Document:

Purchase Agreement

 Exhibit 10.1 
 BASELINE OIL & GAS CORP. 
 $115,000,000 
 12 1/2% Senior Secured Notes due 2012 
 $50,000,000 
 14% Senior Subordinated Convertible Secured Notes due 2013 
 PURCHASE AGREEMENT 
 September 17, 2007 
 JEFFERIES & COMPANY, INC. 
 520 Madison Avenue 
 New York, New York 10022 
 Ladies and Gentlemen: 
 Baseline Oil & Gas Corp., a Nevada corporation (“Baseline” or the “Company”) hereby agrees (this
“Agreement”) with you as follows: 
 1. Issuance of
Notes. Subject to the terms and conditions herein contained, the Company proposes to issue and sell (i) $115,000,000 aggregate principal amount of its 12 1/2
% Senior Secured Notes due 2012 (each a “Senior Note” and, collectively, the “Senior Notes”) and (ii) $50,000,000 aggregate principal amount of its
14% Senior Subordinated Convertible Secured Notes due 2013 (each an “Initial Convertible Note” and, collectively, the “Initial Convertible Notes”) to Jefferies & Company, Inc. (the “Initial
Purchaser”). 
 In addition, the Company has granted to the Initial Purchaser a 30-day option to purchase up to $7.5 million
additional aggregate principal amount of the Convertible Notes (the “Optional Additional Convertible Notes”). The Initial Convertible Notes and, if and to the extent purchased, the Optional Additional Convertible Notes, are
collectively called the “Convertible Notes”. The Senior Notes and the Convertible Notes are collectively referred to as the “Notes”. The Convertible Notes will be in certain circumstances convertible into shares
(the “Underlying Securities”) of common stock of the Company, par value $0.001 per share (the “Common Stock”). 
 The Senior Notes will be issued pursuant to an indenture (the “Senior Notes Indenture”), to be dated as of October 1, 2007, by and between the Company and The Bank of New York, as trustee (in such capacity, the
“Trustee”) and collateral agent (in such capacity, the “Senior Collateral Agent”) and the Convertible Notes will be issued pursuant to an indenture (the “Convertible Notes Indenture” and, together
with the Senior Notes Indenture, the “Indentures”), to be dated as of October 1, 2007, by and between the Company and the Bank of New York, as Trustee and collateral agent (in such capacity, the “Convertible Collateral
Agent,” and together with the Senior Collateral Agent, the “Collateral Agents”). Capitalized terms used but not defined herein shall have the meanings set forth in the “Description of Notes—Certain
Definitions” section of the Offering Circulars (as defined below). 

 The Notes will be offered and sold to the Initial Purchaser pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended (the “Act”). Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Senior Notes
shall bear the legend set forth in the final offering circular related to the issuance of the Senior Notes, dated the date hereof (the “Senior Notes Final Offering Circular”). The Company has prepared a preliminary offering circular
related to the issuance of the Senior Notes, dated September 7, 2007 (the “Senior Notes Preliminary Offering Circular”). The Senior Notes Preliminary Offering Circular, together with the Senior Notes Final Offering Circular, is
referred to as the “Senior Notes Offering”. 
 Upon original issuance thereof, and until such time as the same is no longer
required under the applicable requirements of the Act, the Convertible Notes shall bear the legend set forth in the final offering circular related to the issuance of the Convertible Notes, dated the date hereof (the “Convertible Notes Final
Offering Circular”). The Company has prepared a preliminary offering circular related to the issuance of the Convertible Notes, dated September 7, 2007 (the “Convertible Notes Preliminary Offering Circular”). The
Convertible Notes Preliminary Offering Circular, the Convertible Notes Final Offering Circular and the Senior Notes Offering are collectively referred to as the “Offerings”. 
 “Preliminary Offering Circulars” means the Senior Notes Preliminary Offering Circular and the Convertible Notes Preliminary Offering
Circular. “Final Offering Circulars” means the Senior Notes Final Offering Circular and the Convertible Notes Final Offering Circular. “Offering Circulars” means, as of any date or time referred to in this
Agreement, the most recent offering circulars (whether the Preliminary Offering Circulars or the Final Offering Circulars, and any amendment or supplement to such documents), including, without limitation, exhibits and schedules thereto. 

2. Terms of Offering. The Initial Purchaser has advised the Company, and the Company understands, that the Initial Purchaser will make
offers to sell (the “Exempt Resales”) some or all of the Notes purchased by the Initial Purchaser hereunder on the terms set forth in the Offering Circulars, as amended or supplemented, to persons (the “Subsequent
Purchasers”) (i) outside the United States in compliance with Regulation S of the Act, or (ii) whom the Initial Purchaser (A) reasonably believes to be “qualified institutional buyers” as defined in Rule 144A under
the Act (“QIBs”), as such Rule may be amended from time to time, or (B) reasonably believes (based upon written representations made by such persons to the Initial Purchaser) to be institutional “accredited investors”
(“Accredited Investors”) as defined in Rule 501(a)(1), (2), (3) or (7) under the Act that make certain representations and warranties to the Initial Purchaser and the Company, which representations and warranties are set
forth in the form of Accredited Investor Letter attached as Annex A to the Offering Circulars. 
 Pursuant to the Senior Notes Indenture, all
future Domestic Restricted Subsidiaries (each a “Guarantor”) of the Company, jointly and severally, shall fully and unconditionally guarantee, on a senior secured basis, to each holder of the Senior Notes and the Trustee, the
payment and performance of the Company’s obligations under the Senior Notes Indenture and the Senior Notes (each such guarantee being referred to herein as a “Senior Note Guarantee”). Pursuant to the Convertible Notes
Indenture, all future Guarantors of the Company, jointly and severally, shall fully and unconditionally guarantee, on a senior subordinated basis, to each holder of the Convertible Notes and the Trustee, the payment and performance of the
Company’s obligations under the Convertible Notes Indenture and the Convertible Notes (each such guarantee being referred to herein as a “Convertible Note Guarantee”, and together with the Senior Note Guarantees, the
“Guarantees”). 
 The Company intends to use the proceeds to acquire (the “Acquisition”) certain oil and
gas properties from DSX Energy Limited, LLP (the “DSX Properties”), pursuant to that certain asset purchase and sale agreement, dated as of August 7, 2007, to refinance the Company’s existing indebtedness, for general
corporate purposes, and to pay fees and expenses in connection therewith. 
  

 2 

 Holders of the Senior Notes (including Subsequent
Purchasers) will have the registration rights set forth in the registration rights agreement applicable to the Senior Notes (the “Senior Notes Registration Rights Agreement”), to be executed on and dated as of the First Closing Date
(as hereinafter defined), in a form reasonably acceptable to the Initial Purchaser in conformity in all material respects with the description of such registration rights contained in the Senior Notes Preliminary Offering Circular. Pursuant to the
Senior Notes Registration Rights Agreement, the Company will agree, among other things, (i) to file with the Securities and Exchange Commission (the “SEC”) (i) a registration statement under the Act (the “Exchange
Offer Registration Statement”) relating to the 12 1/2% Senior Secured Notes due 2012 (the
“Exchange Notes”), which shall be identical to the Senior Notes (except that the Exchange Notes shall have been registered pursuant to such registration statement and will not be subject to restrictions on transfer or contain
additional interest provisions) to be offered in exchange for the Senior Notes (such offer to exchange being referred to as the “Exchange Notes Offer”), and/or (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Act (the “Senior Notes Shelf Registration Statement”) relating to the resale by certain holders of the Senior Notes. If required under the Senior Notes Registration Rights Agreement, the Company will
issue Exchange Notes and cause the Guarantors to issue exchange guarantees to the Initial Purchaser (the “Private Exchange Notes” and “Private Exchange Guarantees,” respectively). If the Company fails to satisfy its
obligations under the Senior Notes Registration Rights Agreement, it will be required to pay additional interest to the holders of the Senior Notes under certain circumstances in accordance with the terms of the Senior Notes Registration Rights
Agreement. 
 Holders of the Convertible Notes (including Subsequent Purchasers) will have the registration rights set forth in the
registration rights agreement applicable to the Convertible Notes (the “Convertible Notes Registration Rights Agreement,” and together with the Senior Notes Registration Rights Agreement, the “Registration Rights
Agreements”), to be executed on and dated as of the First Closing Date, in a form reasonably acceptable to the Initial Purchaser in conformity in all material respects with the description of such registration rights contained in the
Convertible Notes Preliminary Offering Circular. Pursuant to the Convertible Notes Registration Rights Agreement, the Company will agree, among other things, (i) to file with the SEC, under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Act (the “Convertible Notes Shelf Registration Statement” and, together with the Senior Notes Shelf Registration Statement, the “Shelf Registration Statements”) relating to the resale
by certain holders of the Convertible Notes and (ii) use its commercially reasonable efforts to cause the Convertible Notes Shelf Registration Statement to become effective. If the Company fails to satisfy its obligations under the Convertible
Notes Registration Rights Agreement, it will be required to pay additional interest to the holders of the Convertible Notes under certain circumstances in accordance with the terms of the Convertible Notes Registration Rights Agreement. 

Pursuant to the terms of the Senior Notes Indenture and the Collateral Agreements (as defined in the Senior Notes Indenture) relating to the Senior
Notes, the Company’s obligations under the Senior Notes Indenture and the Senior Notes will be secured by a second priority lien and security interest (the “Second Priority Lien”) in substantially all of the Collateral;
provided, that the lien and security interest in the Collateral will be contractually subordinated to the lien of the Administrative Agent (as defined below) that secures the obligations (i) under the Company’s new $20.0 million
senior secured credit agreement, to be dated as of the Closing Date (the “New Credit Agreement”), among the Company, as borrower, the lenders party thereto and the administrative agent named therein (the “Administrative
Agent”), and (ii) certain other permitted Indebtedness, in each case, to the extent provided in the Intercreditor Agreement (such additional obligations, together with the Second Priority Lien, being the “Senior Priority
Claims”). 
  

 3 

 Pursuant to the terms of the Convertible Notes Indenture and the Collateral Agreements (as defined in the
Convertible Notes Indenture) relating to the Convertible Notes, the Company’s obligations under the Convertible Notes Indenture and the Convertible Notes will be secured by a third priority lien and security interest in substantially all of the
Collateral; provided, that the lien and security interest in the Collateral will be contractually subordinated to the Senior Priority Claims. 
 This Agreement, the Indentures, the Collateral Agreements, the Registration Rights Agreements, the Notes, the Guarantees, the Underlying Securities, the Exchange Notes, the Private Exchange Notes, if any, and the Private Exchange
Guarantees, if any, are collectively referred to herein as the “Documents.” 
 3. Purchase, Sale and Delivery.

 (a) 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, (i) Senior Notes at a purchase price of $106,314,050 and (ii) Convertible Notes at a purchase
price of $$47,025,000. Delivery to the Initial Purchaser of, and payment for, the Notes shall be made at a closing (the “Closing”) to be held at the New York offices of White & Case LLP, 1155 Avenue of the Americas, New
York, New York 10036 on October 1, 2007 (the “First Closing Date”) at 10:00 a.m. 
 (b) In addition, on the basis of
the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the Initial Purchaser to purchase up to $7,500,000 additional aggregate
principal amount of Optional Additional Convertible Notes from the Company and the Guarantors at the purchase price equal to $7,053,750, plus accrued interest, if any, from the First Closing Date to the Option Closing Date (as defined below). The
option granted hereunder may be exercised at any time and from time to time in whole or in part upon the giving of notice by the Initial Purchaser to the Company at any time within 30 days from the date of this Agreement. Such notice shall set forth
the aggregate principal amount of Optional Additional Convertible Notes as to which the Initial Purchaser is exercising the option and the time and date for delivery of and payment for such Optional Additional Convertible Notes (which date and time
may be simultaneous with, but not earlier than, the First Closing Date and shall be determined by the Initial Purchaser and shall not be earlier than three or later than five full business days after delivery of notice). Any such time and date for
delivery of and payment, if subsequent to the First Closing Date, is called an “Option Closing Date” and shall be determined by the Initial Purchaser but shall not be earlier than three nor later than five full business days after
delivery of notice of the Initial Purchaser’s election to exercise the option; and in the event that such time and date are simultaneous with the First Closing Date, the term “First Closing Date” shall refer to the time and date of
delivery of such Optional Additional Convertible Notes. The First Closing Date and the Option Closing Date are each referred to herein as a “Closing Date.” If any Optional Additional Convertible Notes are to be purchased, the
Company agrees to sell such Optional Additional Convertible Notes to the Initial Purchaser. The Initial Purchaser may cancel the option at any time prior to its expiration by giving written notice of such cancellation to the Company. 
 (c) In addition to the foregoing, the Company agrees to pay to the Initial Purchaser a commitment fee of $5,750,000. 
  

 4 

 (d) The Company will deliver to the Initial Purchaser against several payment of the purchase price
(A) the Senior Notes to be offered and sold by the Initial Purchaser (i) in reliance on Regulation S (the “Regulation S Notes”) in the form of one or more permanent global notes, in such denominations as the Initial
Purchaser shall request, in registered form without interest coupons (the “Offered Regulation S Global Notes”), which will be deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) for the
respective accounts of the DTC participants for Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System (“Euroclear”), and Clearstream Banking, société anonyme, Luxembourg
(“Clearstream, Luxembourg”) and registered in the name of Cede & Co., as nominee for DTC, (ii) in reliance on Rule 144A under the Act (the “144A Senior Notes”) in the form of one or more
permanent global notes, in such denominations as the Initial Purchaser shall request, without interest coupons which will be deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC and
(iii) to Accredited Investors in the form of one or more permanent global notes, in such denominations as the Initial Purchaser shall request, without interest coupons (the “AI Senior Notes” and, together with the 144A Senior
Notes, the “Restricted Global Senior Notes”), which will be deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC and (B) the Convertible Notes to be offered and
sold by the Initial Purchaser (i) in reliance on Rule 144A under the Securities Act (the “144A Convertible Notes”) in the form of one or more permanent global notes, in such denominations as the Initial Purchaser shall request,
without interest coupons which will be deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC and (ii) to Accredited Investors in the form of one or more permanent global notes, in
such denominations as the Initial Purchaser shall request, without interest coupons (the “AI Convertible Notes” and, together with the 144A Convertible Notes, the “Restricted Global Convertible Notes”), which will
be deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC. The Offered Regulation S Global Notes, the Restricted Global Senior Notes and the Restricted Global Convertible Notes shall be
assigned separate CUSIP numbers. 
 (e) Payment for the Regulation S Notes, the AI Senior Notes, the 144A Senior Notes, the AI Convertible
Notes, and the 144A Convertible Notes shall be made by the Initial Purchaser in Federal (same day) funds by wire transfer to one or more accounts as the Company shall designate to the Initial Purchaser on the Closing Date, against delivery to the
Trustee as custodian, for DTC of (i) the Offered Regulation S Global Notes representing all of the Regulation S Notes for the respective accounts of the DTC participants for Euroclear and Clearstream, Luxembourg, (ii) the Restricted Global
Senior Notes representing all of the 144A Senior Notes and AI Senior Notes, and (iii) the Restricted Global Convertible Notes representing all of the 144A Convertible Notes and the AI Convertible Notes. The Offered Regulation S Global Notes,
the Restricted Global Senior Notes and the Restricted Global Convertible Notes will be made available for inspection at the above office of White & Case LLP at least 24 hours prior to the First Closing Date and, with respect to the Optional
Additional Convertible Notes, each Option Closing Date. 
 4. Representations and Warranties of the Company. The Company
represents and warrants to the Initial Purchaser that, as of the date hereof, as of the First Closing Date and as of each Option Closing Date. 
 (a) As of the Applicable Time (as defined below), neither (x) the Preliminary Offering Circulars, as supplemented by the final pricing term sheets in the form attached hereto as Exhibit A (the “Senior Notes Pricing
Supplement”) and Exhibit B (the “Convertible Notes Pricing Supplement” and, together with the Senior Notes Pricing Supplement, the “Pricing Supplements”), the Senior Notes Pricing Supplement and the
Senior Notes Preliminary Offering Circular considered together (the “Senior Notes Time of Sale Circular”) and the Convertible Notes Pricing Supplement and the Convertible Notes 

  

 5 

 
Preliminary Offering Circular considered together (the “Convertible Notes Time of Sale Circular” and, together with the Senior Notes Time of
Sale Circular, the “Time of Sale Circulars”), nor (y) any individual Supplemental Offering Materials (as defined below), when considered together with the Time of Sale Circulars, contain any untrue statement of a material fact,
or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. “Applicable Time” means 4:00 P.M. (Eastern Time) on
September 17, 2007 or such other time as agreed by the Company and the Initial Purchaser. 
 “Supplemental Offering Materials” means
any “written communication” (within the meaning of the Act and the rules and regulations thereunder) prepared by or on behalf of the Company, or used or referred to by the Company, that constitutes an offer to sell or a solicitation of an
offer to buy the Notes other than the Offering Circulars or amendments or supplements thereto (including the Pricing Supplements), including, without limitation, any road show relating to the Notes that constitutes such a written communication.

 The Final Offering Circulars, as of their respective dates did not, and at the First Closing Date and, with respect to the Optional Additional Convertible
Notes, each Option Closing Date will not, and each amendment or supplement thereto as of their respective dates will not, contain any untrue statement of a material fact, or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty as to the Initial Purchaser Information (as defined in
Section 11). No injunction or order has been issued that either (i) asserts that any of the transactions contemplated by the Documents is subject to the registration requirements of the Act or (ii) would prevent or suspend the
issuance or sale of the Notes or the use of the Time of Sale Circulars, the Final Offering Circulars or any amendments or supplements thereto (including the Pricing Supplements), in any jurisdiction. The Time of Sale Circulars and the Final Offering
Circulars, as of their respective dates, contained, and the Final Offering Circulars, as amended or supplemented as of the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, will contain, all
the information specified in, and meet the requirements of, Rule 144A(d)(4) under the Act. 
 (b) Immediately following the Closing, the
Company will have no subsidiaries. 
 (c) The Company (i) has been duly incorporated, is validly existing and is in good standing under
the laws of Nevada, (ii) has all requisite power and authority to carry on its business and to own, lease and operate its properties and assets, and (iii) is duly qualified or licensed to do business and is in good standing as a foreign
corporation, authorized to do business in each jurisdiction in which the nature of its business 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, (B) the ability of the Company to perform its obligations
in all material respects under any Document, (C) the enforceability of any Collateral Agreement or the attachment, perfection or priority of any of the Liens intended to be created thereby or (D) the validity of any of the Documents or the
consummation of any of the transactions contemplated therein (each, a “Material Adverse Effect”). 
 (d) All of the issued
and outstanding shares of Capital Stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and were not issued in violation of any preemptive or similar rights. The table under the caption
“Capitalization” in the Time of Sale Circulars and in the Final Offering Circulars (including the footnotes thereto) sets forth, as of the date of such table, (i) the actual cash and cash equivalents and capitalization of the Company
and (ii) the as adjusted cash 

  

 6 

 
and cash equivalents and capitalization of the Company, after giving effect to the Transactions (as defined in the Offering Circulars). There are no
outstanding options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or any contracts or commitments to issue or sell, any shares of Common Stock, any shares of Capital Stock of any
subsidiary, or any such warrants, convertible securities or obligations, except as set forth in the Time of Sale Circulars and the Final Offering Circulars and except for options granted under, or contracts or commitments pursuant to, the
Company’s previous or currently existing stock option and other similar officer, director or employee benefit plans; the description of the Company’s stock, stock bonus and other stock plans or arrangements and the options or other rights
granted and exercised thereunder set forth in the Time of Sale Circulars and the Final Offering Circulars accurately presents in all material respects all material information with respect to such plans, arrangements, options and rights, and there
are no outstanding options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of Capital Stock or other
equity interests of any subsidiary of the Company. 
 (e) No holder of securities of the Company or the Guarantors will be entitled to have
such securities registered under the registration statements required to be filed by Baseline and the Guarantors pursuant to the Registration Rights Agreement. 
 (f) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Documents and to consummate the transactions contemplated thereby. 
 (g) This Agreement has been duly authorized and validly executed and delivered by Baseline. 
 (h) Each of the Indentures and the Collateral Agreements have been duly authorized by Baseline and upon its execution and delivery by the Company, will
be validly executed and delivered by Baseline, and will, assuming due authorization, execution and delivery by the Trustee, constitute a legal, valid and binding obligation of Baseline, enforceable against Baseline in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance 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. 
 (i) Each of the Registration Rights Agreements has been duly authorized by Baseline and, upon its execution and delivery by Baseline, will be validly executed and delivered by the Company, and will (assuming due
authorization, execution and delivery by you) constitute a legal, valid and binding obligation of Baseline, enforceable against Baseline in accordance with its terms, except that (A) the enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance 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 and (B) any rights to indemnity or contribution thereunder may be limited by federal and state securities laws and public
policy considerations. 
 (j) The Notes, when issued, will be in the form contemplated by the applicable Indenture. The Indentures meet the
requirements for qualification under the Trust Indenture Act of 1939, as amended (the “TIA”) applicable to an indenture required to be qualified thereunder. The Notes, Exchange Notes and Private Exchange Notes have each been duly
and validly authorized by Baseline and, in the case of the Notes, when executed and delivered to and paid for by the Initial Purchaser in accordance with the 

  

 7 

 
terms of this Agreement and the applicable Indenture, assuming due authentication of the Notes by the Trustee, will have been duly executed, issued and
delivered and will be legal, valid and binding obligations of Baseline, entitled to the benefit of the applicable Indenture, the Guarantees and the Collateral Agreements, and enforceable against Baseline in accordance with their terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance 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. 
 (k) Upon purchase of the Convertible Notes in accordance with the Agreement, the Convertible Notes will be convertible at the option of the holder thereof into shares of the Underlying Securities in accordance with
the terms of the Convertible Notes; the Underlying Securities reserved for issuance upon conversion of the Convertible Notes have been duly authorized and reserved and, when issued upon conversion of the Convertible Notes in accordance with the
terms of the Convertible Notes, will be validly issued, fully paid and non-assessable, and the issuance of the Underlying Securities will not be subject to any preemptive or similar rights. 
 (l) The statements set forth in the Time of Sale Circulars and the Final Offering Circulars under the captions “Description of Notes”
and “Material U.S. Federal Income Tax Consequences,” as the case may be, insofar as they constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present, in all material respects, the
information called for with respect to such legal matters, documents or proceedings. 
 (m) The Company is not in violation of its
certificate of incorporation, by-laws or any other of its organizational documents (collectively, its “Charter Documents”). The Company is not (i) in violation of any Federal, state, local or foreign statute, law (including,
without limitation, common law) or ordinance, or any judgment, decree, rule, regulation or order (collectively, “Applicable Law”) of any federal, state, local and other governmental authority, governmental or regulatory agency or
body, court, arbitrator or self-regulatory organization, domestic or foreign (each, a “Governmental Authority”) or (ii) in breach of or default under any bond, debenture, note or other evidence of indebtedness, indenture,
mortgage, deed of trust, lease or any other material agreement or instrument to which it is a party or by which it or its property is bound (collectively, “Applicable Agreements”), other than, in the case of each of the immediately
preceding clauses (i) and (ii) violations, breaches or defaults that would not, individually or in the aggregate, have a Material Adverse Effect. All material Applicable Agreements are in full force and effect and with respect to the
Company, are legal, valid and binding obligations of the Company, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance 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 therefore may be brought. There
exists no condition that, with the passage of time or otherwise, would constitute (a)(i) a violation of such Charter Documents or (ii) Applicable Law, (b) a breach of or default under any Applicable Agreement or (c) result in the
imposition of any penalty or the acceleration of any indebtedness other than in the case of clauses (a)(ii), (b) and (c) as would reasonably be expected, individually or in the aggregate, not to have a Material Adverse
Effect. 
 (n) No transaction has occurred between or among the Company, any of its subsidiaries and their affiliates, officers or directors
or any affiliate or affiliates of any such officer or director that is required to have been described under applicable securities laws in Baseline’s Exchange Act filings and is not so described in such filings. 
  

 8 

 (o) There is no transaction, arrangement or other relationship between the Company and an unconsolidated
or other off-balance sheet entity that is required to be disclosed by Baseline in its Exchange Act filings and is not so disclosed or that otherwise would reasonably be expected to have a Material Adverse Effect. 
 (p) Baseline is in compliance in all material respects with all requirements of the OTC Bulletin Board, and has not received any notice from the OTC
Bulletin Board that the eligibility of its common stock for quotation is in any way threatened. 
 (q) Baseline covenants that it will not
knowingly or recklessly, and that it will use its reasonable best efforts to ensure that each director, officer, agent or employee of the Company will not knowingly or recklessly, use any part of the net proceeds from the sale of the Convertible
Notes for any payments to: (a) any individual or entity listed on the Specially Designated Nationals and Blocked Persons List administered by the United States Department of the Treasury’s Office of Foreign Assets Control
(“OFAC”) and/or any other similar lists administered by OFAC pursuant to any authorizing statute, Executive Order or regulation; (b) the government of any country subject to an OFAC Sanctions Program; (c) any individual or
entity included on any list of terrorists or terrorist organizations maintained by the United Nations, the European Union and or the countries in which the Company operates; or (d) any governmental official or employee, political party,
official of a political party, candidate for political office, anyone else acting in an official capacity, or any agent of any such individual or entity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of
the FCPA (as defined below). 
 (r) Neither the Company nor any director, officer, agent or employee of the Company has made, directly or
indirectly, any payment or promise to pay, or gift or promise to give, or authorized such a promise or gift, of any money or anything of value, directly or indirectly, to (i) any foreign official (as such term is defined in the United States
Foreign Corrupt Practices Act of 1977 (as amended, the “FCPA”)) for the purpose of influencing any official act or decision of such official or inducing him or her to use his or her influence to affect any act or decision of a
governmental authority, or (ii) any foreign political party or official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate or inducing such party,
official or candidate to use his, her or its influence to affect any act or decision of a foreign governmental authority, in the case of both (i) and (ii) above, in order to assist the Company to obtain or retain business for, or direct
business, and under circumstances which would subject the Company to liability under the FCPA or any corresponding foreign laws. The Company has not made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment of funds or
received or retained any funds in violation of any law, rule or regulation. 
 (s) Neither the execution, delivery or performance of the
Documents nor the consummation of any transactions contemplated therein will conflict with, violate, constitute a breach of or a default (with the passage of time or otherwise) under, require the consent of any person (other than (i) consents
already obtained and in full force and effect, (ii) governmental and regulatory approvals required to consummate the Acquisition or (iii) as of the date hereof, governmental and regulatory approvals that are necessary for Baseline to incur
the Indebtedness evidenced by the Notes and Guarantees, and to grant Liens (defined below) on the Collateral) under, result in the imposition of a Lien on any assets of the Company (except for Liens created pursuant to the Documents), or result in
an acceleration of indebtedness under or pursuant to (1) the Charter Documents, (2) any material Applicable Agreement, or (3) any Applicable Law. “Liens” means all liens, security interests, mortgages, pledges,
charges, equities, claims or restrictions on transferability or encumbrances of any kind. After consummation of the Offering and the transactions contemplated in the Documents, no Default or Event of Default under either Indenture will exist.

  

 9 

 (t) When executed and delivered, the Documents will conform in all material respects to the descriptions
thereof in the Time of Sale Circulars, as the case may be. 
 (u) No consent, approval, authorization or order of any Governmental Authority
or third party is required for the issuance and sale by Baseline of the Notes to the Initial Purchaser or the consummation by Baseline of the other transactions contemplated hereby, except such as have been obtained (and are in full force and
effect) and such as may be required under state securities or “Blue Sky” laws in connection with the purchase and resale of the Notes by such Initial Purchaser. 
 (v) There is no action, claim, suit, demand, hearing, notice of violation or deficiency, or proceeding, domestic or foreign (collectively, “Proceedings”), pending or, to the knowledge of the Company,
threatened, that either (i) seeks to restrain, enjoin, prevent the consummation of, or otherwise challenge any of the Documents or any of the transactions contemplated therein, or (ii) except as, would, individually or in the aggregate,
have a Material Adverse Effect. Except as disclosed in the Time of Sale Circulars, the Company is not subject to any judgment, order, decree, rule or regulation of any Governmental Authority that would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. No injunction or order has been issued and no Proceeding is pending or, to the knowledge of the Company, threatened that (i) asserts that the offer, sale and delivery of the Notes to the Initial
Purchaser pursuant to this Agreement or the initial resale of the Notes by such Initial Purchaser in the manner contemplated by this Agreement is subject to the registration requirements of the Act, or (ii) would prevent or suspend the issuance
or sale of the Notes, including the Exempt Resales, or the use of the Preliminary Offering Circulars, the Time of Sale Circulars, the Final Offering Circulars, or any amendments or supplements thereto, in any jurisdiction. 
 (w) The Company possesses 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 business as now or proposed to be conducted as set forth in the Preliminary
Offering Circulars (“Permits”), except where the failure to obtain such Permits would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; the Company has fulfilled and performed all of
its material obligations with respect to such Permits and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of
any such Permit; and the Company has not received any notice of any proceeding relating to revocation or modification of any such Permit, except as disclosed in the Time of Sale Circulars or the Final Offering Circulars or except where such
revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. 
 (x) The Company has good and
marketable title to all real property owned by it and good title to all personal property owned by it and good and indefeasible title to all leasehold estates in real and personal property being leased by it and, as of the First Closing Date and,
with respect to the Optional Additional Convertible Notes, each Option Closing Date, will be free and clear of all Liens (other than Permitted Liens). The assets of the Company include all of the assets and properties necessary or required in, or
otherwise material to, the conduct of the businesses of each of them as currently conducted (as described in the Final Offering Circulars and the Time of Sale Circulars), and such assets are in good working condition, except where the failure of
such assets to be in working condition would not, individually or in the aggregate, have a Material Adverse Effect. 
  

 10 

 (y) The Company has good and defensible title to its interests in its license and subsoil use contract
relating to the exploration, development and production on its oil fields, free and clear of any Liens, except for those (i) created pursuant to its sub-soil use contracts or operating agreements, unitization and pooling arrangements and oil,
condensate and gas sales contracts that secure payment of amounts not yet due and payable and which are of a nature and scope customary in similar oil, condensate and gas drilling and producing operations, (ii) described in the Time of Sale
Circulars and Final Offering Circulars or (iii) which neither individually or in the aggregate would have a Material Adverse Effect. Except to the extent described in the Time of Sale Circulars or Final Offering Circulars, the licenses, subsoil
use contracts or other arrangements held by the Company to explore, develop and exploit the oil fields, and the manner in which the Company acquired or otherwise procured such licenses, subsoil use contracts or other arrangements, was generally
consistent with standard industry practices for acquiring or procuring rights to explore, develop and exploit acreage for hydrocarbons. The Company has complied in all respects with the terms of the licenses, subsoil use contracts or other
arrangements relating to the oil fields in which each purports to own an interest, and no claim has been asserted by any person or entity adverse to the rights of the Company under any of such licenses, subsoil use contracts or other arrangements or
questioning its rights to the continued use of the oil fields under any such licenses, subsoil use contracts or other arrangements except for such noncompliance or claims as would not individually or in the aggregate have a Material Adverse Effect.
The licenses, subsoil use contracts or other arrangements relating to the exploration, development and production on the oil fields held by the Company are valid, existing and enforceable with such exceptions as are described in the Time of Sale
Circulars or Final Offering Circulars or which in the aggregate would not have a Material Adverse Effect. Except as disclosed in the Time of Sale Circulars or the Final Offering Circulars, the Company have the right to use or enjoy the benefits of
the oil fields as are necessary to its operations as now conducted. 
 (z) All Tax returns required to be filed by the Company have been
filed, or valid extensions have been granted, and all such returns that have been filed are true, complete, and correct in all material respects. Except as disclosed in the Offering Circular, all material Taxes that are due from the Company 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 reserves have been established in accordance with generally accepted
accounting principles of the United States, consistently applied (“GAAP”). Except as disclosed in the Offering Circulars, there are no actual or proposed Tax assessments against the Company that would, individually or in the
aggregate, have a Material Adverse Effect. The accruals and reserves on the books and records of the Company in respect of any material Tax liability for any taxable 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 Federal, state, local and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding),
including, without limitation, any interest, additions to tax, or penalties applicable thereto. 
 (aa) The Company owns, or is licensed
under, and has the right to use, all patents, patent rights, licenses, inventions, copyrights, know-how (including, without limitation, trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively, “Intellectual Property”) necessary for the conduct of its businesses and, as of the First Closing Date and, with respect to the Optional Additional Convertible
Notes, each Option Closing Date, will be free and clear of all Liens, other than Permitted Liens. The Company has not received any claims or notices of any potential claim asserted by any person challenging the use of any such Intellectual Property
by the Company or questioning the validity or effectiveness of the Intellectual Property or any license or agreement related thereto and the Company has no knowledge of any facts or circumstances that would reasonably be expected to result in any
such claim or potential claim. To the knowledge of the Company, there is no valid basis for any such claim, other 

  

 11 

 
than any claims that would not, individually or in the aggregate, have a Material Adverse Effect. The Company has no reason to believe that the use of such
Intellectual Property by the Company will infringe on the Intellectual Property rights of any other person. 
 (bb) The Company maintains a
system of internal accounting controls over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the Exchange Act and that is sufficient to provide reasonable assurance that (i) material
transactions are executed in accordance with management’s general or specific authorization, (ii) material 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 assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any material differences. 
 (cc) Since the date of the latest audited financial statements
included in the Time of Sale Circulars, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting. 
 (dd) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the
Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s
principal executive officer and principal financial executive officer by others within those entities; and such disclosure controls and procedures are effective. 
 (ee) The audited consolidated financial statements and related notes of the Company contained in the Time of Sale Circulars and the Final Offering Circulars (the “Financial Statements”) present fairly
the financial position, results of operations and cash flows of Baseline as of the respective dates and for the respective periods to which they apply and have been prepared in accordance with GAAP and the requirements of Regulation S-X of the Act.
The financial data set forth under “Summary Historical and Pro Forma Combined Financial Information” and “Summary Reserve and Operating Data” included in the Time of Sale Circulars and the Final Offering Circulars have been
prepared on a basis consistent with that of the Financial Statements and present fairly the financial position and results of operations of Baseline as of the respective dates and for the respective periods indicated. All other financial,
statistical, and market and industry-related data included in the Time of Sale Circulars and the Final Offering Circulars are fairly and accurately presented and are based on or derived from sources that Baseline believes to be reliable and
accurate. 
 (ff) The pro forma financial information and the related notes of the Company set forth in the Time of Sale Circulars and the
Final Offering Circulars include assumptions that were made in good faith and provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein. The related pro forma adjustments
give appropriate effect to those assumptions and the pro forma adjustments reflect the proper application of those adjustments and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement
amounts in the pro forma financial data included in the Time of Sale Circulars and the Final Offering Circulars. The pro forma financial data set forth under “Summary Historical and Pro Forma Combined Financial Information,”
“Unaudited Pro Forma Combined Financial Data” and “Pro Forma Supplemental Oil and Natural Gas Disclosures” in the Time of Sale Circulars and the Final Offering Circulars comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. 
  

 12 

 (gg) Subsequent to the respective dates as of which information is given in the Time of Sale Circulars
and the Final Offering Circulars, except as disclosed in the Time of Sale Circulars or the Final Offering Circulars, (i) the Company has not incurred any liabilities, direct or contingent, that are material, individually or in the aggregate, to
the Company or has entered into any transactions not in the ordinary course of business and (ii) there has not been any material decrease in the Capital Stock, shares or options issued pursuant to equity incentive plans or purchase plans
approved by the Company’s Board of Directors and repurchases of shares or options pursuant to repurchase plans already approved by the Company’s Board of Directors or any material increase in long-term indebtedness or any material increase
in short-term indebtedness of the Company, or any payment of or declaration to pay any dividends or any other distribution with respect to the Company. 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 (each of clauses (i) and (ii) in the immediately preceding sentence and the events in this sentence, a “Material Adverse
Change”), since December 31, 2006. There is no event that is reasonably likely to occur, which if it were to occur, would, individually or in the aggregate, have a Material Adverse Effect, except such events that have been adequately
disclosed in the Time of Sale Circulars or the Final Offering Circulars. 
 (hh) No “nationally recognized statistical rating
organization” (as such term is defined for purposes of Rule 436(g)(2) under the Act) (i) has imposed (or has informed the Company that it is considering imposing) any condition (financial or otherwise) on the Company relating to any rating
assigned to the Company or to any securities of the Company, or (ii) has indicated to the Company that it is considering (A) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned, or (B) any change in the outlook for any rating of the Company or any securities of the Company. 
 (ii) On the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, the Company (i) will be solvent, (ii) will have sufficient capital with which to
conduct the business it is presently conducting and presently anticipates conducting and (iii) will be able to pay its debts as they mature. 
 (jj) Baseline shall use the proceeds of the Offerings in the manner described in the Time of Sale Circulars and the Final Offering Circulars under the caption “Use of Proceeds.” 
 (kk) Except as disclosed in the Time of Sale Circulars or the Final Offering Circulars and as it relates to the Initial Purchaser, neither Company nor
any affiliate (as defined in Rule 501(b)) has not and, to its knowledge after due inquiry, 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 to facilitate the sale or resale of any of the Notes, (ii) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, any of the Notes, or (iii) except as disclosed in the Time of Sale Circulars or the Final Offering Circulars, paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities
of the Company. 
 (ll) Without limiting any provision herein, no registration under the Act and no qualification of either Indenture under
the TIA is required for the sale of the Notes to the Initial Purchaser as contemplated hereby or for the Exempt Resales, assuming (i) that the purchasers in the Exempt Resales are QIBs or Accredited Investors or non-U.S. persons and
(ii) the accuracy of such Initial Purchaser’s representations contained herein regarding the absence of general solicitation in connection with the sale of the Notes to the Initial Purchaser and in the Exempt Resales. 
  

 13 

 (mm) The Notes are eligible for resale pursuant to Rule 144A under the Act and no other securities of
Baseline are of the same class (within the meaning of Rule 144A under the Act) as the Notes are listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or quoted in a U.S. automated inter-dealer quotation system. No securities of Baseline of the same class as the Notes have been offered, issued or sold by Baseline or any of its Affiliates within the six-month period immediately
prior to the date hereof. 
 (nn) Baseline is subject to the reporting requirements of the Exchange Act and is eligible to register resales
of the Convertible Notes and the Underlying Securities on a registration statement on Form S-3 under the Act. There exist no facts or circumstances (including without limitation any required approvals or waivers or any circumstances that may delay
or prevent the obtaining of accountant’s consents) that reasonably would be expected to prohibit or delay the preparation and filing of a registration statement on Form S-3 that will be available to register resales of the Convertible Notes or
the Underlying Securities under the Act. 
 (oo) Neither Baseline nor any of its Affiliates or other persons acting on behalf of the Company
has offered or sold the Notes by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act or, with respect to Notes sold outside the United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of Rule 902 under the Act, and Baseline, each Affiliate of the Company and each other person acting on behalf of the Company have complied with and will implement the “offering
restrictions” within the meaning of such Rule 902; provided, that no representation is made in this subsection with respect to the actions of the Initial Purchaser. 
 (pp) The Company and each ERISA Affiliate has fulfilled its obligations, if any, under the minimum funding standards of Section 302 of the 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 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
Code (as defined below). Neither the Company nor any ERISA Affiliate thereof has incurred any material unpaid liability to any plan which is subject to ERISA (other than for the payment of premiums in the ordinary course). “ERISA
Affiliate” means a corporation, trade or business that is, along with the Company, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Section 414 of the Internal Revenue Code
of 1986, as amended (the “Code”) or Section 4001 of ERISA. 
 (qq) (i) Except as disclosed in the Time of Sale
Circulars or the Final Offering Circulars, the Company is not 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, and, to the Company’s knowledge, no union organizing or decertification efforts are underway or threatened against the Company; (iii) no labor strike, work stoppage, slowdown, or other material labor dispute is pending against the
Company, or, to the knowledge of the Company threatened against the Company; (iv) there is no worker’s compensation liability, experience or matter that could be reasonably expected to have a Material Adverse Effect; (v) there is no
threatened or pending liability against the Company 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, 

  

 14 

 
investigation, unfair labor practice claim, or inquiry of any kind, pending against the Company that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; (vii) no employee or agent of the Company 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, reasonably be expected to have a Material Adverse Effect; and (viii) no term or condition of employment exists through arbitration awards, settlement agreements, or side
agreements that is contrary to the express terms of any applicable collective bargaining agreement. 
 (rr) None of the transactions
contemplated in the Documents or the application by Baseline or the Guarantors of the proceeds of the Notes 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). 
 (ss) Baseline is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940, as amended (the
“Investment Company Act”); and Baseline is not nor, after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Time of Sale Circulars or the Final Offering Circulars,
will be an “investment company” as defined in the Investment Company Act. 
 (tt) Baseline has not engaged any broker, finder,
commission agent or other person (other than the Initial Purchaser) in connection with the Offering or any of the transactions contemplated in the Documents, and Baseline is not 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). 
 (uu) Except as disclosed in the Time of Sale
Circulars and the Final Offering Circulars, the Company (i) is in compliance with all applicable foreign, Federal, state and local laws and regulations relating to 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 it under applicable Environmental Laws to conduct its business and
(iii) has not received notice of any actual or potential liability for the investigation or remediation of any disposal or release 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, whether or not arising from
transactions in the ordinary course of business. Except as disclosed in the Time of Sale Circulars or the Final Offering Circulars, the Company has not been named as a “potentially responsible party” under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended. 
 (vv) As of the First Closing Date and, with respect to the Optional
Additional Convertible Notes, each Option Closing Date, other than as described in the Time of Sale Circulars and the Final Offering Circulars, there will be no encumbrances or restrictions on the ability of the Guarantors of the Company (x) to
pay dividends or make other distributions on the Guarantors’ Capital Stock or to pay any indebtedness to the Company or the Guarantors, (y) to make loans or advances or pay any indebtedness to, or investments in, the Company or the
Guarantors or (z) to transfer any of its property or assets to the Company or the Guarantors. 
  

 15 

 (ww) Each certificate signed by any officer of the Company delivered to the Initial Purchaser shall be
deemed a representation and warranty by the Company (and not individually by such officer) to the Initial Purchaser with respect to the matters covered thereby. 
 (xx) The Company is 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 its businesses, assets, employees, officers and directors are in full force and effect. The Company is in compliance with the terms of such policies and instruments in all material respects, and there are no
claims by the Company under any such policy or instrument as to which any insurance company is denying liability (or defending under a reservation of rights clause). The Company has not been refused any insurance coverage sought or applied for, and
the Company does not have 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, reasonably be expected to have a Material Adverse Effect. 
 (yy) As of the First
Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, except with respect to Permitted Liens, 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 possible future Lien on, or security interest in, any assets or property
of the Company or any rights thereunder. 
 (zz) Malone & Bailey P.C., the accountants who have audited the financial statements of
Baseline and the DSX Properties (as defined in the Offering Circulars), included as part of the Time of Sale Circulars and the Final Offering Circulars, is an independent certified public accountant with respect to the Company and the DSX
Properties, under Rule 101 of the AICPA’s code of professional conduct and its interpretations and rulings, during the periods covered by the financial statements on which they reported included in the Time of Sale Circulars. 
 (aaa) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Acquisition Agreement. The
Acquisition Agreement has been duly and validly authorized by the Company, constitutes a legal, valid and binding obligation of the Company and is in full force and effect. The representations and warranties contained in the Acquisition Agreement
are true as of the date made therein. The Acquisition Agreement conforms in all material respects to the descriptions thereof in the Time of Sale Circulars and the Final Offering Circulars. 
 5. Covenants of the Company. The Company hereby agrees: 
 (a) 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 state securities commission
of any stop order suspending the qualification or exemption from qualification of any of the Notes for offer or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any 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 Circulars, the Offering Circulars or any Supplemental Offering Material untrue or that requires the making of any additions to or
changes in the Time of Sale Circulars or the Final Offering Circulars in order to make the statements therein, in 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 Notes under any state securities or Blue Sky laws, and (iii) if at any time any 

  

 16 

 
state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of any of the
Notes under any such laws, use its commercially reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. 
 (b) Without the prior written consent of the Initial Purchaser, the officers and directors of the Company (including any persons that become an officer or director of the Company following the Acquisition) will not,
during the period ending 90 days after the date of the Final Offering Circulars (the “Lock-up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such Common Stock or (iii) file with the Commission a registration statement under the Act relating to any
additional shares of the Common Stock or securities convertible into, or exchangeable for, any shares of Common Stock, or publicly disclose the intention to effect any transaction described in clause (i), (ii) or (iii), whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise; provided, however, that the foregoing shall not apply to (A) the sale of the Convertible
Notes under this Agreement or the issuance of the Underlying Securities, (B) the grant by the Company of employee or director stock options, restricted stock awards or restricted stock unit awards in the ordinary course of business, the
issuance by the Company of any shares of Common Stock of the Company upon the exercise of an option or upon the sale by the Company of shares of Common Stock pursuant to the Company’s employee stock purchase plan, (C) any transfer of
shares of Common Stock pursuant to the Company’s 401(k) plan, if any, (D) the filing by the Company of any registration statement with the Commission on Form S-8 relating to the offering of securities pursuant to the terms of the
Company’s existing incentive plan or employee stock purchase plan, (E) the conversion or exercise of a security outstanding on the date hereof and (F) filing of any registration statement in respect of the Convertible Notes and the
Underlying Securities. 
 (c) To (i) furnish the Initial Purchaser, without charge, as many copies of the Final Offering Circulars, and
any amendments or supplements thereto, as the Initial Purchaser may reasonably request, (ii) promptly prepare the Pricing Supplements, in form and substance reasonably satisfactory to the Initial Purchaser, and to furnish to the Initial
Purchaser as soon as practicable but no later than one hour prior to the Time of Sale Circulars as many copies of the Pricing Supplements as such Initial Purchaser may reasonably request and (iii) promptly prepare, upon the Initial
Purchaser’s reasonable request, any amendment or supplement to the Final Offering Circulars that the Initial Purchaser, upon advise of legal counsel, determines may be necessary in connection with Exempt Resales (and the Company hereby consents
to the use of the Preliminary Offering Circulars and the Final Offering Circulars, and any amendments and supplements thereto, by the Initial Purchaser in connection with Exempt Resales. 
 (d) Not to amend or supplement the Final Offering Circulars prior to the First Closing Date and, with respect to the Optional Additional Convertible
Notes, each Option Closing Date unless the Initial Purchaser shall previously have been advised thereof and shall have provided a written consent thereto, which consent shall not be unreasonably withheld. The Company represents and agrees that,
unless it obtains the prior consent of the Initial Purchaser, it has not made and will not make any offer relating to the Notes by means of any Supplemental Offering Materials. 
 (e) So long as the Initial Purchaser shall hold any of the Notes, (i) if any event shall occur as a result of which, in the reasonable judgment of
the Company or the Initial Purchaser or White & Case LLP, it becomes necessary or advisable to amend or supplement the Final Offering Circulars in order to make the statements therein, in light of the circumstances under which they were
made, not misleading, or 

  

 17 

 
if it is necessary to amend or supplement the Time of Sale Circulars or the Final Offering Circulars to comply with Applicable Law, to prepare, at the
expense of the Company, an appropriate amendment or supplement to the Time of Sale Circulars or the Final Offering Circulars (in form and substance reasonably satisfactory to such Initial Purchaser, as evidenced by their written consent thereto,
which consent shall not be unreasonably withheld, conditioned or delayed) so that (A) as so amended or supplemented, the Time of Sale Circulars or the Final Offering Circulars will not include an untrue statement of material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and (B) the Time of Sale Circulars or the Final Offering Circulars will comply with Applicable
Law and (ii) if in the reasonable judgment of the Company or such Initial Purchaser it becomes necessary or advisable to amend or supplement the Time of Sale Circulars or the Final Offering Circulars so that the Time of Sale Circulars or the
Final Offering Circulars will contain all of the information specified in, and meet the requirements of, Rule 144A(d)(4) of the Act, to promptly prepare an appropriate amendment or supplement to the Time of Sale Circulars or the Final Offering
Circulars (in form and substance reasonably satisfactory to the Initial Purchaser, as evidenced by their written consent thereto, which consent shall not be unreasonably withheld, conditioned or delayed) so that the Final Offering Circulars, as so
amended or supplemented, will contain the information specified in, and meet the requirements of, such Rule. 
 (f) To cooperate with the
Initial Purchaser and White & Case LLP in connection with the qualification of the Notes under the securities or Blue Sky laws of such jurisdictions as the Initial Purchaser may reasonably request and continue such qualification in effect
so long as reasonably required for Exempt Resales. 
 (g) Whether or not the Offerings or any of the transactions contemplated under the
Documents are consummated or this Agreement is terminated, to pay (i) all costs, expenses, fees and taxes incidental to and in connection with: (A) the preparation, printing and distribution of the Time of Sale Circulars, any Offering
Circulars and all amendments and supplements thereto (including, without limitation, financial statements and exhibits), any Supplemental Offering Materials 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 Notes, (D) the qualification of the Notes for offer and sale under the securities or Blue Sky laws of the several states (including, without limitation, the fees and disbursements to the Initial Purchaser’s counsel relating
to such registration or qualification), (E) furnishing such copies of the Time of Sale Circulars, any Offering Circulars and all amendments and supplements thereto, as may reasonably be requested for use by the Initial Purchaser, (F) the
performance of the Company’s obligations under the Registration Rights Agreements, including but not limited to the Exchange Offer, the Exchange Offer Registration Statement and any Shelf Registration Statements, (G) the filing with the
National Association of Securities Dealers, Inc., (H) the listing of the Underlying Securities on the OTC Bulletin Board, (I) a “road show” presentation to potential investors, (ii) all fees and expenses of the counsel,
accountants and any other experts or advisors retained by the Company, (iii) all expenses and listing fees in connection with the application for quotation of the Notes on the PORTAL market, (iv) all fees and expenses (including fees and
expenses of counsel) of the Company in connection with approval of the Notes by DTC for “book-entry” transfer, (v) all fees charged by rating agencies in connection with the rating of the Notes, (vi) all fees and expenses
(including fees and expenses of counsel) of the Trustee and the Collateral Agents and trustees under any deed of trust, (vii) all fees and expenses in connection with the creation and perfection of the security interests under each of the
Collateral Agreements (including, without limitation, filing and recording fees, search fees, taxes and costs of title policies), (viii) all fees, disbursements and out-of-pocket expenses incurred by the Initial Purchaser in connection with its
services 

  

 18 

 
to be rendered hereunder including, without limitation, the fees and disbursements of White & Case LLP, counsel to the Initial Purchaser, travel and
lodging expenses, word processing charges, messenger and duplicating services, facsimile expenses and other customary expenditures and (ix) any other fees and expenses payable to the Initial Purchaser under the engagement letter between the
Company and the Initial Purchaser. If the sale of the Notes provided for herein is not consummated because any condition to the obligations of the Initial Purchaser set forth in Section 7 hereof is not satisfied, because this Agreement
is terminated pursuant to Section 9 hereof or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder (other than in
each such case solely by reason of a default by the Initial Purchaser on its obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company agrees to promptly reimburse the Initial Purchaser in cash
upon demand for all fees, disbursements and out-of-pocket expenses (including the fees, disbursements and charges of White & Case LLP, counsel to the Initial Purchaser) to be paid in cash that shall have been incurred by the Initial
Purchaser in connection with the proposed purchase and sale of the Notes. 
 (h) To use the proceeds of the Offerings in the manner described
in the Time of Sale Circulars under the caption “Use of Proceeds.” 
 (i) To do and perform all things required to be done
and performed under the Documents. 
 (j) Not to, and to ensure that no “affiliate” (as defined in Rule 501(b) of the Act) 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 Act) that would be integrated with the sale of the Notes in a manner that would require the registration
under the Act of the sale to the Initial Purchaser or to the Subsequent Purchasers of the Notes. 
 (k) For so long as any of the Notes
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 Notes in connection with any sale thereof and any prospective Subsequent
Purchasers of such Notes from such owner, the information required by Rule 144A(d)(4) under the Act. 
 (l) To comply with the representation
letter of the Company to DTC relating to the approval of the Notes by DTC for “book entry” transfer. 
 (m) To use its reasonable
best efforts to effect the inclusion of the Notes in the Private Offerings, Resale and Trading Automated Linkages (“PORTAL”) market and to use its reasonable best efforts to maintain the listing of the Notes on PORTAL for so long as
the Notes are outstanding. 
 (n) For so long as the Initial Purchaser shall hold any of the Notes, if not otherwise publicly available, to
furnish to such 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 Notes 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. 
 (o) Except in connection with the Exchange Offer or the filing of the Shelf Registration Statements, 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 Notes other than the Time of Sale Circulars, any Offering Circulars and any amendments and supplements to the Final Offering Circulars prepared in compliance with this Agreement, or (ii) solicit any
offer to buy or offer to sell the Notes by means of any form of general solicitation or general advertising (including, without limitation, as such terms are used in Regulation D under the Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Act. 
  

 19 

 (p) During the two-year period after the First Closing Date and, with respect to the Optional Additional
Convertible Notes, each Option Closing Date (or such shorter period as may be provided for in Rule 144(k) under the Act, as the same may be in effect from time to time), to not, and to not permit any future Subsidiaries of either the Company or any
other “affiliates” (as defined in Rule 144A under the Act) controlled by the Company to, resell any of the Notes which constitute “restricted securities” under Rule 144 that have been reacquired by the Company, any future
Subsidiaries of the Company or any other “affiliates” (as defined in Rule 144A under the Act) controlled by the Company, except pursuant to an effective registration statement under the Act. 
 (q) To pay all stamp, documentary and transfer taxes and other duties, if any, which may be imposed by the United States or any political subdivision
thereof or taxing authority thereof or therein with respect to the issuance of either the Notes or the sale thereof to the Initial Purchaser. 
 (r) To not take any action prohibited by Regulation M under the Exchange Act, in connection with the distribution of the Notes contemplated hereby. 
 (s) To reserve and keep available at all times, free of pre-emptive rights, shares of Common Stock for the purpose of enabling the Company to satisfy all obligations to issue the Underlying Securities upon conversion
of the Convertible Notes. 
 (t) Except for such documents that are publicly available on the Commission’s Electronic Data Gathering,
Analysis and Retrieval system (“EDGAR”), to furnish to the holders of the Notes as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders’ equity
and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending
after the date of the Final Offering Circulars), to make available to its security holders consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail. 
 (u) To advise the Initial Purchaser promptly, and, if requested by the Initial Purchaser, confirm such advice in writing, of the issuance by any state
securities commission of any stop order suspending the qualification or exemption of any of the Notes for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other
regulatory authority, and shall use its reasonable best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption of any of the Notes under any state securities or Blue Sky laws, and if, at any time, any
state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption of any of the Notes under any state securities or Blue Sky laws, the Company shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time. 
 (v) To cause any person who becomes an officer or director of the
Company during the Lock-up Period to execute a “lock-up” agreement substantially in the form of Exhibit F-1. 
 6.
Representations and Warranties of the Initial Purchaser; Resales by Initial Purchaser. The Initial Purchaser represents and warrants and agrees with the Company that: 
 (a) It is a QIB and an Accredited Investor and it will offer the Notes, as applicable for resale only upon the terms and conditions set forth in this
Agreement and in the Final Offering Circulars. 
  

 20 

 (b) It is not acquiring the Notes, with a view to any distribution thereof that would violate the Act or
the securities laws of any state of the United States or any other applicable jurisdiction. In connection with the Exempt Resales, it will solicit offers to buy the Notes, as applicable only from, and will offer and sell the Notes, as applicable
only to, (A) persons reasonably believed by such Initial Purchaser to be QIBs or (B) persons reasonably believed by the Initial Purchaser to be Accredited Investors or (C) non-U.S. persons reasonably believed by the Initial Purchaser
to be a purchaser referred to in Regulation S under the Act; provided, however, that in purchasing such Notes, as applicable, such persons are deemed to have represented and agreed as provided under the caption “Notice to
Investors” contained in the Final Offering Circulars. In connection with any offers or sales of the Notes to non-U.S. persons: 
 (i) The Notes have not been registered under the Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Rule 144A or Regulation S under the Act or pursuant
to another exemption from the registration requirements of the Act; 
 (ii) It has offered the Notes, and will offer and sell
the Notes (A) as part of its distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering and the First Closing Date (the “Distribution Compliance Period”), only in
accordance with Rule 903 of Regulation S under the Act or as otherwise permitted under this Section 6. Accordingly, neither it, its affiliates nor any persons acting on its or their behalf, has engaged or will engage in any directed
selling efforts (within the meaning of Regulation S) with respect to the Notes, and it and they have complied and will comply with the offering restrictions requirement of Regulation S. It agrees that at or prior to confirmation of sale of Notes to
persons outside the U.S., it will send to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Notes from it during the Distribution Compliance Period a confirmation or notice stating that such
purchaser is subject to the same restrictions on offers or sales as set forth in this Section 6; 
 (iii) It will not
offer, sell or deliver any of the Notes in any jurisdiction outside the United States except under circumstances that will result in compliance with the applicable laws thereof, and that it will take at its own expense whatever action is required to
permit its purchase and resale of the Notes in such jurisdictions; and 
 (iv) It understands that no action has been taken to
permit a public offering in any jurisdiction outside the United States where action would be required for such purpose. 
 (c) No form of
general solicitation or general advertising in violation of the 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 Act or, with respect to Notes 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 Notes. 
 (d) The Initial Purchaser will deliver to each Subsequent Purchaser of the Notes, in connection with its original distribution of the Notes, a copy of
the respective Final Offering Circular, as amended and supplemented at the date of such delivery. 
  

 21 

 7. Conditions. The obligation of the Initial Purchaser to purchase the Notes, under this
Agreement is subject to the satisfaction of each of the following conditions or waiver thereof by the Initial Purchaser: 
 (a) All the
representations and warranties contained in this Agreement and in each of the Documents shall be true and correct as of the date hereof and at the First Closing Date as though then made and, with respect to the Optional Additional Convertible Notes,
as of each Option Closing date as though then made. On or prior to the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, the Company and each other party to the Documents (other than the
Initial Purchaser) shall have performed or complied in all material respects 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). 
 (b) No injunction, restraining order or order of any nature by a Governmental Authority shall have been issued as of the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option
Closing Date, that would prevent or materially interfere with the consummation of the Offerings or any of the transactions contemplated under the Documents; and no stop order suspending the qualification or exemption from qualification of any of the
Notes, in any jurisdiction shall have been issued and no Proceeding for that purpose shall have been commenced or, to the knowledge of the Company after due inquiry, be pending or contemplated as of the First Closing Date and, with respect to the
Optional Additional Convertible Notes, each Option Closing Date. 
 (c) No action shall have been taken and no Applicable Law shall have been
enacted, adopted or issued that would, as of the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, prevent the consummation of the Offerings or any of the transactions contemplated under the
Documents. No Proceeding shall be pending or, to the knowledge of the Company after due inquiry, threatened other than Proceedings that (A) if adversely determined would not, individually or in the aggregate, adversely affect the issuance or
marketability of the Notes and (B) would not, individually or in the aggregate, have a Material Adverse Effect, except as disclosed in the Final Offering Circulars. 
 (d) Subsequent to the respective dates as of which data and information is given in the Time of Sale Circulars and the Final Offering Circulars, there shall not have been any Material Adverse Change. 
 (e) The Notes shall have been designated PORTAL securities in accordance with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL market. 
 (f) The Underlying Securities shall have been approved for listing on the OTC
Bulletin Board, to the extent required, subject only to notice of issuance. 
 (g) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that
does not indicate the direction of the possible change in, any rating of the Company or any securities of the Company (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) by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 

  

 22 

 
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any such rating organization and (iii) no such rating organization shall have given notice that it has assigned (or is considering assigning) a lower rating to the Notes
than that on which the Notes were marketed. 
 (h) The Initial Purchaser shall have received on the applicable Closing Date: 
 (i) certificates dated the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date,
signed by (1) the Chief Executive Officer and (2) the principal financial or accounting officer of the Company, on behalf of the Company, to the effect that (a) the representations and warranties set forth in Section 4
hereof and in each of the Documents, are true and correct in all respects, as of the date hereof and at the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, (b) the Company and each
other party to the Documents (other than the Initial Purchaser) 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 failure to satisfy would not, individually or in the aggregate, have a Material Adverse Effect), (c) at First Closing Date and, with respect to the Optional Additional Convertible
Notes, each Option Closing Date or since the date of the most recent financial statements in the Final Offering Circulars (exclusive of any amendment or supplement thereto after the date hereof), other than as disclosed in the Final Offering
Circulars or contemplated hereby, no event or events have occurred, no information has become known nor does any condition exist that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, (d) since
the date of the most recent financial statements in the Final Offering Circulars (exclusive of any amendment or supplement thereto after the date hereof), other than as disclosed in the Final Offering Circulars or contemplated hereby, the Company
has not incurred any liabilities or obligations, direct or contingent, not in the ordinary course of business, that are material to the Company 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 of the Company, and there has not been any change in the Capital Stock or long-term indebtedness of the Company that is material to the business, condition (financial or
otherwise) or results of operations or prospects of the Company, and (e) the sale of the Notes has not been enjoined (temporarily or permanently). 
 (ii) a certificate, dated the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, executed by the Secretary of the Company, certifying such matters as the
Initial Purchaser may reasonably request. 
 (iii) a certificate of solvency, dated the First Closing Date and, with respect
to the Optional Additional Convertible Notes, each Option Closing Date, executed by the principal financial or accounting officer of the Company substantially in a form reasonably satisfactory to the Initial Purchaser. 
 (iv) the opinion, dated the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date,
of Eaton & Van Winkle LLP, counsel to the Company substantially in the form attached hereto as Exhibit C. 
  

 23 

 (v) the opinion, dated the First Closing Date and, with respect to the Optional
Additional Convertible Notes, each Option Closing Date, of Jackson Walker L.L.P., counsel to the Company substantially in the form attached hereto as Exhibit D. 
 (vi) the opinion, dated the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date,
of Nevada counsel to the Company, substantially in the form attached hereto as Exhibit E. 
 (vii) the 10b-5 letter,
dated the First Closing Date, and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, of Thompson & Knight LLP, counsel to the Initial Purchaser, in form satisfactory to the Initial Purchaser. 

(viii) the opinion, dated the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing
Date, of White & Case LLP, counsel to the Initial Purchaser, in form satisfactory to the Initial Purchaser covering such matters as are customarily covered in such opinions. 
 (ix) the “lock-up” agreements, each substantially in the form of Exhibit F-1 hereto, from the persons identified on
Exhibit F-2 relating to sales and certain other dispositions of shares of Common Stock or certain other securities shall be in full force and effect on the First Closing Date and, with respect to the Optional Additional Convertible Notes,
each Option Closing Date. 
 (i) The Initial Purchaser shall have received from Malone & Bailey P.C., independent public accountants
under the standards established by the American Institute of Certified Public Accountants, with respect to the Company, (A) customary comfort letters, dated the date of this Agreement, in form and substance reasonably satisfactory to the
Initial Purchaser, with respect to the financial statements and certain financial information contained in the Preliminary Offering Circulars, (B) customary comfort letters, dated the date of this Agreement, in form and substance reasonably
satisfactory to the Initial Purchaser, with respect to the financial statements and certain financial information contained in the Final Offering Circulars and (C) customary “bring down” comfort letters, dated the First Closing Date
and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, in form and substance reasonably satisfactory to the Initial Purchaser, to the effect that Malone & Bailey P.C. reaffirms the statements made in its
respective letters furnished pursuant to clause (A) and (B). 
 (j) On the date hereof and also at the Closing Date, the Initial
Purchaser shall have received from the principal financial or accounting officer of the Company a certificate in form and substance reasonably satisfactory to the Initial Purchaser as to the accuracy of certain numbers contained or incorporated by
reference in the Time of Sale Circulars and the Offering Circulars, which numbers shall be set forth in a schedule attached to such certificate. 
 (k) Each of the Documents shall have been executed and delivered by all parties thereto, and the Initial Purchaser shall have received a fully executed original of each Document. 
 (l) The Initial Purchaser shall have received copies of all opinions, certificates, letters and other documents delivered under or in connection with the
Offerings or any transaction contemplated in the Documents. 
 (m) The Initial Purchaser shall have received the Final Offering Circulars,
and the terms of each Document shall conform in all material respects to the description thereof in the Time of Sale Circulars. 
  

 24 

 (n) Prior to the First Closing Date and, with respect to the Optional Additional Convertible Notes, each
Option Closing Date, Cawley, Gillespie & Associates, the Company’s independent petroleum engineer, shall have furnished to the Initial Purchaser a letter or letters, dated the respective date of delivery thereof, in form and substance
satisfactory to the Initial Purchaser. 
 (o) None of the parties to any of the Documents are in breach or default in any material respect
under their respective obligations thereunder. 
 (p) The Collateral Agents shall have received on the applicable Closing Date: 

(i) appropriately completed copies of Uniform Commercial Code UCC-1 financing statements naming each of the Company and the Guarantors
as the debtor and the applicable Collateral Agent as the secured party, or other similar instruments or documents to be filed under the UCC of all jurisdictions as may be necessary or, in the reasonable opinion of the Collateral Agents and their
counsel, desirable to perfect the Liens of the Collateral Agents pursuant to each of the Security Agreements; 
 (ii)
appropriately completed copies of Uniform Commercial Code Form UCC-3 termination statements, if any, necessary to release all Liens (other than Permitted Liens) of any Person in any collateral described in any Security Agreement previously granted
by any Person; 
 (iii) 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 Agents, dated a date reasonably near to the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date, listing all effective
financing statements which name the Company (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 Collateral Agreement, other than
such financing statements that evidence Permitted Liens); 
 (iv) fully executed counterparts of a deed of trust and mortgage
(the “Deed of Trust”), in form and substance reasonably satisfactory to Collateral Agents, which Deed of Trust shall cover Baseline’s proved oil and gas reserves, as described in the Final Offering Circulars; and 
 (v) such other approvals or documents as the Collateral Agents or the Initial Purchaser may reasonably request in form and substance
reasonably satisfactory to the Collateral Agents or Initial Purchaser, as the case may be. 
 (q) The Collateral Agents and their counsel
shall be satisfied that, concurrent with the purchase of the Notes hereunder by the Initial Purchaser, (A) the Liens granted to the Collateral Agents, for the benefit of the Secured Parties (as defined in the Offering Circulars) in the
collateral described above is of the priority described in the Final Offering Circulars; and (B) no Lien exists on any of the collateral described above other than the Liens created in favor of the Collateral Agents, for the benefit of the
Secured Parties, pursuant to the Collateral Agreements, in each case subject to the Permitted Liens. 
 (r) All steps, other than the payment
of consideration, shall have been completed in connection with the Acquisition. 
 (s) The New Credit Agreement shall have been executed and
delivered by all parties thereto, and the Initial Purchaser shall have received a true and correct copy such document which shall be in form and substance reasonably satisfactory to the Initial Purchaser. No loans shall have been borrowed under the
New Credit Agreement on the Closing Date. 
  

 25 

 8. Indemnification and Contribution. 
 (a) The Company agrees to indemnify and hold harmless the Initial Purchaser, and each person, if any, who controls such Initial Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities of any kind to which, jointly or severally, such Initial Purchaser or such controlling person may become subject under
the Act, the Exchange Act or otherwise, 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 or alleged untrue statement of any material fact contained in the Time of Sale Circulars, any Offering Circulars
or any amendment or supplement thereto or any Supplemental Offering Materials; or 
 (ii) the omission or alleged omission to
state, in the Time of Sale Circulars, any Offering Circulars or any amendment or supplement thereto or any Supplemental Offering Materials, a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; 
 including any losses, claims, damages or liabilities arising out of or based upon the
Company’s failure to perform its obligations under Sections 5(c) and 5(d), and, subject to the provisions hereof, will reimburse, as incurred, the Initial Purchaser and each such controlling person for any legal or other expenses
reasonably incurred by such Initial Purchaser or such controlling person in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action in respect
thereof; provided, however, the Company will not be liable in any such case to the extent (but only to the extent) that any such loss, claim, damage or liability is finally judicially determined by a court of competent jurisdiction in
a final, unappealable judgment, to have resulted primarily from any untrue statement or alleged untrue statement or omission or alleged omission made in any the Time of Sale Circulars, any Offering Circulars or any amendment or supplement thereto or
any Supplemental Offering Materials in reliance upon and in conformity with the Initial Purchaser Information. This indemnity agreement will be in addition to any liability that the Company may otherwise have to the indemnified parties. 

(b) The Initial Purchaser agrees to indemnify and hold harmless the Company and its directors, officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities of any kind to which the Company or any such director, officer or controlling person may become
subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) are finally judicially determined by a court of competent jurisdiction in a final, unappealable judgment, to
have resulted primarily from (i) any untrue statement or alleged untrue statement of any material fact contained in the Time of Sale Circulars, any Offering Circulars or any amendment or supplement thereto or any Supplemental Offering Materials
or (ii) the omission or the alleged omission to state therein a material fact required to be stated in the Timing of Sale Circulars, any Offering Circulars or any amendment or supplement thereto or any Supplemental Offering Materials or
necessary to make the statements therein 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 the
Initial Purchaser Information; and, subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any legal or other expenses incurred by the Company or 

  

 26 

 
any of its directors, officers or controlling persons in connection with any such loss, claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability that such Initial Purchaser may otherwise have to such indemnified parties. 
 (c) As promptly
as reasonably practical after receipt by an indemnified party under this Section 8 of notice of the commencement of any action for which such indemnified party is entitled to indemnification under this Section 8, such
indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, 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 paragraph (a) or (b) above unless and only to the extent it is materially prejudiced as a 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 paragraphs (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 determine, jointly with any other indemnifying party similarly notified, 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 been advised by counsel in writing 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 8 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 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 paragraph (a) of this Section 8 or the Company in the case of paragraph (b) of this Section 8, representing the indemnified parties under such paragraph
(a) or paragraph (b), as the case may be, who are parties to such action or actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying
party. 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, conditioned or delayed), unless such indemnified party waived in writing its rights under this Section 8, in which case the indemnified party may effect
such a settlement without such consent. 
 (d) No indemnifying party shall be liable under this Section 8 for any settlement of
any claim or action (or threatened claim or action) effected without its written consent, which shall not be unreasonably withheld, conditioned or delayed, but if a claim or action is settled with its written consent, 

  

 27 

 
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. 
 (e) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this
Section 8 is unavailable to, or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (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, 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, 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, on the one hand, and such Initial Purchaser, on the other, shall be deemed to be in the same
proportion as the net proceeds from the Offering (before deducting expenses) received by the Company bear to the total discounts, commissions and fees received by such 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 such Initial
Purchaser, on the other, 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) The Company and the Initial Purchaser agree that it would not be equitable if the amount of such contribution
determined pursuant to the immediately preceding paragraph (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 the
first sentence of the immediately preceding paragraph (e). Notwithstanding any other provision of this Section 8, the Initial Purchaser shall not be obligated to make contributions hereunder that in the aggregate exceed the total
discounts, commissions, fees 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of the immediately preceding paragraph (e), each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Initial Purchaser, and each director and officer of the Company and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, shall have the same rights to contribution as the Company. 
  

 28 

 9. Termination. The Initial Purchaser may terminate this Agreement at any time on or prior
to the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date by written notice to the Company if any of the following has occurred: 
 (a) since the date hereof, any Material Adverse Effect or development involving or reasonably expected to result in a prospective Material Adverse Effect
that could, in such Initial Purchaser’s reasonable judgment, be expected to (i) make it impracticable or inadvisable to proceed with the offering or delivery of the Notes on the terms and in the manner contemplated in the Time of Sale
Circulars or the Final Offering Circulars, or (ii) materially impair the investment quality of any of the Notes; 
 (b) the failure of
the Company to satisfy the conditions contained in Section 7 hereof on or prior to the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date; 
 (c) 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 such Initial Purchaser’s sole
judgment, impracticable or inadvisable to market or proceed with the offering or delivery of the Notes on the terms and in the manner contemplated in Time of Sale Circulars or the Final Offering Circulars or to enforce contracts for the sale of any
of the Notes; 
 (d) the 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 on any such exchange or NASDAQ National Market; 
 (e) any securities of the Company shall have been downgraded or placed on any “watch list” for possible downgrading by any “nationally recognized statistical rating organization,” as such term is defined for purposes of
Rule 436(g)(2) under the Act; or 
 (f) 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 in such Initial Purchaser’s opinion could reasonably be expected to have a material adverse effect on the financial markets in the United States
or elsewhere. 
 10. Survival of Representations and Indemnities. The respective representations and warranties, covenants,
indemnities and contribution and expense reimbursement provisions and other agreements, of the Company set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of the Initial Purchaser, (ii) acceptance of the Notes and payment for them hereunder, and (iii) any termination of this Agreement. 
 11. Information Supplied by the Initial Purchaser. The name of the Initial Purchaser set forth on the front and back cover and under the
heading “Plan of Distribution” of the Preliminary Offering Circulars and the Final Offering Circulars and the statements set forth in: the first and second sentences of the third paragraph, the second and third sentences of the
sixth paragraph, the seventh paragraph, the eight paragraph and the ninth paragraph under the heading “Plan of Distribution” in the 

  

 29 

 
Senior Notes Offering Circular and the fifth paragraph, the third and fourth sentences of the seventh paragraph and the eleventh paragraph under the heading
“Plan of Distribution” in the Convertible Notes Offering Circular (in each case, to the extent such statements relate to the Initial Purchaser) (such statements as they relate to the Initial Purchaser are referred to herein as the
“Initial Purchaser Information”) constitute the only information furnished by the Initial Purchaser as to itself to the Company for the purposes of Sections 4(a) and 8 hereof. 
 12. Miscellaneous. 
 (a) The
Company shall use its commercially reasonable best efforts to cause to be delivered to the Collateral Agents, no later than 30 days after the First Closing Date and, with respect to the Optional Additional Convertible Notes, each Option Closing Date
and at the Company’s sole cost and expense, a lender’s title insurance policy issued by a nationally recognized title insurance company in an insured amount reasonably satisfactory to the Collateral Agents and insuring the Deed of Trust as
a valid and enforceable first priority deed of trust lien on Baseline’s proved oil and gas reserves, as described in the Final Offering Circulars, free and clear of all defects and encumbrances except Permitted Encumbrances (as defined in the
Deed of Trust), together with such endorsements, affirmative coverage, coinsurance and reinsurance which Collateral Agents may reasonably request. 
 (b) Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company, to: Baseline Oil & Gas Corp., 11811 North Freeway I-45, Suite 200, Houston, Texas, 77056, with a copy to:
Eaton & Van Winkle LLP, 3 Park Avenue, 16th Floor, New York, NY 10016, Attention: Matthew S. Cohen, Esq. and (ii) if to the Initial Purchaser, to: Jefferies & Company, Inc., 520 Madison Avenue, New York, New York 10022,
Attention: Josh Targoff, Esq. (or in any case to such other address as the person to be notified may have requested in writing). 
 (c) This
Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Initial Purchaser and, to the extent provided in Section 8 hereof, the controlling persons, officers, directors, partners, employees,
representatives and agents referred to in Section 8, 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 Notes from an Initial Purchaser merely because of such purchase. Notwithstanding the foregoing, it is expressly understood
and agreed that each purchaser who purchases Notes from an Initial Purchaser is intended to be a beneficiary of the Company’s covenants contained in the Registration Rights Agreements to the same extent as if the Notes were sold and those
covenants were made directly to such purchaser by the Company, and each such purchaser shall have the right to take action against the Company to enforce, and obtain damages for any breach of, those covenants. 
 (d) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. 
 (e) THE COMPANY 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 CONTEMPLATED HEREBY; AND (II) WAIVES (A) ITS RIGHT TO A TRIAL 

  

 30 

 
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, 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 OBJECTION 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. 
 (f) This
Agreement may be signed in various counterparts which together shall constitute one and the same instrument. 
 (g) The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
 (h) 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 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. 
 (i) 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. This Agreement and the Documents constitute the entire agreement of the parties hereto with respect to the
subject matter hereof. This Agreement supersedes in full all previous oral or written agreements between the parties or their affiliates. As a result, there are no oral or written collateral representations, agreements, or understandings except as
provided herein. 
 [Remainder of page intentionally left blank.] 
  

 31 

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

			
	Very truly yours,
	
	BASELINE OIL & GAS CORP.
		
	By:	 	 /s/ Thomas Kaetzer

	Name:	 	Thomas Kaetzer
	Title:	 	Chief Executive Officer

  

			
	Accepted and Agreed to:
	
	JEFFERIES & COMPANY, INC.
		
	By:	 	 /s/ Richard A. Goldenberg

	Name:	 	Richard A. Goldenberg
	Title:	 	Managing DirectorSupply Agreement between JingAo Solar Co., Ltd. and ReneSola Ltd.

 English Translation for Reference Purpose Only 
  

 Exhibit 10.5 
 Sales Contract 
 Contract NO: YGX0609050001 
 Signing date: 5 September 2006 
 Sign Place: Jiashan
Zhejiang 
 The Buyer: JingAo Solar Co., Ltd 
 Address: JingLong Industrial Park, JingLong Street, NingJin Country, Hebei Province ,China 

			
	Tel: +86-319-5806685	  	Fax: +86-319-5800754

 The Seller: ReneSola Ltd. (Zhengjiang Yuhui Solar Energy Source Co. Ltd.) 
 Address: Industrial park, Yaozhuang Town, Jiashan County, Zhejiang Province, China 

			
	Tel: +86-573-4773390	  	Fax: +86-573-4773063

 The buyer and seller signed three years contract subject to the agreement as below: 
 1. Commodity & Description: 
  

									
	 Name of
products
	  	 Specifications
	  	 Quantity
	  	 Unit Price
	  	 Total Amount

	 Solar
 wafer
	  	 1. Type: P
 2. Dimension:125+/-0.5mm
 3. Diagonal:150+/-0.5mm
 4. Thickness:200+/-20μm
 5. Resistivity:

 6. Lifetime:310μs
 7. Saw mark:<15μm
 8. Dopant: Boron

 9.Oxygen£1×1018atoms/cm3
 10.Carbon£5×1016atoms/cm3
 11.Square sides angle:
90°
 12.Crystal orientation: 100±1.0°
 13.: TTV
£30μm
	  	300 thousand pieces per month delivered from May 2007 to December 2007, delivery amount of each month in the year 2008 and 2009 is increased on the basis of that.	  	RMB51.00/PCS in 2007. In the year of 2008 and 2009, the unit price will be decided by both parties by the end of 2007 and 2008.	  	Before the end of 2007, the buyer shall pay RMB107,100,000.00 (Say One Hundred and Seven Million and One Hundred Thousand Only)to the seller. The amount of payment in 2008 and 2009 shall be paid
after the confirmation of price and quantity by both parties.

 2. The specifications of technical requirement: Execute according to the contract above. 
 3. Shipment: Delivery in the seller’s factory, and the buyer will be in charge of transportation and freight. 
 4. Packing: Packing should be suitable for the long-distance carriage of the solar wafers. 
 5. Inspection and Discrepancy: If the buyers have any defect found after the inspection of arrival goods, claim and defective goods should be sent back to the sellers within one month. After receipt of the
defects, the sellers should replace such defective goods by the bran-new ones within 15 days. 

 English Translation for Reference Purpose Only 
  

 6. Payment terms: Since the sign of the contract, the
buyers shall prepay the 30% of the total amount of payment in 2007, namely RMB32,130,000.00, say RMB Thirty Two Million and One Hundred Thirty Thousand Only before January 31st,2007, and in case buyers delay the payment, this contract will be cancelled The prepayment shall be distributed evenly on the unit price to offset the payment of goods, and the remaining payment of goods will be paid
within 1 week by the buyers according to the actual information of delivery. Negotiation of the unit price in the year of 2008 and 2009 will be decided by the both parties and executed the same fulfillment 
 7. Validity: Validity is from the sign of contract to the complete of performance. 
 8. Breach of contract: (1) In case of delayed payment beyond 7 working days, the buyers shall pay the 1‰ of total payment goods in that month as the penalty for every delayed week. The total penalty
shall not, however, exceed 1% of total value of goods in that month. (2)In case of delayed delivery of goods beyond 7 working days, the sellers shall pay the 1‰ of total payment of goods in that month as the penalty for every delayed week, The
total penalty shall not, however, exceed 1% of total value of goods in that month. 
 9. All disputes arising in the performance of this contract shall be
settled by the friendly negotiation of each side; in case no settlement can be reached, the disputes shall be then submitted to the Localf Arbitration Commission in China. 
 10. Others: This contract is in duplicate and comes into force only after it is signed or sealed by the each party concerned, and each party keeps one. The photocopy of the contract can be considered valid.

 Duly Signed on behalf of: 
 JingAo Solar Co., Ltd

 ReneSola Ltd. (Zhejiang Yuhui Solar Energy Source Co., Ltd.) 
 The Buyer: 
 JingAo Solar Co., Ltd 
 Address: JingLong Industrial Park, JingLong Street, NingJin Country, Hebei Province, China 

			
	Tel: +86-319-5806685	  	Fax: +86-319-5800754

  

			
	 Signature
	 	 /s/ Yang Huaijin

		
	 Date
	 	September 15, 2006

 The Seller: 
 ReneSola Ltd. (Zhejiang Yuhui Solar Energy Source Co., Ltd.) 
 Address: Industrial park Yaozhuang Town Jiashan County Zhejiang Province China

 Tel: +86-573-4773390 
 Fax: +86-573-4773063 
  

			
	 Signature
	 	 /s/ Li Xianshou

		
	 Date
	 	September 15, 2006

  

 2 

 English Translation for Reference Purpose Only 
  

 Additional Agreement 
  

			
	Party A:	  	Renesola Ltd. (Zhejiang Yuhui Solar Energy Source Co., Ltd.)
		
	Party B:	  	JingAo Solar Co., Ltd.

 This additional agreement is set up for some adjustment
against to the contract No. YGX0609050001 which was signed on 5th Sep. 2006 between both parties: 
  

	1.	Former item No. 1 for quantity “300 thousand pieces per month delivered from May 2007 to December 2007, delivery amount of each month in the year 2008 and 2009 is
increased on the basis of that.” revised to “300 thousand pieces per month delivered from June 2007 to December 2007, delivery amount of each month in the year 2008 and 2009 is increased on the basis of that.”

  

	2.	On top of that, the else is the same as before (including price, lead time, total amount, deposit, etc.) 

 JingAo Solar Co., Ltd. 
 Address: Jinglong Industrial Park, Jinglong Street, Ningjin County, Hebei Province, China

			
	Tel: +86-319-5801108	  	Fax: +86-319-5800754

  

			
	Signature:	 	 /s/ Yang Huaijin

		
	Date:	 	September 5, 2006

 The Seller: 
 ReneSola
Ltd. (Zhejiang Yuhui Solar Energy Source Co., Ltd.) 
 Address: Industrial park Yaozhuang Town Jiashan County Zhejiang Province China 
 Tel: +86-593-4773390 
 Fax: +86-593-4773063 
  

			
	Signature:	 	 /s/ Li Xianshou

		
	Date:	 	September 5, 2006

  

 3 

 English Translation for Reference Purpose Only 
  

 Sales Contract 
 Contract NO: YGX0708100001 
 Signing date: 10 August 2007 
 Signing place: Jiashan Zhejiang 
 The Buyer: JingAo
Solar Co., Ltd  
 The Seller: ReneSola Ltd. (Zhengjiang Yuhui Solar Energy Source Co. Ltd.) 
 The buyer and seller entered into this three-year contract subject to the terms and conditions as below: 
 1. Commodity & Description: 
  

											
	 Name of
products
	  	 Specifications
	  	Year	  	Quantity	  	Unit Price	  	 Total
 Amount

	6—inch solar mono-crystalline	  	 1. Type: P
 2. Growth mode: CZ
 3. Crystal orientation: 100+/-1.5o
 4. Dimension:125+/-0.5mm

5. Diagonal:165+/-0.5mm
 6. Thickness:200+/-20μm
 7. Resistivity:

 8. Lifetime: 3
10μs
	  	2008	  	8.4 million
pieces/year	  	RMB48.00/piece	  	RMB40.320
million
	  	 9. Kerf:<15μm
 10. Incision: Multi–lines

 11. Precision<3000 pcs/cm3
 12. TTV£30μm
 13. Squareness: 90o +/-1 o
 14. oxygen£1×1018atoms/cm3
 15.Carbon£1×1017atoms/cm3
	  	2009	  	8.4 million
pieces/year	  	TBD	  	TBD
		  	 16. Clean surface without sticky taint or extraordinary dot.
 17. edge collapse no larger than 1 X 0.5mm, and no more than two collapses apiece
 18. No hole, crack, contamination or obvious
fingerprint
	  	2010	  	8.4 million
pieces/year	  	TBD	  	TBD
					
		  	Total	  	Three
years	  	25.2
 million
pieces
	  	403,200,000 for year 2008;
year 2009 and 2010 to be
determined

  

 4 

 English Translation for Reference Purpose Only 
  

 2. The specifications of technical requirement: Execute according to the contract above. 
 3. Shipment: Delivery in the seller’s factory, and the buyer will be in charge of transportation and freight. 
 4. Packing: Packing should be suitable for the long-distance carriage of the solar wafers. 
 5. Inspection and Discrepancy: If the buyers have any defect found after the inspection of arrival goods, claim and defective goods should be sent back to the sellers within ten days. After receipt of the
defects, the sellers should replace such defective goods by the bran-new ones. Any goods whose specifications are deviated within the range of 0.1% shall considered normal and not be replaced. 
 6. Means and period of settlement: After execution of the contract, the buyers shall prepay the 25% of the
total amount of payment in 2008, namely RMB100,800,000.00, say RMB One Hundred Million and Eighty Hundred Thousand Only as deposit before December 25th, 2007. The Deposit shall be made in two equal installments before September 25th, 2007 and December 25th, 2007, respectively. Any delay in such prepayment shall cause termination of the contract. The deposit shall be distributed evenly on the unit price to offset the purchase price.
The remaining 75% purchase price shall be paid within one week upon receipt of Goods Delivery Notice from the Seller by the Buyer. 
 7. Payment terms: (1) The parties will renegotiate the price on each of the
May 30th and November 30th on and from 2008. The
parties agree to renegotiate price if such price is more than 5% different from the prevailing market price on average, provided that the Seller shall give 3% discount to the Buyer in consideration of the long-term cooperation between the parties.
(2) The Buyer shall make payment based on renegotiated unit price, if any, and all prepayments shall be settled within the current year. (3) The unit price applicable in 2009 and 2010 shall be determined no later than December 2008 and
2009, respectively, and the deposit in the amount of 25% of the total purchase price for the following year shall be paid by the end of the current year, i.e., the deposit for 2009 and 2010 shall be paid by the end of 2008 and 2009, respectively.

 8. Validity: Validity is from the sign of contract to the complete of performance. 
  

 5 

 English Translation for Reference Purpose Only 
  

 9. Breach of contract: (1) In case of delayed payment beyond 7 working days, the buyers shall pay the
1‰ of total payment goods in that month as the penalty for every delayed week. The total penalty shall not, however, exceed 1% of total value of goods in that month. (2)In case of delayed delivery of goods beyond 7 working days, the sellers
shall pay the 1‰ of total payment of goods in that month as the penalty for every delayed week, The total penalty shall not, however, exceed 1% of total value of goods in that month. 
 10. Assignment: All or any part of the rights and obligations hereof may not be transferred without written consent of the non-transferring party. 
 11. Confidentiality: Neither party nor any of its employees, agents, representatives or advisors may disclose any terms and conditions herein without the consent
of the other party, otherwise the breaching party shall be liable for double damages for any loss so incurred by the other party. 
 12. Force
majeure: Non-performance of the contract due to force majeure shall be notified by the affected party to the other party within 7 days of such occurrence and a evidence thereof certified by relevant authority shall be provided within 15 days upon
the lapse of such event. Obligations provided hereunder may be all or partially relieved based on the scale of the force majeure. 
 13. Neither party
nor any of its employees may give or accept, directly or indirectly, any monetary gift, valuable goods, or negotiable securities to or from the other party, or take any other means to provide improper benefits. Conduct of any transaction similar to
those provided herein by any employee of either party in the name of such party or himself shall be deemed prejudicial to the interest of the other party, and the party having such employee shall be liable for double damages for any loss so incurred
by the other party in addition to a liquidated damages in the amount of 20% of the total purchase price (but no more than RMB 1 million). 
 14. No
fraud 
 If any party defraud the other party or the end-customer by knowingly providing false registrations, qualifications, or any other information or
withholding any facts or truth, the defrauding party shall be liable for a liquidated damage of in the amount of 20% of the total purchase price (but no more than RMB 1 million). This provision shall not be prejudicial to any breach liability
incurred by any party hereunder. 
 15. All disputes arising in the performance of this contract shall be settled by the friendly negotiation of each
side; in case no settlement can be reached, the disputes shall be then submitted to the people’s court of first instance with jurisdiction. Any and all expenses and costs in connection with such proceedings shall be borne by the losing party.

 16. Effectiveness and miscellaneous: 
 16.1 This
contract shall be effective upon signature by both parties. Any amendment to the print copy of the contact shall be confirmed with signature and affixture of seals. 
 16.2 This contract is in duplicate and comes into force only after it is signed or sealed by the each party concerned, and each party keeps one. The photocopy of the contract can be considered valid. 
 16.3 The matter unaddressed herein, if any, shall be provided in additional agreement through negotiations by the parties. Such additional agreement shall have the same
effect with this contract. 
  

 6 

 English Translation for Reference Purpose Only 
  

 The Buyer: 
 JingAo Solar Co., Ltd 
 Address: JingLong Industrial Park, JingLong Street, NingJin Country, Hebei Province, China 
 Tel: +86-319-5806685    Fax: +86-319-5800754 
  

			
	By:	 	 /s/ Yang Huaijin

 The Seller: 
 ReneSola Ltd. (Zhejiang Yuhui Solar Energy Source Co., Ltd.) 
 Address: Industrial park Yaozhuang Town Jiashan County Zhejiang Province China

 Tel: +86-573-4773390 
 Fax: +86-573-4773063 
  

			
	By:	 	 /s/Li Xianshou

  

 7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]