Document:

form of Global 15% Senior Secured Note due 2009

 Exhibit 4.2 
 [FORM OF NEW NOTE] 
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS A
NON-U.S. PURCHASER AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS ONE YEAR (OR SUCH OTHER PERIOD THAT MAY BE HEREAFTER PROVIDED UNDER RULE 144(K) UNDER THE
SECURITIES ACT PERMITTING RESALES OF RESTRICTED SECURITIES BY NON-AFFILIATES WITHOUT RESTRICTION); OR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
(OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR TRANSFER AGENT’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE OR TRANSFER AGENT. 
  

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 THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. 
 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT
(“OID”) FOR PURPOSES OF SECTIONS 1271 ET SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND THE YIELD TO MATURITY FOR PURPOSES OF THE OID
RULES, PLEASE CONTACT THE CHIEF FINANCIAL OFFICER OF THE ISSUER AT 11811 NORTH FREEWAY I-45, SUITE 200, HOUSTON, TEXAS 77060, (281) 591-6100. 
  

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 BASELINE OIL & GAS CORP. 
 15% SENIOR SECURED PIK NOTES DUE 2009 
  

			
	CUSIP No. [            ]	  	
	No. [            ]	  	$___________

 Baseline Oil & Gas Corp., a Nevada corporation (the “Company,” which
term includes any successor entity), for value received promises to pay to Cede & Co. or registered assigns the principal sum of One Hundred Six Million Six Hundred Eighty One Thousand Two Hundred Fifty Dollars (or such principal amount as
may be set forth in the records of the Trustee hereinafter referred to in accordance with the Indenture) on June 15, 2009, and to pay interest thereon as hereinafter set forth. 
 Interest Rate: 15% per annum. 
 Interest Payment Dates: Interest will be payable quarterly in cash in arrears on January 1, April 1, July 1 and October 1 of each year, beginning on January 1, 2009; provided, however, that a
portion of such interest in an amount equal to the applicable PIK Interest Amount may be paid by the Company on the applicable Interest Payment Date by issuing to the registered Holder hereof on the applicable Record Date one or more PIK Notes in an
aggregate principal amount equal to such PIK Interest Amount in lieu of paying such portion of such interest in cash. 
 Record Dates:
December 15, March 15, June 15 and September 15. 
 Reference is made to the further provisions of this Note
contained on the reverse side of this Note, which will for all purposes have the same effect as if set forth at this place. 
 IN WITNESS
WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer. 
  

					
	BASELINE OIL & GAS CORP.
		
	By:	 	 
		 	Name:	 	Patrick H. McGarey
		 	Title:	 	Chief Financial Officer

 Dated: October 30, 2008 
  

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 TRUSTEE CERTIFICATE OF AUTHENTICATION 
 This is one of the 15% Senior Secured PIK Notes due 2009 referred to in the within-mentioned Indenture. 
  

							
		 		 	THE BANK OF NEW YORK MELLON, as
Trustee
				
	Dated: October 30, 2008	 		 	By:	 	 
		 		 		 	Authorized Signatory

  

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 (REVERSE OF SECURITY) 
 15% Senior Secured PIK Note due 2009 
 1. Interest. Baseline Oil & Gas Corp., a
Nevada corporation (the “Company”), promises to pay interest on the principal amount of this Note at the rate per annum shown above. Interest on the Note will accrue from the most recent date on which interest has been paid or, if
no interest has been paid, from and including October 1, 2008. The Company will pay interest quarterly in arrears on each Interest Payment Date, commencing January 1, 2009. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months. The Company will pay interest on overdue principal at 1% per annum in excess of the above rate and will pay interest on overdue installments of interest at such higher rate to the extent lawful. 
 2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment Date even if the Notes are cancelled on registration of transfer or registration of exchange after such Record Date, and on or before such Interest Payment Date. Holders
must surrender Notes to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts (“U.S. Legal
Tender”); provided, however, the Company may pay principal and interest by check payable in such U.S. Legal Tender; provided further, however, that a portion of such interest in an amount equal to the applicable
PIK Interest Amount may be paid by the Company by issuing on the applicable Interest Payment Date to the registered Holder hereof on the applicable Record Date one or more PIK Notes in an aggregate principal amount equal to such PIK Interest Amount
in lieu of paying such portion of such interest in cash. The Company may deliver any such interest payment to the Paying Agent or to a Holder at the Holder’s registered address. 
 3. Paying Agent and Registrar. Initially, The Bank of New York Mellon (the “Trustee”) will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. 
 4. Indenture. The Notes and the
Guarantees were issued under an Amended and Restated Indenture, dated October 30, 2008 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) (the
“TIA”), as in effect on the date of the Indenture until such time as the Indenture is qualified under the TIA, and thereafter as in effect on the date on which the Indenture is qualified under the TIA. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture and the TIA for a statement of such terms. The Notes are senior secured obligations of the Company. Each Holder, by accepting a Note,
agrees to be bound by all of the terms and provisions of the Indenture, as the same may be amended from time to time. 
  

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 5. Redemption. 
 (a) Optional Redemption. The Company may, at any time, redeem all or a part of the Notes, upon not less than three nor more than 10 Business Days’ prior notice mailed by first-class mail to each
Holder’s registered address, at a Redemption Price equal to 100% of the principal amount of Notes redeemed plus accrued and unpaid interest and Additional Interest, if any, to the date of redemption (the “Redemption Date”),
subject to the rights of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date. 
 (b)
Mandatory Redemption. The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. 
 6. Notice of Redemption. Notice of redemption will be mailed by first-class mail at least three Business Days but not more than 10 Business Days before the Redemption Date to each Holder of Notes to be redeemed at such Holder’s
registered address with a copy to the Trustee and Paying Agent. If fewer than all of the Notes are to be redeemed, at any time, selection of Notes for redemption will be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee deems to be fair and appropriate; provided, that if any such
partial redemption is made with the proceeds of an Equity Offering, the Trustee will select the Notes only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to DTC procedures), unless such
method is otherwise prohibited. Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may select for redemption portions (equal to $1,000 or any integral multiple thereof) of the principal amount of Notes that have
denominations larger than $1,000. 
 Except as set forth in the Indenture, if monies for the redemption of the Notes called for redemption
shall have been deposited with the Paying Agent for redemption on such Redemption Date sufficient to pay such Redemption Price plus accrued and unpaid interest and Additional Interest, if any, the Notes called for redemption will cease to bear
interest from and after such Redemption Date, and the only remaining right of the Holders of such Notes will be to receive payment of the Redemption Price plus accrued and unpaid interest and Additional Interest, if any, as of the Redemption Date
upon surrender to the Paying Agent of the Notes redeemed. 
 7. Offers to Purchase. Sections 4.16 and 4.27 of the
Indenture provide that after certain Asset Sales and in the event of an Excess Cash Flow Offer, respectively, and subject to further limitations contained therein, the Company will make an offer to purchase certain amounts of the Notes in accordance
with the procedures set forth in the Indenture. 
 8. [Intentionally Omitted]. 
 9. Denominations; Transfer; Exchange. The Notes are in registered form, without coupons, and except in the case of PIK Notes, in denominations of
$1,000 and integral multiples thereof. A Holder shall register the transfer of or exchange of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes, fees or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer of or exchange of any Notes or portions thereof selected for redemption.

  

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 10. Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for
all purposes. 
 11. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee
and the Paying Agent may pay the money without interest thereon back to the Company. After that, all liability of the Trustee and such Paying Agent with respect to such money shall cease. 
 12. Discharge Prior to Redemption or Maturity. If the Company at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to redemption or stated maturity and complies with the other provisions of the Indenture relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its obligation to pay the principal of and interest and Additional Interest, if any, on the Notes). 
 13. Amendment; Supplement; Waiver. Subject to certain exceptions, the Indenture, the Notes, the Guarantees and the Collateral Agreements may be amended or supplemented with the written consent of the Holders of
a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or Event of Default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. Without consent of any Holder, the parties thereto may amend or supplement the Indenture, the Notes, the Guarantees, or the Collateral Agreements to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of certificated Notes, provide for the assumption of the Company’s or any Guarantor’s obligations in accordance with Section 5.01 and
Section 10.04 of the Indenture, make any other change that would provide any additional rights or benefits to the Holders that does not adversely affect the legal rights of any Holder of a Note, to comply with the TIA, to allow for
additional guarantees, if necessary, in connection with any addition or release of Collateral permitted under the Indenture or the Collateral Agreements, to release a Guarantor from its Guarantee as permitted by the Indenture and to conform the text
of the Indenture, the Collateral Agreements, the Notes and the Guarantees to the Offering Circular if necessary. 
 14. Restrictive
Covenants. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, incur additional Indebtedness or grant Liens, make payments in respect of their Capital Stock or certain
Indebtedness, enter into transactions with Affiliates, create dividend or other payment restrictions affecting Subsidiaries, merge or consolidate with any other Person, sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets or adopt a plan of liquidation. Such limitations are subject to a number of important qualifications and exceptions. The Company must annually report to the Trustee on compliance with such limitations. 
  

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 15. Successors. When a successor assumes, in accordance with the Indenture, all the obligations of
its predecessor under the Notes, the Guarantees and the Indenture, the predecessor will be released from those obligations. 
 16.
Defaults and Remedies. If an Event of Default occurs and is continuing (other than certain events of bankruptcy involving the Company), the Trustee or the Holders of at least 25% in aggregate principal amount of outstanding Notes may declare
all the Notes to be due and payable in the manner, at the time and with the effect provided in the Indenture. Holders of Notes may not enforce the Indenture except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity satisfactory to it. The Indenture permits, subject to certain limitations therein provided, Holders of a majority in aggregate principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes notice of any continuing Default or Event of Default (except a Default in payment of principal or interest) if it determines that withholding notice is in their interest.

 17. Trustee Dealings with Company. Subject to the terms of the TIA and the Indenture, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or their respective Affiliates as if it were not the Trustee. 
 18. No Recourse Against Others. No past, present or future affiliate, director, officer, employee, incorporator or holder of any equity interests
in the Company or a Guarantor or any direct or indirect parent corporation of the Company or a Guarantor, as such, will have any liability for any obligations of the Company or a Guarantor under the Notes, the Guarantees or the Indenture, or for any
claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Each
of the parties hereto acknowledge that such waiver may not be effective to waive liabilities under the federal securities laws. 
 19.
Guarantees. Payment of principal and interest (including interest on overdue principal and overdue interest, if lawful), is unconditionally and irrevocably guaranteed, jointly and severally, by each of the Guarantors. 
 20. Authentication. This Note shall not be valid until the Trustee or Authenticating Agent manually signs the certificate of authentication on
this Note. 
 21. Governing Law. THIS NOTE, THE INDENTURE, THE GUARANTEES AND THE COLLATERAL AGREEMENTS (OTHER THAN THE MORTGAGES)
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, THE INDENTURE, THE GUARANTEES AND THE COLLATERAL AGREEMENTS (OTHER THAN THE MORTGAGES) OR THE TRANSACTIONS
CONTEMPLATED BY THIS NOTE. 
  

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 22. Abbreviations and Defined Terms. Customary abbreviations may be used in the name of a Holder
of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act). 
 23. Security. The Company’s and Guarantors’ obligations under the Notes are secured by liens on the Collateral
pursuant to the terms of the Collateral Agreements. The actions of the Trustee and the Holders of the Notes secured by such liens and the application of proceeds from the enforcement of any remedies with respect to such Collateral are limited
pursuant to the terms of the Collateral Agreements. 
 24. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and
reliance may be placed only on the other identification numbers printed thereon. 
 The Company will furnish to any Holder of a Note upon
written request and without charge a copy of the Indenture. Requests may be made to: Baseline Oil & Gas Corp., 11811 North Freeway I-45, Suite 200, Houston, Texas 77060. 
  

 9 

 FORM OF GUARANTEE 
 The undersigned and its successors under the Indenture has irrevocably and unconditionally guaranteed, on a senior secured basis to the extent set forth in the Amended and Restated Indenture, dated as of
October 30, 2008 (the “Indenture”), by and between Baseline Oil & Gas Corp. (the “Company”) and The Bank of New York Mellon, as Trustee and Collateral Agent, (i) the due and punctual payment of
the principal of, premium, if any, and interest on the Notes, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal of (including interest accruing at the then applicable rate provided
in the Indenture, the Notes, the Guarantees or any Collateral Agreement after the occurrence of any Event of Default set forth in Section 6.01(6) or (7) of the Indenture, whether or not a claim for post-filing or
post-petition interest is allowed under applicable law following the institution of a proceeding under bankruptcy, insolvency or similar law) and interest on the Notes, to the extent lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with the terms set forth in Article Ten of the Indenture and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Capitalized terms used herein have the meanings assigned to them in
the Indenture unless otherwise indicated. 
 THE OBLIGATIONS OF THE UNDERSIGNED TO HOLDERS OF THE NOTES AND TO THE TRUSTEE PURSUANT TO THIS
NOTATION OF GUARANTEE (THE “GUARANTEE”) AND THE INDENTURE ARE EXPRESSLY SET FORTH IN ARTICLE TEN OF THE INDENTURE AND REFERENCE IS HEREBY MADE TO THE INDENTURE FOR THE PRECISE TERMS OF THE GUARANTEE AND ALL OTHER PROVISIONS OF THE
INDENTURE TO WHICH THE GUARANTEE RELATES. EACH HOLDER OF A NOTE, BY ACCEPTING THE SAME, (A) AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS AND (B) APPOINTS THE TRUSTEE ATTORNEY-IN-FACT FOR SUCH HOLDER FOR SUCH PURPOSES. 
 This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. 
  

			
	[NAME OF GUARANTOR]
		
	By:	 	 
	Name:	 	
	Title:	 	

  

 10 

 ASSIGNMENT FORM 
 If you the Holder want to assign this Note, fill in the form below and have your signature guaranteed: 
 I or we assign and
transfer this Note to: 
  
  
  
  
  
 (Print or type name, address and zip code and

 social security or tax ID number of assignee) 
 and irrevocably appoint                                  
                                         
                                         
                                         
                                         
               
 agent to transfer this Note on the books of the Company. The agent
may substitute another to act for him. 
  

							
		 		 	
				
	Dated:                             	 		 	Signed:	 	 
		 		 		 	(Sign exactly as your name appears on
the other side of this Note)

  

			
		
	Signature Guarantee:	 	 

 In connection with any transfer of this Note occurring prior to the date which is the earlier of
(i) the date of the declaration by the SEC of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering resales of this Note (which effectiveness shall not have
been suspended or terminated at the date of the transfer) and (ii) October 30, 2009, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and that this Note is
being transferred: 
 [Check One] 
  

	(1)     ̈    	to the Company or a subsidiary thereof; or 

  

	(2)     ̈    	pursuant to and in compliance with Rule 144A under the Securities Act; or 

  

	(3)     ̈    	to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed
letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or 

  

	(4)     ̈    	outside the United States to a person other than a “U.S. person” in compliance with Rule 904 of Regulation S under the Securities Act; or 

  

	(5)     ̈    	pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or 

  

	(6)     ̈    	pursuant to an effective registration statement under the Securities Act. 

  

 11 

 Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in
the name of any person other than the registered Holder thereof; provided that if box (3), (4) or (5) is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in its sole discretion,
such legal opinions, certifications (including an investment letter in the case of box (3) or (4)) and other information as the Trustee or the Company has reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. 
 If none of the foregoing boxes is
checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.15 of
the Indenture shall have been satisfied. 
  

							
				
	Dated:
                                	 		 	Signed:	 	 
		 		 		 	(Sign exactly as your name appears on
the other side of this Note)

  

			
		
	Signature Guarantee:	 	 

 TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED 
 The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s
foregoing representations in order to claim the exemption from registration provided by Rule 144A. 
  

							
				
	Dated:
                                	 		 		 	 
		 		 		 	NOTICE: To be executed by an executive officer

  

 12 

 [OPTION OF HOLDER TO ELECT PURCHASE] 
 If you want to elect to have this Note purchased by the Company pursuant to Section 4.16 or Section 4.27 of the Indenture, check the
appropriate box: 
 Section 4.16 [            ]

 Section 4.27 [            ] 
 If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.16 or Section 4.27 of the Indenture, state
the amount you elect to have purchased: 
 $
                                 
  

							
				
	Dated:
                                	 		 	 	 	 
		 		 	NOTICE:	 	The signature on this assignment must correspond with the name as it appears upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever and
be guaranteed by the endorser’s bank or broker.

  

			
		
	Signature Guarantee:	 	 

  

 13Forbearance, First Amendment to Credit Agreement

 Exhibit 10.1.1 
 FORBEARANCE, FIRST AMENDMENT TO CREDIT AGREEMENT AND FIRST 
 AMENDMENT TO FEE LETTER 

FORBEARANCE, FIRST AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO FEE LETTER, dated as of October 30, 2008, by and among Baseline
Oil & Gas Corp., a Nevada corporation (the “Borrower”), the lenders from time to time to the Credit Agreement (as defined below), and Wells Fargo Foothill, Inc., a California corporation, individually
(“WFF”) and as the arranger, administrative agent and lender under the Credit Agreement (in such capacity, together with its successors and assigns in such capacity, the “Agent”). 
 RECITALS 
 A. The Borrower, the
Lenders, and the Agent are parties to the Credit Agreement, dated as of October 1, 2007 (as amended, restated, supplemented, or otherwise modified prior to the date hereof, the “Credit Agreement”), pursuant to which the Lenders
made certain loans and financial accommodations available to the Borrower. 
 B. Certain material Events of Default have occurred and are
continuing under Sections 7.2(a) and 7.8 of the Credit Agreement and will continue to exist under the Credit Agreement, resulting from (i) the Borrower’s failure to comply with Section 6.8 of the Credit Agreement as a result of
(x) the Permitted Holders’ failure to own and control, directly or indirectly, at least 51% of the Stock of Borrower having the right to vote for the election of members of the Board of Directors and (y) a “person” or
“group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, becoming the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 20%, or more, of the
Stock of Borrower having the right to vote for the election of members of the Board of Directors, in each case, solely as a result of Third Point Partners Qualified L.P. and Third Point Partners L.P. owning a majority of the issued and outstanding
shares of Stock of Borrower (the “Change of Control Default”), (ii) the Borrower’s default under the Second Secured Debt Documents arising by reason of the failure (x) to pay the purchase price for the Existing Second
Secured Notes (as defined below) in respect of the Change of Control Default and (y) to pay interest on overdue installment of interest coming due October 1, 2008 and (z) to satisfy the required financial ratios in Sections 4.31 and
4.32 thereunder with respect to senior secured indebtedness to EBITDA and total indebtedness to EBITDA, each as of June 30, 2008 (the “Debt Default”; together with the Change of Control Default, collectively, the
“Specified Events of Default”) and (iii) the Specified Hedge Events of Default (as defined below). 
 C. An Event of
Default (as defined in the Hedge Agreement) (a “Hedge Event of Default”) has occurred under each of Sections 5(a)(v) and (vi) of the ISDA Master Agreement dated as of October 1, 2007 (including the schedule thereto, any
confirmation entered into pursuant thereto and any obligations assumed pursuant to any novation agreement relating thereto, the “Hedge Agreement”) between WFF and the Borrower by reason of the Debt Default under the Credit Agreement
(the “Specified Hedge Events of Default”). 
 D. The Borrower has requested that the Agent and Lenders forbear from
exercising their rights and remedies as a result of the occurrence and continuance of the Specified Events of Default and that WFF forbear from exercising its rights and remedies under the Hedge Agreement as a result of the occurrence and
continuance of the Specified Hedge Events of Default. 
  

 1 

 E. The Agent, the Lenders and WFF are willing to grant such forbearance on a limited basis, subject to
the amendment of the Credit Agreement and the terms and conditions of this Agreement. 
 NOW, THEREFORE, in consideration of the premises and
the mutual covenants, representations, warranties and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.
In addition, the following terms, for the purposes of this Agreement, shall have the following meanings: 
 “Forbearance
Effective Date” has the meaning assigned to it in Section 7. 
 “Forbearance Period” means the period
commencing on the Forbearance Effective Date and continuing through and including the Termination Date, unless earlier terminated pursuant to the terms and provisions of this Agreement. 
 “Secured Creditor Remedies” means any action by the Agent, any Lender or WFF to sell, foreclose, repossess or liquidate any of the
Collateral. 
 “Termination Date” means midnight (New York Time) on April 15, 2009. 
 “Termination Event” means any one or more of the following: (i) any representation or warranty made or deemed made by the Borrower
in this Agreement shall be false or misleading in any material respect when made or deemed to have been made (or if such representation or warranty is qualified by materiality or a Material Adverse Effect qualification, false or misleading in any
respect), (ii) the Borrower fails to perform or observe any covenant or any agreement or term contained in this Agreement, (iii) any Default or Event of Default, other than the Specified Events of Default, shall occur and be continuing
under the Credit Agreement or any of the other Loan Documents, (iv) any Hedge Event of Default, other than the Specified Hedge Events of Default, shall occur and be continuing under the Hedge Agreement, or (v) any holder of Existing Notes
(as defined in the Second Secured Note Indenture) shall have commenced any action, suit or any other type of legal proceeding against the Borrower and such action, suit or proceeding shall not have been withdrawn or dismissed within thirty
(30) days after the commencement of such action, suit or proceeding. 
 2. Acknowledgements of the Borrower. The Borrower hereby
acknowledges and confirms that (a) the Specified Events of Default and Specified Hedge Events of Default have occurred and are continuing, (b) the Specified Events of Default and Specified Hedge Events of Default are material, (c) the
Credit Agreement permits the Agent and the Lenders to exercise all of their rights and remedies (including, without limitation, Secured Creditor Remedies) as a result of each Specified Event of Default and the Hedge Agreement permits WFF 

  

 2 

 
to exercise all of its rights and remedies (including, without limitation, Secured Creditor Remedies) as a result of each Specified Hedge Event of Default,
(d) neither Jefferies & Company, Inc. nor any of its Affiliates is an Affiliate of the Borrower, (e) as of the Forbearance Effective Date, the Indebtedness evidenced under the Third Secured Debt Documents has been converted into
equity of the Borrower and, accordingly, no obligations remain outstanding under the Third Secured Debt Documents, and (f) no holder of any Existing Second Secured Note (as defined below) has commenced any action, suit or any other type
of legal proceeding against the Borrower. 
 3. Limited Forbearance by the Agent and the Lenders. 
 (a) Temporary Forbearance. In accordance with the terms and subject to the conditions of this Agreement and only so long as no
Termination Event shall have occurred and be continuing, the Agent, the Lenders and WFF agree to temporarily forbear until the Termination Date from (i) (A) in the case of the Agent and the Lenders, declaring all of the Obligations to be
immediately due and payable and, (B) in the case of WFF, terminating the Hedge Agreement, (ii) foreclosing upon the Collateral, and (iii) exercising any other Secured Creditor Remedies with respect to the Collateral, in each case,
solely by reason of, or as a result of the occurrence of, the Specified Events of Default or the Specified Hedge Events of Default. 
 (b) Limited Effect of Forbearance. Notwithstanding the foregoing, the Borrower and the Lenders acknowledge and agree that the temporary forbearance granted by the Agent and the Lenders pursuant to this Agreement shall not constitute,
and shall not be deemed to constitute, a waiver of the Specified Events of Default or of any other Default or Event of Default under the Loan Documents or a waiver of the Specified Hedge Events of Default or of any other Hedge Event of Default under
the Hedge Agreement or a waiver of any of the rights and remedies provided thereunder, under law, at equity or otherwise (except as otherwise expressly provided in Section 3(a)). 
 (c) Termination of Forbearance. On and after the Termination Date, or such earlier date on which a Termination Event occurs and is
continuing, the Agent’s and the Lenders’ agreement hereunder to forbear shall terminate automatically without further act or action by the Agent or the Lenders, unless sooner extended in writing. The Borrower expressly acknowledges and
agrees that the effect of such termination will be to permit the Agent and the Lenders to exercise any and all rights and remedies available to them under the Loan Documents and this Agreement, at law, in equity (including, without limitation, any
Secured Creditor Remedy), or otherwise without any further lapse of time, expiration of applicable grace periods, or (except as otherwise required under provisions of applicable law that cannot be waived) requirements of notice, all of which are
expressly waived by the Borrower. 
 4. Outstanding Amount of Obligations. As of the close of business on October 23, 2008,
(i) the aggregate outstanding principal amount of the Advances (not including amounts accrued but not yet charged to the Loan Account) is $21.50 and the aggregate stated amount of all outstanding Letters of Credit is $24,000.00, and
(ii) the Borrower is unconditionally indebted and liable for the repayment in full of the outstanding principal amount of all Advances, all contingent reimbursement obligations with respect to outstanding Letters of Credit and all other
Obligations, including, without limitation, the Applicable Prepayment Premium, the fees set forth in the Fee Letter and the fees and expenses of legal counsel to the Agent, without offset, defense or counterclaim of any kind, nature or description.

  

 3 

 5. Amendments to Credit Agreement. The Borrower, the Lenders and the Agent wish to amend the
Credit Agreement. Accordingly, on the Forbearance Effective Date (as defined in Section 7 below), the parties hereto hereby agree as follows: 
 (a) Schedule 1.1 of the Credit Agreement is hereby amended by amending and restating the following definitions to read in their entirety as follows: 
 ““Applicable Margin” means (i) 3.50% in the case of Base Rate Loans and (ii) 5.00% in the case of LIBOR
Rate Loans.” 
 ““Second Secured Debt Documents” means the Second Secured Note Indenture, the
Second Secured Notes, the Second Secured Debt Consent and all agreements and documents executed in connection therewith at any time, including, without limitation, those agreements and documents listed on Schedule 4.29 hereto.” 
 ““Second Secured Notes” means the Existing Second Secured Notes and the New Second Secured Notes in the aggregate
principal amount not to exceed $122,319,000 and any PIK Notes that may be issued from time to time pursuant to the Second Secured Note Indenture.” 
 ““Second Secured Note Indenture” means the Amended and Restated Indenture between the Borrower and the Bank of New York Mellon, as trustee, dated as of October 30, 2008, as amended,
supplemented or otherwise modified from time to time in accordance with Section 6.7 of this Agreement.” 
 (b)
Schedule 1.1 of the Credit Agreement is hereby amended by adding the following definitions (in appropriate alphabetical order): 
 ““Existing Second Secured Notes” means the 12 1/2% Senior Secured Notes due October 1, 2012, issued by the Borrower in the aggregate principal amount of not more than
$115,000,000 pursuant to the Second Secured Note Indenture provided, that after the execution and delivery of the Second Secured Debt Consent and the transactions contemplated thereby, the aggregate principal amount of the 12 1/2% Senior Secured Notes due October 1, 2012, issued and outstanding shall not be more than $15,000,000.” 

 ““First Amendment” means Forbearance, First Amendment to Credit Agreement and First Amendment to Fee
Letter, dated as of October 30, 2008, by and among the Borrower, the Lenders and the Agent.” 
 ““Forbearance Effective Date” has the meaning assigned to it in the First Amendment.” 
 ““New Second Secured Notes” means the 15% Senior Secured PIK Notes due June 15, 2009, issued by the Borrower pursuant to the Second Secured Note Indenture and any other securities issued pursuant to the Second
Secured Note Indenture at any time.” 
  

 4 

 ““PIK Notes” has the meaning assigned to it in the Second Secured
Note Indenture.” 
 ““Second Secured Debt Consent” means the Consent dated as of October 29,
2008, from certain holders of the Existing Second Secured Notes.” 
 (c) Section 3.2(a) and (b). Sections
3.2(a) and (b) of the Credit Agreement are amended in their entirety to read as follows: 
 “(a) the representations
and warranties of Borrower contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier
date and subject to the exceptions set forth in Section 10(e) of the First Amendment); 
 (b) no Default or Event of
Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof, except for the Specified Events of Default and the Specified Hedge Events of Default (in each case as defined in
the First Amendment);” 
 (d) Section 3.3 of the Credit Agreement is hereby amended by amending and restating
such section in its entirety to read as follows: 
 “3.3 Term. This Agreement shall continue in full force
and effect for a term ending on the earlier of (a) October 1, 2010, and (b) the date that is 60 days prior to the earliest date on which any principal amount of the Second Secured Notes is scheduled to become due and payable or is
required to be prepaid or redeemed (excluding any principal of the Existing Second Secured Notes), in each case in accordance with the terms of the Second Secured Note Indenture (such earlier date, the “Maturity Date”). The
foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event
of Default.” 
 (e) Section 6.1(h) of the Credit Agreement is hereby amended by amending and restating such
section in its entirety to read as follows: 
 “(h) the Second Secured Debt in an aggregate principal amount not to
exceed $122,319,000, plus the aggregate principal amount of any PIK Notes that may be issued from time to time pursuant to the Second Secured Note Indenture, owing by the Borrower and any Refinancing Indebtedness in respect of such
Indebtedness.” 
  

 5 

 (f) Section 6.7(b) of the Credit Agreement is hereby amended by amending and
restating such section in its entirety to read as follows: 
 “(b) Except in connection with Refinancing Indebtedness
permitted by Section 6.1 and the execution and delivery of certain of the Second Secured Debt Documents on the Forbearance Effective Date, make any cash payment or (except for the issuance of PIK Notes) other payment of any kind on
account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the applicable subordination terms and conditions.” 
 (g) Section 6.7(c) of the Credit Agreement is hereby amended by amending and restating such section in its entirety to read as
follows: 
 “(c) Except in connection with Refinancing Indebtedness permitted by Section 6.1, directly or
indirectly, amend, modify, alter, increase, or change (other than Permitted Changes and the execution and delivery of certain of the Second Secured Debt Documents on the Forbearance Effective Date) any of the terms or conditions of any agreement,
instrument, document, indenture, or other writing evidencing or concerning Indebtedness permitted under Section 6.1(b), (c), (f), (g), (h), (i), (j) or (m), or” 
 (h) Section 6.13(a) of the Credit Agreement is hereby amended by amending and restating such section in its entirety to read
as follows: 
 “(a) transactions (other the payment of management, consulting, monitoring, or advisory fees) between
Borrower, on the one hand, and any Affiliate of Borrower, on the other hand, so long as such transactions (i) are upon fair and reasonable terms, (ii) are fully disclosed to Agent if they involve one or more payments by Borrower in excess
of $500,000 for any single transaction or series of transactions, and (iii) are no less favorable to Borrower, as applicable, than would be obtained in an arm’s length transaction with a non-Affiliate (for the avoidance of doubt, the
acquisition by Third Point LLC, a Delaware limited liability company, of Second Secured Notes in the aggregate principal amount of up to $18,500,000 shall be deemed to comply with this section); and” 
  

 6 

 (i) Section 6.16(a) of the Credit Agreement is hereby amended by amending and
restating such section in its entirety to read as follows: 
 “(a) Minimum EBITDA. For the period from
(i) the Forbearance Effective Date through June 30, 2009, fail to achieve EBITDA of at least the required amount set forth in the following table for the applicable period set forth opposite thereto: 
  

			
	 Applicable Amount
	  	 Applicable Period

	              $0
	  	For the 1 month period ending October 31, 2008
	       $1,014,000
	  	For the 1 month period ending November 30, 2008
	         $925,000
	  	For the 1 month period ending December 31, 2008
	         $931,000
	  	For the 1 month period ending January 31, 2009
	         $901,000
	  	For the 1 month period ending February 28, 2009
	         $872,000
	  	For the 1 month period ending March 31, 2009
	         $845,000
	  	For the 1 month period ending April 30, 2009
	         $822,000
	  	For the 1 month period ending May 31, 2009
	         $797,000
	  	For the 1 month period ending June 30, 2009

 (ii) July 1, 2009 through the Maturity Date, if the sum of (x) Qualified Cash and
(y) Excess Availability is less than $10,000,000 at any time during a quarter, fail to achieve EBITDA for any quarter ending thereafter of at least $27,500,000 for the 12 month period ending September 30, 2009 and each trailing twelve
month period measured quarterly thereafter. 
 (j) Schedule 4.29 to the Credit Agreement is hereby amended by amending
and restating such schedule in its entirety to read as set forth on Schedule 1 to this agreement. 
 (k) Schedule 4.30
to the Credit Agreement is hereby amended by amending and restating such schedule in its entirety to read as set forth on Schedule 2 to this agreement. 
 6. Amendment to Fee Letter. The Borrower and the Agent wish to amend the Fee Letter. Accordingly, on the Forbearance Effective Date, the parties hereto hereby agree that the definition of “Applicable
Prepayment Premium” is hereby amended and restated in its entirety to read as follows: 
 ““Applicable
Prepayment Premium” means, as of any date of determination, an amount equal to 1% times the Maximum Revolver Amount during the period from and after the date of the execution and delivery of the Agreement up to and including the Maturity
Date.” 
 7. Conditions to Effectiveness. This Agreement shall become effective and be deemed effective as of the date when, and
only when, all of the following conditions have been satisfied as determined in the Agent’s reasonable discretion (the date of such effectiveness being referred to as the “Forbearance Effective Date”): 
 (a) The Borrower shall have paid to the Agent, for its sole and separate account, a non-refundable fee equal to $200,000, in immediately
available funds, in Dollars, which fee shall be earned in full when paid, provided that the Agent may in its sole discretion charge such fee to the Loan Account pursuant to Section 2.10 of the Credit Agreement. 
  

 7 

 (b) All out-of-pocket expenses incurred by any member of the Lender Group which have been
invoiced in connection with this Agreement, the Credit Agreement or any other Loan Document, or the transactions contemplated by any of the foregoing, shall have been paid by the Borrower. 
 (c) The Agent shall have received on or before the Forbearance Effective Date the following, each in form and substance reasonably
satisfactory to the Agent: 
 (i) a copy of this Agreement duly executed by the Borrower, the Agent and the Required Lenders;

 (ii) fully executed copies of the Second Secured Debt Documents, and each Second Secured Debt Document shall have become
effective according to its terms; 
 (iii) a fully executed copy of the First Amendment to the Intercreditor Agreement, and
the First Amendment to the Intercreditor Agreement shall have become effective according to its terms; 
 (iv) a fully
executed side letter from Jefferies & Company, Inc. to the Agent, with respect to certain representations; 
 (v) a
certificate from the Secretary of Borrower (A) attesting to the resolutions of the Borrower’s Board of Directors authorizing the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents to be
executed and delivered pursuant hereto to which the Borrower is a party, and the performance of the Credit Agreement, as amended, (B) authorizing specific officers of the Borrower to execute the same, and (C) attesting to the incumbency
and signatures of such specific officers of the Borrower; 
 (vi) an opinion of Thompson & Knight LLP, counsel to the
Borrower, as to the execution, delivery and performance of this Agreement and the performance of the Credit Agreement and other Loan Documents, as amended hereby; and 
 (vii) such other documents and instruments as the Agent, in its reasonable discretion, deems necessary or desirable to evidence and
confirm perfection of its liens and security interests in the Collateral or the Borrower’s due authorization, execution and delivery of this Agreement. 
 The failure of the Borrower to timely comply with any of the terms of this Section 7 shall constitute (i) an Event of Default under and for all purposes of the Credit Agreement and the other Loan Documents, and (ii) a
Termination Event under this Agreement. 
  

 8 

 8. Ratification of Loan Documents and Collateral. The Borrower acknowledges that this Agreement
constitutes receipt from the Agent and the Lenders of proper notice of default, and subject to the terms and conditions of this Agreement, notice of intent to accelerate and opportunity to cure, and demand for payment. The Borrower waives to the
extent permitted by law (a) any further notice of default, notice of intent to accelerate, or demand for payment and (b) any further opportunity to cure the Specified Events of Default or the Specified Hedge Events of Default. Except as
modified by this Agreement, the Borrower acknowledges, ratifies, reaffirms, and agrees that each of the Loan Documents and the perfected liens and security interests created thereby in favor of the Agent for the benefit of the Lenders in the
Collateral, are and will remain in full force and effect and binding on the Borrower, and are enforceable in accordance with their respective terms and applicable law. The Borrower acknowledges, ratifies and reaffirms all of the terms and provisions
of the Loan Documents (including, without limitation, the Credit Agreement), except as modified herein, which are incorporated by reference as of the Forbearance Effective Date as if set forth herein including, without limitation, all promises,
agreements, warranties, representations, covenants, releases, and indemnifications contained therein. 
 9. Insolvency Proceedings and
Certain Waivers. 
 (a) The Borrower agrees that if any Insolvency Proceeding with respect to Borrower exists: 

(i) the Borrower shall not object to or otherwise interfere with any motion or request by or on behalf of the Agent or any nominee
thereof to (A) sell, use or otherwise dispose of any of the Collateral (pursuant to section 363 of the Bankruptcy Code or otherwise) to the extent such motion or request is supported by the Agent, (B) seek post-petition financing from the
Lenders under Section 364 of the Bankruptcy Code, (C) obtain relief from the automatic stay with respect to any of the Collateral to the extent such motion or request is supported by the Agent, (D) provide the Agent and the Lenders
with adequate protection of their interest in any Collateral, (E) convert or dismiss any Insolvency Proceeding of the Borrower to the extent such motion is supported by the Agent or (F) appoint a trustee or an examiner to the extent such
motion or request is supported by the Agent and shall not file any such motion; 
 (ii) the Borrower shall not (A) oppose
or otherwise interfere with the confirmation of any plan of reorganization or liquidation filed or supported by the Agent, or (B) propose any such plan that is not supported by the Agent; 
 (iii) the Borrower shall not directly or indirectly object to, challenge, contest or otherwise seek to invalidate or reduce (or support
directly or indirectly any other person in any such objection, challenge or contest) (A) the existence, validity or amount of the obligations or (B) the extent, legality, validity, perfection, priority or enforceability of any lien,
pledge, security interest or mortgage of the Agent or any Lender purportedly securing any of the Obligations; 
 (iv) the
Borrower shall not seek to subordinate or recharacterize any claim of the Agent or any Lender against the Borrower; 
  

 9 

 (v) after the occurrence and during the continuance of any Event of Default, the Borrower
shall not oppose or otherwise interfere with the exercise by the Agent, its nominee or any Lender of any of the Secured Creditor Remedies; and 
 (vi) the Borrower acknowledges and agrees that the waivers set forth in this Section 9 constitute material consideration for the Lenders to execute and deliver this Agreement and that the Lenders are specifically
relying on the truth and accuracy of the foregoing. 
 10. Representations and Warranties. To induce the Agent and the Lenders to
enter into this Agreement, the Borrower hereby represents and warrants to the Agent and the Lenders as follows: 
 (a) Duly
Organized. The Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has the full power and authority to execute, deliver and perform this Agreement and to perform the
Credit Agreement and the Fee Letter, as amended hereby. 
 (b) Authority. The execution, delivery and performance by
the Borrower of this Agreement, and the performance by each such Borrower of the Credit Agreement and the Fee Letter, as amended hereby, and each other Loan Document (i) have been duly authorized by all requisite action on the part of the
Borrower, (ii) do not and will not violate any provision of federal, state, or local law or regulation applicable to the Borrower, the Governing Documents of the Borrower, or any order, judgment or decree of any court, Governmental Authority or
arbitrator by which the Borrower or any of its properties is bound, (iii) do not and will not conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of the Borrower
and (iv) do not and will not require any filing (other than any disclosure filing) or registration with, consent, or authorization or approval of, or notice to, or other action with or by, any Governmental Authority or other Person. 

(c) Binding Obligation. Each of this Agreement and the Credit Agreement and the Fee Letter, as amended hereby, constitutes the
legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors’ rights generally. 
 (d) No Other Defaults. Except for the Specified Events of
Default and the Specified Hedge Events of Default, no Default or Event of Default has occurred and is continuing or would result from this Agreement becoming effective in accordance with its terms. 
 (e) Representations and Warranties. All representations and warranties by the Borrower contained in the Credit Agreement and in
each other Loan Document and certificate or other writing delivered to the Agent or the Lenders pursuant to the Credit Agreement or this Agreement are true and correct as of the Forbearance Effective Date hereof, except (i) to the extent made
as of a specific date, in which case each such representation and warranty shall be true and correct as of such date, (ii) to the extent that such representation and warranties relate to the Specified Events of Default or the Specified Hedge
Events of Default, and (iii) Section 4.29 of the Credit Agreement (which relate to Third Secured Notes that have been converted to equity of the Borrower). 
  

 10 

 11. Remedies Upon Termination Event. Upon the occurrence of a Termination Event, (a) the
Forbearance Period will terminate without further act or action by the Agent or the Lenders and (b) the Agent and the Lenders shall be entitled immediately to exercise any and all rights and remedies available to them under the Loan Documents
and this Agreement, at law, in equity, or otherwise, without further opportunity to cure, demand, presentment, notice of dishonor, notice of default, notice of intent to accelerate, notice of intent to foreclose, notice of protest or other
formalities of any kind, all of which are expressly waived by the Borrower to the extent permitted by law. 
 12. Release and Covenant Not
to Sue. THE BORROWER (IN ITS OWN RIGHT AND ON BEHALF OF ITS DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS) (THE “RELEASING PARTIES”) JOINTLY AND SEVERALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES
THE AGENT AND THE LENDERS AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS, (COLLECTIVELY, THE “RELEASED PARTIES”), TO THE FULLEST EXTENT PERMITTED BY APPLICABLE STATE AND FEDERAL
LAW, FROM ANY AND ALL ACTS AND OMISSIONS OF THE RELEASED PARTIES, AND FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, COUNTERCLAIMS, DEMANDS, CONTROVERSIES, COSTS, DEBTS, SUMS OF MONEY, ACCOUNTS, RECKONINGS, BONDS, BILLS, DAMAGES, OBLIGATIONS,
LIABILITIES, OBJECTIONS, AND EXECUTIONS OF ANY NATURE, TYPE, OR DESCRIPTION WHICH THE RELEASING PARTIES HAVE AGAINST THE RELEASED PARTIES, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, GROSS NEGLIGENCE, USURY, UNCONSCIONABILITY, DURESS, ECONOMIC
DURESS, DEFAMATION, CONTROL, INTERFERENCE WITH CONTRACTUAL AND BUSINESS RELATIONSHIPS, CONFLICTS OF INTEREST, MISUSE OF INSIDER INFORMATION, CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF COLLATERAL, WRONGFUL RELEASE OF COLLATERAL, FAILURE TO INSPECT,
ENVIRONMENTAL DUE DILIGENCE, NEGLIGENT LOAN PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF, VIOLATIONS OF STATUTES AND REGULATIONS OF GOVERNMENTAL ENTITIES, INSTRUMENTALITIES AND AGENCIES (CIVIL), SECURITIES AND ANTITRUST LAWS VIOLATIONS, TYING
ARRANGEMENTS, BREACH OR ABUSE OF ANY ALLEGED FIDUCIARY DUTY, BREACH OF ANY ALLEGED SPECIAL RELATIONSHIP, COURSE OF CONDUCT OR DEALING, ALLEGED OBLIGATION OF FAIR DEALING, ALLEGED OBLIGATION OF GOOD FAITH, AND ALLEGED OBLIGATION OF GOOD FAITH AND
FAIR DEALING, IN CONNECTION WITH OR RELATED TO THE LOAN DOCUMENTS AND THE CREDIT AGREEMENT, AT LAW OR IN EQUITY, IN CONTRACT IN TORT, OR OTHERWISE, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED (COLLECTIVELY, THE “RELEASED CLAIMS”);
PROVIDED, HOWEVER, THAT THE RELEASED CLAIMS SHALL NOT INCLUDE ANY CLAIMS ARISING OUT OF ANY FAILURE BY THE AGENT OR LENDERS TO PERFORM, ON OR AFTER THE DATE HEREOF, ANY OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR UNDER ANY OF THE LOAN
DOCUMENTS OR THE CREDIT AGREEMENT. THE RELEASING PARTIES FURTHER 

  

 11 

 
JOINTLY AND SEVERALLY AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE AND EXEMPLARY
DAMAGES, DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY, DAMAGES ATTRIBUTABLE TO MENTAL ANGUISH, AND DAMAGES ATTRIBUTABLE TO PAIN AND SUFFERING, AND THE RELEASING PARTIES DO HEREBY JOINTLY AND SEVERALLY WAIVE AND RELEASE ALL SUCH DAMAGES WITH
RESPECT TO ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH MAY ARISE AT ANY TIME AGAINST ANY OF THE RELEASED PARTIES. THE RELEASING PARTIES REPRESENT AND WARRANT THAT NO FACTS EXIST WHICH COULD PRESENTLY SUPPORT THE ASSERTION OF ANY OF THE RELEASED
CLAIMS AGAINST THE RELEASED PARTIES. THE RELEASING PARTIES FURTHER COVENANT NOT TO SUE THE RELEASED PARTIES ON ACCOUNT OF ANY OF THE RELEASED CLAIMS, AND EXPRESSLY WAIVE ANY AND ALL DEFENSES THEY MAY HAVE IN CONNECTION WITH THEIR DEBTS AND
OBLIGATIONS UNDER THE LOAN DOCUMENTS AND THE CREDIT AGREEMENT (AS AMENDED HEREBY). THIS SECTION 12 IS IN ADDITION TO AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES IN FAVOR OF THE
RELEASED PARTIES. NOTWITHSTANDING ANY PROVISION OF THE CREDIT AGREEMENT (AS AMENDED HEREBY) OR ANY OTHER LOAN DOCUMENT, THIS SECTION 12 SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL SURVIVE THE DELIVERY AND PAYMENT ON THE OBLIGATIONS, THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS. 
 13. No Obligation of the Agent or the Lenders. The Borrower acknowledges and understands
that upon the expiration or termination of the Forbearance Period and if the Specified Events of Default and the Specified Hedge Events of Default have not been cured or waived by written agreement in accordance with the Credit Agreement, or if
there shall at such time exist a Default or Event of Default, then the Agent and the Lenders shall have the right to proceed to exercise any or all available rights and remedies, which may include foreclosure on the Collateral and institution of
legal proceedings. The Agent and the Lenders shall have no obligation whatsoever to extend the maturity of the Obligations, waive any events of default or defaults, defer any payments, or further forbear from exercising its rights and remedies.

 14. No Implied Waivers. No failure or delay on the part of the Agent or the Lenders in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement, the Credit Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement, the
Credit Agreement or any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No action or acquiescence by the Agent or the Lenders, including without limitation, the making of any
loan or the acceptance of any payment under the Credit Agreement, shall constitute a waiver of, or a consent to, any default, noncompliance, Default or Event of Default now existing or hereafter arising under the Credit Agreement or any of the other
Loan Documents (including, without limitation, the Specified Events of Default and the Specified Hedge Events of Default). 
  

 12 

 15. INDEMNIFICATION. IN ADDITION TO, AND WITHOUT LIMITATION OF, ANY AND ALL INDEMNITIES PROVIDED
IN THE LOAN DOCUMENTS, THE BORROWER SHALL AND DOES INDEMNIFY AND HOLD EACH OF THE RELEASED PARTIES HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITY, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS, JUDGMENTS, COSTS, AND EXPENSES, INCLUDING, WITHOUT
LIMITATION, ATTORNEYS’ FEES, ARISING OUT OF OR FROM OR RELATED TO ANY OF THE RELEASED CLAIMS. IF ANY ACTION, SUIT, OR PROCEEDING IS BROUGHT AGAINST ANY OF THE RELEASED PARTIES, THE BORROWER SHALL, AT LENDERS’ REQUEST, DEFEND THE SAME AT
THEIR SOLE COST AND EXPENSE, SUCH COST AND EXPENSE TO BE A JOINT AND SEVERAL LIABILITY OF THE BORROWER, BY COUNSEL SELECTED BY THE LENDERS. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, THIS SECTION 15 SHALL REMAIN IN
FULL FORCE AND EFFECT AND SHALL SURVIVE ANY DELIVERY AND PAYMENT ON THE OBLIGATIONS, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. 
 16.
Survival of Representations and Warranties. All representations and warranties made in this Agreement or any other Loan Document will survive the execution and delivery of this Agreement, and no investigation by the Agent or the Lenders or
any closing will affect the representations and warranties or the right of the Agent or the Lenders to rely upon them. 
 17. Review and
Construction of Documents. The Borrower hereby acknowledges, and represents and warrants to the Agent and the Lenders that the Borrower has had the opportunity to consult with legal counsel of their own choice and have been afforded an
opportunity to review this Agreement with their legal counsel, the Borrower has reviewed this Agreement and fully understand the effects thereof and all terms and provisions contained herein, and the Borrower has executed this Agreement of their own
free will and volition. The recitals contained in this Agreement shall be construed to be part of the operative terms and provisions of this Agreement. 
 18. ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT AND THE LOAN DOCUMENTS AS INCORPORATED HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO REGARDING THE AGENT’S AND THE LENDERS’
FORBEARANCE WITH RESPECT TO THEIR RIGHTS AND REMEDIES ARISING AS A RESULT OF THE SPECIFIED EVENTS OF DEFAULT AND THE SPECIFIED HEDGE EVENTS OF DEFAULT AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO. The provisions of this Agreement may be amended or waived only by an instrument in writing signed by the Borrower, the Agent and the Lenders. The Loan Documents, as modified by this Agreement, continue to evidence the agreement of
the parties with respect to the subject matter thereof. 
  

 13 

 19. Miscellaneous. 
 (a) Notices. All notices, requests, demands and other communications under this Agreement will be given in accordance with the
provisions of the Credit Agreement. 
 (b) Successors and Assigns. This Agreement shall (i) be binding on the
Agent, the Lenders, the Borrower and their respective successors and assigns, and (ii) inure to the benefit of the Agent, the Lenders, the Borrower and their respective successors and assigns, provided that Borrower may not assign any rights or
obligations under this Agreement without the prior written consent of the Agent and the Lenders. 
 (c) Tolling of Statutes
of Limitation. The parties hereto agree that all applicable statutes of limitations with respect to the Loan Documents shall be tolled and shall not begin to run again until the Termination Date. 
 (d) Arms-Length/Good Faith. This Agreement has been negotiated at arms-length and in good faith by the parties hereto. 

(e) Interpretation. Wherever the context hereof will so require, the singular shall include the plural, the masculine gender
shall include the feminine gender and the neuter and vice versa. The headings, captions and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. 
 (f) Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 
 (g) Counterparts. This Agreement may be executed and delivered in any number of counterparts, and by different parties hereto on
separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute one and the same instrument; provided that no party shall be bound by this Agreement
until the Borrower, the Agent and the Lenders have executed a counterpart hereof. Execution of this Agreement via facsimile or electronic mail shall be effective, and signatures received via facsimile or electronic mail shall be binding upon the
parties hereto and shall be effective as originals. 
 (h) Further Assurances. The Borrower agrees to execute,
acknowledge, deliver, file and record such further certificates, instruments and documents, and to do all other acts and things, as may be reasonably requested by the Agent and the Lenders as necessary or advisable to carry out the intents and
purposes of this Agreement. 
 (i) Loan Document. This Agreement is a Loan Document for all purposes of the Credit
Agreement and the other Loan Documents. 
  

 14 

 (j) GOVERNING LAW; CHOICE OF VENUE; WAIVER OF JURY TRIAL AND NOTICES. THIS
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE CHOICE OF LAW AND VENUE PROVISIONS SET FORTH IN THE CREDIT AGREEMENT, AND SHALL BE SUBJECT TO THE JURY TRIAL WAIVER AND
NOTICE PROVISIONS OF THE CREDIT AGREEMENT. 
 [Remainder of page intentionally left blank.] 
  

 15 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the
date first written above. 
  

			
	BORROWER:
	
	BASELINE OIL & GAS CORP.,
	a Nevada corporation
		
	By:	 	/s/ Patrick H. McGarey
	Name:	 	Patrick H. McGarey
	Title:	 	Chief Financial Officer

 Forbearance, First Amendment to 
 Credit Agreement, First Amendment 
 to Fee Letter 

			
	AGENT, LENDER AND SWAP COUNTERPARTY:
	
	WELLS FARGO FOOTHILL, INC.,
	a California corporation
		
	By:	 	/s/ Gary Forlenza
	Name:	 	Gary Forlenza
	Title:	 	Vice President

 Forbearance, First Amendment to 
 Credit Agreement, First Amendment 
 to Fee Letter 

 Schedule 1 
 Schedule 4.29 
 Existing Second Secured Notes: 
  

	 	•	 	 Senior Notes Indenture, dated as of October 1, 2007, between Baseline Oil & Gas Corp. and The Bank of New York, as trustee and collateral agent

  

	 	 •
	 	 form of Rule 144A Global 12 1/2% Senior Secured Note due 2012 

  

	 	 •
	 	 form of Regulation S Global 12 1/2% Senior Secured Note due 2012 

  

	 	 •
	 	 form of IAI Global 12 1/2% Senior Secured Note due 2012 

  

	 	•	 	 Senior Notes Security Agreement, dated October 1, 2007, among The Bank of New York Trust Company, NA, as collateral agent, and Baseline Oil & Gas Corp

  

	 	•	 	 Senior Notes Registration Rights Agreement, dated October 1, 2007, between Baseline Oil & Gas Corp and Jefferies & Company, Inc.

  

	 	•	 	 Intercreditor Agreement, dated October 1, 2007, among Wells Fargo Foothills, Inc., The Bank of New York and Baseline Oil & Gas Corp.

 New Second Secured Notes: 
  

	 	•	 	 Amended and Restated Indenture, dated as of October 30, 2008, between Baseline Oil & Gas Corp. and The Bank of New York Mellon, as trustee and
collateral agent 

  

	 	•	 	 form of Rule 144A Global 15% Senior Secured PIK Note due 2009 

  

	 	•	 	 form of Consent Agreement, dated as of October 29, 2008, from Third Point LLC and Jefferies & Company, Inc., with acknowledgement from Baseline
Oil & Gas Corp. 

  

	 	•	 	 First Amendment to Intercreditor Agreement, dated as of October 30, 2008, among Wells Fargo Foothill, Inc., The Bank of New York Mellon and Baseline
Oil & Gas Corp. 

 Schedule 2 
 Schedule 4.30 
 None.

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