Document:

Exhibit 10.15

 

MOCON, INC.

 

DESCRIPTION OF NON-EMPLOYEE
DIRECTOR

COMPENSATION ARRANGEMENTS

 

Retainer and Meeting Fees.    Each
of the non-employee directors of MOCON, Inc. receives an annual retainer
fee of $10,000, paid in equal quarterly installments, without regard to the
number of board of directors or committee meetings held or attended by such
director, along with an additional $500 for each board meeting or committee
meeting attended in person or via telephone. The Chairman of the Audit
Committee receives an additional annual retainer fee of $3,000, paid in equal
quarterly installments.

 

Stock Options.    Non-employee
directors are granted options to purchase shares of MOCON common stock from
time to time in the sole discretion of the board of directors.

 

Director Retirement Plan.    Pursuant
to the MOCON, Inc. Director Retirement Plan, a non-employee director who
has served on the board of directors of MOCON for at least five years will,
upon retirement, receive an amount equal to the annual retainer fee such
director would have been entitled to receive during the fiscal year in which
such director’s retirement occurs. This payment, however, will not be made to a
director who, following his or her retirement, continues to serve as a
consultant to MOCON or any of its subsidiaries. Any amount payable under this
retirement plan will be paid as determined by the MOCON board of directors in
its sole discretion following such director’s retirement.

 

Reimbursement of Expenses.    Non-employee
directors are reimbursed for actual expenses incurred in attending board and
committee meetings.Exhibit 10.16

 

MOCON, INC.

 

DESCRIPTION
OF EXECUTIVE OFFICER

COMPENSATION
ARRANGEMENTS

 

All of the employees of
MOCON, Inc., including executive officers, are employed “at will” and do
not have employment agreements with MOCON. 
MOCON has, however, entered into a written Executive Severance
Agreement, a form of which was filed as an exhibit to our Annual Report on Form 10-K
for our fiscal year ended December 31, 2007, with five of our full-time
executive officers, including each of our officers listed below.  The following is a description of oral
compensation arrangements for 2010 between MOCON, Inc. and our executive
officers who are listed as “named executive officers” in our proxy statement
relating to our 2010 annual meeting of shareholders:

 

	
  Name of

  Executive

  Officer

  	
   

  	
  Title

  	
   

  	
  Base

  Salary

  	
   

  	
  Bonus

  Arrangements

  	
   

  	
  Stock

  Options

  	
   

  	
  Other

  
	
  Robert L. Demorest

  	
   

  	
  Chairman, President and Chief Executive Officer

  	
   

  	
  $281,635 per year

  	
   

  	
  See footnotes (1) and (2) below

  	
   

  	
  Stock options to purchase shares of MOCON common stock are granted
  from time to time in the sole discretion of the Compensation Committee of the
  MOCON board of directors

  	
   

  	
  Under the MOCON, Inc. Savings
  and Retirement Plan, participants, including executive officers, may
  voluntarily request that MOCON reduce pre-tax compensation by up to 75%
  (subject to certain special limitations) and contribute such amounts to a
  trust. MOCON contributed an amount equal to 50% of the first 6% of the amount
  that each participant contributed under this plan. MOCON provides an automobile
  for each of its full-time executive officers. Executive Officers generally
  receive 3-5 weeks vacation per year. MOCON employees, including its executive
  officers, are not compensated for unused vacation. Executive officers are
  reimbursed for expenses incurred in the ordinary course of business.
  Executive officers receive other benefits received by other MOCON employees,
  including health, dental and life insurance benefits.

  
	
  Daniel W. Mayer

  	
   

  	
  Executive Vice President

  	
   

  	
  $212,676 per year

  	
   

  	
  See footnotes (1) and (2) below

  	
   

  	
  See above

  	
   

  	
  See above

  
	
  Darrell B. Lee

  	
   

  	
  Vice President, Chief Financial Officer, Treasurer and Secretary

  	
   

  	
  $157,073 per year

  	
   

  	
  See footnotes (1) and (2) below

  	
   

  	
  See above

  	
   

  	
  See above

  

 

 

	
  Name of

  Executive

  Officer

  	
   

  	
  Title

  	
   

  	
  Base

  Salary

  	
   

  	
  Bonus

  Arrangements

  	
   

  	
  Stock

  Options

  	
   

  	
  Other

  
	
  Douglas J. Lindemann

  	
   

  	
  Vice President and General Manager

  	
   

  	
  $181,317 per year

  	
   

  	
  See footnotes (1) and (2) below

  	
   

  	
  See above

  	
   

  	
  See above

  
	
  Robert E. Forsberg

  	
   

  	
  President, Baseline-MOCON, Inc.

  	
   

  	
  $148,361

  	
   

  	
  See footnotes (1) and (2) below

  	
   

  	
  See above

  	
   

  	
  See above

  

 

(1)                                 MOCON provides its executive officers and
other employees a direct financial incentive to achieve MOCON’s annual profit
goals through the MOCON, Inc. Incentive Pay Plan, which was established
pursuant to resolutions of the Compensation Committee effective January 1,
2003 and filed as an exhibit to MOCON’s annual report on Form 10-K for the
year ended December 31, 2002.  Under
the Incentive Pay Plan, annual goals are measured by MOCON’s annual net income
before income taxes and incentives for Mr. Demorest, Mr. Lee, Mr. Lindemann
and Mr. Mayer, who have overall corporate responsibilities.  The Incentive Pay Plan contemplates that each
year the Compensation Committee will establish goal amounts for MOCON’s
executive officers and will determine the percentage of salary at goal for
MOCON’s executive officers.  On December 31,
2009, the Compensation Committee established these goal amounts and determined
these percentages.  Although the goal
amounts are confidential, the 2010 percentages of salary at goal range from
forty percent to sixty-five percent of 2010 base salary earned, at goal, with
the actual incentive paid based on the percentage of goal achieved, up to a
maximum of one hundred fifty percent. 
The fiscal 2010 goals and percentages of salary were set forth in
resolutions approved by the Compensation Committee and are not otherwise set
forth in any written agreements between MOCON and the executive officers.  The following are the amounts paid to each of
MOCON’s executive officers under the Incentive Pay Plan with respect to fiscal
2009:  Mr. Demorest: $117,849; Mr. Mayer:
$54,718; Mr. Lee: $40,412, Mr. Lindemann: $52,459 and Mr. Forsberg:
$2,280.  These amounts were paid in March 2010.

 

(2)                                 On December 31, 2009, the Compensation
Committee established individual special performance related bonus arrangements
for Messrs. Demorest, Mayer, Lee, Lindemann and Forsberg to further
motivate these individuals to attain certain company-related performance goals
in addition to the profitability performance-related goals covered under MOCON’s
Incentive Pay Plan.  While the specific
performance goals remain confidential, the bonuses if paid will be in the form
of an extra week of paid vacation and an all-expense paid trip for two, up to
maximum amounts ranging from $10,000 to $13,000.  The terms of the fiscal 2010 special
performance related bonuses were set forth in resolutions approved by the
Compensation Committee and are not otherwise set forth in any written
agreements between MOCON and the executive officers.Exhibit 4.2

 

REORGANIZATION
AGREEMENT

 

 

dated as
of

 

 

December 8,
2009

 

 

among

 

 

COBALT
INTERNATIONAL ENERGY, L.P.,

 

 

COBALT
INTERNATIONAL ENERGY, INC.,

 

 

COBALT
MERGERSUB, INC. 

 

 

and

 

 

THE
OTHER PARTIES SIGNATORY HERETO

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Article 1

  	
   

  
	
   

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
   

  	
  Definitions

  	
  1

  
	
  Section 1.02.

  	
   

  	
  Other Definitional and Interpretative Provisions

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Article 2

  	
   

  
	
   

  	
   

  	
  PRE-IPO GRANT OF CLASS C AND D INTERESTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
   

  	
  Outstanding Class B and C Interests

  	
  3

  
	
  Section 2.02.

  	
   

  	
  Class C and D Interests to be Granted in Connection
  with IPO

  	
  3

  
	
  Section 2.03.

  	
   

  	
  Grant of Class C and D Interests

  	
  4

  
	
  Section 2.04.

  	
   

  	
  Certain Other Matters

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Article 3

  	
   

  
	
   

  	
   

  	
  THE CORPORATE REORGANIZATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
   

  	
  The Contributions

  	
  4

  
	
  Section 3.02.

  	
   

  	
  The Exchange

  	
  5

  
	
  Section 3.03.

  	
   

  	
  The Merger

  	
  5

  
	
  Section 3.04.

  	
   

  	
  Newco Charter and Bylaws

  	
  7

  
	
  Section 3.05.

  	
   

  	
  Termination of Rig Guarantees

  	
  7

  
	
  Section 3.06.

  	
   

  	
  PEP, L.P

  	
  7

  
	
  Section 3.07.

  	
   

  	
  Newco LTIP

  	
  7

  
	
  Section 3.08.

  	
   

  	
  Other Agreements

  	
  7

  
	
  Section 3.09.

  	
   

  	
  Post-IPO Exchanges

  	
  8

  
	
  Section 3.10.

  	
   

  	
  Tax Withholdings

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Article 4

  	
   

  
	
   

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
   

  	
  Existence and Power

  	
  8

  
	
  Section 4.02.

  	
   

  	
  Binding Agreement

  	
  9

  
	
  Section 4.03.

  	
   

  	
  Governmental Authorization

  	
  9

  
	
  Section 4.04.

  	
   

  	
  Non-contravention

  	
  9

  
	
  Section 4.05.

  	
   

  	
  Additional Representations and Warranties

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Article 5

  	
   

  
	
   

  	
   

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
   

  	
  Reasonable Best Efforts

  	
  11

  
	
  Section 5.02.

  	
   

  	
  Public Announcements

  	
  11

  
	
  Section 5.03.

  	
   

  	
  Further Assurances

  	
  11

  
	
  Section 5.04.

  	
   

  	
  Intended Tax Treatment

  	
  11

  

 

 

	
   

  	
   

  	
  Article 6

  	
   

  
	
   

  	
   

  	
  CONDITIONS TO THE MERGER; TERMINATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
   

  	
  Conditions to the Obligations of Each Party

  	
  12

  
	
  Section 6.02.

  	
   

  	
  Termination

  	
  12

  
	
  Section 6.03.

  	
   

  	
  Effect of Termination

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Article 7

  	
   

  
	
   

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
   

  	
  Notices

  	
  12

  
	
  Section 7.02.

  	
   

  	
  Amendments and Waivers

  	
  13

  
	
  Section 7.03.

  	
   

  	
  Binding Effect; Benefit; Assignment

  	
  14

  
	
  Section 7.04.

  	
   

  	
  Governing Law

  	
  14

  
	
  Section 7.05.

  	
   

  	
  Jurisdiction

  	
  14

  
	
  Section 7.06.

  	
   

  	
  WAIVER OF JURY TRIAL

  	
  15

  
	
  Section 7.07.

  	
   

  	
  Counterparts; Effectiveness

  	
  15

  
	
  Section 7.08.

  	
   

  	
  Entire Agreement

  	
  15

  
	
  Section 7.09.

  	
   

  	
  Severability

  	
  15

  
	
  Section 7.10.

  	
   

  	
  Specific Performance

  	
  15

  
	
  Section 7.11.

  	
   

  	
  Expenses

  	
  15

  
	
  Section 7.12.

  	
   

  	
  Consent of
  Limited Partners

  	
  15

  

 

Schedules
and Exhibits

 

	
  Schedule 3.01

  	
   

  	
  Pre-IPO Capital
  Contribution

  	
   

  

 

	
  Exhibit A

  	
   

  	
  Forms
  of Restricted Stock Award Agreements and Deferred Compensation Plan

  	
   

  
	
  Exhibit B

  	
   

  	
  Partnership
  Agreement

  	
   

  
	
  Exhibit C

  	
   

  	
  Certificate
  of Incorporation and Bylaws

  	
   

  
	
  Exhibit D

  	
   

  	
  Long
  Term Incentive Plan

  	
   

  
	
  Exhibit E

  	
   

  	
  Forms
  of Employment, Severance and Commitment Agreements

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of
  Stockholders Agreement

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of
  Registration Rights Agreement

  	
   

  
	
  Exhibit H

  	
   

  	
  Form of
  Directors’ Indemnification Agreement

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of
  Contribution Agreement

  	
   

  

 

ii

 

REORGANIZATION
AGREEMENT

 

REORGANIZATION AGREEMENT (this “Agreement”)
dated as of December 8, 2009 among Cobalt International Energy, L.P., a
Delaware limited partnership (the “Partnership”),
Cobalt International Energy, Inc., a Delaware corporation and wholly-owned
subsidiary of the Partnership (“Newco”),
Cobalt MergerSub, Inc., a Delaware corporation and wholly-owned subsidiary
of Newco (“Merger Subsidiary”),
and the other parties signatory hereto.

 

W I T N E S S E T H :

 

WHEREAS, the parties hereto intend that (i) the
exchange contemplated by Section 3.02, (ii) the receipt of Newco
common stock pursuant to the merger contemplated by Section 3.03 (other
than restricted shares as to which an election under Section 83(b) of
the Code will not be made) and (iii) the issuance of Newco common stock in
the IPO shall be treated as exchanges qualifying under Section 351 of the
Code;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE
1

DEFINITIONS

 

Section 1.01.  Definitions.  (a) As used herein, the following terms have the
following meanings:

 

“affiliate”
means, with respect to any person, any other person directly or indirectly
controlling, controlled by or under common control with such person.

 

“Code” means the
Internal Revenue Code of 1986.

 

“Delaware Law”
means the General Corporation Law of the State of Delaware and/or the Delaware
Revised Uniform Limited Partnership Act, as applicable.

 

“Governmental Authority”
means any government, court, tribunal, regulatory or administrative agency,
commission or authority or other governmental instrumentality, whether domestic
or foreign, federal, state or local, multinational or supranational.

 

“IPO” means the underwritten public offering of shares of Newco
common stock pursuant to Registration Statement No. 333-161734 on Form S-1
filed with the Securities and Exchange Commission.

 

“Law” means all laws (including common and civil law),
statutes, ordinances, codes, rules and regulations of any Governmental Authority.

 

“Lien”
means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any kind in
respect of such property or asset.

 

 

“Partnership
Agreement” means the Fourth Amended and Restated Agreement of
Limited Partnership of Cobalt International Energy, L.P. dated as of February 6,
2009.

 

“person” means an individual,
corporation, partnership, limited liability company, association, trust or
other entity or organization, including a Governmental Authority.

 

“subsidiary” means, with respect to
any person, (i) any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by such person and (ii) any entity that does not have a
board of directors or other persons performing similar functions in which such
person owns directly or indirectly general partnership interests, management rights
or other interests that permit such person to control such entity.

 

(b)                       Each of the
following terms is defined in the Section set forth opposite such term:

 

	
  Term

  	
   

  	
  Section

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Class D
  Interests

  	
   

  	
  2.02

  
	
  Contribution

  	
   

  	
  3.01

  
	
  Effective
  Time

  	
   

  	
  3.03

  
	
  Exchange

  	
   

  	
  3.02

  
	
  Guarantee
  Release Agreement

  	
   

  	
  3.05

  
	
  LTIP

  	
   

  	
  3.07

  
	
  Merger

  	
   

  	
  3.03

  
	
  Merger
  Subsidiary

  	
   

  	
  Preamble

  
	
  Newco

  	
   

  	
  Preamble

  
	
  Partnership

  	
   

  	
  Preamble

  
	
  Public
  Offering Price

  	
   

  	
  3.02

  
	
  Special
  Purpose Holdco

  	
   

  	
  3.02

  
	
  Special
  Purpose Holdco Shared Subsidiary

  	
   

  	
  3.02

  
	
  Surviving
  Entity

  	
   

  	
  3.03

  

 

(c)                        Capitalized
terms defined in the Partnership Agreement and used but not otherwise defined
herein are used as therein defined.

 

Section 1.02.  Other Definitional and
Interpretative Provisions.  The
words “hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.  References to Articles, Sections, Exhibits
and Schedules are to Articles, Sections, Exhibits and Schedules of this
Agreement unless otherwise specified. 
All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in
full herein.  All terms defined in this
Agreement and used but not otherwise defined in any Exhibit or Schedule or
any other document made or delivered pursuant hereto shall have the meaning as
defined in this Agreement.  Any singular
term in this Agreement shall be deemed to include the plural, and any plural
term the singular.  Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to

 

2

 

be followed by the words
“without limitation”, whether or not they are in fact followed by those words
or words of like import.  “Writing”,
“written” and comparable terms refer to printing, typing and other means of
reproducing words (including electronic media) in a visible form.  References to any statute shall be deemed to
refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder. 
References to any agreement or contract are to that agreement or
contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. 
References to any person include the successors and permitted assigns of
that person.

 

ARTICLE
2

PRE-IPO
GRANT OF CLASS C AND D INTERESTS

 

Section 2.01.  Outstanding Class B and C
Interests.  All of the Class B
Interests consisting of 100,000 Class B Units and 25% of the Class C
Interests consisting of 25,000 of the 100,000 Class C Units (after giving
effect to a split of each existing Unit into 100 Units effective as of the date
hereof) have been granted prior to the date hereof.  Except as specifically provided in an
applicable restricted stock award agreement, all shares or restricted shares
issued with respect to such Partnership Interests in the Merger that are vested
at the Effective Time or become vested at any time thereafter will not, from
and after the date of vesting, be subject to forfeiture (including in the case
of a termination by Newco for cause). 
All such Partnership Interests that are unvested as of the Effective
Time will, as of the Effective Time, be modified so that the terms and
conditions to be applicable to the restricted shares to be issued with respect
to such Partnership Interests in the Merger will be as set forth on Exhibit A-1
in the case of the Class B Interests and Exhibit A-2 in the
case of the Class C Interests.

 

Section 2.02.  Class C and D Interests
to be Granted in Connection with IPO.

 

(a)                        The terms and
conditions of the Class C Interests that have not been granted prior to
the date hereof are hereby amended so that the terms and conditions to be
applicable to the restricted shares to be issued with respect to such
Partnership Interests in the Merger will be as set forth on Exhibit A-2.

 

(b)                       A new class of
limited partnership interests (the “Class D Interests”)
is hereby created pursuant to Section 3.5 of the Partnership Agreement,
which shall be subject to the same terms and conditions as the Class C
Interests as set forth in the Partnership Agreement as in effect immediately
prior to the date hereof, except that

 

(i)                       the total number of Class D
Units shall be 100,000;

 

(ii)                    the term “Tier 3 Promote
Fraction” as used with respect to the Class D Interests shall mean a
fraction, the numerator of which is the aggregate amount of the “Total Capital
Call” as set forth on Schedule II, and the denominator of which is
the aggregate Capital Contributions;

 

(iii)                 the definition of “Tier 4 Promote Fraction”
shall be revised to read as follows: 
“Tier 4 Promote Fraction” means a fraction, the numerator of which is
the

 

3

 

amount by which the aggregate Capital Contributions exceed the sum of (a) $1,021,171,276.85
plus (b) all amounts contributed to the Partnership pursuant to the
Equity Commitment Letter plus (c) the aggregate amount of the “Total
Capital Call” as set forth on Schedule II of the Reorganization
Agreement, and the denominator of which is the aggregate Capital Contributions;
and

 

(iv)                the terms and conditions to be applicable to
the restricted shares to be issued with respect to such Partnership Interests
in the Merger will be as set forth on Exhibit A-3.

 

(c)                        Except as
specifically provided in an applicable restricted stock award agreement, all
restricted shares issued with respect to Class C or D Interests in the
Merger that become vested at any time after the Effective Time will not, from
and after the date of vesting, be subject to forfeiture (including in the case
of a termination by Newco for cause).

 

Section 2.03.  Grant of Class C and D
Interests.  The Class C
Interests that have not been granted prior to the date hereof (or 75,000 Class C
Units) and up to 75% of the Class D Interests (or 75,000 Class D
Units) will be granted by the Partnership immediately prior to the Effective
Time to the individuals, in the amounts and subject to the terms and conditions
as shall be approved by the Board of Directors of the Partnership.  The grants will be deemed made immediately
prior to the Effective Time without any further action on the part of any
person.

 

Section 2.04.  Certain Other Matters.  In addition to  and
without limiting the rights of the Kern Investor, Kern Investor-2, Kern
Investor-3 or Kern Investor-4 under the Partnership Agreement, Section 3.6(b) of
the Partnership Agreement is amended to allow the Assignment of Partnership
Interests, Equity Commitment Amounts and Unpaid Commitment Amounts held by the
KERN Investor, the KERN Investor-2, the KERN Investor-3 and the Kern Investor-4
or their respective or collective Affiliates, prior to and in connection with
the Exchange and IPO, to one or more Special Purpose Holdcos that transfer
their Class A Interests to Newco pursuant to Section 3.02 or to one
or more Special Purpose Holdcos that are transferred to Newco pursuant to Section 3.02,
in either case whether directly or in two or more steps; provided
that each such Special Purpose Holdco must become a party to the Partnership
Agreement as a Substituted Limited Partner with all the rights and obligations
of the relevant Assigning party.

 

ARTICLE
3

THE
CORPORATE REORGANIZATION

 

Section 3.01.  The Contributions.  Prior to the Exchange, each Class A
Limited Partner, or the permitted assignees or successors of such Class A
Limited Partner, shall make a Capital Contribution (the “Contribution”),
pursuant to Section 4.2(e) of the Partnership Agreement, to the
Partnership in the amount set forth opposite the name of such partner in the
“Total Capital Call” column on Schedule 3.01 (such amounts will be
paid in cash except for the amounts set forth in the “Deferred” column which
have previously been deducted from the individual’s compensation pursuant to
the Partnership’s deferred compensation plan and will be treated for all
purposes of the Partnership Agreement as part of the individual’s Contribution
pursuant to this Section and deducted from the individual’s deferred
compensation account as provided in

 

4

 

Schedule 3.01).  After the Contribution and prior to the
Effective Time, the Class A Limited Partners or their affiliates that hold
the shares of CIP GP Corp., a Delaware corporation and the general partner of
the Partnership, shall transfer all of such shares to Newco for no
consideration.

 

Section 3.02.  The Exchange.  After the Contribution and prior to the
Effective Time, each Investor will transfer or cause to be transferred
(including through a direct or indirect transfer of an Investor) to Newco all
of its Class A Interests or all of the equity or other ownership interests
in one or more Special Purpose Holdcos that holds its Class A Interests so
that Newco will become the owner directly or indirectly of all such Class A
Interests; provided that only entities that are signatories
to a Contribution Agreement may transfer Class A Interests or ownership
interests in Special Purpose Holdcos to Newco. 
The Class A Interests transferred directly or indirectly to Newco
will be exchanged (the “Exchange”) for
the number of shares of Newco common stock (rounded to the nearest whole share)
that such Class A Interests would be converted into in connection with a
Qualified Public Offering as provided in Section 8.14 of the Partnership
Agreement based on the price at which the Publicly Offered Securities (as
defined in the Partnership Agreement) are initially sold by the underwriters
(the “Public Offering Price”).  All such transfers to Newco will be made
pursuant to a Contribution Agreement substantially in the form set forth on Exhibit I.  For purposes of this Agreement, “Special Purpose Holdco” means an entity the sole assets of
which are Class A Interests (or in the case of Section 3.09, Newco
common stock) held directly by such entity or indirectly (i) through one
or more wholly-owned subsidiaries of such entity or (ii) through one or
more entities wholly owned by such entity (or its wholly owned subsidiary)
together with one or more other such entities (or their wholly owned
subsidiaries) being contributed to Newco in the Exchange (each entity owned
directly or indirectly by more than one Special Purpose Holdco, a “Special Purpose Holdco Shared Subsidiary”).  Notwithstanding anything in this Agreement to
the contrary, following the determination of the Public Offering Price and the execution
and delivery of the underwriting agreement in connection with the IPO, each
Investor may cause the Company promptly to effect the Exchange and deliver the
shares of Newco common stock to which such Investor is entitled.

 

Section 3.03.  The Merger.  (a) Immediately after the
Exchange and simultaneously with the closing of the IPO, Merger Subsidiary
shall merge (the “Merger”) with
and into the Partnership in accordance with Delaware Law, whereupon the
separate existence of Merger Subsidiary shall cease, and the Partnership shall
be the surviving entity (the “Surviving
Entity”).  The Merger shall
become effective at such time (the “Effective
Time”) as the certificate of merger is duly filed with the Delaware
Secretary of State or at such later time as is specified in such certificate,
which shall be done so that the Effective Time shall be simultaneous with the
closing of the IPO.  From and after the
Effective Time, the Surviving Entity shall possess all the rights, powers,
privileges and franchises and be subject to all of the obligations,
liabilities, restrictions and disabilities of the Partnership and Merger
Subsidiary, all as provided under Delaware Law.

 

(b)                       At the
Effective Time:

 

(i)                       Except as otherwise provided
in (ii) below, each Class A, B, C and D Interest outstanding at the
Effective Time shall be converted into the right to receive the number of
shares of Newco common stock (rounded to the nearest whole share) that such
Partnership Interests would be converted into in connection with a Qualified
Public

 

5

 

Offering as provided in Section 8.14 of the Partnership Agreement
based on the Public Offering Price; provided that

 

(x)                                   the holders of Class D
Interests shall be entitled to receive 75% (or such lesser percentage of the Class D
Units as shall have been granted prior to the Effective Time pursuant to Section 2.03)
of the number of shares otherwise attributable to the Class D Interests as
provided above, and the remaining shares attributable to the Class D
Interests shall not be issued and shall be reserved for issuance under the
LTIP;

 

(y)                                 the shares
issuable upon conversion of unvested Class B, C and D Interests shall (i),
to the extent unvested as of the Effective Time, be restricted shares issued
pursuant to awards under the LTIP, subject to the terms set forth on Exhibits
A-1 through A-3 and (ii) shall be subject to the terms of any applicable
employment agreement, severance agreement or commitment agreement in the forms
set forth on Exhibits E-1 through  E-3, with certain of the
individuals granted Class C or D Interests pursuant to Section 2.03
as approved by the Board of Directors of the Partnership; and

 

(z)                                   the shares
otherwise issuable upon conversion of Class A Interests attributable to
the amounts set forth on Schedule 3.01 under the “Deferred” column that
are treated as part of the individual’s Contribution pursuant to Section 3.01
shall be issued pursuant to the terms of the Deferred Compensation Plan set
forth on Exhibit A-4.

 

As
of the Effective Time, all such Partnership Interests shall no longer be
outstanding, shall automatically be canceled and retired, shall cease to exist
and shall thereafter represent only the right to receive the shares as provided
above.

 

(ii)                    Each Class A Interest
owned directly or indirectly by Newco at the Effective Time after giving effect
to the transactions contemplated by Section 3.02 shall be canceled and
converted into new limited partnership interests in the Surviving Entity.  Each such new limited partnership interest
shall represent the same economic ownership interest in the Surviving Entity as
the corresponding canceled Class A Interests represented in the
Partnership immediately prior to the Effective Time.

 

(iii)                 Each share of Merger Subsidiary common stock
outstanding at the Effective Time shall be canceled and converted into new
limited partnership interests in the Surviving Entity.  Such new limited partnership interests shall
represent the same economic ownership interest in the Surviving Entity as the
partnership interests canceled pursuant to (i) above represented in the
Partnership immediately prior to the Effective Time.

 

(iv)                Each share of stock of Newco outstanding at
the Effective Time (other than the shares of Newco common stock issued pursuant
to Section 3.02 or 3.03) shall be canceled, and no consideration shall be
paid with respect thereto.

 

6

 

(c)        At the Effective Time, the Partnership Agreement shall be
amended and restated in its entirety as set forth on Exhibit B.

 

Section 3.04.  Newco Charter and Bylaws.  Prior to the closing of the IPO, the
certificate of incorporation and bylaws of Newco shall be amended and restated
in their entirety as set forth on Exhibits C-1 and C-2.

 

Section 3.05.  Termination of Rig Guarantees.  A release agreement
between ENSCO Offshore Company and the relevant Class A Limited Partners
(or their respective affiliates or co-investors) (the “Guarantee
Release Agreement”) in a form to be reasonably agreed upon by such Class A
Limited Partners or such respective affiliates or co-investors which provides
for the unconditional release, effective simultaneously with the closing of the
IPO, of the obligations of the guarantors pursuant to the Irrevocable Contract
Guarantee dated as of May 5, 2008 shall be executed and delivered
simultaneously with the closing of the IPO. 
Simultaneously with and conditional on the closing of the IPO and the
effectiveness of the Guarantee Release Agreement, the Equity Commitment Letter
dated as of December 12, 2008 between the Class A Limited Partners
and the Partnership shall be automatically terminated and be of no further
force or effect.

 

Section 3.06.  PEP, L.P..  Promptly after the closing of the
IPO, the shares or restricted shares of Newco common stock issued in connection
with the conversion of the Class B Interests held by PEP, L.P. shall be
distributed to the individuals holding limited partnership interests in PEP,
L.P., and PEP, L.P. shall be dissolved.

 

Section 3.07.  Newco LTIP.  The Long Term Incentive Plan of Newco (the “LTIP”) in the form set forth on Exhibit D has
been duly adopted and approved by the directors and stockholders of Newco.

 

Section 3.08.  Other Agreements.

 

(a)        Prior to and conditional upon the closing of the IPO, Newco
shall enter into:

 

(i)            an
employment agreement substantially in the form set forth on Exhibit E-1,
severance agreement substantially in the form set forth on Exhibit E-2
or commitment agreement substantially in the form set forth on Exhibit E-3,
with certain of the individuals granted Class C or D Interests pursuant to
Section 2.03 as approved by the Board of Directors of the Partnership; and

 

(ii)           an
indemnification agreement substantially in the form set forth on Exhibit H
with each of the individuals who will be directors of Newco immediately
after the closing of the IPO.

 

(b)        Immediately following the determination of the Public
Offering Price Newco shall enter into:

 

(i)            a
stockholders agreement substantially in the form set forth on Exhibit F
with certain former Class A Limited Partners; and

 

7

 

(ii)           a
registration rights agreement substantially in the form set forth on Exhibit G
with certain former Class A Limited Partners and/or certain affiliates of
such persons.

 

Section 3.09.  Post-IPO Exchanges.  Each Investor and any affiliate of an
Investor that owns a Special Purpose Holdco that holds Newco common stock
received in the Exchange may, upon 10 business days written notice to the
Company, transfer to Newco at any time after the Effective Time all of the
equity or other ownership interests in such Special Purpose Holdco in exchange
for the number of shares of Newco common stock held by such Special Purpose
Holdco at such time, provided that (i) Newco
reasonably determines that such transfer will not have a more than de minimis
adverse effect on Newco and its subsidiaries (taking into account the
likelihood of any circumstances that may give rise to such adverse effect and
any indemnities or other similar agreements provided by the transferor or an
affiliate) and (ii) at the time of such transfer, such transferor or an
affiliate enters into agreements with Newco that are reasonably satisfactory to
Newco, including making representations substantially to the effect set forth
in Article 4 of this Agreement at the time of such transfer.  Newco shall be entitled to withhold from the
shares of Newco common stock that it is required to deliver pursuant to this Section 3.09
such number of shares as it is required to deduct and withhold with respect
thereto under any provision of federal, state or foreign tax law.  In the event that Newco intends to withhold
any shares under this Section 3.09, it shall notify the transferor as
promptly as practicable after making such determination.  If Newco so withholds any shares, such shares
shall be treated for purposes of this Section 3.09 as having been
delivered to the person in respect of which such deduction and withholding were
made.

 

Section 3.10.  Tax Withholdings.  Notwithstanding any provision contained
herein to the contrary, each of the Surviving Entity and Newco shall be
entitled to deduct and withhold from the consideration otherwise payable to any
person pursuant to Section 3.02 or 3.03 such amounts as it is required to
deduct and withhold with respect thereto under any provision of federal, state,
local or foreign tax law; provided that, if the Surviving Entity or
Newco, as the case may be, intends to withhold an amount under this Section 3.10,
it shall notify the applicable person as promptly as practicable after making
such determination.  If the Surviving
Entity or Newco, as the case may be, so withholds amounts, such amounts shall
be treated for all purposes of this Agreement as having been paid to the person
in respect of which such deduction and withholding was made.

 

ARTICLE
4

REPRESENTATIONS
AND WARRANTIES

 

Each of the parties signatory hereto severally and
not jointly represents and warrants to each other party signatory hereto that:

 

Section 4.01.  Existence and Power.  If such party is not an
individual, such party is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has all requisite powers
and all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted.

 

8

 

Section 4.02.  Binding Agreement.  This Agreement has been duly
executed and delivered and constitutes a valid and binding agreement of such
party.

 

Section 4.03.  Governmental
Authorization.  The execution,
delivery and performance by such party of this Agreement and the consummation
by such party of the transactions contemplated hereby require no action by or
in respect of, or filing with, any Governmental Authority other than (i) the
filing of a certificate of merger with respect to the Merger with the Delaware
Secretary of State, (ii) compliance with any applicable requirements of
the Securities Act of 1933 and any other applicable state or federal securities
laws and (iii) any actions or filings the absence of which would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on such party.

 

Section 4.04.  Non-contravention.  The execution, delivery and
performance by such party of this Agreement and the consummation by such party
of the transactions contemplated hereby do not and will not (i) violate
the organizational documents of such party if such party is not an individual, (ii) assuming
compliance with the matters referred to in Section 4.03, violate any
applicable Law or any judgment, injunction, order or decree of any Governmental
Authority with competent jurisdiction, (iii) require any consent or other
action by any person under, constitute a default (or an event that, with or
without notice or lapse of time or both, would constitute a default) under, or
cause or permit the termination, cancellation, acceleration or other change of
any right or obligation or the loss of any benefit to which such party is
entitled under any provision of any agreement or other instrument binding upon
such party or (iv) result in the creation or imposition of any Lien on any
asset of such party or any of its subsidiaries, with only such exceptions, in
the case of each of clauses (ii) through (iv), as would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect
on such party.

 

Section 4.05.  Additional
Representations and Warranties. 
(a) Each Investor causing a direct transfer of Class A
Interests to Newco in the Exchange contemplated by Section 3.02 will cause
the applicable transferor to represent and warrant in the applicable
Contribution Agreement as of the effective time of the Exchange that:

 

(i)            Such
transferor has good and valid title in and to the Class A Interests held
by such person, free and clear of all Liens; and

 

(ii)           Upon
consummation of the exchange, Newco will have acquired good and valid title in
and to such Class A Interests, free and clear of all Liens.

 

(b)       Each Investor causing the direct or indirect transfer of all
of the equity or other ownership interests in one or more Special Purpose
Holdcos to Newco in the Exchange contemplated by Section 3.02 will cause
the applicable transferor to represent and warrant in the applicable
Contribution Agreement as of the effective time of the Exchange that:

 

(i)            Each
such Special Purpose Holdco and each of its subsidiaries, if any, and each
Special Purpose Holdco Shared Subsidiary that is partially owned directly or
indirectly by such Special Purpose Holdco, if any, is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and has all powers and 

 

9

 

all material governmental licenses, authorizations, permits, consents
and approvals required to carry on its business as now conducted;

 

(ii)           Other
than pursuant to the Partnership Agreement, the Equity Commitment Letter and
the Rig Guarantee, there are no liabilities with respect to any such Special
Purpose Holdco or any of its subsidiaries or any Special Purpose Holdco Shared
Subsidiary that is partially owned directly or indirectly by such Special
Purpose Holdco, of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability;

 

(iii)          Each
such Special Purpose Holdco and each of its direct or indirect subsidiaries, if
any, and each Special Purpose Holdco Shared Subsidiary that is partially owned
directly or indirectly by such Special Purpose Holdco, if any, has no assets
other than Class A Interests and the interests in such subsidiaries, if
any, and the interests in each such Special Purpose Holdco Shared Subsidiary,
if any;

 

(iv)          Except
as set forth in a schedule to the applicable Contribution Agreement that is
reasonably acceptable to Newco, each such Special Purpose Holdco is a domestic
corporation for U.S. federal income tax purposes, and each wholly owned
subsidiary thereof is a domestic wholly-owned entity that is disregarded for
U.S. federal income tax purposes, and each Special Purpose Holdco Shared
Subsidiary that is partially owned directly or indirectly by such Special
Purpose Holdco is a domestic entity treated as a partnership for U.S. federal
income tax purposes;

 

(v)           Each
such Special Purpose Holdco that directly owns Class A Interests has good
and valid title in and to the Class A Interests held by such entity, free
and clear of all Liens;

 

(vi)          With
respect to each such Special Purpose Holdco that indirectly owns Class A
Interests through one or more subsidiaries, such Special Purpose Holdco has,
directly or indirectly, good and valid title in and to all of the equity or
other ownership interests of each such subsidiary, free and clear of all Liens
and each such subsidiary holding Class A Interests has good and valid
title in and to the Class A Interests held by such entity, free and clear
of all Liens;

 

(vii)         With
respect to each Special Purpose Holdco that indirectly owns Class A
Interests through one or more Special Purpose Holdco Shared Subsidiaries, (i) such
Special Purpose Holdco (or its wholly owned subsidiary) has good and valid
title in and to all of the equity or other ownership interests of each such
Special Purpose Holdco Shared Subsidiary held directly or indirectly by such
Special Purpose Holdco, free and clear of all Liens and (ii) each such
Special Purpose Holdco Shared Subsidiary holding Class A Interests has
good and valid title in and to the Class A Interests held by such entity,
free and clear of all Liens; and

 

(viii)        Upon
consummation of the Exchange, Newco will have acquired good and valid title in
and to all of the outstanding equity or other ownership interests in each 

 

10

 

such Special Purpose Holdco and its subsidiaries, and to all of the
equity or other ownership interests in each Special Purpose Holdco Shared
Subsidiary, if any, free and clear of all Liens.

 

ARTICLE
5

COVENANTS

The parties hereto agree that:

 

Section 5.01.  Reasonable Best Efforts.  Subject to the terms and
conditions of this Agreement, the parties hereto shall use their reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable Law to
consummate the transactions contemplated by this Agreement, including (i) preparing
and filing as promptly as practicable with any Governmental Authority or other
third party all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information, applications
and other documents and (ii) obtaining and maintaining all approvals,
consents, registrations, permits, authorizations and other confirmations
required to be obtained from any Governmental Authority or other third party
that are necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.

 

Section 5.02.  Public Announcements.  The parties hereto shall consult
with each other before issuing any press release or making any other public
statement with respect to this Agreement or the transactions contemplated
hereby and, except in respect of any public statement or press release as may
be required by applicable Law or any listing agreement with or rule of any
national securities exchange or association, shall not issue any such press
release or make any such other public statement before such consultation.

 

Section 5.03.  Further Assurances.  At and after the Effective Time,
the officers and directors of the Surviving Entity shall be authorized to
execute and deliver, in the name and on behalf of the Partnership or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Partnership or Merger Subsidiary, any
other actions and things to vest, perfect or confirm of record or otherwise in
the Surviving Entity any and all right, title and interest in, to and under any
of the rights, properties or assets of the Partnership acquired or to be
acquired by the Surviving Entity as a result of, or in connection with, the
Merger.

 

Section 5.04.  Intended Tax Treatment.  (a) Each party hereto agrees that (i) the
Exchange contemplated by Section 3.02, (ii) the receipt of shares of
Newco common stock pursuant to the Merger (other than restricted shares as to
which an election under Section 83(b) of the Code will not be made)
and (iii) the issuance of shares of Newco common stock in the IPO are
intended collectively to be treated as exchanges qualifying under Section 351
of the Code, and that it will not take any position on any tax return or other
action inconsistent with such intended treatment.

 

(b)        Newco agrees that it will comply with the reporting
requirements of Treasury Regulation Section 1.351-3(b) with respect
to the transactions described herein.

 

11

 

(c)        Newco and the Surviving Entity each hereby acknowledge that
one or more Class A Limited Partners or affiliates of such Class A
Limited Partners may be required to make certain tax filings with respect to Section 897
of the Code and related provisions to receive nonrecognition treatment with
respect to a transfer of Class A Interests or an entity by such person to
Newco pursuant to Section 3.02 or 3.09 of this Agreement, and each of
Newco and the Surviving Entity agree to reasonably cooperate with such person
in the making of such tax filings.

 

ARTICLE
6

CONDITIONS
TO THE MERGER; TERMINATION

 

Section 6.01.  Conditions to the Obligations
of Each Party.  The
obligations of the parties to consummate the transactions contemplated by Article 2
and Article 3 are subject to the satisfaction of the following conditions:

 

(a)        the closing of the IPO will be completed simultaneously with
the consummation of the transactions contemplated by Article 2 and Article 3
that are to be consummated simultaneously with the IPO; and

 

(b)        there is no applicable Law or judgment, injunction, order or
decree of any Governmental Authority with competent jurisdiction prohibiting or
otherwise making illegal the consummation of the transactions contemplated
hereby.

 

Section 6.02.  Termination.  This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time prior to
the Effective Time by the Partnership with the approval of the Investor
Majority and Executive Board Approval and shall be terminated if the IPO is
abandoned or has not been closed within three months after the date hereof.

 

Section 6.03.  Effect of Termination.  If this Agreement is terminated
pursuant to Section 6.02, this Agreement shall become void and of no
effect without liability of any party hereto (or any limited partner, member,
stockholder, director, officer, employee, agent, consultant or representative
of such party) to the other parties hereto, and the Partnership Agreement will
be automatically amended to reverse all of the amendments to the Partnership
Agreement effected by this Agreement (including the creation of the Class D
Interests and the amendments described in Sections 2.02 and 2.04).  The provisions of this Section 6.03 and
Sections 7.04, 7.05 and 7.06 shall survive any termination hereof pursuant
to Section 6.02.

 

ARTICLE
7

MISCELLANEOUS

 

Section 7.01.  Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission and electronic mail (“e-mail”) transmission, so long as a receipt
of such e-mail is requested and received) and shall be given,

 

12

 

if to the Partnership, Newco or Merger Subsidiary,
to:

 

	
  Cobalt
  International Energy, L.P.

  
	
  Two
  Post Oak Central

  
	
  1980
  Post Oak Blvd., Suite 1200

  
	
  Houston,
  TX 77056

  
	
  Attention:
  Joseph H. Bryant

  
	
  Facsimile
  No.: (713) 579-9184

  
	
  E-mail:
  joe.bryant@cobaltintl.com

  

 

with a copy to:

 

	
  Davis Polk &
  Wardwell LLP

  
	
  450 Lexington Avenue

  
	
  New York, New York 10017

  
	
  Attention:

  	
  Christopher Mayer

  
	
   

  	
  Richard D. Truesdell, Jr.

  
	
  Facsimile No.:

  	
  (212) 701-5338

  
	
   

  	
  (212) 701-5674

  
	
  E-mail:

  	
  chris.mayer@davispolk.com

  
	
   

  	
  richard.truesdell@davispolk.com

  

 

if to a Class A Limited Partner, to such address(es) as set forth
in the Partnership Agreement.

 

with a copy to:

 

	
  Fried, Frank, Harris,
  Shriver & Jacobson LLP

  
	
  One New York Plaza

  
	
  New York, New York 10004

  
	
  Attention:

  	
  Robert C. Schwenkel

  
	
   

  	
  Murray Goldfarb

  
	
  Facsimile No.:

  	
  (212) 859-4000

  
	
  E-mail:

  	
  robert.schwenkel@friedfrank.com

  
	
   

  	
  murray.goldfarb@friedfrank.com

  

 

 

or
to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed to have been received on the next
succeeding business day in the place of receipt.

 

Section 7.02.  Amendments and Waivers.  (a) Prior to the Effective
Time, any provision of this Agreement may be amended or waived by the
Partnership with the written approval of the Investor Majority and Executive
Board Approval; provided that any amendment or
waiver to this Agreement that is reasonably likely to result in a non-pro rata
material adverse effect on any 

 

13

 

Investor vis-à-vis the other
Investors will require the consent of such affected Investor (such consent not
to be unreasonably withheld or delayed). 
Following the Effective Time, any provision of this Agreement may be amended
or waived with the written approval of Newco and each party hereto that would
be adversely affected by such amendment or waiver.

 

(b)        No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by
applicable Law.

 

Section 7.03.  Binding Effect; Benefit;
Assignment.  (a) The
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.  No provision of this Agreement
is intended to confer any rights, benefits, remedies, obligations or
liabilities hereunder upon any person other than the parties hereto and their
respective successors and assigns.

 

(b)        No party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the consent of each
other party hereto, except that (i) Newco or Merger Subsidiary may
transfer or assign its rights and obligations under this Agreement, in whole or
from time to time in part, to one or more of their affiliates at any time; provided that such transfer or assignment shall not relieve
Newco or Merger Subsidiary of its obligations hereunder or enlarge, alter or
change any obligation of any other party hereto and (ii) any Investor can
may transfer or assign its rights and obligations under this Agreement, in
whole or from time to time in part, to any person that the Investor is
permitted to assign any portion of its Partnership Interests pursuant to the
terms of the Partnership Agreement as amended hereby; provided
that such transfer or assignment shall not relieve such Investor of its
obligations hereunder or enlarge, alter or change any obligation of any other
party hereto.

 

Section 7.04.  Governing Law.  This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law rules of such state.

 

Section 7.05.  Jurisdiction.  The parties hereto agree that any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its affiliates or
against any party or any of its affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action
or proceeding may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 7.01 shall be deemed
effective service of process on such party.

 

14

 

Section 7.06.  WAIVER OF JURY TRIAL. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 7.07.  Counterparts; Effectiveness.  This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by all of the other parties hereto.  Until and unless each party has received a
counterpart hereof signed by the other party hereto, this Agreement shall have
no effect and no party shall have any right or obligation hereunder (whether by
virtue of any other oral or written agreement or other communication).

 

Section 7.08.  Entire Agreement.  This Agreement and the agreements
referenced herein constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.

 

Section 7.09.  Severability.  If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other Governmental Authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party.  Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.

 

Section 7.10.  Specific Performance.  The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof,
in addition to any other remedy to which they are entitled at law or in equity.

 

Section 7.11.  Expenses.  The Investors and their affiliates have
incurred and will incur out-of-pocket expenses for legal fees and expenses for
counsel in connection with the IPO and the negotiation of this Agreement and
the agreements to be entered into in connection with the IPO.  Newco and the Partnership agree to pay to
reimburse each Investor (together with its affiliates) for the reasonable
amount of all such expenses.

 

Section 7.12.  Consent of Limited
Partners.  Each party to this
Agreement who is a Limited Partner of the Partnership hereby consents as a
Limited Partner to all of the provisions of this Agreement.

 

[The remainder of this page has been intentionally left blank; the
next 

page is the signature page.]

 

15

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the date set forth on the cover page of this Agreement.

 

	
   

  	
  COBALT
  INTERNATIONAL

  
	
   

  	
        ENERGY,
  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Samuel H. Gillespie III

  
	
   

  	
   

  	
  Name:
  

  	
  Samuel
  H. Gillespie III

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT INTERNATIONAL

  
	
   

  	
         ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel H. Gillespie III

  
	
   

  	
   

  	
  Name:
  

  	
  Samuel
  H. Gillespie III

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  MERGERSUB, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Samuel H. Gillespie III

  
	
   

  	
   

  	
  Name:
  

  	
  Samuel
  H. Gillespie III

  
	
   

  	
   

  	
  Title:

  	
   

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  INVESTORS:

  
	
   

  	
   

  
	
   

  	
  C/R
  COBALT INVESTMENT PARTNERSHIP,

  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
    ENERGY
  PARTNERS II, L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP II, LLC,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  
	
   

  	
   

  
	
   

  	
  C/R
  ENERGY COINVESTMENT II, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
    ENERGY
  PARTNERS II, L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP II, LLC,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  
	
   

  	
   

  
	
   

  	
  RIVERSTONE
  ENERGY COINVESTMENT

    III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RIVERSTONE
  COINVESTMENT GP,

  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RIVERSTONE
  HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title: Authorized Person

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  CARLYLE
  ENERGY COINVESTMENT

    III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE
  ENERGY COINVESTMENT

  
	
   

  	
   

  	
    III
  GP, L.L.C.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TCG
  HOLDINGS, L.L.C.

  
	
   

  	
   

  	
    its
  sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel A. D’Aniello

  
	
   

  	
   

  	
  Name:
  Daniel A. D’Aniello

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
  C/R
  ENERGY III COBALT

  
	
   

  	
    PARTNERSHIP,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE
  ENERGY

  
	
   

  	
   

  	
    PARTNERS
  III, L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP III, LLC,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  
	
   

  	
   

  
	
   

  	
  CARLYLE/RIVERSTONE
  GLOBAL

  
	
   

  	
    ENERGY
  AND POWER FUND III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
    ENERGY
  PARTNERS III, L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP III, LLC,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title: Authorized Person

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  GSCP
  V COBALT HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V FUND, L.P.,

  
	
   

  	
   

  	
    its
  sole member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V ADVISORS, L.L.C.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GSCP
  V OFFSHORE COBALT

  
	
   

  	
    HOLDINGS,
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V OFFSHORE COBALT

  
	
   

  	
   

  	
    HOLDINGS,
  L.P.,

  
	
   

  	
   

  	
    its
  sole member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V OFFSHORE

  
	
   

  	
   

  	
    FUND,
  L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V OFFSHORE ADVISORS, L.L.C.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title: Managing Director

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  GSCP
  V INSTITUTIONAL COBALT

  HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V INSTITUTIONAL

  
	
   

  	
   

  	
    COBALT
  HOLDINGS, L.P.,

  
	
   

  	
   

  	
    its
  sole member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V

  
	
   

  	
   

  	
    INSTITUTIONAL,
  L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  ADVISORS V, L.L.C.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GSCP
  V GMBH COBALT HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V GmbH Cobalt Holdings, L.P.,

  
	
   

  	
   

  	
    its
  sole member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V GmbH Cobalt Holdings,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  GSCP
  VI COBALT HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS VI FUND, L.P.,

  
	
   

  	
   

  	
    its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI ADVISORS, L.L.C.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GSCP
  VI OFFSHORE COBALT

  
	
   

  	
    HOLDINGS,
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI OFFSHORE COBALT

  
	
   

  	
   

  	
   HOLDINGS,
  L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS VI OFFSHORE

  
	
   

  	
   

  	
    FUND,
  L.P.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI OFFSHORE ADVISORS, L.L.C.,

  
	
   

  	
   

  	
    its
  general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  GSCP VI PARALLEL COBALT

  
	
   

  	
    HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP VI PARALLEL

  
	
   

  	
   

  	
    COBALT HOLDINGS, L.P.,

  
	
   

  	
   

  	
    its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS CAPITAL PARTNERS VI

  
	
   

  	
   

  	
    PARALLEL, L.P.,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS ADVISORS VI, L.L.C.,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name: Kenneth Pontarelli

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP VI GMBH COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP VI GmbH Cobalt Holdings, L.P.,

  
	
   

  	
   

  	
    its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP VI GmbH Cobalt Holdings,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name: Kenneth Pontarelli

  
	
   

  	
   

  	
  Title: Managing Director

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  KERN COBALT CO-INVEST PARTNERS LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KERN Cobalt Group LLC,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey van Steenbergen

  
	
   

  	
    Name: Jeffrey van Steenbergen

  
	
   

  	
    Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  KERN COBALT CO-INVEST

  
	
   

  	
    PARTNERS II LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KERN Cobalt Group II LLC,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey van Steenbergen

  
	
   

  	
    Name: Jeffrey van Steenbergen

  
	
   

  	
    Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KERN COBALT CO-INVEST

  
	
   

  	
    PARTNERS III LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KERN Cobalt Group III LLC,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey van Steenbergen

  
	
   

  	
    Name: Jeffrey van Steenbergen

  
	
   

  	
    Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  KERN COBALT CO-INVEST

  
	
   

  	
    PARTNERS IV LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KERN Cobalt Group IV LLC,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey van Steenbergen

  
	
   

  	
    Name: Jeffrey van Steenbergen

  
	
   

  	
    Title: Director

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  FIRST RESERVE FUND XI, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First Reserve GP XI, L.P.,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First Reserve GP XI, Inc.,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Hardy Murchison

  
	
   

  	
    Name: J. Hardy Murchison

  
	
   

  	
    Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FR COBALT HOLDINGS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First Reserve GP XI, L.P.,

  
	
   

  	
   

  	
    its manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First Reserve GP XI, Inc.,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Hardy Murchison

  
	
   

  	
    Name: J. Hardy Murchison

  
	
   

  	
    Title: Managing Director

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  EXECUTIVE MANAGEMENT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Joseph H. Bryant

  
	
   

  	
   Joseph H. Bryant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Samuel H. Gillespie, III

  
	
   

  	
   Samuel H. Gillespie, III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ James W. Farnsworth

  
	
   

  	
   James W. Farnsworth

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ James H. Painter

  
	
   

  	
   James H. Painter

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Van P. Whitfield

  
	
   

  	
   Van P. Whitfield

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Richard A. Smith

  
	
   

  	
   Richard A. Smith

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ John P. Wilkirson

  
	
   

  	
   John P. Wilkirson

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Rodney L. Gray

  
	
   

  	
   Rodney L. Gray

  

 

[Signature Pages to the Reorganization Agreement]

 

 

	
   

  	
  CARLYLE/RIVERSTONE ENERGY PARTNERS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R ENERGY GP III, LLC,

  
	
   

  	
   

  	
    its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name: Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title: Authorized Person

  

 

[Signature Pages to the Reorganization Agreement]

 

 

Schedule 3.01

 

Cobalt International Energy, L.P.

Pre-IPO Capital Contribution

 

Capital
Called                   $186,229,413.79

 

	
   

  	
   

  	
  Deferred(1)

  	
   

  	
  Cash

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
  To 12/14/2009

  	
   

  	
  Amount

  	
   

  	
  Capital Call

  	
   

  
	
  C/R Cobalt Investment Partnership, LP.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  19,572,858.12

  	
   

  	
  $

  	
  19,572,858.12

  	
   

  
	
  C/R Energy Coinvestment II, LP.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  1, 828,105.02

  	
   

  	
  $

  	
  1,828,105.02

  	
   

  
	
  Riverstone Energy Coinvestment III, LP.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  887,013.59

  	
   

  	
  $

  	
  887,013.59

  	
   

  
	
  Carlyle Energy Coinvestment III, L.P.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  194,026.27

  	
   

  	
  $

  	
  194,026.27

  	
   

  
	
  C/R Energy III Cobalt Partnership, LP.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  9,340,695.91

  	
   

  	
  $

  	
  9,340,695.91

  	
   

  
	
  Carlyle/Riverstone
  Global Energy and Power Fund III, L.P.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  21,679,708.50

  	
   

  	
  $

  	
  21,679,708.50

  	
   

  
	
  Total
  Carlyle/Riverstone

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  53,502,407.41

  	
   

  	
  $

  	
  53,502,407.41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GSCPV Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  5,889,789.40

  	
   

  	
  $

  	
  5,889,789.40

  	
   

  
	
  GSCPV Offshore Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  3,042,419.23

  	
   

  	
  $

  	
  3,042,419.23

  	
   

  
	
  GSCPV Institutional Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  2,019,689.59

  	
   

  	
  $

  	
  2,019,689.59

  	
   

  
	
  GSCPV GmbH Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  233,510.29

  	
   

  	
  $

  	
  233,510.29

  	
   

  
	
  GSCPVI Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  19,753,181.32

  	
   

  	
  $

  	
  19,753,181.32

  	
   

  
	
  GSCPVI Offshore Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  16,430,000.99

  	
   

  	
  $

  	
  16,430,000.99

  	
   

  
	
  GSCPVI Parallel Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  5,431,788.22

  	
   

  	
  $

  	
  5,431,788.22

  	
   

  
	
  GSCPVI GmbH Cobalt Holdings, LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  702,028.37

  	
   

  	
  $

  	
  702,028.37

  	
   

  
	
  Total
  GSCP(2)

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  53,502,407.41 

  	
   

  	
  $

  	
  53,502,407.41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KERN Cobalt Co-Invest Partners LP

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  KERN Cobalt Co-Invest Partners II LP

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  KERN Cobalt Co-Invest
  Partners III LP

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  KERN Cobalt Co-Invest Partners IV LP

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  22,862,390.58

  	
   

  	
  $

  	
  22,862,390.58

  	
   

  
	
  Total
  KERN Partners

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  22,862,390.58

  	
   

  	
  $

  	
  22,862,390.58

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Reserve Fund XI, L.P.

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  40,100,820.72

  	
   

  	
  $

  	
  40,100,820.72

  	
   

  
	
  FR Cobalt Holdings LLC

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  13,401,586.69

  	
   

  	
  $

  	
  13,401,586.69

  	
   

  
	
  Total
  First Reserve

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  53,502,407.41

  	
   

  	
  $

  	
  53,502,407.41

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bryant

  	
   

  	
  $

  	
  983,788.51

  	
   

  	
  $

  	
  400,470.69

  	
   

  	
  $

  	
  1,384,259.20

  	
   

  
	
  Gillespie

  	
   

  	
  $

  	
  49,250.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  49,250.00

  	
   

  
	
  Farnsworth

  	
   

  	
  $

  	
  116,628.15

  	
   

  	
  $

  	
  33,389.32

  	
   

  	
  $

  	
  150,017.47

  	
   

  
	
  Painter

  	
   

  	
  $

  	
  235,469.14

  	
   

  	
  $

  	
  93,828.20

  	
   

  	
  $

  	
  329,297.34

  	
   

  
	
  Whitfield

  	
   

  	
  $

  	
  256,966.18

  	
   

  	
  $

  	
  95,852.40

  	
   

  	
  $

  	
  352,818.58

  	
   

  
	
  Smith

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  160,212.39

  	
   

  	
  $

  	
  160,212.39

  	
   

  
	
  Wilkirson

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  128,169.91

  	
   

  	
  $

  	
  128,169.91

  	
   

  
	
  Gray

  	
   

  	
  $

  	
  186,739.80

  	
   

  	
  $

  	
  119,036.30

  	
  (3)

  	
  $

  	
  305,776.10

  	
   

  
	
  Total
  Executive Management

  	
   

  	
  $

  	
  1,828,841.78

  	
   

  	
  $

  	
  1,030,959.20

  	
   

  	
  $

  	
  2,859,800.98 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  All Investors

  	
   

  	
  $

  	
  1,828,841.78

  	
   

  	
  $

  	
  184,400,572.01

  	
   

  	
  $

  	
  186,229,413.79

  	
   

  

 

(1)   The amounts set forth below represent deferred compensation that
has been deducted from the executive’s compensation prior to the date hereof,
together with interest thereon as contemplated by the deferred compensation
plan. In connection with the Capital Contributions to be made by the Class A
Limited Partners pursuant to Section 3.01, these amounts will be treated as
part of the executive’s Capital contribution and deducted from the executive’s
deferred compensation account, except in the case of Mr. Gray, where the
amount to be deducted will be $287,292.

(2)   The amounts to be contributed by the various GSCPV and GSCPVI
entities to be agreed, provided that the aggregate amount contributed by all
such entities equals $53,502,407.41.

(3)   Mr. Gray will make a cash contribution in the amount of $183,132.77
which, for the purposes of determining his Class A Interests, will be
valued at $119,036.30.

 

 

EXHIBIT A-1

 

COBALT
INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN

 

Restricted Stock Award Agreement

IPO Award — Class B Interests

 

You have been granted restricted stock (this “Award”) on the following terms and subject
to the provisions of Attachment A and the Cobalt Energy International, Inc.
Long Term Incentive Plan (the “Plan”).  Unless defined in this Award agreement
(including Attachment A, this “Agreement”),
capitalized terms will have the meanings assigned to them in the Plan.  In the event of a conflict among the
provisions of the Plan, this Agreement and any descriptive materials provided
to you, the provisions of the Plan will prevail.

 

	
  Participant

  	
  [Full name]

  
	
   

  	
   

  
	
  Number of Shares Underlying Award

  	
  [·] Shares (to
  the extent not vested as of any applicable date, the “Restricted
  Shares”)

  
	
   

  	
   

  
	
  Grant
  Date

  	
  [Date of closing of IPO]

  
	
   

  	
   

  
	
  Vesting

  	
  Subject to Section 3 of Attachment A, the Restricted Shares
  shall [vest 60% upon the three year anniversary of the Participant’s date of
  hire and the remaining 40% upon the four year anniversary of the
  Participant’s date of hire (each such date, a “Scheduled
  Vesting Date”) if the Participant does not experience a
  Termination of Service at any time prior to the applicable Scheduled Vesting
  Date (the “Service Condition”).](1)

  

 

(1) If the initial 60%
has vested prior to the grant date, the bracketed language should be replaced
with the language set forth below and certain conforming changes made in the
rest of the agreement:

 

“fully vest on the four year
anniversary of the Participant’s date of hire (the “Scheduled
Vesting Date”) if the Participant does not experience a Termination
of Service at any time prior to the Scheduled Vesting Date (the “Service Condition”).”

 

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock to the Participant on the Grant Date on
the terms set forth on the cover page of this Agreement, as more fully
described in this Attachment A.  This
Award is granted under the Plan, which is incorporated herein by this reference
and made a part of this Agreement.

 

Section 2.  Issuance
of Shares.

 

(a)                                  The Restricted
Shares shall be evidenced by book-entry registration; provided,
however, that the Committee may determine that the Restricted Shares
shall be evidenced in such other manner as it deems appropriate, including the
issuance of a stock certificate or certificates.  In the event that any stock certificate is
issued in respect of the Restricted Shares, such certificate shall (i) be
registered in the name of the Participant, (ii) bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the
Restricted Shares and (iii) be held in custody by the Company.

 

(b)                                 Voting
Rights.  The Participant shall have
voting rights with respect to the Restricted Shares.

 

(c)                                  Dividends.  All cash and other dividends and
distributions, if any, that are paid with respect to any Restricted Shares
shall be withheld by the Company and paid to the Participant, without interest,
only when, and if, the Restricted Shares become vested in accordance with this
Agreement.

 

(d)                                 Transferability.  Unless and until the Restricted Shares become
vested in accordance with this Agreement, the Restricted Shares shall not be
assigned, sold, transferred or otherwise be subject to alienation by the
Participant.

 

(e)                                  Section 83(b) Election.  If the Participant chooses, the Participant
may make an election under Section 83(b) of the Code with respect to
the Restricted Shares, which would cause the Participant currently to recognize
income for U.S. federal income tax purposes in an amount equal to the excess
(if any) of the fair market value of the Restricted Shares (determined as of
the Grant Date) over the amount, if any, that the Participant paid for the
Restricted Shares, which excess will be subject to U.S. federal income
tax.  The form for making a Section 83(b) election is attached as
Attachment B. 
The Participant acknowledges that (i) the Participant is solely
responsible for the decision whether or not to make a Section 83(b) election,
and the Company is not

 

2

 

making any recommendation with respect thereto, (ii) it
is his or her sole responsibility to timely file the Section 83(b) election
within 30 days after the Grant Date, if the Participant decides to make such
election, and (iii) if the Participant does not make a valid and timely Section 83(b) election,
the Participant will be required to recognize ordinary income at the time of
vesting on any future appreciation on the Restricted Shares.

 

(f)                                    Withholding
Requirements.  The Company
may withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (or any dividend or distribution thereon), and
the Participant shall make arrangements satisfactory to the Company to enable
the Company to satisfy all such withholding requirements.  Notwithstanding the foregoing, the Committee
may permit, in its sole discretion, the Participant to satisfy any such
withholding requirement by transferring to the Company pursuant to such
procedures as the Committee may require, effective as of the date on which a
withholding obligation arises, a number of vested Shares owned and designated
by the Participant having an aggregate fair market value as of such date that
is equal to the minimum amount required to be withheld.  If the Committee permits the Participant to
satisfy any such withholding requirement pursuant to the preceding sentence,
the Company shall remit to the Internal Revenue Service and appropriate state
and local revenue agencies, for the credit of the Participant, an amount of
cash withholding equal to the fair market value of the Shares transferred to
the Company as provided above.

 

Section 3.  Vesting of
Restricted Shares.

 

(a)                                  Termination
of Service.

 

(i)                                     Death
or Disability.  In the
event of the Participant’s Termination of Service at any time due to the
Participant’s death or Disability, the Restricted Shares shall fully vest as of
the date of such termination.

 

(ii)                                  Any
Other Termination of Service.  In the event of the Participant’s Termination
of Service at any time for any reason (other than due to the Participant’s
death or Disability), the Restricted Shares shall be forfeited in their
entirety as of the date of such termination without any payment to the
Participant.  [[If the
Participant is subject to a lock up of fewer than five years:] Notwithstanding
the foregoing, if the restrictions contained in the Lock Up Agreement entered
into by the Participant with respect to Shares or Restricted Shares issued to
the Participant in connection with the initial public offering of Shares (the “IPO”) expired on or prior to the date of such termination,
the Restricted Shares shall fully vest; provided that
such vested Shares may not be Transferred (as defined below) until the
Scheduled Vesting Date applicable to such Shares and shall be subject to
forfeiture if the Participant materially breaches the non-competition agreement
entered into by the Participant as of the date hereof

 

3

 

and
attached hereto as Attachment C.  “Transfer” means (a) offer, sell, pledge or hypothecate
any legal or beneficial interest, including the grant of an option or other
right, or otherwise transfer or enter into an agreement to do so or (b) enter
into any hedge, swap or any other agreement that transfers, in whole or in
part, any of the economic consequences of ownership (whether such transaction
is settled by delivery of cash, shares or otherwise).]

 

Notwithstanding
the foregoing, in the event of the Participant’s Termination of Service other
than by the Company for Cause, the Committee may, in its sole discretion,
accelerate the vesting or waive any term or condition (including the Service
Condition) of this Agreement, subject to such terms and conditions as the
Committee deems appropriate, with respect to all or a portion of the Restricted
Shares.

 

(b)                                 Change
in Control.  If a Change
in Control occurs at any time, the Restricted Shares shall fully vest as of the
date of such Change in Control.

 

(c)                                  Committee’s
Failure to Grant Specified Awards.  The Restricted Shares shall fully vest as of
the third anniversary of the IPO if, during the period commencing on the Grant
Date and ending on the third anniversary of the IPO, the Committee has not
granted Awards under the Plan with terms substantially similar to the terms set
forth in the form of restricted stock award agreement appended to the
Reorganization Agreement as Exhibit A-3 (other than Section 4(c) of
such agreement) with respect to [insert number equal to 95% of the excess of
the total number of Shares issuable with respect to 100,000 Class D Units
less the number of Shares issued to Class D holders upon the IPO] Shares
in the aggregate.  For the avoidance of
doubt, IPO Awards granted under the Plan shall not constitute Awards granted
for purposes of this Section 4(c)).

 

(d)                                 Effect
of Vesting.  Subject to
the provisions of this Agreement, upon the vesting of Restricted Shares, the
restrictions under this Award with respect to such Shares shall lapse, and
subject to any applicable Lock Up Agreement, such Shares shall be fully
assignable, saleable and transferable by the Participant, and the Company shall
deliver such Shares, along with any dividends and other distributions that were
paid with respect to such Shares but withheld pending vesting, to the Participant.  Subject to any applicable Lock Up Agreement,
such Shares shall be delivered by transfer to the Depository Trust Company for
the benefit of the Participant or by delivery of a stock certificate registered
in the Participant’s name.

 

Section 4.  Miscellaneous
Provisions.

 

(a)                                  Notices. All notices,
requests and other communications under this Agreement shall be in writing and
shall be delivered in person (by courier or otherwise), mailed by certified or
registered mail, return receipt requested, or sent by facsimile transmission,
as follows:

 

4

 

if
to the Company, to:

 

Cobalt
International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Attention:
[General Counsel]

Facsimile:
[number]

 

if
to the Participant, to the address that the Participant most recently provided
to the Company,

 

or
to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed received on the next succeeding
business day in the place of receipt.

 

(b)                                 Entire
Agreement.  This
Agreement, the Plan, and any other agreements referred to herein and therein
and any schedules, exhibits and other documents referred to herein or therein,
constitute the entire agreement and understanding between the parties in
respect of the subject matter hereof and supersede all prior and
contemporaneous arrangements, agreements and understandings, both oral and
written, whether in term sheets, presentations or otherwise, between the
parties with respect to the subject matter hereof.

 

(c)                                  Amendment;
Waiver.  No amendment or modification
of any provision of this Agreement shall be effective unless signed in writing
by or on behalf of the Company and the Participant, except that the Company may
amend or modify the Agreement without the Participant’s consent in accordance
with the provisions of the Plan or as otherwise set forth in this
Agreement.  No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition whether of like or different nature.  Any amendment or modification of or to any
provision of this Agreement, or any waiver of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose
for which made or given.

 

(d)                                 Assignment.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Participant.

 

(e)                                  Successors
and Assigns; No Third Party Beneficiaries.  This Agreement shall inure to the benefit of
and be binding upon the Company and the Participant and their respective heirs,
successors, legal representatives and permitted assigns.  Nothing in this Agreement, expressed or
implied, is intended

 

5

 

to
confer on any Person other than the Company and the Participant, and their
respective heirs, successors, legal representatives and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.

 

(f)                                    Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

(g)                                 Participant
Undertaking.  The
Participant agrees to take whatever additional action and execute whatever
additional documents the Company may deem necessary or advisable to carry out
or give effect to any of the obligations or restrictions imposed on either the
Participant or the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)                                 Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares and
the Participant’s rights and obligations with respect thereto are set forth in
the Plan.  The Participant has read
carefully, and understands, the provisions of the Plan.

 

(i)                                     Governing
Law.  The Agreement shall be
governed by the laws of the State of Delaware, without application of the
conflicts of law principles thereof.

 

(j)                                     Jurisdiction.  The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its affiliates or
against any party or any of its affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action
or proceeding may be served on each party anywhere in the world, whether within
or without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 4(a) shall be deemed
effective service of process on such party.

 

(k)                                  WAIVER
OF JURY TRIAL.  EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

6

 

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

 

 

	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Participant]

  

 

7

 

Attachment B

 

SECTION 83(b) ELECTION

 

This
statement is being made under Section 83(b) of the Internal Revenue
Code, pursuant to Treas. Reg. Section 1.83-2.

 

(1)     The taxpayer performing the services is:

 

Name:

Address:

Social
Security Number:

 

(2)     The property with respect to which the
election is being made is
                    
shares (the “Restricted Shares”) of common
stock, par value $.01 per share, of Cobalt
International Energy, Inc. (the “Company”)

 

(3)     The Restricted Shares were transferred on                                                       .

 

(4)     The taxable year in which the election is
being made is the calendar year
                   .

 

(5)     The Restricted Shares are not transferable
and are subject to a substantial risk of forfeiture within the meaning of Section 83(c)(1) of
the Internal Revenue Code until and unless specified conditions are satisfied
or a specified event occurs, in each case as set forth in the Company’s Long Term Incentive Plan and the
Restricted Stock Award Agreement pursuant to which the Restricted Shares were
issued.

 

(6)     The fair market value of the Restricted
Shares at the time of transfer (determined without regard to any restriction
other than a restriction which by its terms will never lapse) is
$                    
per share.

 

(7)     The amount paid by the taxpayer for the
Restricted Shares is
$                    
per share.

 

(8)     A copy of this statement has been furnished
to the Company, for whom the taxpayer will be performing services underlying
the transfer of the Restricted Shares.

 

(9)     This statement is executed on
                                                            .

 

	
   

  	
   

  	
   

  
	
  Spouse
  (if any)

  	
   

  	
  Taxpayer

  

 

This
statement must be filed with the Internal Revenue Service Center with which you
filed your last U.S. federal income tax return within 30 days after the grant
date of the Restricted Stock Award Agreement. 
This filing should be made by registered or certified mail, return
receipt requested.  You are also required
to (i) deliver a copy of this statement to the Company and (ii) attach
a copy of this statement to your federal income tax return for the taxable year
that includes the grant date (and may also be required to attach a copy of this
statement to your state income tax return for such year).  You should also retain a copy of this
statement for your records.

 

8

 

Attachment C

 

NON-COMPETITION AGREEMENT

 

This NON-COMPETITION AGREEMENT (this “Agreement”)
dated as of [·],
20   , is made by and between COBALT INTERNATIONAL ENERGY, INC.,
a Delaware corporation (together with its subsidiaries, the “Company”), and [·]
(“Employee”).

 

RECITALS

 

WHEREAS, pursuant to a restricted stock award agreement (the “Restricted Stock Award Agreement”), dated as of the date
hereof, and the Company’s Long Term Incentive Plan (the “LTIP”),
the Company has granted to Employee [·] Restricted Shares (as defined in the Restricted
Stock Award Agreement); and

 

WHEREAS, the Company and Employee agree to the restrictions set forth in
this Agreement for the consideration set forth in Section 1(a) and
for the Company’s agreement to vest the Restricted Shares upon Employee’s
Termination of Service (as defined in the LTIP) pursuant to Section 3(a)(ii) of
the Restricted Stock Award Agreement (from the date of such termination through
the applicable Scheduled Vesting Date, such Restricted Shares are referred to
as the “Non-Competition Shares”).

 

Unless defined in this Agreement, capitalized terms will have the
meanings assigned to them in the Restricted Stock Award Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and for other
valuable consideration, the Company and Employee agree as follows:

 

Section 1.  Non-Competition
and Non-Solicitation.

 

(a)           Employee and the Company agree to the restrictive
covenants contained in this Agreement:  (i) in
consideration for the confidential information provided by the Company to
Employee during the course of his or her employment with the Company; (ii) as
part of the consideration for the Restricted Shares issued to Employee in
connection with the IPO; (iii) to protect the (A) trade secrets and
confidential information of the Company disclosed or entrusted to Employee by
the Company and (B) business goodwill of the Company developed through the
efforts of Employee and/or the business opportunities disclosed or entrusted to
Employee by the Company; and (iv) as an additional incentive for the
Company to enter into the Restricted Stock Award Agreement.

 

9

 

(b)           Subject to the exceptions set forth in the last sentence
of this Section 1(b), Employee shall not at any time during the period
(the “Restricted Period”) commencing on the
date of his or her Termination of Service and ending on the final Scheduled
Vesting Date, directly or indirectly engage in, have any equity interest in, be
affiliated with, or manage or operate any person, firm, corporation,
partnership, entity or business (whether as director, officer, employee, agent,
representative, partner, member, security holder, consultant or otherwise) that
engages in any business that competes with any Business (as defined below) of
the Company in the states within the United States (or District of Columbia, if
applicable) and in the geographic regions outside of the United States (i) in
which the Company conducts operations or (ii) with respect to which the
Company devotes more than de minimis
resources in the furtherance of the Business; provided,
however, that Employee shall be permitted to acquire a passive stock
interest in such a business if the stock acquired is publicly traded and is not
more than two percent of the outstanding interest in such business.  Notwithstanding the foregoing or anything to
the contrary in this Agreement, it shall not be a violation of this Section 1
for Employee to (i) provide services to any person or entity engaged in
the Business if Employee is not involved, directly or indirectly, in the
management, supervision or operations of the Business (including by reason of
any individual reporting to Employee) and the gross revenues generated by the
Business do not constitute more than 33% of the consolidated gross revenues of
such person or entity and its affiliates and (ii) provide services to or
otherwise be affiliated with a venture capital or private equity firm that
holds investments in entities engaged in the Business if Employee is not
involved, directly or indirectly, in the identification, evaluation,
recommendation, acquisition, management, operation, supervision or disposition
of such investments, and the gross revenues generated by such Business do not
constitute more than the 33% of the consolidated gross revenues of such firm
and its affiliates.  “Business” means the exploration for, and the development and
production of, oil and natural gas and the acquisition of leases and other real
property in connection therewith, as such business may be expanded or altered
by the Company during the period of Employee’s employment with the Company; provided that any business or endeavor shall cease to be the
“Business” if the Company is not or ceases to be engaged in such business or
endeavor.

 

(c)           During the
Restricted Period, Employee shall not, directly or indirectly, recruit or
otherwise solicit or induce any employee of the Company, except on behalf of
the Company, to (i) terminate his or her employment with the Company or (ii) establish
any relationship with Employee or any of his or her affiliates for any business
purpose competitive with the Business of the Company, provided,
however, that a general solicitation of the public for employment
shall not constitute a solicitation hereunder so long as such general
solicitation is not designed to target any employee of the Company.

 

(d)           Employee and the Company agree that the foregoing
restrictions are reasonable under the circumstances, are necessary to protect
the Company’s legitimate business interests and that any breach of such
restrictions would cause

 

10

 

irreparable injury to the Company.  Employee understands that the foregoing
restrictions may limit his or her ability to engage in certain businesses
anywhere in the United States and outside the United States during the Restricted
Period but acknowledges that he or she will receive sufficiently high
remuneration and other benefits from the Company to justify such
restrictions.  Further, Employee
acknowledges that his or her skills are such that he or she can be gainfully
employed in non-competitive employment, and that the agreement not to compete
will not prevent him or her from earning a living.  Nevertheless, in the event that any of the
foregoing restrictions shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its extending for too great a
period of time or over too great a geographical area or by reason of its being
too extensive in any other respect, it will be interpreted to extend only over
the maximum period of time for which it may be enforceable, over the maximum geographical
area as to which it may be enforceable, or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action.

 

(e)           Employee hereby represents to the Company that he or she
has read and understands, and agrees to be bound by, the foregoing
restrictions.  Employee acknowledges that
the geographic scope and duration of the foregoing restrictions are the result
of arm’s-length bargaining and are fair and reasonable in light of (i) the
nature and wide geographic scope of the Company’s operations of, and in, the
Business, (ii) Employee’s level of control over and contact with the
Company’s operations of, and in, the Business in all jurisdictions in which it
is conducted, (iii) the geographic breadth in which the Company conducts
the Business and (iv) the amount of consideration (including confidential
information and trade secrets) that Employee is receiving from the Company.

 

(f)            In consideration of the Company’s promises herein, during
the Restricted Period, Employee promises to disclose to the Company any
employment, consulting or other service relationship that her or she enters
into after the termination of his or her employment with the Company for any
reason.  Such disclosure shall be made within
seven business days after Employee enters into such employment, consulting or
other service relationship.  Employee
expressly consents to and authorizes the Company to disclose both the existence
and terms of this Agreement to any future employer or recipient of Employee’s
services and to take any steps the Company deems necessary to enforce this
Agreement.

 

Section 2.  Nondisclosure
of Confidential and Proprietary Information.

 

(a)           Except
in connection with the faithful performance of Employee’s duties for the
Company or pursuant to Section 2(c) or (d), Employee shall, in
perpetuity, maintain in confidence and shall not directly, indirectly or
otherwise, (i) use, disseminate, disclose or publish, or use for his
benefit or the benefit of any person, firm, corporation or other entity, any (A) confidential
or proprietary information or trade secrets of or relating to the Company
(including, without

 

11

 

limitation, intellectual
property in the form of patents, trademarks and copyrights and applications
therefor, ideas, inventions, works, discoveries, improvements, information,
documents, formulae, practices, processes, methods, developments, source code,
modifications, technology, techniques, data, programs, other know-how or
materials, in each case, that are confidential and/or proprietary and owned,
developed or possessed by the Company, whether in tangible or intangible form)
or (B) confidential or proprietary information with respect to the
Company’s operations, processes, products, inventions, business practices,
strategies, business plans, finances, principals, vendors, suppliers,
customers, potential customers, marketing methods, costs, prices, contractual
relationships, regulatory status, prospects and compensation paid to employees
or other terms of employment or (ii) deliver to any person, firm,
corporation or other entity any document, record, notebook, computer program or
similar repository of or containing any such confidential or proprietary information
or trade secrets.  The parties hereby
stipulate and agree that as between them the foregoing matters are important,
material and confidential proprietary information and trade secrets and
materially affect the successful conduct of the businesses of the Company (and
any successor or assignee of the Company).

 

(b)           Upon
the termination of Employee’s employment with the Company for any reason,
Employee will promptly deliver to the Company all correspondence, drawings,
manuals, letters, notes, notebooks, reports, programs, plans, proposals,
financial documents and electronically stored information, in each case, that
are confidential or proprietary to the Company, or any other confidential or
proprietary documents (including electronically stored information) concerning
the Company’s customers, business plans, strategies, products or processes.

 

(c)           Employee may respond to a lawful and valid subpoena or
other legal process relating to the business of the Company or the performance
of his or her duties on behalf of the Company but shall (i) give the
Company prompt notice thereof, (ii) make available to the Company and its
counsel the documents and other information sought that are not subject to a
binding confidentiality agreement and (iii) assist such counsel at
Company’s expense in resisting or otherwise responding to such process.

 

(d)           Nothing in this Agreement shall prohibit Employee from (i) disclosing
information and documents when required by law, subpoena, court order or legal
process, (ii) disclosing information and documents to his or her immediate
family members or, for the purpose of securing legal or tax advice, attorney or
tax adviser (provided that the persons to whom such disclosures are made shall
be informed of their obligation to maintain the strict confidentiality of any
information provided to them), (iii) disclosing the post-employment
restrictions in this Agreement in confidence to any potential new employer or
person or entity to whom he or she may provide consulting services, or (iv) retaining,
at any time, his or her personal correspondence and rolodex or address

 

12

 

book and documents related to his or her own
personal benefits, entitlements and obligations.

 

Section 3.  Inventions.  All rights to discoveries, inventions,
improvements and innovations (including all data and records pertaining
thereto) related to the business of the Company, whether or not patentable,
copyrightable, registrable as a trademark, or reduced to writing, that Employee
may discover, invent or originate during the period of his or her employment
with the Company, either alone or with others and whether or not during working
hours or by the use of the facilities of the Company (“Inventions”),
shall be the exclusive property of the Company. 
Employee shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other documents the
Company may deem reasonably necessary to protect or perfect its rights therein,
and shall assist the Company, upon reasonable request and at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights
therein.  Employee hereby appoints the
Company as his or her attorney-in-fact to execute on his or her behalf any assignments
or other documents reasonably deemed necessary by the Company to protect or
perfect its rights to any Inventions.

 

Section 4.  Non-Disparagement.  During Employee’s employment with the Company
and following termination of his or her employment with the Company for any
reason, (i) Employee agrees not to disparage in any material respect the
Company any of its products or practices, or any of its directors, officers,
agents, representatives, members, partners or stockholders, either orally or in
writing, and (ii) the Company agrees that it will (x) not make any
formal statements that disparage in any material respect Employee and (y) use
commercially reasonable efforts to advise its directors and officers not to
disparage in any material respect Employee.

 

Section 5.  Remedy for Breach.  In the event of Employee’s material breach of
the restrictions contained in this Agreement, the Non-Competition Shares (other
than any such shares that prior to such material breach were transferred
pursuant to Section 6) shall be forfeited in their entirety without any
payment to Employee; it being understood
that the Company shall have no other remedy in the event of Employee’s breach
of such restrictions.  For the avoidance
of doubt, in the event of Employee’s material breach of the restrictions
contained in this Agreement, any of the Restricted Shares that would have
vested upon a Scheduled Vesting Date that occurred prior to the date of such
material breach had Employee’s employment with the Company continued through
such Scheduled Vesting Date shall not be subject to forfeiture.

 

Section 6.  Withholding and Taxes.  The Company shall permit Employee to satisfy
any withholding obligation that becomes due with respect to the vesting of the
Non-Competition Shares (or any dividend or distribution thereon) in connection
with Employee’s Termination of Service, if applicable, by transferring to the
Company pursuant to such procedures as the Company may require, effective as of
the date on which such withholding obligation arises, a number of

 

13

 

the Non-Competition Shares
having an aggregate fair market value as of such date that is equal to the
minimum amount required to be withheld. 
The Company shall remit to the Internal Revenue Service and appropriate
state and local revenue agencies, for the credit of Employee, an amount of cash
withholding equal to the fair market value of such number of the
Non-Competition Shares so transferred to the Company.  In addition, to the extent that the amount of
the income taxes arising from such vesting of the Non-Competition Shares (or
any dividend or distribution thereon) exceeds the amount withheld upon such
vesting, Employee shall be permitted to transfer a number of the
Non-Competition Shares having an aggregate fair market value as of the date of
such transfer equal to such excess.

 

Section 7.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

14

 

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

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COBALT INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

15

 

EXHIBIT A-2

 

COBALT
INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN

 

Restricted Stock Award Agreement

IPO Award — Class C Interests

 

You have been granted restricted stock (this “Award”) on the following terms and subject
to the provisions of Attachment A and the Cobalt Energy International, Inc.
Long Term Incentive Plan (the “Plan”).  Unless defined in this Award agreement
(including Attachment A, this “Agreement”),
capitalized terms will have the meanings assigned to them in the Plan.  In the event of a conflict among the
provisions of the Plan, this Agreement and any descriptive materials provided
to you, the provisions of the Plan will prevail.

 

	
  Participant

  	
  [Full name]

  
	
   

  	
   

  
	
  Number of Shares Underlying Award  

  	
  [·] Shares (the “Restricted Shares”)

  
	
   

  	
   

  
	
  Grant
  Date  

  	
  [Date of closing of IPO]

  
	
   

  	
   

  
	
  Vesting

  	
  Subject to Section 3 of Attachment A, the Restricted Shares
  shall fully vest on [January 1, 2013](1) [fifth anniversary of
  closing of IPO](2) (the “Scheduled Vesting Date”)
  if the Participant does not experience a Termination of Service at any time
  prior to the Scheduled Vesting Date (the “Service
  Condition”).

  

 

(1) For
Class C Interests currently outstanding.

 

(2) For
Class C Interests available for grant in connection with IPO.

 

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock to the Participant on the Grant Date on
the terms set forth on the cover page of this Agreement, as more fully
described in this Attachment A.  This
Award is granted under the Plan, which is incorporated herein by this reference
and made a part of this Agreement.

 

Section 2.  Issuance of
Shares.

 

(a)                                  The Restricted
Shares shall be evidenced by book-entry registration; provided,
however, that the Committee may determine that the Restricted Shares
shall be evidenced in such other manner as it deems appropriate, including the
issuance of a stock certificate or certificates.  In the event that any stock certificate is
issued in respect of the Restricted Shares, such certificate shall (i) be
registered in the name of the Participant, (ii) bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the
Restricted Shares and (iii) be held in custody by the Company.

 

(b)                                 Voting
Rights.  The Participant shall have
voting rights with respect to the Restricted Shares.

 

(c)                                  Dividends.  All cash and other dividends and
distributions, if any, that are paid with respect to any Restricted Shares
shall be withheld by the Company and paid to the Participant, without interest,
only when, and if, the Restricted Shares become vested in accordance with this
Agreement.

 

(d)                                 Transferability.  Unless and until the Restricted Shares become
vested in accordance with this Agreement, the Restricted Shares shall not be
assigned, sold, transferred or otherwise be subject to alienation by the
Participant.(3)

 

(3) With
the consent of the Compensation Committee, the following language may be added
at the end of Section 2(d) in individual cases, “except that the
Restricted Shares may be transferred by gift to a spouse, lineal ancestor,
lineal descendant, legally adopted child, sibling or lineal descendant or
legally adopted child of a sibling of the Participant or a trust or other
entity for the primary benefit of the Participant or any such persons if the
transferee agrees in writing to be bound by the provisions of this Agreement.”

 

2

 

(e)                                  Section 83(b) Election.  If the Participant chooses, the Participant
may make an election under Section 83(b) of the Code with respect to
the Restricted Shares, which would cause the Participant currently to recognize
income for U.S. federal income tax purposes in an amount equal to the excess
(if any) of the fair market value of the Restricted Shares (determined as of
the Grant Date) over the amount, if any, that the Participant paid for the
Restricted Shares, which excess will be subject to U.S. federal income
tax.  The form for making a Section 83(b) election is attached as
Attachment B. 
The Participant acknowledges that (i) the Participant is solely
responsible for the decision whether or not to make a Section 83(b) election,
and the Company is not making any recommendation with respect thereto, (ii) it
is his or her sole responsibility to timely file the Section 83(b) election
within 30 days after the Grant Date, if the Participant decides to make such election,
and (iii) if the Participant does not make a valid and timely Section 83(b) election,
the Participant will be required to recognize ordinary income at the time of
vesting on any future appreciation on the Restricted Shares.

 

(f)                                    Withholding
Requirements.  The Company
may withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (or any dividend or distribution thereon), and
the Participant shall make arrangements satisfactory to the Company to enable
the Company to satisfy all such withholding requirements.  Notwithstanding the foregoing, the Committee
may permit, in its sole discretion, the Participant to satisfy any such
withholding requirement by transferring to the Company pursuant to such procedures
as the Committee may require, effective as of the date on which a withholding
obligation arises, a number of vested Shares owned and designated by the
Participant having an aggregate fair market value as of such date that is equal
to the minimum amount required to be withheld. 
If the Committee permits the Participant to satisfy any such withholding
requirement pursuant to the preceding sentence, the Company shall remit to the
Internal Revenue Service and appropriate state and local revenue agencies, for
the credit of the Participant, an amount of cash withholding equal to the fair
market value of the Shares transferred to the Company as provided above.

 

Section 3.  Vesting of
Restricted Shares.

 

(a)                                  Termination
of Service.

 

(i)                                     Death
or Disability.  In the
event of the Participant’s Termination of Service at any time due to the
Participant’s death or Disability, the Restricted Shares shall fully vest as of
the date of such termination.

 

(ii)                                  Any
Other Termination of Service.  In the event of the Participant’s Termination
of Service at any time for any reason (other than due to the Participant’s
death or Disability), the Restricted Shares shall be forfeited in their
entirety as of the date of such termination without any

 

3

 

payment
to the Participant.  [[If the Participant is subject to a lock up of fewer than five years:] Notwithstanding
the foregoing, if the restrictions contained in the Lock Up Agreement entered
into by the Participant with respect to Shares or Restricted Shares issued to
the Participant in connection with the initial public offering of Shares (the “IPO”) expired on or prior to the date of such termination,
the Restricted Shares shall fully vest; provided that
such vested Shares may not be Transferred (as defined below) until the
Scheduled Vesting Date and shall be subject to forfeiture if the Participant
materially breaches the non-competition agreement entered into by the
Participant as of the date hereof and attached hereto as Attachment C.  “Transfer” means
(a) offer, sell, pledge or hypothecate any legal or beneficial interest,
including the grant of an option or other right, or otherwise transfer or enter
into an agreement to do so or (b) enter into any hedge, swap or any other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership (whether such transaction is settled by delivery of cash, shares
or otherwise).]

 

Notwithstanding
the foregoing, in the event of the Participant’s Termination of Service other
than by the Company for Cause, the Committee may, in its sole discretion,
accelerate the vesting or waive any term or condition (including the Service
Condition) of this Agreement, subject to such terms and conditions as the
Committee deems appropriate, with respect to all or a portion of the Restricted
Shares.

 

(b)                                 Change
in Control.  If a Change
in Control occurs at any time, the Restricted Shares shall fully vest as of the
date of such Change in Control.

 

(c)                                  Committee’s
Failure to Grant Specified Awards.  The Restricted Shares shall fully vest as of
the third anniversary of the IPO if, during the period commencing on the Grant
Date and ending on the third anniversary of the IPO, the Committee has not
granted Awards under the Plan with terms substantially similar to the terms set
forth in the form of restricted stock award agreement appended to the
Reorganization Agreement as Exhibit A-3 (other than Section 4(c) of
such agreement) with respect to [·] Shares in the
aggregate.  For the avoidance of doubt,
IPO Awards granted under the Plan shall not constitute Awards granted for
purposes of this Section 4(c)).

 

(d)                                 Effect
of Vesting.  Subject to
the provisions of this Agreement, upon the vesting of Restricted Shares, the
restrictions under this Award with respect to such Shares shall lapse, and
subject to any applicable Lock Up Agreement, such Shares shall be fully
assignable, saleable and transferable by the Participant, and the Company shall
deliver such Shares, along with any dividends and other distributions that were
paid with respect to such Shares but withheld pending vesting, to the
Participant.  Subject to any applicable
Lock Up Agreement, such Shares shall be delivered by transfer to the Depository
Trust Company for the benefit of the Participant or by delivery of a stock
certificate registered in the Participant’s name.

 

4

 

Section 4.  Miscellaneous
Provisions.

 

(a)                                  Notices. All notices,
requests and other communications under this Agreement shall be in writing and
shall be delivered in person (by courier or otherwise), mailed by certified or
registered mail, return receipt requested, or sent by facsimile transmission,
as follows:

 

if
to the Company, to:

 

Cobalt
International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Attention:
[General Counsel]

Facsimile:
[number]

 

if
to the Participant, to the address that the Participant most recently provided
to the Company,

 

or
to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed received on the next succeeding
business day in the place of receipt.

 

(b)                                 Entire
Agreement.  This
Agreement, the Plan, and any other agreements referred to herein and therein
and any schedules, exhibits and other documents referred to herein or therein,
constitute the entire agreement and understanding between the parties in
respect of the subject matter hereof and supersede all prior and
contemporaneous arrangements, agreements and understandings, both oral and
written, whether in term sheets, presentations or otherwise, between the
parties with respect to the subject matter hereof.

 

(c)                                  Amendment;
Waiver.  No amendment or modification
of any provision of this Agreement shall be effective unless signed in writing
by or on behalf of the Company and the Participant, except that the Company may
amend or modify the Agreement without the Participant’s consent in accordance
with the provisions of the Plan or as otherwise set forth in this
Agreement.  No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition whether of like or different nature.  Any amendment or modification of or to any
provision of this Agreement, or any waiver of any provision of this Agreement,
shall be effective only in the specific instance and for the specific purpose
for which made or given.

 

5

 

(d)                                 Assignment.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Participant.

 

(e)                                  Successors
and Assigns; No Third Party Beneficiaries.  This Agreement shall inure to the benefit of
and be binding upon the Company and the Participant and their respective heirs,
successors, legal representatives and permitted assigns.  Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Company and the
Participant, and their respective heirs, successors, legal representatives and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.

 

(f)                                    Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

(g)                                 Participant
Undertaking.  The
Participant agrees to take whatever additional action and execute whatever
additional documents the Company may deem necessary or advisable to carry out
or give effect to any of the obligations or restrictions imposed on either the
Participant or the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)                                 Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares and
the Participant’s rights and obligations with respect thereto are set forth in
the Plan.  The Participant has read
carefully, and understands, the provisions of the Plan.

 

(i)                                     Governing
Law.  The Agreement shall be
governed by the laws of the State of Delaware, without application of the
conflicts of law principles thereof.

 

(j)                                     Jurisdiction.  The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its affiliates or
against any party or any of its affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action
or proceeding may be served on each party anywhere in the world, whether within
or without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of

 

6

 

process
on such party as provided in Section 4(a) shall be deemed effective
service of process on such party.

 

(k)                                  WAIVER
OF JURY TRIAL.  EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

7

 

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

 

 

	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Participant]

  

 

8

 

Attachment B

 

SECTION 83(b) ELECTION

 

This
statement is being made under Section 83(b) of the Internal Revenue
Code, pursuant to Treas. Reg. Section 1.83-2.

 

(1)     The taxpayer
performing the services is:

 

Name:

Address:

Social
Security Number:

 

(2)     The property
with respect to which the election is being made is
                    
shares (the “Restricted Shares”) of common
stock, par value $.01 per share, of Cobalt
International Energy, Inc. (the “Company”)

 

(3)     The Restricted
Shares were transferred on                          .

 

(4)     The taxable
year in which the election is being made is the calendar year
                   .

 

(5)     The Restricted
Shares are not transferable and are subject to a substantial risk of forfeiture
within the meaning of Section 83(c)(1) of the Internal Revenue Code
until and unless specified conditions are satisfied or a specified event
occurs, in each case as set forth in the Company’s Long Term Incentive Plan and the Restricted Stock Award
Agreement pursuant to which the Restricted Shares were issued.

 

(6)     The fair market
value of the Restricted Shares at the time of transfer (determined without
regard to any restriction other than a restriction which by its terms will
never lapse) is
$                    
per share.

 

(7)     The amount paid
by the taxpayer for the Restricted Shares is
$                    
per share.

 

(8)     A copy of this
statement has been furnished to the Company, for whom the taxpayer will be
performing services underlying the transfer of the Restricted Shares.

 

(9)     This statement
is executed
on                                    .

 

	
   

  	
   

  	
   

  
	
   Spouse
  (if any)

  	
   

  	
  Taxpayer

  

 

This
statement must be filed with the Internal Revenue Service Center with which you
filed your last U.S. federal income tax return within 30 days after the grant
date of the Restricted Stock Award Agreement. 
This filing should be made by registered or certified mail, return
receipt requested.  You are also required
to (i) deliver a copy of this statement to the Company and (ii) attach
a copy of this statement to your federal income tax return for the taxable year
that includes the grant date (and may also be required to attach a copy of this
statement to your state income tax return for such year).  You should also retain a copy of this
statement for your records.

 

9

 

Attachment C

 

NON-COMPETITION AGREEMENT

 

This
NON-COMPETITION AGREEMENT (this “Agreement”)
dated as of [·],
20    , is made by and between COBALT INTERNATIONAL ENERGY,
INC., a Delaware corporation (together with its subsidiaries, the “Company”), and [·] (“Employee”).

 

RECITALS

 

WHEREAS,
pursuant to a restricted stock award agreement (the “Restricted
Stock Award Agreement”), dated as of the date hereof, and the
Company’s Long Term Incentive Plan (the “LTIP”), the
Company has granted to Employee [·] Restricted
Shares (as defined in the Restricted Stock Award Agreement); and

 

WHEREAS,
the Company and Employee agree to the restrictions set forth in this Agreement
for the consideration set forth in Section 1(a) and for the Company’s
agreement to vest the Restricted Shares upon Employee’s Termination of Service
(as defined in the LTIP) pursuant to Section 3(a)(ii) of the
Restricted Stock Award Agreement (from the date of such termination through the
Scheduled Vesting Date, such Restricted Shares are referred to as the “Non-Competition Shares”).

 

Unless
defined in this Agreement, capitalized terms will have the meanings assigned to
them in the Restricted Stock Award Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the foregoing and for other valuable
consideration, the Company and Employee agree as follows:

 

Section 1.  Non-Competition
and Non-Solicitation.

 

(a)           Employee
and the Company agree to the restrictive covenants contained in this Agreement:  (i) in consideration for the
confidential information provided by the Company to Employee during the course
of his or her employment with the Company; (ii) as part of the
consideration for the Restricted Shares issued to Employee in connection with the
IPO; (iii) to protect the (A) trade secrets and confidential
information of the Company disclosed or entrusted to Employee by the Company
and (B) business goodwill of the Company developed through the efforts of
Employee and/or the business opportunities disclosed or entrusted to Employee
by the Company; and (iv) as an additional incentive for the Company to
enter into the Restricted Stock Award Agreement.

 

10

 

(b)           Subject
to the exceptions set forth in the last sentence of this Section 1(b),
Employee shall not at any time during the period (the “Restricted
Period”) commencing on the date of his or her Termination of Service
and ending on the Scheduled Vesting Date, directly or indirectly engage in,
have any equity interest in, be affiliated with, or manage or operate any
person, firm, corporation, partnership, entity or business (whether as
director, officer, employee, agent, representative, partner, member, security
holder, consultant or otherwise) that engages in any business that competes
with any Business (as defined below) of the Company in the states within the
United States (or District of Columbia, if applicable) and in the geographic
regions outside of the United States (i) in which the Company conducts
operations or (ii) with respect to which the Company devotes more than de minimis resources in the furtherance of the Business; provided, however, that Employee shall be permitted to
acquire a passive stock interest in such a business if the stock acquired is
publicly traded and is not more than two percent of the outstanding interest in
such business.  Notwithstanding the
foregoing or anything to the contrary in this Agreement, it shall not be a
violation of this Section 1 for Employee to (i) provide services to
any person or entity engaged in the Business if Employee is not involved,
directly or indirectly, in the management, supervision or operations of the
Business (including by reason of any individual reporting to Employee) and the
gross revenues generated by the Business do not constitute more than 33% of the
consolidated gross revenues of such person or entity and its affiliates and (ii) provide
services to or otherwise be affiliated with a venture capital or private equity
firm that holds investments in entities engaged in the Business if Employee is
not involved, directly or indirectly, in the identification, evaluation,
recommendation, acquisition, management, operation, supervision or disposition
of such investments, and the gross revenues generated by such Business do not
constitute more than the 33% of the consolidated gross revenues of such firm
and its affiliates.  “Business” means the exploration for, and the development and
production of, oil and natural gas and the acquisition of leases and other real
property in connection therewith, as such business may be expanded or altered
by the Company during the period of Employee’s employment with the Company; provided that any business or endeavor shall cease to be the
“Business” if the Company is not or ceases to be engaged in such business or
endeavor.

 

(c)           During the Restricted Period, Employee shall
not, directly or indirectly, recruit or otherwise solicit or induce any
employee of the Company, except on behalf of the Company, to (i) terminate
his or her employment with the Company or (ii) establish any relationship
with Employee or any of his or her affiliates for any business purpose
competitive with the Business of the Company, provided,
however, that a general solicitation of the public for employment
shall not constitute a solicitation hereunder so long as such general
solicitation is not designed to target any employee of the Company.

 

(d)           Employee
and the Company agree that the foregoing restrictions are reasonable under the
circumstances, are necessary to protect the Company’s legitimate business
interests and that any breach of such restrictions would cause

 

11

 

irreparable injury to the Company.  Employee understands that the foregoing restrictions
may limit his or her ability to engage in certain businesses anywhere in the
United States and outside the United States during the Restricted Period but
acknowledges that he or she will receive sufficiently high remuneration and
other benefits from the Company to justify such restrictions.  Further, Employee acknowledges that his or
her skills are such that he or she can be gainfully employed in non-competitive
employment, and that the agreement not to compete will not prevent him or her
from earning a living.  Nevertheless, in
the event that any of the foregoing restrictions shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it will be interpreted
to extend only over the maximum period of time for which it may be enforceable,
over the maximum geographical area as to which it may be enforceable, or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action.

 

(e)           Employee
hereby represents to the Company that he or she has read and understands, and
agrees to be bound by, the foregoing restrictions.  Employee acknowledges that the geographic
scope and duration of the foregoing restrictions are the result of arm’s-length
bargaining and are fair and reasonable in light of (i) the nature and wide
geographic scope of the Company’s operations of, and in, the Business, (ii) Employee’s
level of control over and contact with the Company’s operations of, and in, the
Business in all jurisdictions in which it is conducted, (iii) the
geographic breadth in which the Company conducts the Business and (iv) the
amount of consideration (including confidential information and trade secrets)
that Employee is receiving from the Company.

 

(f)            In
consideration of the Company’s promises herein, during the Restricted Period,
Employee promises to disclose to the Company any employment, consulting or
other service relationship that her or she enters into after the termination of
his or her employment with the Company for any reason.  Such disclosure shall be made within seven
business days after Employee enters into such employment, consulting or other
service relationship.  Employee expressly
consents to and authorizes the Company to disclose both the existence and terms
of this Agreement to any future employer or recipient of Employee’s services
and to take any steps the Company deems necessary to enforce this Agreement.

 

Section 2.  Nondisclosure
of Confidential and Proprietary Information.

 

(a)           Except in connection with the faithful performance of
Employee’s duties for the Company or pursuant to Section 2(c) or (d),
Employee shall, in perpetuity, maintain in confidence and shall not directly,
indirectly or otherwise, (i) use, disseminate, disclose or publish, or use
for his benefit or the benefit of any person, firm, corporation or other
entity, any (A) confidential or proprietary information or trade secrets
of or relating to the Company (including, without

 

12

 

limitation, intellectual property in the form
of patents, trademarks and copyrights and applications therefor, ideas, inventions,
works, discoveries, improvements, information, documents, formulae, practices,
processes, methods, developments, source code, modifications, technology,
techniques, data, programs, other know-how or materials, in each case, that are
confidential and/or proprietary and owned, developed or possessed by the
Company, whether in tangible or intangible form) or (B) confidential or
proprietary information with respect to the Company’s operations, processes,
products, inventions, business practices, strategies, business plans, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, regulatory status, prospects
and compensation paid to employees or other terms of employment or (ii) deliver
to any person, firm, corporation or other entity any document, record,
notebook, computer program or similar repository of or containing any such
confidential or proprietary information or trade secrets.  The parties hereby stipulate and agree that
as between them the foregoing matters are important, material and confidential
proprietary information and trade secrets and materially affect the successful
conduct of the businesses of the Company (and any successor or assignee of the
Company).

 

(b)           Upon
the termination of Employee’s employment with the Company for any reason,
Employee will promptly deliver to the Company all correspondence, drawings,
manuals, letters, notes, notebooks, reports, programs, plans, proposals,
financial documents and electronically stored information, in each case, that
are confidential or proprietary to the Company, or any other confidential or
proprietary documents (including electronically stored information) concerning
the Company’s customers, business plans, strategies, products or processes.

 

(c)           Employee
may respond to a lawful and valid subpoena or other legal process relating to
the business of the Company or the performance of his or her duties on behalf
of the Company but shall (i) give the Company prompt notice thereof, (ii) make
available to the Company and its counsel the documents and other information
sought that are not subject to a binding confidentiality agreement and (iii) assist
such counsel at Company’s expense in resisting or otherwise responding to such process.

 

(d)           Nothing
in this Agreement shall prohibit Employee from (i) disclosing information
and documents when required by law, subpoena, court order or legal process, (ii) disclosing
information and documents to his or her immediate family members or, for the
purpose of securing legal or tax advice, attorney or tax adviser (provided that
the persons to whom such disclosures are made shall be informed of their
obligation to maintain the strict confidentiality of any information provided
to them), (iii) disclosing the post-employment restrictions in this
Agreement in confidence to any potential new employer or person or entity to
whom he or she may provide consulting services, or (iv) retaining, at any
time, his or her personal correspondence and rolodex or address

 

13

 

book and documents related to his or her own
personal benefits, entitlements and obligations.

 

Section 3. 
Inventions.  All rights to discoveries, inventions,
improvements and innovations (including all data and records pertaining
thereto) related to the business of the Company, whether or not patentable,
copyrightable, registrable as a trademark, or reduced to writing, that Employee
may discover, invent or originate during the period of his or her employment
with the Company, either alone or with others and whether or not during working
hours or by the use of the facilities of the Company (“Inventions”),
shall be the exclusive property of the Company. 
Employee shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other documents the
Company may deem reasonably necessary to protect or perfect its rights therein,
and shall assist the Company, upon reasonable request and at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights
therein.  Employee hereby appoints the
Company as his or her attorney-in-fact to execute on his or her behalf any
assignments or other documents reasonably deemed necessary by the Company to
protect or perfect its rights to any Inventions.

 

Section 4. 
Non-Disparagement.  During Employee’s employment with the Company
and following termination of his or her employment with the Company for any
reason, (i) Employee agrees not to disparage in any material respect the
Company any of its products or practices, or any of its directors, officers,
agents, representatives, members, partners or stockholders, either orally or in
writing, and (ii) the Company agrees that it will (x) not make any
formal statements that disparage in any material respect Employee and (y) use
commercially reasonable efforts to advise its directors and officers not to
disparage in any material respect Employee.

 

Section 5. 
Remedy for Breach.  In the event of Employee’s material breach of
the restrictions contained in this Agreement, the Non-Competition Shares (other
than any such shares that prior to such material breach were transferred
pursuant to Section 6) shall be forfeited in their entirety without any
payment to Employee; it being understood
that the Company shall have no other remedy in the event of Employee’s breach
of such restrictions.

 

Section 6. 
Withholding and Taxes.  The Company shall permit Employee to satisfy
any withholding obligation that becomes due with respect to the vesting of the
Non-Competition Shares (or any dividend or distribution thereon) in connection
with Employee’s Termination of Service, if applicable, by transferring to the
Company pursuant to such procedures as the Company may require, effective as of
the date on which such withholding obligation arises, a number of the
Non-Competition Shares having an aggregate fair market value as of such date
that is equal to the minimum amount required to be withheld.  The Company shall remit to the Internal
Revenue Service and appropriate state and local revenue agencies, for the
credit of Employee, an amount of cash withholding equal to the fair market
value of such number of the Non-Competition Shares so transferred to

 

14

 

the Company. 
In addition, to the extent that the amount of the income taxes arising
from such vesting of the Non-Competition Shares (or any dividend or
distribution thereon) exceeds the amount withheld upon such vesting, Employee
shall be permitted to transfer a number of the Non-Competition Shares having an
aggregate fair market value as of the date of such transfer equal to such
excess.

 

Section 7. 
WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

15

 

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

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

16

 

EXHIBIT A-3

 

COBALT
INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN

 

Restricted Stock Award Agreement

IPO Award — Class D Interests

 

You
have been granted restricted stock (this “Award”) on the
following terms and subject to the provisions of Attachment A and the Cobalt
Energy International, Inc. Long Term Incentive Plan (the “Plan”).  Unless defined in this Award agreement
(including Attachment A, this “Agreement”),
capitalized terms will have the meanings assigned to them in the Plan.  In the event of a conflict among the
provisions of the Plan, this Agreement and any descriptive materials provided
to you, the provisions of the Plan will prevail.

 

	
  Participant

  	
   

  	
  [Full name]

  
	
   

  	
   

  	
   

  
	
  Number of Shares Underlying Award

  	
   

  	
  [·] Shares (the
  “Restricted Shares”)

  
	
   

  	
   

  	
   

  
	
  Grant Date

  	
   

  	
  [Date of closing of IPO]

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  Subject
  to Section 3 of Attachment A, the Restricted Shares shall fully vest on
  [fifth anniversary of closing of IPO] (the “Scheduled
  Vesting Date”) if each of the following conditions is satisfied: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ·

  	
  the
  Participant does not experience a Termination of Service at any time prior to
  the Scheduled Vesting Date (the “Service Condition”);
  and 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ·

  	
  the
  average of the volume weighted average price of a Share for each trading day
  during the 90-day period ending on the day before the Scheduled Vesting Date
  equals or exceeds $[price to public in IPO] (the “Value
  Condition”). The “volume weighted average price” of a Share shall
  be computed based on composite trading between 9:30 a.m. and
  4:00 p.m. New York City time on the applicable date (i) as reported
  by The Bloomberg Professional Service on the Company’s page under the
  “VWAP” field, at 4:00 p.m. on such date; or (ii) if the volume
  weighted average price is not available from The Bloomberg Professional
  Service in such manner, as reported from a different third party source to
  which the Company has access on such date or, if the Company does not have
  access to such a third party source, the high and low sale prices (regular 

  

 

 

	
   

  	
   

  	
   

  	
   

  	
  way) of a Share on such date.

  

 

2

 

Attachment A

 

Restricted Stock Award Agreement

Terms and Conditions

 

Grant to:  [Full name]

 

Section 1.  Grant of
Restricted Stock Award. 
Subject to the terms and conditions of the Plan and this Agreement, the
Company hereby grants Restricted Stock to the Participant on the Grant Date on
the terms set forth on the cover page of this Agreement, as more fully
described in this Attachment A.  This
Award is granted under the Plan, which is incorporated herein by this reference
and made a part of this Agreement.

 

Section 2.  Issuance
of Shares.

 

(a)                                  The Restricted
Shares shall be evidenced by book-entry registration; provided,
however, that the Committee may determine that the Restricted Shares
shall be evidenced in such other manner as it deems appropriate, including the
issuance of a stock certificate or certificates.  In the event that any stock certificate is
issued in respect of the Restricted Shares, such certificate shall (i) be
registered in the name of the Participant, (ii) bear an appropriate legend
referring to the terms, conditions and restrictions applicable to the
Restricted Shares and (iii) be held in custody by the Company.

 

(b)                                 Voting
Rights.  The Participant shall have
voting rights with respect to the Restricted Shares.

 

(c)                                  Dividends.  All cash and other dividends and
distributions, if any, that are paid with respect to any Restricted Shares
shall be withheld by the Company and paid to the Participant, without interest,
only when, and if, the Restricted Shares become vested in accordance with this
Agreement.

 

(d)                                 Transferability.  Unless and until the Restricted Shares become
vested in accordance with this Agreement, the Restricted Shares shall not be
assigned, sold, transferred or otherwise be subject to alienation by the
Participant.(1)

 

(1) With
the consent of the Compensation Committee, the following language may be added
at the end of Section 2(d) in individual cases, “except that the
Restricted Shares may be transferred by gift to a spouse, lineal ancestor,
lineal descendant, legally adopted child, sibling or lineal descendant or
legally adopted child of a sibling of the Participant or a trust or other
entity for the primary benefit of the Participant or any such persons if the
transferee agrees in writing to be bound by the provisions of this Agreement.”

 

3

 

(e)                                  Section 83(b) Election.  If the Participant chooses, the Participant
may make an election under Section 83(b) of the Code with respect to
the  Restricted Shares, which would cause
the Participant currently to recognize income for U.S. federal income tax
purposes in an amount equal to the excess (if any) of the fair market value of
the Restricted Shares (determined as of the Grant Date) over the amount, if
any, that the Participant paid for the Restricted Shares, which excess will be
subject to U.S. federal income tax.  The form for making a Section 83(b) election
is attached as Attachment B.  The Participant acknowledges that (i) the
Participant is solely responsible for the decision whether or not to make a Section 83(b) election,
and the Company is not making any recommendation with respect thereto, (ii) it
is his or her sole responsibility to timely file the Section 83(b) election
within 30 days after the Grant Date, if the Participant decides to make such
election, and (iii) if the Participant does not make a valid and timely Section 83(b) election,
the Participant will be required to recognize ordinary income at the time of
vesting on any future appreciation on the Restricted Shares.

 

(f)                                    Withholding
Requirements.  The Company
may withhold any tax (or other governmental obligation) that becomes due with
respect to the Restricted Shares (or any dividend or distribution thereon), and
the Participant shall make arrangements satisfactory to the Company to enable
the Company to satisfy all such withholding requirements.  Notwithstanding the foregoing, the Committee
may permit, in its sole discretion, the Participant to satisfy any such
withholding requirement by transferring to the Company pursuant to such
procedures as the Committee may require, effective as of the date on which a
withholding obligation arises, a number of vested Shares owned and designated
by the Participant having an aggregate fair market value as of such date that
is equal to the minimum amount required to be withheld.  If the Committee permits the Participant to
satisfy any such withholding requirement pursuant to the preceding sentence,
the Company shall remit to the Internal Revenue Service and appropriate state
and local revenue agencies, for the credit of the Participant, an amount of
cash withholding equal to the fair market value of the Shares transferred to
the Company as provided above.

 

Section 3.  Vesting of Restricted
Shares.

 

(a)                                  Termination
of Service.

 

(i)                                     Death
or Disability.  In the
event of the Participant’s Termination of Service at any time due to the
Participant’s death or Disability, (x) the Service Condition shall be
deemed to be satisfied as of the date of such termination and (y) if the
Value Condition is satisfied as of the Scheduled Vesting Date, the Restricted
Shares shall fully vest as of such date.

 

(ii)                                  Any
Other Termination of Service.  In the event of the Participant’s Termination
of Service at any time for any reason (other than

 

4

 

due
to the Participant’s death or Disability), the Restricted Shares shall be
forfeited in their entirety as of the date of such termination without any
payment to the Participant.

 

Notwithstanding
the foregoing, in the event of the Participant’s Termination of Service other
than by the Company for Cause, the Committee may, in its sole discretion,
accelerate the vesting or waive any term or condition (including the Service
Condition and/or Value Condition) of this Agreement, subject to such terms and
conditions as the Committee deems appropriate, with respect to all or a portion
of the Restricted Shares.

 

(b)                                 Change
in Control.  If a Change
in Control occurs at any time and the Value Condition is satisfied as of the
date of such Change in Control (as described below), the Restricted Shares
shall fully vest as of the date of such Change in Control; provided that
if prior to the date of such Change in Control, the Company or the acquirer
requests in writing that the Participant continue to provide services to the
Company (or the successor or surviving entity) for a specified period not to
exceed 12 months after such Change in Control, the Restricted Shares shall vest
as of the earliest of (x) the last day of such requested period, (y) the
Scheduled Vesting Date or (z) the date, if any, of the Participant’s
Termination of Service by the Company (or the successor or surviving entity)
without Cause, by the Participant for Good Reason or due to the Participant’s
death or Disability (such earliest date, the “Change in Control Vesting
Date”).  The Restricted Shares shall be
forfeited in their entirety without any payment to the Participant upon his or
her Termination of Service by the Company (or the successor or surviving
entity) for Cause or by the Participant without Good Reason at any time prior
to the Change in Control Vesting Date. 
If a Change in Control occurs at any time and the Value Condition is not
satisfied as of the date of such Change in Control, the Restricted Shares shall
be forfeited in their entirety as of the date of such Change in Control without
any payment to the Participant.

 

If
a Change in Control results from the occurrence of an event within the meaning
of:

 

(i)                                     clause (i) or
(iii) of the definition of “Change in Control,” the Value Condition shall
be deemed to be satisfied as of the date of such Change in Control if the price
or implied price per Share in such Change in Control equals or exceeds $[price
to public in IPO]; or

 

(ii)                                  clause (ii) of
the definition of “Change in Control,” the Value Condition shall be deemed to
be satisfied if the average of the volume weighted average price of a Share for
each trading day during the 90-day period ending on the day before such Change
in Control equals or exceeds $[price to public in IPO].

 

5

 

(c)                                  Committee’s
Failure to Grant Specified Awards.  The Restricted Shares shall fully vest as of
the third anniversary of the IPO if, during the period commencing on the Grant
Date and ending on the third anniversary of the IPO, the Committee has not
granted Awards under the Plan with terms substantially similar to the terms set
forth in this Agreement (other than this Section 4(c)) with respect to
[insert number equal to 95% of the excess of the total number of Shares
issuable with respect to 100,000 Class D Units less the number of Shares
issued to Class D holders upon the IPO] Shares in the aggregate.  For the avoidance of doubt, IPO Awards
granted under the Plan shall not constitute Awards granted for purposes of this
Section 4(c)).

 

(d)                                 Effect
of Vesting.  Subject to
the provisions of this Agreement, upon the vesting of Restricted Shares, the
restrictions under this Award with respect to such Shares shall lapse, and
subject to any applicable Lock Up Agreement, such Shares shall be fully
assignable, saleable and transferable by the Participant, and the Company shall
deliver such Shares, along with any dividends and other distributions that were
paid with respect to such Shares but withheld pending vesting, to the
Participant.  Subject to any applicable
Lock Up Agreement, such Shares shall be delivered by transfer to the Depository
Trust Company for the benefit of the Participant or by delivery of a stock
certificate registered in the Participant’s name.

 

Section 4.  Miscellaneous
Provisions.

 

(a)                                  Notices. All notices,
requests and other communications under this Agreement shall be in writing and
shall be delivered in person (by courier or otherwise), mailed by certified or
registered mail, return receipt requested, or sent by facsimile transmission,
as follows:

 

if
to the Company, to:

 

Cobalt
International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Attention:
[General Counsel]

Facsimile:
[number]

 

if
to the Participant, to the address that the Participant most recently provided
to the Company,

 

or
to such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto.  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice,
request or communication shall be deemed received on the next succeeding
business day in the place of receipt.

 

6

 

(b)                                 Entire
Agreement.  This
Agreement, the Plan, and any other agreements referred to herein and therein
and any schedules, exhibits and other documents referred to herein or therein,
constitute the entire agreement and understanding between the parties in
respect of the subject matter hereof and supersede all prior and contemporaneous
arrangements, agreements and understandings, both oral and written, whether in
term sheets, presentations or otherwise, between the parties with respect to
the subject matter hereof.

 

(c)                                  Amendment;
Waiver.  No amendment or modification
of any provision of this Agreement shall be effective unless signed in writing
by or on behalf of the Company and the Participant, except that the Company may
amend or modify the Agreement without the Participant’s consent in accordance
with the provisions of the Plan or as otherwise set forth in this
Agreement.  No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition whether of like or different nature.  Any amendment or modification of or to any provision
of this Agreement, or any waiver of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for which
made or given.

 

(d)                                 Assignment.  Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Participant.

 

(e)                                  Successors
and Assigns; No Third Party Beneficiaries.  This Agreement shall inure to the benefit of
and be binding upon the Company and the Participant and their respective heirs,
successors, legal representatives and permitted assigns.  Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the Company and the
Participant, and their respective heirs, successors, legal representatives and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.

 

(f)                                    Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

(g)                                 Participant
Undertaking.  The
Participant agrees to take whatever additional action and execute whatever
additional documents the Company may deem necessary or advisable to carry out
or give effect to any of the obligations or restrictions imposed on either the
Participant or the Restricted Shares pursuant to the provisions of this
Agreement.

 

(h)                                 Plan.  The Participant acknowledges and understands
that material definitions and provisions concerning the Restricted Shares and
the Participant’s rights and obligations with respect thereto are set forth in
the Plan.  The Participant has read
carefully, and understands, the provisions of the Plan.

 

7

 

(i)                                     Governing
Law.  The Agreement shall be
governed by the laws of the State of Delaware, without application of the
conflicts of law principles thereof.

 

(j)                                     Jurisdiction.  The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby (whether brought by any party or any of its affiliates or
against any party or any of its affiliates) shall be brought in the Delaware
Chancery Court or, if such court shall not have jurisdiction, any federal court
located in the State of Delaware or other Delaware state court, and each of the
parties hereby irrevocably consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.  Process in any such suit, action
or proceeding may be served on each party anywhere in the world, whether within
or without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 4(a) shall be deemed
effective service of process on such party.

 

(k)                                  WAIVER
OF JURY TRIAL.  EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

8

 

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

 

	
   

  	
  COBALT INTERNATIONAL ENERGY,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Participant]

  

 

9

 

Attachment B

 

SECTION 83(b) ELECTION

 

This
statement is being made under Section 83(b) of the Internal Revenue
Code, pursuant to Treas. Reg. Section 1.83-2.

 

	
  (1)

  	
  The
  taxpayer performing the services is:

  
	
   

  	
   

  
	
   

  	
  Name:
  _____________________________________________________

  
	
   

  	
  Address:
  ___________________________________________________

  
	
   

  	
  Social
  Security Number:  ______________________________________

  
	
   

  	
   

  
	
  (2)

  	
  The
  property with respect to which the election is being made is                     
  shares (the “Restricted Shares”) of common
  stock, par value $.01 per share, of Cobalt
  International Energy, Inc. (the “Company”)

  
	
   

  	
   

  
	
  (3)

  	
  The
  Restricted Shares were transferred on
                                          .

  
	
   

  	
   

  
	
  (4)

  	
  The
  taxable year in which the election is being made is the calendar year                     
  .

  
	
   

  	
   

  
	
  (5)

  	
  The
  Restricted Shares are not transferable and are subject to a substantial risk
  of forfeiture within the meaning of Section 83(c)(1) of the
  Internal Revenue Code until and unless specified conditions are satisfied or
  a specified event occurs, in each case as set forth in the Company’s Long Term Incentive Plan and the
  Restricted Stock Award Agreement pursuant to which the Restricted Shares were
  issued.

  
	
   

  	
   

  
	
  (6)

  	
  The
  fair market value of the Restricted Shares at the time of transfer
  (determined without regard to any restriction other than a restriction which
  by its terms will never lapse) is $                    per share.

  
	
   

  	
   

  
	
  (7)

  	
  The
  amount paid by the taxpayer for the Restricted Shares is $                    per share.

  
	
   

  	
   

  
	
  (8)

  	
  A
  copy of this statement has been furnished to the Company, for whom the
  taxpayer will be performing services underlying the transfer of the
  Restricted Shares.

  
	
   

  	
   

  
	
  (9)

  	
  This
  statement is executed on
                                          .

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Spouse
  (if any) 

  	
   

  	
   

  	
  Taxpayer

  
	
   

  	
   

  
	
   

  	
  This
  statement must be filed with the Internal Revenue Service Center with which
  you filed your last U.S. federal income tax return within 30 days after the
  grant date of the Restricted Stock Award Agreement.  This filing should be made by registered or
  certified mail, return receipt requested. 
  You are also required to (i) deliver a copy of this statement to
  the Company and (ii) attach a copy of this statement to your federal
  income tax return for the taxable year that includes the grant date (and may
  also be required to attach a copy of this statement to your state income tax
  return for such year).  You should also
  retain a copy of this statement for your records.

  
							

 

10

 

EXHIBIT A-4

 

COBALT
INTERNATIONAL ENERGY, L.P.

DEFERRED
COMPENSATION PLAN

(Amended
and Restated as of October 22, 2009)

 

SECTION 1.  Purpose.  Cobalt International Energy, L.P. adopted the
Deferred Compensation Plan (the “Plan”),
effective as of December 31, 2008, to allow certain of its executives to
defer receipt of a portion of their compensation and to encourage and promote
the profitable growth of the Company. 
Cobalt International Energy, L.P. desires to amend and restate the Plan
to provide that no additional deferrals will be permitted under the Plan and to
clarify the treatment of amounts deferred under the Plan on and following the
IPO (as defined in Section 2(j)). 
This document supersedes the document implementing the terms of the Plan
as in effect prior to the date of this amendment and restatement (the “Prior Plan Document”); it being understood
that nothing in this document shall be deemed to provide for distributions with
respect to amounts deferred under the Plan at any times or upon any events
other than as provided under the Prior Plan Document.

 

SECTION 2.  Definitions. 
As used herein, the following definitions shall apply:

 

(a)           “Administrator” means (i) the Board or (ii) the
person or persons appointed by the Board to serve as the Administrator pursuant
to Section 11.

 

(b)           “Account” means an account maintained by the Company for a
Participant to document the amounts deferred by such Participant under the
Plan.

 

(c)           “Annual Bonus” means the cash bonus, if any, awarded to a
Participant by the Company in 2009 for performance with respect to 2009.

 

(d)           “Beneficiary” means a person entitled to receive a payment
under the Plan in the event of a Participant’s death.  If no such person is named by such
Participant, or if no Beneficiary designated by such Participant is eligible to
receive a payment under the Plan upon his death, such Participant’s Beneficiary
shall be his estate.

 

(e)           “Board” means the board of directors of the Company.

 

(f)            “Change in Control” at any time (i) prior to the IPO
shall have the meaning assigned to it in the Partnership Agreement; provided that clause (iii) of such definition shall not
apply for purposes of the Plan, and (ii) on or following the IPO, shall
have the meaning assigned to it in the LTIP.

 

(g)           “Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and guidance promulgated thereunder.

 

 

(h)           “Company” means (i) prior to the closing of the IPO,
Cobalt International Energy, L.P., and (ii) on and after the closing of the
IPO, Cobalt International Energy, Inc.

 

(i)            “Disability” means, with respect to a Participant, that such
Participant is:

 

(i)            unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months; or

 

(ii)           by reason of any medically
determinable physical or mental impairment, which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the
Company.

 

(j)            “IPO” means the underwritten public offering of shares of the
common stock of Cobalt International Energy, Inc. pursuant to Registration
Statement No. 333-161734 on Form S-1 filed with the Securities and
Exchange Commission.

 

(k)           “LTIP” means the Cobalt International Energy, Inc. Long
Term Incentive Plan.

 

(l)            “Plan” means this Cobalt International Energy, L.P. Deferred
Compensation Plan, as amended from time to time.

 

(m)          “Partnership Agreement” means the Fourth Amended and Restated
Agreement of Limited Partnership of Cobalt International Energy, L.P. dated as
of February 6, 2009.

 

(n)           “Reorganization Agreement” means the Reorganization Agreement
to be entered into prior to the IPO among Cobalt International Energy, L.P.,
Cobalt International Energy, Inc. and the other parties signatory thereto.

 

(o)           “Salary” means the base salary paid by the Company to a
Participant in 2009 for personal services to the Company.

 

(p)           “Separation from Service” means, with respect to a
Participant, the (i) cessation of all services performed by such
Participant for the Company or (ii) permanent decrease in the level of
services performed by such Participant for the Company (whether as an employee
or as an independent contractor) to no more than 20 percent of the average
level of services performed (whether as an 

 

2

 

employee or an independent contractor) over the
immediately preceding 36-month period (or the full period of services to the
Company, if such Participant has been providing services to the Company for
less than 36 months).

 

(q)           “Share” means one share of common stock of Cobalt
International Energy, Inc.

 

Part I

Participation
and Deferrals

 

SECTION 3.  Participation.  As of the date of this amendment and
restatement of the Plan, the participants in the Plan are the individuals whose
names are set forth on Appendix A (the “Participants”).  No additional individuals shall be permitted
to participate in the Plan.

 

SECTION 4.  Deferrals.  Appendix A indicates the amount of his Salary
and/or Bonus that each Participant irrevocably elected to defer under the
Plan.  An Account has been established
for each Participant, which has been credited with the amount of deferred
Salary through the date of this amendment and restatement of the Plan and which
shall be credited with the amount of deferred Salary and/or Bonus following
such date.

 

Part II

Account
Investments

 

SECTION 5.  Account
Investments Prior to the Closing of the IPO.  Each Account merely provides a record of the
bookkeeping entries relating to the Plan and thus reflects a mere unsecured
promise to pay amounts in the future. 
Prior to the closing of the IPO, Accounts shall be deemed to be invested
in the JPMorgan Prime Money Market Fund or such other investment reference as
determined by the Administrator in good faith (the “Investment
Reference”).  Accounts shall
be deemed to have realized applicable investment earnings and losses based on
the performance of the Investment Reference, which shall be credited or debited
to the Account of each Participant as of the end of each calendar quarter.  The Administer may, but shall not be
obligated to, determine the value of the Accounts more frequently than
quarterly.

 

SECTION 6.  Account
Investments from the Closing of the IPO. 
If the closing of the
IPO occurs prior to the date on which the amounts credited to a Participant’s
Account are distributed pursuant to Section 10, then on and following the
closing of the IPO such amounts shall be deemed to be invested in the number of
Shares that otherwise would have been issuable to such Participant pursuant to
the Reorganization Agreement upon conversion of his Class A Interests in
Cobalt International Energy, L.P. attributable to the amounts set forth on
Schedule II of the Reorganization Agreement under the “Deferred” column 

 

3

 

that are treated as
part of his Capital Contribution pursuant to Section 3.01 of the
Reorganization Agreement.

 

SECTION 7.  Dividends.  On and after the closing of the IPO, whenever
a cash dividend or any other distribution is paid with respect to Shares, each
Account will be credited with an additional number of notional Shares, equal to
the number of Shares, including fractional Shares (computed to the second
decimal place), that could have been purchased had such dividend or other
distribution been paid to the Account on the payment date of such dividend or
distribution based on the number of notional Shares in such Account as of such
date and assuming the amount of such dividend or value of such distribution had
been used to acquire additional Shares. 
Such additional notional Shares shall be deemed to be purchased at the
average of the high and low quoted sale price of a Share, as reported on the
New York Stock Exchange Composite Transaction Tape on the payment date for such
dividend or other distribution.  The
value of any distribution in property will be determined by the Administrator.

 

SECTION 8.  Adjustments.  In the event that, at any time following the
closing of the IPO, the Administrator determines that, as a result of any
dividend or other distribution (whether in the form of cash, Shares or other
securities), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, issuance of Shares pursuant to the anti-dilution provisions of
securities of the Company, or other similar corporate transaction or event
affecting the Shares, an adjustment is appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Administrator shall adjust equitably the
number of notional Shares credited to each Participant’s Account.

 

Part III

Vesting
and Distributions

 

SECTION 9.  Vesting.  Each Participant shall have a 100%
non-forfeitable and vested interest in his Account at all times.

 

SECTION 10.  Distributions.

 

(a)           Scheduled
Distribution Date.  Unless
earlier distribution is required pursuant to this Section 10, the amounts
credited to a Participant’s Account shall be distributed to such Participant in
January 2012.  Under no
circumstances shall a Participant be permitted to defer distribution of any
amounts credited to his Account beyond January 2012.

 

4

 

(b)           Death.  In the event of a Participant’s death, the
amounts credited to such Participant’s Account shall be distributed to his
Beneficiary as soon as practicable following his death but in no event later
than 90 days thereafter.

 

(c)           Disability
or Separation from Service.  In the event of a Participant’s Disability or
Separation from Service other than due to his death, the amounts credited to
his Account shall be distributed to him on the last day of the calendar quarter
following such Disability or Separation from Service; provided
that if the Administrator considers such Participant to be one of the Company’s
“specified employees,” as defined in Section 409A of the Code, as of the
date of such Disability or Separation from Service, such distribution shall be
made on the date that is six months after the date of such Disability or
Separation from Service, except to the extent that earlier distribution would
not result in such Participant incurring additional tax or interest under Section 409A
of the Code.

 

(d)           Change
in Control.  Upon, or
within 60 days following, a Change in Control, the amounts credited to a Participant’s
Account shall be distributed to such Participant; provided
that upon any such Change in Control that would not constitute a change in
control, as defined in the Prior Plan Document, the amounts credited to such
Participant’s Account shall not be distributed to him; provided
further that upon any change in control, as defined in the Prior
Plan Document, that would not constitute a Change in Control, the amounts
credited to such Participant’s Account shall be distributed to him upon, or
within 60 days following, such change in control.

 

(e)           Form of
Distribution; Fractional Shares.  In the event that a Participant (or
Beneficiary) becomes entitled to a distribution pursuant to this Section 10
at any time:

 

(i)            prior to the closing of the
IPO, the amounts credited to such Participant’s Account shall be distributed in
cash in a lump sum; or

 

(ii)           on or following the closing
of the IPO, the amounts credited to such Participant’s Account shall be
distributed in Shares; provided that
any fractional Shares shall be paid in cash in an amount equal to the average
of the high and low quoted sale prices of a Share, as reported on the New York
Stock Exchange Composite Transaction Tape, on the trading day preceding the
distribution.

 

Part IV

General
Provisions

 

SECTION 11.  Administration
of the Plan.  The Board, or
the person or persons appointed by the Board to serve as Administrator, shall
be the Administrator of the Plan.  The
Administrator, in its sole discretion, is authorized

 

5

 

to interpret the Plan, to prescribe, amend and
rescind the rules relating to the Plan, and to make such other
determinations and exercise such other powers and authority as may be necessary
or advisable for the administration of the Plan.  No fee or compensation shall be paid to any
person for non-ministerial services as the Administrator.  The Administrator in its sole discretion may
delegate internally or externally any of its functions, including ministerial
functions, and may pay compensation for services rendered relating to such
ministerial functions.  All determinations
of the Administrator shall be made by at least a majority of the individuals
then appointed to serve as Administrator. 
Any determination made by the Administrator pursuant to the powers set
forth herein shall be final, binding and conclusive upon each Participant and
Beneficiary.  The Administrator shall
decide any question that may arise regarding the rights of Participants and
Beneficiaries, and the amounts of their respective interests.  The Administrator shall maintain full and
complete records of its decisions.  Its
records shall contain all relevant data pertaining to the Participant and his
rights and duties under the Plan.  The
Administrator shall have the duty to maintain Account records for the
Participants.  The Administrator shall
provide a copy of the Plan to each Participant, and other documents relating to
the Plan shall be available at the principal office of the Company for
inspection by each Participant at reasonable times determined by the
Administrator.

 

SECTION 12.  Successors
and Assigns; Assumption upon IPO.  The Plan shall
be binding upon and inure to the benefit of the Company and any successor of
the Company, by merger or otherwise.  The
Plan shall also be binding upon and inure to the benefit of each Participant
and his estate.  The Plan and all rights
hereunder are personal to the Participants and shall not be assignable by any
Participant.  If the closing of the IPO
occurs prior to the date on which all amounts have been distributed from all
the Participants’ Accounts, then upon the closing of the IPO the Plan shall be
assumed by Cobalt International Energy, Inc.

 

SECTION 13.  Unfunded
Status of Plan.  The Plan is
intended to be unfunded for tax purposes. 
The Participants have the status of general unsecured creditors of the
Company.  The Plan constitutes a mere
promise by the Company to make payments in the future.

 

SECTION 14.  Continued
Employment or Service Not Presumed.  Nothing in the Plan or any document related
to the Plan or describing it shall give a Participant the right to continue in
employment or service with the Company or affect the right of the Company to
terminate the employment or service of such Participant with or without cause.

 

SECTION 15.  Amendment
and Termination of the Plan.

 

6

 

(a)           The Board, in
its sole discretion, may amend, suspend or discontinue the Plan or a
Participant’s deferral at any time; provided that
no amendment, suspension or discontinuance shall reduce such Participant’s
accrued benefit, except to the extent necessary to comply with any provision of
federal, state or other applicable law. 
The Board further has the right, without a Participant’s consent, to
amend or modify the terms of the Plan and such Participant’s deferral to the
extent that the Administrator deems it necessary to avoid adverse or unintended
tax consequences to such Participant under Section 409A of the Code.

 

(b)           The Board may
terminate the Plan at any time in its discretion, as long as the Company
terminates all similar deferral compensation arrangements that it sponsors and
does not adopt any similar arrangement at any time within three years after the
date on which the Plan is terminated. 
Distribution of amounts payable under the Plan at the time of its
termination will be paid in a lump sum in the form specified in Section 10(e) on
the earlier of (i) the first anniversary of the date of such termination
or (ii) the date on which such amounts otherwise would have been
distributed pursuant to Section 10.

 

SECTION 16.  Severability of Provisions.  Should any provision of the Plan be
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforceability shall not affect the remaining provisions of the Plan but
shall be fully severable, and the Plan shall be construed and enforced as if
such provision had never been inserted herein.

 

SECTION 17.  Offset Permitted.  Notwithstanding any provision of the Plan to the
contrary, the Company may, if the Administrator in its sole and absolute
discretion shall determine, offset any amounts to be paid to a Participant (or
his Beneficiary) under the Plan against any amounts that such Participant may
owe to the Company; provided that
no such offset shall result in or be part of an acceleration of distribution or
substitution payment arrangement with respect to any non-qualified deferred
compensation that would be impermissible under Section 409A of the Code.

 

SECTION 18.  Withholding.  All amounts deferred under the Plan with
respect to a Participant (or his Beneficiary) shall be subject to withholding
and to such other deductions as shall at the time of such payment be required
under any income tax or other law, whether of the United States or any other
jurisdiction, and, in the case of payments to the executors or administrators
of the estate of a deceased Participant, the delivery to the Company of such
tax waiver, letters testamentary and other documents as the Administrator may
reasonably request.

 

SECTION 19.  Governing Law.  The Plan shall be governed by the laws of the
State of Delaware, without application of the conflicts of law principles
thereof.

 

7

 

Appendix A

 

[Table
of Participants and Amounts Deferred]

 

8

 

EXHIBIT B

 

FIFTH
AMENDED AND RESTATED

 

AGREEMENT
OF LIMITED PARTNERSHIP

 

OF

 

COBALT
INTERNATIONAL ENERGY, L.P.

 

A Delaware limited
partnership

 

Dated as
of December 21, 2009

 

This Fifth Amended and Restated Agreement of Limited
Partnership (this “Agreement”) of
Cobalt International Energy, L.P. (the “Partnership”)
is entered into by and among CIP GP Corp., a Delaware corporation, as the sole
general partner (the “General Partner”),
Cobalt International Energy, Inc., a Delaware corporation (“Newco”), FR Cobalt Holdings LLC, GSCP V Institutional Cobalt
Holdings, LLC, GSCP VI Parallel Cobalt Holdings, LLC, Kern Cobalt Co-Invest
Partners LP, Kern Cobalt Co-Invest Partners II LP, Kern Cobalt Co-Invest
Partners III LP and Kern Cobalt Co-Invest Partners IV LP (each of Newco and
each domestic blocker corporation, a “Limited Partner”
and collectively, the “Limited Partners”).

 

WHEREAS, the Partnership was
formed by the General Partner’s execution and filing of a Certificate of
Limited Partnership of the Partnership (the “Certificate”)
on November 10, 2005 (the “Formation Date”),
and the entering into by the parties thereto of an Agreement of Limited
Partnership of Cobalt International Energy, L.P. dated November 10, 2005
(the “Original Agreement”), as amended by
Amendment No. 1 dated December 23, 2005, Amendment No. 2 dated September 25,
2006, Amendment No. 3 dated October 10, 2006, which was amended and
restated by the Amended and Restated Agreement of Limited Partnership dated August 30,
2007, the Second Amended and Restated Agreement of Limited Partnership dated December 10,
2007, the Third Amended and Restated Agreement of Limited Partnership dated December 12,
2008 and the Fourth Amended and Restated Agreement of Limited Partnership dated
February 6, 2009 (the “Current Agreement”).

 

WHEREAS, the parties hereto
desire to amend and restate the Current Agreement and enter into this Agreement
in connection with the transactions contemplated by the Reorganization
Agreement dated as of the date hereof (the “Reorganization
Agreement”) by and among the Partnership, Newco, Cobalt MergerSub, Inc.
and the other parties signatory thereto.

 

NOW, THEREFORE, the parties agree to the following:

 

1

 

1.             Organization.  The Partnership was formed as a Delaware
limited partnership by the filing of the Certificate in the office of the
Delaware Secretary of State on the Formation Date, and the entering into of the
Original Agreement, dated the Formation Date.

 

2.             Name.  The name of the Partnership is “Cobalt
International Energy, L.P.”, and all of the Partnership’s business will be
conducted in such name or such other names that comply with applicable law as
the General Partner may select from time to time.

 

3.             Purpose.  The purpose of the Partnership is to engage,
directly or indirectly, in the exploration for, and the development and
production of, oil and natural gas anywhere in the world, the acquisition and
disposition of leases and other real property in connection therewith, and to
engage in such other activities as are permitted hereby or are incidental or
ancillary thereto as the General Partner deems necessary or advisable, all upon
the terms and conditions set forth in this Agreement.

 

4.             Management
of the Partnership.  The
business and affairs of the Partnership shall be managed by the General
Partner.

 

5.             Term.  The Partnership commenced on the Formation
Date with the filing of the Certificate with the Delaware Secretary of State,
and will continue in existence until the Partnership is dissolved in accordance
with paragraph 10 below, or at such earlier time as may be specified herein.

 

6.             Registered
Office; Registered Agent; Other Offices.  The registered office of the Partnership in
the State of Delaware will be the registered office designated in the
Certificate or such other office (which need not be a place of business of the
Partnership) as the General Partner may designate from time to time in the
manner provided by law.  The Partnership
may have such other offices as the General Partner may determine
appropriate.  The registered agent of the
Partnership in the State of Delaware will be the initial registered agent
designated in the Certificate or such other person or persons as the General Partner
may designate from time to time in the manner provided by law.

 

7.             Foreign
Qualification Governmental Filings.  The General Partner shall cause the
Partnership to be qualified or registered under foreign qualification, assumed
or fictitious names statutes or other limited partnership statutes or similar
laws in any jurisdiction in which the Partnership owns property or transacts
business if and to the extent that such qualification or registration is
necessary in order to protect the limited liability of the Limited Partners or
to permit the Partnership lawfully to own property or transact business.  The General Partner shall execute, file and
publish all such certificates, notices, statements or

 

2

 

other instruments necessary to permit the Partnership
to do business as a limited partnership in all jurisdictions in which the
Partnership elects to do business or to maintain the limited liability of the
Limited Partners.

 

8.             Partners
and Percentage Interests.  The
names and the business addresses of the General Partner and each of the Limited
Partners are as follows:

 

General Partner:

CIP
GP Corp. 

c/o
Cobalt International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Houston,
TX 77056

 

Limited Partners:

Cobalt
International Energy, Inc.

FR
Cobalt Holdings LLC  

GSCP
V Institutional Cobalt Holdings, LLC 

GSCP
VI Parallel Cobalt Holdings, LLC 

Kern
Cobalt Co-Invest Partners LP 

Kern
Cobalt Co-Invest Partners II LP 

Kern
Cobalt Co-Invest Partners III LP 

Kern
Cobalt Co-Invest Partners IV LP

c/o
Cobalt International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Houston,
TX 77056

 

9.             Powers.  The powers of the General Partner include all
powers, statutory and otherwise, possessed by general partners under the laws
of the State of Delaware.  Notwithstanding any other provision of
this Agreement to the contrary, the General Partner is authorized to execute
and deliver any document on behalf of the Partnership without any vote or
consent of any other partner.

 

10.          Dissolution.  The Partnership shall dissolve, and its
affairs shall be wound up at such time as (a) all of the partners of the
Partnership approve in writing, (b) an event of withdrawal of a general
partner has occurred under the Delaware Revised Uniform Limited Partnership Act
(6 Del.C. § 17-101, et  seq.),
as amended from time to time (the “Act”),
(c) an entry of a decree of judicial dissolution has occurred under §
17-802 of the Act or (d) at any time there are no limited partners unless
the Partnership is continued in accordance with the Act; provided, however,
the Partnership shall not be dissolved or required to be wound up upon an event
of withdrawal of a general partner described in the foregoing

 

3

 

clause (b) if (i) at the time of such
event of withdrawal, there is at least one other general partner of the
Partnership who carries on the business of the Partnership (any remaining
general partner being hereby authorized to carry on the business of the Partnership),
or (ii) within 90 days after the occurrence of such event of withdrawal,
all remaining partners agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date of the event of
withdrawal, of one or more additional general partners of the Partnership.

 

11.          Percentage
Interests.  All
distributions and allocations to the partners of the Partnership shall be in
accordance with their Percentage Interests. The General Partner shall determine
the “Percentage Interests” of the
partners, based on the relative value of such partners’ interest in the
partnership as of the date hereof and attach a schedule hereto reflecting such
determination.

 

12.          Additional
Contributions.  No partner
of the Partnership is required to make any additional capital contribution to
the Partnership.

 

13.          Distributions.  Distributions shall be made to the partners
of the Partnership at the times and in the aggregate amounts determined by the
General Partner.  Notwithstanding any
provision to the contrary contained in this Agreement, the Partnership shall
not make a distribution to a partner on account of its interest in the
Partnership if such distribution would violate the Act or other applicable law.

 

14.          Assignments.  (a) Each Limited Partner may assign all
or any part of its partnership interest in the Partnership and may withdraw
from the Partnership only with the consent of the General Partner.

 

(b)        The General
Partner may assign all or any part of its partnership interest in the Partnership
and may withdraw from the Partnership without the consent of the Limited
Partners.

 

15.          Withdrawal.  Except to the extent set forth in the
foregoing paragraph 14, no partner of the Partnership may withdraw from the
Partnership.

 

16.          Admission
of Additional or Substitute Partners.  (a) One or more additional or substitute
limited partners of the Partnership may be admitted to the Partnership with
only the consent of the General Partner.

 

(b)        One or more
additional or substitute general partners of the Partnership may be admitted to
the Partnership with only the consent of the General Partner.

 

17.          Liability
of Limited Partners.  Each
Limited Partner and any additional or substitute limited partners shall not
have any liability for the 

 

4

 

obligations or liabilities of the Partnership
except to the extent provided in the Act.

 

18.          Governing
Law.  This Agreement shall be
governed by, and construed under, the laws of the State of Delaware, all rights
and remedies being governed by said laws.

 

[Remainder of page has been intentionally left blank; signature pages follow.]

 

5

 

IN WITNESS WHEREOF, the undersigned, intending to be
legally bound hereby, have duly executed this Agreement of Limited Partnership
as of the date first set forth above.

 

 

	
   

  	
  CIP
  GP CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  FR
  COBALT HOLDINGS LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FR
  COBALT HOLDINGS, INC., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  V INSTITUTIONAL COBALT HOLDINGS, LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V INSTITUTIONAL COBALT HOLDINGS, CORP., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  VI PARALLEL COBALT HOLDINGS, LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI PARALLEL COBALT HOLDINGS, CORP., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

2

 

	
   

  	
  KERN
  COBALT CO-INVEST PARTNERS LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  KERN
  COBALT GROUP LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  COBALT
  INTERNATIONAL ENERGY, INC., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KERN
  COBALT CO-INVEST PARTNERS II LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  KERN
  COBALT GROUP II LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  COBALT
  INTERNATIONAL ENERGY, INC., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

3

 

	
   

  	
  KERN
  COBALT CO-INVEST PARTNERS III LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  KERN
  COBALT GROUP III LLC, its general partner 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  COBALT
  INTERNATIONAL ENERGY, INC., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KERN
  COBALT CO-INVEST PARTNERS IV LP 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  KERN
  COBALT GROUP IV LLC, its general partner 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  COBALT
  INTERNATIONAL ENERGY, INC., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

EXHIBIT C-1

 

AMENDED
AND RESTATED

CERTIFICATE OF INCORPORATION

OF

COBALT INTERNATIONAL ENERGY, INC.

 

The
original name of the corporation is Cobalt International Energy, Inc. The
original certificate of incorporation of the corporation was filed with the
Secretary of State of the State of Delaware on August 27, 2009.  This Amended and Restated Certificate of
Incorporation, which both restates and integrates and further amends the
provisions of the corporation’s certificate of incorporation, was duly adopted
in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.

 

The
certificate of incorporation of the corporation is hereby amended and restated
to read in its entirety as follows:

 

ARTICLE 1

NAME

 

The name of the corporation is Cobalt International
Energy, Inc. (the “Corporation”).

 

ARTICLE 2

REGISTERED OFFICE AND AGENT

 

The address of its registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, Delaware 19801. 
The name of its registered agent at such address is The Corporation
Trust Company.

 

ARTICLE 3

PURPOSE

 

The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as the same exists or may
hereafter be amended (“Delaware Law”).

 

 

ARTICLE 4

CAPITAL STOCK

 

Section 1.  Authorized Capital Stock.  The total number of shares of stock which the
Corporation shall have authority to issue is 2,200,000,000, consisting of
2,000,000,000 shares of common stock, par value $0.01 per share (the “Common Stock”), and 200,000,000 shares of preferred stock,
par value $0.01 per share (the “Preferred Stock”).

 

Section 2.  Preferred Stock.  The Board of Directors is hereby empowered to
authorize by resolution or resolutions from time to time the issuance of one or
more series of Preferred Stock and to fix the designations, powers, preferences
and relative, participating, optional or other rights, if any, and the
qualifications, limitations or restrictions thereof, if any, with respect to
each such series of Preferred Stock and the number of shares constituting each
such series, and to increase or decrease the number of shares of any such
series to the extent permitted by Delaware Law.

 

ARTICLE 5

BOARD
OF DIRECTORS

 

Section 1.  Power of the Board of
Directors.  The business and
affairs of the Corporation shall be managed by or under the direction of the
Board of Directors.

 

Section 2.  Number of Directors.  Subject to the terms of any series of
Preferred Stock entitled to separately elect directors, the Board of Directors
shall consist of not less than 5 nor more than 15 directors, with the exact
number of directors to be determined from time to time solely by resolution
adopted by the affirmative vote of a majority of the entire Board of Directors.

 

Section 3.  Election of Directors.  (a) Until the Effective Date, all of the
directors will be elected annually at the annual meeting of stockholders.

 

(b)           From and after
the Effective Date, except as otherwise provided in the terms of any series of
Preferred Stock entitled to separately elect directors, the directors shall be
divided into three classes, designated Class I, Class II and Class III.  Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the entire
Board of Directors.  Each director shall
serve for a term ending on the date of the third annual meeting of stockholders
next following the annual meeting at which such director was elected; provided that directors initially
designated as Class I directors shall serve for a term ending on the date
of the first annual meeting following such Effective Date, directors initially
designated as Class II directors shall serve for a term ending on the
second annual meeting following such Effective Date, and directors initially
designated as Class III directors shall serve for a term ending on the
date of the

 

2

 

third annual meeting
following such Effective Date. 
Immediately following the Effective Date, the Board of Directors is
authorized to designate the members of the Board then in office as Class I
directors, Class II directors or Class III directors.  In making such designation, the Board of
Directors shall equalize, as nearly as possible, the number of directors in
each class.  In the event of any change
in the number of directors, the Board of Directors shall apportion any newly
created directorships among, or reduce the number of directorships in, such
class or classes as shall equalize, as nearly as possible, the number of
directors in each class.  In no event
will a decrease in the number of directors shorten the term of any incumbent
director.

 

(c)           Each director
shall hold office until such director’s successor shall have been duly elected
and qualified or until such director’s earlier death, resignation or removal
and, in the case of a classified board, for a term that shall coincide with the
term of the class to which such director shall have been elected.

 

(d)           There shall be
no cumulative voting in the election of directors.

 

Section 4.  Vacancies.  Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
solely by a majority of the directors then in office (although less than a
quorum) or by the sole remaining director. 
Subject to the terms of any series of Preferred Stock entitled to
separately elect directors, whenever the holders of any class or classes of
stock or series thereof are entitled to elect one or more directors by this
certificate of incorporation, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of directors elected by
such class or classes or series thereof then in office, or by a sole remaining
director so elected.  If there are no
directors in office, then an election of directors may be held in accordance
with Delaware Law.  When one or more
directors shall resign from the Board of Directors, effective at a future date,
a majority of the directors then in office, including those who have so
resigned, shall have the power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in the
filling of other vacancies.

 

Section 5.  Removal.  (a) Until the Effective Date, any
director may be removed from office, with or without cause, by the affirmative
vote of the holders of not less than a majority of the shares then entitled to
vote generally in the election of directors, voting together as a single class.

 

(b)           From and after
the Effective Date, no director may be removed from office by the stockholders
except for cause with the affirmative vote of the holders of not less than a
majority of the shares then entitled to vote generally in the election of
directors, voting together as a single class.

 

(c)           Notwithstanding
the foregoing, whenever the holder of one or more classes or series of
Preferred Stock shall have the right, voting separately as

 

3

 

a class or series, to elect
directors, the election, term of office, filling of vacancies, removal and
other features of such directorships shall be governed by the terms of the
resolution or resolutions adopted by the Board of Directors pursuant to Article 4
applicable thereto, and such directors so elected shall not be subject to the
provisions of this Article 5 unless otherwise provided therein.

 

ARTICLE 6

STOCKHOLDERS

 

Section 1.  Action by Written Consent
of Stockholders.  (a) Until
the Effective Date, any action required or permitted to be taken at any annual
or special meeting of stockholders may be taken (i) by a vote of
stockholders at a meeting of stockholders duly noticed and called in accordance
with Delaware Law or (ii) without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action
so taken, shall be signed by the holders of outstanding capital stock of the
Corporation having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares entitled
to vote thereon were present and voted.

 

(b)           From and after
the Effective Date, any action required or permitted to be taken at any annual
or special meeting of stockholders may only be taken upon a vote of
stockholders at an annual or special meeting of stockholders duly noticed and
called in accordance with the Corporation’s bylaws and Delaware Law and may not
be taken by written consent of stockholders without a meeting.

 

Section 2.  Special Meetings of
Stockholders.  Special
meetings of stockholders may be called only by the Board or Directors or the
Chairman of the Board; provided that,
until the Effective Date, special meetings of stockholders will also be called
by the Secretary of the Corporation at the request of the holders of a majority
of the outstanding shares of Common Stock.

 

ARTICLE 7

LIMITATIONS ON LIABILITY AND INDEMNIFICATION

 

Section 1.  Limited Liability.  A director of the Corporation shall not be
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director to the fullest extent permitted by Delaware
Law.

 

Section 2.  Right to Indemnification.  (a) Each person (and the heirs,
executors or administrators of such person) who was or is a party or is
threatened to be made a party to, or is otherwise involved in, any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director or

 

4

 

principal officer (as
defined in the Corporation’s bylaws) of the Corporation shall be indemnified
and held harmless by the Corporation to the fullest extent permitted by
Delaware Law; provided, that the Corporation
shall not be obligated to indemnify (or advance) expenses to such a director or
principal officer with respect to a proceeding (or part thereof) initiated by
such director or principal officer (other than a proceeding to enforce the
rights granted under this Article 7) unless the Board of Directors
approved the initiation of such proceeding (or part thereof).  The right to indemnification conferred in
this Article 7 shall also include the right to be paid by the Corporation
the expenses (including attorneys’ fees) incurred in connection with any such
proceeding in advance of its final disposition to the fullest extent authorized
by Delaware Law.  The right to
indemnification conferred in this Article 7 shall be a contract right.

 

(b)           The Corporation
may, by action of its Board of Directors, provide rights to indemnification and
to advancement of expenses to such other officers, employees and agents of the
Corporation to such extent and to such effect as the Board of Directors shall
determine to be appropriate and authorized by Delaware Law.

 

Section 3.  Insurance.  The Corporation shall have power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity or arising out of such person’s status as such, whether or not the
Corporation would have the power to indemnify such person against such
liability under Delaware Law.

 

Section 4.  Nonexclusivity of Rights.  The rights and authority conferred in this Article 7
shall not be exclusive of any other right which any person may otherwise have
or hereafter acquire.

 

Section 5.  Preservation of Rights.  Neither the amendment nor repeal of this Article 7,
nor the adoption of any provision of this certificate of incorporation or the
bylaws of the Corporation, nor, to the fullest extent permitted by Delaware
Law, any modification of law, shall adversely affect any right or protection of
any person granted pursuant hereto existing at, or arising out of or related to
any event, act or omission that occurred prior to, the time of such amendment,
repeal, adoption or modification (regardless of when any proceeding (or part
thereof) relating to such event, act or omission arises or is first threatened,
commenced or completed).

 

ARTICLE 8

CORPORATE OPPORTUNITIES

 

To the fullest extent
permitted by applicable law, the Corporation, on behalf of itself and its
subsidiaries, renounces any interest or expectancy of the

 

5

 

Corporation and its
subsidiaries in, or in being offered an opportunity to participate in, business
opportunities that are from time to time presented to any of the Sponsors or
any of their respective officers, directors, agents, shareholders, members,
partners, affiliates and subsidiaries (other than the Corporation and its
subsidiaries) (each, a “Specified Party”),
even if the opportunity is one that the Corporation or its subsidiaries might
reasonably be deemed to have pursued or had the ability or desire to pursue if
granted the opportunity to do so and each such Specified Party shall have no
duty to communicate or offer such business opportunity to the Corporation and,
to the fullest extent permitted by applicable law, shall not be liable to the
Corporation or any of its subsidiaries for breach of any fiduciary or other
duty, as a director or officer or otherwise, by reason of the fact that such
Specified Party pursues or acquires such business opportunity, directs such
business opportunity to another person or fails to present such business
opportunity, or information regarding such business opportunity, to the
Corporation or its subsidiaries. 
Notwithstanding the foregoing, a Specified Party who is a director or
officer of the Corporation and who is offered a business opportunity in his or
her capacity as a director or officer of the Corporation (a “Directed Opportunity”) shall be obligated to communicate
such Directed Opportunity to the Corporation, provided,
however, that all of the protections of
this Article 8 shall otherwise apply to the Specified Parties with respect
to such Directed Opportunity, including, without limitation, the ability of the
Specified Parties to pursue or acquire such Directed Opportunity or to direct
such Directed Opportunity to another person.

 

Neither the amendment nor
repeal of this Article 8, nor the adoption of any provision of this
certificate of incorporation or the bylaws of the Corporation, nor, to the
fullest extent permitted by Delaware Law, any modification of law, shall
adversely affect any right or protection of any person granted pursuant hereto
existing at, or arising out of or related to any event, act or omission that
occurred prior to, the time of such amendment, repeal, adoption or modification
(regardless of when any proceeding (or part thereof) relating to such event,
act or omission arises or is first threatened, commenced or completed).

 

If any provision or
provisions of this Article 8 shall be held to be invalid, illegal or
unenforceable as applied to any circumstance for any reason whatsoever: (a) the
validity, legality and enforceability of such provisions in any other
circumstance and of the remaining provisions of this Article 8 (including,
without limitation, each portion of any paragraph of this Article 8
containing any such provision held to be invalid, illegal or unenforceable that
is not itself held to be invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and (b) to the fullest extent
possible, the provisions of this Article 8 (including, without limitation,
each such portion of any paragraph of this Article 8 containing any such
provision held to be invalid, illegal or unenforceable) shall be construed so
as to permit the Corporation to protect its directors, officers, employees and
agents from personal liability in respect of their good faith service to or for
the benefit of the Corporation to the fullest extent permitted by law.

 

6

 

This Article 8 shall
not limit any protections or defenses available to, or indemnification rights
of, any director or officer of the Corporation under this certificate of
incorporation or applicable law.

 

Any person or entity
purchasing or otherwise acquiring any interest in any securities of the
Corporation shall be deemed to have notice of and to have consented to the
provisions of this Article 8.

 

ARTICLE 9

MISCELLANEOUS

 

The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation
and for the further definition of the powers of the Corporation and of its
directors and stockholders:

 

(a)           The directors
shall have the concurrent power with the stockholders to adopt, amend or repeal
the bylaws of the Corporation.

 

(b)           Elections of
directors need not be by written ballot unless the bylaws of the Corporation so
provide.

 

(c)           The Corporation
elects not to be governed by Section 203 of the Delaware Law, and the
restrictions contained in Section 203 shall not apply to the Corporation,
until the first date on which the Sponsors and their affiliates no longer
beneficially own at least 25% of the outstanding shares of Common Stock of the
Corporation.  From and after such date,
the Corporation shall be governed by Section 203 so long as Section 203
by its terms would apply to the Corporation.

 

For so long as that certain Stockholders Agreement,
dated as of December 15, 2009, by and among the Corporation and the
Sponsors, as amended from time to time (the “Stockholders
Agreement”), is in effect, the provisions of the Stockholders
Agreement shall be incorporated by reference into the relevant provisions
hereof, and such provisions shall be interpreted and applied in a manner
consistent with the terms of the Stockholders Agreement.

 

As used herein, the following terms shall have the
following meanings:

 

“Carlyle/Riverstone”
shall mean Riverstone Energy Coinvestment III, L.P., C/R Cobalt Investment
Partnership, L.P., C/R Energy Coinvestment II, L.P., C/R Energy III Cobalt
Partnership, L.P., Carlyle/Riverstone Global Energy and Power Fund III, L.P.
and Carlyle Energy Coinvestment III, L.P. collectively.

 

“GSCP”
shall mean GSCP V Cobalt Holdings, LLC, GSCP V Offshore Cobalt Holdings, LLC,
GS Capital Partners V Institutional, L.P., GSCP V GmbH Cobalt Holdings, LLC,
GSCP VI Cobalt Holdings, LLC, GSCP VI Offshore

 

7

 

Cobalt Holdings, LLC, GS Capital Partners VI
Parallel, L.P. and GSCP VI GmbH Cobalt Holdings, LLC, collectively.

 

“First Reserve”
shall mean First Reserve Fund XI, L.P. and FR XI Onshore AIV, L.P , collectively.

 

“KERN”
shall mean KERN Cobalt Co-Invest Partners AP LP.

 

“Effective
Date” shall mean the first date on which the Sponsors and their
affiliates no longer beneficially own more than 50% of the outstanding shares
of Common Stock of the Corporation or the Corporation no longer qualifies as a “controlled
company” under Section 303A of the New York Stock Exchange Listed Company
Manual as in effect on December 15, 2009.

 

“Sponsors” means
Carlyle/Riverstone, GSCP, First Reserve and KERN.

 

ARTICLE 10
 AMENDMENT OF CERTIFICATE OF
INCORPORATION

 

The Corporation reserves the
right from time to time to amend this certificate of incorporation in any
manner permitted by Delaware Law, and all rights and powers conferred upon
stockholders, directors and officers herein are granted subject to this
reservation.

 

8

 

IN WITNESS WHEREOF, the undersigned has executed
this Amended and Restated Certificate of Incorporation this 18th day of
December, 2009.

 

 

	
   

  	
  COBALT INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Samuel H. Gillespie III

  
	
   

  	
   

  	
  Name:
  Samuel H. Gillespie III

  
	
   

  	
   

  	
  Title:   Executive Vice President

  

 

 

EXHIBIT C-2

 

BYLAWS

OF

COBALT INTERNATIONAL ENERGY, INC.

 

ARTICLE
1

OFFICES

 

Section 1.01.  Registered Office.  The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.

 

Section 1.02.  Other Offices.  The Corporation may also have
offices at such other places both within and without the State of Delaware as
the board of directors may from time to time determine or the business of the
Corporation may require.

 

Section 1.03.  Books.  The books of the Corporation may
be kept within or without the State of Delaware as the board of directors may
from time to time determine or the business of the Corporation may require.

 

ARTICLE
2

MEETINGS OF STOCKHOLDERS

 

Section 2.01.  Time and Place of
Meetings.  All meetings of
stockholders shall be held at such place, either within or without the State of
Delaware, on such date and at such time as may be determined from time to time
by the board of directors (or the chairman in the absence of a designation by the
board of directors).

 

Section 2.02.  Annual Meetings.  Unless directors are elected by
written consent in lieu of an annual meeting as permitted by the General
Corporation Law of the State of Delaware, as the same exists or may hereafter
be amended (“Delaware Law”), and
the certificate of incorporation, an annual meeting of stockholders, commencing
with the year 2010, shall be held for the election of directors and to transact
such other business as may properly be brought before the meeting.

 

Section 2.03.  Special Meetings.  (a) Except as otherwise
provided in the certificate of incorporation, special meetings of stockholders
may be called by the board of directors or the chairman of the board and, until
the Effective Date (as such term is defined in the certificate of
incorporation), will be called by the secretary of the Corporation at the
request of the holders of a majority of the 

 

 

outstanding shares of the
Corporation’s common stock (the “Common Stock”).  Such request shall state the purpose or purposes
of the proposed meeting.

 

(b)           A special
meeting shall be held at such date, time and place as may be fixed by the board
of directors in accordance with these bylaws.

 

(c)           Business
conducted at a special meeting shall be limited to the matters described in the
applicable request for such special meeting and any other matters as the board
of directors shall determine.

 

Section 2.04.  Notice of Meetings and
Adjourned Meetings; Waivers of Notice.  (a) Whenever
stockholders are required or permitted to take any action at a meeting, a
written notice of the meeting shall be given which shall state the place, if
any, date and hour of the meeting, the means of remote communications, if any,
by which stockholders and proxy holders may be deemed to be present in person
and vote at such meeting, the record date for determining stockholders entitled
to vote at such meeting, if such record date is different from the record date
for determining stockholders entitled to notice of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called.  Unless otherwise provided by
Delaware Law, such notice shall be given not less than 10 nor more than 60 days
before the date of the meeting to each stockholder of record entitled to notice
of such meeting.  Unless these bylaws
otherwise require, when a meeting is adjourned to another time or place
(whether or not a quorum is present), notice need not be given of the adjourned
meeting if the time, place, if any, and the means of remote communications, if
any, by which stockholders and proxy holders may be deemed to be present in
person and vote at such meeting, are announced at the meeting at which the
adjournment is taken.  At the adjourned
meeting, the Corporation may transact any business which might have been
transacted at the original meeting.  If
the adjournment is for more than 30 days, or after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to each stockholder of record entitled to notice of such
adjourned meeting.

 

(b)           Whenever notice
is required to be given under any provision of Delaware Law or the certificate
of incorporation or these bylaws, a written waiver signed by the person
entitled thereto, or a waiver by electronic transmission by the person entitled
to notice, whether before or after the time stated therein, shall be deemed
equivalent to notice.  Neither the
business to be transacted at, nor the purpose of, any regular or special
meetings of stockholders need be specified in any written waiver of notice or
any waiver by electronic transmission unless so required by the certificate of
incorporation or these bylaws. 
Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.  Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.

 

2

 

Section 2.05.  Notice of Nominations and
Stockholder Business.

 

(a)           Annual
Meetings of Stockholders.

 

(i)          Nominations of
persons for election to the board of directors of the Corporation or the
proposal of other business to be transacted by the stockholders may be made at
an annual meeting of stockholders only (A) pursuant to the Corporation’s
notice of meeting (or any supplement thereto), (B) by or at the direction
of the board of directors or (C) by any stockholder of the Corporation who
is a stockholder of record at the time of giving of notice provided for in this
Section 2.05(a), who shall be entitled to vote at the meeting and who complies
with the notice procedures set forth in this Section 2.05(a).

 

(ii)         For nominations
or other business to be properly brought before an annual meeting of
stockholders by a stockholder pursuant to clause (C) of paragraph (a)(i) of
this Section 2.05, the stockholder must have given timely notice thereof
in writing to the secretary of the Corporation and any such proposed business
(other than the nominations of persons for election to the board of directors)
must constitute a proper matter for stockholder action.  To be timely, a stockholder’s notice shall be
delivered to or mailed and received by the secretary of the Corporation at the
principal executive offices of the Corporation not less than 90 days nor more
than 120 days prior to the first anniversary of the preceding year’s annual
meeting of stockholders; provided, however,
that in the event that the date of the annual meeting is advanced more than 30
days prior to such anniversary date or delayed more than 30 days after such
anniversary date then to be timely such notice must be received by the
Corporation no earlier than 120 days prior to such annual meeting and no later
than the later of 70 days prior to the date of the meeting or the 10th day following the day on which public
announcement of the date of the meeting was first made by the Corporation.  In no event shall the public announcement of
an adjournment or postponement of an annual meeting commence a new time period
(or extend any time period) for the giving of a stockholder’s notice as described
above.  For purposes of
Sections 2.05(a)(ii) and 2.05(b) of these bylaws, “public
announcement” shall mean disclosure in a press release reported by the Dow
Jones News Service, the Associated Press or any comparable national news
service or in a document publicly filed by the Corporation with the Securities
and Exchange Commission pursuant to Section 13, 14 or 15(d) of the
Securities Exchange Act of 1934.

 

(iii)        A stockholder’s
notice to the secretary shall set forth (A) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors,

 

3

 

or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934 (including such person’s written consent to
being named in the proxy statement as a nominee and to serving as a director if
elected), (B) as to any other business that the stockholder proposes to
bring before the meeting, a brief description of the business desired to be
brought before the meeting, the text of the proposal or business (including the
text of any resolutions proposed for consideration and in the event that such
business includes a proposal to amend these bylaws, the text of the proposed
amendment), the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made and (C) as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf
the proposal is made:

 

(1) the
name and address of such stockholder (as they appear on the Corporation’s
books) and any such beneficial owner;

 

(2) the
class or series and number of shares of capital stock of the Corporation which
are held of record or are beneficially owned by such stockholder and by any
such beneficial owner;

 

(3) a
description of any agreement, arrangement or understanding between or among
such stockholder and any such beneficial owner, any of their respective
affiliates or associates, and any other person or persons (including their
names) in connection with the proposal of such nomination or other business;

 

(4) a
description of any agreement, arrangement or understanding (including,
regardless of the form of settlement, any derivative, long or short positions,
profit interests, forwards, futures, swaps, options, warrants, convertible
securities, stock appreciation or similar rights, hedging transactions and
borrowed or loaned shares) that has been entered into by or on behalf of, or
any other agreement, arrangement or understanding that has been made, the
effect or intent of which is to create or mitigate loss to, manage risk or
benefit of share price changes for, or increase or decrease the voting power
of, such stockholder or any such beneficial owner or any such nominee with
respect to the Corporation’s securities (a “Derivative
Instrument”);

 

4

 

(5) to
the extent not disclosed pursuant to clause (4) above, the principal
amount of any indebtedness of the Corporation or any of its subsidiaries
beneficially owned by such stockholder or by any such beneficial owner,
together with the title of the instrument under which such indebtedness was
issued and a description of any Derivative Instrument entered into by or on
behalf of such stockholder or such beneficial owner relating to the value or
payment of any indebtedness of the Corporation or any such subsidiary;

 

(6) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to bring such nomination or other business before the
meeting; and

 

(7) a
representation as to whether such stockholder or any such beneficial owner
intends or is part of a group that intends to (i) deliver a proxy
statement and/or form of proxy to holders of at least the percentage of the
voting power of the Corporation’s outstanding capital stock required to approve
or adopt the proposal or to elect each such nominee and/or (ii) otherwise
to solicit proxies from stockholders in support of such proposal or nomination.

 

If requested by the
Corporation, the information required under clauses (C)(2), (3), (4) and (5) of
the preceding sentence of this Section 2.05 shall be supplemented by such
stockholder and any such beneficial owner not later than 10 days after the
record date for notice of the meeting to disclose such information as of such
record date.

 

Notwithstanding anything to
the contrary, the notice requirements set forth herein with respect to the
proposal of any business pursuant to this Section 2.05 other than a
nomination shall be deemed satisfied by a stockholder if such stockholder has
submitted a proposal to the Corporation in compliance with Rule 14a-8
promulgated under the Securities and Exchange Act of 1934 and such stockholder’s
proposal has been included in a proxy statement that has been prepared by the
Corporation to solicit proxies for the meeting of stockholders.

 

(b)           Special
Meetings of Stockholders.  Only
such business shall be conducted at a special meeting of stockholders as shall
have been brought before the meeting pursuant to the Corporation’s notice of
meeting pursuant to Section 2.04. 
Nominations of persons for election to the board of directors of the
Corporation at a special meeting of stockholders may be made by stockholders
only if the election of directors is included as business to be brought before
a

 

5

 

special meeting in the Corporation’s notice of
meeting and then only by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this Section 2.05(b),
who shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 2.05(b).  For nominations to be properly brought before
a special meeting of stockholders by a stockholder pursuant to this Section 2.05(b),
the stockholder must have given timely notice thereof in writing to the
secretary of the Corporation.  To be
timely, a stockholder’s notice shall be delivered to or mailed and received by
the secretary of the Corporation at the principal executive offices of the
Corporation (A) not earlier than 120 days prior to the date of the special
meeting nor (B) later than the later of 90 days prior to the date of the
special meeting or the 10th day following the day on which
public announcement of the date of the special meeting was first made.  A stockholder’s notice to the secretary shall
comply with the notice requirements of Section 2.05(a)(iii).

 

(c)           General.

 

(i)          At the request
of the board of directors, any person nominated by the board of directors for
election as a director shall furnish to the secretary of the Corporation the
information that is required to be set forth in a stockholder’s notice of
nomination that pertains to the nominee.  Subject to the provisions of that the
Stockholders Agreement, no person shall be eligible to be nominated by a
stockholder to serve as a director of the Corporation unless nominated in
accordance with the procedures set forth in this Section 2.05.  No business shall be conducted at a
stockholder meeting except in accordance with the procedures set forth in Section 2.03
and this Section 2.05.  The chairman
of the meeting shall, if the facts warrant, determine and declare to the
meeting that a nomination was not made in accordance with the procedures
prescribed by these bylaws or that business was not properly brought before the
meeting, and if he should so determine and declare, the defective nomination
shall be disregarded or such business shall not be transacted, as the case may
be.  Notwithstanding the foregoing
provisions of this Section 2.05, unless otherwise required by law, if the
stockholder (or a qualified representative of the stockholder) does not appear
at the annual or special meeting of stockholders of the Corporation to present
a nomination or other proposed business, such nomination shall be disregarded
or such proposed business shall not be transacted, as the case may be,
notwithstanding that proxies in respect of such vote may have been received by
the Corporation.  For purposes of this Section 2.05,
to be considered a qualified representative of the stockholder, a person must
be a duly authorized officer, manager or partner of such stockholder or must be
authorized by a writing executed by such stockholder or an electronic
transmission delivered by such stockholder to act for such stockholder as proxy
at the meeting of stockholders and such person must produce such writing or
electronic 

 

6

 

transmission, or a reliable reproduction of the writing or electronic
transmission, at the meeting of stockholders.

 

(ii)         Without
limiting the foregoing provisions of this Section 2.05, a stockholder
shall also comply with all applicable requirements of the Securities Exchange
Act of 1934 and the rules and regulations thereunder with respect to the
matters set forth in this Section 2.05; provided,
however, that any references in these
bylaws to the Securities Exchange Act of 1934 or the rules and regulations
promulgated thereunder are not intended to and shall not limit any requirements
applicable to nominations or proposals as to any other business to be
considered pursuant to this Section 2.05, and compliance with Section 2.05(a) or
(b) shall be the exclusive means for a stockholder to make nominations or
submit other business (other than as provided in the last paragraph of Section 2.05(a)).

 

Section 2.06.  Quorum.  Unless otherwise provided in the
certificate of incorporation or these bylaws and subject to Delaware Law, the
presence, in person or by proxy, of the holders of a majority of the
outstanding capital stock of the Corporation entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business.  If, however, such quorum shall not be present
at any meeting of the stockholders, either the chairman of the meeting or a
majority of the stockholders present in person or represented by proxy shall
adjourn the meeting, without notice other than announcement at the meeting, until
a quorum shall be present.  At such
adjourned meeting at which a quorum shall be present any business may be
transacted which might have been transacted at the meeting as originally
notified.

 

Section 2.07.  Voting.  (a) Unless otherwise provided
in the certificate of incorporation and subject to Delaware Law, each
stockholder shall be entitled to one vote for each outstanding share of capital
stock of the Corporation held by such stockholder.  Any share of capital stock of the Corporation
held by the Corporation shall have no voting rights.  Unless otherwise provided in the certificate
of incorporation or these bylaws and subject to Delaware Law, in all matters
other than the election of directors, the affirmative vote of the majority of
the votes cast affirmatively or negatively at the meeting at which a quorum is
present and entitled to vote on the subject matter shall be the act of the
stockholders.  Subject to the rights of
the holders of any series of preferred stock to elect additional directors under
specific circumstances, directors shall be elected by a plurality of the votes
of the shares of capital stock of the Corporation present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors.

 

(b)           Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to a corporate action in writing without a meeting may authorize another person
or persons to act for such stockholder by proxy,

 

7

 

appointed by an instrument in writing, subscribed by
such stockholder or by his attorney thereunto authorized, or by proxy sent by
cable, telegram or by any means of electronic communication permitted by law,
which results in a writing from such stockholder or by his attorney, and
delivered to the secretary of the meeting. 
No proxy shall be voted after three (3) years from its date, unless
said proxy provides for a longer period.

 

(c)           Votes may be
cast by any stockholder entitled to vote in person or by his proxy.  In determining the number of votes cast for
or against a proposal or nominee, shares abstaining from voting on a matter
(including elections) will not be treated as a vote cast.

 

Section 2.08.  Action by Consent.  (a) Until the Effective Date and unless
otherwise provided in the certificate of incorporation, any action required to
be taken at any annual or special meeting of stockholders, or any action which
may be taken at any annual or special meeting of stockholders, may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding capital stock having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares entitled to vote thereon were present and voted and shall be delivered
to the Corporation by delivery to its registered office in Delaware, its
principal place of business or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded.  Delivery made to the
Corporation’s registered office shall be by hand or by certified or registered
mail, return receipt requested.  Prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing and who, if the action had been taken at a meeting, would
have been entitled to notice of the meeting if the record date for such meeting
had been the date that written consents signed by a sufficient number of stockholders
to take the action were delivered to the Corporation as provided in Section 2.08(b).

 

(b)           Every written
consent shall bear the date of signature of each stockholder who signs the
consent, and no written consent shall be effective to take the corporate action
referred to therein unless, within 60 days of the earliest dated consent
delivered in the manner required by this section and Delaware Law to the
Corporation, written consents signed by a sufficient number of holders to take
action are delivered to the Corporation in the manner required by this Section 2.08
and Delaware Law.

 

Section 2.09.  Organization.  At each meeting of stockholders,
the chairman of the board, if one shall have been elected, or in the chairman’s
absence or if one shall not have been elected, the director or officer
designated by the vote of the majority of the directors present at such meeting,
shall act as chairman of the meeting. 
The secretary (or in the secretary’s absence or inability

 

8

 

to act, the person whom the
chairman of the meeting shall appoint secretary of the meeting) shall act as
secretary of the meeting and keep the minutes thereof.

 

Section 2.10.  Order of Business.  The order of business at all
meetings of stockholders shall be as determined by the chairman of the meeting.

 

ARTICLE
3

BOARD OF DIRECTORS

 

Section 3.01.  General Powers.  Except as otherwise provided in
Delaware Law or the certificate of incorporation, the business and affairs of
the Corporation shall be managed by or under the direction of the board of
directors.

 

Section 3.02.  Number, Election, Classes, Term of Office.  (a) Subject to the terms of any series
of Preferred Stock entitled to separately elect directors, the board of
directors shall consist of not less than five nor more than 15 directors, with
the exact number of directors to be determined from time to time solely by
resolution adopted by the affirmative vote of a majority of the entire board of
directors.

 

(b)        Until the
Effective Date, all of the directors will be elected annually at the annual
meeting of stockholders.

 

(c)        From and after
the Effective Date, except as otherwise provided in the terms of any series of
Preferred Stock entitled to separately elect directors, the directors shall be
divided into three classes, designated Class I, Class II and Class III.  Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting the entire
board of directors.  The Board of
Directors is hereby authorized to assign members of the Board of Directors in
office at the Effective Date to such classes. 
Except as otherwise provided in the certificate of incorporation, each
director shall serve for a term ending on the date of the third annual meeting
of stockholders next following the annual meeting at which such director was
elected.

 

(d)        Each director
shall hold office until such director’s successor shall have been duly elected
and qualified or until such director’s earlier death, resignation or removal
and, in the case of a classified board, for a term that shall coincide with the
term of the class to which such director shall have been elected.  Directors need not be stockholders.

 

Section 3.03.  Quorum and Manner of
Acting.  Unless the
certificate of incorporation or these bylaws require a greater number, a
majority of the total number of directors shall constitute a quorum for the
transaction of business, and the affirmative vote of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors.  When a meeting
is

 

9

 

adjourned to another time or
place (whether or not a quorum is present), notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken.  At the
adjourned meeting, the board of directors may transact any business which might
have been transacted at the original meeting. 
If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat shall adjourn the meeting, from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present.

 

Section 3.04.  Time and Place of
Meetings.  The board of
directors shall hold its meetings at such place, either within or without the
State of Delaware, and at such time as may be determined from time to time by
the board of directors (or the chairman in the absence of a determination by
the board of directors).

 

Section 3.05.  Annual Meeting.  The board of directors shall meet
for the purpose of organization, the election of officers and the transaction
of other business, as soon as practicable after each annual meeting of
stockholders.  Notice of such meeting
need not be given.  In the event such
annual meeting is not held on the same day and at the same place as the annual
meeting of stockholders, the annual meeting of the board of directors may be
held at such place either within or without the State of Delaware, on such date
and at such time as shall be specified in a notice thereof given as hereinafter
provided in Section 3.07 or in a waiver of notice thereof signed by any
director who chooses to waive the requirement of notice.

 

Section 3.06.  Regular Meetings.  After the place and time of
regular meetings of the board of directors shall have been determined and
notice thereof shall have been once given to each member of the board of
directors, regular meetings may be held without further notice being given.

 

Section 3.07.  Special Meetings.  Special meetings of the board of
directors may be called by the chairman of the board or the chief executive
officer and shall be called by the secretary on the written request of at least
two directors.  Notice of special
meetings of the board of directors shall be given to each director at least 24
hours before the date of the meeting in such manner as is determined by the
board of directors.

 

Section 3.08.  Committees.  (a) The board of directors
may designate one or more committees, each committee to consist of one or more
of the directors of the Corporation.  The
board of directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee.  In the absence or
disqualification of a member of a committee, the member or members present at
any meeting and not disqualified from voting, whether or not such member or
members constitute a quorum, may unanimously appoint another member of the
board of directors to act at the meeting in the place of any such absent or
disqualified member.  Any

 

10

 

such committee, to the
extent provided in the resolution of the board of directors, shall have and may
exercise all the powers and authority of the board of directors in the
management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority in reference to the
following matters:  (i) approving or
adopting, or recommending to the stockholders, any action or matter expressly
required by Delaware Law to be submitted to the stockholders for approval or (ii) adopting,
amending or repealing any bylaw of the Corporation.  Each committee shall keep regular minutes of
its meetings and report the same to the board of directors when required.

 

(b)        Unless
otherwise provided in the certificate of incorporation, these bylaws or the
resolution of the board of directors designating the committee, a committee may
create one or more subcommittees consisting of one or more members of such
committee and delegate to such subcommittee any or all of the powers and
authority of the committee.

 

(c)        Unless the
board of directors otherwise provides, each committee designated by the board
of directors may make, alter and repeal rules for the conduct of its
business.  In the absence of such rules,
each committee shall conduct its business in the same manner as the board of
directors conducts its business pursuant to this Article 3.

 

Section 3.09.  Action by Consent.  Unless otherwise restricted by the
certificate of incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee
thereof may be taken without a meeting, if all members of the board or
committee, as the case may be, consent thereto in writing or by electronic
transmission, and the writing or writings or electronic transmission or
transmissions, are filed with the minutes of proceedings of the board or
committee.  Such filing shall be in paper
form if the minutes are maintained in paper form and shall be in electronic
form if the minutes are maintained in electronic form.

 

Section 3.10.  Telephonic Meetings.  Unless otherwise restricted by the
certificate of incorporation or these bylaws, members of the board of
directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or such committee, as the
case may be, by means of conference telephone or other communications equipment
by means of which all persons participating in the meeting can hear each other,
and such participation in a meeting shall constitute presence in person at the
meeting.

 

Section 3.11.  Resignation.  Any director may resign at any
time by giving notice in writing or by electronic transmission to the board of
directors or to the secretary of the Corporation.  The resignation of any director shall take
effect upon receipt of notice thereof or at such later time as shall be
specified in such

 

11

 

notice; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

 

Section 3.12.  Vacancies.  Unless otherwise provided in the
certificate of incorporation or as set forth below, vacancies and newly created
directorships resulting from any increase in the authorized number of directors
may be filled solely by a majority of the directors then in office (although
less than a quorum) or by the sole remaining director.  Subject to the terms of any series of
preferred stock entitled to separately elect directors, whenever the holders of
any class or classes of stock or series thereof are entitled to elect one or
more directors by the certificate of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority of
directors elected by such class or classes or series thereof then in office, or
by a sole remaining director so elected. 
Each director so elected shall hold office until such director’s
successor is elected and qualified or until such director’s earlier death,
resignation or removal and, in the case of a classified board, for a term that
shall coincide with the term of the class to which such director shall have
been elected.  If there are no directors
in office, then an election of directors may be held in accordance with
Delaware Law.  Unless otherwise provided
in the certificate of incorporation, when one or more directors shall resign
from the board, effective at a future date, a majority of the directors then in
office, including those who have so resigned, shall have the power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each director so chosen shall hold
office as provided in the filling of other vacancies.

 

Section 3.13.  Removal.  Directors may only be removed from
office in the manner set forth in the certificate of incorporation.  Any vacancies created by any such removal may
be filled in accordance with Section 3.12 herein.

 

Section 3.14.  Compensation.  Unless otherwise restricted by the
certificate of incorporation or these bylaws, the board of directors shall have
authority to fix the compensation of directors, including fees and
reimbursement of expenses.

 

ARTICLE
4

OFFICERS

 

Section 4.01.  Principal Officers.  The principal officers of the
Corporation shall be a chief executive officer, a general counsel, a chief
financial officer, one or more executive vice presidents and a secretary who
shall have the duty, among other things, to record the proceedings of the
meetings of stockholders and directors in a book kept for that purpose.  Subject to Section 3.01, the chief
executive officer shall conduct and direct generally all the day-to-day
business and affairs of the Corporation. 
The Corporation may also have such other principal officers as the board
of directors may in its discretion appoint.

 

12

 

One person may hold the
offices and perform the duties of any two or more of said offices, except that
no one person shall hold the offices and perform the duties of chief executive
officer and secretary.

 

Section 4.02.  Election, Term of Office and
Remuneration.  The principal
officers of the Corporation shall be elected annually by the board of directors
at the annual meeting thereof.  Each such
officer shall hold office until his or her successor is elected and qualified,
or until his or her earlier death, resignation or removal.  The remuneration of all principal officers of
the Corporation shall be fixed by the board of directors.  Any vacancy in any office shall be filled in
such manner as the board of directors shall determine.

 

Section 4.03.  Subordinate Officers.  In addition to the principal
officers enumerated in Section 4.01, the Corporation may have one or more
assistant secretaries and such other subordinate officers, agents and employees
as the board of directors may deem necessary, each of whom shall hold office
for such period as the board of directors may from time to time determine.  The board of directors hereby delegates to
the chief executive officer the power to appoint, fix the compensation of and
remove any such subordinate officers, agents or employees.

 

Section 4.04.  Removal.  In addition to the authority
granted pursuant to Section 4.03 with respect to subordinate officers, any
officer may be removed, with or without cause, at any time, by resolution
adopted by the board of directors.

 

Section 4.05.  Resignations.  Any officer may resign at any time
by giving written notice to the board of directors (or to a principal officer
if the board of directors has delegated to such principal officer the power to
appoint and remove such officer).  The
resignation of any officer shall take effect upon receipt of notice thereof or
at such later time as shall be specified in such notice; and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

 

Section 4.06.  Powers and Duties.  The officers of the Corporation
shall have such powers and perform such duties incident to each of their
respective offices and such other duties as may from time to time be conferred
upon or assigned to them by the board of directors.

 

ARTICLE
5

CAPITAL STOCK

 

Section 5.01.  Certificates For Stock;
Uncertificated Shares.  The
shares of the Corporation shall be represented by certificates, provided that
the board of directors of the Corporation may provide by resolution or
resolutions that some or all of any or all classes or series of its stock shall
be uncertificated shares.  Any

 

13

 

such resolution shall not
apply to shares represented by a certificate until such certificate is
surrendered to the Corporation.  Except
as otherwise provided by law, the rights and obligations of the holders of uncertificated
shares and the rights and obligations of the holders of shares represented by
certificates of the same class and series shall be identical.  Every holder of stock represented by
certificates shall be entitled to have a certificate signed by or in the name
of the Corporation by the chairman or vice chairman of the board of directors,
or any vice president, and by the treasurer, an assistant treasurer, the
secretary or an assistant secretary of such Corporation, representing the
number of shares registered in certificate form.  Any or all of the signatures on the
certificate may be a facsimile.  In case
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue.  The Corporation shall not have power to issue
a certificate in bearer form.

 

Section 5.02.  Transfer Of Shares.  Shares of the stock of the
Corporation may be transferred on the record of stockholders of the Corporation
by the holder thereof or by such holder’s duly authorized attorney upon surrender
of a certificate therefor properly endorsed or upon receipt of proper transfer
instructions from the registered holder of uncertificated shares or by such
holder’s duly authorized attorney and upon compliance with appropriate
procedures for transferring shares in uncertificated form, unless waived by the
Corporation.

 

Section 5.03.  Authority for Additional Rules Regarding
Transfer.  The board of
directors shall have the power and authority to make all such rules and
regulations, not inconsistent with these bylaws, as they may deem expedient
concerning the issue, transfer and registration of certificated or
uncertificated shares of the stock of the Corporation, as well as for the
issuance of new certificates in lieu of those which may be lost or destroyed,
and may require of any stockholder requesting replacement of lost or destroyed
certificates, bond in such amount and in such form as they may deem expedient
to indemnify the Corporation and the transfer agents and registrars of its
stock against any claims arising in connection therewith.

 

ARTICLE
6

GENERAL PROVISIONS

 

Section 6.01.  Fixing the Record Date.  (a)   In
order that the Corporation may determine the stockholders entitled to notice of
any meeting of stockholders or any adjournment thereof, the board of directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the board of directors, and
which record date shall not be more than 60 nor less than 10 days before the
date of such meeting.  If the board of

 

14

 

directors so fixes a record
date for notice of any meeting of stockholders, such date shall also be the
record date for determining the stockholders entitled to vote at such meeting
unless the board of directors determines, at the time it fixes such record
date, that a later date on or before the date of the meeting shall be the date
for making such determination.  If no record
date is fixed by the board of directors, the record date for determining
stockholders entitled to notice of and to vote at a meeting of stockholders
shall be at the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the day
next preceding the day on which the meeting is held.  A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided
that the board of directors may fix a new record date for determination of
stockholders entitled to vote at the adjourned meeting and in such case shall
also fix as the record date for determining stockholders entitled to notice of
such meeting the same or an earlier date as that fixed for determination of
stockholders entitled to vote at such adjourned meeting in accordance with the
foregoing provisions of this Section 6.01(a).

 

(b)        In order that
the Corporation may determine the stockholders entitled to consent to corporate
action in writing without a meeting, the board of directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the board of directors and shall not be
more than 10 days after the date upon which the resolution fixing the record
date is adopted by the board of directors. 
If no record date has been fixed by the board of directors pursuant to
this Section 6.01(b), the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the board of directors is required by Delaware Law, shall be
the first date on which a signed written consent setting forth the action taken
or proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business or
any officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered
office shall be by hand or by certified or registered mail, return receipt
requested.  If no record date has been
fixed by the board of directors and prior action by the board of directors is
required by Delaware Law, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting shall be at the
close of business on the day on which the board of directors adopts the
resolution taking such prior action.

 

(c)        In order that
the Corporation may determine the stockholders entitled to receive payment of
any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the board of directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than 60 days prior to such action.  If no

 

15

 

record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
resolution relating thereto.

 

Section 6.02.  Dividends.  Subject to limitations contained
in Delaware Law and the certificate of incorporation, if any, the board of
directors may declare and pay dividends upon the shares of capital stock of the
Corporation, which dividends may be paid either in cash, in property or in
shares of the capital stock of the Corporation.

 

Section 6.03.  Year.  The fiscal year of the Corporation
shall commence on January 1 and end on December 31 of each year.

 

Section 6.04.  Corporate Seal.  The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words “Corporate Seal, Delaware”. 
The seal may be used by causing it or a facsimile thereof to be
impressed, affixed or otherwise reproduced.

 

Section 6.05.  Voting of Stock Owned by the
Corporation.  The board of
directors may authorize any person, on behalf of the Corporation, to attend,
vote at and grant proxies to be used at any meeting of stockholders of any
corporation (except this Corporation) in which the Corporation may hold stock.

 

Section 6.06.  Amendments.  These bylaws or any other bylaws
may be adopted, amended or repealed by (a) the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock or (b) the
board of directors.

 

Section 6.07.  Stockholders Agreement.  For so long as that certain
Stockholders Agreement, dated as of December 15, 2009, by and among the
Corporation and its private equity sponsors as amended from time to time (the “Stockholders Agreement”), is in effect, the provisions of
the Stockholders Agreement shall be incorporated by reference into the relevant
provisions hereof, and such provisions shall be interpreted and applied in a
manner consistent with the terms of the Stockholders Agreement.

 

16

 

EXHIBIT D

 

COBALT INTERNATIONAL ENERGY, INC.

LONG TERM INCENTIVE PLAN

 

SECTION 1.  Purpose.  The purpose
of the Cobalt International Energy, Inc. Long Term Incentive Plan (the “Plan”) is to motivate and reward those employees and other
individuals who are expected to contribute significantly to the success of
Cobalt International Energy, Inc. (the “Company”)
and its Affiliates to perform at the highest level and to further the best
interests of the Company and its shareholders.

 

SECTION 2.  Definitions.  As used
in the Plan, the following terms shall have the meanings set forth below:

 

(a)           “Act” means
Securities Exchange Act of 1934.

 

(b)           “Affiliate”
means (i) any entity that, directly or indirectly, is controlled by the
Company and (ii) any entity in which the Company has a significant equity
interest, in each case as determined by the Committee.

 

(c)           “Award”
means any Option, SAR, Restricted Stock, RSU, Performance Award or Other
Stock-Based Award granted under the Plan.

 

(d)           “Award
Document” means any agreement, contract or other instrument or
document evidencing any Award granted under the Plan, which may, but need not,
be executed or acknowledged by a Participant.

 

(e)           “Beneficiary”
means a person entitled to receive payments or other benefits or exercise
rights that are available under the Plan in the event of the Participant’s
death.  If no such person is named by a
Participant, or if no Beneficiary designated by the Participant is eligible to
receive payments or other benefits or exercise rights that are available under
the Plan at the Participant’s death, such Participant’s Beneficiary shall be
such Participant’s estate.

 

(f)            “Board”
means the board of directors of the Company.

 

(g)           “Cause”
means, with respect to any Participant, “cause” as defined such Participant’s
Employment Agreement, if any, or if not so defined, except as otherwise
provided in such Participant’s Award Document, such Participant’s:

 

(i)            having engaged in material mismanagement
in providing services to the Company or its Affiliates;

 

(ii)           having engaged in conduct that he or she
knew would be materially injurious to the Company or its Affiliates;

 

 

(iii)          material breach of any applicable
Employment Agreement or Lock Up Agreement;

 

(iv)          having been convicted of, or having
entered a plea bargain or settlement admitting guilt for, any felony under the
laws of the United States, any state or the District of Columbia where such
felony involves moral turpitude or where, as a result of such felony, the
continued employment of the Participant would have, or could reasonably be
expected to have, a material adverse impact on the reputation of the Company or
any of its Affiliates; or

 

(v)           having been the subject of any order,
judicial or administrative, obtained or issued by the Securities and Exchange
Commission for any securities violation involving fraud including, for example,
any such order consented to by the Participant in which findings of facts or
any legal conclusions establishing liability are neither admitted nor denied.

 

The occurrence of any such event that is susceptible
to cure or remedy shall not constitute Cause if such Participant cures or
remedies such event within 30 days after the Company provides notice to such
Participant.

 

(h)           “Change in Control” means the occurrence
of any one or more of the following events:

 

(i)            any “person” (as defined in Section 13(d) of
the Act),  other than (A) an employee
benefit plan or trust maintained by the Company or (B) any of the Sponsors
(as defined in the Amended and Restated Certificate of Incorporation of the
Company as in effect immediately following the closing of the initial public
offering of Shares) or their respective affiliates, becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing more than 50% of the combined voting
power of the Company’s outstanding securities entitled to vote generally in the
election of directors;

 

(ii)           at any time during a period of 12  consecutive months, individuals who at the beginning of
such period constituted the Board and any new member of the Board whose
election or nomination for election was approved by a vote of at
least  a majority of the directors then still
in office who either were directors at the beginning of such period or whose election or nomination
for election was so approved, cease for any reason to constitute a majority of
members of the Board; or

 

2

 

(iii)          the consummation of (A) a merger or
consolidation of the Company or any of its subsidiaries with any other
corporation or entity, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity
or, if applicable, the ultimate parent thereof) at least 50% of the combined
voting power and total fair market value of the securities of the Company or
such surviving entity or parent outstanding immediately after such merger or
consolidation, or (B) any sale, lease, exchange or other transfer to any
Person (other than an Affiliate of the Company) of assets of the Company and/or
any of its subsidiaries, in one transaction or a series of related
transactions, having an aggregate fair market value of more than 50% of the
fair market value of the Company and its subsidiaries (the “Company Value”) immediately prior to such transaction(s),
but only to the extent that, in connection with such transaction(s) or
within a reasonable period thereafter, the Company’s stockholders receive
distributions of cash and/or assets having a fair market value that is greater
than 50% of the Company Value immediately prior to such transaction(s).

 

Notwithstanding
the foregoing, in no event shall a Change in Control be deemed to have occurred
with respect to a Participant if the Participant is part of a “group” within
the meaning of Section 13(d)(3) of the Act that consummates the
Change in Control transaction.  In
addition, for purposes of the definition of Change in Control, a person engaged
in business as an underwriter of securities shall not be deemed to be the
beneficial owner of, or to beneficially own, any securities acquired through
such person’s participation in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of such acquisition.

 

(i)            “Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the
rules, regulations and guidance thereunder. 
Any reference to a provision in the Code shall include any successor
provision thereto.

 

(j)            “Committee”
means the Compensation Committee of the Board or such other committee as may be
designated by the Board.  If the Board
does not designate the Committee, references herein to the “Committee” shall
refer to the Board.

 

(k)           “Covered Employee”
means an individual who is (i) either a “covered employee” or expected by
the Committee to be a “covered employee,” in each case within the meaning of Section 162(m)(3) of
the Code or (ii) expected by the Committee to be the recipient of
compensation (other than Section 162(m) Compensation) in excess of
$1,000,000 for the tax year of the Company with

 

3

 

regard
to which a deduction in respect of such individual’s Award would be claimed.

 

(l)            “Disability”
means, with respect to any Participant, “disability” as defined in such
Participant’s Employment Agreement, if any, or if not so defined, except as
otherwise provided in such Participant’s Award Document:

 

(i)            a permanent and
total disability that entitles the Participant to disability income payments
under any long-term disability plan or policy provided by the Company under
which the Participant is covered, as such plan or policy is then in effect; or

 

(ii)           if such
Participant is not covered under a long-term disability plan or policy provided
by the Company at such time for whatever reason, then the term “Disability”
means a “permanent and total disability” as defined in Section 22(e)(3) of
the Code and, in this case, the existence of any such Disability will be
certified by a physician acceptable to the Company.

 

(m)          “Effective Date”
means the date on which the Plan is adopted by the Board.

 

(n)           “Employment Agreement”
means any employment, severance, consulting or similar agreement between the
Company or any of its Affiliates and a Participant.

 

(o)           “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and
the rules, regulations and guidance thereunder. 
Any reference to a provision in the Exchange Act shall include any
successor provision thereto.

 

(p)           “Fair
Market Value” means with respect to Shares, the closing price of a
Share on the date in question (or, if there is no reported sale on such date,
on the last preceding date on which any reported sale occurred) on the
principal stock market or exchange on which the Shares are quoted or traded, or
if Shares are not so quoted or traded, fair market value as determined by the
Committee, and with respect to any property other than Shares, the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee.

 

(q)           “Good
Reason” means, with respect to any Participant, “good reason” as
defined such Participant’s Employment Agreement, if any, or if

 

4

 

not
so defined, except as otherwise provided in such Participant’s Award Document,
the occurrence of any one or both of the following events:

 

(i)            material reduction by the Company or any
of its Affiliates of such Participant’s base salary; or

 

(ii)           relocation by the Company or any of its
Affiliates of the geographic location of such Participant’s principal place of
employment by more than 75 miles from Houston, Texas.

 

In each case, if
such Participant desires to terminate his or her employment or engagement with
the Company or such Affiliate for Good Reason, he or she must first give
written notice of the facts and circumstances providing the basis for Good
Reason to the Company or such Affiliate and allow the Company or such Affiliate
60 days from the date of such notice to remedy, cure or rectify the situation
giving rise to Good Reason, and in the absence of any such remedy, cure or
rectification, such Participant must terminate his or her employment or
engagement for such Good Reason within 120 days after delivery of such written
notice.

 

(r)            “Incentive
Stock Option” means an option representing the right to purchase
Shares from the Company, granted pursuant to Section 6, that meets the
requirements of Section 422 of the Code.

 

(s)            “Intrinsic Value”
with respect to an Option or SAR Award means (i) the price or implied
price per Share in a Change in Control or other event over (ii) the
exercise or hurdle price of such Award multiplied by (iii) the number of
Shares covered by such Award.

 

(t)            “IPO Awards” has
the meaning assigned to it in Section 3(c).

 

(u)           “Lock Up Agreement”
means any agreement between the Company or any of its Affiliates and a
Participant that provides for restrictions on the transfer of Shares held by
such Participant.

 

(v)           “Non-Qualified Stock Option”
means an option representing the right to purchase Shares from the Company,
granted pursuant to Section 6, that is not an Incentive Stock Option.

 

(w)          “Option” means
an Incentive Stock Option or a Non-Qualified Stock Option.

 

(x)           “Other Stock-Based Award”
means an Award granted pursuant to Section 10.

 

5

 

(y)           “Participant”
means the recipient of an Award granted under the Plan.

 

(z)           “Performance Award”
means an Award granted pursuant to Section 9.

 

(aa)         “Performance Period”
means the period established by the Committee at the time any Performance Award
is granted or at any time thereafter during which any performance goals
specified by the Committee with respect to such Award are measured.

 

(bb)         “Reorganization Agreement”
means the Reorganization Agreement dated as of [·], 2009 among Cobalt International
Energy, L.P., the Company, [Cobalt Merger Subsidiary] and the other parties
signatory thereto.

 

(cc)         “Replacement Award”
means an Award granted in assumption of, or in substitution for, an outstanding
award previously granted by a company acquired by the Company or with which the
Company combines.

 

(dd)         “Restricted Stock”
means any Share granted pursuant to Section 8.

 

(ee)         “RSU” means a
contractual right granted pursuant to Section 8 that is denominated in
Shares.  Each RSU represents a right to
receive the value of one Share (or a percentage of such value) in cash, Shares
or a combination thereof.  Awards of RSUs
may include the right to receive dividend equivalents.

 

(ff)          “SAR” means any
right granted pursuant to Section 7 to receive upon exercise by a
Participant or settlement, in cash, Shares or a combination thereof, the excess
of (i) the Fair Market Value of one Share on the date of exercise or
settlement over (ii) the exercise or hurdle price of the right on the date
of grant, or if granted in connection with an Option, on the date of grant of
the Option.

 

(gg)         “Section 162(m) Compensation”
means “qualified performance-based compensation” under Section 162(m) of
the Code.

 

(hh)         “Shares” means
shares of the Company’s common stock.

 

(ii)           “Termination of Service”
means, in the case of a Participant who is an employee of the Company or an
Affiliate, cessation of the employment relationship such that the Participant
is no longer an employee of the Company or Affiliate, or, in the case of a
Participant who is an independent contractor, the date the performance of
services for the Company or an Affiliate

 

6

 

has
ended; provided, however, that in the case of
an employee, the transfer of employment from the Company to an Affiliate, from
an Affiliate to the Company, from one Affiliate to another Affiliate or, unless
the Committee determines otherwise, the cessation of employee status but the
continuation of the performance of services for the Company or an Affiliate as
a director of the Board or an independent contractor shall not be deemed a
cessation of service that would constitute a Termination of Service; provided, further, that a Termination of Service will be
deemed to occur for a Participant employed by an Affiliate when an Affiliate
ceases to be an Affiliate unless such Participant’s employment continues with
the Company or another Affiliate.

 

SECTION 3. 
Eligibility.

 

(a)           Any employee, consultant or other advisor
of, or any other individual who provides services to, the Company or any
Affiliate, other than any non-employee director of the Company or any
Affiliate, shall be eligible to be selected to receive an Award under the Plan.

 

(b)           Holders of options and other types of awards
granted by a company acquired by the Company or with which the Company combines
are eligible for grants of Replacement Awards under the Plan.

 

(c)           Holders of unvested limited partnership
interests in Cobalt International Energy, L.P. as of immediately prior to the
effective time of the merger contemplated by the Reorganization Agreement shall
receive, as soon as practicable following the closing of the initial public
offering of Shares, Awards of Restricted Stock under the Plan in accordance
with the terms set forth in the Reorganization Agreement (“IPO Awards”).

 

SECTION 4. 
Administration.

 

(a)           The Plan shall be administered by the
Committee.  The Committee shall be
appointed by the Board and shall consist of not less than three directors of
the Board.  To the extent necessary to
comply with applicable regulatory regimes, any action by the Committee shall
require the approval of Committee members who are (i) independent, within
the meaning of and to the extent required by applicable rulings and interpretations
of the applicable stock market or exchange on which the Shares are quoted or
traded; (ii) a non-employee director within the meaning of Rule 16b-3
under the Exchange Act; and (iii) an outside director pursuant to Section 162(m) of
the Code.  The Board may designate one or
more directors as alternate members of the Committee who may replace any absent
or disqualified member at any meeting of the Committee.  To the extent permitted by applicable law,
the Committee may delegate to one or more officers of the Company the authority
to grant Awards, except that such

 

7

 

delegation
shall not be applicable to any Award for  a person then
covered by Section 16 of the Exchange Act. 
The Committee may issue rules and regulations for administration of
the Plan.  It shall meet at such times
and places as it may determine.

 

(b)           Subject to the terms of the Plan and
applicable law, the Committee (or its delegate) shall have full power and
authority to:  (i) designate Participants;
(ii) determine the type or types of Awards (including Replacement Awards)
to be granted to each Participant under the Plan; (iii) determine the
number of Shares to be covered by (or with respect to which payments, rights or
other matters are to be calculated in connection with) Awards; (iv) determine
the terms and conditions of any Award; (v) determine whether, to what
extent and under what circumstances Awards may be settled or exercised in cash,
Shares, other Awards, other property, net settlement, or any combination
thereof, or canceled, forfeited or suspended, and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or suspended; (vi) determine
whether, to what extent and under what circumstances cash, Shares, other
Awards, other property and other amounts payable with respect to an Award under
the Plan shall be deferred either automatically or at the election of the
holder thereof or of the Committee; (vii) interpret and administer the
Plan and any instrument or agreement relating to, or Award made under, the
Plan; (viii) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take
any other action that the Committee deems necessary or desirable for the
administration of the Plan.

 

(c)           All decisions of the Committee shall be
final, conclusive and binding upon all parties, including the Company, its
shareholders and Participants and any Beneficiaries thereof.

 

SECTION 5. 
Shares Available for Awards.

 

(a)           Subject to adjustment as provided in Section 5(c) and
except for Replacement Awards and IPO Awards, (i) the maximum number of
Shares available for issuance under the Plan shall not exceed [·](1) Shares and (ii) no Participant may
receive under the Plan in any calendar year (A) Options and SARs that
relate to more than [insert number equal to
50% of the maximum number of shares specified in clause (i)] Shares;
(B) Restricted Stock and RSUs 

 

(1) Insert number of shares equal to (i) 3%
of the shares outstanding immediately following the IPO plus (ii) the
excess of the total number of Shares issuable with respect to 100,000 Class D
Units less the number of Shares issued to Class D holders upon the IPO
pursuant to the merger contemplated by the Reorganization Agreement.

 

8

 

that relate to more than [insert
number equal to 50% of the maximum number of shares specified in clause (i)]
Shares or (C) Performance Awards and Other Stock-Based Awards that relate
to more than [insert number equal to 50% of the maximum
number of shares specified in clause (i)] Shares.

 

(b)           Any Shares subject to an Award (other
than a Replacement Award or IPO Award), that expires, is canceled, forfeited or
otherwise terminates without the delivery of such Shares, including (i) the
number of Shares surrendered or withheld in payment of any grant, purchase,
exercise or hurdle price of an Award or taxes related to an Award and (ii) any
Shares subject to an Award to the extent that Award is settled without the
issuance of Shares, shall again be, or shall become, available for issuance
under the Plan.

 

(c)           In the event that the Committee
determines that, as a result of any dividend or other distribution (whether in
the form of cash, Shares or other securities), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, issuance of Shares pursuant to the anti-dilution
provisions of securities of the Company, or other similar corporate transaction
or event affecting the Shares, an adjustment is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall adjust equitably any or
all of:

 

(i)       the number and type of Shares (or other
securities) which thereafter may be made the subject of Awards, including the
aggregate and individual limits specified in Section 5(a);

 

(ii)      the number and type of Shares (or other
securities) subject to outstanding Awards; and

 

(iii)     the grant, purchase, exercise or hurdle
price with respect to any Award or, if deemed appropriate, make provision for a
cash payment to the holder of an outstanding Award;

 

provided,
however, that the
number of Shares subject to any Award denominated in Shares shall always be a
whole number.

 

(d)           Any Shares delivered pursuant to an Award
may consist, in whole or in part, of authorized and unissued Shares or Shares
acquired by the Company.

 

9

 

SECTION 6. 
Options.  The Committee is authorized to grant
Options to Participants with the following terms and conditions and with such
additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine:

 

(a)           The exercise price per Share under an Option shall be
determined by the Committee; provided,
however, that, except in the case
of Replacement Awards, such exercise price shall not be less than the Fair
Market Value of a Share on the date of grant of such Option.

 

(b)           The term of each Option shall be fixed by the
Committee but shall not exceed 10 years from the date of grant of such Option.

 

(c)           The Committee shall determine the time or times at
which an Option may be exercised in whole or in part.

 

(d)           The Committee shall determine the method or methods by
which, and the form or forms, including cash, Shares, other Awards, other
property, net settlement, or any combination thereof, having a Fair Market
Value on the exercise date equal to the relevant exercise price, in which
payment of the exercise price with respect thereto may be made or deemed to
have been made.

 

(e)           The terms of any Incentive Stock Option granted under
the Plan shall comply in all respects with the provisions of Section 422
of the Code.

 

SECTION 7. 
Stock Appreciation Rights.  The Committee is authorized to grant SARs
to Participants with the following terms and conditions and with such
additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine.

 

(a)           SARs may be granted under the Plan to
Participants either alone (“freestanding”) or in addition to other Awards
granted under the Plan (“tandem”) and may, but need not, relate to a specific
Option granted under Section 6.

 

(b)           The exercise or hurdle price per Share under a SAR
shall be determined by the Committee; provided,
however, that, except in the case
of Replacement Awards, such exercise or hurdle price shall not be less than the
Fair Market Value of a Share on the date of grant of such SAR.

 

(c)           The term of each SAR shall be fixed by the Committee
but shall not exceed 10 years from the date of grant of such SAR.

 

(d)           The Committee shall determine the time or times at
which a SAR may be exercised or settled in whole or in part.

 

10

 

SECTION 8.  Restricted Stock and RSUs.  The Committee is authorized to grant Awards of
Restricted Stock and RSUs to Participants with the following terms and
conditions and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the Committee shall determine.

 

(a)           Shares of Restricted Stock and RSUs shall
be subject to such restrictions as the Committee may impose (including any
limitation on the right to vote a Share of Restricted Stock or the right to
receive any dividend, dividend equivalent or other right), which restrictions
may lapse separately or in combination at such time or times, in such
installments or otherwise, as the Committee may deem appropriate.

 

(b)           Any share of Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a stock
certificate or certificates.  In the
event any stock certificate is issued in respect of shares of Restricted Stock
granted under the Plan, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock.

 

(c)           If the Committee intends that an Award
granted under this Section 8 shall constitute or give rise to Section 162(m) Compensation,
such Award may be structured in accordance with the requirements of Section 9(a),
including the performance criteria and the Award limitation set forth therein,
and any such Award shall be considered a Performance Award for purposes of the
Plan.

 

(d)           The Committee may provide in an Award
Document that an Award of Restricted Stock is conditioned upon the Participant
making or refraining from making an election with respect to the Award under Section 83(b) of
the Code.  If a Participant makes an
election pursuant to Section 83(b) of the Code with respect to an
Award of Restricted Stock, the Participant shall be required to file promptly a
copy of such election with the Company.

 

SECTION 9.  Performance Awards. 
The Committee is authorized to grant Performance Awards to Participants
with the following terms and conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine:

 

(a)           Performance Awards may be denominated as
a cash amount, number of Shares or a combination thereof and are Awards which
may be earned upon achievement or satisfaction of performance conditions
specified by the Committee.  In addition,
the Committee may specify that any other Award shall constitute a Performance
Award by conditioning the right of a Participant to 

 

11

 

exercise the Award or have it settled, and the timing
thereof, upon achievement or satisfaction of such performance conditions as may
be specified by the Committee.  The
Committee may use such business criteria and other measures of performance as
it may deem appropriate in establishing any performance conditions.  Subject to the terms of the Plan, the
performance goals to be achieved during any Performance Period, the length of
any Performance Period, the amount of any Performance Award granted and the
amount of any payment or transfer to be made pursuant to any Performance Award
shall be determined by the Committee.

 

(b)           Every Performance Award shall, if the Committee
intends that such Award should constitute Section 162(m) Compensation,
include a pre-established formula, such that payment, retention or vesting of
the Award is subject to the achievement during a Performance Period or
Performance Periods, as determined by the Committee, of a level or levels of,
or increases in, in each case as determined by the Committee, one or more of
the following performance measures with respect to the Company:  captured prospects, prospecting licenses
signed, operated prospects matured to drill ready, drilling programs commenced,
drillable prospects, capabilities and critical path items established,
operating budget, third-party capital sourcing, captured net risked resource
potential, acquisition cost efficiency, central lease sale position,
acquisitions of oil and gas interests, increases in proved, probable or
possible reserves, finding and development costs, overhead costs, general and
administration expense, market price of a Share, cash flow, reserve value, net
asset value, earnings, net income, operating income, cash from operations,
revenue, margin, EBITDA (earnings before interest, taxes, depreciation and
amortization), EBITDAX (earnings before interest, taxes, depreciation,
amortization and exploration expense), net capital employed, return on assets,
stockholder return, reserve replacement, return on equity, return on capital
employed, production, assets, unit volume, sales, market share, or strategic
business criteria consisting of one or more objectives based on meeting
specified goals relating to acquisitions or divestitures, each as determined in
accordance with generally accepted accounting principles, where applicable, as
consistently applied by the Company. 
Performance criteria may be measured on an absolute (e.g., plan or budget) or relative basis.  Relative performance may be measured against
a group of peer companies, a financial market index or other acceptable
objective and quantifiable indices. 
Except in the case of an award intended to qualify as Section 162(m) Compensation,
if the Committee determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
the Company conducts its business, or other events or circumstances render the
performance objectives unsuitable, the Committee may modify the performance
objectives or the related minimum acceptable level of achievement, in whole or
in part, as the Committee deems appropriate and equitable.  Performance measures may vary from 

 

12

 

Performance Award to Performance Award, respectively,
and from Participant to Participant, and may be established on a stand-alone
basis, in tandem or in the alternative. 
The Committee shall have the power to impose such other restrictions on
Awards subject to this Section 9(b) as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for Section 162(m)
Compensation.  Notwithstanding any
provision of the Plan to the contrary, the Committee shall not be authorized to
increase the amount payable under any Award to which this Section 9(b) applies
upon attainment of such pre-established formula.

 

(c)           Settlement of Performance Awards;
Other Terms.  Settlement of Performance Awards shall be in
cash, Shares, other Awards, other property, net settlement, or any combination
thereof, in the discretion of the Committee. 
Performance Awards will be settled only after the end of the relevant
Performance Period.  The Committee may,
in its discretion, increase or reduce the amount of a settlement otherwise to
be made in connection with a Performance Award but may not exercise discretion
to increase any amount payable to a Covered Employee in respect of a
Performance Award intended to qualify as Section 162(m) Compensation.  Any settlement that changes the form of
payment from that originally specified shall be implemented in a manner such
that the Performance Award and other related Awards do not, solely for that
reason, fail to qualify as Section 162(m) Compensation.  The Committee shall specify the circumstances
in which, and the extent to which, Performance Awards shall be paid or
forfeited in the event of a Participant’s Termination of Service.

 

SECTION 10. 
Other Stock-Based Awards.  The Committee
is authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to, Shares
or factors that may influence the value of Shares, including convertible or
exchangeable debt securities, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or business units thereof or any other factors
designated by the Committee.  The
Committee shall determine the terms and conditions of such Awards.  Shares delivered pursuant to an Award in the
nature of a purchase right granted under this Section 10 shall be
purchased for such consideration, paid for at such times, by such methods and
in such forms, including cash, Shares, other Awards, other property, or any
combination thereof, as the Committee shall determine.  Cash awards, as an element of or supplement
to any other Award under the Plan, may also be granted pursuant to this Section 10.

 

13

 

SECTION 11. 
Effect of Termination of Service or a Change in Control on Awards.

 

(a)           The Committee may provide, by rule or
regulation or in any Award Document, or may determine in any individual case,
the circumstances in which, and the extent to which, an Award may be exercised,
settled, vested, paid or forfeited in the event of a Participant’s Termination
of Service prior to the end of a Performance Period or exercise or settlement
of such Award.

 

(b)           The Committee may set forth the treatment
of an Award upon a Change in Control in the applicable Award Document.

 

(c)           In the case of an Option or SAR Award,
except as otherwise provided in the applicable Award Document, upon a Change in
Control, a merger or consolidation involving the Company or any other event
with respect to which the Committee deems it appropriate, the Committee may
cause such Award to be canceled in consideration of (i) the full
acceleration of such Award and either (A) a period of at least ten days
prior to such Change in Control to exercise the Award or (B) a payment in
cash or other consideration to the Participant who holds such Award in an
amount equal to the Intrinsic Value of such Award (which may be equal to but
not less than zero), which, if in excess of zero, shall be payable upon the
effective date of such Change in Control, merger, consolidation or other event
or (ii) a substitute award (which immediately upon grant shall have an
Intrinsic Value equal to the Intrinsic Value of such Award).

 

SECTION 12. 
General Provisions Applicable to Awards.

 

(a)           Awards shall be granted for no cash
consideration or for such minimal cash consideration as may be required by
applicable law.

 

(b)           Awards may, in the discretion of the
Committee, be granted either alone or in addition to or in tandem with any
other Award or any award granted under any other plan of the Company.  Awards granted in addition to or in tandem
with other Awards, or in addition to or in tandem with awards granted under any
other plan of the Company, may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.

 

(c)           Subject to the terms of the Plan,
payments or transfers to be made by the Company upon the grant, exercise or
settlement of an Award may be made in the form of cash, Shares, other Awards,
other property, net settlement, or any combination thereof, as determined by
the Committee in its discretion at the time of grant, and may be made in a single
payment or transfer, in installments or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee.  Such rules and procedures may include
provisions for the payment or crediting of reasonable interest on installment
or deferred 

 

14

 

payments or the grant or crediting of dividend
equivalents in respect of installment or deferred payments.

 

(d)           Except as may be permitted by the
Committee or as specifically provided in an Award Document, (i) no Award
and no right under any Award shall be assignable, alienable, saleable or
transferable by a Participant otherwise than by will or pursuant to Section 12(e) and
(ii) during a Participant’s lifetime, each Award, and each right under any
Award, shall be exercisable only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal representative.  The provisions of this Section 12(d) shall
not apply to any Award that has been fully exercised or settled, as the case
may be, and shall not preclude forfeiture of an Award in accordance with the
terms thereof.

 

(e)           A Participant may designate a Beneficiary
or change a previous Beneficiary designation at such times prescribed by the
Committee by using forms and following procedures approved or accepted by the
Committee for that purpose.

 

(f)            All certificates for Shares and/or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the Plan or the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock market
or exchange upon which such Shares or other securities are then quoted, traded
or listed, and any applicable securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

 

(g)           The Committee may impose
restrictions on any Award with respect to non-competition, confidentiality and
other restrictive covenants as it deems necessary or appropriate in its sole
discretion.

 

SECTION 13. 
Amendments and Termination.

 

(a)           Except to the extent prohibited by
applicable law and unless otherwise expressly provided in an Award Document or
in the Plan, the Board may amend, alter, suspend, discontinue or terminate the
Plan or any portion thereof at any time; provided,
however, that no
such amendment, alteration, suspension, discontinuation or termination shall be
made without (i) shareholder approval if such approval is required by
applicable law or the rules of the stock market or exchange, if any, on
which the Shares are principally quoted or traded or (ii) the consent of
the affected Participant, if such action would materially adversely affect the
rights of such Participant under any outstanding Award, except to the extent
any such amendment, alteration, suspension, discontinuance 

 

15

 

or termination is made to cause the Plan to comply
with applicable law, stock market or exchange rules and regulations or
accounting or tax rules and regulations. 
Notwithstanding anything to the contrary in the Plan, the Committee may
amend the Plan in such manner as may be necessary to enable the Plan to achieve
its stated purposes in any jurisdiction in a tax-efficient manner and in
compliance with local rules and regulations.

 

(b)           The Committee may waive any conditions or
rights under, amend any terms of, or amend, alter, suspend, discontinue or
terminate any Award theretofore granted, prospectively or retroactively,
without the consent of any relevant Participant or holder or Beneficiary of an
Award; provided, however, that no such action shall
materially adversely affect the rights of any affected Participant or holder or
Beneficiary under any Award theretofore granted under the Plan, except to the
extent any such action is made to cause the Plan to comply with applicable law,
stock market or exchange rules and regulations or accounting or tax rules and
regulations; provided further
that, except as provided in Section 5(c), no such action shall directly or
indirectly, through cancellation and regrant or any other method, reduce, or
have the effect of reducing, the exercise price of any Award established at the
time of grant thereof; and provided further,
that the Committee’s authority under this Section 13(b) is limited in
the case of Awards subject to Section 9(b), as provided in Section 9(b).

 

(c)           Except as provided in Section 9(b),
the Committee shall be authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of events
(including the events described in Section 5(c)) affecting the Company, or
the financial statements of the Company, or of changes in applicable laws,
regulations or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the
Plan.

 

(d)           The Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem desirable to carry the Plan into
effect.

 

SECTION 14. 
Miscellaneous.

 

(a)           No employee, Participant or other person
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of employees, Participants or holders or
Beneficiaries of Awards under the Plan. 
The terms and conditions of Awards need not be the same with respect to
each recipient.  Any Award granted under
the Plan shall be a one-time Award that does not constitute a promise of future
grants.  The 

 

16

 

Company, in its sole discretion, maintains the right
to make available future grants under the Plan.

 

(b)           The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of, or
to continue to provide services to, the Company or any Affiliate.  Further, the Company or the applicable
Affiliate may at any time dismiss a Participant, free from any liability, or
any claim under the Plan, unless otherwise expressly provided in the Plan or in
any Award Document or in any other agreement binding the parties.  The receipt of any Award under the Plan is
not intended to confer any rights on the receiving Participant except as set
forth in the applicable Award Document.

 

(c)           Nothing contained in the Plan shall prevent
the Company from adopting or continuing in effect other or additional
compensation arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.

 

(d)           The Company shall be authorized to
withhold from any Award granted or any payment due or transfer made under any
Award or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other Awards, other property, net
settlement, or any combination thereof) of applicable withholding taxes due in
respect of an Award, its exercise or settlement or any payment or transfer
under such Award or under the Plan and to take such other action (including
providing for elective payment of such amounts in cash or Shares by the
Participant) as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes.

 

(e)           If any provision of the Plan or any Award
Document is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction, or as to any person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award Document,
such provision shall be stricken as to such jurisdiction, person or Award, and
the remainder of the Plan and any such Award Document shall remain in full
force and effect.

 

(f)            Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Participant or any other
person.  To the extent that any person
acquires a right to receive payments from the Company pursuant to an Award,
such right shall be no greater than the right of any unsecured general creditor
of the Company.

 

17

 

(g)           No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash or other securities shall be paid or transferred in lieu of any
fractional Shares, or whether such fractional Shares or any rights thereto
shall be canceled, terminated or otherwise eliminated.

 

SECTION 15. 
Effective Date of the Plan.  The Plan shall be effective as of the
Effective Date.

 

SECTION 16. 
Term of the Plan.  No Award shall be granted under the Plan
after the earliest to occur of (i) the tenth year anniversary of the
Effective Date, (ii) the maximum number of Shares available for issuance
under the Plan have been issued or (iii) the Board terminates the Plan in
accordance with Section 13(a). 
However, unless otherwise expressly provided in the Plan or in an
applicable Award Document, any Award theretofore granted may extend beyond such
date, and the authority of the Committee to amend, alter, adjust, suspend,
discontinue or terminate any such Award, or to waive any conditions or rights
under any such Award, and the authority of the Board to amend the Plan, shall
extend beyond such date.

 

SECTION 17. 
Section 409A of the Code.  With respect to Awards subject to Section 409A
of the Code, the Plan is intended to comply with the requirements of Section 409A
of the Code, and the provisions of the Plan and any Award Document shall be
interpreted in a manner that satisfies the requirements of Section 409A of
the Code, and the Plan shall be operated accordingly.  If any provision of the Plan or any term or
condition of any Award would otherwise frustrate or conflict with this intent,
the provision, term or condition will be interpreted and deemed amended so as
to avoid this conflict.

 

SECTION 18. 
Governing Law.  The Plan and each Award Document shall be
governed by the laws of the State of Delaware, without application of the
conflicts of law principles thereof.

 

18

 

 

 

EXHIBIT E-1

 

[FORM OF] EMPLOYMENT
AGREEMENT

 

 

dated as of October 23,
2009,

 

 

between

 

 

COBALT INTERNATIONAL ENERGY,
INC.,

(the
Company)

 

 

and

 

[·],

(Employee)

 

 

TABLE OF CONTENTS

 

	
   

  	
  PAGE

  
	
   

  
	
  ARTICLE 1

  DEFINITIONS

  
	
   

  
	
  Section 1.01.  Definitions

  	
  1

  
	
   

  	
   

  
	
  ARTICLE 2

  EFFECTIVENESS; TERM OF AGREEMENT; TERMINATION OF SEVERANCE AGREEMENT

  
	
   

  
	
  Section 2.01.  Effectiveness; Term of Agreement;
  Termination of Severance Agreement

  	
  8

  
	
   

  	
   

  
	
  ARTICLE 3

  POSITIONS AND DUTIES

  
	
   

  
	
  Section 3.01.  Employment; Positions

  	
  8

  
	
  Section 3.02.  Duties and Services

  	
  8

  
	
  Section 3.03.  Other Interests

  	
  8

  
	
   

  	
   

  
	
  ARTICLE 4

  CERTAIN EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO EQUITY GRANT[S]

  
	
   

  
	
  Section 4.01.  Accredited Investor Representations

  	
  9

  
	
  Section 4.02.  Transfer Restrictions

  	
  9

  
	
  Section 4.03.  Life Insurance

  	
  9

  
	
  Section 4.04.  IPO Equity Grants

  	
  9

  
	
   

  	
   

  
	
  ARTICLE 5

  CONFIDENTIAL INFORMATION, INVENTIONS,

  BUSINESS OPPORTUNITIES AND GOODWILL

  
	
   

  
	
  Section 5.01.  Confidential Information, Inventions,
  Business Opportunities and Goodwill

  	
  10

  
	
   

  	
   

  
	
  ARTICLE 6

  COMPENSATION AND BENEFITS

  
	
   

  
	
  Section 6.01.  Base Salary

  	
  10

  
	
  Section 6.02.  Bonuses

  	
  10

  
	
  Section 6.03.  Other Benefits

  	
  11

  
	
  Section 6.04.  Expenses

  	
  11

  

 

 

	
  Section 6.05.  Vacation and Sick Leave

  	
  11

  
	
  Section 6.06.  Offices

  	
  12

  
	
   

  	
   

  
	
  ARTICLE 7

  TERMINATION OF EMPLOYMENT AND NOTICE OF TERMINATION OF EMPLOYMENT

  
	
   

  
	
  Section 7.01.  Termination of Employment

  	
  12

  
	
  Section 7.02.  Notice of Termination of Employment

  	
  12

  
	
  Section 7.03.  Deemed Resignations

  	
  13

  
	
   

  	
   

  
	
  ARTICLE 8

  SEVERANCE BENEFITS

  
	
   

  
	
  Section 8.01.  Death, Disability, Termination for Cause or
  Resignation Without Good Reason

  	
  13

  
	
  Section 8.02.  Involuntary Termination

  	
  13

  
	
  Section 8.03.  Death, Disability or Involuntary Termination
  After Agreement Termination Date

  	
  15

  
	
   

  	
   

  
	
  ARTICLE 9

  INTEREST ON LATE PAYMENTS

  
	
   

  
	
  Section 9.01.  Interest on Late Payments

  	
  15

  
	
   

  	
   

  
	
  ARTICLE 10

  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

  
	
   

  
	
  Section 10.01.  Gross-up Payment

  	
  15

  
	
  Section 10.02.  Disposition of Claims

  	
  16

  
	
   

  	
   

  
	
  ARTICLE 11

  COMPETITION.

  
	
   

  
	
  Section 11.01.  Competition

  	
  17

  
	
   

  	
   

  
	
  ARTICLE 12

  NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION

  
	
   

  
	
  Section 12.01.  Nondisclosure of Confidential and
  Proprietary Information

  	
  19

  
	
   

  	
   

  
	
  ARTICLE 13

  INVENTIONS

  
	
   

  
	
  Section 13.01.  Inventions

  	
  21

  

 

ii

 

	
  ARTICLE 14

  INJUNCTIVE RELIEF

  
	
   

  
	
  Section 14.01.  Injunctive Relief

  	
  21

  
	
   

  	
   

  
	
  ARTICLE 15

  NON-DISPARAGEMENT

  
	
   

  
	
  Section 15.01.  Non-Disparagement

  	
  21

  
	
   

  	
   

  
	
  ARTICLE 16

  GENERAL

  
	
   

  
	
  Section 16.01.  Survivorship

  	
  22

  
	
  Section 16.02.  Arbitration

  	
  22

  
	
  Section 16.03.  Payment Obligations Absolute

  	
  23

  
	
  Section 16.04.  Successors

  	
  23

  
	
  Section 16.05.  Severability

  	
  23

  
	
  Section 16.06.  Non-alienation

  	
  23

  
	
  Section 16.07.  Notices

  	
  23

  
	
  Section 16.08.  Controlling Law and Waiver of Jury Trial

  	
  24

  
	
  Section 16.09.  Release and Delayed Payment Restriction

  	
  24

  
	
  Section 16.10.  Full Settlement

  	
  25

  
	
  Section 16.11.  Unfunded Obligation

  	
  25

  
	
  Section 16.12.  No Right to Continued Employment

  	
  25

  
	
  Section 16.13.  Withholding of Taxes and Other Employee
  Deductions

  	
  25

  
	
  Section 16.14.  Number and Gender

  	
  25

  
	
  Section 16.15.  Entire Agreement

  	
  26

  

 

	
  Annexes
  and Exhibits

  	
   

  
	
   

  	
   

  
	
  Annex
  I

  	
  Accredited
  Investor Representations

  
	
  Annex
  II

  	
  Transfer
  Restrictions

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Restricted Stock Award Agreement — Class C Interests

  
	
  Exhibit B

  	
  Form of
  Restricted Stock Award Agreement — Class D Interests

  
	
  Exhibit C

  	
  Form of
  Release

  
			

 

iii

 

[FORM OF] EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) dated as of October 23, 2009, is made by
and between COBALT INTERNATIONAL ENERGY, INC., a Delaware corporation (the “Company”), and [·] (“Employee”) and, for the limited purpose of Article 2,
Cobalt International Energy, L.P. (the “Partnership”).

 

RECITALS

 

WHEREAS, the Company desires to attract and retain
certain key employee personnel and, accordingly, the Board of Directors of the
Company has approved the Company’s entering into this Agreement with Employee
to encourage Employee’s continued service to Cobalt;

 

WHEREAS, the terms and conditions set forth in this
Agreement are similar to the terms and conditions set forth in an existing
severance agreement between Employee and the Partnership dated as of April 20,
2009 (the “Prior Severance Agreement”);

 

WHEREAS, upon the closing of the IPO (as defined
below), the Severance Agreement shall be terminated, and this Agreement shall
become effective.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing
and for other good and valuable consideration, the Company and Employee agree
as follows:

 

ARTICLE
1

DEFINITIONS

 

Section 1.01.  Definitions.

 

“Accrued Obligations”
shall mean Employee’s base salary through the Date of Termination of Employment
not theretofore paid, any expenses owed to Employee under the Company’s expense
reimbursement policy as in effect from time to time, any accrued vacation pay
owed to Employee pursuant to the Company’s vacation policy as in effect from
time to time, any earned but unpaid annual performance bonus with respect to a
calendar year that has ended on or before the Date of Termination of Employment
(it being understood that a bonus will not be considered to have been unearned
merely because Employee has not remained employed through the payment date so
long as Employee has remained employed through the end of the calendar year
that has ended on or before the

 

 

Date of Termination of Employment), any amount
accrued and arising from Employee’s participation in, or benefits accrued
under, any employee benefit plans, programs or arrangements maintained by the
Company which amounts shall be payable in accordance with the terms and
conditions of such employee benefit plans, programs or arrangements, and such
other or additional benefits as may be, or become, due to Employee under the
applicable terms of applicable plans, programs, agreements, corporate
governance documents and other arrangements of the Company and its
subsidiaries.

 

“Affiliate”
shall mean any entity that owns or controls, is owned or controlled by, or is
under common control with, the Company.

 

“Agreement Termination Date”
shall mean the fifth anniversary of the closing of the IPO.

 

“Annual Bonus”
shall have the meaning assigned to such term in Section 6.02.

 

“Annualized Base Salary”
shall mean an amount equal to the greater of:

 

Employee’s annualized base salary at the rate in
effect on the date of his Involuntary Termination or termination by reason of
death or Disability, as applicable;

 

Employee’s annualized base salary at the rate in
effect 90 days prior to the date of his Involuntary Termination or termination
by reason of death or Disability, as applicable; or

 

Employee’s annualized base salary at the rate in
effect immediately prior to a Change in Control if, on the date upon which such
Change in Control occurs or within two years thereafter, Employee’s employment
shall be subject to an Involuntary Termination or be terminated by reason of death
or Disability.

 

For the avoidance of doubt, for all purposes of this
Agreement, base salary specifically does not include any (A) bonuses, (B) incentive
compensation or (C) equity-based compensation.

 

“Base Salary”
shall have assigned to such term in Section 6.01.

 

“Board” shall
mean the Board of Directors of the Company.

 

“Cause” shall
mean (i) the willful failure of Employee to substantially perform Employee’s
duties as an employee of the Company (other than any such failure resulting
from Employee’s physical or mental incapacity), (ii) Employee’s having
engaged in willful misconduct, gross negligence or a breach of fiduciary duty
that results in material and demonstrable harm to the Company or any of its

 

2

 

Affiliates, (iii) Employee’s willful and
material breach of this Agreement (as amended from time to time) that results
in material and demonstrable harm to the Company or any of its Affiliates, (iv) Employee’s
having been convicted of, or having entered a plea bargain or settlement
admitting guilt or the imposition of unadjudicated probation for, any felony
under the laws of the United States, any state or the District of Columbia,
where such felony involves moral turpitude or where, as a result of such
felony, the continued employment of Employee would have, or would reasonably be
expected to have, a material adverse impact on the Company’s or any of its
Affiliates’ reputations, (v) Employee’s having been the subject of any
order, judicial or administrative, obtained or issued by the Securities and
Exchange Commission, for any securities violation involving fraud including,
for example, any such order consented to by Employee in which findings of facts
or any legal conclusions establishing liability are neither admitted nor
denied, (vi) Employee’s unlawful use (including being under the influence
of) or possession of illegal drugs on the Company’s premises or while
performing Employee’s duties and responsibilities as an employee of the
Company, or (vii) Employee’s commission of an act of fraud, embezzlement,
or misappropriation, in each case, against the Company or any of its
Affiliates.  If the Company desires to
terminate Employee’s employment for Cause in accordance herewith, it shall
provide Employee with a Notice of Termination of Employment in accordance with Section 5.02
and allow Employee 30 days following the date of such notice to fully remedy,
cure or rectify, if possible, the situation giving rise to the Company’s
allegations of Cause.  For purposes of
this definition, no act, or failure to act, on the part of Employee shall be
considered “willful” unless it is done, or omitted to be done, by Employee in
bad faith or without reasonable belief that Employee’s action or omission was
in the best interests of the Company. 
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of the Chief
Employee Officer of the Company (other than Employee if he is serving in such
capacity) or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by Employee in good
faith and in the best interests of the Company. 
The cessation of employment of Employee shall not be deemed to be for
Cause unless and until there shall have been delivered to Employee a copy of a
resolution duly adopted by the affirmative vote of a majority of the entire
membership of the Board (excluding Employee, if Employee is a member of the
Board) at a meeting of the Board at which at least a quorum is present (after
reasonable notice is provided to Employee and Employee is given an opportunity,
together with counsel for Employee, to be heard before the Board) finding that,
in the good faith opinion of the Board, Employee is guilty of the conduct
described in this definition, and specifying the particulars thereof in detail.

 

(a)           “Change in Control”
means the occurrence of any one or more of the following events:

 

3

 

(i)            any “person” (as
defined in Section 13(d) of the Securities Exchange Act of 1934 (the “Act”)),  other than (A) an
employee benefit plan or trust maintained by the Company or (B) any of the
Sponsors (as defined in the Amended and Restated Certificate of Incorporation
of the Company as in effect immediately following the closing of the IPO) or
their respective Affiliates, becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company representing
more than 50% of the combined voting power of the Company’s outstanding
securities entitled to vote generally in the election of directors;

 

(ii)           at any time during a period of 12  consecutive months, individuals who at the beginning of
such period constituted the Board and any new member of the Board whose
election or nomination for election was approved by a vote of at least  a majority of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was so approved, cease for any reason to constitute a majority of
members of the Board; or

 

(iii)          the consummation of (A) a merger
or consolidation of the Company or any of its subsidiaries with any other
corporation or entity, other than a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity
or, if applicable, the ultimate parent thereof) at least 50% of the combined
voting power and total fair market value of the securities of the Company or
such surviving entity or parent outstanding immediately after such merger or consolidation,
or (B) any sale, lease, exchange or other transfer to any Person (other
than an Affiliate (as defined in the Company Long Term Incentive Plan)) of
assets of the Company and/or any of its subsidiaries, in one transaction or a
series of related transactions, having an aggregate fair market value of more
than 50% of the fair market value of the Company and its subsidiaries (the “Company Value”) immediately prior to such transaction(s),
but only to the extent that, in connection with such transaction(s) or
within a reasonable period thereafter, the Company’s stockholders receive
distributions of cash and/or assets having a fair market value that is greater
than 50% of the Company Value immediately prior to such transaction(s).

 

Notwithstanding the foregoing, in no event
shall a Change in Control be deemed to have occurred with respect to Employee
if Employee is part of a “group” within the meaning of Section 13(d)(3) of
the Act that consummates the Change in Control transaction.  In addition, for purposes of the definition
of Change in Control, a person engaged in business as an underwriter of
securities shall not be

 

4

 

deemed to be the beneficial owner of, or to
beneficially own, any securities acquired through such person’s participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.

 

“Cobalt Equity Payment”
means the issuance of an equity interest in Cobalt to Employee, the accelerated
vesting of any such equity interest or any other benefit conferred to Employee
in connection with any such equity interest that, in any such case, could
potentially be subject to the Excise Tax.

 

“Code” shall
mean the Internal Revenue Code of 1986, as amended.

 

“Date of Termination of
Employment” shall mean (i) if Employee’s employment with the
Company is terminated by his death, the date of Employee’s death, or (ii) if
Employee’s employment with the Company is terminated for any reason whatsoever
other than Employee’s death, the earlier of the date indicated in the Notice of
Termination of Employment or the date specified by the Company pursuant to Section 7.02.

 

“Disability”
shall mean, at any time the Company or any Affiliate sponsors a long-term disability
plan that covers Employee and other Employee employees of the Company, “disability”
as defined in such long-term disability plan for the purpose of determining a
participant’s eligibility for benefits; provided, however,
if the long-term disability plan contains multiple definitions of disability,
then “Disability” shall refer to that definition of disability which, if
Employee qualified for such disability benefits, would provide coverage for the
longest period of time.  The
determination of whether Employee has a Disability shall be made by the person
or persons required to make final disability determinations under the long-term
disability plan.  At any time the Company
or any Affiliate does not sponsor such a long-term disability plan, Disability
shall mean Employee’s inability to perform, with or without reasonable
accommodation, the essential functions of his position with the Company for a
total of three months during any six-month period as a result of incapacity due
to mental or physical illness, as determined by a physician selected by the
Company or its insurers and acceptable to Employee or Employee’s legal
representative, such agreement as to acceptability not to be unreasonably
withheld or delayed.  Any refusal by
Employee to submit to a medical examination for the purpose of determining
Disability shall be deemed to constitute conclusive evidence of Employee’s
Disability.

 

“Effective Time”
shall have the meaning assigned such term in the Reorganization Agreement.

 

“Excise Tax” shall have the meaning assigned to such term in Section 10.01.

 

5

 

“Good Reason”
shall mean the occurrence of any of the following events: (i) a material
diminution in Employee’s base salary or (ii) relocation of the geographic
location of Employee’s principal place of employment by more than 75 miles from
Houston, Texas.

 

Notwithstanding the preceding provisions of this
definition or any other provision in this Agreement to the contrary, any
assertion by Employee of a termination of employment for “Good Reason” shall
not be effective unless all of the following conditions are satisfied: (A) the
condition described in clauses (i) or (ii) of this definition giving
rise to Employee’s termination of employment must have arisen without Employee’s
consent; (B) Employee must provide written notice to the Company of such
condition in accordance with Section 16.07 within 45 days of the initial
existence of the condition; (C) the condition specified in such notice
must remain uncorrected for 30 days after receipt of such notice by the
Company; and (D) the date of Employee’s termination of employment must
occur within 90 days after the initial existence of the condition specified in
such notice.

 

“Gross-up Payment”
shall have the meaning assigned to such term in Section 10.01.

 

“Inventions”
shall have the meaning assigned to such term in Article 13.

 

“IPO” shall mean
the underwritten public offering of shares of the Company’s common stock
pursuant to Registration Statement No. 333-161734 on Form S-1 filed
with the Securities and Exchange Commission.

 

“Involuntary Termination”
shall mean any termination of Employee’s employment with the Company (i) by
the Company without Cause or (ii) by Employee for Good Reason.  For the avoidance of doubt, the term “Involuntary
Termination” does not include a termination of Employee’s employment with the
Company for any other reason whatsoever, including, without limitation, (A) by
the Company for Cause, (B) by Employee without Good Reason or (C) as
a result of Employee’s death or Disability.

 

“Non-Compete Period”
shall have the meaning assigned to such term in Section 11.01(b).

 

“Notice of Termination of
Employment” shall have the meaning assigned to such term in Section 7.02.

 

“Parachute Value”
of a Payment shall mean the present value as of the date of the change in
ownership or effective control for purposes of Section 280G of the Code of
the portion of such Payment that constitutes a “parachute
payment” under Section 280G(b)(2) of the Code, as
determined for purposes of 

 

6

 

determining whether and to what extent the
Excise Tax will apply to such Payment.

 

“Partnership Agreement”
shall mean the Fourth Amended and Restated Agreement of Limited Partnership of
Cobalt International Energy, L.P., as amended.

 

“Payment” shall
have the meaning assigned to such term in Section 10.01.

 

“Pro Rata Bonus”
shall mean an amount equal to the product of (i) the actual annual bonus
Employee would have been entitled to receive, based on the Company’s actual
performance through the end of the calendar year in which Employee’s
termination of employment with the Company occurred, determined as if he had
continued his employment with the Company through the end of such calendar year
and (ii) a fraction, the numerator of which is the number of days during
the calendar year through the date of Employee’s termination of employment with
the Company and the denominator of which is 365.

 

“Pro Rata Bonus Payment
Date” shall mean, with respect to a Pro Rata Bonus for a particular
calendar year, the date on which annual bonuses for such calendar year are
generally paid to employees of the Company who have not terminated employment
with the Company, but in no event earlier than January 1 of the year
following such calendar year nor later than December 31 of the year
following such calendar year.

 

“Reorganization Agreement”
shall mean the Reorganization Agreement to be entered into prior to the IPO
among the Partnership, the Company and the other parties signatory thereto.

 

“Restricted Stock”
shall mean the shares of restricted stock issued to Employee in connection with
the IPO.

 

“Safe Harbor Amount”
shall mean 2.99 times Employee’s “base amount,”
within the meaning of Section 280G(b)(3) of the Code.

 

“Separation from Service”
means, with respect to Employee, the (i) cessation of all services
performed by Employee for the Company or (ii) permanent decrease in the
level of services performed by Employee for the Company (whether as an employee
or as an independent contractor) to no more than 20 percent of the average
level of services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the full period
of services to the Company, if Employee has been providing services to the
Company for less than 36 months).

 

7

 

“Severance Amount”
shall mean (i) if Employee incurs an Involuntary Termination prior to a
Change in Control or on or after the second anniversary of the Change in
Control (to the extent applicable), 100% of Annualized Base Salary and (ii) if
Employee incurs an Involuntary Termination on the date of the Change in Control
or prior to the second anniversary of the Change in Control, 100% of Annualized
Base Salary.

 

ARTICLE 2

EFFECTIVENESS; TERM OF AGREEMENT; TERMINATION OF SEVERANCE AGREEMENT

 

Section 2.01.  Effectiveness; Term of Agreement; Termination
of Severance Agreement.  This Agreement
shall become effective upon the closing of the IPO.  Subject to an earlier termination of Employee’s
employment with the Company pursuant to Article 7, this Agreement shall
terminate and be of no further force or effect on the Agreement Termination
Date.  Upon the effectiveness of this
Agreement, the Severance Agreement shall terminate and be of no further force or
effect.  If the IPO does not close by March 31,
2010, this Agreement shall be void ab initio and
the Severance Agreement shall remain in full force and effect in accordance
with its terms as of such date.

 

ARTICLE 3

POSITIONS AND DUTIES

 

Section 3.01.  Employment; Positions.  Employee initially shall be
employed as
                              
of the Company.  The Company may
subsequently assign Employee to a different position with the Company or any
Affiliate of the Company or modify Employee’s duties, responsibilities and
reporting relationship.  Moreover, the
Company may assign this Agreement and Employee’s employment to any Affiliate of
the Company.

 

Section 3.02.  Duties and Services.  Employee agrees to serve in
the position(s) assigned pursuant to Section 3.02 and to perform diligently
and to the best of Employee’s abilities the duties and services pertaining to
such position(s), as well as such additional duties and services that Employee
from time to time may be reasonably directed to perform by the Company.
Employee’s employment shall also be subject to the policies maintained and
established by the Company that are of general applicability to the Company’s
Employees, as such policies may be amended from time to time.

 

Section 3.03.  Other Interests.  Employee agrees, during the
period of Employee’s employment by the Company, to devote substantially all of
Employee’s business time, energy and best efforts to the business and affairs
of 

 

8

 

the Company and its Affiliates.  Notwithstanding the foregoing, the parties
acknowledge and agree that Employee may (a) engage in and manage Employee’s
passive personal investments and (b) engage in charitable and civic
activities; provided, however, that such activities
shall be permitted so long as such activities do not conflict with the business
and affairs of the Company or interfere with Employee’s performance of Employee’s
duties hereunder.

 

ARTICLE 4

CERTAIN EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO EQUITY GRANTS

 

Section 4.01.  Accredited Investor Representations.  Employee hereby represents
to the Company that the representations set forth in Annex I to this Agreement (a) are
true and correct as of the date of this Agreement and (b) shall be true
and correct as of the date of the closing of the IPO.

 

Section 4.02.  Transfer Restrictions.   Employee hereby represents to the Company that
he has read and understands, and agrees to be bound by, the transfer
restrictions set forth in Annex II to this Agreement.

 

Section 4.03.  Life Insurance.  This Agreement constitutes
written notice to Employee that (a) the Company or an Affiliate may insure
Employee’s life, (b) the Company or an Affiliate shall have the right to
determine the amount of insurance and the type of policies, and (c) the
Company or an Affiliate will be the beneficiaries of any proceeds payable under
such policies upon the death of Employee. 
Employee hereby irrevocably consents to being insured under the policies
described in the preceding sentence and to the coverage under such policies
continuing after the termination of this Agreement and/or Employee’s
termination of employment with the Company and its Affiliates.  Employee agrees and acknowledges that
Employee shall not have the right to designate the beneficiary or beneficiaries
of the death benefit payable pursuant to such policies, and neither Employee
nor any other person claiming through Employee shall have any interest in such
policies.  Employee shall (i) furnish
any and all information reasonably requested by the Company, any Affiliate or
the insurer to facilitate the issuance of the life insurance policy or policies
described in this paragraph or any adjustment to any such policy, and (ii) take
such physical examinations as the Company, any Affiliate or the insurer deems
necessary.  Employee shall incur no
financial obligation by executing any required document pursuant to this Section 4.03,
and shall have no interest in any such policy.

 

Section 4.04.  IPO Equity Grants.  Immediately prior to the
Effective Time, Employee received [[X] units of Class C Interests (as
defined in the Partnership 

 

9

 

Agreement) and](1) [X] units of Class D
Interests (as defined in the Partnership Agreement), which will at the
Effective Time convert to restricted shares of the Company’s common stock
subject to the terms and conditions of the Company Long Term Incentive Plan and
the forms of Restricted Stock Award Agreements attached as [Exhibit A and](2) Exhibit B
to this Agreement.

 

ARTICLE 5

CONFIDENTIAL INFORMATION, INVENTIONS,

BUSINESS OPPORTUNITIES AND GOODWILL

 

Section 5.01.  Confidential Information, Inventions,
Business Opportunities and Goodwill.  The Company
shall (a) disclose to Employee, and place Employee in a position to have
access to or develop, confidential or proprietary information and Inventions of
the Company (or its Affiliates); (b) entrust Employee with business
opportunities of the Company (or its Affiliates); and (c) place Employee
in a position to develop business good will on behalf of the Company (or its
Affiliates).

 

ARTICLE 6

COMPENSATION AND BENEFITS

 

Section 6.01.  Base Salary. 
During the term of this Agreement, Employee shall receive a minimum,
annualized base salary of
$                      
(the “Base Salary”).  Employee’s Base Salary shall be reviewed
periodically by the Board (or a committee thereof) and, in the sole discretion
of the Board (or a committee thereof), the Base Salary may be increased (but
not decreased) effective as of any date determined by the Board (or a committee
thereof).  Employee’s Base Salary shall
be paid in equal installments in accordance with the Company’s standard policy
regarding payment of compensation to Employees but no less frequently than
monthly.

 

Section 6.02.  Bonuses. 
Employee shall be eligible to receive an annual, calendar-year bonus
(payable in a single lump sum) based on criteria determined in the discretion
of the Board (or a committee thereof) (the “Annual Bonus”),
it being understood that (a) the target bonus at planned or targeted
levels of performance shall equal 100% of Employee’s Base Salary and (b) the
actual amount of each Annual Bonus shall be determined in the discretion of the
Board 

 

(1)  If applicable.

 

(2)  If applicable.

 

10

 

(or a committee thereof).  The Company shall use commercially reasonable
efforts to pay each Annual Bonus with respect to a calendar year on or before March 15
of the following calendar year (and in no event shall an Annual Bonus be paid
after December 31 of the following calendar year).  If the Effective Time occurs after January 1,
2010, then the Annual Bonus for calendar year 2010 shall be determined as if
Employee’s employment with the Company commenced on January 1, 2010.

 

Section 6.03.  Other Benefits.  During Employee’s employment
hereunder, Employee shall be permitted to participate in all benefit plans and
programs of the Company, including improvements or modifications of the same,
which are now, or may hereafter be, available to other senior Employees of the
Company.  The Company shall not, however,
by reason of this Section 6.03, be obligated to institute, maintain, or
refrain from changing, amending, or discontinuing, any such benefit plan or
program, so long as such changes are similarly applicable to other senior
employees generally.

 

Section 6.04.  Expenses. 
The Company shall reimburse Employee for all reasonable business
expenses incurred by Employee in performing services hereunder, including all
expenses of travel and living expenses while away from home on business or at
the request of and in the service of the Company; provided, in each case, that
such expenses are incurred and accounted for in accordance with the policies
and procedures established by the Company. 
Any such reimbursement of expenses shall be made by the Company upon or
as soon as practicable following receipt of supporting documentation reasonably
satisfactory to the Company (but in any event not later than the close of
Employee’s taxable year following the taxable year in which the expense is
incurred by Employee); provided, however,
that, upon Employee’s termination of employment with the Company, in no event
shall any additional reimbursement be made prior to the date that is six months
after Employee’s termination of employment with the Company to the extent such
payment delay is required under section 409A(a)(2)(B)(i) of the Code.

 

Section 6.05.  Vacation and Sick Leave.  During Employee’s employment
hereunder, Employee shall be entitled to (a) sick leave in accordance with
the Company’s policies applicable to its senior Employees and (b) five
weeks paid vacation each calendar year (none of which may be carried forward to
a succeeding year except to the extent permitted under the Company’s vacation
policy generally applicable to its salaried employees).  For the calendar year during which the
Effective Time occurs, Employee’s sick leave and vacation entitlement for the
portion of such year from and after the effective date of this Agreement shall
be equal to the entitlements described in the preceding sentence but reduced by
the amount of sick leave and vacation Employee used during the portion of such
year preceding the Effective Time while employed by the Partnership.

 

11

 

Section 6.06.  Offices. 
Subject to Articles 3 and 6, Employee agrees to serve without
additional compensation, if elected or appointed thereto, as a director of the
Company or any Affiliate and as a member of any committees of the board of
directors of any such entities, and in one or more Employee positions of any
Affiliate.

 

ARTICLE 7

TERMINATION OF EMPLOYMENT AND NOTICE OF TERMINATION OF EMPLOYMENT

 

Section 7.01.  Termination of Employment.  Employee’s employment with
the Company may be terminated by the Company or Employee under the following
circumstances: (a) Employee’s death; (b) Employee’s Disability; (c) termination
by the Company for Cause; (d) termination by the Company without Cause; (e) resignation
by Employee for Good Reason; or (f) resignation by Employee without Good
Reason.  For all purposes of this
Agreement, Employee shall be considered to have terminated employment with the
Company when Employee incurs a Separation from Service.

 

Section 7.02.  Notice of Termination of Employment.  Any termination of Employee’s
employment by the Company or by Employee (other than termination by reason of
Employee’s death) shall be communicated by a written notice to the other party
hereto indicating the specific termination provision in the first sentence of Section 7.02
relied upon, setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee’s employment under the
provision so indicated, and specifying a Date of Termination of Employment
which, if submitted by Employee, shall be at least 30 days following the date
of such notice (a “Notice of Termination of
Employment”); provided, however,
that in the case of any Notice of Termination of Employment submitted by
Employee, the Company may, in its sole discretion, advance the Date of
Termination of Employment to any date following the Company’s receipt of the
Notice of Termination of Employment (and, if the Date of Termination of
Employment is so advanced, it shall not change the basis for Employee’s
termination nor be construed or interpreted as a termination of Employee’s
employment by the Company for any reason whatsoever).  A Notice of Termination of Employment
submitted by the Company may provide for a Date of Termination of Employment on
the date Employee receives the Notice of Termination of Employment, or any date
thereafter elected by the Company in its sole discretion.  The failure by Employee or the Company to set
forth in the Notice of Termination of Employment any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
Employee or the Company hereunder or preclude Employee or the Company from
asserting such fact or circumstance in enforcing Employee’s or the Company’s
rights hereunder.

 

12

 

Section 7.03.  Deemed Resignations.  Unless otherwise agreed to
in writing by the Company and Employee prior to the termination of Employee’s
employment, any termination of Employee’s employment shall constitute an
automatic resignation of Employee:  (i) as
an officer of the Company and each Affiliate; (ii) as a member of the
Board (if applicable); (iii) from the board of directors or similar
governing body of any Affiliate; and (iv) from the board of directors or
similar governing body of any corporation, limited liability entity or other
entity in which the Company or any Affiliate holds an equity interest and with
respect to which board or similar governing body Employee serves as the Company’s
or such Affiliate’s designee or other representative.

 

ARTICLE 8

SEVERANCE BENEFITS

 

Section 8.01.  Death, Disability, Termination for Cause or
Resignation Without Good Reason.  If Employee’s
employment with the Company is terminated by the Company for Cause or by
Employee without Good Reason, or if such employment terminates by reason of
Employee’s death or Disability, then, upon such termination, Employee (or
Employee’s estate) shall be entitled to receive the Accrued Obligations (other
than in the case of a termination by the Company for Cause, any bonus or
incentive compensation that under the applicable plan requires Employee to be
employed on the date of payment).  If
Employee’s employment with the Company terminates by reason of death or
Disability, then the Company shall also pay to Employee (or Employee’s estate
or legal representatives, as applicable) on the Pro Rata Bonus Payment Date an
amount in cash equal to the Pro Rata Bonus.

 

Section 8.02.  Involuntary Termination.  If Employee’s employment
with the Company shall be subject to an Involuntary Termination, Employee shall
be entitled to receive the Accrued Obligations and, subject to the provisions
of Section 16.09, the Company will, as additional compensation for
services rendered to the Company (including its Affiliates), pay to Employee
the following amounts and take the following actions after the last day of
Employee’s employment with the Company:

 

(a)        if the Involuntary Termination occurs prior to a
Change in Control or on or after the second anniversary of the Change in
Control, pay to Employee in equal monthly installments an amount in cash equal
to the Severance Amount, the first installment to be paid on the date that is
60 days after the date of Employee’s termination of employment with the Company
and subsequent installments to be paid on the first day of each of the next 11
calendar months thereafter or such lesser number of installments such that no
installment is paid after March 1st of the year following the year in
which Employee’s employment 

 

13

 

was terminated, with each
installment equal to the Severance Amount divided by the total number of such
installments to be paid;

 

(b)        if the Involuntary Termination occurs on the date of
a Change in Control or before the second anniversary of the Change in Control,
pay to Employee on the date that is 60 days after the date of Employee’s
termination of employment with the Company a lump sum cash payment in an amount
equal to the Severance Amount;

 

(c)        pay to Employee on the Pro Rata Bonus Payment Date
an amount in cash equal to the Pro Rata Bonus; provided,
however, that if this paragraph applies with respect to a Pro Rata
Bonus for a calendar year beginning on or after January 1, 2010 and is
intended to constitute performance-based compensation within the meaning of,
and for purposes of, Section 162(m) of the Code, then this paragraph
shall apply with respect to such Pro Rata Bonus only to the extent the
applicable performance criteria have been satisfied as certified by a committee
of the Board as required under Section 162(m) of the Code; and

 

(d)        during the portion, if any, of the 18-month period
following the date of Employee’s termination of employment with the Company
that Employee elects to continue coverage for Employee and Employee’s eligible
dependents under the Company’s group health plans under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and/or Sections 601
through 608 of the Employee Retirement Income Security Act of 1974, as amended,
the Company shall promptly reimburse Employee on a monthly basis for the
difference, if any, between (i) the amount Employee pays to effect and
continue such coverage and (ii) the amount charged to a similarly situated
active employee of the Company for similar coverage.

 

Notwithstanding the foregoing, if Employee is
entitled to receive severance payments under Section 8.02(a) or (b),
as applicable, and under Section 8.02(c), the aggregate amount payable
pursuant to Sections 8.02(a) or (b), as applicable, and Section 8.02(c) (the
“Aggregate Severance Amount”) shall be
reduced (but not below zero) by the fair market value, as of the Employee’s
Date of Termination of Employment, of the Restricted Stock held by Employee
that has then vested, or that may vest at any time after the Employee’s Date of
Termination of Employment (the “Carried Amount”).  If the Carried Amount exceeds the Aggregate
Severance Amount prior to the commencement of payment of any of the severance
benefits described in Section 8.02(a) or (b), as applicable, and Section 8.02(c),
then Executive shall not be entitled to receive any payments pursuant to 8.02(a) or
(b), as applicable, or Section 8.02(c). 
If the Carried Amount does not exceed the Aggregate Severance Amount
prior to the commencement of payment of any of the severance benefits described
in Sections 8.02(a) or (b), as applicable, and Section 8.02(c), then
the reduction shall be effected as follows: first, the payment provided for in Section 8.02(c) shall
be 

 

14

 

reduced by the Carried Amount if the Carried
Amount or any portion thereof has been paid prior to the payment date provided
for in Section 8.02(c), and if necessary, payments of the amounts provided
for in Section 8.02(a) or (b), as applicable, shall be reduced pro
rata by any additional Carried Amount.  
If at any time after the commencement of payment of the severance
benefits described in Section 8.02(a) or (b), as applicable, and Section 8.02(c),
the Carried Amount not yet applied as a reduction in the severance benefits
exceeds the remaining severance benefits to be paid, the Company shall cease to
make any further payments in respect of either severance benefit, but no amount
previously paid to Executive pursuant to Section 8.02(a) or (b), as
applicable, and Section 8.02(c) shall be repaid to the Company.

 

Section 8.03.  Death, Disability or Involuntary Termination
After Agreement Termination Date.  If, after the
Agreement Termination Date but prior to the payment date of the Annual Bonus
for the calendar year in which the Agreement Termination Date occurs, Employee’s
employment with the Company terminates by reason of the Employee’s death or by
reason of what would have otherwise qualified as Disability or Involuntary
Termination under this Agreement if this Agreement was still in effect at the
time of such termination of employment, the Company shall pay to Employee (or
Employee’s estate or legal representatives, as applicable), subject to the
provisions of Section 16.09, on the Pro Rata Bonus Payment Date an amount
in cash equal to the Pro Rata Bonus.

 

ARTICLE 9

INTEREST ON LATE PAYMENTS

 

Section 9.01.  Interest on Late Payments.  If any payment provided for
in Section 8.02(a), (b) or (c) or Section 8.03 is not made
when due, then the Company shall pay to Employee interest on the amount payable
from the date that such payment should have been made under such Section until
such payment is made, which interest shall be calculated at 5% plus the prime
rate of interest announced by JPMorgan Chase Bank (or any successor thereto) at
its principal office in New York, and shall change when and as any such change
in such prime rate shall be announced by such bank.

 

ARTICLE 10

CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

 

Section 10.01.  Gross-up Payment.  Notwithstanding anything to
the contrary in this Agreement (but subject to the remaining provisions of this
Article 10), in the event that any payment, benefit or distribution by the
Company to or for the benefit of Employee, whether paid, payable, provided,
distributed or

 

15

 

distributable pursuant to the terms of this
Agreement or otherwise (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code or
any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest or penalties, are hereinafter collectively
referred to as the “Excise Tax”),
the Company shall pay to Employee an additional payment (a “Gross-up Payment”) in an amount such that after payment by
Employee of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax imposed on any Gross-up Payment,
Employee retains an amount of the Gross-up Payment equal to the Excise Tax
imposed upon all Payments except for the Cobalt Equity Payments.  Notwithstanding the provisions of the
preceding sentence, if it shall be determined that Employee is entitled to the
Gross-up Payment, but that the Parachute Value of all Payments does not exceed
110% of the Safe Harbor Amount, then no Gross-up Payment shall be made to
Employee and the amounts payable under Article 6 shall be reduced so that
the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor
Amount.  The reduction of the amounts
payable under Article 8, if applicable, shall be made by reducing Payments
payable hereunder (including reducing a Payment to zero) in the order in which
such Payments would be made (beginning with such Payment that would be made
first in time and continuing, to the extent necessary, through to such Payment
that would be made last in time).  For
purposes of reducing the Payments to the Safe Harbor Amount, only amounts
payable under Article 8 (and no other Payments) shall be reduced.  If the reduction of the amount payable under Article 6
would not result in a reduction of the Parachute Value of all Payments to the
Safe Harbor Amount, then no amounts payable under Article 8 shall be
reduced pursuant to this Section 10.01. 
The Company’s obligation to make a Gross-up Payment under this Article 10
shall not be conditioned upon Employee’s termination of employment.  The Gross-up Payment attributable to a
particular Payment shall be made at the time such Payment is made; provided, however, that in no event shall the Gross-up
Payment be made later than the end of Employee’s taxable year next following
Employee’s taxable year in which Employee remits the related taxes.  The Company and Employee shall make an
initial determination as to whether a Gross-up Payment is required and the
amount of any such Gross-up Payment.

 

Section 10.02.  Disposition of Claims.  Employee shall notify the
Company immediately in writing of any claim by the Internal Revenue Service
which, if successful, would require the Company to make a Gross-up Payment (or
a Gross-up Payment in excess of that, if any, initially determined by the
Company and Employee) within five days of the receipt of such claim.  The Company shall notify Employee in writing
at least five days prior to the due date of any response required with respect
to such claim if it plans to contest the claim. 
If the Company decides to contest such claim, Employee shall cooperate
fully with the Company in such action; provided, however,
the Company shall bear and pay directly or indirectly all costs and expenses
(including additional interest and 

 

16

 

penalties) incurred in connection with such
action and shall indemnify and hold Employee harmless, on an after-tax basis,
for any Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of the Company’s action.  If, as a result of the Company’s action with
respect to a claim, Employee receives a refund of any amount paid by the
Company with respect to such claim, Employee shall promptly pay such refund to
the Company.  If the Company fails to
timely notify Employee whether it will contest such claim or the Company
determines not to contest such claim, then the Company shall immediately pay to
Employee the portion of such claim, if any, which it has not previously paid to
Employee.

 

ARTICLE 11

COMPETITION.

 

Section 11.01.  Competition.

 

(a)        Employee and the Company agree to the restrictive
covenants of this Article 11:  (i) in
consideration for the confidential information provided by the Company to
Employee pursuant to Article 5 or otherwise during the course of his
employment; (ii) as part of the consideration for the compensation and
benefits to be paid to Employee by the Company; (iii) to protect the (A) trade
secrets and confidential information of the Company disclosed or entrusted to
Employee by the Company and (B) business goodwill of the Company or its
subsidiaries developed through the efforts of Employee and/or the business
opportunities disclosed or entrusted to Employee by the Company; and (iv) as
an additional incentive for the Company to enter into this Agreement.

 

(b)        Subject to the exceptions set forth in the last
sentence of this Section 11.01(b), Employee shall not at any time while
employed by the Company and for a 1-year period following the Date of
Termination of Employment (the “Non-Compete Period”),
directly or indirectly engage in, have any equity interest in, be affiliated
with, or manage or operate any person, firm, corporation, partnership, entity
or business (whether as director, officer, employee, agent, representative,
partner, member, security holder, consultant or otherwise) that engages in any
business that competes with any Business (as defined below) of the Company in
the states within the United States (or District of Columbia, if applicable)
and in the geographic regions outside of the United States (i) in which
the Company conducts operations or (ii) with respect to which the Company
devotes more than de minimis resources in the
furtherance of the Business; provided, however,
that Employee shall be permitted to acquire a passive stock interest in such a
business if the stock acquired is publicly traded and is not more than two
percent of the outstanding interest in such business.  Notwithstanding the foregoing or anything to
the contrary in this Agreement, it shall not be a violation of this Article 11
for Employee to (A) provide services to any person or entity engaged in
the Business 

 

17

 

if Employee is not involved,
directly or indirectly, in the management, supervision or operations of the
Business (including by reason of any individual reporting to Employee) and the
gross revenues generated by the Business do not constitute more than 33% of the
consolidated gross revenues of such person or entity and its affiliates and (B) provide
services to or otherwise be affiliated with a venture capital or private equity
firm that holds investments in entities engaged in the Business if Employee is
not involved, directly or indirectly, in the identification, evaluation,
recommendation, acquisition, management, operation, supervision or disposition
of such investments, and the gross revenues generated by such Business do not
constitute more than the 33% of the consolidated gross revenues of such firm
and its affiliates.

 

(c)        During the Non-Compete Period, Employee shall not,
directly or indirectly, recruit or otherwise solicit or induce any employee of
the Company, except on behalf of the Company, (i) to terminate his or her
employment with the Company, or (ii) to establish any relationship with
Employee or any of his affiliates for any business purpose competitive with the
Business of the Company, provided, however,
that a general solicitation of the public for employment shall not constitute a
solicitation hereunder so long as such general solicitation is not designed to
target any employee of the Company.

 

(d)        Employee and the Company agree that the foregoing
restrictions are reasonable under the circumstances, are necessary to protect
the Company’s legitimate business interests and that any breach of such
restrictions would cause irreparable injury to the Company.  Employee understands that the foregoing
restrictions may limit Employee’s ability to engage in certain businesses
anywhere in the United States and outside the United States during the
Non-Compete Period but acknowledges that he will receive sufficiently high
remuneration and other benefits from the Company to justify such
restrictions.  Further, Employee
acknowledges that his skills are such that he can be gainfully employed in
non-competitive employment, and that the agreement not to compete will not
prevent him from earning a living. 
Nevertheless, in the event the terms of this Article 11 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other respect,
it will be interpreted to extend only over the maximum period of time for which
it may be enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action.

 

(e)        Employee hereby represents to the Company that he
has read and understands, and agrees to be bound by, the terms of this Article 11.  Employee acknowledges that the geographic
scope and duration of the covenants contained in this Article 11 are the
result of arm’s-length bargaining and are fair and reasonable in light of (i) the
nature and wide geographic scope of the Company’s 

 

18

 

operations of, and in, the
Business, (ii) Employee’s level of control over and contact with the
Company’s operations of, and in, the Business in all jurisdictions in which it
is conducted, (iii) the geographic breadth in which the Company conducts
the Business and (iv) the amount of consideration (including confidential
information and trade secrets) that Employee is receiving from the Company.

 

(f)         As used in this Article 11, (i) the term “Company” shall include the Company and its subsidiaries and (ii) the
term “Business” shall mean the exploration
for, and the development and production of, oil and natural gas and the
acquisition of leases and other real property in connection therewith, as such
business may be expanded or altered by the Company during the period of
Employee’s employment by the Company; provided, that
any business or endeavor shall cease to be the “Business” if the Company is not
or ceases to be engaged in such business or endeavor.

 

(g)        In consideration of the Company’s promises herein,
during the Non-Compete Period, Employee promises to disclose to the Company any
employment, consulting, or other service relationship that Employee enters into
after the termination of Employee’s employment with the Company for any
reason.  Such disclosure shall be made
within seven business days after Employee enters into such employment,
consulting or other service relationship. 
Employee expressly consents to and authorizes the Company to disclose
both the existence and terms of this Agreement to any future employer or
recipient of Employee’s services and to take any steps the Company deems
necessary to enforce this Agreement.

 

ARTICLE 12

NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION

 

Section 12.01.  Nondisclosure of Confidential and Proprietary
Information.  (a)   Except in connection with the faithful performance of
Employee’s duties for the Company or pursuant to Section 12.01(c) or
(e), Employee shall, in perpetuity, maintain in confidence and shall not
directly, indirectly or otherwise, (i) use, disseminate, disclose or
publish, or use for his benefit or the benefit of any person, firm, corporation
or other entity, any (A) confidential or proprietary information or trade
secrets of or relating to the Company (including, without limitation,
intellectual property in the form of patents, trademarks and copyrights and
applications therefor, ideas, inventions, works, discoveries, improvements,
information, documents, formulae, practices, processes, methods, developments,
source code, modifications, technology, techniques, data, programs, other
know-how or materials, in each case, that are confidential and/or proprietary
and owned, developed or possessed by the Company, whether in tangible or
intangible form) or (B) confidential or proprietary information with
respect to the Company’s operations, processes, products, inventions, business
practices, strategies, business 

 

19

 

plans, finances, principals, vendors,
suppliers, customers, potential customers, marketing methods, costs, prices,
contractual relationships, regulatory status, prospects and compensation paid
to employees or other terms of employment or (ii) deliver to any person,
firm, corporation or other entity any document, record, notebook, computer
program or similar repository of or containing any such confidential or proprietary
information or trade secrets.  The
parties hereby stipulate and agree that as between them the foregoing matters
are important, material and confidential proprietary information and trade
secrets and materially affect the successful conduct of the businesses of the
Company (and any successor or assignee of the Company).

 

(b)        Upon the termination of Employee’s employment with
the Company for any reason, Employee will promptly deliver to the Company all
correspondence, drawings, manuals, letters, notes, notebooks, reports,
programs, plans, proposals, financial documents and electronically stored
information, in each case, that are confidential or proprietary to the Company,
or any other confidential or proprietary documents (including electronically stored
information) concerning the Company’s customers, business plans, strategies,
products or processes.

 

(c)        Employee may respond to a lawful and valid subpoena
or other legal process relating to the business of the Company or the
performance of his duties on behalf of the Company but shall (i) give the
Company prompt notice thereof, (ii) make available to the Company and its
counsel the documents and other information sought that are not subject to a
binding confidentiality agreement and (iii) assist such counsel at Company’s
expense in resisting or otherwise responding to such process.

 

(d)        As used in this Article 12 and Article 13,
the term “Company” shall include the Company and
its subsidiaries.

 

(e)        Nothing in this Agreement shall prohibit Employee
from (i) disclosing information and documents when required by law,
subpoena, court order or legal process, (ii) disclosing information and
documents to his immediate family members or, for the purpose of securing legal
or tax advice, attorney or tax adviser (provided that the persons to whom such
disclosures are made shall be informed of their obligation to maintain the
strict confidentiality of any information provided to them), (iii) disclosing
the post-employment restrictions in this Agreement in confidence to any
potential new employer or person or entity to whom he may provide consulting
services, or (iv) retaining, at any time, his personal correspondence and
rolodex or address book and documents related to his own personal benefits,
entitlements and obligations.

 

20

 

ARTICLE 13

INVENTIONS

 

Section 13.01.  Inventions. 
All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that Employee may discover, invent or
originate during the period of his employment with the Company, either alone or
with others and whether or not during working hours or by the use of the
facilities of the Company (“Inventions”),
shall be the exclusive property of the Company. 
Employee shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other documents the
Company may deem reasonably necessary to protect or perfect its rights therein,
and shall assist the Company, upon reasonable request and at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights therein.  Employee hereby appoints the Company as his
attorney-in-fact to execute on his behalf any assignments or other documents
reasonably deemed necessary by the Company to protect or perfect its rights to
any Inventions.

 

ARTICLE 14

INJUNCTIVE RELIEF

 

Section 14.01.  Injunctive Relief.  It is recognized and
acknowledged by Employee that a breach of the covenants contained in Articles
11, 12, 13 and 15 will cause irreparable damage to Company and its Affiliates
and their goodwill, the exact amount of which will be difficult or impossible
to ascertain, and that the remedies at law for any such breach will be
inadequate.  Accordingly, Employee agrees
that in the event of a breach of any of the covenants contained in Articles 11,
12 ,13 and 15, in addition to any other remedy which may be available at law or
in equity, the Company will be entitled to specific performance and injunctive
relief.

 

ARTICLE 15

NON-DISPARAGEMENT

 

Section 15.01.  Non-Disparagement.  During Employee’s employment
with the Company and following termination of his employment with the Company
for any reason, (a) Employee agrees not to disparage in any material
respect the Company, its subsidiaries, any of their products or practices, or
any of their directors, officers, agents, representatives, members, partners or
stockholders, either orally or in writing, and (b) the Company agrees that
it and its subsidiaries will (i) not make any formal statements that
disparage in any material respect 

 

21

 

Employee and (ii) use commercially
reasonable efforts to advise its directors and officers not to disparage in any
material respect Employee.

 

ARTICLE 16

GENERAL

 

Section 16.01.  Survivorship. 
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.

 

Section 16.02.  Arbitration. 
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before an
arbitrator in Houston, Texas in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect.  Judgment may be entered on
the arbitration award in any court having jurisdiction; provided,
however, that the Company shall be entitled to seek a restraining
order or injunction in any court of competent jurisdiction to prevent any
violation or continuation of any violation of the provisions of Articles 11,
12, 13 or 15 of this Agreement and Employee hereby consents that such
restraining order or injunction may be granted without requiring the Company to
post a bond.  Only individuals who are on
the AAA register of arbitrators shall be selected as an arbitrator.  Within 20 days of the conclusion of the
arbitration hearing, the arbitrator(s) shall prepare written findings of
fact and conclusions of law.  It is
mutually agreed that the written decision of the arbitrator(s) shall be
valid, binding, final and non-appealable; provided however,
that the parties hereto agree that the arbitrator shall not be empowered to
award punitive damages against any party to such arbitration.  The Company shall bear all administrative
fees and expenses of the arbitration and each party shall bear its own counsel
fees and expenses except as otherwise provided in this paragraph.  If Employee makes a claim against the Company
relating to the performance of, or the rights and obligations of, the Company
arising under, relating to or in connection with this Agreement (a “Covered Claim by the Employee”), the arbitrators shall award
Employee his reasonable legal fees and expenses if Employee prevails on one
material Covered Claim by the Employee (as determined by the arbitrator).  If a claim is made by the Company against
Employee relating to the performance of, or the rights and obligations of,
Employee arising under, relating to or in connection with this Agreement (a “Covered Claim by the Company”), the arbitrators shall award
Employee his reasonable legal fees and expenses; provided
that if such Covered Claim by the Company relates to Employee’s performance or
obligations under Articles 11, 12, 13 or 15, the arbitrators shall award
Employee his legal fees and expenses only if the Company does not prevail on
any Covered Claim by the Company relating to any such Section (as
determined by the arbitrator).  Any 

 

22

 

reimbursement of reasonable legal fees and
expenses required under this Section 16.02 and any reimbursement of
expenses included in the Accrued Obligations payable to Employee under Article 6
shall be made not later than the close of Employee’s taxable year following the
taxable year in which Employee incurs the expense; provided,
however, that, upon Employee’s termination of employment with the
Company, in no event shall any additional reimbursement be made prior to the
date that is six months after the date of Employee’s termination of employment
to the extent such payment delay is required under Section 409A(a)(2)(B)(i) of
the Code.  In no event shall any
reimbursement be made to Employee for such fees and expenses incurred after the
date that is 10 years after the date of Employee’s termination of employment
with the Company.

 

Section 16.03.  Payment Obligations Absolute.  The Company’s obligation to
pay Employee the amounts and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or other right which the Company (including its subsidiaries) may have against
him or anyone else.  All amounts payable
by the Company shall be paid without notice or demand.  Employee shall not be obligated to seek other
employment in mitigation of the amounts payable or arrangements made under any
provision of this Agreement, and the obtaining of any such other employment
shall in no event effect any reduction of the Company’s obligations to make (or
cause to be made) the payments and arrangements required to be made under this
Agreement.

 

Section 16.04.  Successors. 
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, by merger or otherwise.  This Agreement shall also be binding upon and
inure to the benefit of Employee and his estate.  If Employee shall die prior to full payment
of amounts due pursuant to this Agreement, such amounts shall be payable
pursuant to the terms of this Agreement to his estate.

 

Section 16.05.  Severability. 
Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction by reason of applicable law shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 16.06.  Non-alienation.  Employee shall not have any
right to pledge, hypothecate, anticipate or assign this Agreement or the rights
hereunder, except by will or the laws of descent and distribution.

 

Section 16.07.  Notices. 
Any notices or other communications provided for in this Agreement
shall be sufficient if in writing.  In
the case of Employee, such notices or communications shall be effectively
delivered if hand-delivered to 

 

23

 

Employee at his principal place of employment
or if sent by registered or certified mail to Employee at the last address he
has filed with the Company.  In the case
of the Company, such notices or communications shall be effectively delivered if
sent by registered or certified mail to the Company at its principal Employee
offices.

 

Section 16.08.  Controlling Law and Waiver of Jury
Trial.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Texas.  With respect to any claim or
dispute related to or arising under this Agreement, Employee and the Company
hereby consent to the exclusive jurisdiction, forum and venue of the state and
federal courts located in Harris County, Texas. 
Notwithstanding the foregoing, Section 4.02 and the transfer restrictions
set forth in Annex II shall be governed by, and construed in accordance with,
the laws of the State of Delaware. 
Furthermore, with respect to any claim or dispute related to or arising
under Section 4.02 and the transfer restrictions set forth in Annex II,
Employee and the Company hereby consent to the exclusive jurisdiction, forum
and venue of the Court of Chancery of the State of Delaware.  Each of the parties hereto hereby irrevocably
waives any and all right to trial by jury in any legal proceeding arising out
of or related to this Agreement or the transactions contemplated hereby.

 

Section 16.09.  Release and Delayed Payment Restriction.

 

(a)        As a condition to the receipt of any benefit under Article 5
hereof (except in the case of the termination of Employee’s employment with the
Company by reason of Employee’s death or Disability and except for the Accrued
Obligations), Employee shall first execute a release in the form attached
hereto as Exhibit C (with such changes therein as the Company may
reasonably require to reflect changes in applicable law and the circumstances
relating to the termination of Employee’s employment), releasing the Company
and certain other persons and entities from certain claims and other
liabilities.

 

(b)        The release described in Section 16.09(a) hereof
must be effective and irrevocable within 55 days after the date of the
termination of Employee’s employment with the Company.  Notwithstanding any provision in this
Agreement to the contrary, if the payment of any amount or benefit under this
Agreement would be subject to additional taxes and interest under Section 409A
of the Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of
the Code and the regulations thereunder, then any such payment or benefit that
Employee would otherwise be entitled to during the first six months following
the date of Employee’s termination of employment shall be accumulated and paid
or provided, as applicable, on the date that is six months after the date of
Employee’s termination of employment (or if such date does not fall on a
business day of the Company, the next following business day of the Company),
or such earlier date upon which such amount can be paid or 

 

24

 

provided under Section 409A
of the Code without being subject to such additional taxes and interest.  If this Section 16.09(b) becomes
applicable such that the payment of any amount is delayed, any payments that
are so delayed shall accrue interest on a non-compounded basis, from the date
such payment would have been made had this Section 16.09(b) not
applied to the actual date of payment, at the prime rate of interest announced
by JPMorgan Chase Bank (or any successor thereto) at its principal office in
New York on the date of Employee’s termination of employment (or the first
business day following such date if such termination does not occur on a
business day) and shall be paid in a lump sum on the actual date of payment of
the delayed payment amount.  Employee
hereby agrees to be bound by the Company’s determination of its “specified
employees” (as such term is defined in Section 409A of the Code) in
accordance with any of the methods permitted under the regulations issued under
Section 409A of the Code.

 

Section 16.10.  Full Settlement.  If Employee is entitled to
and receives the benefits provided hereunder, performance of the obligations of
the Company hereunder will constitute full settlement of all claims that
Employee might otherwise assert against the Company on account of his
termination of employment.

 

Section 16.11.  Unfunded Obligation.  The obligation to pay
amounts under this Agreement is an unfunded obligation of the Company, and no
such obligation shall create a trust or be deemed to be secured by any pledge
or encumbrance on any property of the Company.

 

Section 16.12.  No Right to Continued Employment.  Employee and the Company
recognize and agree that subject to the terms of this Agreement (including the
notice provisions of Section 7.02), (i) the Company may terminate
Employee’s employment at any time, for any reason or no reason at all and (ii) Employee
may terminate his employment at any time, for any reason or no reason at all.

 

Section 16.13.  Withholding of Taxes and Other Employee
Deductions.  The Company may
withhold from any benefits and payments made pursuant to this Agreement
(whether actually or constructively made to Employee or treated as included in
Employee’s income under Section 409A of the Code) all federal, state,
city, foreign and other applicable taxes and withholdings as may be required
pursuant to any law or governmental regulation or ruling and all other
customary deductions made with respect to the Company’s employees generally.

 

Section 16.14.  Number and Gender.  Wherever appropriate herein,
words used in the singular shall include the plural and the plural shall
include the singular.  The masculine
gender where appearing herein shall be deemed to include the feminine gender.

 

25

 

Section 16.15.  Entire Agreement.  This Agreement, including
the Annexes and Exhibits attached hereto, constitutes the entire agreement of
the parties with regard to the subject matter hereof and supersedes any and all
prior understandings, agreements or correspondence between the parties.  Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.

 

26

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date and year first written above.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

27

 

ANNEX I

 

ACCREDITED INVESTOR
REPRESENTATIONS

 

Employee hereby represents and warrants that
he qualifies as an “accredited investor”
(as defined in Regulation D of the Securities Act of 1933) by satisfying one or
more of the following criteria:

 

(i)                                     Employee’s individual net
worth or joint net worth with Employee’s spouse exceeds $1,000,000; or

 

(ii)                                  Employee has individual
income in excess of $200,000 in each of the two most recent years or joint
income with Employee’s spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the current
year.

 

Employee is acquiring interests in the
Partnership and / or shares of Company common stock for investment for his own
account and not with a view to, or for sale in connection with, any
distribution thereof and hereby agrees not to sell any shares of Company common
stock in violation of the Federal securities laws.

 

I-1

 

ANNEX II

 

TRANSFER RESTRICTIONS

 

Employee agrees not to Transfer prior to the
Termination Date the Specified Number of the shares of Company common stock
issued to the Employee upon conversion of Class A and [Class B][Class C]
Interests (as defined in the Partnership Agreement) in connection with the
IPO.  Employee will have the discretion
to determine, from time to time, which specific shares of Company common stock
are subject to this limitation.

 

For purposes of this agreement, the following terms
have the following meanings:

 

“Specified Number”
means, as of any date, a number of shares equal to the sum of

 

(a) the product of 80% (or on or after a Change in
Control, the lesser of 80% and the remainder set forth in (x) below) and
the aggregate number of shares of Company common stock issued to Employee upon
conversion of [Class B][Class C] Interests in connection with the
IPO, plus

 

(b) the product of (x) one minus a fraction,
the numerator of which is the aggregate number of shares of Company common
stock owned by the Sponsors immediately after the closing of the IPO and sold
by the Sponsors after the closing of the IPO and prior to such date (other than
with respect to any shares of common stock sold by any Sponsor to any of its
Affiliates), and the denominator of which is the aggregate number of shares of
Company common stock owned by the Sponsors immediately after the closing of the
IPO, and (y) the aggregate number of shares of Company common stock issued
to Employee upon conversion of Class A Interests in connection with the
IPO.

 

If,
at any time prior to the Termination Date, the outstanding shares of Company
common stock shall be changed into a different number of shares or a different
class (including by reason of any reclassification, recapitalization, stock
split (including reverse stock split) or combination, exchange or readjustment
of shares, or any stock dividend or distribution paid in stock thereon with a
record date during such period or any similar transaction), the calculation of
the Specified Number shall be appropriately adjusted.

 

“Sponsors” shall have the meaning as set forth in the Company’s
certificate of incorporation as of the closing of the IPO.

 

II-1

 

“Termination Date” means the earliest of (i) the fifth
anniversary of the closing of the IPO, (ii) the date of termination of
employment with the Company other than a termination by the Company for Cause, (iii) the
first date on which a Change in Control occurs; provided
that if prior to the date of such Change in Control, the Company or the
acquiror requests in writing that Employee continue to provide services to the
Company (or the successor or surviving entity) for a specified period not to
exceed 12 months after the Change in Control, the Termination Date shall not
expire on the date of the Change in Control but shall expire on the earliest of
(x) the last day of the requested period, (y) the date provided in
clause (i) or (z) the date, if any, of the termination of employment
by the Company (or the successor or surviving entity) without Cause, by
Employee for Good Reason or due to Employee’s death or Disability or (iv) the
first date on which the Sponsors have sold a number of shares of Company common
stock equal to the aggregate number owned by the Sponsors immediately after the
closing of the IPO (other than with respect to any shares of common stock sold
by any Sponsor to any of its Affiliates).

 

“Transfer” means (a) offer, sell, pledge, or hypothecate
any legal or beneficial interest, including the grant of an option or other
right or otherwise transfer or enter into an agreement to do so or (b) entry
into any hedge, swap or any other agreement that transfers, in whole or in
part, any of the economic consequences of ownership (whether such transaction
is settled by delivery of cash, shares or otherwise).

 

All capitalized terms defined in the agreement to
which this Annex is attached and used but not otherwise defined herein are used
as therein defined.

 

Notwithstanding the foregoing, Employee may
Transfer:

 

(i)                                                         any shares of
Company common stock issued to Employee upon conversion of Class A and [Class B][Class C]
Interests in connection with the IPO in excess of the Specified Number, so long
as such shares are not Restricted Shares (as defined in the Award Agreement).

 

(ii)                                                      any shares of
Company common stock issued to Employee upon conversion of Class A and [Class B][Class C]
Interests in connection with the IPO (including all or a portion of the
Specified Number of such shares):

 

(a) by will or the laws of descent and distribution,

 

(b) by gift to a spouse, former spouse, lineal ancestor, lineal
descendant, legally adopted child, sibling or lineal

 

2

 

descendant or legally adopted child of a sibling of Employee or a trust
or other entity for the primary benefit of Employee or any such persons if the
transferee agrees in writing to be bound by the provisions of this agreement,
or

 

(c) to any institution qualified as tax-exempt under Section 501(c)(3) of
the Internal Revenue Code of 1986 if the institution agrees in writing to be
bound by the provisions of this agreement.

 

(iii)                                                   with the
consent of the Compensation Committee of the Company’s board of directors
(which consent will not be unreasonably withheld), a number of shares of
Company common stock, in addition to the shares otherwise transferable pursuant
to (i) above, necessary to pay income taxes arising from the vesting of
any Restricted Shares issued to Employee upon conversion of [Class B][Class C]
Interests in connection with the IPO.

 

(iv)                                                  if the Company’s
board of directors (or a committee thereof) in its reasonable judgment makes a
good faith determination that Employee has incurred an unforeseeable emergency
resulting in severe financial hardship, then Employee may sell a number of
shares of Company common stock reasonably necessary to satisfy the emergency
need (which may include amounts necessary to pay Federal, state, local or
foreign income and employment taxes reasonably anticipated to result from the
sale), such number to be determined through the good faith consultation of the
Company’s board of directors and Employee; provided that,
in all cases, any such sale shall be made only from shares of Company common
stock with respect to which Employee has a 100% vested and nonforfeitable
interest.

 

3

 

EXHIBIT A

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT
— CLASS C

INTERESTS

(if applicable)

 

A-1

 

EXHIBIT B

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT
— CLASS D

INTERESTS

 

B-1

 

EXHIBIT C

 

FORM OF RELEASE

 

For and in consideration of certain payments and
other benefits due to [·] (“Employee”) pursuant to the Employment Agreement (the “Employment Agreement”) dated as of [·], 20    , between Cobalt
International Energy, Inc., (the “Company”) and
Employee, and for other good and valuable consideration, Employee hereby
agrees, for Employee, Employee’s spouse and child or children (if any),
Employee’s heirs, beneficiaries, devisees, executors, administrators,
attorneys, personal representatives, successors and assigns, to forever release,
discharge and covenant not to sue the Company and its divisions, affiliates,
subsidiaries, parents, branches, predecessors, successors, assigns, and, with
respect to such entities, their officers, directors, trustees, employees,
agents, shareholders, administrators, general or limited partners, members,
representatives, attorneys, insurers and fiduciaries, past, present and future
(the “Released Parties”) from any and all
claims of any kind arising out of, or related to, his employment with the Company,
its affiliates or subsidiaries (collectively, with the Company, the “Affiliated Entities”) or Employee’s separation from
employment with the Affiliated Entities, which Employee now has or may have
against the Released Parties, whether known or unknown to Employee, by reason
of facts which have occurred on or prior to the date that Employee has signed
this Release.  Such released claims
include, without limitation, any and all claims relating to the foregoing under
federal, state or local laws pertaining to employment, including, without
limitation, the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et seq., the Fair Labor Standards Act, as amended, 29 U.S.C.
Section 201 et seq., the Americans with
Disabilities Act, as amended, 42 U.S.C. Section 12101 et seq.
the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981
et seq., the Rehabilitation Act of 1973,
as amended, 29 U.S.C. Section 701 et seq., the
Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et seq., and any and all state or local laws regarding
employment discrimination, the payment of wages and/or federal, state or local
laws of any type or description regarding employment, including but not limited
to any claims arising from or derivative of Employee’s employment with the
Affiliated Entities, as well as any and all such claims under state contract or
tort law.  By signing this Release,
Employee is bound by it.  Anyone who succeeds
to Employee’s rights and responsibilities, such as heirs or the executor of
Employee’s estate, is also bound by this Release.  This Release also applies to any claims
brought by any person or agency or class action under which Employee may have a
right or benefit.  Notwithstanding this
release of liability, nothing in this Release prevents Employee from filing any
non-legally waivable claim (including a challenge to the validity of this
Release) with the Equal Employment Opportunity Commission (the “EEOC”) or comparable state or local agency or participating
in any

 

C-1

 

investigation or proceeding conducted by the
EEOC or comparable state or local agency; however, Employee understands and
agrees that Employee is waiving any and all rights to recover any monetary or
personal relief or recovery as a result of such EEOC or comparable state or
local agency proceeding or subsequent legal actions.

 

Employee has read this Release carefully,
acknowledges that Employee has been given at least [21] [45] days to consider
all of its terms and has been and is hereby advised to consult with an attorney
and any other advisors of Employee’s choice prior to executing this Release,
and Employee fully understands that by signing below Employee is voluntarily
giving up any right which Employee may have to sue or bring any other claims
against the Released Parties, including any rights and claims under the Age
Discrimination in Employment Act. 
Employee also understands that Employee has a period of seven days after
signing this Release within which to revoke his agreement, and that neither the
Company nor any other person is obligated to make any payments or provide any
other benefits to Employee pursuant to the Severance Agreement until eight days
have passed since Employee’s signing of this Release without Employee’s
signature having been revoked other than any accrued obligations or other
benefits payable pursuant to the terms of the Company’s normal payroll
practices or employee benefit plans.  Finally, Employee expressly represents that he
has not been forced or pressured in any manner whatsoever to sign this Release,
and Employee agrees to all of its terms voluntarily.

 

Notwithstanding anything else herein to the
contrary, this Release shall not affect: (i) the Company’s obligations
under any compensation or employee benefit plan, program or arrangement
(including, without limitation, obligations to Employee under the Employment
Agreement or any stock option, stock award or agreements or obligations under
any pension, deferred compensation or retention plan) provided by the
Affiliated Entities where Employee’s compensation or benefits are intended to
continue or Employee is to be provided with compensation or benefits, in
accordance with the express written terms of such plan, program or arrangement,
beyond the date of Employee’s termination and (ii) rights to
indemnification Employee may have under (A) applicable law, (B) any
other agreement between Employee and a Released Party and (C) as an insured
under any director’s and officer’s liability insurance policy now or previously
in force.

 

C-2

 

This Release is final and binding and may not be
changed or modified except in a writing signed by both parties.

 

	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  [Employee]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cobalt
  International Energy, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

C-3

 

EXHIBIT E-2

 

[FORM OF]
SEVERANCE AGREEMENT

 

dated as of October 23,
2009,

 

 

between

 

 

COBALT
INTERNATIONAL ENERGY, INC.,

(the
Company)

 

and

 

 

[·],

(Employee)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  Article 1

  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01. Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Article 2

  EFFECTIVENESS; TERM OF AGREEMENT; PRIOR SEVERANCE
  AGREEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01. Effectiveness; Term of
  Agreement; Prior Severance Agreement

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Article 3

  CERTAIN EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO
  EQUITY GRANT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01. Services

  	
   

  	
  8

  
	
  Section 3.02. Accredited Investor
  Representations

  	
   

  	
  8

  
	
  Section 3.03. Transfer Restrictions

  	
   

  	
  8

  
	
  Section 3.04. Life Insurance

  	
   

  	
  8

  
	
  Section 3.05. IPO Equity Grant

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  Article 4

  CONFIDENTIAL INFORMATION, INVENTIONS, BUSINESS

  OPPORTUNITIES AND GOODWILL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01. Confidential
  Information, Inventions, Business Opportunities and Goodwill

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  Article 5

  TERMINATION OF EMPLOYMENT AND NOTICE OF TERMINATION
  OF EMPLOYMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01. Termination of
  Employment

  	
   

  	
  9

  
	
  Section 5.02. Notice of Termination
  of Employment

  	
   

  	
  9

  
	
  Section 5.03. Deemed Resignations

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  Article 6

  SEVERANCE BENEFITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01. Death, Disability,
  Termination for Cause or Resignation Without Good Reason

  	
   

  	
  10

  
	
  Section 6.02. Involuntary
  Termination

  	
   

  	
  11

  

 

i

 

	
  Section 6.03. Death, Disability or
  Involuntary Termination After Agreement Termination Date

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Article 7

  INTEREST ON LATE PAYMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01. Interest on Late
  Payments

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Article 8

  CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01. Gross-up Payment

  	
   

  	
  13

  
	
  Section 8.02. Disposition of Claims

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  Article 9

  COMPETITION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01. Competition

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  Article 10

  NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01. Nondisclosure of
  Confidential and Proprietary Information

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  Article 11

  INVENTIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01. Inventions

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  Article 12

  INJUNCTIVE RELIEF

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01. Injunctive Relief

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  Article 13

  NON-DISPARAGEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.01. Non-disparagement

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  Article 14

  GENERAL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.01. Survivorship

  	
   

  	
  19

  
	
  Section 14.02. Arbitration

  	
   

  	
  19

  
	
  Section 14.03. Payment Obligations
  Absolute

  	
   

  	
  20

  
	
  Section 14.04. Successors

  	
   

  	
  20

  
	
  Section 14.05. Severability

  	
   

  	
  20

  
	
  Section 14.06. Non-alienation

  	
   

  	
  20

  

 

ii

 

	
  Section 14.07. Notices

  	
   

  	
  20

  
	
  Section 14.08. Controlling Law and
  Waiver of Jury Trial

  	
   

  	
  20

  
	
  Section 14.09. Release and Delayed
  Payment Restriction

  	
   

  	
  21

  
	
  Section 14.10. Full Settlement

  	
   

  	
  22

  
	
  Section 14.11. Unfunded Obligation

  	
   

  	
  22

  
	
  Section 14.12. Not a Contract of
  Employment

  	
   

  	
  22

  
	
  Section 14.13. Withholding of Taxes
  and Other Employee Deductions

  	
   

  	
  22

  
	
  Section 14.14. Number and Gender

  	
   

  	
  22

  
	
  Section 14.15. Entire Agreement

  	
   

  	
  22

  

 

Annexes
and Exhibits

 

	
  Annex
  I

  	
  Accredited
  Investor Representations

  
	
  Annex
  II

  	
  Transfer
  Restrictions

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Restricted Stock Award Agreement – Class C Interests

  
	
  Exhibit B

  	
  [Form of
  Restricted Stock Award Agreement – Class D Interests]

  
	
  Exhibit C

  	
  Form of
  Release

  
			

 

iii

 

[FORM OF]
SEVERANCE AGREEMENT

 

This SEVERANCE AGREEMENT (this “Agreement”)
dated as of October 23, 2009, is made by and between COBALT INTERNATIONAL
ENERGY, INC., a Delaware corporation (the “Company”), and
[·] (“Employee”) and, for the limited purpose of Article 2,
Cobalt International Energy, L.P. (the “Partnership”).

 

RECITALS

 

WHEREAS, the Company desires to attract and retain
certain key employee personnel and, accordingly, the Board of Directors of the
Company has approved the Company’s entering into this Agreement with Employee
to encourage Employee’s continued service to Cobalt;

 

WHEREAS, the terms and conditions set forth in this
Agreement are similar to the terms and conditions set forth in an existing
severance agreement between Employee and the Partnership dated as of April 20,
2009 (the “Prior Severance Agreement”);

 

WHEREAS, upon the closing of the IPO (as defined
below), the Prior Severance Agreement shall be terminated, and this Agreement
shall become effective.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing
and for other good and valuable consideration, the Company and Employee agree
as follows:

 

ARTICLE
1

DEFINITIONS

 

Section 1.01.  Definitions.

 

“Accrued Obligations”
shall mean Employee’s base salary through the Date of Termination of Employment
not theretofore paid, any expenses owed to Employee under the Company’s expense
reimbursement policy as in effect from time to time, any accrued vacation pay
owed to Employee pursuant to the Company’s vacation policy as in effect from
time to time, any earned but unpaid annual performance bonus with respect to a
calendar year that has ended on or before the Date of Termination of Employment
(it being understood that a bonus will not be considered to have been unearned
merely because Employee has not remained employed through the payment date so
long as Employee has remained

 

 

employed through the end of
the calendar year that has ended on or before the Date of Termination of
Employment), any amount accrued and arising from Employee’s participation in,
or benefits accrued under, any employee benefit plans, programs or arrangements
maintained by the Company which amounts shall be payable in accordance with the
terms and conditions of such employee benefit plans, programs or arrangements,
and such other or additional benefits as may be, or become, due to Employee
under the applicable terms of applicable plans, programs, agreements, corporate
governance documents and other arrangements of the Company and its
subsidiaries.

 

“Affiliate”
shall mean any entity that owns or controls, is owned or controlled by, or is
under common control with, the Company.

 

“Agreement Termination Date”
shall mean the [·] anniversary of the closing of the IPO.

 

“Annualized Base Salary”
shall mean an amount equal to the greater of:

 

(i)            Employee’s annualized base
salary at the rate in effect on the date of his Involuntary Termination or
termination by reason of death or Disability, as applicable;

 

(ii)           Employee’s annualized base
salary at the rate in effect 90 days prior to the date of his Involuntary
Termination or termination by reason of death or Disability, as applicable; or

 

(iii)          Employee’s annualized base
salary at the rate in effect immediately prior to a Change in Control if, on
the date upon which such Change in Control occurs or within two years
thereafter, Employee’s employment shall be subject to an Involuntary
Termination or be terminated by reason of death or Disability.

 

For the avoidance of doubt, for all purposes of this
Agreement, base salary specifically does not include any (A) bonuses, (B) incentive
compensation or (C) equity-based compensation.

 

“Board” shall
mean the Board of Directors of the Company.

 

“Cause” shall
mean (i) the willful failure of Employee to substantially perform Employee’s
duties as an employee of the Company (other than any such failure resulting
from Employee’s physical or mental incapacity), (ii) Employee’s having
engaged in willful misconduct, gross negligence or a breach of fiduciary duty
that results in material and demonstrable harm to the Company or any of its
Affiliates, (iii) Employee’s willful and material breach of this Agreement
(as amended from time to time) that results in material and demonstrable harm
to the Company or any of its Affiliates, (iv) Employee’s having been
convicted of, or having entered a plea bargain or settlement admitting guilt or
the imposition of

 

2

 

unadjudicated probation for,
any felony under the laws of the United States, any state or the District of
Columbia, where such felony involves moral turpitude or where, as a result of
such felony, the continued employment of Employee would have, or would
reasonably be expected to have, a material adverse impact on the Company’s or
any of its Affiliates’ reputations, (v) Employee’s having been the subject
of any order, judicial or administrative, obtained or issued by the Securities
and Exchange Commission, for any securities violation involving fraud
including, for example, any such order consented to by Employee in which
findings of facts or any legal conclusions establishing liability are neither
admitted nor denied, (vi) Employee’s unlawful use (including being under
the influence of) or possession of illegal drugs on the Company’s premises or
while performing Employee’s duties and responsibilities as an employee of the
Company, or (vii) Employee’s commission of an act of fraud, embezzlement,
or misappropriation, in each case, against the Company or any of its
Affiliates.  If the Company desires to
terminate Employee’s employment for Cause in accordance herewith, it shall
provide Employee with a Notice of Termination of Employment in accordance with Section 5.02
and allow Employee 30 days following the date of such notice to fully remedy,
cure or rectify, if possible, the situation giving rise to the Company’s
allegations of Cause.  For purposes of
this definition, no act, or failure to act, on the part of Employee shall be
considered “willful” unless it is done, or
omitted to be done, by Employee in bad faith or without reasonable belief that
Employee’s action or omission was in the best interests of the Company.  Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Employee Officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by Employee in good faith and in the best interests of the
Company.  The cessation of employment of
Employee shall not be deemed to be for Cause unless and until there shall have
been delivered to Employee a copy of a resolution duly adopted by the
affirmative vote of a majority of the entire membership of the Board at a
meeting of the Board at which at least a quorum is present (after reasonable
notice is provided to Employee and Employee is given an opportunity, together
with counsel for Employee, to be heard before the Board) finding that, in the
good faith opinion of the Board, Employee is guilty of the conduct described in
this definition, and specifying the particulars thereof in detail.

 

(a)           “Change in
Control” means the occurrence of any one or more of the following
events:

 

(i)         any “person”
(as defined in Section 13(d) of the Securities Exchange Act of 1934
(the “Act”)),  other
than (A) an employee benefit plan or trust maintained by the Company or (B) any
of the Sponsors (as defined in the Amended and Restated Certificate of Incorporation
of the Company as in effect immediately following the closing of the IPO) or
their respective Affiliates, becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the

 

3

 

Company
representing more than 50% of the combined voting power of the Company’s
outstanding securities entitled to vote generally in the election of directors;

 

(ii)           at any time during a period
of 12  consecutive months, individuals who at
the beginning of such period constituted the Board and any new member of the
Board whose election or nomination for election was approved by a vote of at
least  a majority of the directors then still
in office who either were directors at the beginning of such period or whose
election or nomination for election was so approved, cease for any reason to
constitute a majority of members of the Board; or

 

(iii)          the consummation of (A) a
merger or consolidation of the Company or any of its subsidiaries with any
other corporation or entity, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or being converted into voting securities of the surviving entity
or, if applicable, the ultimate parent thereof) at least 50% of the combined
voting power and total fair market value of the securities of the Company or
such surviving entity or parent outstanding immediately after such merger or
consolidation, or (B) any sale, lease, exchange or other transfer to any
Person (other than an Affiliate (as defined in the Company Long Term Incentive
Plan)) of assets of the Company and/or any of its subsidiaries, in one
transaction or a series of related transactions, having an aggregate fair
market value of more than 50% of the fair market value of the Company and its
subsidiaries (the “Company Value”)
immediately prior to such transaction(s), but only to the extent that, in
connection with such transaction(s) or within a reasonable period
thereafter, the Company’s stockholders receive distributions of cash and/or
assets having a fair market value that is greater than 50% of the Company Value
immediately prior to such transaction(s).

 

Notwithstanding the
foregoing, in no event shall a Change in Control be deemed to have occurred
with respect to Employee if Employee is part of a “group” within the meaning of
Section 13(d)(3) of the Act that consummates the Change in Control
transaction.  In addition, for purposes
of the definition of Change in Control, a person engaged in business as an
underwriter of securities shall not be deemed to be the beneficial owner of, or
to beneficially own, any securities acquired through such person’s
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.

 

“Cobalt Equity Payment” means the issuance of an equity
interest in Cobalt to Employee, the accelerated vesting of any such equity
interest or any other benefit conferred to Employee in connection with any such
equity interest that, in any such case, could potentially be subject to the
Excise Tax.

 

4

 

“Code” shall
mean the Internal Revenue Code of 1986, as amended.

 

“Date of Termination of
Employment” shall mean (i) if Employee’s employment with the
Company is terminated by his death, the date of Employee’s death, or (ii) if
Employee’s employment with the Company is terminated for any reason whatsoever
other than Employee’s death, the earlier of the date indicated in the Notice of
Termination of Employment or the date specified by the Company pursuant to Section 5.02.

 

“Disability”
shall mean, at any time the Company or any Affiliate sponsors a long-term
disability plan that covers Employee and other Employee employees of the
Company, “disability” as defined in such
long-term disability plan for the purpose of determining a participant’s
eligibility for benefits; provided, however, if the long-term disability plan contains multiple
definitions of disability, then “Disability”
shall refer to that definition of disability which, if Employee qualified for
such disability benefits, would provide coverage for the longest period of
time.  The determination of whether
Employee has a Disability shall be made by the person or persons required to
make final disability determinations under the long-term disability plan.  At any time the Company or any Affiliate does
not sponsor such a long-term disability plan, Disability shall mean Employee’s
inability to perform, with or without reasonable accommodation, the essential
functions of his position with the Company for a total of three months during
any six-month period as a result of incapacity due to mental or physical
illness, as determined by a physician selected by the Company or its insurers
and acceptable to Employee or Employee’s legal representative, such agreement
as to acceptability not to be unreasonably withheld or delayed.  Any refusal by Employee to submit to a
medical examination for the purpose of determining Disability shall be deemed
to constitute conclusive evidence of Employee’s Disability.

 

“Excise Tax”
shall have the meaning assigned to such term in Section 8.01.

 

“Good Reason”
shall mean the occurrence of any of the following events: (i) a material
diminution in Employee’s base salary; or (ii) relocation of the geographic
location of Employee’s principal place of employment by more than 75 miles from
Houston, Texas.

 

Notwithstanding the preceding provisions of this
definition or any other provision in this Agreement to the contrary, any
assertion by Employee of a termination of employment for “Good Reason”
shall not be effective unless all of the following conditions are satisfied: (A) the
condition described in clauses (i) or (ii) of this definition giving
rise to Employee’s termination of employment must have arisen without Employee’s
consent; (B) Employee must provide written notice to the Company of such
condition in accordance with Section 14.07 within 45 days of the initial
existence of the condition; (C) the condition specified in such notice
must remain uncorrected for 30 days after receipt of such notice by

 

5

 

the Company; and (D) the
date of Employee’s termination of employment must occur within 90 days after
the initial existence of the condition specified in such notice.

 

“Gross-up Payment”
shall have the meaning assigned to such term in Section 8.01.

 

“Inventions”
shall have the meaning assigned to such term in Section 11.01.

 

“IPO” shall mean
the underwritten public offering of shares of the Company’s common stock
pursuant to Registration Statement No. 333-161734 on Form S-1 filed
with the Securities and Exchange Commission.

 

“Involuntary Termination”
shall mean any termination of Employee’s employment with the Company (i) by
the Company without Cause or (ii) by Employee for Good Reason.  For the avoidance of doubt, the term “Involuntary Termination” does not include a termination of
Employee’s employment with the Company for any other reason whatsoever,
including, without limitation, (A) by the Company for Cause, (B) by
Employee without Good Reason or (C) as a result of Employee’s death or Disability.

 

“Non-Compete Period”
shall have the meaning assigned to such term in Section 9.01(b).

 

“Notice of Termination of
Employment” shall have the meaning assigned to such term in Section 5.02.

 

“Parachute Value”
of a Payment shall mean the present value as of the date of the change in
ownership or effective control for purposes of Section 280G of the Code of
the portion of such Payment that constitutes a “parachute
payment” under Section 280G(b)(2) of the Code, as
determined for purposes of determining whether and to what extent the Excise
Tax will apply to such Payment.

 

“Partnership Agreement”
shall mean the Fourth Amended and Restated Agreement of Limited Partnership of
Cobalt International Energy, L.P., as amended.

 

“Payment” shall
have the meaning assigned to such term in Section 8.01.

 

“Pro Rata Bonus”
shall mean an amount equal to the product of (i) the actual annual bonus
Employee would have been entitled to receive, based on the Company’s actual
performance through the end of the calendar year in which Employee’s
termination of employment with the Company occurred, determined as if he had
continued his employment with the Company through the end of such calendar year
and (ii) a fraction, the numerator of which is the number of days

 

6

 

during the calendar year
through the date of Employee’s termination of employment with the Company and
the denominator of which is 365.

 

“Pro Rata Bonus Payment
Date” shall mean, with respect to a Pro Rata Bonus for a particular
calendar year, the date on which annual bonuses for such calendar year are
generally paid to employees of the Company who have not terminated employment
with the Company, but in no event earlier than January 1 of the year
following such calendar year nor later than December 31 of the year
following such calendar year.

 

“Reorganization Agreement”
shall mean the Reorganization Agreement to be entered into prior to the IPO
among the Partnership, the Company and the other parties signatory thereto.

 

“Restricted Stock”
shall mean the shares of restricted stock issued to Employee in connection with
the IPO.

 

“Safe Harbor Amount”
shall mean 2.99 times Employee’s “base amount,”
within the meaning of Section 280G(b)(3) of the Code.

 

“Separation from Service”
means, with respect to Employee, the (i) cessation of all services
performed by Employee for the Company or (ii) permanent decrease in the
level of services performed by Employee for the Company (whether as an employee
or as an independent contractor) to no more than 20 percent of the average
level of services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the full period
of services to the Company, if Employee has been providing services to the
Company for less than 36 months).

 

“Severance Amount”
shall mean (i) if Employee incurs an Involuntary Termination prior to a
Change in Control or on or after the second anniversary of the Change in
Control (to the extent applicable), 50% of Annualized Base Salary and (ii) if
Employee incurs an Involuntary Termination on the date of the Change in Control
or prior to the second anniversary of the Change in Control, 50% of Annualized
Base Salary

 

ARTICLE
2

EFFECTIVENESS; TERM OF AGREEMENT; PRIOR SEVERANCE AGREEMENT

 

Section 2.01.  Effectiveness; Term of Agreement; Prior
Severance Agreement.  This Agreement
shall become effective upon the closing of the IPO.  Subject to an earlier termination of Employee’s
employment with the Company pursuant to Article 5, this Agreement shall
terminate and be of no further force or effect on the Agreement Termination
Date.  Upon the effectiveness of this
Agreement, the Prior Severance Agreement shall terminate and be of no further force
or effect.  If the IPO does not close by March 31,
2010, this Agreement shall 

 

7

 

be void ab initio
and the Prior Severance Agreement shall remain in full force and effect in
accordance with its terms as of such date.

 

ARTICLE
3

CERTAIN EMPLOYEE REPRESENTATIONS AND AGREEMENTS; IPO EQUITY GRANT.

 

Section 3.01.  Services. 
Employee agrees that he will render services to the Company (as well as
any subsidiary thereof or successor thereto) during the period of his
employment to the best of his ability, in a prudent and businesslike manner and
consistent with the standards expected by the Company of an Employee-level
employee.  Employee also agrees that he
will devote substantially the same time, efforts and dedication to his duties
as heretofore devoted.

 

Section 3.02.  Accredited Investor Representations.  Employee hereby represents
to the Company that the representations set forth in Annex I to this Agreement (i) are
true and correct as of the date of this Agreement and (ii) shall be true
and correct as of the date of the closing of the IPO.

 

Section 3.03.  Transfer Restrictions.  Employee hereby represents
to the Company that he has read and understands, and agrees to be bound by, the
transfer restrictions set forth in Annex II to this Agreement.

 

Section 3.04.  Life Insurance.  This Agreement constitutes
written notice to Employee that (a) the Company or an Affiliate may insure
Employee’s life, (b) the Company or an Affiliate shall have the right to
determine the amount of insurance and the type of policies, and (c) the
Company or an Affiliate will be the beneficiaries of any proceeds payable under
such policies upon the death of Employee. 
Employee hereby irrevocably consents to being insured under the policies
described in the preceding sentence and to the coverage under such policies
continuing after the termination of this Agreement and/or Employee’s
termination of employment with the Company and its Affiliates.  Employee agrees and acknowledges that
Employee shall not have the right to designate the beneficiary or beneficiaries
of the death benefit payable pursuant to such policies, and neither Employee
nor any other person claiming through Employee shall have any interest in such
policies.  Employee shall (i) furnish
any and all information reasonably requested by the Company, any Affiliate or
the insurer to facilitate the issuance of the life insurance policy or policies
described in this paragraph or any adjustment to any such policy, and (ii) take
such physical examinations as the Company, any Affiliate or the insurer deems
necessary.  Employee shall incur no
financial obligation by executing any required document pursuant to this Section 3.04,
and shall have no interest in any such policy.

 

Section 3.05.  IPO Equity Grant.  Immediately prior to the
Effective Time (as defined in the Reorganization Agreement), Employee received
[X] units of 

 

8

 

Class C Interests (as
defined in the Partnership Agreement) [and [X] units of Class D Interests
(as defined in the Partnership Agreement)](1), which will at the Effective Time
convert to restricted shares of the Company’s common stock subject to the terms
and conditions of the Company Long Term Incentive Plan and the forms of
Restricted Stock Award Agreements attached as Exhibit A [and Exhibit B](2) to
this Agreement.

 

ARTICLE
4

CONFIDENTIAL INFORMATION, INVENTIONS, BUSINESS

OPPORTUNITIES AND GOODWILL

 

Section 4.01.  Confidential Information, Inventions,
Business Opportunities and Goodwill.  The Company shall
(a) disclose to Employee, and place Employee in a position to have access
to or develop, confidential or proprietary information and Inventions of the
Company (or its Affiliates); (b) entrust Employee with business
opportunities of the Company (or its Affiliates); and (c) place Employee
in a position to develop business good will on behalf of the Company (or its
Affiliates).

 

ARTICLE
5

TERMINATION OF EMPLOYMENT AND NOTICE OF TERMINATION OF EMPLOYMENT

 

Section 5.01.  Termination of Employment.  Employee’s employment with
the Company may be terminated by the Company or Employee under the following
circumstances: (a) Employee’s death; (b) Employee’s Disability; (c) termination
by the Company for Cause; (d) termination by the Company without Cause; (e) resignation
by Employee for Good Reason; or (f) resignation by Employee without Good
Reason.  For all purposes of this
Agreement, Employee shall be considered to have terminated employment with the
Company when Employee incurs a Separation from Service.

 

Section 5.02.  Notice of Termination of Employment.  Any termination of Employee’s
employment by the Company or by Employee (other than termination by reason of
Employee’s death) shall be communicated by a written notice to the other party
hereto indicating the specific termination provision in the first sentence of Section 5.01
relied upon, setting forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee’s employment under the
provision so indicated, and specifying a Date of Termination of Employment
which, if submitted by Employee, shall be at least 30 

 

(1) 
If applicable.

 

(2) 
If applicable.

 

9

 

days following the date of
such notice (a “Notice of Termination of Employment”);
provided, however,
that in the case of any Notice of Termination of Employment submitted by
Employee, the Company may, in its sole discretion, advance the Date of
Termination of Employment to any date following the Company’s receipt of the
Notice of Termination of Employment (and, if the Date of Termination of
Employment is so advanced, it shall not change the basis for Employee’s
termination nor be construed or interpreted as a termination of Employee’s
employment by the Company for any reason whatsoever).  A Notice of Termination of Employment
submitted by the Company may provide for a Date of Termination of Employment on
the date Employee receives the Notice of Termination of Employment, or any date
thereafter elected by the Company in its sole discretion.  The failure by Employee or the Company to set
forth in the Notice of Termination of Employment any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
Employee or the Company hereunder or preclude Employee or the Company from
asserting such fact or circumstance in enforcing Employee’s or the Company’s
rights hereunder.

 

Section 5.03.  Deemed Resignations.  Unless otherwise agreed to
in writing by the Company and Employee prior to the termination of Employee’s
employment, any termination of Employee’s employment shall constitute an
automatic resignation of Employee: (i) as an officer of the Company and
each Affiliate; (ii) as a member of the Board (if applicable); (iii) from
the board of directors or similar governing body of any Affiliate; and (iv) from
the board of directors or similar governing body of any corporation, limited
liability entity or other entity in which the Company or any Affiliate holds an
equity interest and with respect to which board or similar governing body
Employee serves as the Company’s or such Affiliate’s designee or other
representative.

 

ARTICLE
6

SEVERANCE BENEFITS

 

Section 6.01.  Death, Disability, Termination for Cause or
Resignation Without Good Reason.  If Employee’s
employment with the Company is terminated by the Company for Cause or by
Employee without Good Reason, or if such employment terminates by reason of
Employee’s death or Disability, then, upon such termination, Employee (or
Employee’s estate) shall be entitled to receive the Accrued Obligations (other
than in the case of a termination by the Company for Cause, any bonus or
incentive compensation that under the applicable plan requires Employee to be
employed on the date of payment).  If
Employee’s employment with the Company terminates by reason of death or
Disability, then the Company shall also pay to Employee (or Employee’s estate
or legal representatives, as applicable) on the Pro Rata Bonus Payment Date an
amount in cash equal to the Pro Rata Bonus.

 

10

 

Section 6.02.  Involuntary Termination.  If Employee’s employment
with the Company shall be subject to an Involuntary Termination, Employee shall
be entitled to receive the Accrued Obligations and, subject to the provisions
of Section 14.09, the Company will, as additional compensation for
services rendered to the Company (including its Affiliates), pay to Employee
the following amounts and take the following actions after the last day of Employee’s
employment with the Company:

 

(a)   if the Involuntary Termination occurs prior to a
Change in Control or on or after the second anniversary of the Change in
Control (to the extent applicable), pay to Employee in equal monthly
installments an amount in cash equal to the Severance Amount, the first
installment to be paid on the date that is 60 days after the date of Employee’s
termination of employment with the Company and subsequent installments to be
paid on the first day of each of the next 11 calendar months thereafter or such
lesser number of installments such that no installment is paid after March 1st
of the year following the year in which Employee’s employment was terminated,
with each installment equal to the Severance Amount divided by the total number
of such installments to be paid;

 

(b)   if the Involuntary Termination occurs on the date of
a Change in Control or before the second anniversary of the Change in Control,
pay to Employee on the date that is 60 days after the date of Employee’s termination
of employment with the Company a lump sum cash payment in an amount equal to
the Severance Amount;

 

(c)   pay to Employee on the Pro Rata Bonus Payment Date
an amount in cash equal to the Pro Rata Bonus; provided,
however, that if this paragraph applies
with respect to a Pro Rata Bonus for a calendar year beginning on or after January 1,
2010 and is intended to constitute performance-based compensation within the
meaning of, and for purposes of, Section 162(m) of the Code, then
this paragraph shall apply with respect to such Pro Rata Bonus only to the
extent the applicable performance criteria have been satisfied as certified by
a committee of the Board as required under Section 162(m) of the
Code; and

 

(d)   during the portion, if any, of the 18-month period
following the date of Employee’s termination of employment with the Company
that Employee elects to continue coverage for Employee and Employee’s eligible
dependents under the Company’s group health plans under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and/or Sections 601
through 608 of the Employee Retirement Income Security Act of 1974, as amended,
the Company shall promptly reimburse Employee on a monthly basis for the
difference, if any, between (i) the amount Employee pays to effect and
continue such coverage and (ii) the amount charged to a similarly situated
active employee of the Company for similar coverage.

 

Notwithstanding the foregoing, if Employee is
entitled to receive severance payments under Section 6.02 (a) or (b),
as applicable, and under 

 

11

 

Section 6.02(c), the
aggregate amount payable pursuant to Sections 6.02 (a) or (b), as
applicable, and Section 6.02(c) (the “Aggregate
Severance Amount”) shall be reduced (but not below zero) by the fair
market value, as of the Employee’s Date of Termination of Employment, of the
Restricted Stock held by Employee that has then vested, or that may vest at any
time after the Employee’s Date of Termination of Employment (the “Carried Amount”).  If
the Carried Amount exceeds the Aggregate Severance Amount prior to the
commencement of payment of any of the severance benefits described in Section 6.02(a) or
(b), as applicable, and Section 6.02(c), then Executive shall not be entitled
to receive any payments pursuant to 6.02(a) or (b), as applicable, or Section 6.02(c).  If the Carried Amount does not exceed the
Aggregate Severance Amount prior to the commencement of payment of any of the
severance benefits described in Sections 6.02(a) or (b), as applicable,
and Section 6.02(c), then the reduction shall be effected as follows:
first, the payment provided for in Section 6.02(c) shall be reduced
by the Carried Amount if the Carried Amount or any portion thereof has been
paid prior to the payment date provided for in Section 6.02(c), and if
necessary, payments of the amounts provided for in Section 6.02(a) or
(b), as applicable, shall be reduced pro rata by any additional Carried
Amount.   If at any time after the
commencement of payment of the severance benefits described in Section 6.02(a) or
(b), as applicable, and Section 6.02(c), the Carried Amount not yet
applied as a reduction in the severance benefits exceeds the remaining
severance benefits to be paid, the Company shall cease to make any further
payments in respect of either severance benefit, but no amount previously paid
to Executive pursuant to Section 6.02(a) or (b), as applicable, and Section 6.02(c) shall
be repaid to the Company.

 

Section 6.03.  Death, Disability or Involuntary Termination
After Agreement Termination Date.  If, after the
Agreement Termination Date but prior to the payment date of the annual bonus
for the calendar year in which the Agreement Termination Date occurs, Employee’s
employment with the Company terminates by reason of the Employee’s death or by
reason of what would have otherwise qualified as Disability or Involuntary
Termination under this Agreement if this Agreement was still in effect at the
time of such termination of employment, the Company shall pay to Employee (or
Employee’s estate or legal representatives, as applicable), subject to the
provisions of Section 14.09, on the Pro Rata Bonus Payment Date an amount
in cash equal to the Pro Rata Bonus.

 

ARTICLE
7

INTEREST ON LATE PAYMENTS

 

Section 7.01.  Interest on Late Payments. If any payment
provided for in Section 6.02(a), (b) or (c) or Section 6.03
is not made when due, then the Company shall pay to Employee interest on the
amount payable from the date that such payment should have been made under such
Section until such payment is made, which interest shall be calculated at
5% plus the prime rate of interest 

 

12

 

announced by JPMorgan Chase
Bank (or any successor thereto) at its principal office in New York, and shall
change when and as any such change in such prime rate shall be announced by
such bank.

 

ARTICLE
8

CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

 

Section 8.01.  Gross-up Payment.  Notwithstanding anything to
the contrary in this Agreement (but subject to the remaining provisions of this
Section 8.01), in the event that any payment, benefit or distribution by
the Company to or for the benefit of Employee, whether paid, payable, provided,
distributed or distributable pursuant to the terms of this Agreement or
otherwise (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company shall pay to Employee an
additional payment (a “Gross-up Payment”)
in an amount such that after payment by Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including any Excise
Tax imposed on any Gross-up Payment, Employee retains an amount of the Gross-up
Payment equal to the Excise Tax imposed upon all Payments except for the Cobalt
Equity Payments.  Notwithstanding the
provisions of the preceding sentence, if it shall be determined that Employee
is entitled to the Gross-up Payment, but that the Parachute Value of all
Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-up
Payment shall be made to Employee and the amounts payable under Article 6
shall be reduced so that the Parachute Value of all Payments, in the aggregate,
equals the Safe Harbor Amount.  The
reduction of the amounts payable under Article 6, if applicable, shall be
made by reducing Payments payable hereunder (including reducing a Payment to
zero) in the order in which such Payments would be made (beginning with such
Payment that would be made first in time and continuing, to the extent
necessary, through to such Payment that would be made last in time).  For purposes of reducing the Payments to the
Safe Harbor Amount, only amounts payable under Article 6 (and no other
Payments) shall be reduced.  If the
reduction of the amount payable under Article 6 would not result in a
reduction of the Parachute Value of all Payments to the Safe Harbor Amount,
then no amounts payable under Article 6 shall be reduced pursuant to this Section 8.01.  The Company’s obligation to make a Gross-up
Payment under this Section 8.01 shall not be conditioned upon Employee’s
termination of employment.  The Gross-up
Payment attributable to a particular Payment shall be made at the time such
Payment is made; provided, however, that in no
event shall the Gross-up Payment be made later than the end of Employee’s
taxable year next following Employee’s taxable year in which Employee remits
the related taxes.  The Company and
Employee shall make an initial determination as to whether a Gross-up Payment
is required and the amount of any such Gross-up Payment.

 

13

 

Section 8.02.  Disposition of Claims.  Employee shall notify the
Company immediately in writing of any claim by the Internal Revenue Service
which, if successful, would require the Company to make a Gross-up Payment (or
a Gross-up Payment in excess of that, if any, initially determined by the
Company and Employee) within five days of the receipt of such claim.  The Company shall notify Employee in writing
at least five days prior to the due date of any response required with respect
to such claim if it plans to contest the claim. 
If the Company decides to contest such claim, Employee shall cooperate
fully with the Company in such action; provided, however,
the Company shall bear and pay directly or indirectly all costs and expenses
(including additional interest and penalties) incurred in connection with such
action and shall indemnify and hold Employee harmless, on an after-tax basis,
for any Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of the Company’s action.  If, as a result of the Company’s action with
respect to a claim, Employee receives a refund of any amount paid by the
Company with respect to such claim, Employee shall promptly pay such refund to
the Company.  If the Company fails to
timely notify Employee whether it will contest such claim or the Company
determines not to contest such claim, then the Company shall immediately pay to
Employee the portion of such claim, if any, which it has not previously paid to
Employee.

 

ARTICLE 9

COMPETITION

 

Section 9.01.  Competition. 
(a) Employee and the Company agree to the restrictive covenants of
this Article  9: (i) in consideration for the confidential
information provided by the Company to Employee pursuant to Section 4.01
or otherwise during the course of his employment; (ii) as part of the
consideration for the compensation and benefits to be paid to Employee by the
Company; (iii) to protect the (A) trade secrets and confidential
information of the Company disclosed or entrusted to Employee by the Company
and (B) business goodwill of the Company developed through the efforts of
Employee and/or the business opportunities disclosed or entrusted to Employee
by the Company; and (iv) as an additional incentive for the Company to
enter into this Agreement.

 

(b)        Subject to the exceptions set forth in the last
sentence of this Section 9.01(b), Employee shall not at any time while
employed by the Company and for a 6-month period following the Date of
Termination of Employment (the “Non-Compete Period”),
directly or indirectly engage in, have any equity interest in, be affiliated
with, or manage or operate any person, firm, corporation, partnership, entity
or business (whether as director, officer, employee, agent, representative,
partner, member, security holder, consultant or otherwise) that engages in any
business that competes with any Business (as defined below) of the Company in
the states within the United States (or District of Columbia, if applicable)
and in the geographic regions outside of the United States (i) in which
the Company

 

14

 

conducts operations or (ii) with
respect to which the Company devotes more than de minimis
resources in the furtherance of the Business; provided,
however, that Employee shall be
permitted to acquire a passive stock interest in such a business if the stock
acquired is publicly traded and is not more than two percent of the outstanding
interest in such business. 
Notwithstanding the foregoing or anything to the contrary in this
Agreement, it shall not be a violation of this Article 9 for Employee to (A) provide
services to any person or entity engaged in the Business if Employee is not
involved, directly or indirectly, in the management, supervision or operations
of the Business (including by reason of any individual reporting to Employee)
and the gross revenues generated by the Business do not constitute more than
33% of the consolidated gross revenues of such person or entity and its
affiliates and (B) provide services to or otherwise be affiliated with a
venture capital or private equity firm that holds investments in entities
engaged in the Business if Employee is not involved, directly or indirectly, in
the identification, evaluation, recommendation, acquisition, management,
operation, supervision or disposition of such investments, and the gross
revenues generated by such Business do not constitute more than the 33% of the
consolidated gross revenues of such firm and its affiliates.

 

(c)        During the Non-Compete Period, Employee shall not,
directly or indirectly, recruit or otherwise solicit or induce any employee of
the Company, except on behalf of the Company, (i) to terminate his or her
employment with the Company or (ii) to establish any relationship with
Employee or any of his affiliates for any business purpose competitive with the
Business of the Company, provided, however, that a general solicitation of the public for
employment shall not constitute a solicitation hereunder so long as such
general solicitation is not designed to target any employee of the Company.

 

(d)        Employee and the Company agree that the foregoing
restrictions are reasonable under the circumstances, are necessary to protect
the Company’s legitimate business interests and that any breach of such restrictions
would cause irreparable injury to the Company. 
Employee understands that the foregoing restrictions may limit Employee’s
ability to engage in certain businesses anywhere in the United States and
outside the United States during the Non-Compete Period but acknowledges that
he will receive sufficiently high remuneration and other benefits from the
Company to justify such restrictions. 
Further, Employee acknowledges that his skills are such that he can be gainfully
employed in non-competitive employment, and that the agreement not to compete
will not prevent him from earning a living. 
Nevertheless, in the event the terms of this Article 9 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its extending for too great a period of time or over too great a
geographical area or by reason of its being too extensive in any other respect,
it will be interpreted to extend only over the maximum period of time for which
it may be enforceable, over the maximum geographical area as to which it may be
enforceable, or to the maximum extent in all other respects as to which it may
be enforceable, all as determined by such court in such action.

 

15

 

(e)        Employee hereby represents to the Company that he
has read and understands, and agrees to be bound by, the terms of this Article 9.  Employee acknowledges that the geographic
scope and duration of the covenants contained in this Article 9 are the
result of arm’s-length bargaining and are fair and reasonable in light of (i) the
nature and wide geographic scope of the Company’s operations of, and in, the
Business, (ii) Employee’s level of control over and contact with the
Company’s operations of, and in, the Business in all jurisdictions in which it
is conducted, (iii) the geographic breadth in which the Company conducts
the Business and (iv) the amount of consideration (including confidential
information and trade secrets) that Employee is receiving from the Company.

 

(f)         As used in this Article 9, (i) the term “Company” shall include the Company and its subsidiaries and (ii) the
term “Business” shall mean the exploration
for, and the development and production of, oil and natural gas and the
acquisition of leases and other real property in connection therewith, as such
business may be expanded or altered by the Company during the period of
Employee’s employment by the Company; provided, that
any business or endeavor shall cease to be the “Business”
if the Company is not or ceases to be engaged in such business or endeavor.

 

(g)        In consideration of the Company’s promises herein,
during the Non-Compete Period, Employee promises to disclose to the Company any
employment, consulting, or other service relationship that Employee enters into
after the termination of Employee’s employment with the Company for any
reason.  Such disclosure shall be made
within seven business days after Employee enters into such employment,
consulting or other service relationship. 
Employee expressly consents to and authorizes the Company to disclose
both the existence and terms of this Agreement to any future employer or
recipient of Employee’s services and to take any steps the Company deems
necessary to enforce this Agreement.

 

ARTICLE 10

NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION

 

Section 10.01.  Nondisclosure of Confidential and Proprietary
Information.  (a) Except
in connection with the faithful performance of Employee’s duties for the
Company or pursuant to Section 10.01(c) or (e), Employee shall, in
perpetuity, maintain in confidence and shall not directly, indirectly or
otherwise, (i) use, disseminate, disclose or publish, or use for his
benefit or the benefit of any person, firm, corporation or other entity, any (A) confidential
or proprietary information or trade secrets of or relating to the Company
(including, without limitation, intellectual property in the form of patents,
trademarks and copyrights and applications therefor, ideas, inventions, works,
discoveries, improvements, information, documents, formulae, practices,
processes, methods, developments, source code, modifications, technology,
techniques, data, programs, other know-

 

16

 

how or materials, in each case, that are
confidential and/or proprietary and owned, developed or possessed by the
Company, whether in tangible or intangible form) or (B) confidential or
proprietary information with respect to the Company’s operations, processes,
products, inventions, business practices, strategies, business plans, finances,
principals, vendors, suppliers, customers, potential customers, marketing
methods, costs, prices, contractual relationships, regulatory status, prospects
and compensation paid to employees or other terms of employment or (ii) 
deliver to any person, firm, corporation or other entity any document, record,
notebook, computer program or similar repository of or containing any such
confidential or proprietary information or trade secrets.  The parties hereby stipulate and agree that
as between them the foregoing matters are important, material and confidential
proprietary information and trade secrets and materially affect the successful
conduct of the businesses of the Company (and any successor or assignee of the
Company).

 

(b)        Upon the termination of Employee’s employment with
the Company for any reason, Employee will promptly deliver to the Company all
correspondence, drawings, manuals, letters, notes, notebooks, reports,
programs, plans, proposals, financial documents and electronically stored
information, in each case, that are confidential or proprietary to the Company,
or any other confidential or proprietary documents (including electronically
stored information) concerning the Company’s customers, business plans, strategies,
products or processes.

 

(c)        Employee may respond to a lawful and valid subpoena
or other legal process relating to the business of the Company or the
performance of his duties on behalf of the Company but shall (i) give the
Company prompt notice thereof, (ii) make available to the Company and its
counsel the documents and other information sought that are not subject to a
binding confidentiality agreement and  (iii) assist
such counsel at Company’s expense in resisting or otherwise responding to such process.

 

(d)        As used in this Article 10 and Article 11,
the term “Company” shall include the Company and
its subsidiaries.

 

(e)        Nothing in this Agreement shall prohibit Employee
from (i) disclosing information and documents when required by law,
subpoena, court order or legal process, (ii) disclosing information and
documents to his immediate family members or, for the purpose of securing legal
or tax advice, attorney or tax adviser (provided that the persons to whom such
disclosures are made shall be informed of their obligation to maintain the
strict confidentiality of any information provided to them), (iii) disclosing
the post-employment restrictions in this Agreement in confidence to any
potential new employer or person or entity to whom he may provide consulting
services, or (iv) retaining, at any time, his personal correspondence and
rolodex or address book and documents related to his own personal benefits,
entitlements and obligations.

 

17

 

ARTICLE 11

INVENTIONS

 

Section 11.01.  Inventions. 
All rights to discoveries, inventions, improvements and innovations
(including all data and records pertaining thereto) related to the business of
the Company, whether or not patentable, copyrightable, registrable as a
trademark, or reduced to writing, that Employee may discover, invent or
originate during the period of his employment with the Company, either alone or
with others and whether or not during working hours or by the use of the
facilities of the Company (“Inventions”),
shall be the exclusive property of the Company. 
Employee shall promptly disclose all Inventions to the Company, shall
execute at the request of the Company any assignments or other documents the
Company may deem reasonably necessary to protect or perfect its rights therein,
and shall assist the Company, upon reasonable request and at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights
therein.  Employee hereby appoints the
Company as his attorney-in-fact to execute on his behalf any assignments or
other documents reasonably deemed necessary by the Company to protect or
perfect its rights to any Inventions.

 

ARTICLE 12

INJUNCTIVE RELIEF

 

Section 12.01.  Injunctive Relief.   It is recognized and acknowledged by Employee
that a breach of the covenants contained in Articles 9, 10, 11 and 13 will
cause irreparable damage to Company and its Affiliates and their goodwill, the
exact amount of which will be difficult or impossible to ascertain, and that
the remedies at law for any such breach will be inadequate.  Accordingly, Employee agrees that in the
event of a breach of any of the covenants contained in Articles 9, 10, 11 and
13, in addition to any other remedy which may be available at law or in equity,
the Company will be entitled to specific performance and injunctive relief.

 

ARTICLE 13

NON-DISPARAGEMENT

 

Section 13.01.  Non-disparagement.  During Employee’s employment
with the Company and following termination of his employment with the Company
for any reason, (a) Employee agrees not to disparage in any material
respect the Company, its subsidiaries, any of their products or practices, or
any of their directors, officers, agents, representatives, members, partners or
stockholders, (b) either orally or in writing and (c) the Company
agrees that it and its subsidiaries will (i) not make any formal
statements that disparage in any material respect Employee and (ii) use
commercially reasonable efforts to advise its directors and officers not to
disparage in any material respect Employee.

 

18

 

ARTICLE 14

GENERAL

 

Section 14.01.  Survivorship. 
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary for the
intended preservation of such rights and obligations.

 

Section 14.02.  Arbitration. 
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before an
arbitrator in Houston, Texas in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect.  Judgment may be entered on
the arbitration award in any court having jurisdiction; provided,
however, that the Company shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any violation or continuation of any violation of the
provisions of Articles 9, 10, 11 or 13 of this Agreement and Employee hereby
consents that such restraining order or injunction may be granted without
requiring the Company to post a bond. 
Only individuals who are on the AAA register of arbitrators shall be
selected as an arbitrator.  Within 20
days of the conclusion of the arbitration hearing, the arbitrator(s) shall
prepare written findings of fact and conclusions of law.  It is mutually agreed that the written
decision of the arbitrator(s) shall be valid, binding, final and
non-appealable; provided however, that the parties hereto agree that the
arbitrator shall not be empowered to award punitive damages against any party
to such arbitration.  The Company shall
bear all administrative fees and expenses of the arbitration and each party
shall bear its own counsel fees and expenses except as otherwise provided in
this paragraph.  If Employee makes a
claim against the Company relating to the performance of, or the rights and
obligations of, the Company arising under, relating to or in connection with
this Agreement (a “Covered Claim by the
Employee”), the arbitrators shall award Employee his reasonable
legal fees and expenses if Employee prevails on one material Covered Claim by
the Employee (as determined by the arbitrator). 
If a claim is made by the Company against Employee relating to the
performance of, or the rights and obligations of, Employee arising under,
relating to or in connection with this Agreement (a “Covered
Claim by the Company”), the arbitrators shall award Employee his
reasonable legal fees and expenses; provided that
if such Covered Claim by the Company relates to Employee’s performance or
obligations under Articles 9, 10, 11 or 13, the arbitrators shall award
Employee his legal fees and expenses only if the Company does not prevail on
any Covered Claim by the Company relating to any such Section (as
determined by the arbitrator).  Any
reimbursement of reasonable legal fees and expenses required under this Section 14.02
and any reimbursement of expenses included in the Accrued Obligations payable
to Employee under Article 6 shall be made not later than the close of
Employee’s taxable year following the taxable year in which Employee incurs the
expense; provided, however,
that, upon Employee’s termination of employment with the Company, in no event
shall any additional reimbursement be made prior

 

19

 

to the date that is six months after the date
of Employee’s termination of employment to the extent such payment delay is
required under Section 409A(a)(2)(B)(i) of the Code.  In no event shall any reimbursement be made
to Employee for such fees and expenses incurred after the date that is 10 years
after the date of Employee’s termination of employment with the Company.

 

Section 14.03.  Payment Obligations Absolute.  The Company’s obligation to
pay Employee the amounts and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or other right which the Company (including its subsidiaries) may have against
him or anyone else.  All amounts payable
by the Company shall be paid without notice or demand.  Employee shall not be obligated to seek other
employment in mitigation of the amounts payable or arrangements made under any
provision of this Agreement, and the obtaining of any such other employment
shall in no event effect any reduction of the Company’s obligations to make (or
cause to be made) the payments and arrangements required to be made under this
Agreement.

 

Section 14.04.  Successors. 
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of the Company, by merger or otherwise.  This Agreement shall also be binding upon and
inure to the benefit of Employee and his estate.  If Employee shall die prior to full payment
of amounts due pursuant to this Agreement, such amounts shall be payable
pursuant to the terms of this Agreement to his estate.

 

Section 14.05.  Severability. 
Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction by reason of applicable law shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

Section 14.06.  Non-alienation.  Employee shall not have any
right to pledge, hypothecate, anticipate or assign this Agreement or the rights
hereunder, except by will or the laws of descent and distribution.

 

Section 14.07.  Notices. 
Any notices or other communications provided for in this Agreement
shall be sufficient if in writing.  In
the case of Employee, such notices or communications shall be effectively
delivered if hand-delivered to Employee at his principal place of employment or
if sent by registered or certified mail to Employee at the last address he has
filed with the Company.  In the case of
the Company, such notices or communications shall be effectively delivered if
sent by registered or certified mail to the Company at its principal Employee
offices.

 

Section 14.08.  Controlling Law and Waiver of Jury
Trial.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of

 

20

 

Texas. 
With respect to any claim or dispute related to or arising under this
Agreement, Employee and the Company hereby consent to the exclusive
jurisdiction, forum and venue of the state and federal courts located in Harris
County, Texas.  Notwithstanding the
foregoing, Section 3.03 and the transfer restrictions set forth in Annex
II shall be governed by, and construed in accordance with, the laws of the
State of Delaware.  Furthermore, with
respect to any claim or dispute related to or arising under Section 3.03
and the transfer restrictions set forth in Annex II, Employee and the Company
hereby consent to the exclusive jurisdiction, forum and venue of the Court of
Chancery of the State of Delaware.  Each
of the parties hereto hereby irrevocably waives any and all right to trial by
jury in any legal proceeding arising out of or related to this Agreement or the
transactions contemplated hereby.

 

Section 14.09.  Release and Delayed Payment Restriction.  (a) As a condition to
the receipt of any benefit under Article 6 hereof (except in the case of
the termination of Employee’s employment with the Company by reason of Employee’s
death or Disability and except for the Accrued Obligations), Employee shall
first execute a release in the form attached hereto as Exhibit B (with
such changes therein as the Company may reasonably require to reflect changes
in applicable law and the circumstances relating to the termination of Employee’s
employment), releasing the Company and certain other persons and entities from
certain claims and other liabilities.

 

(b)        The release described in Section 14.09(a) hereof
must be effective and irrevocable within 55 days after the date of the
termination of Employee’s employment with the Company.  Notwithstanding any provision in this
Agreement to the contrary, if the payment of any amount or benefit under this
Agreement would be subject to additional taxes and interest under Section 409A
of the Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of
the Code and the regulations thereunder, then any such payment or benefit that
Employee would otherwise be entitled to during the first six months following
the date of Employee’s termination of employment shall be accumulated and paid
or provided, as applicable, on the date that is six months after the date of
Employee’s termination of employment (or if such date does not fall on a
business day of the Company, the next following business day of the Company),
or such earlier date upon which such amount can be paid or provided under Section 409A
of the Code without being subject to such additional taxes and interest.  If this Section 14.09(b) becomes
applicable such that the payment of any amount is delayed, any payments that
are so delayed shall accrue interest on a non-compounded basis, from the date
such payment would have been made had this Section 14.09(b) not
applied to the actual date of payment, at the prime rate of interest announced
by JPMorgan Chase Bank (or any successor thereto) at its principal office in
New York on the date of Employee’s termination of employment (or the first
business day following such date if such termination does not occur on a
business day) and shall be paid in a lump sum on the actual date of payment of
the delayed payment amount.  Employee
hereby agrees to be

 

21

 

bound by the Company’s
determination of its “specified employees”
(as such term is defined in Section 409A of the Code) in accordance with
any of the methods permitted under the regulations issued under Section 409A
of the Code.

 

Section 14.10.  Full Settlement.  If Employee is entitled to
and receives the benefits provided hereunder, performance of the obligations of
the Company hereunder will constitute full settlement of all claims that
Employee might otherwise assert against the Company on account of his
termination of employment.

 

Section 14.11.  Unfunded Obligation.  The obligation to pay
amounts under this Agreement is an unfunded obligation of the Company, and no
such obligation shall create a trust or be deemed to be secured by any pledge
or encumbrance on any property of the Company.

 

Section 14.12.  Not a Contract of Employment.  This Agreement shall not be
deemed to constitute a contract of employment and shall in no way change the
at-will nature of Employee’s employment. 
Employee and the Company thus recognize and agree that subject to the
notice provisions of Section 5.02, (a) the Company may terminate
Employee’s employment at any time, for any reason or no reason at all; and (b) Employee
may terminate his employment at any time, for any reason or no reason at all.

 

Section 14.13.  Withholding of Taxes and Other Employee
Deductions.  The Company may
withhold from any benefits and payments made pursuant to this Agreement
(whether actually or constructively made to Employee or treated as included in
Employee’s income under Section 409A of the Code) all federal, state,
city, foreign and other applicable taxes and withholdings as may be required
pursuant to any law or governmental regulation or ruling and all other
customary deductions made with respect to the Company’s employees generally.

 

Section 14.14.  Number and Gender.  Wherever appropriate herein,
words used in the singular shall include the plural and the plural shall
include the singular.  The masculine
gender where appearing herein shall be deemed to include the feminine gender.

 

Section 14.15.  Entire Agreement.  This Agreement, including
the Annexes and Exhibits attached hereto, constitutes the entire agreement of
the parties with regard to the subject matter hereof and supersedes any and all
prior understandings, agreements or correspondence between the parties.  Any modification of this Agreement will be
effective only if it is in writing and signed by the party to be charged.

 

22

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date and year first written above.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

23

 

ANNEX I

 

ACCREDITED INVESTOR
REPRESENTATIONS

 

Employee hereby represents and warrants that he
qualifies as an “accredited investor” (as defined
in Regulation D of the Securities Act of 1933) by satisfying one or more of the
following criteria:

 

(i)            Employee’s individual net
worth or joint net worth with Employee’s spouse exceeds $1,000,000; or

 

(ii)           Employee has individual
income in excess of $200,000 in each of the two most recent years or joint
income with Employee’s spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the current
year.

 

Employee is acquiring interests in the Partnership
and / or shares of Company common stock for investment for his own account and
not with a view to, or for sale in connection with, any distribution thereof
and hereby agrees not to sell any shares of Company common stock in violation
of the Federal securities laws.

 

1

 

ANNEX II

 

TRANSFER RESTRICTIONS

 

Employee agrees not to Transfer prior to the
Termination Date the Specified Number of the shares of Company common stock
issued to the Employee upon conversion of Class A and Class B
Interests (as defined in the Partnership Agreement) in connection with the IPO.  Employee will have the discretion to
determine, from time to time, which specific shares of Company common stock are
subject to this limitation.

 

For purposes of this agreement, the following terms
have the following meanings:

 

“Specified Number”
means, as of any date, a number of shares equal to the sum of

 

(a) the product of 80% (or on or after a Change in
Control, the lesser of 80% and the remainder set forth in (x) below) and
the aggregate number of shares of Company common stock issued to Employee upon
conversion of Class B Interests in connection with the IPO, plus

 

(b) the product of (x) one minus a fraction,
the numerator of which is the aggregate number of shares of Company common
stock owned by the Sponsors immediately after the closing of the IPO and sold
by the Sponsors after the closing of the IPO and prior to such date (other than
with respect to any shares of common stock sold by any Sponsor to any of its
Affiliates), and the denominator of which is the aggregate number of shares of
Company common stock owned by the Sponsors immediately after the closing of the
IPO, and (y) the aggregate number of shares of Company common stock issued
to Employee upon conversion of Class A Interests in connection with the
IPO.

 

If,
at any time prior to the Termination Date, the outstanding shares of Company
common stock shall be changed into a different number of shares or a different
class (including by reason of any reclassification, recapitalization, stock
split (including reverse stock split) or combination, exchange or readjustment
of shares, or any stock dividend or distribution paid in stock thereon with a
record date during such period or any similar transaction), the calculation of
the Specified Number shall be appropriately adjusted.

 

“Sponsors” shall have the meaning as set forth in the Company’s
certificate of incorporation as of the closing of the IPO.

 

A-1

 

“Termination Date” means the earliest of (i) the
     anniversary of the closing of the IPO, (ii) the
date of termination of employment with the Company other than a termination by
the Company for Cause, (iii) the first date on which a Change in Control
occurs; provided that if prior to the date of
such Change in Control, the Company or the acquiror requests in writing that
Employee continue to provide services to the Company (or the successor or
surviving entity) for a specified period not to exceed 12 months after the
Change in Control, the Termination Date shall not expire on the date of the Change
in Control but shall expire on the earliest of (x) the last day of the
requested period, (y) the date provided in clause (i) or (z) the
date, if any, of the termination of employment by the Company (or the successor
or surviving entity) without Cause, by Employee for Good Reason or due to
Employee’s death or Disability or (iv) the first date on which the
Sponsors have sold a number of shares of Company common stock equal to the
aggregate number owned by the Sponsors immediately after the closing of the IPO
(other than with respect to any shares of common stock sold by any Sponsor to
any of its Affiliates).

 

“Transfer” means (a) offer, sell, pledge, or hypothecate
any legal or beneficial interest, including the grant of an option or other
right or otherwise transfer or enter into an agreement to do so or (b) entry
into any hedge, swap or any other agreement that transfers, in whole or in
part, any of the economic consequences of ownership (whether such transaction
is settled by delivery of cash, shares or otherwise).

 

All capitalized terms defined in the agreement to
which this Annex is attached and used but not otherwise defined herein are used
as therein defined.

 

Notwithstanding the foregoing, Employee may
Transfer:

 

(i)                   any shares of
Company common stock issued to Employee upon conversion of Class A and Class B
Interests in connection with the IPO in excess of the Specified Number, so long
as such shares are not Restricted Shares (as defined in the Award Agreement).

 

(ii)                  any shares of
Company common stock issued to Employee upon conversion of Class A and Class B
Interests in connection with the IPO (including all or a portion of the
Specified Number of such shares):

 

(a) by will or the laws of descent and distribution,

 

(b) by gift to a spouse, former spouse, lineal ancestor, lineal
descendant, legally adopted child, sibling or lineal descendant or legally
adopted child of a sibling of Employee or a trust or other entity for the
primary benefit 

 

2

 

of Employee or any such persons if the transferee agrees in writing to
be bound by the provisions of this agreement, or

 

(c) to any institution qualified as tax-exempt under Section 501(c)(3) of
the Internal Revenue Code of 1986 if the institution agrees in writing to be
bound by the provisions of this agreement.

 

(iii)                 with the
consent of the Compensation Committee of the Company’s board of directors
(which consent will not be unreasonably withheld), a number of shares of
Company common stock, in addition to the shares otherwise transferable pursuant
to (i) above, necessary to pay income taxes arising from the vesting of
any Restricted Shares issued to Employee upon conversion of Class B
Interests in connection with the IPO.

 

(iv)                 if the Company’s
board of directors (or a committee thereof) in its reasonable judgment makes a
good faith determination that Employee has incurred an unforeseeable emergency
resulting in severe financial hardship, then Employee may sell a number of
shares of Company common stock reasonably necessary to satisfy the emergency
need (which may include amounts necessary to pay Federal, state, local or
foreign income and employment taxes reasonably anticipated to result from the
sale), such number to be determined through the good faith consultation of the
Company’s board of directors and Employee; provided that,
in all cases, any such sale shall be made only from shares of Company common
stock with respect to which Employee has a 100% vested and nonforfeitable
interest.

 

3

 

EXHIBIT A

 

[FORM OF RESTRICTED
STOCK AWARD AGREEMENT – CLASS C INTERESTS]

 

4

 

EXHIBIT B

 

[FORM OF RESTRICTED
STOCK AWARD AGREEMENT –  CLASS D
INTERESTS]

(if applicable)

 

5

 

EXHIBIT C

 

FORM OF RELEASE

 

For and in consideration of certain payments and
other benefits due to [·] (“Employee”) pursuant to the Severance Agreement (the “Severance Agreement”) dated as of [·],
20    , between Cobalt International Energy, Inc.,
(the “Company”) and Employee, and for other
good and valuable consideration, Employee hereby agrees, for Employee, Employee’s
spouse and child or children (if any), Employee’s heirs, beneficiaries,
devisees, executors, administrators, attorneys, personal representatives,
successors and assigns, to forever release, discharge and covenant not to sue
the Company and its divisions, affiliates, subsidiaries, parents, branches,
predecessors, successors, assigns, and, with respect to such entities, their
officers, directors, trustees, employees, agents, shareholders, administrators,
general or limited partners, members, representatives, attorneys, insurers and
fiduciaries, past, present and future (the “Released
Parties”) from any and all claims of any kind arising out of, or
related to, his employment with the Company, its affiliates or subsidiaries
(collectively, with the Company, the “Affiliated Entities”)
or Employee’s separation from employment with the Affiliated Entities, which
Employee now has or may have against the Released Parties, whether known or
unknown to Employee, by reason of facts which have occurred on or prior to the
date that Employee has signed this Release. 
Such released claims include, without limitation, any and all claims
relating to the foregoing under federal, state or local laws pertaining to
employment, including, without limitation, the Age Discrimination in Employment
Act, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e
et. seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201
et. seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101
et. seq. the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981
et. seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701
et. seq., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601
et. seq., and any and all state or local laws regarding employment
discrimination, the payment of wages and/or federal, state or local laws of any
type or description regarding employment, including but not limited to any
claims arising from or derivative of Employee’s employment with the Affiliated
Entities, as well as any and all such claims under state contract or tort law.  By signing this Release, Employee is bound by
it.  Anyone who succeeds to Employee’s
rights and responsibilities, such as heirs or the executor of Employee’s
estate, is also bound by this Release. 
This Release also applies to any claims brought by any person or agency
or class action under which Employee may have a right or benefit.  Notwithstanding this release of liability,
nothing in this Release prevents Employee from filing any non-legally waivable
claim (including a challenge to the validity of this Release) with the Equal
Employment Opportunity Commission (the “EEOC”) or
comparable state or local agency or participating in any 

 

B-1

 

investigation or proceeding conducted by the
EEOC or comparable state or local agency; however, Employee understands and
agrees that Employee is waiving any and all rights to recover any monetary or
personal relief or recovery as a result of such EEOC or comparable state or
local agency proceeding or subsequent legal actions.

 

Employee has read this Release carefully,
acknowledges that Employee has been given at least [21] [45] days to consider
all of its terms and has been and is hereby advised to consult with an attorney
and any other advisors of Employee’s choice prior to executing this Release,
and Employee fully understands that by signing below Employee is voluntarily
giving up any right which Employee may have to sue or bring any other claims
against the Released Parties, including any rights and claims under the Age
Discrimination in Employment Act. 
Employee also understands that Employee has a period of seven days after
signing this Release within which to revoke his agreement, and that neither the
Company nor any other person is obligated to make any payments or provide any
other benefits to Employee pursuant to the Severance Agreement until eight days
have passed since Employee’s signing of this Release without Employee’s
signature having been revoked other than any accrued obligations or other
benefits payable pursuant to the terms of the Company’s normal payroll
practices or employee benefit plans. 
Finally, Employee expressly represents that he has not been forced or
pressured in any manner whatsoever to sign this Release, and Employee agrees to
all of its terms voluntarily.

 

Notwithstanding anything else herein to the
contrary, this Release shall not affect: (i) the Company’s obligations
under any compensation or employee benefit plan, program or arrangement
(including, without limitation, obligations to Employee under the Severance
Agreement or any stock option, stock award or agreements or obligations under
any pension, deferred compensation or retention plan) provided by the
Affiliated Entities where Employee’s compensation or benefits are intended to
continue or Employee is to be provided with compensation or benefits, in
accordance with the express written terms of such plan, program or arrangement,
beyond the date of Employee’s termination and (ii) rights to
indemnification Employee may have under (A) applicable law, (B) any
other agreement between Employee and a Released Party and (C) as an
insured under any director’s and officer’s liability insurance policy now or
previously in force.

 

B-2

 

This Release is final and binding and may not be
changed or modified except in a writing signed by both parties.

 

	
   

  	
   

  	
   

  
	
  [Name]

  	
   

  	
  [Employee]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cobalt
  International Energy, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  [Name]

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

B-3

 

EXHIBIT E-3

 

COMMITMENT AGREEMENT

 

November     ,
2009

 

Cobalt
International Energy, Inc.

Two
Post Oak Central

1980
Post Oak Blvd., Suite 1200

Houston,
TX  77056

 

Dear
Sirs:

 

In connection with the initial public offering (the “IPO”) of shares of common stock of Cobalt International
Energy, Inc. (the “Company”),

 

(i) Employee
will receive [X] units of Class C Interests [and [X] units of Class D
Interests] under the limited partnership agreement for Cobalt International
Energy, L.P. (the “Partnership”),
which Interests will in connection with the IPO convert into restricted shares
of Company common stock subject to the terms and conditions of the Company Long
Term Incentive Plan (the “LTIP”) and the
form[s] of Restricted Stock Award Agreement[s] attached as Exhibit A to
this letter agreement (the “Award Agreements”);
and

 

(ii) Employee
agrees to be bound by the transfer restrictions set forth in Exhibit B to
this letter agreement and represents to the Company that the representations
set forth in Annex I to this letter agreement (i) are true and correct as
of the date of this letter agreement and (ii) shall be true and correct as
of the date of the closing of the IPO.

 

This letter agreement shall become effective upon
the closing of the IPO.  If the IPO does
not close by March 31, 2010, this letter agreement shall be void ab initio.  Employee
and the Company recognize and agree that subject to the terms of this letter
agreement, (i) the Company may terminate Employee’s employment at any
time, for any reason or no reason at all and (ii) Employee may terminate
his or her employment at any time, for any reason or no reason at all.

 

This letter agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.  With respect to any claim or dispute related
to or arising under this letter agreement, Employee and the Company hereby
consent to the exclusive jurisdiction, forum and venue of the Court of Chancery
of the State of Delaware.

 

 

EACH OF THE PARTIES TO THIS LETTER AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS LETTER AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

 

	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

Accepted as of the date first set forth above:

 

COBALT
INTERNATIONAL ENERGY, INC.

 

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

2

 

ANNEX I

 

ACCREDITED INVESTOR
REPRESENTATIONS

 

Employee hereby represents and warrants that
he qualifies as an “accredited investor”
(as defined in Regulation D of the Securities Act of 1933) by satisfying one or
more of the following criteria:

 

(i)            Employee’s
individual net worth or joint net worth with Employee’s spouse exceeds
$1,000,000; or

 

(ii)           Employee has
individual income in excess of $200,000 in each of the two most recent years or
joint income with Employee’s spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same income level in the
current year.

 

Employee
is acquiring interests in the Partnership and / or shares of Company common
stock for investment for his own account and not with a view to, or for sale in
connection with, any distribution thereof and hereby agrees not to sell any
shares of Company common stock in violation of the Federal securities laws.

 

I-1

 

ANNEX A

 

FORM OF RESTRICTED STOCK AWARD

 

A-1

 

ANNEX B

 

TRANSFER RESTRICTIONS

 

Employee agrees not to Transfer prior to the
Termination Date the Specified Number of the shares of Company common stock
issued to the Employee upon conversion of Class B Interests (as defined in
the Partnership Agreement) in connection with the IPO.  Employee will have the discretion to
determine, from time to time, which specific shares of Company common stock are
subject to this limitation.

 

For purposes of this agreement, the following terms
have the following meanings:

 

“Specified Number”
means, as of any date, a number of shares equal to the product of

 

(a) 80% (or on or after a Change in Control (as defined in
the LTIP), the lesser of 80% and one minus a fraction, the
numerator of which is the aggregate number of shares of Company common stock
owned by the Sponsors immediately after the closing of the IPO and sold by the
Sponsors after the closing of the IPO and prior to such date (other than with
respect to any shares of common stock sold by any Sponsor to any of its
Affiliates), and the denominator of which is the aggregate number of shares of
Company common stock owned by the Sponsors immediately after the closing of the
IPO), and

 

(b) the aggregate number of shares of Company common
stock issued to Employee upon conversion of Class B Interests in
connection with the IPO.

 

If,
at any time prior to the Termination Date, the outstanding shares of Company
common stock shall be changed into a different number of shares or a different
class (including by reason of any reclassification, recapitalization, stock
split (including reverse stock split) or combination, exchange or readjustment
of shares, or any stock dividend or distribution paid in stock thereon with a
record date during such period or any similar transaction), the calculation of
the Specified Number shall be appropriately adjusted.

 

“Sponsors” shall have the meaning as set forth in the Company’s
certificate of incorporation as of the closing of the IPO.

 

“Termination Date” means the earliest of (i) the [fifth]
anniversary of the closing of the IPO, (ii) the date of termination of
employment with the Company other than a termination by the Company

 

B-1

 

for Cause (as defined in the LTIP), (iii) the first date on which
a Change in Control occurs; provided that if
prior to the date of such Change in Control, the Company or the acquiror
requests in writing that Employee continue to provide services to the Company
(or the successor or surviving entity) for a specified period not to exceed 12
months after the Change in Control, the Termination Date shall not expire on
the date of the Change in Control but shall expire on the earliest of (x) the
last day of the requested period, (y) the date provided in clause (i) or
(z) the date, if any, of the termination of employment by the Company (or
the successor or surviving entity) without Cause, by Employee for Good Reason
(as defined in the LTIP) or due to Employee’s death or Disability (as defined
in the LTIP) or (iv) the first date on which the Sponsors have sold a
number of shares of Company common stock equal to the aggregate number owned by
the Sponsors immediately after the closing of the IPO (other than with respect
to any shares of common stock sold by any Sponsor to any of its Affiliates).

 

“Transfer” means (a) offer, sell, pledge, or hypothecate
any legal or beneficial interest, including the grant of an option or other
right or otherwise transfer or enter into an agreement to do so or (b) entry
into any hedge, swap or any other agreement that transfers, in whole or in
part, any of the economic consequences of ownership (whether such transaction
is settled by delivery of cash, shares or otherwise).

 

All capitalized terms defined in the agreement to
which this Exhibit is attached or in the LTIP and used but not otherwise
defined herein are used as therein defined.

 

Notwithstanding the foregoing, Employee may
Transfer:

 

(i)                   any shares of
Company common stock issued to Employee upon conversion of Class B
Interests in connection with the IPO in excess of the Specified Number, so long
as such shares are not Restricted Shares (as defined in the Award Agreement).

 

(ii)                  any shares of
Company common stock issued to Employee upon conversion of Class B
Interests in connection with the IPO (including all or a portion of the Specified
Number of such shares):

 

(a) by will or the laws of descent and distribution,

 

(b) by gift to a spouse, former spouse, lineal ancestor, lineal
descendant, legally adopted child, sibling or lineal descendant or legally
adopted child of a sibling of

 

B-2

 

Employee or a trust or other entity for the primary benefit of Employee
or any such persons if the transferee agrees in writing to be bound by the
provisions of this agreement, or

 

(c) to any institution qualified as tax-exempt under Section 501(c)(3) of
the Internal Revenue Code of 1986 if the institution agrees in writing to be
bound by the provisions of this agreement.

 

(iii)                 with the
consent of the Compensation Committee of the Company’s board of directors
(which consent will not be unreasonably withheld), a number of shares of
Company common stock, in addition to the shares otherwise transferable pursuant
to (i) above, necessary to pay income taxes arising from the vesting of
any Restricted Shares issued to Employee upon conversion of Class B
Interests in connection with the IPO.

 

(iv)                 if the Company’s
board of directors (or a committee thereof) in its reasonable judgment makes a
good faith determination that Employee has incurred an unforeseeable emergency
resulting in severe financial hardship, then Employee may sell a number of
shares of Company common stock reasonably necessary to satisfy the emergency
need (which may include amounts necessary to pay Federal, state, local or
foreign income and employment taxes reasonably anticipated to result from the
sale), such number to be determined through the good faith consultation of the
Company’s board of directors and Employee; provided that,
in all cases, any such sale shall be made only from shares of Company common
stock with respect to which Employee has a 100% vested and nonforfeitable
interest.

 

B-3

 

EXHIBIT
F

 

 

STOCKHOLDERS AGREEMENT

 

by and among

 

COBALT INTERNATIONAL ENERGY,
INC.

 

and

 

THE STOCKHOLDERS THAT ARE
SIGNATORIES HERETO

 

 

Dated as of December 15,
2009

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.2.

  	
  Other
  Interpretive Provisions

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. REPRESENTATIONS AND
  WARRANTIES

  	
   

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Existence;
  Authority; Enforceability

  	
   

  	
  6

  
	
  Section 2.2.

  	
  Absence
  of Conflicts

  	
   

  	
  6

  
	
  Section 2.3.

  	
  Consents

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. GOVERNANCE

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Board
  of Directors

  	
   

  	
  7

  
	
  Section 3.2.

  	
  Committees

  	
   

  	
  10

  
	
  Section 3.3.

  	
  Information;
  Duties

  	
   

  	
  11

  
	
  Section 3.4.

  	
  Controlled
  Company

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. TRANSFERS OF SHARES

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Limitations
  on Transfer

  	
   

  	
  12

  
	
  Section 4.2.

  	
  Transfer
  to Permitted Transferees

  	
   

  	
  13

  
	
  Section 4.3.

  	
  Rights
  and Obligations of Permitted Transferees

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. GENERAL PROVISIONS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Further
  Assurances

  	
   

  	
  14

  
	
  Section 5.2.

  	
  Assignment;
  Benefit

  	
   

  	
  14

  
	
  Section 5.3.

  	
  Freedom
  to Pursue Opportunities

  	
   

  	
  14

  
	
  Section 5.4.

  	
  Termination

  	
   

  	
  14

  
	
  Section 5.5.

  	
  Subsequent
  Acquisition of Shares; Other Activities

  	
   

  	
  15

  
	
  Section 5.6.

  	
  Severability

  	
   

  	
  15

  
	
  Section 5.7.

  	
  Entire
  Agreement

  	
   

  	
  15

  
	
  Section 5.8.

  	
  Amendment

  	
   

  	
  15

  
	
  Section 5.9.

  	
  Waiver

  	
   

  	
  15

  
	
  Section 5.10.

  	
  Counterparts

  	
   

  	
  16

  
	
  Section 5.11.

  	
  Notices

  	
   

  	
  16

  
	
  Section 5.12.

  	
  Governing
  Law

  	
   

  	
  16

  
	
  Section 5.13.

  	
  Jurisdiction

  	
   

  	
  16

  
	
  Section 5.14.

  	
  Waiver
  of Jury Trial

  	
   

  	
  17

  
	
  Section 5.15.

  	
  Specific
  Performance

  	
   

  	
  17

  
	
  Section 5.16.

  	
  Marketing
  Materials

  	
   

  	
  17

  
	
  Section 5.17.

  	
  Notice
  of Events

  	
   

  	
  17

  
	
  Section 5.18.

  	
  Adjustments

  	
   

  	
  17

  
	
  Section 5.19.

  	
  No Third Party
  Beneficiaries

  	
   

  	
  17

  

 

 

STOCKHOLDERS AGREEMENT

 

THIS STOCKHOLDERS AGREEMENT
(as it may be amended from time to time in accordance with the terms hereof,
this “Agreement”), dated as of December 15, 2009, is made by and
among Cobalt International Energy, Inc., a Delaware corporation (the “Company”),
and the stockholders that are or become signatories hereto (each a “Stockholder”
and collectively, the “Stockholders”).

 

RECITALS

 

WHEREAS, the Company and the
Stockholders (or their respective Affiliates) are parties to that certain
Reorganization Agreement, dated as of December 8, 2009, as such agreement
may be amended from time to time in accordance therewith (the “Reorganization
Agreement”);

 

WHEREAS, as of the date of
this Agreement, the Stockholders beneficially own greater than a majority of
the outstanding Company Shares (as defined below);

 

WHEREAS, the Company is
proposing to sell Company Shares to the public in an initial public offering
(the “IPO”); and

 

WHEREAS, subject to the
terms and conditions herein, the Stockholders and the Company desire to enter
into this Agreement to provide for certain rights and obligations of the
Stockholders and the Company.

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual promises, covenants and
agreements of the Parties, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:

 

ARTICLE I.

DEFINITIONS

 

Section 1.1.            Definitions.  As used in this
Agreement, the following terms shall have the following meanings:

 

“Affected Stockholder”
has the meaning set forth in Section 5.8.

 

“Affiliate” means (a) with
respect to any GSCP Party, any C/R Party and any FR Party, any Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, and includes any private equity investment
fund the primary investment advisor to which is the primary investment advisor
(or an Affiliate thereof) to such specified Person, (b) with respect to
any of the KERN Parties, any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with KERN Partners
Ltd. and (c) with respect to any other Person, any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person.  It being
understood and agreed that, for purposes hereof, (i) each GSCP Party shall
be deemed to be an Affiliate of every other GSCP Party, (ii) each C/R
Party shall be deemed to be an Affiliate of every other C/R Party, (iii) each
FR Party shall be deemed to be an Affiliate of every other FR Party, (iv) 

 

 

neither
the Company nor any subsidiary of the Company shall be deemed to be an
Affiliate of any Stockholder, (v) except as set forth in clauses (i) through
(iii) above, no Stockholder shall be deemed to be an Affiliate of any
other Stockholder and (vi) neither the Board of Trustees of Leland
Stanford Junior University nor Caisse de Depot et Placement du Quebec or any of
their Affiliates shall be deemed to be Affiliates of KERN Cobalt Co-Invest
Partners AP LP, KERN Partners Ltd. or any KERN Party.

 

“Agreement” has the
meaning set forth in the preamble.

 

“Board of Directors”
means the board of directors of the Company.

 

“Business Day” means
any day other than a Saturday, Sunday or day on which banking institutions in
New York, New York are authorized or obligated by law or executive order to
close.

 

“Company” has the
meaning set forth in the preamble.

 

“Company Shares”
means common stock of the Company, par value $0.01 per share, and any and all
securities of any kind whatsoever of the Company that may be issued by the
Company after the date hereof in respect of, in exchange for, or in
substitution of, Company Shares, pursuant to any stock dividends, splits,
reverse splits, combinations, reclassifications, recapitalizations,
reorganizations and the like occurring after the date hereof.

 

“C/R Parties” means,
collectively, C/R Cobalt Investment Partnership, L.P., C/R Energy Coinvestment
II, L.P., Riverstone Energy Coinvestment III, L.P., Carlyle Energy Coinvestment
III, L.P., C/R Energy III Cobalt Partnership, L.P. and Carlyle/Riverstone
Global Energy and Power Fund III, L.P. and any Affiliates of the foregoing to
whom Company Shares are Transferred by a Stockholder after the IPO Date in
accordance with this Agreement.

 

“Cure Period” has the
meaning set forth in Section 3.1(h).

 

“Defaulting Stockholder”
has the meaning set forth in Section 3.1(h).

 

“Directed Opportunity”
has the meaning set forth in Section 5.3.

 

“Director” means a
member of the Board of Directors.

 

“FR Parties” means,
collectively, First Reserve Fund XI, L.P. and FR XI Onshore AIV, L.P. and any
Affiliates of the foregoing to whom Company Shares are Transferred by a
Stockholder after the IPO Date in accordance with this Agreement.

 

“Governing Documents”
means the certificate of incorporation of the Company, as amended or modified
from time to time, and the by-laws of the Company, as amended or modified from
time to time.

 

“GSCP Parties” means,
collectively, GSCP V Cobalt Holdings, LLC, GSCP V Offshore Cobalt Holdings,
LLC, GSCP V GMBH Cobalt Holdings, LLC, GSCP VI Cobalt Holdings, LLC, GSCP VI
Offshore Cobalt Holdings, LLC, GSCP VI GMBH Cobalt Holdings, LLC, GS 

 

2

 

Capital
Partners V Institutional, L.P. and GS Capital Partners VI Parallel, L.P., any
Affiliates of the foregoing to whom Company Shares are Transferred by a Stockholder
after the IPO Date in accordance with this Agreement.

 

“Hedge” means (a) any
swap, hedge or other arrangement that transfers, in whole or in part, any of
the economic consequences of ownership of any Company Shares, whether any such
aforementioned transaction is to be settled by delivery of Company Shares or
other securities, in cash or otherwise or (b) any agreement to take or
commit to any of the foregoing actions.

 

“independent director”
means a Director who qualifies, as of the date of such Director’s election or
appointment to the Board of Directors and as of any other date on which the
determination is being made, as an “independent director” pursuant to SEC rules and
applicable listing standards, as amended from time to time, as determined by the
Board of Directors without the vote of such Director.

 

“Initial Post-IPO Shares”
means, with respect to the GSCP Parties, 74,868,148 Company Shares, with
respect to the C/R Parties, 74,862,984 Company Shares, with respect to the FR
Parties, 74,183,499 Company Shares and, with respect to the KERN Parties,
32,035,093 Company Shares, in each case, as adjusted pursuant to any stock
dividends, splits, reverse splits, combinations, reclassifications,
recapitalizations, reorganizations and the like occurring after the date
hereof.

 

“IPO” has the meaning
set forth in the recitals.

 

“IPO Date” means the
date on which the IPO is consummated.

 

“KERN
Parties” means KERN Cobalt Co-Invest Partners AP LP and any Affiliates of
KERN Partners Ltd. to whom Company Shares are Transferred by a Stockholder
after the IPO Date in accordance with this Agreement.

 

“KERN
Permitted Transfer” means (a) a Transfer of Company Shares by KERN
Cobalt Co-Invest Partners AP LP to a limited partner of KERN Cobalt Co-Invest
Partners AP LP who is not an Affiliate of the KERN Parties if (i) such
Transfer is being effected in connection with KERN Cobalt Co-Invest Partners AP
LP’s exercise of its rights as a Tagging Holder pursuant to the Tag-Along
Agreement and such Transfer is being effected for the purpose of permitting
such limited partner to be the direct seller of such Company Shares in
connection with the sale pursuant to the Tag-Along Agreement or (ii) such
Transfer is being effected in connection with KERN Cobalt Co-Invest Partners AP
LP’s exercise of its “piggyback” or “demand” rights under the Registration
Rights Agreement and such Transfer is being effected for the purpose of
permitting such limited partner to be the direct seller of such Company Shares
in connection with the exercise of such “piggyback” or “demand” rights
(provided that, in any such case, the number of Company Shares being
Transferred to any such limited partner shall not exceed the aggregate number
of Company Shares that KERN Cobalt Co-Invest Partners AP LP has elected to
Transfer pursuant to such exercise of its rights as a Tagging Holder pursuant
to the Tag-Along Agreement or in such exercise of its “piggyback” or “demand”
rights pursuant to the Registration Rights Agreement, as applicable) or (b) a
Transfer of partnership interests in KERN Cobalt Co-Invest Partners AP LP by a
limited partner thereof to an Affiliate of such limited partner.

 

3

 

“Management Rights
Agreements” means the management rights agreements between the Company and
each of First Reserve Fund XI, L.P., FR XI Onshore AIV, L.P., C/R Cobalt
Investment Partnership, L.P., Carlyle/Riverstone Global Energy and Power Fund
III, L.P., GS Capital Partners V Institutional, L.P. and GS Capital Partners VI
Parallel, L.P. as such agreements may be amended from time to time in
accordance therewith.

 

“Necessary Action”
means, with respect to a specified result, all actions (to the extent such
actions are permitted by law and by the Governing Documents) necessary to cause
such result, including (i) voting or providing a written consent or proxy
with respect to the Company Shares, (ii) causing the adoption of
stockholders’ resolutions and amendments to the Governing Documents, (iii) causing
Directors (to the extent such Directors were nominated or designated by the
Person obligated to undertake the Necessary Action, and subject to any
fiduciary duties that such Directors may have as Directors) to act in a certain
manner or causing them to be removed in the event they do not act in such a
manner, (iv) executing agreements and instruments, and (v) making, or
causing to be made, with governmental, administrative or regulatory
authorities, all filings, registrations or similar actions that are required to
achieve such result.

 

“Party” means the
Company and the Stockholders party to this Agreement, including any Permitted
Transferee who becomes a Party pursuant to Section 4.3(a).

 

“Permitted Transferee”
means in the case of any Stockholder, an Affiliate of such Stockholder.

 

“Person” means an
individual, partnership, limited liability company, corporation, trust, other
entity, association, estate, unincorporated organization or a government or any
agency or political subdivision thereof.

 

“Proposed Transfer”
has the meaning set forth in Section 4.3(a).

 

“Proposed Transferee”
has the meaning set forth in Section 4.3(a).

 

“Proxy Holder” has
the meaning set forth in Section 3.1(h).

 

“Registration Rights
Agreement” means that certain Registration Rights Agreement, dated as of
the date of this Agreement, by and among the Company, the Stockholders and the
other parties that are signatories thereto, as such agreement may be amended
from time to time in accordance therewith.

 

“Registration Statement”
means any registration statement of the Company filed with, or to be filed
with, the SEC under the Securities Act, including any related prospectus,
amendments and supplement to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement other than a registration statement
(and related prospectus) filed on Form S-8 or any successor form thereto.

 

“Reorganization Agreement”
has the meaning set forth in the recitals.

 

“Restricted Period”
means the period beginning on IPO Date and ending on the 24-month anniversary
of the IPO Date.

 

4

 

“SEC” means the
Securities and Exchange Commission.

 

“Securities Act”
means the United States Securities Act of 1933, as amended, and any successor
thereto, and any rules and regulations promulgated thereunder, all as the
same shall be in effect from time to time.

 

“Selling Stockholder”
has the meaning set forth in Section 4.3(a).

 

“Sponsor Director”
means any Director designated by a Sponsor pursuant to the terms of this
Agreement.

 

“Sponsor Party” means any Sponsor, any
Sponsor Director and any of their respective officers, directors, agents,
stockholders, members, partners, Affiliates and subsidiaries (other than the
Company and its subsidiaries).

 

“Sponsors” means the
GSCP Parties, the C/R Parties, the FR Parties and the KERN Parties.

 

“Stockholder” and “Stockholders”
have the meaning set forth in the preamble.

 

“Stockholder Majority”
means the consent or approval of the Stockholders (including, if applicable,
the Stockholder(s) requesting a consent or approval) then owning a
majority of the Company Shares then owned by all of the Stockholders.

 

“Tag-Along Agreement”
means that certain Tag-Along Agreement, dated as of the date of this Agreement,
by and among the Stockholders and the other parties that are signatories
thereto, as such agreement may be amended from time to time in accordance
therewith.

 

“Tagging Holder” has
the meaning given to such term in the Tag-Along Agreement.

 

“Transfer” means (a) a
direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation
or other encumbrance or other disposition of Company Shares, or any legal or
beneficial interest therein, including the grant of an option or other right or
the grant of any interest that would result in a Stockholder no longer having
the power to vote, or cause to be voted, such Stockholder’s Company Shares,
whether directly or indirectly, whether voluntarily, involuntarily or by
operation of law or (b) any agreement to take or commit to any of the
foregoing actions; and “Transferred,” “Transferee,” “Transferor,”
and “Transferability” shall each have a correlative meaning.  For the avoidance of doubt, a transfer, sale,
exchange, assignment, pledge, hypothecation or other encumbrance or other
disposition of an interest in any Stockholder, or direct or indirect parent
thereof, all or substantially all of whose assets are, directly or indirectly,
Company Shares shall constitute a “Transfer” of Company Shares for purposes of
this Agreement.  For the avoidance of
doubt, a transfer, sale, exchange, assignment, pledge, hypothecation or other
encumbrance or other disposition of an interest in any Stockholder, or direct
or indirect parent thereof, which has substantial assets in addition to Company
Shares shall not constitute a “Transfer” of Company Shares for purposes of this
Agreement.  For the avoidance of doubt,
it is understood and agreed that (x) any change in ownership of The
Goldman Sachs Group, Inc., Goldman, Sachs & Co., or their
successors shall not be deemed to be a “Transfer” by any GSCP Party or any of
their respective Affiliates and (y) 

 

5

 

any
change in ownership of any management company of any Sponsor shall not be
deemed to be a “Transfer” by any Sponsor or any of its Affiliates.

 

“Transferring Stockholder”
has the meaning set forth in Section 4.3(a).

 

Section 1.2.            Other Interpretive Provisions.

 

(a)           The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

 

(b)           The words “hereof,” “herein,” “hereunder”
and similar words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and any subsection and Section references are
to this Agreement unless otherwise specified.

 

(c)           The term “including” is not limiting and means “including
without limitation.”

 

(d)           The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.

 

(e)           Whenever the context requires, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms.

 

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

 

Each of the Parties hereby
represents and warrants, solely with respect to itself, to each other Party
that:

 

Section 2.1.            Existence; Authority; Enforceability.  Such Party has the
power and authority to enter into this Agreement and to carry out its
obligations hereunder.  Such Party is
duly organized and validly existing under the laws of its jurisdiction of
organization, and the execution of this Agreement, and the performance of its
obligations hereunder, have been authorized by all necessary action, and no
other act or proceeding on its part is necessary to authorize the execution of
this Agreement or the performance of its obligations hereunder.  This Agreement has been duly executed by it
and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms except as the same may be affected by bankruptcy,
insolvency, moratorium or similar laws, or by legal or equitable principles
relating to or limiting the rights of contracting parties generally.

 

Section 2.2.            Absence of Conflicts.  The execution and delivery by such Party of
this Agreement and the performance of its obligations hereunder does not (a) conflict
with, or result in the breach of any provision of the constitutive documents of
such Party; (b) result in any violation, breach, conflict, default or
event of default (or an event which with notice, lapse of time, or both, would
constitute a default or event of default), or give rise to any right of
acceleration or termination or any additional payment obligation, under the
terms of any contract, agreement or permit to which such Party is a party or by
which such Party’s assets or operations are bound or affected; or (c) violate
any law applicable to such Party, except, in the 

 

6

 

case
of clause (b), as would not have a material adverse effect on such Party’s
ability to perform its obligations hereunder.

 

Section 2.3.            Consents.  Other than as has already been obtained, no
consent, waiver, approval, authorization, exemption, registration, license or
declaration is required to be made or obtained by such Party in connection with
the execution, delivery or performance of this Agreement, except in each case,
as would not have a material adverse effect on such Party’s ability to perform
its obligations hereunder.

 

ARTICLE III.

GOVERNANCE

 

Section 3.1.            Board of Directors.

 

(a)           Effective as of the date of this Agreement, the Board of
Directors shall be comprised of nine Directors, as follows: (i) two shall
be designees of the GSCP Parties, (ii) two shall be designees of the C/R
Parties, (iii) two shall be designees of the FR Parties, (iv) one
shall be a designee of the KERN Parties, (v) one shall be the Chief
Executive Officer of the Company, who shall be the Chairman of the Board of
Directors, and (vi) one shall be designated by the Board of Directors, who
shall be an “independent director” pursuant to applicable listing standards, in
accordance with the Governing Documents.

 

(b)           From and after the date of this Agreement, the GSCP Parties
shall have the right, but not the obligation, to nominate a number of designees
equal to:  (i) up to two designees
so long as the GSCP Parties beneficially own in the aggregate a number of
Company Shares equal to at least 40% of their Initial Post-IPO Shares and (ii) up
to one designee so long as the GSCP Parties beneficially own in the aggregate a
number of Company Shares equal to (x) less than 40% of their Initial
Post-IPO Shares and (y) at least 5% of the then outstanding Company
Shares.  If the GSCP Parties beneficially
own in the aggregate a number of Company Shares equal to less than 40% of their
Initial Post-IPO Shares and less than 5% of the then outstanding Company
Shares, the GSCP Parties shall not have the right pursuant to this Section 3.1(b) to
nominate any designees to be elected to the Board of Directors.  In the event that the GSCP Parties have
nominated less than the total number of designees the GSCP Parties are entitled
to nominate pursuant to this Section 3.1(b), the GSCP Parties shall
have the right, at any time, to nominate such additional designees to which
they are entitled, in which case, the Stockholders shall take, or cause to be
taken, all Necessary Action to (A) increase the size of the Board of
Directors as required to enable the GSCP Parties to so nominate such additional
designees and (B) appoint such additional designees nominated by the GSCP
Parties to such newly created directorships. 
For so long as the GSCP Parties are entitled to nominate two designees
for election to the Board of Directors, one such designee shall be nominated by
GS Capital Partners V Institutional, L.P. and one such designee shall be
nominated by GS Capital Partners VI Parallel, L.P.  For so long as the GSCP Parties are entitled
to nominate only one designee for election to the Board of Directors, such
designee shall be nominated by GS Capital Partners VI Parallel, L.P.

 

(c)           From and after the date of this Agreement, the C/R Parties
shall have the right, but not the obligation, to nominate a number of designees
equal to:  (i) up to two designees 

 

7

 

so
long as the C/R Parties beneficially own in the aggregate a number of Company
Shares equal to at least 40% of their Initial Post-IPO Shares and (ii) up
to one designee so long as the C/R Parties beneficially own in the aggregate a
number of Company Shares equal to (x) less than 40% of their Initial
Post-IPO Shares and (y) at least 5% of the then outstanding Company
Shares.  If the C/R Parties beneficially
own in the aggregate a number of Company Shares equal to less than 40% of their
Initial Post-IPO Shares and less than 5% of the then outstanding Company
Shares, the C/R Parties shall not have the right pursuant to this Section 3.1(b) to
nominate any designees to be elected to the Board of Directors.  In the event that the C/R Parties have
nominated less than the total number of designees the C/R Parties are entitled
to nominate pursuant to this Section 3.1(c), the C/R Parties shall
have the right, at any time, to nominate such additional designees to which they
are entitled, in which case, the Stockholders shall take, or cause to be taken,
all Necessary Action to (A) increase the size of the Board of Directors as
required to enable the C/R Parties to so nominate such additional designees and
(B) appoint such additional designees nominated by the C/R Parties to such
newly created directorships.  For so long
as the C/R Parties are entitled to nominate two designees for election to the
Board of Directors, one such designee shall be nominated by C/R Cobalt Investment
Partnership, L.P. and one such designee shall be nominated by
Carlyle/Riverstone Global Energy and Power Fund III, L.P.  For so long as the C/R Parties are entitled
to nominate only one designee for election to the Board of Directors, such
designee shall be nominated by Carlyle/Riverstone Global Energy and Power Fund
III, L.P.

 

(d)           From and after the date of this Agreement, the FR Parties
shall have the right, but not the obligation, to nominate a number of designees
equal to:  (i) up to two designees so
long as the FR Parties beneficially own in the aggregate a number of Company
Shares equal to at least 40% of their Initial Post-IPO Shares and (ii) up
to one designee so long as the FR Parties beneficially own in the aggregate a
number of Company Shares equal to (x) less than 40% of their Initial
Post-IPO Shares and (y) at least 5% of the then outstanding Company
Shares.  If the FR Parties beneficially
own in the aggregate a number of Company Shares equal to less than 40% of their
Initial Post-IPO Shares and less than 5% of the then outstanding Company
Shares, the FR Parties shall not have the right pursuant to this Section 3.1(b) to
nominate any designees to be elected to the Board of Directors.  In the event that the FR Parties have
nominated less than the total number of designees the FR Parties are entitled
to nominate pursuant to this Section 3.1(d), the FR Parties shall
have the right, at any time, to nominate such additional designees to which
they are entitled, in which case, the Stockholders shall take, or cause to be
taken, all Necessary Action to (A) increase the size of the Board of
Directors as required to enable the FR Parties to so nominate such additional
designees and (B) appoint such additional designees nominated by the FR
Parties to such newly created directorships. 
For so long as the FR Parties are entitled to designees for election to
the Board of Directors, such designees shall be nominated by First Reserve Fund
XI, L.P.

 

(e)           From and after the date of this Agreement,, the KERN Parties
shall have the right, but not the obligation, to nominate one designee so long
as the KERN Parties beneficially own in the aggregate a number of Company
Shares equal to at least 5% of the then outstanding Company Shares.  If the KERN Parties beneficially own in the
aggregate a number of Company Shares equal to less than 5% of the then
outstanding Company Shares, the KERN Parties shall not have the right pursuant
to this Section 3.1(b) to nominate any designees to be elected
to the Board of Directors  In the event
that the KERN Parties have not nominated the 

 

8

 

designee
that the KERN Parties are entitled to nominate pursuant to this Section 3.1(e),
the KERN Parties shall have the right, at any time, to nominate such designee,
in which case, the Stockholders shall take, or cause to be taken, all Necessary
Action to (A) increase the size of the Board of Directors as required to
enable the KERN Parties to so nominate such designee and (B) appoint such
designee nominated by the KERN Parties to such newly created directorship.  For so long as the KERN Parties are entitled
to nominate a designee for election to the Board of Directors, such designee
shall be an employee of KERN Partners Ltd. or an Affiliate thereof.

 

(f)            Each of the Stockholders shall take all Necessary Action to
cause the Board of Directors to be constituted as set forth in this Section 3.1
(including appointing or removing Sponsor designees and filling any vacancies
created by reason of death, disability, retirement, removal or resignation of a
Sponsor’s designees with a new designee of such Sponsor) and shall vote all of
such Stockholder’s Company Shares in favor of the election of the persons
designated pursuant to this Section 3.1 to the Board of Directors.  The Company agrees to include in the slate of
nominees recommended by the Board of Directors those persons designated
pursuant to this Section 3.1 and to use its best efforts to cause
the election or appointment of each such designee to the Board of Directors,
including nominating such designees to be elected as Directors.

 

(g)           The Company shall reimburse the Sponsor Directors for all
reasonable out-of-pocket expenses incurred in connection with their attendance
at meetings of the Board of Directors and any committees thereof.

 

(h)           Solely for purposes of this Section 3.1, and in
order to secure the performance of each Stockholder’s obligations under this Section 3.1,
each Stockholder hereby irrevocably appoints each other Stockholder that
qualifies as a Proxy Holder (as defined below) the attorney-in-fact and proxy
of such Stockholder (with full power of substitution) to vote or provide a
written consent with respect to its Company Shares as described in this
paragraph if, and only in the event that, such Stockholder fails to vote or
provide a written consent with respect to its Company Shares in accordance with
the terms of this Section 3.1 (each such Stockholder, a “Defaulting
Stockholder”).  Each Defaulting
Stockholder shall have five Business Days from the date of a request for such
vote or written consent (the “Cure Period”) to cure such failure.  If after the Cure Period the Defaulting
Stockholder has not cured such failure, any Stockholder whose designees to the
Board of Directors were required to be approved or removed by the Defaulting
Stockholder pursuant to this Section 3.1 but were not approved or
removed by the Defaulting Stockholder, shall have, and is hereby irrevocably
granted, a proxy to vote or provide a written consent with respect to each such
Defaulting Stockholder’s Company Shares for the purposes of taking the actions
required by this Section 3.1 (such Stockholder, a “Proxy Holder”),
and of removing from office any Directors elected to the Board of Directors in
lieu of the designees of the Proxy Holder who should have been elected pursuant
to this Section 3.1.  Each
Stockholder intends this proxy to be, and it shall be, irrevocable and coupled
with an interest, and each Stockholder will take such further action and
execute such other instruments as may be necessary to effectuate the intent of
this proxy and hereby revokes any proxy previously granted by it with respect
to the matters set forth in this Section 3.1 with respect to the
Company Shares owned by such Stockholder. 
Notwithstanding the foregoing, the power of attorney and proxy granted
by this Section 3.1 shall be deemed to be revoked upon the
termination of this Agreement in accordance with its terms.

 

9

 

(i)            To the extent that the number of
Directors that the GSCP Parties, the C/R Parties, the FR Parties or the KERN
Parties are entitled to designate pursuant to this Section 3.1 is
reduced, the GSCP Parties, the C/R Parties, the FR Parties or the KERN Parties,
as the case may be, shall cause the required number of Directors to promptly
resign from the Board of Directors and any vacancies resulting from such
resignation shall be filled by the Board of Directors in accordance with the
Governing Documents and SEC rules and applicable listing standards then in
effect.  Notwithstanding the foregoing,
if, during the Restricted Period, the KERN Parties’ beneficial ownership of
Company Shares is, as a result of an issuance of Company Shares by the Company,
reduced to less than 5% of the then outstanding Company Shares, the KERN
Parties shall not be required to cause the Director nominated by the KERN
Parties to resign from the Board of Directors until after the expiration of the
Restricted Period unless otherwise requested by the Board of Directors.

 

Section 3.2.            Committees.

 

(a)           For so long as the GSCP Parties are
entitled to nominate at least one Director for election to the Board of
Directors pursuant to Section 3.1(b), the GSCP Parties shall have
the right to have at least one of their designated Directors serve on each
committee (with the exception of the audit committee) of the Board of
Directors, to the extent such Directors are permitted to serve on such
committees under SEC rules and applicable listing standards then in
effect.

 

(b)           For so long as the C/R Parties are
entitled to nominate at least one Director for election to the Board of
Directors pursuant to Section 3.1(c), the C/R Parties shall have
the right to have at least one of their designated Directors serve on each
committee (with the exception of the audit committee) of the Board of
Directors, to the extent such Directors are permitted to serve on such
committees under SEC rules and applicable listing standards then in
effect.

 

(c)           For so long as the FR Parties are
entitled to nominate at least one Director for election to the Board of
Directors pursuant to Section 3.1(d), the FR Parties shall have the
right to have at least one of their designated Directors serve on each
committee (with the exception of the audit committee) of the Board of
Directors, to the extent such Directors are permitted to serve on such
committees under SEC rules and applicable listing standards then in
effect.

 

(d)           For so long as the KERN Parties are
entitled to nominate a Director for election to the Board of Directors pursuant
to Section 3.1(e), the KERN Parties shall have the right to have
such designated Director serve on each committee (with the exception of the
audit committee) of the Board of Directors, to the extent such Director is
permitted to serve on such committees under SEC rules and applicable
listing standards then in effect.

 

(e)           To the extent permitted by SEC rules and
applicable listing standards then in effect, for so long as the Sponsors
collectively beneficially own in the aggregate a number of Company Shares equal
to at least of 25% of the then outstanding Company Shares, (i) the Sponsor
Directors shall constitute the majority of each committee of the Board of
Directors (with the exception of the audit committee) and (ii) the
chairman of each committee of the Board of 

 

10

 

Directors (with the exception of the audit
committee) shall be a Director serving on such committee who is selected by a
Stockholder Majority to serve as chairman. 
In the event that SEC rules or applicable listing standards then in
effect limit the number of Sponsor Directors that can serve on any committee,
the Sponsor Parties shall allocate committee membership among Sponsor Directors
in as equitable a manner as possible, taking into account the relative level of
ownership by each of the Sponsors and considering committee preferences of the
Sponsor Directors.

 

(f)            Each of the Stockholders shall take
all Necessary Action to cause each committee of the Board of Directors to be
constituted as set forth in this Section 3.2.  The Company agrees to use its best efforts to
cause the appointment of the Sponsor Designees to the committees of the Board
of Directors (with the exception of the audit committee) in accordance with
this Section 3.2, including causing the chairman of each committee
of the Board of Directors (with the exception of the audit committee) to be a
Director who is selected by a Stockholder Majority to serve as chairman.

 

Section 3.3.            Information; Duties.

 

(a)           The Company and the Stockholders
agree that (i) the Directors designated by the GSCP Parties, the C/R
Parties and the FR Parties may share confidential, non-public information about
the Company with the GSCP Parties, the C/R Parties, the FR Parties and their
respective Affiliates and (ii) the Director designated by the KERN Parties
may share confidential, non-public information about the Company with the KERN
Parties and its Affiliates and the limited partners of KERN Cobalt Co-Invest
Partners AP LP, in each case only to the extent reasonably necessary in
connection with their investment in the Company, provided that such Parties agree to keep such information
confidential (except as may be required by law or applicable listing standards
then in effect) and agree to comply with all applicable securities laws in
connection therewith.

 

(b)           The Company and the Stockholders
agree that, notwithstanding anything to the contrary in any other agreement or
at law or in equity, when any of the Stockholders (in their capacity as
Stockholders) takes any action under this Agreement to give or withhold its
consent, such Person shall, to the fullest extent permitted by law, have no
duty to consider the interests of the Company or the other Stockholders or any
other stockholders of the Company and may act exclusively in its and its
Affiliates own interests; provided,
however, that the foregoing shall
in no way affect the obligations of the Parties to comply with the provisions
of this Agreement.

 

Section 3.4.            Controlled Company.

 

(a)           For so long as the Company qualifies
as a “controlled company” under the applicable listing standards then in
effect, the Company will elect to be a “controlled company” for purposes of
such applicable listing standards, and will disclose in its annual meeting
proxy statement that it is a “controlled company” and the basis for that
determination.  The Company and the
Stockholders acknowledge and agree that, as of the date of this Agreement, the
Company is a “controlled company.”  If
the Company ceases to qualify as a “controlled company” under applicable
listing standards then in effect, the Sponsors and the Company will take
whatever 

 

11

 

action may be reasonably necessary, if any,
to cause the Company to comply with SEC rules and applicable listing
standards then in effect.

 

(b)           After the Company ceases to qualify
as a “controlled company” under applicable listing standards then in effect,
each of the Sponsors shall cause a sufficient number of their designees to
qualify as “independent directors” to ensure that the Board of Directors
complies with such applicable listing standards in the time periods required by
the applicable listing standards then in effect.

 

ARTICLE IV.

TRANSFERS OF SHARES

 

Section 4.1.            Limitations on Transfer.

 

(a)           Except as otherwise expressly
provided in this Article IV, no Stockholder shall be entitled to
Transfer any of its Company Shares at any time if such Transfer would violate
the Securities Act, or any state (or other jurisdiction) securities or “blue
sky” laws applicable to the Company or the applicable Transfer of Company
Shares.

 

(b)           In addition, during the Restricted
Period, except (i) in connection with the exercise of “piggyback” rights under
the Registration Rights Agreement, (ii) as permitted by Section 4.2,
(iii) as a Tagging Holder pursuant to the Tag-Along Agreement or (iv) pursuant
to a KERN Permitted Transfer, no Stockholder may Transfer any Company Shares,
Hedge any Company Shares, or exercise a “demand” right under the Registration
Rights Agreement, except with the prior written consent of the Stockholder
Majority.  Notwithstanding the foregoing,
this Section 4.1(b) shall not apply to Transfers by any of the
KERN Parties if, at the time of such Transfer, (a) the KERN Parties’
beneficial ownership of Company Shares has been, as a result of an issuance of
Company Shares by the Company, reduced to less than 5% of the then outstanding
Company Shares and (b) the last Director nominated by the KERN Parties
pursuant to Section 3.1(e) has either (x) been removed as
a Director by the Board of Directors or the stockholders of the Company, in
each case, other than for cause or (y) resigned from the Board of
Directors at the request of the Board of Directors pursuant to the last
sentence of Section 3.1(i).

 

(c)           In the event of a purported Transfer
by a Stockholder of any Company Shares in violation of the provisions of this
Agreement, such purported Transfer will be void and of no effect, and the
Company will not give effect to such Transfer.

 

(d)           Each certificate evidencing the
Company Shares held by a Stockholder shall bear the following restrictive
legend, either as an endorsement or on the face thereof:

 

THE SALE, ASSIGNMENT,
TRANSFER OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE
IS RESTRICTED BY THE TERMS OF A STOCKHOLDERS AGREEMENT, DATED AS OF DECEMBER
15, 2009, COPIES OF WHICH ARE ON FILE WITH THE ISSUER OF THIS CERTIFICATE.  NO SALE, ASSIGNMENT, TRANSFER OR OTHER DISPOSITION
SHALL BE 

 

12

 

EFFECTIVE UNLESS AND UNTIL
THE TERMS AND CONDITIONS OF SUCH STOCKHOLDERS AGREEMENT HAVE BEEN COMPLIED WITH
IN FULL.

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY OTHER JURISDICTION AND MAY NOT BE SOLD OR TRANSFERRED OTHER THAN IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.

 

(e)           In the event that the restrictive
legend set forth in Section 4.1(d) has ceased to be
applicable, or upon request by a Stockholder proposing to Transfer Company
Shares pursuant to any Transfer permitted under this Agreement, the Company
shall promptly provide such Stockholder, or its Transferees, at their request,
without any expense to such Persons (other than applicable transfer taxes and
similar governmental charges, if any), with new certificates for such
securities not bearing the legend with respect to which the restriction has
ceased and terminated (it being understood that the restriction referred to in
the first paragraph of the legend in Section 4.1(d) shall be
inapplicable on the earlier of (i) the end of the Restricted Period and (ii) when
Section 4.1 becomes inapplicable with respect to the applicable
Stockholder).

 

Section 4.2.            Transfer to Permitted Transferees.  Subject to the provisions of Section 4.1(a) and
Section 4.3, a Stockholder may Transfer any or all of its Company
Shares to a Permitted Transferee of such Stockholder; provided  that
each Permitted Transferee of such Stockholder to which Company Shares are
Transferred shall, and such Stockholder shall cause each such Permitted Transferee
to, Transfer back to such Stockholder (or to another Permitted Transferee of
such Stockholder) any Company Shares it owns if such Permitted Transferee
ceases to be a Permitted Transferee of such Stockholder.

 

Section 4.3.            Rights and Obligations of
Permitted Transferees.

 

(a)           Any Transfer of Company Shares to any
Permitted Transferee of a Stockholder, which Transfer is otherwise in
compliance herewith, shall be permitted hereunder only if such Permitted
Transferee agrees in writing that it shall, upon such Transfer, assume with
respect to such Company Shares the Transferor’s obligations under this
Agreement and become a Party for such purpose and be treated as a Stockholder
for all purposes of this Agreement, and become a party to any other applicable
agreement or instrument executed and delivered by such Transferor in respect of
the Company Shares.

 

(b)           Notwithstanding the foregoing, Section 4.3(a) shall
not apply to any Transfer of Company Shares to a Permitted Transferee completed
pursuant to (i) a Registration Statement, (ii) an underwritten
registered public offering, or (iii) a bona fide sale pursuant to a
brokers’ transaction, transaction directly with a market maker or riskless
principal transaction in each case in accordance with Rule 144 under the
Securities Act (including block trades), in each 

 

13

 

case for which the Transferor does not have
knowledge that such Company Shares are being Transferred to a Permitted
Transferee.

 

ARTICLE V.

GENERAL PROVISIONS

 

Section 5.1.            Further Assurances.  The Parties shall take all Necessary Action
in order to give full effect to this Agreement and every provision hereof.  Each of the Company and the Stockholders
shall take or cause to be taken all lawful action necessary to ensure at all
times that the Company’s Governing Documents are not at any time inconsistent
with the provisions of this Agreement. 
In addition, each Party shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
Party reasonably may request in order to carry out the intent and accomplish
the purposes of this Agreement.

 

Section 5.2.            Assignment; Benefit.  The rights and obligations hereunder shall
not be assigned without the prior written consent of the Company and the
Stockholder Majority, except in connection with a Transfer of Company Shares in
compliance with Article IV. 
Any assignment of rights or obligations in violation of this Section 5.2
shall be null and void.  This Agreement
shall be binding upon and shall inure to the benefit of the Parties, and their
respective successors and permitted assigns.

 

Section 5.3.            Freedom to Pursue Opportunities.  To the fullest extent permitted by applicable
law, the Company hereby, on behalf of itself and its subsidiaries, renounces
any interest, duty or expectancy of the Company and its subsidiaries in, or in
being offered an opportunity to participate in, business opportunities that are
from time to time presented to any Sponsor Party even if the opportunity is one
that the Company or its subsidiaries might reasonably be deemed to have pursued
or had the ability or desire to pursue if granted the opportunity to do so and
each Sponsor Party shall have no duty to communicate or offer such business
opportunity to the Company and to the fullest extent permitted by applicable
law, shall not be liable to the Company or any of its subsidiaries for breach
of any fiduciary or other duty, as a Director or otherwise, by reason of the
fact that such Sponsor Party pursues or acquires such business opportunity,
directs such business opportunity to another Person or fails to present such
business opportunity, or information regarding such business opportunity, to
the Company or its subsidiaries. 
Notwithstanding the foregoing, a Sponsor Party who is a Director and who
is offered a business opportunity in his or her capacity as a Director (a “Directed
Opportunity”) shall be obligated to communicate such Directed Opportunity
to the Company, provided, however, that all of the protections of
this Section 5.3 shall otherwise apply to the Sponsor Party with
respect to such Directed Opportunity, including, without limitation, the ability
of the Sponsor Party to pursue or acquire such Directed Opportunity or to
direct such Directed Opportunity to another Person.

 

Section 5.4.            Termination.  This Agreement shall terminate on the later
of (a) the expiration of the Restricted Period and (b) the first day
that none of the Stockholders has the right to nominate a Director pursuant to Section 3.1;
provided that termination of this Agreement shall not relieve any
Party for liability for any breach of this Agreement prior to such termination.

 

14

 

Section 5.5.            Subsequent Acquisition of Shares;
Other Activities.  Any Company Shares
acquired subsequent to the date hereof by a Stockholder shall be subject to the
terms and conditions of this Agreement. 
For the avoidance of doubt, Company Shares acquired by any Affiliate of
any Stockholder (other than Company Shares acquired pursuant to this Agreement)
shall not be subject to the terms and conditions of this Agreement.  Notwithstanding anything in this Agreement to
the contrary, none of the provisions of this Agreement shall in any way limit
Goldman, Sachs & Co. or any of its Affiliates (other than any
Stockholder, as expressly set forth in this Agreement) from engaging in any
brokerage, investment advisory, financial advisory, anti-raid advisory,
principaling, merger advisory, financing, asset management, trading, market
making, arbitrage, investment activity and other similar activities conducted
in the ordinary course of their business.

 

Section 5.6.            Severability.  In the event that any provision of this
Agreement shall be invalid, illegal or unenforceable, such provision shall be
construed by limiting it so as to be valid, legal and enforceable to the
maximum extent provided by law and
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.

 

Section 5.7.            Entire Agreement.  This Agreement, the Governing Documents, the
Registration Rights Agreement, the Reorganization Agreement, the Tag-Along
Agreement, the Management Rights Agreement and the other agreements referenced
herein and therein constitute the entire agreement among the Parties with
respect to the subject matter hereof, and supersede any prior agreement or
understanding among them with respect to the matters referred to herein.

 

Section 5.8.            Amendment.  This Agreement may not be amended, modified,
supplemented, waived or terminated (other than pursuant to Section 5.4)
except with the written consent of the Stockholder Majority; provided
that, any amendment, modification, supplement, waiver or termination that (a) materially
and adversely affects the rights of any Stockholder under this Agreement
disproportionately vis-à-vis any other Stockholder (each an “Affected Stockholder”)
will require both (i) the written consent of the Stockholder Majority and (ii) the
written consent of Affected Stockholders holding a majority of the then
outstanding Company Shares then held by all Affected Stockholders and (b) adversely
affects the rights of the Company under this Agreement, imposes additional
obligations on the Company, or amends or modifies Section 3.1, Section 3.2,
Article V, and any corresponding definitions in Article I,
will require both (i) the written consent of the Stockholder Majority and (ii) the
written consent of the Company with the approval of the “independent directors”
of the Company.

 

Section 5.9.            Waiver.  Except as set forth in Section 5.8,
no waiver of any breach of any of the terms of this Agreement shall be
effective unless such waiver is expressly made in writing and executed and
delivered by the Party against whom such waiver is claimed.  Waiver by any Party of any breach or default
by any other Party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from the
breach or default waived.  No waiver of
any provision of this Agreement shall be implied from any course of dealing
between the Parties or from any failure by any Party to assert its or his or
her rights hereunder on any occasion or series of occasions.

 

15

 

Section 5.10.          Counterparts.  This Agreement may be executed in any number
of separate counterparts each of which when so executed shall be deemed to be
an original and all of which together shall constitute one and the same
agreement.

 

Section 5.11.          Notices.  Unless otherwise specified herein, all
notices, consents, approvals, reports, designations, requests, waivers, elections
and other communications authorized or required to be given pursuant to this
Agreement shall be in writing and shall be given, made or delivered (and shall
be deemed to have been duly given, made or delivered upon receipt) by personal
hand-delivery, by facsimile transmission, by electronic mail, by mailing the
same in a sealed envelope, registered first-class mail, postage prepaid, return
receipt requested, or by air courier guaranteeing overnight delivery, addressed
to the Company at the address set forth below or to the applicable Stockholder
at the address indicated on Annex A hereto (or at such other address for
a Stockholder as shall be specified by like notice):

 

(a)     if to the Company, to:

 

	
  Cobalt International Energy, Inc.

  
	
  Two Post Oak Central

  
	
  1980 Post Oak Blvd., Suite 1200

  
	
  Houston, TX 77056

  
	
  Attention: Joseph H. Bryant

  
	
  Facsimile No.: (713) 579-9184

  
	
  E-mail: joe.bryant@cobaltintl.com

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Davis Polk & Wardwell LLP

  
	
  450 Lexington Avenue

  
	
  New York, New York 10017

  
	
  Attention:

  	
  Christopher
  Mayer

  
	
   

  	
  Richard
  D. Truesdell, Jr.

  
	
  Facsimile
  No.:

  	
  (212)
  701-5338

  
	
   

  	
  (212)
  701-5674

  
	
  E-mail:

  	
  chris.mayer@davispolk.com

  
	
   

  	
  richard.truesdell@davispolk.com

  

 

Section 5.12.          Governing Law.  This Agreement is governed by and will be
construed in accordance with the laws of the State of Delaware, excluding any
conflict-of-laws rule or principle (whether of Delaware or any other
jurisdiction) that might refer the governance or the construction of this
Agreement to the law of another jurisdiction.

 

Section 5.13.          Jurisdiction.  Each of the
Parties (a) consents to submit itself to the personal jurisdiction of the
Court of Chancery of the State of Delaware in the event any dispute arises out
of this Agreement, (b) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from such court
and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any
court other than the Court of Chancery of the State of Delaware.  Each Party 

 

16

 

hereby agrees that, to the
fullest extent permitted by law, service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in Section 5.11
shall be effective service of process for any suit or proceeding in connection
with this Agreement.

 

Section 5.14.          Waiver of Jury Trial.  EACH OF THE
PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.  The Company or any Stockholder may file an
original counterpart or a copy of this Section 5.14 with any court
as written evidence of the consent of any of the Parties to the waiver of their
rights to trial by jury.

 

Section 5.15.          Specific Performance.  It is hereby agreed and acknowledged that it
will be impossible to measure the money damages that would be suffered if the
Parties fail to comply with any of the obligations imposed on them by this
Agreement and that, in the event of any such failure, an aggrieved Party will
be irreparably damaged and will not have an adequate remedy at law.  Each Party shall, therefore, be entitled (in
addition to any other remedy to which such Party may be entitled at law or in
equity) to seek injunctive relief, including specific performance, to enforce
such obligations, without the posting of any bond, and if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the Parties shall raise the defense that there is an adequate remedy at law.

 

Section 5.16.          Marketing Materials.  The Company grants each of the Sponsors and
their respective Affiliates permission to use the Company’s name and logo in
marketing materials of such Sponsor or any of its Affiliates.  The Sponsors and their respective Affiliates,
as applicable, shall include a trademark attribution notice giving notice of
the Company’s ownership of its trademarks in the marketing materials in which
the Company’s name and logo appear.

 

Section 5.17.          Notice of Events.  Except as otherwise would require early disclosure
under applicable law or regulation, unless the applicable Sponsor notifies the
Company that it does not want to receive information pursuant to this Section 5.17,
the Company shall notify each of the Sponsors on a reasonably current basis, of
any events, discussions, notices or changes with respect to any criminal or
regulatory investigation or action involving the Company or any of its
subsidiaries, and shall reasonably cooperate with such Sponsor and its
Affiliates in efforts to mitigate any adverse consequences to such Sponsor or
its Affiliates which may arise (including by coordinating and providing
assistance in meeting with regulators).

 

Section 5.18.          Adjustments.  All references in this Agreement to Company
Shares shall be appropriately adjusted for any stock dividends, splits, reverse
splits, combinations, reclassifications, recapitalizations, reorganizations and
the like occurring after the date hereof.

 

Section 5.19.          No Third Party Beneficiaries.  Except as specifically provided in Section 5.3
and as otherwise provided herein, this Agreement is not intended to confer upon
any Person, except for the Parties, any rights or remedies hereunder.

 

17

 

*   *   *

 

18

 

IN WITNESS WHEREOF, the
parties set forth below have duly executed this Agreement as of the day and
year first above written.

 

 

	
  COBALT INTERNATIONAL ENERGY, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  Samuel H. Gillespie III

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:
  Samuel H. Gillespie III

  
	
   

  	
   

  
	
   

  	
  Title:

  

 

 

	
   

  	
  C/R
  COBALT INVESTMENT PARTNERSHIP,

  
	
   

  	
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
   ENERGY
  PARTNERS II, L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP II, LLC,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  C/R
  ENERGY COINVESTMENT II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
   ENERGY
  PARTNERS II, L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP II, LLC,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RIVERSTONE
  ENERGY COINVESTMENT

  
	
   

  	
  III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RIVERSTONE
  COINVESTMENT GP,

  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RIVERSTONE
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  

 

 

	
   

  	
  CARLYLE
  ENERGY COINVESTMENT

  
	
   

  	
  III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE
  ENERGY COINVESTMENT

  
	
   

  	
   

  	
   III
  GP, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TCG
  HOLDINGS, L.L.C.

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. D’Aniello

  
	
   

  	
   

  	
  Name:
  Daniel A. D’Aniello

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  C/R
  ENERGY III COBALT PARTNERSHIP,

  
	
   

  	
  L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE
  ENERGY

  
	
   

  	
   

  	
   PARTNERS
  III, L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP III, LLC,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CARLYLE/RIVERSTONE
  GLOBAL

  
	
   

  	
  ENERGY AND POWER FUND III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
   ENERGY
  PARTNERS III, L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP III, LLC,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Name:
  Pierre F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  Authorized Person

  

 

 

	
   

  	
  GSCP
  V COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V FUND, L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V ADVISORS, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  V OFFSHORE COBALT

  
	
   

  	
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V OFFSHORE COBALT

  
	
   

  	
   

  	
   HOLDINGS,
  L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V OFFSHORE

  
	
   

  	
   

  	
   FUND,
  L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V OFFSHORE ADVISORS, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

	
   

  	
  GS CAPITAL
  PARTNERS V

  
	
   

  	
  INSTITUTIONAL, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  ADVISORS V, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  V GMBH COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V GmbH Cobalt Holdings, L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V GmbH Cobalt Holdings,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  VI COBALT HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS VI FUND, L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI ADVISORS, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

	
   

  	
  GSCP
  VI OFFSHORE COBALT

  
	
   

  	
  HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI OFFSHORE COBALT

  
	
   

  	
   

  	
   HOLDINGS,
  L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS VI OFFSHORE

  
	
   

  	
   

  	
   FUND,
  L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI OFFSHORE ADVISORS, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GS
  CAPITAL PARTNERS VI PARALLEL, 

  
	
   

  	
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  ADVISORS VI, L.L.C.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  VI GMBH COBALT HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI GmbH Cobalt Holdings, L.P.,

  
	
   

  	
   

  	
   its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI GmbH Cobalt Holdings,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

	
   

  	
  KERN
  COBALT CO-INVEST PARTNERS AP

  
	
   

  	
  LP

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KERN
  Cobalt Group Management Ltd.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey van Steenbergen

  
	
   

  	
   

  	
  Name:
  Jeffrey van Steenbergen

  
	
   

  	
   

  	
  Title:
  Director

  

 

 

	
   

  	
  FIRST
  RESERVE FUND XI, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First
  Reserve GP XI, L.P.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First
  Reserve GP XI, Inc.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth W. Moore

  
	
   

  	
   

  	
  Name:
  Kenneth W. Moore

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FR XI
  ONSHORE AIV, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First
  Reserve GP XI, L.P.,

  
	
   

  	
   

  	
   its
  manager

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  First
  Reserve GP XI, Inc.,

  
	
   

  	
   

  	
   its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth W. Moore

  
	
   

  	
   

  	
  Name:
  Kenneth W. Moore

  
	
   

  	
   

  	
  Title: Managing Director

  

 

 

ANNEX A

 

	
  If to the GSCP Parties, to:

  
	
   

  
	
  Goldman
  Sachs Capital Partners

  
	
  c/o
  Goldman Sachs & Co.

  
	
  85
  Broad Street

  
	
  New
  York, NY 10004

  
	
  Attention:

  	
  Ken
  Pontarelli

  
	
   

  	
  David
  Thomas

  
	
  Tel:
  212-902-0353

  
	
  Fax:
  212-357-5505

  
	
  Email:

  	
  ken.pontarelli@gs.com

  
	
   

  	
  David.Thomas@gs.com

  
	
   

  
	
  with a copy (which shall not constitute notice)
  to:

  
	
   

  
	
  Fried,
  Frank, Harris, Shriver & Jacobson

  
	
  One
  New York Plaza

  
	
  New
  York, NY 10004

  
	
  Attention:

  	
  Robert
  C. Schwenkel

  
	
   

  	
  Murray
  Goldfarb

  
	
  Tel:
  212-859-8000

  
	
  Fax:
  212-859-4000

  
	
  Email:

  	
  Robert.Schwenkel@friedfrank.com

  
	
   

  	
  Murray.Goldfarb@friedfrank.com

  
	
   

  
	
  If to the C/R Parties, to:

  
	
   

  
	
  Riverstone
  Holdings LLC

  
	
  712
  Fifth Avenue, 51st Floor

  
	
  New
  York, NY 10019

  
	
  Attn:
  Greg Beard

  
	
  Email:

  	
  greg@riverstonellc.com

  
	
   

  
	
  with a copy (which shall not constitute notice)
  to:

  
	
   

  
	
  Fried,
  Frank, Harris, Shriver & Jacobson

  
	
  One
  New York Plaza

  
	
  New
  York, NY 10004

  
	
  Attention:

  	
  Robert
  C. Schwenkel

  
	
   

  	
  Murray
  Goldfarb

  
	
  Tel:
  212-859-8000

  
	
  Fax:
  212-859-4000

  
	
  Email:

  	
  Robert.Schwenkel@friedfrank.com

  
	
   

  	
  Murray.Goldfarb@friedfrank.com

  
						

 

 

	
  If to the F/R Parties, to:

  
	
   

  
	
  c/o
  First Reserve Corporation

  
	
  One
  Lafayette Place

  
	
  Greenwich,
  CT 06830

  
	
  Attn:
  Alan G. Schwartz

  
	
  Email:

  	
  aschwartz@firstreserve.com

  
	
   

  
	
  with a copy (which shall not constitute notice)
  to:

  
	
   

  
	
  Simpson
  Thacher & Bartlett LLP

  
	
  425
  Lexington Avenue

  
	
  New
  York, NY 10017-3954

  
	
  Attention:

  	
  Barrie
  B. Covit

  
	
  Tel:
  212- 455-3141

  
	
  Fax:
  212- 455-2502

  
	
  Email:
  bcovit@stblaw.com

  
	
   

  
	
  If to the KERN Parties, to:

  
	
   

  
	
  c/o
  KERN Partners Ltd.

  
	
  200
  Doll Block

  
	
  116-8th
  Avenue

  
	
  Calgary,
  Alberta, Canada T26 0K4

  
	
  Attn:
  Jeff van Steenbergen

  
	
  Email:

  	
  jvs@kernpartners.com

  
	
   

  
	
  with a copy (which shall not constitute notice)
  to:

  
	
   

  
	
  Fried,
  Frank, Harris, Shriver & Jacobson

  
	
  One
  New York Plaza

  
	
  New
  York, NY 10004

  
	
  Attention:

  	
  Robert
  C. Schwenkel

  
	
   

  	
  Murray
  Goldfarb

  
	
  Tel:
  212-859-8000

  
	
  Fax:
  212-859-4000

  
	
  Email:

  	
  Robert.Schwenkel@friedfrank.com

  
	
   

  	
  Murray.Goldfarb@friedfrank.com

  
	
   

  
	
  and

  
	
   

  
	
  Ropes &
  Gray LLP

  
	
  One
  International Place

  
	
  Boston,
  MA 02110-2624

  
	
  Attention:

  	
  Richard
  E. Gordet

  
	
  Tel:
  617-951-7491

  
	
  Fax:
  617-235-0480

  
	
  Email: Rich.Gordet@ropesgray.com

  
					

 

 

	
  and

  
	
   

  
	
  Kaye
  Scholer LLP

  
	
  425
  Park Avenue

  
	
  New
  York, NY 10022-3598

  
	
  Attention: Steven G. Canner

  
	
  Tel:
  212-836-8136

  
	
  Fax:
  212-836-8689

  
	
  Email:
  scanner@kayescholer.com

  

 

 

EXHIBIT G

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

the Persons listed on Schedule A hereto under the heading GSCP,

 

the Persons listed on Schedule A hereto under the heading C/R,

 

the Persons listed on Schedule A hereto under the heading FIRST RESERVE,

 

the Persons listed on Schedule A hereto under the heading KERN,

 

the Persons listed on Schedule A hereto under the heading MANAGEMENT

 

and

 

COBALT INTERNATIONAL ENERGY, INC.

 

Dated as of December 15, 2009

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Certain Definitions

  	
   

  	
  1

  
	
  2.

  	
  Registration Rights

  	
   

  	
  4

  
	
   

  	
  2.1.

  	
  Demand Registrations

  	
   

  	
  4

  
	
   

  	
  2.2.

  	
  Piggyback Registrations

  	
   

  	
  7

  
	
   

  	
  2.3.

  	
  Allocation of Securities Included in Registration Statement
  or Offering

  	
   

  	
  9

  
	
   

  	
  2.4.

  	
  Registration Procedures

  	
   

  	
  11

  
	
   

  	
  2.5.

  	
  Registration Expenses

  	
   

  	
  17

  
	
   

  	
  2.6.

  	
  Certain Limitations on Registration Rights

  	
   

  	
  17

  
	
   

  	
  2.7.

  	
  Limitations on Sale or Distribution of Other Securities

  	
   

  	
  18

  
	
   

  	
  2.8.

  	
  No Required Sale

  	
   

  	
  18

  
	
   

  	
  2.9.

  	
  Indemnification

  	
   

  	
  18

  
	
  3.

  	
  Underwritten Offerings

  	
   

  	
  22

  
	
   

  	
  3.1.

  	
  Requested Underwritten Offerings

  	
   

  	
  22

  
	
   

  	
  3.2.

  	
  Piggyback Underwritten Offerings

  	
   

  	
  23

  
	
  4.

  	
  General

  	
   

  	
  23

  
	
   

  	
  4.1.

  	
  Adjustments Affecting Registrable Securities

  	
   

  	
  23

  
	
   

  	
  4.2.

  	
  Rule 144 and Rule 144A

  	
   

  	
  24

  
	
   

  	
  4.3.

  	
  Amendments and Waivers

  	
   

  	
  24

  
	
   

  	
  4.4.

  	
  Notices

  	
   

  	
  24

  
	
   

  	
  4.5.

  	
  Successors and Assigns

  	
   

  	
  25

  
	
   

  	
  4.6.

  	
  Limitations on Subsequent Registration Rights

  	
   

  	
  26

  
	
   

  	
  4.7.

  	
  Goldman, Sachs & Co. and its Affiliates

  	
   

  	
  26

  
	
   

  	
  4.8.

  	
  Entire Agreement

  	
   

  	
  26

  
	
   

  	
  4.9.

  	
  Governing Law; Waiver of Jury Trial; Jurisdiction

  	
   

  	
  26

  
	
   

  	
  4.10.

  	
  Interpretation; Construction

  	
   

  	
  27

  
	
   

  	
  4.11.

  	
  Counterparts

  	
   

  	
  27

  
	
   

  	
  4.12.

  	
  Severability

  	
   

  	
  27

  
	
   

  	
  4.13.

  	
  Specific Performance

  	
   

  	
  27

  
	
   

  	
  4.14.

  	
  Further Assurances

  	
   

  	
  27

  

 

 

This REGISTRATION RIGHTS
AGREEMENT is made as of December 15, 2009, by and among Cobalt
International Energy, Inc., a Delaware corporation (“Cobalt” or the
“Company”), the Persons listed on Schedule A hereto under the heading
GSCP (each a “GSCP Entity” and collectively, “GSCP”), the Persons
listed on Schedule A hereto under the heading C/R (each a “C/R Entity”
and collectively, “C/R”), the Persons listed on Schedule A hereto under
the heading First Reserve (each a “First Reserve Entity” and
collectively, “First Reserve”), the Persons listed on Schedule A hereto
under the heading KERN (each a “KERN Entity” and collectively, “KERN”)
and the Persons listed on Schedule A hereto under the heading Management (“Management”).

 

1.             Certain
Definitions.  As used herein, the
following terms shall have the following meanings:

 

“Additional Piggyback
Rights” has the meaning set forth in Section 2.2(c).

 

“Affiliate” means,
with respect to any Person, any other Person controlling, controlled by or
under common control with such particular Person, where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities,
contract or otherwise; provided, however, that, for purposes
hereof, neither the Company nor any Person controlled by the Company shall be
deemed to be an Affiliate of any Holder.

 

“Agreement” means
this Registration Rights Agreement, as this agreement may be amended, modified,
supplemented or restated from time to time after the date hereof.

 

“Assign” means to
directly or indirectly sell, transfer, assign, distribute, exchange, pledge,
hypothecate, mortgage, grant a security interest in, encumber or otherwise
dispose of Registrable Securities, whether voluntarily or by operation of law,
including by way of a merger.  “Assignor,”
“Assignee,” “Assigning” and “Assignment” have meanings
corresponding to the foregoing.

 

“automatic shelf registration
statement” has the meaning set forth in Section 2.4.

 

“Board” means the
Board of Directors of the Company.

 

“Business Day” shall
mean any day ending at 11:59 p.m. (Eastern Time) other than a Saturday or
Sunday or a day on which banks are required or authorized to close in the City
of New York.

 

“Claims” has the
meaning set forth in Section 2.9(a).

 

“Common Equity” means
the common stock of the Company and any and all securities of any kind
whatsoever of the Company which may be issued after the date hereof in respect
of, or in exchange for, such shares of common stock of the Company pursuant to
a merger, consolidation, stock split, stock dividend or recapitalization of the
Company or otherwise.

 

“Common Equity
Equivalents” means all options, warrants and other securities convertible
into, or exchangeable or exercisable for (at any time or upon the occurrence of
any 

 

 

event or contingency and without regard to
any vesting or other conditions to which such securities may be subject) shares
of Common Equity or other equity securities of the Company (including, without
limitation, any note or debt security convertible into or exchangeable for
Common Equity or other equity securities of the Company).

 

“Company” means
Cobalt International Energy, Inc., any Subsidiary of Cobalt International
Energy, Inc. and any successor to Cobalt International Energy, Inc.

 

“C/R” has the meaning
set forth in the preamble.

 

“C/R Entity” has the
meaning set forth in the preamble and any subsequent Holder who is Assigned all,
but not less than all, of such C/R Entity’s Registrable Securities in a single
transaction in accordance with Section 4.5.

 

“Demand Exercise Notice”
has the meaning set forth in Section 2.1(a).

 

“Demand Registration”
has the meaning set forth in Section 2.1(a).

 

“Demand Registration
Request” has the meaning set forth in Section 2.1(a).

 

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

 

“Expenses” means any
and all fees and expenses incident to the Company’s performance of or compliance
with Article 2, including, without limitation:  (i) SEC, stock exchange or FINRA
registration and filing fees and all listing fees and fees with respect to the
inclusion of securities on the New York Stock Exchange or on any other
securities market on which the Common Equity is listed or quoted, (ii) fees
and expenses of compliance with state securities or “blue sky” laws and in
connection with the preparation of a “blue sky” survey, including, without
limitation, reasonable fees and expenses of outside “blue sky” counsel, (iii) printing
and copying expenses, (iv) messenger and delivery expenses, (v) expenses
incurred in connection with any road show, (vi) fees and
disbursements of counsel for the Company, (vii) with respect to
each registration, the fees and disbursements of one counsel for the
Participating Holder(s) (selected by the Majority Participating Holders), (viii) fees
and disbursements of all independent public accountants (including the expenses
of any audit and/or “cold comfort” letter and updates thereof) and fees and
expenses of other Persons, including special experts, retained by the Company, (ix) fees
and expenses payable to a Qualified Independent Underwriter, (x) any
other fees and disbursements of underwriters, if any, customarily paid by
issuers or sellers of securities and (xi) expenses for securities law
liability insurance and, if any, rating agency fees.

 

“FINRA” means the
Financial Industry Regulatory Authority.

 

“First Reserve” has
the meaning set forth in the preamble.

 

“First Reserve Entity”
has the meaning set forth in the preamble and any subsequent Holder who is
Assigned all, but not less than all, of such First Reserve Entity’s Registrable
Securities in a single transaction in accordance with Section 4.5.

 

“GSCP” has the meaning
set forth in the preamble.

 

2

 

“GSCP Entity” has the
meaning set forth in the preamble and any subsequent Holder who is Assigned
all, but not less than all, of such GSCP Entity’s Registrable Securities in a
single transaction in accordance with Section 4.5.

 

“Holder” or “Holders”
means the GSCP Entities, the First Reserve Entities, the C/R Entities, the KERN
Entities, Management or any transferee of Registrable Securities to whom any
Person who is a party to this Agreement shall Assign any rights hereunder in
accordance with Section 4.5.

 

“Initiating Holder(s)”
has the meaning set forth in Section 2.1(a).

 

“IPO” means the first
underwritten public offering of the common stock of the Company to the general
public pursuant to a registration statement filed with the SEC.

 

“KERN” has the
meaning set forth in the preamble.

 

“KERN Entity” has the
meaning set forth in the preamble and any subsequent Holder who is Assigned
all, but not less than all, of such KERN Entity’s Registrable Securities in a
single transaction in accordance with Section 4.5.

 

“Litigation” means
any action, proceeding or investigation in any court or before any governmental
authority.

 

“Lock-Up Agreement”
means any agreement between the Company, or any of its Affiliates, and any
member of Management that provides for restrictions on the transfer of
Registrable Securities held by such member of Management.

 

“Majority Participating
Holders” means Participating Holders holding more than 50% of the
Registrable Securities proposed to be included in any registration or offering
of Registrable Securities by such Participating Holders pursuant to Section 2.1
or Section 2.2.

 

“Management” has the
meaning set forth in the preamble.

 

“Manager” has the
meaning set forth in Section 2.1(c).

 

“NASD” means the
National Association of Securities Dealers, Inc.

 

“Participating Holders”
means all Holders of Registrable Securities which are proposed to be included
in any registration or offering of Registrable Securities pursuant to Section 2.1
or Section 2.2.

 

“Partner Distribution”
has the meaning set forth in Section 2.1(b)(ii).

 

“Person” means any
individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, governmental entity or agency or other entity of any
kind or nature.

 

“Piggyback Shares”
has the meaning set forth in Section 2.3(a)(iv).

 

3

 

“Qualified Independent
Underwriter” means a “qualified independent underwriter” within the meaning
of NASD Conduct Rule 2720.

 

“Registrable Securities”
means (a) any shares of Common Equity held by the Holders at any
time (including those held as a result of the conversion or exercise of Common
Equity Equivalents) and (b) any shares of Common Equity issued or
issuable, directly or indirectly in exchange for or with respect to the Common
Equity referenced in clause (a) above by way of stock dividend, stock
split or combination of shares or in connection with a reclassification,
recapitalization, merger, share exchange, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (A) a registration
statement with respect to the sale of such securities shall have been declared
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, or (B) such
securities shall have been sold (other than in a privately negotiated sale) in
compliance with the requirements of Rule 144 under the Securities Act, as
such Rule 144 may be amended (or any successor provision thereto).

 

“Rule 144” and “Rule 144A”
have the meaning set forth in Section 4.2.

 

“SEC” means the
Securities and Exchange Commission.

 

“Section 2.3(a) Sale
Number” has the meaning set forth in Section 2.3(a).

 

“Section 2.3(b) Sale
Number” has the meaning set forth in Section 2.3(b).

 

“Section 2.3(c) Sale
Number” has the meaning set forth in Section 2.3(c).

 

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

 

“Stockholders Agreement”
means the Stockholders Agreement, dated as of the date hereof, 2009, by and
among the Company and the other parties thereto.

 

“Sponsors” means the
GSCP Entities, the First Reserve Entities, the C/R Entities, and the KERN
Entities.

 

“Subsidiary” means
any direct or indirect subsidiary of the Company on the date hereof and any
direct or indirect subsidiary of the Company organized or acquired after the
date hereof, including Cobalt International Energy, L.P.

 

“Valid Business Reason”
has the meaning set forth in Section 2.1(a)(v).

 

“WKSI” has the
meaning set forth in Section 2.4.

 

2.             Registration
Rights.

 

2.1.          Demand Registrations.

 

(a)           If the Company shall receive from any of C/R, GSCP, First
Reserve, or KERN, at any time after six (6) months after the closing of
the IPO, a written request that the Company file 

 

4

 

a registration statement with respect to
Registrable Securities (a “Demand Registration Request,” and the
registration so requested is referred to herein as a “Demand Registration,”
and the sender(s) of such request or any similar request pursuant to this
Agreement shall be known as the “Initiating Holder(s)”), then the
Company shall, within five (5) days of the receipt thereof, give written
notice (the “Demand Exercise Notice”) of such request to all Holders,
and subject to the limitations of this Section 2.1, use its reasonable best
efforts to effect, as soon as practicable, the registration under the 1933 Act
(including, without limitation, by means of a shelf registration pursuant to Rule 415
thereunder if so requested and if the Company is then eligible to use such a
registration) of all Registrable Securities that the Holders request to be
registered.  The Company shall not be
obligated to take any action to effect any Demand Registration:

 

(i)            after it has effected a total of twelve (12) Demand
Registrations pursuant to this Section 2.1, and such registrations have
been declared or ordered effective.  None
of C/R acting individually, GSCP acting individually, First Reserve acting
individually or KERN acting individually may make more than three (3) Demand
Registration Requests, which registrations have been declared or ordered
effective;

 

(ii)           within three (3) months after a Demand Registration
pursuant to this Section 2.1 that has been declared or ordered effective;

 

(iii)          during the period starting with the date fifteen (15) days
prior to its good faith estimate of the date of filing of, and ending on a date
ninety (90) days after the effective date of, a Company initiated registration
(other than a registration relating solely to the sale of securities to
employees of the Company pursuant to a stock option, stock purchase or similar
plan or to a Commission Rule 145 transaction), provided that the
Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective;

 

(iv)          where the anticipated offering price, net of any
underwriting discounts or commissions, is equal to or less than $25,000,000;

 

(v)           if the Company shall furnish to such Holders a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board, any registration of Registrable Securities should
not be made or continued (or sales under a shelf registration statement should
be suspended) because (i) such registration (or continued sales under a
shelf registration statement) would materially interfere with a material
financing, acquisition, corporate reorganization or merger or other material
transaction or event involving the Company or any of its subsidiaries or (ii) the
Company is in possession of material non-public information, the disclosure of
which has been determined by the Board to not be in the Company’s best
interests (in either case, a “Valid Business Reason”), then (x) the
Company may postpone filing a registration statement relating to a Demand Registration
Request or suspend sales under an existing shelf registration statement until
five (5) Business Days after such Valid Business Reason no longer exists,
but in no event for more than sixty (60) days after the date the Board
determines a Valid Business Reason exists and (y) in case a
registration statement has been filed relating to a Demand Registration
Request, if the Valid Business Reason has not resulted from actions taken by
the Company, the Company may cause such registration statement to be withdrawn
and its effectiveness terminated or may postpone amending or supplementing such
registration statement until five (5) Business Days after such Valid
Business Reason no 

 

5

 

longer exists, but in no event for more than
sixty (60) days after the date the Board determines a Valid Business Reason
exists; and the Company shall give written notice to the Participating Holders
of its determination to postpone or withdraw a registration statement or
suspend sales under a shelf registration statement and of the fact that the
Valid Business Reason for such postponement, withdrawal or suspension no longer
exists, in each case, promptly after the occurrence thereof; provided, however,
that the Company shall not defer its obligation in this manner more than once
in any twelve (12) month period; or

 

(vi)          in any
particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such
registration, qualification or compliance.

 

If
the Company shall give any notice of postponement, withdrawal or suspension of
any registration statement pursuant to clause 2.1(a)(v), the Company shall not,
during the period of postponement, withdrawal or suspension, register any
Common Equity, other than pursuant to a registration statement on Form S-4
or S-8 (or an equivalent registration form then in effect).  Each Holder of Registrable Securities agrees
that, upon receipt of any notice from the Company that the Company has
determined to withdraw any registration statement pursuant to clause (iii) above,
such Holder will discontinue its disposition of Registrable Securities pursuant
to such registration statement and, if so directed by the Company, will deliver
to the Company (at the Company’s expense) all copies, other than permanent file
copies, then in such Holder’s possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such
notice.  If the Company shall have
withdrawn or prematurely terminated a registration statement filed pursuant to
a Demand Registration (whether pursuant to clause 2.1(a)(v) or as a result
of any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court), the Company shall not be considered to
have effected an effective registration for the purposes of this Agreement
until the Company shall have filed a new registration statement covering the
Registrable Securities covered by the withdrawn registration statement and such
registration statement shall have been declared effective and shall not have
been withdrawn.  If the Company shall
give any notice of withdrawal or postponement of a registration statement, the
Company shall, not later than five (5) Business Days after the Valid
Business Reason that caused such withdrawal or postponement no longer exists
(but in no event later than sixty (60) days after the date of the postponement
or withdrawal), use its reasonable best efforts to effect the registration
under the Securities Act of the Registrable Securities covered by the withdrawn
or postponed registration statement in accordance with Section 2.1 (unless
the Initiating Holders shall have withdrawn such request, in which case the Company
shall not be considered to have effected an effective registration for the
purposes of this Agreement), and such registration shall not be withdrawn or
postponed pursuant to clause 2.1(a)(v).

 

(b)

 

(i)            The Company,
subject to Sections 2.3 and 2.6, shall include in a Demand Registration (x) the
Registrable Securities of the Initiating Holders and (y) the Registrable
Securities of any other Holder of Registrable Securities, which shall have made
a written request to the Company for inclusion in such registration pursuant to
Section 2.2 (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such 

 

6

 

Participating Holder) within thirty (30) days
after the receipt of the Demand Exercise Notice (or fifteen (15) days if, at
the request of the Initiating Holders, the Company states in such written
notice or gives telephonic notice to all Holders, with written confirmation to
follow promptly thereafter, that such registration will be on a Form S-3).

 

(ii)           The Company shall, as expeditiously as possible, but
subject to the limitations set forth in this Section 2.1, use its
reasonable best efforts to (x) effect such registration under the
Securities Act (including, without limitation, by means of a shelf registration
pursuant to Rule 415 under the Securities Act if so requested and if the
Company is then eligible to use such a registration) of the Registrable
Securities which the Company has been so requested to register, for
distribution in accordance with such intended method of distribution, including
a distribution to, and resale by, the members or partners of a Holder (a “Partner
Distribution”) and (y) if requested by the Majority Participating
Holders, obtain acceleration of the effective date of the registration
statement relating to such registration.

 

(iii)          Notwithstanding anything contained herein to the contrary,
the Company shall, at the request of any Holder seeking to effect a Partner
Distribution, file any prospectus supplement or post-effective amendments and
otherwise take any action necessary to include therein all disclosure and
language deemed necessary or advisable by such Holder if such disclosure or
language was not included in the initial registration statement, or revise such
disclosure or language if deemed necessary or advisable by such Holder,
including filing a prospectus supplement naming the Holders, partners, members
and shareholders to the extent required by law, to effect such Partner Distribution.

 

(c)           In connection with any Demand Registration, the Majority
Participating Holders shall have the right to designate the lead managing
underwriter (any lead managing underwriter for the purposes of this Agreement,
the “Manager”) in connection with such registration and each other
managing underwriter for such registration, in each case subject to consent of
the Company, not be unreasonably withheld.

 

(d)           If so requested by the Initiating Holder(s), the Company
(together with all Holders proposing to distribute their securities through
such underwriting) shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by the
Company in its sole discretion.

 

(e)           Any Holder that intends to sell Registrable Securities by
means of a shelf registration pursuant to Rule 415 thereunder, shall give
the Company 2 (two) days notice of any such sale.

 

2.2.          Piggyback Registrations.

 

(a)           If, at any time or from time to time the Company will
register or commence an offering of any of its securities for its own account
or otherwise (other than pursuant to registrations on Form S-4 or Form S-8
or any similar successor forms thereto) (including but not limited to the
registrations or offerings pursuant to Section 2.1), the Company will:

 

(i)            promptly give to each Holder written notice thereof (in
any event within five (5) Business Days); and

 

7

 

(ii)           include in such registration and in any underwriting
involved therein (if any), all the Registrable Securities specified in a
written request or requests, made within twenty (20) days after mailing or
personal delivery of such written notice from the Company, by any of the
Holders, except as set forth in Sections 2.2(b) and 2.2(f), with the
securities which the Company at the time proposes to register or sell to permit
the sale or other disposition by the Holders (in accordance with the intended
method of distribution thereof) of the Registrable Securities to be so
registered or sold, including, if necessary, by filing with the SEC a
post-effective amendment or a supplement to the registration statement filed by
the Company or the prospectus related thereto. 
There is no limitation on the number of such piggyback registrations
pursuant to the preceding sentence which the Company is obligated to
effect.  No registration of Registrable
Securities effected under this Section 2.2(a) shall relieve the
Company of its obligations to effect Demand Registrations under Section 2.1
hereof.

 

(b)           If the registration in this Section 2.2 involves an
underwritten offering, the right of any Holder to include its Registrable
Securities in a registration or offering pursuant to this Section 2.2
shall be conditioned upon such Holder’s participation in the underwriting and
the inclusion of such Holder’s Registrable Securities in the underwriting to
the extent provided herein.  All Holders
proposing to distribute their Registrable Securities through such underwriting
shall (together with the Company) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company.

 

(c)           The Company, subject to Sections 2.3 and 2.6, may elect to
include in any registration statement and offering pursuant to demand
registration rights by any Person, (i) authorized but unissued shares of
Common Equity or shares of Common Equity held by the Company as treasury shares
and (ii) any other shares of Common Equity which are requested to be
included in such registration pursuant to the exercise of piggyback
registration rights granted by the Company after the date hereof and which are
not inconsistent with the rights granted in, or otherwise conflict with the
terms of, this Agreement (“Additional Piggyback Rights”); provided,
however, that such inclusion shall be permitted only to the extent that
it is pursuant to, and subject to, the terms of the underwriting agreement or
arrangements, if any, entered into by the Initiating Holders.

 

(d)           If, at any time after giving written notice of its
intention to register or sell any equity securities and prior to the effective
date of the registration statement filed in connection with such registration
or sale of such equity securities, the Company shall determine for any reason
not to register or sell or to delay registration or sale of such equity
securities, the Company may, at its election, give written notice of such
determination to all Holders of record of Registrable Securities and (i) in
the case of a determination not to register or sell, shall be relieved of its
obligation to register or sell any Registrable Securities in connection with
such abandoned registration or sale, without prejudice, however, to the rights
of Holders under Section 2.1, and (ii) in the case of a determination
to delay such registration or sale of its equity securities, shall be permitted
to delay the registration or sale of such Registrable Securities for the same
period as the delay in registering such other equity securities.

 

(e)           Notwithstanding anything contained herein to the contrary,
the Company shall, at the request of any Holder (including to effect a Partner
Distribution), file any prospectus 

 

8

 

supplement or post-effective amendments and
otherwise take any action necessary to include therein all disclosure and
language deemed necessary or advisable by such Holder if such disclosure or
language was not included in the initial registration statement, or revise such
disclosure or language if deemed necessary or advisable by such Holder
including filing a prospectus supplement naming the Holders, partners, members
and shareholders to the extent required by law.

 

(f)            Notwithstanding anything in this Agreement to the
contrary, the rights of each member of Management set forth in this Agreement
are subject to any Lock-Up Agreement that such member of Management has entered
into with the Company.

 

2.3.          Allocation of Securities Included
in Registration Statement or Offering.

 

(a)           Notwithstanding any other provision of this Agreement, in
connection with an underwritten offering initiated by Demand Registration
Request, if the Manager advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten (such number, the “Section 2.3(a) Sale Number”)
within a price range acceptable to the Majority Participating Holders, the
Initiating Holders shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the Company shall use its
reasonable best efforts to include in such registration or offering, as
applicable, the number of shares of Registrable Securities in the registration
and underwriting as follows:

 

(i)            first, all Registrable Securities requested to be
included in such registration or offering by the Holders thereof (including
pursuant to the exercise of piggyback rights pursuant to Section 2.2); provided,
however, that if such number of Registrable Securities exceeds the Section 2.3(a) Sale
Number, the number of such Registrable Securities (not to exceed the Section 2.3(a) Sale
Number) to be included in such registration shall be allocated among all such Holders
requesting inclusion thereof in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time
of filing of the registration statement or the time of the offering, as
applicable;

 

(ii)           second, if by the withdrawal of Registrable Securities by
a Participating Holder, a greater number of Registrable Securities held by
other Holders, may be included in such registration or offering (up to the Section 2.3(a) Sale
Number), then the Company shall offer to all Holders who have included
Registrable Securities in the registration or offering the right to include
additional Registrable Securities in the same proportions as set forth in
2.3(a)(i).

 

(iii)          third, to the extent that the number of Registrable
Securities to be included pursuant to clause (i) and (ii) of this Section 2.3(a) is
less than the Section 2.3(a) Sale Number, and if the underwriter so
agrees, any securities that the Company proposes to register or sell, up to the
Section 2.3(a) Sale Number; and

 

(iv)          fourth, to the extent that the number of securities to be
included pursuant to clauses (i), (ii) and (iii) of this Section 2.3(a) is
less than the Section 2.3(a) Sale Number, the remaining securities to
be included in such registration or offering shall be allocated on a pro rata
basis among all Persons requesting that securities be included in such
registration or offering 

 

9

 

pursuant to the exercise of Additional
Piggyback Rights (“Piggyback Shares”), based on the aggregate number of
Piggyback Shares then owned by each Person requesting inclusion in relation to
the aggregate number of Piggyback Shares owned by all Persons requesting
inclusion, up to the Section 2.3(a) Sale Number.

 

Notwithstanding
anything in this Section 2.3(a) to the contrary, no employee
shareholder of the Company, other than a member of Management, will be entitled
to include Registrable Securities in a registration requested pursuant to Section 2.1
to the extent the Manager of such offering shall determine in good faith that
the participation of such employee shareholder would adversely affect the
marketability of the securities being sold by the Initiating Holder(s) in
such registration.

 

(b)           Notwithstanding any other provision of this Agreement, in
a registration involving an underwritten offering on behalf of the Company,
which was initiated by the Company, if the Manager determines that marketing
factors require a limitation of the number of shares to be underwritten (such
number, the “Section 2.3(b) Sale Number”) the Company shall so
advise all Holders whose securities would otherwise be registered and
underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated as follows:

 

(i)            first, all equity securities that the Company proposes to
register for its own account;

 

(ii)           second, to the extent that the number of securities to be
included pursuant to clause (i) of this Section 2.3(b) is less
than the Section 2.3(b) Sale Number, among all Holders in proportion,
as nearly as practicable, to the respective amounts of Registrable Securities
requested for inclusion in such registration by Holders pursuant to Section 2.2
up to the Section 2.3(b) Sale Number; and;

 

(iii)          third, to the extent that the number of securities to be
included pursuant to clauses (i) and (ii) of this Section 2.3(b) is
less than the Section 2.3(b) Sale Number, the remaining securities to
be included in such registration shall be allocated on a pro rata basis among
all Persons requesting that securities be included in such registration
pursuant to the exercise of Additional Piggyback Rights, based on the aggregate
number of Piggyback Shares then owned by each Person requesting inclusion in
relation to the aggregate number of Piggyback Shares owned by all Persons
requesting inclusion, up to the Section 2.3(b) Sale Number.

 

(c)           If any registration pursuant to Section 2.2 involves
an underwritten offering that was initially requested by any Person(s) other
than a Holder to whom the Company has granted registration rights which are not
inconsistent with the rights granted in, or otherwise conflict with the terms
of, this Agreement and the Manager (as selected by the Company or such other
Person) shall advise the Company that, in its view, the number of securities
requested to be included in such registration exceeds the number (the “Section 2.3(c) Sale
Number”) that can be sold in an orderly manner in such registration within
a price range acceptable to the Company, the Company shall include shares in
such registration as follows:

 

10

 

(i)            first, the shares requested to be included in such
registration shall be allocated on a pro rata basis among such Person(s) requesting
the registration and all Holders requesting that Registrable Securities be
included in such registration pursuant to the exercise of piggyback rights
pursuant to Section 2.2, based on the aggregate number of securities or
Registrable Securities, as applicable, then owned by each of the foregoing
requesting inclusion in relation to the aggregate number of securities or
Registrable Securities, as applicable, owned by all such Holders and Persons
requesting inclusion, up to the Section 2.3(c) Sale Number;

 

(ii)           second, to the extent that the number of securities to be
included pursuant to clause (i) of this Section 2.3(c) is less
than the Section 2.3(c) Sale Number, the remaining shares to be
included in such registration shall be allocated on a pro rata basis among all
Persons requesting that securities be included in such registration pursuant to
the exercise of Additional Piggyback Rights, based on the aggregate number of
Piggyback Shares then owned by each Person requesting inclusion in relation to
the aggregate number of Piggyback Shares owned by all Persons requesting
inclusion, up to the Section 2.3(c) Sale Number; and

 

(iii)          third, to the extent that the number of securities to be
included pursuant to clauses (i) and (ii) of this Section 2.3(c) is
less than the Section 2.3(c) Sale Number, the remaining shares to be
included in such registration shall be allocated to shares the Company proposes
to register for its own account, up to the Section 2.3(c) Sale Number.

 

(d)           If any Holder of Registrable Securities disapproves of the
terms of the underwriting, or if, as a result of the proration provisions set
forth in clauses (a), (b) or (c) of this Section 2.3, any Holder
shall not be entitled to include all Registrable Securities in a registration
or offering that such Holder has requested be included, such Holder may elect
to withdraw such Holder’s request to include Registrable Securities in such
registration or offering or may reduce the number requested to be included; provided,
however, that (x) such request must be made in writing, to the
Company, Manager and, if applicable, the Initiating Holder(s), prior to the
execution of the underwriting agreement with respect to such registration and (y) such
withdrawal or reduction shall be irrevocable and, after making such withdrawal
or reduction, such Holder shall no longer have any right to include such
withdrawn Registrable Securities in the registration as to which such
withdrawal or reduction was made to the extent of the Registrable Securities so
withdrawn or reduced.

 

2.4.          Registration Procedures.  If and whenever the Company is required by
the provisions of this Agreement to use its reasonable best efforts to effect
or cause the registration of any Registrable Securities under the Securities
Act as provided in this Agreement, the Company shall, as expeditiously as
possible (but, in any event, within sixty (60) days after a Demand Registration
Request in the case of Section 2.4(a) below), in connection with the Registration
of the Registrable Securities and, where applicable, a takedown off of a shelf
registration statement:

 

(a)           prepare and file with the SEC a registration statement on
an appropriate registration form of the SEC for the disposition of such Registrable
Securities in accordance with the intended method of disposition thereof
(including, without limitation, a Partner Distribution), which registration
form (i) shall be selected by the Company and (ii) shall, in the case
of a shelf registration, be available for the sale of the Registrable
Securities by the selling Holders thereof 

 

11

 

and such registration statement shall comply
as to form in all material respects with the requirements of the applicable
registration form and include all financial statements required by the SEC to
be filed therewith, and the Company shall use its reasonable best efforts to
cause such registration statement to become effective and remain continuously
effective from the date such registration statement is declared effective until
the earliest to occur (i) the first date as of which all of the
Registrable Securities included in the registration statement have been sold or
(ii) a period of ninety (90) days in the case of an underwritten offering
effected pursuant to a registration statement other than a shelf registration
statement and a period of three years in the case of a shelf registration
statement (provided, however, that before filing a registration
statement or prospectus or any amendments or supplements thereto, or comparable
statements under securities or state “blue sky” laws of any jurisdiction, or
any free writing prospectus related thereto, the Company will furnish to one
counsel for the Holders participating in the planned offering (selected by the
Majority Participating Holders) and to one counsel for the Manager, if any,
copies of all such documents proposed to be filed (including all exhibits
thereto), which documents will be subject to the reasonable review and
reasonable comment of such counsel (provided that the Company shall be under no
obligation to make any changes suggested by the Holders), and the Company shall
not file any registration statement or amendment thereto, any prospectus or
supplement thereto or any free writing prospectus related thereto to which the
Majority Participating Holders or the underwriters, if any, shall reasonably
object);

 

(b)           prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
continuously effective for the period set forth in Section 2.4(a) and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of all Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement (and, in connection
with any shelf registration statement, file one or more prospectus supplements
covering Registrable Securities upon the request of one or more Holders wishing
to offer or sell Registrable Securities whether in an underwritten offering or
otherwise);

 

(c)           in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the Manager of such offering;

 

(d)           furnish, without charge, to each Participating Holder and
each underwriter, if any, of the securities covered by such registration
statement such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits), the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), any other prospectus filed under Rule 424
under the Securities Act and each free writing prospectus utilized in
connection therewith, in each case, in conformity with the requirements of the
Securities Act, and other documents, as such seller and underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such seller (the Company hereby
consenting to the use in accordance with all applicable law of each such
registration statement (or amendment or post-effective amendment thereto) and
each such prospectus (or preliminary prospectus or supplement thereto) or free
writing prospectus by each such Participating Holder and the underwriters, if
any, 

 

12

 

in connection with the offering and sale of
the Registrable Securities covered by such registration statement or
prospectus);

 

(e)           use its reasonable best efforts to register or qualify the
Registrable Securities covered by such registration statement under such other
securities or state “blue sky” laws of such jurisdictions as any sellers of
Registrable Securities or any managing underwriter, if any, shall reasonably
request in writing, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such sellers or underwriter, if
any, to consummate the disposition of the Registrable Securities in such
jurisdictions (including keeping such registration or qualification in effect
for so long as such registration statement remains in effect), except that in
no event shall the Company be required to qualify to do business as a foreign
corporation in any jurisdiction where it would not, but for the requirements of
this paragraph (e), be required to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of process
in any such jurisdiction;

 

(f)            promptly notify each Participating Holder and each
managing underwriter, if any: (i) when the registration statement,
any pre-effective amendment, the prospectus or any prospectus supplement
related thereto, any post-effective amendment to the registration statement or
any free writing prospectus has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective; (ii) of
any request by the SEC or state securities authority for amendments or
supplements to the registration statement or the prospectus related thereto or
for additional information; (iii) of the issuance by the SEC of any
stop order suspending the effectiveness of the registration statement or the
initiation of any proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the securities or
state “blue sky” laws of any jurisdiction or the initiation of any proceeding
for such purpose; (v) of the existence of any fact of which the
Company becomes aware which results in the registration statement or any
amendment thereto, the prospectus related thereto or any supplement thereto,
any document incorporated therein by reference, any free writing prospectus or
the information conveyed to any purchaser at the time of sale to such purchaser
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statement
therein not misleading; and (vi) if at any time the representations
and warranties contemplated by any underwriting agreement, securities sale
agreement, or other similar agreement, relating to the offering shall cease to
be true and correct in all material respects; and, if the notification relates
to an event described in clause (v), the Company shall promptly prepare and
furnish to each such seller and each underwriter, if any, a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include 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;

 

(g)           comply (and continue to comply) with all applicable rules and
regulations of the SEC (including, without limitation, maintaining disclosure
controls and procedures (as defined in Exchange Act Rule 13a-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f))
in accordance with the Exchange Act), and make generally available to its
security holders, as soon as reasonably practicable after the effective date of
the 

 

13

 

registration statement (and in any event
within forty-five (45) days, or ninety (90) days if it is a fiscal year, after
the end of such twelve (12) month period described hereafter), an earnings
statement (which need not be audited) covering the period of at least twelve
(12) consecutive months beginning with the first day of the Company’s first
calendar quarter after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder;

 

(h)           (i) (A) cause all such Registrable
Securities covered by such registration statement to be listed on the principal
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (B) if no
similar securities are then so listed, to cause all such Registrable Securities
to be listed on a national securities exchange and, without limiting the
generality of the foregoing, take all actions that may be required by the
Company as the issuer of such Registrable Securities in order to facilitate the
managing underwriter’s arranging for the registration of at least two market
makers as such with respect to such shares with FINRA, and (ii) comply
(and continue to comply) with the requirements of any self-regulatory
organization applicable to the Company, including without limitation all
corporate governance requirements;

 

(i)            provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;

 

(j)            enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such other actions as the
Majority Participating Holders or the underwriters shall reasonably request in
order to expedite or facilitate the disposition of such Registrable Securities
(it being understood that the Holders of the Registrable Securities which are
to be distributed by any underwriters shall be parties to any such underwriting
agreement and may, at their option, require that the Company make to and for
the benefit of such Holders the representations, warranties and covenants of
the Company which are being made to and for the benefit of such underwriters);

 

(k)           use its reasonable best efforts (i) to obtain
an opinion from the Company’s counsel and a “cold comfort” letter and updates
thereof from the Company’s independent public accountants who have certified
the Company’s financial statements included or incorporated by reference in
such registration statement, in each case, in customary form and covering such
matters as are customarily covered by such opinions and “cold comfort” letters
(including, in the case of such “cold comfort” letter, events subsequent to the
date of such financial statements) delivered to underwriters in underwritten
public offerings, which opinion and letter shall be dated the dates such opinions
and “cold comfort” letters are customarily dated and otherwise reasonably
satisfactory to the underwriters, if any, and to the Majority Participating
Holders, and (ii) furnish to each Holder participating in the
offering and to each underwriter, if any, a copy of such opinion and letter
addressed to such underwriter;

 

(l)            deliver promptly to counsel for each Participating Holder
and to each managing underwriter, if any, copies of all correspondence between
the SEC and the Company, its counsel or auditors and all memoranda relating to
discussions with the SEC or its staff with respect to the 

 

14

 

registration statement, and, upon receipt of
such confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by counsel for each Participating Holder,
by counsel for any underwriter, participating in any disposition to be effected
pursuant to such registration statement and by any accountant or other agent
retained by any Participating Holder or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of
the Company, and cause all of the Company’s officers, directors and employees
to supply all information reasonably requested by any such counsel for a
Participating Holder, counsel for an underwriter, accountant or agent in
connection with such registration statement;

 

(m)          use its reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness of the registration
statement, or the prompt lifting of any suspension of the qualification of any
of the Registrable Securities for sale in any jurisdiction;

 

(n)           provide a CUSIP number for all Registrable Securities, not
later than the effective date of the registration statement;

 

(o)           use its best efforts to make available its employees and
personnel for participation in “road shows” and other marketing efforts and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company’s businesses and the requirements of the marketing
process) in marketing the Registrable Securities in any underwritten offering;

 

(p)           prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement), and prior to the
filing of any free writing prospectus, provide copies of such document to
counsel for each Participating Holder and to each managing underwriter, if any,
and make the Company’s representatives reasonably available for discussion of
such document and make such changes in such document concerning the
Participating Holders prior to the filing thereof as counsel for the
Participating Holders or underwriters may reasonably request;

 

(q)           furnish to counsel for each Participating Holder and to
each managing underwriter, without charge, at least one signed copy of the
registration statement and any post-effective amendments or supplements
thereto, including financial statements and schedules, all documents
incorporated therein by reference, the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus), any other prospectus filed under Rule 424 under the
Securities Act and all exhibits (including those incorporated by reference) and
any free writing prospectus utilized in connection therewith;

 

(r)            cooperate with the Participating Holders and the managing
underwriter, if any, to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the underwriting
agreement at least three (3) Business Days prior to any sale of
Registrable Securities to the underwriters or, if not an underwritten offering,
in accordance with the instructions of the Participating Holders at least three
(3) Business Days prior to any sale of Registrable Securities and instruct
any transfer agent and registrar of Registrable Securities to release any stop
transfer orders in respect thereof;

 

15

 

(s)           cooperate with any due diligence investigation by any
Manager, underwriter or Participating Holder and make available such documents
and records of the Company and its Subsidiaries that they reasonably request
(which, in the case of the Participating Holder, may be subject to the
execution by the Participating Holder of a customary confidentiality agreement
in a form which is reasonably satisfactory to the Company);

 

(t)            take no direct or indirect action prohibited by
Regulation M under the Exchange Act; provided, however, that to
the extent that any prohibition is applicable to the Company, the Company will
take such action as is necessary and feasible to make any such prohibition
inapplicable;

 

(u)           use its reasonable best efforts to cause the Registrable
Securities covered by the applicable registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Participating Holders or the underwriters, if any, to
consummate the disposition of such Registrable Securities;

 

(v)           take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities;

 

(w)          take all reasonable action to ensure that any free writing
prospectus utilized in connection with any registration covered by Section 2.1
or 2.2 complies in all material respects with the Securities Act, is filed in
accordance with the Securities Act to the extent required thereby, is retained
in accordance with the Securities Act to the extent required thereby and, when
taken together with the related prospectus, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and

 

(x)            in connection with any underwritten offering, if at any
time the information conveyed to a purchaser at the time of sale includes any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, promptly file with
the SEC such amendments or supplements to such information as may be necessary
so that the statements as so amended or supplemented will not, in light of the
circumstances, be misleading.

 

To the extent the Company is
a well-known seasoned issuer (as defined in Rule 405 under the Securities
Act) (a “WKSI”) at the time any Demand Registration Request is submitted
to the Company, and such Demand Registration Request requests that the Company
file an automatic shelf registration statement (as defined in Rule 405
under the Securities Act) (an “automatic shelf registration statement”)
on Form S-3, the Company shall file an automatic shelf registration
statement which covers those Registrable Securities which are requested to be
registered.  The Company shall use its
reasonable best efforts to remain a WKSI (and not become an ineligible issuer (as
defined in Rule 405 under the Securities Act)) during the period during
which the Registrable Securities remain Registrable Securities.  If the Company does not pay the filing fee
covering the Registrable Securities at the time the automatic shelf registration
statement is filed, the Company agrees to pay such fee at such time or times as
the Registrable Securities are to be sold. 
If the automatic shelf registration statement has been outstanding for
at least three years, at the end of the third year the Company shall refile a
new automatic shelf 

 

16

 

registration
statement covering the Registrable Securities. 
If at any time when the Company is required to re-evaluate its WKSI
status the Company determines that it is not a WKSI, the Company shall use its
reasonable best efforts to refile the shelf registration statement on Form S-3
and, if such form is not available, Form S-1 and keep such registration
statement effective during the period during which such registration statement
is required to be kept effective.

 

If the Company files any
shelf registration statement for the benefit of the holders of any of its
securities other than the Holders, the Company agrees that it shall include in
such registration statement such disclosures as may be required by Rule 430B
under the Securities Act (referring to the unnamed selling security holders in
a generic manner by identifying the initial offering of the securities to the
Holders) in order to ensure that the Holders may be added to such shelf
registration statement at a later time through the filing of a prospectus
supplement rather than a post-effective amendment.

 

It shall be a condition
precedent to the obligations of the Company to take any action pursuant to
Sections 2.1, 2.2, or 2.4 that each Participating Holder shall furnish to the
Company such information regarding themselves, the Registrable Securities held
by them, and the intended method of disposition of such securities as the
Company may from time to time reasonably request provided that such information
is necessary for the Company to consummate such registration and shall be used
only in connection with such registration.

 

If any such registration
statement or comparable statement under state “blue sky” laws refers to any
Holder by name or otherwise as the Holder of any securities of the Company,
then such Holder shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to such Holder and the
Company, 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 Company’s securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such
reference to such Holder by name or otherwise is not in the judgment of the
Company, as advised by counsel, required by the Securities Act or any similar
federal statute or any state “blue sky” or securities law then in force, the
deletion of the reference to such Holder.

 

2.5.          Registration Expenses.  All Expenses incurred in connection with any
registration, filing, qualification or compliance pursuant to Article 2
shall be borne by the Company, whether or not a registration statement becomes
effective.  All underwriting discounts
and all selling commissions relating to securities registered by the Holders
shall be borne by the holders of such securities pro rata in accordance with
the number of shares sold in the offering by such Participating Holder.

 

2.6.          Certain Limitations on Registration Rights.  In the case of any registration under Section 2.1
pursuant to an underwritten offering, or, in the case of a registration under Section 2.2,
all securities to be included in such registration shall be subject to the
underwriting agreement and no Person may participate in such registration or
offering unless such Person (i) agrees to sell such Person’s
securities on the basis provided therein and completes and executes all
reasonable questionnaires, and other documents (including custody agreements
and powers of attorney) which must be executed in connection therewith; provided,
however, that all such 

 

17

 

documents shall be consistent with the
provisions hereof and (ii) provides such other information to the
Company or the underwriter as may be necessary to register such Person’s
securities.

 

2.7.          Limitations on Sale or Distribution
of Other Securities.

 

(a)           Each Holder agrees, (i) to the extent
requested in writing by a managing underwriter, if any, of any registration
effected pursuant to Section 2.1, not to sell, transfer or otherwise
dispose of, including any sale pursuant to Rule 144 under the Securities
Act, any Common Equity, or any other equity security of the Company or any
security convertible into or exchangeable or exercisable for any equity
security of the Company (other than as part of such underwritten public
offering) during the time period reasonably requested by the managing
underwriter, not to exceed ninety (90) days (and the Company hereby also so
agrees (except that the Company may effect any sale or distribution of any such
securities pursuant to a registration on Form S-4 (if reasonably
acceptable to such managing underwriter) or Form S-8, or any successor or
similar form which is (x) then in effect or (y) shall
become effective upon the conversion, exchange or exercise of any then
outstanding Common Equity Equivalent), to use its reasonable best efforts to
cause each holder of any equity security or any security convertible into or
exchangeable or exercisable for any equity security of the Company purchased
from the Company at any time other than in a public offering so to agree), and (ii) to
the extent requested in writing by a managing underwriter of any underwritten
public offering effected by the Company for its own account, not to sell any
Common Equity (other than as part of such underwritten public offering) during
the time period reasonably requested by the managing underwriter, which period
shall not exceed ninety (90) days.

 

(b)           The Company hereby agrees that, if it shall previously
have received a request for registration pursuant to Section 2.1 or 2.2,
and if such previous registration shall not have been withdrawn or abandoned,
the Company shall not sell, transfer, or otherwise dispose of, any Common
Equity, or any other equity security of the Company or any security convertible
into or exchangeable or exercisable for any equity security of the Company
(other than as part of such underwritten public offering, a registration on Form S-4
or Form S-8 or any successor or similar form which is (x) then
in effect or (y) shall become effective upon the conversion,
exchange or exercise of any then outstanding Common Equity Equivalent), until a
period of ninety (90) days shall have elapsed from the effective date of such
previous registration; and the Company shall (i) so provide in any
registration rights agreements hereafter entered into with respect to any of
its securities and (ii) use its reasonable best efforts to cause
each holder of any equity security or any security convertible into or
exchangeable or exercisable for any equity security of the Company purchased
from the Company at any time other than in a public offering to so agree.

 

2.8.          No Required Sale. 
Nothing in this Agreement shall be deemed to create an independent
obligation on the part of any Holder to sell any Registrable Securities
pursuant to any effective registration statement.

 

2.9.          Indemnification.

 

(a)           In the event of any registration and/or offering of any
securities of the Company under the Securities Act pursuant to this Article 2,
the Company will, and hereby agrees to, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, each Holder, its 

 

18

 

directors, officers, fiduciaries, employees,
stockholders, members or general and limited partners (and the directors,
officers, fiduciaries, employees, stockholders, members or general and limited
partners thereof), any underwriter (as defined in the Securities Act) for such
Holder and each Person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or Exchange Act, from and against any and all
losses, claims, damages or liabilities, joint or several, actions or
proceedings (whether commenced or threatened) and expenses (including
reasonable fees of counsel and any amounts paid in any settlement effected with
the Company’s consent, which consent shall not be unreasonably withheld or
delayed) to which each such indemnified party may become subject under the
Securities Act or otherwise in respect thereof (collectively, “Claims”),
insofar as such Claims arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement under which such securities were registered under
the Securities Act or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary or final prospectus
or any amendment or supplement thereto, together with the documents
incorporated by reference therein, or any free writing prospectus utilized in
connection therewith, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iii) any untrue statement or alleged
untrue statement of a material fact in the information conveyed by the Company
to any purchaser at the time of the sale to such purchaser, or the omission or
alleged omission to state therein a material fact required to be stated
therein, or (iv) any violation by the Company of any federal, state
or common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with any such
registration, and the Company will reimburse any such indemnified party for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the Company shall not be liable
to any such indemnified party in any such case to the extent such Claim arises
out of or is based upon any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission of a material fact made in such
registration statement or amendment thereof or supplement thereto or in any
such prospectus or any preliminary or final prospectus or free writing
prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such indemnified party specifically
for use therein.  Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.

 

(b)           Each Participating Holder shall, severally and not
jointly, indemnify and hold harmless (in the same manner and to the same extent
as set forth in paragraph (a) of this Section 2.9) to the extent
permitted by law the Company, its officers and directors, each Person
controlling the Company within the meaning of the Securities Act, each
underwriter (within the meaning of the 1933 Act) of the Company’s securities
covered by such a registration statement, any Person who controls such
underwriter, and any other Holder selling securities in such registration
statement and each of its directors, officers, partners or agents or any Person
who controls such Holder with respect to any untrue statement or alleged untrue
statement of any material fact in, or omission or alleged omission of any
material fact from, such registration statement, any preliminary or final
prospectus contained therein, or any amendment or 

 

19

 

supplement thereto, or any free writing
prospectus utilized in connection therewith, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company or its representatives by or
on behalf of such Participating Holder, specifically for use therein and
reimburse such indemnified party for any legal or other expenses reasonably
incurred in connection with investigating or defending any such Claim as such
expenses are incurred; provided, however, that the aggregate
amount which any such Participating Holder shall be required to pay pursuant to
this Section 2.9(b) and Sections 2.9(c) and (e) shall in no
case be greater than the amount of the net proceeds actually received by such
Participating Holder upon the sale of the Registrable Securities pursuant to
the registration statement giving rise to such Claim.  The Company and each Participating Holder
hereby acknowledge and agree that, unless otherwise expressly agreed to in
writing by such Participating Holders to the contrary, for all purposes of this
Agreement, the only information furnished or to be furnished to the Company for
use in any such registration statement, preliminary or final prospectus or
amendment or supplement thereto or any free writing prospectus are statements
specifically relating to (a) the beneficial ownership of shares of Common
Equity by such Participating Holder and its Affiliates and (b) the name
and address of such Participating Holder. 
Such indemnity and reimbursement of expenses shall remain in full force
and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder.

 

(c)           Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.9 (with appropriate
modifications) shall be given by the Company and each Participating Holder with
respect to any required registration or other qualification of securities under
any applicable securities and state “blue sky” laws.

 

(d)           Any Person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement of
any action or proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 2.9, but the failure of any indemnified
party to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.9, except to
the extent the indemnifying party is materially and actually prejudiced thereby
and shall not relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than under this Article 2.  In case any action or proceeding is brought
against an indemnified party, the indemnifying party shall be entitled to (x) participate
in such action or proceeding and (y), unless, in the reasonable opinion of
outside counsel to the indemnified party, a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, assume
the defense thereof jointly with any other indemnifying party similarly
notified, with counsel reasonably satisfactory to such indemnified party.  The indemnifying party shall promptly notify
the indemnified party of its decision to assume the defense of such action or
proceeding.  If, and after, the indemnified
party has received such notice from the indemnifying party, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense of such action or proceeding other than reasonable costs of
investigation; provided, however, that (i) if the
indemnifying party fails to take reasonable steps necessary to defend
diligently the action or proceeding within twenty (20) days after receiving
notice from such indemnified party that the indemnified party believes it has
failed to do so; or (ii) if such indemnified party who is a
defendant in any action or proceeding which is also brought against the
indemnifying party 

 

20

 

reasonably shall have concluded that there
may be one or more legal or equitable defenses available to such indemnified
party which are not available to the indemnifying party or which may conflict
with those available to another indemnified party with respect to such Claim;
or (iii) if representation of both parties by the same counsel is
otherwise inappropriate under applicable standards of professional conduct,
then, in any such case, the indemnified party shall have the right to assume or
continue its own defense as set forth above (but with no more than one firm of
counsel for all indemnified parties in each jurisdiction, except to the extent
any indemnified party or parties reasonably shall have made a conclusion
described in clause (ii) or (iii) above) and the indemnifying party
shall be liable for any expenses therefor. 
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim), unless such settlement or compromise (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action or claim and (ii) does
not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party. The indemnity
obligations contained in Sections 2.9(a) and 2.9(b) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the indemnified
party which consent shall not be unreasonably withheld.

 

(e)           If for any reason the foregoing indemnity is held by a
court of competent jurisdiction to be unavailable to an indemnified party under
Sections 2.9(a), (b) or (c), then each applicable indemnifying party shall
contribute to the amount paid or payable to such indemnified party as a result
of any Claim in such proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and the indemnified party, on the
other hand, with respect to such Claim as well as any other relevant equitable
considerations.  The relative fault shall
be determined by a court of law 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 indemnifying party or the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.  If,
however, the allocation provided in the second preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative faults but also the relative
benefits of the indemnifying party and the indemnified party as well as any
other relevant equitable considerations. 
The parties hereto agree that it would not be just and equitable if any
contribution pursuant to this Section 2.9(e) were to be determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the preceding sentences
of this Section 2.9(e).  The amount
paid or payable in respect of any Claim shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim. 
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.  Notwithstanding anything in this Section 2.9(e) to
the contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 2.9(e) to contribute any amount greater than
the amount of the net proceeds actually received by such indemnifying party
upon the sale of the Registrable Securities 

 

21

 

pursuant to the registration statement giving
rise to such Claim, less the amount of any indemnification payment made by such
indemnifying party pursuant to Sections 2.9(b) and (c).

 

(f)            The indemnity and contribution agreements contained
herein shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract
and shall remain operative and in full force and effect regardless of any
investigation made or omitted by or on behalf of any indemnified party and
shall survive the transfer of the Registrable Securities by any such party and
the completion of any offering of Registrable Securities in a registration statement.  In the event one or more Holders effect a
Partner Distribution pursuant to a registration statement in which the name of
partners, members or shareholders who receive a distribution are named in a
prospectus supplement or registration statement, the partners, members or
shareholders so named shall be entitled to indemnification and contribution by
the Company to the same extent as a Holder hereunder.

 

(g)           The indemnification and contribution required by this Section 2.9
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred; provided, however, that the
recipient thereof hereby undertakes to repay such payments if and to the extent
it shall be determined by a court of competent jurisdiction that such recipient
is not entitled to such payment hereunder.

 

3.             Underwritten
Offerings.

 

3.1.          Requested Underwritten Offerings.  If the Initiating Holders request an
underwritten offering pursuant to a registration under Section 2.1
(pursuant to a request for a registration statement to be filed in connection
with a specific underwritten offering or a request for a shelf takedown in the
form of an underwritten offering), the Company shall enter into a customary
underwriting agreement with the underwriters. 
Such underwriting agreement shall (i) be satisfactory in
form and substance to the Majority Participating Holders, (ii) contain
terms not inconsistent with the provisions of this Agreement and (iii) contain
such representations and warranties by, and such other agreements on the part
of, the Company and such other terms as are generally prevailing in agreements
of that type, including, without limitation, indemnities and contribution
agreements on substantially the same terms as those contained herein.  Any Participating Holder shall be a party to
such underwriting agreement and may, at its option, require that any or all of
the representations and warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriters shall also be made to
and for the benefit of such Participating Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Participating
Holder; provided, however, that the Company shall not be required
to make any representations or warranties with respect to written information
specifically provided by a Participating Holder for inclusion in the
registration statement.  Each such
Participating Holder shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Participating Holder,
its ownership of and title to the Registrable Securities, any written
information specifically provided by such Participating Holder for inclusion in
the registration statement and its intended method of distribution; and any
liability of such Participating Holder to any underwriter or other Person under
such underwriting agreement 

 

22

 

shall be limited to the amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the registration statement and shall be limited to liability for
written information specifically provided by such Participating Holder.

 

3.2.          Piggyback Underwritten Offerings.  In the case of a registration pursuant to Section 2.2
which involves an underwritten offering, the Company shall enter into an
underwriting agreement in connection therewith and all of the Participating
Holders’ Registrable Securities to be included in such registration shall be subject
to such underwriting agreement.  Any
Participating Holder may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Participating Holder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Participating Holder; provided, however, that the Company shall
not be required to make any representations or warranties with respect to
written information specifically provided by a Participating Holder for
inclusion in the registration statement. 
Each such Participating Holder shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such Participating Holder, its ownership of and title to the Registrable
Securities, any written information specifically provided by such Participating
Holder for inclusion in the registration statement and its intended method of
distribution; and any liability of such Participating Holder to any underwriter
or other Person under such underwriting agreement shall be limited to the
amount of the net proceeds received by such Participating Holder upon the sale
of the Registrable Securities pursuant to the registration statement and shall
be limited to liability for written information specifically provided by such
Participating Holder.

 

4.             General.

 

4.1.          Adjustments Affecting Registrable Securities.  The Company agrees that it shall not effect
or permit to occur any combination or subdivision of shares of Common Equity
which would adversely affect the ability of any Holder of any Registrable
Securities to include such Registrable Securities in any registration or
offering contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration or offering.  The Company agrees that it will take all
reasonable steps necessary to effect a subdivision of shares of Common Equity
if in the reasonable judgment of (a) the Majority Participating
Holders or (b) the managing underwriter for the offering in respect
of such Demand Registration Request, such subdivision would enhance the
marketability of the Registrable Securities. 
Each Holder agrees to vote all of its shares of capital stock in a
manner, and to take all other actions necessary, to permit the Company to carry
out the intent of the preceding sentence including, without limitation, voting
in favor of an amendment to the Company’s organizational documents in order to
increase the number of authorized shares of capital stock of the Company.  In any event, the provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Registrable Securities, to any and all shares of capital stock of the Company
or any successor or assign of the Company (whether by merger, share exchange,
consolidation, sale of assets or otherwise) which may be issued in respect of,
in exchange for or in substitution of, Registrable Securities and shall be
appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.

 

23

 

4.2.          Rule 144 and Rule 144A.  If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of the
Securities Act in respect of the Common Equity or Common Equity Equivalents,
the Company covenants that (i) so long as it remains subject to the
reporting provisions of the Exchange Act, it will timely file the reports
required to be filed by it under the Securities Act or the Exchange Act
(including, but not limited to, the reports under Sections 13 and 15(d) of
the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act, as such Rule may be amended (“Rule 144”))
or, if the Company is not required to file such reports, it will, upon the
request of any Holder, make publicly available other information so long as
necessary to permit sales by such Holder under Rule 144, Rule 144A
under the Securities Act, as such Rule may be amended (“Rule 144A”),
or any similar rules or regulations hereafter adopted by the SEC, and (ii) it
will take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (A) Rule 144, (B) Rule 144A
or (C) any similar rule or regulation hereafter adopted by the
SEC.  Upon the request of any Holder of
Registrable Securities, the Company will deliver to such Holder a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any
time after it so qualifies), a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company and such other information as may be reasonably requested in availing
any Holder of any rule or regulation of the SEC which permits the selling
of any such securities without registration or pursuant to such form.

 

4.3.          Amendments and Waivers.  Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and the Sponsors holding a majority of the
Registrable Securities then held by all Sponsors; provided that any amendment
or waiver that results in a non-pro rata material adverse effect on the rights
of Management vis-à-vis the rights of the Sponsors under this Agreement will
require the written consent of Management holding a majority of the Registrable
Securities then held by all Management. 
Any amendment or waiver effected in accordance with this Section 4.3
shall be binding upon each Holder and the Company.  Any waiver of any breach or default by any
other party of any of the terms of this Agreement effected in accordance with
this Section 4.3 shall not operate as a waiver of any other breach or
default, whether similar to or different from the breach or default
waived.  No waiver of any provision of
this Agreement shall be implied from any course of dealing between the parties
hereto or from any failure by any party to assert its or his or her rights
hereunder on any occasion or series of occasions.

 

4.4.          Notices. 
Unless otherwise specified herein, all notices, consents, approvals,
reports, designations, requests, waivers, elections and other communications
authorized or required to be given pursuant to this Agreement shall be in
writing and shall be given, made or delivered (and shall be deemed to have been
duly given, made or delivered upon receipt) by personal hand-delivery, by
facsimile transmission, by electronic mail, by mailing the same in a sealed
envelope, registered first-class mail, postage prepaid, return receipt
requested, or by air courier guaranteeing overnight delivery, addressed to the
Company at the address set forth below 

 

24

 

or to the applicable Holder at the address
indicated on Schedule A hereto (or at such other address for a Holder as shall
be specified by like notice):

 

(i)                                     If to the
Company, to:

 

Cobalt International Energy, Inc.

Two Post Oak Central

1980 Post Oak Blvd., Suite 1200

Houston, TX 77056

Attention: Joseph H. Bryant

Facsimile No.: (713) 579-9184

E-mail:
joe.bryant@cobaltintl.com

 

with copies to:

 

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention:         Christopher
Mayer

  Richard
D. Truesdell, Jr.

Facsimile No.: (212) 701-5338

(212) 701-5674

E-mail: chris.mayer@davispolk.com

richard.truesdell@davispolk.com

 

4.5.          Successors and Assigns.  A Holder may Assign his rights in this
Agreement without the Company’s consent to an Assignee of Registrable
Securities which (i) is with respect to any Holder, the spouse, parent,
sibling, child, step-child or grandchild of such Holder, or the spouse thereof
and any trust, limited liability company, limited partnership, private
foundation or other estate planning vehicle for such Holder or for the benefit
of any of the foregoing or other persons pursuant to the laws of descent and
distribution, or (ii) is a legatee, executor or other fiduciary pursuant
to a last will and testament of the Holder or pursuant to the terms of any
trust which take effect upon the death of the Holder.  Furthermore, any Holder may Assign its rights
in this Agreement without the Company’s prior written consent to any party;
provided that such Assignment occurs in connection with the transfer of all,
but not less than all, of such Holder’s Registrable Securities in a single
transaction (to the extent such transfer is otherwise permissible).  Any Assignment shall be conditioned upon
prior written notice to the Company or identifying the name and address of such
Assignee and any other material information as to the identity of such Assignee
as may be reasonably requested, and Schedule A hereto shall be updated to
reflect such Assignment.  Notwithstanding
anything to the contrary contained in this Section 4.5, any Holder may
elect to transfer all or a portion of its Registrable Securities to any third
party (to the extent such transfer is otherwise permissible) without Assigning
its rights hereunder with respect thereto, provided that in any such event all
rights under this Agreement with respect to the Registrable Securities so
transferred shall cease and terminate. 
This Agreement may not be Assigned by the Company, without the prior
written consent of the Sponsors holding a majority of the Registrable
Securities held by all Sponsors.

 

25

 

4.6.          Limitations on Subsequent Registration Rights.  From and after the effective date of the
first registration statement filed by the Company for the offering of its
securities to the general public, the Company may, without the prior written
consent of the Holders, enter into any agreement with any holder or prospective
holder of any securities of the Company which provides such holder or
prospective holder of securities of the Company comparable, but not more
favorable or conflicting, information and registration rights granted to the
Holders hereby.

 

4.7.          Goldman, Sachs & Co. and Affiliates.  Notwithstanding anything in this Agreement,
none of the provisions of this Agreement shall in any way limit Goldman, Sachs &
Co. or any of its Affiliates (other than any GSCP Entity as expressly set forth
in this Agreement) from engaging in any brokerage, investment advisory,
financial advisory, anti-raid advisory, principaling, merger advisory,
financing, asset management, trading, market making, arbitrage, investment
activity and other similar activities conducted in the ordinary course of their
business.

 

4.8.          Entire Agreement. 
This Agreement, the Stockholders Agreement and the other agreements
referenced herein and therein constitute the entire agreement among the parties
hereto with respect to the subject matter hereof, and supersede any prior
agreement or understanding among them with respect to the matters referred to
herein.

 

4.9.          Governing Law; Waiver of Jury
Trial; Jurisdiction.

 

(a)           Governing Law. 
This Agreement is governed by and will be construed in accordance with
the laws of the State of New York, excluding any conflict-of-laws rule or
principle (whether of New York or any other jurisdiction) that might refer the
governance or the construction of this Agreement to the law of another
jurisdiction.

 

(b)           Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF THE PARTIES HERETO IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF. The Company or any Holder
may file an original counterpart or a copy of this Section 4.9(b) with
any court as written evidence of the consent of any of the parties hereto to
the waiver of their rights to trial by jury.

 

(c)           Jurisdiction. 
Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of the courts of the State of New York located in the
county and city of New York in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from such court, (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than the courts of the State
of New York located in the county and city of New York and (iv) to the
fullest extent permitted by law, consents to service being made through the
notice procedures set forth in Section 4.4.  Each party hereto hereby agrees that, to the
fullest extent permitted by law, service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in Section 4.4
shall be effective service of process for any suit or proceeding in connection
with this Agreement or the transactions contemplated hereby

 

26

 

4.10.        Interpretation; Construction.

 

(a)           The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions
hereof.  Where a reference in this
Agreement is made to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. 
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”

 

(b)           The parties have participated jointly in negotiating and
drafting this Agreement.  In the event
that an ambiguity or a question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provision of this Agreement.

 

4.11.        Counterparts. 
This Agreement may be executed in any number of separate counterparts
each of which when so executed shall be deemed to be an original and all of
which together shall constitute one and the same agreement.

 

4.12.        Severability. 
In the event that any provision of this Agreement shall be invalid,
illegal or unenforceable, such provision shall be construed by limiting it so
as to be valid, legal and enforceable to the maximum extent provided by law and
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.

 

4.13.        Specific Performance. 
It is hereby agreed and acknowledged that it will be impossible to
measure the money damages that would be suffered if the parties fail to comply
with any of the obligations imposed on them by this Agreement and that, in the
event of any such failure, an aggrieved party will be irreparably damaged and
will not have an adequate remedy at law. 
Each party hereto shall, therefore, be entitled (in addition to any
other remedy to which such party may be entitled at law or in equity) to
injunctive relief, including specific performance, to enforce such obligations,
without the posting of any bond, and if any action should be brought in equity
to enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.

 

4.14.        Further Assurances. 
Each party hereto shall do and perform or cause to be done and performed
all such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

27

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Joseph H. Bryant

  

 

[Signature page to the Registration Rights Agreement]

 

 

	
   

  	
  SPONSORS:

  
	
   

  	
   

  
	
   

  	
  C/R
  COBALT INVESTMENT PARTNERSHIP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
  ENERGY PARTNERS II, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP II, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr

  
	
   

  	
   

  	
  Name:

  	
  Pierre
  F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title: 

  	
  Authorized
  Person

  
	
   

  	
   

  	
   

  
	
   

  	
  C/R
  ENERGY COINVESTMENT II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
  ENERGY PARTNERS II, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP II, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr

  
	
   

  	
   

  	
  Name:

  	
  Pierre
  F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title: 

  	
  Authorized
  Person

  
	
   

  	
   

  	
   

  
	
   

  	
  RIVERSTONE
  ENERGY COINVESTMENT III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RIVERSTONE
  COINVESTMENT GP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  RIVERSTONE
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr

  
	
   

  	
   

  	
  Name:

  	
  Pierre
  F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title: 

  	
  Authorized Person

  

 

[Signature page to the Registration Rights Agreement]

 

 

	
   

  	
  CARLYLE
  ENERGY COINVESTMENT III, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE
  ENERGY COINVESTMENT III GP, L.L.C.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TCG
  HOLDINGS, L.L.C.

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel A. D’Aniello

  
	
   

  	
   

  	
  Name:
  

  	
  Daniel
  A. D’Aniello

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C/R
  ENERGY III COBALT PARTNERSHIP, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE
  ENERGY

  
	
   

  	
   

  	
  PARTNERS III, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP III, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr

  
	
   

  	
   

  	
  Name:
  

  	
  Pierre
  F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Person

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CARLYLE/RIVERSTONE GLOBAL ENERGY
  AND POWER FUND III, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CARLYLE/RIVERSTONE

  
	
   

  	
   

  	
  ENERGY PARTNERS III, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  C/R
  ENERGY GP III, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pierre F. Lapeyre, Jr

  
	
   

  	
   

  	
  Name:
  

  	
  Pierre
  F. Lapeyre, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  Person

  

 

[Signature page to the Registration Rights Agreement]

 

 

	
   

  	
  GSCP
  V COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V FUND, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V ADVISORS, L.L.C.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  

  	
  Kenneth
  Pontarelli

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSCP V OFFSHORE COBALT HOLDINGS,
  LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V OFFSHORE COBALT

  
	
   

  	
   

  	
  HOLDINGS, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS V OFFSHORE FUND, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V OFFSHORE ADVISORS, L.L.C.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  

  	
  Kenneth
  Pontarelli

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  

 

[Signature page to the Registration Rights Agreement]

 

 

	
   

  	
  GS
  CAPITAL PARTNERS V INSTITUTIONAL, L.P.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  ADVISORS V, L.L.C.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  

  	
  Kenneth
  Pontarelli

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GSCP
  V GMBH COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V GmbH Cobalt Holdings, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  V GmbH Cobalt Holdings,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  

  	
  Kenneth
  Pontarelli

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  

 

[Signature page to the Registration Rights Agreement]

 

 

	
   

  	
  GSCP
  VI COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS VI FUND, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI ADVISORS, L.L.C.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  

  	
  Kenneth
  Pontarelli

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
  GSCP
  VI OFFSHORE COBALT HOLDINGS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI OFFSHORE COBALT

  
	
   

  	
   

  	
  HOLDINGS, L.P.,

  
	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GS
  CAPITAL PARTNERS VI OFFSHORE FUND, L.P.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GSCP
  VI OFFSHORE ADVISORS, L.L.C.,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth Pontarelli

  
	
   

  	
   

  	
  Name:
  

  	
  Kenneth
  Pontarelli

  
	
   

  	
   

  	
  Title:
  

  	
  Managing
  Director

  

 

[Signature page to the Registration Rights Agreement]

 

 

	
   

  	
   

  	
  GS
  CAPITAL PARTNERS VI PARALLEL, L.P.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GS
  ADVISORS VI, L.L.C.,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
   

  	
  Name:  Kenneth Pontarelli

  
	
   

  	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GSCP
  VI GMBH COBALT HOLDINGS, LLC

  

 

	
   

  	
   

  	
  By:

  	
  GSCP
  VI GmbH Cobalt Holdings, L.P.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  GSCP
  VI GmbH Cobalt Holdings,

  
	
   

  	
   

  	
   

  	
  its general partner

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Kenneth Pontarelli

  
	
   

  	
   

  	
   

  	
  Name:  Kenneth Pontarelli

  
	
   

  	
   

  	
   

  	
  Title:  Managing Director

  

 

 

[Signature
page to the Registration Rights Agreement]

 

 

	
   

  	
   

  	
  KERN
  COBALT CO-INVEST PARTNERS AP LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  KERN
  Cobalt Group Management, Ltd.,

  
	
   

  	
   

  	
   

  	
  its general partner

  

 

 

	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey van Steenbergen

  
	
   

  	
   

  	
  Name:  Jeffrey van Steenbergen

  
	
   

  	
   

  	
  Title:  Director

  

 

 

[Signature
page to the Registration Rights Agreement]

 

 

	
   

  	
   

  	
  FIRST
  RESERVE FUND XI, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  First
  Reserve GP XI, L.P.,

  
	
   

  	
   

  	
   

  	
  its general partner

  

 

	
   

  	
   

  	
  By:

  	
  First
  Reserve GP XI, Inc.,

  
	
   

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
  By:

  	
  /s/
  Kenneth W. Moore

  
	
   

  	
   

  	
  Name: 
  Kenneth W. Moore

  
	
   

  	
   

  	
  Title: 
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FR XI
  ONSHORE AIV L.P.

  

 

	
   

  	
   

  	
  By:

  	
  First
  Reserve GP XI, L.P.,

  
	
   

  	
   

  	
   

  	
  its manager

  

 

	
   

  	
   

  	
  By:

  	
  First
  Reserve GP XI, Inc.,

  
	
   

  	
   

  	
   

  	
  its general partner

  

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kenneth W. Moore

  
	
   

  	
   

  	
  Name:  Kenneth W. Moore

  
	
   

  	
   

  	
  Title: 
  Managing Director

  

 

 

[Signature
page to the Registration Rights Agreement]

 

 

	
   

  	
   

  	
  MANAGEMENT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Joseph H. Bryant

  
	
   

  	
   

  	
  Joseph
  H. Bryant

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Samuel H. Gillespie, III

  
	
   

  	
   

  	
  Samuel
  H. Gillespie, III

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  James W. Farnsworth

  
	
   

  	
   

  	
  James
  W. Farnsworth

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  James H. Painter

  
	
   

  	
   

  	
  James
  H. Painter

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Van P. Whitfield

  
	
   

  	
   

  	
  Van
  P. Whitfield

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Richard A. Smith

  
	
   

  	
   

  	
  Richard
  A. Smith

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  John P. Wilkirson

  
	
   

  	
   

  	
  John
  P. Wilkirson

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Rodney L. Gray

  
	
   

  	
   

  	
  Rodney L. Gray

  

 

 

[Signature
page to the Registration Rights Agreement]

 

 

Schedule A

 

GSCP

 

	
  GSCP
  V Cobalt Holdings, LLC

  	
  85
  Broad St, 10th Floor

  New
  York, NY 10004

  Attn:
  Ken Pontarelli

  
	
  GSCP
  V Offshore Cobalt Holdings, LLC

  
	
  GS
  Capital Partners V Institutional, L.P.

  
	
  GSCP
  V GmbH Cobalt Holdings, LLC

  
	
  GSCP
  VI Cobalt Holdings, LLC

  
	
  GSCP
  VI Offshore Cobalt Holdings, LLC

  
	
  GS
  Capital Partners VI Parallel, L.P.

  
	
  GSCP
  VI GmbH Cobalt Holdings, LLC

  

 

C/R

 

	
  Riverstone
  Energy Coinvestment III, L.P.

  	
  c/o
  Riverstone Holdings LLC

  712
  Fifth Avenue, 51st Floor

  New York, NY 10019

  Attn:
  Greg Beard

  
	
  Carlyle
  Energy Coinvestment III, L.P.

  
	
  C/R
  Energy III Cobalt Partnership, L.P.

  
	
  Carlyle/Riverstone
  Global Energy and Power Fund III, L.P.

  
	
  C/R
  Energy Coinvestment II, L.P.

  
	
  C/R
  Cobalt Investment Partnership, L.P.

  

 

First
Reserve

 

	
  First
  Reserve Fund XI, L.P.

  	
  c/o First Reserve
  Corporation

  One
  Lafayette Place

  
	
  FR
  XI Onshore AIV L.P.

  	
  Greenwich, CT 06830

  Attn:
  Alan G. Schwartz

  

 

KERN

 

	
  KERN
  Cobalt Co-Invest Partners AP LP

  	
  100
  Doll Block

  116-8th Avenue

  Calagary,
  Alberta, Canada T26 0K4

  Attn:
  Jeff van Steenbergen

  

 

Management

 

	
  Joseph
  H. Bryant

  	
  c/o Cobalt International
  Energy, L.P.

  Two Post Oak Central

  1980 Post Oak Blvd., Suite 1200

  Houston,
  TX 77056

  
	
  Samuel
  H. Gillespie, III

  
	
  James
  W. Farnsworth

  
	
  James
  H. Painter

  
	
  Van
  P. Whitfield

  
	
  Richard
  A. Smith

  
	
  John
  P. Wilkirson

  
	
  Rodney
  L. Gray

  

 

A-1

 

EXHIBIT H

 

DIRECTOR INDEMNIFICATION AGREEMENT

 

Indemnification Agreement (this “Agreement”), dated as of
              ,
2009 between Cobalt International Energy, Inc., a Delaware corporation
(the “Company”), and
                  
(“Indemnitee”).

 

W I T N E S S E T H:

 

WHEREAS, highly competent persons have become more
reluctant to serve as directors of publicly held corporations unless they are
provided with adequate protection through insurance and indemnification against
risks of claims and actions against them arising out of their service to and
activities on behalf of the corporation.

 

WHEREAS, directors are increasingly being subjected
to expensive and time-consuming litigation relating to, among other things,
matters that traditionally would have been brought only against the corporation
itself.

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain
qualified individuals, the Company will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect persons serving the
Company and its subsidiaries from certain liabilities.  At the same time, the Board recognizes the
limitations on the protection provided by liability insurance and the
uncertainties as to the scope and level of such coverage that may be available
in the future.

 

WHEREAS, the Company’s directors have certain
existing indemnification arrangements pursuant to the Company’s certificate of
incorporation and bylaws and may be entitled to indemnification pursuant to the
General Corporation Law of the State of Delaware (“DGCL”).  At the same time, the Board recognizes the
limitations on the protection provided by such indemnification and the
uncertainties as to its availability in any particular situation.

 

WHEREAS, the Board believes that in light of the
limitations and uncertainties about the protection provided by the Company’s
liability insurance and existing indemnification arrangements and the impact
these uncertainties may have on the Company’s ability to attract and retain
qualified individuals to serve as directors, the Company should act to assure
such persons that there will be increased certainty of protection in the
future.

 

WHEREAS, it is reasonable, prudent and necessary for
the Company contractually to obligate itself to indemnify, and to advance
expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will 

 

 

serve or continue to serve the Company free
from undue concern that they will not be adequately protected.

 

WHEREAS, Indemnitee is concerned that the protection
provided under the Company’s liability insurance and existing indemnification
arrangements may not be adequate and may not be willing to serve as a director
of the Company without greater certainty concerning such protection, and the
Company desires Indemnitee to serve in such capacity and is willing to provide
such greater certainty.

 

[WHEREAS, Indemnitee has certain rights to
indemnification and/or insurance provided by the Sponsor Indemnitors (as
defined below) which Indemnitee and the Sponsor Indemnitors intend to be
secondary to the primary obligation of the Company to indemnify Indemnitee as
provided herein, with the Company’s acknowledgement and agreement to the
foregoing being a material condition to Indemnitee’s willingness to serve on
the Board.]*

 

NOW, THEREFORE, in consideration of the premises and
the covenants contained herein, the Company and Indemnitee do hereby covenant
and agree as follows:

 

ARTICLE 1

CERTAIN DEFINITIONS

 

(a) As used in this Agreement:

 

“Change of Control”
means any one of the following circumstances occurring after the date hereof: (i) there
shall have occurred an event required to be reported with respect to the
Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any other schedule or form) under the Exchange
Act, regardless of whether the Company is then subject to such reporting
requirement; (ii) any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) shall have become, without prior
approval of a majority of the Continuing Directors, the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing a majority or more of the combined
voting power of the Company’s then outstanding voting securities (provided that
for purposes of this clause (ii), the term “person” shall exclude a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company); (iii) there occurs a merger or consolidation of the Company with
any other entity,

 

* Bracketed language to be included in
indemnification agreements between the Company and the Sponsor Indemnitors’
designees.

 

2

 

other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving or resulting entity) more than 51% of the combined voting power of
the voting securities of the surviving or resulting entity outstanding
immediately after such merger or consolidation and with the power to elect at
least a majority of the board of directors or other governing body of such
surviving or resulting entity; (iv) all or substantially all the assets of
the Company are sold or otherwise disposed of in a transaction or series of
related transactions; (v) the approval by the stockholders of the Company
of a complete liquidation of the Company; or (vi) the Continuing Directors
cease for any reason to constitute at least a majority of the members of the
Board.

 

“Continuing Directors”
means the directors who are on the Board on the date hereof and any new
directors whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the directors
then still in office who were directors on the date hereof or whose election or
nomination was so approved.

 

“Corporate Status”
means the status of a person who is or was a director, officer, employee,
consultant or agent of the Company or who is or was serving at the request of
the Company as a director, officer, employee, consultant or agent of any other
Enterprise.

 

“Disinterested Director”
means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification or advancement of expenses is
sought by Indemnitee.

 

“Enterprise”
means any corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan or other person or enterprise.

 

“Exchange Act”
means the Securities Exchange Act of 1934.

 

“Expenses” means
all  costs and expenses (including fees and
expenses of counsel, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt
of any payments under this Agreement) incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, a Proceeding.  Expenses shall also include expenses incurred
in connection with any appeal resulting from any Proceeding (including the
premium, security for and other costs relating to any cost bond, supersedeas

 

3

 

bond or other appeal bond or its
equivalent).  Expenses, however, shall
not include Liabilities.

 

“Independent Counsel”
means a law firm, or a partner or member of a law firm, that is experienced in
matters of corporate law and neither currently is, nor in the five years
previous to its selection or appointment has been, retained to represent (i) the
Company or Indemnitee in any matter material to either such party  (provided that acting as an Independent Counsel under this
Agreement or in a similar capacity with respect to any other indemnification
arrangements between the Company and its present or former directors shall not
be deemed a representation of the Company or Indemnitee) or (ii) any other
party to the Proceeding giving rise to a claim for indemnification or
advancement of expenses hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.

 

“Liabilities”
means all judgments, fines (including any excise taxes assessed with
respect to any employee benefit plan), penalties and amounts paid in settlement
and other liabilities (including all interest, assessments and other charges
paid or payable in connection with or in respect of any such amounts) arising
out of or in connection with any Proceeding; provided
that Liabilities shall not include any Expenses.

 

“person” means
an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization.

 

“Proceeding” includes any threatened, pending or completed
action, suit or other proceeding (which shall include an arbitration or other
alternate dispute resolution mechanism or an inquiry, investigation or
administrative hearing), whether civil, criminal, administrative, legislative
or investigative (formal or informal) in nature (including any and all appeals
therefrom) and whether instituted by or on behalf of the Company or any other
party, in any such case, in which Indemnitee was, is or may be involved as a
party or otherwise by reason of any Corporate Status of Indemnitee or by reason
of any action taken (or failure to act) by him or on his part while serving in
any Corporate Status or any inquiry or investigation that Indemnitee in good
faith believes might lead to the institution of any such action, suit or other
proceeding; provided that Proceeding shall not
include an action, suit or other proceeding contemplated by Section 8.06(b).

 

(b)        For the
purposes of this Agreement:

 

References to the “Company”
shall include, in addition to the surviving or resulting corporation in any
merger or consolidation, any constituent corporation

 

4

 

(including any constituent of a constituent)
absorbed in a merger or consolidation which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
employees or agents, so that if Indemnitee is or was a director, officer,
employee, consultant or agent of such constituent corporation or is or was
serving at the request of such constituent corporation as a director, officer,
employee, consultant or agent of another Enterprise, then Indemnitee shall
stand in the same position under the provisions of this Agreement with respect
to the surviving or resulting corporation as Indemnitee would have with respect
to such constituent corporation if its separate existence had continued.

 

References to “director, officer,
employee, consultant or agent” shall include, in addition to
directors, officers, employees, consultants and agents, a trustee, general
partner, manager, managing member, fiduciary or member of a committee of a
board of directors.

 

References to “serving at the request of
the Company” shall include any service as a director, officer,
employee, consultant or agent of the Company or any other Enterprise which
imposes duties on, or involves services by, such director, officer, employee,
consultant or agent with respect to an employee benefit plan, its participants
or beneficiaries;  and a person who acted in good
faith and in a manner such person reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner “not opposed to the best interests of
the Company” as used herein.

 

References to “hereof”, “herein” and “hereunder” and
words of like import shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
References to “includes” or “including” shall be deemed to be followed by the words “without
limitation”, whether or not they are in fact followed by those words or words
of like import.  Unless otherwise
expressly stated herein, references to any statute shall be deemed to refer to
such statute as amended from time to time and to any rules or regulations
promulgated thereunder.

 

ARTICLE 2

SERVICES BY INDEMNITEE

 

Section 2.01.  Services by
Indemnitee.  Indemnitee hereby
agrees to serve or continue to serve as a director of the Company, for so long
as Indemnitee is duly elected or appointed or until Indemnitee tenders his
resignation or is removed.

 

5

 

ARTICLE 3

INDEMNIFICATION

 

Section 3.01. 
General.  (a) The Company hereby agrees to
and shall indemnify Indemnitee and hold Indemnitee harmless, to the fullest
extent permitted by applicable law, from and against any and all Expenses and
Liabilities actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with any Proceeding. 
The phrase “to the fullest extent permitted by applicable law” shall
include:

 

(i)           to the fullest
extent permitted by the DGCL as in effect on the date of this Agreement, and

 

(ii)          to the fullest
extent authorized or permitted by any amendments to or replacements of the DGCL
adopted after the date of this Agreement.

 

(b)        To the extent
that Indemnitee is a party to (or a participant in) and is successful, on the
merits or otherwise, in the defense of any Proceeding or any claim, issue or
matter therein, in whole or in part, the Company shall indemnify Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf
in connection therewith.  If Indemnitee
is successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in any Proceeding, the Company shall indemnify
Indemnitee against all Expenses actually and reasonably incurred by him or on
his behalf in connection with each successfully resolved claim, issue or matter
and any claim, issue or matter related to each such successfully resolved claim,
issue or matter.  For purposes of this Section 3.01(b) and
without limitation, the termination of any Proceeding or any claim, issue or
matter in a Proceeding by dismissal, with or without prejudice, shall be deemed
to be a successful result as to such Proceeding, claim, issue or matter.  Nothing in this Section 3.01(b) is
intended to limit Indemnitee’s rights provided for in Section 3.01(a).

 

(c)        To the extent
that Indemnitee is, by reason of his Corporate Status, a witness in or is
otherwise asked to participate in any Proceeding to which Indemnitee is not a
party, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.  Nothing in this Section 3.01(c) is
intended to limit Indemnitee’s rights provided for in Section 3.01(a).

 

(d)        If Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of Expenses, but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.

 

6

 

Section 3.02. Exclusions.  Notwithstanding
any provision of this Agreement to the contrary (including Section 3.01),
the Company shall not be obligated under this Agreement to indemnify in
connection with:

 

(a)        any claim made
against Indemnitee for an accounting of profits made from the purchase and sale
(or sale and purchase) by Indemnitee of securities of the Company pursuant to Section 16(b) of
the Exchange Act or similar provisions of state statutory law or common law;

 

(b)        except for an
action, suit or other proceeding contemplated by Section 8.06(b), any
action, suit or other proceeding (or part thereof) initiated by Indemnitee
against the Company or its directors, officers, employees, agents or other
indemnitees unless (i) the Board authorizes the action, suit or other
proceeding (or part thereof), (ii) the Company provides the
indemnification or advancement of Expenses, in its sole discretion, pursuant to
the powers vested in the Company under applicable law, or (iii) such
indemnification or advancement of Expenses is otherwise required under the
DGCL; or

 

(c)        any claim,
issue or matter in a Proceeding by or in the right of the Company to procure a
judgment in its favor as to which Indemnitee shall have been finally adjudged
by a court of competent jurisdiction to be liable to the Company unless and
only to the extent the Delaware Chancery Court or the court in which such
Proceeding was brought shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Chancery Court or such other court shall deem proper.

 

ARTICLE 4

ADVANCEMENT OF EXPENSES; DEFENSE OF CLAIMS

 

Section 4.01.  Advances. The Company shall advance any
Expenses that shall be actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any Proceeding within 20 days after
receipt by the Company of a written request for advancement of Expenses, which
request may be delivered to the Company at such time and from time to time as
Indemnitee deems appropriate in his sole discretion (whether prior to or after
final disposition of any such Proceeding). 
Advances shall be made without regard to Indemnitee’s ability to repay
such amounts and without regard to Indemnitee’s ultimate entitlement to
indemnification under this Agreement or otherwise.  Any such advances shall be made on an
unsecured basis and be interest free. 
Nothing in this Section 4.01 shall require the Company to advance
Expenses in any case in which indemnification would not be permitted under Section 3.02(a) or
(b) or following the entry of a final, nonappealable judgment of the type
described in Section 3.02(c).

 

7

 

Section 4.02.  Repayment of Advances or Other
Expenses.  Indemnitee agrees
that Indemnitee shall reimburse the Company for all amounts advanced by the
Company pursuant to Section 4.01 if it is ultimately determined, by a
court of competent jurisdiction in a final judgment, not subject to appeal,
that Indemnitee is not entitled to be indemnified by the Company for such
Expenses.  If Indemnitee seeks a judicial
adjudication or an arbitration pursuant to Section 6.01, or if the Company
initiates an action, suit or other proceeding against Indemnitee to recover any
amounts advanced by the Company pursuant to Section 4.01, Indemnitee shall
not be required to reimburse the Company pursuant to this Section 4.02
until a final determination (as to which all rights of appeal have been
exhausted or lapsed) has been made.

 

Section 4.03.  Defense Of Claims.  (a) If a Change of Control
shall not have occurred, the Company shall be entitled to assume the defense of
any Proceeding with counsel reasonably acceptable to Indemnitee upon delivery
of written notice to the Indemnitee. 
After the Company assumes the defense, the Company will not be liable to
Indemnitee under this Agreement for any fees or expenses of counsel
subsequently incurred by Indemnitee with respect to such Proceeding; provided that (i) Indemnitee shall have the right to
employ separate counsel in respect of any Proceeding at Indemnitee’s expense
and (ii) if the employment of counsel by Indemnitee has been previously
authorized in writing by the Company or Indemnitee shall have reasonably
concluded upon the advice of counsel that (x) there is a conflict of
interest between the Company and Indemnitee in the conduct of the defense of
such Proceeding or (y) Indemnitee has one or more legal defenses available
to him which are different from or additional to those available to the Company
in such Proceeding, then, in each such case, the fees and expenses of
Indemnitee’s counsel shall be at the Company’s expense.  The Company shall not settle any Proceeding
(in whole or in part) which would impose any Expense, Liability or limitation
on Indemnitee without Indemnitee’s prior written consent, such consent not to
be unreasonably withheld.  Indemnitee
shall not settle any Proceeding (in whole or in part) which would impose any
Expense, Liability or limitation on the Company without the Company’s prior
written consent, such consent not to be unreasonably withheld.

 

(b)  If a Change of Control shall have
occurred, the Company shall not have the right to assume the defense of any
Proceeding; provided, however, that the Company will
be entitled to participate in any Proceeding at its own expense.

 

ARTICLE 5

REQUEST FOR INDEMNIFICATION AND DETERMINATION OF ENTITLEMENT

 

Section 5.01. 
Notification; Request For Indemnification.  (a) As
soon as reasonably practicable after receipt by Indemnitee of written
notice that Indemnitee is a party to or a participant (as a witness or
otherwise) in any

 

8

 

Proceeding or of any other matter in respect
of which Indemnitee intends to seek indemnification or advancement of Expenses
hereunder, Indemnitee shall provide to the Company written notice thereof
(including the nature and facts underlying such matter).  The omission by Indemnitee to so notify the
Company will not relieve the Company from any liability which it may have to
Indemnitee under this Agreement or otherwise than under this Agreement.  Any delay in so notifying the Company shall
not constitute a waiver by Indemnitee of any rights under this Agreement or
otherwise than under this Agreement.

 

(b)        To obtain
indemnification under this Agreement, Indemnitee shall deliver to the Company a
written request for indemnification, including therewith such information as is
reasonably available to Indemnitee and reasonably necessary to determine
Indemnitee’s entitlement to indemnification hereunder.  Such request(s) may be delivered at such
times and from time to time as Indemnitee deems appropriate in his sole
discretion.  Indemnitee’s entitlement to
indemnification shall be determined according to Section 5.02 of this
Agreement and applicable law.

 

Section 5.02. 
Determination of Entitlement.  (a) Except with
respect to requests for indemnification pursuant to Sections 3.01(b) or
(c), in which case payment of indemnification shall be made by the Company
automatically within 10 days of receipt by the Company of a written request
therefor, as soon as reasonably practicable (but in no event later than 60
days) after the later of request for indemnification pursuant to Section 5.01(b) and
the final disposition of the matter that is the subject of the request for
indemnification, a determination shall be made with respect to Indemnitee’s
entitlement thereto in the specific case. 
If a Change in Control shall not have occurred, such determination shall
be made (i) by a majority vote of the Disinterested Directors or of a
committee of Disinterested Directors designated by a majority vote of the
Disinterested Directors (in either case, even though less than a quorum of the
Board) or (ii) if there are no Disinterested Director or the Disinterested
Directors so direct, by Independent Counsel. 
If a Change in Control shall have occurred, such determination shall be
made by Independent Counsel.  Any
determination made by Independent Counsel pursuant to this Section 5.02
shall be in the form of a written opinion to the Board, a copy of which shall
be delivered to Indemnitee.  Indemnitee
shall reasonably cooperate with the person or persons making such determination
including providing to such person or persons upon reasonable advance request
any documentation or information which is not privileged or otherwise protected
from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination.  Any
costs or expenses (including fees and expenses of counsel) incurred by
Indemnitee in so cooperating with the person or persons making such
determination shall be deemed “Expenses” hereunder and shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold
Indemnitee harmless therefrom.

 

9

 

Indemnification for the Expenses referred to
in the immediately preceding sentence shall be made by the Company
automatically within 10 days of receipt by the Company of a written request
therefor.

 

(b)        If the
determination is to be made by Independent Counsel, such Independent Counsel
shall be selected as provided in this Section 5.02(b).  If a Change in Control shall not have
occurred, the Independent Counsel shall be selected by the Board, and the
Company shall give written notice to Indemnitee advising him of the identity of
the Independent Counsel so selected.  If
a Change in Control shall have occurred, the Independent Counsel shall be
selected by Indemnitee (unless Indemnitee shall request that such selection be
made by the Board, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Company advising it of the identity
of the Independent Counsel so selected. 
In either case, the party receiving the notice may, within 10 days after
receipt thereof, deliver to the other a written objection to such selection; provided that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements
of “Independent Counsel” as defined in Article 1 of this Agreement, and
the objection shall set forth with particularity the factual basis of such
assertion.  Absent a proper and timely
objection, the person so selected shall act as Independent Counsel.  If a proper and timely objection is made, the
counsel selected may not serve as Independent Counsel unless and until such
objection is withdrawn or a court of competent jurisdiction  (or,
at Indemnitee’s option pursuant to Section 6.01, an arbitration) has
determined that such objection is without merit.  If, within 20 days after the later of the
receipt by the Company of a request for indemnification pursuant to Section 5.01(b) and
the final disposition of the matter, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition a
court of competent jurisdiction (or, at Indemnitee’s option pursuant to Section 6.01,
an arbitration) for resolution of any objection which shall have been made to
the selection of Independent Counsel and/or for the appointment of another
person as Independent Counsel, and the person with respect to whom all
objections are so resolved or the person so appointed shall act as Independent
Counsel.  The Company agrees to pay the
reasonable fees and expenses of any Independent Counsel appointed pursuant to
this Section and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

 

(c)        If it is
determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within 10 days after such determination.

 

Section 5.03.  Presumptions
and Burdens of Proof; Effect of Certain Proceedings.  (a) In making any determination as to Indemnitee’s
entitlement to indemnification hereunder, Indemnitee shall, to the fullest
extent not prohibited by law, be entitled to a presumption that he is entitled
to indemnification under

 

10

 

this Agreement if Indemnitee has submitted a
request for indemnification in accordance with Section 5.01(b), and the
Company shall, to the fullest extent not prohibited by law, have the burdens of
coming forward with evidence and of persuasion to overcome that presumption.

 

(b)        The termination
of any Proceeding or of any claim, issue or matter therein by judgment, order,
settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent shall not  of itself
create a presumption (i) that Indemnitee did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Company, (ii) that with respect to any criminal
Proceeding, Indemnitee had reasonable cause to believe that his conduct was
unlawful or (iii) that Indemnitee did not otherwise satisfy the applicable
standard of conduct to be indemnified pursuant to this Agreement.

 

(c)        For purposes of
any determination of good faith, Indemnitee shall be deemed to have acted in
good faith if Indemnitee’s action is based (i) on the records or books of
account of the Company or other Enterprise, as applicable, including financial
statements, (ii) on information supplied to Indemnitee by the officers of
the Company or other Enterprise, as applicable, in the course of their duties, (iii) on
the advice of legal counsel for the Company or other Enterprise, as applicable,
or counsel selected by any committee of the board of directors of such entity,
or (iv) on information or records given or reports made to the Company or
other Enterprise, as applicable, by an independent certified public accountant
or an appraiser, investment banker or other expert selected with reasonable
care by such entity or the board of directors or any committee of the board of
directors of such entity.  The provisions
of this Section 5.03(c) shall not be deemed to be exclusive or to
limit in any way other circumstances in which Indemnitee may be deemed or found
to  have met the applicable standard of
conduct to be indemnified pursuant to this Agreement.

 

(d)        The knowledge
or actions or failure to act of any other director, officer, employee,
consultant or agent of the Company or other Enterprise, as applicable, shall
not be imputed to Indemnitee for purposes of determining Indemnitee’s right to
indemnification under this Agreement.

 

(e)        If a
determination as to Indemnitee’s entitlement to indemnification shall not have
been made pursuant to this Agreement within 60 days after the later of the
request for indemnification pursuant to Section 5.01(b) and the final
disposition of the matter that is the subject of the request for
indemnification, the requisite determination of entitlement to indemnification
shall, to the fullest extent not prohibited by law, be deemed to have been made
in favor of Indemnitee, and Indemnitee shall be entitled to such
indemnification, absent a misstatement by Indemnitee of a material fact or an
omission by Indemnitee of a material fact necessary in order to make the
information provided not misleading in connection with the request for
indemnification; provided that such 60-day

 

11

 

period may be extended for a
reasonable time, not to exceed an additional 30 days, if the person or persons
making the determination in good faith requires such additional time to obtain
or evaluate any documentation or information relating thereto.

 

ARTICLE 6

REMEDIES OF INDEMNITEE

 

Section 6.01.  Adjudication or
Arbitration.  (a) Indemnitee shall be entitled
to an adjudication (by a court of competent jurisdiction or, at Indemnitee’s option,
through an arbitration conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association) of
any determination pursuant to Section 5.02 that Indemnitee is not entitled
to indemnification under this Agreement. 
Any such adjudication shall be conducted in all respects as a de novo trial or arbitration on the merits, and any prior
adverse determination shall not be referred to or introduced into evidence,
create a presumption that Indemnitee is not entitled to indemnification or
advancement of expenses, be a defense or otherwise adversely affect
Indemnitee.  In addition, neither the
failure of the Company, the Disinterested Directors, a committee of the
Disinterested Directors or Independent Counsel to have made a determination
prior to the commencement of any such adjudication that indemnification under
this Agreement is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Company, the
Disinterested Directors, a committee of the Disinterested Directors or
Independent Counsel that Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct in such
adjudication.  In any such judicial
proceeding or arbitration, the provisions of Section 5.03 (including the
presumption in favor of Indemnitee and the burdens on the Company) shall apply.

 

(b)        Indemnitee
shall also be entitled to an adjudication (by a court of competent jurisdiction
or, at Indemnitee’s option, through an arbitration as described above) of any
other disputes under this Agreement, including any disputes arising because (i) advancement
of Expenses is not timely made pursuant to Section 4.01, (ii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 5.02 of this Agreement within the required time period, (iii) payment
of indemnification is not made pursuant to Section 3.01(b) or (c) or
the last two sentences of Section 5.02(a) within 10 days after
receipt by the Company of written request therefor, (iv) payment of
indemnification pursuant to Section 3.01(a) is not made within 10
days after a determination has been made that Indemnitee is entitled to
indemnification, or (v) the Company takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation
or other action or Proceeding designed to deny, or to

 

12

 

recover from, the Indemnitee
the benefits provided or intended to be provided to the Indemnitee hereunder.

 

(c)        If a
determination shall have been made pursuant to Section 5.02 that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 6.01, absent a misstatement by Indemnitee of a material fact
or an omission by Indemnitee of a material fact necessary in order to make the
information provided not misleading in connection with the request for
indemnification.

 

(d)        In connection
with any judicial proceeding or arbitration commenced pursuant to this Section 6.01,
the Company shall not oppose Indemnitee’s right to seek such adjudication,
shall be precluded from asserting that the procedures and presumptions of this
Agreement are not valid, binding or enforceable and shall stipulate in any such
court or before any such arbitrator that the Company is bound by all of the provisions
of this Agreement.

 

ARTICLE 7

DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE

 

Section 7.01.  D&O Liability
Insurance.  (a) The Company shall obtain and
maintain a policy or policies of insurance (“D&O
Liability Insurance”) with reputable insurance companies providing
liability insurance for directors of the Company in their capacities as such
(and for any capacity in which any director of the Company serves any other
Enterprise at the request of the Company), in respect of acts or omissions
occurring while serving in such capacity, on terms with respect to coverage and
amount (including with respect to the payment of expenses) no less favorable
than those of such policy in effect on the date hereof; provided
that such coverage and amounts are available on commercially reasonable terms.

 

(b)        Indemnitee
shall be covered by the Company’s D&O Liability Insurance policies as in
effect from time to time in accordance with the applicable terms to the maximum
extent of the coverage available for any other director under such policy or
policies.  The Company shall, promptly
after receiving notice of a Proceeding as to which Indemnitee is a party or a
participant (as a witness or otherwise), give notice of such Proceeding to the
insurers under the Company’s D&O Liability Insurance policies in accordance
with the procedures set forth in the respective policies.  The Company shall thereafter take all
necessary or desirable actions to cause such insurers to pay, on behalf of Indemnitee,
all amounts payable as a result of such Proceeding in accordance with the terms
of such policies.  The failure or refusal
of any such insurer to pay any

 

13

 

such amount shall not affect
or impair the obligations of the Company under this Agreement.

 

(c)        Upon request by
Indemnitee, the Company shall provide to Indemnitee copies of the D&O
Liability Insurance policies as in effect from time to time.  The Company shall promptly notify Indemnitee
of any material changes in such insurance coverage.

 

[(d)          The Company
hereby acknowledges that Indemnitee has certain rights to indemnification,
advancement of expenses and/or insurance provided by [Insert name of applicable
Sponsor] and/or certain of its affiliates (collectively, the “Sponsor Indemnitors”). 
The Company hereby agrees (i) that it is the indemnitor of first
resort (i.e., its obligations to Indemnitee are primary and any obligation of
the Sponsor Indemnitors to advance expenses or to provide indemnification for
the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that
it shall be required to advance the full amount of Expenses incurred by
Indemnitee and shall be liable for the full amount of all Expenses and
Liabilities to the extent legally permitted and as required by the terms of
this Agreement and the Company’s certificate of incorporation and bylaws (or
any other agreement between the Company and Indemnitee), without regard to any
rights Indemnitee may have against the Sponsor Indemnitors, and, (iii) that
it irrevocably waives, relinquishes and releases the Sponsor Indemnitors from
any and all claims against the Sponsor Indemnitors for contribution,
subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no
advancement or payment by the Sponsor Indemnitors on behalf of Indemnitee with
respect to any claim for which Indemnitee has sought indemnification from the
Company shall affect the foregoing and the Sponsor Indemnitors shall have a
right of contribution and/or be subrogated to the extent of such advancement or
payment to all of the rights of recovery of Indemnitee against the
Company.  The Company and Indemnitee
agree that the Sponsor Indemnitors are express third party beneficiaries of the
terms of this Section 7.01(d).]*

 

ARTICLE
8

MISCELLANEOUS

 

Section 8.01. 
Nonexclusivity of Rights.  The
rights of indemnification and advancement of Expenses provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled to 

 

* Bracketed language to be included in
indemnification agreements between the Company and the Sponsor Indemnitors’
designees.

 

14

 

under applicable law, the Company’s
certificate of incorporation or bylaws, any other agreement, any vote of
stockholders or resolution of directors or otherwise.  No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee
under this Agreement in respect of any action taken or omitted by such
Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.  To the extent that a change in
Delaware law, whether by statute or judicial decision, permits greater
indemnification or advancement of Expenses than would be afforded currently
under this Agreement, it is the intent of the parties hereto that Indemnitee
shall be entitled under this Agreement to the greater benefits so afforded by
such change.  No right or remedy herein
conferred is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other right or remedy.

 

Section 8.02.  Subrogation,
etc.  (a) [Except as provided in Section 7.01(d),]
in the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee [(other than against the Sponsor Indemnitors)], who shall execute
all papers required and take all actions necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

(b)        [Except as provided in Section 7.01(d),] the Company
shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (or for which advancement is provided
hereunder) if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

 

(c)        [Except as provided in Section 7.01(d),] the Company’s
obligation to indemnify or advance Expenses hereunder to Indemnitee who is or
was serving at the request of the Company as a director, officer, employee,
consultant or agent of any other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of Expenses
from such Enterprise.

 

Section 8.03.  Contribution.  To the fullest extent permissible
under applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee
or on his behalf, whether for Liabilities and/or Expenses in connection with a
Proceeding or other expenses relating to an indemnifiable event under this
Agreement, in such proportion as is deemed fair and reasonable in light of all
of the circumstances in order to reflect (i) the relative benefits
received by the

 

15

 

Company and Indemnitee as a result of the
event(s) and/or transaction(s) giving rise to such action, suit or
other proceeding; and/or (ii) the relative fault of the Company (and its
directors, officers, employees and agents) and Indemnitee in connection with
such event(s) and/or transaction(s).

 

Section 8.04. 
Amendment.  This
Agreement may not be modified or amended except by a written instrument
executed by or on behalf of each of the parties hereto.

 

Section 8.05. 
Waivers.  The
observance of any term of this Agreement may be waived (either generally or in
a particular instance and either retroactively or prospectively) only by a
writing signed by the party against which such waiver is to be asserted.  Unless otherwise expressly provided herein,
no delay on the part of any party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party hereto of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder.

 

Section 8.06.  Expenses.  (a) The Company shall pay all
costs and expenses (including fees and expenses of counsel) incurred by the
Company and Indemnitee in connection with the preparation of this Agreement.

 

(b)        The Company
shall indemnify and hold Indemnitee harmless from any and all Expenses
(including fees and expenses of counsel and expenses incurred in connection
with the preparation and forwarding of statements to the Company to support an
advancement of Expenses hereunder) actually and reasonably incurred by
Indemnitee or on his behalf in seeking (whether through a judicial proceeding
or arbitration (including any and all appeals resulting therefrom) or
otherwise) to enforce, interpret or defend any rights against the Company for
indemnification or advancement of Expenses (whether under this Agreement or
otherwise) or to recover under any liability insurance policy maintained by any
person for the benefit of Indemnitee in connection with the performance of his
duties for or on behalf of the Company. 
The Company shall pay (or reimburse Indemnitee for the payment of) any
such Expenses within 10 days after receipt by the Company of a written request
for the payment of such amounts, which request may be delivered to the Company
at such time or from time to time as Indemnitee deems appropriate in his sole
discretion (whether prior to or after final disposition of any such
matter).  Indemnitee shall have no
obligation to reimburse any amounts paid by the Company pursuant to this Section 8.06(b).

 

Section 8.07.  Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties hereto with respect to the
matters covered herein

 

16

 

and supersedes all prior oral, written or
implied understandings or agreements with respect to the matters covered
herein.  This Section 8.07 shall not
be construed to limit any other rights Indemnitee may have under the Company’s
certificate of incorporation or bylaws, applicable law or otherwise.

 

Section 8.08. 
Severability.  If any
provision or provisions of this Agreement shall be held to be invalid, illegal
or unenforceable for any reason whatsoever: 
(a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by applicable law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested thereby.

 

Section 8.09.  Notices.  All notices, requests and other
communications under this Agreement shall be in writing (including facsimile
transmission or electronic mail (“e-mail”) transmission so long as a
confirmation of receipt of such e-mail is requested and received).  All such notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00 p.m. on a business day in the place of
receipt.  Otherwise, any such notice, request
or communication shall be deemed to have been received on the next succeeding
business day in the place of receipt. 
The address for notice to a party is as shown on the signature page of
this Agreement, or such other address as any party shall have given by written
notice to the other party as provided above.

 

Section 8.10.  Binding
Effect.  (a) The Company expressly
confirms and agrees that it has entered into this Agreement and assumed the
obligations imposed on it hereby in order to induce Indemnitee to serve as a
director of the Company, and the Company acknowledges that Indemnitee is
relying upon this Agreement in serving as a director of the Company.

 

(b)        This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns, including any
direct or indirect successor by purchase, merger, consolidation or otherwise to
all or substantially all of the business and/or assets of the Company, heirs,
executors, administrators or other successors. 
The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all or
substantially all or a

 

17

 

substantial part of the
business or assets of the Company, by written agreement in form and substance
reasonably satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

 

(c)        The
indemnification and advancement of expenses provided by this Agreement shall
continue as to a person who has ceased to be a director, officer, employee,
consultant or agent or is deceased and shall inure to the benefit of the heirs,
executors, administrators or other successors of the estate of such person.

 

Section 8.11.  Governing
Law.  This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware, without regard to its conflict of laws rules.

 

Section 8.12.  Consent To Jurisdiction.  Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 6.01, the Company
and Indemnitee hereby irrevocably and unconditionally (i) agree that any
action, suit or other proceeding arising out of or in connection with this
Agreement shall be brought only in the Delaware Chancery Court and any court to
which an appeal may be taken in such action, suit or other proceeding (the “Delaware Court”), and not in any other state or federal
court in the United States of America or any court in any other country, (ii) consent
to submit to the exclusive jurisdiction of the Delaware Court for purposes of
any action, suit or other proceeding arising out of or in connection with this
Agreement, (iii) appoint, to the extent such party is not otherwise
subject to service of process in the State of Delaware, The Corporation Trust
Company, Wilmington, Delaware as its agent in the State of Delaware as such
party’s agent for acceptance of legal process in connection with any such
action or proceeding against such party with the same legal force and validity
as if served upon such party personally within the State of Delaware, (iv) waive
any objection to the laying of venue of any such action, suit or other
proceeding in the Delaware Court, and (v) waive, and agree not to plead or
to make, any claim that any such action, suit or other proceeding brought in
the Delaware Court has been brought in an improper or inconvenient forum.

 

Section 8.13. 
Headings.  The Article and
Section headings in this Agreement are for convenience of reference only,
and shall not be deemed to alter or affect the meaning or interpretation of any
provisions hereof.

 

Section 8.14.  Counterparts.  This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original but all of which together shall constitute one and the same
Agreement.  Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.

 

18

 

IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered to be effective as of the date first above written.

 

 

	
   

  	
   

  	
  COBALT
  INTERNATIONAL ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [INDEMNITEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
  Attention:

  

 

19

 

EXHIBIT I

 

FORM OF
CONTRIBUTION AGREEMENT(1)

 

THIS CONTRIBUTION AGREEMENT, dated as of [·] [·], 2009 (this “Agreement”), is
entered into by and among Cobalt International Energy, Inc., a Delaware
corporation (“Cobalt”)
and the other parties signatory hereto (the “Holders”)
who hold, directly or indirectly, Class A Interests (“Class A Interests”)
in Cobalt International Energy, L.P., a Delaware limited partnership (the “Partnership”).

 

RECITALS

 

WHEREAS, Cobalt is a party to a Reorganization
Agreement, dated as of December [·], 2009 by and among the Partnership,
Cobalt, Cobalt MergerSub, Inc., a Delaware corporation and wholly-owned
subsidiary of Cobalt, and the other parties signatory thereto (the “Reorganization Agreement”).  Capitalized terms used herein but not
otherwise defined herein shall have the meaning ascribed to such terms in the
Reorganization Agreement;

 

WHEREAS, the Holders
own Class A Interests of the Partnership (the “Contributed Class A Interests”) and/or equity interests in one or more Special
Purpose Holdcos (as defined in the Reorganization Agreement) that hold Class A
Interests of the Partnership (the “Contributed Holdcos,”
and together with the Contributed Class A Interests, the “Contributed Interests”), in each
case as set forth on Schedule I hereto;

 

WHEREAS, pursuant to Section 3.02
of the Reorganization Agreement, after the Contribution and prior to the
Effective Time, each
Investor (as defined in the Partnership Agreement) has agreed to contribute or
cause to be contributed (including through a direct or indirect transfer of
such Investor) to Cobalt the
Contributed Interests in exchange for a number of shares of common stock
of Cobalt, par value $0.01 per share (the “Common Stock”),
determined as set forth herein;

 

WHEREAS, upon the contribution
of the Contributed Interests, Cobalt will become the direct owner of the
Contributed Class A Interests and certain Contributed Holdcos and the
indirect owner of certain other Contributed Holdcos and all of the Class A
Interests owned by the Contributed Holdcos; and

 

WHEREAS, the parties hereto intend that the
contributions contemplated by this Agreement shall be treated as exchanges
qualifying under Section 351 of the Code.

 

NOW, THEREFORE, in consideration of the premises and
the mutual agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

(1) Each Sponsor Group will execute a separate
Contribution Agreement.  Applicable
private equity funds of each Sponsor Group will agree to stand behind the
representations made by and other obligations of its affiliated Holders.

 

 

ARTICLE I

CONTRIBUTION

 

Section 1.1             Contribution.  Upon the terms and subject to the conditions set forth
herein, effective immediately prior to the Effective Time, each Holder hereby
contributes, assigns, conveys and delivers its Contributed Interests to Cobalt,
and Cobalt, in exchange therefor, hereby agrees to issue and deliver, subject
to Section 3.10 of the Reorganization Agreement, to each Holder,
immediately prior to the Effective Time, such number of shares of Common Stock
set forth opposite such Holder’s name on Schedule I hereto.

 

Section 1.2             Deliveries. 
Contemporaneously with the execution of this Agreement, (a) each
Holder agrees to deliver to Cobalt certificates representing the Contributed
Interests, to the extent certificated, duly endorsed or accompanied by
appropriate powers or, in the case of the Contributed Class A Interests,
such other documents required by the Partnership Agreement as may be necessary,
in order to facilitate the contribution of the Contributed Interests under this
Agreement and (b) Cobalt shall deliver to each Holder a certificate or
certificates with appropriate legends in accordance with the terms of the
Stockholders Agreement, registered in the name of such Holder or its designee,
representing the number of shares of Common Stock to be issued to such Holder
pursuant to Section 1.1 hereof.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Section 2.1             Each Holder contributing Class A
Interests directly to Cobalt in the exchange contemplated by Section 1.1
of this Agreement represents and warrants to Cobalt that:

 

(i)            Such Holder has
good and valid title in and to the Class A Interests held by such person,
free and clear of all Liens; and

 

(ii)           Upon
consummation of the exchange, Cobalt will have acquired good and valid title in
and to such Class A Interests, free and clear of all Liens.

 

(b)        Each Holder
that indirectly owns Class A Interests through one or more Special Purpose
Holdcos and is contributing all of the equity or other ownership interests in
one or more such Special Purpose Holdcos to Cobalt in the exchange contemplated
by Section 1.1 of this Agreement, represents and warrants to Cobalt that:

 

(i)            Each such
Special Purpose Holdco and each of its subsidiaries, if any, and each Special
Purpose Holdco Shared Subsidiary that is partially owned directly or indirectly
by such Special Purpose Holdco, if any, is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization and has all
powers and all material governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted;

 

(ii)           Other than
pursuant to the Partnership Agreement, the Equity Commitment Letter and the Rig
Guarantee, there are no liabilities with respect to any 

 

2

 

such Special Purpose Holdco or any of its subsidiaries or any Special
Purpose Holdco Shared Subsidiary that is partially owned directly or indirectly
by such Special Purpose Holdco, of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability;

 

(iii)          Each such
Special Purpose Holdco and each of its direct or indirect subsidiaries, if any,
and each Special Purpose Holdco Shared Subsidiary that is partially owned
directly or indirectly by such Special Purpose Holdco, if any has no assets
other than Class A Interests and the interests in such subsidiaries, if
any, and the interests in each such Special Purpose Holdco Shared Subsidiary,
if any;

 

(iv)          Except as set
forth in Schedule II that is reasonably acceptable to Cobalt, each such Special
Purpose Holdco is a domestic corporation for U.S. federal income tax purposes,
and each wholly owned subsidiary thereof is a domestic wholly-owned entity that
is disregarded for U.S. federal income tax purposes, and each Special Purpose
Holdco Shared Subsidiary that is partially owned directly or indirectly by such
Special Purpose Holdco is a domestic entity treated as a partnership for U.S.
federal income tax purposes;

 

(v)           Each such
Special Purpose Holdco that directly owns Class A Interests has good and
valid title in and to the Class A Interests held by such entity, free and
clear of all Liens;

 

(vi)          With respect to
each such Special Purpose Holdco that indirectly owns Class A Interests
through one or more wholly-owned subsidiaries, such Special Purpose Holdco has,
directly or indirectly, good and valid title in and to all of the equity or
other ownership interests of each such subsidiary, free and clear of all Liens
and each such subsidiary holding Class A Interests has good and valid
title in and to the Class A Interests held by such entity, free and clear
of all Liens;

 

(vii)         With respect to
each Special Purpose Holdco that indirectly owns Class A Interests through
one or more Special Purpose Holdco Shared Subsidiaries, (i) such Special
Purpose Holdco (or its wholly owned subsidiary) has good and valid title in and
to all of the equity or other ownership interests of each such Special Purpose
Holdco Shared Subsidiary held directly or indirectly by such Special Purpose
Holdco, free and clear of all Liens and (ii) each such Special Purpose
Holdco Shared Subsidiary holding Class A Interests has good and valid
title in and to the Class A Interests held by such entity, free and clear
of all Liens; and

 

(viii)        Upon
consummation of the contribution contemplated by Section 1.1, Cobalt will
have acquired good and valid title in and to all of the outstanding equity or
other ownership interests in each such Special Purpose Holdco contributed
pursuant to Section 1.1 and its subsidiaries, and to all of the equity or
other ownership interests in each Special Purpose Holdco Shared Subsidiary, if
any, free and clear of all Liens.

 

3

 

ARTICLE III

CERTAIN TAX MATTERS

 

Section 3.1             Preparation
and Filing of Special Purpose Holdco and Special Purpose Holdco Shared
Subsidiary Tax Returns. Each Holder contributing one or more Special Purpose
Holdcos to Cobalt, directly or indirectly, shall timely prepare or cause to be
prepared all Tax Returns for each such Special Purpose Holdco (and any Special
Purpose Holdco Shared Subsidiary in which such Special Purpose Holdco holds an
interest, directly or indirectly) for all periods ending on or prior to the
date of the closing of the IPO (the “Effective Date”)
that are required to be filed by such Special Purpose Holdco (and any Special
Purpose Holdco Shared Subsidiary in which such Special Purpose Holdco holds an
interest, directly or indirectly) after the Effective Date (the “Pre-Effective Date Returns”),
subject to the reasonable advance review of Cobalt, and at least five (5) business
days before the respective due dates for filing such Pre-Effective Date
Returns, deliver them to Cobalt for signing and filing.  The applicable Holder shall be responsible
for all Tax liabilities with respect to such Tax Returns; provided that,
in the case of a Special Purpose Holdco Shared Subsidiary, such obligation
shall be shared, jointly and severally, by each Holder directly or indirectly
contributing a portion of such Special Purpose Holdco Shared Subsidiary
pursuant to the Exchange (the “Shared Holders”).  Cobalt will (i) cooperate fully in
connection with the preparation and filing of Tax Returns pursuant to this Section 3.1,
(ii) provide to the applicable Holder copies of any K-1s and other Tax
information received by each Special Purpose Holdco (and any Special Purpose
Holdco Shared Subsidiary in which such Special Purpose Holdco holds an
interest, directly or indirectly) for all periods that begin before and end on
or after the Effective Date, and (iii) provide information to each
applicable Holder regarding the apportionment of items of income, gain, loss,
deduction and credit among periods ending on or prior to the Effective Date and
periods beginning after the Effective Date. 
No amended Tax Returns for any periods ending on or prior to the
Effective Date shall be filed by Cobalt for any Special Purpose Holdco or any
Special Purpose Holdco Shared Subsidiary without the prior written consent of
the applicable Holder(s).  Cobalt shall
timely prepare and file or cause to be prepared and filed all Tax Returns for
each Special Purpose Holdco and any Special Purpose Holdco Shared Subsidiary
for any taxable period that includes (but does not end on) the Effective Date
(each such period, a “Straddle Period”,
and each such Tax Return, a “Straddle Return”),
subject to the reasonable advance review of the applicable Holder, provided that (i) Cobalt shall consult with the
applicable Holder(s) on any items on such Straddle Returns that relate to
transactions or events of the Special Purpose Holdco or Special Purpose Holdco
Shared Subsidiary, as the case may be, occurring on or prior to the Effective
Date, (ii) no Straddle Return shall be filed without the consent of the
applicable Holder(s), such consent not to be unreasonably withheld and (iii) the
applicable Holder(s) shall reimburse Cobalt for 50% of Cobalt’s reasonable
out-of-pocket costs and expenses incurred in connection with the preparation
and filing of any Straddle Return.  The
applicable Holder(s) shall be responsible for all Tax liabilities with
respect to any Straddle Return allocable to periods ending on or prior to the
Effective Date; provided that, in the case of a
Special Purpose Holdco Shared Subsidiary, such obligation shall be shared,
jointly and severally, by the Shared Holders.

 

Section 3.2             Procedures Relating to Tax Claims.  If Cobalt or an affiliate of Cobalt
receives notice of the assertion or commencement of any claim, audit,
examination, proceeding, litigation or other proposed change or adjustment by
any taxing authority or other person (a “Tax Claim”) with respect to a
taxable period of a Special Purpose Holdco or any Special Purpose 

 

4

 

Holdco Shared Subsidiary ending on, prior to, or
including the Effective Date, then promptly after receipt of such notice, the
party receiving notice of such Tax Claim shall notify the applicable Holder of
such notice.  Such notice will contain
factual information (to the extent known) describing the asserted Tax Claim in
reasonable detail and will include copies of any notice or other document
received from any taxing authority in respect of any such asserted Tax
Claim.  The applicable Holder(s) shall
have the right to control, defend or prosecute (A) any Tax Claim relating
to a period ending on or prior to the Effective Date and (B) any Tax Claim
relating to a Straddle Period to the extent such Tax Claim relates to
transactions or events of the Special Purpose Holdco or the Special Purpose
Holdco Shared Subsidiary, as the case may be, occurring on or prior to the
Effective Date, by all appropriate proceedings, and Cobalt shall (i) cooperate
fully in connection with such Tax Claim and (ii) provide all necessary
approvals, including powers of attorney, needed to defend, control, or
prosecute such Tax Claim; provided, however,
that (x) Cobalt shall be kept informed of and have the right to
participate in such Tax Claim and (y) the applicable Holder(s) shall
not, without the prior written consent of Cobalt, which consent shall not be
unreasonably withheld, delayed or conditioned, enter into any compromise or
settlement of such Tax Claim that could reasonably be expected to have an
adverse effect on Cobalt or any of its affiliates; provided,
further, that in the case of a Special Purpose Holdco Shared
Subsidiary, such right shall be shared by the Shared Holders in a manner
determined by such Holders.  Except as
otherwise provided in this Section 3.2, Cobalt shall control, defend or
prosecute any Tax Claim relating to Straddle Periods by all appropriate
proceedings and the applicable Holder(s) shall cooperate fully, as and to
the extent requested by Cobalt, in connection with such Tax Claims provided, however, that (1) the applicable Holder(s) shall
be kept informed of and have the right to participate in such Tax Claim and (2) Cobalt
shall not, without the prior written consent of the applicable Holder(s), which
consent shall not be unreasonably withheld, delayed or conditioned, enter into
any compromise or settlement of such Tax Claim that could reasonably be
expected to have an adverse effect on the applicable Holder(s) or any of
its affiliates.  The applicable Holder(s) shall
reimburse Cobalt for all reasonable out-of-pocket costs and expenses incurred
in connection with controlling, defending or prosecuting any Tax Claim pursuant
to this Section 3.2 to the extent such costs and expenses are attributable
to a Tax Claim arising out of transactions or events of a Special Purpose
Holdco or a Special Purpose Holdco Shared Subsidiary occurring on or prior to
the Effective Date; provided that,
in the case of a Special Purpose Holdco Shared Subsidiary, such reimbursement
obligation shall be shared, jointly and severally, by the Shared Holders.

 

Section 3.3             Tax Refunds.  Any refund of
Taxes paid by a Holder pursuant to this Article III and any amounts
credited against Tax (but only when and to the extent such credit results in a
reduction in current Taxes payable by Cobalt or any subsidiary thereof) to
which a Special Purpose Holdco or a Special Purpose Holdco Shared Subsidiary
becomes entitled, that relate to Taxes for taxable periods or portions thereof
ending on or before the Effective Date shall be for the account of such Holder,
and Cobalt shall pay
over to such Holder
an amount equal to such refund or credit (less any related expenses incurred by
Cobalt to obtain such Tax refund or credit) no more than ten (10) days
after receipt of such refund or credit. 
Cobalt and the applicable Holder shall cooperate fully regarding the
filing of any claim for refund or credit that is for the benefit of such Holder
under this Section 3.3.  
Notwithstanding any other provision in this Section 3.3, to the
extent any taxing authority disallows any Tax refund or Tax credit with respect
to which the Company has made a payment to the applicable Holder pursuant to
this Section 3.3, the Company shall notify such Holder of such disallowed
Tax refund or credit, and 

 

5

 

such Holder shall pay to Cobalt an amount equal to
such disallowed Tax refund or credit within five (5) business days after
such notification.  In the case of a
Special Purpose Holdco Shared Subsidiary, the rights and obligations of this Section 3.3
shall be shared among the Shared Holders, and the obligations shall be joint
and several.

 

Section 3.4             Straddle Periods. 
For all purposes under this Agreement, in the case of Taxes that are
payable with respect to any Straddle Period, the portion of any such Tax that
is allocable to the portion of the period ending on the close of the Effective
Date shall be (i) in the case of Taxes that are (x) based upon or
related to income or receipts, (y) imposed in connection with the sale or
other transfer or assignment of property (real or personal, tangible or
intangible) and (z) employment, social security or other similar taxes,
deemed equal to the amount which would be payable for such period if the taxable
year ended at the end of the Effective Date; and (ii) in the case of Taxes
imposed on a periodic basis with respect to any assets or otherwise measured by
the level of any item, deemed to be the amount of such Taxes for the entire
period (or, in the case of such Taxes determined on an arrears basis, the
amount of such Taxes for the immediately preceding period) multiplied by a
fraction the numerator of which is the number of calendar days in the period
ending on the Effective Date and the denominator of which is the number of
calendar days in the entire period.

 

Section 3.5             Intended Tax Treatment. 
Each party hereto agrees that (1) the exchange contemplated by Section 1.1
of this Agreement, (2) the receipt of shares of Cobalt common stock
pursuant to the Merger (other than restricted shares as to which an election
under Section 83(b) of the Code will not be made) and (3) the
issuance of shares of Cobalt common stock in the IPO are intended collectively
to be treated as exchanges qualifying under Section 351 of the Code, and
that it will not take any position on any Tax Return or other action
inconsistent with such intended treatment. 
Each party hereto agrees to treat the contribution of Class A
interests to [applicable newly formed Special Purpose Holdco] as a transaction
qualifying under Section 351(a) of the Code, and will not take any
position on any Tax Return or other action inconsistent with such intended
treatment, except as required by applicable law.

 

Section 3.6             Reporting.  Cobalt agrees
that it will comply with the reporting requirements of Treasury Regulation Section 1.351-3(b) with
respect to the transactions described herein.

 

Section 3.7             Tax Filings. 
Cobalt and the Surviving Entity each hereby acknowledge that one or more
Class A Limited Partners or affiliates of such Class A Limited
Partners may be required to make certain Tax filings with respect to Section 897
of the Code and related provisions to receive nonrecognition treatment with
respect to (i) a transfer of Class A Interests or an entity by such
person to Cobalt pursuant to Section 1.1 of this Agreement and (ii) if
applicable, a transfer of Class A Interests by such person to a Special
Purpose Holdco, and each of Cobalt and the Surviving Entity agree to reasonably
cooperate with such person in the making of such Tax filings and not to take
any position on any Tax Return or other action inconsistent with the treatment
of such transfers as qualifying for nonrecognition treatment under Section 351
and Section 897(e) of the Code, and the Treasury regulations
promulgated thereunder, except as required by applicable law.

 

For purposes of this
Agreement:

 

6

 

“Tax” or “Taxes” means all taxes, charges, fees,
levies, or other similar assessments or liabilities, including without
limitation income, gross receipts, ad valorem, premium, excise, real property,
personal property, windfall profit, sales, use, transfer, licensing,
withholding, employment, payroll, and franchise taxes imposed by any
governmental body; and such term shall include any interest, fines, penalties,
assessments, or additions to tax resulting from, attributable to, or incurred
in connection with any such tax or any contest or dispute thereof, and

 

“Tax Return” or “Tax Returns” means any return (including any
information return), report, statement, schedule, notice, form, or other
document or information filed with or submitted to, or required to be filed
with or submitted to, any governmental body in connection with the
determination, assessment, collection, or payment of any Tax or in connection
with the administration, implementation, or enforcement of or compliance with
any laws relating to any Tax.

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1             Indemnification. 
Each Holder shall jointly and severally indemnify, defend and hold
harmless Cobalt, its Affiliates, and the officers, directors, employees,
agents, representatives, successors and assigns of any of the foregoing (each a
“Cobalt Indemnitee”) against all claims, losses, liabilities and damages
incurred by any Cobalt Indemnitee arising out of or relating to any breach of
any representation or warranty made by Holders in Article II of this
Agreement.

 

Section 4.2             Notices.  All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission and
electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is
requested and received) and shall be given:

 

if to Cobalt, to:

 

	
  Cobalt International
  Energy, Inc.

  
	
  Two Post Oak Central

  
	
  1980 Post Oak Blvd.,
  Suite 1200

  
	
  Houston, TX 77056

  
	
  Attention: Joseph H.
  Bryant

  
	
  Facsimile No.: (713)
  579-9184

  
	
  E-mail: joe.bryant@cobaltintl.com

  

 

7

 

with a copy to:

 

	
  Davis Polk &
  Wardwell LLP

  
	
  450 Lexington Avenue

  
	
  New York, New York
  10017

  
	
  Attention:

  	
  Christopher Mayer

  
	
   

  	
  Richard D.
  Truesdell, Jr.

  
	
  Facsimile
  No.:

  	
  (212) 701-5338

  
	
   

  	
  (212) 701-5674

  
	
  E-mail:

  	
  chris.mayer@davispolk.com

  
	
   

  	
  richard.truesdell@davispolk.com

  

 

if to any Holder, to such Holder at the
address set forth on Schedule III hereto:

 

with a copy to:

 

	
  Fried, Frank, Harris,
  Shriver & Jacobson LLP

  
	
  One New York Plaza

  
	
  New York, New York
  10004

  
	
  Attention:

  	
  Robert C. Schwenkel

  
	
   

  	
  Murray Goldfarb

  
	
  Facsimile No.:

  	
  (212) 859-4000

  
	
  E-mail:

  	
  robert.schwenkel@friedfrank.com

  
	
   

  	
  murray.goldfarb@friedfrank.com

  

 

or to such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the other parties
hereto.  All such notices, requests and
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5:00 p.m. on a business day in the
place of receipt.  Otherwise, any such
notice, request or communication shall be deemed to have been received on the
next succeeding business day in the place of receipt.

 

Section 4.3             Amendments and Waivers.  Any provision of this Agreement may be amended or
waived with the written approval of Cobalt and each of the Holders that would
be adversely affected by such amendment or waiver.  No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by applicable Law.

 

Section 4.4             Binding Effect; Benefit;
Assignment.  The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. 
No provision of this Agreement is intended to confer any rights,
benefits, remedies, obligations or liabilities hereunder upon any person other
than the parties hereto and their respective successors and assigns.  No party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto, except that Cobalt may transfer or assign
its rights and obligations under 

 

8

 

this Agreement, in whole or from time to time in part,
to one or more of its affiliates at any time; provided
that such transfer or assignment shall not relieve Cobalt of its obligations
hereunder or enlarge, alter or change any obligation of any Holder, and each
Holder may transfer or assign its rights and obligations under this Agreement,
in whole or from time to time in part, to any person that such Holder or any of
its affiliates is permitted to assign any portion of its Partnership Interests
pursuant to the terms of the Partnership Agreement; provided
that such transfer or assignment shall not relieve such Holder of its
obligations hereunder or enlarge, alter or change any obligation of Cobalt.

 

Section 4.5             Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of law rules of such state.

 

Section 4.6             Jurisdiction.  The parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby (whether brought by any party or any of its affiliates or against any
party or any of its affiliates) shall be brought in the Delaware Chancery Court
or, if such court shall not have jurisdiction, any federal court located in the
State of Delaware or other Delaware state court, and each of the parties hereby
irrevocably consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection that it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. 
Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 2.1 shall be deemed effective
service of process on such party.

 

Section 4.7             WAIVER OF JURY TRIAL. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 4.8             Counterparts; Effectiveness.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by all of the other parties hereto.  Until and unless each party has received a
counterpart hereof signed by the other party hereto, this Agreement shall have
no effect and no party shall have any right or obligation hereunder (whether by
virtue of any other oral or written agreement or other communication).

 

Section 4.9             Entire Agreement.  This Agreement and the agreements referenced herein
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.

 

9

 

Section 4.10           Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
Governmental Authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party.  Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.

 

Section 4.11           Specific Performance.  The parties hereto agree that irreparable damage would
occur if any provision of this Agreement were not performed in accordance with
the terms hereof and that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically
the performance of the terms and provisions hereof, in addition to any other
remedy to which they are entitled at law or in equity.

 

[The remainder of this page has been intentionally left blank; the
next 

page is the signature page.]

 

10

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective authorized officers as
of the date set forth on the cover page of this Agreement.

 

 

	
   

  	
   

  	
  COBALT INTERNATIONAL ENERGY,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [HOLDERS]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE
I

 

	
  Holder

  	
   

  	
  Class A Interests

  	
   

  	
  Contributed

  Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

SCHEDULE II

 

	
  Holder

  	
   

  	
  Number of Shares of Common

  Stock to be Issued to Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

SCHEDULE III

ADDRESS OF HOLDERS

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