Document:

Exhibit
      10.7

    

    Joinder
      to Security Agreement

    

    The
      undersigned, SONTERRA RESOURCES, INC., f/k/a RIVER CAPITAL GROUP, INC., a
      Delaware corporation, hereby joins in the execution of that certain Security
      Agreement dated as of July 9, 2007 (as amended by the First Amendment to
      Security Agreement, dated as of August 3, 2007, and as may be further amended,
      restated, supplemented or otherwise modified and in effect from time to time,
      the “Security
      Agreement”)
      by and
      between Sonterra Oil & Gas, Inc. (f/k/a Sonterra Resources, Inc.), a
      Delaware corporation, Buyer (as defined therein), and each other Person that
      becomes a Debtor thereunder after the date thereof and hereof and pursuant
      to
      the terms thereof, to and in favor of Viking Asset Management, LLC, in
      its
      capacity as Collateral Agent for Buyer.
      By
      executing this Joinder, the undersigned hereby agrees that it is a Debtor
      thereunder and agrees to be bound by all of the terms and provisions of the
      Security Agreement.

    

    

    The
      undersigned represents and warrants to Secured Party that:

    

    (a) all
      of
      the Equipment, Inventory and Goods owned by such Debtor is located at the places
      as specified on Schedule
      I
      and such
      Debtor conducts business in the jurisdiction set forth on Schedule
      I;
      

    

    (b) except
      as
      disclosed on Schedule
      I,
      none of
      such Collateral is in the possession of any bailee, warehousemen, processor
      or
      consignee; 

    

    (c) the
      chief
      place of business, chief executive office and the office where such Debtor
      keeps
      its books and records are located at the place specified on Schedule
      I;

    

    (d) such
      Debtor (including any Person acquired by such Debtor) does not do business
      or
      has not done business during the past five years under any tradename or
      fictitious business name, except as disclosed on Schedule
      II;

    

    (e) all
      Copyrights, Patents and Trademarks owned or licensed by the undersigned are
      listed in Schedules
      III,
      IV
      and
V,
      respectively;

    

    (f) all
      Deposit Accounts, securities accounts, brokerage accounts and other similar
      accounts maintained by such Debtor, and the financial institutions at which
      such
      accounts are maintained, are listed on Schedule
      VI;

    

    (g) all
      Commercial Tort Claims of such Debtor are listed on Schedule
      VII;

    

    (h) all
      interests in real property and mining rights held by such Debtor are listed
      on
Schedule
      VIII;
      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (i) all
      Equipment (including Motor Vehicles) owned by such debtor are listed on
Schedule
      IX;
      and

    

    

    (j) all
      other
      representations and warranties made by the Debtors in the Security Agreement
      are
      true, complete and correct in all respects as of the date hereof.

    

    

    [Signature
      Page Follows]

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	 	 	 
	 	 	SONTERRA RESOURCES, INC. (f/k/a River Capital Group,
              Inc.), a Delaware corporation
	 
 	 
 	 
 
	 	  	By:
              /s/ Howard Taylor
	 	
              
Name: Howard
              Taylor
	 	Title:  
              Chief
              Executive Officer
	 	FEIN: 51-0392750

    

    

    

    [Signature
      Page to Joinder to Security Agreement]Exhibit
      10.8

    

     

    GUARANTY

     

    This
      GUARANTY
      (as
      amended, restated, supplemented, or otherwise modified and in effect from time
      to time, this “Guaranty”)
      is
      made as of this 14th
      day of
      February 2008 (this “Guaranty”),
      jointly and severally, by
      Sonterra Oil & Gas, Inc. (f/k/a
      Sonterra Resources, Inc.), a Delaware corporation (“Sonterra”),
      Sonterra
      Operating, Inc., a
      Delaware corporation (“Operations”;
      each
      of Sonterra and Operations, together with each other person or entity who
      becomes a party to this Guaranty by execution of a joinder in the form of
Exhibit
      A
      attached
      hereto, is referred to individually as a “Guarantor”
and
      collectively as the “Guarantors”;
      provided, that the parties hereto agree that, as of the date hereof, Sonterra
      and Operations are the
      only
      Guarantors) in favor of Viking
      Asset Management LLC,
      a
      California limited liability company in its capacity as collateral agent
      (together with its successors and assigns in such capacity, the “Collateral
      Agent”)
      for
      the benefit of Buyer (as hereinafter defined).

     

    WITNESSETH:

     

    WHEREAS,
      Sonterra, The Longview Fund, L.P., a California limited partnership
      (“Buyer”)
      and
      certain officers of Sonterra are parties to that certain Amended and Restated
      Securities Purchase Agreement, dated effective as of July 9, 2007 (as amended,
      restated, supplemented, or otherwise modified from time to time, the
“Purchase
      Agreement”),
      pursuant to which Buyer purchased (i) 333 shares (the “New
      Sonterra Shares”)
      of
      common stock, no par value, of Sonterra (“Sonterra
      Common Stock”);
      for
      an aggregate amount of $9,990, which shares constitute 100% of the issued and
      outstanding Capital Stock of Sonterra, and (ii) a senior secured note of
      Sonterra in the initial principal amount of $322,500 (the “Deposit
      Note”);

     

    WHEREAS,
      contemporaneously with the execution and delivery of that certain Securities
      Exchange and Additional Note Purchase Agreement, dated as of August 3, 2007
      (as
      amended by the February 2008 Amendment Agreement, dated as of February 14,
      2008,
      and as may be further amended, modified, restated or supplemented and in effect
      from time to time, the “Exchange
      Agreement”),
      between Sonterra Resources, Inc. (f/k/a River Capital Group, Inc.), a Delaware
      corporation (the “Company”),
      and
      Buyer, the transactions contemplated by the Purchase Agreement to occur at
      the
      Equity Closing (as defined in the Purchase Agreement) and the transactions
      contemplated by the Cinco Purchase Agreement were consummated; without limiting
      the foregoing, pursuant to the Purchase Agreement, Buyer purchased from Sonterra
      a senior secured note of Sonterra in the initial principal amount of $5,990,010
      (of which $322,500 represents refinancing of the Deposit Note, which is now
      being surrendered to Sonterra) (as amended, restated, supplemented, or otherwise
      modified from time to time, the “Sonterra
      Equity Note”)
      and a
      warrant to purchase 50 shares of Sonterra Common Stock (as amended, restated,
      supplemented, or otherwise modified from time to time, the “Sonterra
      Warrants”);

     

    WHEREAS,
      at the Flash Acquisition Closing (as defined in the Purchase Agreement), the
      transactions contemplated by the Purchase Agreement to occur at the Flash
      Acquisition Closing and the transactions contemplated by the Flash Purchase
      Agreement were consummated subject to the terms and conditions of the Purchase
      Agreement; without limiting the foregoing, pursuant to the Purchase Agreement,
      at the Flash Acquisition Closing Buyer purchased an additional senior secured
      note of Sonterra in the initial principal amount of $2,000,000 (as amended,
      restated, supplemented, or otherwise modified from time to time, the
“Sonterra
      Non-Equity Note”);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    WHEREAS,
      at the Exchange Closing, subject to the terms and conditions thereof, Buyer
      (i)
      is exchanging all of its Sonterra Common Stock and the Sonterra Equity Note
      for
      common stock of the Company, par value $0.001 per share (the common stock of
      the
      Company being referred to herein as “RCGI
      Common Stock”;
      and
      any shares thereof being referred to herein as “RCGI
      Common Shares”)
      (the
      RCGI Common Shares received by Buyer in such exchange being referred to as
      the
“New
      RCGI Common Shares”),
      (ii)
      is exchanging the Sonterra Warrant for a warrant (such warrant, together with
      any warrants or other securities issued in exchange or substitution therefor
      or
      replacement thereof, and as any of the same may be amended or modified and
      in
      effect from time to time, the “RCGI
      Warrant”)
      to
      purchase RCGI Common Shares (subject to adjustment as provided in the RCGI
      Warrant) (the “Warrant
      Shares”),
      which
      RCGI Warrant shall have a term of five years and be exercisable into the Warrant
      Shares at a price per Warrant Share (the “Warrant
      Exercise Price”)
      equal
      to 110% of the quotient of $6,000,000 divided by the number of New RCGI Common
      Shares issued to Buyer at the Exchange Closing (subject to adjustment as
      provided in the RCGI Warrant); and (iii) is exchanging the Sonterra Non-Equity
      Note for a senior secured note of the Company in an initial principal amount
      equal to the principal amount owing under the Sonterra Non-Equity Note on the
      Exchange Closing Date (such note, together with any promissory notes or other
      securities issued in exchange or substitution therefor or replacement thereof,
      and as any of the same may be amended or modified from time to time, the
“Initial
      RCGI Note”);

     

    WHEREAS,
      subject to the terms and conditions set forth in the Exchange Agreement, during
      the Additional Note Issuance Period (as defined therein), the Company will
      have
      the option to sell, and if the Company exercises such option Buyer shall be
      obligated to purchase, additional senior secured notes (including any promissory
      notes or other securities issued in exchange or substitution for such senior
      secured notes or replacement thereof, and as any of the same may be amended,
      restated, modified or supplemented and in effect from time to time, the
“Additional
      RCGI Notes”;
      and,
      collectively with any Initial RCGI Note, the “Notes”),
      each
      with a maturity date of August 31, 2010, in an original aggregate principal
      amount of up to the result of $10,000,000 minus the original principal amount
      of
      the Initial RCGI Note;

     

    WHEREAS,
      pursuant to a Pledge Agreement of even date herewith (as the same may be
      amended, restated, supplemented or otherwise modified and in effect from time
      to
      time, the “Company
      Pledge Agreement”)
      by the
      Company in favor of the Collateral Agent, the Company has pledged a lien on
      and
      security interest in all of the issued and outstanding Capital Stock of
      Sonterra; 

     

    WHEREAS,
      pursuant to a Pledge Agreement of even date herewith (as the same may be
      amended, restated, supplemented or otherwise modified and in effect from time
      to
      time, the “Sonterra
      Pledge Agreement”)
      by
      Sonterra in favor of the Collateral Agent, Sonterra has pledged a lien on and
      security interest in all of the issued and outstanding Capital Stock of
      Operations;

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    WHEREAS,
      pursuant to a Security Agreement dated as of July 9, 2007 (as amended by a
      First
      Amendment to Security Agreement dated August 3, 2007, and as may be further
      amended, restated, supplemented or otherwise modified and in effect from time
      to
      time, the “Security
      Agreement”)
      between Sonterra as “Debtor” (as defined therein and the Collateral Agent named
      therein, such Debtor has granted the Collateral Agent, for the benefit of Buyer,
      a first priority security interest in, lien upon and pledge of its rights in
      the
      Collateral (as defined in the Security Agreement); and

     

    WHEREAS,
      the Guarantors are direct and indirect subsidiaries of the Company and, as
      such,
      will derive substantial benefit and advantage from the loans and other financial
      accommodations available to the Company set forth in the Exchange Agreement,
      the
      Notes and the other Transaction Documents, and it will be to the Guarantors’
direct interest and economic benefit to assist the Company in procuring said
      Loans and other financial accommodations from Buyer.

     

    NOW,
      THEREFORE,
      for and
      in consideration of the premises and in order to induce Buyer to make the Loans,
      and for other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, each Guarantor hereby jointly and severally
      agrees as follows:

     

    Definitions:
      Capitalized
      terms used herein without definition and defined in the Exchange Agreement
      are
      used herein as defined therein. In addition, as used
      herein:

     

    “Bankruptcy
      Code”
shall
      mean
      the
      Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et
      seq.),
      as
      amended and in effect from time to time thereunder.

     

    “Obligations”
      shall
      mean (i) all obligations, liabilities and indebtedness of every nature of the
      Company from time to time owed or owing to the Buyer and Collateral Agent,
      including, without limitation, all obligations, liabilities and indebtedness
      of
      every nature of the Company under the Security Documents, the Exchange
      Agreement, the Notes, the Loans, the Warrants, the Registration Rights Agreement
      and the other Transaction Documents, including, without limitation, the
      principal amount of all debts, claims and indebtedness, accrued and unpaid
      interest and all fees, taxes, indemnities, costs and expenses, whether primary,
      secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
      time to time hereafter owing, due or payable whether before or after the filing
      of a bankruptcy, insolvency or similar proceeding under applicable federal,
      state, foreign or other law and whether or not an allowed claim in any such
      proceeding, and (ii) all obligations, liabilities and indebtedness of every
      nature of any subsequent Guarantor from time to time owed or owing to Buyer
      and/or Collateral Agent, including, without limitation, all obligations,
      liabilities and indebtedness of every nature of the Guarantors under or in
      respect of this Guaranty, the Pledge Agreement, the Security Agreement, the
      Exchange Agreement, the Notes, the Loans, the Warrants, the Registration Rights
      Agreement, the other Security Documents and the other Transaction Documents,
      as
      the case may be, including, without limitation, the principal amount of all
      debts, claims and indebtedness, accrued and unpaid interest and all fees, taxes,
      indemnities, costs and expenses, whether primary, secondary, direct, contingent,
      fixed or otherwise, heretofore, now and/or from time to time hereafter owing,
      due or payable whether before or after the filing of a bankruptcy, insolvency
      or
      similar proceeding under applicable federal, state, foreign or other law and
      whether or not an allowed claim in any such proceeding.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Guaranty
      of Payment.

     

    Each
      Guarantor, jointly and severally, hereby unconditionally and irrevocably
      guaranties the full and prompt payment and performance to Buyer and Collateral
      Agent, on behalf of itself and in its capacity as agent for the benefit of
      Buyer, when due upon demand, at maturity or by reason of acceleration or
      otherwise and at all times thereafter, of any and all of the
      Obligations.

     

    Each
      Guarantor acknowledges that valuable consideration supports this Guaranty,
      including, without limitation, the consideration set forth in the recitals
      above, as well as any commitment to lend, extension of credit or other financial
      accommodation, whether heretofore or hereafter made by Buyer to the Company;
      any
      extension, renewal or replacement of any of the Obligations; any forbearance
      with respect to any of the Obligations or otherwise; any cancellation of an
      existing guaranty; any purchase of any of the Company’s assets by Buyer or
      Collateral Agent; or any other valuable consideration.

     

    Each
      Guarantor agrees that all payments under this Guaranty shall be made in United
      States currency and in the same manner as provided for the
      Obligations.

     

    Notwithstanding
      any provision of this Guaranty to the contrary, it is intended that this
      Guaranty, and any interests, liens and security interests granted by Guarantors
      as security for this Guaranty, not constitute a “Fraudulent Conveyance” (as
      defined below) in the event that this Guaranty or such interest is subject
      to
      the Bankruptcy Code or any applicable fraudulent conveyance or fraudulent
      transfer law or similar law of any state. Consequently, Guarantors, Collateral
      Agent and Buyer agree that if this Guaranty, or any such interests, liens or
      security interests securing this Guaranty, would, but for the application of
      this sentence, constitute a Fraudulent Conveyance, this Guaranty and each such
      lien and security interest shall be valid and enforceable only to the maximum
      extent that would not cause this Guaranty or such interest, lien or security
      interest to constitute a Fraudulent Conveyance, and this Guaranty shall
      automatically be deemed to have been amended accordingly at all relevant times.
      For purposes hereof, “Fraudulent
      Conveyance”
means
      a
      fraudulent conveyance under Section 548 of the Bankruptcy Code or a fraudulent
      conveyance or fraudulent transfer under the provisions of any applicable
      fraudulent conveyance or fraudulent transfer law or similar law of any state,
      as
      in effect from time to time.

     

    Costs
      and Expenses. Each
      Guarantor, jointly and severally, agrees to pay on demand, all costs and
      expenses of every kind incurred by Buyer or Collateral Agent: (a) in enforcing
      this Guaranty, (b) in collecting any of the Obligations from the Company or
      any
      Guarantor, (c) in realizing upon or protecting or preserving any collateral
      for
      this Guaranty or for payment of any of the Obligations, and (d) in connection
      with any amendment of, modification to, waiver or forbearance granted under,
      or
      enforcement or administration of any Transaction Document or for any other
      purpose in connection with any Transaction Document, in each case, to the extent
      Buyer or Collateral Agent may take such action pursuant to the terms and
      conditions of this Agreement. “Costs
      and
      expenses”
      as used in the preceding sentence shall include, without limitation, reasonable
      attorneys’ fees incurred by Buyer or Collateral Agent in retaining legal counsel
      for advice, suit, appeal, any insolvency or other proceedings under the
      Bankruptcy Code or otherwise, or for any purpose specified in the preceding
      sentence.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Nature
      of Guaranty: Continuing, Absolute and Unconditional.

     

    This
      Guaranty is and is intended to be a continuing guaranty of payment of the
      Obligations, and not of collectibility, and is and is intended to be independent
      of and in addition to any other guaranty, indorsement, collateral or other
      agreement held by Buyer or Collateral Agent therefor or with respect thereto,
      whether or not furnished by a Guarantor. None of Buyer and Collateral Agent
      shall be required to prosecute collection, enforcement or other remedies against
      Company, any other Guarantor or guarantor of the Obligations or any other person
      or entity, or to enforce or resort to any of the Collateral or other rights
      or
      remedies pertaining thereto, before calling on a Guarantor for payment. The
      obligations of each Guarantor to repay the Obligations hereunder shall be
      unconditional. Each Guarantor shall have no right of subrogation with respect
      to
      any payments made by any Guarantor hereunder until the termination of this
      Guaranty in accordance with Section
      8
      below,
      and hereby waives any benefit of, and any right to participate in, any security
      or collateral given to Buyer to secure payment of the Obligations, and each
      Guarantor agrees that it will not take any action to enforce any obligations
      of
      the Company to such Guarantor prior to the Obligations being finally paid in
      full in cash, provided
      that, in
      the event of the bankruptcy or insolvency of the Company, to the extent the
      Obligations have not been finally paid in full in cash, Collateral Agent, for
      the benefit of itself and Buyer, and Buyer shall be entitled notwithstanding
      the
      foregoing, to file in the name of any Guarantor or in its own name a claim
      for
      any and all indebtedness owing to a Guarantor by the Company (exclusive of
      this
      Guaranty), vote such claim and to apply the proceeds of any such claim to the
      Obligations.

     

    For
      the
      further security of Buyer and without in any way diminishing the liability
      of
      the Guarantors, following the occurrence of an Event of Default, all debts
      and
      liabilities, present or future of the Company to the Guarantors and all monies
      received from the Company or for its account by the Guarantors in respect
      thereof shall be received in trust for Buyer and Collateral Agent and promptly
      following receipt shall be paid over to Collateral Agent, for its benefit and
      in
      its capacity as collateral agent for the benefit of Buyer, until all of the
      Obligations have been paid in full in cash. 

     

    This
      Guaranty shall not be changed or affected by any representation, oral agreement,
      act or thing whatsoever, except as herein provided. This Guaranty is intended
      by
      the Guarantors to be the final, complete and exclusive expression of the
      guaranty agreement between the Guarantors and Buyer. No modification or
      amendment of any provision of this Guaranty shall be effective against any
      party
      hereto unless in writing and signed by a duly authorized officer of such
      party.

     

    Each
      Guarantor hereby releases the Company from all, and agrees not to assert or
      enforce (whether by or in a legal or equitable proceeding or otherwise) any
      “claims” (as defined in Section 101(5) of the Bankruptcy Code), whether arising
      under any law, ordinance, rule, regulation, order, policy or other requirement
      of any domestic or foreign government or any instrumentality or agency thereof,
      having jurisdiction over the conduct of its business or assets or otherwise,
      to
      which the Guarantors are or would at any time be entitled by virtue of its
      obligations hereunder, any payment made pursuant hereto or the exercise by
      Buyer
      or Collateral Agent of its rights with respect to the Collateral, including
      any
      such claims to which such Guarantors may be entitled as a result of any right
      of
      subrogation, exoneration or reimbursement.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Certain
      Rights and Obligations.

     

    Each
      Guarantor acknowledges and agrees that Buyer and Collateral Agent, for its
      benefit and as collateral agent for the benefit of Buyer, may, without notice,
      demand or any reservation of rights against such Guarantor and without affecting
      such Guarantor’s obligations hereunder, from time to time:

     

    renew,
      extend, increase, accelerate or otherwise change the time for payment of, the
      terms of or the interest on the Obligations or any part thereof or grant other
      indulgences to the Company or others;

     

    accept
      from any person or entity and hold collateral for the payment of the Obligations
      or any part thereof, and modify, exchange, enforce or refrain from enforcing,
      or
      release, compromise, settle, waive, subordinate or surrender, with or without
      consideration, such collateral or any part thereof;

     

    accept
      and hold any indorsement or guaranty of payment of the Obligations or any part
      thereof, and discharge, release or substitute any such obligation of any such
      indorser or guarantor, or discharge, release or compromise any Guarantor, or
      any
      other person or entity who has given any security interest in any collateral
      as
      security for the payment of the Obligations or any part thereof, or any other
      person or entity in any way obligated to pay the Obligations or any part
      thereof, and enforce or refrain from enforcing, or compromise or modify, the
      terms of any obligation of any such indorser, guarantor, or person or
      entity;

     

    dispose
      of any and all collateral securing the Obligations in any commercially
      reasonable manner (to the extent required under applicable law) as the
      Collateral Agent, in its reasonable discretion may consider appropriate and
      direct the order or manner of such disposition and the enforcement of any and
      all endorsements and guaranties relating to the Obligations or any part thereof
      as Collateral Agent in its sole discretion may determine;

     

    subject
      to the terms of the Notes, determine the manner, amount and time of application
      of payments and credits, if any, to be made on all or any part of any component
      or components of the Obligations (whether principal, interest, fees, costs,
      and
      expenses, or otherwise), including, without limitation, the application of
      payments received from any source to the payment of indebtedness other than
      the
      Obligations even though Buyer might lawfully have elected to apply such payments
      to the Obligations or to amounts which are not covered by this Guaranty;
      and

     

    take
      advantage or refrain from taking advantage of any security or accept or make
      or
      refrain from accepting or making any compositions or arrangements when and
      in
      such manner as Collateral Agent, in its sole discretion, may deem
      appropriate;

     

    and
      generally do or refrain from doing any act or thing which might otherwise,
      at
      law or in equity, release the liability of such Guarantor as a guarantor or
      surety in whole or in part, and in no case shall Buyer or Collateral Agent
      be
      responsible or shall any Guarantor be released either in whole or in part for
      any act or omission in connection with Buyer or Collateral Agent having sold
      any
      security at less than its value; provided
      any such
      sale was conducted in a commercially reasonable manner (to the extent required
      under applicable law).

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Following
      the occurrence and during the continuance of an Event of Default, and upon
      demand by Collateral Agent, each Guarantor, jointly and severally, hereby agrees
      to pay the Obligations to the extent hereinafter provided and to the extent
      unpaid:

     

    without
      deduction by reason of any setoff, defense (other than payment) or counterclaim
      of the Company or any other Guarantor;

     

    without
      requiring presentment, protest or notice of nonpayment or notice of default
      to
      any Guarantor, to the Company or to any other person or entity;

     

    without
      demand for payment or proof of such demand or filing of claims with a court
      in
      the event of receivership, bankruptcy or reorganization of the Company or any
      other Guarantor;

     

    without
      requiring Buyer or Collateral Agent to resort first to the Company (this being
      a
      guaranty of payment and not of collection), to any other Guarantor, or to any
      other guaranty or any collateral which Buyer or Collateral Agent may
      hold;

     

    without
      requiring notice of acceptance hereof or assent hereto by Buyer or Collateral
      Agent; and

     

    without
      requiring notice that any of the Obligations has been incurred, extended or
      continued or of the reliance by Buyer or Collateral Agent upon this
      Guaranty;

     

    all
      of
      which each Guarantor hereby waives.

     

    Each
      Guarantor’s obligation hereunder shall not be affected by any of the following,
      all of which such Guarantor hereby waives:

     

    any
      failure to perfect or continue the perfection of any security interest in or
      other lien on any collateral securing payment of any of the Obligations or
      any
      Guarantor’s obligation hereunder;

     

    the
      invalidity, unenforceability, propriety of manner of enforcement of, or loss
      or
      change in priority of any document or any such security interest or other lien
      or guaranty of the Obligations;

     

    any
      failure to protect, preserve or insure any such collateral;

     

    failure
      of a Guarantor to receive notice of any intended disposition of such
      collateral;

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    any
      defense arising by reason of the cessation from any cause whatsoever of
      liability of the Company including, without limitation, any failure, negligence
      or omission by Buyer or Collateral Agent in enforcing its claims against the
      Company;

     

    any
      release, settlement or compromise of any obligation of the Company, any other
      Guarantor or any other guarantor of the Obligations;

     

    the
      invalidity or unenforceability of any of the Obligations;

     

    any
      change of ownership of the Company, any other Guarantor or any other guarantor
      of the Obligations or the insolvency, bankruptcy or any other change in the
      legal status of the Company, any other Guarantor or any other guarantor of
      the
      Obligations;

     

    any
      change in, or the imposition of, any law, decree, regulation or other
      governmental act which does or might impair, delay or in any way affect the
      validity, enforceability or the payment when due of the
      Obligations;

     

    the
      existence of any claim, setoff or other rights which the Guarantor, Company,
      any
      other Guarantor or guarantor of the Obligations or any other person or entity
      may have at any time against Buyer, Collateral Agent or the Company in
      connection herewith or any unrelated transaction;

     

    Buyer’s
      or Collateral Agent’s election in any case instituted under chapter 11 of the
      Bankruptcy Code, of the application of section 1111(b)(2) of the Bankruptcy
      Code;

     

    any
      use
      of cash collateral, or grant of a security interest by the Company, as debtor
      in
      possession, under sections 363 or 364 of the Bankruptcy Code;

     

    the
      disallowance of all or any portion of any of Buyer’s or Collateral Agent’s
      claims for repayment of the Obligations under sections 502 or 506 of the
      Bankruptcy Code;

     

    any
      stay
      or extension of time for payment by the Company or any other Guarantor resulting
      from any proceeding under the Bankruptcy Code or any similar law;
      or

     

    any
      other
      fact or circumstance which might otherwise constitute grounds at law or equity
      for the discharge or release of a Guarantor from its obligations hereunder,
      all
      whether or not such Guarantor shall have had notice or knowledge of any act
      or
      omission referred to in the foregoing clauses (i) through (xiv) of this Section
      5(c).

     

    Representations
      and Warranties. Each
      Guarantor further represents and warrants to Buyer and Collateral Agent that:
      (a) such Guarantor is a corporation or other entity duly incorporated or
      organized, as applicable, validly existing and in good standing under the laws
      of the jurisdiction of its incorporation or formation, as applicable, and has
      full power, authority and legal right to own its property and assets and to
      transact the business in which it is presently engaged; (b) such Guarantor
      has
      full power, authority and legal right to execute and deliver, and to perform
      its
      obligations under, this Guaranty, and has taken all necessary action to
      authorize the guarantee hereunder on the terms and conditions of this Guaranty
      and to authorize the execution, delivery and performance of this Guaranty;
      (c)
      this Guaranty has been duly executed and delivered by such Guarantor and
      constitutes a legal, valid and binding obligation of such Guarantor enforceable
      against such Guarantor in accordance with its terms, except to the extent that
      such enforceability is subject to applicable bankruptcy, insolvency,
      reorganization, fraudulent conveyance and moratorium laws and other laws of
      general application affecting enforcement of creditors’ rights generally, or the
      availability of equitable remedies, which are subject to the discretion of
      the
      court before which an action may be brought; and (d) the execution, delivery
      and
      performance by each Guarantor of this Guaranty do not require any action by
      or
      in respect of, or filing with, any governmental body, agency or official and
      do
      not violate, conflict with or cause a breach or a default under any provision
      of
      (i) applicable law or regulation, (ii) the organizational documents of any
      Guarantor, (iii) any judgment, injunction, order, decree or other instrument
      binding upon it, or (iv) any agreement binding upon it, to the extent, solely
      with respect to this clause (iv), such violation could not reasonably be
      expected to have a Material Adverse Effect.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    Negative
      Covenants. Each
      Guarantor covenants with Buyer and Collateral Agent that such Guarantor shall
      not grant any security interest in or permit any lien, claim or encumbrance
      upon
      any of its assets in favor of any person or entity other than liens and security
      interests in favor of Buyer and Collateral Agent and Permitted
      Liens.

     

    Termination. This
      Guaranty shall not terminate until such
      time, if any, as (i) all Indebtedness under the Notes secured hereby shall
      be
      finally paid in full in cash, (ii) no Notes shall remain outstanding, (iii)
      all
      commitments to lend under the Exchange Agreement (including, without limitation,
      any and all commitments of Buyer to purchase Additional Notes) shall have
      terminated and (iv) there shall exist no other outstanding payment or
      reimbursement obligations (other than contingent indemnification obligations
      for
      which no claims shall have been asserted) of the Borrower or the Guarantors
      to
      the Collateral Agent under any of the Transaction Documents. Thereafter, but
      subject to the following, Collateral Agent, on its behalf and as agent for
      Buyer, shall take such action and execute such documents as the Guarantors
      may
      request (and at the Guarantors’ cost and expense) in order to evidence the
      termination of this Guaranty. Each Guarantor further agrees that, to the extent
      that the Company makes a payment or payments to Buyer or Collateral Agent on
      the
      Obligations, or Buyer or Collateral Agent receive any proceeds of collateral
      securing the Obligations or any other payments with respect to the Obligations,
      which payment or receipt of proceeds or any part thereof is subsequently
      invalidated, declared to be fraudulent or preferential, set aside or required
      to
      be returned or repaid to the Company, its estate, trustee, receiver, debtor
      in
      possession or any other person or entity, including, without limitation, the
      Guarantors, under any insolvency or bankruptcy law, state or federal law, common
      law or equitable cause, then to the extent of such payment, return or repayment,
      the obligation or part thereof which has been paid, reduced or satisfied by
      such
      amount shall be reinstated and continued in full force and effect as of the
      date
      when such initial payment, reduction or satisfaction occurred, and this Guaranty
      shall continue in full force notwithstanding any contrary action which may
      have
      been taken by Buyer or Collateral Agent in reliance upon such payment, and
      any
      such contrary action so taken shall be without prejudice to Buyer’s or
      Collateral Agent’s rights under this Guaranty and shall be deemed to have been
      conditioned upon such payment having become final.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    Guaranty
      of Performance. Each
      Guarantor also guaranties the full, prompt and unconditional performance of
      all
      obligations and agreements of every kind owed or hereafter to be owed by the
      Company to Buyer and Collateral Agent under the Exchange Agreement, Registration
      Rights Agreement, the Warrants, Security Documents and the Notes. Every
      provision for the benefit of Buyer and Collateral Agent contained in this
      Guaranty shall apply to the guaranty of performance given in this
      paragraph.

     

    Assumption
      of Liens and Obligations. To
      the extent that a Guarantor has received or shall hereafter receive
      distributions or transfers from the Company of property or cash that are
      subject, at the time of such contribution, to liens and security interests
      in
      favor of Buyer and/or the Collateral Agent in accordance with the Notes, the
      Security Agreement or any other Security Document, such Guarantor hereby
      expressly agrees that (i) it shall hold such assets subject to such liens and
      security interests, and (ii) it shall be liable for the payment of the
      Obligations secured thereby. Each Guarantor’s obligations under this
Section
      10
      shall be in addition to its obligations as set forth in other sections of this
      Guaranty and not in substitution therefor or in lieu
      thereof.

     

    Miscellaneous.

     

    The
      terms
“Company” and “Guarantor” as used in this Guaranty shall include: (i) any
      successor individual or individuals, association, partnership, limited liability
      company or corporation to which all or substantially all of the business or
      assets of the Company or such Guarantor shall have been transferred and (ii)
      any
      other association, partnership, limited liability company, corporation or entity
      into or with which the Company or such Guarantor shall have been merged,
      consolidated, reorganized, or absorbed.

     

    Without
      limiting any other right of Buyer or Collateral Agent, whenever Buyer or
      Collateral Agent has the right to declare any of the Obligations to be
      immediately due and payable (whether or not it has been so declared), Collateral
      Agent, on its behalf and in its capacity as agent for the benefit of Buyer,
      at
      its sole election without notice to the undersigned may appropriate and set
      off
      against the Obligations:

     

    any
      and
      all indebtedness or other moneys due or to become due to any Guarantor by Buyer
      or Collateral Agent in any capacity; and

     

    any
      credits or other property belonging to any Guarantor (including all account
      balances, whether provisional or final and whether or not collected or
      available) at any time held by or coming into the possession of Buyer or
      Collateral Agent, or any affiliate of Buyer or Collateral Agent, whether for
      deposit or otherwise;

     

    whether
      or not the Obligations or the obligation to pay such moneys owed by Buyer or
      Collateral Agent is then due, and Buyer or Collateral Agent shall be deemed
      to
      have exercised such right of set off immediately at the time of such election
      even though any charge therefor is made or entered on Buyer’s or Collateral
      Agent’s records subsequent thereto. Collateral Agent agrees to notify such
      Guarantor in a reasonably practicable time of any such set-off; however, failure
      to so notify such Guarantor shall not affect the validity of any
      set-off.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    No
      course
      of dealing between the Company or any Guarantor and Buyer or Collateral Agent
      and no act, delay or omission by Buyer or Collateral Agent in exercising any
      right or remedy hereunder or with respect to any of the Obligations shall
      operate as a waiver thereof or of any other right or remedy, and no single
      or
      partial exercise thereof shall preclude any other or further exercise thereof
      or
      the exercise of any other right or remedy. Buyer or Collateral Agent may remedy
      any default by the Company under any agreement with the Company or with respect
      to any of the Obligations in any reasonable manner without waiving the default
      remedied and without waiving any other prior or subsequent default by the
      Company. All rights and remedies of Buyer and Collateral Agent hereunder are
      cumulative.

     

    This
      Guaranty shall inure to the benefit of the parties hereto and their respective
      successors and assigns.

     

    Collateral
      Agent may assign its rights hereunder without the consent of Guarantors, in
      which event such assignee shall be deemed to be Collateral Agent hereunder
      with
      respect to such assigned rights; provided
      such
      assignment shall not relieve the Collateral Agent of any liability it may have
      to the Guarantor.

     

    Captions
      of the sections of this Guaranty are solely for the convenience of the parties
      hereto, and are not an aid in the interpretation of this Guaranty and do not
      constitute part of the agreement of the parties set forth herein.

     

    If
      any
      provision of this Guaranty is unenforceable in whole or in part for any reason,
      the remaining provisions shall continue to be effective.

     

    All
      questions concerning the construction, validity, enforcement and interpretation
      of this Guaranty shall be governed by the internal laws of the State of New
      York, without giving effect to any choice of law or conflict of law provision
      or
      rule (whether of the State of New York or any other jurisdiction) that would
      cause the application of the laws of any jurisdiction other than the State
      of
      New York. Each Guarantor hereby irrevocably submits to the non-exclusive
      jurisdiction of the state and federal courts sitting in the City of New York,
      borough of Manhattan, for the adjudication of any dispute hereunder or in
      connection herewith or with any transaction contemplated hereby or discussed
      herein, and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is brought
      in an inconvenient forum or that the venue of such suit, action or proceeding
      is
      improper. Each Guarantor hereby irrevocably waives personal service of process
      and consents to process being served in any such suit, action or proceeding
      by
      mailing a copy thereof to such party at the address for such notices to it
      under
      this Agreement and agrees that such service shall constitute good and sufficient
      service of process and notice thereof. Nothing contained herein shall be deemed
      to limit in any way any right to serve process in any manner permitted by law.
      The parties hereto acknowledge that Buyer has executed each of the Transaction
      Documents to be executed by it in the State of New York. 

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    Notices.
      All
      notices, approvals, requests, demands and other communications hereunder shall
      be delivered or made in the manner set forth in, and shall be effective in
      accordance with the terms of, the Exchange Agreement or, in the case of
      communications to the Collateral Agent, directed to the notice address set
      forth
      in the Security Agreement; provided, that any communication shall be effective
      as to any Guarantor if made or sent to the Company in accordance with the
      foregoing.

     

    WAIVERS.

     

    EACH
      GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION
      LAWS.

     

    UPON
      THE OCCURRENCE OF A DEFAULT OR EVENT OF DEFAULT, EACH GUARANTOR HEREBY WAIVES
      ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY BUYER
      OR
      COLLATERAL AGENT, ON ITS BEHALF AND IN ITS CAPACITY AS AGENT FOR THE BENEFIT
      OF
      BUYER, OF ITS RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR
      TO
      REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.
      EACH GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE
      WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.

     

    EACH
      GUARANTOR WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
      BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, OR THE TRANSACTIONS
      CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
      BROUGHT BY BUYER OR COLLATERAL AGENT. EACH GUARANTOR AGREES THAT ANY SUCH CLAIM
      OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
      LIMITING THE FOREGOING, EACH GUARANTOR FURTHER AGREES THAT ITS RIGHT TO A TRIAL
      BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM
      OR
      OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
      OR
      ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL
      APPLY
      TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
      GUARANTY.

     

    Collateral
      Agent.
      The terms and provisions of Section 5.12 of the Security Agreement which set
      forth the appointment of the Collateral Agent and the indemnifications by Buyer
      to which the Collateral Agent is entitled are hereby incorporated by reference
      herein as if fully set forth therein.

     

    Payments
      Free of Taxes.

     

    Definitions.
      In this
Section
      14:

     

    “Excluded
      Taxes”
means,
      with respect to the Collateral Agent or Buyer, or any other recipient of any
      payment to be made by or on account of any obligations of any Guarantor under
      this Guaranty, or under any other Security Document, income or franchise taxes
      imposed on (or measured by) its net income by the United States of America
      or
      such other jurisdiction under the laws of which such recipient is organized
      or
      in which its principal office is located.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    “Governmental
      Authority”
means
      the government of the United States of America or any other nation, or any
      political subdivision thereof, whether state or local, or any agency, authority,
      instrumentality, regulatory body, court, central bank or other entity exercising
      executive, legislative, judicial, taxing, regulatory or administrative powers
      or
      functions of or pertaining to government over the Company or any of its
      Subsidiaries, or any of their respective properties, assets or
      undertakings.

     

    “Indemnified
      Taxes”
means
      Taxes other than Excluded Taxes.

     

    “Taxes”
means
      any and all present or future taxes, levies, imposts, duties, deductions,
      charges or withholdings imposed by any Governmental Authority.

     

    Any
      and
      all payments by or on account of any obligation of any of the Guarantors under
      this Guaranty or any other Security Document shall be made without any set-off,
      counterclaim or deduction and free and clear of and without deduction for any
      Indemnified Taxes; provided that if any Guarantor shall be required to deduct
      any Indemnified Taxes from such payments, then (i) the sum payable shall be
      increased as necessary so that after making all required deductions (including
      deductions applicable to additional sums payable under this Section
      14(b)),
      the
      Collateral Agent or Buyer, as applicable, receives an amount equal to the sum
      it
      would have received had no such deductions been made, (ii) such Guarantor shall
      make such deductions and (iii) such Guarantor shall pay the full amount deducted
      to the relevant Governmental Authority in accordance with applicable
      law.

     

    Indemnification
      by the Guarantors.
      Each
      Guarantor shall indemnify the Collateral Agent and Buyer, within ten (10) days
      after written demand therefor, for the full amount of any Indemnified Taxes
      paid
      by the Collateral Agent or Buyer, as applicable, on or with respect to any
      payment by or on account of any obligation of such Guarantor under this Guaranty
      and the other Security Documents (including Indemnified Taxes or imposed or
      asserted on or attributable to amounts payable under this Section
      14)
      and any
      penalties, interest and reasonable expenses arising therefrom or with respect
      thereto, whether or not such Indemnified Taxes were correctly or legally imposed
      or asserted by the relevant Governmental Authority. A certificate of the
      Collateral Agent or Buyer as to the amount of such payment or liability under
      this Section
      14
      shall be
      delivered to such Guarantor and shall be conclusive absent manifest
      error.

     

    Counterparts;
      Headings.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to each other party;
      provided that a facsimile, .pdf or similar electronically transmitted signature
      shall be considered due execution and shall be binding upon the signatory
      thereto with the same force and effect as if the signature were an original
      signature.
      The headings in this Agreement are for convenience of reference only and shall
      not alter or otherwise affect the meaning hereof.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first
      written above.

     

    GUARANTORS:

     

    Sonterra
      Oil & Gas, Inc. (f/k/a
      Sonterra Resources, Inc.),
      a
      Delaware corporation

     

    
      	 	 	 
	 
 	 
 	 
 
	 	  	By:
              /s/ Michael J. Pawelek
	 	
              
Name: Michael
              J. Pawelek

    

     

    Title:           
      President

    

     

    Sonterra
      Operating, Inc.,
      a
      Delaware corporation

    
       

      
        	 	 	 
	 
 	 
 	 
 
	 	  	By:
                /s/ Wayne A. Psencik
	 	
                
Name: Wayne
                A. Psencik

      

    

     

    Title:           
      President

    

    

    

    [Signature
      Page to Guaranty]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A

    

    Form
      of Joinder

    Joinder
      to Guaranty

    

    The
      undersigned, [__________] a [__________], hereby joins in the execution of
      that
      certain Guaranty dated as of February 14, 2008 (the “Guaranty”),
      by
      each of Sonterra
      Oil & Gas, Inc.
      (f/k/a
      Sonterra Resources, Inc.),
      a
      Delaware corporation, Sonterra
      Operating, Inc.,
      a
      Delaware corporation, and each other person or entity that becomes a Guarantor
      thereunder after the date and pursuant to the terms thereof, to and in favor
      of
      Viking Asset Management L.L.C., a California limited liability company, as
      collateral agent. By executing this Joinder, the undersigned hereby agrees
      that
      it is a Guarantor thereunder with the same force and effect as if originally
      named therein as a Guarantor. The undersigned agrees to be bound by all of
      the
      terms and provisions of the Guaranty and represents and warrants that the
      representations and warranties set forth in Section
      6
      of the
      Guaranty are, with respect to the undersigned, true and correct as of the date
      hereof. Each reference to a Guarantor in the Guaranty shall be deemed to include
      the undersigned.

     

    In
      Witness Whereof, the undersigned has executed this Joinder this ___ day of
      _________, 200_.

    ___________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]