Document:

exv10w2

    Exhibit 10.2

 

    FIRST
    AMENDMENT TO LICENSE, DISTRIBUTION, MANUFACTURING AND

    SUPPLY AGREEMENT

 

    This First Amendment to License, Distribution, Manufacturing and
    Supply Agreement (this “First Amendment”) is made and
    entered into as of September   , 2008, by and
    between LUITPOLD PHARMACEUTICALS, INC., a corporation duly
    organized and existing under the applicable laws of the State of
    New York, and having a principal place of business in Shirley,
    New York (hereinafter referred to as “Luitpold”),
    AMERICAN REGENT, INC., a corporation duly organized and existing
    under the applicable laws of the State of New York, and having a
    principal place of business in Shirley, New York (hereinafter
    referred to as “AR”, and Luitpold and AR collectively
    referred to as “Luitpold/AR”), FRESENIUS USA
    MANUFACTURING, INC., a corporation duly organized and existing
    under the applicable laws of the State of Delaware, and having a
    principal place of business in Waltham, Massachusetts
    (hereinafter referred to as “FUSA”), and VIFOR
    (INTERNATIONAL), INC., a Swiss corporation having its principal
    place of business at Rechenstrasse 37, CH-9001 St. Gallen
    (Switzerland) (hereinafter referred to as “Vifor”).

 

    WHEREAS, the parties hereto are parties to a LICENSE,
    DISTRIBUTION, MANUFACTURING AND SUPPLY AGREEMENT, dated
    May 30, 2008 (the “License Agreement”); and

 

    WHEREAS, the parties hereto desire to amend the License
    Agreement to correct certain provisions thereof to the intent of
    the parties

 

    NOW, THEREFORE, the parties hereto, intending to be
    legally bound, agree as follows:

 

    1. Section 1.01 of the License Agreement is amended as
    follows:

 

    A. [*]

 

    B. [*]

 

    C. The definition of “Effective Date” is replaced
    in its entirety by the following:

 

    “Effective Date” means (i) the first day of the
    month immediately following at least thirty (30) days
    following the date on which all conditions set forth in
    Section 13.01 have been satisfied or waived in writing or
    (ii) such earlier date on which FUSA and Luitpold/AR may
    mutually agree in writing.

 

    D. The definition of “Intellectual Property” is
    amended by replacing the term “Annual Period” with the
    term “Contract Year.”

 

    E. [*]

 

    F. [*]

 

    G. [*]

 

    2. [*]

 

    3. Section 6.10 of the License Agreement is revised by
    changing the term “Annual Period” to “Contract
    Year.”

 

    4. [*]

 

    5. The numbering of Schedules/Exhibits to the License
    Agreement is amended to be as follows:

 

	 	 	 
	

    Exhibit 1.01-A

	
 
	
    [*]

	

    Exhibit 1.01-B

	
 
	
    [*]

	

    Exhibit 1.01-C

	
 
	
    [*]

	

    Exhibit 1.01-D

	
 
	
    [*]

	

    Exhibit 1.01-E

	
 
	
    [*]

	

    Exhibit 2.01(c)

	
 
	
    [*]

	

    Exhibit 2.01(d-1)

	
 
	
    [*]

	

    Exhibit 2.01(d-2)

	
 
	
    [*]

 

	 	 	 
	

    Exhibit 3.11

	
 
	
    [*]

	

    Exhibit 5.01(a)

	
 
	
    [*]

	

    Exhibit 6.01

	
 
	
    [*]

	

    Exhibit 6.03

	
 
	
    [*]

	

    Exhibit 6.06

	
 
	
    [*]

	

    Exhibit 6.08

	
 
	
    [*]

	

    Exhibit 6.11

	
 
	
    [*]

	

    Exhibit 6.11(h)

	
 
	
    [*]

	

    Exhibit 7.05(a)

	
 
	
    [*]

 

    6. [*]

 

    7. [*]

 

    8. Final versions of the Schedules/Exhibits are attached to
    this First Amendment as follows:

 

	 	 	 
	

    Schedule 7.02(d)

	
 
	
    [*]

	

    Exhibit 1.01-C

	
 
	
    [*]

	

    Exhibit 1.01-E

	
 
	
    [*]

	

    Exhibit 2.01(c)

	
 
	
    [*]

	

    Exhibit 2.01(d-1)

	
 
	
    [*]

	

    Exhibit 2.01(d-2)

	
 
	
    [*]

	

    Exhibit 3.11

	
 
	
    [*]

	

    Exhibit 5.01(a)

	
 
	
    [*]

	

    Exhibit 6.01

	
 
	
    [*]

	

    Exhibit 6.03

	
 
	
    [*]

	

    Exhibit 6.06

	
 
	
    [*]

	

    Exhibit 6.08

	
 
	
    [*]

	

    Exhibit 6.11

	
 
	
    [*]

	

    Exhibit 6.11(h)

	
 
	
    [*]

	

    Exhibit 7.05(a)

	
 
	
    [*]

 

    9. Except as expressly amended by this First Amendment, the
    License Agreement shall remain in full force and effect. The
    representations, warranties and covenants of the Parties
    contained in the Agreement are true and correct in all material
    respects as of and on the date hereof as if made again on the
    date hereof or as of the Effective Date (as applicable) and each
    Party shall have performed and complied with all of its
    covenants and agreements contained in the Agreement required to
    be performed and complied with by it at or prior to the
    Effective Date. If requested, each Party shall provide to the
    other a certificate to the matters set forth in this section
    signed on behalf of such Party by an authorized officer.

 

    10. This First Amendment may be executed in facsimile
    counterparts, each of which shall have the legal binding effect
    of an original signature, but all of which together shall
    constitute one and the same instrument.

 

    [Signatures
    are on the following page.]
    

 

    IN WITNESS WHEREOF, the parties hereto have duly executed this
    First Amendment to License, Distribution, Manufacturing and
    Supply Agreement as of the date first set forth above.

 

    LUITPOLD PHARMACEUTICALS, INC.

 

			
	 	    By: 
	
    /s/  Mary
    Jane Helenek

    Name:     Mary Jane Helenek

			
	 	    Title: 
	
    President & CEO 9-13-08

 

    AMERICAN REGENT, INC.

 

			
	 	    By: 
	
    /s/  Mary
    Jane Helenek

    Name:     Mary Jane Helenek

			
	 	    Title: 
	
    President & CEO

 

    FRESENIUS USA MANUFACTURING, INC.

 

			
	 	    By: 
	
    /s/  Rice
    Powell

    Name:     

			
	 	    Title: 
	

 

    VIFOR (INTERNATIONAL),
    INC.1

 

			
	 	    By: 
	
    /s/  Anthony
    Coombs

    Name:     A. Coombs

			
	 	    Title: 
	
    CEO Vifor Pharma

 

			
	 	        
	
    /s/  G.
    Zampieri

    Name:     G. Zampieri

			
	 	    Title: 
	
    Deputy CEO Vifor Pharma

 

 

    1 Executing

    this Agreement to indicate its acknowledgement of and consent to
    the terms and provisions hereof, and to agree to be bound to
    those provisions hereof that pertain to it.

 

    SCHEDULE 7.02 (D)

 

    [*]
    

 

    EXHIBIT 1.01-A

 

    [*]
    

 

    EXHIBIT
    1.01-C

 

    [*]
    

 

    EXHIBIT 1.01-E

 

    [*]
    

 

    EXHIBIT 2.01 (C)

 

    [*]
    

 

    EXHIBIT 2.01 (D-1)

 

    [*]
    

 

    EXHIBIT 2.01 (D-2)

 

    [*]
    

 

    EXHIBIT 3.11

 

    [*]
    

 

    EXHIBIT 5.01 (A)

 

    [*]
    

 

    EXHIBIT 6.01

 

    [*]
    

 

    EXHIBIT 6.03

 

    [*]
    

 

    EXHIBIT 6.06

 

    [*]
    

 

    EXHIBIT 6.08

 

    [*]
    

 

    EXHIBIT 6.11

 

    [*]
    

 

    EXHIBIT 6.11 (H)

 

    [*]
    

 

    EXHIBIT 7.05 (a)

 

    [*]ex4_2.htm

     

     

    
      

      

    

     

    Exhibit 4.2

     

    

      P
R O S P E C T U S

       

      

       

      

       

      

       

      

       

      ENERGY
XXI SERVICES, LLC

       

      

       

      EMPLOYEE
STOCK PURCHASE PLAN

       

      _______________________

       

      COMMON
STOCK

       

      

       

      Par
Value $.001 Per Share

       

      _______________________

       

      This
Prospectus relates to shares of common stock, par value $.001 per share (the
“Common Stock”), of
Energy XXI (Bermuda) Limited, a Bermuda corporation (the “Company”), that may be
purchased by employees of the Company and Energy XXI Services, LLC, a Delaware
limited liability company and an indirect wholly-owned subsidiary of the Company
(the “Employer”), as
well as employees of certain designated subsidiaries of the Employer (“Designated Subsidiaries”),
pursuant to the Energy XXI Services, LLC Employee Stock Purchase Plan (the
“Plan”).

       

      _______________________

       

      THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES

      AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS

      THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES

      COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS

      PROSPECTUS.  ANY
REPRESENTATION TO THE CONTRARY IS A

      CRIMINAL
OFFENSE.

      

       

      THIS
PROSPECTUS MAY NOT BE USED BY ANY PERSON IN CONNECTION WITH ANY

      RESALES
OF THE COMMON STOCK ACQUIRED UNDER THE PLAN.

       

      _______________________

       

      THIS
DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES

      THAT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

       

      _______________________

       

      The date
of this Prospectus is _______________ , 2008.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE OF
CONTENTS

       

      
        	 
      	
                Page

              
	 
      	 
      
	
                THE
      COMPANY

              	
                 
      1

              
	
                DESCRIPTION
      OF THE EMPLOYEE STOCK PURCHASE PLAN

              	
                 
      1

              
	 
      	 
      
	
                   General

              	
                 
      1

              
	
                   Administration
      of the Plan

              	
                 
      2

              
	
                   Employees
      Who May Participate in the Plan

              	
                 
      2

              
	
                   Securities
      to be Offered

              	
                 
      2

              
	
                   Payment
      of Purchase Price; Payroll Deductions

              	
                 
      2

              
	
                   Other
      Provisions

              	
                 
      3

              
	 
      	 
      
	
                APPLICATION
      OF SECTION 16(b) OF THE EXCHANGE ACT

              	
                 
      4

              
	
                OTHER
      RESTRICTIONS ON RESALE

              	
                 
      4

              
	
                FEDERAL
      TAX CONSEQUENCES

              	
                 
      4

              
	
                AVAILABLE
      INFORMATION

              	
                 
      5

              
	
                INCORPORATION
      OF CERTAIN DOCUMENTS BY REFERENCE

              	
                 
      5

              
	 
      	 
      

      

      

       

      _______________________

       

      

       

      No
person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized.  This Prospectus does not constitute an offer to sell or
the solicitation of an offer to buy in any jurisdiction in which or to any
person to whom it is unlawful to make such offer or
solicitation.  Neither the delivery of this Prospectus nor any sale
made hereunder will under any circumstances imply that information contained in
this Prospectus is correct at any time subsequent to the date of this
Prospectus.

       

      
        
           

        

        
           
i

          
            

          

        

        
           

        

      

      THE
COMPANY

       

      The Company is an independent oil and
natural gas exploration and production company whose growth strategy emphasizes
acquisitions, enhanced by a value-added organic drilling program. The Company
operates geographically focused producing reserves located in the U.S. Gulf of
Mexico waters and the Gulf Coast onshore, and it targets the acquisition of oil
and gas properties with which it can add value by increasing production and
ultimate recovery of reserves, whether through exploitation or exploration,
often using reprocessed seismic data to identify previously overlooked
opportunities.  As of the Company’s fiscal year end June 30, 2007, its
total proved reserves were 55.6 MMBoe and it operated or had an interest in 338
producing wells on 131,235 net developed acres, including interests in 60
producing fields. All of the Company’s properties are located on the Gulf Coast
and in the Gulf of Mexico, with approximately 76 percent of its proved reserves
being offshore. This concentration facilitates the Company’s ability to manage
the operated fields efficiently. The Company believes managing its assets is a
key strength, and approximately 75 percent of its proved reserves are on
properties operated by it. In addition, the Company has a seismic database
covering approximately 2,300 square miles, primarily focused on its existing
operations. This database has helped the Company identify additional development
and exploration opportunities. The Company believes the mature legacy fields on
which its assets are located lend themselves well to its aggressive exploitation
strategy and expects to identify incremental exploration opportunities on the
properties. For the nine months ended March 31, 2008, and year ended
June 30, 2007, approximately 60 percent of the Company’s drilling capital
was spent on exploitation, with the balance split between lower-risk and
higher-impact exploration plays. The Company intends to grow its reserve base
and increase production through strategic acquisitions of oil and natural gas
properties, its drilling program and the further optimization of
production.  The Company actively manages price risk and hedges a high
percentage of its proved developed producing reserves to enhance revenue
certainty and predictability. The Company’s disciplined risk management strategy
provides substantial price protection so that its cash flow is largely driven by
production results rather than commodity prices. This greater price certainty
allows the Company to efficiently allocate its capital resources and minimize
its operating cost. The
Company’s executive offices and operating headquarters are located at Canon’s
Court, 22 Victoria Street, PO Box HM 1179, Hamilton HM EX, Bermuda, and its
telephone number at those offices is (441) 298-3262.

      

      DESCRIPTION
OF THE EMPLOYEE STOCK PURCHASE PLAN

       

      The
following is a summary of the provisions of the Plan.  Additional
information about the Plan and its administrators may be obtained from the
Corporate Secretary, Energy XXI (Bermuda) Limited, Canon’s Court, 22 Victoria
Street, PO Box HM 1179, Hamilton HM EX, Bermuda.

       

      General

       

      The Plan
is named the “Energy XXI Services, LLC Employee Stock Purchase Plan” and was
adopted by the board of directors of the Company on September 9, 2008,
effective December 1, 2008 (the “Effective
Date”).

       

      The
purpose of the Plan is to provide certain employees of the Company and the
Employer, and Designated Subsidiaries (“Eligible Employees”), with an
opportunity to conveniently purchase, through payroll deductions, Common Stock
of the Company and such other securities of the Company that may be substituted
for Common Stock, pursuant to the terms of the Plan, (Common Stock, together
with such other securities, the “Stock”).  The Plan
allows Eligible Employees to purchase from the Company shares of Stock that have
been authorized and unissued, purchased by the Company on the open market, or
held by the Company in treasury.

       

      The Plan
and the right of  participants to make purchases thereunder, is
intended to qualify under the provisions of Section 423 of the Internal Revenue
code of 1986, as amended (the “Code”).  See
“Federal Tax Consequences” below.  The Plan is not subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      Administration
of the Plan

       

      The Plan
is administered by a committee appointed by the board of directors (“Board”) of the
Company.  The Board has appointed the Renumeration Committee (“Committee”) to administer the
Plan, which committee consists solely of two or more non-employee members of the
Board.  Unless otherwise limited by the Plan or Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Committee
has broad discretion to administer the Plan and interpret its
provisions.  This discretion includes the power to determine when and
how rights to purchase Stock shall be granted and the provisions of each
offering of such rights (which need not be identical), establish, amend, and
revoke rules and regulations for the Plan’s administration, to designate which
subsidiaries of the Employer shall be “Designated Subsidiaries,” and to execute
all other responsibilities permitted or required under the Plan.

       

      Employees
Who May Participate in the Plan

       

      “Eligible
Employee” shall include any officer or other employee of the Company, the
Employer, or any Designated Subsidiary who does not, immediately after any
rights under the Plan are granted, own (either directly or through attribution
in accordance with Code Section 424(d)) stock possessing 5% or more of the total
combined voting power or value of all classes of Stock or other stock of the
Employer, or a parent or subsidiary of Employer (as determined under Code
Section 423(b)(3)).  Eligible Employees who are employed by the
Company, the Employer, or a Designated Subsidiary on the day immediately
preceding the first day of a period during which the Committee has selected to
grant or provide for the grant of rights to purchase Stock (“Offering Period”) shall be
eligible to participate in the Plan during such Offering Period, subject to
certain limitations imposed by Section 423(b) of the Code.  Eligible
Employees may become participants in the Plan by delivering to the Company, the
Employer, or Designated Subsidiary, as applicable, prior to the enrollment date
of such Offering Period a participation agreement authorizing deductions from
his or her payroll.  No change in payroll deductions, other than
complete discontinuance (which shall be deemed an election to withdraw from the
Plan for the applicable Offering Period) can be made during an Offering Period,
and, specifically, once an Offering Period has commenced, a participant may not
alter the rate of his or her payroll deductions for such Offering
Period.

       

      A
participant may withdraw all, but not less than all, of the payroll deductions
credited to his or her account and not yet used to exercise his or her rights
under the Plan at any time by giving written notice to the Company or the
Employer, or a Designated Subsidiary, in a form acceptable to the
Committee.  All of the participant’s payroll deductions credited to
his or her account during the Offering Period shall be paid to such participant
as soon as reasonably practicable after receipt of notice of withdrawal and such
participant’s rights for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for
such Offering Period.  If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of the next
Offering Period unless the participant delivers to the Company or the Employer,
or a Designated Subsidiary, a new participation agreement.

       

      Securities
to be Offered

       

      The total
number of shares of Stock that may be issued pursuant to rights granted under
the Plan shall be 5,000,000 shares.  If any right granted under the
Plan shall for any reason terminate without having been exercised, the Stock not
purchased under such right shall again become available for issuance under the
Plan.  There are no fees, commissions or other charges applicable to a
purchase of Stock under the Plan.

       

      Payment
of Purchase Price; Payroll Deductions

       

      All
Eligible Employees have the option to purchase Stock under the
Plan.  Except as otherwise determined by the Committee, these options
will be granted on December 1, 2008, July 1, 2009, and January 1 and July 1 of
each year thereafter (a “Date
of Grant”). The term of the initial option granted under the plan on
December 1, 2008 will be for a period of seven months, ending on June 30, 2009.
The term of each option granted under the Plan on July 1, 2009 and after will be
for a period of six months, beginning on the Date of Grant and ending on the
following June 30 or December 31, as applicable, (the last day of any option
period being the “Date of
Exercise”) (each such six month period is herein referred to as an “Option Period”).

       

      The
purchase price per share at which Stock will be sold under the Plan will be an
amount equal to the lesser of (i) eighty-five percent (85%) of the fair market
value of the Common Shares on the Date of Exercise or (ii) eighty-five percent
(85%) of the fair market value of the Common Shares on the Date of Grant (the
“Purchase Price”). The
fair market value of a Common Share on a given date will be the last reported
sale price by the National Association of Securities Dealers Automated Quotation
System on that day for our Common Shares trading under the ticker symbol “EXXI”.
The purchase price may be adjusted pursuant to recapitalization.  See
“Other Provisions—Merger or
Recapitalization” below.

       

      The
Purchase Price of the Stock to be purchased under the Plan will be accumulated
by participant payroll deductions during each Offering Period in such amount as
stated in his or her participation agreement.  For each participant,
these payroll deductions may not be less than $10.00 and may not exceed either:
(i) seventy percent (70%) of the amount of eligible compensation (which is
generally defined in the Plan to include all gross wages and salary, excluding
overtime payments, sales commissions, incentive compensation, bonuses,
contributions to pension, profit sharing, health and life insurance and other
plans, expense reimbursements, fringe benefits, and other special payments) from
which the deduction is made, or (ii) an amount which will result in
noncompliance with the limitations described below.  Such payroll
deductions will be credited to a book entry account established for each
participant.  If approved by the Committee, a participant may continue
payroll deductions during a paid leave of absence.

       

      No
Eligible Employee will be granted an option to purchase Stock  under
the Plan if, immediately after the grant of the option, the employee would own
five percent or more of the voting power or value of all classes of our stock or
the stock of our subsidiaries, nor will any eligible employee be granted an
option which would permit the employee to purchase, pursuant to the Plan, more
than $25,000 worth of Stock (determined at the fair market value of the shares
at the Date of Grant) in any calendar year.  If the total number of
shares of Stock remaining available for issuance is less than the total number
of shares of Stock that could otherwise be acquired pursuant to all options for
a given option period, then the number of shares of Stock that could otherwise
be acquired pursuant to each option for a given option period will be reduced
proportionately. If, after this adjustment, an Eligible Employee is entitled to
an option for a fraction of a share of Stock, the Eligible Employee’s payroll
deductions that would be used to purchase such fractional share will be returned
to him as soon as administratively feasible.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      Other
Provisions

       

      Merger or
Recapitalization.  If any change is made in the Stock by reason
of any stock dividend or by reason of subdivision, stock split, reverse stock
split, combination or exchange of shares, recapitalization, reorganization,
reclassification of shares, or any other similar corporate event affecting the
Stock, appropriate action will be taken by the Board to make such proportionate
adjustments, if any, as the Board in its discretion, may deem appropriate to
reflect such change with respect to (i) the aggregate number and type of shares
of Stock (or other securities or property) that may be issued under the Plan;
(ii) the classes(es) and number of shares and price per share of Stock subject
to outstanding rights; and (iii) the purchase price with respect to any
outstanding  rights.

       

      Assignment.  A
right granted to a participant under the Plan is not transferable other than by
will or the laws of descent and distribution, and is exercisable during the
participant’s lifetime only by the participant.  Any participant’s
attempt to transfer such right shall not be recognized by the Company or the
Employer.

       

      Termination of
Employee.  If the employment of a participant terminates for
any reason (other than death) prior to the Purchase Date relating to a
particular Offering Period, such participant’s participation in the Plan
automatically and without any act on such participant’s part shall terminate as
of the date of termination of such employment.  The Company or
Employer shall refund to such participant the amount of the cash balance in such
participant’s account under the Plan, and thereupon such participant’s interest
under the Plan will terminate.  Notwithstanding the preceding, if the
Purchase Date for the Offering Period during which such termination of
employment occurs is not a “Business Day” (defined below) and the participant’s
employment terminates on the last Business Day of the Offering Period, then such
participant will be considered to have terminated employment on the Purchase
Date.  A “Business Day” is any day except a Saturday, Sunday, or other
day on which national banking associations in the State of Texas are generally
closed for the conduct of business.

       

      If a
participant’s employment terminates due to death, then such participant’s
personal representative shall have the right to elect either to: (i) withdraw
the amount of the balance in the participant’s account under the Plan at the
date of such participant’s death; or (ii) exercise such participant’s right to
purchase stock on the applicable Purchase Date of the Offering Period during
which the participant’s death occurs, in which event such personal
representative shall be permitted to purchase the number of whole shares of
stock which the amount of the balance in the participant’s account under the
Plan at the date of such Participant’s termination of employment will purchase
at the applicable purchase price, with any balance remaining in the
participant’s account to be returned to such personal
representative.

       

      Amendment or Termination of the
Plan.  The Board may amend, suspend, or terminate the Plan from
time to time without the approval of the stockholders of the Company; provided,
however, no amendment may be made to the Plan without prior approval of the
stockholders of the Company if such amendment would change the number of shares
of Stock that may be sold under the Plan (other than as a result of certain
adjustments due to corporate events), change the class of individuals who may be
granted rights under the Plan, materially increase benefits accruing to
participants under the Plan, or change the Plan in any manner that would cause
the Plan to fail to meet the requirements for an “employee stock purchase plan,”
as defined in Section 423 of the Code.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      APPLICATION
OF SECTION 16(b) OF THE EXCHANGE ACT

       

      Section
16(b) of the Exchange Act imposes liability on officers and directors of the
Company and beneficial owners of 10% or more of a class of equity securities of
the Company with respect to any profit realized on a purchase and sale, or sale
and purchase, of any equity security (including derivative securities such as
options and stock appreciation rights) of the Company within a period of less
than six months.  The liability is owed to the Company and may be
enforced by the Company and any Company stockholder suing derivatively for the
Company’s benefit.  The Plan is intended to comply with Rule 16b-3
under the Exchange Act, which, together with Rule 16b-6, exempts certain
transactions under the Plan from the short-swing liability provisions of Section
16(b) of the Exchange Act.  You should consult with the Company
or legal counsel before determining for yourself whether a transaction you are
considering is exempt from short-swing liability or whether the Plan has in fact
been administered in compliance with Rule 16b-3.

       

      OTHER
RESTRICTIONS ON RESALE

       

      Subject
to the limitations of Section 16(b) of the Exchange Act, shares of Stock
acquired by an officer or director of the Company pursuant to the Plan may be
sold by such officer or director only in accordance with the provisions of Rule
144 under the Securities Act of 1933 (the “Securities Act”), pursuant to
an effective registration statement under the Securities Act, or in transactions
that are exempt from registration under the Securities Act.  Under
Rule 144, an officer or director may sell Stock if the sale meets certain
conditions.  In general, under Rule 144 an officer or director may
sell within any three-month period a number of shares that does not exceed the
greater of 1% of the total number of outstanding shares of Stock or the average
weekly trading volume of the Stock reported during the four calendar weeks
immediately preceding the sale.  In addition to other conditions, the
shares of Stock must also be sold in unsolicited “brokers’ transactions” within
the meaning of Rule 144 and Section 4(4) of the Securities Act, directly with a
“market maker” within the meaning of Rule 144 and Section 3(a)(38) of the
Exchange Act, or in “riskless principal transactions” with the meaning of Rule
144 and in certain circumstances the seller must file a notice of sale with the
Securities and Exchange Commission (the “SEC”).  You should consult with the Company
or legal counsel before determining for yourself whether a transaction you are
considering complies with the conditions specified in Rule 144 or otherwise
satisfies an exemption under the Securities Act.

       

      FEDERAL
TAX CONSEQUENCES

       

      The
following discussion is for general information only and is intended to
summarize briefly the federal income tax consequences arising from participation
in the Plan.  This description is based on current law, which is
subject to change (possibly retroactively).  The tax treatment of a
participant in the Plan may vary depending on his particular situation and may,
therefore, be subject to special rules not discussed below.  No
attempt has been made to discuss any potential foreign, state or local tax
consequences or the effect, if any, of gift, estate or inheritance
taxes.  You should
consult with your tax advisor concerning the specific tax consequences of
participating in the Plan.

       

      The Plan,
and the right of participants to make purchases thereunder, is intended to
qualify under the provisions of Section 423 of the Code.  Under this
provision, no income will be taxable to a participant at the time of grant of
the option or purchase of the shares.  Upon disposition of the shares,
the participant will generally be subject to tax and the amount of the tax will
depend upon the participant’s holding period.  If the shares have been
held by the participant for more than two years after the date of the option
grant, the lesser of (a) the excess of the fair market value of the shares
at the time of such disposition over the purchase price or (b) the excess
of the fair market value of the shares at the date of the option grant over the
purchase price will be treated as ordinary income, and any further gain or loss
will be treated as long-term capital gain or loss.  If the shares are
disposed of before the expiration of this holding period, the excess of the fair
market value of the shares on the purchase date over the purchase price will be
treated as ordinary income, and any further gain or loss on such disposition
will be long-term or short-term capital gain or loss, depending on the holding
period.

       

      The
foregoing brief summary of the effect of federal income taxation upon the
participants and the Company with respect to the purchase of shares under the
Plan does not purport to be complete, and reference should be made to the
applicable provisions of the Code.  In addition, this summary does not
discuss tax consequences of a participant’s death or the provisions of the
income tax laws of any municipality, state or foreign country in which the
participant may reside.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      AVAILABLE
INFORMATION

       

      The
Company is subject to the information requirements of the Exchange Act and in
accordance therewith files reports, proxy statements, and other information with
the SEC, which can be inspected and copied at prescribed rates at the public
reference facilities maintained by the SEC at Room 1580, 100 F Street, N.E.,
Washington, D.C. 20549.  These reports, proxy statements and other
information may also be obtained without charge from the web site that the SEC
maintains at http://www.sec.gov.

       

      This
Prospectus constitutes a part of a Registration Statement on Form S-8 (together
with any and all amendments thereto, the “Registration Statement”) that
the Company has filed with the SEC under the Securities Act.  This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the Common Stock, reference is made to the Registration Statement and to the
exhibits thereto. Statements contained herein concerning the provisions of
certain documents are not necessarily complete, and in each instance, reference
is made to the copy of the document filed as an exhibit to the Registration
Statement or otherwise filed with the SEC. Each such statement is qualified in
its entirety by that reference.

       

      INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE

       

      Except to
the extent that information is deemed furnished and not filed pursuant to
securities laws and regulations, the following documents have been filed by the
Company with the SEC and are incorporated by reference into this Prospectus, and
will be deemed to be a part hereof:

       

      
        	
                 
      

              	
                (a)

              	
                Our
      latest Annual Report on Form 10-K filed with the Commission on
      September 11, 2008 for the fiscal year ended June 30,
      2008;

              

      

       

      
        	       
      (b)           Our latest
      Quarterly Report on Form 10-Q filed with the Commission on November 5,
      2008 for the quarterly period ended September
2008;

      

       

      
        	
                 
      

              	
                (c)

              	
                Our
      Current Reports on Form 8-K filed with the Commission on
      September 11, 2008, October 20, 2008 and November 4, 2008;
      and

              

      

       

      
        	
                 
      

              	
                (d)

              	
                The
      description of our common stock in our Registration Statement on Form 8-A
      (File No. 001-33628) dated July 30, 2007 under Section 12(b) of
      the Securities Exchange Act of 1934 (the “Exchange
  Act”).

              

      

       

      Except to
the extent that information is deemed furnished and not filed pursuant to
securities laws and regulations, all documents filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby will be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of the filing of such documents.  Any statement
contained herein or any document incorporated or deemed to be incorporated by
reference herein will be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein or in any Prospectus supplement modifies or supersedes such
statement.  Any statement so modified or superseded will not be deemed
to constitute a part of this Prospectus, except as so modified or
superseded.

       

      The
Company will provide without charge to each person to whom a copy of this
Prospectus has been delivered, on the written or oral request of any person, a
copy of any or all of the documents referred to above that have been or may be
incorporated by reference into this Prospectus, other than exhibits to the
documents (unless the exhibits are specifically incorporated by reference into
the documents).  Written or telephone request for the copies should be
directed to Corporate Secretary, Energy XXI (Bermuda) Limited, Canon’s Court, 22
Victoria Street, PO Box HM 1179, Hamilton HM EX, Bermuda  (Telephone: (441)
298-3262).

       

      
        	 
      

      

      

      
        
           

        

        
          5

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