Document:

Third Supplemental Indenture

 Exhibit 4.3.4 
  

 THIRD SUPPLEMENTAL INDENTURE 
 between 
 XTO ENERGY INC. 
 and 
 THE BANK OF NEW YORK TRUST
COMPANY, N.A., 
 as Trustee 
  

 March 30, 2006 
 5.65% Senior Notes due 2016 
 6.10% Senior Notes due 2036 
  

 TABLE OF CONTENTS 
  

					
	 ARTICLE 1 THE NOTES
	  	2
	 SECTION 1.1. Designation of Notes; Establishment of Form.
	  	2
	 SECTION 1.2. Amount.
	  	2
	 SECTION 1.3. Redemption and Repurchase.
	  	3
	 SECTION 1.4. Conversion.
	  	3
	 SECTION 1.5. Maturity.
	  	3
	 SECTION 1.6. Other Terms of Notes.
	  	3
		
	 ARTICLE 2 AMENDMENTS TO THE INDENTURE
	  	3
	 SECTION 2.1. Definitions.
	  	3
	 SECTION 2.2. Covenants.
	  	5
		
	 ARTICLE 3 MISCELLANEOUS PROVISIONS
	  	6
	 SECTION 3.1. Integral Part.
	  	6
	 SECTION 3.2. Rules of Construction.
	  	6
	 SECTION 3.3. Adoption, Ratification and Confirmation.
	  	6
	 SECTION 3.4. Counterparts.
	  	6
	 SECTION 3.5. Benefits of Indenture.
	  	6
	 SECTION 3.6. Governing Law.
	  	6
	 SECTION 3.7. Supplemental Indenture Controls.
	  	7
	 SECTION 3.8. Trustee.
	  	7
		
	 EXHIBIT A     FORM OF 2016 NOTE
	  	A-1
	 EXHIBIT B     FORM OF 2036 NOTE
	  	B-1

  

 i 

 THIRD SUPPLEMENTAL INDENTURE 
 THIS THIRD SUPPLEMENTAL INDENTURE, dated as of March 30, 2006 (this “Third Supplemental Indenture”), between XTO Energy
Inc., a Delaware corporation (the “Company”), and The Bank of New York Trust Company, N.A., a national banking association organized under the laws of the United States of America (the “Trustee”), 
 W I T N E S S E T H: 
 WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of April 13, 2005 (the “Original Indenture” and, as amended and supplemented by First Supplemental Indenture dated as of
April 13, 2005, Second Supplemental Indenture dated as of October 1, 2005 and this Third Supplemental Indenture, the “Indenture”), providing for the issuance from time to time of one or more series of the Company’s
Securities; 
 WHEREAS, Section 8.1(k) of the Indenture provides that the Company and the Trustee may from time to time
enter into one or more indentures supplemental thereto to establish the form or terms of Securities of a new series; 
 WHEREAS, Section 8.1(h) of the Indenture permits the execution of supplemental indentures without the consent of any Holders to add to, change or eliminate any of the provisions of the Indenture with respect to all or any series of
Securities, provided that, among other things, such addition, change or elimination does not apply to any outstanding Security of any series created prior to the execution of such supplemental indenture; 
 WHEREAS, Sections 2.1 and 2.2 of the Indenture provide that the Company may establish the form, terms and provisions of a series of
Securities issued pursuant to the Indenture; 
 WHEREAS, the Company desires to issue $400,000,000 aggregate principal amount
of 5.65% Senior Notes due 2016 (the “2016 Notes”), a new series of Securities, the issuance of which was authorized by or pursuant to resolution of the Board of Directors of the Company; 
 WHEREAS, the Company desires to issue $600,000,000 aggregate principal amount of 6.10% Senior Notes due 2036 (the “2036
Notes”), a new series of Securities, the issuance of which was authorized by or pursuant to a resolution of the Board of Directors of the Company; 
 WHEREAS, the Company, pursuant to the foregoing authority, proposes in and by this Third Supplemental Indenture to supplement and amend the Original Indenture insofar as it will apply only to the 2016 Notes and the
2036 Notes in certain respects; and 
 WHEREAS, all things necessary have been done to make the 2016 Notes and the 2036
Notes, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company, and to make this Third Supplemental Indenture a valid and legally binding agreement of the Company,
in accordance with their and its terms; 
  

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 NOW, THEREFORE: 
 In consideration of the premises provided for herein, the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of all Holders of the 2016 Notes and 2036
Notes as follows: 
 ARTICLE 1 
 THE NOTES 
 SECTION 1.1. Designation of Notes; Establishment of Form. 
 There shall be a series of Securities designated “5.65% Senior Notes due 2016” of the Company (the “2016 Notes”), and
the form thereof shall be substantially as set forth in Exhibit A hereto, which is incorporated into and shall be deemed a part of this Third Supplemental Indenture, in each case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or
as may, consistently with the Indenture, be determined by the officers of the Company executing such 2016 Notes, as evidenced by their execution of the 2016 Notes. 
 There shall be a series of Securities designated “6.10% Senior Notes due 2036” of the Company (the “2036 Notes”), and the form thereof shall be substantially as set forth in
Exhibit B hereto, which is incorporated into and shall be deemed a part of this Third Supplemental Indenture, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture,
and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently with the Indenture, be determined by
the officers of the Company executing such 2036 Notes, as evidenced by their execution of the 2036 Notes. 
 The 2016 Notes
and the 2036 Notes are referred to collectively in this Third Supplemental Indenture as the “Notes”. 
 The Notes
will initially be issued in permanent global form, substantially in the form set forth in Exhibit A or Exhibit B hereto, as applicable, as a Global Security. 
 The Company initially appoints the Trustee to act as Paying Agent and Security Registrar with respect to the Notes. 
 SECTION 1.2. Amount. 
 The Trustee shall authenticate and
deliver Notes for original issue in an aggregate principal amount of up to $1,000,000,000, consisting of up to $400,000,000 principal amount of 2016 Notes and up to $600,000,000 principal amount of 2036 Notes, all upon Company Order for the
authentication and delivery of Notes, without any further action by the Company. The authorized aggregate principal amount of Notes of each series may be increased at any time 

  

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hereafter and each series may be reopened for issuances of additional Securities as provided in the last paragraph of Section 2.2 of the Original
Indenture, so long as such additional Securities are fungible with the 2016 Notes or the 2036 Notes, as applicable, issued on the date hereof for U.S. Federal income tax purposes. The 2016 Notes issued on the date hereof and any such additional 2016
Notes that may be issued hereafter shall be part of the same series of Securities. The 2036 Notes issued on the date hereof and any such additional 2036 Notes that may be issued hereafter shall be part of the same series of Securities. 

SECTION 1.3. Redemption and Repurchase. 
 (a) There shall be no sinking fund for the retirement of the Notes or other mandatory redemption or repurchase obligation. 
 (b) The Company, at its option, may redeem the Notes in accordance with the provisions of the Notes and the Indenture, including, without limitation, Section 10.8. 
 SECTION 1.4. Conversion. 
 The Notes shall not be convertible into any other securities. 
 SECTION 1.5.
Maturity. 
 The Stated Maturity of the 2016 Notes shall be April 1, 2016. The Stated Maturity of the 2036 Notes
shall be April 1, 2036. 
 SECTION 1.6. Other Terms of Notes. 
 Without limiting the foregoing provisions of this Article 1, the terms of the 2016 Notes shall be as provided in the form of 2016 Notes
set forth in Exhibit A hereto and as provided in the Indenture, and the terms of the 2036 Notes shall be as provided in the form of 2036 Notes set forth in Exhibit B hereto and as provided in the Indenture. 
 ARTICLE 2 
 AMENDMENTS TO THE INDENTURE

 The amendments and supplements contained herein shall apply to Notes only and not to any other series of Securities issued
under the Indenture and any covenants provided herein are expressly being included solely for the benefit of the Notes. These amendments and supplements shall be effective for so long as there remains any Notes outstanding. 
 SECTION 2.1. Definitions. 
 Section 1.1 of the Original Indenture is amended and supplemented by inserting or restating, as the case may be, in their appropriate alphabetical position, the following definitions: 
 “2016 Notes” means the 5.65% Senior Notes due 2016 of the Company to be issued pursuant to this Indenture. 
  

 3 

 “2016 Note Issue Date” means the first day on which the Company issues the 2016
Notes under this Indenture. 
 “2036 Notes” means the 6.10% Senior Notes due 2036 of the Company to be issued under
the Indenture. 
 “2036 Notes Issue Date” means the first day on which the Company issues the 2036 Notes under the
Indenture. 
 “Additional 2016 Notes” means 5.65% Senior Notes due 2016 issued from time to time after the 2016
Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture). 
 “Additional 2036 Notes” means 6.10% Senior Notes due 2036 issued from time to time after the 2036 Note Issue Date under the terms of this Indenture (other than pursuant to Section 2.8, 2.9, 2.11 or 10.7 of this Indenture).

 “Notes” means the 2016 Notes and the 2036 Notes. 
 “Regular Record Date” for the interest payable on the Notes on any Interest Payment Date means the March 15 or
September 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 
 “Make-Whole Amount” with respect to a Note means an amount equal to the excess, if any, of (1) the present value of the remaining interest, premium and principal payments due on such Note (excluding any portion of such
payments of interest accrued as of the redemption date), computed using a discount rate equal to the Treasury Rate plus 15 basis points (in the case of the 2016 Notes) or 25 basis points (in the case of the 2036 Notes), over (2) the outstanding
principal amount of such Note. “Treasury Rate” is defined as the yield to maturity (calculated on semi-annual bond-equivalent basis) at the time of the computation of United States Treasury securities with a constant maturity (as compiled
by and published in the most recent Federal Reserve Statistical Release H.15 (510), which has become publicly available at least two business days prior to the date of the redemption notice or, if such Statistical Release is no longer published, any
publicly available source of similar market data) most nearly equal to the then remaining maturity of such Note; provided that if the Make-Whole Average Life of such Note is not equal to the constant maturity of the United States Treasury security
for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are
given, except that if the Make-Whole Average Life of such Note is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. “Make-Whole Average
Life” means the number of years (calculated to the nearest one-twelfth) between the date of redemption and the Stated Maturity of such Note. 
  

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 SECTION 2.2 Covenants. 
 Section 9.10 of the Original Indenture is amended to read in its entirety as follows: 
 SECTION 9.10 Limitation on Liens. 
 (a) The Company shall not, and shall not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien, except
Permitted Liens, upon any Principal Property or upon any Capital Stock or Indebtedness of any Restricted Subsidiary, whether owned or leased on the date of this Indenture or thereafter acquired, to secure any of its Debt (other than the Securities)
or any Debt of any other Person, without in each case making effective provision whereby all Notes (together with, if it so determines, any other Debt of the Company that is not subordinate in right of payment to the prior payment in full of the
Notes) shall be secured equally and ratably with, or prior to, such Debt so long as such Debt shall be so secured. 
 (b)
Notwithstanding the preceding provisions of this Section 9.10, the Company may, and may permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Lien upon any Principal Property or upon any Capital Stock or Indebtedness
of any Restricted Subsidiary to secure its Debt (other than the Securities) or Debt of any other Person that is not excepted pursuant to Section 9.10(a), without securing the Notes, provided that the aggregate principal amount of all
Debt then outstanding secured by such Lien and all other Liens not excepted pursuant to Section 9.10(a), together with all Attributable Indebtedness from Sale-leaseback Transactions, excluding Sale-leaseback Transactions permitted under the
first paragraph of Section 9.11, does not exceed 15% of the Company’s Consolidated Net Tangible Assets. 
 Section 9.11 of the Original Indenture is amended to read in its entirety as follows: 
 SECTION 9.11 Limitation on Sale-leaseback Transactions. 
 The Company shall not,
and shall not permit any of its Subsidiaries to, engage in a Sale-leaseback Transaction unless (i) the Sale-leaseback Transaction occurs within one year from the date of completion of the acquisition of the Principal Property subject thereto or
the date of the completion of construction, development or substantial repair or improvement, or commencement of full operations on such Principal Property, whichever is later; (ii) the Sale-leaseback Transaction involves a lease for a period,
including renewals, of not more than three years; (iii) the Attributable Indebtedness from the Sale-leaseback Transaction is an amount equal to or less than the amount that the Company or such Subsidiary would be allowed by Section 9.10 to
incur as Debt secured by a Lien on the Principal Property subject thereto without equally and ratably securing the Notes; or (iv) the Company or such Subsidiary, within a one-year period after the Sale-leaseback Transaction, applies or causes
to be applied an amount not less than the net sale proceeds from the Sale-leaseback Transaction to (A) the prepayment, repayment, redemption, reduction or retirement of any Pari Passu Debt of the Company or (B) the expenditure or
expenditures for Principal Property used or to be used in the ordinary course of the business of the Company or its Subsidiaries. Notwithstanding the preceding provisions of this Section 9.11, the Company may, and may permit any Subsidiary to,
effect any Sale-leaseback Transaction that is not excepted in the preceding sentence, provided that the 

  

 5 

 
Attributable Indebtedness from such Sale-leaseback Transaction and any other Sale-leaseback Transaction that is not so excepted, together with the aggregate
principal amount of then outstanding Debt (other than Securities) secured by Liens upon Principal Properties not excepted in Section 9.10(a) do not exceed 15% of the Company’s Consolidated Net Tangible Assets. 
 ARTICLE 3 
 MISCELLANEOUS PROVISIONS

 SECTION 3.1. Integral Part. 
 This Third Supplemental Indenture constitutes an integral part of the Indenture. 
 SECTION 3.2. Rules of Construction. 
 For all purposes of this Third
Supplemental Indenture: 
 (a) capitalized terms used herein without definition shall have the meanings specified in the
Original Indenture; and 
 (b) the terms “herein,” “hereof,” “hereunder” and other words of
similar import refer to this Third Supplemental Indenture. 
 SECTION 3.3. Adoption, Ratification and Confirmation.

 The Original Indenture, as supplemented and amended by First Supplemental Indenture dated as of April 13, 2005,
the Second Supplemental Indenture dated as of October 1, 2005 and this Third Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. 
 SECTION 3.4. Counterparts. 
 This Third Supplemental
Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed an original; and all such counterparts shall together constitute but one and the same instrument. 
 SECTION 3.5. Benefits of Indenture. 
 Nothing in this Third Supplemental Indenture or in the Notes, express or implied, shall give to any Person (other than the parties hereto, any Paying Agent, any Securities Registrar and their
successors hereunder and the Holders) any benefit or any legal or equitable right, remedy or claim under the Indenture. 
 SECTION 3.6. Governing Law. 
 THIS THIRD SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE TRUST INDENTURE ACT IS APPLICABLE. 
  

 6 

 SECTION 3.7. Supplemental Indenture Controls. 
 In the event there is any conflict or inconsistency between the Original Indenture and this Third Supplemental Indenture, the provisions
of this Third Supplemental Indenture shall control. 
 SECTION 3.8. Trustee. 
 The Trustee makes no representations as to the validity or sufficiency of this Third Supplemental Indenture. The recitals and statements
herein are deemed to be those of the Company and not the Trustee. 
  

 7 

 IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed as of the day and year first written above. 
  

			
	XTO ENERGY INC.
		
	By:	 	  
		 	 Brent W. Clum
 Vice President

	
	 THE BANK OF NEW YORK TRUST
 COMPANY, N.A., as Trustee

		
	By:	 	  
		 	 John C. Stohlmann
 Vice President

  

 8 

 EXHIBIT A 
 [FORM OF FACE OF 2016 NOTE] 
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]1 
  

	1	 These paragraphs should be included only if the Security is a Global Security. 

  

 A-1 

 XTO ENERGY INC. 
 5.65% SENIOR NOTE DUE 2016 
  

			
	 No.         
	 	$            
		
		 	CUSIP No. 98385X AH 9

 XTO Energy Inc., a Delaware corporation (herein called the “Company,”
which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to              or registered assigns the principal
sum of              Dollars on April 1, 2016 [or such greater or lesser amount as is indicated on the Schedule of Exchanges of Securities attached hereto]2, at the office or agency of the Company referred to below, and to pay interest thereon, commencing on October 1, 2006 and
continuing semiannually thereafter, on April 1 and October 1 of each year, from March 30, 2006 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 5.65% per annum,
until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand, interest on any overdue interest at the rate borne by the Securities from the date on which such overdue interest becomes payable to the date
payment of such interest has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Interest on the Securities of this series shall be computed on the basis of a 360-day year comprised of twelve 30-day months. 
 Payment of the principal of, premium, if any, and interest on this Security will be made at the office or agency of the Company
maintained for that purpose in the City of New York, and at such other office or agency of the Company as may be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided however, that payment of interest may be made at the option of the Company (i) by check mailed to Holders at their respective addresses as shown in the Security Register or (ii) with
respect to any Holder owning Securities in the principal amount of $500,000 or more, by wire transfer to an account maintained by the Holder located in the United States, as specified in a written notice to the Trustee (received prior to the
relevant record date) by any such Holder requesting payment by wire transfer and specifying the account to 
  

	2	 This clause should be included only if the Security is a Global Security. 

  

 A-2 

 which transfer is requested. Notwithstanding the foregoing, so long as this Security is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by wire transfer of immediately available funds to the account of such Depositary or its nominee. The Holder must surrender this Security to a Paying Agent to collect payment of
principal. 
 Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth at this place. 
 Unless the certificate of
authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. 
 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. 
 [SEAL] 
  

					
	XTO ENERGY INC.
		
	 By:
	 	  
		 	 Name:
	 	  
		 	 Title:
	 	  

  

			
	Attest:
	
	  
	 Secretary

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 
 This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. 
  

									
	 Dated:             
	 		 	 THE BANK OF NEW YORK TRUST
 COMPANY, N.A., as Trustee

					
		 		 		 	 By
	 	  
		 		 		 		 	Authorized Signatory

  

 A-3 

 [FORM OF REVERSE OF 2016 NOTE] 
 This Security is one of a duly authorized issue of the series of securities of the Company designated as its 5.65% Senior Notes due 2016
(herein called the “Securities”), which is issued under, with securities of one or more additional series that may be issued under, the Indenture dated as of April 13, 2005, between the Company and The Bank of New York Trust Company,
N.A., as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), as amended and supplemented by the First Supplemental Indenture of even date, the Second Supplemental Indenture dated as of
October 1, 2005 and the Third Supplemental Indenture dated as of March 30, 2006 (such Indenture, as so amended and supplemented, being called the “Indenture”), to which Indenture and all future indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. 
 The Securities are subject to redemption at the option of the Company, in
whole or in part, at any time and from time to time, upon not less than 30 or more than 60 days’ notice, at a Redemption Price of 100% of their principal amount plus a Make-Whole Amount, together in the case of any such redemption with accrued
and unpaid interest to the Redemption Date (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date), all as provided in the
Indenture. 
 In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall cease to bear interest from and after the Redemption Date. 
 In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. 
 The Securities do not have the benefit of any sinking fund or mandatory repurchase obligations. 
 As set forth in the Indenture, an Event of Default is generally: (a) failure to pay principal upon Stated Maturity, redemption or
otherwise; (b) default for 30 days in payment of interest on any of the Securities; (c) default in the performance of agreements relating to mergers, consolidations and sales of all or substantially all assets; (d) failure for 30 days
after notice to comply with any other covenants in the Indenture or the Securities; (e) certain payment defaults under, or the acceleration prior to the maturity of, Debt of the Company or any Subsidiary in an aggregate principal amount in
excess of $50,000,000; and (f) certain events of bankruptcy, insolvency or reorganization of the Company. 
  

 A-4 

 If any Event of Default occurs and is continuing, the Trustee or the holders of at least
25% in aggregate principal amount of the Outstanding Securities may declare the principal amount of all the Securities to be due and payable immediately, except that (i) in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization of the Company, the principal amount of the Securities will become due and payable immediately without further action or notice and (ii) in the case of an Event of Default which relates to certain
payment defaults or acceleration with respect to certain Debt, any acceleration of the Securities will be automatically rescinded if any such Debt is repaid or if the default relating to such Debt is cured or waived and if the holders thereof have
accelerated such Debt then such holders have rescinded their declaration of acceleration. 
 No Holder may pursue any remedy
under the Indenture unless the Trustee shall have failed to act after notice of an Event of Default and written request by Holders of at least 25% in principal amount of the Outstanding Securities, and the offer to the Trustee of indemnity
reasonably satisfactory to it; however, such provision does not affect the right to sue for enforcement of any overdue payment on a Security by the Holder thereof. Subject to certain limitations, Holders of a majority in principal amount of the
Outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except default in payment of principal, premium or interest) if it determines in good faith
that withholding the notice is in the interest of the Holders. The Company is required to file annual reports with the Trustee as to the absence or existence of defaults. 
 The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of the Company on this Security and (ii) certain restrictive covenants and the related
Defaults and Events of Default, upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Security. 
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders under the Indenture at any time
by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. Without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Securities in addition to or in place of Definitive Securities and to make certain other specified changes and other changes that do not adversely affect the rights of any Holder
in any material respect. 
  

 A-5 

 No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any, on) and interest on this Security at the times, place, and rate, and in the coin or currency, herein
prescribed. 
 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. 
 The Securities are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the same. 
 No service charge shall be made for
any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith. 
 A director, officer, employee or stockholder of the Company shall not have any personal liability under this Security or the Indenture by
reason of his or its status as such director, officer, employee or stockholder. Each Holder, by accepting this Security, waives and releases all such liability. Such waiver and release are part of the consideration for the issuance of this Security.

 Prior to the time of due presentment of this Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security is overdue, and neither the Company, the Trustee nor any agent shall be affected by
notice to the contrary. 
 All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Company, 810 Houston Street, Fort Worth, Texas 76102. 
 Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders thereof. No representation is made as to the accuracy of such numbers as printed on the Securities and reliance may be placed only on the other identifying information printed
hereon. 
  

 A-6 

 This Security shall be governed by and construed in accordance with the laws of the State
of New York, except to the extent that the Trust Indenture Act is applicable. 
  

 A-7 

 ASSIGNMENT FORM 
 (I) or (we) assign and transfer this Security to 
  

 (Insert assignee’s social security or tax I.D. number) 
  
  

  

  

 (Print or type assignee’s name, address and zip code) 
 and irrevocably appoint
                                        
                                        
                                        
                                        
                 
 as agent to transfer this Security on
the Security Register of the Company. The agent may substitute another to act for him. 
  

									
	 Dated:                 
	 		 	 Signature:
	 	  
		 		 		 	(Sign exactly as name appears on the face of this Security)
					
		 		 		 	Name:	 	  
		 		 		 	 Address:
	 	  
		 		 		 		 	  
		 		 		 	 Phone No.:
	 	  

  

			
	 Signature Guarantee

		
	 By:
	 	  
	 Signature guarantor must be an eligible guarantor institution – a bank or trust company or broker or dealer which is a member of a registered exchange or the
NASD.

  

 A-8 

 SCHEDULE OF EXCHANGES OF SECURITIES3 
 The following exchanges, redemptions
or repurchases of a part of this Global Security have been made: 
  

							
	 Principal Amount
of this Global Security
Following Such
 Decrease Date
 of Exchange (or Increase)
	 	 Authorized
Signatory
of
Trustee or Security
Custodian
	 	 Amount of Decrease in
Principal Amount
of this
Global Security
	  	Amount of
Increase in
Principal Amount
of this Global Security

  

	3	 This schedule should be included only if the Security is a Global Security. 

  

 A-9 

 EXHIBIT B 
 [FORM OF FACE OF 2036 NOTE] 
 [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]4 
  

	4	 These paragraphs should be included only if the Security is a Global Security. 

  

 B-1 

 XTO ENERGY INC. 
 6.10% SENIOR NOTE DUE 2036 
  

			
	 No.         
	 	$            
		
		 	CUSIP No.98385X AJ 5

 XTO Energy Inc., a Delaware corporation (herein called the “Company,”
which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to              or registered assigns the principal
sum of              Dollars on April 1, 2036 [or such greater or lesser amount as is indicated on the Schedule of Exchanges of Securities attached hereto]5, at the office or agency of the Company referred to below, and to pay interest thereon, commencing on October 1, 2006 and
continuing semiannually thereafter, on April 1 and October 1 of each year, from March 30, 2006 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 6.10% per annum,
until the principal hereof is paid or duly provided for, and (to the extent lawful) to pay on demand, interest on any overdue interest at the rate borne by the Securities from the date on which such overdue interest becomes payable to the date
payment of such interest has been made or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the March 15 or September 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Interest on the Securities of this series shall be computed on the basis of a 360-day year comprised of twelve 30-day months. 
 Payment of the principal of, premium, if any, and interest on this Security will be made at the office or agency of the Company
maintained for that purpose in the City of New York, and at such other office or agency of the Company as may be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided however, that payment of interest may be made at the option of the Company (i) by check mailed to Holders at their respective addresses as shown in the Security Register or (ii) with
respect to any Holder owning Securities in the principal amount of $500,000 or more, by wire transfer to an account maintained by the Holder located in the United States, as specified in a written notice to the Trustee (received prior to the
relevant record date) by any such Holder requesting payment by wire transfer and specifying the account to 
  

	5	 This clause should be included only if the Security is a Global Security. 

  

 B-2 

 which transfer is requested. Notwithstanding the foregoing, so long as this Security is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by wire transfer of immediately available funds to the account of such Depositary or its nominee. The Holder must surrender this Security to a Paying Agent to collect payment of
principal. 
 Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth at this place. 
 Unless the certificate of
authentication hereon has been duly executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. 
 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. 
 [SEAL] 
  

					
	XTO ENERGY INC.
		
	 By:
	 	  
		 	 Name:
	 	  
		 	 Title:
	 	  

  

			
	Attest:
	
	  
	 Secretary

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION 
 This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. 
  

									
	 Dated:             
	 		 	 THE BANK OF NEW YORK TRUST
 COMPANY, N.A., as Trustee

					
		 		 		 	 By
	 	  
		 		 		 		 	Authorized Signatory

  

 B-3 

 [FORM OF REVERSE OF 2036 NOTE] 
 This Security is one of a duly authorized issue of the series of securities of the Company designated as its 6.10% Senior Notes due 2036
(herein called the “Securities”), which is issued under, with securities of one or more additional series that may be issued under, the Indenture dated as of April 13, 2005, between the Company and The Bank of New York Trust Company,
N.A. as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), as amended and supplemented by the First Supplemental Indenture of even date, the Second Supplemental Indenture dated as of
October 1, 2005 and the Third Supplemental Indenture dated as of March 30, 2006 (such Indenture, as so amended and supplemented, being called the “Indenture”), to which Indenture and all future indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered. 
 The Securities are subject to redemption at the option of the Company, in
whole or in part, at any time and from time to time, upon not less than 30 or more than 60 days’ notice, at a Redemption Price of 100% of their principal amount plus a Make-Whole Amount, together in the case of any such redemption with accrued
and unpaid interest to the Redemption Date (subject to the right of Holders of record on the relevant Regular Record Date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date), all as provided in the
Indenture. 
 In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall cease to bear interest from and after the Redemption Date. 
 In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. 
 The Securities do not have the benefit of any sinking fund or mandatory repurchase obligations. 
 As set forth in the Indenture, an Event of Default is generally: (a) failure to pay principal upon Stated Maturity, redemption or
otherwise; (b) default for 30 days in payment of interest on any of the Securities; (c) default in the performance of agreements relating to mergers, consolidations and sales of all or substantially all assets; (d) failure for 30 days
after notice to comply with any other covenants in the Indenture or the Securities; (e) certain payment defaults under, or the acceleration prior to the maturity of, Debt of the Company or any Subsidiary in an aggregate principal amount in
excess of $50,000,000; and (f) certain events of bankruptcy, insolvency or reorganization of the Company. 
  

 B-4 

 If any Event of Default occurs and is continuing, the Trustee or the holders of at least
25% in aggregate principal amount of the Outstanding Securities may declare the principal amount of all the Securities to be due and payable immediately, except that (i) in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization of the Company, the principal amount of the Securities will become due and payable immediately without further action or notice and (ii) in the case of an Event of Default which relates to certain
payment defaults or acceleration with respect to certain Debt, any acceleration of the Securities will be automatically rescinded if any such Debt is repaid or if the default relating to such Debt is cured or waived and if the holders thereof have
accelerated such Debt then such holders have rescinded their declaration of acceleration. 
 No Holder may pursue any remedy
under the Indenture unless the Trustee shall have failed to act after notice of an Event of Default and written request by Holders of at least 25% in principal amount of the Outstanding Securities, and the offer to the Trustee of indemnity
reasonably satisfactory to it; however, such provision does not affect the right to sue for enforcement of any overdue payment on a Security by the Holder thereof. Subject to certain limitations, Holders of a majority in principal amount of the
Outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except default in payment of principal, premium or interest) if it determines in good faith
that withholding the notice is in the interest of the Holders. The Company is required to file annual reports with the Trustee as to the absence or existence of defaults. 
 The Indenture contains provisions for defeasance at any time of (i) the entire indebtedness of the Company on this Security and (ii) certain restrictive covenants and the related
Defaults and Events of Default, upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Security. 
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders under the Indenture at any time
by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by or on behalf of the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. Without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the Securities to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Securities in addition to or in place of Definitive Securities and to make certain other specified changes and other changes that do not adversely affect the rights of any Holder
in any material respect. 
  

 B-5 

 No reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any, on) and interest on this Security at the times, place, and rate, and in the coin or currency, herein
prescribed. 
 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. 
 The Securities are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the same. 
 No service charge shall be made for
any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith. 
 A director, officer, employee or stockholder of the Company shall not have any personal liability under this Security or the Indenture by
reason of his or its status as such director, officer, employee or stockholder. Each Holder, by accepting this Security, waives and releases all such liability. Such waiver and release are part of the consideration for the issuance of this Security.

 Prior to the time of due presentment of this Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security is overdue, and neither the Company, the Trustee nor any agent shall be affected by
notice to the contrary. 
 All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to the Company, 810 Houston Street, Fort Worth, Texas 76102. 
 Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP
numbers to be printed on the Securities as a convenience to the Holders thereof. No representation is made as to the accuracy of such numbers as printed on the Securities and reliance may be placed only on the other identifying information printed
hereon. 
  

 B-6 

 This Security shall be governed by and construed in accordance with the laws of the State
of New York, except to the extent that the Trust Indenture Act is applicable. 
  

 B-7 

 ASSIGNMENT FORM 
 (I) or (we) assign and transfer this Security to 
  

 (Insert assignee’s social security or tax I.D. number) 
  
  

  

  

 (Print or type assignee’s name, address and zip code) 
 and irrevocably appoint
                                        
                                        
                                        
                                        
                 
 as agent to transfer this Security on
the Security Register of the Company. The agent may substitute another to act for him. 
  

									
	 Dated:                 
	 		 	 Signature:
	 	  
		 		 		 	(Sign exactly as name appears on the face of this Security)
					
		 		 		 	Name:	 	  
		 		 		 	 Address:
	 	  
		 		 		 		 	  
		 		 		 	 Phone No.:
	 	  

  

			
	 Signature Guarantee

		
	 By:
	 	  
	 Signature guarantor must be an eligible guarantor institution – a bank or trust company or broker or dealer which is a member of a registered exchange or the
NASD.

  

 B-8 

 SCHEDULE OF EXCHANGES OF SECURITIES6 
 The following
exchanges, redemptions or repurchases of a part of this Global Security have been made: 
  

							
	 Principal Amount
of this Global Security
Following Such
 Decrease Date
 of Exchange (or Increase)
	 	 Authorized
Signatory
of
Trustee or Security
Custodian
	 	 Amount of Decrease in
Principal Amount
of this
Global Security
	  	Amount of
Increase in
Principal Amount
of this Global Security

  

	6	 This schedule should be included only if the Security is a Global Security. 

  

 B-9Employment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (“Agreement”) is made by and
between W&T Offshore, Inc., a Texas corporation (the “Company”), and William Talafuse (“Key Employee”). 
 W I T N E S S E T H: 
 WHEREAS, Key Employee is currently employed by
the Company; and 
 WHEREAS, the Company is desirous of continuing to employ Key Employee on the terms and conditions, and for the
consideration, hereinafter set forth and Key Employee is desirous of continuing to be employed by the Company on such terms and conditions and for such consideration; 
 NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, the Company and Key Employee agree as follows: 
 ARTICLE 1: EMPLOYMENT AND DUTIES  
 1.1 Employment; Effective Date. Effective as of September 28, 2005 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Key
Employee’s employment by the Company shall be subject to the terms and conditions of this Agreement. 
 1.2 Positions.
During the term of this Agreement, the Company shall employ Key Employee in the position of Senior Vice President and Chief Accounting Officer of the Company, or in such other positions as the parties mutually may agree. 
 1.3 Duties and Services. Key Employee agrees to serve in the positions referred to in paragraph 1.2 and to perform diligently and to the
best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Key Employee’s employment shall
also be subject to the policies maintained and established by the Company that are of general applicability to the Company’s employees, as such policies may be amended from time to time. 
 1.4 Other Interests. Key Employee agrees, during the period of his employment by the Company, to devote substantially all of his business
time, energy and best efforts to the business and affairs of the Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of the Company, except with the consent of the
Board of Directors of Company (the “Board of Directors”). The foregoing notwithstanding, the parties recognize and agree that Key Employee may engage in other business activities that do not conflict with the business and affairs of the
Company or interfere with Key Employee’s performance of his duties hereunder, which shall be at the sole determination of the Board of Directors. 
 1.5 Duty of Loyalty. Key Employee acknowledges and agrees that Key Employee owes a fiduciary duty of loyalty to act at all times in the best interests of the Company. In keeping with such duty, Key
Employee shall make full disclosure to the Company of all business opportunities pertaining to the Company’s business and shall not appropriate for Key Employee’s own benefit business opportunities concerning the Company’s business.

 ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT  
 2.1 Term. Unless sooner terminated pursuant to other provisions hereof, the Company agrees to employ Key Employee for the period beginning
on the Effective Date and ending on the third anniversary of the Effective Date (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date
thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 90 days prior to the first
day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur. 

 2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, the
Company shall have the right to terminate Key Employee’s employment under this Agreement at any time for any of the following reasons: 
 (i) upon Key Employee’s death; 
 (ii) upon Key Employee’s becoming incapacitated by
accident, sickness, or other circumstances which, in the opinion of a physician selected by the Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder; or 
 (iii) for “Cause”, which shall mean Key Employee (A) has engaged in gross negligence or willful misconduct in the
performance of the duties required of him hereunder, (B) has willfully refused without proper legal reason to perform the duties and responsibilities required of him hereunder, (C) has materially breached any material provision of this
Agreement or any material corporate policy maintained and established by the Company that is of general applicability to the Company’s employees, (D) has willfully engaged in conduct that he knows or should know is materially injurious to
the Company or any of its affiliates, or (E) has been convicted of, or pleaded no contest to, a crime involving moral turpitude or any felony, or (F) has engaged in any act of serious dishonesty which adversely affects, or reasonably could
in the future adversely affect, the value, reliability, or performance of Key Employee in a material manner; provided, however, that Key Employee’s employment may be terminated for Cause only if such termination is approved by at least a
majority of a quorum (as defined in the Company’s By-laws) of the members of the Board of Directors after Key Employee has been given written notice by the Company of the specific reason for such termination and an opportunity for Key Employee,
together with his counsel, to be heard before the Board of Directors. 
 Members of the Board of Directors may participate in any hearing that is required
pursuant to paragraph 2.2(iii) by means of conference telephone or similar communications equipment by means of which all persons participating in the hearing can hear and speak to each other. 
 2.3 Key Employee’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Key Employee shall have the right to terminate
his employment under this Agreement for any of the following reasons: 
 (i) for “Good Reason”, which shall mean,
within 60 days of and in connection with or based upon (A) a material breach by the Company of any material provision of this Agreement (provided, however, that a reduction in Key Employee’s annual base salary that is consistent with
reductions taken generally by other employees of the Company shall not be considered a material breach of a material provision of this Agreement), (B) a significant reduction in the nature or scope of Key Employee’s duties and
responsibilities, (C) the assignment to Key Employee of duties and responsibilities that are materially inconsistent with the positions referred to in paragraph 1.2, or (D) any requirement that Key Employee relocate to a site more than 50
miles from his present business address; provided, however, that, prior to Key Employee’s termination for Good Reason, Key Employee must give written notice to the Company of any such breach, reduction, assignment or requirement and such
breach, reduction, assignment or requirement must remain uncorrected for 10 days following such written notice; or 
 (ii) at
any time for any other reason whatsoever, in the sole discretion of Key Employee. 
 2.4 Notice of Termination. If Company
desires to terminate Key Employee’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it shall do so by giving written notice to Key Employee that it has elected to terminate Key
Employee’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder. If Key Employee desires to terminate his
employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, he shall do so by giving a 30-day written notice to the Company that he has elected to terminate his employment hereunder and stating the
effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder. 

 2.5 Deemed Resignations. Any termination of Key Employee’s employment shall constitute
an automatic resignation of Key Employee as an officer of the Company and each affiliate of the Company, and an automatic resignation of Key Employee from the Board of Directors (if applicable) and from the board of directors of any affiliate of the
Company and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar governing body
Key Employee serves as the Company’s or such affiliate’s designee or other representative. 
 ARTICLE 3:
COMPENSATION AND BENEFITS  
 3.1 Base Salary. During the period of this Agreement, Key Employee shall receive a
minimum annual base salary of $230,000. Key Employee’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis (or more frequently, should the Board of Directors decide to do so), and, in the
sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased (except for a decrease that is consistent with reductions taken generally by other employees of the Company), effective as of
any date determined by the Board of Directors. Key Employee’s annual base salary shall be paid in equal installments in accordance with the Company’s standard policy regarding payment of compensation to employees but no less frequently
than monthly. 
 3.2 Bonuses. Key Employee shall be eligible to participate in the Company’s Bonus Plan and the
Company’s Long Term Incentive Compensation Plan as approved from time to time by the Compensation Committee of the Board of Directors in amounts to be determined by the Compensation Committee based upon criteria established by the Compensation
Committee. 
 3.3 Other Perquisites. During his employment hereunder, Key Employee shall be afforded the following benefits as
incidences of his employment: 
 (i) Business and Entertainment Expenses - Subject to the Company’s standard
policies and procedures with respect to expense reimbursement as applied to its employees generally, the Company shall reimburse Key Employee for, or pay on behalf of Key Employee, reasonable and appropriate expenses incurred by Key Employee for
business related purposes, including dues and fees to industry and professional organizations and costs of entertainment and business development. 
 (ii) Vacation - During his employment hereunder, Key Employee shall be entitled to 4 weeks of paid vacation each calendar year (or such greater amount of vacation as provided to employees of the Company
generally) and to all holidays provided to employees of the Company generally; provided, however, that for the period beginning on the Effective Date and ending on the last day of the calendar year in which the Effective Date occurs, Key Employee
shall be entitled to 4 weeks of paid vacation (or such greater amount of vacation as provided to employees of the Company generally) reduced by the number of vacation days that Key Employee has already used during such calendar year and prior to the
Effective Date. 
 (iii) Other Company Benefits - Key Employee and, to the extent applicable, Key Employee’s
spouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plans and programs, including improvements or modifications of the same, which are now, or may hereafter be, available to other employees of the Company. Such
benefits, plans and programs shall include, without limitation, any profit sharing plan, thrift plan, health insurance or health care plan, life insurance, disability insurance, pension plan, supplemental retirement plan, vacation and sick leave
plan, and the like which may be maintained by the Company. The Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such benefit plan or program, so
long as such changes are similarly applicable to employees generally. 

 ARTICLE 4: EFFECT OF TERMINATION AND CHANGE IN CONTROL ON COMPENSATION; ADDITIONAL PAYMENTS  
 4.1 Defined Terms. For purposes of this Article 4, the following terms shall have the meanings indicated: 
 “Base Amount” shall be the “base amount” of Key Employee’s annual compensation, determined in accordance with
Section 280(g) of the Internal Revenue Code of 1986, as amended. 
 “Change in Control” means (i) a merger
of the Company with another entity, a consolidation involving the Company, or the sale of all or substantially all of the assets of the Company to another entity if, in any such case, (A) the holders of equity securities of the Company
immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 40% or more of the votes then eligible to be cast in the election of directors
generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of the Company immediately prior to such transaction or event or (B) the persons who were members of
the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of
Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to
vote) of more than 60% of the combined voting power of the outstanding securities of, (A) if the Company has not engaged in a merger or consolidation, Company, or (B) if the Company has engaged in a merger or consolidation, the resulting
entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For
purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the
case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of the Company receive capital stock of such other entity in such transaction or
event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting
entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity. Notwithstanding the foregoing, if the Company engages in any transaction approved by the shareholders of
the Company and by the Board of Directors of the Company, and the Board of Directors of the Company (or any successor of the Company by merger, consolidation or otherwise) remains the Board of Directors of the Company (or any successor of the
Company by merger, consolidation or otherwise) immediately following such transaction, regardless of whether shareholders of the Company own a majority of the outstanding securities of the Company (or any successor of the Company by merger,
consolidation or otherwise), then such transaction shall not be considered a “Change in Control.” 
 “Termination Benefits” means (i) a lump sum cash payment equal to 3 times Key Employee’s “Base Amount”, less $1.00. 
 “Health Coverage” means that if Key Employee elects to continue coverage for himself or his eligible dependents under the Company’s group health plans pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), during the twelve-month period commencing on the date of Key Employee’s termination of employment from the Company (the “Severance Period”), then throughout the Severance
Period the Company shall promptly reimburse Key Employee on a monthly basis for the difference between the amount Key Employee pays to effect and continue such coverage and the employee contribution amount that active senior employees pay for the
same or similar coverage under Company’s group health plans. Further, if after the Severance Period Key Employee continues his COBRA coverage and Key Employee’s COBRA coverage terminates at any time during the eighteen-month period
commencing on the day immediately following the last day of the Severance Period (the “Extended Coverage Period”), then the Company shall provide Key Employee (and his eligible dependents) with health benefits substantially similar to
those provided under its group health plans for active employees for the remainder of the Extended Coverage Period at a cost to Key Employee that is no greater than the cost of COBRA coverage; 

 provided, however, that the Company shall use its reasonable efforts so that such health benefits are
provided to Key Employee under one or more insurance policies (or such other manner) so that reimbursement or payment of benefits to Key Employee thereunder shall not result in taxable income to Key Employee. Notwithstanding the preceding provisions
of this paragraph, the Company’s obligation to reimburse Key Employee during the Severance Period and to provide health benefits to Key Employee during the Extended Coverage Period shall immediately end if and to the extent Key Employee becomes
eligible to receive health plan coverage from a subsequent employer (with Key Employee being obligated hereunder to promptly report such eligibility to the Company). 
 4.2 Termination By Expiration. If Key Employee’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because either party has provided the notice
contemplated in such paragraph, then all compensation and all benefits to Key Employee hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of
his employment. 
 4.3 Termination By the Company. If Key Employee’s employment hereunder shall be terminated by the
Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefore, all compensation and benefits to Key Employee hereunder shall terminate contemporaneously with the termination of
such employment; provided, however, that, subject to paragraph 4.7 below, if such termination shall be for any reason other than those encompassed by paragraph 2.2(i), 2.2(ii), or 2.2(iii), then the Company shall provide Key Employee with the
Termination Benefits. Any lump sum cash payment due to Key Employee pursuant to the preceding sentence shall be paid to Key Employee within five business days of the date of Key Employee’s termination of employment with the Company; provided,
however, that if the lump sum cash payment would be subject to additional taxes and interest under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then payment of the lump sum cash payment shall be deferred
to the extent required to avoid such additional taxes and interest. 
 4.4 Termination By Key Employee. If Key Employee’s
employment hereunder shall be terminated by Key Employee prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefore, all compensation and benefits to Key Employee hereunder shall
terminate contemporaneously with the termination of such employment; provided, however, that, subject to paragraph 4.7 below, if such termination occurs for Good Reason, then the Company shall provide Key Employee with the Termination Benefits. Any
lump sum cash payment due to Key Employee pursuant to this paragraph shall be paid to Key Employee within five business days of the date of Key Employee’s termination of employment with the Company; provided, however, that if the lump sum cash
payment would be subject to additional taxes and interest under Section 409A of the Code, then payment of the lump sum cash payment shall be deferred to the extent required to avoid such additional taxes and interest. 
 4.5 Change in Control Benefits. If Key Employee is employed by the Company on the date upon which a Change in Control occurs, then the
Company shall provide Key Employee with the Termination Benefits (other than Health Coverage), which benefits shall be determined as if Key Employee’s employment by the Company terminated on the date of such Change in Control; provided,
however, that, if Key Employee is entitled to Termination Benefits under paragraph 4.3 or 4.4 of this Agreement as of the date of such Change in Control, then Key Employee shall not also be entitled to additional Termination Benefits under this
paragraph. Any lump sum cash payment due to Key Employee pursuant to the preceding sentence shall be paid to Key Employee within five business days of the date of the Change in Control. 
 4.6 Parachute Payments. Notwithstanding anything to the contrary in this Agreement, if Key Employee is a “disqualified
individual” (as defined in Section 280G(c) of the Code), and the benefits provided for in this Article, together with any other payments and benefits which Key Employee has the right to receive from the Company and its affiliates, would
constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the benefits provided hereunder (beginning with any benefit to be paid in cash hereunder) shall be either (1) reduced (but not below zero) so
that the present value of such total amounts and benefits received by Key Employee will be one dollar ($1.00) less than three times Key Employee’s Base Amount and so that no portion of such amounts and benefits received by Key Employee shall be
subject to the excise tax imposed by Section 4999 of the Code or (2) paid in full, whichever produces the better net after-tax position to Key Employee (taking into account any 

 applicable excise tax under Section 4999 of the Code and any other applicable taxes). The determination as to
whether any such reduction in the amount of the benefits provided hereunder is necessary shall be made initially by the Company in good faith. If a reduced benefit is provided hereunder in accordance with clause (1) of the first sentence of
this paragraph and through error or otherwise that payment, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than
three times Key Employee’s base amount, then Key Employee shall immediately repay such excess to the Company upon notification that an overpayment has been made. 
 4.7 Release and Full Settlement. Anything to the contrary herein notwithstanding, as a condition to the receipt of Termination Benefits under paragraph 4.3 or 4.4 hereof, Key Employee shall first execute
a release, in the form established by the Board of Directors, releasing the Board of Directors, the Company, and the Company’s parent corporation, subsidiaries, affiliates, and their respective shareholders, partners, officers, directors,
employees, attorneys and agents from any and all claims and from any and all causes of action of any kind or character including, but not limited to, all claims or causes of action arising out of Key Employee’s employment with the Company or
its affiliates or the termination of such employment, but excluding all claims to vested benefits and payments Key Employee may have under any compensation or benefit plan, program or arrangement, including this Agreement. The performance of the
Company’s obligations hereunder and the receipt of any benefits provided under paragraphs 4.3 and 4.4 shall constitute full settlement of all such claims and causes of action. 
 4.8 No Duty to Mitigate Losses. Key Employee shall have no duty to find new employment following the termination of his employment under
circumstances that require the Company to pay any amount to Key Employee pursuant to this Article 4. Except to the extent Key Employee becomes eligible to receive health plan coverage from a subsequent employer as provided in paragraph 4.1 with
respect to Health Coverage, any salary or remuneration received by Key Employee from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his
employment under circumstances pursuant to which this Article 4 apply shall not reduce the Company’s obligation to make a payment to Key Employee (or the amount of such payment) pursuant to the terms of this Article 4. 
 4.9 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of Key Employee’s employment
under this Agreement, the Company and Key Employee hereby agree that the payments, if any, to be received by Key Employee pursuant to this Article 4 shall be received by Key Employee as liquidated damages. 
 4.10 Other Benefits. This Agreement governs the rights and obligations of Key Employee and the Company with respect to Key Employee’s
base salary and certain perquisites of employment. Except as expressly provided herein, Key Employee’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and
deferred compensation, life insurance policies insuring the life of Key Employee, and other benefits under the plans and programs maintained by the Company shall be governed by the separate agreements, plans and other documents and instruments
governing such matters. 
 ARTICLE 5: MISCELLANEOUS  
 5.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 
  

			
	If to the Company to:	 	 W&T Offshore, Inc.
 Attn: Tracy W.
Krohn
 Eight Greenway Plaza, Suite 1330
 Houston, TX
77046

			
	If to Employee to:	 	William Talafuse
		 	 W&T Offshore, Inc.
 Eight Greenway Plaza, Suite
1330
 Houston, Texas 77046

 or to such other address as either party may furnish to the other in writing in accordance herewith, except that
notices or changes of address shall be effective only upon receipt. 
 7.2 Applicable Law. This Agreement is entered into
under, and shall be governed for all purposes by, the laws of the State of Texas. 
 7.3 No Waiver. No failure by either party
hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. 
 7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement
is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

 7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an
original, but all of which together will constitute one and the same Agreement. 
 7.6 Withholding of Taxes and Other Employee
Deductions. The Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal
employee deductions made with respect to the Company’s employees generally. 
 7.7 Headings. The paragraph headings have
been inserted for purposes of convenience and shall not be used for interpretive purposes. 
 7.8 Gender and Plurals. Wherever
the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely. 
 7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, the Company. 
 7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company, by merger
or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be
subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party. 

 7.11 Term. This Agreement has a term co-extensive with the term of employment provided in
paragraph 2.1. Termination shall not affect any right or obligation of any party that is accrued or vested prior to such termination. 
 7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraphs 3.2 and 3.3(iii) (and any agreements between the Company and Key Employee that have been executed under such
plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by the Company and Key Employee, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and
contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Key Employee by the Company. Without limiting the scope of the preceding sentence, all understandings and agreements
preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any
modification of this Agreement will be effective only if it is in writing and signed by the party to be charged. 
 IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on the 20th day of October, 2005, to be effective as of
the Effective Date. 
  

			
	W&T OFFSHORE, INC.
		
	By:	 	 /s/ Tracy W. Krohn

	Name:	 	Tracy W. Krohn
	Title:	 	CEO
		
		 	“COMPANY”
		
	By:	 	 /s/ William Talafuse

	Name:	 	William Talafuse
		 	“EMPLOYEE”

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