Document:

ex10_1.htm

     

    
      

      

    

    
 

    EXHIBIT
      10.1

    

    FIRST
      AMENDMENT TO AMENDED AND RESTATED

    FIRST
      LIEN CREDIT AGREEMENT

    

    This
      FIRST AMENDMENT TO AMENDED AND RESTATED FIRST LIEN CREDIT AGREEMENT
      (“Amendment”), dated effective as of November 19, 2007 (the
“Effective Date”), is by and among Energy XXI Gulf Coast, Inc., a
      Delaware corporation (the “Borrower”), the lenders party to the First
      Lien Credit Agreement described below (the “Lenders”), The Royal Bank of
      Scotland plc, as administrative agent for the Lenders (in such capacity, the
      “Administrative Agent”), and the other parties in the capacities herein
      identified.

     

    WHEREAS,
      the Borrower, the Lenders, the Administrative Agent and certain other Persons
      in
      the capacities therein identified are parties to the Amended and Restated First
      Lien Credit Agreement, dated as of June 8, 2007, as modified by the Consent
      Regarding Amended and Restated First Lien Credit Agreement dated as of July
      27,
      2007 (as so modified, and as amended, supplemented, amended and restated or
      otherwise modified from time to time, the “First Lien Credit
      Agreement”);

     

    WHEREAS,
      the parties hereto desire to amend the First Lien Credit Agreement in certain
      respects as set forth herein;

     

    NOW THEREFORE,
      in consideration of the premises and the mutual covenants, representations
      and
      warranties contained herein, and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      hereby agree as follows:

     

    AGREEMENT

     

    Section
      1.  Definitions.  Capitalized
      terms used herein but not defined herein shall have the meanings as given them
      in the First Lien Credit Agreement, unless the context otherwise
      requires.

     

    Section
      2.  Amendments.

     

    (a)  Section
      1.1.  Section 1.1 of the First Lien Credit Agreement is hereby
      amended as follows:

     

    (i)           The
      definition of “Applicable Margin” is hereby amended by inserting the following
      language at the end of the words “after the Closing Date” in the proviso
      following the table in such definition:

     

    “;
      provided, further, that the applicable percentages set forth in
      the foregoing table shall be increased by 0.15% during any period commencing
      with the date that a 90% Hedging Position shall have occurred and ending on
      the
      date that is the later of (a) ninety (90) days after the occurrence of such
      90%
      Hedging Position or (b) the date that (i) such 90% Hedging Position shall no
      longer be existing and (ii) the Borrower shall have delivered a certificate
      of
      an Authorized Officer of the Borrower certifying as to the same in form and
      substance reasonably satisfactory to the Administrative Agent.”

     

    (ii)           The
      definition of “Loan Documents” is hereby amended and restated in its entirety as
      follows:

     

    “Loan
      Documents” means, collectively, this Agreement, the Notes, the Letters of
      Credit, each Hedging Agreement between the Borrower (or a Subsidiary thereof
      if
      permitted by Section 7.2.20) and any Approved Counterparty that is or was
      a Lender or an Affiliate thereof at the time such Approved Counterparty entered
      into such Hedging Agreement, the Fee Letter, each Security Document, each
      Guaranty, each Borrowing Request, each Issuance Request, and each other
      agreement, certificate, document or instrument delivered in connection with
      any
      Loan Document, whether or not specifically mentioned herein or
      therein.

     

    (iii)           The
      definitions of “Offshore Oil and Gas Properties” and “Onshore Oil and Gas
      Properties” are hereby deleted in their entirety.

     

    (iv)           The
      definition of “Secured Parties” is hereby amended and restated in its entirety
      as follows:

     

    “Secured
      Parties” means, collectively, (a) the Lenders, (b) the Issuers, (c) the
      Administrative Agent and the other Agents, and (d) each Approved Counterparty
      to
      a Hedging Agreement with the Borrower (or a Subsidiary thereof if permitted
      by
Section 7.2.20) that is or was a Lender or an Affiliate thereof at the
      time such Approved Counterparty entered into such Hedging Agreement (provided
      that such Approved Counterparty is a Secured Party only for purposes of each
      such Hedging Agreement so entered into and not for Hedging Agreements entered
      into after such Approved Counterparty ceased to be a Lender or Affiliate
      thereof), and in each case each of their respective successors, transferees
      and
      assigns.

     

    (v)           A
      new definition “90% Hedging Position” shall be inserted into Section 1.1 in the
      appropriate alphabetical order:

     

    “90%
      Hedging Position” means:

     

    (a)           the
      entering into by the Borrower and/or any other Obligor of one of more Hedging
      Agreements or hedging positions such that volumes corresponding to swaps or
      collars (for the absence of doubt, volumes related to puts that are not executed
      in conjunction with any other Hedging Agreements are excluded) covering Oil
      and
      Gas Properties of the Obligors will, at any date, exceed 90% for any month
      for
      crude oil or natural gas in respect of the reasonably estimated projected crude
      oil and natural gas production, respectively, from the Obligors’ Proved
      Developed Producing Reserves, as determined by reference to the then current
      Reserve Reports delivered pursuant to the terms of this Agreement and such
      other
      supplemental reserve information as has been provided to the Administrative
      Agent in form and substance reasonably acceptable to the Administrative Agent;
      or

     

    (b)           the
      maintaining by the Borrower and/or any other Obligor of one of more Hedging
      Agreements or hedging positions such that volumes corresponding to swaps or
      collars (for the absence of doubt, volumes related to puts that are not executed
      in conjunction with any other Hedging Agreements are excluded) covering Oil
      and
      Gas Properties of the Obligors will, at any date, exceed 90% for any month
      for
      crude oil or natural gas in respect of the reasonably estimated projected crude
      oil and natural gas production, respectively, from the Obligors’ Proved
      Developed Producing Reserves, as determined by reference to the then current
      Reserve Reports delivered pursuant to the terms of this Agreement and such
      other
      supplemental reserve information as has been provided to the Administrative
      Agent in form and substance reasonably acceptable to the Administrative Agent;
      provided that such maintaining of Hedging Agreements or hedging positions
      shall not constitute a 90% Hedging Position if the following are true: (i)
      at
      the time of the entering into of such Hedging Agreements or hedging positions,
      a
      90% Hedging Position under clause (a) of this definition is not in existence
      or
      would result therefrom; and (ii) after such time of entering into such Hedging
      Agreements and hedging positions, a 90% Hedging Position shall occur by
      operation of clause (b) of this definition (without giving effect to this
      proviso of such clause (b)) solely as a result of a decrease in the reasonably
      estimated projected crude oil and natural gas production, respectively, from
      the
      Obligors’ Proved Developed Producing Reserves, and such 90% Hedging Position
      under this clause (ii) shall continue for a period of not longer than five
      (5)
      Business Days.

     

    (vi)           A
      new definition “Six-Month Production Low” shall be inserted into Section 1.1 in
      the appropriate alphabetical order:

     

    “Six-Month
      Forecast Production Low” means, at any date of determination, the Obligor’s
      lowest (and reasonably estimated) projected monthly production for crude oil
      or
      natural gas, as the case may be, from the Obligors’ Proved Developed Producing
      Reserves for crude oil and natural gas, as the case may be, during the forecast
      six months immediately following such date of determination.

     

    (b)  Section
      7.1.1(s).  Section 7.1.1(s) of the First Lien Credit Agreement is
      hereby amended and restated in its entirety as follows:

     

    “(s)  (i)
      concurrently with any delivery of financial statements under Section
      7.1.1(a), a certificate of an Authorized Officer of the Borrower, in form
      and substance satisfactory to the Administrative Agent, (A) setting forth as
      of
      the last Business Day of such Fiscal Quarter, a true and complete list of all
      Hedging Agreements of the Borrower and each Subsidiary, the material terms
      thereof (including the type, term, effective date, termination date and notional
      amounts or volumes), the net mark-to-market value therefor, any new credit
      support agreements relating thereto not listed on Schedule7.2.20,
      or not previously provided to the Administrative Agent, any margin required
      or
      supplied under any credit support document, and the Approved Counterparty to
      each such agreement, and (B) providing information and calculations as to (x)
      any volumes corresponding to swaps or collars (for the absence of doubt, volumes
      related to puts that are not executed in conjunction with any other Hedging
      Agreements are excluded) covering Oil and Gas Properties of the Obligors to
      the
      extent the same exceed 100% for crude oil or for natural gas, as the case may
      be, of the reasonably estimated projected crude oil and natural gas production,
      respectively, from the Obligors’ Proved Developed Producing Reserves in respect
      of such Oil and Gas Properties and (y) the Borrower’s good faith estimate (with
      reasonably detailed calculations and based on such hedging positions as the
      Borrower may deem appropriate provided such hedging positions are in compliance
      with the terms of the Loan Documents) of the cost to modify or unwind the
      Obligors’ hedging positions so that such volumes would not exceed 100% of such
      reasonably estimated projected crude oil and natural gas production,
      respectively, from the Obligors’ Proved Developed Producing Reserves in respect
      of such Oil and Gas Properties, (ii) within five days after any execution of
      any
      new Hedging Agreements or any assignment, termination or unwinding of any
      existing Hedging Agreements, notice thereof to the Administrative Agent, which
      notice shall be in form and substance and with details reasonably acceptable
      to
      the Administrative Agent, and (iii) within five days after the occurrence
      thereof, notice of the Obligors having entered into a 90% Hedging Position;
      and”

     

    (c)  Section
      7.1.16.  Section 7.1.16 of the First Lien Credit Agreement is
      hereby amended and restated in its entirety as follows:

     

    “SECTION
      7.1.16.                                           Minimum
      Availability Under Borrowing Base.  (a)  During the
      period from the Closing Date to the date that the Borrower shall have achieved
      compliance with the windstorm insurance requirements described in clause (y)
      of
Section 7.1.4, the Borrower will not permit the aggregate Credit
      Exposures of all Lenders to exceed an amount equal to (i) the Borrowing Base
      then in effect minus (ii) $100,000,000.

     

    (b)           During
      each period from July 1st to October
      31st of each
      calendar
      year, the Borrower will not permit the aggregate Credit Exposures of all Lenders
      to exceed an amount equal to (a) the Borrowing Base then in effect minus
      (b) $25,000,000.”

     

    (d)  Section
      7.2.20.  Section 7.2.20 of the First Lien Credit Agreement is
      hereby amended and restated in its entirety as follows:

     

    “SECTION
      7.2.20.                                           Restrictions
      on Hedging Agreements.  (a)  No Obligor will enter into
      or maintain any Hedging Agreements with any Person other than (i) commodity
      Hedging Agreements with one or more Approved Counterparties (in the case of
      Hedging Agreements that are puts or calls that are not executed in conjunction
      with any other Hedging Agreements) or Lenders or Affiliates thereof (in the
      case
      of any other Hedging Agreements); (ii) Hedging Agreements in respect of interest
      rates with an Approved Counterparty; and (iii) Hedging Agreements required
      under
Section 7.1.12; provided that all Hedging Agreements permitted
      hereunder are in accordance with this Section 7.2.20 and have a fixed
      price or floor prices acceptable to the Administrative Agent and aggregate
      notional volumes acceptable to the Administrative Agent.

     

    (b)           With
      respect to any commodity Hedging Agreements permitted hereunder:

     

    (i)           as
      at any date, volumes corresponding to swaps or collars (for the absence of
      doubt, volumes related to puts that are not executed in conjunction with any
      other Hedging Agreements are excluded) covering Oil and Gas Properties of the
      Obligors shall not exceed (A) during the first six calendar months period
      following such date, 90% for crude oil or for natural gas, as the case may
      be,
      of the reasonably estimated projected crude oil and natural gas production,
      respectively, from the Obligors’ Proved Developed Producing Reserves in respect
      of such Oil and Gas Properties, and (B) for any period after such six month
      period described in clause (A), the lower of (x) 90% for crude oil or for
      natural gas, as the case may be, of the Six-Month Forecast Production Low for
      crude oil and natural gas, respectively, in respect of such Oil and Gas
      Properties; and (y) the sum of 100% of the reasonably estimated projected crude
      oil and natural gas production, as the case may be, from the Obligors’ Proved
      Developed Producing Reserves plus 50% of the reasonably estimated
      projected crude oil and natural gas production, as the case may be, from the
      Obligors’ Proved Developed Nonproducing Reserves; and

     

    (ii)           as
      at any date, volumes for all commodity Hedging Agreements (including swaps,
      collars and puts) shall not be less than 50% on a rolling two year period basis
      of the reasonably estimated projected BTU equivalent of crude oil and natural
      gas production from its Proved Developed Producing Reserves,

     

    in
      each
      case as determined by reference to the then current Reserve Reports delivered
      pursuant to the terms of this Agreement and such other supplemental reserve
      information as has been provided to the Administrative Agent in form and
      substance reasonably acceptable to the Administrative Agent and provided that
      all calculations of reasonably estimated projected crude oil and natural gas
      production made by the Borrower shall be made in a manner consistent with oil
      and gas production and reserve estimating techniques of, and reserve category
      definitions provided by, the Society of Petroleum Engineers.

     

    (c)           As
      at any date, volumes corresponding to basis swaps covering Oil and Gas
      Properties of the Obligors shall not exceed (i) during the first six calendar
      months period following such date, 90% for crude oil or for natural gas, as
      the
      case may be, of the reasonably estimated projected crude oil and natural gas
      production, respectively, from the Obligors’ Proved Developed Producing Reserves
      in respect of such Oil and Gas Properties, and (ii) thereafter, the lower of
      (A)
      90% for crude oil or for natural gas, as the case may be, of the Six-Month
      Production Low for crude oil and natural gas, respectively, in respect of such
      Oil and Gas Properties; and (B) the sum of 100% of the reasonably estimated
      projected crude oil and natural gas production, as the case may be, from the
      Obligors’ Proved Developed Producing Reserves plus 50% of the reasonably
      estimated projected crude oil and natural gas production, as the case may be,
      from the Obligors’ Proved Developed Nonproducing Reserves, in each case as
      determined by reference to the then current Reserve Reports delivered pursuant
      to the terms of this Agreement and such other supplemental reserve information
      as has been provided to the Administrative Agent in form and substance
      reasonably acceptable to the Administrative Agent; provided that all
      calculations of reasonably estimated projected crude oil and natural gas
      production made by the Borrower shall be made in a manner consistent with oil
      and gas production and reserve estimating techniques of, and reserve category
      definitions provided by, the Society of Petroleum Engineers.

     

    (d)           Notwithstanding
      anything in this Section to the contrary, by no later than July 1st of each
      calendar
      year, swaps and collars covering Oil and Gas Properties of the Obligors shall
      not exceed (i) 70% of the reasonably estimated projected crude oil production
      from the Obligors’ Proved Developed Producing Reserves for the delivery period
      from July 1 of such calendar year through October 31 of such calendar year,
      or
      (ii) 40% of the reasonably estimated projected natural gas production from
      the
      Obligors’ Proved Developed Producing Reserves for the delivery period from July
      1 of such calendar year through October 31 of such calendar year, in each case
      as determined by reference to the then current Reserve Reports delivered
      pursuant to the terms of this Agreement and such other supplemental reserve
      information as has been provided to the Administrative Agent in form and
      substance reasonably acceptable to the Administrative Agent; provided
      that all calculations of reasonably estimated projected crude oil and natural
      gas production made by the Borrower shall be made in a manner consistent with
      oil and gas production and reserve estimating techniques of, and reserve
      category definitions provided by, the Society of Petroleum
      Engineers.

     

    (e)           No
      Obligor will purchase any calls other than (i) calls corresponding to an
      existing permitted collar already executed or being executed in conjunction
      with
      such purchased call or (ii) with the consent of the Administrative Agent, calls
      for the purpose of mitigating physical delivery risk, provided that the
      unamortized premium of all outstanding calls for all Obligors shall not exceed
      $6,000,000 in the aggregate at any time.

     

    (f)           In
      no event shall the Obligors post collateral (whether cash or by letters of
      credit or otherwise) or margin in respect of its Hedging Agreements in an
      aggregate outstanding amount in excess of $10,000,000 to secure its obligations
      under its Hedging Agreements or to cover market exposures with respect
      thereto.  Notwithstanding anything herein to the contrary, no Obligor
      will enter into any Hedging Agreements other than in the ordinary course of
      business for the purpose of protecting against fluctuations in interest rates
      and commodity prices and basis risk and not for purposes of
      speculation.  The Borrower will not permit any Subsidiary to enter
      into any Hedging Agreement without the written consent of the Administrative
      Agent.

     

    (g)           Notwithstanding
      anything in this Section to the contrary, the Borrower’s maintenance of Hedging
      Agreements or hedging positions in violation of clauses (b) through (d) above
      is
      not a Default or an Event of Default under this Section 7.2.20
      if:  (i) the Borrower was in compliance with the requirements of this
Section 7.2.20 at the time of the entering into of any such Hedging
      Agreements or hedging positions; and (ii) after the time of the entering into
      of
      any such Hedging Agreements or hedging positions, a decrease in the reasonably
      estimated projected crude oil and natural gas production, respectively, from
      the
      Obligors’ Proved Developed Producing Reserves causes the Borrower to no longer
      be in compliance with Section 7.2.20 and such non-compliance lasts for a
      period of not longer than five (5) Business Days; provided that all
      calculations of reasonably estimated projected crude oil and natural gas
      production made by the Borrower shall be made in a manner consistent with oil
      and gas production and reserve estimating techniques of, and reserve category
      definitions provided by, the Society of Petroleum Engineers.”

     

    (e)  Section
      10.19.  Section 10.19 of the First Lien Credit Agreement is hereby
      amended and restated in its entirety as follows:

     

    “SECTION
      10.19                                           Collateral
      Matters; Hedging Agreements.  The benefit of the Security
      Documents and of the provisions of this Agreement relating to the Collateral
      shall also extend to and be available to each Approved Counterparty to a Hedging
      Agreement with the Borrower (or a Subsidiary thereof if permitted by Section
      7.2.20) that is or was a Lender or an Affiliate thereof at the time such
      Approved Counterparty entered into such Hedging Agreement (but only for purposes
      of each such Hedging Agreement so entered into and not for Hedging Agreements
      entered into after such Approved Counterparty ceased to be a Lender or Affiliate
      thereof); provided that it is the intention of the parties hereto that
      repayment of the Hedging Obligations of the Borrower (or a Subsidiary thereof
      if
      permitted by Section 7.2.20) under any qualifying Hedging Agreement with
      any such Approved Counterparty from realization of any Collateral shall be
      subject to the terms of the Security Documents.  For sake of clarity,
      the parties further agree that any Hedging Agreements entered into with the
      Borrower by Société Générale or one of its Affiliates at a time when Société
Générale was a Lender shall be entitled to the benefit of the Security Documents
      and of the provisions of this Agreement relating to the Collateral in accordance
      with the foregoing sentence.”

     

    (f)  Schedule
      II.  Schedule II to the First Lien Credit Agreement is hereby
      amended and restated in its entirety as set forth in Schedule II attached
      hereto.

     

    Section
      3.  Redetermination
      of Borrowing Base.  The Borrower and the Revolving Loan Lenders
      hereby agree that effective as of November 19, 2007, the Borrowing Base shall
      be
      equal to $450,000,000 until such time as the Borrowing Base is redetermined
      or
      otherwise adjusted pursuant to the terms of the First Lien Credit Agreement;
      provided, that if the Borrower (a) acquires all of the EPL/Castex Assets
      (the “Acquisition”); (b) executes and delivers documentation (including
      opinions, security agreements, mortgages, deeds of trusts and other similar
      documents and supplements, amendments or modifications thereto as requested
      by
      the Administrative Agent) in form and substance satisfactory to the
      Administrative Agent, granting to the Administrative Agent first perfected
      liens
      and security interests on the EPC/Castex Assets; (c) pays to the Administrative
      Agent for the account of each Lender an upfront fee for each Existing Lender
      in an amount equal to twenty-five (25) basis points on such Lender’s Percentage
      of the BB Increased Amount (defined below); and (d) furnishes to the
      Administrative Agent (i) evidence of the closing of the Acquisition by the
      Borrower of the EPL/Castex Assets on terms and conditions acceptable to the
      Administrative Agent and (ii) a certificate of an Authorized Officer of the
      Borrower (A) certifying that immediately before and after giving effect to
      the
      Acquisition, no Default or Event of Default has occurred and is continuing
      and
      such other representations and warranties as the Administrative Agent reasonably
      deems appropriate, (B) attaching appropriate resolutions regarding the
      Acquisition, and (C) copies, certified true and correct by an Authorized Officer
      of the Borrower, of the assignment of the EPL/Castex Assets into the Borrower
      and of the acquisition agreements relating to such assignment; then upon
      satisfaction of the foregoing requirements in (a) through (d) above (including
      all sub-requirements thereof), provided that such requirements are satisfied
      on
      or before January 31, 2008, the Borrowing Base then in effect shall
      automatically, without further action by the Administrative Agent, the Borrower
      or any Lender, increase by $10,000,000 (the “BB Increased
      Amount”).  In each instance, it is agreed that the Borrowing Base
      remains subject to determination or redetermination or reduction pursuant to
      terms of the First Lien Credit Agreement (including Sections 2.8, 7.1.13 and
      7.2.10 thereof).  As used herein, “EPL/Castex Assets” means the
      real property and personal property interests described in Schedule I
      attached hereto with such other non-material changes or modifications as
      reasonably acceptable to the Administrative Agent and such other material
      changes or modifications as acceptable to the Required Lenders (it being
      understood that the exclusion of real property or personal property assets
      having an aggregate fair market value, as determined in good faith by the
      Borrower, of less than $1,000,000 shall not be considered a material change
      or
      modification).

     

    Section
      4.  Consent
      to Amendment of Security Documents.  The Administrative Agent, the
      Issuers and the undersigned Lenders hereby consent and agree that the parties
      to
      the Security Documents may amend the Security Documents, as applicable, to
      reflect (a) the amendment to the defined term “Secured Parties” as set forth in
Section 2(a)(iv) hereof, and (b) the amendment to Section 10.19 of the
      Credit Agreement as set forth in Section 2(e) hereof, together with such
      other changes as the Administrative Agent deems reasonable in connection
      therewith.

     

    Section
      5.  Conditions
      to Effectiveness.  This Amendment shall be deemed effective as of
      the Effective Date following the satisfaction of the following
      conditions:

     

    (a)  the
      Administrative Agent shall have received counterparts hereof duly executed
      by
      the Borrower, the Administrative Agent, the Issuers and the Required Lenders
      (provided that Section 3 shall not become effective unless all of the
      Lenders shall have delivered executed counterparts hereof to the Administrative
      Agent);

     

    (b)  the
      Administrative Agent shall have received for each Lender, as appropriate, its
      new (for each Assignee Lender) or replacement (for Existing Lenders) Notes
      payable to them in the principal amounts set forth on the column entitled “Loan
      Commitments” in Schedule II hereto, which Notes in the case of the
      replacement Notes shall be a renewal and replacement of, and shall be given
      in
      substitution and exchange for, but not in payment of, those Notes held by each
      Existing Lender prior to the effectiveness of this Amendment; and

     

    (c)  the
      Administrative Agent shall have received (i) for the account of each Existing
      Lender, an amendment fee for each such Existing Lender in an amount equal to
      ten
      (10) basis points on such Existing Lender’s Percentage of the Borrowing Base as
      in effect immediately before giving effect to this Amendment; (ii) for the
      account of each Existing Lender, an upfront fee for each Existing Lender in
      an
      amount equal to twenty-five (25) basis points on the positive difference between
      (A) such Existing Lender’s “$450M Borrowing Base Allocation” as set forth on
Schedule II attached hereto and (B) such Existing Lender’s Percentage of
      the Borrowing Base as in effect immediately before giving effect to this
      Amendment; and (iii) for the account of each Assignee Lender, an upfront fee
      for
      such Assignee Lender in an amount equal to twenty-five (25) basis points on
      such
      Assignee Lender’s “$450M Borrowing Base Allocation” as set forth on Schedule
      II attached hereto.

     

    Section
      6.  Representations
      and Warranties.  The Borrower hereby represents and warrants that
      after giving effect hereto:

     

    (a)  the
      representations and warranties of the Obligors contained in the Loan Documents
      are true and correct in all material respects on and as of the Effective Date,
      other than those representations and warranties that expressly relate solely
      to
      a specific earlier date, which shall remain correct in all material respects
      as
      of such earlier date;

     

    (b)  the
      execution, delivery and performance by the Borrower and each other Obligor
      of
      this Amendment has been duly authorized by all necessary corporate action
      required on their part and this Amendment, along with the First Lien Credit
      Agreement and other Loan Documents, constitutes the legal, valid and binding
      obligation of each Obligor parties thereto enforceable against them in
      accordance with its terms, except as its enforceability may be affected by
      the
      effect of bankruptcy, insolvency, reorganization, moratorium or other similar
      laws now or hereafter in effect relating to or affecting the rights or remedies
      of creditors generally;

     

    (c)  neither
      the execution, delivery and performance of this Amendment by the Borrower and
      each other Obligor, the performance by them of the First Lien Credit Agreement
      nor the consummation of the transactions contemplated hereby does or shall
      contravene, result in a breach of, or violate (i) any provision of any Obligor’s
      certificate or articles of incorporation or bylaws or other similar documents,
      or agreements, (ii) any law or regulation, or any order or decree of any court
      or government instrumentality, or (iii) any indenture, mortgage, deed of trust,
      lease, agreement or other instrument to which any Obligor or any of its
      Subsidiaries is a party or by which any Obligor or any of its Subsidiaries
      or
      any of their property is bound, except in any such case to the extent such
      conflict or breach has been waived herein or by a written waiver document,
      a
      copy of which has been delivered to Administrative Agent on or before the date
      hereof;

     

    (d)  no
      Material Adverse Effect has occurred since June 8, 2007; and

     

    (e)  no
      Default or Event of Default has occurred and is continuing.

     

    Section
      7.  Ratification.

     

    (a)  This
      Amendment shall be deemed to be an amendment to the First Lien Credit Agreement,
      and the First Lien Credit Agreement, as hereby amended, and all Obligations
      in
      connection therewith, are hereby ratified, approved and confirmed in each and
      every respect.  On and after the effectiveness of this Amendment in
      accordance with Section 5 above, each reference in the First Lien Credit
      Agreement to “this Agreement”, “hereunder”, “hereof” or
      words of like import, referring to the First Lien Credit Agreement, and each
      reference in each other Loan Document to “the Credit Agreement”, “the
      First Lien Credit Agreement” “thereunder”, “thereof” or words
      of like import referring to the First Lien Credit Agreement, shall mean and
      be a
      reference to the First Lien Credit Agreement as amended or otherwise modified
      by
      this Amendment.  This Amendment is a Loan Document.

     

    (b)  The
      Borrower and each other Obligor hereby ratifies, approves and confirms in every
      respect all the terms, provisions, conditions and obligations of each of the
      Security Documents, including without limitation all Mortgages, Security
      Agreements, Guaranties and Control Agreements, to which it is a
      party.

     

    Section
      8.  Costs
      and Expenses.  As provided in Section 10.3 of the First Lien
      Credit Agreement, the Borrower agrees to reimburse Administrative Agent for
      all
      fees, costs, and expenses, including the reasonable fees, costs, and expenses
      of
      counsel or other advisors for advice, assistance, or other representation in
      connection with this Amendment.

     

    Section
      9.  New
      Lenders; Purchase and Sale of Loans, Etc.

     

    (a)  Upon
      the
      effectiveness of this Amendment and by its execution and delivery hereof, each
      of Allied Irish Banks p.l.c., Credit Suisse, UBS Loan Finance LLC and Whitney
      National Bank (each, an “Assignee Lender”) shall be deemed automatically
      to have become a party to the First Lien Credit Agreement, shall have all the
      rights and obligations of a “Lender” under the First Lien Credit Agreement and
      the other Loan Documents as if each were an original signatory thereto, and
      shall agree, and does hereby agree, to be bound by the terms and conditions
      set
      forth in the First Lien Credit Agreement and the other Loan Documents to which
      the Lenders are a party, in each case, as if each were an original signatory
      thereto.

     

    (b)  Each
      Assignee Lender (i) confirms that it has received a copy of the First Lien
      Credit Agreement and such other documents and information as it has deemed
      appropriate to make its own credit analysis and decision to enter into this
      Amendment and the First Lien Credit Agreement; (ii) agrees that it will,
      independently and without reliance upon the Administrative Agent, any Issuer
      or
      any other Lender and based on such documents and information as it shall deem
      appropriate at the time, continue to make its own credit decisions in taking
      or
      not taking action under the First Lien Credit Agreement; (iii) represents and
      warrants that its name set forth herein is its legal name and that it has full
      power and authority, and has taken all action necessary, to execute and deliver
      this Amendment and to consummate the transactions contemplated hereby and to
      become a Lender under the First Lien Credit Agreement; (iv) appoints and
      authorizes the Administrative Agent to take such action as agent on its behalf
      and to exercise such powers and discretion under the Loan Documents as are
      delegated to the Administrative Agent by the terms thereof, together with such
      powers and discretion as are reasonably incidental thereto; and (vi) agrees
      that
      it will perform in accordance with their terms all of the obligations that
      by
      the terms of the First Lien Credit Agreement are required to be performed by
      it
      as a Lender.

     

    (c)  Each
      Assignee Lender hereby advises each other party hereto that its respective
      address for notices shall be as set forth below its name Schedule II
      hereto.

     

    (d)  The
      Lenders party to the First Lien Credit Agreement prior to the effectiveness of
      this Amendment (the “Existing Lenders”) hereby sell, assign, transfer and
      convey, and each Assignee Lender hereby purchases and accepts, so much of the
      aggregate Commitments under, Loans outstanding under, and participations in
      Letters of Credit issued pursuant to, the First Lien Credit Agreement such
      that,
      after giving effect to this Amendment, the Percentage of each Lender (including
      the Existing Lenders and the Assignee Lenders), and the portion of the Loan
      Commitment (and allocation of the new Borrowing Base and the Borrowing Base
      if
      increased pursuant to Section 3 hereof) of each Lender, shall be as set
      forth on Schedule II hereto.  The foregoing assignments,
      transfers and conveyances are without recourse to the Existing Lenders and
      without any warranties whatsoever by the Administrative Agent, the Issuer or
      any
      Existing Lender as to title, enforceability, collectibility, documentation
      or
      freedom from liens or encumbrances, in whole or in part, other than the warranty
      of each Existing Lender that it has not previously sold, transferred, conveyed
      or encumbered such interests.

     

    (e)  The
      Existing Lenders and the Assignee Lenders shall make all appropriate adjustments
      in payments under the First Lien Credit Agreement, the Notes and the other
      Loan
      Documents for periods prior to the adjustment date among
      themselves.

     

    Section
      10.  GOVERNING
      LAW.  THIS AMENDMENT SHALL BE DEEMED A CONTRACT AND INSTRUMENT
      MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED
      IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND THE
      LAWS OF THE UNITED STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
      OF LAW.

     

    Section
      11.  Severability.  Any
      provision of this Amendment that is prohibited or unenforceable in any
      jurisdiction shall, as to such provision and such jurisdiction, be ineffective
      to the extent of such prohibition or unenforceability without invalidating
      the
      remaining provisions of this Amendment or affecting the validity or
      enforceability of such provision in any other jurisdiction.

     

    Section
      12.  Counterparts.  This
      Amendment may be
      executed in any number of counterparts, all of which taken together shall
      constitute one and the same instrument, and any party hereto may execute this
      Amendment by signing one or more counterparts.  Any signature hereto
      delivered by a party by facsimile or electronic transmission shall be deemed
      to
      be an original signature hereto.

     

    Section
      13.  No
      Waiver.  Except as expressly set forth in this Amendment, the
      execution, delivery and effectiveness of this Amendment shall not operate as
      a
      waiver of any default of the Borrower or any other Obligor or any right, power
      or remedy of the Administrative Agent or the other Secured Parties under any
      of
      the Loan Documents, nor constitute a waiver of any provision of any of the
      Loan
      Documents.

     

    Section
      14.  Successors
      and Assigns.  This Amendment shall be binding upon the Borrower
      and its successors and permitted assigns and shall inure, together with all
      rights and remedies of each Lender Party hereunder, to the benefit of each
      Lender Party and the respective successors, transferees and
      assigns.

     

    Section
      15.  Entire
      Agreement.  THIS AMENDMENT, THE FIRST LIEN CREDIT AGREEMENT AND
      THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT OF THE PARTIES WITH
      RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE
      OF
      PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
      PARTIES.

     

    THERE
      ARE NO UNWRITTEN ORAL AGREEMENTS
      BETWEEN THE PARTIES.

     

    [Signature
      Pages Follow]

     

    
      
              

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    IN WITNESS WHEREOF,
      the parties hereto have caused this Amendment to be duly executed and delivered
      by their respective duly authorized officers as of the Effective
      Date.

     

    BORROWER:

     

    ENERGY
      XXI GULF COAST, INC.

    

    

    By:     /s/ 
      Ben
      Marchive                                                                      

    Name:  Ben
      Marchive

     

    Title:  President

     

    
      
              

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    ADMINISTRATIVE
      AGENT AND LENDERS:

     

    THE
      ROYAL
      BANK OF SCOTLAND plc, as Administrative Agent, Issuer and Lender

    

    

    By:      
       /s/ P.R.
      Ballard                                                                     

    Name:  
      P.R.
      Ballard                                                                         

    Title:     Managing
      Director                                                                      

    

    

    
      
              

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    BNP
      PARIBAS, as Issuer and
      Lender

    

    

    By:            
      /s/  Robert Long                                                                       

    Name:       Robert
      Long                                                                    

    Title:         Vice
      President                                                                  

    

    

    By:             /s/ Russell
      Otts                                                           

    Name:        Russell
      Otts                                                                   

    Title:          Vice
      President                                                                

    
      
              

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    BMO
      CAPITAL MARKETS FINANCING, INC., as Lender

    

    

    By:            /s/ 
      Mary Lou
      Allen                                                               

    Name:        Mary
      Lou
      Allen                                                                   

    Title:         
      Vice President

    
      
              

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    GUARANTY
      BANK, FSB, as Lender

    

    

    

    By:             /s/
      Kelly L. Elmore
      III                                                              

    Name:          Kelly
      L. Elmore
      III                                                                 

    Title:           
      Senior Vice President

    

    
      
              

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    AMEGY
      BANK NATIONAL ASSOCIATION, as Lender

    

    

    

    By:         /s/
      W.
      Bryan Chapman                                                          

    Name:     W.
      Bryan
      Champman                                                                    

    Title:       Senior
      Vice President

    
      
              

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    THE
      BANK
      OF NOVA SCOTIA, as Lender

    

    

    

    By:         /s/
      Andrew Ostrov                                                                  

    Name:    Andrew Ostrov                                                                                                                                         

    Title:     
      Director

    
      
              

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    LEHMAN
      COMMERCIAL PAPER INC., as Lender

    

    

    

    

    By:      
      /s/ J. Robert
      Chambers                                                                  

    Name:    J.
      Robert
      Chambers                                                                                    

    Title:    
      Authorized Signatory

    

    
      
              

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    TORONTO
      DOMINION (TEXAS) LLC, as Lender

    

    

    

    

    By:        /s/
      Debbi L.
      Brito                                                                   

    Name:     Debbi
      L.
      Brito             

    Title:      
      Authorized Signatory

    

    
      
              

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    CAPITAL
      ONE, NATIONAL ASSOCIATION, as Lender

    

    

    

    

    By:      /s/ 
      Nancy G.
      Moragas                                                                     

    Name:    Nancy
      G.
      Moragas                                                                     

    Title:     
      Sr. Vice President

    
      
              

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    NATIXIS,
      as Lender

    

    

    

    

    By:        /s/  
      Donovan C.
      Broussard                                                                  

    Name:     Donovan
      C.
      Broussard           

    Title:     
      Managing Director

     

    By:      
/s/ 
Louis
      P. Laville,
      III                                               

    
      Name:     Louis
        P. Laville, III                                               

      Title:     
        Managing Director

    

    
      
              

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    ALLIED
      IRISH BANKS p.l.c., as Lender

    

    

    

    

    By:       /s/ 
       Aidan
      Lanigan                                                                   

    Name:    Aidan
      Lanigan                   

    Title:     
      Vice President

     

    By:       /s/   Joanne
      Gibson

    Name:   
Joanne
      Gibson

    Title:     
Assistant
      Vice
      President

    
      
              

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    CREDIT
      SUISSE, as Lender

    

    

    

    

    By:        /s/ 
       Brian
      Caldwell                                                                  

    Name:    Brian
      Caldwell                                                                                    

    Title:     
      Director

     

    By:        /s/ 
Nupur
      Kumar

    Name:   
Nupur
      Kumar

    Title:     
      Associate

    
      
              

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    UBS
      LOAN
      FINANCE LLC, as Lender

    

    

    

    

    By:     /s/ 
      Mary L.
      Evans                                                                      

    Name:   Mary
      L. Evans                   

    Title:    
      Associate Director

     

    By:     /s/ 
      Irja R. Otsa

    Name:   Irja
      R. Otsa

    Title:    
      Associate Director

     

     

    
      
              

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    WHITNEY
      NATIONAL BANK, as Lender

    

    

    

    

    By:      /s/
      John B.
      Lane                                                                   

    Name:   John
      B.
      Lane                                                                   

    Title:    
      Senior Vice President

    

    
      
              

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    ACKNOWLEDGED
      AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:

    

    ENERGY
      XXI GOM, LLC f/k/a MARLIN ENERGY OFFSHORE, L.L.C.

    

    

    

    By:     /s/ 
      Ben
      Marchive                                                                      

    Name:  Ben
      Marchive                                                                      

    Title:    President

    

    ENERGY
      XXI TEXAS GP, LLC f/k/a MARLIN TEXAS GP, L.L.C.

    

    

    By:       /s/ 
      Ben
      Marchive                                                                                                                                          

    Name:  Ben
      Marchive                                                                      

    Title:    President

    

    ENERGY
      XXI TEXAS, LP f/k/a MARLIN TEXAS, L.P.

    

    By:  Energy
      XXI Texas GP, LLC f/k/a Marlin Texas GP, L.L.C., its General
      Partner

    
 

    By:      /s/ 
      Ben
      Marchive                                                                                                                                                                                                               

    Name:  Ben
      Marchive                                                                      

    Title:    President

    
      
              

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    ACKNOWLEDGED
      AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN IN ITS CAPACITY AS GUARANTOR
      UNDER
      ITS LIMITED RECOURSE GUARANTY AND GRANTOR UNDER ITS PLEDGE AGREEMENT AND
      IRREVOCABLE PROXY DELIVERED IN CONNECTION WITH THE FIRST LIEN CREDIT
      AGREEMENT:

    

    ENERGY
      XXI USA, INC.

    

    

    By:      
      /s/  Ben
      Marchive                                                                                                                                                                                                               

    Name:  Ben
      Marchive                                                                      

    Title:    President

    
      
              

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    SCHEDULE
      I

    

    EPL/CASTEX
      ASSETS

     

    

     

    The
      attached pages hereto contain identifying descriptions of the working interests,
      revenue interests, leasehold interests and wells, facilities and pipelines
      in
      which the Borrower proposes to acquire a forty-nine and one half percent (49.5%)
      interest as part of the Acquisition.  For purposes of compliance with
      Section 3 of the Amendment, any material changes to, or modifications of, the
      “EPL/Castex Assets” as described herein shall require the consent of the
      Required Lenders (it being understood that the exclusion of real property or
      personal property assets having an aggregate fair market value, as determined
      in
      good faith by the Borrower, of less than $1,000,000 shall not be considered
      a
      material change or modification).  Upon provision of information
      reasonably acceptable to it, the Administrative Agent may approve or consent
      to
      any non material changes to, or modification of, the “EPL/Castex Assets” for
      purposes of compliance with Section 3 of the Amendment.  Capitalized
      terms used herein but not defined herein shall have the meanings as given them
      in the First Amendment to Amended and Restated First Lien Credit Agreement
      to
      which this Schedule I is attached (the “Amendment”).

     

    
      
              

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    SCHEDULE
      II

     

     

    PERCENTAGES;

     

     

    COMMITMENTS;

     

     

    LIBOR
      OFFICE;

     

     

    DOMESTIC
      OFFICE

     

     

    

     

     

    

     

    Notice
      Address of Borrower:

     

    Energy
      XXI Gulf Coast, Inc.

     

    c/o
      Corporation Trust Center

     

    1209
      Orange Street, Room 123

     

    Wilmington,
      DE 19801

     

    With
      a
      copy to:

     

    1021
      Main
      (One City Centre), Suite 2626

     

    Houston,
      Texas 77002

     

    Attention:
      West Griffin

     

    Telephone:  (713)
      659-2100

     

    Facsimile:  (713)
      659-2101

     

    

     

    
      	
              NAME
                AND NOTICE ADDRESS

              OF
                LENDERS

            	
              LIBOR
                OFFICE

            	
              DOMESTICOFFICE

            
	
               

              The
                Royal Bank of Scotland plc

              101
                Park Avenue

              New
                York, NY 10178

              Attention:  Linda
                Supaswud or Matt Wilson

              Telephone:  (212)
                250-1411 or (212) 401-1412

              Facsimile:  (212)
                797-0406 or (212) 401-1478

               

              With
                a copy to:

               

              600
                Travis Street, Suite 6500

              Houston,
                Texas 77002

              Attention:  Robert
                Poirrier

              Telephone:  (713)
                221-2434

              Facsimile:  (713)
                221-2428

            	
               

              101
                Park Avenue

              New
                York, NY 10178

            	
               

              101
                Park Avenue

              New
                York, NY 10178

            
	
               

              BNP
                Paribas

              919
                Third Avenue

              New
                York, NY 10022

              Attention:  Cory
                Lantin

              Telephone:
                (212) 471-6626

              Facsimile:  (212)
                841-2683

               

              With
                a copy to:

               

              1200
                Smith Street, Suite 3000

              Houston,
                Texas 77002

              Attention:  Gabe
                Ellisor

              Telephone:  (713)
                982-1162

              Facsimile:  (713)
                659-6915

               

            	
               

              919
                Third Avenue

              New
                York, NY 10022

            	
               

              919
                Third Avenue

              New
                York, NY 10022

            
	
               

              Guaranty
                Bank, FSB

              333
                Clay, Suite 4400

              Houston,
                Texas 77002

              Attention:  Kelly
                L. Elmore III

              Telephone:  (713)
                890-8849

              Facsimile:  (713)
                890-8868

               

            	
               

              8333
                Douglas Avenue

              Dallas,
                TX 75225

            	
               

              8333
                Douglas Avenue

              Dallas,
                TX 75225

            
	
               

              BMO
                Capital Markets

              Financing,
                Inc.

              700
                Louisiana, Suite 4400

              Houston,
                TX 77002

              Attention:  Mary
                Lou Allen

              Telephone:  (713)
                546-9761

              Facsimile:
                (713) 223-4007

               

            	
               

              115
                S. LaSalle Street

              Chicago,
                IL 60603

            	
               

              115
                S. LaSalle Street

              Chicago,
                IL 60603

            
	
               

              Amegy
                Bank National Association

              4400
                Post Oak Parkway, #404

              Houston,
                Texas 77027

              Attention:
                W. Bryan Chapman, Senior Vice President

              Telephone:
                (713) 232-2026

              Facsimile:
                (713) 561-0345

               

            	
               

              4400
                Post Oak Parkway

              #404

              Houston,
                TX 77027

            	
               

              4400
                Post Oak Parkway

              #404

              Houston,
                TX 77027

               

            
	
               

              The
                Bank of Nova Scotia

              711
                Louisiana, Suite 1400

              Houston,
                TX 77002

              Attention:  Sandra
                Aultman

              Telephone:  713-759-3428

              Fax:  713-752-2425

               

            	
               

              101
                Park Avenue

              6th
                Floor

              New
                York, NY 10178

            	
               

              101
                Park Avenue

              6th
                Floor

              New
                York, NY 10178

            
	
               

              Lehman
                Commercial Paper Inc.

              745
                7th
                Avenue, 5th
                Floor

              New
                York, New York 10019

              Attention:  Winnie
                Chin

              Telephone:  (212)
                526-6560

              Facsimile:  (212)
                520-0450

               

            	
               

              745
                7th
                Avenue

              5th
                Floor

              New
                York, NY 10019

            	
               

              745
                7th
                Avenue

              5th
                Floor

              New
                York, NY 10019

            
	
               

              Toronto
                Dominion (Texas) LLC

              31
                West 52nd
                Street, 20th
                Floor

              New
                York, New York 10019

              Attention:
                Martin Snyder

              Telephone:
                (713) 653-8211

              Facsimile:
                (713) 652-2647

               

            	
               

              31
                West 52nd
                Street

              20th
                Floor

              New
                York, NY 10019

            	
               

              31
                West 52nd
                Street

              20th
                Floor

              New
                York, NY 10019

            
	
               

              Capital
                One, National Association

              313
                Carondolet, 10th
                Floor

              New
                Orleans, LA 70130

              Attention:  Nancy
                Moragas

              Telephone:  (504)
                533-2863

              Facsimile:  (504)
                533-5594

               

              (For
                Operations)

              5718
                Westheimer, 6th
                Floor

              Energy
                Banking Department

              Houston,
                Texas 77057

              Attention:  Norma
                Jean Platt

              Telephone:  (713)
                759-6316

              Facsimile:  (713)
                650-0824

               

            	
               

              5718
                Westheimer

              6th
                Floor

              Energy
                Banking Dpt.

              Houston,
                TX 77057

            	
               

              5718
                Westheimer

              6th
                Floor

              Energy
                Banking Dpt.

              Houston,
                TX 77057

            
	
               

              Natixis

              Houston
                Energy Group

              333
                Clay Street, Suite 4340

              Houston,
                Texas 77002

              Attention:
                Donovan Broussard

              Telephone:  (713)
                759-0973

              Facsimile:  (713)
                571-6167

               

            	
               

              333
                Clay Street

              Suite
                4340

              Houston,
                TX 77002

            	
               

              333
                Clay Street, Suite 4340

              Houston,
                TX 77002

            
	
               

              Allied
                Irish Banks, p.l.c.

               

              (for
                Credit)

              c/o
                AIB Corporate Banking

              405
                Park Avenue, 4th
                Floor

              New
                York, New York 10022

              Attention:
                James Giordano

              Telephone:  (212)
                515-6763

              Facsimile:  (212)
                339-8099

               

              (for
                Operations)

              Allied
                Irish Bank – Corporate Operations

              2nd
                Floor, Iona
                House, Shelbourne Road

              Ballsbridge,
                Dublin 4, Ireland

              Attention:  Eimear
                O’Meara / Peter Garvey

              Telephone:  +353
                1 641 9933 / 6636

              Facsimile:  +353
                1 641 6668

               

            	
               

              2nd
                Floor, Iona
                House, Shelbourne Road

              Ballsbridge,
                Dublin 4, Ireland

            	
               

              2nd
                Floor, Iona
                House,

              Shelbourne
                Road

              Ballsbridge,
                Dublin 4, Ireland

            
	
               

              Credit
                Suisse

              Eleven
                Madison Avenue

              New
                York, New York 10010

              Attention:  Vanessa
                Gomez

              Telephone:  (212)
                538-2993

              Facsimile:  (212)
                448-3755

               

            	
               

              Eleven
                Madison Avenue

              New
                York, New York 10010

            	
               

              Eleven
                Madison Avenue

              New
                York, New York 10010

            
	
               

              UBS
                Loan Finance LLC

              677
                Washington Blvd.

              Stamford,
                Connecticut 06901

              Attention:  Jenny
                Milioti

              Telephone:  (203)
                719-5993

              Facsimile:  (203)
                719-3888

               

            	
               

              677
                Washington Blvd.

              Stamford,
                Connecticut 06901

            	
               

              677
                Washington Blvd.

              Stamford,
                Connecticut 06901

            
	
               

              Whitney
                National Bank

              4265
                San Felipe Ave., Suite 200

              Houston,
                Texas 77027

              Attention:  John
                Lane

              Telephone:  (713)
                951-7116

              Facsimile:  (713)
                951-7172

               

            	
               

              4265
                San Felipe Ave., Suite 200

              Houston,
                Texas 77027

            	
               

              4265
                San Felipe Ave., Suite 200

              Houston,
                Texas 77027

            

    

    

    
      
              

                            24641584
            06020964              
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Percentages;
      Commitments of Lenders:

     

    
      	 	 	 	 	 
	
              LENDER

            	
              PERCENTAGE*

            	
              $450M
                BORROWING BASE

              ALLOCATION**

            	
              $460M
                BORROWING BASE

              ALLOCATION***

            	
              LOAN
                COMMITMENT

            
	
              The
                Royal Bank of Scotland plc

            	
              13.913

            	
              $62,608,695.65

            	
              $64,000,000.00

            	
              $97,391,304.35

            
	
              BNP
                Paribas

            	
              13.913

            	
              $62,608,695.65

            	
              $64,000,000.00

            	
              $97,391,304.35

            
	
              Guaranty
                Bank, FSB

            	
              13.696

            	
              $61,630,434.78

            	
              $63,000,000.00

            	
              $95,869,565.22

            
	
              BMO
                Capital Markets Financing, Inc.

            	
              9.783

            	
              $44,021,739.13

            	
              $45,000,000.00

            	
              $68,478,260.87

            
	
              Amegy
                Bank National Association

            	
              5.435

            	
              $24,456,521.74

            	
              $25,000,000.00

            	
              $38,043,478.26

            
	
              The
                Bank of Nova Scotia

            	
              5.435

            	
              $24,456,521.74

            	
              $25,000,000.00

            	
              $38,043,478.26

            
	
              Lehman
                Commercial Paper Inc.

            	
              5.435

            	
              $24,456,521.74

            	
              $25,000,000.00

            	
              $38,043,478.26

            
	
              Toronto
                Dominion (Texas) LLC

            	
              5.435

            	
              $24,456,521.74

            	
              $25,000,000.00

            	
              $38,043,478.26

            
	
              Capital
                One, National Association

            	
              5.000

            	
              $22,500,000.00

            	
              $23,000,000.00

            	
              $35,000,000.00

            
	
              Natixis

            	
              4.348

            	
              $19,565,217.39

            	
              $20,000,000.00

            	
              $30,434,782.61

            
	
              Allied
                Irish Banks p.l.c.

            	
              5.435

            	
              $24,456,521.74

            	
              $25,000,000.00

            	
              $38,043,478.26

            
	
              Credit
                Suisse

            	
              5.435

            	
              $24,456,521.74

            	
              $25,000,000.00

            	
              $38,043,478.26

            
	
              UBS
                Loan Finance LLC

            	
              3.478

            	
              $15,652,173.91

               

            	
              $16,000,000.00

            	
              $24,347,826.09

            
	
              Whitney
                National Bank

            	
              3.261

            	
              $14,673,913.04

            	
              $15,000,000.00

            	
              $22,826,086.96

            
	 	 	 	 	 
	
              Total:

            	
              100.00%

            	
              $450,000,000.00**

            	
              $460,000,000.00***

            	
              $700,000,000.00

            

    

    

    *           Percentage
      is rounded to the third decimal for convenience purposes.  The true
      Percentage for a Lender is calculated based on dividing the Loan Commitment
      of
      such Lender by the total Loan Commitment for all Lenders.

    

    **           Based
      on a Borrowing Base of $450,000,000 as of November 19, 2007.

    

    ***           Based
      on a Borrowing Base of $460,000,000 assuming satisfaction of the conditions
      set
      forth in that certain First Amendment to Amended and Restated First Lien Credit
      Agreement dated as of November 19, 2007.

    

    

    
      
              

                            24641584
            06020964Sale and production Agreement for

Sale and Production Agreement for

Intelligent Chinese Wolf-Berry Pellets

                   (English Version For Reference Only)

Part A: Hubei Longdan Biological Medicine Technology Co. Ltd

Legal Address: Floor 21, Jiangtian Building, No. 586 Wuluo Road, 

Wuchang District, Wuhan, Hubei, China, 430070          

Part B: Hubei Huirui Pharmacy Co 

Legal Address: No.1, Miaoshan special development zone, Wuhan High-tech Development Zone, Wuhan Hubei, China.

WHEREAS, Party A is a company with exclusively domestic capital 

registered in the People's Republic of China, and is engaged in the sale of pharmaceutical products, including Chinese medicine and healthy products. 

WHEREAS, Party B is a privately owned limited liability company, registered in the People's Republic of China, and is engaged in the 

business of Chinese medicine development, manufacturing, and sale.

WHEREAS, “Intelligent Chinese Wolf-Berry Pellets” (the “Pellets”) has Chinese pinyin (spelling) name “Zhiqi Ke Li”.

WHEREAS, Part A owns the manufacturing rights, and associated intellectual property of the Pellets.

NOW THEREFORE, Party A and Part B, based in equality, fair, and honest principles, through friendly negotiations hereby agree as follows:

1. This Agreement shall be governed by, and construed in accordance with the "Contract Law of the People's Republic of China (PRC)" as well as other correlation laws and regulations of PRC. 

2. Part A gives Part B the Part A’s original copy of the production approval of the Pellets issued by the State Food And Drug Administration of PRC.

3. Part A submits the quality control plan of the Pellets production following the National Standard for Quality Control in Production to Part B, and will monitor the quality control in the manufacturing process. Part B is responsible to prepare the raw materials and all relative supplementary and package for the production following the quality control plan.

4. Part A will demand Part B to follow the National Quality Standards of the Chinese Medicine strictly. Part B must seriously take every step in controlling the quality. Part B cannot make any production if the raw material is not acceptable, and cannot make the next process if the unfinished products after some processing are not acceptable, and cannot ship any unqualified finished products.

5. Part B should inspect the raw material, and keep the inspection records. Every shipment should be accompanied by the quality inspection report.

6. Part B should guarantee on time to ship every purchase order, and cannot make any delay. Part B has full financial responsibility for shipping unqualified products, and is financially responsible for any products unqualified caused in the processes of shipment, or storage. 

7. Part A assigns professional quality-controllers for sale to Part B, and Part B pays their salary. Part A is responsible for the administration and training of the salesmen and quality-controllers of the Pellets.

8. Payment:

Part B receives all revenue, and will pay Part A the service fee. The amount of the service fee is referenced by the profits produced in the previous period. The payment of the first year is RMB 2,000,000 (including labor charge 50,000) Yuan, then with 5% increase annually in the next three years. Payment is made quarterly. Part A is not responsible for the Part B’s profits.

9. Violation

Part A and Part B should strictly perform the Agreement. Either Part A or Part B has the right to cancel the Agreement, and asks the other part to take the consequence of violation if the opposite party has violated the Agreement.

10. If there need the modification and supplementary in the process of products registration or production cooperation after this Agreement becomes effectiveness, the amendments and supplementary agreements will have equal effect as this Agreement.

11. Settlement of Dispute:

11.1 Part A and Par B will friendly negotiate any additional issue relative to this Agreement.

 

11.2 If there is any dispute of this Agreement, Part A and Part B should friendly negotiate the settlement of any dispute. If no settlement can be reached, each party can submit such matter to the local Court for the judgment.

12. Effective Date and Term:

This Agreement shall come into effect as Part A and Part B sign. The term is five years from January 1, 2007 to December 31, 2011.  The term can be renewed, or negotiated again on the time of half a year prior to the expiration of this Agreement.

13. The Agreement has three copies. Every part keeps one, and the third copy is submitted to the relative administrative department of the Government. All copied have same legal effectiveness.

                     (Left blank)

                   (Signature page)

Part A: Hubei Longdan Biological Medicine Technology Co. Ltd

/s/Zhilin Zhang                                

Zhilin Zhang, President                     Date: 5/20/2007

Part B: Hubei Huirui Pharmacy Co 

/s/Zhilin Zhang                

Zhilin Zhang, President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]