SECURITIES PURCHASE AGREEMENT

      TATONKA OIL AND GAS, INC.,

TATONKA OIL AND GAS COMPANY, INC.

and

THE PURCHASERS LISTED ON EXHIBIT A

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      This SECURITIES PURCHASE AGREEMENT (this “ Agreement ”), dated as of October 5, 2007, by and among TATONKA OIL AND GAS, INC., a Colorado corporation (the “ Parent ”), TATONKA OIL AND GAS COMPANY, INC., a Colorado corporation (the “ Company ”), and the entities listed on Exhibit A hereto (each, a “ Purchaser ” and collectively, the “ Purchasers ”), for the purchase by the Purchasers of the Company’s Senior Secured Notes Due 2008 (including any Additional Notes, the “ Notes ”), and warrants to purchase shares of the Parent’s Common Stock, par value $0.001 per share (the “ Common Stock ”).

                 Section 1.1 Purchase and Sale of Notes and Warrants . Upon the following terms and conditions, the Company or Parent, as the case may be, shall issue and sell to the Purchasers, and each Purchaser shall, severally but not jointly, purchase from the Company or Parent, as the case may be, on the Closing Date (i) a Note in substantially the form attached hereto as Exhibit B , and (ii) warrants to purchase shares of Common Stock, in substantially the form attached hereto as Exhibit C (the “ Closing Date Warrants ”), in each case as set forth opposite each such Purchaser’s name on Exhibit A hereto, for an aggregate purchase price to the Company from all Purchasers of $200,000 (the “ Purchase Price ”). In addition, the Company may request that the Purchasers purchase additional Notes in an amount up to $200,000 (the “ Additional Notes ”), which shall be purchased only in increments of $100,000, in substantially the form attached hereto as Exhibit B ; provided that Purchasers shall be under no obligation to purchase such Notes. If Purchasers agree to purchase such Additional Notes, the Company will authorize the issuance to Purchasers of up to an amount as determined by the Company in its sole discretion of the Additional Notes. The Company, Parent and the Purchasers 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 U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “ Securities Act ”), including Regulation D (“ Regulation D ”), and/or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the investments to be made hereunder.

                 Section 1.2 Purchase Price and Closing . The Company and Parent, as the case may be, agree to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Purchasers, severally but not jointly, agree to purchase the Notes and Warrants, in the amounts as set forth opposite their respective names on Exhibit A . The closing of the purchase and sale of the Notes and Warrants to be acquired by the Purchasers from the Company and Parent under this Agreement on the Closing Date shall take place at the offices of Patton Boggs LLP, 2001 Ross Avenue, Suite 3000, Dallas, Texas 75201 (the “ Closing ”) at 10:00 a.m., Central Time (i) on or before October 5, 2007, provided, that all of the conditions set forth in Article IV hereof and

applicable to the Closing shall have been fulfilled or waived in accordance herewith, or (ii) at such other time and place or on such date as the Purchasers and the Company may agree upon (the “ Closing Date ”). The entire Purchase Price shall be paid by the Purchasers in cash, by wire transfer or in readily available funds. Each subsequent funding that is to be funded by the Purchasers pursuant to the Additional Notes on each subsequent funding date shall be made by wire transfer of immediately available funds to the applicable account of the Company.

                 Section 1.3 Warrants . At the Closing, the Parent shall issue to each Purchaser such number of Closing Date Warrants to purchase shares of Common Stock (which shall equal 1% of the fully diluted Common Stock in the aggregate) as is set forth opposite such Purchaser’s name on Exhibit A hereto, subject to adjustment as set forth in the Closing Date Warrants. In addition, (a) if the Purchasers purchase Additional Notes, the Parent shall issue to such Purchasers additional Warrants to purchase 0.5% of the fully diluted Common Stock for each $100,000 of Additional Notes purchased, each in the form attached hereto as Exhibit C and (b) the Parent shall issue to the Purchasers additional Warrants pursuant to the terms set forth in the Notes, each in the form attached hereto as Exhibit C (in each case, the “ Additional Warrants ” and together with the Closing Date Warrants, the “ Warrants ”). The Warrants shall be exercisable for ten (10) years from the date of issuance and shall have an initial exercise price equal to $0.20.

                 Section 1.4 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 2.1 Representations and Warranties of the Parent and the Company . In order to induce the Purchasers 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 the Purchasers:

                  (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 (as defined in Section 2.1(g)) or own securities of any kind in any other entity, except as disclosed in the Commission Documents (as defined in Section 2.1(f)) or as set forth on Schedule 2.1(g) hereto. The Parent and each such Subsidiary 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. For the purposes of this Agreement, “ Material Adverse Effect ” means any adverse effect on the business, operations, properties, prospects or financial condition

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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.

                 (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.

                 (c) Capitalization . The authorized capital stock of the Parent and the shares thereof currently issued and outstanding as of the Closing Date are set forth on Schedule 2.1(c) hereto. All of the outstanding shares of the Parent’s Common Stock and any other security of the Company have been duly and validly authorized. Except as disclosed in the Commission Documents or as set forth on Schedule 2.1(c) hereto, no shares of Common Stock or any other security of the 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. Furthermore, except as disclosed in the Commission Documents or as set forth on Schedule 2.1(c) hereto, there are no contracts, commitments, understandings, or arrangements by which the Parent is or may become bound to issue additional shares of the capital stock of the Parent or options, securities or rights convertible into shares of capital stock of the Parent. Except for customary transfer restrictions contained in agreements entered into by the Parent in order to sell restricted securities or as provided on Schedule 2.1(c) hereto, 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. Except as set forth on Schedule 2.1(c) , the Parent is not a party to, and

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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 Closing 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. The Parent has furnished or made available to the Purchasers true and correct copies of the Parent’s and Company’s Articles of Incorporation as in effect on the date hereof (the “ Articles of Incorporation ”), and the Parent’s and Company’s Bylaws as in effect on the date hereof (the “ Bylaws ”).

                 (d) Issuance of Securities . The Notes and the Warrants to be issued at the Closing 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.

                 (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 any of its Subsidiaries is a party or by which the Parent or any of its Subsidiaries’ 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 the Parent or any of its Subsidiaries under any agreement or any commitment to which the Parent or any of its Subsidiaries is a party or by which the Parent or any of its Subsidiaries is bound or by which any of their respective properties or assets are 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 the Parent and its Subsidiaries 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 the Parent nor any of its Subsidiaries 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

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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 ”) prior to or subsequent to the Closing, or state securities administrators prior to or subsequent to the Closing, or any registration statement which may be filed pursuant hereto or thereto).

                 (f) Commission Documents; Financial Statements . 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, the 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 ”). The Parent has delivered or made available (through the SEC EDGAR website) to the Purchasers true and complete copies of the Commission Documents filed with the Commission since February 27, 2003. The Parent has not provided to the Purchasers any material non-public information or other information which, according to applicable law, rule or regulation, should have been disclosed publicly by the Parent but which has not been so disclosed, other than with respect to the transactions contemplated by this Agreement. At the time of its filing, the Parent’s Quarterly Report on Form 10-QSB for the fiscal quarter ended July 31, 2007 (the “ Form 10-Q” ) complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such documents, and the Form 10-Q did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. At the time of its filing, the Parent’s Annual Report on Form 10-KSB for the fiscal year ended October 31, 2006 (the “ Form 10-K ”) complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such documents, and, at the time of its filing, the Form 10-K did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Parent included in the Form 10-Q complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles (“ GAAP ”) applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Parent and its Subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

                  (g) Subsidiaries . Schedule 2.1(g) hereto sets forth each Subsidiary of the Parent, showing the jurisdiction of its incorporation or organization and showing the percentage

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of each Person’s ownership of the outstanding stock or other interests of such Subsidiary. For the purposes of this Agreement, “ Subsidiary ” shall mean any Person of which at least a majority of the securities or other ownership interest having ordinary voting power (absolutely or contingently) for the election of directors or other Persons performing similar functions are at the time owned directly or indirectly by the Parent and/or any of its other Subsidiaries. All of the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, and are fully paid and nonassessable. There are no outstanding preemptive, conversion or other rights, options, warrants or agreements granted or issued by or binding upon any Subsidiary for the purchase or acquisition of any shares of capital stock of any Subsidiary or any other securities convertible into, exchangeable for or evidencing the rights to subscribe for any shares of such capital stock. Neither the Parent nor any Subsidiary is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of the capital stock of any Subsidiary or any convertible securities, rights, warrants or options of the type described in the preceding sentence except as set forth on Schedule 2.1(g) hereto. Neither the Parent nor any Subsidiary is party to, nor has any knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of any Subsidiary.

                 (h) No Material Adverse Change . Since October 31, 2006, neither the Parent nor the Company has experienced or suffered any Material Adverse Effect, except for operating losses incurred in the ordinary course of business.

                 (i) No Undisclosed Liabilities . Except as disclosed on Schedule 2.1(i) hereto, neither the Parent nor any of its Subsidiaries has any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) other than those set forth on the balance sheet included in the Form 10-Q or incurred in the ordinary course of the Parent’s or its Subsidiaries respective businesses since October 31, 2006, and which, individually or in the aggregate, do not or would not have a Material Adverse Effect on the Parent or its Subsidiaries.

                 (j) No Undisclosed Events or Circumstances . Since October 31, 2006, except as disclosed on Schedule 2.1(j) hereto or in the Commission Documents, no event or circumstance has occurred or exists with respect to the Parent or its Subsidiaries or their respective businesses, properties, prospects, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Parent but which has not been so publicly announced or disclosed.

                 (k) Indebtedness . Schedule 2.1(k) hereto sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Parent or any Subsidiary, or for which the Parent or any Subsidiary has commitments. For purposes of this Agreement: (x) “ Indebtedness ” of any Person means, without duplication (A) any indebtedness for borrowed money in excess of $25,000, (B) any obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business) in excess of $25,000, (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) any obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) any indebtedness in excess of $25,000 created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets

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acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease with a present value in excess of $25,000, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; and (y) “ Contingent Obligation ” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto in excess of $25,000 due under leases required to be capitalized in accordance with GAAP. Except as disclosed on Schedule 2.1(k) , neither the Parent nor any Subsidiary is in default with respect to any Indebtedness.

                 (l) Title to Assets . Each of the Parent and the Subsidiaries has good and marketable title to all of its real and personal property, free and clear of any mortgages, pledges, charges, liens, security interests or other encumbrances of any nature whatsoever, except as disclosed in the Commission Documents, for those indicated on Schedule 2.1(l) hereto or such that, individually or in the aggregate, do not have a Material Adverse Effect. All leases to real and personal property of the Parent and each of its Subsidiaries are valid and subsisting and in full force and effect.

                 (m) Actions Pending . There is no action, suit, claim, investigation, arbitration, alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the Parent, threatened against the Parent or any Subsidiary which questions the validity of this Agreement or any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto. Except as set forth on Schedule 2.1(m) hereto, there is no action, suit, claim, investigation, arbitration, alternate dispute resolution proceeding or other proceeding pending or, to the knowledge of the Parent, threatened against or involving the Parent, any Subsidiary or any of their respective properties or assets, which individually or in the aggregate, would have a Material Adverse Effect. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Parent or any Subsidiary or any officers or directors of the Parent or any Subsidiary in their capacities as such, which individually, or in the aggregate, would have a Material Adverse Effect.

                 (n) Compliance with Law . The business of the Parent and the Subsidiaries has been and is presently being conducted in accordance with all applicable federal, state and local governmental laws, rules, regulations and ordinances, except as set forth in the Commission Documents or on Schedule 2.1(n) hereto or such that, individually or in the aggregate, the noncompliance therewith would not have a Material Adverse Effect. The Parent and each of its

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Subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary for the conduct of its business as now being conducted by it unless the failure to possess such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The preceding sentence does not include such permits, consents, authorizations or approvals that may be required to be obtained in the future for the Parent’s and Company’s exploration and development activities.

                 (o) Taxes . Except as set forth on Schedule 2.1(o) hereto, the Parent and each of the Subsidiaries has accurately prepared and filed all federal, state and other tax returns required by law to be filed by it, has paid or made provisions for the payment of all taxes shown to be due and all additional assessments, and adequate provisions have been and are reflected in the financial statements of the Parent and the Subsidiaries for all current taxes and other charges to which the Parent or any Subsidiary is subject and which are not currently due and payable. Except as disclosed on Schedule 2.1(o) hereto, none of the federal income tax returns of the Parent or any Subsidiary have been audited by the Internal Revenue Service. The Parent has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or threatened against the Parent or any Subsidiary for any period, nor of any basis for any such assessment, adjustment or contingency.

                 (p) Certain Fees . Except as set forth on Schedule 2.1(p) hereto, the Parent has not employed any broker or finder or incurred any liability for any brokerage or investment banking fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees in connection with the Transaction Documents.

                 (q) Disclosure . To the best of the Parent’s knowledge, neither this Agreement or the Schedules hereto nor any other documents, certificates or instruments furnished to the Purchasers by or on behalf of the Parent or any Subsidiary in connection with the transactions contemplated by this Agreement contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein or therein, in the light of the circumstances under which they were made herein or therein, not misleading.

                 (r) Intellectual Property . Except as set forth on Schedule 2.1(r) , the Parent and each of the Subsidiaries owns or possesses all the Proprietary Rights owned by it and have no knowledge that such rights are in conflict with the rights of others. As of the date of this Agreement, neither the Parent nor any of its Subsidiaries has received any written notice that any Proprietary Rights have been declared unenforceable or otherwise invalid by any court or governmental agency. As of the date of this Agreement, there is, to the knowledge of the Parent, no material existing infringement, misuse or misappropriation of any Proprietary Rights by others. From October 31, 2006 to the date of this Agreement, neither the Parent nor any of its Subsidiaries has received any written notice alleging that the operation of the business of the Parent or any of its Subsidiaries infringes in any material respect upon the intellectual property rights of others. “ Proprietary Rights ” shall mean patents, trademarks, domain names (whether or not registered) and any patentable improvements or copyrightable derivative works thereof, websites and intellectual property rights relating thereto, service marks, trade names, copyrights, licenses and authorizations, and all rights with respect to the foregoing.

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      (s) Environmental Compliance . Except as disclosed on Schedule 2.1(s) hereto, the Parent and each of its Subsidiaries have obtained all approvals, authorization, certificates, consents, licenses, orders and permits or other similar authorizations of all governmental authorities, or from any other Person, that are required under any Environmental Laws, the absence of which would have a Material Adverse Effect. “ Environmental Laws ” shall mean all applicable laws relating to the protection of the environment including, without limitation, all requirements pertaining to reporting, licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or threatened releases of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, materials or wastes, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous substances, chemical substances, pollutants, contaminants or toxic substances, material or wastes, whether solid, liquid or gaseous in nature. Except as set forth on Schedule 2.1(s) hereto, the Parent has all necessary governmental approvals required under all Environmental Laws and used in its business or in the business of any of its Subsidiaries (for such business as is actually being conducted as of the date of this Agreement), except for such instances as would not individually or in the aggregate have a Material Adverse Effect. The Parent and each of its Subsidiaries are also in material compliance with all other limitations, restrictions, conditions, standards, requirements, schedules and timetables required or imposed under all Environmental Laws. Except for such instances as would not individually or in the aggregate have a Material Adverse Effect, there are no past or present events, conditions, circumstances, incidents, actions or omissions relating to or in any way affecting the Parent or its Subsidiaries that violate any Environmental Law or that give rise to any Environmental Liabilities, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing, study or investigation (i) under any Environmental Law, or (ii) based on or related to the manufacture, processing, distribution, use, treatment, storage (including, without limitation, underground storage tanks), disposal, transport or handling, or the emission, discharge, release or threatened release of any hazardous substance. “ Environmental Liabilities ” means all liabilities of a Person (whether such liabilities are owed by such Person to governmental authorities, third parties or otherwise) whether currently in existence which arise under or relate to any Environmental Law.

                 (t) Books and Records; Internal Accounting Controls . The books, records and documents of the Parent and its Subsidiaries accurately reflect in all material respects the information relating to the business of the Parent and the Subsidiaries, the location and collection of their assets, and the nature of all transactions giving rise to the obligations or accounts receivable of the Parent or any Subsidiary. The Parent and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Parent’s Board of Directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate actions are taken with respect to any differences.

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                 (u) Material Agreements . Except for the Transaction Documents or as set forth on Schedule 2.1(u) hereto, or those that are included as exhibits to the Commission Documents, neither the Parent nor any Subsidiary is a party to any written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement, a copy of which would be required to be filed with the Commission (collectively, “ Material Agreements” ) if the Parent or any Subsidiary were registering securities under the Securities Act. The Parent and each of its Subsidiaries has in all material respects performed all the obligations required to be performed by them to date under the foregoing agreements, have received no notice of default and, to the best of the Parent’s knowledge, are not in default under any Material Agreement now in effect, the result of which could cause a Material Adverse Effect. No written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement of the Parent or of any Subsidiary limits or shall limit the payment of dividends on its Common Stock, except as set forth on Schedule 2.1(u) hereto.

                 (v) Transactions with Affiliates . Except as disclosed in the Commission Documents or as set forth on Schedule 2.1(v) hereto, there are no loans, leases, agreements, contracts, royalty agreements, management contracts or arrangements or other continuing transactions between (a) the Parent, any Subsidiary or any of their respective customers or suppliers, on the one hand, and (b) on the other hand, any officer, employee, consultant or director of the Parent, or any of its Subsidiaries, or any Person owning 5% or more of the capital stock of the Parent or any Subsidiary or any member of the immediate family of such Person, officer, employee, consultant, director or 5% or greater stockholder or any corporation or other entity controlled by such officer, employee, consultant, director or stockholder.

                 (w) Securities Act of 1933 . The Parent has complied and will comply with all applicable federal and state securities laws in connection with the offer, issuance and sale of the Securities hereunder. Neither the Parent nor anyone acting on its behalf, directly or indirectly, has or will sell, offer to sell or solicit offers to buy any of the Securities, or similar securities to, or solicit offers with respect thereto from, or enter into any preliminary conversations or negotiations relating thereto with, any Person, or has taken or will take any action so as to bring the issuance and sale of any of the Securities under the registration provisions of the Securities Act and applicable state securities laws. Neither the Parent nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities.

                 (x) Governmental Approvals . Except as set forth on Schedule 2.1(x) hereto, and except for the filing of any notice prior or subsequent to the Closing that may be required under applicable state and/or federal securities laws (which if required, shall be filed on a timely basis), no authorization, consent, approval, license, exemption of, filing or registration with any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, is or will be necessary for, or in connection with, the execution or delivery of the Notes and the Warrants, or for the performance by the Company and Parent of their obligations under the Transaction Documents.

                 (y) Employees . Neither the Parent nor any Subsidiary has any collective bargaining arrangements or agreements covering any of its employees. Except as set forth in the Commission Documents or on Schedule 2.1(y) hereto, neither the Parent nor any Subsidiary has

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any employment contract, agreement regarding proprietary information, non-competition agreement, non-solicitation agreement, confidentiality agreement, or any other similar contract or restrictive covenant, relating to the right of any officer, employee or consultant to be employed or engaged by the Parent or such Subsidiary, which contract or agreement is required to be disclosed in the Commission Documents but which is not so disclosed. Except as set forth in the Commission Documents or on Schedule 2.1(y) hereto, since October 31, 2006, no officer, consultant or key employee of the Parent or any Subsidiary whose termination, either individually or in the aggregate, could have a Material Adverse Effect, has terminated or, to the knowledge of the Parent, has any present intention of terminating his or her employment or engagement with the Parent or any Subsidiary.

                 (z) Absence of Certain Developments . Except as set forth in the Commission Documents or on Schedule 2.1(z) hereto, since October 31, 2006, neither the Parent nor any Subsidiary has:

                                 (i) issued any stock, bonds or other corporate securities or any rights, options or warrants with respect thereto other than under the Parent’s stock option plans;

                                 (ii) borrowed any amount or incurred or become subject to any liabilities (absolute or contingent) except current liabilities incurred in the ordinary course of business which are comparable in nature and amount to the current liabilities incurred in the ordinary course of business during the comparable portion of its prior fiscal year, as adjusted to reflect the current nature and volume of the Parent’s or such Subsidiary’s business;

                                 (iii) discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities paid in the ordinary course of business;

                                 (iv) declared or made any payment or distribution of cash or other property to stockholders with respect to its stock, or purchased or redeemed, or made any agreements so to purchase or redeem, any shares of its capital stock;

                                 (v) sold, assigned or transferred any other tangible assets, or canceled any debts or claims, except in the ordinary course of business;

                                 (vi) sold, assigned or transferred any patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assets or intellectual property rights, or disclosed any proprietary confidential information to any Person except in the ordinary course of business or to the Purchasers or their representatives;

                                 (vii) suffered any substantial losses or waived any rights of material value, whether or not in the ordinary course of business, or suffered the loss of any material amount of prospective business;

                                 (viii) made any changes in employee compensation except in the ordinary course of business and consistent with past practices;

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                                 (ix) made capital expenditures or commitments therefor that aggregate in excess of $25,000;

                                 (x) entered into any other transaction other than in the ordinary course of business, or entered into any other material transaction, whether or not in the ordinary course of business;

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