Document:

exv10w20

EXHIBIT 10.20

FORM OF ZAZA NOTE

	 	 	 

	$[___________]

	 	New York, New York
	 

	 	[l], 2011

          ZaZa Energy, LLC, a Texas limited liability company (“Maker”), hereby promises to pay
to [ZaZa Member], (“Payee”), on the fourth anniversary of the date hereof (the
“Maturity Date”), in lawful money of the United States of America, the principal amount of
[_______] DOLLARS ($[______]), and to pay simple interest at the rate of 8% per annum on the
outstanding principal balance hereof from the date hereof until payment of the principal balance in
full or in part without premium or penalty on the Maturity Date (or any extension thereof),
pursuant to the terms and conditions set forth in this secured, non-negotiable, non-transferable
promissory note (this “Note”). Interest payments shall be made in cash on the last day of
each month and on the Maturity Date.

          If the obligation of Maker to pay any principal or interest on this Note becomes due on a
Saturday, Sunday or day on which banks in New York State are permitted or required to be closed,
then such due date shall be extended to the next succeeding day that is not a Saturday, Sunday or a
day on which banks in New York State are permitted or required to be closed. All payments of
principal and interest due hereunder shall be paid in lawful money of the United States of America
by wire transfer at the account specified by Payee.

          This Note shall be secured by a pledge of collateral in favor of Payee in accordance with that
certain security agreement executed by and between Maker and Payee concurrently with the execution
of this Note (the “Security Agreement”).

          The Maker may prepay all or a portion of the principal amount hereof, in whole or in part at
any time, and to repay any interest accrued on the principal amount hereof at any time and from
time to time, in each case, without premium or penalty. If Maker, ZaZa Energy Corporation, a
Delaware corporation (“Parent”), or any of their subsidiaries consummate any debt or equity
financing (other than a revolving credit facility), Maker shall, within five (5) days of the
consummation of such financing, prepay a portion of the Note equal to the lesser of (i) all amounts
of accrued interest and outstanding principal hereunder or (ii) twenty percent (20%) of the net
cash proceeds of such financing multiplied by a fraction, the numerator of which is the outstanding
balance of this Note and the denominator of which is the sum of the outstanding balance of this
Note and the other similar notes issued by Maker or Parent on or about the date of this Note to
Todd Brooks, Gaston Kearby, John Hearn, Lara Energy, Inc., Omega Energy Corp. and Blackstone Oil &
Gas, LLC (a “Mandatory Prepayment”), which Mandatory Prepayment shall be applied first to
any interest accrued on the outstanding principal amount hereof at the time of such prepayment and
second to the outstanding principal amount hereof. Maker shall also make prepayments, if
applicable, as required under the terms of the Contribution Agreement (as hereinafter defined).

          Payee represents that it is acquiring this Note for investment and not with a view to the sale
or distribution thereof.

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          Maker represents, warrants and covenants that (i) the issuance and delivery of this Note has
been duly and validly authorized and (ii) this Note is a valid and legally binding obligation of
the Maker, enforceable in accordance with its terms, except as enforceability may be limited by
bankruptcy and similar laws affecting creditors’ rights generally and that the granting of specific
performance lies at the discretion of a court in equity.

          This Note evidences secured, non-negotiable and non-transferable indebtedness of the Maker.

          If an Event of Default (as defined below) under this Note shall occur and be continuing, then
the Payee shall have the right to declare the entire principal balance and all accrued interest
under this Note due and payable. An “Event of Default” shall occur hereunder upon the occurrence
of any one or more of the following events with respect to Maker: (i) if Maker shall fail to make
any payment of principal or interest on this Note required hereby when due; (ii) any security
interest purported to be created by the Security Agreement shall cease to be, or shall be asserted
by the Maker not to be, a valid, perfected, first priority) security interest in the collateral
covered thereby; (iii) default shall be made in the due observance or performance by Maker of any
covenant, condition or agreement contained in the Security Agreement and such default shall
continue unremedied for a period of 30 days after the receipt of notice thereof by the Maker from
the Payee, (iv) if, pursuant to or within the meaning of the United States Bankruptcy Code or any
other federal or state law relating to insolvency or relief of debtors (a “Bankruptcy
Law”), Maker shall (1) commence a voluntary case or proceeding; (2) consent to the entry of an
order for relief against it in an involuntary case; (3) consent to the appointment of a trustee,
receiver, assignee, liquidator or similar official; (4) make an assignment for the benefit of its
creditors; or (5) admit in writing its inability to pay its debts as they become due; or (v) if a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (1) is for
relief against Maker in an involuntary case; (2) appoints a trustee, receiver, assignee, liquidator
or similar official for Maker or substantially all of Maker’s properties; or (3) orders the
liquidation of Maker, and in each case the order or decree is not dismissed within 30 days.

          All notices in respect of this Note shall be given by hand delivery, by a recognized overnight
courier service, or by registered or certified United States mail, return receipt requested, to
Maker or Payee and their respective agents at their addresses set forth in Section 7.02 of the
Contribution Agreement (the “Contribution Agreement”), dated as of August 9, 2011, among
Parent, Payee and the other members of Maker, it being understood that notices to Maker should be
sent to the address specified for Parent in the Contribution Agreement. Any notice deemed to have
been given two business days after delivery to the courier service or five days after deposited in
the U.S. mail, as the case may be.

          This Note is not transferable or assignable by its holder without the prior written consent of
the Maker.

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          Maker covenants and agrees, and Payee by its acceptance of this Note likewise covenants and
agrees, that the payment of the principal of this Note is subordinated, to the extent and in the
manner provided herein, to the prior payment in full of all Senior Indebtedness (as hereinafter
defined) and that the subordination is for the benefit of the lenders under such Senior
Indebtedness (the “Lenders”). Maker, and Payee by its acceptance of this Note likewise,
hereby (i) authorizes each Lender to demand specific performance of the terms hereof, whether or
not Maker shall have complied with any of the provisions hereof applicable to it, at any time when
Maker shall have failed to comply with any provisions hereof which are applicable to it, and (ii)
irrevocably waives any defense based on the adequacy of a remedy at law, which might be asserted as
a bar to such remedy of specific performance. Upon any payment of any amounts hereunder by Maker to
Payee, or upon any distribution of assets of Maker in any dissolution, winding up, liquidation or
reorganization (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment
for the benefit of creditors or otherwise):

     (i) The Lenders shall first be entitled to receive payment in full in cash of the
Senior Indebtedness before Payee is entitled to receive any payment on account of any
obligations evidenced hereby; provided that so long as no Default or Event of
Default (as such terms are defined in the definitive agreements governing any Senior
Indebtedness) shall have occurred and continue under any definitive agreement governing any
Senior Indebtedness, Maker may pay to Payee and Payee may receive for itself and not for
the benefit of the Lenders regularly scheduled payments of interest hereunder and Mandatory
Prepayments in accordance with the terms hereof;

     (ii) Any payment or distribution of assets of Maker of any kind or character, whether
in cash, property or securities, to which Payee would be entitled except for the provisions
hereof, shall be paid by the liquidating trustee or agent or other person making such
payment or distribution directly to the Lenders, to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution or provisions therefor to the Lenders; and

     (iii) In the event that notwithstanding the provisions hereof, any payment or
distribution of assets of Maker of any kind or character (other than regularly scheduled
interest and Mandatory Prepayments paid in accordance with clause (i) above), whether in
cash, property or securities, shall be received by Payee on account of this Note before all
Senior Indebtedness is paid in full, such payment or distribution shall be received and
held in trust for and shall be paid over to the Lenders for application to the payment of
the Senior Indebtedness until all of the Senior Indebtedness shall have been paid in full
in cash, after giving effect to any concurrent payment or distribution or provision
therefor to the Lenders.

          No right of any Lender or any other present or future holders of any Senior Indebtedness to
enforce the subordination provisions herein shall at any time in any way be prejudiced or impaired
by any act or failure to act on the part of Maker or Payee or by

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any act or failure to act, in good faith, by any Lender, or by any noncompliance by Maker or
Payee with the terms of this Note, regardless of any knowledge thereof which any Lender may have or
be otherwise charged with; and such indebtedness of Maker to the Payee, if any Lender, after a
Default or Event of Default (as such terms are defined in the definitive agreements governing any
Senior Indebtedness) has occurred, so requests, shall be collected, enforced and received by Payee
as trustee for the Lenders and be paid over to the Lenders on account of Senior Indebtedness, but
without affecting or impairing in any manner the liability of Maker under the provisions of this
Note.

          As used herein, “Senior Indebtedness” means any obligation of Maker or Parent to any
unaffiliated third party for borrowed money which, by its express terms, is senior to the
obligations of Maker under this Note, and all obligations and liabilities (including all principal
and any interest accruing on the foregoing), fees, charges and collection expenses in connection
therewith; provided, however, that in no event shall the principal amount of the
Senior Indebtedness exceed $150,000,000.

          This Note shall be governed by and construed in accordance with the laws and the State of New
York, and the terms hereof may only be changed by written agreement duly executed by Maker and
Payee.

[Remainder of this page has been intentionally left blank]

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IN WITNESS WHEREOF, the Maker has caused this Note to be executed and delivered as of the date
first above written.

	 	 	 	 	 
	 	ZAZA ENERGY, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

5exv10w21

EXHIBIT 10.21

AMENDED AND RESTATED MANAGEMENT AGREEMENT

     THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (herein designated “Agreement”) is made as of
November 18, 2011 (herein designated “Effective Date”) by and between Sequent Petroleum Management,
LLC (previously known as ZaZa Management Resources, LLC and herein designated “Management Firm”), a
Texas limited liability company and ZaZa Energy, LLC (herein designated “Company”), a Texas limited
liability company. The Management Firm and the Company are sometimes referred to individually as a
“Party” and collectively as the “Parties.”

     WHEREAS, the Parties previously entered into a Management Agreement as of February 28, 2011
(the “Original Agreement”); and

     WHEREAS, the Parties desire to amend and restate the Original Agreement.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Parties hereby amend and restate the
Original Agreement as follows:

     1. Purpose. The purpose of this Agreement is to set forth the terms and conditions under which
the Management Firm will provide certain management services to the Company related to the
following: (i) the Company’s oil and gas exploration business and (ii) the Company’s ownership of
certain oil and gas interests, including (without limitation) that business and that ownership of
oil and gas interests contemplated in that certain Exploration and Development Agreement, Eagleford
Shale Area, by and between Hess Corporation and ZaZa Energy, LLC dated April 28, 2010 (herein
designated “Hess Contract”) (herein such management services are collectively designated
“Activities”).

     2. Scope of Work. Company hereby appoints the Management Firm, and the Management Firm hereby
accepts the appointment, on the terms and conditions herein provided, as the operator and manager
of the Activities during the term of this Agreement. Subject to the last sentence of Section 10,
the Management Firm shall have full responsibility and authority in the name and on behalf of
Company to operate and manage the Activities and hereby covenants and agrees to take all actions
necessary or desirable to operate and manage the Activities and to fulfill its duties hereunder,
including without limitation to: (i) operate assets owned by the Company in respect of the
Activities; (ii) collect all revenues and timely pay all obligations relating to the Activities,
including cash calls, fixed expenses and taxes; (iii) ensure the Activities comply with applicable
Federal, state and local laws, permit requirements and regulations; (iv) recruit, hire and train
personnel as needed for the operation of the Activities; (v) establish salary levels, performance
standards, personnel policies and employee benefits for employees; (vi) maintain such bank accounts
as may be necessary or desirable for the operation of the Activities (herein designated “Operating
Accounts”); (vii) comply with all terms of the Company’s agreements, including, but not limited to,
the Hess Contract; and (viii) to take all other actions necessary or desirable to operate and
manage the Activities in accordance with prudent practice and industry standards.

 

 

     Management Firm shall make all distributions from the Operating Accounts for the Company’s
Federal, state or local income or sales tax due in connection with the operation of the Activities.

     Company acknowledges and agrees that all personnel employed or independently contracted with
to perform the Activities shall be deemed the employees or independent contractors of the
Management Firm or its designee, but shall be paid salaries and wages (including employment taxes
and the like) or other remuneration by Company as part of the expenses of the Activities. The
Parties acknowledge and agree that some of such wages and remuneration may be reimbursed to
Management Firm or Company by Hess Corporation in accordance with the Hess Contract.

     It is the intention of the Parties that the Management Firm be responsible for providing
services necessary or desirable for the efficient and orderly management and operations of the
Activities, including (without limitation) as needed for performance of Company’s duties and
discretions under the Hess Contract. The cost and expense of operating the Activities is to be paid
by Company. The Management Firm shall actively utilize staff specialists in such areas as
accounting, budgeting, marketing, reimbursement and third party payments in the management of the
Activities when considered desirable by the Management Firm. The expense of such personnel shall be
included in the reimbursement payments to Management Firm.

     3. Independent Contractor Status. The Management Firm has been retained as and shall act as an
independent contractor with regard to all services it is required to render under this Agreement.
Nothing contained in this Agreement shall be construed to create a relationship of employer and
employee between the Company and (i) the Management Firm, (ii) the owners of the Management Firm,
or (iii) any director, officer, employee or agent of the Management Firm. The Management Firm shall
be free to exercise its own judgment as to those persons who will perform the services to be
provided hereunder. The Management Firm shall have the sole, absolute and uncontrolled discretion
as to the methods and means of its provision of such services.

     4. Financial Statements. The Management Firm shall prepare and deliver to the Company an
unaudited balance sheet within ninety (90) days after the close of each fiscal year of the Company.
The Management Firm shall also cause an unaudited annual statement to be made of the financial
records of the Company and a copy of such report shall be provided as soon as it is available after
the end of the fiscal year. The cost of the reports shall be an expense of the Company. All
financial statements are to be prepared in accordance with sound accounting principles consistently
applied.

     5. Confidentiality and Intellectual Property. Management Firm understands and acknowledges
that Company has devoted substantial resources to developing a process and procedure to manage and
operate the Activities, and that such processes, procedures, information and materials compiled or
prepared in connection therewith, including without limitation marketing plans, business plans,
business contacts, lessors, lessees, pricing information, information on competition, demographics,
suppliers and providers of services and financing arrangements (herein collectively designated
“Confidential Information”) are proprietary to the Company and the confidential information of the
Company. Management Firm shall not disclose

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to any party any Confidential Information, without the prior written consent of the Company,
except as may be required by law. The Management Firm shall have no right, title or interest in or
to any of the Confidential Information or intellectual property of the Company, and during the term
of this Agreement and at all times thereafter shall not utilize, or cause or facilitate the
utilization by any other Person, of such Confidential Information or intellectual property other
than in furtherance of the Activities. Furthermore, the name “ZaZa” including any derivatives
thereof, shall remain the exclusive property of the Company. Upon termination of this Agreement,
all rights to the use of the Confidential Information, intellectual property of the Company and the
use of the name “ZaZa,” including any derivatives thereof, shall revert to the Company. The
provisions of this Section shall survive the expiration or sooner termination of this Agreement.

     6. Term of Agreement. The term of this Agreement shall commence upon the date hereof (herein
designated “Effective Date”) and continue until the second anniversary of the Effective Date;
thereafter, the term of this Agreement shall automatically renew for an additional one year term
commencing on each successive anniversary of the Effective Date unless either Party gives to the
other Party a notice of non-renewal delivered at least thirty (30) days prior to the anniversary on
which the next successive renewal term is to commence. Notwithstanding the foregoing, either party
may terminate this Agreement upon thirty (30) days notice to the other Party. In the event of
termination of this Agreement by either Party, the Management Firm shall return to the Company all
of Company’s its personal property, materials and Confidential Information.

     7. Liability and Indemnification/Force Majeure. WITH REGARD TO THE SERVICE TO BE PERFORMED BY
THE MANAGEMENT FIRM PURSUANT TO THE TERMS OF THIS AGREEMENT, THE MANAGEMENT FIRM SHALL NOT BE
LIABLE TO THE COMPANY, NOR TO ANY OTHER PERSON OR FIRM WHO MAY CLAIM ANY RIGHT DUE TO HIS, HER OR
ITS RELATIONSHIP WITH THE COMPANY, FOR ANY ACTS OR OMISSIONS OF THE MANAGEMENT FIRM, OR ITS OWNERS,
EMPLOYEES OR AGENTS, IN THE PERFORMANCE OF SUCH SERVICES, EXCEPT WHEN SUCH ACTS OR OMISSIONS OF THE
MANAGEMENT FIRM, OR ITS PARTNERS, EMPLOYEES OR AGENTS, IS DUE TO WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE. Nothing contained herein shall preclude either party from asserting any claims or suits
against the other party which may arise out of the terms and provisions of this Agreement.

          (a) Indemnification by the Company. The Company shall indemnify, defend and hold the
Management Firm and its partners, employees and agents free and harmless from and against any and
all obligations, costs, claims, threatened claims, judgments, attorney’s fees and attachments
(herein designated “Claims”) arising from, or in any way connected with, such services, including
without limitation those relating to payroll taxes and withholdings, except when such Claims arise
due to the willful misconduct or gross negligence of the Management Firm, or its partners, agents
or employees. All obligations and expenses incurred in connection with the Company shall be for the
account, on behalf and at the expense of the Company. All such obligations and expenses shall be
paid by the Company from the gross revenues derived from the Activities, provided, however, in the
event such gross revenues are not sufficient to pay such obligations or expenses, the Company shall
pay all such obligations or

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expenses without reimbursement, offset or expense to the Management Firm, and to the extent
the Management Firm pays any such obligations or expenses, or any Claim is made against the
Management Firm with respect to such obligations or expenses, the Company shall indemnify, defend
and hold the Management Firm and its partners, employees and agents free and harmless from and
against such obligations and expenses. The provisions of this Section shall survive the expiration
or termination of this Agreement.

          (b) Indemnification by the Management Firm. The Management Firm shall indemnify, defend, save
and hold harmless the Company, its members, shareholders, officers, directors, employees, or agents
from and against all Claims asserted against or incurred by the Company, its members, shareholders,
officers, directors, employees, or agents, in connection with, or arising out of, or resulting from
(i) a breach of any covenant, agreement, representation or warranty of the Management Firm or (ii)
the negligent or willful acts or omissions of Management Firm, its employees or agents. The
provisions of this Section shall survive the expiration or termination of this Agreement.

          (c) Force Majeure. The Management Firm shall not be deemed to be in violation of this
Agreement, and its performance shall be excused, if it is prevented from performing any of its
obligations hereunder for any reason beyond its control, including shortages in labor or supplies,
war, acts of God, failure of the Company to advance funds, or changes in any law of Federal, state
or local government, or any agency thereof.

     8. Management Fee. For the services rendered hereunder, the Management Firm shall for each
calendar month be entitled to a management fee equal to the sum of the Reimbursable Expenditures
for that month and the Non-Reimbursable Expenditures for that month (such sum being herein
designated “Management Fee”). The Management Fee shall be prorated on a daily basis for any partial
calendar month. Each Management Fee shall be due and payable on the last day of the calendar month
to which such Management Fee relates. As noted above, some of Management Firm’s expenditures are
reimbursable by Hess Corporation in accordance with the Hess Contract, i.e., the Reimbursable
Expenditures. Management Firm agrees to invoice the Management Fee in two separate invoices, one of
which invoices shall be for Reimbursable Expenditures (which the Parties acknowledge and agree
shall be submitted to Hess Corporation) and one of such invoices shall be for Non-Reimbursable
Expenditures. For purposes of this Agreement:

          (a) “Reimbursable Expenditures” for a pertinent calendar month collectively means (1) base
salary of employees and independent contractors (computed using 240 calendar days), including one
employee who shall office at the Management Firm’s location at a base salary not to exceed $4,000
per month (with annual raises not to exceed 5% on an annual basis and a bonus not to exceed 10% per
year) (herein designated “Permitted Salary”); (2) bonus compensation of employees and independent
contractors (herein designated “Permitted Bonuses”), (3) employee and independent contractor
expense reimbursements related to performance of the Hess Contract; and (4) a charge of five
thousand dollars ($5,000) per month, which shall be increased annually on each January 1 in
accordance with the Consumer Price Index for the prior year, and (5) any other taxes or third party
costs related to this Agreement, including, without limitation worker’s compensation and franchise
taxes.

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          (b) “Non-Reimbursable Expenditures” for a pertinent calendar month collectively means (1)
payroll taxes (other than payroll taxes withheld from an employee’s Permitted Salary and Permitted
Bonuses, respectively), (2) employee and independent contractor expense reimbursements unrelated to
performance of the Hess Contract, (3) costs related to employee sick day pay, (4) costs related to
employee vacation day pay, (5) costs related to standard benefits provided to Management Firm’s
employees under the employee leasing program in which the Management Firm participates (e.g.,
health insurance premiums, 401(k) plan, etc.),

     9. Funding of Costs and Expenses by the Company. The Company, and not the Management Firm,
shall be responsible for the costs and expenses of all operations of the Activities and Company’s
office space not included as a Reimbursable Expenditure and Non- Reimbursable Expenditure
(respectively). The Company shall at all times provide sufficient office space, office facilities
and working capital for operation of the Activities. The Company shall deposit such capital from
time to time into the Operating Accounts of the Activities in advance of the time required to be
disbursed by the Management Firm.

     10. Authority of the Management Firm. The Management Firm shall operate the Activities. The
Management Firm shall, not less frequently than annually, adopt a plan of operation for the
Activities which shall set forth proposed staffing, budgets, program and related matters; such
shall not, however, be subject to approval of the Company or its designee. The Company, its agents,
officers and employees, shall not participate in the day-to-day operation of the Activities.
Notwithstanding anything to the contrary contained in this Section 10 or otherwise in this
Agreement, no person, including any employee of the Management Firm, may enter into any contract or
agreement or otherwise bind the Company without the consent of managers of the Company.

     11. Management of Competing Activities. Company understands and acknowledges that Management
Firm is in the business of operating businesses, and that Management Firm intends to continue to
manage and operate such other businesses, which may or may not be in competition with the
Activities. Nothing contained herein shall be deemed to be construed as a restriction on the
Management Firm’s right to so operate and manage such other existing companies or companies that
may be opened in the future, even if such companies are in direct competition with the Activities.

     12. Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered in person, Federal Express or other recognized
overnight courier or sent by registered or certified U.S. mail, return receipt requested or sent by
facsimile or telecopy transmission and addressed:

	 	(a)	 	If to the Management Firm, at:
	 
	 	 	 	952 Echo Lane, Suite 115

Houston, Texas 77024

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	 	(b)	 	If to the Company, at:
	 
	 	 	 	1301 McKinney, Suite 2850

Houston, Texas 77010

or to such other address or facsimile number as a Party may designate by notice to the other Party.

     13. Dispute Resolution.

          (a) Mediation. The Parties agree that if any dispute arises between them under this Agreement
(herein designated “Dispute”), such Dispute shall be subject to mediation. If any Party desires to
mediate any Dispute, such Party shall notify the other Parties of the Dispute desired to be
mediated, including a brief statement of the matter in controversy. If the Parties are not able to
resolve the Dispute within five (5) days after the Party notifies the other Parties of its desire
to mediate (herein designated “Mediation Notice”), then, within five (5) days immediately after the
expirations of the aforesaid five (5) day period, the Parties shall attempt to agree upon an
independent mediator. If the Parties are unable to reach an agreement upon an independent mediator
within such second five (5) day period, then any Party shall be entitled to request that the
Judicial Arbitration and Mediation Service (herein designated “JAMS”) (or similar mediation service
of a similar national scope if JAMS no longer then exists) appoint an independent mediator who
shall serve as mediator for all purposes hereof. Each of the Parties shall each pay an equal share
of the cost of the mediator’s services, in advance upon request by the mediator or any Party.
Within ten (10) days after selection of the mediator, the mediator shall call for and set a meeting
among the Parties and the mediator for the purpose of mediating the Dispute.

          (b) Arbitration. If the Parties are unable to resolve the Dispute within thirty (30) days
after the Mediation Notice (herein designated “Mediation Period,” the Dispute shall be decided by
mandatory, final, and binding arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (herein designated “AAA”). Any Dispute under this Agreement
resolved by arbitration shall be in Houston, Texas and in accordance with the commercial
arbitration rules of the AAA then in effect. Arbitration will be the sole and exclusive remedy of
the Parties for any dispute arising out of this Agreement. However, in all events, these
arbitration provisions shall govern over any conflicting rules that may now or hereafter be
contained in the AAA rules. Any judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction over the subject matter thereof. Any dispute submitted to
arbitration will be subject to the same burden of proof standards as though the claim were
litigated in a Texas judicial proceeding. The arbitrator shall have the authority to grant any
equitable and legal remedies that would be available in any judicial proceeding instituted to
resolve such dispute, and may, in his or her discretion, award attorneys’ fees, expenses and costs.

     Any such arbitration will be conducted before a single arbitrator who will be
compensated for his or her services at a rate to be determined by the Parties or by the
American Arbitration Association, but based upon reasonable hourly or daily consulting rates
for the arbitrator if the Parties are not able to agree upon his or her rate of

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compensation. The AAA will have the authority to select an arbitrator from a list of
arbitrators who are lawyers familiar with Texas employment/independent contractor law;
provided, however, that each party will have the opportunity to make such reasonable
objection to any of the arbitrators listed as such party may wish and that the AAA will
select the arbitrator from the list of arbitrators as to whom neither party makes any such
objection. If the foregoing procedure is not followed, then each party will choose one
person from the list of arbitrators provided by the AAA (provided that such person does not
have a conflict of interest), and the two persons so selected will select from the list
provided by the AAA the person who will act as the arbitrator. The arbitrator will render
findings of fact and conclusions of law and a written opinion setting forth the basis and
reasons for any decision reached and will deliver such documents to each party to this
Agreement along with a signed copy of the award.

     14. Successors and Assigns. Neither Company nor Management Firm may assign this Agreement,
expressly, by operation of law, or otherwise, without the prior written consent of the other, which
consent may be withheld in the sole, absolute and uncontrolled discretion of the Party whose
consent is required.

     15. Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Texas.

     16. Severability. If any provision of this Agreement is held to be unenforceable for any
reason, all other provisions of this Agreement shall be deemed valid and enforceable to the fullest
extent possible. To the fullest extent permitted by law, the Parties hereby waive any provision of
law that renders any term or provision of this Agreement invalid or unenforceable in any respect.

     17. Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which when taken together shall constitute a single
instrument.

     18. Amendments. This Agreement may be modified or amended only by a written instrument
executed by the Parties.

(Signature page follows)

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     IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties have affixed their
names by their proper officers or duly authorized representatives as of the Effective Date.

	 	 	 	 	 

	MANAGEMENT FIRM:	 	Sequent Petroleum Management, LLC,
	 	 	a Texas limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/ Madsen Waters
	 

	 	 	 	nbsp;
	 

	 	Name:
	 	Madsen Waters, LLC Manager
	 
	 	 	 	 
	COMPANY:	 	ZAZA ENERGY, LLC,
	 	 	a Texas limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/ Todd Alan Brooks
	 

	 	 	 	 
	 

	 	Name:
	 	Todd Alan Brooks
	 

	 	Title:
	 	Manager

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