Document:

Consent, Subordination, and Intercreditor
Agreement

 

This Consent, Subordination,
and Intercreditor Agreement ("Agreement") is entered into as of August 2, 2012 among 1975 Babcock, LLC, a limited liability
company ("Lender"), Eos Petro, Inc., a Delaware corporation ("Borrower"), and Vatsala Sharma ("VS,"
and together with Lender, and the Borrower, the "Parties").

 

Whereas Lender is making
a loan of Three Hundred Thousand Dollars ($300,000) to Borrower pursuant to a Loan Agreement and Secured Promissory Note (the "Lender
Note") executed concurrently with this Agreement (terms used but not defined in this Agreement shall have the meanings, if
any, ascribed thereto in the Lender Note);

 

Whereas VS has previously
made loans to Borrower pursuant to a Second Promissory Note dated February 15, 2012 and related documents (collectively, the "VS
Loan Agreements");

 

Whereas VS is a secured
creditor of Borrower pursuant to the VS Loan Agreements, including a leasehold mortgage over Borrower's "Work Lease"
(all such security interests, the "VS Security," and all such documents, the "Works VS Mortgage:); and

 

Whereas Lender is concurrently
herewith filing a Leasehold Mortgage, Assignment, Security Agreement and Fixture Filing financing (together with any related security
documents, the "Works Lender Documents," and all such security interests the "Lender Security").

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements of the parties set forth below, the parties do hereby
agree as follows:

 

1.          VS
hereby consents to the loans and security interests made or created by the Lender Note, the Works Lender Documents and related
documents and waives any event of default that may result from the making of such loans and the creation of such security interests,
including the Lender Security.

 

2.          Lender
and VS hereby confirm and agree that, to the extent the security interests are in the same collateral (the "Common Collateral"),
the security interests of Lender under the Works Lender Documents, including the Lender Security, are senior to the security interests
of VS under the Works VS Mortgage, including the VS Security.

 

3.          From
the date of this Agreement and until at least the indebtedness of Borrower to Lender (the "Lender Debt") is repaid and
the indebtedness of Borrower to VS (the "VS Debt") is repaid, Lender will receive and administer the proceeds of the
Common Collateral on behalf of VS and on behalf of Lender. VS and Lender agree that such proceeds will be applied first to the
payment of the Lender Debt and second to the payment of the indebtedness to VS.

 

4.          Any
notice herein required or permitted to be given shall be in writing and shall be deemed effectively given in the manner and to
the person(s) identified in the Lender Note, the Works Lender Documents or the VS Loan Agreements, as applicable.

 

5.          This
Agreement may be amended by a writing signed by all Parties and or their successors or assigns.

 

    	 

    	 

    

 

6.          This
Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regarding to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement
shall be brought only in the manner and in the location specified in the Lender Note, the Works Lender Documents and the VS loan
Agreements, with the Lender Note controlling in the event of any inconsistency. The Parties irrevocably waive, to the fullest extent
permitted by applicable law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that
any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall
be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability
of any other provision of this Agreement.

 

7.          THE
PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

8.          Each
party acknowledges that it or its legal counsel participated in the preparation of this Agreement and, therefore, stipulates that
the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation
of this Agreement to favor any party against the other and this is the entire integrated agreement of the parties.

 

IT WITNESS WHEREOF,
the Parties have each caused this Consent, Subordination and Intercreditor Agreement to be signed, on the 2nd day of August 2011.

 

	 	Vatsala Sharma
	 	 	 
	 	By:	/s/ Vatsala Sharma
	 	 	 Vatsala Sharma an individual
	 	 	 
	 	1975 Babcock, LLC
	 	 	 
	 	By:	/s/ John Roberts
	 	 	 John Roberts
	 	Title:	Managing Member
	 	 	 
	 	Eos Petro, Inc.
	 	 	 
	 	By:	/s/ Nikolas Konstant
	 	 	 Nikolas Konstant
	 	Title:	ChairmanPERSONAL GUARANTY
AGREEMENT

 

This Personal Guaranty
Agreement ("Agreement") is made and executed this 1st day of August 2012 by Nikolas Konstant, an individual, with
a business address located at 2049 Century Park East, Suite 3670, Los Angeles, CA 90067 ("Guarantor"), in
favor of 1975 Babcock, LLC, a Texas limited liability company ("Holder"), whose office is located at 4040
Broadway, Suite 525, San Antonio, TX 7S209 ("Lender") as the provider of the Three Hundred. Thousand and 00/100
U.S. Dollar (US$300,000.00) loan to EOS Petro Inc, a Delaware corporation with a business address located at 2049 Century Park
East, Suite 3670, Los Angeles, CA 90067 ("Borrower").

 

The undersigned Guarantor
undertakes and agrees as follows.

 

(1)          Obligations
Guaranteed. To induce Lender to make the Three Hundred Thousand and 00/100 U.S. Dollar (US$300.000.00) loan to Borrower (the
"Loan") provided for in the Loan Agreement and Secured Promissory Note (the "Note") dated concurrently
herewith between Lender and Borrower, and for other good and valuable consideration. the Guarantor, intending to be legally bound,
hereby absolutely and unconditionally guarantees and becomes Guarantor for the payment of all outstanding amounts due in respect
of the Loan, due or to become due, absolute or contingent, now existing or hereafter arising, and whether principal, interest,
fees, costs, expenses or otherwise (including any interest and/or expenses accruing following the commencement of any insolvency,
receivership, reorganization or bankruptcy case or proceeding relating to any Borrower, whether or not a claim for post-petition
interest and/or expenses is allowed or allowable in such case or proceeding, but excluding any Lease payments (as define/ in the
Note)). The Guarantor shall also pay or reimburse Lender as the prevailing party on demand for all costs and expenses, including
without limitation attorneys' fees, incurred by Lender at any time to enforce, protect, preserve, or defend Lender' rights hereunder
and with respect to any property securing this Agreement. All payments hereunder shall be made in lawful money of the United States,
in immediately available funds. Unless otherwise defined herein, all capitalized terms in this Agreement shall have the respective
meanings given to such terms in the Note or in any other agreements entered into concurrently therewith among Borrower and Lender.

 

(2)          Representations
and Warranties. The Guarantor represents and warrants that:

 

(a)          The
Guarantor's execution and performance of this Agreement shall not (i) violate or result in a default or breach (immediately or
with the passage of time) under any contract, agreement or instrument to which the Guarantor is a party, or by which the Guarantor
is bound, (ii) violate or result in a default or breach under any order, decree, award, injunction, judgment, law, regulation or
rule, (iii) cause or result in the imposition or creation of any lien upon any property of the Guarantor, or (iv) violate or result
in a breach of the certificate of formation or organization, articles of incorporation or organization, bylaws, operating agreement,
as applicable, or any other organizational document of the Guarantor.

 

(b)          The
Guarantor has the full power and authority to enter into and perform under this Agreement, which has been authorized by all necessary
corporate or organizational, as applicable, action on behalf of the Guarantor.

 

(c)          No
consent, license or approval of, or filing or registration with, any governmental authority is necessary for the execution and
performance hereof by the Guarantor.

 

    	 

    	 

    

 

(d)          This
Agreement constitutes the valid and binding obligation of the Guarantor enforceable in accordance with its terms,

 

(e)          This
Agreement promotes and furthers the business and interests of the Guarantor and the creation of the obligations hereunder will
result in direct financial benefit to the Guarantor.

 

(3)          Guarantor
Acknowledgements.

 

(a)          The
Guarantor hereby waives notice of (i) acceptance of this Agreement, (ii) the existence or incurring from time to time of any Obligations
guaranteed hereunder, (iii) nonpayment, the existence of any Event of Default, the making of demand, or the taking of any
action by Lender, under the Note or the Assignment, and (iv) default and demand hereunder.

 

(b)          The
Guarantor further acknowledges that the Guarantor (i) has examined or had the opportunity to examine the Note and related agreements
and (ii) waives any defense which may exist resulting from the Guarantor's failure to receive or examine at any time such documents
or any amendments, supplements, restatements or replacements therefor.

 

(c)          The
Guarantor acknowledges that in entering into this Agreement the Guarantor is not relying upon any statement, representation, warranty
or opinion of any kind from bender as to the present or future financial condition, performance, assets, liabilities or prospects
of Borrower or as to any other matter.

 

(4)          Lender
Actions. The Guarantor hereby consents and agrees that Lender may at any time or from time to time in their discretion (a)
extend or defer the timing of payments in respect of the Loan, (b) modify the terms and conditions under which an extension of
credit may be made to Borrower, (c) settle, compromise or grant releases for liabilities of Borrower, and/or any other person(s)
or entity(ies) liable with Guarantor for, any payments in respect of the Loan, (d) and exchange, compromise, release or surrender,
or subordinate or release any lien on any Borrower asset (including any collections therefrom or proceeds thereof), all of the
foregoing in such manner and upon such terms as Lender may see fit, and without notice to or further consent from the Guarantor,
who hereby agrees to be and shall remain bound upon this Agreement notwithstanding any such action on Lender's part.

 

(5)          Scope
of Guaranty. The Agreement is an agreement of suretyship and a guaranty of payment and not of collection. The liability of
the Guarantor hereunder is absolute, primary, unlimited and unconditional and shall not be reduced, impaired or affected in any
way by reason of (a) any failure to obtain, retain or preserve, or the lack of prior enforcement of, any rights against any person(s)
or entity(ies) liable for in respect of the Loan (including Borrower and the Guarantor), (b) the invalidity, unenforceability or
voidability of the Loan or any liens or rights by any person(s) or entity(ies), (c) any delay in making demand upon Borrower or
any delay in enforcing, or any failure to enforce, any rights against Borrower or any other person(s) or entity(ies) liable for
any or all of the Loan or in any collateral pledged by any person(s) or entity(ies), even if such rights arc thereby lost, (d)
any failure, neglect or omission on Lender's part to obtain, perfect or continue any lien upon, protect, exercise rights against,
or realize on the Borrower, the Guarantor or any other patty securing the Loan, (e) the existence or nonexistence of any defenses
which may be available to Borrower with respect to the Loan, (f) the granting of any waiver or forbearance at any time and
for any period with respect to any performance by Borrower or any Event(s) of Default under the Note, (g) the commencement of any
bankruptcy, reorganization, liquidation, dissolution or receivership proceeding or case filed by or against Borrower or any guarantor
or (h) any other fact, event, condition or omission which may give rise to suretyship defense or any other defense. Guarantor promises
and undertakes to make all payments hereunder fret and clear of any deduction, offset, defense, claim or counterclaim of any kind.

 

    	 

    	 

    

 

(6)         Reinstatement.
If any or all payments securing any or all of the Loan made from time to time to Lender with respect to the Loan hereby guaranteed
are at any time recovered from, or repaid by, Lender in whole or in part in any bankruptcy, reorganization, receivership, insolvency
or similar case or proceeding instituted by or against the Borrower, this Agreement shall continue to be fully applicable to (or,
as the case may be, reinstated to be applicable to) such obligation to the same extent as if the recovered or repaid payment(s)
or proceeds had never been originally paid to Lender.

 

(7)         Cumulative
Remedies. All rights and remedies hereunder and under the Note or other agreements entered into concurrently by the parties
hereto are cumulative but alternative;

 

(8)         Subrogation.
Any and all rights of any nature of the Guarantor to subrogation, reimbursement or indemnity and any right of the Guarantor to
recourse to any assets or property of the Borrower as a result of any payments made or to be made hereunder for any reason shall
be unconditionally subordinated to all of the Lender's rights under the Note and the Guarantor shall not at any time exercise or
be entitled to the benefit of any of such rights unless and until all amounts in respect of the Loan have been unconditionally
paid in full. Any payments received by the Guarantor in violation of this Section 8 shall be held in trust for and immediately
remitted to the benefit of Lender.

 

(9)         Lender's
Records. Lender's books and records of any and all of the Obligations, absent manifest error, shall be prima facie evidence
against the Guarantor of the indebtedness owing or to become owing to Lender hereunder.

 

(10)        Continuing
Guarantee. This Agreement shall constitute a continuing Guarantor obligation with respect to all amounts of the Loan from time
to time outstanding and shall continue in effect until all amounts of the Loan are indefeasibly paid and satisfied and the liability
of the Guarantor under this Agreement may not be revoked or terminated.

 

(11)        Setoff:
The Guarantor agrees that Lender shall have a right of setoff against any and all property of the Guarantor now or at any time
in Lender's possession, including without limitation deposit accounts, and the proceeds thereof, as security for the obligations
of the Guarantor hereunder.

 

(12)        Acceleration.
If an Event of Default occurs under any of the agreements entered into concurrently herewith, including the Note and the Assignment,
then all of the Guarantor's liabilities of every kind or nature to Lender hereunder shall, at Lenders option. become immediately
due and payable (or automatically due and payable to the extent the Loan becomes automatically due and payable by reason of the
occurrence of any Event of Default under the terms and conditions of the Note, and. Lender may at any time and from time to time,
at Lender's option (regardless of whether the liability of Borrower for any or all of the Obligations has matured or may then be
enforced), take any and/or all actions and enforce all rights and remedies available hereunder or under applicable law to collect
the Guarantor's liabilities hereunder.

 

    	 

    	 

    

 

(13)        Enforcement
Timing. Failure or delay in exercising any right or remedy against the Guarantor hereunder shall not be deemed a waiver thereof
or preclude the exercise of any other right or remedy hereunder. No waiver of any breach of any provision of this Agreement shall
be construed as a waiver of any subsequent breach or of any other provision.

 

(14)        Successors
and Assigns. This Agreement shall (a) be legally binding upon the Guarantor, and the Guarantor's successors and assigns, provided
that the Guarantor's obligations hereunder may not be delegated or assigned without Lender's prior written consent and (b) benefit
any and all of Lender's successors and assigns.

 

(15)        Entire
Agreement. This Agreement embodies the whole agreement and understanding of the parties hereto relative to the subject guaranty.
No modification or waiver of any provision hereof shall be enforceable unless agreed to by Lender and Guarantor in writing.

 

(16)        CHOICE
OF LAW; VENUE; JURY WAIVER. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF TEXAS WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES. GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE
OR FEDERAL COURT LOCATED WITHIN, TEXAS AND IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO TILE NOTE
OR THE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER.

 

(17)        Service
of Process: Notices.

 

(a)          TO
THE MAXIMUM EXTENT ALLOWED BY LAW, GUARANTOR HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE OF PROCESS
BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED. In the event such waiver is unenforceable at the time process is to
be served, Guarantor agrees to unequivocally and unconditionally execute a Notice and Acknowledgment of Receipt of summons and
complaint and any other applicable documents.

 

(b)          Any
and all notices which may be given to Guarantor by Lender hereunder shall be sent to Guarantor at the address of Guarantor set
forth on the signature page hereto (or such other address at which Guarantor is then located) and shall be sent in the manner described
in the concurrently executed agreements.

 

(18)        Suretyship
Waivers.

 

(a)          Guarantor
shall remain bound under this Agreement for the obligation of Borrower to Lender in respect of the Loan and shall be liable to
Lender for any and all amounts of the Loan remaining unpaid after any such foreclosure.

 

(b)          To
the maximum extent permitted by law, Guarantor specifically waives the benefit of the statute of limitations affecting its liability
hereunder or the enforcement hereof, or the collection of any amount in respect of the Loan, including, without limiting the foregoing,
any and all special statutes of limitations arising out of Texas Code of Civil Procedure sections 580a or 726(b), and any laws
of similar tenor in the State of Texas. Any partial payment by Borrower which operates to toll any statute of limitations as to
Borrower shall likewise toll the statute of limitations as to Guarantor.

 

    	 

    	 

    

 

(c)          Guarantor
acknowledges that Guarantor may have certain rights under applicable law which, if not waived by Guarantor, might provide Guarantor
with defenses against Guarantor's liability under this Agreement. Among those rights, are certain rights of subrogation, reimbursement,
indemnification and contribution, and rights provided in sections 2757 to 2855, inclusive, of the Texas Civil Code, and any laws
of similar tenor in the State of Texas. Guarantor waives all of Guarantor's rights of subrogation, reimbursement, indemnification,
and contribution, and any other rights and defenses that are or may become available to Guarantor by reason of any or all of Texas
Civil Code sections 2787 to 2855, inclusive, and any laws of similar tenor in the State of Texas, including, without limitation,
Guarantor's rights:

 

(i)          To
require Lender to notify Guarantor of any default by Borrower, provide Guarantor with notice of any sale or other disposition of
security for the Loan, disclose information with respect to the Loan. Borrower, or any other guarantor, surety, co-signer or endorser,
or with respect to any collateral;

 

(ii)         That
Guarantor's obligation under this Agreement must be commensurate with that of Borrower;

 

(iii)        To
be discharged based upon the absence of any liability of Borrower, at any time, by virtue of operation of law, or otherwise, or
due to any other disability or defense of Borrower or any other guarantor, surety, endorser or co-signer;

 

(iv)        To
be discharged if any or the terms, conditions or provisions of the Loan are altered in any respect;

 

(v)         To
be discharged upon acceptance by Lender of anything in partial satisfaction of the Loan, and/or if Lender designates the portion
of the Loan to be satisfied;

 

(vi)        To
be discharged upon any modification of the Loan or the release by Lender of Borrower or any other guarantor, surety, endorser or
co-signer;

 

(vii)       To
require Lender to proceed against Borrower, or any other guarantor, surety, endorser, co-signer, or other person, or to pursue
or refrain from pursuing any other remedy in Lender's power;

 

(viii)      To
receive the benefit of or participate in any and all security for repayment and/or performance of the Loan;

 

(ix)         To
have any security for the Loan first applied to satisfy or discharge the Loan;

 

(x)          That
any arbitration award rendered against Borrower not constitute an award against Guarantor;

 

    	 

    	 

    

 

(xi)         To
be discharged based upon any failure by Lender to perfect or continue perfection of any lien, use due diligence to collect all
or any part of the Loan, or if recovery against Borrower becomes barred by any statute of limitations, or if Borrower is not liable
for any deficiency after Lender realizes upon any collateral; and

 

(xii)        To
be discharged due to the release or discharge of any collateral for the Loan or guaranty or surety, or relating to the validity,
value or enforceability of any collateral.

 

(d)          Guarantor
waives all rights and defenses arising out of an election of remedies by Lender, even though that election of remedies, such as
a nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor's rights of subrogation
and reimbursement against the principal by the operation of Section 580d of the Texas Code of Civil Procedure, any laws of similar
tenor in the State of Texas or otherwise.

 

(c)          Guarantor
waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor,
notices of acceptance, notices of the existence, creation or increase of any new or additional credit, notice of sale in regard
to judicial or non-judicial foreclosure of real or personal property collateral and all other notices and demands of any kind or
nature whatsoever except as expressly set forth herein.

 

(19)        Maximum
Liability. To the extent that applicable law otherwise would render the obligations of the Guarantor hereunder invalid or unenforceable,
the Guarantor shall nevertheless remain liable hereunder, provided however that the Guarantor's obligations shall be limited to
the maximum amount which does not result in such invalidity or unenforceability. Notwithstanding the foregoing, the Guarantor's
obligations hereunder shall be presumptively valid and enforceable to their fullest extent in accordance with the terms of this
Agreement, as if this Section 19 were not it part of this Agreement,

 

(20)        Severability,
The invalidity or unenforceability of any provision hereof shall not affect the remaining provisions which shall remain in full
force and effect.

 

[SIGNATURE APPEARS ON
FOLLOWING PAGE]

 

    	 

    	 

    

 

In Witness Whereof, the undersigned has
duly signed this Personal Guaranty Agreement as of the date and year first above written.

 

	 	Guarantor
	 	 	 
	 	 	/s/ Nikolas Konstant
	 	 	Nikolas Konstant an individual

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