Document:

EXHIBIT
10.3

    

    SECOND AMENDMENT TO AMENDED
AND RESTATED FINANCING AGREEMENT

    

    This SECOND AMENDMENT TO AMENDED AND
RESTATED FINANCING AGREEMENT (this “Amendment”) is entered into as of September
21, 2009, by and among Frederick’s of Hollywood Group Inc., a New York
corporation (“Group”), FOH Holdings, Inc., a Delaware corporation (the
“Parent”), Frederick’s of Hollywood, Inc., a Delaware corporation
(“Frederick’s”), Frederick’s of Hollywood Stores, Inc., a Nevada
corporation (“Stores”), Hollywood Mail Order, LLC, a Nevada limited liability
company (“Mail Order” and collectively with Group, the Parent, Frederick’s and
Stores, individually, a “Borrower”, and collectively, the “Borrowers”), and
Wells Fargo Retail Finance II, LLC, a Delaware limited liability company, in its
capacity as Lender and as arranger and agent for the Lenders (in such capacity,
the “Agent”).

     

    RECITALS

     

    A.         WHEREAS,
the Borrowers, the Lenders and the Agent are parties to that certain Amended and
Restated Financing Agreement, dated as of January 28, 2008, as amended by that
certain First Amendment to Amended and Restated Financing Agreement, dated as of
September 9, 2008  (as so amended, the “Financing
Agreement”);

     

    B.         WHEREAS,
the Borrowers have requested that the Agent and the Lenders agree to certain
further amendments to the Financing Agreement; and

     

    C.         WHEREAS,
the Agent and the Lenders are willing to agree to such amendments upon the terms
and subject to the conditions set forth herein.

     

    NOW, THEREFORE, in consideration of
the premises and the mutual agreements herein contained, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Agent, the Lenders and the Borrowers agree as follows:

     

    1.         Definitions.  Unless
otherwise defined herein, initial capitalized terms have the meanings given to
them in the Financing Agreement.

     

    2.         Amendments.  Upon
the Amendment Effective Date (as hereinafter defined) the Financing Agreement is
hereby amended as follows:

     

    a.)           Section
1.01 of the Financing Agreement is amended by amending and restating the
following defined terms (and related definitions) therein to read in their
entirety as follows:

     

    
      	
               
      

            	
              (i)

            	
              “Applicable Margin”
      means,

            

    

     

    (A) up to
and including the first date on which the Borrower shall have repaid, following
the Bridge Period, not less than $2,000,000 in aggregate principal amount of
Revolving Loans:

     

    (i) with
respect to the initial $2,000,000 in outstanding Revolving Loans, a rate equal
to ten percent 10.0% per annum, and

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (ii) with
respect to outstanding Revolving Loans in excess thereof, maintained as (a) Base
Rate Loans, a rate equal to one and three-quarters percent (1.75%) per annum,
and (b) LIBOR Rate Loans, a rate equal to three percent (3.00%) per annum;
and

     

    (B)
thereafter: with respect to outstanding Revolving Loans maintained as (a) Base
Rate Loans, a rate equal to one and three-quarters percent (1.75%) per annum,
and (b) LIBOR Rate Loans, a rate equal to three percent (3.00%) per
annum.”

     

    
      	
               
      

            	
              (ii)

            	
              “Applicable Import L/C
      Margin” means two and one quarter percent
  (2.25%).

            

    

     

    
      	
            	
              (iii) 

            	
              “Applicable Standby L/C
      Margin” means three percent
(3.00%).

            

    

     

    
      	
               
      

            	
              (iv)

            	
              “Base
      Rate” means, for any day, a per annum rate of interest equal to the
      greatest of (a) the Federal Funds Rate in effect on such day plus 1/2 of
      1%, (b) the rate of interest announced from time to time within Wells
      Fargo at its principal office in San Francisco as its “prime rate”, with
      the understanding that the “prime rate” is one of Wells Fargo’s base rates
      (not necessarily the lowest of such rates) and serves as the basis upon
      which effective rates of interest are calculated for those loans making
      reference thereto and is evidenced by the recording thereof after its
      announcement in such internal publications as Wells Fargo may designate
      and (c) the LIBOR Rate on such day for a one month Interest Period plus
      1%.  If for any reason Agent shall have determined (which
      determination shall be conclusive absent manifest error) that it is unable
      to ascertain the Federal Funds Rate for any reason, including the
      inability or failure of Agent to obtain sufficient quotations in
      accordance with the terms hereof, the Base Rate shall be determined
      without regard to clause (a) of the first sentence of this definition
      until the circumstances giving rise to such inability no longer
      exist.  Any change in the Base Rate due to a change in the “prime
      rate” or the Federal Funds Rate shall be effective on the effective date
      of such change in the “prime rate” or the Federal Funds Rate,
      respectively.

            

    

     

    
      	
               
      

            	
              (v)

            	
              “Borrowing Base”
      means, at any time, the difference
between:

            

    

     

    (i) the
sum of

     

    (A) Prior
to the Recapitalization Event, ninety percent (90%), and  after the
Recapitalization Event, eighty five percent (85%), of the Eligible Credit Card
Accounts at such time,

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (B) Prior
to the Recapitalization Event, ninety percent (90%), and  after the
Recapitalization Event, eighty five percent (85%), of the Eligible Wal-Mart
Account Receivables at such time,

     

    (C) Prior
to the Recapitalization Event, eighty five percent (85%), and after the
Recapitalization Event, eighty percent (80%), of the Other Eligible Account
Receivables at such time,

     

    (D) Prior to the Recapitalization Event, one hundred
percent (100%), and after the Recapitalization
Event, eighty-five percent (85%) of the Net
Retail Liquidation Value of Eligible Warehouse Liquid Inventory, provided that at no
time shall the amount attributable to Eligible In Transit Inventory pursuant to
paragraphs (D, (E) and (F), exceed $15,000,000 in the aggregate,

     

    (E)  Prior to the Recapitalization Event,
ninety percent (90%), and after the Recapitalization Event, eighty-five percent
(85%), of the then current Net Retail Liquidation Value of Eligible Retail
Inventory, provided that at no time shall the amount attributable to
Eligible In Transit Inventory pursuant to paragraphs (D, (E) and (F), exceed
$15,000,000 in the aggregate,

     

    (F) The
lesser of (x) sixty percent (60%) of Eligible Wholesale Inventory, which shall
include inventory supported by documentary Letters of Credit (in such form as
acceptable to the Agent in its sole discretion), or (y) prior to the
Recapitalization Event, eighty five percent (85%), and after the
Recapitalization Event, eighty percent (80%) of the then current Net Retail
Liquidation Value of Eligible Wholesale Inventory, which shall include inventory
supported by documentary Letters of Credit (in such form as acceptable to the
Agent in its sole discretion), provided that at no
time shall the amount attributable to Eligible In Transit Inventory pursuant to
paragraphs (D, (E) and (F), exceed $15,000,000 in the aggregate,
and

     

    (G)
during the Bridge Period, $2,000,000,

     

    (ii)
minus, the sum
of (A) Required Minimum Availability Reserve, (B) Availability Reserves and (C)
without duplication, such other Reserves as the Agent may deem appropriate in
the exercise of its reasonable business judgment based upon the lending
practices of the Agent, which may include, without limitation reserves for
freight and duty with respect to outstanding Letters of Credit; provided that the
Agent shall have the right to have the Inventory reappraised by an independent
appraiser selected by the Agent from time to time for the purpose of
redetermining the advance rates of the Eligible Inventory and, as a result, the
Borrowing Base.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (vi)

            	
              “Required Minimum
      Availability Reserve” means an amount equal to the greater of (x)
      $2,250,000 and (y) seven and one-half percent (7.5%) of the Total
      Revolving Credit Commitment as in effect from time to time (including,
      without limitation, after giving effect to any Commitment
      Increase).

            

    

     

    b.)           Section
1.01 of the Financing Agreement is amended by adding the following new defined
terms (and corresponding definitions) in appropriate alphabetical order
therein:

     

    
      	
               
      

            	
              (i)

            	
              “Adjusted Borrowing
      Base” means, at any time, the Borrowing Base at such time,
      determined without giving effect to clause (G)
  thereof.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              “Bridge Facility
      Effective Date” means September 21,
2009.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              “Bridge Period”
      means the period commencing on the Bridge Facility Effective Date and
      ending December 7, 2009.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              “Recapitalization
      Event” means the receipt by Group of a written irrevocable
      commitment from a third party (not constituting a Loan Party) to purchase
      Capital Stock issued by Group for a purchase price of not less than
      $10,000,000 payable in cash (of which not less than $4,900,000 (net of all
      related costs and expenses) shall be received in cash by one or more of
      the Borrowers contemporaneously with the closing thereof), pursuant to a
      transaction and agreements acceptable to the Agent and the Required
      Lenders in their sole discretion.

            

    

     

    c.)           Section
2.06(b) of the Financing Agreement is amended and restated to read in its
entirety as set forth below:

     

    “(b)           Unused Line
Fee.  From and after the Effective Date and until the Maturity
Date, the Borrowers shall pay to the Agent for the account of the Lenders in
accordance with their Pro Rata Shares an unused line fee (the “Unused Line Fee”),
which shall accrue at the rate per annum of one half of one percent (0.50%) on
the excess, if any, of (x) the Total Revolving Credit Commitment over (y) the
sum of the average principal amount of Revolving Loans and Letter of Credit
Obligations outstanding from time to time, less, during the Bridge Period,
$2,000,000, and shall be payable monthly in arrears on the first day of each
month commencing October 1, 2009.

     

    d.)           Section
7.01(g) of the Financing Agreement is amended by deleting each of the two
provisos therein in their entirety.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    

      e.)           Section
7.01 of the Financing Agreement is amended by adding a new subsection, Section
7.01(w), therein which Section shall read in its entirety as
follows:

       

      “(w)           No
later than July 15, 2009, the Borrowers shall retain, at their sole cost and
expense, a financial consultant reasonably acceptable to the Agent to evaluate
the Borrowers’ financial condition, business, operations and
prospects.  Unless otherwise consented to by the Agent in writing, the
Borrowers shall at all times thereafter retain the services of such financial
consultant and cooperate fully therewith and shall make available such senior
executives and other members of management and all information, books and
records requested by such Persons.  The Borrower shall cause such
financial consultant to share all results, reports and other data generated as a
result of such evaluation with the Agent and the Lenders.”

       

      f.)           Section
7.01 of the Financing Agreement is amended by adding a new subsection, Section
7.01(x), therein which Section shall read in its entirety as
follows:

       

      “(x)           Recapitalization.  The
Borrowers shall consummate the Recapitalization Event on or before December 7,
2009.

       

      g.)           Section
7.02(d) of the Financing Agreement is amended by deleting the word “and”
immediately before clause (E) therein and by inserting the following clause (F)
immediately following clause (E) therein:

       

      “ and (F)
consummate the Recapitalization Event.”

       

      h.)           Section
9.01(c) of the Financing Agreement is amended by amending and restating clause
(i) therein to read in its entirety as follows:

       

      “(i) paragraphs
(b)(vi), (c), (e), (g), (i), (p), (q), (s), (x) or clauses (i)(C), (i)(D) or
(i)(E) of paragraph (t) of Section 7.01 or Section 7.02, or any Loan Party shall
fail to perform or comply with any negative covenant contained in Section 6
of any Pledge Agreement to which it is a party or in Section 5 of any Security
Agreement to which it is a party,”

       

      3.            Conditions to
Effectiveness.  This Amendment shall become effective upon the
satisfaction (or waiver by the Agent) of each of the following conditions (the
first date on which said conditions have been so satisfied (or so waived), the
“Amendment Effective Date”):

       

      a.)           The
Borrowers, the Agent and the Lenders shall each have executed and delivered two
originals of this Amendment;

       

      b.)           On
the Amendment Effective Date, no Default or Event of Default shall
exist;

       

      c.)           The
Borrowers shall have paid the Amendment Fee (as hereinafter defined) in full to
the Agent; and

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      d.)           The
Borrowers shall have paid all reasonable fees, costs and expenses of the Agent
and the Lenders in connection with this Amendment, including, without
limitation, the fees and expenses of Proskauer Rose, LLP.

       

      If the
Amendment Effective Date shall not have occurred by the close of business (New
York time) on September 22, 2009 (or such later time as the Agent consents to in
writing), this Amendment shall be deemed rescinded, null and void.

       

      4.           No
Waiver.  Except as expressly stated herein, nothing herein
shall be deemed to constitute a waiver of compliance with, or other modification
of, any term or condition contained in the Financing Agreement or any other Loan
Document and nothing contained herein shall constitute a course of conduct or
dealing among the parties hereto.  Except as expressly stated herein,
the Agent and the Lenders reserve all rights, privileges and remedies under the
Loan Documents.

       

      5.           Representations.  In
order to induce the Agents and the Lenders to execute this Amendment, the
Borrowers hereby represent, warrant and covenant to the Agent and the Lenders
that as of the date hereof and as of the Amendment Effective Date (which
representations, warranties and covenants shall survive execution and delivery
of this Amendment):

       

      a.)           the
Borrowers are duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of formation;

       

      b.)           the
Borrowers have the power and authority to execute, deliver and perform their
obligations under this Amendment;

       

      c.)           the
execution, delivery and performance by the Borrowers of this Amendment has been
duly authorized by all necessary action and does not and will not require any
registration with, consent or approval of, notice to or action by, any other
Person;

       

      d.)           this
Amendment constitutes the legal, valid and binding obligation of the Borrowers,
enforceable against the Borrowers in accordance with its terms; and

       

      e.)           no
Default or Event of Default exists.

       

      6.           Fee.   In
consideration for the amendments to the Financing Agreement provided herein, the
Borrowers shall pay an amendment fee to the Agent, for the ratable benefit of
the Lenders based upon their Pro Rata Shares, in an amount equal to $150,000
(the “Amendment Fee”), which fee shall be fully earned on the Amendment
Effective Date, and due and payable one-half on the Amendment Effective Date and
the remainder upon the Recapitalization Event.

       

      7.           Counterparts.  This
Amendment may be executed by the parties hereto in any number of separate
counterparts, each of which when so executed, shall be deemed an original and
all said counterparts when taken together shall be deemed to constitute but one
and the same instrument.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

       

      8.           Successors and
Assigns.  This Amendment shall be binding upon and inure to the
benefit of the Borrowers and their successors and permitted assigns, and the
Lenders and the Agent and their successors and permitted assigns.

       

      9.           Further
Assurance.  The Borrowers hereby agree from time to time, as
and when requested by the Agent, to execute and deliver or cause to be executed
and delivered, all such documents, instruments and agreements and to take or
cause to be taken such further or other action as the Agent may reasonably deem
necessary or desirable in order to carry out the intent and purposes of this
Amendment.

       

      10.           GOVERNING
LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
ITS CONFLICT OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

       

      11.           Severability.  Wherever
possible, each provision of this Amendment shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Amendment shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.

       

      12.           Reaffirmation.  Each
Borrower hereby ratifies and reaffirms all of its payment and performance
obligations, contingent or otherwise, under each of the Loan Documents to which
it is a party (after giving effect hereto).  Each Borrower hereby
acknowledges that, except as expressly modified herein, each of the Loan
Documents, remains in full force and effect and is hereby ratified and
reaffirmed.

       

      13.           Acknowledgment of Rights;
Release of Claims.  Each Borrower hereby acknowledges that:
(a) it has no defenses, claims or set-offs to the enforcement by the Agent
or the Lenders of the liabilities, obligations and agreements of the Borrowers
under the Financing Agreement or other Loan Documents on the date hereof; and
(b) to its knowledge, the Agent and the Lenders have fully performed all
undertakings and obligations owed to it as of the date hereof.  In
consideration of the Agent and the Lenders entering into this Amendment, each
Borrower hereby irrevocably releases and forever discharges the Agent, the
Lenders and their respective Affiliates, and each such Person’s respective
directors, officers, employees, agents, attorneys and representatives (each, a
“Released
Person”) of and from all damages, losses, claims, demands, liabilities,
obligations, actions or causes of action whatsoever which such Borrower may now
have or claim to have against any Released Person for or because of any matter
or thing done, omitted or suffered to be done or omitted by any of the Released
Persons prior to and including the date hereof and on account of or in any way
concerning, arising out of or founded upon the Financing Agreement or any other
Loan Document, whether presently known or unknown and of every nature and extent
whatsoever.  This Section 13 shall survive the termination of the
Financing Agreement and payment in full of the Obligations
thereunder.

       

      [Signature
Pages Follow]

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF, the parties
hereto have caused this Second Amendment to Amended and Restated Financing
Agreement to be duly executed by their respective duly authorized officers as of
the date first written above.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        BORROWERS:

                                                      
	 
	
                                                        FREDERICK’S
      OF HOLLYWOOD GROUP INC.

                                                      
	 	 
	
                                                        By:  

                                                      	
                                                        /s/
      Thomas Rende  

                                                      
	 
      	
                                                        Name:  Thomas
      Rende

                                                      
	 
      	
                                                        Title:  Chief
      Financial Officer

                                                      
	 
	
                                                        FOH
      HOLDINGS, INC.

                                                      
	 	 
	
                                                        By: 

                                                      	
                                                        /s/
      Thomas Rende

                                                      
	 
      	
                                                        Name:  Thomas
      Rende

                                                      
	 
      	
                                                        Title:  Chief
      Financial Officer

                                                      
	 
	
                                                        FREDERICK’S
      OF HOLLYWOOD, INC.

                                                      
	 	 
	
                                                        By: 

                                                      	
                                                        /s/
      Thomas Rende

                                                      
	 
      	
                                                        Name:  Thomas
      Rende

                                                      
	 
      	
                                                        Title:  Chief
      Financial Officer

                                                      
	 
	
                                                        FREDERICK’S
      OF HOLLYWOOD STORES, INC.

                                                      
	 	 
	
                                                        By: 

                                                      	
                                                        /s/
      Thomas Rende

                                                      
	 
      	
                                                        Name:  Thomas
      Rende

                                                      
	 
      	
                                                        Title:  Chief
      Financial Officer

                                                      
	 
	
                                                        HOLLYWOOD
      MAIL ORDER, LLC

                                                      
	 
	
                                                        By:
      FOH Holdings, Inc., its Manager

                                                      
	 	 	 
	 
      	
                                                        By: 

                                                      	
                                                        /s/
      Thomas Rende

                                                      
	 
      	 
      	
                                                        Name:  Thomas
      Rende

                                                      
	 
      	 
      	
                                                        Title:  Chief
      Financial
Officer

                                                      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    AGENT

                                  
	 
	
                                    WELLS
      FARGO RETAIL FINANCE II, LLC

                                  
	 	 
	
                                    By: 

                                  	
                                    /s/ Joseph Burt

                                  
	 
      	
                                    Name:  Joseph
      Burt

                                  
	 
      	
                                    Title:  Vice
      President

                                  
	 
	
                                    LENDER

                                  
	 
	
                                    WELLS
      FARGO RETAIL FINANCE II, LLC

                                  
	 	 
	
                                    By: 

                                  	
                                    /s/ Joseph Burt

                                  
	 
      	
                                    Name:  Joseph
      Burt

                                  
	 
      	
                                    Title:  Vice
      PresidentUnassociated Document

    
 

    
      Execution
Copy

       

    

    WAIVER,
CONSENT AND FOURTH AMENDMENT TO

    AMENDED
AND RESTATED FIRST LIEN CREDIT AGREEMENT

     

    This
WAIVER, CONSENT AND FOURTH AMENDMENT TO AMENDED AND RESTATED FIRST LIEN CREDIT
AGREEMENT (“Amendment”), dated as
of September 11, 2009, is by and among Energy XXI Gulf Coast, Inc., a
Delaware corporation (the “Borrower”), the
lenders party to the First Lien Credit Agreement described below (the “Lenders”), and The
Royal Bank of Scotland plc, as administrative agent for the Lenders (in such
capacity, the “Administrative
Agent”), and the other parties in the capacities herein
identified.

     

    RECITALS

     

    WHEREAS,
the Borrower, the Lenders, the Administrative Agent and certain other Persons
are parties to the Amended and Restated First Lien Credit Agreement, dated as of
June 8, 2007, as modified by the Consent Regarding Amended and Restated
First Lien Credit Agreement dated as of July 27, 2007, as amended by that
certain First Amendment to Amended and Restated First Lien Credit Agreement
dated effective as of November 19, 2007, as amended by that certain Waiver,
Consent and Second Amendment to Amended and Restated First Lien Credit Agreement
dated effective as of December 1, 2008, as amended by the Third Amendment to
Amended and Restated First Lien Credit Agreement dated as of April 6, 2009, and
as modified by the Waiver and Consent to Amended and Restated First Lien Credit
Agreement dated as of June 30, 2009 (as so modified, and as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“First Lien Credit
Agreement”);

     

    WHEREAS,
the Borrower intends to tender for exchange (the “Exchange Offer”) at
least a majority in principal amount of the PP Notes outstanding (and not held
by Borrower or its Affiliates) pursuant to which the tendering holders of PP
Notes shall be entitled to receive Second Lien Notes (hereinafter defined) in a
principal amount determined at an exchange rate of 0.80 for tenders made prior
to a date that is ten (10) days following commencement of the offer and 0.75 for
tenders made after a date that is ten (10) days following but prior to
expiration of the offer;

     

    WHEREAS,
in conjunction with the Exchange Offer, the Borrower intends to sell (the “Private Placement”)
an additional amount of Second Lien Notes in an aggregate principal amount of at
least $50,000,000 and not more than $89,000,000 (and, in connection therewith,
Parent will issue to each of the purchasers of such Second Lien Notes ordinary
shares in the amount of 220,412 shares for every $1,000,000 of such Second Lien
Notes such purchaser purchases as part of the Private Placement);

     

    WHEREAS,
pursuant to the Exchange Offer and the Private Placement, the Borrower intends
to issue certain 16% second lien junior secured notes due 2014 in an aggregate
principal amount of up to $338,000,000 pursuant to that certain Indenture dated
on or about the Effective Date;

     

    WHEREAS,
the Borrower has requested that the Administrative Agent, the Issuer, and the
Lenders amend the First Lien Credit Agreement in order to permit the Borrower to
enter into the Second Lien Indenture (as hereinafter defined) and to grant
certain collateral to secure the obligations under and in connection with the
Second Lien Indenture;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
concurrently with issuing the Second Lien Notes (as hereinafter defined), EXXI,
Inc. will contribute the $126,000,000 principal amount of PP Notes  to
the Borrower as a capital contribution and the Borrower will cancel such PP
Notes (the “Pledged
Notes Contribution and Cancellation”); and

     

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

     

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

     

    AGREEMENT

     

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

     

    Section
2.  Amendments to
First Lien Credit Agreement.  The First Lien Credit Agreement
is hereby amended as follows:

     

    (a)           Section
1.1.

     

    (1)           Section
1.1 of the First Lien Credit Agreement is hereby amended by deleting the
following terms therefrom:  “Pledged Notes Sales Contribution”,
“Pledged Notes Security Agreement”, “PP Notes Letter Agreement”, “Second Lien
Administrative Agent”, “Second Lien Credit Agreement” and “Second Lien Loan
Documents”.

     

    (2)           Section
1.1 of the First Lien Credit Agreement is hereby amended by adding the following
definition(s) in the proper alphabetical order:

     

    “Intercreditor
Agreement” means the Intercreditor Agreement, dated on or before
October 25, 2009, executed and delivered by the Administrative Agent, the
Second Lien Agents and the Obligors pursuant to the terms of this Agreement, as
amended, supplemented, amended and restated, replaced or otherwise modified from
time to time.

     

    “Second Lien Agents”
means the “Trustee” and the “Collateral Agent” under the Second Lien Indenture,
and includes each other Person appointed as successors thereto
respectively.

     

    “Second Lien
Indebtedness” means the Indebtedness and related monetary obligations of
the Borrower and the Guarantors (including, without limitation, all fees,
premiums, penalties, yield protections, breakage costs, damages, indemnification
obligations, reimbursement obligations and expenses (including, without
limitation, reasonable fees and expenses of counsel, accountants and other
professional advisors), together with interest on the foregoing) arising or
incurred under the Second Lien Indenture, the Second Lien Notes and the other
Second Lien Note Documents.

     

    
      
        
        

      

      
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    “Second Lien
Indenture” means the Indenture, dated on or before
October 25, 2009, pursuant to which the Second Lien Notes are issued,
as amended, supplemented, amended and restated, refinanced or otherwise modified
from time to time in accordance with Section 7.2.11
and the Intercreditor Agreement.

     

    “Second Lien Note
Documents” means the Second Lien Indenture, the Second Lien Notes and the
other agreements, documents or instruments delivered in connection with any of
the foregoing (including, without limitation, the “Security Documents” (as
defined in the Second Lien Indenture)).

     

    “Second Lien
Noteholders” shall have the meaning given to the term “Noteholders” in
the Second Lien Indenture (or such corresponding term in the event the
Borrower’s obligations under the Second Lien Indenture are refinanced in
accordance with the terms hereof and of the Intercreditor
Agreement).

     

    “Second Lien Notes”
means the Borrower’s 16% second lien junior secured notes due 2014 and shall
have the meaning given the term “Notes” as defined in the Second Lien Indenture
(or such corresponding term in the event the Borrower’s obligations under the
Second Lien Indenture are refinanced in accordance with the terms hereof and of
the Intercreditor Agreement); for the avoidance of doubt, the “Second Lien
Notes” shall include any Notes (as defined in the Second Lien Indenture) issued
under the Second Lien Indenture in capitalization of Borrower’s interest payment
obligations on then outstanding Second Lien Notes.

     

    (3)           The
definition of “Change in Control” in Section 1.1 of the First Lien Credit
Agreement is hereby amended by adding the phrase “or under any Second Lien Note
Documents” after the phrase “under a Loan Document” in the parenthetical at the
end of each of subsections (b) and (c) thereof.

     

    (4)           The
definition of “Interest Expense” in Section 1.1 of the First Lien Credit
Agreement is hereby amended by adding the phrase “and the Second Lien Note
Documents” after the phrase “and the PP Debt Documents”.

     

    (5)           The
definition of “Loan Documents” in Section 1.1 of the First Lien Credit Agreement
is hereby amended by adding the phrase “the Intercreditor Agreement,” after the
phrase “each Guaranty,” in the fifth line thereof.

     

    
      
        
        

      

      
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    (6)           The
definition of “No Less Favorable Terms and Conditions” in Section 1.1 of the
First Lien Credit Agreement is hereby amended and restated as
follows:

     

    “No Less Favorable Terms and
Conditions” means, with respect to any refinancing of any Indebtedness
permitted hereunder, terms and conditions that are, taken as a whole, no less
favorable to the Lenders and evidenced by documentation that shall not (a)
increase the principal amount of or interest rate on such outstanding
Indebtedness, (b) reduce either the tenor or the average life of such
Indebtedness, (c) change the respective primary obligor(s) on the refinancing
Indebtedness, (d) change the security, if any, for the refinancing Indebtedness
(except to the extent that only a subset of existing security is granted to
holders of such refinancing Indebtedness) or (e) afford the holders of such
refinancing Indebtedness other covenants, defaults, rights or remedies, taken as
a whole, more burdensome to the obligor(s) than those contained in such
Indebtedness (and in the case of PP Debt and Second Lien Indebtedness, none of
the provisions contained in the refinancing Indebtedness shall be materially
more favorable taken as a whole to the Noteholders or the Second Lien
Noteholders, as the case may be, than the corresponding provision in the
Indenture or the Second Lien Indenture, as the case may be, as in effect at the
time of such refinancing).

     

    (7)           The
definition of “Obligor” in Section 1.1 of the First Lien Credit Agreement
is hereby amended and restated as follows:

     

    “Obligor” means, as
the context may require, the Borrower and each other Person that is a Subsidiary
of the Parent that is obligated under any Loan Document.

     

    (8)           The
definition of “Total Debt” in Section 1.1 of the First Lien Credit Agreement is
hereby amended and restated as follows:

     

    “Total Debt” means, on
any date and without duplication, the outstanding principal amount of all
Indebtedness of the Borrower and its Subsidiaries of the type referred to in
clause (a)
(which, in the case of the Loans or PP Debt or Second Lien Indebtedness, shall
be deemed to equal the actual daily amount of the Loans or PP Notes or Second
Lien Notes, as the case may be, outstanding for such date), clause (b) (which, in
the case of Letter of Credit Outstandings shall be deemed to equal the actual
daily amount of Letter of Credit Outstandings for such date), clause (c), clause (f) (but
excluding any current non-cash asset or liability (including in respect of
Hedging Agreements) described in or calculated pursuant to the requirements of
Statement of Financial Accounting Standards 133 and 143, in each case as amended
(provided that, for the avoidance of doubt, the calculation of Total Debt shall
include any current assets or liabilities in respect of the termination of any
Hedging Agreement), and clause (g), in each
case of the definition of “Indebtedness” (exclusive of intercompany Indebtedness
between the Borrower and its Subsidiaries but including the Indebtedness in
respect of principal hereunder and under the PP Notes and under the Second Lien
Notes, as the case may be) and any Contingent Liability in respect of any of the
foregoing.

     

    
      
        
        

      

      
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    (9)           The
definition of “Transaction Documents” in Section 1.1 of the First Lien Credit
Agreement is hereby amended and restated in its entirety as
follows:

     

    “Transaction
Documents” means, collectively, the PP Debt Documents, the Second Lien
Note Documents, the PSA and the documents and agreements executed and delivered
in connection with the PSA, in each case as amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with Section
7.2.11.

     

    (b)           Section
2.1.2.  The last sentence of Section 2.1.2 of the First Lien
Credit Agreement is hereby amended and restated as follows:

     

    “Notwithstanding
anything herein to the contrary, no Issuer shall be obligated to issue, renew or
extend a Letter of Credit if (i) any Lender is at such time an Impacted Lender
hereunder or (ii) the Administrative Agent or the Issuer in good faith
determines that there is a reasonable possibility that a Lender may become an
Impacted Lender, unless such Issuer has entered into arrangements reasonably
satisfactory to such Issuer with the Borrower or such Lender to eliminate such
Issuer’s risk with respect to such Lender.”

     

    (c)           Section
6.21.  Section 6.21 of the First Lien Credit Agreement is
hereby amended and restated in its entirety as follows:

     

    “SECTION
6.21. Restrictions on
Liens.  Other than as provided under the Second Lien Note
Documents and the PP Debt Documents, neither the Borrower nor any of its
Subsidiaries is a party to any material agreement or arrangement or subject to
any order, judgment, writ or decree, that either restricts or purports to
restrict its ability to grant Liens to the Administrative Agent and the Lenders
on or in respect of their Properties to secure the Obligations and the Loan
Documents.”

     

    (d)           Section
7.1.1(i).  Section 7.1.1(i) of the First Lien Credit Agreement
is hereby amended by adding the phrase “or the Second Lien Indenture” after the
word “Indenture” and before the comma following the word “Indenture” in such
Section.

     

    (e)           Section
7.2.2(g).  Section 7.2.2(g) of the First Lien Credit Agreement
is hereby amended and restated in its entirety as follows:

     

    “(g)           Indebtedness
incurred pursuant to (i) the PP Debt Documents, and Contingent Liabilities of
the Subsidiary Guarantors in respect of the PP Debt; and, the refinancing of all
such Indebtedness so long as such refinancing is on No Less Favorable Terms and
Conditions, provided, however, that such
Indebtedness (x) is unsecured and does not exceed an aggregate outstanding
principal amount of U.S.$400,000,000 and (y) does not have a maturity date
that is prior to the later to occur of (A) the date that is six (6) months after
the Stated Maturity Date or (B) the date that is the originally scheduled
“Stated Maturity” (as defined in the Indenture) with respect to the payment of
principal on the PP Notes and (ii) the Second Lien Note Documents (in an
aggregate principal amount not to exceed the sum of (x) $338,000,000 plus (y) the aggregate
principal amount of Indebtedness resulting from the capitalization of interest
through either the increase of principal amount of outstanding Second Lien Notes
or the issuance of additional Second Lien Notes thereunder or a combination
thereof), and Contingent Liabilities of the Subsidiary Guarantors in respect of
the Second Lien Indebtedness, and the refinancing of all such Indebtedness so
long as (A) such refinancing is on No Less Favorable Terms and Conditions and is
in accordance with the terms and provisions of this Agreement and the
Intercreditor Agreement and (B) the trustee or other agent in respect of such
refinancing Indebtedness executes and delivers the Intercreditor Agreement
unless such Indebtedness is not secured by assets and properties of the Borrower
and its Subsidiaries;”

     

    
      
        
        

      

      
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    (f)           Section
7.2.3(k).  Section 7.2.3(k) of the First Lien Credit Agreement
is hereby amended and restated in its entirety as follows:

     

    “(k)  Liens
securing Second Lien Indebtedness and refinancings of such Second Lien
Indebtedness permitted under clause (g) of Section 7.2.2;
provided however, that (i)
each and every Lien securing the Second Lien Indebtedness shall be subordinated
to the Liens securing the Obligations, this Agreement and the other Loan
Documents and (ii) no Lien shall be granted on any Property to secure the Second
Lien Indebtedness unless the Lien is also being granted to secure the
Obligations, this Agreement and the other Loan Documents;”

     

    (g)           Section
7.2.11(a).  Section 7.2.11(a) of the First Lien Credit
Agreement is hereby amended and restated in its entirety as
follows:

     

    “(a)  any
of the Transaction Documents (other than the PP Debt Documents and the Second
Lien Note Documents), other than non-material amendments, supplements, waivers
or other modifications that individually or in the aggregate would not be
materially adverse to the Secured Parties;”

     

    (h)           Section
7.2.11(c).  Section 7.2.11(c) of the First Lien Credit
Agreement is hereby amended and restated in its entirety as
follows:

     

    “(c)  any
of (i) the PP Debt Documents that results or causes or has the effect of doing
any of the following:  (A) increasing the then outstanding aggregate
principal amount of the PP Notes to an amount exceeding $400,000,000, (B)
contravening the provisions of this Agreement, (C) increasing the interest,
premium or the yield on the PP Notes beyond the interest, yield or premium
specified in the PP Debt Documents as of June 8, 2007, (D) providing for dates
for payment of principal, interest, premium (if any), yield or fees which are
earlier than such dates under the Indenture as in effect on June 8, 2007, (E)
providing for any covenant, event of default or remedy which is more restrictive
on any Obligor than that set forth in the Indenture as in effect on June 8,
2007, (F) providing for redemption, prepayment or defeasance provisions that are
more burdensome on any Obligor than those set forth in the Indenture as in
effect on June 8, 2007, (G) providing for collateral securing Indebtedness
thereunder, or (H) increasing the obligations of any Obligor or conferring any
additional rights on any holder of PP Debt which could reasonably be expected to
be adverse to the Secured Parties, or (ii) the Second Lien Note Documents, other
than any such amendment, supplement, waiver or modification permitted in
accordance with the Intercreditor Agreement and in accordance with the
provisions of this Agreement.”

     

    
      
        
        

      

      
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    (i)           Section
7.2.13.  Section 7.2.13 of the First Lien Credit Agreement is
hereby amended by adding the phrase “or in the Second Lien Note Documents, as
the case may be” at the end of the last sentence of such Section before the
period.

     

    (j)           Section
7.2.21.  The First Lien Credit Agreement is hereby amended by
adding the following Section 7.2.21 after Section 7.2.20:

     

    “SECTION
7.2.21.  No
Prepayment of Second Lien Notes.  The Borrower will not, and
will not permit any of its Subsidiaries to, prior to the date that is ninety-one
(91) days after the Stated Maturity Date:

     

    (a)  make
any payment or prepayment of principal of, or premium or interest on, any Second
Lien Indebtedness other than (to the extent permitted by the Intercreditor
Agreement):  (i) with respect to interest, (A) on the stated,
scheduled dates for payment of interest set forth in the Second Lien Indenture
or (B) upon any refinancing of Second Lien Indebtedness permitted hereunder, or
(ii) with respect to principal, (A) on the date of the “Stated Maturity” (as
defined in the Second Lien Indenture) with respect to the payment of principal
on the Second Lien Notes, (B) on each scheduled date for payment of principal or
as required in connection with a mandatory prepayment, redemption or defeasance
of the Second Lien Notes under the Second Lien Indenture, so long as on the date
of such payment (1) no Default or Event of Default or Borrowing Base
Deficiency has occurred and is continuing or would result therefrom and (2) the
Borrower has paid any Obligations required to be paid hereunder pursuant to the
terms of this Agreement, or (C) upon any refinancing of Second Lien Indebtedness
permitted by this Agreement and the Intercreditor Agreement;

     

    (b)  redeem,
retire, purchase, defease or otherwise acquire any Second Lien Indebtedness
(except as set forth in clause (a));
or

     

    (c)  make
any deposit (including the payment of amounts into a sinking fund or other
similar fund) for any of the foregoing purposes other than, in each case, in
connection with a refinancing of Second Lien Indebtedness (to the extent of such
Indebtedness being refinanced) on No Less Favorable Terms and Conditions and in
accordance with the terms of the Intercreditor Agreement.”

     

    
      
        
        

      

      
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    (k)           Section
8.1.3.  Section 8.1.3 of the First Lien Credit Agreement is
hereby amended by deleting the words “or Parent or EXXI, Inc. shall default
under any obligation under the PP Notes Letter Agreement” at the end of such
Section.

     

    (l)           Section
8.1.4.  Section 8.1.4 of the First Lien Credit Agreement is
hereby amended by deleting the words “and/or EXXI, Inc. shall default in the
performance or observance of any of its obligations under the Pledged Notes
Security Agreement” immediately following the words “executed by it”
therein.

     

    (m)           Section
8.1.5.  Section 8.1.5 of the First Lien Credit Agreement is
hereby amended by inserting the phrase “or the Second Lien Indenture” at the end
of such Section before the period.

     

    (n)           Section
8.1.11.  The First Lien Credit Agreement is hereby amended by
inserting the following Section 8.1.11 after Section 8.1.10,

     

    “SECTION
8.1.11.  Intercreditor
Agreement.  The Intercreditor Agreement, after execution and
delivery thereof by the parties thereto, shall for any reason, except to the
extent expressly permitted by the terms thereof, cease to be in full force and
effect and valid, binding and enforceable in accordance with its terms against
the Borrower, each party thereto and each holder of any of the Second Lien
Indebtedness or shall be repudiated by any of them or any party thereto shall
contest the validity, binding or enforceable effect thereof:  or any
payment shall be made by the Borrower or any Guarantor in violation of the terms
of the Intercreditor Agreement.”

     

    (o)           Section
9.12(b).  The last sentence of Section 9.12(b) of the First
Lien Credit Agreement is hereby amended and restated in its entirety as
follows:

     

    “Each
Lender hereby authorizes and consents to the Administrative Agent’s entering
into and performing the Intercreditor Agreement and hereby agrees to be bound by
the terms and provisions of the Intercreditor Agreement.”

     

    (p)           Section
10.19.  The first sentence of Section 10.19 of the First Lien
Credit Agreement is hereby amended by adding the phrase “the Intercreditor
Agreement and” at the end of such sentence before the phrase “the Security
Documents.”

     

    (q)           Disclosure
Schedule.  The Disclosure Schedule to the First Lien Credit
Agreement is hereby amended by deleting Item 6.19(a) thereof in its entirety and
replacing it in its entirety with Item 6.19(a) to the Disclosure Schedule
attached hereto as Annex I.

     

    Section
3. Borrowing
Base.  The Borrower and the Lenders hereby agree that effective
as of the Effective Date, the Borrowing Base shall be equal to $199,000,000
until such time as the Borrowing Base is redetermined or otherwise adjusted
pursuant to the terms of the First Lien Credit Agreement.

     

    
      
        
        

      

      
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    Section
4. Waiver; Consent;
Termination; Further Assurances.

     

    (a)           Waiver and
Consent:  Subject to the terms and conditions of this
Amendment, the Administrative Agent, the Issuers and the undersigned Lenders
hereby consent to the Borrower’s and the Obligors’ making of the Exchange Offer,
offering of the Private Placement, performing the Pledged Notes Contribution and
Cancellation and consummating the transactions contemplated by the Second Lien
Note Documents to be consummated in conjunction with this Amendment
notwithstanding that such actions and consummation may not comply with or
observe the terms of the First Lien Credit Agreement and other Loan Documents as
in effect without the benefit of the amendments, supplements or other
modifications set forth in this Amendment, including as set forth under Sections
6.6, 7.2.2(g), 7.2.6, 7.2.11, 7.2.15 of the First Lien Credit Agreement, Section
4.1 of the Pledged Notes Security Agreement and Sections 3.5 and 4.1 of the
Intermediate Holdco Pledge Agreement (and waive any Default or Event of Default
to the extent it would arise therefrom but for the amendments, supplements and
other modifications set forth in this Agreement).

     

    (b)           Termination.  The
Administrative Agent, the Issuer and the Lenders hereby acknowledge and agree
that, upon the satisfaction of the condition set forth in Section 5(e)(iv)
below, the Pledged Notes Security Agreement and the PP Notes Letter Agreement
shall terminate and such agreements and each other agreement, certificate,
document or instrument specifically delivered in connection therewith shall be
of no further force and effect (subject only the provisions thereof regarding
reinstatement).

     

    (c)           Further
Assurances.  Subject to the terms and provisions of the First
Lien Credit Agreement and the Intercreditor Agreement and at the Borrower’s cost
and expense, the Administrative Agent agrees to use its reasonable efforts to
assist the Obligors to effectuate the terms of this Amendment (including,
without limitation, the Pledged Notes Contribution and Cancellation) and the
granting of mortgages and security interests and perfection of such interests in
accordance with the terms of the Second Lien Note Documents and entering into
amendments or otherwise applicable modifications of each Control Agreement
required presently or in the future in effect.

     

    Section
5. Conditions to
Effectiveness.  This Amendment shall be deemed effective
(subject to the conditions herein contained) as of the date (the “Effective Date”) of
satisfaction of all of the following conditions:

     

    (a)           the
Administrative Agent shall have received counterparts hereof duly executed by
the Borrower, the Administrative Agent, the Issuers and the Required
Lenders;

     

    (b)           the
Administrative Agent shall have received for the account of each Lender that has
delivered its executed counterpart this Amendment to the Administrative Agent on
or prior to the Effective Date, an amendment fee for each such Lender in an
amount equal to 100 basis points on such Lender’s Percentage of the Borrowing
Base established pursuant to this Agreement;

     

    
      
        
        

      

      
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    (c)           the
Administrative Agent shall have received, and each shall be in form and
substance satisfactory to it and to the Required Lenders, copies of the
Intercreditor Agreement, the Second Lien Indenture and each of the Second Lien
Note Documents certified by the Borrower as being true, correct and complete
copies thereof;

     

    (d)           Borrower
shall execute and deliver or cause to be executed and delivered to the
Administrative Agent, all agreements, documents, instruments and other writings
described in Section 5.1.2 of the First Lien Credit Agreement with respect to
such Obligor; provided that any
such agreements and other writings previously delivered by Borrower or any other
Obligor to the Administrative Agent may be incorporated by reference into the
certificate duly executed and delivered by the Borrower’s Secretary or Assistant
Secretary hereunder;

     

    (e)           the
Administrative Agent shall have received evidence, satisfactory to it, that (i)
the Borrower shall have concurrently received offers to exchange and have
exchanged at least $311,000,000 of outstanding PP Notes for Second Lien Notes at
an exchange rate of not greater than $0.80 of the principal amount of Second
Lien Notes to $1.00 of principal amount of PP Notes, (ii) the Borrower shall
have received at least $50,000,000 in cash for additional Second Lien Notes,
(iii) $41,000,000 of such proceeds will be used to repay concurrently
outstanding Loans under the First Lien Credit Agreement, and (iv) Energy XXI
(Bermuda) Limited and its subsidiaries have contributed $126 million of the PP
Notes to the Borrower and that the Borrower has cancelled such PP Notes;
and

     

    (f)           Borrower
shall receive 90% of the amount of any cash proceeds in excess of $50,000,000
paid as purchase price in respect of the Private Placement (with the Parent and
its other Subsidiaries entitled to receive the remaining 10% of cash proceeds of
such excess amount) and shall either (i) use such amount to repay outstanding
Loans under the First Lien Credit Agreement (but any such repayment shall not be
in or otherwise cause a reduction of the Borrowing Base thereunder) or (ii)
deposit such amount into a Deposit Account that is subject to a Control
Agreement in favor of the Administrative Agent.

     

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

     

    (a)           the
representations and warranties of the Obligors contained in the Loan Documents
(other than Section 6.17 of the First Lien Credit Agreement solely with respect
to the Lehman Hedging Agreement (as defined in the Second Amendment)) are true
and correct in all material respects, other than those representations and
warranties that expressly relate solely to a specific earlier date, which shall
remain correct in all material respects as of such earlier date;

     

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

     

    
      
        
        

      

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

     

    (d)           no
Material Adverse Effect has occurred since June 30, 2008; and

     

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

     

    Section
7. Loan Document;
Ratification.

     

    (a)           This
Amendment is a Loan Document.

     

    (b)           The
Borrower and each other Obligor hereby ratifies, approves and confirms in every
respect all the terms, provisions, conditions and obligations of the First Lien
Credit Agreement and each of the other Loan Documents (other than the Lehman
Hedging Agreement (as defined in the Second Amendment)), including without
limitation all Mortgages, Security Agreements, Guaranties, Control Agreements
and other Security Documents, to which it is a party.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    Section 11. Counterparts.  This
Amendment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any party hereto may
execute this Amendment by signing one or more counterparts.  Any
signature hereto delivered by a party by facsimile or electronic transmission
shall be deemed to be an original signature hereto.

     

    Section
12. No
Waiver.  The express waivers set forth herein are limited to
the extent expressly provided in this Amendment and, except as expressly set
forth in this Agreement, the execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any default of the Borrower or any
other Obligor or any right, power or remedy of the Administrative Agent or the
other Secured Parties under any of the Loan Documents, nor constitute a waiver
of (or consent to departure from) any terms, provisions, covenants, warranties
or agreements of any of the Loan Documents.  The parties hereto
reserve the right to exercise any rights and remedies available to them in
connection with any present or future defaults with respect to the First Lien
Credit Agreement or any other provision of any Loan Document.

     

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

     

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

     

    THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     

    [Signature
Pages Follow]

     

     

    
      
        
        

      

      
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    In
Witness Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective duly authorized officers as of the
date first written above.

     

     

    
      
        	 	BORROWER:	 
	 	 	 
	 	ENERGY
      XXI GULF COAST, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/
      Rick Fox 	 
	 	Name: 	Rick
      Fox	 
	 	Title:	Chief
      Financial Officer	 
	 	 	 	 

      

    

     

     

    
      
        
        

      

      
        S -
1

        
          

        

      

      
        
        

      

       

       

    

    
      
        
          	 	ADMINISTRATIVE
      AGENT, ISSUERS AND LENDERS:	 
	 	 	 
	 	THE
      ROYAL BANK OF SCOTLAND plc, as Administrative Agent, Issuer and
      Lender	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Phillip Ballard 	 
	 	Name: 	Phillip
      Ballard 	 
	 	Title:	Managing
      Director 	 
	 	 	 	 

        

      

       

    

    

    
      
        
        

      

      
        S -
2

        
          

        

      

      
        
        

      

    

     

     

    
      
        
          
            	 	BNP
      PARIBAS, as Issuer and Lender	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Douglas
      R. Liftman 	 
	 	Name: 	Douglas R.
      Liftman 	 
	 	Title:	Managing
      Director 	 
	 	 	 	 

          

        

        
          
            
              
                
                  	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Greg Smothers 	 
	 	Name: 	Greg
      Smothers 	 
	 	Title:	Director 	 
	 	 	 	 

                

              

               

            

          

        

      

    

    

    
      
        
        

      

      
        S -
3

        
          

        

      

      
        
        

      

    

     

     

    
      
        
          
            
              	 	BMO
      CAPITAL MARKETS FINANCING, INC., as Lender	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 

            

          

           

        

      

    

     

    
      
        
        

      

      
        S -
4

        
          

        

      

      
        
        

      

    

     

    

      
        
          
            
              	 	GUARANTY
      BANK, FSB, as Lender	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/
      Kelly L. Elmore III 	 
	 	Name: 	Kelly L. Elmore
      III 	 
	 	Title:	Senior
      Vice-President 	 
	 	 	 	 

            

          

           

        

      

    

     

    
      
        
        

      

      
        S -
5

        
          

        

      

      
        
        

      

    

     

     

    
      
        
          
            	 	AMEGY
      BANK NATIONAL ASSOCIATION, as Lender	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ W.
      Bryan Chapman 	 
	 	Name: 	W. Bryan
      Chapman 	 
	 	Title:	Senior Vice
      President 	 
	 	 	 	 

          

        

         

         

        
          
            
            

          

          
            S -
6

            
              

            

          

          
            
            

          

        

      

      
         

         

        
          
            
              
                
                  	 	THE
      BANK OF NOVA SCOTIA, as Lender	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      David G. Mills 	 
	 	Name: 	David G.
      Mills 	 
	 	Title:	Managing
      Director 	 
	 	 	 	 

                

              

               

               

              
                
                  
                    
                    

                  

                  
                    S -
7

                    
                      

                    

                  

                  
                    
                    

                  

                

                
                   

                   

                  
                    
                      
                        
                          
                            	 	LEHMAN
      COMMERCIAL PAPER INC., as Lender	 
	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	/s/
      Sally N. Nancoz 	 
	 	Name: 	Sally N.
      Nancoz 	 
	 	Title:	Authorized
      Signatory 	 
	 	 	 	 

                          

                        

                         

                      

                    

                  

                

              

              
                
                  
                  

                

                
                  S -
8

                  
                    

                  

                

                
                  
                  

                

              

              
                 

                 

                
                  
                    
                      
                        
                          	 	TORONTO
      DOMINION (TEXAS) LLC, as Lender	 
	 	 	 	 
	
                                   

                                	
                                  By:
      

                                	/s/
      Debbi L. Brito 	 
	 	Name: 	Debbi L.
      Brito 	 
	 	Title:	Authorized
      Signatory 	 
	 	 	 	 

                        

                      

                       

                    

                  

                

              

            

          

        

         

      

    

    
      
        
          
          

        

        
          S -
9

          
            

          

        

        
          
          

        

      

      
         

         

        
          
            
              
                
                  	 	CAPITAL
      ONE, NATIONAL ASSOCIATION, as Lender	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Peter Shen 	 
	 	Name: 	Peter
      Shen 	 
	 	Title:	Assistant Vice
      President 	 
	 	 	 	 

                

              

               

          

        

      

    

    
      
        
          
          

        

        
          S -
10

          
            

          

        

        
          
          

        

      

      
         

         

        
          
            
              
                
                  	 	NATIXIS,
      as Lender	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Donovan C. Broussard 	 
	 	Name: 	Donovan C.
      Broussard 	 
	 	Title:	Managing
      Director 	 
	 	 	 	 

                

              

              
                
                  
                    
                      
                        
                          	 	 	 	 
	
                                   

                                	
                                  By:
      

                                	/s/
      Liana Tchernysheva 	 
	 	Name: 	Liana
      Tchernysheva 	 
	 	Title:	Director 	 
	 	 	 	 

                        

                         

                         

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
          

        

        
          S -
11

          
            

          

        

        
          
          

        

      

      
         

         

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

                        	
                          By:
      

                        	/s/
      Mark Connelly 	 
	 	Name: 	Mark
      Connelly 	 
	 	Title:	Senior Vice
      President 	 
	 	 	 	 

                

              

              
                 

                
                  
                    
                      
                        
                          	 	 	 	 
	
                                   

                                	
                                  By:
      

                                	/s/ James
      Giordano 	 
	 	Name: 	James
      Giordano 	 
	 	Title:	Assistant Vice
      President 	 
	 	 	 	 

                        

                      

                       

                    

                  

                

              

          

        

      

    

    
      
        
          
          

        

        
          S -
12

          
            

          

        

        
          
          

        

      

      
        
           

           

          
            
              
                
                  
                    	 	CREDIT
      SUISSE, as Lender	 
	 	 	 	 
	
                             

                          	
                            By:
      

                          	/s/ Mikhail
      Faybusovich 	 
	 	Name: 	Mikhail
      Faybusovich 	 
	 	Title:	Vice
      President 	 
	 	 	 	 

                  

                

                
                   

                  
                    
                      
                        
                          
                            	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	/s/ Kevin
      Buddhdew 	 
	 	Name: 	Kevin
      Buddhdew 	 
	 	Title:	Assistant 	 
	 	 	 	 

                          

                        

                         

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
          

        

        
          S -
13

          
            

          

        

        
          
          

        

      

      
         

         

        
          
            
              
                
                  	 	UBS
      LOAN FINANCE LLC, as Lender	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Marie Haddad 	 
	 	Name: 	Marie
      Haddad 	 
	 	Title:	Associate
      Director 	 
	 	 	 	 

                

              

              
                
                   

                  
                    
                      
                        
                          
                            	 	 	 	 
	
                                     

                                  	
                                    By:
      

                                  	/s/ Irja
      R. Otsa 	 
	 	Name: 	Irja R.
      Otsa 	 
	 	Title:	Assistant
      Director 	 
	 	 	 	 

                          

                        

                         

                      

                    

                  

                

              

               

            

          

        

      

    

    
      
        
          
          

        

        
          S -
14

          
            

          

        

        
          
          

        

      

      
         

         

        
          
            
              
                
                  	 	WHITNEY
      NATIONAL BANK, as Lender	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/ William
      Jochetz 	 
	 	Name: 	William
      Jochetz 	 
	 	Title:	Officer 	 
	 	 	 	 

                

              

               
 

          

        

      

    

    
      
        
          
          

        

        
          S -
15

          
            

          

        

        
          
          

        

      

      
         

         

        
          
            
              
                
                  	 	ACKNOWLEDGED
      AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN:	 
	 	 	 
	 	ENERGY XXI GOM,
      LLC	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Rick Fox 	 
	 	Name: 	Rick
      Fox	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 

                

              

               

            

          

        

      

    

    
      
        
          
            
              
                
                  	 	ENERGY XXI TEXAS
      ONSHORE, LLC	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Rick Fox 	 
	 	Name: 	Rick
      Fox	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	 	ENERGY XXI ONSHORE,
      LLC	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/
      Rick Fox 	 
	 	Name: 	Rick
      Fox	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 

                

              

               

               

            

          

        

      

    

    
      
        
        

      

      
        S -
16

        
          

        

      

      
        
        

      

    

     

    
      
         

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

                        	
                          By:
      

                        	/s/
      Rick Fox 	 
	 	Name: 	Rick
      Fox	 
	 	Title:	Chief Financial Officer	 
	 	 	 	 

                

              

               

               

            

          

        

      

    

    
      
        
        

      

      
        S -
17

        
          

        

      

      
        
        

      

    

    
 

    ANNEX
I

     

    Item
6.19(a) of Disclosure Schedule

     

    

    
      	
              Obligor

            	 	
              Depository
      Institution

            	 	
              Account
      Number

            
	
              Borrower

            	 	
              Guaranty
      Bank, FSB

            	 	
              3804623571

            
	
              Borrower

            	 	
              Amegy
      Bank National Association

            	 	
              0053059839

            
	
              Borrower

            	 	
              Amegy
      Bank National Association

            	 	
              0953059839

            
	
              EXXI
      GOM

            	 	
              Guaranty
      Bank, FSB

            	 	
              3804623704

            
	
              EXXI
      GOM

            	 	
              Guaranty
      Bank, FSB

            	 	
              3804629479

            
	
              EXXI
      GOM

            	 	
              Guaranty
      Bank, FSB

            	 	
              3804626392

            
	
              Energy
      XXI Onshore, LLC

            	 	
              Guaranty
      Bank, FSB

            	 	
              3804623696

            
	
              Energy
      XXI Gulf Coast, Inc.

            	 	
              The
      Royal Bank of Scotland plc

            	 	
              RBSEXC

            

    

    

    
      
        
        

      

      
        Annex
I

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]