Exhibit
      10.16

    


    MASTER
      PURCHASE AGREEMENT

    No.
      MP
      A-002-2006

     

     

    Between

     

     

    PETROBRAS
      AMERICA INC.

     

    And

     

    UNITED
      ENERGY CORP.

     

     

     

    Effective
      Date:

    February
      23, 2006 to February 23, 2009


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      


      MASTER
        PURCHASE AGREEMENT

      


      THIS
        AGREEMENT, dated as of February 23,2006 (the "Effective Date"), entered into
        by
        and between Petrobras America Inc., a Delaware corporation having its principal
        office at 10777 Westheimer Road, Suite 1200, in Houston, Harris County, Texas,
        hereinafter referred to as "PURCHASER", and United Energy Corporation,
        incorporated in the State of Nevada, hereinafter referred to as "SELLER".
        

      


      WITNESSED:

      


      WHEREAS,
        PURCHASER and SELLER desire to enter into this Master Purchase Agreement
        in
        order to agree and establish the general terms and conditions of SELLER'S
        potential future sales and deliveries of any or all of the SELLER'S oil and
        gas
        well production enhancement products as listed in Schedule I (hereinafter
        collectively referred to as "PRODUCTS"), 

      


      WHEREAS,
        SELLER is willing and able to sell and deliver from time to time to PURCHASER
        as
        the case may be, the PRODUCTS in accordance with the general terms and
        conditions set forth herein, 

      


      WHEREAS,
        PURCHASER desires to enter into a cooperative Master Purchase Agreement with
        SELLER aimed at reducing administrative costs, improving order cycle times,
        and
        simplifying the process of acquisition of PRODUCTS offered by SELLER as selected
        by PURCHASER. 

      


      WHEREAS,
        the parties wish to set forth their agreement with respect to the foregoing
        and
        related matters, 

      


      NOW,
        THEREFORE, in consideration of the premises and other good and valuable
        consideration hereinafter set forth, PURCHASER and SELLER agree as follows:
        

      


      DEFINITIONS:

      


      AGREEMENT/CONTRACT
        - Shall mean this entire Master Purchase Agreement acknowledged and signed
        by
        the Parties, which shall govern all purchasing transactions initiated by
        the
        PURCHASER for the length of time established herein and covering those PRODUCTS
        contained in the PRODUCT LIST. 

      


      CLIENT
        -
        Hereby refers to customers of the PURCHASER who are the end users of the
        PRODUCTS sold by SELLER to PURCHASER. SELLER acknowledges that PURCHASER
        is not
        anticipated to be the ultimate end user of any PRODUCTS it sells and that
        PURCHASER will re-sell those PRODUCTS to its clients. 

      


      DAYS
        -
        Unless otherwise indicated herein "day[s]" shall mean a normal business day
        defined as Monday through Friday 

      


      EXHIBITS
        - Shall mean the documents attached hereto and incorporated herein for all
        purposes. 

      


      MADE-TO-ORDER
        PRODUCTS - PRODUCTS not maintained as part of the stock inventory and which
        require the SELLER to design, manufacture, produce or purchase all or part
        of
        the end product as requested by PURCHASER in order to meet the specifications
        or
        technical aspects of the PRODUCTS sought by PURCHASER. 

      


      PRODUCTS
        - Shall mean SELLER'S formulations of oil and gas well production enhancement
        products listed on Schedule I, as such exhibit may be amended from time to
        time
        during the Term hereof. 

      


      PRODUCT
        LIST - Shall mean SELLER'S PRODUCTS and price list as identified on Schedule
        I
        any and all documents and electronic lists demonstrating the PRODUCTS that
        are
        available for sale, including PRODUCTS in the SELLER's inventory as well
        as any
        PRODUCTS classified as MADE-TO-ORDER. 

      


      PURCHASE
        ORDER - Shall mean an official Purchase Order, whether generated electronically
        or on paper, executed by PURCHASER
        and/or authorizing the supply of PRODUCTS by SELLER.  .
        

      


      STOCK
        PRODUCTS - Are those PRODUCTS generated or maintained as part of the SELLER'S
        inventory at the time of the placement of the Purchase Order. 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      ARTICLE
        I. GENERAL PROVISIONS

      


      1.1 Mutual
        Agreement.
        The
        parties hereto agree that this Master Purchase Agreement sets forth the general
        terms and conditions that shall govern all sale and purchase transactions
        between PURCHASER and SELLER for PRODUCTS, from time to time for the Term
        and
        under the scope of this Master Purchase Agreement, pursuant to each individual
        Purchase
        Order (hereinafter defined "PO"). The
        terms
        and conditions of this Agreement are incorporated by reference in each PO.
        

      


      1.2 Term.
        The
        term ("Term") of this Master Purchase Agreement shall commence on the Effective
        Date and subject to early termination in accordance with the terms and
        conditions herein, shall remain in full force and effect for an initial period
        of three (3) years, and thereafter shall be subject to renewal for successive
        three (3) year periods upon the written agreement of both parties prior to
        the
        expiration date of the then existing Term. Both parties may at any time agree
        in
        writing to early termination of the Term.

       

      1.3
         No
        Exclusivity.
        Notwithstanding anything contained herein to the contrary, the parties agree
        that this is not an exclusivity agreement and nothing in this Master Purchase
        Agreement requires PURCHASER to purchase any PRODUCTS solely from SELLER
        or
        requires SELLER to sell PRODUCTS exclusively to PURCHASER; provided, however,
        that during the Term of this Master Purchase Agreement, SELLER shall sell
        and
        deliver to PURCHASER, PRODUCTS, in accordance with the terms and conditions
        herein. 

      


      SELLER
        acknowledges that PURCHASER is not anticipated to be the ultimate end user
        of
        any PRODUCTS it purchases from SELLER, and that PURCHASER will re-sell those
        PRODUCTS to its CLIENT. 

      


      ARTICLE
        II. PURCHASE ORDERS

       

      2.1 Issuance
        of Purchase Orders.
        SELLER
        shall sell and deliver to PURCHASER and PURCHASER shall purchase from SELLER
        PRODUCTS, when the same are ordered by PURCHASER, as set forth below:


      


      2.1
        (a)
        PURCHASER may issue to SELLER one or more POs for PRODUCTS. The PO is the
        exclusive instrument to be used by PURCHASER and shall be governed by the
        general terms and conditions set forth herein, and this Master Purchase
        Agreement is expressly referenced in the text of the PO, and shall be considered
        incorporated therein by reference. 

      


      2.1
        (b)
        No sale or transaction of any kind related to this Agreement shall be valid
        without the issuance and execution of a Purchase Order. 

      


      2.I(c)
        PURCHASER may send POs to SELLER in an electronic form (e.g., e-mail attachments
        in Microsoft Word or Excel, Adobe Acrobat, XML, Browser-Web) compatible with
        SELLER'S systems requirements, via facsimile, or regular mail. 

      


      2.2
         Acceptance
        of Purchase Orders.
        SELLER
        shall, within ten (10) days of the receipt of any PO from PURCHASER, issue
        to
        PURCHASER a written acceptance thereof or if rejected, a written explanation
        of
        the reasons for such rejection. Provided, however, that SELLER may reject
        a PO
        only for legitimate business reasons. If PURCHASER does not receive such
        written
        explanation of the reasons for rejection of a PO within the ten (10) days
        following SELLER'S receipt of such PO, then said PO shall be deemed accepted
        by
        SELLER for purposes of this Master Purchase Agreement. If unable to meet
        the
        delivery time requested in any PO, SELLER may propose a revised delivery
        time,
        then PURCHASER, at its discretion, may accept such revised delivery time
        or
        withdraw the relevant PO without any liability whatsoever, as provided in
        Article 2.3. 

      


      2.3.4
         Prevalence.
        Except
        for the provisions applicable to the delivery time, in the event of any conflict
        or discrepancy that may appear between the terms and conditions of this Master
        Purchase Agreement and any POs, the terms and conditions of this Master Purchase
        Agreement and its attached exhibits shall prevail. 

      


      2.4
         Assurances.
        SELLER
        agrees to give PURCHASER reasonable assurances of SELLER'S ability to perform
        its obligations under this Master Purchase Agreement upon PURCHASER'S request
        for such assurances and to provide follow-up with SELLER'S own factory, its
        vendors or subcontractors on each PO to ensure that the delivery date provided
        therein and other stipulations provided herein are met. 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      ARTICLE
        III.
        DELIVERY
        TERMS

      


      3.1
         Delivery.
        SELLER
        shall deliver the PRODUCTS to PURCHASER'S EXW ("EX Works"), SELLER'S Plant
        on
        the agreed delivery time and at the agreed delivery point in accordance with
        the
        applicable PO and the terms and conditions set forth herein. In addition,
        SELLER
        AND PURCHASER ACKNOWLEDGE AND AGREE THAT TIME IS OF THE ESSENCE WITH RESPECT
        TO
        THE DELIVERY OF PRODUCTS HEREUNDER. SELLER agrees to provide frequent follow-up
        to POs designated as "CRITICAL PRODUCTS" since they represent first priority
        requirements as set forth in Exhibit A, (Delivery Times). Notwithstanding
        the
        foregoing, the parties may agree upon other delivery terms, in which event,
        the
        parties shall also agree upon any adjustments to the general commercial terms
        applicable hereunder, taking into account all relevant circumstances.


      


      3.2
         Title
        and Risk of Loss.
        Risk of
        loss or damage of PRODUCTS sold under any PO and title to PRODCUTS shall
        pass to
        PURCHASER, as the case may be, upon SELLER's delivery of PRODUCT EXW, SELLER'S
        Plant, in accordance with the Incoterms 2000 published by the International
        Chamber of Commerce. Notwithstanding the foregoing, the parties may agree,
        in
        exceptional cases, to other delivery terms. 

      


      3.3
         Containers.
        SELLER
        shall deliver the PRODUCT in 55 gallon drums, separately labeled, as per
        the
        warehouse number and final destination indicated in the applicable POs or
        by
        other means of transport in accordance with the terms of a Purchase Order.
        

      


      3.4
         Shipping
        Documents.
        SELLER
        shall submit to PURCHASER a commercial invoice as well as those documents
        required by the authorities of the exporting country, for each shipment of
        PRODUCTS pursuant to a PO, which shall meet the invoicing requirements indicated
        in Exhibit D, (Requirements for Payment). For clearance of the customs
        authorities of the country of importation, SELLER shall produce and submit
        the
        certificate of country of origin and/or any other documents needed for customs
        clearance. In the event that, by changes in the applicable laws and regulations,
        further documentation would be required for tile effective and timely
        exportation from the country of origin and importation into the designated
        country. SELLER agrees to use its best reasonable efforts to produce any
        required documentation. If SELLER fails to fully comply with the provisions
        of
        this Article 3.4, SELLER shall be liable for any and all charges related
        to
        insurance, transportation, storage, detention or demurrage charges, penalties
        and fees related thereto. In such circumstance PURCHASER shall have the right
        to
        charge SELLER for those charges and/or make deductions from any outstanding
        invoice at PURCHASER'S election. In addition, shipments shall not be deemed
        delivered when lack of required documentation persists. SELLER shall provide
        to
        PURCHASER with the information herein described accurately and in a timely
        manner. Furnishing this information by SELLER shall be a pre-condition for
        process of payment. 

      


      3.5
         SELLER'S
        Delivery Performance.
        SELLER
        shall meet a minimum of90% On-Time Delivery of the total number of POs delivered
        within six (6) months period. If SELLER'S On-Time Delivery falls under 90%,
        subject to exceptions for Force Majeure SELLER shall have four weeks to present
        a detailed plan to reach the minimum performance agreed in this Master Purchase
        Agreement. Notwithstanding the foregoing, if SELLER fails to comply with
        the
        minimum delivery performance after the four weeks period (the "Grace Period"),
        Liquidated Damages for Delay will apply as per Article 3.5.1. 

      


      3.5.1
        Liquidated
        Damage for Delay.
        In the
        event SELLER fails to make delivery within the time established following
        the
        Grace Period as provided under Article 3.5, PURCHASER may at its option
        terminate the PO or part thereof as to which there has been delay without
        incurring cancellation charges or any other costs. Should PURCHASER elect
        to
        maintain such PO active, SELLER shall be subject to Liquidated Damages of
        one
        percent (1 %) of the total value of the delayed PRODUCT or PRODUCTS per week
        of
        delay regarding PRODUCTS delivered after the Grace Period. This Liquidated
        Damages Article shall start from the eighth (8th) day of delay and up to
        the day
        the PRODUCTS are delivered in accordance with the terms of this Agreement
        and
        meet all specific requirements contained in the PO as previously agreed to,
        but
        in any event shall not exceed ten percent (10%) of the total value of the
        PRODUCTS on any individual PO. PURCHASER'S failure to exercise this Liquidated
        Damages Article when applicable within any specific time frame or any specific
        occasion shall not be deemed to be a waiver of said Article at any time.
        

      


      PURCHASER,
        at its discretion, shall be entitled to forthwith deduct the accrued applicable
        liquidated damages from any outstanding invoice. In the event there are no
        outstanding invoices, SELLER shall immediately issue a credit note for the
        benefit of PURCHASER, establishing the applicable delay charge. The provision
        in
        this Article 3.5.1 shall be SELLER'S sole liability and PURCHASER'S sole
        remedy
        for delay in delivery. 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      ARTICLE
        IV. INSPECTION, REJECTION

      


      4.1
         Inspection.
        PURCHASER, at its own expense, reserves the right to appoint a competent
        inspection company approved by SELLER to perform services on its behalf at
        SELLER'S plant, or at the plant of a third party contracted by SELLER, through
        a
        qualified service representative (hereinafter the "Inspector"). Inspector
        shall
        be responsible for performing any inspection services required by PURCHASER
        in
        accordance with an inspection protocol subject to be determined in accordance
        with the further mutual agreement between PURCHASER and SELLER (Inspection
        Services). 

      


      4.2
         Rejection.
        Upon
        inspection at the final destination, PURCHASER may reject any or all PRODUCTS
        delivered by SELLER hereunder that are non-conforming as reasonably determined
        by PURCHASER as per Exhibit C, (Discrepancies). 

      


      ARTICLE
        V. INVOICING; PRICE AND PAYMENT; TAXES

      


      5.1
         Invoicing.
        SELLER
        shall, within three (3) business days after delivery, submit to PURCHASER
        sales
        invoices in US Dollars, together with copies of the bill of lading and/or
        relevant shipping documents evidencing delivery. Such sales invoices shall
        contain all the information requested in Exhibit D, (Requirements for Payment).
        No payment shall be due if such sales invoices are submitted without the
        proper
        shipping documents. 

      


      5.2
         Price
        and Payment.
        Within
        thirty (30) days after receipt of a proper sales invoice, accompanied by
        the
        documents evidencing delivery, PURCHASER shall pay to SELLER the price for
        the
        PRODUCTS so invoiced, in accordance with the PRODUCT LIST set forth in Schedule
        1. The invoices shall include the discounts as calculated in accordance with
        the
        discount program included in Exhibit E (Discount Program). PURCHASER reserves
        the right to request SELLER to provide additional documentation that any
        financing entity may request, from time to time, in order to process payment.
        

      


      5.3
         Taxes.
        Except
        as otherwise expressly provided herein, each party shall bear and pay each
        of
        the corresponding taxes, charges, withholdings, fees, levies, tariffs and
        duties
        of any kind or nature, now existing or which may hereafter come into effect,
        imposed on such party or its agents, subcontractors, officials or employees
        that
        each party has the obligation to pay during the execution and fulfillment
        of
        this Master Purchase Agreement and/or any PO according to Federal, State
        and
        Municipal laws. 

      


      Notwithstanding
        the foregoing, the SELLER'S sales invoice shall include, and PURCHASER shall
        pay
        any sales tax required to be paid by PURCHASER and collected by SELLER in
        accordance with applicable law. 

      


      ARTICLE
        VI. PRODUCT LIST &
        PRICING

      


      6.1
         Prices.
        The
        prices of PRODUCTS set forth in Schedule I shall remain fixed and effective
        for
        at least the balance of the calendar year after the Effective Date with the
        exception of a "pass through" increase for SELLER's increase in cost for
        component raw material price increases, which cost increases shall be subject
        to
        documentation upon PURCHASER's request. Subject to the foregoing, annual
        revisions to the PRODUCT LIST, if any, shall be per the guidelines set forth
        in
        Exhibit F. If the revised PRODUCT LIST is not provided to PURCHASER thirty
        (30)
        days before the then current PRODUCT LIST expires, the current PRODUCT LIST,
        including net and PRODUCT LIST shall have its validity extended until the
        revised PRODUCT LIST goes into effect. If the revised PRODUCT LIST complies
        with
        the requirements set forth in Exhibit F, such PRODUCT LIST will go into effect
        thirty (30) days after it is received by PURCHASER. During the validity of
        the
        PRODUCT LIST, if necessary, SELLER may revise, update, modify, improve or
        supplement each PRODUCT included in the PRODUCT LIST; if this requires an
        increase in a PRODUCT'S price, SELLER shall promptly request approval from
        PURCHASER and submit the relevant justification. PRODUCT with superseding
        part
        numbers shall maintain tile price of the superseded PRODUCT during the validity
        of the PRODUCT LIST. 

      


      ARTICLE
        VII. REPRESENTATIONS AND WARRANTIES

      


      SELLER
        hereby represents and warrants to PURCHASER as follows: 

      


      7.1 Title.
        SELLER
        warrants that it has clear, good and marketable title to each PRODUCT to
        be sold
        and delivered hereunder, free and clear of any and all claims, liens,
        encumbrances, equities and restrictions of every kind and nature whatsoever.
        PURCHASER shall be entitled to use the PRODUCTS without disturbance, provided
        PURCHASER agrees that any alteration of the PRODUCTS by dilution, addition
        of
        additives or otherwise, will void any SELLER's warranty 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      7.2
         Proprietary
        Rights.
        SELLER
        warrants having the rights to design, manufacture, and sell PRODUCTS included
        in
        tl1is Agreement. Each PRODUCT and its use does not and will not violate or
        infringe any patent, copyright, trade secret or other proprietary right of
        any
        other person or entity or contribute to such violation or infringement in
        any
        country. In tile event of breach of the warranty set forth in tins Section
        7.2,
        SELLER shall, at its own cost and expense, at PURCHASER'S discretion, either
        (i)
        procure for PURCHASER the right to continue to use such PRODUCT as contemplated
        hereunder, or (ii) replace or modify such PRODUCT to make their use
        non-infringing, while being capable of performing the same function without
        degradation of performance, and/or (iii) indemnify, defend, and hold PURCHASER
        harmless from any liabilities, damages, claims, judgments, expenses and
        disbursements, of any kind and nature whatsoever, related in any way to a
        breach
        of the warranty set forth herein. If SELLER accomplishes none of the foregoing,
        PURCHASER shall have the right to terminate the corresponding PO. 

      


      7.3
         Quality.
        PRODUCTS sold by SELLER shall conform to PRODUCT specifications provided
        by
        SELLER to PURCHASER, which specifications may be revised and updated from
        time
        to time following written notice of such change to PURCHASER. For eighteen
        (18)
        months
        following the transfer of title hereunder PRODUCT shall function properly
        under
        intended, ordinary and proper use. SELLER AND PURCHASER ACKNOWLEDGE AND AGREE
        THAT COMPLIANCE WITH THE ABOVE WARRANTIES IS OF THE ESSENCE FOR THE PERFORMANCE
        HEREUNDER. Any breach of any warranty set forth in this Article 7.3 shall
        be
        remedied by the replacement of the non-conforming PRODUCT at no charge to
        PURCHASER, in a timely and professional manner by SELLER. If SELLER is unable
        to
        make such replacements in a timely fashion, PURCHASER may terminate the
        corresponding Purchase Order, as per the terms and conditions herein.


      


      PURCHASER
        covenants, warrants and represents to the SELLER as follows: 

      


      7.4
         No
        Alteration.
        PURCHASER will not dilute or in any other manner alter the composition of
        the
        PRODUCTS and will not provide to its Clients, instructions, guidelines or
        warranties regarding the use or application of the PRODUCTS which are not
        in
        accord with PRODUCT use and application guidelines and instructions and PRODUCT
        warranties as published and provided by the SELLER to PURCHASER from time
        to
        time during the Term hereof. 

      


      ARTICLE
        VIII. INDEMNIFICATION

      


      8.1  Indemnification
        by SELLER.
        SELLER
        warrants that the PRODUCTS shall be delivered tree of any rightful claim
        of any
        third party for infringement of any patent of the United States, or infringement
        of any patent of another country. SELLER shall indemnify PURCHASER and its
        employees; or its agents and their employees; or the CLIENT and its employees;
        or its agents and their employees from any and all damages, costs, expenses
        or
        liabilities incurred as a result of any such claim of infringement. Upon
        notice
        in writing of a claim and given authority, information and reasonable assistance
        by PURCHASER, SELLER shall defend, or may settle at its expense, any claim,
        suit
        or proceeding against PURCHASER and its employees; or its agents and their
        employees; or against the CLIENT and its employees; or its agents and their
        employees; and SELLER shall pay all judgments, damages and costs awarded
        therein
        against PURCHASER and its employees; or its agents and their employees; or
        against the CLIENT and its employees; or its agents and their employees.
        In the
        event any PRODUCTS is held to constitute such an infringement and the use
        for
        the purpose intended of said PRODUCTS is enjoined, SELLER shall, at its expense
        and option, either procure for the CLIENT the right to continue using the
        PRODUCTS or replace same with non-infringing PRODUCTS, or modify same so
        they
        become non-infringing, or remove the PRODUCTS and refund the purchase price.
        

      


      8.2
         Limitations
        of Liability.
        The
        remedies of PURCHASER and Indemnification obligations of SELLER set forth
        in
        this Article VIII herein are exclusive as stated, and in any event, the total
        liability of SELLER with respect to claims under this Master Purchase Agreement
        or PO shall not exceed, per occurrence, the invoice price For SELLER'S PRODUCT.
        No party shall be liable to any other party for any consequential, indirect
        or
        punitive damages arising out of this Master Purchase Agreement or PO, including
        claims based on loss of profits or revenues. 

      


      8.3
         Insurance.
        SELLER
        shall, during the Term of this Master Purchase Agreement, at its sole cost
        and
        expense, obtain and maintain all insurance coverage required by law and such
        insurance as is necessary to protect SELLER and PURCHASER against liability
        from
        Claims arising in connection with or relating to the use of SELLER'S PRODUCT
        pursuant to this Master Purchase Agreement. SELLER shall furnish PURCHASER
        with
        a certification of insurance coverage upon PURCHASER'S written request.



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      8.4
         SELLER'S
        Warranty.
        SELLER,
        for a period of one year from date of sale of PRODUCT, warrants its PRODUCT
        to
        be free from defects in composition. SELLER'S obligation under this warranty,
        is
        limited to replacement of PRODUCT; this warranty being expressly IN LIEU
        OF ALL
        OTHER WARRANTIES, EXPRESSED OR IMPLIED OF MERCHANTABILITY OR FITNESS FOR
        PARTICULAR PURPOSE, and of all other obligations and liabilities on SELLER’S
        part, SELLER neither assumes nor authorizes any person to assume for it,
        any
        other liability in connection with the sale of PRODUCTS. This Warranty shall
        not
        apply to any PRODUCT that shall have been altered in any way, nor to any
        PRODUCT
        that shall have been used or applied contrary to SELLER'S printed instructions.
        NO OTHER WARRANTY EXPRESSED OR IMPLIED, WHETHER OF FITNESS FOR A PARTICULAR
        PURPOSE OR OF MERCHANTABILITY OR OF ANY OTHER KIND, SHALL EXIST IN RESPECT
        TO
        SUCH PRODUCT. 

      


      ARTICLE
        IX. TERMINATION

      


      9.1
         Termination
        for Cause of this Master Purchase Agreement.
        In the
        event that PURCHASER, or SELLER hereto defaults in the performance of any
        of its
        duties or obligations hereunder, which default is not cured within t11irty
        (30)
        days after written notice is given by the non-defaulting party to the defaulting
        party specifying tile default, then the party not in default may, by giving
        t11irty (30) days prior written notice thereof to the defaulting party,
        terminate this Master Purchase Agreement without any liability whatsoever,
        provided that the defaulting party shall be liable as per Article 9 herein.
        The
        termination of this Agreement based on this Article shall not affect any
        PO
        which has been previously accepted by SELLER prior to the effective date
        of
        termination of this Master Purchase Agreement. 

      


      The
        insolvency or voluntary or involuntary liquidation of any party hereto, or
        any
        party becoming the subject of judicial reorganization or bankruptcy proceedings,
        or instituting any legal proceeding under any law under which it seeks to
        obtain
        protection from its creditors that affect the ordinary course of its operations
        shall be a cause for termination under this Article 9.1. 

      


      9.2
         Termination
        for Cause of Purchase Order.
        PURCHASER may terminate the relevant Purchase Order accepted by SELLER, or
        portion thereof, by giving written notice to SELLER specifying such termination:
        (i) if any PRODUCT specified in that Purchase Order is non-conforming, and
        upon
        failure of SELLER to comply with the provisions of Article 4.2; and (ii)
        if the
        Purchase Order total or partial delivery is delayed after the period in which
        PURCHASER is entitled to collect liquidated damages under Article 3.5.1 herein,
        in which case SELLER shall refund to PURCHASER an amount equal to the sum
        then
        already paid by PURCHASER to SELLER for that Purchase Order, or a portion
        thereof, if any, as well as related shipping expenses (back and forth) or
        a
        portion thereof, if any. Either PURCHASER or SELLER may terminate the relevant
        Purchase Order if a force majeure event occurs in accordance with Article
        11.5
        herein. 

      


      9.3
         Termination
        for Convenience of Purchase Order.
        If
        PURCHASER terminates without cause a Purchase Order for Made to Order Product
        or
        a portion thereof (accepted by SELLER) and SELLER has already commenced the
        manufacturing of non-stock Purchase Order specifically for such Purchase
        Order
        or if PURCHASER terminates without cause a PO for PRODUCT already delivered
        Ex-work, then (i) SELLER in the case of MADE TO ORDER PRODUCT shall forthwith
        take all reasonably necessary steps, including the sale of canceled Purchase
        Orders for Made to Order Product to third parties, in order to minimize or
        mitigate any damages or losses which SELLER may incur in connection with
        such
        termination, and (ii) SELLER in the case of PRODUCT already delivered Ex-Work
        shall be entitled to a consideration, that in no event shall exceed the
        aggregate purchase price of the canceled Purchase Orders. 

      


      ARTICLE
        X. ARBITRATION AND GOVERNING LAW

       

      10.1
         Arbitration.
        Any
        claims, disputes and controversies arising out of or relating to this Master
        Purchase Agreement, which can not be adjusted by mutual agreement shall,
        upon
        written notice by one party to the other, be determined by arbitration in
        accordance with and subject to the Commercial Arbitration Rules of the American
        Arbitration Association. The place of arbitration shall be Houston, TX USA.
        The
        language of the arbitration shall be English. The party desiring arbitration
        shall notify the other party in writing of the matter to be arbitrated and
        the
        name of the arbitrator selected by said party. Within the following ten (10)
        days after receipt of such notice, the other party shall appoint an arbitrator
        and shall forthwith notify the first party of such appointment. After
        confirmation by the American Arbitration Association, the two (2) arbitrators
        so
        named shall within the following ten (10) days appoint, in writing, a third
        arbitrator. Should such arbitrators fail to agree upon a third arbitrator,
        within the following ten (10) days, he or she shall be appointed by the American
        Arbitration Association. Pending a decision by the arbitrators, both parties
        agree to take no action that may upset the status quo, or prejudice the
        respective positions of the parties in respect to the matter in controversy.
        Any
        awards granted by the arbitration panel shall be final and binding upon both
        parties and judgment upon the award may be entered in any court of competent
        jurisdiction. 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      10.2
         Governing
        Law.
        The
        laws of the State of Texas, USA, excluding any conflict of laws rules that
        would
        require otherwise, shall apply to and govern the interpretation, performance
        and
        enforcement of this Master Purchase Agreement. The parties hereby agree that
        the
        provisions of the United Nations Convention on Contracts for the International
        Sale of Goods shall not apply to this Master Purchase Agreement, nor shall
        it
        have any application to the interpretation, performance or enforcement of
        this
        Master Purchase Agreement. It is being understood that the parties hereby
        expressly waive compliance with such Convention. 

      


      10.3
         Taxes.
        Unemployment Benefits.
        SELLER
        hereby accepts exclusive liability for, and agrees to indemnify PURCHASER
        against liability for the payment of any and all liens, contributions, payroll
        taxes, unemployment benefits, fees, assessments, pensions, annuities, increased
        wages and all other costs now or hereafter imposed directly or indirectly
        on
        acc9unt of SELLER'S work, labor, or services required under or relating to
        any
        Purchase Orders from PURCHASER in connection with this Agreement, whether
        imposed by the government of the United States, of any State, or by any other
        legal authority within the United States of America. PURCHASER reserves the
        right to pay any amounts in connection with the SELLER'S liabilities listed
        above and deduct the corresponding amounts from the payment of any outstanding
        invoices from SELLER. 

      


      10.4
         Fair
        Labor Standards Act.
        SELLER
        warrants that all PRODUCTS covered by this Agreement have been produced in
        compliance with the requirements of the Fair Labor Standard Act of 1938,
        as
        amended, and regulations and orders pursuant thereto, issued by the United
        States Department of Labor. 

      


      10.5
         Health.
        Safety. and Environment (HSE).
        All
        hazardous materials shall be properly packaged and labeled. One copy of the
        Material Safety Data Sheet (MSDS) and/or other applicable certificates shall
        be
        enclosed in a water-proof envelope attached to the outside of the package
        and
        conspicuously identified, and one copy sent directly to the Contract Coordinator
        named on the face of this Purchase Order. An emergency telephone number shall
        be
        provided on the MSDS, as required by law. SELLER shall select only carriers
        that
        meet all applicable current rules and regulations regarding the safe handling
        and transportation of hazardous goods in the country of origin, including
        but
        not limited to The Hazardous Materials Transportation Act (49 U.S.C. 1801
        et
        seq.) and the regulations contained in Title 49, Code of Federal Regulations,
        Parts 100-178 (including exemptions and approvals issued hereunder) when
        goods
        are shipped from the U.S.A. SELLER also agrees to hold PURCHASER harmless
        from
        any claims, suits, or cause of action in connection with any hazardous or
        otherwise dangerous materials issue arising out of the purchase of the goods
        from SELLER by PURCHASER. 

      


      ARTICLE
        XI. MISCELLANEOUS

      


      11.1
         Confidentiality.
        All
        information proprietary in nature or otherwise confidential exchanged by
        the
        parties shall not be disclosed or made available to any third party or used
        in
        any way outside the scope of this Agreement without the previous consent
        in
        writing of the party disclosing the proprietary information. Both PURCHASER
        and
        SELLER shall take all reasonable precautions to protect such information
        from
        unauthorized or negligent disclosure, whether such information is obtained
        in
        print or electronic format, or represents knowledge acquired from access
        to any
        of the party's business office, job site, shop, or restricted areas where
        development work or other work of proprietary nature is being conducted.
        All
        such proprietary information obtained by PURCHASER during the Term of this
        agreement shall be returned to SELLER upon termination of this agreement.
        

      


      11.2
         Amendments
        or Additions.
        SELLER
        acknowledges and agrees that PURCHASER will exclusively be the only party
        that
        might negotiate with SELLER amendments or additions to this Master Purchase
        Agreement. Such amendments or additions shall be in writing and signed by
        PURCHASER and SELLER. 

      


      11.3
         No
        Waiver.
        No
        delay or omission by either party hereto in the exercise of any right or
        remedy
        hereunder shall impair such right or remedy or be construed to be a waiver
        thereof. Any waiver of any such right or remedy by any party must be in writing
        and signed by the party's representative against which such waiver is sought,
        and such waiver shall not be construed to be a waiver of any succeeding breach
        thereof or of any other covenant herein contained. 

      


      11.4
         Assignment.
        This
        Master Purchase Agreement shall be binding on the parties hereto and their
        respective successors and permitted assignees, but no party may assign this
        Master Purchase Agreement without the prior written consent of PURCHASER
        and
        SELLER. 


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      11.5
         Force
        Majeure.
        Except
        as otherwise provided in this Master Purchase Agreement, neither party shall
        be
        subject to any liability hereunder for loss or damage to the extent such
        loss or
        damage is directly caused by unforeseen and unavoidable occurrences or
        situations beyond the reasonable control of the parties, which shall include
        but
        not be limited to: acts of God, hurricanes, riots, wars (declared or
        undeclared), insurrection, terrorist acts, laws, decrees, regulations, orders
        or
        other directives or actions of either general or particular application of
        any
        governmental authority or any political subdivision thereof. In the event
        that
        either party hereto is rendered unable, wholly or in part, to carry out its
        obligations under the Master Purchase Agreement and/or POs due to force majeure,
        such party shall give notice and details of the force majeure in writing
        to the
        other party as promptly as possible after its occurrence. In case of force
        majeure, the obligations of the parties shall be suspended during the
        continuance of any
        inability so caused. If such suspension continues for a period of one hundred
        twenty (120) days, either party shall have the right to terminate without
        prejudice the corresponding PO. 

      


      11.6 Notices.
        All
        notices hereunder shall be in writing and sent to the respective parties
        as
        indicated in Exhibit G. Any notice given in accordance with this Master Purchase
        Agreement shall be effective upon receipt by the addressee. 

      


      11.7
         Survival.
        Termination of this Master Purchase Agreement for any reason shall not release
        any party any party from any liabilities or obligations set forth in this
        Master
        Purchase Agreement which (i) the parties have expressly agreed shall survive
        any
        such termination or expiration, or (ij) remain to be performed or by their
        nature would be intended to be applicable following any such termination
        or
        expiration. 

      


      11.8
         Severability.
        If any
        provisions of this Master Purchase Agreement or the application thereof to
        any
        party or circumstance shall be declared unlawful, invalid or unenforceable
        to
        any extent, the remainder of this Master Purchase Agreement and the application
        of such provisions to other party or circumstances shall not be affected
        thereby, nor shall the validity and enforceability thereof be affected.


      


      11.9
         Entire
        Agreement.
        This
        Master Purchase Agreement, including any exhibit referred to herein, and
        any
        POs, issued pursuant thereto, constitutes the entire agreement between the
        parties with respect to the subject matter hereof. No provision of any
        commercial invoice, sales invoice or other instrument used by SELLER shall
        supersede the provisions of this Master Purchase Agreement, except as otherwise
        agreed upon in writing by PURCHASER and SELLER. 

      


      IN
        WITNESS WHEREOF, PURCHASER and SELLER have executed this Master Purchase
        Agreement, as of the Effective Date. 

      


      
        	
                PETROBAS
                  AMERICA INC.

              	 	
                SELLER
                  ( )

              
	 	 	 	 	 
	
                By:
                  

              	
                Renato
                  Tadeu Bertani

              	 	
                By:
                  

              	
                Brian
                  King

              
	
                Name:

              	
                Renato
                  Tadeu Bertani

              	 	
                Name:

              	
                Brian
                  King

              
	
                Title:

              	
                President

              	 	
                Title:

              	
                CEO