Exhibit 10.2
 
FARMOUT AGREEMENT

THIS Farmout Agreement (this “Agreement”) is entered into on effective as of May
31, 2010 (“Effective Date”) between SK Energy, Sucursal Peruana, the Peruvian
registered branch of SK Energy Co., Ltd., a company organized and existing under
the laws of the Republic of Korea (“Farmor”), and Gulf United Energy Cuenca
Trujillo Ltd., a company organized and existing under the laws of the British
Virgin Islands (“Farmee”).  Farmor and Farmee are sometimes referred to
collectively as the “Parties” and individually as a “Party.”

WITNESSETH:

WHEREAS, Farmor holds one hundred percent (100%) of the Participating Interest
under that certain License Contract, dated November 21, 2007, for the
Exploration and Exploitation of Hydrocarbons in Block Z-46 (“License Contract”)
between Perupetro S.A. (“Perupetro”) and Farmor in the Republic of Peru; and
 
 
WHEREAS, Farmor is willing to assign and transfer a certain undivided interest
in its rights and obligations under the License Contract to Farmee in accordance
with the terms set forth herein and Farmee wishes to acquire such interest.

NOW THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the Parties agree as follows:

1.           Definitions

The terms defined in the License Contract shall have the same meaning when used
in this Agreement unless the context requires otherwise.  Terms defined in the
singular shall have the same meaning when used in the plural and vice versa.  A
reference to a “Clause” is a reference to a clause of this Agreement unless
otherwise specified.

 
1.1
“Affiliate” shall have the same meaning as such term is defined the License
Contract except the reference to “Parties” as used in that definition shall mean
the Parties to this Agreement.

 
1.2
“Agreement” means this Farmout Agreement together with the Exhibits, and any
extension, renewal or amendment hereof agreed to in writing by the Parties.

 
1.3
“Approval Date” means the date on which Perupetro and/or the Government formally
approves or endorses the Assignment of the Participating Interest transferred
hereunder.

 
 

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1.4
“Assignment” means the transfer from Farmor to Farmee of the Farmout Interest.

 
1.5
“Assignment Agreement” means the document, of which form is attached hereto as
Exhibit A, to be signed by Farmor and Farmee to effect the Assignment.

 
1.6
“Business Day” means a day (other than a Saturday or Sunday) on which commercial
banks in Texas, United States of America, Seoul, Republic of Korea, and Lima,
Republic of Peru are generally open for business.

 
1.7
“Closing Date” means the date within fifteen (15) days from execution of the
amendment to the License Contract in accordance with Clause 3.1, which date will
agreed upon between the Parties.

 
1.8
“Consideration” has the meaning given in Clause 2.4.

 
1.9
“Contract Area” shall have the same meaning as such term is defined in the
License Contract.  The current Contract Area covered by the License Contract is
set forth on Exhibit B attached hereto.

 
1.10
“Contractor” shall have the same meaning as such term is defined in the License
Contract.

 
1.11
“Cut-off Date” means the date falling on eighteen (18) months from the date on
which this Agreement is signed.

 
1.12
“Farmout Interest” means an undivided forty percent (40%) of the rights and
obligations of the Contractor under the License Contract.

 
1.13
“Government” means the government of the Republic of Peru, and all departments,
political subdivisions, instrumentalities, agencies, corporations or commissions
under the direct or indirect control thereof or owned thereby and shall include
any court, legislature, council or state government or national, regional,
municipal or local authorities.

 
1.14
“Interim Period”  means the period commencing from the date of the execution of
this Agreement until the Approval Date together with satisfaction or waiver of
the Conditions Precedent, or the termination of this Agreement for a failure to
fulfill or waive, such Conditions Precedent, as defined in Clause 2.2.

 
 

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1.15
“JOA” means the document regulating the future joint operations of the Parties
under the License Contract which will be executed contemporaneously with this
Agreement, and is attached as Exhibit D.

 
1.16
“Laws/Regulations” means those laws, statutes, rules and regulations governing
activities under the License Contract.

 
1.17
“License Contract” means the instrument attached as Exhibit C and any extension,
renewal or amendment thereto.

 
1.18
“On-going Costs” means any and all costs and expenses incurred in accordance
with the terms of the JOA in carrying out Operations conducted on or after the
Effective Date of this Agreement.

 
1.19
“Operator” means the entity designated to conduct operations in the Contract
Area in accordance with the terms of the JOA.

 
1.20
“Operations” shall have the same meaning as such term is defined in the License
Contract.

 
1.21
“Participating Interest” means the undivided percentage interest of any Party in
the rights and obligations of Contractor under the License Contract (i.e., as a
result of the Assignment hereunder Farmor 60%, Farmee 40%).

 
1.22
“Past Costs” covers any and all costs and expenses incurred in carrying out
Operations conducted prior to the Effective Date of this Agreement, which
include, without limitation, costs such as: (a) third-party costs for (i) data
acquisition, licensing and evaluation, (ii) License Contract negotiations and
acquisitions, including legal, consulting, translation and secretarial services,
and (iii) environmental studies; (b) internal costs (salaries, benefits and
other related overhead) for personnel of Farmor and its Affiliates related to
(i) License Contract negotiations and acquisitions, (ii) preparation for
drilling operations, and (iii) data acquisition, licensing and evaluation, (c)
drilling costs; and (d) costs and expenses incurred in relation to the bidding
stage.

 
1.23
“Person” means any natural or judicial person, including an individual, firm,
corporation, partnership, limited liability company, trust, association, joint
venture, Government or other entity.

 
 

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1.24
“Second Period” means the 2nd Period of the exploration phase referred to in
Clause 4 of the License Contract and is calculated by the Farmor to be from July
19, 2009 to August 16, 2011.

 
 
1.25
“Seismic Acquisition Costs” means any and all costs and expenses to be incurred
in accordance with the terms of the JOA relating to the acquisition and
processing of seismic data for Operations and which will become part of the
On-going Costs.

2.           Assignment and Consideration

 
2.1
Farmor and Farmee shall be bound by this Agreement as of the date hereof and
shall fully perform all of their respective obligations under this Agreement.

 
2.2.
Subject to the terms and conditions of this Agreement as herein set forth,
Farmor will perform, and Farmee will accept, the Assignment.  The Assignment
shall be conditioned upon: (i) receipt of Perupetro Approval (as provided in
Clause 3.1 of this Agreement), and (ii) execution and delivery of the Assignment
Agreement.  Items (i) and (ii) above are referred to herein as the “Conditions
Precedent.”

 
2.3
After the assignment contemplated under this Clause 2, the Participating
Interests in the License Contract shall be:

 
SK Energy, Surcursal Peruana:
60%

 
Gulf United Energy Cuenca Trujillo Ltd.:
40%

 
2.4
As Consideration for the Assignment, Farmee shall pay the following to Farmor:

 
(a)
Past Costs: Farmee shall pay its Participating Interest share of the Past Costs
in accordance with Clause 2.6 which the Parties agree to be US$7,287,292.
 

 
(b)
On-going Costs: Farmee shall pay its Participating Interest share of the
On-going Costs in accordance with Clause 7.2; and

 
(c)
Premium: With respect to the Seismic Acquisition Costs incurred during Second
Period, Farmee shall pay an additional thirty five percent (35%) of such Seismic
Acquisition Costs (“Premium”) in addition to its payment pursuant to Clause 2.4
(a) and (b) above, until 3000km of 2D seismic has been acquired and
processed.  For avoidance of doubt, Farmee will pay seventy five percent (75%)
of the Seismic Acquisition Costs incurred during the Second Period.

 
 

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2.5
Notwithstanding the date on which the Assignment is executed, the effective date
of this Agreement as between the Parties shall be deemed to be the Effective
Date, as defined above. The Consideration payable by Farmee reflects this
Effective Date.  Farmor and Farmee agree that they shall make whatever
adjustments and payments from one to the other to reflect the Assignment as of
the Effective Date, notwithstanding any cost recovery allocations, tax
deductions or other benefits or payments received from a Government thereafter
as a result of the application of the License Contract or any applicable laws of
a Government which reflect the Approval Date (and not the Effective Date).

 
2.6
Notwithstanding the satisfaction of the other Conditions Precedent, Farmee shall
pay the Past Costs within thirty (30) days after receipt of Perupetro Approval
in accordance with Clause 3, against the invoice issued by Farmor in immediately
available funds by electronic transfer to the bank account designated by Farmor.

3.
Perupetro Approval

 
3.1
Pursuant to Clause 16 of the License Contract, the Assignment can only be made
with the prior written consent of Perupetro (the “Perupetro Approval”).  Clause
16.1 of the License Contract requires that Farmee submits information to the
Government to qualify as a petroleum contractor in accordance with the
Laws/Regulations. As such, after the execution of this Agreement, each Party
will use all reasonable efforts to timely take any actions, make any filings or
submissions and affect any undertakings reasonably required in order to obtain
the Perupetro Approval.  As soon as practical upon receiving Perupetro Approval
to the Assignment, the Parties will execute the Assignment Agreement, and an
amendment to the License Contract to effect the Assignment. The Parties will
keep each other fully informed of all communications with Perupetro in
connection with obtaining the approvals described in Clauses 3.1.

 
 
 
 
 

 
 
 

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4.           Additional Agreements

 
4.1
Payment Currency.  Payments between the Parties under this Agreement shall be
made in US dollars.

 
4.2
Bank Guarantee.  Farmee shall provide Farmor with a bank guarantee issued by a
reputable bank in a form acceptable to Farmor to guarantee the performance of
its obligations for the Second Period pursuant to this Agreement, the JOA and
the License Contract in addition to the guarantee provided to Petroperu under
clause 3.10 of the License Contract.

5.           License Contract

 
5.1
Acceptance of Prior Terms.  Farmee hereby ratifies, confirms and accepts the
terms of the License Contract and, during the Interim Period, Farmee agrees to
abide by the terms of the License Contract to the extent of its Participating
Interest, including but not limited to, the provision of any and all guarantees
that the Contractor is required to provide.

6.
JOA

 
6.1
Acceptance of Prior Terms.  Farmor and Farmee hereby ratify, confirm and accept
the terms of the JOA and during the Interim Period, Farmor and Farmee agree to
abide by the terms of the JOA to the extent of their respective Participating
Interests.

 
6.2
Operations.  All Operations conducted with respect to the Contract Area shall be
conducted pursuant to the terms of the JOA.

7.           Interim Period
 
 
7.1
Notification Farmor shall promptly notify Farmee and provide details upon the
occurrence of: (a) any written notice of default or termination received or
given by Farmor with respect to the License Contract, (b) any written notice of
any pending or threatened claim, demand, action, suit, inquiry or proceeding
related to the License Contract, (c) any material damage, destruction or loss to
major assets under the License Contract, or (d) any event or condition between
the date of this Agreement and the Approval Date that (i) would have a material
adverse effect on the business, operations, financial condition or results of
operations under the License Contract, taken as a whole, or (ii) would render
impossible Farmee’s right to the Assignment.

 
 

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7.2
JOA Costs  During the Interim Period, On-going Costs and the Premium as set
forth in Clause 2.4 (b) and (c) shall be paid by the method of cash calls
pursuant to the JOA and this Agreement.  Farmee shall have the right to verify
and audit the On-going Costs, pursuant to the audit procedures of the
JOA.  Notwithstanding the above, pursuant to the JOA, it is agreed by both
Parties that Farmee’s audit rights begin from the date of execution and delivery
of the Assignment Agreement.

 
7.3
Undertakings  During the Interim Period the Farmee and Farmor shall comply with
each of the following undertakings:

 
(a)
Each Party, as applicable, agrees to use commercially reasonable efforts to
satisfy, in an expeditious manner, the Conditions Precedent to the Assignment
set forth in Clause 2; and

 
(b)
The Parties shall not take any action nor fail to take any action prior to the
Approval Date that would result in a breach of any of its representations and
warranties under this Agreement.

 
 

8.
Representations and Warranties

 
8.1
Farmee hereby represents and warrants to Farmor that as of the date hereof and
the Effective Date of this Agreement:

 
(a)
In making the decision to enter into this Agreement and consummate the
transactions contemplated hereby, Farmee has relied solely on the basis of its
own independent due diligence investigation.

 
(b)
Farmee has all necessary corporate power and authority to enter into this
Agreement and the Assignment Agreement and to perform its obligations hereunder
and thereunder. All necessary corporate action has been taken to authorize
Farmee to sign and deliver, and perform, the transactions contemplated by this
Agreement and the Assignment Agreement.  This Agreement has been duly executed
and delivered by Farmee and constitutes a legal, valid and binding obligation of
Farmee, enforceable against Farmee in accordance with its terms, subject to the
legal doctrines of bankruptcy, insolvency or similar legal doctrines affecting
creditors’ rights generally and general principles of equity.  The Assignment
Agreement, once executed by Farmee and Farmor, will have been duly executed and
delivered by Farmee and constitute a legal, valid and binding obligation of
Farmee, enforceable against Farmee in accordance with its terms, subject to the
legal doctrines of bankruptcy, insolvency or similar legal doctrines affecting
creditors’ rights generally and general principles of equity.

 
 

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(c)
No event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute, a
contravention of, or default under, any agreement or instrument by which Farmee
or any of its assets is bound or affected, being a contravention or default
which would have a material adverse effect on the business, assets, or condition
of Farmee and which would materially and adversely affect its ability to observe
or perform its obligations under this Agreement and the transactions
contemplated hereby.

 
(d)
Farmee has the financial and technical capability to meet its financial and
technical obligations under this Agreement and under the License Contract.

 
(e)
No litigation, arbitration or administrative proceeding or claim which might by
itself or together with any other such proceedings or claims materially and
adversely affect Farmee’s ability to observe or perform its obligations under
this Agreement and the agreements contemplated hereby, is presently in progress
or pending or, to the best of the knowledge, information and belief of Farmee,
threatened against Farmee or any Affiliate of Farmee.

 
8.2
Farmor hereby represents and warrants to Farmee that as of the date hereof and
the Effective Date of this Agreement:

 
(a)
Farmor is a Contractor under the License Contract.

 
(b)
Farmor holds one hundred percent (100%) of the rights and obligations under the
License Contract, free and clear of all liens, claims and encumbrances, and it
has not received any notice or other communication from Perupetro or other
Government or Person to terminate the License Contract or which would reduce
Farmor's Participating Interest in the License Contract.

 
 

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(c)
The License Contract and all rights and interest thereunder or deriving
therefrom of Farmor are in full force and effect and no default or act or
omission of Farmor, or, as far as Farmor is aware, of any other Person, has
occurred thereunder nor is there any notice or intimation to Farmor in respect
thereof whether as a result of its default, act or omission or those of any
other person or otherwise. Farmor has provided Farmee with a complete and
correct copy of the License Contract.

 
(d)
Farmor has all necessary corporate power and authority to enter into this
Agreement and the Assignment Agreement and to perform its obligations hereunder
and thereunder. All necessary corporate action has been taken to authorize
Farmor to sign and deliver, and perform, the transactions contemplated by this
Agreement and the Assignment Agreement.  This Agreement has been duly executed
and delivered by Farmor and constitutes a legal, valid and binding obligation of
Farmor, enforceable against Farmor in accordance with its terms, subject to the
legal doctrines of bankruptcy, insolvency or similar legal doctrines affecting
creditors’ rights generally and general principles of equity. This Assignment
Agreement, once executed by Farmor and the Farmee, will have been duly executed
and delivered by Farmor and constitute a legal, valid and binding obligation of
Farmor, enforceable against Farmor in accordance with its terms, subject to the
legal doctrines of bankruptcy, insolvency or similar legal doctrines affecting
creditors’ rights generally and general principles of equity.

 
(e)
No event has occurred which constitutes, or which with the giving of notice
and/or the lapse of time and/or a relevant determination would constitute, a
contravention of, or default under, any agreement (including, for the avoidance
of doubt, the License Contract) or instrument by which Farmor or any of its
assets is bound or affected, being a contravention or default which would have a
material adverse effect on the business, assets, or condition of Farmor and
which would materially and adversely affect its ability to observe or perform
its obligations under this Agreement and the transactions contemplated hereby.

 
(f)
No litigation, arbitration or administrative proceeding or claim which might by
itself or together with any other such proceedings or claims materially and
adversely affect Farmor’s ability to observe or perform its obligations under
this Agreement and the agreements contemplated hereby or which concerns the
License Contract or Contract Area, is presently in progress or pending or, to
the best of the knowledge, information and belief of Farmor, threatened against
Farmor or any Affiliate of Farmor.

 
 

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8.3           Each Party acknowledges and agrees that:

 
(a)
The representations and warranties contained in this Agreement are the only
representations or warranties of any kind given by or on behalf of the other
Party and on which it may rely in entering into this Agreement;

 
(b)
Other than the representations and warranties given in this Agreement, no
statement, promise or forecast made by or on behalf of any other Party or any
other person may form the basis of, or be pleaded in connection with, any claim
by such Party under or in connection with this Agreement; and

 
(c)
The Parties respective representations and warranties set out in this Clause 8
shall be also true and accurate at the date the Assignment Agreement is
executed.

 
8.4
Other Representations and Warranties Except as disclosed in schedules attached
to this Agreement, the execution, delivery, and performance of this Agreement by
each Party, the consummation of the transactions contemplated hereby, and the
compliance with the provisions hereof will not, to the best of each Party's
knowledge and belief:

 
(a)
violate any applicable Laws/Regulations, judgment, decree or award;

(b)           contravene the organization documents of a Party; or

 
(c)
result in a violation of a term or provision, or constitute a default or
accelerate the performance of an obligation under any contract or agreement
executed by a Party hereto.

 
 

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8.5
Disclaimer of Other Representations and Warranties  Except for the
representations and warranties provided in this Clause 8, Farmor and Farmee make
no, and disclaim any, warranty or representation of any kind, either express,
implied, statutory, or otherwise, including, without limitation, the accuracy or
completeness of any data, reports, records, projections, information, or
materials now, heretofore, or hereafter furnished or made available to Farmee in
connection with this Agreement.

9.
Limitation of Liability

 
9.1
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT, NEITHER PARTY SHALL BE
LIABLE FOR BREACH OF THE REPRESENTATIONS AND WARRANTIES MADE BY IT IN CLAUSE 8
OF THIS AGREEMENT:

 
(A)
UNLESS NOTICE OF SUCH CLAIM IS GIVEN IN WRITING BY THE OTHER PARTY, GIVING
REASONABLE PARTICULARS, WITHIN ONE (1) YEAR AFTER THE CLOSING DATE; OR

 
(B)
TO THE EXTENT THAT THE CUMULATIVE AGGREGATE AMOUNT OF THE LIABILITY FOR ALL
CLAIMS FOR BREACH OF THE REPRESENTATIONS AND WARRANTIES MADE BY IT UNDER THIS
AGREEMENT, EXCEEDS FIVE MILLION US DOLLARS (US$5,000,000).

 
9.2
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT, NO PARTY SHALL BE LIABLE
IN ANY CIRCUMSTANCES TO THE OTHER PARTIES OR ANY OF THEIR AFFILIATES, ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT FOR ANY CONSEQUENTIAL OR
INDIRECT LOSS OR DAMAGE WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE AT
LAW.  FOR THE PURPOSE OF THIS CLAUSE CONSEQUENTIAL LOSS SHALL INCLUDE BUT NOT BE
LIMITED TO ANY OBLIGATIONS OR INABILITY TO PRODUCE PETROLEUM, LOSS PRODUCTION OR
LOSS OF PROFITS HOWSOEVER ARISING.

 
 
 

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10.           Tax Obligations
 
 
10.1
Each Party shall be responsible for reporting and discharging its own tax
measured by the profit or income of the Party and the satisfaction of such
Party’s share of all contract obligations under the License Contract and under
this Agreement.  Each Party shall protect, defend and indemnify each other Party
from any and all loss, cost or liability arising from the indemnifying Party’s
failure to report and discharge such taxes or satisfy such obligations.  The
Parties intend that all income and all tax benefits (including deductions,
depreciation, credits and capitalization) with respect to the expenditures made
by the Parties hereunder will be allocated by the Government tax authorities to
the Parties based on the share of each tax item actually received or borne by
each Party.  If such allocation is not accomplished due to the application of
the Laws / Regulations or other Government action, the Parties shall attempt to
adopt mutually agreeable arrangements that will allow the Parties to achieve the
financial results intended.  Operator shall provide each Party, in a timely
manner and at such Party’s sole expense, with such information with respect to
Joint Operations (as defined in the JOA) as such Party may reasonably request
for preparation of its tax returns or responding to any audit or other tax
proceeding.

 
10.2
Joint Levy  If interpretation or enforcement of the License Contract by the
Government imposes joint and several liability on the Parties for any levy,
charge or tax, the Parties agree to cross indemnify each other to the extent
that such levy, charge or tax is owed by one Party individually.

 
10.3
Assignment  Each Party shall be responsible for any taxes assessed against it as
a result of the Assignment.

 
11.
Confidentiality and Access to Data

 
11.1
Confidentiality Each Party agrees that all information disclosed under this
Agreement, except information which (a) at the time such information is provided
to a Party under this Agreement, is in the public domain; (b) subsequently comes
into the public domain, except through breach of the undertakings set out in
this Clause 11; or (c) is already lawfully in possession of a Party prior to the
Effective Date, shall be considered confidential and shall not be disclosed to
any other person or entity without the prior written consent of the Party which
owns such confidential information. This obligation of confidentiality shall
remain in force during the term of the License Contract and for a period of two
(2) years thereafter. Notwithstanding the foregoing, confidential information
may be disclosed without consent and without violating the obligations contained
in this Clause 11 in the following circumstances:

 
 

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(a)
to an Affiliate provided the Affiliate is bound to the provisions of this Clause
11 and the Party disclosing is responsible for the violation of an Affiliate;

 
(b)
to a governmental agency or other entity when required by the License Contract;

 
(c)
to the extent such information is required to be furnished in compliance with
the applicable laws/regulations, or pursuant to any legal proceedings or because
of any order of any court binding upon a Party;

 
(d)
to attorneys engaged, or proposed to be engaged, by any Party where disclosure
of such information is essential to such attorneys’ work for such Party and such
attorneys are bound by an obligation of confidentiality;

 
(e)
to contractors and consultants engaged, or proposed to be engaged, by any Party
where disclosure of such information is essential to such contractor’s or
consultant’s work for such Party;

 
(f)
to a bona fide prospective transferee of all or a portion of a Party’s
Participating Interest, or portion thereof, to the extent appropriate in order
to allow the assessment of such Participating Interest (including an entity with
whom a Party and/or its Affiliates are conducting bona fide negotiations
directed toward a merger, consolidation or the sale of a majority of its or an
Affiliate’s shares);

 
(g)
to a bank or other financial institution to the extent appropriate to a Party
arranging for funding;

 
(h)
to the extent a Party determined in good faith that such information is required
to be disclosed by any law, rule or regulation of any government or stock
exchange having jurisdiction over such Party, or its Affiliates or is subject to
a request by any regulatory authority or Government; provided that such Party
shall comply with the requirements of Clause 17 hereunder and provide notice of
the disclosure to the non-disclosing Party and to the extent Clause 26 is
applicable thereto, comply with the requirements thereof;

 
(i)
to its respective employees, subject to each Party taking sufficient precautions
to ensure such information is kept confidential; and

 
(k)
to the other parties to the License Contract and JOA and Perupetro solely to the
extent as may be required to satisfy the Conditions Precedent.

 
 

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Disclosure as pursuant to Clause 11.1(e), (f), (g) and (k) shall not be made
unless prior to such disclosure the disclosing Party has obtained a written
undertaking from the recipient party to keep the information strictly
confidential for at least as long as the period set out above and to use the
information for the sole purpose described in Clause 11.1(e), (f), (g), and (k),
whichever is applicable, with respect to the disclosing Party.

 
11.2
Access to Data  Each Party shall provide the other Party with access to all data
relating to the Contract Area in its possession, custody or control, including
without limitation technical, geological, commercial and other information
relating to Contract Area.  The data provided under this Clause 11.2 shall be
subject to the confidentiality obligations under Clause 11.1.

12.           Term and Termination

 
12.1
This Agreement shall become effective on the Effective Date and shall remain in
full force until termination of this Agreement pursuant to this Clause 12.

 
12.2
Provided that the Conditions Precedent have been satisfied, this Agreement shall
terminate at the earlier to occur of (i) the date upon which the Parties agree
in writing to terminate this Agreement or (ii) the date upon which the License
Contract is terminated.

 
12.3
If the Conditions Precedent are not satisfied by the Cut-off Date, then the
Parties shall meet and discuss, within thirty (30) days after the Cut-Off Date,
possible amendments to the transaction envisaged by this Agreement which would
facilitate, or avoid the need for, satisfaction of the Conditions
Precedent.  If, during such thirty (30) day period, the Parties are unable agree
to such amendments, this Agreement may be terminated by either Party, without
penalty for such termination, upon written notice to the other Party unless the
Parties shall have agreed otherwise; provided, however, that the right of
termination under this Clause 12.3 shall not be available to any Party whose
failure to fulfill any obligation under this Agreement shall have been the sole
cause of, or shall have resulted in, the failure of the satisfaction of the
Conditions Precedent by the Cut-off Date.  After termination of this Agreement
under this Clause 12.3,

 
(i)
The proposed Assignment shall terminate, shall be rendered void and shall have
no force or effect and Farmee shall have no interest whatsoever in the License
Contract and shall be deemed to have reassigned any rights or equitable interest
it may have acquired under this Agreement to Farmor retroactive to the Effective
Date of this Agreement;

 
 

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(ii)
Farmor shall return to Farmee any amounts paid to date under the terms of Clause
2 herein without interest; and

 
(ii)
Both Parties shall terminate the JOA and any other transaction agreements
specified herein.

13.           Further Assistance and Business Ethics

Each of the Parties shall perform such further acts and execute and deliver such
further documents as shall be reasonably required to perform its obligations
pursuant to the terms of this Agreement; provided, however, each of the Parties
represents to the other and agrees:

 
13.1
No Improper Payments  It has not made nor shall it make in connection with the
performance of this Agreement any payments, loans or gifts or promises or offers
of payments, loans or gifts of any money or anything of value directly or
indirectly to or for the use or benefit of any official or employee of any
government or the agency or instrumentality of any government or to any
political party or official or candidate thereof or to any other person if such
Party knows or has reason to suspect that any part of such payment, loan or gift
will be directly or indirectly given or paid to any such governmental official
or employee or political party or candidate or official thereof or to any other
person or entity the making of which would violate the laws or policies of the
Republic of Peru, the Republic of Korea or the United States of America.

 
13.2
Compliance Information  It shall answer, in reasonable detail, any written or
oral questionnaire from the other Party to the extent such questionnaire
pertains to compliance with its representations provided in Clause 13.1.

14.           Governing Law and Arbitration

 
14.1
Governing Law  This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Texas, United States of America except for
conflict of laws provisions which would apply the law of another jurisdiction.

 
 

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14.2
Arbitration  Any dispute arising out of this Agreement which any Party
determines in its sole discretion cannot be settled by mutual agreement shall be
settled by arbitration in accordance with the Rules of the International Chamber
of Commerce (“ICC”).  The place of arbitration shall be in Houston, Texas.  The
number of arbitrators shall be three (3), one (1) appointed by each of the
Parties and the third appointed by mutual agreement of the Parties.  The
proceedings shall be in English and the award shall be final, binding and not
subject to appeal.  Judgment upon the award rendered may be entered in any court
having jurisdiction thereof. Neither Party shall be liable in an action
initiated by one against the other for special, indirect or consequential
damages resulting from or arising out of this Agreement, including, without
limitation, loss of profit or business interruptions, however same may be
caused.  A dispute shall be deemed to have arisen when either Party notifies the
other Party in writing to that effect.  Any monetary award issued by the
arbitrator shall be payable in US dollars. Breach by Farmee of its obligation
under Clause 2.4 of this Agreement shall be deemed a direct damage with respect
to Farmor.

15.
Force Majeure

 
If as a result of Force Majeure, any Party is rendered unable, wholly or in
part, to carry out its obligations under this Agreement, other than the
obligation to pay any amounts due, then the obligations of the Party giving such
notice, so far as and to the extent that the obligations are affected by such
Force Majeure, shall be suspended during the continuance of any inability so
caused and for such reasonable period thereafter as may be necessary for the
Party to put itself in the same position that it occupied prior to the Force
Majeure, but for no longer period.  The Party claiming Force Majeure shall
notify the other Parties of the Force Majeure within a reasonable time after the
occurrence of the facts relied on and shall keep all Parties informed of all
significant developments.  Such notice shall give reasonably full particulars of
the Force Majeure and also estimate the period of time which the Party will
probably require to remedy the Force Majeure.  The affected Party shall use all
reasonable diligence to remove or overcome the Force Majeure situation as
quickly as possible in a commercially reasonable manner but shall not be
obligated to settle any labor dispute except on terms acceptable to it. All such
disputes shall be handled within the sole discretion of the affected Party.  For
the purposes of this Agreement, “Force Majeure” shall have the same meaning as
is set out in the License Contract.
 
16.
Reassignment

 
 
In the event that Farmee fails to perform its obligations under Article 2
herein, Farmor shall be entitled to exercise all of the rights and remedies
available to Farmor under the JOA with regards to reassignment to Farmor of
Farmee’s Participating Interest.  For avoidance of doubt, the rights and
remedies available to the Farmor under the JOA for Farmee’s failure to perform
its obligations under Article 2 herein, shall be in addition to any rights and
remedies available to the Farmor under this Agreement.

 
 

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17.           Notices

Any notice required or permitted to be given under this Agreement shall be given
in writing in the English language and shall be deemed to have been sufficiently
given when received whether delivered personally, mailed or couriered (postage
prepaid), or sent by fax, with written confirmation of complete transmission, in
accordance with the address information applicable to the receiving Party as set
forth below or such other address or the attention of such other person as such
Party may have designated by notice given in accordance with this Clause 18.

 
SK Energy, Surcursal Peruana
     
Address: 11th Floor, SK Building
 
99, Seorin-dong
 
Jongro-gu
 
Seoul 110-110
 
Republic of Korea
     
Email: hobaik@skenergy.com
 
Tel: 82-2-2121-5220
 
Fax: 82-2-2121-7008
     
Attention: Mr. Ho Baik
         
Gulf United Energy Cuenca Trujillo Ltd.
     
Address:
     
Email:
 
Tel:
 
Fax:
     
Attention:

 
 

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18.           Relationship of Parties
The rights, duties, obligations and liabilities of the Parties under this
Agreement shall be individual, not joint or collective.  It is not the intention
of the Parties to create, nor shall this Agreement be deemed or construed to
create, a mining or other partnership, joint venture or association or (except
as explicitly provided in this Agreement) a trust.  This Agreement shall not be
deemed or construed to authorize any Party to act as an agent, servant or
employee for any other Party for any purpose whatsoever except as explicitly set
forth in this Agreement.  In their relations with each other under this
Agreement, the Parties shall not be considered fiduciaries except as expressly
provided in this Agreement.

19.           Waiver

No waiver by any Party of any one or more defaults by another Party in the
performance of any provision of this Agreement shall operate or be construed as
a waiver of any future default or defaults by the same Party whether of a like
or of a different character.  Except as expressly provided in this Agreement, no
Party shall be deemed to have waived, released or modified any of its right
under this Agreement unless such Party has expressly stated, in writing, that it
does waive, release or modify such right.

20.           Joint Preparation

Each provision of this Agreement shall be construed as though all Parties
participated equally in the drafting of the same.  Consequently, the Parties
acknowledge and agree that any rule of construction that a document is to be
construed against the drafting party shall not be applicable to this Agreement.

21.           Severance of Invalid Provisions

If and for so long as any provision of this Agreement shall be deemed to be
judged invalid for any reason whatsoever, such invalidity shall not affect the
validity or operation of any other provision of this Agreement except only so
far as shall be necessary to give effect to the construction of such invalidity,
and any such invalid provision shall be deemed severed from this Agreement
without affecting the validity of the balance of this Agreement.

22.           Modifications

There shall be no modification of this Agreement except by written consent of
all Parties.

 
 

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23.           Priority of Agreement

In the event of any conflict between the provisions of the main body of this
Agreement and its Exhibits, the provisions of the main body of the Agreement
shall prevail. In the event of any conflict between this Agreement and the JOA,
this Agreement shall prevail. In the event of any conflict between this
Agreement and the License Contract, this Agreement shall prevail unless such
would be in violation of the Laws of Republic of Peru or the terms of the
License Contract.

24.           Interpretation

 
24.1
Headings The topical headings used in this Agreement are for convenience only
and shall not be construed as having any substantive significance or as
indicating that all of the provisions of this Agreement relating to any topic
are to be found in any particular Clause.

 
24.2
Singular and Plural Reference to the singular includes a reference to the plural
and vice versa.

 
24.3
Gender Reference to any gender includes a reference to all other genders.

 
24.4
Include "include" and "including" shall mean to be inclusive without limiting
the generality of the description preceding such term and are used in an
illustrative sense and not a limiting sense.

25.           Counterpart Execution

This Agreement may be executed in any number of counterparts and each such
counterpart shall be deemed an original Agreement for all purposes; provided
that no Party shall be bound to this Agreement unless and until all Parties have
executed a counterpart. For purposes of assembling all counterparts into one
document, Farmor is authorized to detach the signature page from one or more
counterparts and, after signature thereof by the respective Party, attach each
signed signature page to a counterpart.

26.           Public Announcements

 
26.1
Consent of Parties  Without the written consent of the other Party, which
consent shall not be unreasonably withheld, no Party will issue, or permit any
of its Affiliates to issue, any press release or otherwise make any public
statement relating to the subject matter of this Agreement unless such release
or statement is deemed in good faith by the disclosing Party to be required by
any law, rule or regulation of any Government or the rules and regulations of a
stock exchange on which the shares of such Party or any of its Affiliates are
listed.   In each case to which such exception applies, prior to making such
press release or public statement, the releasing Party will provide a copy of
such press release or public statement to the other Party. The Parties will
coordinate with each other on the issuance of press releases and public
statements regarding the subject matter of this Agreement.

 
 

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26.2
Consent of Perupetro  Without limiting the generality of what is stated in
Clause 26.1, any consent requested by Farmee from Farmor pursuant to Clause 26.1
shall not be considered unreasonably withheld so long as Farmor is endeavoring
to obtain the consent of Perupetro for the making of any such public
announcement, which consent Farmor determines in its good faith judgment is
reasonably required or desirable.

27.           No Brokers or Finders

Neither Party, nor any of their respective Affiliates, has employed or retained
any broker, agent or finder in connection with this Agreement, or incurred any
liability for, paid or agreed to pay any brokerage fee, finder's fee, commission
or similar payment to any person or entity on account of this Agreement or
transactions contemplated hereby.

28.
Entire Agreement

This Agreement constitutes the entire agreement of the Parties with respect to
its subject matter and supersedes any prior oral or written understandings and
communications with respect to its subject matter.  This Agreement shall inure
to the benefit of and be binding on the Parties and their respective successors
and assigns.

29.           Each Party’s Expenses.

Each Party shall bear its own expenses with respect to the Assignment
contemplated under this Agreement.

 
 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective, duly authorized representatives.

SK Energy, Sucursal Peruana
Gulf United Energy Cuenca Trujillo Ltd.
       
By:                                                   
By:                                                   
   
Name: Mr. Ho Baik
Name:                                                   
   
Title: Head of E&P Technology Office
Title:                                                   
   
Date:                                                   
Date:                                                   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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