Exhibit 10.1

$25,000,000

SARATOGA RESOURCES, INC.

12½% Senior Secured Notes due 2016

PURCHASE AGREEMENT

November 29, 2012

IMPERIAL CAPITAL, LLC

2000 Avenue of the Stars

9th Floor, South Tower

Los Angeles, California 90067

Ladies and Gentlemen:

Saratoga Resources, Inc., a Texas corporation (the “Company”), and each of the
Guarantors (as hereinafter defined) hereby agree with you as follows:

1.

Issuance of Notes.  Subject to the terms and conditions herein contained, the
Company proposes to issue and sell to Imperial Capital, LLC (the “Initial
Purchaser”) $25,000,000 aggregate principal amount of its 12½% Senior Secured
Notes due 2016 (the “Notes”).  The Company previously issued $127,500,000
aggregate principal amount of 12½% Senior Secured Notes due 2016.  The Notes
will be issued pursuant to that certain indenture (the “Base Indenture”), dated
as of July 12, 2011, to be amended by the First Supplemental Indenture, to be
dated as of December 4, 2012 (the “First Supplemental Indenture” and, together
with the Base Indenture, the “Indenture”), each by and among the Company, the
Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as
trustee (the “Trustee”).  Capitalized terms used, but not defined herein, shall
have the meanings set forth in the “Description of Notes” section of the Final
Offering Circular (as hereinafter defined).

The Notes will be offered and sold to the Initial Purchaser pursuant to an
exemption from the registration requirements of the Securities Act of 1933, as
amended, and the rules and regulations of the Securities and Exchange Commission
(the “SEC”) thereunder (collectively, the “Securities Act”), including without
limitation exemption under Rule 144A and Regulation S. Upon original issuance
thereof, and until such time as the same is no longer required under the
applicable requirements of the Securities Act, the Notes shall bear the legends
set forth in the final offering circular, dated the date hereof  (the “Final
Offering Circular”).  The Company has prepared (i) a preliminary offering
circular, dated November 14, 2012 (the “Preliminary Offering Circular”), (ii) a
pricing term sheet, dated the date hereof, attached hereto as Schedule I, which
includes pricing terms and other information with respect to the Notes (the
“Pricing Supplement”), and (iii) the Final Offering Circular, in each case,
relating to the offer and sale of the Notes (the “Offering”).  All references in
this Agreement to the Preliminary Offering Circular, the Time of Sale Document
or the Final Offering Circular include, unless expressly stated otherwise, (i)
all amendments or supplements thereto, (ii) all documents, financial statements
and schedules and other information contained or incorporated by reference
therein (and references in this Agreement to such information being “contained,”
“included” or “stated” (and other references of like import) in the Preliminary
Offering Circular, the Time of Sale Document or the Final Offering Circular
shall be deemed to mean all such information contained or incorporated by
reference therein), (iii) any electronic Time of Sale Document or Final Offering
Circular and (iv) any offering circular “wrapper” to be used in connection with
offers to sell, solicitations of offers to buy or sales of the Notes in non-U.S.
jurisdictions.  The Preliminary Offering Circular as supplemented by the Pricing
Supplement are collectively referred to herein as the “Time of Sale Document.”

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2.

Terms of Offering.  The Initial Purchaser has advised the Company, and the
Company understands, that the Initial Purchaser will make offers to sell some or
all of the Notes purchased by the Initial Purchaser hereunder on the terms set
forth in the Final Offering Circular to persons (the “Subsequent Purchasers”)
whom the Initial Purchaser reasonably believes (i) are “qualified institutional
buyers” (“QIBs”) (as defined in Rule 144A under the Securities Act), or (ii) are
not “U.S. persons” (as defined in Regulation S under the Securities Act) and in
compliance with the laws applicable to such persons in jurisdictions outside of
the United States, with the Notes being offered and sold to the Subsequent
Purchasers pursuant to an exemption from the registration requirements of the
Securities Act (the “Exempt Resales”).

Holders of the Notes (including Subsequent Purchasers) will have the
registration rights set forth in the registration rights agreement applicable to
the Notes (the “Registration Rights Agreement”) to be executed on and dated as
of the Closing Date (as hereinafter defined). Pursuant to the Registration
Rights Agreement, the Company will agree, among other things, to file with the
SEC (a) a registration statement under the Securities Act (the “Exchange Offer
Registration Statement”) relating to notes to be offered in exchange for the
Notes (the “Exchange Notes”) which shall be identical to the Notes, except that
the Exchange Notes shall have been registered pursuant to the Exchange Offer
Registration Statement and will not be subject to restrictions on transfer or
contain additional interest provisions, (such offer to exchange being referred
to as the “Exchange Offer”), and/or (b) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the “Shelf
Registration Statement”) relating to the resale by certain holders of the Notes.
 If the Company fails to satisfy its obligations under the Registration Rights
Agreement, it will be required to pay additional interest to the holders of the
Notes under certain circumstances to be set forth in the Registration Rights
Agreement.

The payment of principal of, premium, if any, and interest on the Notes will be
fully and unconditionally guaranteed on a senior secured basis, jointly and
severally, by (i) the entities listed on the signature pages hereof as
“Guarantors” and (ii) any subsidiary of the Company formed or acquired after the
Closing Date that executes an additional guarantee in accordance with the terms
of the Indenture, and their respective successors and assigns (collectively, the
“Guarantors”), pursuant to their guarantees (the “Guarantees”). The Notes and
the Guarantees attached thereto are herein collectively referred to as the
“Securities”; and the Exchange Notes and the Guarantees attached thereto (the
“Exchange Guarantees”) are herein collectively referred to as the “Exchange
Securities.”

The Securities and the Exchange Securities will be secured, subject to Permitted
Liens (as defined in the Indenture), by liens on the Collateral (as defined in
the Security Documents (as defined below)) as more particularly described in the
Time of Sale Document and documented by that certain security agreement, dated
as of July 12, 2011 (the “Security Agreement”), and other instruments evidencing
or creating a security interest (collectively, with the Security Agreement, the
“Security Documents”) in favor of The Bank of New York Mellon Trust Company,
N.A. as collateral agent (in such capacity, the “Collateral Agent”), for its
benefit and the benefit of the Trustee and the holders of the Notes.

This Agreement, the Indenture (including the First Supplemental Indenture), the
Security Agreement, the Security Documents, the Registration Rights Agreement,
the Notes, the Guarantees, the Engagement Letter dated November 12, 2012 (the
“Engagement Letter”) between the Company and the Initial Purchaser, the Exchange
Notes and the Exchange Guarantees are collectively referred to herein as the
“Documents.”  The issuance and the sale of the Securities, the issuance of the
Exchange Securities and the Exchange Guarantees and the payment of transaction
costs and all other transactions contemplated hereby and by the Time of Sale
Document are collectively referred to herein as the “Transactions.”  Nothing in
this Agreement should be read to limit or otherwise modify the terms and
provisions of the Engagement Letter, provided that, in the event any terms of
the Engagement Letter are inconsistent with or contradict any terms of this
Agreement, this Agreement shall govern.

3.

Purchase, Sale and Delivery.  On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the Initial
Purchaser, and the Initial Purchaser agrees to purchase from the Company, the
Securities at a purchase price of 95.58% of the principal amount thereof.
 Delivery to the Initial Purchaser of and payment for the Securities shall be
made at a closing (the “Closing”) to be held at 10:00 a.m., New York time, on
December 4, 2012 (the “Closing Date”) at the New York offices of Proskauer Rose
LLP, Eleven Times Square, New York, New York 10036 (or such other place as shall
be reasonably acceptable to the Initial Purchaser); provided, however, that if
the Closing has not taken place on the Closing Date because of a failure to
satisfy one or more of the conditions

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specified in Section 7 hereof and this Agreement has not otherwise been
terminated by the Initial Purchaser in accordance with its terms, “Closing Date”
shall mean 10:00 a.m. New York time on the first business day following the
satisfaction (or waiver) of all such conditions after notification by the
Company to the Initial Purchaser of the satisfaction (or waiver) of such
conditions.

The Company shall deliver to the Initial Purchaser one or more certificates
representing the Securities, registered in such names and denominations as the
Initial Purchaser may request, against payment by the Initial Purchaser of the
purchase price therefor by immediately available federal funds bank wire
transfer to such bank account or accounts as the Company shall designate to the
Initial Purchaser at least two business days prior to the Closing.  The
certificates representing the Securities shall be made available to the Initial
Purchaser for inspection at the New York offices of Proskauer Rose LLP, Eleven
Times Square, New York, New York 10036 (or such other place as shall be
reasonably acceptable to the Initial Purchaser) not later than 10:00 a.m. New
York time one business day immediately preceding the Closing Date.  Securities
to be represented by one or more global securities in book-entry form will be
deposited on the Closing Date, by or on behalf of the Company, with The
Depository Trust Company (“DTC”) or its designated custodian, and registered in
the name of Cede & Co.

4.

Representations and Warranties of the Company and the Guarantors.  The Company
and the Guarantors jointly and severally represent and warrant to, and agree
with, the Initial Purchaser that, as of the date hereof and as of the Closing
Date (except to the extent expressly made as of a specified date, in which case
as of such date):

(a)

Limitation on Offering Materials.  The Company has not prepared, made, used,
authorized, approved or distributed and will not, and will not cause or allow
its agents or representatives to, prepare, make, use, authorize, approve or
distribute any written communication that constitutes an offer to sell or a
solicitation of an offer to buy the Securities, or otherwise is prepared to
market the Securities, other than (i) the Time of Sale Document, (ii) the Final
Offering Circular and (iii) any marketing materials (including any roadshow or
investor presentation materials) or other written communications, in each case
used in accordance with Section 5(c) hereof (each such communication by the
Company or its agents or representatives described in this clause (iii), a
“Company Additional Written Communication”).

(b)

No Material Misstatement or Omission.  (i) The Time of Sale Document, as of the
date thereof, did not and, at all times subsequent thereto through the Closing
Date, will not include any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (ii) the Final
Offering Circular, as of the date thereof, did not and, at the time of the sale
of the Securities and at the Closing Date, will not include any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (iii) each such Company Additional Written
Communication, when taken together with the Time of Sale Document, did not, and,
at the Closing Date, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except in
each case that the representations and warranties set forth in this paragraph do
not apply to statements or omissions made in reliance upon and in conformity
with information relating to the Initial Purchaser and furnished to the Company
in writing by the Initial Purchaser expressly for use in the Time of Sale
Document or the Final Offering Circular as set forth in Section 12.  No
injunction or order has been issued that either (i) asserts that any of the
Transactions is subject to the registration requirements of the Securities Act
or (ii) would prevent or suspend the issuance or sale of any of the Securities
or the use of the Time of Sale Document or the Final Offering Circular in any
jurisdiction. No statement of material fact included in the Final Offering
Circular has been omitted from the Time of Sale Document, and no statement of
material fact included in the Time of Sale Document has been omitted from the
Final Offering Circular.

(c)

Reporting Compliance.  The Company is subject to, and is in full compliance in
all material respects with, the reporting requirements of Section 13 and Section
15(d), as applicable, of the Exchange Act.

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(d)

Preparation of the Financial Statements.  The audited consolidated financial
statements and related notes and supporting schedules of the Company and the
Subsidiaries contained in the Time of Sale Document and the Final Offering
Circular (the “Financial Statements”) present fairly the financial position,
results of operations and cash flows of the Company and its consolidated
Subsidiaries, as of the respective dates and for the respective periods to which
they apply and have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved and the requirements of
Regulation S-X. The financial data set forth under the caption “Summary
Historical Consolidated and Combined Financial and Other Data” in the Time of
Sale Document and the Final Offering Circular has been prepared on a basis
consistent with that of the Financial Statements and present fairly the
financial position and results of operations of the Company and its consolidated
Subsidiaries as of the respective dates and for the respective periods
indicated.  All other financial, statistical and market and industry data and
forward-looking statements (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in the Time of Sale Document
and the Final Offering Circular are fairly and accurately presented, are based
on or derived from sources that the Company believes to be reliable and accurate
and are presented on a reasonable basis.  Notwithstanding anything to the
contrary in this subsection, with respect to all statistical and industry data
and forward-looking statements, the Company and the Subsidiaries only warrant
that such information was prepared based on assumptions believed to be
reasonable at the time.

(e)

Disclosure Controls and Procedures.  The Company and the Subsidiaries maintain
an effective system of “disclosure controls and procedures” (as defined in Rule
13a-15(e) of the Exchange Act) that is designed to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure.  The Company and the Subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.  The statements
relating to disclosure controls and procedures made by the principal executive
officers (or their equivalents) and principal financial officers (or their
equivalents) of the Company in the certifications required by the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated in connection therewith
are materially complete and correct.

(f)

Independent Accountants.  MaloneBailey, LLP, who have certified and expressed
their opinion with respect to the financial statements including the related
notes thereto and supporting schedules contained in the Time of Sale Document
and the Final Offering Circular, are (i) an independent registered public
accounting firm with respect to the Company and the Subsidiaries within the
applicable rules and regulations adopted by the SEC and as required by the
Securities Act, (ii) in compliance with the applicable requirements relating to
the qualification of accountants under Regulation S-X and (iii) a registered
public accounting firm as defined by the Public Company Accounting Oversight
Board (United States) whose registration has not been suspended or revoked and
who has not requested such registration to be withdrawn.

(g)

No Material Adverse Change.  Subsequent to the respective dates as of which
information is contained in the Time of Sale Document and the Final Offering
Circular, except as disclosed in the Time of Sale Document and the Final
Offering Circular, (i) neither the Company nor any of the Subsidiaries has
incurred any liabilities, direct or contingent, including without limitation any
losses or interference with its business from fire, explosion, flood,
earthquakes, accident or other calamity, whether or not covered by insurance, or
from any strike, labor dispute or court or governmental action, order or decree,
that are material, individually or in the aggregate, to the Company and the
Subsidiaries, taken as a whole, or has entered into any transactions not in the
ordinary course of business, (ii) there has not been any material decrease in
the capital stock or any material increase in any short-term or long-term
indebtedness of the Company or the Subsidiaries, or any payment of or
declaration to pay any dividends or any other distribution with respect to the
Company and (iii) there has not been any material adverse change in the
properties, business, prospects, operations, earnings, assets, liabilities or
condition (financial or otherwise) of the Company and the Subsidiaries, taken as
a whole (each of clauses (i), (ii) and (iii), a “Material Adverse Change”). To
the Company’s knowledge, there is no event that is reasonably likely to occur,
which if it were to occur, would,

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individually or in the aggregate, have a Material Adverse Effect (as hereinafter
defined) except as disclosed in the Time of Sale Document and the Final Offering
Circular.

(h)

Rating Agencies.  No “nationally recognized statistical rating organization” (as
defined in Rule 436(g)(2) under the Securities Act) (i) has imposed (or has
informed the Company that it is considering imposing) any condition (financial
or otherwise) to retain any rating assigned to the Company or any of the
Subsidiaries or to any securities of  the Company or any of the Subsidiaries or
(ii) has notified the Company that it is considering (A) the downgrading,
suspension, or withdrawal of, or any review (or of any potential or intended
review) for a possible change in, any rating so assigned (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
or (B) any adverse or negative change in the outlook for any rating of the
Company or any of the Subsidiaries or any securities of the Company or any of
the Subsidiaries.

(i)

Subsidiaries. Each corporation, partnership or other entity in which the
Company, directly or indirectly through any of its subsidiaries, owns more than
fifty percent (50%) of any class of equity securities or interests is listed on
Schedule II attached hereto (the “Subsidiaries”).

(j)

Incorporation and Good Standing of the Company and its Subsidiaries; MAE.  The
Company and each of the Subsidiaries (i) has been duly organized or formed, as
the case may be, is validly existing and is in good standing under the laws of
its jurisdiction of organization, (ii) has all requisite power and authority to
carry on its business and to own, lease and operate its properties and assets as
described in the Time of Sale Document and in the Final Offering Circular and
(iii) is duly qualified or licensed to do business and is in good standing as a
foreign corporation, partnership or other entity as the case may be, authorized
to do business in each jurisdiction in which the nature of such businesses or
the ownership or leasing of such properties requires such qualification, except
where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on (A) the properties, business,
prospects, operations, earnings, assets, liabilities or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, (B) the
ability of the Company or any Subsidiary to perform its obligations in all
material respects under any Document, (C) the enforceability of any Security
Document or the attachment, perfection or priority of any of the liens or
security interests intended to be created thereby, (D) the validity or
enforceability of any of the Documents, or (E) the consummation of any of the
Transactions (each, a “Material Adverse Effect”).

(k)

Capitalization and Other Capital Stock Matters.  All of the issued and
outstanding shares of capital stock of the Company and each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of, and are not subject to, any preemptive or
similar rights.  The table under the caption “Capitalization” in the Time of
Sale Document and the Final Offering Circular (including the footnotes thereto)
sets forth, as of its date, the capitalization of the Company other than
subsequent issuances, if any, pursuant to employee benefit plans or upon
exercise of outstanding options or warrants as described in the Final Offering
Circular.  All of the outstanding shares of capital stock or other equity
interests of each of the Subsidiaries are owned, directly or indirectly, by the
Company, free and clear of all liens, security interests, mortgages, pledges,
charges, equities, claims or restrictions on transferability or encumbrances of
any kind (collectively, “Liens), other than those Permitted Liens and those
imposed by the Securities Act and the securities or “Blue Sky” laws of certain
U.S. state or non-U.S. jurisdictions. Except as disclosed in the Time of Sale
Document and the Final Offering Circular, there are no outstanding (A) options,
warrants or other rights to purchase from the Company or any of the
Subsidiaries, (B) agreements, contracts, arrangements or other obligations of
the Company or any of the Subsidiaries to issue or (C) other rights to convert
any obligation into or exchange any securities for, in the case of each of
clauses (A) through (C), shares of capital stock of or other ownership or equity
interests in the Company or any of the Subsidiaries.

(l)

Legal Power and Authority.  Each of the Company and the Guarantors has all
necessary corporate or limited liability company (as applicable) power and
authority to execute, deliver and perform their respective obligations under the
Documents to which they are a party and to consummate the Transactions.

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(m)

This Agreement, the Base Indenture, the First Supplemental Indenture, the
Registration Rights Agreement, the Security Agreement and the Security
Documents.  This Agreement has been duly and validly authorized, executed and
delivered by the Company and the Guarantors.  Each of the Base Indenture, the
First Supplemental Indenture, the Registration Rights Agreement, the Security
Agreement and the Security Documents has been duly and validly authorized by the
Company and the Guarantors.  Each of the First Supplemental Indenture and the
Registration Rights Agreement, when executed and delivered by the Company and
the Guarantors, will constitute a legal, valid and binding obligation of each of
the Company and Guarantors, enforceable against each of the Company and the
Guarantors in accordance with its terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, receivership,
moratorium, fraudulent conveyance, fraudulent transfer or other similar laws now
or hereafter in effect relating to creditors’ rights generally, (ii) general
principles of equity (whether applied by a court of law or equity) and the
discretion of the court before which any proceeding therefor may be brought and
(iii) with respect to the Registration Rights Agreement, rights to indemnity or
contribution thereunder, federal and state securities laws and public policy
considerations.  When executed and delivered, this Agreement, the First
Supplemental Indenture and the Registration Rights Agreement will conform in all
material respects to the descriptions thereof in the Time of Sale Document and
the Final Offering Circular. When the First Supplemental Indenture is executed
and delivered by the Company and the Guarantors, the Indenture will meet the
requirements for qualification under the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the SEC thereunder (collectively, the
“TIA”).

(n)

Notes.  The Notes and the Exchange Notes have each been duly and validly
authorized by the Company and, in the case of the Notes, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchaser in accordance with the terms of this
Agreement and the Indenture, will constitute legal, valid and binding
obligations of the Company, entitled to the benefit of the Indenture, the
Security Agreement, the other Security Documents and the Registration Rights
Agreement, and enforceable against the Company in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.  When executed and delivered, the
Notes will conform in all material respects to the descriptions thereof in the
Time of Sale Document and the Final Offering Circular and will be in the form
contemplated by the Indenture.

(o)

Guarantees.  The Guarantees and the Exchange Guarantees have been duly and
validly authorized by the Guarantors and, when issued and executed by the
Guarantors, will have been duly executed, authenticated, issued and delivered
and, when the Notes and the Exchange Notes (as applicable) have been issued,
executed and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchaser in accordance with the terms
of this Agreement, will constitute legal, valid and binding obligations of the
Guarantors, entitled to the benefit of the Indenture, the Security Agreement,
the other Security Documents and the Registration Rights Agreement, and
enforceable against the Guarantors in accordance with their terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance, fraudulent
transfer or other similar laws now or hereafter in effect relating to creditors’
rights generally and (ii) general principles of equity (whether applied by a
court of law or equity) and the discretion of the court before which any
proceeding therefor may be brought.  When executed and delivered, the Guarantees
will conform in all material respects to the descriptions thereof in the Time of
Sale Document and the Final Offering Circular.

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(p)

Collateral.

(i)

The Liens granted on the Collateral pursuant to the Security Documents
constitute valid and enforceable perfected Liens on the Collateral securing the
Obligations under the Notes and the Guarantees, in each case prior and superior
in right to any other Person therein (other than any Person holding a Permitted
Lien), except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.

(ii)

As of the Closing Date, there will be no currently effective financing
statement, security agreement, chattel mortgage, real estate mortgage or other
document filed or recorded with any filing records, registry, or other public
office, that purports to cover, affect or give notice of any present or future
Lien on any assets or property of the Company, any Guarantor or any Subsidiary
or any rights thereunder, except for Permitted Liens.

(iii)

All the information certified by an officer of the Company in the perfection
certificate dated as of the Closing Date and delivered by such officer on behalf
of the Company is true and correct in all material respects as of the Closing
Date.

(q)

Compliance with Existing Instruments.  Neither the Company nor any of the
Subsidiaries is (i) in violation of its certificate of incorporation, by-laws or
other organizational documents (the “Charter Documents”); (ii) in violation of,
to the extent applicable to any of them or any of their respective properties,
any U.S. federal, state or local statute, law (including, without limitation,
common law) or ordinance, or any judgment, decree, rule, regulation, order or
injunction (collectively, “Applicable Law”) of any U.S. federal, state, local or
other governmental or regulatory authority, governmental or regulatory agency or
body, court, arbitrator or self-regulatory organization (each, a “Governmental
Authority”); or (iii) in breach of or default under any bond, debenture, note,
loan or other evidence of indebtedness, indenture, mortgage, deed of trust,
lease or any other agreement or instrument to which any of them is a party or by
which any of them or their respective property is bound (collectively, the
“Applicable Agreements”), except, in the case of clauses (ii) and (iii), for
such violations, breaches or defaults that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  All
Applicable Agreements are in full force and effect and are legal, valid and
binding obligations of the Company and/or the Subsidiaries, as the case may be,
other than as disclosed in the Time of Sale Document and the Final Offering
Circular, except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought. To the knowledge of the Company
and the Subsidiaries, there exists no condition that, with the passage of time
or otherwise, would constitute (a) a violation of such Charter Documents or
Applicable Laws, (b) a breach of or default by the Company or the Subsidiaries
under any Applicable Agreement, except for such breaches or defaults that would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, or a “Debt Repayment Triggering Event” (as defined below) under
any Applicable Agreement or (c) result in the imposition of any penalty of a
material nature or the acceleration of any indebtedness of a material nature. As
used herein, a “Debt Repayment Triggering Event” means any event or condition
that gives, or with the giving of notice or lapse of time would give, the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of the
Subsidiaries or any of their respective properties.

(r)

No Conflicts.  Neither the execution, delivery or performance of the Documents
nor the consummation of any of the Transactions will conflict with, violate,
constitute a breach of or a default (with the passage of time or otherwise) or a
Debt Repayment Triggering Event under, or result in the imposition of a Lien on
any assets of the Company or any of its Subsidiaries (except for Permitted Liens
pursuant to the Indenture), the imposition of any penalty or a Debt Repayment
Triggering Event under or pursuant to (i) the Charter

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Documents, (ii) any Applicable Agreement, (iii) any Applicable Law or (iv) any
order, writ, judgment, injunction, decree, determination or award binding upon
or affecting the Company and the Guarantors, except, in the case of clauses (ii)
and (iii), as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Upon consummation of the Offering
and the Transactions, no Default or Event of Default will exist.

(s)

No Consents.  No consent, approval, authorization, order, filing or registration
of or with any Governmental Authority or third party is required for execution,
delivery or performance of the Documents or the consummation of the Transactions
by the Company or the Subsidiaries under Applicable Law, except (i) those that
have been official or made, as the case may be, that are in full force and
effect, (ii) as may be required under the securities or “Blue Sky” laws of U.S.
state or non-U.S. jurisdictions or other non-U.S. laws applicable to the
purchase of the Securities outside the U.S. in connection with the Transactions,
(iii) those contemplated by the Registration Rights Agreement and the Security
Documents or (iv) the filing of a Current Report on Form 8-K with the SEC as may
be required under the Securities Act and the Exchange Act, as the case may be,
regarding the Documents and the Transactions.

(t)

No Material Applicable Laws or Proceedings.  There is no action, claim, suit,
demand, hearing, notice of violation or deficiency, or proceeding pending or, to
the knowledge of the Company or any of the Subsidiaries, threatened or
contemplated by Governmental Authorities or threatened by others (collectively,
“Proceedings”) that would, (A) as of the date hereof and at the Closing Date,
restrain, enjoin, prevent or interfere with the consummation of the Offering or
any of the Transactions or (B) individually or in the aggregate, have a Material
Adverse Effect.

(u)

All Necessary Permits.  Each of the Company and the Subsidiaries possess all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
Governmental Authorities, presently required or necessary to own or lease, as
the case may be, and to operate its properties and to carry on its businesses as
now or proposed to be conducted as described in the Time of Sale Document and
the Final Offering Circular (“Permits”), except where the failure to possess
such Permits would not, individually or in the aggregate, have a Material
Adverse Effect; each of the Company and the Subsidiaries has fulfilled and
performed all of its obligations with respect to such Permits, except where the
failure to so fulfill and perform would not, individually or in the aggregate,
have a Material Adverse Effect; to the knowledge of the Company and the
Subsidiaries, no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination of any such Permit or has resulted,
or after notice or lapse of time would result, in any other material impairment
of the rights of the holder of any such Permit; and none of the Company or the
Subsidiaries has received or has any reason to believe it will receive any
notice of any proceeding relating to revocation or modification of any such
Permit, except as described in the Time of Sale Document and the Final Offering
Circular or except where such revocation or modification would not, individually
or in the aggregate, have a Material Adverse Effect.

(v)

Title to Properties.  Each of the Company and the Subsidiaries has good,
marketable and valid title to all real property owned by it and good title to
all personal property owned by it and good and valid title to all leasehold
estates in real and personal property being leased by it and, as of the Closing
Date, will be free and clear of all Liens other than Permitted Liens. All
Applicable Agreements to which the Company or any of the Subsidiaries is a party
or by which any of them is bound are valid and enforceable against each of the
Company or such Subsidiary, as applicable, and, to the knowledge of the Company
and the Subsidiaries, are valid and enforceable against the other party or
parties thereto and are in full force and effect with only such exceptions as
would not, individually or in the aggregate, have a Material Adverse Effect;
provided, however, that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance, fraudulent transfer or other similar laws now or hereafter in effect
relating to creditors’ rights generally and (ii) general principles of equity
(whether applied by a court of law or equity) and the discretion of the court
before which any proceeding therefor may be brought.

8

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(w)

Tax Law Compliance.  All Tax (as hereinafter defined) returns required to be
filed by the Company and each of the Subsidiaries have been filed and all such
returns are true, complete and correct in all material respects.  All material
Taxes that are due from the Company and the Subsidiaries have been paid other
than those (i) currently payable without penalty or interest or (ii) being
contested in good faith and by appropriate proceedings and for which adequate
accruals have been established in accordance with generally accepted accounting
principles of the United States, applied on a consistent basis throughout the
periods involved (“GAAP”). To the knowledge of the Company, there are no actual
or proposed Tax assessments against the Company or any of the Subsidiaries that
would, individually or in the aggregate, have a Material Adverse Effect. The
accruals on the books and records of the Company and the Subsidiaries in respect
of any material Tax liability for any period not finally determined are adequate
to meet any assessments of Tax for any such period. For purposes of this
Agreement, the term “Tax” and “Taxes” shall mean all U.S. and non-U.S. federal,
state, local and taxes, and other assessments of a similar nature (whether
imposed directly or through withholding), including any interest, additions to
tax or penalties applicable thereto.

(x)

Intellectual Property Rights.  Each of the Company and the Subsidiaries owns, or
is licensed under, and has the right to use, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, domain names and trade names
(collectively, “Intellectual Property”) necessary for the conduct of its
businesses as presently carried out and described in the Final Offering
Circular, and, as of the Closing Date, the Intellectual Property will be free
and clear of all Liens, other than Permitted Liens.  The Company is not a party
to, or bound by, any options, licenses or agreements with respect to the
intellectual property rights of any other person or entity that are necessary to
be described in the Time of Sale Document or the Final Offering Circular to
avoid a material misstatement or omission and are not described therein.  No
claims or notices of any potential claim have been received by the Company or
any Subsidiary challenging the use of any such Intellectual Property by the
Company or any of the Subsidiaries or questioning the validity or effectiveness
of any Intellectual Property or any license or agreement related thereto, other
than any claims that, if successful, would not, individually or in the
aggregate, have a Material Adverse Effect.  None of the intellectual property
used by the Company or any of the Subsidiaries has been obtained or is hereby
used by the Company or any of the Subsidiaries in violation of any contractual
obligation binding on the Company or any of the Subsidiaries or, to the Company
or any of the Subsidiaries’ knowledge, its officers, directors or employees or
otherwise in violation of the rights of any person.

(y)

ERISA Matters.  Each of the Company, the Subsidiaries and each ERISA Affiliate
(as hereinafter defined) has fulfilled its obligations, if any, under the
minimum funding standards of Section 302 of the United States Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), with respect to
each “pension plan” (as defined in Section 3(2) of ERISA), subject to Section
302 of ERISA, which the Company, the Subsidiaries or any ERISA Affiliate
sponsors or maintains, or with respect to which it has (or within the last three
years had) any obligation to make contributions, and each such plan is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”).  None of
the Company, the Subsidiaries or any ERISA Affiliate has incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA.  “ERISA Affiliate” means a corporation, trade or business that is,
along with the Company or any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Section 414 of the Code or Section 4001 of ERISA.

(z)

Labor Matters.  (i) Neither the Company nor any of the Subsidiaries is party to
or bound by any collective bargaining agreement with any labor organization;
(ii) there is no union representation question existing with respect to the
employees of the Company or the Subsidiaries, and, to the knowledge of the
Company, no union organizing activities are taking place that, could,
individually or in the aggregate, have a Material Adverse Effect; (iii) to the
knowledge of the Company, no union organizing or decertification efforts are
underway or threatened against the Company or the Subsidiaries; (iv) no labor
strike, work stoppage, slowdown or other material labor dispute is pending
against the Company or the Subsidiaries, or, to the Company’s knowledge,
threatened against the Company or the Subsidiaries; (iv) there is no worker’s

9

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compensation liability, experience or matter that could be reasonably expected
to have a Material Adverse Effect; (v) to the knowledge of the Company, there is
no threatened or pending liability against the Company or the Subsidiaries
pursuant to the Worker Adjustment Retraining and Notification Act of 1988, as
amended (“WARN”), or any similar state or local law; (vi) there is no
employment-related charge, complaint, grievance, investigation, unfair labor
practice claim or inquiry of any kind, pending against the Company or the
Subsidiaries that could, individually or in the aggregate, have a Material
Adverse Effect; (vii) to the knowledge of the Company and the Subsidiaries, no
employee or agent of the Company or the Subsidiaries has committed any act or
omission giving rise to liability for any violation identified in subsection (v)
and (vi) above, other than such acts or omissions that would not, individually
or in the aggregate, have a Material Adverse Effect; and (viii) no term or
condition of employment exists through arbitration awards, settlement agreements
or side agreement that is contrary to the express terms of any applicable
collective bargaining agreement.

(aa)

Compliance with Environmental Laws.  Each of the Company and the Subsidiaries is
(i) in compliance with any and all applicable U.S. or non-U.S. federal, state
and local laws and regulations relating to health and safety, or the pollution
or the protection of the environment or hazardous or toxic substances of wastes,
pollutants or contaminants (“Environmental Laws”), (ii) has received and is in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its respective businesses and (iii) has
not received notice of, and is not aware of, any actual or potential liability
for damages to natural resources or the investigation or remediation of any
disposal, release or existence of hazardous or toxic substances or wastes,
pollutants or contaminants, in each case except where such non-compliance with
Environmental Laws, failure to receive and comply with required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect.  Neither the Company nor any of the
Subsidiaries has been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, or any similar U.S. or non-U.S. state or local Environmental Laws or
regulation requiring the Company or any of the Subsidiaries to investigate or
remediate any pollutants or contaminants, except where such requirements would
not, individually or in the aggregate, have a Material Adverse Effect, whether
or not arising from transactions in the ordinary course of business.  In the
ordinary course of its business, the Company periodically reviews the effects of
Environmental Laws on the business, operations and properties of the Company and
the Subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties).  On the
basis of such review, the Company has reasonably concluded that such associated
costs would not have a Material Adverse Effect.

(bb)

Insurance.  Each of the Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged.  All policies of insurance insuring the Company or any of the
Subsidiaries or their respective businesses, assets, employees, officers and
directors are in full force and effect.  The Company and the Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects, and there are no claims by the Company or any of the Subsidiaries
under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.  Neither the
Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any such Subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not,
individually or in the aggregate, have a Material Adverse Effect.

(cc)

Accounting System.  The Company and each of the Subsidiaries make and keep
accurate books and records and maintain a system of internal accounting controls
and procedures sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP, and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for

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assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any material differences. The
Company’s independent auditors and board of directors have been advised of: (i)
all “material weaknesses” and “significant deficiencies” (each, as defined in
Rule 12b-2 of the Exchange Act), if any, in the design or operation of internal
controls which could adversely affect the Company’s ability to record, process,
summarize and report financial data and (ii) all fraud, if any, whether or not
material, that involves management or other employees who have a role in the
Company’s internal controls (whether or not remediated); all such material
weaknesses and significant deficiencies, if any, have been disclosed in the Time
of Sale Document and the Final Offering Circular in all material respects; and
since the date of the most recent evaluation of such disclosure controls and
procedures and internal controls, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

(dd)

Use of Proceeds; Solvency; Going Concern.  All indebtedness represented by the
Securities is being incurred for proper purposes and in good faith. On the
Closing Date, after giving pro forma effect to the Offering and the use of
proceeds therefrom described under the caption “Use of Proceeds” in the Time of
Sale Document and Final Offering Circular, the Company and each Guarantor will
be Solvent (as hereinafter defined).  As used in this paragraph, the term
“Solvent” means, with respect to a particular date, that on such date (i) the
present fair market value (or present fair saleable value) of the assets of  the
Company and each Guarantor is not less than the total amount required to pay the
liabilities of the Company and each Guarantor on its total existing debts and
liabilities (including contingent liabilities) as they become absolute and
matured; (ii) the Company and each Guarantor is able to pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business; (iii) assuming consummation of the
issuance of the Securities as contemplated by this Agreement and the Time of
Sale Document and Final Offering Circular, neither the Company nor any Guarantor
is incurring debts or liabilities beyond its ability to pay as such debts and
liabilities mature; (iv) neither the Company nor any Guarantor is engaged in any
business or transaction, and does not propose to engage in any business or
transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in
which the Company or any Guarantor is engaged; and (v) neither the Company nor
any Guarantor is otherwise insolvent under the standards set forth in Applicable
Laws.

(ee)

No Price Stabilization or Manipulation.  Neither the Company nor any of its
Affiliates has and, to the Company’s knowledge, no one acting on its behalf has,
(i) taken, directly or indirectly, any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company,
whether to facilitate the sale or resale of any of the Securities or otherwise,
(ii) sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, any of the Securities, or (iii) except as disclosed in the Time of
Sale Document and the Final Offering Circular, paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.

(ff)

No Registration Required Under the Securities Act or Qualification Under the
TIA.  Without limiting any provision herein, no registration under the
Securities Act and no qualification of the Indenture under the TIA is required
for the offer or sale of the Securities to the Initial Purchaser as contemplated
hereby or for the Exempt Resales, assuming (i) that the purchasers in the Exempt
Resales are QIBs or are not “U.S. persons” (as defined under Regulation S of the
Securities Act) and (ii) the accuracy of the Initial Purchaser’s representations
contained herein regarding the absence of general solicitation in connection
with the sale of the Securities to the Initial Purchaser and in the Exempt
Resales.

(gg)

No Integration.  The Securities will be, upon issuance, eligible for resale
pursuant to Rule 144A under the Securities Act and no other securities of the
Company are of the same class (within the meaning of Rule 144A under the
Securities Act) as the Securities and listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.  No securities of the Company of the same class
as the Securities have been offered, issued or sold by the Company or any of its
Affiliates within the six-month period immediately prior to the date hereof; and
the Company does not have any intention of making, and will not make, an offer
or sale of such securities of

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the Company of the same class as the Securities, for a period of six months
after the date of this Agreement, except for the offering of the Securities as
contemplated by this Agreement or the Registration Rights Agreement or any
offering of Additional Notes (as defined in the Indenture).  As used in this
paragraph, the terms “offer” and “sale” have the meanings specified in Section
2(a)(3) of the Securities Act.

(hh)

No Directed Selling Efforts.  None of the Company, any of its Affiliates or
other person acting on behalf of the Company has, with respect to Securities
sold outside the United States, offered the Securities to buyers qualifying as
“U.S. persons” (as defined in Rule 902 under the Securities Act) or engaged in
any directed selling efforts within the meaning of Rule 902 under the Securities
Act; the Company, any Affiliate of the Company and any person acting on behalf
of the Company have complied with and will implement the “offering restrictions”
within the meaning of such Rule 902; and neither the Company nor any of its
Affiliates has entered or will enter into any arrangement or agreement with
respect to the distribution of the Securities, except for this Agreement;
provided that no representation is made in this paragraph with respect to the
actions of the Initial Purchaser.

(ii)

No Applicable Registration or Other Similar Rights.  There are no persons with
registration or other similar rights to have any equity or debt securities of
the Company or any “Affiliate” registered for sale under a registration
statement, except for rights (i) contained in the Registration Rights Agreement
or (ii) as have been duly waived.

(jj)

Margin Requirements.  None of the Transactions or the application of the
proceeds of the Securities will violate or result in a violation of Section 7 of
the Exchange Act (including, without limitation, Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System).

(kk)

Investment Company Act.  The Company has been informed of, and understands, the
Investment Company Act of 1940, as amended, and the rules and regulations of the
SEC thereunder (collectively, the “Investment Company Act”); as of the date
hereof and, after giving effect to the Offering and the use of proceeds of the
Offering, each of the Company and its Subsidiaries is not and will not be,
individually or on a consolidated basis, an “investment company” that is
required to be registered under the Investment Company Act; and following the
Closing, the Company and its Subsidiaries will conduct their businesses in a
manner so as not to be required to register under the Investment Company Act.

(ll)

No Brokers.  Neither the Company nor any of its Affiliates has engaged any
broker, finder, commission agent or other person (other than the Initial
Purchaser) in connection with the Offering or any of the Transactions, and
neither the Company nor any of its Affiliates is under any obligation to pay any
broker’s fee or commission in connection with such Transactions (other than
commissions or fees to the Initial Purchaser).

(mm)

No Restrictions on Payments of Dividends.  As of the Closing Date, except as
otherwise disclosed in the Time of Sale Document and the Final Offering Circular
there will be no encumbrances or restrictions on the ability of any Subsidiary
of the Company (x) to pay dividends or make other distributions on such
Subsidiary’s capital stock or to pay any indebtedness to the Company or any
other Subsidiary of the Company, (y) to make loans or advances or pay any
indebtedness to, or investments in, the Company or any other Subsidiary or (z)
to transfer any of its property or assets to the Company or any other Subsidiary
of the Company.

(nn)

Sarbanes-Oxley.  There is and has been no failure on the part of the Company and
the Subsidiaries or any of the officers and directors of the Company or any of
the Subsidiaries, in their capacities as such, to comply with the applicable
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith.

12

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(oo)

Foreign Corrupt Practices Act.  None of the Company or any Subsidiary or any
director, officer, employee or, to the knowledge of the Company or any
Subsidiary, any agent or other person acting on behalf of the Company or any
Subsidiary has, in the course of its actions for, or on behalf of, the Company
or any Subsidiary (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any domestic government
official, “foreign official” (as defined in the U.S. Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder (collectively,
the “FCPA”) or employee from corporate funds; (iii) violated or is in violation
of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or
regulation; or (iv) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any domestic government official, such
foreign official or employee.

(pp)

Money Laundering.  The operations of the Company and the Subsidiaries are and
have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all applicable jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”),
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or the Subsidiaries
with respect to the Money Laundering Laws is pending or, to the Company’s
knowledge, after due inquiry, threatened.

(qq)

OFAC.  Neither the Company nor the Subsidiaries nor, to the Company’s knowledge,
after due inquiry, any director, officer, agent, employee or Affiliate of the
Company or any of the Subsidiaries or other person acting on their behalf is
currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will
not directly or indirectly use the proceeds of the Offering, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.

(rr)

Stamp Taxes.  Under the laws of the State of Texas, there are no stamp or other
issuance or transfer taxes or duties or other similar fees or charges required
to be paid in connection with the execution and delivery of this Agreement or
the issuance or sale of the Securities other than, to the extent applicable,
usual and customary recording fees and taxes for recording the Mortgages and
Security Documents and/or financing statements related thereto.

(ss)

Financial Services and Market Act.  The Company has not taken or omitted to take
any action and will not take any action or omit to take any action (such as
issuing any press release or making any other public announcement referring to
the Offering without an appropriate stabilization legend) which may result in
the loss by the Initial Purchaser of the ability to rely on any stabilization
safe harbour provided by the Financial Services Authority of the United Kingdom
under the Financial Services and Markets Act 2000 (the “FSMA”).  The Company has
been informed of the guidance relating to stabilization provided by the
Financial Services Authority of the United Kingdom, in particular the guidance
contained in Section MAR 2 of the Financial Services Handbook.

(tt)

Certificates.  Each certificate signed by any officer of the Company or any of
the Subsidiaries and delivered to the Initial Purchaser shall be deemed a
representation and warranty by the Company or any such Subsidiary (and not
individually by such officer) to the Initial Purchaser with respect to the
matters covered thereby.

(ww)

Oil and Gas Information.  The information set forth in the Time of Sale Document
as of the date hereof and as of the Closing Date and set forth in the Final
Offering Circular, as of the Closing Date, relating to oil and natural gas
reserves and any other oil and natural gas related information has been prepared
by the Company in accordance with methods generally applied in the oil and
natural gas industry and conforms, in all material respects, to the requirements
of the Securities Act and the rules and regulations promulgated thereunder as of
the date hereof.

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(xx)

Reserve Estimates.  The oil and gas reserve estimates of the Company contained
in the Time of Sale Document and the Final Offering Circular (i) are derived
from certain reports that have been prepared by Collarini Associates, summaries
of which are attached to the Time of Sale Document and the Final Offering
Circular, (ii) to the Company’s knowledge, such reserve estimates fairly reflect
the oil and gas reserves of the Company at the dates indicated therein and (iii)
have been prepared in accordance with the guidelines described therein.

(zz)

Independent Engineers. Collarini Associates has represented to the Company that
they are, and the Company believes them to be, independent petroleum engineers
with respect to the Company and its Subsidiaries for the periods set forth in
the Time of Sale Information.

5.

Covenants of the Company and the Guarantors.  Each of the Company and the
Guarantors jointly and severally agrees:

(a)

Securities Law Compliance.  To (i) advise the Initial Purchaser promptly after
obtaining knowledge (and, if requested by the Initial Purchaser, confirm such
advice in writing) of (A) the issuance by any U.S. or non-U.S. federal or state
securities commission of any stop order suspending the qualification or
exemption from qualification of any of the Securities for offer or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any U.S.
or non-U.S. federal or state securities commission or other regulatory
authority, or (B) the happening of any event that makes any statement of a
material fact made in the Time of Sale Document, any Company Additional Written
Communication or the Final Offering Circular, untrue or that requires the making
of any additions to or changes in the Time of Sale Document, any Company
Additional Written Communication, or the Final Offering Circular, to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (ii) use its reasonable best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption
from qualification of any of the Securities under any securities or “Blue Sky”
laws of U.S. state or non-U.S. jurisdictions and (iii) if, at any time, any U.S.
or non-U.S. federal or state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of any of the Securities under any such laws, use its reasonable
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.

(b)

Offering Documents.  To (i) furnish the Initial Purchaser, without charge, as
many copies of the Time of Sale Document and the Final Offering Circular, and
any amendments or supplements thereto, as the Initial Purchaser may reasonably
request, and (ii) promptly prepare, upon the Initial Purchaser’s reasonable
request, any amendment or supplement to the Time of Sale Document or Final
Offering Circular that the Initial Purchaser, upon advice of legal counsel,
determines may be necessary in connection with Exempt Resales (and the Company
and the Guarantors hereby consent to the use of the Time of Sale Document and
the Final Offering Circular, and any amendments and supplements thereto, by the
Initial Purchaser in connection with Exempt Resales).

(c)

Consent to Amendments and Supplements.  Not to amend or supplement the Time of
Sale Document or the Final Offering Circular prior to the Closing Date, or at
any time prior to the completion of the resale by the Initial Purchaser of all
the Securities purchased by the Initial Purchaser, unless the Initial Purchaser
shall previously have been advised and has not reasonably objected thereto.
Before making, preparing, using, authorizing, approving or referring to any
Company Additional Written Communications, the Company will furnish to the
Initial Purchaser and counsel for the Initial Purchaser a copy of such written
communication for review and will not make, prepare, use, authorize, approve or
refer to any such written communication to which the Initial Purchaser
reasonably objects.  The Company and the Guarantors consent to the use by the
Initial Purchaser of a Company Additional Written Communication that contains
(A) information describing the preliminary terms of the Securities or their
offering or (B) information that describes the final terms of the Securities or
their offering and that is included in or is subsequently included in the Final
Offering Circular, including by means of the Pricing Supplement.

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(d)

Preparation of Amendments and Supplements to Offering Documents.  So long as the
Initial Purchaser shall hold any of the Securities, (i) if any event shall occur
as a result of which, in the reasonable judgment of the Company or the Initial
Purchaser, it becomes necessary or advisable to amend or supplement the Time of
Sale Document or the Final Offering Circular to correct any untrue statement of
a material fact or omission to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to amend or supplement the Time of
Sale Document or the Final Offering Circular to comply with any Applicable Law,
to prepare, at the expense of the Company, an appropriate amendment or
supplement to the Time of Sale Document and the Final Offering Circular (in form
and substance reasonably satisfactory to the Initial Purchaser) so that (A) as
so amended or supplemented, the Time of Sale Document and the Final Offering
Circular will not include an untrue statement of material fact or omit to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (B) the Time of
Sale Document and the Final Offering Circular will comply with Applicable Law
and (ii) if in the reasonable judgment of the Company it becomes necessary or
advisable to amend or supplement the Time of Sale Document or the Final Offering
Circular so that the Time of Sale Document and the Final Offering Circular will
contain all of the information specified in, and meet the requirements of, Rule
144A(d)(4) of the Securities Act, to prepare an appropriate amendment or
supplement to the Time of Sale Document or the Final Offering Circular (in form
and substance reasonably satisfactory to the Initial Purchaser) so that the Time
of Sale Document or the Final Offering Circular, as so amended or supplemented,
will contain the information specified in, and meet the requirements of, such
Rule.

(e)

“Blue Sky” Law Compliance.  To cooperate with the Initial Purchaser and the
Initial Purchaser’s counsel in connection with the qualification of the
Securities under the securities or “Blue Sky” laws of U.S. state or non-U.S.
jurisdictions as the Initial Purchaser may request and continue such
qualification in effect so long as reasonably required for Exempt Resales.  The
Company will advise the Initial Purchaser promptly of the suspension of any such
exemption relating to the Securities for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.

(f)

Payment of Expenses.  Whether or not any of the Offering or the Transactions are
consummated or this Agreement is terminated, to pay (i) all costs, expenses,
fees and taxes incident to and in connection with: (A) the preparation, printing
and distribution of the Time of Sale Document and the Final Offering Circular
and all amendments and supplements thereto (including, without limitation,
financial statements and exhibits), and all other agreements, memoranda,
correspondence and other documents prepared and delivered in connection
herewith, (B) the negotiation, printing, processing and distribution (including,
without limitation, word processing and duplication costs) and delivery of, each
of the Documents, (C) the preparation, issuance and delivery of the Securities,
(D) the qualification of the Securities for offer and sale under the securities
or “Blue Sky” laws of U.S. state or non-U.S. jurisdictions (including, without
limitation, the fees and disbursements of the Initial Purchaser’s counsel
relating to such registration or qualification), (E) furnishing such copies of
the Time of Sale Document and the Final Offering Circular, and all amendments
and supplements thereto, as may reasonably be requested for use by the Initial
Purchaser and (F) the performance of the obligations of the Company and the
Guarantors obligations under the Registration Rights Agreement, including but
not limited to the Exchange Offer, the Exchange Offer Registration Statement and
any Shelf Registration Statement, (ii) all fees and expenses of the counsel,
accountants and any other experts or advisors retained by the Company or the
Guarantors, (iii) all fees and expenses (including fees and expenses of counsel)
of the Company or the Guarantors in connection with approval of the Securities
by DTC for “book-entry” transfer, (iv) all fees charged by rating agencies in
connection with the rating of the Securities, if any, (v) all fees and expenses
(including reasonable fees and expenses of counsel) of the Trustee and all
collateral agents, (vi) all costs and expenses in connection with the creation
and perfection of the security interest to be created and perfected pursuant to
the Security Documents (including without limitation, filing and recording fees,
search fees, taxes and costs of title policies) and (vii) all other fees,
disbursements and out-of-pocket expenses incurred by Initial Purchaser including
(A) in connection with its services to be rendered hereunder, including, without
limitation, the fees and disbursements of Proskauer Rose LLP, counsel to the
Initial Purchaser, travel and lodging expenses, chartering of airplanes,
roadshow or investor presentation expenses, word processing charges, the

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costs of printing or producing any investor presentation materials, messenger
and duplicating service expenses, facsimile expenses and other customary
expenditures; provided, however, that neither the Company nor the Guarantors
shall be required to pay any fees, expenses or disbursements of Proskauer Rose
LLP, counsel to the Initial Purchaser, in excess of $210,000 in the aggregate.

(g)

Use of Proceeds.  To use the proceeds of the Offering in the manner described in
the Time of Sale Document and the Final Offering Circular under the caption “Use
of Proceeds.”

(h)

Transaction Documents.  To do and perform all things required to be done and
performed under the Documents prior to and after the Closing Date.

(i)

Integration.  Not to, and to ensure that no Affiliate of the Company will, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of any
“security” (as defined in the Securities Act) that would be integrated with the
sale of the Securities in a manner that would require the registration under the
Securities Act of the sale to the Initial Purchaser or to the Subsequent
Purchasers of the Securities.

(j)

Stabilization or Manipulation.  Not to take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Securities or any other
reference security, whether to facilitate the sale or resale of the Securities
or otherwise.

(k)

DTC.  To comply with the representation letter of the Company to DTC relating to
the approval of the Securities by DTC for “book-entry” transfer.

(l)

Rule 144(A) Information.  For so long as any of the Securities remain
outstanding, during any period in which the Company is not subject to Section 13
or 15(d) of the Exchange Act, to make available, upon request, to any owner of
the Securities in connection with any sale thereof and any prospective
Subsequent Purchasers of such Securities from such owner, the information
required by Rule 144A(d)(4) under the Securities Act.

(m)

Furnish Trustee and Noteholder Reports.  For so long as any of the Securities
remain outstanding, to furnish to the Initial Purchaser copies of all reports
and other communications (financial or otherwise) furnished by the Company to
the Trustee or to the holders of the Securities and, as soon as available,
copies of any reports or financial statements furnished to or filed by the
Company with the SEC or any national securities exchange on which any class of
securities of the Company may be listed.

(n)

Additional Offering Materials.  Except in connection with the Exchange Offer or
the filing of the Shelf Registration Statement, not to, and not to authorize or
permit any person acting on its behalf to, (i) distribute any offering material
in connection with the offer and sale of the Securities other than the Time of
Sale Document and the Final Offering Circular and any amendments and supplements
to the Preliminary Offering Circular or the Final Offering Circular prepared in
compliance with this Agreement, (ii) solicit any offer to buy or offer to sell
the Securities by means of any form of general solicitation or general
advertising (including, without limitation, as such terms are used in Regulation
D under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (iii) engage in any
directed selling efforts within the meaning of Regulation S, and all such
persons will comply with the offering restrictions requirement of Regulation S.

(o)

Sale of Restricted Securities.  During the one year period after the Closing
Date (or such shorter period as may be provided for in Rule 144 under the
Securities Act, as the same may be in effect from time to time), to not, and to
not permit any current or future Subsidiaries of either the Company or any other
Affiliates controlled by the Company to, resell any of the Securities which
constitute “restricted securities” under Rule 144 that have been reacquired by
the Company, any current or future Subsidiaries or any other Affiliates
controlled by the Company, except pursuant to an effective registration
statement under the Securities Act.

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(p)

Stamp Taxes.  To pay all stamp or other issuance or transfer taxes or duties
other similar fees or charges which may be imposed by any governmental or
regulatory authority in connection with the execution and delivery of this
Agreement or the issuance or sale of the Securities.

(q)

Security Interests.  Subject to clause (t) below, to complete on or prior to the
Closing Date all filings and other similar actions required in connection with
the perfection of security interests as and to the extent contemplated by the
Security Documents.

(r)

Investment Company.  The Company and its Subsidiaries will conduct their
businesses in a manner so as to not be required to register under the Investment
Company Act.

(s)

Clear Market.  During the period beginning from the date hereof and continuing
until the date that is 90 days after the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to the Securities
without the prior written consent of Imperial Capital, LLC.

6.

Representations and Warranties of the Initial Purchaser.  The Initial Purchaser
represents and warrants as of the date hereof and as of the Closing Date that:

(a)

Initial Purchaser Status, Resale Terms.  The Notes are being acquired by the
Initial Purchaser pursuant to an exemption from the registration requirements of
the Securities Act. It is a “QIB” (as defined in Rule 144A under the Securities
Act) and it will offer the Securities for resale only upon the terms and
conditions set forth in this Agreement and in the Time of Sale Document and the
Final Offering Circular.

(b)

Sale of Restricted Exchange Securities.  It will solicit offers to buy the
Securities only from, and will offer and sell the Securities only to, persons
reasonably believed by the Initial Purchaser (A) to be QIBs or (B) to not be
“U.S. persons” (as defined under Regulation S under the Securities Act) and in
compliance with laws applicable to such persons in jurisdictions outside of the
United States; provided, however, that in purchasing such Securities, such
persons are deemed to have represented and agreed as provided under the caption
“Notice to Investors” contained in the Time of Sale Document and the Final
Offering Circular.

(c)

General Solicitation.  No form of general solicitation or general advertising in
violation of the Securities Act has been or will be used nor will any offers in
any manner involving a public offering within the meaning of Section 4(2) of the
Securities Act or, with respect to Securities to be sold in reliance on
Regulation S, by means of any directed selling efforts be made by such Initial
Purchaser or any of its representatives in connection with the offer and sale of
any of the Securities.

7.

Conditions.  The obligations of the Initial Purchaser to purchase the Securities
under this Agreement are subject to the performance by each of the Company and
the Guarantors of their respective covenants and obligations hereunder and the
satisfaction of each of the following conditions:

(a)

Representations, Warranties and Agreements.  All the representations and
warranties of the Company and the Guarantors contained in this Agreement and in
each of the other Documents shall be true and correct as of the date hereof and
at the Closing Date (except to the extent expressly made as of a specified date,
in which case as of such date).  On or prior to the Closing Date, the Company
and each other party to the Documents (other than the Initial Purchaser) shall
have performed or complied with all of the agreements and satisfied all
conditions on their respective parts to be performed, complied with or satisfied
pursuant to the Documents (other than conditions to be satisfied by such other
parties, which the failure to so satisfy would not, individually or in the
aggregate, have a Material Adverse Effect).  It is understood and agreed that,
for purposes of this Agreement, in the event that the Initial Purchaser
determines that a Material Adverse Effect or a Material Adverse Change has
occurred and the Company or a Guarantor seeks to dispute such determination, the
Company or such Guarantor shall bear the burden of proof to demonstrate by clear
and convincing evidence that a Material Adverse Effect or a Material Adverse
Change, as applicable, has not occurred.

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(b)

Closing Deliverables.  The Initial Purchaser shall have received on the Closing
Date:

(i)

Officers’ Certificate.  A certificate dated the Closing Date, signed by (1) the
Chief Executive Officer and (2) the principal financial or accounting officer of
the Company and the Guarantors, on behalf of the Company and the Guarantors, to
the effect that (a) the representations and warranties set forth in Section 4
hereof, in each of the Documents and the Perfection Certificate are true and
correct in all material respects with the same force and effect as though
expressly made at and as of the Closing Date, (b) the Company and the Guarantors
have performed and complied with all agreements and satisfied all conditions in
all material respects on its part to be performed or satisfied at or prior to
the Closing Date, (c) at the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Time of Sale Document and
the Final Offering Circular (exclusive of any amendment or supplement thereto
after the date hereof), no event or events have occurred, no information has
become known nor does any condition exist that, individually or in the
aggregate, would have a Material Adverse Effect, (d) since the date of the most
recent financial statements in the Time of Sale Document and the Final Offering
Circular (exclusive of any amendment or supplement thereto after the date
hereof), other than as described in the Time of Sale Document and the Final
Offering Circular or contemplated hereby, neither the Company, the Guarantors
nor any other Subsidiary has incurred any liabilities or obligations, direct or
contingent, not in the ordinary course of business, that are material to the
Company and the Subsidiaries, taken as a whole, or entered into any transactions
not in the ordinary course of business that are material to the business,
condition (financial or otherwise) or results of operations or prospects of the
Company and the Subsidiaries, taken as a whole, and there has not been any
change in the capital stock or long-term indebtedness of the Company, the
Guarantors or any other Subsidiary of the Company that is material to the
business, condition (financial or otherwise) or results of operations or
prospects of the Company and the Subsidiaries, taken as a whole, and (e) the
sale of the Securities has not been enjoined (temporarily or permanently).

(ii)

Secretary’s Certificate.  A certificate, dated the Closing Date, executed by the
Secretary of the Company and each Guarantor, certifying such matters as the
Initial Purchaser may reasonably request.

(iii)

Good Standing Certificates.  A certificate evidencing (A) the good standing of
the Company and the Guarantors from the Secretaries of State in their respective
jurisdictions of organization or formation, as applicable, and (B) the
qualification by such entity as a foreign corporation in good standing from the
Secretaries of State (or comparable office) of each of the jurisdictions in
which each of the Company and the Guarantors operates as of a date within five
days prior to the Closing Date.

(iv)

Solvency Certificate.  A certificate of solvency, dated the Closing Date,
executed by the principal financial or accounting officer of the Company in the
form of Exhibit A attached hereto.

(v)

Company Counsel Opinion.  The opinion of Adams and Reese LLP, counsel to the
Company, dated the Closing Date, substantially in the form of Exhibit B attached
hereto.

(vi)

Initial Purchaser Counsel Opinion.  An opinion, dated the Closing Date, of
Proskauer Rose LLP, counsel to the Initial Purchaser, in form satisfactory to
the Initial Purchaser covering such matters as are customarily covered in such
opinions.

(vii)

Comfort Letters.  The Initial Purchaser shall have received from MaloneBailey,
LLP, the registered public or certified public accountants of the Company, (A) a
customary initial comfort letter delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), dated the date hereof, in form and
substance reasonably satisfactory to the Initial Purchaser and its counsel, with
respect to the financial statements and certain financial information contained
in the Time of Sale Document and the Final Offering Circular, and (B) a
customary “bring-down” comfort letter, dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchaser and its counsel, to
the effect that MaloneBailey, LLP, which includes among other

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things, a reaffirmation of the statements made in its initial letter furnished
pursuant to clause (A) with respect to such financial statements and financial
information contained in the Time of Sale Document and the Final Offering
Circular.

(viii)

Consent Letter. The Initial Purchaser shall have received a consent letter from
Collarini Associates, independent reserve engineers, in form and substance
reasonably satisfactory to the Initial Purchaser.

(c)

Executed Documents.  The Initial Purchaser shall have received fully executed
originals of each Document to be executed on the Closing Date (each of which
shall be in full force and effect on terms reasonably satisfactory to the
Initial Purchaser), and each opinion, certificate, letter and other document to
be delivered in connection with the Offering or any other Transaction.

(d)

Collateral.

(A)

The Collateral Agent shall have received on the Closing Date the following, in
the form and substance reasonably satisfactory to the Initial Purchaser:

(i)

certified copies of Uniform Commercial Code Requests for Information or Copies
(Form UCC 11), or a similar search report certified by a party acceptable to the
Collateral Agent, dated a date reasonably near to the Closing Date, listing all
effective financing statements which name the Company or any Guarantor (under
its present name and any previous names) as the debtor, together with copies of
such financing statements (none of which shall cover any collateral described in
any Security Document, other than such financing statements that evidence
Permitted Liens);

(ii)

such other approvals, opinions, or documents as the Collateral Agent may
reasonably request in form and substance reasonably satisfactory to the
Collateral Agent;

(B)

The Collateral Agent and its counsel shall be satisfied that (a) the Lien
granted to the Collateral Agent, for the benefit of the Secured Parties (as
defined in the Indenture) in the Collateral is of the priority described in the
Time of Sale Document and the Final Offering Circular and (b) no Lien exists on
any of the Collateral, other than the Lien created in favor of the Collateral
Agent, for the benefit of the Secured Parties pursuant to a Security Document,
in each case, subject to Permitted Liens;

(C)

All information certified by an officer of the Company in the Perfection
Certificate to be dated as of December 4, 2012 and delivered by such officer on
behalf of the Company is true and correct in all material respects both as of
the date hereof and as of the Closing Date.

(D)

The representations and warranties of the Company in the Security Documents are
true and correct (if such representations and warranties are not already
qualified with respect to materiality) in all material respects.

(e)

[Reserved].

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(f)

No Material Adverse Change.  Subsequent to the respective dates as of which
information is given in the Time of Sale Document (exclusive of any amendment or
supplement thereto), there shall not have been any Material Adverse Change that
could, in the sole judgment of the Initial Purchaser be expected to (i) make it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated by this Agreement,
the Time of Sale Document and the Final Offering Circular or (ii) materially
impair the investment quality of any of the Securities.

(g)

No Hostilities.  Any outbreak or escalation of hostilities or other national or
international calamity or crisis, including acts of terrorism, or material
adverse change or disruption in economic conditions in, or in the financial
markets of, the United States (it being understood that any such change or
disruption shall be relative to such conditions and markets as in effect on the
date hereof), if the effect of such outbreak, escalation, calamity, crisis, act
or material adverse change in the economic conditions in, or in the financial
markets of, the United States could be reasonably expected to make it, in the
Initial Purchaser’s sole judgment, impracticable or inadvisable to market or
proceed with the offering or delivery of the Securities on the terms and in the
manner contemplated in the Time of Sale Document and the Final Offering Circular
or to enforce contracts for the sale of any of the Securities.

(h)

No Suspension in Trading; Banking Moratorium.  There shall not have been (i) a
suspension in the trading of the Company’s common stock by the SEC or a
suspension or limitation of trading generally in securities on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market or any
setting of limitations on prices for securities occurs on any such exchange or
market or (ii) the declaration of a banking moratorium by any Governmental
Authority or the taking of any action by any Governmental Authority after the
date hereof in respect of its monetary or fiscal affairs that, which in the case
of clause (i) or (ii) of this paragraph, in the Initial Purchaser’s sole
judgment could reasonably be expected to have a material adverse effect on the
financial markets in the United States or elsewhere.

(i)

Corporate Proceedings.  All corporate proceedings and other legal matters
incident to the authorization, form and validity of the Documents and the
Transactions and all other legal matters relating of the offering, issuance and
sale of the Securities and the Transactions shall be reasonably satisfactory in
all material respects to counsel to the Initial Purchaser; and the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.

(j)

Additional Documents.  On or before the Closing Date, the Initial Purchaser and
counsel to the Initial Purchaser shall have received such information, documents
and opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Securities as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.

(k)

Offering Materials Furnished to Initial Purchaser.  The Company has delivered to
the Initial Purchaser the Time of Sale Document, the Final Offering Circular and
each Company Additional Written Communication (as hereinafter defined) in such
quantities and at such places as the Initial Purchaser has reasonably requested.

(l)

No Material Applicable Laws or Proceedings. No Applicable Law shall have been
enacted, adopted, issued or passed that would restrain, enjoin, prevent or
interfere with the consummation of the Offering or any of the Transactions, no
stop order suspending the qualification or exemption from qualification of any
of the Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or, to the Company’s knowledge, be
pending or contemplated as of the Closing Date.

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8.

Indemnification and Contribution.

(a)

Indemnification by the Company and the Guarantors.  The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless the
Initial Purchaser, its affiliates, directors, officers and employees, and each
person, if any, who controls the Initial Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities of any kind to which the Initial Purchaser,
affiliate, director, officer, employee or such controlling person may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:

(i)

any untrue statement of a material fact contained in the Time of Sale Document,
any Company Additional Written Communication or the Final Offering Circular, or
any amendment or supplement thereto;

(ii)

the omission to state, in the Time of Sale Document, any Company Additional
Written Communication or the Final Offering Circular, or any amendment or
supplement thereto, a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; or

(iii)

any breach by the Company or any of the Guarantors of their respective
agreements set forth herein or of Applicable Law;

and, subject to the provisions hereof, will reimburse, as incurred, the Initial
Purchaser and its affiliates, directors, officers, employees and each such
controlling persons for any legal or other expenses incurred by such person in
connection with defending against, settling, compromising or paying any such
loss, claim, damage, liability, expense or action in respect thereof; provided,
however, the Company and the Guarantors will not be liable in any such case to
the extent (but only to the extent) that a court of competent jurisdiction shall
have determined by a final, unappealable judgment that such loss, claim, damage,
liability or expense resulted solely from any untrue statement or alleged untrue
statement or omission or alleged omission made in the Time of Sale Document, any
Company Additional Written Communication or the Final Offering Circular or any
amendment or supplement thereto in reliance upon and in conformity with written
information concerning the Initial Purchaser furnished to the Company by the
Initial Purchaser specifically for use therein, it being understood and agreed
that the only such information furnished by the Initial Purchaser to the Company
consists of the information set forth in 12.  The indemnity agreement set forth
in this Section shall be in addition to any liability that the Company and the
Guarantors may otherwise have to the indemnified parties.

(b)

Indemnification by the Initial Purchaser.  The Initial Purchaser agrees to
indemnify and hold harmless each of the Company, each of the Guarantors and
their respective directors, officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any losses, claims, damages, liabilities or expenses to
which the Company, such Guarantors or any such director, officer or controlling
person may become subject under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Initial Purchaser), insofar as a court of competent
jurisdiction shall have determined by a final, unappealable judgment that such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
have resulted solely from (i) any untrue statement of any material fact
contained in the Time of Sale Document or the Final Offering Circular or any
amendment or supplement thereto or (ii) the omission to state therein a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, in each case to the extent (but only
to the extent) that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information concerning the Initial Purchaser furnished to the Company by
the Initial Purchaser specifically for use therein as set forth in Section 12;
and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses incurred by the Company,
each of the

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Guarantors or any such director, officer or controlling person in connection
with any such loss, claim, damage, liability, expense or action in respect
thereof.  The indemnity agreement set forth in this Section shall be in addition
to any liability that the Initial Purchaser may otherwise have to the
indemnified parties.

(c)

Notifications and Other Indemnification Procedures.  As promptly as reasonably
practicable after receipt by an indemnified party under this Section of notice
of the commencement of any action for which such indemnified party is entitled
to indemnification under this Section, such indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof in writing;
but the omission to so notify the indemnifying party (i) will not relieve such
indemnifying party from any liability under Section 8(a) or (b) above unless and
only to the extent it is materially prejudiced as a proximate result thereof and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
Section 8(a) and (b) above.  In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may elect, jointly with any other indemnifying party
similarly notified by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party, and the indemnified party shall
have concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be one or more legal defenses available to it
and/or other indemnified parties that are different from or additional to those
available to the indemnifying party, or (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after receipt by the
indemnifying party of notice of the institution of such action, then, in each
such case, the indemnifying party shall not have the right to direct the defense
of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties at the expense
of the indemnifying party.  After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately preceding
sentence (it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the fees and expenses of more than
one separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction arising out
of the same general allegations or circumstances, designated by the Initial
Purchaser in the case of Section 8(a) or the Company in the case of Section
8(b), representing the indemnified parties under such Section 8(a) or (b), as
the case may be, who are parties to such action or actions), (ii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party or (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party and shall
be paid as they are incurred.  After such notice from the indemnifying party to
such indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified party
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably withheld), unless such indemnified party waived in writing
its rights under this Section, in which case the indemnified party may effect
such a settlement without such consent.

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(d)

Settlements.  No indemnifying party shall be liable under this Section for any
settlement of any claim or action (or threatened claim or action) effected
without its written consent, which shall not be unreasonably withheld, but if a
claim or action settled with its written consent, or if there be a final
judgment for the plaintiff with respect to any such claim or action, each
indemnifying party jointly and severally agrees, subject to the exceptions and
limitations set forth above, to indemnify and hold harmless each indemnified
party from and against any and all losses, claims, damages or liabilities (and
legal and other expenses as set forth above) incurred by reason of such
settlement or judgment.  No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement or compromise of any pending or threatened
proceeding in respect of which the indemnified party is or could have been a
party, or indemnity could have been sought hereunder by the indemnified party,
unless such settlement (A) includes an unconditional written release of the
indemnified party, in form and substance satisfactory to the indemnified party,
from all liability on claims that are the subject matter of such proceeding and
(B) does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of the indemnified party.  Notwithstanding the
foregoing, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for legal or other
expenses as contemplated by Section 8(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
effected without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement or
compromise of, or consent to the entry of such judgment.

(e)

Contribution.  In circumstances in which the indemnity agreements provided for
in this Section is unavailable to, or insufficient to hold harmless, an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof), each indemnifying party, in order to
provide for just and equitable contributions, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties, on the one hand, and the indemnified party, on the other hand,
from the Offering or (ii) if the allocation provided by the foregoing clause (i)
is not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties, on the one hand, and the
indemnified party, on the other hand, in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof).  The relative
benefits received by the Company and the Guarantors, on the one hand, and the
Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as the total proceeds from the Offering (before deducting expenses)
received by the Company bear to the total discounts and commissions received by
the Initial Purchaser.  The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or the Initial
Purchaser pursuant to Section 8(b) above, on the other hand, the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission or alleged statement or omissions, and any
other equitable considerations appropriate in the circumstances.

(f)

Equitable Consideration.  The Company, the Guarantors and the Initial Purchaser
agree that it would not be equitable if the amount of such contribution
determined pursuant to Section 8(e) were determined by pro rata or per capita
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in Section 8(e).  The amount paid or
payable by an indemnified party as a result of losses, claims, damages or
liabilities referred to in Section 8(e) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with defending any such action or claim.
 Notwithstanding any other provision of this Section, the Initial Purchaser
shall not be obligated to make contributions hereunder that in the aggregate
exceed the total discounts, commissions and other compensation received by such
Initial Purchaser under this Agreement, less the aggregate amount of any damages
that such Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was

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not guilty of such fraudulent misrepresentation. For purposes of Section 8(e),
each director, officer and employee of the Initial Purchaser, and each person,
if any, who controls the Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, shall have the same rights
to contribution as the Initial Purchaser, and each director, officer and
employee of the Company and the Guarantors, and each person, if any, who
controls the Company or any of the Guarantors within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company and the Guarantors.

9.

Termination.  The Initial Purchaser may terminate this Agreement at any time
prior to the Closing Date by written notice to the Company if any of the events
described in Sections 7(f) (No Material Adverse Change), 7(g) (No Hostilities)
or 7(h) (No Suspension in Trading; Banking Moratorium) shall have occurred or if
the Initial Purchaser shall decline to purchase the Securities for any reason
permitted by this Agreement.  Any termination pursuant to this Section shall be
without liability on the part of (a) the Company or the Guarantors to the
Initial Purchaser, except that the Company and the Guarantors shall be obligated
to reimburse the expenses of the Initial Purchaser pursuant to Section 5(f)
hereof or (b) the Initial Purchaser to the Company or the Guarantors, except, in
the case of each of clauses (a) and (b), that the provisions of Sections 9 and
10 hereof shall at all times be effective and shall survive such termination.

10.

Survival.  The covenants, indemnities and contribution and expense reimbursement
provisions and other agreements of the Company, the Guarantors and the Initial
Purchaser to the other party set forth in or made pursuant to this Agreement
shall remain operative and in full force and effect, and will survive,
regardless of (i) the acceptance of the Securities, and payment for them
hereunder and (ii) any termination of this Agreement.

11.

Relationship.  The Company and the Guarantors hereby acknowledge that the
Initial Purchaser is acting as initial purchaser in connection with the purchase
and sale of the Securities hereunder and otherwise is acting in accordance with
the scope of engagement specified in the Engagement Letter.  The Company and the
Guarantors further acknowledge that the Initial Purchaser is acting pursuant to
a contractual relationship created solely by this Agreement and the Engagement
Letter entered into on an arm’s-length basis, and in no event do the parties
intend that the Initial Purchaser act or be responsible as a fiduciary to either
the Company, the Guarantors or their respective management, stockholders or
creditors or any other person in connection with any activity that the Initial
Purchaser may undertake or have undertaken in furtherance of the purchase and
sale of the Securities, either before or after the date hereof.  The Initial
Purchaser hereby expressly disclaims any fiduciary obligations to either the
Company or the Guarantors, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company and the Guarantors hereby confirm their understanding and
agreement to that effect. The Company, the Guarantors and the Initial Purchaser
agree that they are each responsible for making their own independent judgments
with respect to any such transactions. Each of the Company and the Guarantors
acknowledge and agree that they are capable of evaluating and understanding, and
understand and accept, the terms, risk and conditions of the transactions
contemplated by this Agreement.  The Company and the Guarantors hereby waive and
release, to the fullest permitted by law, any claims that either of the Company
or the Guarantors may have against the Initial Purchaser with respect to any
breach of any fiduciary duty to the Company or the Guarantors in connection with
the transactions contemplated by this Agreement or any matters leading up to
such transactions.

12.

Information Supplied by Initial Purchaser.  Each of the Company and the
Guarantors hereby acknowledges that, for purposes of Section 4(c) and Section 8,
the only information that the Initial Purchaser has furnished to the Company
specifically for use in the Preliminary Offering Circular or the Final Offering
Circular are the statements set forth in (a) the first sentence of the third
paragraph, (b) the second sentence of the fourth paragraph, (c) the fifth
paragraph, (d) the fifth sentence of the sixth paragraph and (e) the first
sentence of the seventh paragraph, each under the caption “Plan of Distribution”
in the Preliminary Offering Circular and the Final Offering Circular.

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13.

Miscellaneous.

(a)

Notices.  Notices given pursuant to any provision of this Agreement shall be
addressed as follows: (i) if to the Company, to: Saratoga Resources, Inc., 7500
San Felipe, Suite 675, Houston, Texas 77063, Attention: Michael Aldridge, with a
copy to: Adams and Reese LLP, Concord Center, 2100 Third Avenue North, Suite
1100, Birmingham, AL 35203, Attention: David Bowsher, Esq., and (ii) if to the
Initial Purchaser, to: Imperial Capital, LLC., 2000 Avenue of the Stars, 9th
Floor, South Tower, Los Angeles, California 90067, with a copy to: Proskauer
Rose LLP, Eleven Times Square, New York, New York 10036, Attention: Frank Lopez,
Esq., (or in any case to such other address as the person to be notified may
have requested in writing).

(b)

Beneficiaries.  This Agreement has been and is made solely for the benefit of
and shall be binding upon the Company, the Guarantors, the Initial Purchaser and
to the extent provided in Section 8 hereof, the controlling persons, affiliates,
officers, directors, partners, employees, representatives and agents referred to
in Section 8 hereof and their respective heirs, executors, administrators,
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term “successors and assigns” shall not include a purchaser of
any of the Securities from the Initial Purchaser merely because of such
purchase.  Notwithstanding the foregoing, it is expressly understood and agreed
that each purchaser who purchases Securities from the Initial Purchaser is
intended to be a beneficiary of the covenants of the Company and the Guarantors
contained in the Registration Rights Agreement to the same extent as if the
Securities were sold and those covenants were made directly to such purchaser by
the Company and the Guarantors, and each such purchaser shall have the right to
take action against the Company and the Guarantors to enforce, and obtain
damages for any breach of, those covenants.

(c)

Governing Law; Jurisdiction; Waiver of Jury Trial; Venue.  This Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York.  Each of the Company and the Guarantors hereby expressly and irrevocably
(i) submits to the non-exclusive jurisdiction of the federal and state courts
sitting in the Borough of Manhattan in the City of New York in any suit or
proceeding arising out of or relating to this Agreement or the Transactions, and
(ii) waives (a) its right to a trial by jury in any legal action or proceeding
relating to this Agreement, the Transactions or any course of conduct, course of
dealing, statements (whether verbal or written) or actions of the Initial
Purchaser and for any counterclaim related to any of the foregoing and (b) any
obligation which it may have or hereafter may have to the laying of venue of any
such litigation brought in any such court referred to above and any claim that
any such litigation has been brought in an inconvenient forum.

(d)

Entire Agreement; Counterparts.  This Agreement, together with the Engagement
Letter, constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.  This
Agreement may be executed in two or more counterparts, each one of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.

(e)

Headings.  The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

(f)

Separability.  If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

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(g)

Amendment.  This Agreement may be amended, modified or supplemented, and waivers
or consents to departures from the provisions hereof may be given, provided that
the same are in writing and signed by all of the signatories hereto.

[Signature Pages Follow]

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Please confirm that the foregoing correctly sets forth the agreement between the
Company, the Guarantors and the Initial Purchaser.

Very truly yours,

 

 

 

 

SARATOGA RESOURCES, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas F. Cooke

 

 

Name:   Thomas F. Cooke

 

 

Title:     Chief Executive Officer

 

 

 

 

 

 

 

HARVEST OIL & GAS, LLC

 

 

 

 

 

 

 

By:

/s/ Thomas F. Cooke

 

 

Name:   Thomas F. Cooke

 

 

Title:     Operating Manager

 

 

 

 

 

 

 

THE HARVEST GROUP LLC

 

 

 

 

 

 

 

By:

/s/ Thomas F. Cooke

 

 

Name:   Thomas F. Cooke

 

 

Title:     Operating Manager

 

 

 

 

 

 

 

LOBO RESOURCES, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas F. Cooke

 

 

Name:   Thomas F. Cooke

 

 

Title:     President

 

 

 

 

 

 

 

LOBO OPERATING, INC.

 

 

 

 

 

 

 

By:

/s/ Thomas F. Cooke

 

 

Name:   Thomas F. Cooke

 

 

Title:      President

 

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Accepted and Agreed to:

IMPERIAL CAPITAL, LLC

By:  /s/ Todd Wiench
       Name:  Todd Wiench
       Title:   General Counsel