PURCHASE AND SALE AGREEMENT BETWEEN ENERGY XXI USA, INC. AS SELLER AND GRAND ISLE CORRIDOR, LP AS BUYER AND DATED JUNE 22, 2015

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Exhibit 2.1

 

BETWEEN

 

ENERGY XXI USA, INC.

 

AS SELLER

 

AND

 

GRAND ISLE CORRIDOR, LP

 

AS BUYER

 

AND

 

DATED JUNE 22, 2015

 

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TABLE OF CONTENTS

		Page
Article I DEFINITIONS		1
1.1	Definitions	1
1.2	Certain Interpretive Provisions	15
Article II PURCHASE AND SALE		16
2.1	Purchase and Sale	16
2.2	Assumption of Assumed Liability	16
2.3	Nonrefundable Consideration	16
Article III PURCHASE PRICE		17
3.1	Purchase Price	17
3.2	Escrow Arrangements	17
Article IV BUYER’S INSPECTION		19
4.1	Access to Records, Insurance Policies, Environmental Permits, Material Agreements, Authorizations, and documents evidencing the Right of Use Agreement	19
4.2	Disclaimer	19
4.3	Access to the Liquids Transportation System and Personal Property	19
Article V CASUALTY; CONSENTS		20
5.1	Casualty Loss	20
5.2	Consents	20
Article VI CONFIDENTIALITY		21
6.1	No Disclosure or Use of Confidential Information	21
6.2	Compelled and Anticipated Disclosure	21
6.3	Ownership and Return	22
6.4	Standstill	22
6.5	Attorneys’ Fees	22
6.6	Announcements	22
6.7	Injunctive Relief	22
6.8	Survival	23
Article VII SELLER’S REPRESENTATIONS		23
7.1	Incorporation; Qualification	23
7.2	Power and Authority; No Conflicts	23
7.3	Authorization and Enforceability	23
7.4	Liability for Brokers’ Fees	24

 

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7.5	Solvency; No Bankruptcy	24
7.6	Litigation	24
7.7	Environmental Matters	24
7.8	Assets	25
7.9	Taxes	26
7.10	Compliance with Laws	26
7.11	Governmental Authorizations	26
7.12	Bonds, Letters of Credit, Guarantees	27
7.13	Ownership	27
7.14	No Consents	27
7.15	No Purchase Rights	27
7.16	Material Agreements	27
7.17	Sufficiency of the Assets	28
7.18	Adverse Changes	28
7.19	No Tenant Factual Default Under the Lease	28
7.20	Capital Expenditures	28
7.21	Labor Matters	28
7.22	Insurance	29
7.23	Financial Statements	29
7.24	Regulation	29
7.25	Miscellaneous	29
7.26	Disclaimers	30
7.27	Survival	30
Article VIII BUYER’S REPRESENTATIONS		31
8.1	Organization	31
8.2	Power and Authority	31
8.3	Authorization and Enforceability	31
8.4	Liability for Brokers’ Fees	31
8.5	No Bankruptcy	31
8.6	Litigation	31
8.7	Buyer’s Evaluation	31
8.8	Ownership Information	32
8.9	No Buyer Default Under the Lease	32
8.10	Survival	32

 

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Article IX COVENANTS AND AGREEMENTS		32
9.1	Conduct of Business	32
9.2	Insurance	33
9.3	Financial Resources, Buyer’s Warranties	33
9.4	Further Assurances	33
9.5	PSA Guaranties	33
Article X TAX MATTERS		34
10.1	Apportionment of Property Tax Liability	34
10.2	Property Tax Reports and Returns	34
10.3	Transfer Taxes	34
10.4	Federal Tax Reporting	35
Article XI CONDITIONS PRECEDENT TO CLOSING		35
11.1	Seller’s Conditions Precedent	35
11.2	Buyer’s Conditions Precedent	36
Article XII RIGHT OF TERMINATION		37
12.1	Termination	37
12.2	Effect of Termination	37
Article XIII CLOSING		37
13.1	Date of Closing	37
13.2	Time and Place of Closing	37
13.3	Closing Obligations	37
Article XIV ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION		38
14.1	Seller’s Retention of Liabilities and Obligations	38
14.2	Environmental Indemnification	38
14.3	Indemnification	39
14.4	Survival	40
14.5	Procedure	40
14.6	No Insurance; Subrogation	41
14.7	Reservation as to Non-Parties	41
14.8	Consequential Damages	41
14.9	No Derivative Liability	42
14.10	Attorneys’ Fees	42
Article XV MISCELLANEOUS		43
15.1	Expenses	43
15.2	Notices	43

 

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15.3	Amendments	44
15.4	Assignment	44
15.5	Counterparts/PDF and Fax Signatures	45
15.6	GOVERNING LAW; JURISDICTION, VENUE; JURY WAIVER	45
15.7	Entire Agreement	45
15.8	Binding Effect	45
15.9	No Third-Party Beneficiaries	45
15.10	Time of the Essence	46
15.11	Business Day	46
15.12	No Recordation of Agreement	46

 

15.13	No Waiver	46
15.14	Waiver of Trial by Jury	46
15.15	Further Assurances	46
15.16	Specific Performance	47
15.17	Construction	47

 

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This Purchase and Sale Agreement (this “Agreement”), is made as of June 22, 2015 (the “Effective Date”), by and between ENERGY XXI USA, INC., a Delaware corporation (“Seller”), and GRAND ISLE CORRIDOR, LP, a Delaware limited partnership (“Buyer”).  Seller and Buyer may be referred to individually as a “Party” or collectively as the “Parties.”

 

RECITALS

 

 

 

 

 

AGREEMENT

 

In consideration of the mutual promises, covenants and warranties contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

 

ARTICLE I

DEFINITIONS

 

 

 

“Acceptable Letter of Credit” means one or more irrevocable, transferable (as provided herein) standby letters of credit issued to Buyer by a Qualified Bank with a Credit Rating of at least A from S&P or A2 from ▇▇▇▇▇’▇, having a term of at least one (1) year, that meets the requirements of Section 14.11 and otherwise is in a form reasonably acceptable to Buyer.

 

“Affiliate” means, with respect to a specified Person, (i) any Subsidiary of that Person, and (ii) any Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with, the specified Person.

 

“Allocable Amount” has the meaning given in Section 10.4.

 

“Allocation Schedule” has the meaning given in Section 10.4.

 

“Assets” means the Liquids Transportation System, the Personal Property, and the Interconnection Agreements, but expressly excluding the MC 268 “A” Platform.

 

“Assignment and ▇▇▇▇ of Sale” means the Assignment and ▇▇▇▇ of Sale, executed at Closing by Buyer and Seller in the form attached hereto as Exhibit A.

 

“Assumed Liability” means Seller’s asset decommissioning, plugging and abandonment obligations with respect to the Liquids Transportation System (excluding decommissioning, site clearance, and any other liability related to the MC 268 “A” Platform), in the estimated amount of Twelve Million Five Hundred Thousand Dollars ($12,500,000).

 

“Authorizations” has the meaning given in Section 7.11.

 

“Balance Sheet Date” has the meaning given in Section 7.23.

 

“BOEM” means the Bureau of Ocean Energy Management, an agency within the U.S. Department of the Interior.

 

“BSEE” means the Bureau of Safety and Environmental Enforcement, an agency within the U.S. Department of the Interior.

 

“BSEE Consent” means the consent of BSEE to the assignment to Buyer hereunder of the Federal ROWs.

 

“Building Lease” means a lease agreement providing Buyer the right to use certain space within an office building owned by Seller or its Affiliate adjacent to the Land, executed at Closing by Buyer and Seller or its Affiliate in the form attached hereto as Exhibit B.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or Houston, Texas, are authorized or required by law to remain closed.

 

“Buyer” has the meaning given in the Preamble.

 

“Buyer Closing Deliverables” means (i) the Lease executed by Buyer, (ii) the ROW Assignments executed by Buyer and, as applicable, with its signature acknowledged, (iii) the Assignment and ▇▇▇▇ of Sale executed by Buyer and with its signature acknowledged, (iv) the Building Lease executed by Buyer, (v) the Landlord Lease Guaranty, executed by CorEnergy, (vi) the Escrow Agreement executed by Buyer, (vii) the Multi-Platform Access Agreement, executed by Buyer and with its signature acknowledged, (viii) the Heliport License, executed by Buyer and with its signature acknowledged, (ix) the Form BOEM-1017 executed by Buyer, (x) the OSFR Agreement executed by Buyer, (xi) the Buyer Servitude Agreement, executed by Buyer and with its signature acknowledged, (xii) the EXXI Servitude Agreement, executed by Buyer and with its signature acknowledged, (xiii) the Water Supply Agreement, executed by Buyer, (xiv) the Gas Supply Agreement, executed by Buyer, (xv) the Designation and Reimbursement Agreement, executed by Buyer, and (xvi) the Notice of Lease (as defined in the Lease), executed by Buyer and with its signature acknowledged.

 

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“Buyer Closing Payments” means the Purchase Price in Current Funds, and to the extent payable at Closing, any Taxes that Buyer is required to pay under Section 10.3 as a result of Closing.

 

“Buyer PSA Guaranty” means the guaranty of certain obligations of Buyer under this Agreement, dated the date hereof, executed by CorEnergy.

 

“Buyer Servitude Agreement” means the Pipeline Servitude Agreement between Energy XXI GOM, LLC or its Affiliate, as grantor, and Buyer, as grantee, executed at Closing by Buyer and Energy XXI GOM, LLC in the form attached hereto as Exhibit C.

 

“Buyer’s Conditions” has the meaning given in Section 11.2.

 

“Buyer’s Warranties” has the meaning given in Section 8.10.

 

“Casualty Loss” has the meaning given in Section 5.1

 

“Claim” has the meaning given in Section 14.5(b).

 

“Claim Notice” has the meaning given in Section 14.5(a).

 

“Closing” has the meaning given in Section 13.1.

 

“Closing Date” has the meaning given in Section 13.1.

 

“Closing Deliverables” means the Seller Closing Deliverables and the Buyer Closing Deliverables.

 

“Code” means the Internal Revenue Code of 1986, as amended.  All references to the Code, Treasury Regulations or other governmental pronouncements shall be deemed to include references to any applicable successor regulations or amending pronouncements.

 

“Confidential Information” means (i) all Proprietary Information, and (ii) all other information furnished to Buyer or any of Buyer’s Affiliates or Representatives by or on behalf of Seller or any of Seller’s Affiliates and identified to the recipient as confidential.  Notwithstanding the foregoing, Confidential Information shall not include information that is publicly available other than as a result of actions in violation of Article VI hereof.

 

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated December 4, 2014, by and between Energy XXI Pipeline, LLC and Corridor InfraTrust Management, LLC.

 

“Confidentiality Provisions” means the terms, conditions and requirements of the Confidentiality Agreement and Article VI of this Agreement.

 

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“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“CorEnergy” means CorEnergy Infrastructure Trust, Inc., a Maryland corporation.

 

“Credit Rating” means with respect to any Qualified Bank, on any date of determination, the respective ratings then assigned to such entity’s unsecured, senior long-term debt (not supported by third party credit enhancement) or deposit obligations by ▇▇▇▇▇’▇ or S&P, as applicable.

 

“Current Funds” means immediately available funds wire transferred to an account designated in advance by Seller.

 

“Decommissioning Bonds” means the general and supplemental bonds that must, under applicable legal requirements with respect to financial assurances for decommissioning liabilities associated with the Assets, be posted prior to or upon the filing of the Form BSEE-0149s for the assignment of the Federal ROWs from Seller to Buyer.

 

“Designation and Reimbursement Agreement” means the letter agreement between Buyer and Seller, executed at Closing by Buyer and Seller in the form attached hereto as Exhibit D.

 

“Disapproved Liens” means any Lien, unless arising as a result of the actions of Buyer or approved in writing by Buyer, that may be removed by the payment of money, such as mortgage Liens, judgment Liens, mechanic Liens/claims.

 

“Disclosing Party” means the Party disclosing Confidential Information to the Recipient Party.

 

“Effective Date” has the meaning given in the Preamble.

 

“Encumbrance” means any charge, encumbrance, claim, condition, Lien (statutory or other), carriers’, workmen’s, repairmen’s or other like Lien, encroachment, easement, right-of-way, right of first refusal, or restriction of any kind (including any restriction on any attribute of ownership), and including all restatements, modifications, amendments, consolidations, extensions, renewals or substitutions thereto or thereof.

 

“Environmental Laws” means all applicable U.S. federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, and other legally enforceable requirements relating to (i) pollution or protection of the environment or natural resources or human health and safety (to the extent such health and safety relate to exposure to Hazardous Substances), (ii) any Release into the environment of, or any exposure to, any Hazardous Substances or (iii) the generation, manufacture, processing, distribution, use, treatment, storage, transport, disposal or handling of any Hazardous Substances; including the federal Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act, the Emergency Planning and Community Right-to-Know Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Oil Pollution Act of 1990, the Outer Continental Shelf Lands Act, the Federal Hazardous Materials Transportation Law, the Marine Mammal Protection Act, the Endangered Species Act, the National Environmental Policy Act, and the Occupation, Safety and Health Act, each as amended through the Closing Date.

 

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“Environmental Permit” means any permit, approval, U.S. Environmental Protection Agency or state equivalent issued identification number (with regard to Resource Conservation and Recovery Act hazardous waste), license, registration, certification, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law.

 

“Escrow Account” has the meaning given in Section 3.2(a).

 

“Escrow Agent” means UMB Bank, N.A.

 

“Escrow Agreement” means the escrow agreement between Seller, Buyer, and Escrow Agent, executed at Closing by Buyer, Seller, and Escrow Agent, in the form attached hereto as Exhibit E.

 

“Escrow Amount” means Five Million Dollars ($5,000,000).

 

“EXXI Parent” means Energy XXI Ltd, a Bermuda corporation.

 

“EXXI Parent Financials” has the meaning given in Section 7.23.

 

“EXXI Servitude Agreement” means the Pipeline Servitude Agreement between Buyer, as grantor, and Energy XXI GOM, LLC or its Affiliate, as grantee, in the form attached hereto as Exhibit F.

 

“Exxon Platform License” means an agreement, in form and substance satisfactory to Buyer (acting reasonably), pursuant to which the Exxon entity that owns oil platform MC 280A in the Gulf of Mexico grants directly to Buyer, or to Seller or its Affiliate (and Seller or such Affiliate assigns to Buyer at Closing), rights of access to such oil platform for purposes of connecting, inspecting, maintaining, and repairing the portion of the Liquids Transportation System that runs through such oil platform.

 

“Exxon Reimbursement Agreement” means that certain letter agreement between Energy XXI GOM, LLC and ExxonMobil Production Company, dated August 3, 2012, for the reimbursement of costs associated with the abandonment and decommissioning of the MC 268 “A” Platform.

 

“Federal ROWs” means the federal Outer Continental Shelf pipeline rights-of-way included in the Right of Use Agreements, as specified in Exhibit G.

 

“Flow and Volume Information” means any flow and volume information furnished or made available by Seller in respect of the Liquids Transportation System.

 

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“Fundamental Representations” means (i) the Seller’s Representations set forth in Sections 7.1 through 7.5, 7.13, and 7.17 and (ii) the Buyer’s Representations set forth in Sections 8.1 through 8.5 and 8.7.

 

“GAAP” means generally accepted accounting principles in effect in the United States of America from time to time or at a specific time if so specified in this Agreement.

 

“Gas Supply Agreement” means the agreement between Buyer and Energy XXI GOM, LLC, executed at Closing by Buyer and Energy XXI GOM, LLC or its Affiliate in the form attached hereto as Exhibit H.

 

“Governmental Authority” means any governmental authority, agency, department, commission, bureau, board, instrumentality, court or quasi-governmental authority having jurisdiction or supervisory or regulatory authority over any of the Assets.

 

“Hazardous Substance” means (i) any substance that is regulated as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance under any Environmental Law (ii) any petroleum, petroleum hydrocarbons, petroleum products and petrochemical products, any crude oil or any components, fractions or derivatives thereof, any oil or natural gas exploration or production waste, and any natural gas, synthetic gas, and any mixtures thereof, as each is regulated under Environmental Law, and (iii) radioactive materials or polychlorinated biphenyls, as each is regulated under Environmental Law.

 

“Heliport” means that certain heliport located near the Land and customarily used by Seller and its Affiliates to access the Land.

 

“Heliport License” means a license to use the Heliport, executed at Closing by Buyer and Energy XXI GOM, LLC in the form attached hereto as Exhibit I.

 

“Improvements” means all of the improvements and fixtures used as part of the Liquids Transportation System, including: any and all surface or subsurface pipelines; surface or subsurface machinery and equipment, line pipe, pipe connections, fittings, flanges, welds, other interconnections, and valves (including subsea tie-in valves); control and monitoring equipment; cathodic or electrical protection units; by-passes; regulators; drips; brine pumps, salt water disposal pumps, and oil pumps; salt water filter systems; treating, dehydration, separation, processing equipment; crude oil and produced water storage tanks; gas compressors; vapor recovery units and associated gas lines; towers and storage sheds; gas and electric fixtures; electrical generators, fuel tanks, switchgear, transformers, and switches; and motor control center, in each case that are downstream of the inlet flange to each pipeline pig launcher trap on oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, SP 93A, and MC 280A in the Gulf of Mexico to, and including, the Grand Isle terminal facility on the Land, including any of the foregoing described on the attached Exhibit J.  The term “Improvements” includes all of the improvements and fixtures which are a part of the Liquids Transportation System as described herein, regardless of whether they are included or properly described in Exhibit J.

 

“Indemnified Party” has the meaning given in Section 14.5(a).

 

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“Indemnifying Party” has the meaning given in Section 14.5(a).

 

“Indemnity Deductible” has the meaning given in Section 14.3(e).

 

“Independent Contract Consideration” has the meaning given in Section 2.3.

 

“Insurance Policies” means the policies of general liability, workers’ compensation and other insurance held as of the Effective Date by Seller or its Affiliates with respect to the Assets.

 

“Interconnection Agreements” has the meaning given in Section 7.16(a)(iii).

 

“Interim Period” has the meaning given in Section 9.1(a).

 

“Joint Instruction Letter” has the meaning given in Section 3.2(a).

 

“Land” means the approximately 16 acre parcel of land described on Exhibit K.

“Landlord Lease Guaranty” means the Landlord Guaranty, as defined in the Lease.

“LC Term” means the period commencing upon the Title Commitment Outside Delivery Date and continuing until no Major Title Breaches or Minor Title Breaches exist, as evidenced by the removal of any exception of such Title Support Breach from Title Commitment or Title Insurance Policy (either directly or through an endorsement thereto) or the Survey.

“Lease” means the Lease of the Assets from Buyer to Tenant, in the form attached hereto as Exhibit L, executed by Buyer, as landlord, and Tenant, as tenant.

“Letter of Credit” means a Letter of Credit delivered to Buyer pursuant to this Agreement, regardless of whether such Letter of Credit is an Acceptable Letter of Credit.

 

“Letter of Credit Event” means with respect to an outstanding Letter of Credit, the occurrence of any of the following events: (i) the issuer of such Letter of Credit shall fail to maintain a Credit Rating of at least A by S&P or A2 by ▇▇▇▇▇’▇; (ii) the issuer of such Letter of Credit shall fail to comply with or perform its obligations under such Letter of Credit if such failure shall be continuing after the lapse of any applicable grace period; (iii) the issuer of such Letter of Credit shall disaffirm, disclaim, repudiate or reject, in whole or in part, or challenge the validity of, such Letter of Credit; (iv) such Letter of Credit shall expire or terminate, or shall fail or cease to be in full force and effect.

 

“Lien” means any mortgage lien, deed of trust lien, tax lien, deed to secure debt, vendor’s lien, security interest, pledge, collateral assignment, mechanics’ or materialmen’s lien, or other similar instruments and all restatements, modifications, amendments, consolidations, extensions, renewals or substitutions thereto or thereof.

 

“Limited Title Opinion” means a title opinion based upon an abstract of title prepared by a third party abstractor from the courthouse records for Jefferson and Plaquemines Parishes, Louisiana, with respect to any filings in the names of all Exxon entities and all Energy XXI entities, covering the period from (i) January 1, 1967 through June 9, 2015, with respect to the mortgage records of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, (ii) December 10, 1973 through June 12, 2015, with respect to the mortgage records of Plaquemines Parish, and (iii) January 1, 1990 through June 15, 2015, with respect to any Uniform Commercial Code filings, issued by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.C. to Buyer, opining that, based upon such abstract of title, there are no Liens recorded in the mortgage records maintained by those Parishes or in the Uniform Commercial Code indices against any portion of the Land or the Right of Use Agreements set forth on Exhibit G, other than Liens to be released at Closing pursuant to the Mortgage Releases.

 

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“Liquids Transportation System” (a) means, generally, the system of pipelines, storage tanks, collection and separation facilities, salt water disposal ▇▇▇▇▇ and facilities, and related properties, facilities, equipment and rights, identified on Exhibit M, as such system exists as of the Effective Date, that is capable of (i) transporting, collecting, separating, storing, and delivering for sale or transport oil produced from oil ▇▇▇▇▇ located in the Gulf of Mexico, and (ii) transporting, collecting, separating, and disposing of salt water associated with the production of such oil, and (b) includes, specifically, the Land, the Right of Use Agreements, and the Improvements.  The Liquids Transportation System begins at the inlet flange to each pipeline pig launcher trap on oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, SP 93A, and MC 280A in the Gulf of Mexico, but expressly excluding the MC 268 “A” Platform, extends through an interconnected system of pipelines and subsea tie-in valves to the collection, separation equipment, storage tanks, disposal ▇▇▇▇▇, and pipelines located at the Grand Isle terminal facility on the Land, and includes the pipeline from such terminal facility to the interconnection point under the Interconnection Agreement, dated December 17, 2010, with ExxonMobil Pipeline Company (as such agreement may be amended or replaced from time to time).

 

“Loss” has the meaning given in Section 14.3.

 

“Louisiana ROW” means the right-of-way granted by the State of Louisiana included in the Right of Use Agreements, as specified in Exhibit G.

 

“Major Casualty Loss” has the meaning given in Section 5.1.

 

“Major Casualty Notice” has the meaning given in Section 5.1.

 

“Major Title Support Breach” means (i) the Title Commitment shows a Disapproved Lien on the Land or on the Right of Use Agreements set forth on Exhibit N, (ii) the Title Commitment takes exception for one or more Encumbrances that are not Permitted Encumbrances, or the Survey shows one or more encroachments or other defects that, in the aggregate, would have a Material Adverse Effect, (iii) Seller fails to deliver to Buyer the Title Commitment prior to the Title Commitment Outside Delivery Date, or (iv) Seller fails to deliver to Buyer the Survey prior to the Title Commitment Outside Delivery Date.

 

“Material Adverse Effect” means any circumstance, change, or effect that is materially adverse to the ownership, operation, or financial condition of the Assets, taken as a whole.

 

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“Material Adverse Effect for Closing Conditions” means any circumstance, change, or effect that is materially adverse to the ownership, operation, or financial condition of the Assets, taken as a whole, but excluding any circumstance, change, or effect resulting or arising from:  (a) any general change in conditions in the industries or markets in which Seller operates; (b) seasonal reductions in revenues or earnings of Seller in the conduct of its business with respect to the Assets in the ordinary course; (c) any adverse change, event, or effect on the global, national, or regional energy industry as a whole, including those impacting energy prices or the value of gathering assets and properties or other commodities, goods, or services, or the availability or costs of ▇▇▇▇▇▇; (d) national or international political conditions, including any engagement in hostilities, whether or not pursuant to declaration of a national emergency or war, or the occurrence of any military or terrorist attack; (e) changes in law or generally accepted accounting procedures, or the interpretation thereof; (f) the entry into or announcement of this Agreement, actions contemplated by this Agreement, or the consummation of the transactions contemplated hereby; or (g) changes or developments in financial or securities markets or the economy in general.

 

“Material Agreements” has the meaning given in Section 7.16(a).

 

“MC 268 “A” Platform” means that certain platform located on Block 268, Mississippi Canyon Area, as shown on OCS Official Protraction Diagram NH 16-10 at Latitude 28.652145, Longitude 89.786457, along with all buildings, vessels, tanks, motors, pumps, compressors and equipment, located thereon, if any.

 

“Minor Title Support Breach” means the Title Insurance Policy shows an Encumbrance that would not result in a Major Title Support Breach but is not a Permitted Encumbrance.

 

“▇▇▇▇▇’▇” means ▇▇▇▇▇’▇ Investor’s Service, Inc. and its successors and assigns.

 

“Mortgage Releases” means, collectively, those documents necessary to release all Disapproved Liens, including, but not limited to those identified on Exhibit O or in the Limited Title Opinion, in form and substance sufficient for filing in the real property records of Jefferson, Plaquemines, Lafourche or Terrebonne Parishes, Louisiana, and in the Non-required file maintained for the Federal ROWs by BOEM/BSEE, in all cases satisfactory to Buyer and the Title Company.

 

“Multi-Platform Access Agreement” means the Multi-Platform Pipeline Connection and Access Agreement by and between Buyer and Energy XXI GOM, LLC, in respect of (i) oil platforms GI 22L, ST 54G, WD 73A, WD 30J, MC 268A, MC 397A, and SP 93A in the Gulf of Mexico and (ii) the connection points specified therein, executed at Closing in a form acceptable to the Parties.

 

“Non-Assignable Assets” has the meaning given in Section 5.2(b).

 

“Non-Foreign Affidavit” means a certificate of non-foreign status executed by Seller in the form prescribed by Treasury Regulations Section 1.1445-2(b)(2) and attached to this Agreement as Exhibit P.

 

“Notice” has the meaning given in Section 15.2.

 

“Order” means any writ, judgment, decree, award, ruling, subpoena, verdict, injunction or similar order of any applicable Governmental Authority (in each such case whether preliminary or final).

 

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“OSFR Agreement” means an agreement obligating Seller to conduct certain activities in order to ensure that Buyer (and any successor Landlord under the Lease) and the Liquids Transportation System remain compliant with all statutes, laws, rules, requirements and regulations promulgated by any Governmental Authority relating to Oil Spill Financial Responsibility, executed at Closing by Buyer and Seller, or its Affiliate, in the form attached hereto as Exhibit Q.

 

“Outside Closing Date” means the date that is two months after the Effective Date, or such other date as may be mutually agreed in writing by Buyer and Seller, in either case as such date may be automatically extended upon a Major Casualty Loss if Buyer and Seller fail to terminate this Agreement, but only as and to the extent expressly provided in Section 5.1.

 

“Party” and “Parties” have the meanings given in the Preamble.

 

“Permitted Encumbrance” means (i) Liens for (A) Taxes not yet due and payable or (B) any Taxes that are being contested in good faith by appropriate proceedings, (ii) mechanics’, carriers’, workmen’s, repairmen’s or other like Liens arising or incurred in the ordinary course of business with respect to amounts that are not delinquent or which are being contested in good faith by appropriate proceedings by or on behalf of Seller, (iii) the terms of any Right of Use Agreement (excluding any Lien or right to terminate caused by the breach of such Right of Use Agreement by Seller or any of its Affiliates), (iv) recorded agreements, easements, servitudes, rights-of-way and other documents of record, affecting the Land that, in the reasonable judgment of Buyer, do not prohibit or interfere with the current operation of the Liquids Transportation System or the use of the Land for its current use or for other activities related to the extraction, Shipment, processing, refinement or disposal of produced water, oil, gas or other hydrocarbons, (v) zoning ordinances, (vi) any use restrictions set forth in that certain Act of Cash Sale with Reservation of Servitude, dated effective as of December 1, 2010, by and between ExxonMobil Pipeline Company and Energy XXI GOM, LLC, (vii) Liens granted to the lenders to Seller or Seller’s Affiliates so long as such Liens are released from the Assets at Closing and, thereafter, extend only to Tenant’s leasehold interest in the Assets, (viii) all of the terms and conditions of this Agreement, the Assignment and ▇▇▇▇ of Sale and the Lease, and (ix) required consents to assignment under any Material Agreement.  Notwithstanding anything herein to the contrary, Disapproved Liens shall not be deemed to be Permitted Encumbrances.

“Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, Governmental Authority or any other entity of any kind.

 

“Personal Property” means (a) the monitoring equipment located in or on the Liquids Transportation System, (b) the computer hardware and software used in respect of the Liquids Transportation System, (c) the wires and other connectors between such computer hardware and such monitoring equipment, (d) all office furnishings, computers and associated hardware located at the Grand Isle terminal facility, (e) spare parts and stores for the Liquids Transportation System, and (f) the Records, all as of the Effective Date.

 

“Property Taxes” has the meaning given in Section 10.1.

 

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“Proprietary Information” means (i) the business concept, operating techniques, marketing methods, financial information, plans, site and system renderings, schedules, itemized costs, development plans and all related trade secrets or confidential or proprietary information treated as such by Seller, whether by course of conduct, by letter or report or by use of any appropriate proprietary stamp of legend designating such information item to be confidential or proprietary, by communication to such effect made prior to or at the time any such Proprietary Information is disclosed to Buyer, or otherwise, (ii) all financial statements and financial information relating to the Liquids Transportation System delivered to Buyer by Seller and EXXI Parent pursuant to Article IV, and (iii) all Flow and Volume Information.  Notwithstanding the foregoing, Proprietary Information shall not include information that is publicly available other than as a result of actions in violation of Article VI hereof.

 

“Purchase Price” has the meaning given in Section 3.1.

 

“Qualified Bank” means (i) a U.S. commercial bank or (ii) a U.S. branch of a foreign bank.

 

“Recipient Party” means the Party receiving, directly or by delivery to its Representatives, Confidential Information disclosed by or on behalf of the other Party hereto.

 

“Records” means the following, to the extent in Seller’s Possession:  all engineering drawings or plans of or covering the Liquids Transportation System or any component thereof, site assessments and environmental reports regarding or covering the Liquids Transportation System or any component thereof, manuals relating to the operation of the Assets, and “as-built” surveys of the pipelines and drawings of the Liquids Transportation System.

 

“Release” means (a) any leaking, spilling, pouring, pumping, emitting, injecting, escaping, leaching, dumping, discharging, depositing or disposing of any Hazardous Substances into the environment (including the air, soil, groundwater or surface water) in sufficient quantity or concentration such that notification to a Governmental Authority is required under Environmental Laws or permitting is required under Environmental Laws, or (b) any presence or discovery of Hazardous Substances in soils, surface waters or groundwater on or under the Assets that exceeds screening standards under the Louisiana Risk Evaluation and Corrective Action Program, as may be modified or amended from time to time.

 

“Representatives” means those Persons, including officers, directors, employees, accountants, attorneys, consultants, independent contractors, agents, stockholders, members, partners, actual or potential financing sources, investment advisers, and investment bankers, with a need to know the Confidential Information in order to evaluate and carry out the Transaction.

 

“Required Consents” has the meaning given in Section 11.2(c).

 

“Required LC Amount” means if on the Title Commitment Outside Delivery Date there exists: (i) one or more Major Title Support Breaches, the lesser of (x) thirty two million five hundred thousand dollars ($32,500,000.00) or (y) the sum of (1) the stated amount or amounts of all Liens that constitute a Major Title Support Breach plus (2) the amount, determined by Buyer, in its reasonable judgment, to be sufficient to remove or otherwise resolve all other Major Title Support Breaches that are not Liens; or (ii) one or more Minor Title Support Breaches, but no Major Title Support Breach, two million dollars ($2,000,000.00); provided, however, that in the event a Major Title Support Breach is resolved such that no other Major Title Support Breaches exist but one or more Minor Title Support Breaches exist, the Required LC Amount may be reduced to two million dollars ($2,000,000.00) following prior written notice to Buyer.

 

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“Restoration Operations” has the meaning given in Section 5.1.

 

“Retained Liabilities” has the meaning given in Section 14.1.

 

“Right of Use Agreements” means the easements, servitudes, rights of way, and similar agreements and instruments listed in Exhibit G, including all of Seller’s rights thereunder, which shall be assigned to Buyer pursuant to the Assignment and ▇▇▇▇ of Sale and the ROW Assignments.

 

“ROW Assignments” means (a) for each Federal ROW, a Form BSEE-0149 executed by Seller and Buyer, and (b) for the Louisiana ROW, an Assignment of Right-of-Way executed and acknowledged at Closing by Buyer and Seller in the form attached hereto as Exhibit R.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors and assigns.

 

“Seller” has the meaning given in the Preamble.

 

“Seller Closing Deliverables” means (i) the Lease executed by Tenant, (ii) the ROW Assignments executed by Seller and, as applicable, with its signature acknowledged, (iii) the Assignment and ▇▇▇▇ of Sale executed by Seller and with its signature acknowledged, (iv) the Non-Foreign Affidavit executed by Seller, (v) the Tenant Lease Guaranty executed by EXXI Parent, (vi) the Escrow Agreement executed by Seller, (vii) the Multi-Platform Access Agreement, executed by Energy XXI GOM, LLC and with its signature acknowledged, (viii) the Heliport License executed by Energy XXI GOM, LLC and with its signature acknowledged, (ix) Form BOEM-1025 executed by Seller, (x) the Limited Title Opinion executed by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.C., (xi) the Mortgage Release executed by Seller, (xii) the Protective Mortgage (as defined in the Lease) executed by Seller and Tenant and with their signatures acknowledged, and the Protective UCCs (as defined in the Lease), (xiii) the OSFR Agreement executed by Seller, (xiv) the Mortgage Releases executed by the Person granting the releases and with their signatures acknowledged, (xv) the UCC Termination Statements, (xvi) a boundary survey of the Land and the Right of Use Agreements set forth on Exhibit G as Items 1 and 2, (xvii) the Buyer Servitude Agreement, executed by Energy XXI GOM, LLC or its Affiliate, and with its signature acknowledged, (xviii) the EXXI Servitude Agreement, executed by Energy XXI GOM, LLC or its Affiliate, and with its signature acknowledged, (xix) the Water Supply Agreement, executed by Energy XXI GOM, LLC or its Affiliate, (xx) the Gas Supply Agreement, executed by Energy XXI GOM, LLC or its Affiliate, (xxi) the Designation and Reimbursement Agreement, executed by Seller, and (xxii) the Notice of Lease (as defined in the Lease) executed by Tenant and with its signature acknowledged.

 

“Seller Closing Payments” means, to the extent payable at Closing, any Taxes that Seller is required to pay under Section 10.3 as a result of Closing.

 

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“Seller PSA Guaranty” means the guaranty of certain obligations of Seller under this Agreement, dated the date hereof, executed by EXXI Parent.

 

“Seller’s Conditions” has the meaning given in Section 11.1.

 

“Seller’s Knowledge” means, as of any date, the then-current actual knowledge of Seller’s Representatives as of such date, and not any implied, imputed or constructive knowledge of such individuals, after due inquiry.  The foregoing qualification of Seller’s Knowledge shall in no event give rise to any personal liability on the part of any Seller’s Representative or any other officer or employee of Seller or its Affiliates on account of any breach of any representation or warranty made by Seller herein.  No broker, agent or Person other than Seller is authorized to make any representation or warranty for or on behalf of Seller.

 

“Seller’s Possession” means with respect to information, records and materials, only such information, records and materials as may be in the actual possession or, to Seller’s Knowledge, in the control of Seller or its Affiliates.

 

 “Seller’s Representatives” means, as of any date, the Chief Accounting Officer, Chief Financial Officer, Chief Operating Officer, and Senior Vice President (Legal) of EXXI Parent, or, if the title of any such officer changes, the equivalent titled officer of EXXI Parent.

 

“Seller’s Warranties” has the meaning given in Section 7.26(a).

 

“Solvent” means, with respect to any Person on a particular date, that on such date, (i) the present fair salable value of the property and assets of such Person exceeds the debts and liabilities, including contingent liabilities, of such Person, (ii) the present fair salable value of the property and assets of the such Person is greater than the amount that will be required to pay the probable liability of such Person on its debts and other liabilities, including contingent liabilities, as such debts and other liabilities become absolute and matured in the ordinary course, (iii) such Person does not intend to incur, or believe that it will incur, debts and liabilities, including contingent liabilities, beyond its ability to pay such debts and liabilities as they become absolute and matured in the ordinary course, and (iv) such Person does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.  For purposes of this definition, the amount of a Person’s contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Subsidiary” means with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (i) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent,  or (ii) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent.

 

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“Survey” means an ALTA/ACSM Land Title Survey of the Land and any servitudes established by the Right of Use Agreements set forth on Exhibit N, meeting the 2011 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys, with certification to Buyer and the Title Company, by a licensed surveyor in the State of Louisiana, depicting the following “Table A” items: 1 (Section Corners), 3, 4 (as to the Land only), 6(b), 8, 11(b) (as to the Land only), 13, 16, 18 and 20(a) (but only in the event that the "surveyed property" as that phase is used in the Table A requirement is determined by the survey or not to include any property other than the Land), and shall refer to the Title Insurance Policy.

 

“Survival Period” means (i) for the Fundamental Representations, the period beginning on the Closing Date and continuing indefinitely, (ii) for the Seller’s Representations set forth in Section 7.9, the period beginning on the Closing Date and ending on the date that is ninety (90) days following the end of the applicable statute of limitations, and (iii) for all other Buyer’s Warranties and Seller’s Warranties, the period beginning on the Closing Date and ending eighteen (18) months following the Closing Date.

 

“Target Closing Date” means June 30, 2015.

 

“Tax” or “Taxes” means (i) all federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Section 59A of the Code), customs, duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, escheat, registration, value added, alternative or add-on minimum, estimated or any other taxes, unclaimed property liabilities, any payments in lieu of taxes or other similar payments, charges, fees, levies, imposts, customs or duties of any kind whatsoever, that are imposed by a Taxing Authority, including any interest, penalty, or addition thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the tax liability of any other Person, or (ii) any liability for the payment of any taxes, interest, penalty, addition to tax or like additional amount resulting from the application of Treasury Regulation Section 1.1502-6 or comparable federal, state or local laws.

 

“Tax Return” means any return, declaration, report, claim for refund, property rendition or information return or statement relating to Taxes, including any schedule or attachment thereto and including any amendment thereof.

 

“Taxing Authority” means a governmental entity having jurisdiction over the assessment, determination, collection, or other imposition of any Tax.

 

“Tenant” means Energy XXI GIGS Services, LLC, a Delaware limited liability company.

 

“Tenant Lease Guaranty” means the Tenant Guaranty (as defined in the Lease).

 

“Title Breach Expense” shall have the meaning set forth in Section 14.11(b)(i).

 

“Title Commitment” means a commitment by the Title Company to issue the Title Insurance Policy on the terms and conditions set forth in the commitment.

 

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“Title Commitment Outside Delivery Date” means such date that is one hundred twenty (120) days following the Closing Date.

 

“Title Company” means ▇▇▇▇▇ Title Co., Inc., as agent for First American Title Insurance Company, or any other a national title insurance company, or an agent thereof, that is designated by Buyer, reasonably acceptable to Seller, and licensed or authorized to write and issue a Title Insurance Policy in the State of Louisiana.

 

“Title Insurance Policy” means an ALTA extended coverage owner’s policy of title insurance issued by the Title Company insuring good, valid and marketable title in and to the Land and any servitudes established by the Right of Use Agreements set forth on Exhibit N, in the name of Buyer and in an amount equal to the fair market value of the Land and the Right of Use Agreements set forth on Exhibit N, subject only to the Permitted Encumbrances.

 

“Title Support Breach” means any Major Title Support Breach or Minor Title Support Breach.

 

“Transaction” has the meaning given in Section 3.1.

 

“Treasury Regulations” means the regulations promulgated by the United States Treasury Department under the Code.

 

“UCC Termination Statements” means completed UCC Financing Statement Amendments, in form and substance acceptable to Buyer, to delete the Assets as collateral under, or to terminate, as the case may be, the UCC financing statements listed on Exhibit Q.

 

“Water Supply Agreement” means the agreement between Buyer and Energy XXI GOM, LLC, executed at Closing by Buyer and Energy XXI GOM, LLC or its Affiliate in the form attached hereto as Exhibit S.

 

 

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ARTICLE II

PURCHASE AND SALE

 

 

 

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ARTICLE III

PURCHASE PRICE

 

 

 

 

 

 

 

 

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ARTICLE IV

BUYER’S INSPECTION

 

 

 

 

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ARTICLE V

CASUALTY; CONSENTS

 

 

 

 

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ARTICLE VI

CONFIDENTIALITY

 

 

 

 

 

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ARTICLE VII

SELLER’S REPRESENTATIONS

 

Seller represents and warrants to Buyer as of the Effective Date and as of the Closing Date the following:

 

 

 

 

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Notwithstanding anything to the contrary in this Agreement, the representations and warranties set forth in this Section 7.9 constitute the sole exclusive representations and warranties of Seller relating to Tax matters.

 

 

 

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ARTICLE VIII

BUYER’S REPRESENTATIONS

 

Buyer represents and warrants to Seller as of the Effective Date and as of the Closing Date the following:

 

 

 

 

 

 

 

 

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ARTICLE IX

COVENANTS AND AGREEMENTS

 

 

 

 

 

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ARTICLE X

TAX MATTERS

 

 

 

 

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ARTICLE XI

CONDITIONS PRECEDENT TO CLOSING

 

 

 

 

 

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ARTICLE XII

RIGHT OF TERMINATION

 

 

 

 

 

 

ARTICLE XIII

CLOSING

 

 

 

 

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ARTICLE XIV

ASSUMPTION AND RETENTION OF OBLIGATIONS AND INDEMNIFICATION

 

 

 

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ARTICLE XV

MISCELLANEOUS

 

 

 

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If to Seller:

Energy XXI USA, Inc.

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attn: ▇▇ ▇▇▇▇

Email Address: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇

With a copy to:

Energy XXI USA, Inc.

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attn: ▇▇▇▇ ▇▇▇▇▇▇

Email Address: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇

If to Buyer:

Grand Isle Corridor, LP

▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇

With a copy to:

Husch ▇▇▇▇▇▇▇▇▇, LLP

▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention:  ▇▇▇▇▇ ▇▇▇▇▇▇

Any Party may, by written notice so delivered to the other Party, change the address or individual to which delivery shall thereafter be made.

 

 

 

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[Signature page follows.]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date.

	BUYER:
	GRAND ISLE CORRIDOR, LP
	By Grand Isle GP, Inc., its general partner
	By:	/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
	Name:	▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
	Title:	President
	SELLER:
	ENERGY XXI USA, INC.
	By:	/s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
	Name:	▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
	Title:	President

 

[Signature page to Purchase and Sale Agreement]

 

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			Page
Article I DEFINITIONS AND Interpretive PROVISIONS			1
	1.1	Definitions	1
	1.2	Certain Interpretive Provisions	25
Article II Lease Characterization			25
	2.1	Lease Characterization	25
	Article III Leased Property		27
	3.1	Lease of Leased Property	27
	3.2	Additional Encumbrances	28
	3.3	Tenant Other Activities	29
Article IV Representations and Warranties			29
	4.1	Representations and Warranties of Landlord	29
	4.2	Representations and Warranties of Tenant	30
Article V Rent			32
	5.1	Base Rent	32
	5.2	Account for Payment of Base Rent	32
	5.3	Payment to Party Claiming Rent	32
	5.4	Past Due Rent	32
Article VI TAXES and IMPOSITIONS			32
	6.1	Taxes and Impositions	32
	6.2	Payment	33
	6.3	Exclusions from Taxes and Impositions	33
	6.4	Payment of Taxes and Impositions	34
	6.5	Abatements	35
	6.6	Right to Contest Taxes	35
	6.7	Limitation on Tenant’s Tax Challenges	35
	6.8	Right to Contest Impositions	36
Article VII Condition of Leased Property; Maintenance			36
	7.1	Tenant Maintenance of Leased Property	36
	7.2	No Trespass	36
Article VIII Utilities; Interconnection AGREEMENTS			36
	8.1	Payment of Utility Charges	36
	8.2	Interconnection Agreements	37
Article IX Use			37
	9.1	Tenant Use	37

	9.2	Operating Requirement	38
Article X PERMITTED CAPITAL IMPROVEMENT AND ADDITIONAL LINES, PARTS AND tenant OTHER ACTIVITIES			38
	10.1	Permitted Capital Improvements and Additional Lines	38
	10.2	Replacement of Parts	42
	10.3	Tenant Other Activities	42
Article XI Regulatory Issues			43
	11.1	Tenant’s Rights	43
	11.2	Landlord’s Rights	45
	11.3	No Application to Condemnation	45
Article XII Mechanic’s Liens			45
	12.1	Tenant’s Obligations	45
	12.2	Landlord’s Obligations	46
Article XIII TENANT PROPERTY			46
	13.1	No Lien	46
	13.2	Sole Risk of Tenant	46
	13.3	Tenant’s Ability to Grant Liens on Tenant Property	47
Article XIV Insurance			47
	14.1	Insurance Coverage	47
	14.3	Waiver of Subrogation	47
	14.4	No Release from Liability	47
Article XV Fire and Other Casualty			48
	15.1	Fire and Other Casualty	48
	15.2	Restoration Conditions	50
Article XVI Condemnation			50
	16.1	Condemnation Damages and Awards	50
	16.2	Apportionment of Award, Termination and Purchase Offer	51
	16.3	Restoration Conditions	52
Article XVII LIMITS ON TRANSFERS, ASSIGNMENTS, LEASES AND LIENS			53
	17.1	Assignment and Subletting by Tenant	53
	17.2	No Restrictions on Indebtedness or Liens of Tenant or Tenant Guarantors	55
	17.3	Cure Rights Upon Assignee Default	56
	17.4	Release of Tenant and Tenant Guarantor	56
	17.5	Transfers and Liens by Landlord and Equity Investors	56
	17.6	Non-Consent Matters	59

Article XVIII Tenant’s Surrender of Leased Property			60
	18.1	Surrender	60
Article XIX Assignment of Lease			60
	19.1	Assignment of Lease	60
Article XX Mortgage Subordination and Non-Disturbance			60
	20.1	Mortgage Subordination	60
Article XXI Indemnification			61
	21.1	Indemnification by Tenant	61
	21.2	Release and Indemnification by Landlord	62
	21.3	Concurrent Negligence	63
	21.4	Survival	63
	21.5	Claims Procedure	64
Article XXII Environmental Laws			64
	22.1	Environmental Undertakings	64
	22.2	Environmental Covenants	64
	22.3	Tenant Environmental Indemnity	65
	22.4	Landlord Environmental Indemnity	66
	22.5	Claims Procedure	67
	22.6	Survival	67
Article XXIII DefaultS AND REMEDIES			67
	23.1	Tenant Events of Default	67
	23.2	Landlord’s Remedies for a Tenant Event of Default	69
	23.3	Landlord Events of Default	73
	23.4	Tenant’s Remedies for a Landlord Event of Default	74
	23.5	Mitigation of Damages	76
Article XXIV Notice			76
	24.1	Notices	76
	24.2	Deemed Receipt	77
	24.3	Delivery; Time of Notice	77

Article XXV RENEWAL AND End of Term Options, Right of First Refusal, and other Preferential Purchase Rights			77
	25.1	Renewal Option	77
	25.2	Tenant as Operator After Term	80
	25.3	Right of First Refusal With Respect to the Transfer of All of the Leased Property	81
	25.4	Right of First Refusal With Respect to a Landlord Lease Transaction	84
	25.5	Application of Certain Right of First Refusal Rights to a Foreclosure Sale	86
Article XXVI Miscellaneous Provisions			87
	26.1	Memorandum/Notice of Lease	87
	26.2	Force Majeure	87
	26.3	Consequential Damages	87
	26.4	Holding Over	87
	26.5	Quiet Enjoyment	87
	26.6	Cost and Expense	88
	26.7	Access; Reporting	88
	26.8	Accord and Satisfaction	91
	26.9	Prevailing Party	91
	26.10	Confidentiality	91
	26.11	Consent of Landlord and Tenant	92
	26.12	Permitted Tenant Contests	93
	26.13	Waiver	93
	26.14	Interpretation	93
	26.15	No Derivative Liability	94
	26.16	Successors and Assigns	94
	26.17	No Offer; Entire Agreement	94
	26.18	Headings	94
	26.19	Counterparts	94
	26.20	Governing Law; Venue; Service of Process; Waiver of Jury Trial	95
	26.21	Time of the Essence	95
	26.22	Estoppel Certificates	96
Article XXVII Other Agreements of Landlord			96
	27.1	Landlord Covenants	96
Article XXVIII Other Agreements of tenant			97
	28.1	Tenant Covenants	97

	LANDLORD:
	GRAND ISLE CORRIDOR, LP,
	a Delaware limited partnership
	By: GRAND ISLE GP, INC., a Delaware corporation, its sole general partner
	Name:
	Title:

	TENANT:
	ENERGY XXI GIGS SERVICES, LLC,
	a Delaware limited liability company
	Name:
	Title: