Document:

Exhibit 10.2

 

UNIT PURCHASE AGREEMENT

 

THIS
UNIT PURCHASE AGREEMENT (the “Agreement”) is made as of the ___ day of ____________, 2016 by and among
MUSTANG BIO, INC. a Delaware corporation (the “Company”), the investors listed on the Schedule of Investors
attached hereto as Exhibit A (each an “Investor” and collectively, the “Investors”).

 

W I T N E S S E T H:

 

WHEREAS, the Company
desires to sell to the Investors through National Securities Corporation, in its capacity as the “Placement Agent”
(the “Placement Agent”) (the “Offering”), and the Investors desire to purchase from the Company
Units consisting of 10,000 shares of the common stock of the Company, $0.001 par value per share (the “Common Stock”)
and a Common Stock Purchase Warrant, the form of which is attached hereto as Exhibit B, exercisable for 2,500 shares of
Common Stock at an exercise price of $8.50 per share (a “Common Stock Warrant” and, together with the shares
of Common Stock, a “Unit”) for cash at a price of $65,000 per Unit;

 

WHEREAS, the Company
is currently conducting the Offering pursuant to a private placement memorandum provided herewith (the “Private Placement
Memorandum”).

 

NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

 

1       Purchase
and Sale of Units.

 

1.1       Issuance
and Sale of Units.

 

(a)       Units
Issued in the Offering through the Placement Agent. Subject to the terms and conditions of this Agreement, the Investors severally
and not jointly agree to purchase at the Closing (as hereafter defined), and the Company agrees to issue and sell to the Investors
at the Closing, the amount of Units set forth opposite each Investor’s name on the Signature Page hereto, at a price of $65,000.00
per Unit, for an aggregate purchase price of a minimum of $10,000,000 (the “Minimum Amount”) and up to a maximum
of $30,000,000 (the “Maximum Offering Amount”) and the offering of the Units being offered hereunder is hereinafter
referred to as the “Offering.” The Company may, in its sole discretion, increase the Maximum Offering Amount
from $30,000,000 to $70,000,000.

 

1.2       Payment.
Any Investor purchasing the Units is enclosing with its delivery of its Signature Page hereto a check payable to, or will promptly
make a wire transfer payment to, “Signature Bank, as Escrow Agent for Mustang Bio, Inc.” in the full amount of the
purchase price of the Units being subscribed for (the “Purchase Price”). Wire instructions are as follows:

 

Bank Name: Signature Bank

ABA Number: [Routing
Number]

A/C Name: Signature Bank, as Escrow Agent
for Mustang Bio, Inc.

A/C Number: [Account
Number]

FBO: [Investor Name]

[Social Security Number]

[Address]

 

     

     

    

 

All payments made by
check as provided in this Section 1.2 shall be promptly deposited by the Company or the Placement Agent with Signature Bank (the
“Escrow Agent”), and all payments hereunder shall be held in a non-interest-bearing escrow account (the “Escrow
Account”) until the earliest to occur of (a) the Closing (as defined below), (b) the rejection of such proposed investment
by the Company or the Placement Agent and (c) the termination of the Offering by the Company or the Placement Agent. 

 

1.3       Closing.

 

(a)       The
initial closing of the purchase and sale of Units Preferred under this Agreement (the “Initial Closing”) is
expected to be held at the offices of Wyrick Robbins Yates & Ponton LLP, counsel to the Company (“Wyrick”)
or remotely via the exchange of documents and signatures), on or about _________, 2016, or such other date as may be agreed to
between the Company and the Placement Agent, which period may be extended upon the mutual approval of both the Company and the
Placement Agent (the date of a Closing is hereinafter referred to as the “Closing Date”). In the event there
is more than one closing, the term “Closing” shall apply to each such closing unless otherwise specified with each
Closing occurring after the Initial Closing referred to as a “Subsequent Closing.”

 

(b)       After
the Initial Closing, the Company may sell, on the same terms and conditions as those contained in this Agreement, up to the balance
of the Units not sold at the Initial Closing (collectively, the number of Units underlying such amount of Units sometimes referred
to herein as the “Additional Units”) in one or more Subsequent Closings, to one or more purchasers (the “Additional
Investors”) as shall be determined by the Company in its sole discretion, provided that (i) such Subsequent Closing is
consummated on or prior to November 30, 2016 (as may be subsequently extended (x) until December 31, 2016 upon the mutual consent
of the Placement Agent and the Company, or, (y) until any other extended date in the event that there shall have occurred any material
adverse change in the financial markets of the United States, any outbreak or escalation of hostilities or other national or international
calamity or crisis the effect of which is such to make it, in the judgment of the Placement Agent, impracticable to market the
Units or enforce contracts for the sale of the Units) and (ii) each Additional Investor shall become a party to this Agreement
by executing and delivering a Confidential Purchase Questionnaire and a counterpart Omnibus Signature Page to this Unit Purchase
Agreement. Exhibit A to this Agreement shall be updated to reflect the number of Additional Units purchased at each such
Subsequent Closing and the Additional Investors purchasing such Additional Units.

 

(c)       At
each Closing, the Company shall deliver the certificates representing the Common Stock and Common Stock Warrants purchased to each
Investor participating in such Closing against payment of the Purchase Price to the Company as described above, along with delivery
by each such Investor of the Confidential Purchaser Questionnaire to the Placement Agent and a counterpart Omnibus Signature Page
to this Unit Purchase Agreement. The Confidential Purchaser Questionnaire is included in the Subscription Booklet provided to Investors
separately.

 

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1.4       Additional
Definitions. For purposes of this Agreement, certain capitalized terms are defined under Appendix A.

 

2       Representations
and Warranties of the Company. The Company hereby represents and warrants to the Investors that the following is true and accurate
as of the date of the Initial Closing:

 

2.1       Organization
and Qualification. The Company is an entity duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, with the requisite power and authority to own and use its properties and assets and to carry on its business
as currently conducted. The Company is not in violation or default of any of the provisions of its Amended and Restated Certificate
of Incorporation (the “Certificate of Incorporation”) or its Bylaws. The Company is duly qualified to conduct
business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.

 

2.2       Capitalization.
The authorized, issued and outstanding shares of the capital stock of the Company is as set forth in Company’s filings with
the SEC (the “SEC Filings”) and all issued and outstanding shares of the Company are validly issued, fully paid
and nonassessable. Except as set forth in the SEC Filings, there are no outstanding options, warrants, agreements, convertible
securities, preemptive rights or other rights to subscribe for or to purchase any shares of capital stock of the Company. Except
as set forth in the Private Placement Memorandum and as otherwise required by law, there are no restrictions upon the voting or
transfer of any of the shares of capital stock of the Company pursuant to the Company’s Certificate of Incorporation, Bylaws
or other governing documents or any agreement or other instruments to which the Company is a party or by which the Company is bound.

 

2.3       Subsidiaries.
The Company does not own, directly or indirectly, any subsidiaries.

 

2.4       Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to this Agreement and (ii) the filing of Form D with the SEC and such filings as are required to
be made under applicable state securities laws (collectively, the “Required Approvals”).

 

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2.5       Issuance
of the Shares. The shares of Common Stock and the shares to be issued upon exercise of the Common Stock Warrants (the “Warrant
Shares”) are duly authorized and reserved for issuance and, when issued and paid for in accordance with the applicable
Transaction Documents, or issued in accordance with the Certificate of Incorporation, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction
Documents.

 

2.6       Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of this Agreement and the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith
or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.

 

2.7       No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Units, the Common Stock and the Warrant Shares and the consummation by it of
the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Certificate
of Incorporation or Bylaws, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company, or give
to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which
the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such
as could not have or reasonably be expected to result in a Material Adverse Effect.

 

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2.8       Compliance.
To the Company’s knowledge, the Company: (i) is not in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company
received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or
any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such
default or violation has been waived), (ii) is not in violation of any judgment, decree, or order of any court, arbitrator or other
governmental authority or (iii) is not or has not been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect.

 

2.9       Absence
of Certain Changes. Since the date of the SEC Filings, there has been no change in the business, operations, conditions (financial
or otherwise), prospects, assets or results of operations of the Company or any of its subsidiaries that could reasonably be expected
to have a Material Adverse Effect.

 

No “Bad Actor”
Disqualification. No Covered Person (as defined below) is subject to any of the “bad
actor” disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act (“Disqualification
Events”). No Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2)
or (d)(3) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e)
under the Securities Act. “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities
Act, including: the Company; any predecessor or Affiliate of the Company; any director, executive officer, other officer participating
in the offering, general partner or managing member of the Company; any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of the sale of the Units; and any person that has been
or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Units (a
“Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or
other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor. 2.11Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s employees is
a member of a union that relates to such employee’s relationship with the Company, and the Company is not a party to a collective
bargaining agreement. To the knowledge of the Company, no executive officer of the Company is, or is now expected to be, in violation
of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition
agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment
of each such executive officer does not subject the Company to any liability with respect to any of the foregoing matters. The
Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

2.12       Intellectual
Property. Except as would not reasonably be expected to have a Material Adverse Effect or as disclosed in the SEC Filings,
to the Company’s knowledge, (i) the Company owns or possesses the requisite licenses or other rights to use all patents,
patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets, licenses, customer lists and know how (collectively, “Intellectual Property”)
necessary to conduct its business, (ii) the Company has not received any communications alleging that the Company has violated
or, by conducting its business as conducted, would violate any of the patents, trademarks, service marks, trade names, copyrights
or trade secrets or other proprietary rights or processes of any other person or entity, nor is the Company aware of any basis
therefor and (iii) no claim is pending or, to the Company’s knowledge after due inquiry, threatened to the effect that any
Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid or unenforceable
by the Company.

 

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2.13       Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company (i) has made or filed all United States federal, state and local income and all foreign income
and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

2.14       Obligations
to Related Parties. Except as disclosed in the Private Placement Memorandum or as would not reasonably be expected to have
a Material Adverse Effect, there are no obligations of the Company to officers, directors, stockholders, or employees of the Company
other than (i) for payment of salary or other compensation for services rendered, (ii) reimbursement for reasonable expenses incurred
on behalf of the Company, (iii) standard indemnification provisions in the certificate of incorporation and by-laws, and (iv) for
other standard employee benefits made generally available to all employees (including stock option agreements outstanding under
any stock option plan approved by the Board of Directors). Except as may be disclosed in the SEC Filings, the Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or corporation other than its wholly-owned subsidiaries.

 

2.15       Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which
adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents, the shares of Common
Stock comprising each Unit or the Warrant Shares.

 

2.16       Title
to Assets. The Company has good and marketable title in fee simple to all real property owned by them and good and marketable
title in all personal property owned by them that is material to the business of the Company, in each case free and clear of all
Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and (ii) Liens for the payment of federal, state or other taxes, for
which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company are held by them under valid, subsisting and enforceable
leases with which the Company is in compliance.

 

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2.17       Certain
Fees. Other than the fees payable to the Placement Agent pursuant to the Placement Agent Agreement as disclosed under Section
7.7 of this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Investors shall have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with
the transactions contemplated by the Transaction Documents except that the proceeds from purchase and sale of the Units shall be
used to pay the fee payable to the Placement Agent pursuant to the terms of the Placement Agent Agreement.

 

2.18       Private
Placement. Assuming the accuracy of the Investors’ representations and warranties set forth in Section 2, no registration
under the Securities Act is required for the offer and sale of the Units by the Company to the Investors as contemplated hereby.

 

2.19       Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Units, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.

 

2.20       Financial
Statements. The financial statements of the Company included in the SEC Filings (the “Financial Statements”)
fairly present in all material respects the financial condition and results of operations of the Company at the dates and for the
periods indicated and have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”)
consistently applied throughout the periods covered thereby, except as may be otherwise specified in such Financial Statements
or the notes thereto, and except that unaudited financial statements do not contain all footnotes and do not contain the cash flow
statement required by GAAP, and fairly present in all material respects the financial condition of the Company as of the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal year-end audit adjustments. Since the date of the most recent balance sheet included as part of the Financial Statements,
there has not been to the Company’s knowledge: (i) any change in the assets, liabilities, financial condition or operations
of the Company from that reflected in the Financial Statements, other than changes in the ordinary course of business, none of
which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect; or (ii) any other event
or condition of any character that, either individually or cumulatively, would reasonably be expected to have a Material Adverse
Effect, except for the expenses incurred in connection with the transactions contemplated by this Agreement.

 

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2.21       Clinical
Trials. The pre-clinical studies and clinical trials conducted by or, to the knowledge of the Company, on behalf of the Company
that are described in, or the results of which are described in, the Private Placement Memorandum were and, if still pending, are
being conducted in all material respects in accordance with protocols filed with the appropriate regulatory authorities for each
such study or trial, as the case may be, all applicable statutes, all applicable rules and regulations of the United States Food
and Drug Administration (the “FDA”) and, if applicable, comparable regulatory agencies outside of the United
States to which they are subject. Each description of the results of such studies and trials contained in the Private Placement
Memorandum are, to the Company’s knowledge, accurate and complete in all material respects and fairly presents the data derived
from such studies and trials, and, except to the extent disclosed in the Private Placement Memorandum, the Company has no knowledge
of any other studies or trials the results of which are inconsistent with, or otherwise call into question, the results described
in the Private Placement Memorandum when viewed in the context in which such results are so described and the clinical stage of
development. The Company has not received any written notices, correspondence or other written communications from the FDA or from
any other U.S. or foreign government or drug regulatory agency (collectively, the “Regulatory Agencies”) requiring
or threatening the termination, suspension or material modification of any clinical trials being conducted by or on behalf of the
Company that are described in the Private Placement Memorandum. The Company has operated at all times and currently are in compliance
in all material respects with all statutes, rules and regulations of the Regulatory Agencies applicable to the conduct of their
respective business.

 

2.22       Licenses
and Permits. Except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse
Effect, (i) the Company holds, and is operating in compliance with, such permits, licenses, franchises, registrations, exemptions,
approvals, authorizations and clearances of any governmental authorities (including, without limitation, the FDA) required for
the conduct of its business as currently conducted (collectively, the “Permits”), and all such Permits are in
full force and effect; and (ii) the Company has fulfilled and performed all of its obligations with respect to the Permits which
were required to be performed prior to the date hereof, and, to the Company’s knowledge, no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof or results in any other impairment of the rights
of the holder of any Permit. All applications, notifications, submissions, information, claims, reports and statistics, and other
data and conclusions derived therefrom, utilized as the basis for any and all requests for a Permit from the FDA or other governmental
authority relating to the Company, its business and its products, when submitted to the FDA or other governmental authority by
or on behalf of the Company were true, complete and correct in all material respects. Any necessary or required updates, changes,
corrections or modification to such applications, submissions, information and data have been submitted to the FDA or other governmental
authority, except as would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.
The Company has not received any written notification, correspondence or any other written communication, including written notification
of any pending or, to the Company’s knowledge, threatened claim, suit, proceeding, hearing, enforcement, investigation, arbitration
or other action brought against it from any governmental authority, including, without limitation, the FDA of potential or actual
material non-compliance by, or material liability of, the Company under any Permits. To the Company’s knowledge, there are
no facts or circumstances that would reasonably be expected to give rise to any material liability of the Company under any Permit.

 

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2.23       Compliance
with Certain Regulatory Matters. The Company, its officers and directors, and, to the Company’s knowledge, its respective
employees and agents have operated and currently are in compliance in all material respects with applicable statutes and implementing
regulations administered or enforced by the FDA, or any other federal, state, local, or foreign governmental authority which are
applicable to their respective businesses, including, without limitation, the regulations promulgated pursuant to such laws; and
any other similar local, state or federal law or regulation applicable to their respective businesses. The Company is not a party
to, or has any ongoing reporting obligations pursuant to, any corporate integrity agreement, deferred prosecution agreement, monitoring
agreement, consent decree, settlement order, plan of correction or similar agreement imposed by any governmental authority. The
Company and, to the knowledge of the Company, any of its directors, officers, employees or agents has not been debarred, excluded
or suspended from participation in or receiving payment from any federal, state or local government health care program. The Company
has not failed to file with the Regulatory Agencies any required filing, declaration, listing, registration, report or submission
with respect to their respective products or product candidates that are described in the Private Placement Memorandum as having
already been filed by or on behalf of the Company; all such filings, declarations, listings, registrations, reports or submissions
were in material compliance with applicable laws when filed; and no deficiencies regarding compliance with applicable law have
been asserted against the Company in writing by any applicable Regulatory Agency with respect to any such filings, declarations,
listings, registrations, reports or submissions

 

2.24       Absence
of Certain Regulatory Actions. Except as described in the Private Placement Memorandum, or as would not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect, the Company has not had any product or manufacturing
site (whether Company-owned or that of a contract manufacturer for Company product candidates) subject to a governmental authority
(including, without limitation, the FDA) shutdown or import or export prohibition, nor received any FDA Form 483 or other governmental
authority notice of inspectional observations, “warning letters,” or similar correspondence or written notice from
the FDA or other governmental authority alleging or asserting material noncompliance with any applicable laws. To the Company’s
knowledge, neither the FDA nor any other governmental authority has threatened such action.

 

2.25       No
Integrated Offering. Assuming the accuracy of the Investors’ representations and warranties set forth in Section 3, neither
the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Units to be integrated with prior offerings by the Company for purposes of the Securities Act which would require the registration
of any such securities under the Securities Act.

 

2.26       No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Units
by any form of general solicitation or general advertising. The Company has offered the Units for sale only to the Investors and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

2.27       Foreign
Corrupt Practices. Neither the Company nor, to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

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2.28       Acknowledgment
Regarding Investors’ Purchase of Shares. The Company acknowledges and agrees that to its knowledge each of the Investors
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice
given by any Investor or any of their respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Investors’ purchase of the Units. The Company further represents
to each Investor that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

2.29       Office
of Foreign Assets Control. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee or Affiliate
of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

 

2.30       U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon any Investor’s
request.

 

2.31       Bank
Holding Company Act. The Company is not subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Company
does not own or control, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities
or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve. The Company does not exercise a controlling influence over the management or policies of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve.

 

2.32       Money
Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

 

2.33       Statistical
and Market-Related Data. The statistical, demographic and market-related data included in the Private Placement Memorandum,
as of the date or dates to which they speak, are based on or derived from sources that the Company believes to be reliable and
accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.

 

2.34       Use
of Proceeds. The Company has no plans to use the proceeds of the Offering to (i) make a loan or any other payment to the Company’s
officers, managers or Affiliates, except in the ordinary course of business for services performed (e.g., salary) or reimbursement
of business expenses in accordance with the Company’s policies and procedures or (ii) pay any personal expenses of the Company’s
officers, managers or Affiliates.

 

    	 	10	 

     

    

 

2.35       No
Misstatement or Omission. The documents filed by the Company pursuant the Securities Exchange Act of 1934, as amended, (the
“Exchange Act”) when they were filed with the SEC conformed in all material respects to the requirements of
the Exchange Act and were filed on a timely basis with the SEC and none of such documents contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; any further documents filed with the SEC, will conform in all material respects to the requirements
of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading

 

3       Representations
and Warranties of the Investors. Each of the Investors, severally and not jointly, hereby represents and warrants that:

 

3.1       Authorization.
Investor (i) if a natural person, represents that Investor has reached the age of 21 and has full power and authority to execute
and deliver this Agreement and all other Transaction Documents and to carry out the provisions hereof and thereof; (ii) if a corporation,
partnership, or limited liability company or partnership, or association, joint stock company, trust, unincorporated organization
or other entity, represents that such entity was not formed for the specific purpose of acquiring the Units and the Warrant Shares,
such entity is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation
of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other
organizational documents, such entity has full power and authority to execute and deliver this Agreement and all other Transaction
Documents and to carry out the provisions hereof and thereof and to purchase and hold the Units and the Warrant Shares the execution
and delivery of this Agreement has been duly authorized by all necessary action, this Agreement has been duly executed and delivered
on behalf of such entity and is a legal, valid and binding obligation of such entity; or (iii) if executing this Agreement in a
representative or fiduciary capacity, represents that it has full power and authority to execute and deliver this Agreement in
such capacity and on behalf of the subscribing individual, ward, partnership, trust, estate, corporation, or limited liability
company or partnership, or other entity for whom Investor is executing this Agreement, and such individual, partnership, ward,
trust, estate, corporation, or limited liability company or partnership, or other entity has full right and power to perform pursuant
to this Agreement and make an investment in the Company, and represents that this Agreement constitutes a legal, valid and binding
obligation of such entity. The execution and delivery of this Agreement will not violate or be in conflict with any order, judgment,
injunction, agreement or controlling document to which Investor is a party or by which it is bound.

 

3.2       Purchase
Entirely for Own Account. The Units and the Warrant Shares to be purchased by the Investor will be acquired for investment
for the Investor’s own account and not with a view to the resale or distribution of any part thereof, and such Investor has
no present intention of selling, granting any participation in, or otherwise distributing the same. Such Investor does not have
any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participation to any person with
respect to any of the Units or the Warrant Shares.

 

3.3       Disclosure
of Information. The Investor acknowledges that it has received all the information that it has requested relating to the Company
and the purchase of the Units and the Warrant Shares. The Investor further represents that it has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the Offering of the Units and the Warrant Shares. The
Investor acknowledges receipt of the Company’s Private Placement Memorandum. The foregoing, however, does not limit or modify
the representations and warranties of the Company in Section 2 of this Agreement or the right of the Investor to rely thereon.

 

    	 	11	 

     

    

 

3.4       Investment
Experience. Investor is an investor in securities of companies in the development stage and acknowledges that it is able to
fend for itself, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits
and risks of the investment in the Units. Investor is able to bear the economic risk of an investment in the Units and, at the
present time, is able to afford a complete loss of such investment.

 

3.5       Accredited
Investor. The Investor meets the requirements of at least one of the suitability standards for an “accredited investor”
within the meaning of Rule 501 of Regulation D of the Securities and Exchange Commission (the “SEC”) and
as set forth on the Accredited Investor Certification.

 

3.6       Restricted
Securities. Investor understands that the Units and the Warrant Shares are characterized as “restricted securities”
under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public
offering, and that under such laws and applicable regulations such securities may be resold without registration under the Securities
Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

3.7       High
Risk and Speculative Investment. Investor recognizes that the purchase of the Units involves a high degree of risk including,
but not limited to, the risk factors set forth in the Private Placement Memorandum and the following: (i) the Company requires
funds in addition to the proceeds of the Offering; (ii) an investment in the Company is highly speculative, and only investors
who can afford the loss of their entire investment should consider investing in the Company and the Units; (iii) the Investor may
not be able to liquidate its investment; (iv) transferability of the Units and the Warrant Shares is extremely limited; (v) the
Company may issue additional securities in the future which have rights and preferences that are senior to those of the Common
Stock; and (vi) that the Common Stock may not successfully become actively traded. Investor has reviewed the Risk Factors which
are set forth in the Company’s SEC Filings.

 

3.8       General
Solicitation. Investor is not purchasing the Units as a result of any advertisement, article, notice, or other communication
regarding the Units published in any newspaper, magazine or similar media or broadcast over television or radio or presented in
any seminar or any other general solicitation or general advertisement.

 

3.9       Fees.
Other than the fees payable to the Placement Agent as described in Section 7.7 below, no brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other person with respect to the transactions contemplated by the Transaction Documents. The Investors shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by the Transaction Documents except that the proceeds
from purchase and sale of the Units shall be used to pay the fee payable to the Placement Agent pursuant to the terms of the Placement
Agent Agreement.

 

    	 	12	 

     

    

 

3.10       Legends.
It is understood that the certificates evidencing the shares sold hereunder may bear the following legend, in addition to any other
legends required by applicable law:

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE
REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE (OR AN AFFIDAVIT OF LOST CERTIFICATE ACCEPTABLE TO THE ISSUER) MUST
BE SURRENDERED TO THE ISSUER OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY
INTEREST IN THE SECURITIES REPRESENTED HEREBY.”

 

3.11       For
ERISA plans only. The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed
of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification
of plan assets and impose other fiduciary responsibilities. Investor fiduciary or Plan (i) is responsible for the decision to invest
in the Company; (ii) is independent of the Company or any of its Affiliates; (iii) is qualified to make such investment decision;
and (iv) in making such decision, Investor fiduciary or Plan has not relied primarily on any advice or recommendation of the Company
or any of its Affiliates.

 

3.12       OFAC.
Investor should check the Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before
making the following representations.

 

(a)       Investor
represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from
activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations.
Federal regulations and Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions with,
and the provision of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited
countries, territories, persons and entities can be found on the OFAC website at http://www.treas.gov/ofac. In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals or entities in certain countries
regardless of whether such individuals or entities appear on the OFAC lists;

 

    	 	13	 

     

    

 

(b)       To
the best of Investor’s knowledge, none of: (i) Investor; (ii) any person controlling or controlled by Investor; (iii) if
Investor is a privately-held entity, any person having a beneficial interest in Investor; or (iv) any person for whom Investor
is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC
list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company may not accept any amounts from
a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph. Investor
agrees to promptly notify the Company and the Placement Agent should Investor become aware of any change in the information set
forth in these representations. Investor understands and acknowledges that, by law, the Company may be obligated to “freeze
the account” of Investor, either by prohibiting additional subscriptions from Investor, declining any redemption requests
and/or segregating the assets in the account in compliance with governmental regulations, and the Placement Agent may also be required
to report such action and to disclose Investor’s identity to OFAC. Investor further acknowledges that the Company may, by
written notice to Investor, suspend the redemption rights, if any, of Investor if the Company reasonably deems it necessary to
do so to comply with anti-money laundering regulations applicable to the Company and the Placement Agent or any of the Company’s
other service providers. These individuals include specially designated nationals, specially designated narcotics traffickers and
other parties subject to OFAC sanctions and embargo programs.

 

(c)       To
the best of Investor’s knowledge, none of: (i) Investor; (ii) any person controlling or controlled by Investor; (iii) if
Investor is a privately-held entity, any person having a beneficial interest in Investor; or (iv) any person for whom Investor
is acting as agent or nominee in connection with this investment is a senior foreign political figure, or any immediate family
member or close associate of a senior foreign political figure, as such terms are defined in the footnotes below.

 

(d)       If
Investor is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if Investor receives deposits
from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, Investor represents and warrants
to the Company that: (i) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the
Foreign Bank is authorized to conduct banking activities; (ii) the Foreign Bank maintains operating records related to its banking
activities; (iii) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct
banking activities; and (iv) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a
physical presence in any country and that is not a regulated affiliate.

 

3.13       Investment
Representations, Warranties and Covenants by Non-United States Persons. Each Investor who is a Non-U.S. person (as that term
is defined in Section 3.13(c)) hereby represents and warrants to the Company as follows:

 

(a)       This
Agreement is made by the Company with the Investor, who is a Non-U.S. person, in reliance upon such Non-U.S. person’s representations,
warranties and covenants made in this Section 3.13.

 

    	 	14	 

     

    

 

(b)       Such
Non-U.S. person has been advised and acknowledges that:

 

(i)       the
Units and the Warrant Shares have not been, and when issued, will not be registered under the Securities Act, the securities laws
of any state of the United States or the securities laws of any other country;

 

(ii)       in
issuing and selling the Units to such Non-U.S. person pursuant hereto, the Company is relying upon the “safe harbor”
provided by Regulation S and/or on Section 4(2) under the Securities Act;

 

(iii)       it
is a condition to the availability of the Regulation S “safe harbor” that the Units and the Warrant Shares not be offered
or sold in the United States or to a U.S. person until the expiration of a one-year “distribution compliance period”
(or a six-month “distribution compliance period,” if the issuer is a “reporting issuer,” as defined in
Regulation S) following the Closing Date; and

 

(iv)       notwithstanding
the foregoing, prior to the expiration of the one-year “distribution compliance period” (or six-month “distribution
compliance period,” if the issuer is a “reporting issuer,” as defined in Regulation S) after the Closing
(the “Restricted Period”), the Units and the Warrant Shares may be offered and sold by the holder thereof only
if such offer and sale is made in compliance with the terms of this Agreement and either: (A) if the offer or sale is within
the United States or to or for the account of a U.S. person (as such terms are defined in Regulation S), the securities are offered
and sold pursuant to an effective registration statement or pursuant to Rule 144 under the Securities Act or pursuant to an exemption
from the registration requirements of the Securities Act; or (B) the offer and sale is outside the United States and to other
than a U.S. person.

 

(c)       As
used herein, the term “United States” means the United States of America, its territories and possessions,
any State of the United States, and the District of Columbia, and the term “U.S. person” (as defined
in Regulation S) means:

 

(i)       a
natural person resident in the United States;

 

(ii)       any
partnership or corporation organized or incorporated under the laws of the United States;

 

(iii)       any
estate of which any executor or administrator is a U.S. person;

 

(iv)       any
trust of which any trustee is a U.S. person;

 

(v)       any
agency or branch of a foreign entity located in the United States;

 

(vi)       any
nondiscretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit
or account of a U.S. person;

 

    	 	15	 

     

    

 

(vii)       any
discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated
and (if an individual) resident in the United States; and

 

(viii)       a
corporation or partnership organized under the laws of any foreign jurisdiction and formed by a U.S. person principally for the
purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned,
by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

 

As used herein, the
term “Non-U.S. person” means any person who is not a U.S. person or is deemed not to be a U.S. person
under Rule 902(k)(2) of the Securities Act.

(d)       Such
Non-U.S. person agrees that with respect to the Units and the Warrant Shares, until the expiration of the Restricted Period:

 

(i)       such
Non-U.S. person, its agents or its representatives have not and will not solicit offers to buy, offer for sale or sell any of the
Units and the Warrant Shares, or any beneficial interest therein in the United States or to or for the account of a U.S. person;
and

 

(ii)       notwithstanding
the foregoing, the Units and the Warrant Shares may be offered and sold by the holder thereof only if such offer and sale is made
in compliance with the terms of this Agreement and either: (A) if the offer or sale is within the United States or to or for
the account of a U.S. person (as such terms are defined in Regulation S), the securities are offered and sold pursuant to an effective
registration statement or pursuant to Rule 144 under the Securities Act or pursuant to an exemption from the registration requirements
of the Securities Act; or (B) the offer and sale is outside the United States and to other than a U.S. person; and

 

(iii)       such
Non-U.S. person shall not engage in hedging transactions with regard to the Units and the Warrant Shares unless in compliance with
the Securities Act.

 

The foregoing restrictions
are binding upon subsequent transferees of the Units and the Warrant Shares, except for transferees pursuant to an effective registration
statement. Such Non-U.S. person agrees that after the Restricted Period, the Units and the Warrant Shares may be offered or sold
within the United States or to or for the account of a U.S. person only pursuant to applicable securities laws.

 

(e)       Non-U.S.
person has not engaged, nor is it aware that any party has engaged, and such Non-U.S. person will not engage or cause any third
party to engage, in any directed selling efforts (as such term is defined in Regulation S) in the United States with respect to
the Units and the Warrant Shares.

 

(f)       Such
Non-U.S. person: (i) is domiciled and has its principal place of business outside the United States; (ii) certifies it
is not a U.S. person and is not acquiring the Units and the Warrant Shares for the account or benefit of any U.S. person; and (iii) at
the time of the Closing Date, the Non-U.S. person or persons acting on Non-U.S. person’s behalf in connection therewith will
be located outside the United States.

 

    	 	16	 

     

    

 

(g)       At
the time of offering to such Non-U.S. person and communication of such Non-U.S. person’s order to purchase the Units and
the Warrant Shares and at the time of such Non-U.S. Person’s execution of this Agreement, the Non-U.S. person or persons
acting on Non-U.S. person’s behalf in connection therewith were located outside the United States.

 

(h)       Such
Non-U.S. person is not a “distributor” (as defined in Regulation S) or a “dealer” (as defined in the Securities
Act).

 

(i)       Such
Non-U.S. person acknowledges that the Company shall make a notation in its stock books regarding the restrictions on transfer set
forth in this 3.13 and shall transfer such shares on the books of the Company only to the extent consistent therewith.

 

In particular, such
Non-U.S. person acknowledges that the Company shall refuse to register any transfer of the Units and the Warrant Shares not made
in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act or pursuant to an available
exemption from registration.

 

(j)       Such
Investor understands and agrees that each certificate held by such Non-U.S. person representing the Units and the Warrant Shares,
or any other securities issued in respect of the Units and the Warrant Shares upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, shall bear the following legend (in addition to any legend required by this Agreement or
under applicable state securities laws):

 

THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER
THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION
OR ANY OTHER TRANSFER OF ANY INTEREST IN ANY OF THE SHARES REPRESENTED BY THIS CERTIFICATE.

 

    	 	17	 

     

    

 

3.14       Representations
by Non-United States persons. If an Investor is not a United States person, the Investor hereby represents that the
Investor is satisfied as to the full observance of the laws of the Investor’s jurisdiction in connection with any invitation
to subscribe for the Units and the Warrant Shares or any use of the Transaction Documents, including (i) the legal requirements
within the Investor’s jurisdiction for the purchase of the Units and the Warrant Shares, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may need to be obtained and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of such securities.
The Investor’s subscription and payment for, and the Investor’s continued beneficial ownership of, the Units and the
Warrant Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction.

 

4       Conditions
of the Investors’ Obligations at Closing. The obligations of the Investors under subsection 1.2 of this Agreement
are subject to the fulfillment on or before each Closing of each of the following conditions:

 

4.1       Representations
and Warranties. The representations and warranties of the Company contained in Section 2 hereof shall be true on and as
of the date of such Closing.

 

4.2       Performance.
The Company shall have performed and complied with all agreements, obligations, and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.

 

4.3       Suspension
of Offering. No order suspending or enjoining the Offering or sale of the Units has been issued, and no proceedings for that
purpose or a similar purpose have been initiated or are pending, or, to the best of the Company’s knowledge, are contemplated
or threatened.

 

4.4       No
Material Adverse Effect. There shall have been no Material Adverse Effect with respect to the Company since the date hereof.

 

4.5       Compliance
Certificate. The President or Chief Executive Officer of the Company shall deliver to the Placement Agent on behalf of the
Investors, at the Closing, a certificate, dated as of the Initial Closing certifying that the conditions specified in Sections 4.1,
4.2, 4.3 and 4.4 have been fulfilled.

 

4.6       Opinion
of Counsel. The Investors and the Placement Agent shall have received from Wyrick an opinion containing certain opinions to
be substantially as set forth in Exhibit C, dated as of the date of such Closing, in a form reasonably acceptable to the
Placement Agent and counsel to the Placement Agent.

 

4.7       Offering
Amount. With respect to the Initial Closing only, the aggregate amount to be paid for Shares purchased hereunder at such Closing
shall be no less than the Minimum Amount.

 

5       Conditions
of the Company’s Obligations at Closing. The obligations of the Company to the Investors under this Agreement are subject
to the fulfillment on or before each Closing of each of the following conditions by the Investors:

 

5.1       Representations
and Warranties. The representations and warranties of the Investors contained in Section 3 shall be true on and as of such
Closing with the same effect as though such representations and warranties had been made on and as of such Closing. All covenants,
agreements and conditions contained in this Agreement to be performed by such Investor on or prior to the date of such Closing
shall have been performed or complied with in all material respects.

 

    	 	18	 

     

    

 

5.2       Suspension
of Offering. No order suspending or enjoining the Offering or sale of the Units has been issued, and no proceedings for that
purpose or a similar purpose have been initiated or are pending, or, to the best of the Company’s knowledge, are contemplated
or threatened. There shall not be in effect any law, rule or regulation prohibiting or restricting the sale of the Units or requiring
any consent or approval of any person, which shall not have been obtained, to issue the Units (except as otherwise provided in
this Agreement).

 

5.3       Payment
of Purchase Price. The Investors shall have delivered the purchase price specified in Section 1.2.

 

6       Covenant
Regarding Certificates for Shares. No later than thirty (30) days after each Closing, the Company shall deliver the certificates
representing the shares of Common Stock purchased by the Investors in such Closing, as specified in Section 1.

 

7       Miscellaneous.

 

7.1       Survival
of Warranties. All of the representations and warranties made herein shall survive the execution and delivery of this Agreement
for a period of one year. The Investors are entitled to rely, and the parties hereby acknowledge that the Investors have so relied,
upon the truth, accuracy and completeness of each of the representations and warranties of the Company contained herein, irrespective
of any independent investigation made by Investors. The Company is entitled to rely, and the parties hereby acknowledge that the
Company has so relied, upon the truth, accuracy and completeness of each of the representations and warranties of the Investors
contained herein, irrespective of any independent investigation made by the Company.

 

7.2       Successors
and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties (including transferees of any of the Common Stock or Warrant
Shares sold hereunder. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

 

7.3       Governing
Law. This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware.

 

7.4       Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement may also be executed via facsimile or by e-mail delivery of a “.pdf”
format data file, either of which shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) this Agreement with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

    	 	19	 

     

    

 

7.5       Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

7.6       Notices.
Unless otherwise provided, any notice, authorization, request or demand required or permitted to be given under this Agreement
shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or three (3)
days following deposit with the United States Post Office, by registered or certified mail, postage prepaid, or two days after
it is sent by an overnight delivery service, or when sent by facsimile with machine confirmation of delivery addressed as follows:

 

If to the Investors to:

 

The addresses sent forth
on the signature pages attached.

 

If to Company,
to:

 

Mustang Bio, Inc.

2 Gansevoort Street, 9th Floor

New York, NY 10014

Attn: Chief Executive Officer

 

With a copy to:

 

Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail, Suite 300

Raleigh, NC 27607-7506

Facsimile: (919) 781-4865

Attn: W. David Mannheim, Esq.

 

Any party may change its address for such
communications by giving notice thereof to the other parties in conformity with this Section.

 

7.7       Compensation
of Placement Agent. Each Investor acknowledges that it is aware that the Placement Agent will receive from the Company, in
consideration of its services as Placement Agent in respect of the transactions contemplated hereby, (i) selling commissions aggregating
10% of the Purchase Price of the Units to “accredited investors” as that term is defined within the meaning of Rule
501 under the Securities Act introduced to the Company by the Placement Agent (“Qualified Investors”) (excluding
the purchase price paid upon exercise of the Warrants), (ii) reimbursement for reasonable and documented expenses incurred by the
Placement Agent, not to exceed $20,000, (iii) reasonable and documented expenses of the Placement Agent’s transaction counsel,
up to a maximum of $60,000 (iv) escrow fees payable to the escrow agent of up to $4,000, except to the extent the Escrow Agent
requires additional fees for additional Closings, and (v) a warrant to purchase shares of Common Stock equal to 10% of the
number of Units sold in this offering to Qualified Investors, at an exercise price of $8.50 per share of Common Stock.

 

7.8       Transaction
Expenses; Enforcement of Transaction Documents. The Company and each Investor shall pay their respective costs and expenses
incurred with respect to the negotiation, execution, delivery and performance of this Agreement. If any action at law or in
equity is necessary to enforce or interpret the terms of the Transaction Documents, the prevailing party shall be entitled to reasonable
attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.

 

    	 	20	 

     

    

 

7.9       Amendments
and Waivers. Except as set forth in Section 1.3(b), this Agreement may be amended or terminated and the observance of any term
of this Agreement may be waived with respect to all parties to this Agreement (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company and the Requisite Holders (as defined below). Notwithstanding
the foregoing, this Agreement may not be amended or terminated and the observance of any term hereunder may not be waived with
respect to any Investor without the written consent of such Investor unless such amendment, termination or waiver applies to all
Investors in the same fashion. The Company shall give prompt written notice of any amendment or termination hereof or waiver hereunder
to any party hereto that did not consent in writing to such amendment, termination or waiver. Any amendment, termination or waiver
effected in accordance with this Section 7.9 shall be binding on all parties hereto, even if they do not execute such consent.
No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such term, condition or provision. Any amendment or waiver effected
in accordance with this paragraph shall be binding upon each holder of any Shares purchased under this Agreement at the time outstanding
each future holder of all such Shares, and the Company. For purposes hereof, “Requisite Holder(s)” shall mean Investors
representing a majority of the Units purchased by the Investors pursuant to this Agreement.

 

7.10       Adjustment
for Stock Split. All references to the number of shares of Common Stock and Warrant Shares and the purchase price of the Units
in this Agreement shall be adjusted to reflect any stock split, stock dividend or other change in the Common Stock of the Company
which may be made after the date of this Agreement.

 

7.11       Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

 

7.12       Entire
Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party
shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically
set forth herein or therein.

 

    	 	21	 

     

    

 

7.13       Independent
Nature of Investors. The obligations of each Investor under this Agreement or other transaction document are several and not
joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations
of any other Investor under this Agreement or any other transaction document. Each Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder. The decision of each Investor to purchase Units pursuant to this
Agreement has been made by such Investor independently of any other Investor and independently of any information, materials, statements
or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial
or otherwise) or prospects of the Company which may have been made or given by any other Investor or by any agent or employee of
any other Investor, and no Investor or any of its agents or employees shall have any liability to any other Investor (or any other
person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any
other transaction document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in
any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Except
as otherwise provided in this Agreement or any other transaction document, each Investor shall be entitled to independently protect
and enforce its rights arising out of this Agreement or out of the other transaction documents, and it shall not be necessary for
any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor represents and warrants
that it has been represented by its own separate legal counsel in connection with the transactions contemplated hereby and acknowledges
and understands that Wyrick has served as counsel to the Company only, and the Investors cannot rely upon Wyrick in any manner
with regard to their decision to participate in the transactions contemplated hereby. Each Investor also acknowledges and understands
that Duane Morris LLP has served as counsel to the Placement Agent only and the Investors cannot rely upon Duane Morris LLP in
any manner with regard to their decision to participate in the transactions contemplated hereby.

 

[Signature page follows.]

 

    	 	22	 

     

    

 

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

 

Company: 

 

Mustang Bio, Inc.

a Delaware corporation

 

  

	By:	 	 
	 	Name:	Michael Weiss	 
	 	Title:	President and CEO	 

 

 

Investors:

 

[TO SIGN AND COMPLETE OMNIBUS SIGNATURE PAGE ANNEXED HERETO]

  

     

     

    

 

APPENDIX A

 

Additional Definitions

 

For purposes of this
Agreement, the following additional capitalized terms shall have the respective definitions set forth below:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors” means the board of directors of the Company.

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Transaction
Documents” means this Agreement, the Placement Agent Agreement by and between the Company and the Placement Agent dated
as of August 3, 2016, and the warrant to purchase shares of Common Stock to be issued to the Placement Agent in connection with
each Closing, together with all exhibits and schedules thereto and hereto.

 

 

 

* * * *Exhibit 10.5

 

 

 

ENERGY XXI LTD

 

PLAN SUPPORT AGREEMENT

 

November 14, 2016

 

 

 

This Plan Support Agreement
(together with the Plan Mediation Term Sheet (as defined below) and the Plan (as defined below), as such may be amended, restated,
supplemented, or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”),1
dated as of November 14, 2016, is entered into by and among: (a) the Debtors; and (b) the undersigned noteholders
who are members of the ad hoc committee of Second Lien Noteholders (the “Second Lien Plan Support Parties”),
the Second Lien Notes Trustee, the Creditors’ Committee, the undersigned noteholders who are members of the ad hoc group
of EGC Unsecured Noteholders (collectively with the EGC Unsecured Notes Indenture Trustee, the “EGC Plan Support Parties”),
and the undersigned noteholders who are members of the ad hoc group of EPL Unsecured Noteholders (collectively with the EPL Unsecured
Notes Indenture Trustee, the “EPL Plan Support Parties”) (collectively with the EXXI 3.0% Senior Convertible
Notes Trustee, and together with any such parties that may enter into this Agreement in accordance with Section 13
and/or Section 14 hereof, the “Plan Support Parties”); provided, however that
the Indenture Trustees shall not be required to sign this Agreement; provided further, however that each Indenture
Trustee shall be deemed a Plan Support Party unless and until such Indenture Trustee files an objection to the approval, acceptance,
or implementation of the Plan and/or directly or indirectly votes to reject the Plan; provided further, however, that an
Indenture Trustee shall remain a Plan Support Party notwithstanding the filing of any objection to the Plan solely on the grounds
that the Plan does not comply with this Plan Support Agreement or the Plan Mediation Term Sheet or pertains solely to the effect
of one or more specific Plan provisions (including omissions) on the rights and duties of such Indenture Trustee. This Agreement
(x) collectively refers to the Second Lien Plan Support Parties, the EGC Plan Support Parties, and the EPL Plan Support Parties
as the “Noteholder Plan Support Parties” and each of the foregoing individually as a “Noteholder
Plan Support Party” and (y) collectively refers to the Debtors and the Plan Support Parties as the “Parties”
and each individually as a “Party.”

 

RECITALS

 

WHEREAS, on September 16,
2016, the Court appointed Judge Leif Clark as the mediator pursuant to the Order (A) Adjourning the Confirmation Hearing and
Extending Related Deadlines, (B) Extending the Filing Exclusivity Period and Soliciting Exclusivity Period, and (C) Appointing
a Mediator [Docket No. 1337];

 

 

		1	Capitalized terms used but not defined herein are used as defined in the Debtors’ First
Amended Joint Chapter 11 Plan of Reorganization [Docket No. 1418] (the “Existing Plan”).

 

     

     

    

 

WHEREAS, in an effort to
consensually resolve outstanding disputes among the parties in interest in the Debtors’ Chapter 11 Cases and achieve a consensual
and value-maximizing restructuring, representatives for the Debtors, the First Lien Agent, the Second Lien Ad Hoc Committee, the
Second Lien Indenture Trustee, the Creditors’ Committee, the Equity Committee, the ad hoc group of EGC Unsecured Noteholders,
the EGC Unsecured Notes Indenture Trustee, the ad hoc group of EPL Unsecured Noteholders, the EPL Unsecured Notes Indenture Trustee,
and the EXXI 3.0% Senior Convertible Notes Indenture Trustee (collectively, the “Mediation Parties”)
participated in a confidential and non-binding mediation process, as discussed on the record at a hearing before the Court
on September 13, 2016;

 

WHEREAS, the Debtors, in
consultation with the independent directors of EGC and EPL respectively, and their respective Boards, have continued to engage
in extensive, good-faith, arms’ length mediation negotiations with the Plan Support Parties;

 

WHEREAS, the Parties have
reached agreement on the terms of a global settlement that contemplates (a) the execution of this Agreement and (b) the modification
of the Existing Plan on the terms set forth in that certain plan mediation term sheet (the “Plan Mediation Term Sheet”)
attached hereto as Exhibit A;

 

WHEREAS, as a result of
these negotiations, the Parties have agreed to support the Existing Plan as modified in accordance with the terms of this Agreement
and the Plan Mediation Term Sheet (as modified, the “Plan”) attached hereto as Exhibit B;

 

WHEREAS, the independent
directors of EGC and EPL have determined that the Debtors’ entry into this Agreement and consummation of the Plan in accordance
with the Plan Mediation Term Sheet are in the best interests of the EGC and EPL estates (as applicable);

 

NOW, THEREFORE, in consideration
of the promises, mutual covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally bound, hereby agrees as follows:

 

AGREEMENT

 

1.           PSA
Effective Date. This Agreement shall become effective, and the obligations contained herein shall become binding upon the
Parties, upon the first date (such date, the “PSA Effective Date”) that this Agreement has been executed
by all of the following: (a) each Debtor; (b) the Creditors’ Committee; (c) the Second Lien Plan Support Parties,
holding, in the aggregate, at least 66.6% in principal amount outstanding of the Second Lien Notes Claims; (d) the EGC Plan
Support Parties holding, in the aggregate, at least 26% in principal amount outstanding of the EGC Unsecured Notes Claims (excluding
the EGC Repurchased Bonds); (e) the EPL Plan Support Parties holding, in the aggregate, at least 55.7% in principal amount
outstanding of the EPL Unsecured Notes Claims (excluding the EPL Repurchased Bonds).

 

2.           Exhibits
and Schedules Incorporated by Reference. Each of the exhibits attached hereto and any schedules to such exhibits (collectively,
the “Exhibits and Schedules”) is expressly incorporated herein and made a part of this Agreement, and
all references to this Agreement shall include the Exhibits and Schedules. In the event of any inconsistency between this Agreement
(without reference to the Exhibits and Schedules) and the Exhibits and Schedules, this Agreement (without reference to the Exhibits
and Schedules) shall govern. For the avoidance of doubt, in the event of any inconsistency between the Plan Mediation Term Sheet
and the Plan, the Plan Mediation Term Sheet shall govern.

 

    	 	2	 

     

    

  

3.           Definitive
Documentation.

 

		(a)	The definitive documents and agreements governing the Restructuring Transactions (collectively,
the “Definitive Documentation”) shall include:

 

		(i)	the Plan;

 

		(ii)	the Confirmation Order; and

 

		(iii)	the second supplement (as amended, supplemented, or otherwise modified from time to time, the “Second
Supplement”) to the Debtors’ Third Amended Disclosure Statement for the Debtors’ Proposed Joint Chapter
11 Plan of Reorganization [Docket No. 809] (the “Disclosure Statement”).

 

		(b)	The Definitive Documentation identified in Section 3(a) will, after the PSA Effective Date, remain
subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent
with the terms of this Agreement (including all exhibits hereto) and be in form and substance reasonably satisfactory to each of:
(i) the Second Lien Plan Support Parties who hold, in the aggregate, at least 66.6% in principal amount outstanding of the Second
Lien Notes Claims held by the Second Lien Plan Support Parties (the “Majority Second Lien Plan Support Parties”);
(ii) the Creditors’ Committee; (iii) the EGC Unsecured Notes Indenture Trustee and the EGC Plan Support Parties who hold,
in the aggregate, at least 66.6% in principal amount outstanding of the EGC Unsecured Notes Claims held by the EGC Plan Support
Parties (the “Majority EGC Plan Support Parties”); and (iv) the EPL Unsecured Notes Indenture Trustee
and the EPL Plan Support Parties who hold, in the aggregate, at least 66.6% in principal amount outstanding of the EPL Unsecured
Notes Claims held by the EPL Plan Support Parties (the “Majority EPL Plan Support Parties” and, collectively
with the Majority Second Lien Plan Support Parties, the Creditors’ Committee, and the Majority EGC Plan Support Parties,
the “Majority Plan Support Parties”). For the avoidance of doubt, when used herein, the term “Majority
Plan Support Parties” shall require the independent approval of the Majority Second Lien Plan Support Parties, the Creditors’
Committee, the Majority EGC Plan Support Parties, and the Majority EPL Plan Support Parties.

 

4.           Milestones.
Subject to Section 7, the Debtors shall implement the Restructuring Transactions on the following timeline (each deadline,
a “Milestone”):

 

		(a)	no later than December 15, 2016, the Court shall have commenced the Confirmation Hearing;

 

    	 	3	 

     

    

  

		(b)	no later than December 31, 2016, the Court shall have entered the Confirmation Order; and

 

		(c)	no later than January 31, 2017, the Effective Date shall have occurred.

 

Subject to the individual
termination right set forth in Sub-Clause (a) of Section 10, the Debtors may extend a Milestone with the express
prior written consent of the Majority Plan Support Parties.

 

5.           Commitment
of the Noteholder Plan Support Parties. Each Noteholder Plan Support Party shall (severally and not jointly), solely as
it remains the legal owner, beneficial owner, and/or investment advisor or manager of or with power and/or authority to bind any
claims held by it, from the PSA Effective Date until the occurrence of a Termination Date (as defined in Section 11)
applicable to such Noteholder Plan Support Party:

 

		(a)	use commercially reasonable efforts to support and cooperate with the Debtors to take all commercially
reasonable actions necessary to consummate the Restructuring Transactions in accordance with the Plan and the terms and conditions
of this Agreement and the Plan Mediation Term Sheet (but without limiting consent, approval, or termination rights provided in
this Agreement and the Definitive Documentation), including vote all of its claims against, or interests in, as applicable, the
Debtors now or hereafter owned by such Noteholder Plan Support Party (or for which such Noteholder Plan Support Party now or hereafter
has voting control over) to accept the Plan in accordance with the applicable procedures set forth in the Disclosure Statement,
the Second Supplement, and the solicitation materials with respect to the Plan (collectively, the “Solicitation Materials”);
as approved consistent with the Bankruptcy Code upon receipt of Solicitation Materials approved by the Court and timely return
a duly-executed ballot in connection therewith;

 

		(b)	not withdraw, amend, or revoke (or cause to be withdrawn, amended, or revoked) its tender, consent,
or vote with respect to the Plan; provided, however, that upon termination of this Agreement, the votes of the Noteholder
Plan Support Parties shall be deemed immediately withdrawn and deemed timely votes to reject the Plan unless the applicable Noteholder
Plan Support Party elects otherwise in writing to the Debtors, and each Party agrees that nothing in this Agreement, the Bankruptcy
Code, or applicable law prohibits such Noteholder Plan Support Party from making such election; and

 

		(c)	use commercially reasonable efforts to support and not object to, delay, impede, or take any other
action to interfere with the Restructuring Transactions, or propose, file, support, or vote for any restructuring, workout, or
chapter 11 plan for any of the Debtors other than the Restructuring Transactions and the Plan (but without limiting consent,
approval, or termination rights provided in this Agreement and the Definitive Documentation).

 

    	 	4	 

     

    

  

Notwithstanding anything
herein to the contrary, nothing in this Agreement shall require any Second Lien Plan Support Party to take any action or refrain
from taking any action that is inconsistent with such Second Lien Plan Support Party’s obligations under that certain Intercreditor
Agreement, dated as of March 12, 2015, between The Royal Bank of Scotland plc, as Priority Lien Agent, and U.S. Bank National Association,
as Second Lien Collateral Trustee.

 

Notwithstanding anything
herein to the contrary, nothing in this Agreement and neither a vote to accept the Plan by any Noteholder Plan Support Party nor
the acceptance of the Plan by any Noteholder Plan Support Party shall (w) be construed to prohibit any Noteholder Plan Support
Party from contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement or the Definitive
Documentation, or exercising rights or remedies specifically reserved herein, (x) be construed to limit any Noteholder Plan
Support Party’s rights under any applicable indenture, credit agreement, other loan document, and/or applicable law or to
prohibit any Noteholder Plan Support Party from appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11
Cases, so long as, from the PSA Effective Date until the occurrence of a Termination Date, such appearance and the positions advocated
in connection therewith are consistent with this Agreement and are not for the purpose of hindering, delaying, or preventing the
consummation of the Restructuring Transactions, provided, however, that any delay or other impact on consummation
of the Restructuring Transactions caused by a Noteholder Plan Support Party’s opposition to any relief that is inconsistent
with the terms of this Agreement, the Plan Mediation Term Sheet, or the Plan shall not constitute a violation of this Agreement,
or (y) impair or waive the rights of any Noteholder Plan Support Party to assert or raise any objection permitted under
this Agreement in connection with any hearing on confirmation of the Plan or in the Court.

 

6.           Commitment
of the Creditors’ Committee. The Creditors’ Committee (solely in its capacity as an official committee) shall
from the PSA Effective Date until the occurrence of a Termination Event (as defined in Section 9) applicable to the
Creditors’ Committee:

 

		(a)	Subject to Sub-Clause (c) of this Section 6, use commercially reasonable efforts
to support and cooperate with the Debtors to take all commercially reasonable actions necessary to consummate the Restructuring
Transactions in accordance with the Plan and the terms and conditions of this Agreement (but without limiting consent, approval,
or termination rights provided in this Agreement, the Plan and the Definitive Documentation).

 

		(b)	Subject to Sub-Clause (c) of this Section 6, use commercially reasonable efforts
to not object to, delay, impede, or take any other action to interfere with the Restructuring Transactions, or propose, file or
support any restructuring, workout, or chapter 11 plan for any of the Debtors other than the Restructuring Transactions and
the Plan.

 

    	 	5	 

     

    

 

		(c)	Notwithstanding anything herein to the contrary, nothing in this Agreement shall (i) be construed
to prohibit the Creditors’ Committee from contesting whether any matter, fact, or thing is a breach of, or is inconsistent
with, this Agreement or the Definitive Documentation, or exercising rights or remedies specifically reserved herein, (ii) be construed
to limit the Creditors’ Committee’s rights under applicable law or to prohibit the Creditors’ Committee from
appearing as a party-in-interest in any matter to be adjudicated in the Chapter 11 Cases, so long as, from the PSA Effective Date
until the occurrence of a Termination Date, such appearance and the positions advocated in connection therewith are consistent
with this Agreement and the Plan Mediation Term Sheet and are not for the purpose of hindering, delaying, or preventing the consummation
of the Restructuring Transactions, provided, however, that any delay or other impact on consummation of the Restructuring
Transactions caused by the Creditors’ Committee’s opposition to any relief that is inconsistent with the terms of this
Agreement or the Plan shall not constitute a violation of this Agreement, or (ii) impair or waive the rights of the Creditors’
Committee to assert or raise any objection permitted under this Agreement in connection with any hearing on confirmation of the
Plan or in the Court.

 

		(d)	Notwithstanding anything to the contrary herein, nothing in this Agreement shall prevent the Creditors’
Committee from taking or refraining from taking any action that, after receiving advice from counsel, it is obligated to take or
refrain from taking in the performance of its fiduciary obligations under applicable law. Further, for the avoidance of doubt,
and notwithstanding any provisions to the contrary herein, in order to fulfill its fiduciary obligations, the Creditors’
Committee may analyze and consider unsolicited proposals or offers for any alternative chapter 11 plan or restructuring transaction
and may ask clarifying questions regarding that offer without breaching its obligations under this Agreement or giving rise to
a Termination Event.

 

		(e)	The Creditors’ Committee agrees to submit a letter, which shall be included in the Solicitation
Materials, recommending that the Debtors’ unsecured creditors vote in favor of the Plan, which letter and recommendation
shall not be subsequently withdrawn, provided however, that if this Agreement is terminated with respect to the Creditors’
Committee for any reason such letter shall be deemed automatically withdrawn and shall not be utilized by the Debtors for any further
purpose without the express written consent of the Creditors’ Committee.

 

For the avoidance of doubt,
the obligations of the Creditors’ Committee under this Agreement shall be binding on the Creditors’ Committee itself,
and nothing set forth in this Agreement shall be construed to bind any individual member of the Creditors’ Committee in its
individual capacity, unless such member has separately executed this Agreement in its individual capacity.

 

    	 	6	 

     

    

  

7.           Commitment
of the Debtors.

 

		(a)	Subject to Sub-Clause (b) of this Section 7, each of the Debtors (i) agrees
to (A) support and make commercially reasonable efforts to complete the Restructuring Transactions set forth in the Plan and
this Agreement, (B) take any and all necessary and appropriate actions in furtherance of the Plan Mediation Term Sheet, the
Plan and this Agreement, and (C) make reasonable best efforts to complete the Restructuring Transactions set forth in the Plan
in accordance with each Milestone set forth in Section 4 of this Agreement, and (ii) shall not undertake any action inconsistent
with the adoption and implementation of the Plan and the confirmation thereof, including, without limitation, filing any motion
to terminate this Agreement.

 

		(b)	Notwithstanding anything to the contrary herein, nothing in this Agreement shall prevent the directors,
officers, or managers of any Debtor (in such person’s capacity as a director, officer, or manager of such Debtor) from taking
or refraining from taking any action that, after receiving advice from counsel, it is obligated to take or refrain from taking
in the performance of its fiduciary obligations under applicable law.

 

		(c)	The Debtors shall timely file a formal objection, in form and substance reasonably acceptable to
the Majority Plan Support Parties, to any motion filed with the Court seeking the entry of an order (i) directing the appointment
of a trustee or examiner (with expanded powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code), (ii)
converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or (iii) dismissing the Chapter 11 Cases.

 

		(d)	The Debtors shall timely file a formal objection, in form and substance reasonably acceptable to
the Majority Plan Support Parties, to any motion filed with the Court seeking the entry of an order modifying or terminating the
Debtors’ exclusive right to file and/or solicit acceptances of a plan of reorganization, as applicable.

 

		(e)	The Debtors may receive (but not solicit) proposals or offers for any chapter 11 plan or restructuring
transaction (including, for the avoidance of doubt, a transaction premised on an asset sale under section 363 of the Bankruptcy
Code) other than the Restructuring Transactions (an “Alternative Transaction”) from other parties and
discuss such Alternative Transactions received; provided, however, that the Debtors shall provide a copy of any written
offer or proposal (and notice of all terms of any oral offer or proposal) for an Alternative Transaction received to the legal
counsel and financial advisors to Plan Support Parties within one (1) day of the Debtors’ or their advisors’ receipt
of such offer or proposal.

 

    	 	7	 

     

    

  

For the avoidance of doubt,
nothing in this Section 7 shall be construed to limit in any way any Plan Support Party’s rights under this Agreement,
including upon occurrence of any Termination Event.

 

8.           Plan
Support Party Termination Events. Each of the Majority Second Lien Plan Support Parties, the Creditors’ Committee,
the Majority EGC Plan Support Parties, and the Majority EPL Plan Support Parties (each such group, a “Terminating Support
Group”) shall have the right, but not the obligation, upon notice to the other Parties, to terminate the obligations
of the Second Lien Plan Support Parties, the Creditors’ Committee, the EGC Plan Support Parties, and the EPL Plan Support
Parties, respectively, under this Agreement upon the occurrence of any of the following events (other than with respect to the
events enumerated in Sections 8(h) and (m)), unless waived, in writing, by the Majority Plan Support Parties on a prospective
or retroactive basis (each, a “Plan Support Party Termination Event”). Only the Majority Second Lien
Plan Support Parties shall have the right, but not the obligation, upon notice to the other Parties, to terminate the obligations
of the Second Lien Plan Support Parties under this Agreement upon the occurrence of any of the events enumerated in Sections
8(h) and (m):

 

		(a)	the failure to meet any of the Milestones in Section 4 unless (i) such failure is the
direct result of any act, omission, or delay on the part of any Plan Support Party in violation of its obligations under this Agreement
or (ii) such Milestone is extended in accordance with Section 4;

 

		(b)	the conversion of one or more of the Chapter 11 Cases to a case under chapter 7 of the
Bankruptcy Code;

 

		(c)	the appointment of a trustee, receiver, or examiner with expanded powers beyond those set forth
in section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the Chapter 11 Cases;

 

		(d)	any Debtor (i) files, amends or modifies, or files a pleading seeking authority to amend or modify,
the Definitive Documentation in a manner that is inconsistent with this Agreement, the Plan, or the Plan Mediation Term Sheet,
(ii) revokes the Restructuring Transactions without the prior consent of the Majority Plan Support Parties, or (ii) publicly announces
its intention to take any such acts listed in (i) or (ii) of this Sub-Clause (d);

 

		(e)	any Debtor files or publicly announces that it will file or joins in or supports any plan of reorganization
other than the Plan;

 

    	 	8	 

     

    

 

		(f)	a material breach by any Debtor or the Creditors’ Committee of any representation, warranty,
or covenant of such Debtor or the Creditors’ Committee set forth in this Agreement (it being understood and agreed that any
actions required to be taken by the Debtors or the Creditors’ Committee that are included in the Plan Mediation Term Sheet
attached to this Agreement but not in this Agreement are to be considered “covenants” of the Debtors
and the Creditors’ Committee, and therefore covenants of this Agreement, notwithstanding the failure of any specific provision
in the Plan Mediation Term Sheet to be re-copied in this Agreement) that could reasonably be expected to impair the economic treatment
provided under the Plan Mediation Term Sheet for the applicable Terminating Support Group (or the constituency such Terminating
Support Group represents) or prevent confirmation of the Plan in accordance with the Plan Mediation Term Sheet, which (to the extent
curable) remains uncured for a period of five (5) business days after the receipt by the Plan Support Parties or the Debtors
or the Creditors’ Committee (as applicable) of written notice of such breach; provided, however, that the Debtors
or the Creditors’ Committee, as applicable shall provide written notice of such breach promptly upon becoming aware of such
breach following reasonable inquiry;

 

		(g)	a material breach by a Plan Support Party that is not or was not formerly a member of the same
ad hoc group or ad hoc committee as the Terminating Support Group of any representation, warranty, or covenant of such Plan Support
Party set forth in this Agreement that could reasonably be expected to impair the economic treatment provided under the Plan Mediation
Term Sheet for the applicable Terminating Support Group (or the constituency such Terminating Support Group represents) or prevent
confirmation of the Plan in accordance with the Plan Mediation Term Sheet (to the extent curable) remains uncured for a period
of five (5) business days after the receipt by such Plan Support Party of notice and description of such breach; provided, however,
that in the event of such breach, the Debtors and the Majority Plan Support Parties (excluding the breaching Plan Support Party)
may elect to terminate this Agreement as to such breaching Plan Support Party, in which case such Plan Support Party shall no longer
be considered a Party to this Agreement and all Parties reserve their rights against the breaching Party;

 

		(h)	with the exception of any challenge that is the subject of a pleading that has been filed with
the Court as of the PSA Effective Date, (which pleadings need not be withdrawn until the Plan is confirmed and the Effective Date
occurs),either (i) any Party files, supports, or directs any party to file or support a motion, application, or adversary proceeding
(A) challenging the validity, enforceability, perfection, or priority of, or seeking avoidance or subordination of the Second Lien
Notes Claims or the liens securing such claims, or (B) asserting any other cause of action against and/or with respect or relating
to such claims or the prepetition liens securing such claims; or (ii) the Court (or any court with jurisdiction over the Chapter
11 Cases) enters an order providing relief against the interests of any Second Lien Plan Support Party, the Second Lien Noteholders,
the Second Lien Indenture Trustee, or the collateral agent under the Second Lien Indenture with respect to any of the foregoing
causes of action or proceedings;

 

    	 	9	 

     

    

  

		(i)	any Debtor or the Creditors’ Committee terminates its obligations under and in accordance
with this Agreement;

 

		(j)	any board, director, officer, or manager (or party with authority to act) of a Debtor (or the Debtors
themselves) takes any action in furtherance of the rights available to it (or them) under Section 7(b) of this Agreement
that are inconsistent with the Restructuring Transactions as contemplated by the Plan Mediation Term Sheet;

 

		(k)	any of the orders approving this Agreement, the Plan, the Second Supplement, or any supplement
to the Disclosure Statement are (A) stayed and such stay is not vacated or does not expire by its own terms by the later of the
applicable Milestone for the entry of such order or 14 days after the imposition of such stay, (B) vacated and no replacement order
(which otherwise complies with the terms of this Agreement) is entered by the later of the applicable Milestone for entry of such
order or 5 days after such vacatur, or (C) reversed;

 

		(l)	the failure of any Definitive Documentation to be in form and substance reasonably satisfactory
to the Majority Plan Support Parties; or

 

		(m)	the Creditors’ Committee fails to comply with Section 6(e) of this Agreement.

 

		(n)	In addition to the foregoing, the Creditors’ Committee shall have the right, but not the
obligation, upon notice to the other Parties, to terminate the Creditors’ Committee’s obligations under this Agreement
(i) upon the occurrence of any Plan Support Party Termination Event unless waived, in writing, by the Majority Plan Support Parties
and the Creditors’ Committee on a prospective or retroactive basis, and (ii) if the Creditors’ Committee determines,
after receiving advice from counsel, that proceeding with the Restructuring Transactions (including, without limitation, the Plan
or solicitation of the Plan) would be inconsistent with the exercise of its fiduciary duties.

 

9.           The
Debtors’ Termination Events. Each Debtor may, upon notice to the Plan Support Parties, terminate its obligations
under this Agreement upon the occurrence of any of the following events (each a “Debtor Termination Event,”
and together with the Plan Support Party Termination Events, the “Termination Events”), in which case
this Agreement shall terminate with respect to all Parties, subject to the rights of the Debtors to fully or conditionally waive,
in writing, on a prospective or retroactive basis, the occurrence of a Debtor Termination Event:

 

		(a)	a material breach by a Plan Support Party of any representation, warranty, or covenant of such
Plan Support Party set forth in this Agreement that could reasonably be expected to prevent confirmation of the Plan in accordance
with the Plan Mediation Term Sheet;

 

    	 	10	 

     

    

 

		(b)	upon notice to the Plan Support Parties, if the board of directors or board of managers, as applicable,
of a Debtor determines, after receiving advice from counsel, that proceeding with the Restructuring Transactions (including, without
limitation, the Plan or solicitation of the Plan) would be inconsistent with the exercise of its fiduciary duties; or

 

		(c)	the issuance by any governmental authority, including the Court, any regulatory authority, or any
other court of competent jurisdiction, of any ruling or order that could reasonably be expected to prevent confirmation of the
Plan in accordance with the Plan Mediation Term Sheet; provided, however, that the Debtors have made commercially
reasonable, good faith efforts to cure, vacate, or have overruled such ruling or order prior to terminating this Agreement.

 

10.         Individual
Termination. (a) Any Plan Support Party may terminate this Agreement as to itself in the event that the Milestone
set forth in Sub-Clause (c) of Section 4 is not met, (b) any Plan Support Party may terminate this Agreement as to
itself in the event the economic treatment provided under the Plan or the Plan Mediation Term Sheet for such Plan Support Party
is amended or modified in a manner adverse to such Plan Support Party (or the constituency such Plan Support Party represents),
or (c) any Second Lien Plan Support Party may terminate this Agreement as to itself in the event that any Definitive Document
is filed or executed that specifically provides, with respect to distributions under the Plan, for the allocation for tax purposes
between principal and interest in a manner that is not acceptable to such Second Lien Plan Support Party, in each case, by giving
ten (10) business days’ notice to the Debtors and the other Plan Support Parties within five (5) business days of such missed
Milestone, filing, or execution.

 

11.         Mutual
Termination; Automatic Termination. This Agreement and the

obligations of all Parties hereunder may be terminated by mutual written agreement by and among (a) each of the Debtors and (b)
each of the Majority Plan Support Parties. Notwithstanding anything in this Agreement to the contrary, this Agreement shall terminate
automatically upon the occurrence of the Effective Date.

 

12.         Effect
of Termination. The earliest date on which termination of this Agreement as to a Party is effective in accordance with
Sections 8, 9, 10 or 11 of this Agreement shall be referred to, with respect to such Party, as
a “Termination Date.” Upon the occurrence of a Termination Date, the terminating Party’s and, solely
in the case of a Termination Date in accordance with Section 11, all Parties’ obligations under this Agreement shall
be terminated effective immediately, and such Party or Parties hereto shall be released from all commitments, undertakings, and
agreements hereunder; provided, however, that each of the following shall survive any such termination: (a) any
claim for breach of this Agreement that occurs prior to such Termination Date, and all rights and remedies with respect to such
claims shall not be prejudiced in any way; (b) the Debtors’ obligations in Section 15 of this Agreement
accrued up to and including such Termination Date; and (c) Sections 12, 16, 18, 19, 20,
21, 22, 23, 24, 25, 26, 29, 31, and 32 hereof. The automatic stay
applicable under section 362 of the Bankruptcy Code shall not prohibit a Party from taking any action necessary to effectuate the
termination of this Agreement pursuant to and in accordance with the terms hereof. The Parties agree that the giving of notice
under and/or termination of this Agreement in accordance with its terms is not prohibited as a matter of law by the automatic stay
imposed by section 362 of the Bankruptcy Code, and the Debtors agree not to raise any argument or take any position to the contrary. 
To the extent the Debtors raise any such argument or take any such position, the occurrence of any of the Termination Events in
Section 8 of this Agreement shall result in an automatic termination of the Agreement.

 

    	 	11	 

     

    

 

13.         Transfers
of Claims and Interests.

 

		(a)	No Noteholder Plan Support Party shall (i) sell, transfer, assign, pledge, grant a participation
interest in, or otherwise dispose of, directly or indirectly, its right, title, or interest in respect of any of such Noteholder
Plan Support Party’s claims against any Debtor subject to this Agreement, as applicable, in whole or in part, or (ii) deposit
any of such Noteholder Plan Support Party’s claims against any Debtor, as applicable, into a voting trust, or grant any proxies,
or enter into a voting agreement with respect to any such claims or interests (the actions described in clauses (i) and (ii)
are collectively referred to herein as a “Transfer” and the Noteholder Plan Support Party making such
Transfer is referred to herein as the “Transferor”), unless such Transfer is to another Noteholder Plan
Support Party or any other entity that first agrees in writing to be bound by the terms of this Agreement by executing and delivering
to the Debtors a Transferee Joinder substantially in the form attached hereto as Exhibit C (the “Transferee
Joinder”). With respect to claims against or interests in a Debtor held by the relevant transferee upon consummation
of a Transfer in accordance herewith, such transferee is deemed to make all of the representations, warranties, and covenants of
a Noteholder Plan Support Party, as applicable, set forth in this Agreement. Upon compliance with the foregoing, the Transferor
shall be deemed to relinquish its rights (and be released from its obligations, except for any claim for breach of this Agreement
that occurs prior to such Transfer) under this Agreement to the extent of such transferred rights and obligations. Any Transfer
made in violation of this Sub-Clause (a) of this Section 13 shall be deemed null and void ab initio and of
no force or effect, regardless of any prior notice provided to the Debtors and/or any Noteholder Plan Support Party, and shall
not create any obligation or liability of any Debtor or any other Plan Support Party to the purported transferee.

 

    	 	12	 

     

    

 

		(b)	Notwithstanding Sub-Clause (a) of this Section 13, (i) an entity that is
acting in its capacity as a Qualified Marketmaker shall not be required to be or become a Noteholder Plan Support Party to effect
any transfer (by purchase, sale, assignment, participation, or otherwise) of any claim against any Debtor, as applicable, by a
Plan Support Party to a transferee; provided that such transfer by a Noteholder Plan Support Party to a transferee
shall be in all other respects in accordance with and subject to Sub-Clause (a) of this Section 13; and
(ii) to the extent that a Noteholder Plan Support Party, acting in its capacity as a Qualified Marketmaker, acquires any claim
against, or interest in, any Debtor from a holder of such claim who is not a Noteholder Plan Support Party, it may transfer (by
purchase, sale, assignment, participation, or otherwise) such claim or interest without the requirement that the transferee be
or become a Plan Support Party in accordance with this Section 13. For purposes of this Sub-Clause (b),
a “Qualified Marketmaker” means an entity that (x) holds itself out to the market as standing ready in
the ordinary course of its business to purchase from customers and sell to customers claims against any of the Debtors (including
debt securities or other debt) or enter with customers into long and short positions in claims against the Debtors (including debt
securities or other debt), in its capacity as a dealer or market maker in such claims against the Debtors, and (y) is in fact regularly
in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).

 

14.         Further
Acquisition of Claims or Interests. Except as set forth in Section 13, nothing in this Agreement shall be construed
as precluding any Noteholder Plan Support Party or any of its affiliates from acquiring additional First Lien Claims, Second Lien
Notes Claims, unsecured notes claims, existing equity interests, or interests in the instruments underlying the First Lien Claims,
Second Lien Notes Claims, unsecured notes claims, or existing equity interests; provided, however, that any additional
First Lien Claims, Second Lien Notes Claims, unsecured notes claims, existing equity interests, or interests in the underlying
instruments acquired by any Noteholder Plan Support Party and with respect to which such Noteholder Plan Support Party is the legal
owner, beneficial owner, and/or investment advisor or manager of or with power and/or authority to bind any claims or interests
held by it shall automatically be subject to the terms and conditions of this Agreement. Upon any such further acquisition, such
Noteholder Plan Support Party shall notify the Debtors in advance of the Confirmation Hearing.

 

15.         Fees
and Expenses. On the Effective Date (and thereafter with respect to fees and expenses relating to post-Effective Date services),
the Debtors shall pay in Cash all reasonable and documented unpaid fees and expenses of the Second Lien Plan Support Parties and
the Ad Hoc Committee of Second Lien Noteholders and their advisors, including counsel, without application to or approval of the
Court; provided, however that such fees and expenses will be subject to review as set forth in the Final Cash Collateral
Order (whether or not the Final Cash Collateral Order remains in effect as of the Effective Date).

 

16.         Consents
and Acknowledgments. Each Party irrevocably acknowledges and agrees that this Agreement is not and shall not be deemed
to be a solicitation for consents to the Plan. The acceptance of the Plan by each of the Plan Support Parties will not be solicited
until such Parties have received the Second Supplement and related ballots in accordance with applicable law, and will be subject
to sections 1125, 1126 and 1127 of the Bankruptcy Code. The EGC Plan Support Parties and the EPL Plan Support Parties agree
that the agreements set forth herein constitute a direction to the applicable trustees for the EGC Unsecured Notes Indenture and
the EPL Unsecured Notes Indenture, respectively, to take all necessary and appropriate actions to carry out the intent and purpose
of this Agreement and to consummate the transactions contemplated thereby.

 

    	 	13	 

     

    

 

17.         Representations
and Warranties.

 

		(a)	Each Plan Support Party hereby represents and warrants on a several and not joint basis for itself
and not any other person or entity that the following statements are true, correct, and complete, to the best of its actual knowledge,
as of the date hereof:

 

		(i)	it has the requisite organizational power and authority to enter into this Agreement and to carry
out the transactions contemplated by, and perform its respective obligations under, this Agreement (as limited by the Bankruptcy
Code and applicable law with respect to the Creditors’ Committee);

 

		(ii)	the execution and delivery of this Agreement and the performance of its obligations hereunder have
been duly authorized by all necessary corporate or other organizational action on its part;

 

		(iii)	the execution, delivery and performance by it of this Agreement does not violate any provision
of law, rule, or regulation applicable to it, or its certificate of incorporation, or bylaws, or other organizational documents
in any material respect;

 

		(iv)	subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, this Agreement is the
legally valid and binding obligation of it, enforceable against it in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors’ rights generally,
or by equitable principles relating to enforceability;

 

		(v)	except for the Creditors’ Committee, it is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities
Act”), with sufficient knowledge and experience to evaluate properly the terms and conditions of this Agreement and
to consult with its legal and financial advisors with respect to its investment decision to execute this Agreement, and it has
made its own analysis and decision to enter into this Agreement;

 

		(vi)	except for the Creditors’ Committee, it (A) either (1) is the sole owner of the claims and
interests identified below its name on its signature page hereof and in the amounts set forth therein, or (2) has all necessary
investment or voting discretion with respect to the principal amount of claims and interests identified below its name on its signature
page hereof, and has the power and authority to bind the owner(s) of such claims and interests to the terms of this Agreement;
(B) is entitled (for its own accounts or for the accounts of such other owners) to all of the rights and economic benefits of such
claims and interests; or (C) does not directly or indirectly own any claims against any Debtor other than as identified below its
name on its signature page hereof; and

 

    	 	14	 

     

    

  

		(vii)	solely for the Creditors’ Committee, the Creditors’ Committee has been represented
by counsel in connection with this Agreement and the transactions contemplated by the Agreement.

 

		(b)	Each Debtor hereby represents and warrants on a joint and several basis (and not any other person
or entity other than the Debtors) that the following statements are true, correct, and complete as of the date hereof:

 

		(i)	it has the requisite corporate or other organizational power and authority to enter into this Agreement
and to carry out the transactions contemplated by, and perform its respective obligations under, this Agreement;

 

		(ii)	the execution and delivery of this Agreement and the performance of its obligations hereunder have
been duly authorized by all necessary corporate or other organizational action on its part, including approval of each of the independent
director(s) or manager(s), as applicable, of each of the corporate entities that comprise the Debtors;

 

		(iii)	the execution and delivery by it of this Agreement does not (A) violate its certificates of
incorporation, or bylaws, or other organizational documents, or those of any of its affiliates, or (B) result in a breach
of, or constitute (with due notice or lapse of time or both) a default (other than, for the avoidance of doubt, a breach or default
that would be triggered as a result of the Chapter 11 Cases or any Debtor’s undertaking to implement the Restructuring
Transactions through the Chapter 11 Cases) under any material contractual obligation to which it or any of its affiliates
is a party;

 

		(iv)	the Plan Mediation Term Sheet and this Agreement have been reviewed, approved and authorized by
each of the independent directors of EGC and EPL, respectively, each of whom has had the benefit of the advice of independent counsel
and a financial advisor, and such independent directors (A) have concluded that the Debtors’ entry into this Agreement and
performance of their obligations hereunder are in the best interests of the EGC and EPL estates (as applicable) under the circumstances
and (B) approve, authorize and support the Debtors’ proposal, prosecution, confirmation, and consummation of the Plan and
other Definitive Documents on the terms described in the Plan Mediation Term Sheet and the Definitive Documents prepared in accordance
with this Agreement;

 

    	 	15	 

     

    

 

		(v)	the execution and delivery by it of this Agreement does not require any registration or filing
with, the consent or approval of, notice to, or any other action with any federal, state, or other governmental authority or regulatory
body, other than, for the avoidance of doubt, the actions with governmental authorities or regulatory bodies required in connection
with implementation of the Restructuring Transactions;

 

		(vi)	subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code and, to the extent
applicable, approval by the Court, this Agreement is the legally valid and binding obligation of it, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to or limiting creditors’ rights generally, or by equitable principles relating to enforceability;
and

 

		(vii)	it has sufficient knowledge and experience to evaluate properly the terms and conditions of the
Plan and this Agreement, and has been afforded the opportunity to consult with its legal and financial advisors with respect to
its decision to execute this Agreement, and it has made its own analysis and decision to enter into this Agreement and otherwise
investigated this matter to its full satisfaction.

 

		(c)	Each of the Plan Support Parties and the Debtors (including the independent directors of EGC and
EPL, respectively) agree to support consummation of the Restructuring Transactions in accordance with the Plan Mediation Term Sheet
and the terms and conditions of this Agreement and to take all actions as may be appropriate to consummate the Restructuring Transactions,
including, without limitation, filing pleadings and making statements in open Court in support of the Restructuring Transactions.

 

18.         Survival
of Agreement. Each of the Parties acknowledges and agrees that (i) the rights granted in this Agreement are enforceable
by each signatory hereto without approval of any court, including the Court, and (ii) the Debtors waive any rights to assert that
the exercise of such rights violate the automatic stay or any other provisions of the Bankruptcy Code.

 

19.         Waiver.
If the Restructuring Transactions contemplated herein are not consummated, or following the occurrence of a Termination Event,
if applicable, nothing herein shall be construed as a waiver by any Party of any or all of such Party’s rights, other than
as provided in Section 16, and the Parties expressly reserve any and all of their respective rights. The Parties acknowledge
that this Agreement, the Plan, and all negotiations relating hereto are part of a proposed settlement of matters that could otherwise
be the subject of litigation. Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state rules of evidence
and any other applicable law, foreign or domestic, the Plan, this Agreement, the Plan Mediation Term Sheet, any related documents,
and all negotiations relating thereto shall not be admissible into evidence in any proceeding other than a proceeding to enforce
its terms.

 

    	 	16	 

     

    

 

20.         Relationship
Among Parties. Notwithstanding anything herein to the contrary, the duties and obligations of the Plan Support Parties
under this Agreement shall be several, not joint. No Party shall have any responsibility by virtue of this Agreement for any trading
by any other entity. No prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way
affect or negate this Agreement. The Parties acknowledge that this Agreement does not constitute an agreement, arrangement, or
understanding with respect to acting together for the purpose of acquiring, holding, voting, or disposing of any equity securities
of the Debtors and do not constitute a “group” within the meaning of Rule 13d-5 under the Securities Exchange Act of
1934, as amended. No action taken by any Plan Support Party pursuant to this Agreement shall be deemed to constitute or to create
a presumption by any of the Parties that the Plan Support Parties are in any way acting in concert or as such a “group.”

 

21.         Specific
Performance. It is understood and agreed by the Parties that money damages may be an insufficient remedy for any breach
of this Agreement by any Party and each non-breaching Party shall be entitled to seek specific performance and injunctive or other
equitable relief as a remedy of any such breach of this Agreement, including, without limitation, an order of the Court or other
court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.

 

22.         Governing
Law & Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to such state’s choice of law provisions which would require or permit the application of the law
of any other jurisdiction. By its execution and delivery of this Agreement, each Party (a) agrees that the Court shall have exclusive
jurisdiction of all matters arising out of or in connection with this Agreement and (b) irrevocably and unconditionally submits
to the personal jurisdiction of the Court solely for purposes of any action, suit, proceeding, or other contested matter arising
out of or relating to this Agreement, or for recognition or enforcement of any judgment rendered or order entered in any such action,
suit, proceeding, or other contested matter.

 

23.         Waiver
of Right to Trial by Jury. Each of the Parties waives any right to have a jury participate in resolving any dispute, whether
sounding in contract, tort or otherwise, between any of the Parties arising out of, connected with, relating to, or incidental
to the relationship established between any of them in connection with this Agreement. Instead, any disputes resolved in court
shall be resolved in a bench trial without a jury.

 

24.         Successors
and Assigns. Except as otherwise provided in this Agreement, this Agreement is intended to bind and inure to the benefit
of each of the Parties and each of their respective permitted successors, assigns, heirs, executors, administrators, and representatives.

 

    	 	17	 

     

    

 

25.         No
Third-Party Beneficiaries. Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties
and no other person or entity shall be a third-party beneficiary of this Agreement.

 

26.          Notices.
All notices (including, without limitation, any notice of termination or breach) and other communications from any Party hereunder
shall be in writing and shall be deemed to have been duly given if personally delivered by courier service, messenger, email, or
facsimile to the other Parties at the applicable addresses below, or such other addresses as may be furnished hereafter by notice
in writing. Any notice of termination or breach shall be delivered to all other Parties.

 

		(a)	If to any Debtor:

 

Energy XXI Ltd

Attn:    John D. Schiller

1021 Main, Suite 2626

Houston, TX 77002

Tel:     (713) 351-3000

Fax:    (713) 351-33000

Email:  jschiller@energyxxi.com

 

with a copy to:

 

Vinson & Elkins L.L.P.

Attn:    Harry A. Perrin

1001 Fannin Street

Houston, TX 10022-4611

Tel:     (713) 758-2222

Fax:    (713) 758-2346

Email:  hperrin@velaw.com

 

Vinson & Elkins L.L.P.

Attn:    David S. Meyer

666 Fifth Avenue, 26th Floor

New York, NY 10103-0040

Tel:     (212) 237-0000

Fax:    (212) 237-0100

Email:  dmeyer@velaw.com

 

		(b)	If to a Second Lien Plan Support Party:

 

To the address
set forth on its signature page hereto

 

with a copy to

 

Milbank, Tweed, Hadley & McCloy
LLP

Attn:    Dennis
F. Dunne and Samuel A. Khalil

28 Liberty Street

 

    	 	18	 

     

    

 

New York, NY 10005

Tel:      (212)
530-5000

Fax:      (212)
530-5219

Email:   ddunne@milbank.com

   skhalil@milbank.com

 

		(c)	If to the Creditors’ Committee:

 

Latham & Watkins LLP

Attn:    Mitchell
A. Seider and Adam J. Goldberg

885 Third Avenue

New York, NY

Tel:      (212) 906-1637

Fax:      (212) 751-4864

Email:   mitchell.seider@lw.com

   adam.goldberg@lw.com

 

and

 

Heller, Draper, Patrick, Horn &
Dabney, L.L.C.

Attn: William H. Patrick III and Tristan
Manthey

650 Poydras Street, Suite 2500

New Orleans, Louisiana 70130

Tel:      (504)
299-3345

Fax:      (504)299-3399

Email:   wpatrick@hellerdraper.com

   tmanthey@hellerdraper.com

 

		(d)	If to an EGC Plan Support Party:

 

To the address
set forth on its signature page hereto

 

with a copy
to 

 

White & Case
LLP

Southeast Financial
Center

200 South Biscayne
Boulevard, Suite 4900

Miami, Florida
33131-2532

Attn: Thomas E
Lauria

 

and

 

White & Case
LLP

1155 Avenue of
the Americas

New York, New York
10036-2787

Attn:  Harrison
Denman

Andrew Zatz

 

    	 	19	 

     

    

 

		(e)	If to an EPL Plan Support Party:

 

To the address
set forth on its signature page hereto

 

with a copy
to 

 

Wilmer Cutler Pickering
Hale and Dorr LLP

7 World Trade Center

250 Greenwich Street

New York, NY 10007

Attn: Philip D.
Anker

 

and

 

Wilmer Cutler Pickering
Hale and Dorr LLP

60 State Street

Boston MA 02109

Attn: Dennis L.
Jenkins

 

27.         Entire
Agreement. This Agreement (including the Exhibits and Schedules) constitutes the entire agreement of the Parties with respect
to the subject matter of this Agreement, and supersedes all prior negotiations, agreements, and understandings, whether written
or oral, among the Parties with respect to the subject matter of this Agreement.

 

28.         Amendments.
Except as otherwise provided herein, this Agreement may not be modified, amended, or supplemented without the prior written consent
of the Debtors and the Majority Plan Support Parties; provided, however, that (a) the prior written consent of all
Parties shall be required to modify, amend, or supplement Sections 10(a) or 10(b) of this Agreement and (b) the prior
written consent of all Second Lien Plan Support Parties shall be required to modify, amend, or supplement Section 10(c)
of this Agreement.

 

29.         Reservation
of Rights.

 

		(a)	Except as expressly provided in this Agreement or the Plan Mediation Term Sheet, including Section 5(a)
of this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict the ability of any Party
to protect and preserve its rights, remedies and interests, including without limitation, its claims against any of the other Parties.

 

    	 	20	 

     

    

 

		(b)	Without limiting Sub-Clause (a) of this Section 29 in any way, if the Plan
is not consummated in the manner set forth, and on the timeline set forth, in this Agreement and the Plan Mediation Term Sheet,
or if this Agreement is terminated for any reason, nothing shall be construed herein as a waiver by any Party of any or all of
such Party’s rights, remedies, claims, and defenses and the Parties expressly reserve any and all of their respective rights,
remedies, claims and defenses, subject to Section 19 of this Agreement. The Plan Mediation Term Sheet, this Agreement,
the Plan, and any related document shall in no event be construed as or be deemed to be evidence of an admission or concession
on the part of any Party of any claim or fault or liability or damages whatsoever. Each of the Parties denies any and all wrongdoing
or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert.

 

30.      Counterparts.
This Agreement may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument,
and the counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf).

 

31.      Public
Disclosure. This Agreement, as well as its terms, its existence, and the existence of the negotiation of its terms are
expressly subject to any existing confidentiality agreements executed by and among any of the Parties as of the date hereof; provided,
however, that, after the PSA Effective Date, the Parties may disclose the existence of, or the terms of, this Agreement
or any other material term of the transaction contemplated herein without the express written consent of the other Parties; provided
further, however, that no Party or its advisors shall disclose to any person or entity (including, for the avoidance
of doubt, any other Party) the holdings information of any Plan Support Party without such Plan Support Party’s prior written
consent.

 

32.      Headings.
The section headings of this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of
this Agreement.

 

33.      Interpretation.
This Agreement is the product of negotiations among the Parties, and the enforcement or interpretation hereof, is to be interpreted
in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having
drafted or caused to be drafted this Agreement or any portion hereof, shall not be effective in regard to the interpretation hereof.

 

[Signatures and exhibits follow.]

 

    	 	21	 

     

    

 

[Signature
Pages Redacted.]

 

     

     

    

 

Exhibit A to the Plan Support Agreement

 

Plan Mediation Term Sheet

 

     

     

    

 

EXXI – Plan
Mediation Term Sheet1

 

		I.	Definitions:

 

		·	“Ad Hoc Group of EGC Unsecured Noteholders” means the ad hoc group of
holders of EGC Unsecured Notes, represented by White & Case LLP, as defined in that certain Verified Statement of White &
Case LLP and the Ad Hoc Group of EGC Unsecured Noteholders Pursuant to Bankruptcy Rule 2019 filed on or about June 10, 2016 [Docket
No. 475], as it may be amended or supplemented from time to time.

 

		·	“Ad Hoc Group of EPL Unsecured Noteholders” means (a) the ad hoc group
of holders of EPL 8.25% Senior Notes, represented by Wilmer Cutler Pickering Hale and Dorr LLP, as defined in that certain Sixth
Supplemental Verified Statement Pursuant to Bankruptcy Rule 2019 filed on or about November 3, 2016 [Docket No. 1617], as it may
be amended or supplemented from time to time, and (b) the “EPL Sponsor Group,” as defined in that certain First Supplemental
Verified Statement Pursuant to Bankruptcy Rule 2019 of Bryan Cave LLP and the EPL Sponsor Group filed on or about August 10, 2016
[Docket No. 1010], as it may be amended or supplemented from time to time.

 

		·	“EGC New Warrant Package” means warrants equal to an aggregate of 3.6%
of the New Equity (subject to dilution from the Management Incentive Plan, but otherwise subject to anti-dilution adjustments for
stock dividends, stock splits, and similar combinations or subdivisions of the common stock) with a maturity of five (5) years
from the Effective Date and an equity strike price equal to $1.45 billion divided by the number of shares of common stock in New
Parent outstanding on the Effective Date.

 

		·	“EGC Unsecured Notes Claims” means, collectively, Claims arising on account
of the EGC Unsecured Notes, including any guaranty Claims arising on account of the EGC Unsecured Notes and the EGC Unsecured Notes
Indentures, other than any Claims arising on account of the EGC Repurchased Bonds, which, for the purposes of this Plan, shall
not be considered EGC Unsecured Notes Claims.

 

		·	“EPL New Warrant Package” means warrants equal to an aggregate of 2.4%
of the New Equity (subject to dilution from the Management Incentive Plan, but otherwise subject to anti-dilution adjustments for
stock dividends, stock splits, and similar combinations or subdivisions of the common stock) with a maturity of five (5) years
from the Effective Date and an equity strike price equal to $1.45 billion divided by the number of shares of common stock in New
Parent outstanding on the Effective Date.

 

		·	“EPL Unsecured Notes Claims” means, collectively, Claims arising on account
of the EPL 8.25% Senior Notes other than any Claims arising on account of the EPL Repurchased Bonds, which, for purposes of this
Plan, shall not be considered EPL Unsecured Notes Claims.

 

 

		1	Capitalized terms used but not defined herein are used as defined in the Debtors’ First
Amended Joint Chapter 11 Plan of Reorganization [Docket No. 1418] (as amended, the “Plan”)
or the Plan Support

Agreement (as defined herein), as applicable.

 

    	 	- 1 -	 

     

    

 

		·	“Exculpated Party” means each of the following solely in its capacity
as such: (a) the Debtors; (b) the Reorganized Debtors; (c) the Plan Support Parties; (d) the Creditors’ Committee and
its past and current members in their capacities as such; (e) the First Lien Agent; (f) the First Lien Secured Parties;
(g) the Second Lien Indenture Trustee; (h) the Second Lien Collateral Trustee; (i) the Provisional Liquidator; and (j) with respect
to each of the foregoing Entities in clauses (a) through (i), such Entity’s current and former Affiliates, and such Entities’
and their current and former Affiliates’ current and former directors, managers, officers, managed accounts and funds, predecessors,
successors, and assigns, subsidiaries, and each of their respective current and former officers, directors, managers, principals,
members, employees, subcontractors, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment
bankers, consultants, representatives, management companies, fund advisors, and other professionals, each solely in their capacity
as such.

 

		·	“General Unsecured Claim Distribution” means $1,470,000.

 

		·	“Management Equity Pool” means up to 5% of the total New Equity on a
fully diluted basis reserved under the Management Incentive Plan, 3% of which will be allocated by the New Parent Board to officers,
directors, employees, and consultants of the Reorganized Debtors no later than 120 days after the Effective Date on terms and conditions
determined by the New Parent Board, including the type of equity based awards. 

 

		·	“New Warrant Agreement” means the document governing the New Warrant
Package, the form of which shall be included in the Plan Supplement. The New Warrant Agreement will (i) provide for anti-dilution
adjustments (in addition to those included in the definitions of EGC New Warrant Package and EPL New Warrant Package) solely for
spin-offs and other asset distributions and extraordinary cash distributions, and (ii)  provide that, in connection with a
merger or similar sale of New Parent, each warrant will become exercisable for such cash, stock,
securities or other assets or property as would have been payable in such sale transaction with respect to the New Parent
securities issuable upon exercise of such warrant if such warrant had been exercised immediately prior to the occurrence of such
transaction.

 

		·	“New Warrant Package” means, collectively, the EGC New Warrant Package
and the EPL New Warrant Package.

 

		·	“Plan Support Agreement” means that certain plan support
agreement among the Debtors, the Second Lien Plan Support Parties, the Creditors’ Committee, and the other Plan Support Parties
(except as otherwise noted herein) and satisfactory to the Debtors, the ad hoc committee of Second Lien Noteholders, the Creditors’
Committee, and the other Plan Support Parties.

 

    	 	2	 

     

    

 

		·	“Plan Support Parties” means the Second Lien Plan Support Parties, the
Debtors, the Creditors’ Committee, the EGC Plan Support Parties, the EGC Unsecured Notes Indenture Trustee, the EPL Plan
Support Parties, the EPL Unsecured Notes Indenture Trustee, and the EXXI 3.0% Senior Convertible Notes Trustee; provided
that the Indenture Trustees shall not be required to execute the Plan Support Agreement to become a Plan Support Party and shall
be deemed a Plan Support Party unless they file an objection to the approval, acceptance or implementation of the Plan and/or directly
or indirectly solicit votes to reject the Plan; provided, further, that an Indenture Trustee shall remain a Plan
Support Party notwithstanding the filing of any objection to the Plan solely on the grounds that the Plan does not comply with
the Plan Support Agreement or this Plan Mediation Term Sheet or pertains solely to the effect of one or more specific Plan provisions
(including omissions) on the rights and duties of such Indenture Trustee.

 

		·	“Released Party” means each of the following solely in its capacity as
such: (a) the Debtors; (b) the Reorganized Debtors; (c) the Creditors’ Committee and its past and current members in
their capacities as such; (d) the First Lien Agent; (e) the First Lien Secured Parties; (f) the Plan Support Parties; (g) the Second
Lien Indenture Trustee; (h) the Second Lien Collateral Trustee; (i) the Provisional Liquidator; and (j) with respect
to each of the foregoing parties under (a) through (i) such Entity and its current and former Affiliates, and such Entity’s
current and former Affiliates’ current and former directors, managers, officers, managed accounts and funds, predecessors,
successors, and assigns, subsidiaries, and each of their respective current and former equity holders, officers, directors, managers,
principals, members, employees, subcontractors, agents, advisory board members, financial advisors, partners, attorneys, accountants,
investment bankers, consultants, representatives, management companies, fund advisors, and other professionals, each solely in
their capacity as such.

 

		·	“Releasing Party” means each of the following solely in its capacity
as such: (a) the Debtors; (b) the Reorganized Debtors; (c) the Creditors’ Committee and its past and current members
in their capacities as such; (d) the First Lien Agent; (e) the First Lien Secured Parties; (f) the Second Lien Indenture Trustee;
(g) the Plan Support Parties; (h) the Provisional Liquidator; (i) all holders of Claims and Interests that are deemed to accept
the Plan; (j) all holders of Claims and Interests who vote to accept the Plan; (k) all holders of Claims and Interests who abstain
from voting on the Plan and who do not opt out of the releases provided by the Plan; (l) all holders of Claims and Interests who
vote to reject the Plan and who do not opt out of the releases provided by the Plan; and (m) with respect to each of the foregoing
parties under (a) through (l), such Entity and its current and former Affiliates, and such Entities’ and their current and
former Affiliates’ current and former directors, managers, officers, managed accounts and funds, predecessors, successors,
and assigns, subsidiaries, and each of their respective current and former officers, directors, managers, principals, members,
employees, subcontractors, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers,
consultants, representatives, management companies, fund advisors, and other professionals, each solely in their capacity as such.
For the avoidance of doubt, the term “Releasing Party” does not include (i) holders of Claims or Interests who are
not entitled to vote on the Plan or (ii) holders of EXXI Interests in their capacities as such.

 

		·	“Second Lien Plan Support Parties” means the members of the ad hoc committee
of Second Lien Noteholders party to the Plan Support Agreement.

 

    	 	3	 

     

    

 

		II.	Changes to Current Plan Treatment:

 

		·	Each holder of an Allowed Second Lien Notes Claim receives such holder’s Pro Rata share of
84% of the New Equity under the Plan, subject to dilution by the Management Incentive Plan and the New Warrant Package.

 

		·	Each
                                         holder of an Allowed EGC Unsecured Notes Claim receives such holder’s Pro Rata
                                         share of (a) 12% of the New Equity under the Plan, subject to dilution by the Management
                                         Incentive Plan and the New Warrant Package, and (b) the EGC New Warrant Package.2

 

		·	Each
                                         holder of an Allowed EPL Unsecured Notes Claim receives such holder’s Pro Rata
                                         share of (a) 4% of the New Equity under the Plan, subject to dilution by the Management
                                         Incentive Plan and the New Warrant Package, and (b) the EPL New Warrant Package.3

 

		·	Each holder of an Allowed EXXI Convertible Notes Claim receives such holder’s Pro Rata share
of $2,000,000.

 

		III.	Settlements under the Plan:

 

		·	The Plan constitutes a settlement of all issues in respect of the Chapter 11 Cases (collectively,
the “Settled Issues”), including, without limitation, the following:

 

		o	the EGC Intercompany Note Dispute and any other disputes concerning in any way the validity, effectiveness,
or priority of the EGC Intercompany Note or the Liens granted in connection therewith;

 

		o	the valuation of the Reorganized Debtors’ enterprise, including the value of any unencumbered
assets;

 

		o	any dispute regarding the application of the equities of the case exception under section 552(b)
or surcharge under section 506(c) in respect of the Second Lien Prepetition Indebtedness;

 

		o	amount of the Second Lien Prepetition Indebtedness and such holders’ Allowed Claims, and
the validity and enforceability of the liens securing such Claims;

 

		o	amount of adequate protection claims held by the Second Lien Noteholders and/or the First Lien
Lenders under the Final Cash Collateral Order;

 

 

		2	The distribution to holders of EGC Unsecured Notes Claims does not include a distribution to EGC
on account of the EGC Repurchased Bonds. For the avoidance of doubt, EGC will not receive a distribution on account of the EGC
Repurchased Bonds.

 

		3	The distribution to holders of EPL Unsecured Notes Claims does not include a distribution to EGC
on account of the EPL Repurchased Bonds. For the avoidance of doubt, EGC will not receive a distribution on account of the EPL
Repurchased Bonds.

 

    	 	4	 

     

    

 

		o	any dispute regarding the appropriate allocation of general and administrative costs across the
Debtors’ Estates and the amount of the Second Lien Notes Deficiency Claims;

 

		o	any challenges to cash transfers and the EPL note interest;

 

		o	any challenges to transfers made by the Debtors to any related entities;

 

		o	the releases, exculpations, and injunctions provided in the Plan;

 

		o	any dispute related to the allowance or disallowance of the EGC Repurchased Bonds or the EPL Repurchased
Bonds;

 

		o	any dispute related to the amount and validity of the intercompany payables between EGC and EPL;

 

		o	any claims for payment of administrative expenses as a substantial contribution under section 503
of the Bankruptcy Code; and

 

		o	the allocation of the $90 million minimum cash requirement under the Debtors’ Exit Facility.

 

    	 	5	 

     

    

 

		IV.	Additional Plan Changes:

 

		·	To the extent not already authorized pursuant to the Final Cash Collateral Order, and except as
provided herein with respect to the Debtors and the Creditors’ Committee and in the Plan Support Agreement with respect to
the Second Lien Plan Support Parties, the reasonable and documented fees and expenses incurred on or after the Petition Date of
(a) counsel, financial advisors (including valuation and any other experts), and management and industry consultants to the
Plan Support Parties, the Ad Hoc Group of EGC Unsecured Noteholders, and the Ad Hoc Group of EPL Unsecured Noteholders, and (b)
the Indenture Trustees that are Plan Support Parties as of the Effective Date (such fees and expenses, the “Plan Support
Parties Fees”) in an amount equal to reasonable estimates provided by each of the Plan Support Parties will be escrowed
on the Effective Date. For the avoidance of doubt, such Plan Support Parties Fees shall exclude the fees and expenses incurred
on or after the Effective Date of the Indenture Trustees payable pursuant to Article VI.B.1(e)-(g)) of the Plan). Each of the Plan
Support Parties Fees will be subject to a review period by the Debtors and the Creditors’ Committee of seven (7) business
days following submission of each invoice (including reasonable documentation of such fees and expenses, which may be redacted
to preserve privilege and/or confidentiality).  Each Plan Support Party may submit more than one but not more than two invoices
per professional covering the period from the Petition Date through the Effective Date.  To the extent either the Debtors
or the Creditors’ Committee delivers to the applicable Plan Support Party a written notice of objection within the seven
(7) business day review period, and the applicable Plan Support Party and objecting party are unable to resolve such objection
on a consensual basis within seven (7) business days after such objection has been submitted, the Debtors or the Creditors’
Committee, as applicable, may file with the Court a motion or other pleading setting forth the specific objections to the disputed
invoice, and the Court shall adjudicate the matter. The Reorganized Debtors will promptly pay any undisputed Plan Support Parties
Fees one (1) business day following the expiration of the seven (7) business day review period. When all such amounts owing to
Plan Support Parties have been paid in full, any remaining amount in the Plan Support Parties Fee Escrow Account shall promptly
be turned over to the Reorganized Debtors without any further action or order of the Court. Notwithstanding anything contained
herein to the contrary, (i) the fees and expenses of counsel and financial advisors (including valuation and any other experts)
to the Debtors and the Creditors’ Committee shall remain subject to the Court’s Order Establishing Procedures for
Monthly and Interim Compensation and Reimbursement of Expenses for Retained Professionals [Docket No. 409], the applicable
provisions of the Appendix B Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under
United States Code by Attorneys in Large Chapter 11 Cases, all other applicable law and Court orders, and all applicable retention
orders entered during the course of these Chapter 11 Cases for the professionals of the Debtors and the Creditors’ Committee,
(ii) the disallowance of any disputed fees or expenses of any Indenture Trustee shall not affect or modify in any way such Indenture
Trustee’s charging lien or other rights to recover such fees and expenses pursuant to the relevant indenture, and (iii) the
Debtors’ liability for fees and expenses for counsel, financial advisors (including valuation and any other experts), and
management and industry consultants to: (A) the Ad Hoc Group of EGC Unsecured Noteholders and the EGC Unsecured Notes Indenture
Trustee shall not exceed $11.5 million in the aggregate, and (B) the Ad Hoc Group of EPL Unsecured Noteholders and the EPL
Unsecured Notes Indenture Trustee shall not exceed $11 million in the aggregate; provided, further, that notwithstanding
the foregoing, the Debtors shall promptly pay (x) up to $15,000 of the undisputed reasonable and documented fees and expenses incurred
prior to the Petition Date by counsel, financial advisors (including valuation and any other experts), and management and industry
consultants to the EGC Unsecured Notes Indenture Trustee or by the EGC Unsecured Notes Indenture Trustee, which fees and expenses
shall be subject to review by the Creditors’ Committee and the Debtors and (y) up to $15,000 of the undisputed reasonable
and documented fees and expenses incurred prior to the Petition Date by counsel, financial advisors (including valuation and any
other experts), and management and industry consultants to the EPL Unsecured Notes Indenture Trustee or by the EPL Unsecured Notes
Indenture Trustee, which fees and expenses shall be subject to review by the Creditors’ Committee and the Debtors.
Nothing herein or in the Plan shall affect the rights of any of the Plan Support Parties to appear before the Court and be heard
with respect to any application for the payment of fees or expenses of any of the counsel or advisors (including valuation and
any other experts) to the Creditors’ Committee or the Debtors.

 

    	 	6	 

     

    

 

		·	The
                                         following minority protections for New Equity holders:4

 

		o	the New Parent Board shall consist of seven members, consisting of John D. Schiller, Jr. as President
and Chief Executive Officer of New Parent (the “CEO”), and six additional Persons selected by the Second
Lien Plan Support Parties who are independent from the Second Lien Plan Support Parties pursuant to the standard for independence
under NYSE rules; provided, however that the Second Lien Plan Support Parties shall consult with the Ad Hoc Group
of EGC Unsecured Noteholders and the Ad Hoc Group of EPL Unsecured Noteholders with respect to the selection of one of the initial
directors of the New Parent Board; and

 

		o	customary preemptive rights for each holder that, together with its affiliates (including accounts
managed by a common investment manager), owns 1% or more of the outstanding common stock of New Parent to subscribe for
its share (calculated pro rata in accordance with the percentage of shares of outstanding common stock of New Parent held)
of any equity (including securities convertible into equity) issued by New Parent or any of its subsidiaries, including a customary
right for New Parent to provide such preemptive rights promptly following the completion of such an issuance.

 

		·	The Warrant Agreement will be withdrawn and replaced in its entirety by the New Warrant Agreement.

 

		·	The EGC Intercompany Note Trust and all provisions related thereto will be deleted from the Plan.

 

		·	It shall be a condition to Confirmation of the Plan that (i) the Court has approved in all material
respects the compromise and settlement of all the Settled Issues, which approval shall be included in the Confirmation Order, and
(ii) the Plan Support Agreement has not been breached and remains in full force and effect. For the avoidance of doubt, in the
event the Court does not approve in all material respects the compromise and settlement of all the Settled Issues or the Plan is
otherwise not confirmed in a manner consistent in all material respects with the terms provided for in this Plan Mediation Term
Sheet, no party shall be bound to support any of the terms of this Plan Mediation Term Sheet, such parties’ votes in favor
of the Plan shall be deemed withdrawn and deemed timely votes to reject the Plan unless the applicable party elects otherwise in
writing to the Debtors, and all parties’ rights, remedies, claims, and defenses shall be expressly preserved as if no settlement
had been reached.

 

		·	The New Warrant Agreement, the Plan, the Confirmation Order, and any New Money Contribution shall
be in form and substance reasonably acceptable to the Majority Plan Support Parties, which shall be defined to include the EGC
Unsecured Notes Indenture Trustee, and consistent with this Plan Mediation Term Sheet. With respect to all other Definitive Documentation
(as defined in the Plan), the Majority Plan Support Parties (excluding the Majority Second Lien Plan Support Parties) shall have
reasonable consent rights with respect to only those terms (which, for the avoidance of doubt, shall include the terms providing
for the specific minority protections that are expressly set forth in the Plan Mediation Term Sheet) that could reasonably be expected
to impair the economic treatment provided under the Plan and this Plan Mediation Term Sheet for the applicable Majority Plan Support
Party. Notwithstanding anything herein to the contrary, (i) the Majority Plan Support Parties shall have a right to review and
consult with the Debtors with respect to all Definitive Documentation prior to such Definitive Documentation being filed in the
Chapter 11 Cases, and (ii) all Definitive Documentation and the Plan Supplement shall be in form and substance reasonably acceptable
to the Majority Second Lien Plan Support Parties and consistent with this Plan Mediation Term Sheet.

 

 

		4	It is not contemplated that there will be a shareholders agreement. Such minority protections will
be set forth in the organizational documents for the Reorganized Debtors.

 

    	 	7	 

     

    

 

		·	Waiver of conditions precedent to the Effective Date shall require consent of the Plan Support
Parties.

 

		·	Except as expressly provided under the Plan, the releases set forth in Article VIII.F of the Plan
shall not release obligations arising under agreements among the Releasing Parties and the Released Parties other than the Debtors
(including, without limitation, the indemnification rights of the Indenture Trustees under the Indentures and related documentation).

 

		·	The agreement of each of the Plan Support Parties to this Plan Mediation Term Sheet shall be subject
to the terms set forth herein and the Plan Support Agreement. No Plan Support Party shall remain bound by this Plan Mediation Term
Sheet in the event that the Plan, the Confirmation Order, the New Warrant Agreement, or any other Definitive Documentation differs
materially from the terms set forth herein, including with respect to the treatment of any Plan Support Parties or other parties
in interest.

 

		·	The terms and conditions of the Management Incentive Plan shall be consistent with the terms set forth
in Exhibit 1 to this Plan Mediation Term Sheet.

 

		·	On the Effective Date, New Parent shall enter into a new employment agreement with John D. Schiller,
Jr. as Chief Executive Officer of New Parent (such agreement, the “CEO Employment Agreement”), which
CEO Employment Agreement shall include the terms and conditions set forth in Exhibit 1 to this Plan Mediation Term
Sheet. The form of the CEO Employment Agreement shall be included in the Plan Supplement.

 

		·	The Debtors shall reject all existing employment agreements or other severance arrangements with
management and any existing management incentive programs on the Effective Date. The terms and conditions of any post-Effective
Date employment agreements for management other than John D. Schiller, Jr. shall be determined by the New Parent Board; provided,
however, that any such employment agreements shall contain a release of claims against the Debtors consistent with the release
set forth in the CEO Employment Agreement.

 

		·	Except as expressly set forth herein, the terms of the existing Plan will remain unchanged with
respect to the treatment of the Debtors’ directors and officers and holders of Claims and Interests, including holders of
First Lien Claims, the BOEM, and Exxon.

 

    	 	8	 

     

    

 

EXHIBIT 1

 

Terms of the CEO Employment Agreement

 

    	 	- 1 -	 

     

    

 

EXXI – Terms of the CEO Employment
Agreement1

 

	
        Schiller

        Employment Agreement
	
        New
        Parent will enter into a new employment agreement (the “New Agreement”) with  John D. Schiller, Jr. as
        Chief Executive Officer of New Parent on terms and conditions generally
        consistent with those proposed in the Energy XXI Ltd Proposed Forms of Employment Agreement summary circulated by Vinson and Elkins
        on 8/16/16 (the “Employment Agreement Matrix”); provided, however, that the New Agreement will
        not include provisions that are off-market, generally inconsistent with prevailing practices of publicly traded companies, or may
        cause governance issues. The New Agreement, which shall be in form and substance acceptable to the Majority Second Lien Plan Support
        Parties and consistent with this term sheet, will be effective as of the Effective Date.

         

        Material terms of the New Agreement will include:

         

        Term: Three-year initial
        term, no automatic renewals.

         

        Severance: The severance
        payments and benefits under the New Agreement will be generally consistent with those proposed in the Employment Agreement Matrix;
        provided that if Mr. Schiller’s employment is terminated by the New Parent without Cause or by Mr. Schiller for Good
        Reason (including with respect to a termination that occurs in connection with a change of control) before the first anniversary
        of the Effective Date, then Mr. Schiller’s sole remedy will be a cash payment of $2 million, less applicable withholding
        and deductions as required by law (the “Initial Severance Amount”).

         

        New Parent Board Evaluation
        Right: Until the first anniversary of the Effective Date, the New Parent Board will have the right to reevaluate the New Agreement
        to ensure that its terms are consistent with market practices. To the extent the New Parent Board determines that the New Agreement
        is inconsistent with market practices, the New Parent Board will provide a notice (the “Notice”) to Mr. Schiller
        and the parties will negotiate in good faith to revise the New Agreement as necessary. If the parties are unable to reach an agreement
        within 30 days of the Notice, the New Parent may terminate the New Agreement and Mr. Schiller’s sole remedy will be the Initial
        Severance Amount. For the avoidance of doubt, nothing will limit the ability of the New Parent Board to terminate Mr. Schiller’s
        employment for any reason, for Cause or without Cause at any time.

         

        Other Non-Economic Terms:
Other than the economic and other terms contemplated by this term sheet, the other terms of the New Agreement will generally be
consistent with those in Mr. Schiller’s existing employment agreement (e.g., restrictive covenants, release, etc.);
provided that the parties will agree that the Effective Date shall not have constituted a change in control. Mr. Schiller
shall release any and all claims he may have, or now has, against any of the Debtors (including, without limitation, claims arising
from his existing employment agreement or the Debtors’ rejection of such agreement), and Mr. Schiller agrees not to assert
any such claim; provided, however, that Mr. Schiller may assert and receive a recovery on any prepetition indemnification
claims as Class 11 General Unsecured Claims in accordance with the terms of the Plan.

 

 

		1	Capitalized terms used but
not defined herein are used as defined in the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket
No. 1418] (as amended, the “Plan”).

 

    	 	- 1 -	 

     

    

 

	Management Incentive Plan	
        Awards under the Management
        Incentive Plan will be awarded to the Reorganized Debtors’ officers, directors, employees, and consultants at the
        discretion of the New Parent Board; provided, however, that at least 3% of the Management Equity Pool2
        will be allocated by the New Parent Board to such officers, directors, employees, and consultants no later than
        120 days after the Effective Date on terms and conditions determined by the New Parent Board, including the type of equity
        based awards.

 

 

		2	Capitalized terms used but not defined herein are used
as defined in the Debtors’ First Amended Joint Chapter 11 Plan of Reorganization [Docket No. 1418] (as amended, the “Plan”).

 

    	 	2	 

     

    

 

Exhibit B to the Plan Support Agreement

 

Plan

 

     

     

    

 

Exhibit C to the Plan Support Agreement

 

Form of Transferee Joinder

 

     

     

    

 

Form of Transferee Joinder

 

This joinder (this “Joinder”)
to the Plan Support Agreement (the “Agreement”),1 dated as of [__], 2016, by and among
(i) the Debtors, and (ii) the Plan Support Parties,
is executed and delivered by [________________] (the “Joining Party”) as of [________________].

 

1.     Agreement
to be Bound. The Joining Party hereby agrees to be bound by all of the terms of the Agreement, a copy of which is attached
to this Joinder as Annex 1 (as the same has been or may be hereafter amended, restated, or otherwise modified from time
to time in accordance with the provisions thereof). The Joining Party shall hereafter be deemed to be a Party for all purposes
under the Agreement and one or more of the entities comprising the Plan Support Parties, as applicable.

 

2.
     Representations and Warranties. The Joining Party hereby represents and warrants to
each other Party to the Agreement that, as of the date hereof, such Joining Party (a) is the legal or beneficial holder of, and
has all necessary authority (including authority to bind any other legal or beneficial holder) with respect to, the claims identified
below its name on the signature page hereof, and (b) makes, as of the date hereof, the representations and warranties set forth
in Section 17 of the Agreement to each other Party.

 

3.
     Governing Law. This Joinder shall be governed by and construed in accordance with the
internal laws of the State of New York, without regard to any conflicts of law provisions which would require or permit the application
of the law of any other jurisdiction.

 

4.
     Notice. All notices and other communications given or made pursuant to the Agreement
shall be sent to:

 

  To the Joining Party at:

 

  [JOINING PARTY]

  [ADDRESS]

  Attn:

  Facsimile: [FAX]

  EMAIL:

 

IN WITNESS WHEREOF, the
Joining Party has caused this Joinder to be executed as of the date first written above.

 

 

		1	Each capitalized term used herein but not otherwise defined
shall have the meaning ascribed to it in the Agreement.

 

     

     

    

 

	 	[JOINING PARTY]	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt 	 
	 	 	Under the First Lien Credit Agreement	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the Second Lien Indenture	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the 9.25% Indenture	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the 7.75% Indenture	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the 7.5% Indenture	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the 6.875% Indenture	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the 8.25% Indenture	 
	 	 	 	 
	 	Holdings: 	$__________________ of Debt	 
	 	 	Under the 3.0% Indenture	 
	 	 	 	 
	 	Holdings:	 __________________	 
	 	 	shares of Common Equity	 
	 	 	 	 
	 	Holdings: 	__________________	 
	 	 	shares of Preferred Equity	 

 

     

     

    

 

Annex 1 to the Form of Transferee
Joinder

 

Plan Support Agreement

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