LENDING AGREEMENT
Exhibit 10.3
LENDING
AGREEMENT
Dated as of December 5, 2007
among
TATONKA OIL AND GAS, INC.,
TATONKA OIL AND GAS COMPANY, INC.
and
LMA Xxxxxx LLLP
This LENDING AGREEMENT (this “Agreement”), dated as of December 5, 2007, is entered
into by and among the following parties: TATONKA OIL AND GAS, INC., a Colorado corporation (the
“Parent”), TATONKA OIL AND GAS COMPANY, INC., a Colorado corporation (the “Company”
a wholly-owned subsidiary of the Parent), and LMA Xxxxxx LLLP (“LMA”). This Agreement is
intended to provide for the Company’s borrowing funds from LMA (the “Lender”) from time to
time, through the Lender’s purchase of the Company’s Junior Secured Notes (the “Notes”),
and warrants to purchase shares of the Parent’s Common Stock, par value $0.001 per share (the
“Common Stock”).
Energy Capital Solutions, LP (“ECS”) is not a party to this Agreement, but signs this
Agreement only to evidence its consent to the Parent and the Company entering into this Agreement,
and to consummation of all transactions contemplated hereby, which consent is required by Sections
3.14(b) and (c) of the October 5, 2007 Securities Purchase Agreement between the Parent, the
Company, and ECS.
RECITALS
Whereas, LMA has loaned funds to the Company from time to time in the amount of $1,264,500
(the “Company’s Currrent Net Obligation to LMA,” as further defined below), and LMA desires
to make additional loans to the Company (the “ Loans”).; and
Whereas, the Current Obligation is not secured and the Parent and the Company, and LMA, intend
for the Current Obligation to be secured by the Company’s oil and gas leasehold assets, and other
assets; and the Parent and the Company, and LMA intend for further LMA Loans to be secured by the
same assets;
Now, Therefore, the parties hereto agree as follows:
ARTICLE I
Notes and Warrants
Notes and Warrants
Section 1.1 Purchase and Sale of Notes and Warrants. Upon the terms and conditions of this
Agreement, the Company shall issue and sell
(a) to LMA as the Lender and LMA shall purchase from the Company, from time to time
Notes in the form attached hereto as Exhibit A, (“LMA’s Loans”).
and
(b) to LMA, on January 15, 2008 (the “Expiration Date” of this Agreement), a
warrant to purchase shares of common stock of the Parent, in the form attached
hereto as Exhibit B, with the number of shares underlying the warrant
determined in accordance with Section 1.2 below including the recent advance of
$122,000 as set forth under Section 1.6 . No consideration in addition to the
amount of LMA’s total Loan(s) shall be required to be paid by LMA for issuance of
the warrant.
Section 1.2 Calculation of Shares Underlying the Warrant. The total number of shares
underlying the warrant to be issued to LMA shall be equal to (x) 616,667 multiplied by (y) that
fractional number which results from dividing (i) all of LMA’s Loans, by (ii) $200,000.
Section 1.3 Procedures for Requests for Additional Loans and Closings; No Commitment to
Fund After LMA’s First Loan. Requests for Additional Loans may be made by the Company in its
discretion at any time, and from time to time, by notice to LMA specifying the amount requested
and the categories
to which loan proceeds will be applied. LMA shall promptly notify the Company whether, and if
so to what extent, LMA will fund the request. If LMA agrees to lend against a request, closing
thereof (a “Subsequent Closing”) shall occur as soon as possible with LMA’s wire transfer
to the Company’s bank account and the Company’s immediate delivery, in person to a representative
of LMA or by overnight courier to LMA of a Note (together with Parent’s guarantee of payment of
that Note, in the form of the Guaranty attached as Exhibit C to this Agreement).
Section 1.4 Exemption for 1933 Act Registration. The Company, Parent, and LMA are
executing and delivering this Agreement in accordance with and in reliance upon the exemption from
securities registration afforded by Section 4(2) of the Securities Act of 1933.
Section 1.5 Warrant Shares. The Parent has authorized and has reserved and covenants to
continue to reserve, free of preemptive rights and other similar contractual rights of
stockholders, a number of its authorized but unissued shares of Common Stock equal to the aggregate
number of shares of Common Stock necessary to effect the exercise of the Warrants. Any shares of
Common Stock issuable upon exercise of the Warrants (and such shares when issued) are herein
referred to as the “Warrant Shares”. The Notes, the Warrants and the Warrant Shares are
sometimes collectively referred to herein as the “Securities.”
Section 1.6 Issuance of Note for the Company’s Net Obligation to LMA. On the date of
this Agreement, the Company shall issue and deliver to LMA a Note in the amount of $1,501,214.60
(which includes (i) advances since November 2, 2006 and (ii) interest at a simple annual rate of
15% on the outstanding net advances on a month-to-month basis, from November 2, 2006 through
December 4, 2007). and in the form as Exhibit AA. From inception of the Company, LMA has
loaned funds to the Company from time to time on an unsecured basis, without interest, and without
specific repayment terms. The loan balance has been reduced by cash payments from the Company to
LMA, and also by amounts paid for payroll for work done by Company employees on projects managed by
LMA unrelated to the Company’s business. The principal component of the obligation ($1,386,417.73)
represents the Company’s and LMA’s good faith estimate of the net funds out of the total loans
prior to the date of this Agreement which were spent on Company-related business and therefore owed
to LMA by the Company, and the additional amount of interest represents the parties’ current
agreement to further compensate LMA for agreeing to make the LMA Loans under this Agreement. No
warrants shall be issued by Parent to LMA in connection with the Company’s execution and delivery
of the Note for the Company’s Net Obligation to LMA, except that the $122,000 recently advanced
(which amount is included in such Obligation amount) shall be treated as a LMA Loan for purposes of
calculating the number of shares underlying the warrant pursuant to Section 1.2.
ARTICLE II
Representations and Warranties
Representations and Warranties
Section 2.1 Representations and Warranties of the Parent and the Company. In order to
induce LMA to enter into this Agreement and to purchase the Notes and the Warrants, each of the
Parent and the Company hereby makes the following representations and warranties to LMA:
| (a) | Organization, Good Standing and Power. Each of the Parent and the
Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Colorado and has the requisite corporate power to own, lease
and operate its properties and assets and to conduct its business as it is now being
conducted.
The Parent does not have any subsidiaries other than the Company or own
securities of any kind in any other entity except for AWCS as disclosed in the
Commission Documents (as defined in Section 2.1(f)). The Parent and Company each is
duly qualified as a foreign
entity to do business and is in good standing in every jurisdiction in which the
nature of the business conducted or property owned by it makes such qualification
necessary, except for any jurisdiction(s) (alone or in the aggregate) in which the
failure to be so qualified will not have a Material Adverse Effect. |
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For the
purposes of this Agreement, “Material Adverse Effect” means any adverse
effect on the business, operations, properties, prospects or financial condition of
the Parent or its Subsidiaries and which is material to the Parent and its
Subsidiaries, taken as a whole, or which is likely to materially hinder the
performance by the Company of its material obligations hereunder and under the other
Transaction Documents (as defined in Section 2.1(b) hereof); provided that “Material
Adverse Effect” shall not be deemed to include the impact of effects arising out of
or resulting from changes in general economic conditions which affect or are
reasonably likely to affect the Company to substantially the same degree as another
Person operating in the natural resources industry. |
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| (b) | Authorization; Enforcement. Each of the Parent and the Company, as the
case may be, has the requisite corporate power and authority to enter into and perform
this Agreement, the Registration Rights Agreement, the Security Agreement, the Notes,
the Warrants, and the other agreements and documents contemplated hereby and thereby
and executed by the Company or the Parent or to which the Company or Parent is party
(collectively, the “Transaction Documents”), and to issue and sell the Notes
and the Warrants in accordance with the terms hereof. The execution, delivery and
performance of the Transaction Documents by the Company and Parent and the consummation
by it of the transactions contemplated thereby have been duly and validly authorized by
all necessary corporate action, and, except as set forth in Schedule 2.1(b), no
further consent or authorization of the Company or Parent, their Boards of Directors or
their stockholders is required. This Agreement has been duly executed and delivered by
the Company and Parent. The other Transaction Documents will have been duly executed
and delivered by the Company and Parent, as applicable, at the Closing. Each of the
Transaction Documents constitutes, or shall constitute when executed and delivered, a
valid and binding obligation of the Company and Parent enforceable against the Company
and Parent in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement of,
creditor’s rights and remedies or by other equitable principles of general application. |
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| (c) | Capitalization. Parent has 55,000,000 shares of Common Stock issued and
outstanding, all of which, and all other outstanding securities of Parent, have been
duly and validly authorized. Except as disclosed in the Commission Documents, (i) no
shares of Common Stock or any other security of Parent are entitled to preemptive
rights or registration rights and there are no outstanding options, warrants, scrip,
rights to subscribe to, call or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the Parent; and
(ii) there are no contracts, commitments, understandings, or arrangements by which
Parent is or may become bound to issue additional shares of the capital stock of Parent
or options, securities or rights convertible into shares of capital stock of Parent.
Except for customary transfer restrictions contained in agreements entered into by the
Parent in order to sell restricted securities, the Parent is not a party to or bound by
any agreement or understanding granting registration or anti-dilution rights to any
individual, corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company, government
(or an agency or political subdivision thereof) or other entity of any kind (a
“Person”) with respect to any of its equity or debt securities. Parent
is not a party to, and it has no knowledge of, any agreement or understanding
restricting the voting or transfer of any shares of the capital stock of the Parent.
Except as set forth on Schedule 2.1(c) hereto, the offer and sale of all
capital stock, convertible securities, rights, warrants, or options of the Parent
issued prior to the date hereof complied with all applicable federal and state
securities laws, and no holder of such securities has a right of rescission or claim
for damages with respect thereto which could have a Material Adverse Effect. |
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| (d) | Issuance of Securities. The Notes and the Warrants to be issued under
this Agreement have been duly authorized by all necessary corporate action and, when
paid for or issued in accordance with the terms hereof, the Notes and the Warrants
shall be validly issued and outstanding, fully paid and nonassessable and free and
clear of all liens, encumbrances and rights of refusal of any kind. When the Warrant
Shares are issued and paid for in accordance with the terms of this Agreement and as
set forth in the Warrants, such shares will be duly authorized by all necessary
corporate action and validly issued and outstanding, fully paid and nonassessable, free
and clear of all liens, encumbrances and rights of refusal of any kind and the holders
shall be entitled to all rights accorded to a holder of Common Stock. |
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| (e) | No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and Parent and the consummation by the Company and
Parent of the transactions contemplated hereby and thereby do not and will not (i)
violate any provision of the Articles of Incorporation or Bylaws or any Subsidiary’s
comparable charter documents, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any
agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement,
instrument or obligation to which the Parent or the Company is a party or by which
their respective properties or assets are bound, (iii) create or impose a lien,
mortgage, security interest, charge or encumbrance of any nature on any property or
asset of Parent or Company under any agreement or any commitment to which either is a
party or by which either (or any of their respective properties or assets) is bound
(except as contemplated by the Security Agreement), or (iv) result in a violation of
any federal, state, local or foreign statute, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable to the
Parent or any of its Subsidiaries or by which any property or asset of the Parent or
any of its Subsidiaries is bound or affected, except, in all cases other than
violations pursuant to clauses (ii), (iii) or (iv) (with respect to federal and state
securities laws) or clause (i) above, for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would not, individually or in
the aggregate, have a Material Adverse Effect. The business of Parent and Company is
not being conducted in violation of any laws, ordinances or regulations of any
governmental entity, except for possible (i) violations which singularly or in the
aggregate do not and will not have a Material Adverse Effect; and (ii) violations of
Environmental Laws (the representation and warranty for clause (ii) matters is set
forth under subparagraph (s) below). Neither Parent nor Company is required under
federal, state, foreign or local law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under the Transaction Documents or issue and sell the Securities in
accordance with the terms hereof or thereof (other than any filings which may be
required to be made by the Parent with the Securities and Exchange Commission (the
“Commission”), or state securities administrators prior to or
subsequent to the Closing, or any registration statement which may be filed pursuant
hereto or thereto). |
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| (f) | Commission Documents. The Common Stock is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and, except as disclosed on Schedule 2.1(f) hereto, Parent has
timely filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of the
Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the
Exchange Act (all of the foregoing, including filings incorporated by reference
therein, being referred to herein as the “Commission Documents”). |
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| (g) | Use of Proceeds. The proceeds from the sale of the Notes and exercise
of the Warrants will be used for working capital purposes. |
Section 2.2 Representations and Warranties of LMA. LMA hereby makes the following
representations and warranties to the Company and Parent:
| (a) | Organization and Standing of the Purchasers. It is duly incorporated or
organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization. |
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| (b) | Authorization and Power. It has the requisite power and authority to
enter into and perform the Transaction Documents and to purchase the Notes and the
Warrants being sold to it hereunder. The execution, delivery and performance of the
Transaction Documents and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary corporate or partnership action, and
no further consent or authorization is required. This Agreement has been duly
authorized, executed and delivered by LMA. This Agreement and each of the other
Transaction Documents constitute, or shall constitute when executed and delivered,
valid and binding obligations of LMA enforceable in accordance with their terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or similar laws
relating to, or affecting generally the enforcement of, creditor’s rights and remedies
or by other equitable principles of general application. |
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| (c) | Acquisition for Investment. It is purchasing the Notes and acquiring
the Warrants solely for its own account and not with a view to or for sale in
connection with the distribution thereof. It does not have a present intention to sell
any of the Securities, nor a present arrangement or intention to effect any
distribution of any of the Securities to or through any Person. LMA (i) has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of its investment in the Company and Parent, (ii) is
able to bear the financial risks associated with an investment in the Securities, and
(iii) has been given full access to such records of Parent and Company and to their
officers as it has deemed necessary or appropriate to conduct its due diligence
investigation. |
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| (b) | Rule 144. It understands that the Securities must be held indefinitely
unless such Securities are registered under the Securities Act or an exemption from
registration is available. It acknowledges that it is familiar with Rule 144 of the
rules and regulations of
the Commission, as amended, promulgated pursuant to the Securities Act (“Rule
144”), and understands that Rule 144 permits resales only under certain
circumstances. |
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ARTICLE III
Transfer Restrictions and Legends
Transfer Restrictions and Legends
Section 3.1 (a) The Securities may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Securities other than pursuant to an effective
registration statement, to the Company or to Parent, or to an Affiliate of either,, the Company and
Parent may require the transferor thereof to provide to the Company and Parent an opinion of
counsel selected by the transferor and reasonably acceptable to the Company and Parent, to the
effect that such transfer does not require registration of such transferred Securities under the
Securities Act.
(b) The Lender agrees to the imprinting, so long as is required by this Section 5.1(b), of a
legend on any of the Securities in the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT.
ARTICLE IV
Termination
Termination
Section 4.1 Termination by Mutual Consent. This Agreement may be terminated at any
time by the mutual written consent of the Company, Parent, and LMA.
Section 4.2 Effect of Termination. If this Agreement is terminated, this
Agreement shall become void and of no further force and effect, except that none of the parties
shall be released from any liability for any breach under this Agreement.
ARTICLE V
Indemnification
Indemnification
Section 4.2 General Indemnity. Each of the Company and Parent agrees to indemnify and hold
harmless LMA (and its respective directors, officers, employees, affiliates, agents, successors and
assigns) from and against any and all losses, liabilities, deficiencies, costs, damages and
expenses (including, without limitation, reasonable attorneys’ fees, charges and disbursements)
incurred by each as a result of any inaccuracy in or breach of the representations or warranties
made by the Company and Parent herein. LMA agrees to indemnify and
hold harmless the Company and Parent (and its directors, officers, employees, affiliates, agents,
representatives, successors and assigns) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys’
fees, charges and disbursements) incurred by the Company or Parent or any such Person as result of
any inaccuracy in or breach of the representations or warranties made by LMA herein.
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Section 4.3 Indemnification Procedure. Any party entitled to indemnification under this
Article V (an “indemnified party”) will give written notice to the indemnifying party of
any matters giving rise to a claim for indemnification; provided, that the failure of any
party entitled to indemnification hereunder to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Article V except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is brought against an indemnified party in respect of which indemnification is
sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it and the indemnifying
party may exist with respect to such action, proceeding or claim, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. In the event that the indemnifying
party advises an indemnified party that it will contest such a claim for indemnification hereunder,
or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing,
such Person of its election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it commences such
defense), then the indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party elects in writing
to assume and does so assume the defense of any such claim, proceeding or action, the indemnified
party’s costs and expenses arising out of the defense, settlement or compromise of any such action,
claim or proceeding shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any negotiation or defense of
any such action or claim by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such action or claim.
The indemnifying party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If the indemnifying
party elects to defend any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and expense. The
indemnifying party shall not be liable for any settlement of any action, claim or proceeding
effected without its prior written consent. Notwithstanding anything in this Article V to the
contrary, the indemnifying party shall not, without the indemnified party’s prior written consent,
settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes
any future obligation on the indemnified party or which does not include, as an unconditional term
thereof, the giving by the claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such claim. The indemnification required by this Article V shall be made by
periodic payments of the amount thereof during the course of investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred, so long as the indemnified
party irrevocably agrees to refund such moneys if it is ultimately determined by a court of
competent jurisdiction that such party was not entitled to indemnification. The indemnity
agreements contained herein shall be in addition to (a) any cause of action or similar rights of
the indemnified party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.
ARTICLE VI
Miscellaneous
Miscellaneous
Section 6.1 Fees and Expenses. Each party shall pay the fees and expenses of its advisors, counsel, accountants and other
experts, if any, and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
Section 6.2 Entire Agreement; Amendment. This Agreement and the Transaction Documents
contain the entire understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein or in the other Transaction Documents, neither
the Company nor Parent nor LMA make any representation, warranty, covenant or undertaking with
respect to such matters, and they supersede all prior understandings and agreements with respect to
said subject matter, all of which are merged herein. No provision of this Agreement may be waived
or amended other than by a written instrument signed by the Company, Parent and the holders of at
least a majority in principal amount of the then-outstanding Notes, and no provision hereof may be
waived other than by a written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought. No such amendment shall be effective to the extent that it applies
to less than all of the holders of the Notes then outstanding. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents unless the same consideration is also offered to all of the parties to the
Transaction Documents or holders of Notes, as the case may be.
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Section 6.3. Notices. Any notice, demand, request, waiver or other communication required
or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand
delivery by telecopy or facsimile at the address or number designated below (if delivered on a
Business Day during normal business hours where such notice is to be received), or the first
Business Day following such delivery (if delivered other than on a Business Day during normal
business hours where such notice is to be received), or (b) on the second Business Day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be:
If to the Company or Parent:
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Tatonka Oil and Gas, Inc. 000 Xxxxxxxxxxx Xxxxxx Xxxxx 0000 Xxxxxx, Xxxxxxxx 00000 Attention: Xxxxx Xxxxx Telecopier: 303.476.4101 |
|
with copies (which copies
shall not constitute notice
to the Company or Parent) to:
|
Welborn, Sullivan, Xxxx & Xxxxxx, P.C. 000 Xxxxxxxxxxx Xxxxxx Xxxxx 000 Xxxxxx, Xxxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxxxx, Esq. Telecopier: 303.832.2366 |
|
If to LMA:
|
LMA Xxxxxx LLLP 0000 X. Xxxxxxxx Xxx, XX 0000. Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000 Attn: Xxxxx Xxxxxx or Xxxx Xxxxxx Telecopier 303.409.7645 |
Any party hereto may from time to time change its address for notices by giving at least ten
(10) days written notice of such changed address to the other party hereto.
Section 6.4 Waivers. No waiver by any party of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
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Section 6.5 Successors and Assigns, Etc. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. The Notes and Warrants cannot be
assigned without the prior consent of Parent and Company, which shall not be unreasonably withheld.
This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by,
any other Person (other than indemnified Persons under Article V). This Agreement shall be
governed by and construed in accordance with the internal laws of the State of Colorado, without
giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed
with any presumption against the party causing this Agreement to be drafted. This Agreement may be
executed in any number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by each party and
delivered to the other parties hereto, it being understood that all parties need not sign the same
counterpart. The provisions of this Agreement are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or part of the
provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement and this Agreement shall be reformed and
construed as if such invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and enforceable to the
maximum extent possible. From and after the date of this Agreement, upon the request of the
Purchasers or the Company or Parent, the Company, Parent and Zulu and LMA shall execute and deliver
such instruments, documents and other writings as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purposes of this Agreement and the
other Transaction Documents.
[Remainder of page intentionally left blank. Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the date first above written.
| TATONKA OIL AND GAS, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| TATONKA OIL AND GAS COMPANY, INC. |
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| By: | ||||
| Name: | ||||
| LMA XXXXXX LLLP |
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| By: | ||||
| Xxxx Xxxxxx, Duly Authorized____________ | ||||
Signed by Energy Capital Solutions, LP only to evidence its consent to Tatonka Oil and Gas, Inc.
and Tatonka Oil and Gas Company, Inc. entering into this Agreement, and to consummation of all
transactions contemplated hereby, which consent is required by Sections 3.14(b) and (c) of the
October 5, 2007 Securities Purchase Agreement.
| ENERGY CAPITAL SOLUTIONS, LP | ||||
By:
|
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| Xxxxxxxxx Xxxxxx, Duly Authorized | ||||
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EXHIBIT A
FORM OF NOTE
FORM OF NOTE
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EXHIBIT B
FORM OF WARRANT
FORM OF WARRANT
12
EXHIBIT AA
FORM OF NOTE FOR CURRENT OBLIGATION
TO LMA XXXXXX LLLP
FORM OF NOTE FOR CURRENT OBLIGATION
TO LMA XXXXXX LLLP
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EXHIBIT D
FORM OF SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT
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