, that relate to any of the Hydrocarbon
Interests or the production, sale, purchase, exchange or processing of
Hydrocarbons from or attributable to such Hydrocarbon Interests;

       

      (5)           all
Hydrocarbons in and under and that may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests;

       

      (6)           all
tenements, hereditaments, appurtenances and Properties in any manner
appertaining, belonging, affixed or incidental to the Hydrocarbon Interests;
and

       

      (7)           all
Properties, rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property that may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or other wells, buildings,
structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes, together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      “Opinion of Counsel” means an
opinion in form and substance reasonably satisfactory to the Trustee from legal
counsel who is reasonably acceptable to the Trustee, that meets the requirements
of Section 11.05 hereof.  The counsel may be an employee of or counsel
to the Company, any Subsidiary of the Company or the Trustee.

       

      “Original Issue Discount
Legend” means the legend set forth in Section 2.07(f)(4) hereof to be
placed on all Notes issued under this Indenture except where otherwise permitted
by the provisions of this Indenture.

       

      “Parent” means Energy XXI
(Bermuda) Limited, a Bermuda company, and the ultimate parent company of the
Company, and any and all successors thereto.

       

      “Participant” means, with
respect to the Depositary, Euroclear or Clearstream, a Person who has an account
with the Depositary, Euroclear or Clearstream, respectively (and, with respect
to DTC, shall include Euroclear and Clearstream).

       

      “Permitted Business
Investments” means Investments made in the ordinary course of, and of a
nature that is or shall have become customary in, the Oil and Gas Business,
including through agreements, transactions, interests or arrangements that
permit one to share risk or costs, comply with regulatory requirements regarding
local ownership or satisfy other objectives customarily achieved through the
conduct of the Oil and Gas Business jointly with third parties, including
without limitation:

       

      (1)           direct
or indirect ownership of crude oil, natural gas, other related hydrocarbon and
mineral properties or any interest therein or gathering, transportation,
processing, storage or related systems; and

       

      (2)           the
entry into operating agreements, joint ventures, processing agreements, working
interests, royalty interests, mineral leases, farm-in agreements, farm-out
agreements, development agreements, production sharing agreements, area of
mutual interest agreements, contracts for the sale, transportation or exchange
of crude oil and natural gas and related hydrocarbons and minerals, unitization
agreements, pooling arrangements, joint bidding agreements, service contracts,
partnership agreements (whether general or limited), or other similar or
customary agreements, transactions, properties, interests or arrangements and
Investments and expenditures in connection therewith or pursuant thereto, in
each case made or entered into in the ordinary course of the Oil and Gas
Business, excluding, however, Investments in corporations and publicly traded
limited partnerships.

       

      “Permitted Investments”
means:

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (1)          any
Investment in the Company or in a Restricted Subsidiary of the
Company;

       

      (2)          any
Investment in Cash Equivalents;

       

      (3)          any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment:

       

      (a)           such
Person becomes a Restricted Subsidiary of the Company; or

       

      (b)           such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its properties or assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company;

       

      (4)          any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10
hereof;

       

      (5)          any
Investment in any Person, solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;

       

      (6)          any
Investments received in compromise of obligations of trade creditors or
customers that were incurred in the ordinary course of business, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer;

       

      (7)          Investments
represented by Hedging Obligations permitted pursuant to and in compliance with
Section 4.09;

       

      (8)          Permitted
Business Investments; and

       

      (9)          other
Investments in any Person having an aggregate Fair Market Value (measured on the
date such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments under this clause (9),
that are at the time outstanding, not exceeding 2.0% of ACNTA.

       

      “Permitted Liens”
means:

       

      (1)          Liens
on any property or assets of the Company or any of its Restricted Subsidiaries
securing Indebtedness and other Obligations under the Credit Facilities that are
permitted under this Indenture;

       

      (2)          Liens
on any property or assets of the Company and any Guarantor securing Indebtedness
under the Notes, the Guarantees or other Obligations under the Indenture
Documents and the Security Documents;

       

      (3)          Liens
in favor of the Company or the Guarantors;

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

     (4)          Liens
on property or assets of a Person existing at the time such Person is merged
with or into or consolidated with the Company or any Restricted Subsidiary of
the Company; provided
that such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company or the Restricted
Subsidiary;

     

    (5)           Liens
on property or assets existing at the time of acquisition of the property or
assets by the Company or any Restricted Subsidiary of the Company; provided that such Liens were
not incurred in connection with the contemplation of, such
acquisition;

     

    (6)           Liens
to secure the performance of statutory obligations, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the ordinary
course of business;

     

    (7)           Liens
existing on the Issue Date;

     

    (8)           Liens
arising from Uniform Commercial Code financing statement filings regarding
operating leases entered into by the Company and its Restricted Subsidiaries in
the ordinary course of business;

     

    (9)           Liens
securing Permitted Refinancing Indebtedness incurred to refinance Indebtedness
that was previously so secured, provided that any such Lien is limited to all or
part of the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
Indebtedness being refinanced or is in respect of property that is the security
for a Permitted Lien hereunder;

     

    (10)         Liens
securing Hedging Obligations of the Company or any of its Restricted
Subsidiaries;

     

    (11)         Liens
securing Indebtedness incurred (a) in connection with the acquisition by the
Company or any Restricted Subsidiary of assets used in the Oil and Gas Business
(including the office buildings and other real property used by the Company or
such Restricted Subsidiary in conducting its operations); provided that
(i) such Liens attach only to the assets acquired with the proceeds of such
Indebtedness; (ii) such Indebtedness is not in excess of the purchase price of
such fixed assets; and (iii) such Indebtedness is permitted to be incurred under
Section 4.09 or (b) pursuant to clause (13) of the definition of
“Permitted Debt”;

     

    (12)         any
Lien incurred in the ordinary course of business incidental to the conduct of
the business of the Company or the Restricted Subsidiaries or the ownership of
their property (including (a) easements, rights of way and similar encumbrances,
(b) rights or title of lessors under leases (other than Capital Lease
Obligations), (c) rights of collecting banks having rights of setoff,
revocation, refund or chargeback with respect to money or instruments of the
Company or the Restricted Subsidiaries on deposit with or in the possession of
such banks, (d) Liens imposed by law, including Liens under workers’
compensation or similar legislation and mechanics’, carriers’, warehousemen’s,
materialmen’s, suppliers’ and vendors’ Liens, and (e) Liens incurred to secure
performance of obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety bonds or other obligations of a
like nature and incurred in a manner consistent with industry
practice;

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    (13)         Liens
for taxes, assessments and governmental charges not yet due or the validity of
which are being contested in good faith by appropriate proceedings, promptly
instituted and diligently conducted, and for which adequate reserves have been
established to the extent required by GAAP as in effect at such
time;

     

    (14)         Capital
Lease Obligations not to exceed $10.0 million in aggregate principal amount;
and

     

    (15)         Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed $10.0
million at any one time outstanding.

     

    Notwithstanding the foregoing, the aggregate principal
amount of the Indebtedness secured by the Permitted Liens shall not exceed the
sum of (1) the aggregate principal amount of the Notes and any PIK Notes issued
on or added to the principal amount of any series of Notes in payment of
interest, (2) the aggregate principal amount available to be borrowed under the
Credit Facilities at the time such Indebtedness was incurred, (3) Hedging
Obligations, (4) Indebtedness incurred pursuant to clause (13) of the definition
of Permitted Debt set forth in Section
4.09 for the purposes set forth therein
and (5) Capital Lease Obligations not to exceed $10.0 million in aggregate
principal amount.

     

    “Permitted Parent Business”
means:

     

    (1)           the
ownership of all of the Capital Stock of its existing Subsidiaries as of the
Issue Date and any activities directly related to such ownership;

     

    (2)           the
performance of its obligations under and in connection with its Guarantee of the
Notes and any existing and future Credit Facilities and the performance of
similar obligations with respect to any Credit Facilities or other items of
Indebtedness of future direct subsidiaries of Parent, in each case otherwise
permitted to be incurred under Section
4.09 hereof;

     

    (3)           the
undertaking of any actions required by law, regulation or order, including to
maintain its existence; and

     

    (4)           directly
engaging in the Oil and Gas Business or the ownership of the Capital Stock of
other Persons that are corporations or limited liability companies or other
Persons consisting of limited partnership interests in limited partnerships, in
each case, engaged in the Oil and Gas Business.

     

    “Permitted Payments to Parent
Companies” means:

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    (1)           payments
to the Parent or any of its Subsidiaries to permit them to pay their reasonable
accounting, legal and administrative expenses when due, in an aggregate amount
not to exceed $3.5 million per annum; and

     

    (2)           for
so long as the Company is a member of a group filing a consolidated or combined
tax return with Parent or any Subsidiary thereof, payments to Parent or any
Subsidiary thereof in respect of an allocable portion of the tax liabilities of
such group that is attributable to the Company and its Subsidiaries (“Tax Payments”); provided that
the Tax Payments do not exceed the amount of the relevant tax (including any
penalties and interest) that the Company would owe if the Company were filing a
separate tax return (or a separate consolidated or combined return with its
Subsidiaries that are members of the consolidated or combined group), taking
into account any carryovers and carrybacks of tax attributes (such as net
operating losses) of the Company and such Subsidiaries from other taxable
years.  Any Tax Payments received from the Company shall be paid over
the appropriate taxing authority within 30 days of Parents’ receipt of such Tax
Payments or refunded to the Company.

     

    “Permitted Refinancing
Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, renew, refund, refinance, replace, defease or discharge other
Indebtedness of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:

     

    (1)           the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums,
incurred in connection therewith);

     

    (2)           such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, renewed, refunded, refinanced, replaced, defeased or
discharged;

     

    (3)           if
the Indebtedness being extended, renewed, refunded, refinanced, replaced,
defeased or discharged is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to, the
Notes on terms at least as favorable to the Holders as those contained in the
documentation governing the Indebtedness being extended, renewed, refunded,
refinanced, replaced, defeased or discharged; and

     

    (4)           such
Indebtedness is not incurred by a Restricted Subsidiary of the Company if the
Company is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; provided, however, that a
Restricted Subsidiary that is also a Guarantor may guarantee Permitted
Refinancing Indebtedness incurred by the Company, whether or not such Restricted
Subsidiary was an obligor or guarantor of the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    

     

    “Person” means any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, limited liability company or government or
other entity.

     

    “PIK Interest” means interest
paid either through the making of PIK Payments or the issuance of PIK
Notes.

     

    “Private Placement
Legend” means the legend set forth in Section 2.07(f)(1) hereof to be placed on all Initial Series A Notes and
Initial Series B Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.

     

    “Production Payments” means,
collectively, Dollar-Denominated Production Payments and Volumetric Production
Payments.

     

    “Property” means any interest
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, cash, securities, accounts and
contract rights.

     

    “Proved Developed Producing
Reserves” has the meaning ascribed to such term in the Credit
Agreement.

     

    “Proved Reserves” has the
meaning ascribed to such term in the Credit Agreement.

     

    “QIB” means a “qualified institutional
buyer” as defined in Rule 144A.

     

    “QIB Global Note” means a
Global Note representing Initial Series A Notes or Initial Series B Notes
substantially in the form of Exhibit A hereto bearing the Global Note Legend,
the Private Placement Legend and the Intercreditor Legend and deposited with or
on behalf of, and registered in the name of, the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Initial Series A Notes or Initial Series B Notes sold to QIBs.

     

    “Rating Agency” means each of
S&P and Moody’s, or if S&P or Moody’s or both shall not make a rating on
the Notes publicly available, a nationally recognized statistical rating agency
or agencies, as the case may be, selected by the Company (as certified by a
Board Resolution) which shall be substituted for S&P or Moody’s, or both, as
the case may be.

     

    “Rating Category”
means:

     

    (5)           With
respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B,
Class C, CC, C and D (or equivalent successor categories); and

     

    (6)           With
respect to Moody’s, any of the following categories: Aaa, Aa, A, Baa, Ba, B,
Class A, Ca, C and D (or equivalent successor categories).

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    “Ratings Decline Event” means
(a) a decrease in the rating of the Notes by either Moody’s or S&P (or if
either or both shall not make a rating on the Notes publicly available, another
nationally recognized statistical rating agency or agencies that does so) by one
or more gradations (including gradations within Rating Categories as well as
between Rating Categories).  In determining whether the rating of the
Notes has decreased by one or more gradations, gradations within Ratings
Categories, namely + or - for S&P, and 1, 2 and 3 for Moody’s will be taken
into account; for example, in the case of S&P, a Ratings Decline Event
either from BB+ to BB or BB to BB- will constitute a decrease of one gradation
or (b) a public announcement by either such Rating Agency that it has placed its
rating of the Notes under review with negative implications of a possible
decrease as described in clause (a).

     

    “Registered Exchange Offer”
has the meaning set forth for the term “Exchange Offer” in Section 2(a) of the
Registration Rights Agreement.

     

    “Registration Rights
Agreement” means one or more Registration Rights Agreements dated as of
November 12, 2009 among the Company, the Guarantors party thereto and the
Purchasers party thereto, with respect to one or more Registered Exchange Offers
for the Initial Series A Notes and Initial Series B Notes.

     

    “Responsible Officer,” when
used with respect to the Trustee, means any officer within the Corporate Trust
Administration of the Trustee (or any successor group of the Trustee) or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.

     

    “Restricted Definitive Note”
means a Definitive Note representing Initial Series A Notes or Initial Series B
Notes and bearing the Private Placement Legend.

     

    “Restricted Global Note” means
a Global Note representing Initial Series A Notes or Initial Series B Notes and
bearing the Private Placement Legend.

     

    “Restricted Investment” means
an Investment other than a Permitted Investment.

     

    “Restricted Subsidiary” of a
Person means any Subsidiary of the referent Person that is not an Unrestricted
Subsidiary.  Any Subsidiary of the Company that owns Collateral shall
be deemed to be a Restricted Subsidiary of the Company.

     

    “Rule 144” means Rule 144
promulgated under the Securities Act.

     

    “Rule 144A” means Rule 144A
promulgated under the Securities Act.

     

    “SEC” means the Securities and
Exchange Commission.

     

    “Second Lien Agent” means the
Collateral Agent.

     

    “Second Lien Claims” means (1)
Indebtedness under the Notes of any series, including any issued or added to the
principal amount thereof in payment of interest thereon and the Guarantees
permitted pursuant to clause (3) of the definition of the term Permitted Debt
and (2) all other Obligations related to the Indebtedness described in clause
(1) above.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    “Secured Obligations” means
the First Lien Claims and Second Lien Claims.

     

    “Secured Parties” means the
holders of the First Lien Claims, the First Lien Agent, the Holders of the
Second Lien Claims, the Second Lien Agent and the Trustee.

     

    “Securities Act” means the
Securities Act of 1933, as amended.

     

    “Security Agreement” means one
or more Second Lien Security Agreements, dated as of the Issue Date, made by the
Company, the Direct Parent and the Subsidiary Guarantors in favor of the
Collateral Agent, as amended or supplemented from time to time in accordance
with its terms.

     

    “Security Documents” means any
one or more of the Intercreditor Agreement, the Security Agreement, each
Mortgage and any other security agreements, pledge agreements, mortgages, deeds
of trust or other grants or transfers for security executed and delivered by the
Company, the Guarantors or any other obligor under this Indenture creating, or
purporting to create, a Lien upon Collateral in favor of the Trustee for the
benefit of the Holders of the Notes, in each case as amended, modified, renewed,
restated or replaced, in whole or part, from time to time, in accordance with
its terms.

     

    “Senior Debt” means all Indebtedness
of the Company or any of its Restricted Subsidiaries permitted to be incurred
under the terms of this Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is subordinate in right of
payment to the Notes or any Guarantee, and all Obligations with respect to the
foregoing.

     

    “Significant Subsidiary” means
any Subsidiary that would be a “significant subsidiary” as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the Issue Date.

     

    “S&P” means Standard &
Poor’s Rating Service, a division of The McGraw-Hill Companies, Inc., or any
successor to the rating agency business thereof.

     

    “Special Ratings Interest”
means, with respect to both series of Notes, additional Cash Interest payable if
one of Moody’s or S&P shall fail to issue a rating of the Notes within six
months of the Issue Date due a failure by the Company to use its reasonable best
efforts to cause such a rating to be issued, including by failing to promptly
respond to any request for information or similar requests by one or both of
such Rating Agencies, in which case Cash Interest thereon will be increased by
50 basis points until at least one of such Rating Agencies shall have delivered
its rating.

     

    “Special Registration
Interest” means, with respect to the Initial Series A Notes and Initial
Series B Notes, additional Cash Interest payable as set forth in the
Registration Rights Agreement.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    “Specified Ratios” means,
collectively, (a) the Company’s Fixed Charge Coverage Ratio for the most
recently ended four full fiscal quarters for which internal financial statements
are available, (b) the Company’s Total Leverage Ratio (as defined in the Credit
Agreement as in effect on the Issue Date) as of the most recent balance sheet
date for which internal financial statements are available, and (c) the ratio of
the Company’s Total Debt to Proved Reserves (as each such term is defined in the
Credit Agreement as in effect on the Issue Date).  For purposes of the
calculations in clause (c), (i) Total Debt will be as of the most recent balance
sheet date for which internal financial statements are available and (ii) Proved
Reserves will be as set forth in the Company’s year-end reserve report in
accordance with the definition of “ACNTA,” prepared by one or more of the
Company’s independent petroleum engineers as of the last date of the Company’s
most recent fiscal year, as adjusted for subsequent acquisitions, dispositions,
discoveries, extensions or revisions, if any, as provided for in the definition
of “ACNTA.”

     

    “Stated Maturity” means, with
respect to any installment of interest or principal on any series of
Indebtedness, the date on which the payment of interest or principal was
scheduled to be paid in the original documentation governing such Indebtedness,
and will not include any contingent obligations to repay, redeem or repurchase
any such interest or principal prior to the date originally scheduled for the
payment thereof.

     

    “Subordinated Indebtedness”
means any Indebtedness that is subordinated in right of payment to the rights of
the Holders of the Notes.

     

    “Subsidiary” means, with
respect to any specified Person:

     

    (1)           any
corporation, association or other business entity (other than a partnership) of
which more than 50% of the total voting power of Voting Stock is at the time
owned or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof);
and

     

    (2)           any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are that Person or one or more Subsidiaries of that Person (or
any combination thereof), or (c) as to which such Person and its Subsidiaries
are entitled to receive more than 50% of the assets of such partnership upon its
dissolution.

     

    “Subsidiary Guarantors” means
each Restricted Subsidiary of the Company that executes this Indenture as an
initial Guarantor or that becomes a Guarantor in accordance with the provisions
of this Indenture and their respective successors and assigns.

     

    “TIA” means the Trust
Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

     

    “Treasury Rate” means, with
respect to the Notes as of any redemption date, the yield to maturity at the
time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source or similar market data)) most
nearly equal to the period from the redemption date to June 15, 2011; provided, however, that if
the period from the redemption date to June 15, 2011 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the redemption date to the final maturity
of the Notes is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used.

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    “Trustee” means Wilmington
Trust FSB until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.

     

    “Unrestricted Subsidiary”
means any Subsidiary of the Company that is designated by the Board of Directors
of the Company as an Unrestricted Subsidiary pursuant to a resolution of the
Board of Directors of the Company, but only to the extent that such
Subsidiary:

     

    (1)           has
no Indebtedness other than Non-Recourse Debt;

     

    (2)           is
not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company;

     

    (3)           is
a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

     

    (4)           has
not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted
Subsidiaries.

     

    Any
designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be
evidenced to the Trustee by filing with the Trustee the Board Resolution giving
effect to such designation and an Officers’ Certificate certifying that such
designation complied with the preceding conditions and was permitted by Section
4.07 hereof.  If, at any time, any Unrestricted Subsidiary would fail
to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and any Lien of such
Subsidiary will be deemed to be incurred as of such date, and if such
Indebtedness is not permitted to be incurred as of such date under Section 4.09
hereof or such Lien is not permitted to be incurred as of such date under
Section 4.12 hereof, then, in either case, the Company will be in default of
such covenant.

     

    “Volumetric Production
Payments” means production
payment obligations recorded as deferred revenue in accordance with GAAP,
together with all related undertakings and obligations.

     

    “Voting Stock” of any
specified Person as of any date means the Capital Stock of such Person that is
at the time entitled (without regard to the occurrence of any contingency) to
vote in the election of the Board of Directors of such Person.

     

    “Weighted Average Life to
Maturity” means, when applied to any Indebtedness at any date, the number
of years obtained by dividing:

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    (1)           the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by

     

    (2)           the
then outstanding principal amount of such Indebtedness.

     

    Section
1.02       Other
Definitions.

     

    
      
        
          
            
              	
                      Term

                    	 
      	
                      Defined in

                      Section

                    
	
                      “Affiliate
      Transaction”

                    	 
      	
                      4.11

                    
	
                      “Asset
      Sale Offer”

                    	 
      	
                      3.09

                    
	
                      “Authentication
      Order”

                    	 
      	
                      2.03

                    
	
                      “Calculation
      Agent”

                    	 
      	
                      4.01

                    
	
                      “Change
      of Control Offer”

                    	 
      	
                      4.15

                    
	
                      “Change
      of Control Payment”

                    	 
      	
                      4.15

                    
	
                      “Change
      of Control Payment Date”

                    	 
      	
                      4.15

                    
	
                      “Collateral
      Disposition Proceeds Account”

                    	 
      	
                      4.10

                    
	
                      “Covenant
      Defeasance”

                    	 
      	
                      8.03

                    
	
                      “DTC”

                    	 
      	
                      2.04

                    
	
                      “Event
      of Default”

                    	 
      	
                      6.01

                    
	
                      “incur”

                    	 
      	
                      4.09

                    
	
                      “Interest
      Accrual Period”

                    	 
      	
                      4.01

                    
	
                      “Interest
      Payment Date”

                    	 
      	
                      Exhibit
      A

                    
	
                      “Legal
      Defeasance”

                    	 
      	
                      8.02

                    
	
                      “Offer
      Amount”

                    	 
      	
                      3.09

                    
	
                      “Offer
      Period”

                    	 
      	
                      3.09

                    
	
                      “Paying
      Agent”

                    	 
      	
                      2.04

                    
	
                      “Payment
      Default”

                    	 
      	
                      6.01

                    
	
                      “Permitted
      Debt”

                    	 
      	
                      4.09

                    
	
                      “PIK
      Notes”

                    	 
      	
                      2.01

                    
	
                      “PIK
      Payment”

                    	 
      	
                      2.01

                    
	
                      “Purchase
      Date”

                    	 
      	
                      3.09

                    
	
                      “Record
      Date”

                    	 
      	
                      Exhibit
      A

                    
	
                      “Registrar”

                    	 
      	
                      2.04

                    
	
                      “Restricted
      Payments”

                    	 
      	
                      4.07

                    
	
                      “Second
      Priority Lien”

                    	 
      	
                      13.02

                    
	
                      “Services”

                    	 
      	
                      4.11

                    
	
                      “Trustee”

                    	 
      	
                      Preamble

                    

            

          

        

      

    

     

    Section
1.03     Incorporation by Reference of Trust
Indenture Act.

     

    Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    The
following TIA terms used in this Indenture have the following
meanings:

     

    “indenture securities” means
the Notes;

     

    “indenture security Holder”
means a Holder of a Note;

     

    “indenture to be qualified”
means this Indenture;

     

    “indenture Trustee” or “institutional Trustee” means
the Trustee; and

     

    “obligor” on the Notes and the
Guarantees means the Company and the Guarantors, respectively, and any successor
obligor upon the Notes and the Guarantees, respectively.

     

    All other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.

     

    Section
1.04      Rules of
Construction.

     

    Unless
the context otherwise requires:

     

    (1)           a
term has the meaning assigned to it;

     

    (2)           an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

     

    (3)           “or” is not
exclusive;

     

    (4)           words
in the singular include the plural, and in the plural include the
singular;

     

    (5)           “will” shall be interpreted to
express a command;

     

    (6)           provisions
apply to successive events and transactions; and

     

    (7)           references
to sections of or rules under the Securities Act will be deemed to include
substitute, replacement of successor sections or rules adopted by the SEC from
time to time.

     

    ARTICLE
2

    THE
NOTES

     

    Section
2.01       Amount of Notes.

     

    The
aggregate principal amount of Notes which may be authenticated and delivered
under this Indenture on the Issue Date is $338,000,000, comprised of $278,000,000 in
initial aggregate principal amount of Initial Series A Notes and $60,000,000 in
initial aggregate principal amount of Initial Series B Notes.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    In
connection with the payment of PIK Interest in respect of the Notes, the Company
is entitled to, without the consent of the Holders and without regard to Section
4.09, (a) in the case of the Global Notes, increase the outstanding principal
amount of the Global Notes of the applicable series (the “PIK Payment”) or (b) in the
case of Definitive Notes, issue additional Definitive Notes of the applicable
series (the “PIK
Notes”) under this Indenture on the same terms and conditions as the
Notes.

     

    The
Series A Notes and the Series B Notes, including any PIK Notes or PIK Payment on
either series of Notes shall be treated as a single class for all purposes under
this Indenture, including, without limitation, waivers, amendments, redemptions
and offers to purchase.

     

    Section
2.02        Form and Dating.

     

    (a)           General.  The Notes
and the Trustee’s certificate of authentication will be substantially in the
form of Exhibit A hereto.  The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage.  Each Note
will be dated the date of its authentication.  The Notes shall be
initially issued in denominations of $2,000 and integral multiples of $1,000 in
excess thereof.

     

    The terms
and provisions contained in the Notes will constitute, and are hereby expressly
made, a part of this Indenture and the Company, the Guarantors and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.  However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.

     

    (b)           Global
Notes.  Notes of either series issued in global form will be
substantially in the form of Exhibit A hereto (including the Global Note Legend
thereon and the “Schedule of Exchanges
of Interests in the Global Note” attached thereto).  Notes
issued in definitive form will be substantially in the form of Exhibit A hereto
(but without the Global Note Legend thereon and without the “Schedule of Exchanges
of Interests in the Global Note” attached thereto).  Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and
redemptions.  Any endorsement of a Global Note to reflect the amount
of any increase or decrease in the aggregate principal amount of outstanding
Notes represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section
2.07 hereof.  The parties
hereto expect that each Global Note (including any PIK Payment thereon) will be
credited by the Depositary for the accounts of the Participants in accordance
with the Applicable Procedures, in amounts proportionate to each such
Participant’s respective beneficial interests in the Global Note, rounded as
appropriate to the most precise increment provided by the Applicable Procedures,
which the parties hereto understand, in the case of DTC as of the Issue Date, is
the nearest $1.00.

     

    
      
         

      

      
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    Section
2.03        Execution and
Authentication.

     

    The Trustee shall authenticate and make available for
delivery upon a written order of the Issuer signed by one Officer (who must be
the principal executive officer, the principal financial officer, the treasurer
or the principal accounting officer of the Company), (a) Notes for original
issue on the Issue Date in an aggregate principal amount of $338,000,000,
consisting of $278,000,000 aggregate principal amount of Initial Series
A  Notes and $60,000,000 aggregate principal amount of Initial Series
B Notes, (b) subject to the terms of this Indenture, additional Notes for
original issue after the Issue Date, provided that the aggregate principal
amount of Notes issued on and after the Issue Date (other than PIK Notes and PIK
Payments) shall not exceed $338,000,000, (c) the Exchange Notes for issue in a
Registered Exchange Offer pursuant to the Registration Rights Agreement for a
like principal amount of Initial Series A Notes and a like principal amount of
Initial Series B Notes exchanged pursuant thereto or otherwise pursuant to an
effective registration statement under the Securities Act and (d) any PIK Notes
issued or PIK Payment made in payment of interest.  Such order shall
specify the amount of separate Note certificates to be authenticated, the
principal amount of each of the Notes to be authenticated, the date on which the
original issue of Notes is to be authenticated, the registered holder of each of
the Notes and delivery instructions and whether the Notes are to be Initial
Series A Notes, Initial Series B Notes, Exchange Notes or PIK
Notes.  Notwithstanding anything to the contrary in this Indenture or
Exhibit A,
any issuance of Notes after the Issue Date shall be in a principal amount of at
least $2,000 and integral multiples of $1,000 in excess of $2,000, subject to
last sentence of this Section 2.03 in connection with the issuance of PIK Notes; provided,
however, that Notes may be issuable in denominations of less than $2,000
to the extent necessary to accommodate book-entry positions that have been
created in denominations of less than $2,000 by DTC.

     

    At least
one Officer must sign the Notes for the Company by manual or facsimile
signature.

     

    If an
Officer whose signature is on a Note no longer holds that office at the time a
Note is authenticated, the Note will nevertheless be valid.

     

    A Note
will not be valid until authenticated by the manual signature of the
Trustee.  The signature will be conclusive evidence that the Note has
been authenticated under this Indenture.

     

    The Trustee will, upon receipt of a written order of the
Company signed by one Officer (who must be the principal executive officer, the
principal financial officer, the treasurer or the principal accounting officer
of the Company) (an “Authentication
Order”), authenticate Notes for original issue that may be validly issued
under this Indenture, including any PIK Notes and Exchange Notes.  The
aggregate principal amount of Notes outstanding at any time may not exceed the
aggregate principal amount of Notes authorized for issuance by the Company
pursuant to one or more Authentication Orders, except as provided in
Section 2.08 hereof.

     

    The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Notes.  An authenticating agent may authenticate Notes
whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the same rights as an Agent to
deal with Holders or an Affiliate of the Company.

    
      
         

      

      
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    On any
Interest Payment Date on which the Issuer pays PIK Interest with respect to a
Global Note, the Trustee shall increase the principal amount of such Global Note
by an amount equal to the interest payable, rounded up to the nearest $1,000,
for the relevant interest period on the principal amount of such Global Note as
of the relevant Record Date for such Interest Payment Date, to be allocated for
the credit of the Participants on such Record Date, pro rata in accordance with
their interests and subject to the procedures of DTC, and an adjustment shall be
made on the books and records of the Trustee (if it is then the Note Custodian
for such Global Note) with respect to such Global Note, by the Trustee or the
Note Custodian, to reflect such increase.  On any Interest Payment
Date on which the Issuer pays PIK Interest with respect to a Definitive Note,
the Issuer shall issue PIK Notes in payment of such PIK Interest, and the
principal amount of any such PIK Notes issued to any Holder, for the relevant
interest period as of the relevant Record Date for such Interest Payment Date,
shall be rounded up to the nearest $1.00.  Any amount by which such
interest payable on either (i) a Global Note shall be rounded up to the nearest
$1,000, or (ii) a Definitive Note shall be rounded up to the nearest $1.00,
shall be solely the obligation of, and at the expense of, the
Company.

     

    Section
2.04        Registrar and Paying
Agent.

     

    The
Company will maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (“Registrar”) and an office or
agency where Notes may be presented for payment (“Paying
Agent”).  The Registrar will keep a register of the Notes and
of their transfer and exchange.  The Company may appoint one or more
co-registrars and one or more additional paying agents.  The term
“Registrar” includes
any co-registrar and the term “Paying Agent” includes any
additional paying agent.  The Company may change any Paying Agent or
Registrar without notice to any Holder.  The Company will notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture.  If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such.  The
Trustee will initially act as Paying Agent and Registrar.  The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.

     

    The
Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary
with respect to the Global Notes.

     

    The
Company initially appoints the Trustee to act as the Registrar and Paying Agent
and to act as Custodian with respect to the Global Notes.

     

    Section
2.05        Paying Agent to Hold Money in
Trust.

     

    The
Company will require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment.  While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee.  The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee.  Upon payment over
to the Trustee, the Paying Agent (if other than the Company or a Subsidiary)
will have no further liability for the money.  If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying
Agent.  Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee will serve as Paying Agent for the Notes.

     

    
      
         

      

      
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    Section
2.06        Holder Lists.

     

    The
Trustee will preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of all Holders and shall
otherwise comply with TIA § 312(a).  If the Trustee is not the
Registrar, the Company will furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA § 312(a).

     

    Section
2.07       Transfer and
Exchange.

     

    (a)           Transfer and Exchange of Global
Notes.  A Global Note may not be transferred except as a whole
by the Depositary to a nominee of the Depositary, by a nominee of the Depositary
to the Depositary or to another nominee of the Depositary, or by the Depositary
or any such nominee to a successor Depositary or a nominee of such successor
Depositary.  All Global Notes will be exchanged by the Company for
Definitive Notes if:

     

    (1)           the
Company delivers to the Trustee notice from the Depositary that it is unwilling
or unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 90 days after the date of such
notice from the Depositary;

     

    (2)           the
Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee; or

     

    (3)           there
has occurred and is continuing a Default or Event of Default with respect to the
Notes.

     

    Upon the occurrence of either of the
preceding events in (1) or (2) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee.  Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections
2.08 and 2.11 hereof.  Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.07 or Section 2.08 or 2.11 hereof, shall be authenticated
and delivered in the form of, and shall be, a Global Note.  A Global
Note may not be exchanged for another Note other than as provided in this
Section
2.07(a), however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section
2.07(b) or
2.07(c) hereof.

     

    (b)           Transfer and Exchange of Beneficial
Interests in the Global Notes.  The transfer and exchange of
beneficial interests in the Global Notes will be effected through the
Depositary, in accordance with the provisions of this Indenture and the
Applicable Procedures.  Beneficial interests in the Restricted Global
Notes will be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act.  Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:

     

    
      
         

      

      
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    (1)           Transfer of Beneficial
Interests in the Same Global Note.  Beneficial interests in any
Restricted Global Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted Global Note in
accordance with the transfer restrictions set forth in the Private Placement
Legend.  No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.07(b)(1).

     

    (2)           All Other Transfers
and Exchanges of Beneficial Interests in Global Notes.  In
connection with all transfers and exchanges of beneficial interests that are not
subject to Section 2.07(b)(1) above, the transferor of such beneficial interest
must deliver to the Registrar either:

     

    (A)         both:

     

    (1)           a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to credit or cause to be credited a beneficial interest in another Global Note
in an amount equal to the beneficial interest to be transferred or exchanged;
and

     

    (2)           instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase;
or

     

    (B)         both:

     

    (1)           a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and

     

    (2)           instructions
given by the Depositary to the Registrar containing information regarding the
Person in whose name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above;

     

    Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in this Indenture
and the Notes or otherwise applicable under the Securities Act, the Trustee
shall adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.07(i) hereof.

     

    (3)           Transfer of Beneficial
Interests to Another Restricted Global Note.  A beneficial
interest in any Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Restricted
Global Note if the transfer complies with the requirements of Section 2.07(b)(2) above and the Registrar receives the
following:

     

    
      
         

      

      
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    (A)           If
the transferee will take delivery in the form of a beneficial interest in the
QIB Global Note, then the transferor must deliver a certificate in the form
of  Exhibit B hereto, including the certifications in item (1)
thereof; and

     

    (B)           if
the transferee will take delivery in the form of a beneficial interest in the
IAI Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (2)(d) thereof, if applicable.

     

    (c)          Transfer or Exchange of Beneficial
Interests for Definitive Notes; Restricted Definitive
Notes.  If in accordance with Section 2.07(a) a beneficial
interest in a Restricted Global Note is to be exchanged for a Restricted
Definitive Note or transferred to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:

     

    (A)           if
the holder of such beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof;

     

    (B)           if
such beneficial interest is being transferred to a QIB in accordance with Rule
144A, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;

     

    (C)           if
such beneficial interest is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2)(a) thereof;

     

    (D)           if
such beneficial interest is being transferred to an Institutional Accredited
Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraph (B) above, a certificate
to the effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (2)(d) thereof, if
applicable;

     

    (E)           if
such beneficial interest is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2)(b) thereof; or

     

    (F)           if
such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)(c)
thereof,

    
      
         

      

      
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    the
Trustee shall cause the aggregate principal amount of the applicable Global Note
to be reduced accordingly pursuant to Section 2.07(i) hereof, and the Company
shall execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate principal
amount.  Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.07(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered.  Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.07(c) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.

     

    (d)          Transfer and Exchange of Definitive
Notes for Beneficial Interests.

     

    (1)          Restricted Definitive Notes to
Beneficial Interests in Restricted Global Notes.  If any Holder
of a Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:

     

    (A)           if
the Holder of such Restricted Definitive Note proposes to exchange such Note for
a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item
(1)(b) thereof;

     

    (B)           if
such Restricted Definitive Note is being transferred to a QIB a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;

     

    (C)           if
such Restricted Definitive Note is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2)(a) thereof;

     

    (D)           if
such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in subparagraphs (B)
and (C) of this Section 2.07(d), a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (2)(d) thereof, if applicable;

     

    (E)           if
such Restricted Definitive Note is being transferred to the Company or any of
its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2)(b) thereof; or

     

    (F)           if
such Restricted Definitive Note is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)(c)
thereof,

    
      
         

      

      
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    the
Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the QIB
Global Note, and in all other cases, the IAI Global Note.

     

    (e)          Transfer and Exchange of Definitive
Notes for Definitive Notes.  Upon request by a Holder of
Definitive Notes and such Holder’s compliance with the provisions of this
Section 2.07(e), the Registrar will register the transfer or exchange of
Definitive Notes.  Prior to such registration of transfer or exchange,
the requesting Holder must present or surrender to the Registrar the Definitive
Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing.  In addition, the requesting Holder must
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section
2.07(e).

     

    (1)          Restricted Definitive Notes to
Restricted Definitive Notes.  Any Restricted Definitive Note
may be transferred to and registered in the name of Persons who take delivery
thereof in the form of a Restricted Definitive Note if the Registrar receives
the following:

     

    (A)           If
the transfer will be made pursuant to Rule 144A, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;

     

    (B)           if
the transfer will be made pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (2)(d) thereof, if
applicable.

     

    (f)          Legends.  The
following legends will appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the
applicable provisions of this Indenture.

     

    (1)          Private Placement
Legend.

     

    (A)           Except
as permitted by subparagraph (B) of this Section 2.07(f)(1), each Restricted
Global Note and each Restricted Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:

    
      
         

      

      
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    “THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
“QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS
AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO THE
EXTENT THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) TO AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT.  THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.”

    
      
         

      

      
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    (B)           Notwithstanding
the foregoing, any Global Note or Definitive Note shall not bear the Private
Placement Legend if it is (I) a Series A Note held by a Holder other than an
affiliate (as defined in Rule 144), (II) an Exchange Note issued pursuant to
subparagraph (g) of this Section 2.07 (or issued in exchange therefore or in
substitution thereof), (III) is subject to an Opinion of Counsel to the Trustee
reasonably satisfactory to the Company to the effect that neither such legend
nor the related restrictions on transfer are required in order to maintain
compliance with the Securities Act or (IV) is otherwise sold pursuant to an
effective registration statement under the Securities Act.

     

    (2)          Global Note
Legend.  Each Global Note will bear a legend in substantially
the following form:

     

    “THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.07 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12
OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF ENERGY XXI GULF COAST,
INC.

     

    UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

     

    (3)          Intercreditor Agreement
Legend.  So long as the Intercreditor Agreement shall be in
effect, each Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the legend in
substantially the following form:

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

     

    “THE
TERMS OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT,
DATED NOVEMBER 12, 2009, BY AND AMONG THE FIRST LIEN AGENT, WILMINGTON TRUST
FSB, AS TRUSTEE AND COLLATERAL AGENT, THE COMPANY, ENERGY XXI (USA), INC. AND
THE SUBSIDIARY GUARANTORS.”

     

    (4)          Original Issue Discount
Legend.  If required by U.S. Treasury regulations, each Global
Note and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:

     

    “THIS
NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ.
OF THE INTERNAL REVENUE CODE.  THE ISSUE DATE IS NOVEMBER 12,
2009.  INFORMATION REGARDING THE ISSUE PRICE, THE YIELD TO MATURITY
AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT UNDER THIS NOTE CAN BE PROMPTLY
OBTAINED BY SENDING A WRITTEN REQUEST TO THE TREASURER OF THE ISSUER AT 1021
MAIN, SUITE 2626, HOUSTON, TEXAS 77002.”

     

    (g)          Registered Exchange
Offer.  Upon the occurrence of the Registered Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall execute and
issue and, upon receipt of an Authentication Order in accordance with Section
2.03 hereof, the Trustee shall authenticate:

     

    (1)          one
or more Global Notes in an aggregate principal amount equal to the principal
amount of the beneficial interests in the Restricted Global Notes accepted for
exchange in the Exchange Offer by Persons that certify in the applicable letters
of transmittal that (A) they are not Broker-Dealers (as defined in the
Registration Rights Agreement), (B) they are not participating in a distribution
of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Company; and

     

    (2)          Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer by
Persons that certify in the applicable letters of transmittal that (A) they are
not Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (C) they are not affiliates (as defined in Rule 144) of the
Company.

     

    Concurrently
with the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Trustee shall deliver to the Persons designated by the Holders of Definitive
Notes so accepted Definitive Notes in the appropriate principal
amount.

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    (h)          Cancellation and/or Adjustment of
Global Notes.  At such time as all beneficial interests in a
particular Global Note have been exchanged for Definitive Notes or a particular
Global Note has been redeemed, repurchased or canceled in whole and not in part,
each such Global Note will be returned to or retained and canceled by the
Trustee in accordance with Section 2.12 hereof.  At any time prior to
such cancellation, if any beneficial interest in a Global Note is exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note will be reduced
accordingly and an endorsement will be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note will be increased accordingly and an
endorsement will be made on such Global Note by the Trustee or by the Depositary
at the direction of the Trustee to reflect such increase.

     

    (i)          General Provisions Relating to
Transfers and Exchanges.

     

    (1)           To
permit registrations of transfers and exchanges, the Company will execute and
the Trustee will authenticate Global Notes and Definitive Notes upon receipt of
an Authentication Order in accordance with Section 2.03 hereof or at the
Registrar’s request.

     

    (2)          No
service charge will be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.11, 3.06, 3.09, 4.10, 4.15 and 9.05
hereof).

     

    (3)          The
Registrar will not be required to register the transfer of or exchange of any
Note selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.

     

    (4)          All
Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes will be the valid obligations of
the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.

     

    (5)          Neither
the Registrar nor the Company will be required:

     

    (A)           to
issue, to register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection;

     

    (B)           to
register the transfer of or to exchange any Note selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part; or

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    (C)           to
register the transfer of or to exchange a Note between a record date and the
next succeeding interest payment date.

     

    (6)           Prior
to due presentment for the registration of a transfer of any Note, the Trustee,
any Agent and the Company may deem and treat the Person in whose name any Note
is registered as the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by notice to
the contrary.

     

    (7)           The
Trustee will authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.03 hereof.

     

    (8)           All
certifications, certificates and Opinions of Counsel required to be submitted to
the Registrar pursuant to this Section 2.07 to effect a registration of transfer
or exchange may be submitted by facsimile.

     

    
      	
              Section
      2.08

            	
              Replacement
      Notes.

            

    

     

    If any
mutilated Note is surrendered to the Trustee or the Company and the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, the Company will issue and the Trustee, upon receipt of an Authentication
Order, will authenticate a replacement Note if the Trustee’s requirements are
met.  If required by the Trustee or the Company, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Trustee
and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced.  The Company may charge for its expenses in replacing a
Note.

     

    Every
replacement Note is an additional obligation of the Company and will be entitled
to all of the benefits of this Indenture equally and proportionately with all
other Notes duly issued hereunder.

     

    
      	
              Section
      2.09

            	
              Outstanding
      Notes.

            

    

     

    The Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation, those
reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.09
as not outstanding.  Except as set forth in Section 2.10 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a) hereof.

     

    If a Note
is replaced pursuant to Section 2.08 hereof, it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a protected purchaser.

     

    If the
principal amount of any Note is considered paid under Section 4.01 hereof, it
ceases to be outstanding and interest on it ceases to accrue.

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

     

    If the
Paying Agent (other than the Company, a Subsidiary or an Affiliate of any
thereof) holds, on a redemption date or maturity date, money sufficient to pay
Notes payable on that date, then on and after that date such Notes will be
deemed to be no longer outstanding and will cease to accrue
interest.

     

    
      	
              Section
      2.10

            	
              Treasury
      Notes.

            

    

     

    In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Company or any
Guarantor, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any Guarantor,
will be considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
will be so disregarded.

     

    
      	
              Section
      2.11

            	
              Temporary
      Notes.

            

    

     

    Until
certificates representing Notes are ready for delivery, the Company may prepare
and the Trustee, upon receipt of an Authentication Order, will authenticate
temporary Notes.  Temporary Notes will be substantially in the form of
certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee.  Without unreasonable delay, the Company will prepare and the
Trustee will authenticate definitive Notes in exchange for temporary
Notes.

     

    Holders
of temporary Notes will be entitled to all of the benefits of this
Indenture.

     

    
      	
              Section
      2.12

            	
              Cancellation.

            

    

     

    The
Company at any time may deliver Notes to the Trustee for
cancellation.  The Registrar and Paying Agent will forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment.  The Trustee and no one else will cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and will destroy canceled Notes (subject to the record retention
requirement of the Exchange Act).  Certification of the destruction of
all canceled Notes will be delivered to the Company.  The Company may
not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.

     

    
      	
              Section
      2.13

            	
              Defaulted
      Interest.

            

    

     

    The
Company will pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and interest at the rate equal to
2% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01
hereof.  The Company will notify the Trustee in writing of the amount
of defaulted interest proposed to be paid on each Note and the date of the
proposed payment.  The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special
record date may be less than 10 days prior to the related payment date for such
defaulted interest.  At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) will mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

     

    
      	
              Section
      2.14

            	
              CUSIP
      Number.

            

    

     

    The
Company in issuing the Notes may use “CUSIP,” “ISIN” or such other numbers, and
if so, the Trustee shall use such CUSIP, ISIN or such other numbers in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP, ISIN or such other numbers printed in the notice or on
the Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes.  The Company shall promptly notify the
Trustee of any change in the CUSIP, ISIN or such other number.  Upon
the consummation of the Registered Exchange Offer, subject to compliance with
applicable U.S. federal income tax law, the Company shall submit an appropriate
application to CUSIP Global Services, an entity managed on behalf of the
American Bankers Association by S&P, to assign to the Exchange Notes issued
in exchange for the Initial Series A Notes and the Initial Series B Notes the
same CUSIP Identifier(s).

     

    ARTICLE
3

    REDEMPTION
AND PREPAYMENT

     

    
      	
              Section
      3.01

            	
              Notices to
      Trustee.

            

    

     

    If the
Company elects to redeem Notes pursuant to the optional redemption provisions of
Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not
more than 60 days before a redemption date, an Officers’ Certificate setting
forth:

     

    (1)          the
clause of this Indenture pursuant to which the redemption shall
occur;

     

    (2)          the
redemption date;

     

    (3)          the
principal amount of Notes to be redeemed; and

     

    (4)          the
redemption price.

     

    
      	
              Section
      3.02

            	
              Selection of Notes to Be
      Redeemed or Purchased.

            

    

     

    If less
than all of the Notes are to be redeemed or purchased in an offer to purchase at
any time, the Trustee will select Notes for redemption or purchase on a pro rata basis unless
otherwise required by law or applicable stock exchange
requirements.

     

    In the
event of partial redemption or purchase by lot, the particular Notes to be
redeemed or purchased will be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption or purchase date by
the Trustee from the outstanding Notes not previously called for redemption or
purchase.

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

     

    The
Trustee will promptly notify the Company in writing of the Notes selected for
redemption or purchase and, in the case of any Note selected for partial
redemption or purchase, the principal amount thereof to be redeemed or
purchased.  Notes and portions of Notes selected will be in amounts of
$2,000 and integral multiples of $1,000 in excess thereof; no Notes in
denominations of $2,000 or less may be redeemed in part, except that if all of
the Notes of a Holder are to be redeemed or purchased, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed or purchased, subject in the case of Global Notes, to the procedures of
DTC.  Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption or purchase also apply to
portions of Notes called for redemption or purchase.

     

    
      	
              Section
      3.03

            	
              Notice of
      Redemption.

            

    

     

    Subject
to the provisions of Section 3.09 hereof, at least 30 days but not more than 60
days before a redemption date, the Company will mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address, except that redemption notices may be mailed
more than 60 days prior to a redemption date if the notice is issued in
connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 10 hereof.

     

    The
notice will identify the Notes to be redeemed and will state:

     

    (1)          the
redemption date;

     

    (2)          the
redemption price;

     

    (3)          if
the Notes are being redeemed in part:

     

    (a)           the
Trustee shall select Notes for redemption as follows: i) if the relevant Notes
are listed on any national securities exchange, in compliance with the
requirements of such exchange on which the Notes are listed; or ii) on a pro
rata basis; and in either case, not in parts of $2,000 or less;

     

    (b)           the
portion of the principal amount of such Notes to be redeemed and that, after the
redemption date upon surrender of such Notes, a new Note or Notes in principal
amount equal to the unredeemed portion will be issued upon cancellation of the
original Note; the name and address of the Paying Agent;

     

    (4)          that
Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

     

    (5)          that,
unless the Company defaults in making such redemption payment, interest on Notes
called for redemption ceases to accrue on and after the redemption
date;

     

    (6)          the
paragraph of the Notes and/or Section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; and

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

     

    (7)          that
no representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Notes.

     

    At the
Company’s request, the Trustee will give the notice of redemption in the
Company’s name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date (or a shorter period as agreed to by the Trustee), an Officers’ Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in this Section 3.03 above.

     

    
      	
              Section
      3.04

            	
              Effect of Notice of
      Redemption.

            

    

     

    Once
notice of redemption is mailed in accordance with Section 3.03 hereof, Notes
called for redemption become irrevocably due and payable on the redemption date
at the redemption price.  A notice of redemption may not be
conditional.

     

    
      	
              Section
      3.05

            	
              Deposit of Redemption or
      Purchase Price.

            

    

     

    No later
than 10:00 a.m. Eastern Time on the redemption or purchase date, the Company
will deposit with the Trustee or with the Paying Agent money in the currency or
currency unit in which the Notes are payable sufficient to pay the redemption or
purchase price of and accrued interest on all Notes to be redeemed or purchased
on that date.  The Trustee or the Paying Agent will promptly return to
the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest on, all Notes to be redeemed or
purchased.

     

    If the
Company complies with the provisions of the preceding paragraph, on and after
the redemption or purchase date, interest will cease to accrue on the Notes or
the portions of Notes called for redemption or purchase.  If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date.  If any Note called for redemption or
purchase is not so paid upon surrender for redemption or purchase because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption or purchase date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.

     

    
      	
              Section
      3.06

            	
              Notes Redeemed or Purchased in
      Part.

            

    

     

    Upon
surrender of a Note that is redeemed or purchased in part, the Company will
issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    
      	
              Section
      3.07

            	
              Optional
      Redemption.

            

    

     

    (a)           Except
as set forth in clauses (b) and (c) of this Section 3.07, the Notes shall not be
redeemable at the option of the Company prior to June 15,
2011.  Beginning on June 15, 2011, the Company may redeem all or a
portion of the Notes, at once or over time, after giving the notice required
pursuant to Section 3.03 hereof, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest on the Notes redeemed, to the applicable redemption date (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant Interest Payment Date), if redeemed during the twelve-month
periods beginning on June 15 of the years set forth below:

     

    
      
        
          	
                  
                    Period

                  

                	 	
                  
                    Percentage

                  

                	 
	
                  2011

                	 	 	106.500	%
	
                  2012

                	 	 	103.250	%
	
                  2013
      and thereafter

                	 	 	100.000	%

        

      

    

    

    (b)           At
any time and from time to time prior to June 15, 2011, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount of the
Notes issued under this Indenture at a redemption price (expressed as a
percentage of principal amount) equal to 110% of the principal amount thereof,
plus accrued and unpaid interest, if any, on the Notes to the redemption date
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date) with the net cash
proceeds of one or more Equity Offerings by the Company, provided, however, that (i) at least
65% of the aggregate principal amount of the Notes (including PIK Notes or PIK
Payments) remains outstanding immediately after giving effect to such redemption
(excluding Notes held by the Company or its Subsidiaries); and (ii) any such
redemption shall be made within 90 days of the date of closing of such Equity
Offering.

     

    (c)           At
any time prior to June 15, 2011, the Company may at its option redeem the Notes
in whole or in part, at once or over time, after giving the notice required
pursuant to Section 3.03 hereof, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued and
unpaid interest, if any, to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the redemption date).

     

    (d)           Any
redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.

     

    (e)           Except
as provided in this Section 3.07, the Notes will not be redeemable at the
Company’s option prior to their Stated Maturity.

     

    
      	
              Section
      3.08

            	
              Mandatory
      Redemption.

            

    

     

    The
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.

     

    
      	
              Section
      3.09

            	
              Offer to Purchase by
      Application of Excess
Proceeds.

            

    

     

    In the
event that, pursuant to Section 4.10 hereof, the Company shall be required to
commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will
follow the procedures specified below and in Sections 4.10(c), (d), (e) and
(f):

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    

     

    (a)          The
Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets.

     

    (b)          The
Asset Sale Offer will remain open for a period of at least 20 Business Days
following its commencement and not more than 30 Business Days, except to the
extent that a longer period is required by applicable law (the “Offer Period”).

     

    (c)          No
later than three Business Days after the termination of the Offer Period (the
“Purchase Date”), the
Company will apply all Excess Proceeds (the “Offer Amount”) to the
purchase of Notes and such other pari passu Indebtedness (on a
pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale
Offer.  Payment for any Notes so purchased will be made in the same
manner as interest payments are made.

     

    (d)          If
the Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest will be paid to
the Person in whose name a Note is registered at the close of business on such
record date, and no additional interest will be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.

     

    (e)          Upon
the commencement of an Asset Sale Offer, the Company will send, by first class
mail, a notice to the Trustee and each of the Holders, with a copy to the
Trustee.  The notice will contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer.  The notice, which will govern the terms of the Asset Sale
Offer, will state:

     

    (1)           that
the Asset Sale Offer is being made pursuant to this Section 3.09 and Section
4.10 hereof and the length of time the Asset Sale Offer will remain
open;

     

    (2)           the
Offer Amount, the purchase price and the Purchase Date;

     

    (3)           that
any Note not tendered or accepted for payment will continue to accrue
interest;

     

    (4)           that,
unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer will cease to accrue interest after the
Purchase Date;

     

    (5)           that
Holders electing to have a Note purchased pursuant to an Asset Sale Offer may
elect to have Notes purchased in amounts of $2,000 and in integral multiples of
$1,000 in excess thereof only;

     

    (6)           that
Holders electing to have Notes purchased pursuant to any Asset Sale Offer will
be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” attached to the Notes completed, or transfer by book-entry
transfer, to the Company, a Depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before the
Purchase Date;

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

     

    (7)           that
Holders will be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;

     

    (8)           that,
if the aggregate principal amount of Notes and other pari passu Indebtedness
surrendered by holders thereof exceeds the Offer Amount, the Company will select
the Notes and other pari
passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the Company
so that only Notes in denominations of $2,000, or integral multiples of $1,000
in excess thereof, will be purchased); provided, that no Notes in
denominations of $2,000 or less shall be purchased in part, except that if all
of the Notes of a Holder are to be purchased, the entire outstanding amount of
Notes held by such Holder, even if not a multiple of $1,000, shall be purchased,
subject, in the case of Global Notes, to the procedures of DTC; and

     

    (9)           that
Holders whose Notes were purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).

     

    On or
before the Purchase Date, the Company will, to the extent lawful, accept for
payment, on a pro rata
basis to the extent necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has
been tendered, all Notes tendered, and will deliver or cause to be delivered to
the Trustee the Notes properly accepted together with an Officers’ Certificate
stating that such Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09.  The
Company, the Depositary or the Paying Agent, as the case may be, will promptly
(but in any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company will promptly issue a new Note, and the Trustee, upon written request
from the Company, will authenticate and mail or deliver (or cause to be
transferred by book entry) such new Note to such Holder, in a principal amount
equal to any unpurchased portion of the Note surrendered.  Any Note
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof.  The Company will publicly announce the results of the
Asset Sale Offer on the Purchase Date.

     

    Other
than as specifically provided in this Section 3.09, any purchase pursuant to
this Section 3.09 shall be made pursuant to the provisions of Sections 3.01
through 3.06 hereof.

     

    The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the Asset Sale provisions of this
Indenture, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under
Section 4.10 of this Indenture by virtue of such conflict.

    
      
         

      

      
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      ARTICLE
4

      COVENANTS

       

      Section
4.01         Payment of
Notes.

       

      The
Company will pay or cause to be paid the principal of, premium, if any, and
interest on, the Notes on the dates and in the manner provided in this Indenture
and the Notes.  Principal, premium, if any, and interest will be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then
due.  The Company shall pay Special Registration Interest on the
Initial Series A Notes and Initial Series B Notes, if any, in the same manner,
on the dates and in the amounts set forth in the Registration Rights Agreement,
the Initial Series A Notes, the Initial Series B Notes and in this
Indenture.  The Company shall pay Special Ratings Interest on the
Series A Notes and Series B Notes, if any, in the same manner, on the dates and
in the amounts set forth in the Notes and in this Indenture.

       

      Section
4.02          Maintenance of Office or
Agency.

       

      The
Company will maintain an office or agency (which may be an office of the Trustee
or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served.  The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or
agency.  If at any time the Company fails to maintain any such
required office or agency or fails to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.

       

      The
Company may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations.  The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

       

      The
Company hereby designates the Corporate Trust Office of the Trustee as one such
office or agency of the Company in accordance with Section 2.04
hereof.

       

      Section
4.03          Reports.

       

      (a)           Whether
or not required by the Commission, so long as any notes are outstanding, the
Parent will file with the Commission for public availability within the time
periods specified in the Commission’s rules and regulations (unless the
Commission will not accept such a filing), and the Parent will furnish to the
Trustee and, upon its request, to any of the Holders, within five Business Days
of filing, or attempting to file, the same with the Commission:

      
        
           

        

        
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      (1)           all
quarterly and annual financial and other information with respect to the Parent
and its Subsidiaries that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Parent were required to file such
Forms, including a “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and, with respect to
the annual information only, a report on the annual financial statements by the
Parent’s certified independent accountants;

       

      (2)           all
current reports that would be required to be filed with the Commission on Form
8-K if the Parent were required to file such reports; and

       

      (3)           unaudited
quarterly and audited annual financial statements of the Company and its
Subsidiaries.

       

      (b)           If
the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
then the quarterly and annual financial information required by paragraph (a) of
this Section 4.03 will include a reasonably detailed presentation, either on the
face of the financial statements or in the footnotes thereto, and in
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the
Company.

       

      (c)           In
addition, the Company and the Guarantors agree that, for so long as any Notes
remain outstanding during any period when the Company or the Parent is not
subject to Section 13 or 15(d) under the Exchange Act or otherwise permitted to
furnish to the SEC certain information 12g3-2(b) of the Exchange Act, they will
furnish to the Holders of Notes and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.

       

      Section
4.04          Compliance
Certificate.

       

      (a)           The
Company and each Guarantor shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers’ Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect
thereto.

      
        
           

        

        
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      (b)           So
long as any of the Notes are outstanding, the Company will deliver to the
Trustee, forthwith upon any Officer becoming aware of any Default or Event of
Default, an Officers’ Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect
thereto.

       

      Section
4.05          Taxes.

       

      The
Company will pay, and will cause each of its Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.

       

      Section
4.06          Stay, Extension and Usury
Laws.

       

      The
Company and each of the Guarantors covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been
enacted.

       

      Section
4.07          Restricted
Payments.

       

      (a)           The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly:

       

      (1)           declare
or pay any dividend or make any other payment or distribution on account of the
Company’s or any of its Restricted Subsidiaries’ Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
payable to the Company or a Restricted Subsidiary of the Company);

       

      (2)           purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
in connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the
Company;

       

      (3)           make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Subordinated Indebtedness, except a payment of
interest or principal at the Stated Maturity thereof; or

      
        
           

        

        
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      (4)           make
any Restricted Investment (all such payments and other actions set forth in
these clauses (1) through (4) above being collectively referred to as “Restricted
Payments”),

       

      unless,
at the time of and after giving effect to such Restricted Payment:

       

      (5)           no
Default or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment;

       

      (6)           the
Company would, at the time of such Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning of
the applicable four-quarter period, have been permitted to incur at least $1.00
of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09(a) hereof; and

       

      (7)           such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after June 8, 2007
(excluding Restricted Payments permitted by clauses (2), (3), (4), (6), (7),
(8), (9) and (10) of paragraph (b) of this Section 4.07), is less than the sum,
without duplication, of:

       

      (A)           50%
of the Consolidated Net Income of the Company for the period (taken as one
accounting period) from April 1, 2007 to the end of the Company’s most recently
ended fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus

       

      (B)           100%
of the aggregate net cash proceeds received by the Company (including the Fair
Market Value of any Additional Assets to the extent acquired in consideration of
Equity Interests of the Company (other than Disqualified Stock)) after the Issue
Date as a contribution to its common equity capital or from the issue or sale of
Equity Interests of the Company (other than Disqualified Stock) or from the
issue or sale of convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of the Company that have been converted into or
exchanged for such Equity Interests (other than Equity Interests (or
Disqualified Stock or debt securities) sold to a Subsidiary of the Company),
plus

       

      (C)           to
the extent that any Restricted Investment that was made after the Issue Date is
sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the
cash return of capital with respect to such Restricted Investment (less the cost
of disposition, if any) and (ii) the initial amount of such Restricted
Investment, plus

       

      (D)           to
the extent that any Unrestricted Subsidiary of the Company designated as such
after the Issue Date is redesignated as a Restricted Subsidiary after the Issue
Date, the lesser of (i) the Fair Market Value of the Company’s Investment in
such Subsidiary as of the date of such redesignation or (ii) such Fair Market
Value as of the date on which such Subsidiary was originally designated as an
Unrestricted Subsidiary.

      
        
           

        

        
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      (b)           So
long as no Default or Event of Default has occurred and is continuing or would
be caused thereby, the preceding provisions will not prohibit:

       

      (1)           the
payment of any dividend within 60 days after the date of declaration of the
dividend, if at the date of declaration, the dividend would have complied with
the provisions of this Indenture;

       

      (2)           the
redemption, repurchase, retirement, defeasance or other acquisition of any
Subordinated Indebtedness of the Company or any Subsidiary Guarantor or of any
Equity Interests of the Company in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of the Company)
of, Equity Interests of the Company (other than Disqualified Stock); provided
that the amount of any such net cash proceeds that are utilized for any such
Restricted Payment will be excluded from clause (3)(B) of the preceding
paragraph;

       

      (3)           the
defeasance, redemption, repurchase, retirement or other acquisition of
Subordinated Indebtedness of the Company or any Guarantor with the net cash
proceeds from an incurrence of, or in exchange for, Permitted Refinancing
Indebtedness;

       

      (4)           the
payment of any dividend by a wholly-owned Restricted Subsidiary of the Company
to the Company or a Restricted Subsidiary;

       

      (5)           the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company held
by any current or former director or employee of the Company or any of its
Restricted Subsidiaries pursuant to any director or employee equity subscription
agreement or plan, stock option agreement or similar agreement or plan; provided
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests may not exceed $2.0 million in any twelve-month
period;

       

      (6)           the
acquisition of Equity Interests by the Company in connection with the exercise
of stock options or stock appreciation rights by way of cashless
exercise;

       

      (7)           so
long as no Default has occurred and is continuing, upon the occurrence of a
Change of Control or an Asset Sale and within 60 days after the completion of
the offer to repurchase the Notes pursuant to Section 4.15 or Section 4.10
(including the purchase of all Notes tendered), any purchase, repurchase,
redemption, defeasance, acquisition or other retirement for value of
Subordinated Indebtedness required under the terms thereof as a result of such
Change of Control or Asset Sale at a purchase or redemption price not to exceed
101% of the outstanding principal amount thereof, plus accrued and unpaid
interest thereon, if any, provided that, in the notice to Holders relating to a
Change of Control or Asset Sale hereunder, the Company shall describe this
clause (7);

      
        
           

        

        
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      (8)           the
payment of cash in lieu of fractional shares of Capital Stock in connection with
any transaction otherwise permitted under this Indenture;

       

      (9)           Permitted
Payments to Parent Companies; and

       

      (10)         other
Restricted Payments in an aggregate amount since the Issue Date not to exceed
$20.0 million.

       

      (c)           The
amount of all Restricted Payments (other than cash) will be the Fair Market
Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted
Payment.  The fair market value of any assets or securities that are
required to be valued by this covenant will be determined by the Board of
Directors of the Company, whose determination shall be evidenced by a resolution
of the Board of Directors of the Company.  Such Board of Directors’
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
Fair Market Value exceeds $20.0 million.  Not later than the date of
making any Restricted Payment under the first paragraph of this covenant the
Company will deliver to the Trustee an Officers’ Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, together with a copy
of any fairness opinion or appraisal required by this Indenture.  For
purposes of determining compliance with this Section 4.07, in the event that a
Restricted Payment meets the criteria of more than one of the categories of
Restricted Payments described in the preceding clauses (1) through (10), the
Company will be permitted to classify (or later classify or reclassify in whole
or in part in its sole discretion) such Restricted Payment in any manner that
complies with this covenant.

       

      Section
4.08          Dividend and Other Payment
Restrictions Affecting Subsidiaries.

       

      The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:

       

      (1)           pay
dividends or make any other distributions on its Capital Stock to the Company or
any of its Restricted Subsidiaries, or pay any Indebtedness or other obligations
owed to the Company or any of its Restricted Subsidiaries;

       

      (2)           make
loans or advances to the Company or any of its Restricted Subsidiaries;
or

       

      (3)           transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries.

       

      However,
the preceding restrictions will not apply to encumbrances or restrictions
existing under or by reason of:

      
        
           

        

        
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      (4)           agreements
governing Existing Indebtedness and Credit Facilities (including agreements
related to First Lien Claims under the Credit Facility) as in effect on the
Issue Date and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those agreements,
provided that the amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other payment
restrictions than those contained in those agreements on the Issue
Date;

       

      (5)           this
Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the other
Security Documents;

       

      (6)           applicable
law;

       

      (7)           any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition, which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred;

       

      (8)           customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices;

       

      (9)           purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions on that property of the nature described in clause (3) of
the preceding paragraph;

       

      (10)         any
agreement for the sale or other disposition of a Restricted Subsidiary of the
Company that restricts distributions by that Restricted Subsidiary pending its
sale or other disposition;

       

      (11)         Permitted
Refinancing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially
more restrictive, taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced;

       

      (12)       
agreements governing other Indebtedness of the Company and one or more
Restricted Subsidiaries permitted under this Indenture, provided that the
restrictions in the agreements governing such Indebtedness are not materially
more restrictive, taken as a whole, than those in this Indenture;

       

      (13)         Liens
securing Indebtedness otherwise permitted to be incurred under the provisions of
Section 4.12 that limit the right of the debtor to dispose of the assets subject
to such Liens;

       

      (14)         provisions
with respect to the disposition or distribution of assets or property in joint
venture agreements, asset sale agreements, stock sale agreements, agreements
respecting Permitted Business Investments and other similar agreements entered
into in the ordinary course of business; and

      
        
           

        

        
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      (15)         restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business.

       

      Section
4.09          Incurrence of Indebtedness and
Issuance of Preferred Stock.

       

      (a)           The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur”)
any Indebtedness (including Acquired Debt), neither the Company nor any
Guarantor (other than Parent and the Direct Parent) will issue any Disqualified
Stock and the Company will not permit any of its other Restricted Subsidiaries
to issue any shares of preferred stock; provided, however, that the
Company and any Guarantor may incur Indebtedness (including Acquired Debt) or
issue Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued, would have been
at least 2.5 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Disqualified Stock had been issued, as the case may be,
at the beginning of such four-quarter period.

       

      (b)           The
provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of
the following items of Indebtedness (collectively, “Permitted
Debt”):

       

      (1)           the
incurrence by the Company and or any Guarantor of additional Indebtedness
(including letters of credit) under one or more Credit Facilities in an
aggregate principal amount at any one time outstanding under this clause (1)
(with letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Subsidiaries thereunder) not
to exceed an amount equal to the greater of (a) $400.0 million, less the aggregate amount of
all Net Proceeds of Asset Sales applied by the Company or any of its Restricted
Subsidiaries since the Issue Date to repay revolving credit Indebtedness under
the Credit Facilities and effect a corresponding commitment reduction thereunder
pursuant to Section 4.10 hereof and (b) 30% of ACNTA as of the date of such
incurrence;;

       

      (2)           the
incurrence by the Company or any of its Restricted Subsidiaries of the Existing
Indebtedness;

       

      (3)           the
incurrence by the Company and the Guarantors of Indebtedness represented by the
Series A Notes, Series B Notes and any PIK Notes or PIK Payment on any series of
Notes and the related Guarantees to be issued on the Issue Date and any Exchange
Notes and related Guarantees;

       

      (4)           the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such Restricted
Subsidiaries, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to, refund, refinance or replace any
Indebtedness incurred pursuant to this clause (4), not to exceed $10.0 million
at any time outstanding;

      
        
           

        

        
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      (5)           the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used
to refund, refinance or replace any Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under Section
4.09(a) hereof or clauses (2), (3), (12) or (13) of this Section 4.09(b) or this
clause (5);

       

      (6)           the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided,
however, that:

       

      (A)           if
the Company is the obligor on such Indebtedness and a Guarantor is not the
obligee, such Indebtedness must be expressly subordinated to the prior payment
in full in cash of all Obligations then due with respect to the Notes, or if a
Guarantor is the obligor on such Indebtedness and neither the Company nor
another Guarantor is the obligee, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all Obligations with
respect to the Guarantee of such Guarantor; and

       

      (B)           any
(i) subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company, and (ii) sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary of the Company,

       

      will be
deemed, in each case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);

       

      (7)           the
incurrence by the Company or any of its Restricted Subsidiaries of Hedging
Obligations;

       

      (8)           the
guarantee by the Company or any of the Guarantors of Indebtedness of the Company
or any Guarantor that was permitted to be incurred by another provision of this
Section 4.09;

       

      (9)           the
incurrence by the Company or any of its Restricted Subsidiaries of obligations
relating to net gas balancing positions arising in the ordinary course of
business and consistent with past practice;

       

      (10)         the
incurrence by the Company or any of its Unrestricted Subsidiaries of
Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if
any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event will be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary that is not permitted by this clause
(10);

      
        
           

        

        
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      (11)         the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
in respect of bid, performance, surety and similar bonds issued for the account
of the Company and any of its Restricted Subsidiaries in the ordinary course of
business, including guarantees and obligations of the Company and any of its
Restricted Subsidiaries with respect to letters of credit supporting such
obligations (in each other than an obligation for money borrowed);

       

      (12)         Indebtedness
of a Restricted Subsidiary incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by, or merged into, the Company or any
Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or
any portion of the funds utilized to consummate the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise
in connection with, or in contemplation of, such acquisition); provided, however, that at the time
such Restricted Subsidiary is acquired by the Company, the Company would have
been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a)
after giving effect to the incurrence of such Indebtedness pursuant to this
clause (12);

       

      (13)         Indebtedness
(including secured Indebtedness) of the Company or any of its Restricted
Subsidiaries incurred (a) to provide all or any portion of the funds utilized to
consummate a transaction pursuant to which assets are acquired or another Person
becomes a Restricted Subsidiary or is otherwise acquired by the Company or (b)
in connection with, or in contemplation of, such acquisition; provided, however, that after
giving effect to such transaction on a pro forma basis, (i) the Specified Ratios
would have improved over those immediately prior to such transaction (solely for
purposes of the calculation of the Fixed Charge Coverage Ratio pursuant to this
clause (13), excluding from Fixed Charges any Fixed Charges relating to
unsecured Indebtedness) and (ii) no Ratings Decline Event shall
occur;

       

      (14)         the
incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness
arising from agreement of the Company or any of its Restricted Subsidiaries
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or Capital Stock of a Subsidiary, provided
that the maximum aggregate liability in respect of all such indebtedness shall
at no time exceed the gross proceeds actually received by the Company and its
Restricted Subsidiaries in connection with such disposition; and

       

      (15)         the
incurrence by the Company or any of its Restricted Subsidiaries of additional
Indebtedness in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding, not to exceed $25.0 million.

       

      Notwithstanding
the foregoing, the Company may not refinance Funded Indebtedness requiring the
Company to repurchase or repay such Funded Indebtedness upon a change of control
that would not constitute a Change of Control under this Indenture, unless this
Indenture is amended to provide Holders of the Notes the same rights upon the
occurrence of such a change of control as those provided to holders of such
Funded Indebtedness.

      
        
           

        

        
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      For
purposes of determining compliance with this Section 4.09, in the event that an
item of Indebtedness (including Acquired Debt) meets the criteria of more than
one of the categories of Permitted Debt described in clauses (1) through (15) of
this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a),
the Company will be permitted to classify (or later classify or reclassify in
whole or in part in its sole discretion) such item of Indebtedness in any manner
that complies with this covenant.

       

      The
amount of Indebtedness issued at a price that is less than the principal amount
thereof will be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.  Indebtedness of any Person
existing at the time such Person becomes a Restricted Subsidiary shall be deemed
to have been incurred by the Company and the Restricted Subsidiary at the time
such Person becomes a Restricted Subsidiary.  The accrual of interest,
the accretion or amortization of original issue discount, the payment of
interest on any Indebtedness in the form of additional Indebtedness with the
same terms (including, without limitation, any PIK Notes or PIK Payments), and
the payment of dividends on Disqualified Stock in the form of additional shares
of the same class of Disqualified Stock will not be deemed to be an incurrence
of Indebtedness or an issuance of Disqualified Stock for purposes of this
covenant; provided, in
each such case, that the amount thereof is included in Fixed Charges of the
Company as accrued.

       

      Section
4.10          Asset Sales.

       

      (a)           The
Company will not, and will not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale (including a Collateral Disposition)
unless:

       

      (1)           the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the Fair Market
Value of the assets or Equity Interests issued or sold or otherwise disposed
of;

       

      (2)           the
Fair Market Value is determined by the Company’s Board of Directors and
evidenced by a resolution of the Board of Directors of the Company set forth in
an Officers’ Certificate delivered to the Trustee;

       

      (3)           at
least 75% of the consideration received by the Company or such Restricted
Subsidiary from all Asset Sales since the Issue Date, in the aggregate, is in
the form of cash; and

       

      (4)           in
the case of a Collateral Disposition, the Collateral Agent is granted a
perfected Lien (subject only to Permitted Liens) in all assets or property
received by the Company or any Restricted Subsidiary as consideration therefor
(or, with respect to cash, the portion of such cash that constitutes Net
Proceeds) as additional Collateral under the Security Documents to secure the
Second Lien Claims, and, in the case of cash constituting Net Proceeds, such
cash must be deposited into a segregated account under the control of the First
Lien Agent and the Collateral Agent that includes only proceeds from the
Collateral Disposition and interest earned thereon (a “Collateral Disposition Proceeds
Account”), which proceeds shall be subject to release from the Collateral
Disposition Proceeds Account for the uses described below in this covenant as
provided for in the Security Documents.

      
        
           

        

        
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      Except
with respect to a Collateral Disposition, for purposes of this provision, each
of the following will be deemed to be cash:

       

      (A)           any
liabilities, as shown on the Company’s or such Restricted Subsidiary’s most
recent balance sheet, of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability; and

       

      (B)           any
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are converted within 90 days by
the Company or such Restricted Subsidiary into cash, to the extent of the cash
received in that conversion.

       

      (b)           Within
360 days after the receipt of any Net Proceeds from an Asset Sale, the Company
or any such Restricted Subsidiary may apply those Net Proceeds at its option to
any combination of the following:

       

      (1)           to
repay, redeem or repurchase Indebtedness constituting First Lien Claims, the
Notes and other pari
passu Indebtedness secured by a Lien permitted by this Indenture;
provided that if such Indebtedness is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto as specified in Section
4.09 hereof;

       

      (2)           to
acquire all or substantially all of the properties or assets of one or more
other Persons primarily engaged in the Oil and Gas Business, and, for this
purpose, a division or line of business of a Person shall be treated as a
separate Person so long as such properties and assets are acquired by the
Company or a Restricted Subsidiary;

       

      (3)           to
acquire a majority of the Voting Stock of one or more other Persons primarily
engaged in the Oil and Gas Business, if after giving effect to any such
acquisition of Voting Stock, such Person is or becomes a Restricted
Subsidiary;

       

      (4)           to
make one or more capital expenditures; or

       

      (5)           to
acquire other long-term assets that are used or useful in the Oil and Gas
Business;

       

      provided, that if the Net
Proceeds are from a Collateral Disposition, the property, assets, Voting Stock
or capital expenditures referred to in clauses (2), (3), (4) and (5) shall be of
a type substantially similar to such items constituting Collateral, and the
Collateral Agent is granted a perfected Lien (subject only to Permitted Liens)
therein in accordance with the Security Documents.

      
        
           

        

        
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      Pending
the final application of any Net Proceeds (other than Net Proceeds held in the
Collateral Disposition Proceeds Account), the Company or any such Restricted
Subsidiary may temporarily reduce revolving credit borrowings or otherwise
invest the Net Proceeds in any manner that is not prohibited by this
Indenture.

       

      (c)           Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
Section 4.10(b) hereof will constitute “Excess
Proceeds.”  On the 361st day after the Asset Sale (or, at the
Company’s option, any earlier date), if the aggregate amount of Excess Proceeds
(including Net Proceeds held in a Collateral Disposition Proceeds Account) then
exceeds $15.0 million, the Company will make an Asset Sale Offer to all Holders
of Notes pursuant to Section 3.09 hereof, and all holders of other Indebtedness
that is pari passu with
the Notes containing provisions similar to those in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets, to
purchase the maximum principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds.

       

      (d)          The
offer price in any Asset Sale Offer will be equal to 100% of principal amount
plus accrued and unpaid interest, if any, to the date of settlement, subject to
the right of Holders on the relevant Record Date to receive interest due on an
Interest Payment Date that is on or prior to the date of settlement, and will be
payable in cash.

       

      (e)           If
any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use those Excess Proceeds for any purpose not otherwise prohibited
by this Indenture.

       

      (f)           If
the aggregate principal amount of Notes and other Indebtedness ranking pari passu with the Notes
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee will select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds will be reset at zero.

       

      Section
4.11          Transactions with
Affiliates.

       

      (a)           The
Company will not, and will not permit any of its Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”),
unless:

       

      (1)           the
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person; and

       

      (2)           the
Company delivers to the Trustee:

       

      (A)           with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $10.0 million, a resolution of
the Board of Directors of the Company set forth in an Officers’ Certificate
certifying that such Affiliate Transaction complies with this covenant and that
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of the Company; and

      
        
           

        

        
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      (B)           with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $25.0 million, the Company
delivers to the Trustee a written opinion that such Affiliate Transaction(s) is
fair, from a financial point of view, to the Company and its Restricted
Subsidiaries, taken as a whole, or that such Affiliate Transaction(s) is not
less favorable to the Company and its Restricted Subsidiaries than could
reasonably be expected to be obtained at the time in an arm’s-length transaction
with a person who is not an Affiliate, in either such case issued by an
independent accounting, appraisal or investment banking firm of national
standing.

       

      (b)           The
following items will not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of paragraph (a) of this
Section:

       

      (1)           any
employment or severance agreement or other employee compensation agreement,
arrangement or plan, or any amendment thereto, entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of
business;

       

      (2)           transactions
between or among any of the Parent, the Direct Parent, the Company and its
Restricted Subsidiaries;

       

      (3)           transactions
with a Person (other than an Unrestricted Subsidiary of the Company) that is an
Affiliate of the Company solely because the Company owns an Equity Interest in
such Person;

       

      (4)           the
payment of reasonable directors’ fees, payments, the payments of other
reasonable benefits and the provision of officers’ and directors’
indemnification and insurance to the extent permitted by law to persons who are
officers and directors of the Parent or its Subsidiaries and the Company and its
Restricted Subsidiaries and who are not otherwise Affiliates of the Company, in
each case in the ordinary course of business and approved by the Board of
Directors of the Company;

       

      (5)           sales
of Equity Interests (other than Disqualified Stock) to Affiliates of the
Company;

       

      (6)           transactions
among the Company, its Restricted Subsidiaries and Energy XXI Services, Inc.
(“Services”), a
wholly-owned subsidiary of Parent and a sister company of the Direct Parent and
the Company, relating to the provision of employment, administrative and related
services by Services pursuant to the Cost Allocation Agreement in effect on the
Issue Date among the Company, certain Subsidiaries and Services, as such
agreement may be amended, modified or supplemented from time to time provided
that any such amendment, modification or supplement will not be materially
adverse to the Company or the Restricted Subsidiaries compared to the terms of
such agreement in effect on the Issue Date; and

      
        
           

        

        
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      (7)           Restricted
Payments that are permitted pursuant to Section 4.07 hereof, including Permitted
Payments to Parent Companies.

       

      Section
4.12          Liens.

       

      The
Company will not and will not permit any of its Restricted Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing Indebtedness or Attributable Debt upon any of
their respective assets or properties, except for Permitted Liens.

       

      Section
4.13          Business
Activities.

       

      The
Company will not, and will not permit any Restricted Subsidiary to, engage in
any business other than the Oil and Gas Business, except to such extent as would
not be material to the Company and its Restricted Subsidiaries taken as a whole,
and Parent will not engage in any business other than the Permitted Parent
Business, except to such extent as would not be material to Parent.

       

      Section
4.14          Corporate
Existence.

       

      Subject
to Article 5 hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect:

       

      (1)           its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary; and

       

      (2)           the
rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries;

       

      provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries, taken as a whole, and that the loss thereof would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.

       

      Section
4.15          Offer to Repurchase Upon Change of
Control.

       

      (a)           Upon
the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to
each Holder to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price
in cash equal to 101% of the aggregate principal amount of Notes repurchased
plus accrued and unpaid interest, if any, on the Notes repurchased to the date
of purchase, subject to the rights of Holders on the relevant record date to
receive interest due on the relevant interest payment date (the “Change of Control Payment”).
Within 30 days following any Change of Control, the Company will mail a notice
to each Holder describing the transaction or transactions that constitute the
Change of Control and stating:

      
        
           

        

        
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     (1)           that
the Change of Control Offer is being made pursuant to this Section 4.15 and that
all Notes tendered will be accepted for payment;

     

    (2)           the
purchase price and the purchase date, which shall be no earlier than 30 days and
no later than 60 days from the date such notice is mailed (the “Change of Control Payment
Date”);

     

    (3)           that
any Note not tendered will continue to accrue interest;

     

    (4)           that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date;

     

    (5)           that
Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect
Purchase” attached to the Notes completed, or transfer by book-entry
transfer, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date;

     

    (6)           that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have the Notes purchased; and

     

    (7)           that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $2,000 in principal amount or an
integral multiple of $1,000 in excess thereof; provided, that no Notes in
denominations of $2,000 or less shall be purchased in part, except that if all
of the Notes of a Holder are to be purchased, the entire outstanding amount of
Notes held by such Holder, even if not a multiple of $1,000, shall be purchased,
subject, in the case of Global Notes, to the procedures of DTC.

     

    The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with the repurchase of the
Notes as a result of a Change in Control.  To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.15, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
this Section 4.15 by virtue of such compliance.

     

    (b)           On
the Change of Control Payment Date, the Company will, to the extent
lawful:

    
      
         

      

      
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    (1)           accept
for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer;

     

    (2)           deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes properly tendered; and

     

    (3)           deliver
or cause to be delivered to the Trustee the Notes properly accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Company.

     

    The
Paying Agent will promptly mail to each Holder of Notes properly tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided, that each new Note
will be in an aggregate principal amount of $2,000 or an integral multiple of
$1,000 in excess thereof.  The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.

     

    (c)           Notwithstanding
anything to the contrary in this Section 4.15, the Company will not be required
to make a Change of Control Offer upon a Change of Control if (1) a third party
makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 4.15 and Section 3.09
hereof and purchases all Notes properly tendered and not withdrawn under the
Change of Control Offer, or (2) notice of redemption has been given pursuant to
Section 3.07 hereof, unless and until there is a default in payment of the
applicable redemption price.

     

    Section
4.16           Payments for
Consent.

     

    Neither
the Parent, the Company nor any of the Company's Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Beneficial Owner or Holder of any notes for
or as an inducement to any consent to any waiver, supplement or amendment of any
terms or provisions of this Indenture or the Notes, unless such consideration is
offered to be paid or agreed to be paid to all Beneficial Owners and Holders of
the Notes which so consent in the time frame set forth in solicitation documents
relating to such consent.

     

    Section
4.17           Additional
Guarantees.

     

    If the
Company or any of its Restricted Subsidiaries acquires or creates another
Material Domestic Subsidiary after the Issue Date, or if any Restricted
Subsidiary that is not already a Guarantor guarantees any other Indebtedness of
the Company after such date, then in either case the Company will cause such
Subsidiary to become a Guarantor by executing a supplemental indenture pursuant
to which it becomes a Guarantor within 20 Business Days of the date on which it
was acquired or created or guaranteed Indebtedness of the Company, as the case
may be; provided,
however, that the foregoing shall not apply to Subsidiaries of the
Company that have properly been designated as Unrestricted Subsidiaries in
accordance with this Indenture for so long as they continue to constitute
Unrestricted Subsidiaries.

     

    
      
         

      

      
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      In
addition to the foregoing, the Company shall cause each Domestic Restricted
Subsidiary that owns or holds Collateral and is not already a Guarantor and any
Subsidiary that guarantees the Indebtedness under the Credit Agreement or the
Existing Notes but that does not guarantee the Notes to become a Guarantor by
executing a supplemental indenture in the manner contemplated by this
Indenture.

       

    

    Section
4.18           Designation of Restricted and
Unrestricted Subsidiaries.

     

    (a)           The
Board of Directors of the Company may designate any Restricted Subsidiary of the
Company (other than a Restricted Subsidiary owning Collateral) to be an
Unrestricted Subsidiary if that designation would not cause a
Default.  If a Restricted Subsidiary of the Company is designated as
an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary properly designated will be deemed to be an Investment made as of the
time of the designation and will reduce the amount available for Restricted
Payments under Section 4.07(a) hereof or represent Permitted Investments, as
determined by the Company.  That designation will only be permitted if
the Investment would be permitted at that time and if the Subsidiary so
designated otherwise meets the definition of an Unrestricted
Subsidiary.

     

    (b)           The
Board of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary of the Company; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and the creation, incurrence, assumption or otherwise causing to
exist any Lien of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, (2) such Lien is permitted under
Section 4.12 hereof and (3) no Default or Event of Default would be in existence
following such designation.

     

    Section
4.19           Sale and Leaseback
Transactions

     

    The
Company will not, and will not permit any of its Restricted Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company or any
Guarantor may enter into a sale and leaseback transaction if:

     

    (a)           the
Company or that Guarantor, as applicable, could have (i) incurred Indebtedness
in an amount equal to the Attributable Debt relating to such sale and leaseback
transaction under the Fixed Charge Coverage Ratio test in Sections 4.09(a)
hereof and (ii) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12 hereof;

     

    (b)           the
gross cash proceeds of that sale and leaseback transaction are at least equal to
the fair market value, as determined in good faith by the Board of Directors of
the Company and set forth in an Officers’ Certificate delivered to the Trustee,
of the property that is the subject of that sale and leaseback transaction;
and

     

    (c)           the
transfer of assets in that sale and leaseback transaction is permitted by, and
the Company applies the proceeds of such transaction in compliance with, Section
4.10 hereof.

    
      
         

      

      
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    Section
4.20          Impairment of Security Interest;
Liens on Additional Property.

     

    (1)           Subject
to the Intercreditor Agreement, neither the Company nor any of its Restricted
Subsidiaries will take or omit to take any action which would adversely affect
or impair in any material respect the Liens in favor of the Collateral Agent
with respect to the Collateral, except as otherwise permitted or required by the
Security Documents or this Indenture.  Neither the Company nor any of
its Restricted Subsidiaries will enter into any agreement that requires the
proceeds received from any sale of Collateral to be applied to repay, redeem,
defease or otherwise acquire or retire any Indebtedness of any Person, other
than the First Lien Claims and the Notes.  The Company shall, and
shall cause each Guarantor to, at its sole cost and expense, execute and deliver
all such agreements and instruments as the Collateral Agent or the Trustee shall
reasonably request to more fully or accurately describe the property intended to
be Collateral or the obligations intended to be secured by the Security
Documents.  The Company shall, and shall cause each Subsidiary
Guarantor to, at its sole cost and expense, file any such notice filings or
other agreements or instruments as may be reasonably necessary or desirable
under applicable law to perfect the Liens created by the Security Documents at
such times and at such places as the Collateral Agent or the Trustee may
reasonably request.

     

    (2)           If
the Company grants a Lien in favor of the First Lien Agent on any property of
the type constituting Collateral after the Issue Date, the Company will grant a
Lien on such property in favor of the Collateral Agent to secure the
Notes.  If any Guarantor grants a Lien in favor of the First Lien
Agent on any property of the type constituting Collateral, after the Issue Date,
such Guarantor will grant a Lien on such property in favor of the Collateral
Agent to secure its Guarantee.  Any such Lien granted by the Company
or a Guarantor will be subject to the provisions of the Intercreditor Agreement
and otherwise will be granted pursuant to documentation in substantially the
form used for the grant of the related Lien in favor of the First Lien Agent,
and the Company or such Guarantor, as applicable, will deliver to the Collateral
Agent opinions of counsel and certificates (on which the Collateral Agent may
rely) and other documents relating to such Lien that are substantially the same
as those that were delivered to the First Lien Agent, if any, except insofar as
they relate to the first-priority nature of the First Lien Agent’s
Lien.

     

    (3)           The
Company will deliver to the Trustee an Officers’ Certificate not later than
April 15 and October 15 in each calendar year while the Notes are outstanding,
or as frequently as the Company certifies to such effect to the First Lien
Agent, certifying that the Collateral includes Oil and Gas Properties
representing at least 85% of the Proved Reserves and Proved Developed Producing
Reserves of the Company and the Subsidiary Guarantors located in the United
States as reflected in the most recent available annual or semi-annual reserve
report (which shall use pricing assumptions consistent with SEC guidelines), or
to the extent such Oil and Gas Properties represent less than such percentage,
certify that it has directed the First Lien Agent to put in place Liens
sufficient to increase such percentage to at least 85% with the Company using
reasonable commercial efforts to correct any shortfall within 90
days.  To the extent that any Oil and Gas Properties constituting
Collateral are released from the Lien of this Indenture and are then assigned to
Persons other than the Company and the Guarantors, any reserves attributable to
such Oil and Gas Properties shall be deemed excluded from such reserve report
for the purpose of determining whether such 85% requirement is met after giving
effect to such release.

    
      
         

      

      
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    (4)           At
or prior to the time that the Company is required to deliver to the Trustee an
Officers’ Certificate in compliance with the preceding paragraph (3) of this
Section 4.20, the Company or the applicable Guarantor will deliver:

     

    (A)           to
the Collateral Agent, as mortgagee, fully executed counterparts of Mortgages or
amendments and supplements to prior Mortgages, duly executed by the Company or
the Guarantor, as applicable, in form and substance reasonably satisfactory to
the Collateral Agent (together with evidence of the completion, or satisfactory
arrangements for the completion, of all recordings and filings of such
instruments) as may be necessary to create a valid, perfected Lien (subject to
no Lien other than Permitted Liens and subject to the Intercreditor Agreement)
on such Oil and Gas Properties, as may be required in order to make the
certification in such Officers’ Certificate true and correct and promptly after
correcting any shortfall thereto; and

     

    (B)           if
no legal opinions are then being delivered pursuant to paragraph (2) of this
Section 4.20, such legal opinions concerning the authorization, execution and
delivery of such Mortgages, amendments or supplements, and the enforceability
and recording thereof, as the Company, based on advice of counsel, deems
appropriate.

     

    Section
4.21          Repurchases of
Notes.

     

    The
Company will not repurchase Existing Notes or Notes if, after giving effect
thereto on a pro forma basis, the sum of (1) the unused availability under the
Credit Facilities and (2) cash and Cash Equivalents held by the Parent and its
Subsidiaries, would be less than $90 million.

     

    ARTICLE
5

    SUCCESSORS

     

    Section
5.01          Merger, Consolidation, or Sale of
Assets.

     

    The
Company will not, directly or indirectly:  (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, lease, convey or otherwise dispose
of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:

     

    (1)           either
(A) the Company is the surviving corporation; or (B) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
has been made is a corporation organized or existing under the laws of the
United States, any state of the United States or the District of
Columbia;

    
      
         

      

      
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    (2)           the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made assumes (a) all the Obligations of
the Company under the Notes, this Indenture and the Registration Rights
Agreement pursuant to agreements reasonably satisfactory to the Trustee and (b)
by amendment, supplement or other instrument (in form and substance reasonably
satisfactory to the Trustee and the Collateral Agent) executed and delivered to
the Trustee and the Collateral Agent, all Obligations of the Company under the
Security Documents to which it is a party;

     

    (3)           immediately
after such transaction no Default or Event of Default exists;

     

    (4)           except
with respect to a transaction solely between the Company and a Guarantor, the
Company or the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made will, on the date of such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof; and

     

    (5)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel in a form satisfactory to the Trustee, each stating that such
consolidation, merger or disposition and such Supplemental Indenture (if any)
comply with this Indenture.

     

    Section
5.02          Successor Corporation
Substituted.

     

    Upon any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of the
Company or its Restricted Subsidiaries in a transaction that is subject to, and
that complies with the provisions of, Section 5.01 hereof, the successor Person
formed by such consolidation or into or with which the Company or Restricted
Subsidiaries is or are merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition, the
provisions of this Indenture referring to the “Company” shall refer instead
to the successor Person and not to the Company or the applicable Restricted
Subsidiaries), and may exercise every right and power of the Company or
Restricted Subsidiaries under this Indenture with the same effect as if such
successor Person had been named as the Company or Restricted Subsidiaries
herein; provided,
however, that the predecessor Company or Restricted Subsidiaries shall
not be relieved from the obligation to pay the principal of and interest on the
Notes except in the case of a sale of all of the Company’s or the applicable
Restricted Subsidiaries’ assets in a transaction that is subject to, and that
complies with the provisions of, Section 5.01 hereof.

    
      
         

      

      
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    ARTICLE
6

    DEFAULTS
AND REMEDIES

     

    Section
6.01           Events of
Default.

     

    Each of
the following is an “Event of
Default”:

     

    (1)           default
for 30 days in the payment when due of interest on the Notes;

     

    (2)           default
in the payment when due of the principal of, or premium, if any, on, the
Notes;

     

    (3)           failure
by the Company to comply with the provisions of Sections 3.09, 4.10, 4.15 or
Article 5 hereof;

     

    (4)           failure
by the Parent, the Company or any of its Restricted Subsidiaries, as applicable,
to comply for 30 days after receipt of written notice from the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes to comply
with Sections 4.07, 4.08, 4.09, 4.11, 4.12, 4.13, 4.17, 4.19, 4.20 and 4.21
hereof;

     

    (5)           failure
by the Company or the Parent, as applicable, for 60 days after notice from the
Trustee or the Holders of at least 25% of the principal amount of the Notes
outstanding to comply with any of the other agreements in this Indenture or any
Security Document (or 120 days with respect to Section 4.03 hereof provided, however, that
beginning on the 61st day the
Company is not in compliance with Section 4.03 hereof, additional interest at a
rate of 0.25% per annum shall accrue and be payable (in the same manner and at
the same time as regular interest payments) on the Notes until such covenant is
complied with);

     

    (6)           default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists, or is created after the Issue Date, if
that default:

     

    (A)           is
caused by a failure to pay principal of, or interest or premium, if any, on,
such Indebtedness prior to the expiration of the grace period and any extensions
thereof provided in the documents governing such Indebtedness on the date of
such default (a “Payment
Default”); or

     

    (B)           results
in the acceleration of such Indebtedness prior to its final Stated
Maturity,

     

    and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more;

    
      
         

      

      
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    (7)          failure
by the Parent, the Company or any of its Restricted Subsidiaries to pay final
judgments entered by a court or courts of competent jurisdiction aggregating in
excess of $15.0 million with respect to any amounts not covered by insurance,
which judgments are not paid, discharged or stayed within 60 days;

     

    (8)          any
Security Document at any time for any reason shall cease to be in full force and
effect in all material respects, or ceases to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby, superior
to and prior to the rights of all third persons other than the holders of
Permitted Liens and subject to no other Liens except as expressly permitted by
the applicable Security Document or this Indenture;

     

    (9)          the
Company or any of the Guarantors, directly or indirectly, contests in any manner
the effectiveness, validity, binding nature or enforceability of any Security
Document;

     

    (10)        except
as permitted by this Indenture, any Guarantee is held in any judicial proceeding
to be unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor,
denies or disaffirms in writing its obligations under its
Guarantee;

     

    (11)        the
Company or any of its Subsidiaries that is a Significant Subsidiary or any group
of Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:

     

    (A)           commences
a voluntary case,

     

    (B)           consents
to the entry of an order for relief against it in an involuntary
case,

     

    (C)           consents
to the appointment of a custodian of it or for all or substantially all of its
property,

     

    (D)           makes
a general assignment for the benefit of its creditors, or

     

    (E)           generally
is not paying its debts as they become due; or

     

    (12)        a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

     

    (A)           is
for relief against the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary in an involuntary case;

     

    (B)           appoints
a custodian of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary; or

    
      
         

      

      
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    (C)           orders
the liquidation of the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary;

     

    and the
order or decree remains unstayed and in effect for 60 consecutive
days.

     

    Section
6.02          Acceleration.

     

    In the
case of an Event of Default specified in clause (11) or (12) of Section 6.01
hereof, with respect to the Company, any Subsidiary of the Company that is a
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable immediately without further action or
notice.  If any other Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable
immediately.  Upon any such declaration, the Notes shall become due
and payable immediately.

     

    The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may, on behalf of all of the Holders,
rescind an acceleration and its consequences, if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.

     

    Section
6.03          Other Remedies.

     

    If an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal, premium, if any, and interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.

     

    The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding.  A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default.  All
remedies are cumulative to the extent permitted by law.

     

    In the
case of any Event of Default occurring by reason of any willful action or
inaction taken or not taken by or on behalf of the Company with the intention of
avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes prior to Stated Maturity (other
than with the net cash proceeds of an Equity Offering), an equivalent premium
will also become and be immediately due and payable to the extent permitted by
law upon the acceleration of the Notes.

    
      
         

      

      
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    Section
6.04         Waiver of Past
Defaults.

     

    Holders
of not less than a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except (i) a continuing Default or Event of Default in the payment of
the principal of, premium, if any, or interest on, the Notes (including in
connection with an offer to purchase) or (ii) a Default in respect of a
provision that under Section 9.02 hereof cannot be amended without the consent
of each Holder affected; provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration, if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.  Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.

     

    Section
6.05         Control by
Majority.

     

    Holders
of a majority in aggregate principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it.  However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or may involve the
Trustee in personal liability.

     

    Section
6.06         Limitation on
Suits.

     

    Except to
enforce the right to receive payment of principal, interest or premium, if any,
when due, no Holder of a Note may pursue any remedy with respect to this
Indenture or the Notes unless:

     

    (1)           such
Holder has previously given the Trustee notice that an Event of Default is
continuing;

     

    (2)           Holders
of at least 25% in aggregate principal amount of the then outstanding Notes have
requested the Trustee to pursue the remedy;

     

    (3)           such
Holders have offered the Trustee reasonable security or indemnity against any
loss, liability or expense;

     

    (4)           the
Trustee has not complied with such request within 60 days after the receipt
of the request and the offer of security or indemnity; and

     

    (5)           Holders
of a majority in aggregate principal amount of the then outstanding Notes have
not given the Trustee a direction inconsistent with such request within such
60-day period.

    
      
         

      

      
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    A Holder
of a Note may not use this Indenture to prejudice the rights of another Holder
of a Note or to obtain a preference or priority over another Holder of a
Note.

     

    Section
6.07          Rights of Holders of Notes to
Receive Payment.

     

    Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal, premium, if any, and interest on the Note, on or
after the respective due dates expressed in the Note (including in connection
with an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder; provided that a Holder shall
not have the right to institute any such suit for the enforcement of payment if
and to the extent that the institution or prosecution thereof or the entry of
judgment therein would, under applicable law, result in the surrender,
impairment, waiver or loss of the Lien of this Indenture upon any property
subject to such Lien.

     

    Section
6.08          Collection Suit by
Trustee.

     

    If an
Event of Default specified in Sections 6.01(1) or (2) hereof occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
Trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on, the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

     

    Section
6.09          Trustee May File Proofs of
Claim.

     

    The
Trustee shall be authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof.  To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise.  Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

    
      
         

      

      
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    Section
6.10           Priorities.

     

    If the
Trustee collects any money or property pursuant to this Article 6, it shall pay
out the money or property in the following order:

     

    First:           to
the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof,
including payment of all compensation, expenses and liabilities incurred, and
all advances made, by the Trustee and the costs and expenses of
collection;

     

    Second:      to
Holders of Notes for amounts due and unpaid on the Notes for principal, premium,
if any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium, if
any and interest, respectively; and

     

    Third:         to
the Company or to such party as a court of competent jurisdiction shall
direct.

     

    The
Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.10.

     

    Section
6.11           Undertaking for
Costs.

     

    In any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as a Trustee, a
court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate
principal amount of the then outstanding Notes.

     

    ARTICLE
7

    TRUSTEE

     

    Section
7.01           Duties of
Trustee.

     

    Except to
the extent, if any, provided otherwise in the TIA:

     

    (a)           If
an Event of Default has occurred and is continuing, the Trustee will exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person’s own
affairs.

     

    (b)           Except
during the continuance of an Event of Default:

    
      
         

      

      
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    (1)           the
duties of the Trustee will be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
and

     

    (2)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture.  However, the Trustee will
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.

     

    (c)           The
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that:

     

    (1)           this
paragraph does not limit the effect of paragraph (b) of this Section
7.01;

     

    (2)           the
Trustee will not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and

     

    (3)           the
Trustee will not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.05 hereof.

     

    (d)           Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of
this Section 7.01.

     

    (e)           No
provision of this Indenture will require the Trustee to expend or risk its own
funds or incur any liability.  The Trustee will be under no obligation
to exercise any of its rights and powers under this Indenture at the request of
any Holders, unless such Holder has offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or
expense.

     

    (f)           The
Trustee will not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.  Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.

     

    Section
7.02           Rights of
Trustee.

     

    (a)           The
Trustee may conclusively rely upon any document believed by it to be genuine and
to have been signed or presented by the proper Person.  The Trustee
need not investigate any fact or matter stated in the document.

     

    (b)           Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both.  The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers’ Certificate or Opinion of Counsel.  The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
will be full and complete authorization and protection from liability in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.

     

    
      
         

      

      
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    (c)           The
Trustee may act through its attorneys and agents and will not be responsible for
the misconduct or negligence of any agent appointed with due care.

     

    (d)           The
Trustee will not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within the rights or powers conferred
upon it by this Indenture.

     

    (e)           Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company will be sufficient if signed by an Officer
of the Company.

     

    (f)           None
of the provisions of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise to incur any liability, financial or otherwise, in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it.

     

    (g)           The
Trustee shall not be deemed to have notice or knowledge of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of such Default or Event of Default is sent to
the Trustee in accordance with Section 11.02 hereof, and such notice references
this Indenture and the Notes and states that it is a Notice of
Default.

     

    (h)           The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer that may be imposed under this
Indenture with respect to the Notes as contemplated by this Indenture or under
applicable law, other than to require delivery of such certificates,
documentation or other evidence as are expressly required by, and to do so if
and when expressly required by, this Indenture or the terms of such
Notes.  The Trustee shall have no responsibility for any actions taken
or not taken by the Depositary.

     

    (i)           The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, and
each agent, custodian and other Person employed to act hereunder.

     

    (j)           In
the event the Company is required to pay Special Ratings Interest or Special
Registration Interest, the Company will provide written notice to the Trustee of
the Company’s obligation to pay Special Ratings Interest or Special Registration
Interest, as applicable, no later than 15 days prior to the next Interest
Payment Date, which notice shall set forth the amount of the Special Ratings
Interest or Special Registration Interest, as applicable, to be paid by the
Company. The Trustee shall not at any time be under any duty or responsibility
to any Holders to determine whether any Special Ratings Interest or Special
Registration Interest, as applicable, is payable and the amount
thereof.

    
      
         

      

      
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    Section
7.03           Individual Rights of
Trustee.

     

    The
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Company or any Affiliate of the Company
with the same rights it would have if it were not Trustee.  However,
in the event that the Trustee acquires any conflicting interest as described in
the TIA it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as Trustee (if this Indenture has been qualified under
the TIA) or resign.  Any Agent may do the same with like rights and
duties.  The Trustee is also subject to Sections 7.10 and 7.11
hereof.

     

    Section
7.04           Trustee’s
Disclaimer.

     

    The
Trustee will not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Company’s use of the proceeds from the Notes or any money paid to the
Company or upon the Company’s direction under any provision of this Indenture,
it will not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it will not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.

     

    Section
7.05           Notice of
Defaults.

     

    If a
Default or Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee will mail to Holders of Notes a notice of the Default or
Event of Default within 90 days after it occurs, unless such default shall have
been cured or waived.  Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest on, any Note,
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Notes.  The Trustee shall not be
deemed to know of any Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is such a
Default is received by a Responsible Officer of the Trustee at the Corporate
Trust Office of the Trustee and such notice refers to the Notes and this
Indenture.

     

    Section
7.06           Reports by Trustee to Holders of the
Notes.

     

    (a)           Within
60 days after each September 15 beginning with the September 15 following the
Issue Date, and for so long as Notes remain outstanding, the Trustee will mail
to the Holders of the Notes a brief report dated as of such reporting date that
complies with TIA § 313(a) (but if no event described in TIA § 313(a)
has occurred within the twelve months preceding the reporting date, no report
need be transmitted).  The Trustee also will comply with TIA
§ 313(b)(2).  The Trustee will also transmit by mail all reports
as required by TIA § 313(c).

     

    (b)           A
copy of each report at the time of its mailing to the Holders of Notes will be
mailed by the Trustee to the Company and filed by the Trustee with the SEC and
each stock exchange on which the Notes are listed in accordance with TIA
§ 313(d).  The Company will promptly notify the Trustee when the
Notes are listed on any stock exchange.

    
      
         

      

      
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      Section
7.07          Compensation and
Indemnity.

       

      (a)           The
Company and the Guarantors, jointly and severally, will pay to the Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder.  The Trustee’s compensation will not be limited by
any law on compensation of a Trustee of an express trust.  The Company
and the Guarantors, jointly and severally, will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services.  Such
expenses will include the reasonable compensation, disbursements and expenses of
the Trustee’s agents and counsel.

       

      (b)           The
Company and the Guarantors, jointly and severally, will indemnify the Trustee
for, and hold the Trustee harmless against, any and all losses, liabilities or
expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company and the Guarantors
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company, the Guarantors, any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its negligence or bad faith.  The Trustee will
notify the Company promptly of any claim for which it may seek
indemnity.  Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations
hereunder.  The Company or such Guarantor will defend the claim and
the Trustee will cooperate in the defense.  The Trustee may have
separate counsel and the Company will pay the reasonable fees and expenses of
such counsel.  Neither the Company nor any Guarantor need pay for any
settlement made without its consent, which consent will not be unreasonably
withheld.

       

      (c)           The
obligations of the Company and the Guarantors under this Section 7.07 will
survive the satisfaction and discharge of this Indenture or the earlier
resignation or removal of the Trustee.

       

      (d)           To
secure the Company’s and the Guarantors’ payment obligations in this Section
7.07, the Trustee will have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes.  Such Lien will survive the satisfaction
and discharge of this Indenture.

       

      (e)           When
the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(11) or (12) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

       

      (f)           The
Trustee will comply with the provisions of TIA § 313(b)(2) to the extent
applicable.

      
        
           

        

        
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      Section
7.08           Replacement of
Trustee.

       

      (a)           A
resignation or removal of the Trustee and appointment of a successor Trustee
will become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.

       

      (b)           The
Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Company.  The Holders of a majority
in aggregate principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing.  The
Company may remove the Trustee if:

       

      (1)           the
Trustee fails to comply with Section 7.10 hereof;

       

      (2)           the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered
with respect to the Trustee under any Bankruptcy Law;

       

      (3)           a
custodian or public officer takes charge of the Trustee or its property;
or

       

      (4)           the
Trustee becomes incapable of acting.

       

      (c)           If
the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason, the Company will promptly appoint a successor
Trustee.  Within one year after the successor Trustee takes office,
the Holders of a majority in aggregate principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.

       

      (d)           If
a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders
of at least 10% in aggregate principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

       

      (e)           If
the Trustee, after written request by any Holder who has been a Holder for at
least six months, fails to comply with Section 7.10 hereof, such Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

       

      (f)           A
successor Trustee will deliver a written acceptance of its appointment to the
retiring Trustee and to the Company.  Thereupon, the resignation or
removal of the retiring Trustee will become effective, and the successor Trustee
will have all the rights, powers and duties of the Trustee under this
Indenture.  The successor Trustee will mail a notice of its succession
to Holders.  The retiring Trustee will promptly transfer all property
held by it as Trustee to the successor Trustee; provided all sums owing to
the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof.  Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company’s and the Guarantors’ obligations
under Section 7.07 hereof will continue for the benefit of the retiring
Trustee.

       

      
        
           

        

        
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      Section
7.09           Successor Trustee by Merger,
etc.

       

      If the
Trustee consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the successor
corporation without any further act will be the successor Trustee.

       

      Section
7.10           Eligibility;
Disqualification.

       

      There
will at all times be a Trustee hereunder that is a corporation organized and
doing business under the laws of the United States of America or of any state
thereof that is authorized under such laws to exercise corporate Trustee power,
that is subject to supervision or examination by federal or state authorities
and that has a combined capital and surplus of at least $100.0 million as set
forth in its most recent published annual report of condition.

       

      This
Indenture will always have a Trustee who satisfies the requirements of TIA
§ 310(a)(1), (2) and (5).  The Trustee is subject to TIA
§ 310(b).

       

      Section
7.11           Preferential Collection of Claims
Against Company.

       

      The
Trustee is subject to TIA § 311(a), excluding any creditor relationship
listed in TIA § 311(b).  A Trustee who has resigned or been
removed shall be subject to TIA § 311(a) to the extent indicated
therein.

       

      Section
7.12           No Representations of
Trustee.

       

      The
recitals and statements contained herein (except the name, address and
jurisdiction of organization of the Trustee) and in the Notes (other than the
Trustee’s authentication of the Notes) shall be taken as the recitals of and
statements of the Company, and the Trustee assumes no responsibility for their
correctness.  The Trustee shall not be responsible for and makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes (except the Trustee’s certificates of authentication thereof) of any
series.  The Trustee shall not be accountable for the use or
application by the Company of the Notes or the proceeds thereof.  The
Trustee shall have no duty to ascertain or inquire as to the performance of the
Company’s covenants in Article 4 hereof or otherwise established by the terms of
the Notes.

       

      ARTICLE
8

      LEGAL
DEFEASANCE AND COVENANT DEFEASANCE

       

      Section
8.01           Option to Effect Legal Defeasance or
Covenant Defeasance.

       

      The
Company may at any time, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers’ Certificate, elect to have either Section
8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Article 8.

       

      
        
           

        

        
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      Section
8.02           Legal Defeasance and
Discharge.

       

      Upon the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Company and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from their obligations with respect to all outstanding
Notes (including the Guarantees and any Liens or other security for the Notes)
on the date the conditions set forth below are satisfied (hereinafter, “Legal
Defeasance”).  For this purpose, Legal Defeasance means that
the Company and the Guarantors will be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes (including the
Guarantees), which will thereafter be deemed to be “outstanding” only for the
purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in clauses (1) and (2) below, and to have satisfied all their other
obligations under such Notes, the Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
will survive until otherwise terminated or discharged hereunder:

       

      (1)           the
rights of Holders of outstanding Notes to receive payments in respect of the
principal of, or interest or premium, if any, on, such Notes when such payments
are due from the trust referred to in Section 8.05 hereof;

       

      (2)           the
Company’s obligations with respect to such Notes under Article 2 and Section
4.02 hereof;

       

      (3)           the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s and the Guarantors’ obligations in connection therewith;
and

       

      (4)           this
Article 8.

       

      Subject
to compliance with this Article 8, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.

       

      Section
8.03           Covenant
Defeasance.

       

      Upon the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, the Company and each of the Guarantors will, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.03,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and
4.21 hereof, clause (4) of Section 5.01 hereof and Article 13 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and
the Notes will thereafter be deemed not “outstanding” for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but will
continue to be deemed “outstanding” for all other purposes
hereunder.  For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Guarantees, the Company and the Guarantors
may omit to comply with and will have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply will not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Notes and Guarantees will be
unaffected thereby.  In addition, upon the Company’s exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(3) through 6.01(10) hereof will not constitute Events of
Default.

       

      
        
           

        

        
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      Section
8.04           Conditions to Legal or Covenant
Defeasance.

       

      In order
to exercise either Legal Defeasance or Covenant Defeasance under either Section
8.02 or 8.03 hereof:

       

      (1)           the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, and interest and premium, if any, on the outstanding Notes on the
stated date for payment thereof or on the applicable redemption date, as the
case may be, and the Company must specify whether the Notes are being defeased
to such stated date for payment or to a particular redemption date;

       

      (2)           in
the case of an election under Section 8.02 hereof, the Company must deliver to
the Trustee an Opinion of Counsel confirming that (a) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or
(b) since the Issue Date, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel will confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;

       

      (3)           in
the case of an election under Section 8.03 hereof, the Company must deliver to
the Trustee an Opinion of Counsel confirming that the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;

       

      (4)           no
Default or Event of Default has occurred and is continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit);

       

      (5)           such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its Guarantors (other than
Parent) is a party or by which the Company or any of its Guarantors (other than
Parent) is bound;

       

      
        
           

        

        
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      (6)           the
Company must have delivered to the Trustee an Opinion of Counsel to the effect
that after the 91st day following the deposit (or, if any Holder or Beneficial
Owner of Notes is an insider of the Company, such later date as counsel may
specify in such opinion), the trust funds will not be subject to the effect of
Section 547 of the Federal Bankruptcy Code;

       

      (7)           the
Company must deliver to the Trustee an Officers’ Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of
Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding any creditors of the Company or others;
and

       

      (8)           the
Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.

       

      Section
8.05           Deposited Money and Government
Securities to be Held in Trust; Other Miscellaneous
Provisions.

       

      Subject
to Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
Trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section
8.04 hereof in respect of the outstanding Notes will be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.

       

      The
Company will pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 8.04 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.

       

      Notwithstanding
anything in this Article 8 to the contrary, the Trustee will deliver or pay to
the Company from time to time upon the request of the Company any money or
non-callable Government Securities held by it as provided in Section 8.04 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.

       

      
        
           

        

        
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      Section
8.06           Repayment to
Company.

       

      Any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on, any
Note and remaining unclaimed for two years after such principal, premium, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) will be discharged from such trust; and
the Holder of such Note will thereafter be permitted to look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as Trustee
thereof, will thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times or The Wall Street Journal, notice that such money remains unclaimed and
that, after a date specified therein, which will not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.

       

      Section
8.07           Reinstatement.

       

      If the
Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable
Government Securities in accordance with Section 8.02 or 8.03 hereof, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company’s and the Guarantors’ obligations under this Indenture and the Notes
and the Guarantees will be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if
the Company makes any payment of principal of, premium, if any, or interest on,
any Note following the reinstatement of its obligations, the Company will be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

       

      ARTICLE
9

      AMENDMENT,
SUPPLEMENT AND WAIVER

       

      Section
9.01           Without Consent of Holders of
Notes.

       

      Notwithstanding
Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may
amend or supplement this Indenture, the Notes, the Guarantees or, subject to the
terms thereof (including any concurrence by the First Lien Agent required
thereby), any of the Security Documents, without the consent of any Holder of
Note:

       

      (1)           to
cure any ambiguity, defect or inconsistency;

       

      (2)           to
provide for uncertificated Notes in addition to or in place of certificated
Notes;

       

      (3)           to
provide for the assumption of the Company’s or a Guarantor’s obligations to the
Holders of the Notes and Guarantees by a successor to the Company or such
Guarantor pursuant to Article 5 hereof;

       

      (4)           to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
hereunder or under the Security Documents of any Holder provided that any change to
conform the text of this Indenture, the Notes or the Guarantees to any provision
of the “Description of the New Second Lien Notes” section of the Confidential
Offering Circular will not be deemed to adversely affect the legal rights under
this Indenture or the Security Documents of any Holder;

       

      
        
           

        

        
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      (5)           to
secure the Notes or the Guarantees pursuant to the requirements of Section
4.12;

       

      (6)           to
provide for the issuance of additional Notes (including PIK Notes) in accordance
with the limitations set forth in this Indenture as of the date
hereof;

       

      (7)           to
add any additional Guarantor or to evidence the release of any Guarantor from
its Guarantees in accordance with the terms of this Indenture or the Security
Documents;

       

      (8)           to
add or release any Collateral pursuant to the terms of this Indenture or the
Security Documents;

       

      (9)           to
add additional secured creditors holding other second lien Obligations so long
as such second lien Obligations are not prohibited by this Indenture or the
Security Documents;

       

      (10)           to
comply with requirements of the SEC to effect or maintain qualifications of this
Indenture under the TIA; or

       

      (11)           to
evidence or provide for acceptance of appointment of a successor Trustee or
Collateral Agent.

       

      Upon the
request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such supplemental indenture or amendment to
this Indenture, and upon receipt by the Trustee of the documents described in
Section 11.04 hereof, the Trustee will join with the Company and the Guarantors
in the execution of any supplemental indenture or amendment to this Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee will not be obligated to enter into such supplemental indenture or
amendment to this Indenture that affects its own rights, duties or immunities
under this Indenture or otherwise.

       

      Section
9.02           With Consent of Holders of
Notes.

       

      Except as
provided below in this Section 9.02, the Company and the Trustee may amend or
supplement this Indenture, the Notes, the Guarantees or the Security Documents
with the consent of the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on, the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture, the
Notes or the Guarantees may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes voting as a
single class (including, without limitation, consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the
Notes).  Section 2.09 hereof shall determine which Notes are
considered to be “outstanding” for purposes of this Section 9.02.

       

      
        
           

        

        
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      Without
the consent of each Holder affected, an amendment, supplement or waiver may not
(with respect to any Notes held by a non-consenting Holder):

       

      (1)           reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;

       

      (2)           reduce
the principal of or change the fixed maturity of any Note or alter or waive any
of the provisions with respect to the redemption or repurchase of the Notes
(other than the provisions of Sections 3.09, 4.10 and 4.15 hereof);

       

      (3)           reduce
the rate of or change the time for payment of interest, including default
interest, on any Note;

       

      (4)           waive
a Default or Event of Default in the payment of principal of, or premium, if
any, or interest on, the Notes (except a rescission of acceleration of the Notes
by the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted from such
acceleration);

       

      (5)           make
any Note payable in currency other than that stated in the Notes;

       

      (6)           make
any change in the provisions of this Indenture relating to waivers of past
Defaults or the rights of Holders of Notes to receive payments of principal of,
or interest or premium, if any, on, the Notes;

       

      (7)           waive
a redemption or repurchase payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 or 4.15 hereof);

       

      (8)           release
any Guarantor from any of its obligations under its Guarantee or this Indenture,
except in accordance with the terms of this Indenture;

       

      (9)           make
any change in the provisions of the Intercreditor Agreement or this Indenture
relating to the application of proceeds of Collateral that would adversely
affect the Holders of the Notes; or

       

      (10)           make
any change in the preceding amendment and waiver provisions.

       

      The
Holders holding a majority in principal amount of the outstanding Notes may
release all or substantially all of the Collateral otherwise than in accordance
with the terms of this Indenture and the Security Documents.

       

      Section
9.03           Compliance with Trust Indenture
Act.

       

      Every
amendment or supplement to this Indenture or the Notes will be set forth in a
amended or supplemental indenture that complies with the TIA as then in
effect.

       

      
        
           

        

        
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      Section
9.04           Revocation and Effect of
Consents.

       

      Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note.  However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the amendment, supplement or waiver becomes
effective.  An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.

       

      The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver.  If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or to revoke
any consent previously given, whether or not such Persons continue to be Holders
after such record date.

       

      Section
9.05           Notation on or Exchange of
Notes.

       

      The
Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated.  The Company in exchange
for all Notes may issue and the Trustee shall, upon receipt of an Authentication
Order, authenticate new Notes that reflect the amendment, supplement or
waiver.

       

      Failure
to make the appropriate notation or issue a new Note will not affect the
validity and effect of such amendment, supplement or waiver.

       

      Section
9.06           Trustee to Sign Amendments,
etc.

       

      The
Trustee will sign any supplemental indenture or amendment to this Indenture
authorized pursuant to this Article 9 if the supplemental indenture or amendment
to this Indenture does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  The Company may not sign an amended or
supplemental indenture or amendment to this Indenture until the Board of
Directors of the Company approves it.  In executing any amended or
supplemental indenture or amendment to this Indenture, the Trustee will be
entitled to receive and (subject to Section 7.01 hereof) will be fully protected
in relying upon, in addition to the documents required by Section 11.04 hereof,
an Officers’ Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture or amendment to this Indenture is authorized or
permitted by this Indenture and the Trustee shall be entitled to receive (i) a
copy of any Board Resolution passed pursuant to this Article 9 and (ii) evidence
of any consent of the Holders provided in accordance with Section 9.02
hereof.

       

      Section
9.07           Additional Voting Terms; Calculation
of Principal Amount.

       

      All Notes
issued under this Indenture shall vote and consent together on all matters (as
to which any of such Notes may vote) as one class and no series of Notes will
have the right to vote or consent as a separate class on any
matter.  Determinations as to whether Holders of the requisite
aggregate principal amount of Notes  have concurred in any direction,
waiver or consent shall be made in accordance with this Article 9 and Section
2.09.

       

      
        
           

        

        
          93

          
            

          

        

        
           

        

      

       

      ARTICLE
10

      SATISFACTION
AND DISCHARGE

       

      Section
10.01         Satisfaction and
Discharge.

       

      This
Indenture will be discharged and will cease to be of further effect as to all
Notes issued hereunder, except as otherwise specified in this Section 10.01,
when:

       

      (1)           either:

       

      (A)           all
Notes that have been authenticated, except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has been deposited
in trust and thereafter repaid to the Company, have been delivered to the
Trustee for cancellation; or

       

      (B)           all
Notes that have not been delivered to the Trustee for cancellation have become
due and payable or will become due and payable within one year by reason of the
mailing of a notice of redemption or otherwise and the Company or any Guarantor
has irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, without consideration of any reinvestment of interest, to
pay and discharge the entire Indebtedness on the Notes not delivered to the
Trustee for cancellation for principal, interest and premium, if any, to the
date of maturity or redemption;

       

      (2)           no
Default or Event of Default has occurred and is continuing on the date of the
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit) and the deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which the Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;

       

      (3)           the
Company or any Guarantor has paid or caused to be paid all sums payable by it
under this Indenture; and

       

      (4)           the
Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at
maturity or on the redemption date, as the case may be.

       

      In
addition, the Company must deliver an Officers’ Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.

       

      Notwithstanding
the satisfaction and discharge of this Indenture, the provisions of Sections
2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 8.06 hereof and this Article 10 shall
survive until the Notes have been paid in full.  In addition, nothing
in this Section 10.01 will be deemed to discharge those provisions of Section
7.07 hereof, that, by their terms, survive the satisfaction and discharge of
this Indenture.

       

      
        
           

        

        
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      Section
10.02         Application of Trust
Money.

       

      Subject
to the provisions of Section 8.06 hereof, all money deposited with the Trustee
pursuant to Section 10.01 hereof shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.

       

      If the
Trustee or Paying Agent is unable to apply any money or Government Securities in
accordance with Section 10.01 hereof by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company’s
and any Guarantor’s obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
10.01 hereof; provided
that if the Company has made any payment of principal of, premium, if any, or
interest on, any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the Trustee
or Paying Agent.

       

      ARTICLE
11

      MISCELLANEOUS

       

      Section
11.01         Trust Indenture Act
Controls.

       

      If any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by TIA §318(c), the imposed duties will control.

       

      Section
11.02         Notices.

       

      Any
notice or communication by the Company, any Guarantor or the Trustee to the
others is duly given if in writing and delivered in Person or by first class
mail (registered or certified, return receipt requested), facsimile transmission
or overnight air courier guaranteeing next day delivery, to the others’
address:

       

      If to the
Company and/or any Guarantor:

       

      ENERGY
XXI GULF COAST, INC.

      1021
Main

      Suite
2626

      Houston,
Texas  77002

      Attention:  Chief
Financial Officer

       

      
        
           

        

        
          95

          
            

          

        

        
           

        

      

      
         

        If to the
Trustee:

         

      

      WILMINGTON
TRUST FSB

      50 South
Sixth Street, Suite 1290

      Minneapolis,
MN 55402

      Facsimile
No.:  (612) 217-5651

      Attention:  Corporate
Capital Markets

       

      The
Company, any Guarantor or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or
communications.

       

      All
notices and communications (other than those sent to Holders) will be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if transmitted by facsimile; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

       

      Any
notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar.  Any notice or communication will also be so mailed to any
Person described in TIA § 313(c), to the extent required by the
TIA.  Failure to mail a notice or communication to a Holder or any
defect in it will not affect its sufficiency with respect to other
Holders.

       

      If a
notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives
it.

       

      If the
Company mails a notice or communication to Holders, it will mail a copy to the
Trustee and each Agent at the same time.

       

      Notwithstanding
any other provision of this Indenture or any Note, where this Indenture or any
Note provides for notice of any event (including any notice of redemption) to a
Holder of a Global Note (whether by mail or otherwise), such notice shall be
sufficiently given if given to the Depositary for such Note (or its designee),
pursuant to the customary procedures of such Depositary.

       

      Section
11.03         Communication by Holders of Notes
with Other Holders of Notes.

       

      Holders
may communicate pursuant to TIA § 312(b) with other Holders with respect to
their rights under this Indenture or the Notes.  The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA
§ 312(c).

       

      Section
11.04         Certificate and Opinion as to
Conditions Precedent.

       

      Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

       

      (1)           an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 11.05 hereof)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and

       

      
        
           

        

        
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      (2)           an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 11.05 hereof) stating
that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

       

      Section
11.05         Statements Required in Certificate
or Opinion.

       

      Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA § 314(a)(4)) must comply with the provisions of TIA § 314(e) and
must include:

       

      (1)           a
statement that the Person making such certificate or opinion has read such
covenant or condition;

       

      (2)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

       

      (3)           a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and

       

      (4)           a
statement as to whether or not, in the opinion of such Person, such condition or
covenant has been satisfied.

       

      Section
11.06         Rules by Trustee and
Agents.

       

      The
Trustee may make reasonable rules for action by or at a meeting of
Holders.  The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.

       

      Section
11.07         No Personal Liability of Directors,
Officers, Employees and Stockholders.

       

      No
director, officer, employee, incorporator or stockholder or other owner of
Capital Stock of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Guarantees or the Security Documents or for any claim based on,
in respect of, or by reason of, such obligations or their
creation.  Each Holder of Notes by accepting a Note, waives and
releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.  The waiver may not be
effective to waive liabilities under the federal securities laws.

       

      Section
11.08         Governing Law.

       

      THE LAWS
OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE
NOTES AND THE GUARANTEES.

       

      
        
           

        

        
          97

          
            

          

        

        
           

        

      

       

      Section
11.09         Intercreditor
Agreement.

       

      The terms
of this Indenture are subject to the terms of the Intercreditor
Agreement.

       

      Section
11.10         No Adverse Interpretation of Other
Agreements.

       

      This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other
Person.  Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

       

      Section
11.11         Successors.

       

      All
agreements of the Company in this Indenture and the Notes will bind its
successors.  All agreements of the Trustee in this Indenture will bind
its successors.  All agreements of each Guarantor in this Indenture
will bind its successors, except as otherwise provided in Section 12.05
hereof.

       

      Section
11.12         Severability.

       

      In case
any provision in this Indenture or in the Notes is invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.

       

      Section
11.13         Counterpart
Originals.

       

      The
parties may sign any number of copies of this Indenture.  Each signed
copy will be an original, but all of them together represent the same
agreement.

       

      Section
11.14         Table of Contents, Headings,
etc.

       

      The Table
of Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and will in no way modify or restrict any
of the terms or provisions hereof.

       

      ARTICLE
12

      GUARANTEES

       

      Section
12.01         Guarantee.

       

      (a)           Subject
to this Article 12, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of this Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that:

       

      (1)           the
principal of, premium, if any, and interest on, the Notes will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other Obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and

       

      
        
           

        

        
          98

          
            

          

        

        
           

        

      

    

    (2)           in
case of any extension of time of payment or renewal of any Notes or any of such
other Obligations, that same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.

     

    Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors will be jointly and severally obligated to
pay the same immediately.  Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.

     

    (b)           The
Guarantors hereby agree that their obligations hereunder are unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this
Indenture.

     

    (c)           If
any Holder or the Trustee is required by any court or otherwise to return to the
Company, the Guarantors or any custodian, Trustee, liquidator or other similar
official acting in relation to either the Company or the Guarantors, any amount
paid by either to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, will be reinstated in full force and
effect.

     

    (d)           Each
Guarantor agrees that it will not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.  Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the Holders
and the Trustee, on the other hand, (1) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Guarantee.  The Guarantors will have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the
Guarantee.

    
      
         

      

      
        99

        
          

        

      

      
         

      

    

     

    Section
12.02        Limitation on Guarantor
Liability.

     

    (a)           Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any
Guarantee.  To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 12, result in the obligations of such Guarantor
under its Guarantee not constituting a fraudulent transfer or
conveyance.

     

    (b)           Notwithstanding
anything in this Article 12 to the contrary, the recourse under the Guarantee of
the Direct Parent will be limited to the Capital Stock of the Company owned by
the Direct Parent.

     

    Section
12.03        Execution and Delivery of
Guarantee.

     

    To
evidence its Guarantee set forth in Section 12.01 hereof, each Guarantor hereby
agrees that a notation of such Guarantee substantially in the form attached as
Exhibit E hereto will be signed by an Officer of such Guarantor (by manual or
facsimile signature) on each Note authenticated and delivered by the Trustee and
that this Indenture will be executed on behalf of such Guarantor by one of its
Officers.

     

    Each
Guarantor hereby agrees that its Guarantee set forth in Section 12.01 hereof
will remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Guarantee.

     

    If an
Officer whose signature is on this Indenture or on the Guarantee no longer holds
that office at the time the Trustee authenticates the Note on which a Guarantee
is endorsed, the Guarantee will be valid nevertheless.

     

    The
delivery of any Note by the Trustee, after the authentication thereof hereunder,
will constitute due delivery of the Guarantee set forth in this Indenture on
behalf of the Guarantors.

     

    In the
event that the Company or any of its Restricted Subsidiaries creates or acquires
any Domestic Subsidiary after the Issue Date, if required by Section 4.17
hereof, the Company will cause such Domestic Subsidiary to comply with the
provisions of Section 4.17 hereof and this Article 12, to the extent
applicable.

     

    Section
12.04        Guarantors May Consolidate, etc., on
Certain Terms.

     

    Except as
otherwise provided in Section 12.05 hereof, no Guarantor may sell or otherwise
dispose of all or substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Guarantor is the surviving Person)
another Person, other than the Company or another Guarantor,
unless:

     

    (1)           immediately
after giving effect to such transaction, no Default or Event of Default exists;
and

    
      
         

      

      
        100

        
          

        

      

      
         

      

    

     

    (2)           either:

     

    (A)           subject
to Section 12.05 hereof, the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation or
merger assumes (a) all the obligations of that Guarantor under this
Indenture, its Guarantee and the Registration Rights Agreement pursuant to a
supplemental indenture reasonably satisfactory to the Trustee and (b) if
such Guarantor holds Collateral, by amendment, supplement or other instrument
(in form and substance reasonably satisfactory to the Trustee and Collateral
Agent) executed and delivered to the Trustee and the Collateral Agent, all
obligations of such Guarantor under the Security Documents to which it is a
party; or

     

    (B)           such
sale or other disposition complies with Section 4.10 hereof.

     

    In case
of any such consolidation, merger, sale or conveyance and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed upon
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Guarantor, such successor
Person will succeed to and be substituted for the Guarantor with the same effect
as if it had been named herein as a Guarantor.  Such successor Person
thereupon may cause to be signed any or all of the Guarantees to be endorsed
upon all of the Notes issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee.  All the
Guarantees so issued will in all respects have the same legal rank and benefit
under this Indenture as the Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Guarantees had
been issued at the date of the execution hereof.

     

    Except as
set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(a) and (b)
above, nothing contained in this Indenture or in any of the Notes will prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or will prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.

     

    Section
12.05        Releases.

     

    The
Guarantee of a Guarantor will be released:

     

    (1)           with
respect to a Guarantee by Subsidiary Guarantors, in connection with any sale or
other disposition of all or substantially all of the assets of that Guarantor
(including by way of merger or consolidation) to a Person that is not (either
before or after giving effect to such transaction) a Subsidiary of the Company,
if the sale or other disposition does not violate Section 4.10
hereof;

     

    (2)           upon
the release of such Guarantors’ Guarantees under the Credit Agreement, other
than as a result of payment under Guarantees, unless such Guarantor remains a
guarantor of the Existing Notes;

     

    
      
         

      

      
        101

        
          

        

      

      
         

      

    

     

    (3)           in
the case of a Subsidiary Guarantor, in connection with any sale or other
disposition of all of the Capital Stock of that Subsidiary Guarantor to a Person
that is not (either before or after giving effect to such transaction) the
Company or a Subsidiary of the Company, if the sale or other disposition does
not violate Section 4.10 hereof;

     

    (4)           if
the Company designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary in accordance with Section 4.18 hereof; or

     

    (5)           upon
Legal Defeasance or Covenant Defeasance in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 10
hereof.

     

    Any
Guarantor not released from its obligations under its Guarantee as provided in
this Section 12.05 will remain liable for the full amount of principal of and
interest and premium, if any, on the Notes and for the other obligations of any
Guarantor under this Indenture as provided in this Article 12.

     

    ARTICLE
13

    COLLATERAL

     

    Section
13.01        Security
Documents.

     

    (a)           The
Obligations under the Notes and the Guarantees (other than the Guarantee by the
Parent) will be secured pursuant to the Security Documents by second priority
Liens (subject to certain Permitted Liens) granted to the Collateral Agent for
the benefit of the Holders of the Notes, in all of the Collateral.

     

    (b)           The
Company, the Subsidiary Guarantors and the Collateral Agent will enter into one
or more Security Documents granting, in favor of the Collateral Agent for the
benefit of the Holders, Liens on the Collateral securing the Notes and
Guarantees.  Direct Parent will enter into a Security Agreement
granting in favor of the Collateral Agent for the benefit of the Holders, Liens
on the Capital Stock it owns in the Company as security for the Notes and Direct
Parent’s Guarantee.

     

    (c)           The
Company, the Subsidiary Guarantors and Direct Parent shall make all filings
(including filings of continuation statements and amendments to UCC financing
statements that may be necessary to continue the effectiveness of such UCC
financing statements) and take all other actions as are necessary or required by
the Security Documents to maintain (at the sole cost and expense of the Company,
the Subsidiary Guarantors and the Direct Parent) the security interest created
by the Security Documents in the Collateral (other than with respect to any
Collateral the security interest in which is not required to be perfected under
the Security Documents) as a perfected second priority security interest subject
only to Permitted Liens.

     

    Section
13.02        Collateral
Agent.

     

    (a)           The
Collateral Agent is authorized and empowered to appoint one or more
co-Collateral Agents as it deems necessary or appropriate.

    
      
         

      

      
        102

        
          

        

      

      
         

      

    

     

    (b)           Subject
to Section 7.01, neither the Trustee nor the Collateral Agent nor any of their
respective officers, directors, employees, attorneys or agents will be
responsible or liable for the existence, genuineness, value or protection of any
Collateral, for the legality, enforceability, effectiveness or sufficiency of
the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Lien in favor of Second Lien Claims (a “Second Priority Lien”), or
for any defect or deficiency as to any such matters, or for any failure to
demand, collect, foreclose or realize upon or otherwise enforce any of the
Second Priority Liens or Security Documents or any delay in doing
so.

     

    (c)           The
Collateral Agent will be subject to such directions as may be given it by the
Trustee from time to time (as required or permitted by this Indenture). Except
as directed by the Trustee as required or permitted by this Indenture and any
other representatives, the Collateral Agent will not be obligated:

     

    (1)           to
act upon directions purported to be delivered to it by any other
Person;

     

    (2)           to
foreclose upon or otherwise enforce any Second Priority Lien; or

     

    (3)           to
take any other action whatsoever with regard to any or all of the Second
Priority Liens, Security Documents or Collateral.

     

    (d)           The
Collateral Agent will be accountable only for amounts that it actually receives
as a result of the enforcement of the Second Priority Liens or Security
Documents.

     

    (e)           In
acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each
co-Collateral Agent may rely upon and enforce for its own benefit and for the
benefit of the Holders each and all of the rights, powers, immunities,
indemnities and benefits of the Trustee under Article 7 hereof, each of which
shall also be deemed to be for the benefit of Collateral Agent and the
Holders.

     

    (f)           The
Holders of Notes agree that the Collateral Agent shall be entitled to the
rights, privileges, protections, immunities, indemnities and benefits provided
to the Collateral Agent by the Security Documents. Furthermore, each Holder of a
Note, by accepting such Note, consents to the terms of and authorizes and
directs the Trustee (in each of its capacities) and the Collateral Agent to
enter into and perform the Intercreditor Agreement and Security Documents in
each of its capacities thereunder.

     

    (g)           If
the Company (i) incurs First Lien Claims at any time when no intercreditor
agreement is in effect or at any time when Indebtedness constituting First Lien
Claims entitled to the benefit of an existing Intercreditor Agreement is
concurrently retired, and (ii) delivers to the Collateral Agent an Officers’
Certificate so stating and requesting the Collateral Agent to enter into an
intercreditor agreement (on substantially the same terms as the Intercreditor
Agreement in effect on the Issue Date) in favor of a designated agent or
representative for the Holders of the First Lien Claims so incurred, the
Collateral Agent shall (and is hereby authorized and directed to) enter into
such intercreditor agreement, bind the Holders on the terms set forth therein
and perform and observe its obligations thereunder.

    
      
         

      

      
        103

        
          

        

      

      
         

      

    

     

    (h)           At
all times when the Trustee is not itself the Collateral Agent, the Company will
deliver to the Trustee copies of all Security Documents delivered to the
Collateral Agent and copies of all documents delivered to the Collateral Agent
pursuant to the Security Documents.

     

    Section
13.03        Authorization of Actions to Be
Taken.

     

    (a)           Each
Holder of Notes of each such series, by its acceptance thereof, consents and
agrees to the terms of each Security Document and the Intercreditor Agreement,
as originally in effect and as amended, supplemented or replaced from time to
time in accordance with its terms or the terms of this Indenture, authorizes and
directs the Trustee and the Collateral Agent to enter into the Security
Documents to which it is a party, authorizes and empowers the Trustee to direct
the Collateral Agent to enter into, and the Collateral Agent to execute and
deliver, the Intercreditor Agreement, and authorizes and empowers the Trustee
and the Collateral Agent to bind the Holders of Notes of each such series and
other Holders of Obligations as set forth in the Security Documents to which it
is a party and the Intercreditor Agreement and to perform its obligations and
exercise its rights and powers thereunder.

     

    (b)           The
Collateral Agent and the Trustee are authorized and empowered to receive for the
benefit of the Holders of Notes of each series any funds collected or
distributed under the Security Documents to which the Collateral Agent or
Trustee is a party and to make further distributions of such funds to the
Holders of Notes of each series according to the provisions of this
Indenture.

     

    (c)           Subject
to the provisions of Section 7.01, Section 7.02, and the Intercreditor
Agreement, the Trustee may, in its sole discretion and without the consent of
the Holders, direct, on behalf of the Holders, the Collateral Agent to take all
actions it deems necessary or appropriate in order to:

     

    (1)           foreclose
upon or otherwise enforce any or all of the Second Priority Liens;

     

    (2)           enforce
any of the terms of the Security Documents to which the Collateral Agent or
Trustee is a party; or

     

    (3)           collect
and receive payment of any and all Obligations.

     

    Subject
to the Intercreditor Agreement, the Trustee is authorized and empowered to
institute and maintain, or direct the Collateral Agent to institute and
maintain, such suits and proceedings as it may deem expedient to protect or
enforce the Second Liens Claims or the Security Documents to which the
Collateral Agent or Trustee is a party or to prevent any impairment of
Collateral by any acts that may be unlawful or in violation of the Security
Documents to which the Collateral Agent or Trustee is a party or this Indenture,
and such suits and proceedings as the Trustee or the Collateral Agent may deem
expedient to preserve or protect its interests and the interests of the Holders
of Notes of such series in the Collateral, including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of Holders, the Trustee or the Collateral
Agent.

    
      
         

      

      
        104

        
          

        

      

      
         

      

    

     

    Section
13.04        Release of
Liens.

     

    (a)           Subject
to subsections (b) and (c) of this Section 13.04, Collateral may be released
from the Lien and security interest created by the Security Documents at any
time or from time to time in accordance with the provisions of the Security
Documents, the Intercreditor Agreement or as provided hereby. The applicable
assets included in the Collateral shall be released from the Liens securing the
Notes at the Company’s sole cost and expense, under any one or more of the
following circumstances:

     

    (1)           in
whole, upon payment in full of the principal of, accrued and unpaid interest and
premium, if any, on the Notes and all other amounts due under this
Indenture;

     

    (2)           in
whole, upon satisfaction and discharge of this Indenture as set forth in Section
10.01 hereof;

     

    (3)           in
whole, upon a Legal Defeasance or Covenant Defeasance as set forth in Sections
8.01 and 8.02, respectively, hereof;

     

    (4)           in
part, with the consent of Holders of a majority in aggregate principal amount of
the then outstanding Notes, including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Notes;

     

    (5)           as
to any Collateral (i) that is sold or otherwise disposed of by the Company or
any Restricted Subsidiary (other than to the Company or a Restricted Subsidiary)
in compliance with this Indenture, subject to the limitations set forth under
Section 4.10 hereof, or (ii) that constitutes a portion of the Collateral
Disposition Proceeds Account that are to be applied or distributed as described
under the Section 4.10 hereof; or

     

    (6)           in
part, as to assets of a Guarantor, upon release of such Guarantor from its
Guarantee pursuant to Section 12.05 hereof and the Security Documents;
or

     

    (7)           in
connection with a substitution of Collateral in accordance with the Security
Documents.

     

    Notwithstanding
the foregoing, if an Event of Default under this Indenture exists on the date of
discharge of First Lien Claims, the Second Priority Liens on the Collateral
securing the Notes will not be released, except to the extent the Collateral or
any portion thereof was disposed of in order to repay the First Lien Claims
secured by the Collateral, and thereafter the Trustee (or another designated
representative acting at the direction of the Holders of a majority of
outstanding principal amount of the Notes) will have the right to direct the
First Lien Agent to foreclose upon the Collateral (but in such event, the Liens
on the Collateral securing the Notes will be released when such Event of Default
and all other Events of Default under this Indenture cease to
exist).

    
      
         

      

      
        105

        
          

        

      

      
         

      

    

     

    Upon the
receipt of an Officers’ Certificate from the Company, as described in Section
13.04(b) below, if applicable, and any necessary or proper instruments of
termination, satisfaction or release prepared by the Company, the Collateral
Agent shall execute, deliver or acknowledge such instruments or releases to
evidence the release of any Collateral permitted to be released pursuant to this
Indenture or the Security Documents or the Intercreditor Agreement.

     

    (b)           In
connection with (x) any release of Collateral pursuant to Section 13.04(a)(1),
(3), (4), (5), (6), or (7) hereof above, such Collateral may not be released
from the Lien and security interest created by the Security Documents and (y)
any release of Collateral pursuant to Section 13.04(a)(2), the Collateral Agent
shall not be required to execute, deliver or acknowledge any instruments of
termination, satisfaction or release unless an Officers’ Certificate and Opinion
of Counsel certifying that all conditions precedent, including, without
limitation, this Section 13.04, have been met and stating under which of the
circumstances set forth in Section 13.04(a) hereof above the Collateral is being
released have been delivered to the Collateral Agent on or prior to the date of
such release.

     

    (c)           At
any time when a Default or Event of Default has occurred and is continuing and
the maturity of the Notes has been accelerated (whether by declaration or
otherwise) and the Trustee has delivered a notice of acceleration to the
Collateral Agent, no release of Collateral pursuant to the provisions of this
Indenture or the Security Documents will be effective as against the Holders,
except as otherwise provided in the Intercreditor Agreement.

     

    Section
13.05        Filing, Recording and
Opinions

     

    (a)           The
Company will comply with the provisions of TIA Sections 314(b), 314(c) and
314(d), except to the extent not required as set forth in any Commission
regulation or interpretation (including any no-action letter issued by the Staff
of the Commission, whether issued to the Company or any other Person). To the
extent the Company is required to furnish to the Trustee an Opinion of Counsel
pursuant to TIA Section 314(b)(2), the Company will furnish such opinion not
more than 60 but not less than 30 days prior to each September 30.

     

    Any
release of Collateral permitted by Section 13.04 hereof will be deemed not to
impair the Liens under this Indenture and the Security Documents in
contravention thereof and any person that is required to deliver an Officers’
Certificate or Opinion of Counsel pursuant to Section 314(d) of the TIA, shall
be entitled to rely upon the foregoing as a basis for delivery of such
certificate or opinion. The Trustee may, to the extent permitted by Section 7.01
and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and Opinion of
Counsel.

     

    (b)           If
any Collateral is released in accordance with this Indenture or any Security
Document and if the Company has delivered the certificates and documents
required by the Security Documents and Section 13.04 hereof, the Trustee will
determine whether it has received all documentation required by TIA Section
314(d) in connection with such release and, based on such determination and the
Opinion of Counsel delivered pursuant to Section 13.04 hereof, will, upon
request, deliver a certificate to the Collateral Agent setting forth such
determination.

    
      
         

      

      
        106

        
          

        

      

      
         

      

    

     

    Section
13.06        Powers Exercisable by Receiver or
Trustee.

     

    In case
the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article 13 upon the Company or the
applicable Guarantors (other than the Parent) with respect to the release, sale
or other disposition of such property may be exercised by such receiver or
trustee, and an instrument signed by such receiver or trustee shall be deemed
the equivalent of any similar instrument of the Company or the applicable
Guarantor or of any officer or officers thereof required by the provisions of
this Article 13; and if the Trustee shall be in the possession of the Collateral
under any provision of this Indenture, then such powers may be exercised by the
Trustee.

     

    Section
13.07        Release Upon Termination of the
Company’s Obligations.

     

    In the
event (i) that the Company delivers to the Trustee, in form and substance
acceptable to it, an Officers’ Certificate and Opinion of Counsel certifying
that all the obligations under this Indenture, the Notes and the Security
Documents have been satisfied and discharged by the payment in full of the
Company’s obligations under the Notes, this Indenture and the Security
Documents, and all such obligations have been so satisfied, or (ii) a discharge,
legal defeasance or covenant defeasance of this Indenture occurs under Article 8
or Article 10, the Trustee shall deliver to the Company and the Collateral Agent
a notice stating that the Trustee, on behalf of the Holders, disclaims and gives
up any and all rights it has in or to the Collateral, and any rights it has
under the Security Documents, and upon receipt by the Collateral Agent of such
notice, the Collateral Agent shall be deemed not to hold a Lien in the
Collateral on behalf of the Trustee and shall do or cause to be done all acts
reasonably necessary to release such Lien as soon as is reasonably
practicable.

     

    Section
13.08        Designations.

     

    Except as
provided in the next sentence, for purposes of the provisions hereof and the
Intercreditor Agreement requiring the Company to designate Indebtedness for the
purposes of the terms of the First Lien Claims or any other such designations
hereunder or under the Intercreditor Agreement, any such designation shall be
sufficient if the relevant designation provides in writing that such First Lien
Claims are permitted under this Indenture and is signed on behalf of the Company
by an Officer and delivered to the Trustee, the Collateral Agent and the First
Lien Agent. For all purposes hereof and the Intercreditor Agreement, the Company
hereby designates the Obligations pursuant to the Credit Agreement as in effect
on the Issue Date as First Lien Claims.

     

    Section
13.09        Relative Rights.

     

    The
Intercreditor Agreement defines the relative rights, as lienholders, of holders
of Second Priority Liens and holders of Liens securing First Lien Claims.
Nothing in this Indenture or the Intercreditor Agreement will:

     

    (a)           impair,
as between the Holder and Holders of each series of Notes, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium and
interest on such series of Notes in accordance with their terms or to perform
any other obligation of the Company or any Guarantor under this Indenture, the
Notes, the Guarantees and the Security Documents;

    
      
         

      

      
        107

        
          

        

      

      
         

      

    

     

    (b)           restrict
the right of any Holder to sue for payments that are then due and owing, in a
manner not inconsistent with the provisions of the Intercreditor
Agreement;

     

    (c)           prevent
the Trustee, the Collateral Agent or any Holder from exercising against the
Company or any other obligor any of its other available remedies upon a Default
or Event of Default (other than its rights as a secured party, which are subject
to the Intercreditor Agreement); or

     

    (d)           subject
to the Intercreditor Agreement, restrict the right of the Trustee, the
Collateral Agent or any Holder:

     

    (1)           to
file and prosecute a petition seeking an order for relief in an involuntary
bankruptcy case as to any obligor or otherwise to commence, or seek relief
commencing, any insolvency or liquidation proceeding involuntarily against any
obligor;

     

    (2)           to
make, support or oppose any request for an order for dismissal, abstention or
conversion in any insolvency or liquidation proceeding;

     

    (3)           to
make, support or oppose, in any insolvency or liquidation proceeding, any
request for an order extending or terminating any period during which the debtor
(or any other Person) has the exclusive right to propose a plan of
reorganization or other dispositive restructuring or liquidation plan
therein;

     

    (4)           to
seek the creation of, or appointment to, any official committee representing
creditors (or certain of the creditors) in any insolvency or liquidation
proceedings and, if appointed, to serve and act as a member of such committee
without being in any respect restricted or bound by, or liable for, any of the
obligations under this Article 13;

     

    (5)           to
seek or object to the appointment of any professional person to serve in any
capacity in any insolvency or liquidation proceeding or to support or object to
any request for compensation made by any professional person or others
therein;

     

    (6)           to
make, support or oppose any request for order appointing a trustee or examiner
in any insolvency or liquidation proceedings; or

     

    (7)           otherwise
to make, support or oppose any request for relief in any insolvency or
liquidation proceeding that it is permitted by law to make, support or
oppose:

     

    
      	
               
      

            	
              (y)

            	
              if
      it were a holder of unsecured claims;
or

            

    

     

    
      	
               
      

            	
              (x)

            	
              as
      to any matter relating to any plan of reorganization or other
      restructuring or liquidation plan or as to any matter relating to the
      administration of the estate or the disposition of the case or
      proceeding.

            

    

     

    [Signatures
on following page]

    
      
         

      

      
        108

        
          

        

      

      
         

      

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      ENERGY
      XXI GULF COAST, INC.

                                    
	 
      	 
      	 
      
	
                                      By:

                                    	/s/ Rick
      Fox
	 
      	
                                      Name:

                                    	
                                      Rick
      Fox

                                    
	 
      	
                                      Title:

                                    	
                                      Chief
      Financial Officer

                                    
	 
      	 
      	 
      
	
                                      ENERGY
      XXI (BERMUDA) Limited

                                    
	 
      	 
      	 
      
	
                                      By:

                                    	/s/
      David
      West Griffin
	 
      	
                                      Name:

                                    	
                                      David
      West Griffin

                                    
	 
      	
                                      Title:

                                    	
                                      Chief
      Financial Officer

                                    
	 
      	 
      	 
      
	
                                      ENERGY
      XXI ONSHORE, LC

                                    
	 
      	 
      	 
      
	
                                      By:

                                    	/s/
      Rick
      Fox
	 
      	
                                      Name:

                                    	
                                      Rick
      Fox

                                    
	 
      	
                                      Title:

                                    	
                                      Chief
      Financial Officer

                                    
	 
      	 
      	 
      
	
                                      ENERGY
      XXI ONSHORE, LLC

                                    
	 
      	 
      	 
      
	
                                      By:

                                    	/s/
      Rick
      Fox
	 
      	
                                      Name:

                                    	
                                      Rick
      Fox

                                    
	 
      	
                                      Title:

                                    	
                                      Chief
      Financial Officer

                                    
	 
      	 
      	 
      
	
                                      ENERGY
      XXI GOM, LLC

                                    
	 
      	 
      	 
      
	
                                      By:

                                    	/s/
      Rick
      Fox
	 
      	
                                      Name:

                                    	
                                      Rick
      Fox

                                    
	 
      	
                                      Title:

                                    	
                                      Chief
      Financial
Officer

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        	
                Acknowledged
      and agreed as of the date first above written in its capacity under its
      limited recourse Guarantee and grantor under its Security Agreement and
      irrevocable proxy delivered in connection with the Credit
      Agreement:

              

      

    

    

    
      
        
          
            
              
                
                  	
                          ENERGY
      XXI USA, INC.

                        
	 
      	 
      	 
      
	
                          By:

                        	/s/
      Rick
      Fox
	 
      	
                          Name:

                        	
                          Rick
      Fox

                        
	 
      	
                          Title:

                        	
                          Chief
      Financial Officer

                        
	 
      	 
      	 
      
	
                          WILMINGTON TRUST FSB, as
      Trustee

                        
	 
      	 
      	 
      
	
                          By:

                        	      
                          /s/
      Timothy Mowdy

                        
	 
      	
                          Name:

                        	
                          Timothy
      Mowdy

                        
	 
      	
                          Title:

                        	
                          Vice
      President

                        

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    FORM
OF NOTE

     

    
      [Face of
Note] 

        
          

        

      

    

     

    [Insert
the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]

     

    THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.07 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (3) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12
OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF ENERGY XXI GULF COAST,
INC.

     

    UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (“DTC”), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     

    [Insert
the Private Placement Legend, if applicable to the Initial Series A Notes and
Initial Series B Notes pursuant to the provisions of the
Indenture]

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

    THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
“QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), OR (B) IT IS
AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) WHICH IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO THE
EXTENT THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) TO AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT.  THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    [Insert
the Intercreditor Agreement Legend, if applicable pursuant to the provisions of
the Indenture]

     

    THE TERMS
OF THIS SECURITY ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR AGREEMENT, DATED
NOVEMBER 12, 2009, BY AND AMONG THE FIRST LIEN AGENT, WILMINGTON TRUST FSB, AS
TRUSTEE AND COLLATERAL AGENT, THE COMPANY, ENERGY XXI (USA), INC. AND THE
SUBSIDIARY GUARANTORS.

     

     [Insert
the Original Issue Discount Legend, as required by U.S. Treasury
Regulations]

     

    THIS NOTE
IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF
THE INTERNAL REVENUE CODE.  THE ISSUE DATE IS NOVEMBER 12,
2009.  INFORMATION REGARDING THE ISSUE PRICE, THE YIELD TO MATURITY
AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT UNDER THIS NOTE CAN BE PROMPTLY
OBTAINED BY SENDING A WRITTEN REQUEST TO THE TREASURER OF THE ISSUER AT 1021
MAIN, SUITE 2626, HOUSTON, TEXAS 77002.

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

     

    CUSIP/ISIN
[29276K AG6

    US29276KAG67]1

    [29276K AH4

    US29276KAH41]2

    [29276K J0

    US29276KAJ07]3

    [29276K AF7

    US29276KAF79]4

     

    16%
Second Lien Junior Secured Notes due 2014

    Series
[A/B]

     

    
      	
              No.
      [A/B]-___

            	
              $____________

            

    

     

    ENERGY
XXI GULF COAST, INC.

     

    promises
to pay to [                   
] or registered
assigns, the principal sum of ____________
______________________________________________ DOLLARS ($_____________) on June
15, 2014.

     

    Interest
Payment Dates:  June 15 and December 15

     

    Record
Dates:  June 1 and December 1

     

    Dated:  _______________,
20__

     

    
      
        
          
            
              	
                      ENERGY
      XXI GULF COAST, INC.

                    
	 
      	 
      
	
                      By:

                    	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    

            

          

        

      

    

    
       

      
        

      

      
        	
                1

              	
                Insert
      on Initial Series A Notes held by QIBs.

              

    

    
      
        	
                2

              	
                Insert
      on Initial Series A Notes held by IAIs.

              

    

    
      
        	
                3

              	
                Insert
      on Initial Series A Notes held by QIBs.

              

    

    
      
        	
                4

              	
                Insert
      on Initial Series A Notes held by
IAIs.

              

      

    

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    
      This is
one of the Notes referred to

    

    
      in the
within-mentioned Indenture:

    

    

    
      
        
          
            	
                    WILMINGTON
      TRUST FSB

                  
	
                    as
      Trustee

                  
	 
      	 
      
	
                    By:

                  	 
      
	 	 
	 
      	
                    Authorized
      Signatory

                  

          

        

      

    

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    [Back of
Note]

    16%
Second Lien Junior Secured Notes due 2014

    Series
[A/B]

     

    Capitalized
terms used herein have the meanings assigned to them in the Indenture referred
to below unless otherwise indicated.

     

    (1)          Interest.  Energy
XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), promises to pay
interest on the principal amount of this Note at a rate of 16% per annum, from
November 12, 2009 until maturity.  The Company will pay interest
semi-annually in arrears on June 15 and December 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”),
proved that no interest will accrue for the intervening
period.  Interest on the Notes will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the date
of issuance; provided
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof
(each, a “Record Date”)
and the next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided further that the
first Interest Payment Date shall be December 15, 2009.  Cash Interest
on this Note will accrue at the rate of 14.0% per annum and be payable in cash,
and PIK Interest on this Note will accrue at the rate of 2.0% per annum and be
payable (x) with respect to Notes represented by one or more Global Notes
registered in the name of, or held by, the Depository Trust Company (“DTC”) or
its nominee on the relevant record date, by increasing the principal amount of
the outstanding Global Note by an amount equal to the amount of PIK Interest for
the applicable interest period (rounded up to the nearest $1,000) and (y) with
respect to Notes represented by certificated notes, by issuing PIK Notes in
certificated form in an aggregate principal amount equal to the amount of PIK
Interest for the period (rounded up to the nearest $1), and the Trustee will, at
the request of the Company, authenticate and deliver such PIK Notes in
certificated form for original issuance to the holders on the relevant record
date, as shown by the records of the register of holders.  Following
an increase in the principal amount of the outstanding Global Notes as a result
of a PIK Payment, the Global Notes will bear interest on such increased
principal amount from and after the date of such PIK Payment.  The
Company also shall pay Special Ratings Interest on the Notes under the
circumstances provided in the Indenture.  [The Company also
shall pay Special Registration Interest on the Initial Series [A/B] Notes under the
circumstances provided in the Indenture and the Registration Rights
Agreement.]5

     

    All Notes
issued pursuant to a PIK Payment will mature on June 15, 2014 and will be
governed by, and subject to the terms, provisions and conditions of, the
Indenture and shall have the same rights and benefits as the Notes issued on the
Issue Date.  Any certificated PIK Notes will be issued with the
description PIK on the face of such PIK Note.  The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 2% per annum in excess of the interest rate then in
effect to the extent lawful; it will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.

     

    
      
        

      

      
        	
                5

              	
                Insert
      in Initial Series A Notes and Initial Series B Notes
  only.

              

      

    

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

     

    (2)          Method of
Payment.  The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on June 1 or December 1 next preceding the Interest Payment
Date, even if such Notes are canceled after such record date and on or before
such Interest Payment Date, except as provided in Section 2.13 of the Indenture
with respect to defaulted interest.  The Notes will be payable as to
principal, premium, if any, and interest at the office or agency of the Company
maintained for such purpose, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, premium on, all Global Notes and all other Notes the
Holders of which will have provided wire transfer instructions to the Company or
the Paying Agent.  Such payment will be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.

     

    (3)          Paying
Agent and Registrar.  Initially, Wilmington Trust FSB, the
Trustee under the Indenture, will act as Paying Agent and
Registrar.  The Company may change any Paying Agent or Registrar
without notice to any Holder.  The Company or any of its Subsidiaries
may act in any such capacity.

     

    (4)          Indenture.  The
Company issued the Notes under an Indenture dated as of November 12, 2009 (the
“Indenture”) among the
Company, the Guarantors and the Trustee.  The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended.  The Notes
are subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms.  To the extent any provision
of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling.

     

    (5)          Optional
Redemption.

     

    (a)           Except
as set forth in clauses (b) and (c) of this Section 5, the Notes shall not be
redeemable at the option of the Company prior to June 15,
2011.  Beginning on June 15, 2011, the Company may redeem all or a
portion of the Notes, at once or over time, after giving the notice required
pursuant to Section 3.03 of the Indenture, at the redemption prices (expressed
as percentages of principal amount) set forth below, plus accrued and unpaid
interest on the Notes redeemed, to the applicable redemption date (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant Interest Payment Date), if redeemed during the twelve-month
periods beginning on June 15 of the years set forth below:

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

     

    
      
        
          	
                  
                    Period

                  

                	 	
                  
                    Percentage

                  

                	 
	
                  2011

                	 	 	106.500	%
	
                  2012

                	 	 	103.250	%
	
                  2013
      and thereafter

                	 	 	100.000	%

        

      

    

     

    (b)           At
any time and from time to time prior to June 15, 2011, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount of the
Notes issued under the Indenture at a redemption price (expressed as a
percentage of principal amount) equal to 110% of the principal amount thereof,
plus accrued and unpaid interest, if any, on the Notes to the redemption date
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on the relevant Interest Payment Date) with the net cash
proceeds of one or more Equity Offerings by the Company, provided, however, that (i) at least
65% of the aggregate principal amount of the Notes (including any PIK Notes or
PIK Payments) remains outstanding immediately after giving effect to such
redemption (excluding Notes held by the Company and its Subsidiaries); and (ii)
any such redemption shall be made within 90 days of the date of closing of such
Equity Offering.

     

    (c)           At
any time prior to June 15, 2011, the Company may at its option redeem the Notes
in whole or in part, at once or over time, after giving the notice required
pursuant to Section 3.03 of the Indenture, at a redemption price equal to 100%
of the principal amount thereof plus the Applicable Premium as of, and accrued
and unpaid interest, if any, to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on an
Interest Payment Date that is on or prior to the redemption date).

     

    (d)           Any
redemption pursuant to this Section 5 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 of the Indenture.

     

    (e)           Except
as provided in this Section 5, the Notes will not be redeemable at the Company’s
option prior to maturity.

     

    (6)          Mandatory
Redemption.

     

    The
Company is not be required to make mandatory redemption or sinking fund payments
with respect to the Notes.

     

    (7)          Repurchase
at the Option of Holder.

     

    (a)           If
there is a Change of Control, the Company will be required to make an offer (a
“Change of Control
Offer”) to each Holder to repurchase all or any part (equal to $2,000 or
an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a
purchase price in cash equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest thereon to the date of purchase, subject to the
rights of Holders on the relevant record date to receive interest due on the
relevant interest payment date (the “Change of Control
Payment”).  Within 30 days following any Change of Control or,
at the Company’s option, prior to such Change of Control but after public
announcement thereof, the Company will mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

     

    (b)           If
the Company or a Restricted Subsidiary of the Company consummates an Asset Sale,
the Company in circumstances specified in the Indenture may be required to
commence an offer to all Holders of Notes and all holders of other Indebtedness
that is pari passu with
the Notes containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets (an
“Asset Sale Offer”)
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds at an offer price in cash in an
amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon to the date of purchase, in accordance with the procedures set
forth in the Indenture.  Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled “Option of
Holder to Elect Purchase” attached to the Notes.

     

    (8)          Notice of
Redemption.  Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction or
discharge of the Indenture.  Notes in denominations larger than $2,000
may be redeemed in part but only in whole multiples of $1,000 in excess thereof,
unless all of the Notes held by a Holder are to be redeemed.

     

    (9)          Collateral
and Ranking.  The Notes are secured obligations of the
Company.  The Guarantees by the Direct Parent and the Subsidiary
Guarantors are secured obligations of such Guarantors.  The Notes and
such Guarantees are secured by security interests in the Collateral pursuant to
the Security Documents.  The Notes and such Guarantees will be secured
by Second Priority Liens subject to Permitted Liens on the
Collateral.  Pursuant to the Intercreditor Agreement, the Notes are
subordinated in right of payment to the First Lien Claims and the Second
Priority Liens are subordinate in priority to all present and future liens
securing First Lien Claims.

     

    (10)        Denominations,
Transfer, Exchange.  The Notes are in registered form without
coupons in denominations of $2,000 and integral multiples of $1,000 in excess
thereof (except that with respect to Notes represented by certificated Notes,
the principal amount of PIK Notes issued in payment of PIK Interest will be
rounded up to the nearest $1.00 as provided in Section 1(y) of this
Note).  The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture.  The Company need
not exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being redeemed in
part.  Also, the Company need not exchange or register the transfer of
any Notes for a period of 15 days before a selection of Notes to be redeemed or
during the period between a record date and the corresponding Interest Payment
Date.

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

     

    (11)        Persons
Deemed Owners.  The registered Holder of a Note may be treated
as its owner for all purposes.

     

    (12)        Amendment,
Supplement and Waiver.  Subject to certain exceptions, (i) the
Indenture, the Notes or the Guarantees may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, voting as a single class, and (ii) any existing
Default or Event or Default or compliance with any provision of the Indenture,
the Notes or the Guarantees may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes, voting as
a single class.  Without the consent of any Holder of a Note, the
Indenture, the Notes or the Guarantees may be amended or supplemented to cure
any ambiguity, defect or inconsistency and to effect certain other changes as
set forth in the Indenture.

     

    (13)        Defaults
and Remedies.  If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare all the Notes to be due and
payable immediately.  Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable immediately without further action
or notice.  Holders may not enforce the Indenture or the Notes except
as provided in the Indenture.  Subject to certain limitations, Holders
of a majority in aggregate principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power.  The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest or premium, if any,) if it determines that withholding
notice is in their interest.  The Holders of a majority in aggregate
principal amount of the then outstanding Notes by notice to the Trustee may, on
behalf of the Holders of all of the Notes, rescind an acceleration or waive any
existing Default or Event of Default and its consequences under the Indenture
except (i) a continuing Default or Event of Default in the payment of interest
or premium, if any, on, or the principal of, the Notes (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) or (ii) a Default in respect of a provision that under Section
9.02 of the Indenture cannot be amended without the consent of each Holder
affected.  The Company is required to deliver to the Trustee annually
a statement regarding compliance with the Indenture, and the Company is
required, upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of
Default.

     

    (14)        Trustee
Dealings with Company.  The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.

    
      
         

      

      
        A-10

        
          

        

      

      
         

      

    

     

    (15)        No
Recourse Against Others.  No director, officer, employee,
incorporator or other owner of Capital Stock of the Company or any Guarantor, as
such, will have any liability for any obligations of the Company or the
Guarantors under the Notes, the Indenture, the Guarantees or the Security
Documents or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each Holder of Notes by accepting a
Note waives and releases all such liability.  The waiver and release
are part of the consideration for issuance of the Notes.

     

    (16)        Authentication.  This
Note will not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.

     

    (17)         Abbreviations.  Customary
abbreviations may be used in the name of a Holder or an assignee, such
as:  TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

     

    (18)        CUSIP
Numbers.  Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders.  No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption, and reliance may be
placed only on the other identification numbers placed thereon.

     

    (19)        GOVERNING
LAW. THE LAWS OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THE INDENTURE, THIS NOTE AND THE GUARANTEES.

     

    The
Company will furnish to any Holder upon written request and without charge a
copy of the Indenture.  Requests may be made to:

     

    ENERGY
XXI GULF COAST, INC.

    1021
Main

    Suite
2626

    Houston,
Texas  77002

    Attention:  Chief
Financial Officer

    
      
         

      

      
        A-11

        
          

        

      

      
         

      

    

    Assignment
Form

     

    To assign
this Note, fill in the form below:

    (I) or
(we) assign and transfer this Note to:                                                                                                                                  

    (Insert
assignee’s legal name)

     

     

    

      
        

      

    

    (Insert
assignee’s soc. sec. or tax I.D. no.)

       

     

    
      

    

     

    
      
        

      

      
         

        
          

        

      

    

     

    
      
        

      

    

    (Print or
type assignee’s name, address and zip code)

     

    and
irrevocably appoint                                                                                                                           
  
                              
to
transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

     

    Date:  _______________

     

    Your
Signature:                                    
                                                     

    (Sign
exactly as your name appears on the face of this Note)

    

    Signature
Guarantee*:  _________________________

    

    *           Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

    
      
         

      

      
        A-12

        
          

        

      

      
         

      

    

    Option of
Holder to Elect Purchase

     

    If you
want to elect to have this Note purchased by the Company pursuant to Section
4.10 or 4.15 of the Indenture, check the appropriate box below:

     

    o Section
4.10   o Section 4.15

     

    If you
want to elect to have only part of the Note purchased by the Company pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to
have purchased:

     

    $_______________

    

    Date:  _______________

     

    Your
Signature:                                           
                                             

    (Sign
exactly as your name appears on the face of this Note)

     

    Tax
Identification No.:                                                                           
  

    

    Signature
Guarantee*:  _________________________

    

    *           Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).

    
      
         

      

      
        A-13

        
          

        

      

      
         

      

    

    Schedule
of Exchanges of Interests in the Global Note *

     

    The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been
made:

     

    
      
        	
                
                  Date of

                  Exchange

                

              	 	
                
                  Amount of

                  decrease in

                  Principal

                  Amount 

                  of 

                  this Global Note

                

              	 	
                
                  Amount of

                  increase in

                  Principal

                  Amount 

                  of 

                  this Global Note

                

              	 	
                
                  Principal

                  Amount 

                  of this Global

                  Note following

                  such decrease 

                  (or increase)

                

              	 	
                
                  Signature of

                  authorized

                  officer of

                  Trustee or

                  Custodian

                

              
	 
      	 	 
      	 	 
      	 	 
      	 	 
      
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

      

    

    

    
      	
              *

            	
              This schedule should be
      included only if the Note is issued in global
  form.

            

    

    
      
         

      

      
        A-14

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    FORM
OF CERTIFICATE OF TRANSFER

     

    ENERGY
XXI GULF COAST, INC.

    1021
Main, Suite 2626

    Houston,
TX  77002

    Attention:  Chief
Financial Officer

    

    WILMINGTON
TRUST FSB

    50 South
Sixth Street, Suite 1290

    Minneapolis,
MN 55402

    Facsimile
No.:  (612) 217-5651

    Attention:  Corporate
Capital Markets

    

    
      	
               
      

            	
              Re:

            	
              16%
      Second Lien Junior Secured Notes due 2014, Series [A/B]

            

    

     

    CUSIP
[29276K AG6/2927KH AH4] [29276K AJ0/29276K AF7]

     

    Reference
is hereby made to the Indenture, dated as of November ___, 2009 (the “Indenture”), among Energy XXI
Gulf Coast, Inc., as issuer (the “Company”), the Guarantors
party thereto and Wilmington Trust FSB, as Trustee.  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

     

    ___________________,
(the “Transferor”) owns
and proposes to transfer the Note[s] or interest in such Note[s] specified in
Annex A hereto, in the principal amount of $___________ in such Note[s] or
interests (the “Transfer”),
to  ___________________________ (the “Transferee”), as further
specified in Annex A hereto.  In connection with the Transfer, the
Transferor hereby certifies that:

     

    [CHECK
ALL THAT APPLY]

     

    1.   ̈   Check
if Transferee will take delivery of a beneficial interest in the QIB Global Note
or a Restricted Definitive Note pursuant to Rule 144A.  The Transfer
is being effected pursuant to an in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believes is purchasing the beneficial interest or Definitive Note for
its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Personal and each such account is
a “qualified  institutional buyer” within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A, and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transfer enumerated in the
Private Placement Legend printed on the QIB Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

     

    2.   ̈   Check
and complete if Transferee will take delivery of a beneficial interest in the
IAI Global Note or a Restricted Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A.  The Transfer is being effected
in compliance with the transfer restrictions applicable to beneficial interests
in Restricted Global Notes and Restricted Definitive Notes and pursuant to and
in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):

     

    (a)            ̈   such
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act;

     

    or

     

    (b)            ̈   such
Transfer is being effected to the Company or a subsidiary thereof;

     

    or

     

    (c)            ̈   such
Transfer is being effected pursuant to an effective registration statement under
the Securities Act and in compliance with the prospectus delivery requirements
of the Securities Act;

     

    or

     

    (d)            ̈   such
Transfer is being effected to an Institutional Accredited Investor and pursuant
to an exemption from the registration requirements of the Securities Act other
than Rule 144A or Rule 144, and the Transferor hereby further certifies that it
has not engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act.  Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the IAI Global Note and/or the
Restricted Definitive Notes and in the Indenture and the Securities
Act.

     

    This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      
	 
      	
                                [Insert
      Name of
Transferor]

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    
      
        	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

    Dated:  _______________________

    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    

    ANNEX
A TO CERTIFICATE OF TRANSFER

     

    
      	
              1. 

            	
              The
      Transferor owns and proposes to transfer a beneficial interest in
      the:

            

    

     

    [CHECK
ONE OF (a) OR (b)]

     

    
      	
            	
              (a) 

            	
               ̈   QIB
      Global Note (CUSIP 29276K AG6/29276K AJ0),
or

            

    

    
      	
            	
              (b) 

            	
               ̈   IAI
      Global Note (CUSIP 29276K AH4/29276K
AF7).

            

    

    

    
      	
              2. 

            	
              After
      the Transfer the Transferee will hold a beneficial interest in
      the:

            

    

     

    [CHECK
ONE]

     

    
      	
            	
              (a) 

            	
               ̈   QIB
      Global Note (CUSIP 29276K AG6/29276K AJ0),
or

            

    

    
      	
            	
              (b) 

            	
               ̈   IAI
      Global Note (CUSIP 29276K AH4/29276K
AF7).

            

    

    

    in
accordance with the terms of the Indenture.

    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    FORM
OF CERTIFICATE OF EXCHANGE

     

    ENERGY
XXI GULF COAST, INC.

    1021
Main, Suite 2626

    Houston,
TX  77002

    Attention:  Chief
Financial Officer

    

    WILMINGTON
TRUST FSB

    50 South
Sixth Street, Suite 1290

    Minneapolis,
MN 55402

    Facsimile
No.:  (612) 217-5651

    Attention:  Corporate
Capital Markets

    

    
      Re:  16%
Second Lien Junior Secured Notes due 2014, Series [A/B]

    

     

    (CUSIP[29276K
AG6/2927KH AH4] [29276K AJ0/29276K AF7])

     

    Reference
is hereby made to the Indenture, dated as of November 12, 2009 (the “Indenture”), among Energy XXI
Gulf Coast, Inc., as issuer (the “Company”), the Guarantors
party thereto and Wilmington Trust FSB, as Trustee.  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

     

    __________________________,
(the “Owner”) owns and
proposes to exchange the Note[s] or interest in such Note[s] specified herein,
in the principal amount of $____________ in such Note[s] or interests (the
“Exchange”).  In
connection with the Exchange, the Owner hereby certifies that:

     

    1.           Exchange
of Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes for Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes

     

    (a)   ̈ Check
if Exchange is from beneficial interest in a Restricted Global Note to
Restricted Definitive Note.  In connection with the Exchange of the
Owner’s beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.

     

    (b)   ̈ Check
if Exchange is from Restricted Definitive Note to beneficial interest in a
Restricted Global Note.  In connection with the Exchange of the
Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
 ̈
QIB Global Note,  ̈ IAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States.  Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities
Act.

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    This
certificate and the statements contained herein are made for your benefit and
the benefit of the Company.

     

    
      
        
          
            	 
      	 
      
	 
      	
                    [Insert
      Name of Transferor]

                  
	 
      	 
      
	
                    By: 

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

    Dated:  ______________________

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    EXHIBIT
D

     

    FORM
OF CERTIFICATE FROM

    ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR

     

    ENERGY
XXI GULF COAST, INC.

    1021
Main, Suite 2626

    Houston,
TX  77002

    Attention:  Chief
Financial Officer

    

    If to the
Trustee:

     

    WILMINGTON
TRUST FSB

    50 South
Sixth Street, Suite 1290

    Minneapolis,
MN 55402

    Facsimile
No.:  (612) 217-5651

    Attention:  Corporate
Capital Markets

    

    Re:  16%
Second Lien Junior Secured Notes due 2014, Series [A/B]

     

    Reference
is hereby made to the Indenture, dated as of November 12, 2009 (the “Indenture”), among Energy XXI
Gulf Coast, Inc., as issuer (the “Company”), the Guarantors
party thereto and Wilmington Trust FSB, as Trustee.  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.

     

    In
connection with our proposed purchase of $____________ aggregate principal
amount of:

     

    (a)   ̈ a
beneficial interest in a Global Note, or

     

    (b)   ̈ a
Definitive Note,

     

    we
confirm that:

     

    1.           We
understand that any subsequent transfer of the Notes or any interest therein is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes or any interest therein except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
“Securities
Act”).

     

    2.           We
understand that the offer and sale of the Notes have not been registered under
the Securities Act, and that the Notes and any interest therein may not be
offered or sold except as permitted in the following sentence.  We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a “qualified institutional
buyer” (as defined therein), (C) to an institutional “accredited investor” (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) pursuant to the provisions of Rule
144(k) under the Securities Act or (E) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
Person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (D) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

    3.           We
understand that, on any proposed resale of the Notes or beneficial interest
therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions.  We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.

     

    4.           We
are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investment.

     

    5.           We
are acquiring the Notes or beneficial interest therein purchased by us for our
own account or for one or more accounts (each of which is an institutional
“accredited investor”) as to each of which we exercise sole investment
discretion.

     

    You and
the Company are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

     

    
      
        
          
            
              	 
      	 
      
	 
      	
                      [Insert
      Name of Accredited Investor]

                    
	 
      	 
      
	
                      By: 

                    	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    

            

          

        

      

    

    Dated:  _______________________

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

    EXHIBIT
E

     

    FORM
OF NOTATION OF GUARANTEE

     

    For value
received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent
set forth in the Indenture and subject to the provisions in the Indenture dated
as of November 12, 2009 (the “Indenture”) among Energy XXI
Gulf Coast, Inc. (the “Company”), the Guarantors
party thereto and Wilmington Trust FSB, as Trustee (the “Trustee”), (a) the due and
punctual payment of the principal of, premium, if any, and interest on, the
Notes, whether at maturity, by acceleration, redemption or otherwise, the due
and punctual payment of interest on overdue principal of and interest on the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.  The obligations of the Guarantors to the Holders of Notes
and to the Trustee pursuant to the Guarantee and the Indenture, and the
limitations thereon, are expressly set forth in Article 12 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Guarantee.

     

    Capitalized
terms used but not defined herein have the meanings given to them in the
Indenture.

     

    
      
        
          
            
              	
                      [ENERGY
      XXI (BERMUDA) LIMITED]

                    
	 
      	 
      
	
                      By: 

                    	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    
	 
      	 
      
	
                      [ENERGY
      XXI ONSHORE, LC]

                    
	 
      	 
      
	
                      By:

                    	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    
	 
      	 
      
	
                      [ENERGY
      XXI ONSHORE, LLC]

                    
	 
      	 
      
	
                      By: 

                    	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

                    

            

          

        

      

    

    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  	
                          [ENERGY
      XXI GOM, LLC]

                        
	 
      	 
      
	
                          By: 

                        	 
      
	 
      	
                          Name:

                        
	 
      	
                          Title:

                        
	 
      	 
      
	
                          [Acknowledged and agreed
      as of the date first above written in its capacity under its limited
      recourse Guarantee and grantor under its Security Agreement and
      irrevocable proxy delivered in connection with the Credit
      Agreement:

                        
	 
      
	
                          ENERGY
      XXI USA, INC.]

                        
	 
      
	
                          By:

                        	 
      
	 
      	
                          Name:

                        
	 
      	
                          Title:

                        
	 
	
                          [NAME
      OF OTHER GUARANTOR(S)]

                        
	 
      	 
      
	
                          By:  

                        	 
      
	 
      	
                          Name:

                        
	 
      	
                          Title:

                        

                

              

            

          

        

      

    

    
      
         

      

      
        E-2

        
          

        

      

      
         

      

    

    EXHIBIT
F

     

    FORM
OF SUPPLEMENTAL INDENTURE

    TO
BE DELIVERED BY SUBSEQUENT GUARANTORS

     

    Supplemental
Indenture
(this “Supplemental
Indenture”), dated as of ________________, 20___, among
__________________ (the “Guaranteeing Subsidiary”), a
subsidiary of Energy XXI Gulf Coast, Inc. (or its permitted successor), a
Delaware corporation (the “Company”), the Company, the
other Guarantors (as defined in the Indenture referred to herein) and Wilmington
Trust FSB, as Trustee under the Indenture referred to below (the “Trustee”).

     

    WITNESSETH

     

    WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture
(the “Indenture”),
dated as of November ___, 2009 providing for the issuance of 16% Second Lien
Junior Secured Notes due 2014 (the “Notes”);

     

    WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing
Subsidiary shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee
all of the Company’s Obligations under the Notes and the Indenture on the terms
and conditions set forth herein (the “Guarantee”); and

     

    WHEREAS,
pursuant to Section 9.01 of the Indenture, each of the Company, the Guarantors
and the Trustee is authorized to execute and deliver this Supplemental
Indenture.

     

    NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing
Subsidiary and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:

     

    1.           Capitalized
Terms.  Capitalized
terms used herein without definition shall have the meanings assigned to them in
the Indenture.

     

    2.           Agreement
to Guarantee.  The
Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on
the terms and subject to the conditions set forth in the Guarantee and in the
Indenture including but not limited to Article 12 thereof, and subject to the
limitations therein.

     

    3.           No
Recourse
Against
Others.  No
director, officer, employee, incorporator or stockholder of the Company or any
Guarantor, as such, will have any liability for any obligations of the Company
or the Guarantors under the Notes, the Indenture or the Guarantees or for any
claim based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder of Notes by accepting a Note waives and
releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.  The waiver may not be
effective to waive liabilities under the federal securities
laws.

    
      
         

      

      
        F-1

        
          

        

      

      
         

      

    

    4.           NEW
YORK LAW TO GOVERN.  THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

     

    5.           Counterparts.  The
parties may sign any number of copies of this Supplemental
Indenture.  Each signed copy shall be an original, but all of them
together represent the same agreement.

     

    6.           Effect
of Headings.  The
Section headings herein are for convenience only and shall not affect the
construction hereof.

     

    7.           The
Trustee.  The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Supplemental Indenture or for or in respect
of the recitals contained herein, all of which recitals are made solely by the
Guaranteeing Subsidiary and the Company.

    
      
         

      

      
        F-2

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed, all as of the date first above written.

     

    Dated:  _______________,
20__

    

    
      
        
          
            
              
                
                  
                    	
                            [GUARANTEEING
      SUBSIDIARY]

                          
	 
      
	
                            By:

                          	 
      
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 
      	 
      
	
                            ENERGY
      XXI GULF COAST, INC.

                          
	 
      	 
      
	
                            By:  

                          	 
      
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 
      	 
      
	
                            [EXISTING
      GUARANTORS]

                          
	 
      	 
      
	
                            By:

                          	 
      
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 
      	 
      
	
                            WILMINGTON
      TRUST FSB,

                          
	 
      	
                            as
      Trustee  

                          
	 	 
	
                            By:

                          	 
      
	 
      	
                            Authorized
      Signatory

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        F-3Unassociated Document

    

     

    REGISTRATION RIGHTS
AGREEMENT

     

    Dated as of November 12, 2009

     

    Among

     

    Energy XXI Gulf Coast,
Inc.,

     

    

     

    The Guarantors

     

    listed on the signature pages
hereto,

     

    and

     

    the
Purchasers listed on the signature page hereto

     

    

     

    16%
Second Lien Junior Secured Notes due 2014

     

     

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    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.	
                19

              
	 	 
	SECTION
      8. RULES 144 AND 144A	
                21

              
	 	 
	SECTION
      9. UNDERWRITTEN REGISTRATIONS. 	
                22

              
	 	 
	SECTION
      10. MISCELLANEOUS.	
                22

              

      

    

    
      
      

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    

    REGISTRATION
RIGHTS AGREEMENT

     

    This
Registration Rights Agreement, dated as of November 12, 2009 (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 purchasers listed on the signature page hereto (the
“Purchasers”).

     

    This
Agreement is entered into in connection with (i) the issuance by the Company of
$278,000,000 in aggregate principal amount of newly issued Series A 16% Second
Lien Junior Secured Notes due 2014 (the “Series A Notes”) in exchange for
$347,500,000 in aggregate principal amount of the Company’s outstanding 10%
Senior Notes due 2013, and (ii) the Note and Common Stock Purchase Agreement by
and among the Company, the Guarantors and the Purchasers, dated September 18,
2009 (the “Purchase Agreement”), pursuant to which the Company issued and sold
(x) $60,000,000 in aggregate principal amount of its Series B 16% Second Lien
Junior Secured Notes due 2014 (the “Series B Notes” and together with the Series
A Notes, the “Notes”) and (y) 13,224,720 shares of common stock of
Parent.  The Notes were offered and sold in transactions exempt from
the registration requirements of the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission (the
“Commission”) thereunder (collectively, the “Securities Act”) in private
placements without being registered under the Securities Act in reliance upon
Section 4(2) thereof and/or Regulation D thereunder.

     

    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 have the meaning set forth in the preamble hereof.

     

    “Day”
shall mean a calendar day.

     

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

     

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

     

    
      
        
        

      

      
        - 1
-

        
          

        

      

      
        
        

      

    

     

    “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.

     

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

     

    “Indenture”
shall mean the Indenture, dated as of November 12, 2009, among the Company, the
Guarantors and Wilmington Trust FSB, as trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms thereof.

     

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

     

    “Issue
Date” shall mean November 12, 2009, the date of original issuance of the Notes.

     

    “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.

     

    “NASD”
shall have the meaning set forth in Section 5(s) hereof.

     

    “Notes”
shall have the meaning set forth in the second introductory paragraph
hereto.

     

    “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.

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    “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 second introductory paragraph
hereto.

     

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

     

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

     

    “Registrable
Notes” shall mean (x) each 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 Note or Exchange Note has been
declared effective by the Commission and such Note or Exchange Note, as the case
may be, has been disposed of in accordance with such effective Registration Statement, (ii) such 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 Note or
Exchange Note, as the case
may be, ceases to be
outstanding or (iv) such 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.

     

    “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.

     

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

    

     

    “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.

     

    “Series A
Notes” shall have the meaning set forth in the second introductory paragraph
hereto.

     

    “Series B
Notes” shall have the meaning set forth in the second introductory paragraph
hereto.

     

    “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 (i) file within 90 days of the Issue Date a
Registration Statement (the “Exchange Offer Registration Statement”) with the
Commission 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 (the “Exchange Notes”) that are
identical in all material respects to the Notes (except that the Exchange Notes
shall not contain terms with respect to transfer restrictions or Liquidated
Damages upon a Registration Default) and (ii) use its reasonable best efforts to
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act within 180 days after the Issue Date. Upon the Exchange Offer
Registration Statement being declared effective by the Commission, the Issuer
will: (i) use its reasonable best efforts to commence the Exchange Offer as soon
as practicable after the Exchange Offer Registration Statement is declared
effective, (ii) use its reasonable best efforts to 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.

     

    
      
        
        

      

      
        - 4
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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 or, if it is an affiliate, it will comply with
the registration and prospectus delivery requirements of the Securities Act to
the extent applicable, (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 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 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 Purchasers acknowledge that the staff of the Commission has taken
the position that any broker-dealer that elects to exchange 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 Regulation S Notes).

     

    The Issuer and the 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 not to exceed 120 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
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    For each Note surrendered in the
Exchange Offer, the Holder will receive an Exchange Note having a principal
amount equal to that of the surrendered 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 Notes surrendered in exchange therefor
or, if no interest has been paid on the 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) 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 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 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 Notes so accepted
for exchange; and

     

    (3)           cause
the Trustee to authenticate and deliver promptly to each such Holder of Notes or
Exchange Notes, as the case may be, 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.

     

    
      
        
        

      

      
        - 6
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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 Notes shall vote and consent
together on all matters as one class and that neither the Exchange Notes nor the 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
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 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) is applicable (the “Shelf Registration”). The Issuer shall
use its reasonable best efforts to file with the Commission the Shelf
Registration as promptly as practicable but in any event within 30 days of
notice of the Shelf Filing Event (the “Filing Date”). 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.

     

    
      
        
        

      

      
        - 7
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    (b)           The
Issuer shall use its reasonable best efforts:

     

    (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 180th 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 90th day
after the date on which the Shelf Registration Statement is required to be
filed; and

     

    (3)           to
keep the Shelf Registration Statement effective until the earliest of (A) the
time when the Notes covered by the Shelf Registration Statement can be sold
pursuant to Rule 144 without any information under clause (c), (e), (f) and (h)
of Rule 144, (B) one year from the Issue Date and (c) the date on which all
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 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
Issuers fail to file the Exchange Offer Registration Statement with the
Commission on or prior to the 90th day
after the Issue Date,

     

    (2)           the
Exchange Offer Registration Statement is not declared effective on or prior to
the 180th day
following the Issue Date or, if that day is not a Business Day, the next day
that is a Business Day;

     

    
      
        
        

      

      
        - 8
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    (3)           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;

     

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

     

    (5)           a
Shelf Registration Statement that is either (x) required to be filed pursuant to
Section 2(c)(i) is not declared effective by the 180th day
after the Filing 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)(ii),
(iii) or (iv) is not declared effective by the 90th day after the 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

     

    (6)           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 (i) through (vi) a “Registration Default”),
liquidated damages in the form of additional cash interest (“Liquidated
Damages”) will accrue on the affected Notes and the affected Exchange Notes, as
applicable. The rate of Liquidated Damages will be 0.5% per annum for the first
60-day period immediately following the occurrence of a Registration Default,
increasing by an additional 0.5% per annum with respect to each subsequent
60-day period up to a maximum amount of additional interest of 1.50% 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 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 Notes and
Exchange Notes becoming freely transferable, the 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 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 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.

     

    (b)           So
long as 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 Notes that are Registrable Securities. 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.

     

    
      
        
        

      

      
        - 9
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    (c)           Notwithstanding
the foregoing, in the event a Registration Default by the Issuer pursuant to
Section 4(a)(1), 4(a)(2) or 4(a)(3) above continues uncured for twenty (20)
days, any Purchaser shall, immediately upon the expiration of such 20 day cure
period, be entitled to equitable relief of specific performance to compel the
Issuer to comply with its registration obligations under Sections 2 and 3 hereof
and cure such Registration Default, without posting any bond and without proving
that monetary damages would be inadequate.

    
       

      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.

     

    
      
        
        

      

      
        - 10
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    (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.

     

    (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 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 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 trust 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 the National Association of Securities Dealers, Inc. (the
“NASD”).

     

    (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.

     

    
      
        
        

      

      
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    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.

     

    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 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 the NASD 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.

     

    
      
        
        

      

      
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      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.

     

    (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.

     

    
      
        
        

      

      
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    (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 reasonable 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 Notes to the 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 Series B Notes, be deemed to be in the same proportion as
(x) the total proceeds from the sale of the Notes to the 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.

     

    
      
        
        

      

      
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    (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 Rule 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(k) 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.

     

    
      
        
        

      

      
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      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.

     

    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 (I) the Issuer and (II)(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.

     

    
      
        
        

      

      
        - 22
-

        
          

        

      

      
        
        

      

    

     

    (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:

     

    (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 Purchasers, at the addresses contained in their signature
pages.  Trustee:

     

    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.

     

    
      
        
        

      

      
        - 23
-

        
          

        

      

      
        
        

      

    

     

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

     

    (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, except as set forth in Section 7 hereof.

     

    (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.

     

    
      
        
        

      

      
        - 24
-

        
          

        

      

      
        
        

      

    

     

    (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, the 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, the 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.

     

    (n)           Entire
Agreement. This Agreement,
together with the Purchase
Agreement, the Work Letter (as defined in the Purchase Agreement), any
commitment letters between the Company and any Purchaser, 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/ Ben
      Marchive	 
	 	 	
                      
                        Name: Ben
      Marchive

                      

                    	 
	 	 	
                      
                        Title:   President

                      

                    	 
	 	 	 	 

            

          

          
             

            
              
                	 	
                        
                          
                            
                              ENERGY
      XXI USA, INC., as Guarantor

                            

                          

                        

                      	 
	 	 	 	 
	
                      	
                        By:
      

                      	/s/
      David West Griffin	 
	 	
                         

                      	
                        Name: West
      Griffin

                      	 
	 	 	
                        
                          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 TEXAS, LP, as Guarantor

                                    

                                  

                                

                              

                            

                          	 
	 	 	 	 
	
                          	
                            By:
      

                          	/s/ Ben Marchive	 
	 	 	
                            
                              
                                Name: Ben
      Marchive

                              

                            

                          	 
	 	 	
                            
                              Title:   President

                            

                          	 

                  

                

              

            

          

        

        
          
             

            
              
                	 	
                        
                          
                            
                              
                                
                                  ENERGY
      XXI TEXAS GP, LLC, as
    Guarantor

                                

                              

                            

                          

                        

                      	 
	 	 	 	 
	
                      	
                        By:
      

                      	/s/ Ben Marchive	 
	 	 	
                        
                          
                            Name: Ben
      Marchive

                          

                        

                      	 
	 	 	
                        
                          Title:   President

                        

                      	 

              

            

          

          
            
              
                 

                
                  
                    	 	
                            
                              
                                
                                  
                                    
                                      
                                        ENERGY
      XXI GOM, LLC, as
    Guarantor

                                      

                                    

                                  

                                

                              

                            

                          	 
	 	 	 	 
	
                          	
                            By:
      

                          	/s/ Ben Marchive	 
	 	 	
                            
                              
                                Name: Ben
      Marchive

                              

                            

                          	 
	 	 	
                            
                              Title:   President

                            

                          	 

                  

                

              

              
                
                  
                     

                    
                      
                        
                        

                      

                      
                        - 26
-

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    
                      
                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  LATIGO
      PARTNERS, L.P.,

                                	 
	 
      	
                                  SEG
      LATIGO ADVISORS, L.P.,

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      David Ford

                                	 
	 
      	 
      	
                                  Name:
      David Ford

                                  Title:
      Partner

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 27
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	
                                  MOUNT
      KELLETT MASTER FUND II, LP

                                	 
	 
      	 
      	 
	 
      	
                                  By:  Mount
      Kellett Capital Partners GP LLC

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Stuart D. Freedman

                                	 
	 
      	 
      	
                                  Name:  Stuart
      D. Freedman

                                  Title:  Authorized
      Signatory

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 28
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  MSD
      ENERGY INVESTMENTS, L.P.

                                	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Marc Lisker

                                	 
	 
      	 
      	
                                  Name:
      Marc Lisker

                                  Title:
      General Counsel

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 29
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	
                                  SENATOR
      GLOBAL OPPORTUNITY FUND LP

                                
	 
      	 
      	 
	 
      	
                                  By
      Senator GP LLC, its General Partner

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Edward Larmann

                                	 
	 
      	 
      	
                                  Name:
      Edward Larmann

                                  Title:
      Chief Financial Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 30
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	
                                  SENATOR
      GLOBAL OPPORTUNITY INTERMEDIATE FUND LP

                                
	 
      	 
      	 
	 
      	
                                  By
      Senator GP LLC, its general partner

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Edward Larmann

                                	 
	 
      	 
      	
                                  Name:
      Edward Larmann

                                  Title:
      Chief Financial Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 31
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  SOF
      INVESTMENTS, L.P.

                                	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Marc Lisker

                                	 
	 
      	 
      	
                                  Name:
      Marc Lisker

                                  Title:
      General Counsel

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 32
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  FAIRFAX
      COUNTY RETIREMENT SYSTEM

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 33
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  VERMONT
      STATE EMPLOYEES RETIREMENT

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 34
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  VIRGINIA
      RETIREMENT SYSTEM

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 35
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  UNIVERSITY
      OF PENNSYLVANIA

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 36
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  UBS
      LWC INSTITUTIONAL SICAU ALPHA CHOICE

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 37
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  UBS
      ALPHA CHOICE FUND LIMITED

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 38
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  TEXAS
      COUNTY & DISTRICT RETIREMENT

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 39
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  POST
      TRADITIONAL HIGH YIELD FUND LP

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 40
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  TIMKEN
      COMPANY COLLECTIVE INVESTMENT TRUST FOR RETIREMENT

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 41
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  TACOMA
      EMPLOYEES RETIREMENT SYSTEM

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 42
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  STICHT
      BEDRIPENS METALEKTRO

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 43
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  STATE
      OF NEW JERSEY

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 44
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  SMS
      ALLIANZGI-FONDS DREDOLE DENTUS US HY

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 45
-

                            
                              

                            

                          

                          
                            
                            

                          

                           

                        

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  QWEST
      PENSION TRUST

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 46
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  PMT
      STICHTING PENSIOENFONDS VOOR DE MET

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 47
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  OHIO
      PUBLIC EMPLOYEES RETIREMENT SYSTEM

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 48
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  NATION
      TELECOM COOP ASSN

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 49
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  NATIONAL
      RAILROAD

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 50
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  W.M.
      KECK FOUNDATION

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 51
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  IKANO
      FUND MANAGEMENT

                                	 
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 52
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  POST
      HIGH YIELD PLUS MASTER FUND

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 53
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  INVESTERINGSFORENINGEN
      GUDME RAASCHOU

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                         

                        
                          
                            
                            

                          

                          
                            - 54
-

                            
                              

                            

                          

                          
                            
                            

                          

                        

                         

                        
                          	 
      	
                                  PURCHASER

                                	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	
                                  GERVENE
      REKEN BEROEPSVERVOER

                                
	 
      	 
      	 
	 
      	
                                  By:
      Post Advisory Group as Investment Manager

                                	 
	 
      	 
      	 
	 
      	
                                  By:

                                	
                                  /s/
      Allen Schweitzer

                                	 
	 
      	 
      	
                                  Name:
      Allen Schweitzer

                                  Title:
      Chief Investment Officer

                                	 

                        

                        

                      

                      
                        
                          
                          

                        

                        
                          - 55
-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]