Unassociated Document


    Exhibit
      10.1

    


    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (the “Agreement”)
      is
      entered into as of the 21st day of July 2008, by and between Loreto Resources
      Corporation, a Nevada corporation, with a business address of 1266 1st
      Street,
      Suite 4, Sarasota, FL 34236 (the “Company”),
      and
      Luis Francisco Saenz, an individual with a residence address of Malecon de
      la
      Reserva 777, Apt. 1702, Lima 18, Peru (the “Executive”).

    


    INTRODUCTION

     

    WHEREAS,
      the Company is in the mining, exploration and development business (the
“Business”);

     

    WHEREAS,
      the Company wishes to employ the Executive as its President and Chief Executive
      Officer pursuant to the terms and conditions set forth herein; and

     

    WHEREAS,
      the Executive desires to be employed by the Company pursuant to the terms and
      conditions set forth herein.

     

    AGREEMENT

     

    NOW,
      THEREFORE, In consideration of the premises and mutual promises herein below
      set
      forth, the parties hereby agree as follows:

    


    1. Employment
      Period.
      The
      term of the Executive’s employment by the Company pursuant to this Agreement
      (the “Employment
      Period”)
      shall
      commence on the date hereof (the “Effective Date”) and shall continue for a
      period of one year from the Effective Date. Thereafter, the Employment Period
      shall automatically renew for successive periods of one (1) year, unless either
      party shall have given to the other at least thirty (30) days’ prior written
      notice of their intention not to renew the Executive’s employment prior to the
      end of the Employment Period or the then applicable renewal term, as the case
      may be. In any event, the Employment Period may be terminated as provided
      herein.

     

    2. Employment;
      Duties.
      

     

    (a) General. Subject
      to the terms and conditions set forth herein, the Company hereby employs the
      Executive to act as the President and Chief Executive Officer of the Company
      during the Employment Period, and the Executive hereby accepts such employment.
      The duties assigned and authority granted to the Executive shall be as
      determined by the Company’s Board of Directors (the “Board”)
      from
      time to time. The Executive agrees to perform his duties for the Company
      diligently, competently, and in a good faith manner and to use his best efforts
      to promote and serve the best interests of the Company. The Executive will
      also
      serve as a member of the Company’s Board.

     

    (b) Exclusive
      Services. The
      Executive shall devote substantially all of his working time and efforts during
      the Company's normal business hours to the business and affairs of the Company
      and its subsidiaries, if any (together with any affiliates of the Company,
      the
“Affiliates”), and to the diligent and faithful performance of the duties and
      responsibilities duly assigned to him by the Board pursuant to this Agreement.
      However, Executive may devote a reasonable amount of his time to civic,
      community, or charitable activities and may serve as a director of other
      corporations (provided that any such other corporation is not a competitor
      of
      the Company, as determined by the Board) and to other types of business or
      public activities not expressly mentioned in this paragraph. 

     

    
      
        
        

      

      
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    (c) Place
      of Employment.
      It
      is
      acknowledged that the Executive's services shall be performed primarily at
      the
      offices of the Company in Lima Peru. The parties acknowledge, however, that
      Executive may be required to travel in connection with the performance of his
      duties hereunder.

     

    3. Base
      Salary. The
      Executive shall be entitled to receive a salary from the Company during the
      Employment Period at the rate of Two Hundred Fifty Thousand ($250,000) per
      year
      (the “Base
      Salary”),
      payable in monthly installments in accordance with the Company’s customary
      payroll practices. The Base Salary and any other compensation paid to the
      Executive shall be paid in Peruvian Nuevo Sols (“PEN”). The exchange rate used
      to calculate the Executive’s monthly salary payment will be calculated each
      month and shall neither exceed a maximum of PEN 2.9 nor be less than a minimum
      of PEN 2.5. This minimum/maximum range will be adjusted at the end of each
      calendar year based upon changes in the consumer price index in Peru.


     

    Beginning
      on the anniversary of the Effective Date, the Executive’s Base Salary may be
      increased on each anniversary of the Effective Date, at the Board’s sole
      discretion. The parties expressly agree that what the Executive receives now
      or
      in the future, in addition to his regular Base Salary, whether this be in the
      form of benefits or regular or occasional aid/assistance, such as recreation,
      club memberships, meals, education for him or his family, extralegal health
      benefits, vehicle, lodging or clothing, occasional bonuses or anything else
      he
      receives, during the Employment Period and any renewals thereof, in cash or
      in
      kind, shall not be deemed as salary. 

     

    4. Bonus.
      The
      Executive shall be eligible to receive an annual cash bonus (the “Annual Bonus”)
      of up to fifty percent (50%) of the then applicable Base Salary, payable in
      U.S.
      dollars within ten (10) days of the filing with the Securities and Exchange
      Commission of the Company’s annual report on Form 10-K. The Executive’s Annual
      Bonus (if any) shall be in such amount (up to the limit stated above) as the
      Board may determine in its sole discretion, based upon the Executive’s
      achievement of certain performance milestones to be established annually by
      the
      Board in discussion with the Executive (the “Milestones”). For the initial
      Employment Period, in the event the Board and the Executive are unable to agree
      to Milestones acceptable to both the Board and the Executive, the amount of
      the
      Executive’s bonus shall be determined by the Board on a discretionary basis. The
      Executive shall be eligible to participate in any other bonus or incentive
      program established by the Company for executives of the Company.

     

    
      
        
        

      

      
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    5. Stock
      Options.
      

     

    Grant
      of Options.
      As of
      the Effective Date, the Company shall grant the Executive an option to purchase
      an aggregate of 1,550,000 shares1 
      of the
      Company’s common stock (“Options”) under the Company’s 2008 Equity Incentive
      Plan (the “2008 Plan”). Such grant shall be evidenced by an Option Agreement
      issued by the Company as contemplated by the 2008 Plan and approved by the
      Board. In subsequent years the Executive shall be eligible for such grants
      of
      Options and/or other permissible awards under the 2008 Plan as the Compensation
      Committee of the Company, if any, or the Board shall determine.

     

    Option
      Price; Term.
      The per
      share exercise price of the Options shall be the fair market closing price
      per
      share of Company common stock on the date of grant (which is currently expected
      to be $1.00 per share). The term of the Option (i.e., the length of time during
      which the Option may be exercised) shall be ten years from the date of
      grant.

     

    Exercise.
      One
      third of the shares of the Options shall become exercisable on each anniversary
      of the date of grant.

     

    Payment.
      The
      full consideration for any shares purchased by the Executive upon exercise
      of
      the Options shall be paid in cash.

     

    Termination
      of Employment; Accelerated Vesting.
      

     

    (i) If
      the
      Executive’s employment is terminated for Cause, as such term is defined below,
      all Options, whether or not vested, shall immediately expire effective as of
      the
      date of termination of employment. 

     

    (ii) If
      the
      Executive’s employment is terminated voluntarily by the Executive without Good
      Reason, as such term is defined below, all unvested Options shall immediately
      expire effective the date of termination of employment. Vested Options, to
      the
      extent unexercised, shall expire one month after the termination of
      employment.

     

    (iii) If
      the
      Executive’s employment terminates on account of death or Disability, as defined
      below, all unvested Options shall immediately expire effective the date of
      termination of employment. Vested Options, to the extent unexercised, shall
      expire six months after the termination of employment.

     

    (iv) If
      the
      Executive’s employment is terminated (A) in connection with a Change of Control,
      as defined below, (B) by the Company without Cause within 12 months of the
      Effective Date or (C) by the Executive for Good Reason, all unvested Options
      shall immediately vest and become exercisable effective the date of termination
      of employment, and, together with any previously vested options, to the extent
      unexercised, shall expire six months after any such event. These acceleration
      and expiration provisions shall not apply with respect to a Change of Control
      following which the Executive remains President or Chief Executive Officer
      or
      continues to perform functions and be responsible for duties significantly
      and
      substantially similar to those of one or both of those positions.

     

      
        

      

    

    
      1
        Assuming
        fifteen million five hundred thousand (15,500,000) shares of the Company’s
        common stock outstanding after taking into account the Company’s $2 million
        private placement offering of its common stock at a price of $1.00 per share
        (the “PPO”). Should more than $2 million be raised in the PPO, the Executive
        shall receive Options to purchase approximately ten percent (10%) of the
        Company’s common stock to be outstanding following the PPO. 

       

      
        
          
          

        

        
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    (f)
       Change
      of Control. For
      purposes of this Agreement, “Change of Control” means the occurrence of, or a
      Board vote to approve, any of the following:

     

    (i) any
      consolidation or merger of the Company pursuant to which the stockholders of
      the
      Company immediately before the transaction do not retain immediately after
      the
      transaction, in substantially the same proportions as their ownership of shares
      of the Company’s voting stock immediately before the transaction, direct or
      indirect beneficial ownership of more than 50% of the total combined voting
      power of the outstanding voting securities of the surviving business
      entity;

     

    (ii) any
      sale,
      lease, exchange or other transfer (in one transaction or a series of related
      transactions) of all, or substantially all, of the assets of the Company other
      than any sale, lease, exchange or other transfer to any company where the
      Company owns, directly or indirectly, 100% of the outstanding voting securities
      of such company after any such transfer; or 

     

    (iii) the
      direct or indirect sale or exchange in a single or series of related
      transactions by the stockholders of the Company of more than 50% of the voting
      stock of the Company.

     

    6. Other
      Benefits

     

    (a) Insurance
      and Other Benefits.
      During
      the Employment Period, the Executive shall be entitled to participate in the
      Company’s insurance programs and any ERISA benefit plans, as the same may be
      adopted and/or amended from time to time (the “Benefits”).
      The
      Executive shall be entitled to paid personal days on a basis consistent with
      the
      Company’s other senior executives, as determined by the Board. The Executive
      shall be bound by all of the policies and procedures established by the Company
      from time to time. However, in case any of those policies conflict with the
      terms of this Agreement, the terms of this Agreement shall control.


     

    (b) Vacation.
      During
      the Employment Period, the Executive shall be entitled to an annual vacation
      of
      such duration consistent with the Company’s policies from time to time, as
      determined by the Board.

     

    (c) Expense
      Reimbursement.
      The
      Company shall reimburse the Executive for all reasonable business, promotional,
      travel and entertainment expenses ("Reimbursable Expenses") incurred or paid
      by
      him during the Employment Period in the performance of his services under this
      Agreement, provided that the Executive furnishes to the Company appropriate
      documentation required by the Internal Revenue Code in a timely fashion in
      connection with such expenses and shall furnish such other documentation and
      accounting as the Company may from time to time reasonably request.
      Additionally, the Company shall reimburse the Executive for reasonable
      relocation expenses not to exceed $20,000 unless the Executive receives prior
      approval from the Company for any amounts in excess of $20,000. 

     

    
      
        
        

      

      
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    7. Termination;
      Compensation Due Upon Termination of Employment.
      The
      Executive's employment hereunder may terminate as provided in paragraphs (a)
      through (e) below. The Executive’s right to compensation for periods after the
      date his employment with the Company terminates shall be determined in
      accordance with the provisions of paragraphs (a) through (e) below:

     

    (a) Voluntary
      Resignation; Termination without Cause.
      

     

    (i)
      Voluntary
      Resignation. The
      Executive may terminate his employment at any time upon thirty (30) days prior
      written notice to the Company. In the event of the Executive's voluntary
      termination of employment other than for Good Reason (as defined below), the
      Company shall have no obligation to make payments to the Executive in accordance
      with the provisions of Sections 3 or 4, except as otherwise required by this
      Agreement or by [Colombia] or U.S. law, to provide the benefits described in
      Section 6, for periods after the date on which the Executive's employment with
      the Company terminates due to the Executive 's voluntary resignation, except
      for
      the payment of the Executive’s Base Salary accrued through the date of such
      resignation. 

    


    (ii) Termination
      without Cause. 

    


    (A)    If
      the Executive’s employment is terminated by the Company without Cause at any
      time during the twelve month period commencing on the Effective Date, the
      Company shall (x) continue to pay the Executive the Base Salary (at the rate
      in
      effect on the date the Executive’s employment is terminated) until the end of
      the Severance Period (as defined in Section 7(e) below), (y) to the extent
      the
      Milestones are achieved or, in the absence of Milestones, the Board has, in
      its
      sole discretion, otherwise determined an amount for the Executive’s bonus for
      the initial Employment Period, pay the Executive a pro rata portion of his
      Annual Bonus for the initial Employment Period on the date such Annual Bonus
      would have been payable to the Executive had he remained employed by the
      Company, and (z) pay any other accrued compensation and Benefits. The Executive
      shall have no further rights under this Agreement or otherwise to receive any
      other compensation or benefits after such termination of employment.


    


    (B)    If,
      following a termination of employment without Cause, the Executive breaches
      the
      provisions of Sections 8 through 9 hereof, the Executive shall not be
      eligible, as of the date of such breach, for the payments and benefits described
      in Section 7(a)(ii), and any and all obligations and agreements of the
      Company with respect to such payments shall thereupon cease. 

     

    (b) Discharge
      for Cause.
      Upon
      (i) written notice to the Executive, the Company may terminate the Executive’s
      employment for “Cause” if any of the following events shall occur:

     

    (i) any
      act or omission that
      constitutes a material breach by the Executive of any of his obligations under
      this Agreement;

     

    (ii) the
      willful and continued failure or refusal of the Executive to satisfactorily
      perform the duties reasonably required of him as an employee of the
      Company;

     

    (iii) the
      Executive’s conviction of, or plea of nolo contendere to, (i) any felony or
      (ii) a crime involving dishonesty or moral turpitude or which could reflect
      negatively upon the Company or otherwise impair or impede its
      operations;

     

    
      
        
        

      

      
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    (iv) the
      Executive’s engaging in any misconduct, negligence, act of dishonesty
      (including, without limitation, theft or embezzlement), violence, threat of
      violence or any activity that could result in any violation of federal
      securities laws, in each case, that is injurious to the Company or any of its
      Affiliates;

     

    (v) the
      Executive’s material breach of a written policy of the Company or the rules of
      any governmental or regulatory body applicable to the Company;
      

     

    (vi) the
      Executive’s refusal to follow the directions of the Board; 

     

    (vii) any
      other
      willful misconduct by the Executive which is materially injurious to the
      financial condition or business reputation of the Company or any of its
      subsidiaries or affiliates,
      or

     

    (viii) the
      Executive’s breach of his obligations under Section 8 or Section 9.

     

    In
      the
      event Executive is terminated for Cause, the Company shall have no obligation
      to
      make payments to Executive in accordance with the provisions of Sections 3
      or 4,
      or, except as otherwise required by law, to provide the benefits described
      in
      Section 5, for periods after the Executive's employment with the Company is
      terminated on account of the Executive's discharge for Cause except for the
      Executive’s then applicable Base Salary accrued through the date of such
      termination.

     

    (c) Disability.
      The
      Company shall have the right, but shall not be obligated to terminate the
      Executive's employment hereunder in the event the Executive becomes disabled
      such that he is unable to discharge his duties to the Company for a period
      of
      ninety (90) consecutive days or one hundred twenty (120) days in any one hundred
      eighty (180) consecutive day period, provided longer periods are not required
      under applicable labor regulations (a "Permanent
      Disability").
      In
      the event of a termination of employment due to a Permanent Disability, then
      the
      Company shall be obligated to continue to make payments to the Executive in
      an
      amount equal to Executive’s then applicable Base Salary for the Severance Period
      (as defined below), payable in the form of salary continuation for the
      applicable Severance Period after the Executive’s employment with the Company is
      terminated due to a Permanent Disability. A determination of a Permanent
      Disability shall be made by a physician satisfactory to both the Executive
      and
      the Company; provided,
      however,
      that if
      the Executive and the Company do not agree on a physician, the Executive and
      the
      Company shall each select a physician and those two physicians together shall
      select a third physician, whose determination as to a Permanent Disability
      shall
      be binding on all parties.

     

    (d) Death.
      The
      Executive's employment hereunder shall terminate upon the death of the
      Executive. The Company shall have no obligation to make payments to the
      Executive in accordance with the provisions of Sections 3 or 4, or, except
      as
      otherwise required by law or the terms of any applicable benefit plan, to
      provide the benefits described in Section 6, for periods after the date of
      the
      Executive's death except for then applicable Base Salary earned and accrued
      through the date of death, payable to the Executive's beneficiary, as the
      Executive shall have indicated in writing to the Company (or if no such
      beneficiary has been designated, to Executive’s estate).

     

    
      
        
        

      

      
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    (e) Termination
      for Good Reason.
      The
      Executive may terminate this Agreement at any time for Good Reason. In the
      event
      of termination under this Section 7(e), Company shall pay to the Executive
      severance in an amount equal to the Executive’s then applicable Base Salary for
      a period equal to 12 months (the “Severance
      Period”),
      subject to the Executive’s continued compliance with Sections 8 and 9 of this
      Agreement, payable in the form of salary continuation for the applicable
      Severance Period following the Executive’s termination, and subject to the
      Company’s regular payroll practices and required withholdings. Such severance
      shall be reduced by any cash remuneration paid to the Executive because of
      the
      Executive’s employment or self-employment during the Severance Period. The
      Executive shall continue to receive all Benefits during the Severance Period.
      The
      Executive shall have no further rights under this Agreement or otherwise to
      receive any other compensation or benefits after such resignation.
      For the
      purposes of this Agreement, “Good Reason” shall mean any of the following
      (without Executive’s express written consent): 

     

    (i)
      the
      assignment to the Executive of duties that are significantly different from,
      and
      that result in a substantial diminution of, the duties that he assumed on the
      Effective Date (except with respect to the diminution of duties relating to
      the
      function of President, it being understood by the Executive that the Company
      intends to hire an additional employee to serve in that capacity);

    


    (ii)
      removal of the Executive from his position as Chief Executive Officer, or the
      assignment to the Executive of duties that are significantly different from,
      and
      that result in a substantial diminution of, the duties that he assumed as Chief
      Executive Officer, within twelve (12) months after a Change of Control (as
      defined above); 

    


    (iii) a
      reduction by the Company in the Executive’s then applicable Base Salary or other
      compensation, unless said reduction is pari passu with other senior executives
      of the Company; 

    


    (iv)
      the
      taking of any action by the Company that would, directly or indirectly,
      materially reduce the Executive’s benefits, unless said reductions are pari
      passu with other senior executives of the Company; or 

    


    (v) a
      breach by the Company of any material term of this Agreement that is not cured
      by the Company within 30 days following receipt by the Company of written notice
      thereof.

     

    (f)    Notice
      of Termination.    Any
      termination of employment by the Company or the Executive shall be communicated
      by a written ‘‘Notice of Termination’’ to the other party hereto given in
      accordance with Section 14 of this Agreement. In the event of a termination
      by the Company for Cause, the Notice of Termination shall (i) indicate the
      specific termination provision in this Agreement relied upon, (ii) set
      forth in reasonable detail the facts and circumstances claimed to provide a
      basis for termination of the Executive’s employment under the provision so
      indicated and (iii) specify the date of termination, which date shall be
      the date of such notice. The failure by the Executive or the Company to set
      forth in the Notice of Termination any fact or circumstance which contributes
      to
      a showing of Cause shall not waive any right of the Executive or the Company,
      respectively, hereunder or preclude the Executive or the Company, respectively,
      from asserting such fact or circumstance in enforcing the Executive’s or the
      Company’s rights hereunder. 

     

    
      
        
        

      

      
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    (g)    Resignation
      from Directorships and Officerships.    The
      termination of the Executive’s employment for any reason will constitute the
      Executive’s resignation from (i) any director, officer or employee position
      the Executive has with the Company or any of its Affiliates and (ii) all
      fiduciary positions (including as a trustee) the Executive holds with respect
      to
      any employee benefit plans or trusts established by the Company. The Executive
      agrees that this Agreement shall serve as written notice of resignation in
      this
      circumstance, unless otherwise required by any plan or applicable law.


    


    8. Non-Competition;
      Non-Solicitation.
      

     

    (a) Unless
      the Executive terminates this Agreement pursuant to Section 7(a) or the Company
      terminates the Executive’s employment for Cause, for the duration of the
      Employment Period and during the Severance Period (the “Non-compete
      Period”),
      the
      Executive shall not, directly or indirectly engage or invest in, own, manage,
      operate, finance, control or participate in the ownership, management,
      operation, financing, or control of, be employed by, associated with, or in
      any
      manner connected with, lend any credit to, or render services or advice to,
      any
      business, firm, corporation, partnership, association, joint venture or other
      entity that engages or conducts any business the same as or substantially
      similar to the Business or currently proposed to be engaged in or conducted
      by
      the Company and/or any of its Affiliates in South America or included in the
      future strategic plan of the Business, anywhere within the United States of
      America or South America; provided,
      however,
      that the
      Executive may own less than 5% of the outstanding shares of any class of
      securities of any enterprise (but without otherwise participating in the
      activities of such enterprise) including those engaged in the mining business,
      other than any such enterprise with which the Company competes or is currently
      engaged in a joint venture, if such securities are listed on any national or
      regional securities exchange or have been registered under Section 12(g) of
      the
      Securities Exchange Act of 1934, as amended; and provided,
      further,
      that
      solely with the prior approval of the Company, the Executive may participate
      in
      the activities of an enterprise in the commercial banking industry or mining
      consultancy business;

     

    (b) During
      the Employment Period and for a period of 12 months following termination of
      the
      Executive’s employment with the Company, the Executive shall not:

     

    (i)
      solicit or hire, or attempt to recruit, solicit or hire, any employee, or
      independent contractor of the Company, or its Affiliates to leave the employment
      (or independent contractor relationship) thereof, whether or not any such
      employee or independent contractor is party to an employment agreement;
      or

     

    (ii)
      attempt in any manner to solicit or accept from any customer of the Company
      or
      any of its Affiliates with whom the Company or any of its Affiliates had
      significant contact during the term of the Agreement, business of the kind
      or
      competitive with the business done by the Company or any of its Affiliates
      with
      such customer or to persuade or attempt to persuade any such customer to cease
      to do business or to reduce the amount of business which such customer has
      customarily done or is reasonably expected to do with the Company or any of
      its
      Affiliates or if any such customer elects to move its business to a person
      other
      than the Company or any of its Affiliates, provide any services (of the kind
      or
      competitive with the Business of the Company or any of its Affiliates) for
      such
      customer, or have any discussions regarding any such service with such customer,
      on behalf of such other person.

     

    
      
        
        

      

      
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    The
      Executive recognizes and agrees that because a violation by him of his
      obligations under this Section 8 will cause irreparable harm to the Company
      that
      would be difficult to quantify and for which money damages would be inadequate,
      the Company shall have the right to injunctive relief to prevent or restrain
      any
      such violation, without the necessity of posting a bond. The Non-compete Period
      will be extended by the duration of any violation by the Executive of any of
      his
      obligations under this Section 8.

     

    The
      Executive expressly agrees that the character, duration and scope of the
      covenant not to compete are reasonable in light of the circumstances as they
      exist at the date upon which this Agreement has been executed. However, should
      a
      determination nonetheless be made by a court of competent jurisdiction at a
      later date that the character, duration or geographical scope of the covenant
      not to compete is unreasonable in light of the circumstances as they then exist,
      then it is the intention of both the Executive and the Company that the covenant
      not to compete shall be construed by the court in such a manner as to impose
      only those restrictions on the conduct of the Executive which are reasonable
      in
      light of the circumstances as they then exist and necessary to assure the
      Company of the intended benefit of the covenant to compete.

    


    9. Confidentiality
      Covenants.

     

    (a) The
      Executive understands that the Company and/or its Affiliates from time to time,
      may impart to him confidential information, whether such information is written,
      oral or graphic. 

     

    For
      purposes of this Agreement, “Confidential Information” means information, which
      is used in the business of the Company or its Affiliates and (i) is
      proprietary to, about or created by the Company or its Affiliates,
      (ii) gives the Company or its Affiliates some competitive business
      advantage or the opportunity of obtaining such advantage or the disclosure
      of
      which could be detrimental to the interests of the Company or its Affiliates,
      (iii) is designated as Confidential Information by the Company or its
      Affiliates, is known by the Executive to be considered confidential by the
      Company or its Affiliates, or from all the relevant circumstances should
      reasonably be assumed by the Executive to be confidential and proprietary to
      the
      Company or its Affiliates, or (iv) is not generally known by non-Company
      personnel. Such Confidential Information includes, without limitation, the
      following types of information and other information of a similar nature
      (whether or not reduced to writing or designated as confidential): 

         

    (i)
      Internal personnel and financial information of the Company or its Affiliates,
      information regarding oil and gas properties including reserve information,
      vendor information (including vendor characteristics, services, prices, lists
      and agreements), purchasing and internal cost information, internal service
      and
      operational manuals, and the manner and methods of conducting the business
      of
      the Company or its Affiliates; 

     

    
      
        
        

      

      
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    (ii)
      Marketing and development plans, price and cost data, price and fee amounts,
      pricing and billing policies, bidding, quoting procedures, marketing techniques,
      forecasts and forecast assumptions and volumes, and future plans and potential
      strategies (including, without limitation, all information relating to any
      oil
      and gas prospect and the identity of any key contact within the organization
      of
      any acquisition prospect) of the Company or its Affiliates which have been
      or
      are being discussed; 

         

    (iii)
      Names of customers and their representatives, contracts (including their
      contents and parties), customer services, and the type, quantity, specifications
      and content of products and services purchased, leased, licensed or received
      by
      customers of the Company or its Affiliates; and 

         

    (iv)
      Confidential and proprietary information provided to the Company or its
      Affiliates by any actual or potential customer, government agency or other
      third
      party (including businesses, consultants and other entities and
      individuals).

     

    The
      Executive hereby acknowledges the Company’s exclusive ownership of such
      Confidential Information.

     

    (b) The
      Executive agrees as follows: (1) only to use the Confidential Information to
      provide services to the Company and its subsidiaries and affiliates; (2) only
      to
      communicate the Confidential Information to fellow employees, agents and
      representatives on a need-to-know basis; and (3) not to otherwise disclose
      or
      use any Confidential Information, except as may be required by law or otherwise
      authorized by the Board. Upon demand by the Company or upon termination of
      the
      Executive’s employment, the Executive will deliver to the Company all manuals,
      photographs, recordings and any other instrument or device by which, through
      which or on which Confidential Information has been recorded and/or preserved,
      which are in the Executive’s possession, custody or control.

     

    10. Executive’s
      Representation.
      The
      Executive hereby represents that his entry into this Employment Agreement will
      not violate the terms or conditions of any other agreement to which the
      Executive is a party.

     

    11. Arbitration.
      In the
      event of any breach arising from the performance of this Agreement, either
      party
      may request arbitration. In such event, the parties will submit to arbitration
      by a qualified arbitrator with the definition and laws of the State of New
      York.
      Such arbitration shall be final and binding on both parties.

     

    12. Governing
      Law/Jurisdiction.
      This
      Agreement and any disputes or controversies arising hereunder shall be construed
      and enforced in accordance with and governed by the internal laws of the State
      of New York and, to the extent required by local labor law, the laws of country
      in which the Executive is based (the “Executive’s Home Country”).

     

    13. Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the parties hereto with
      respect to the subject matter hereof and thereof and supersedes and cancels
      any
      and all previous agreements, written and oral, regarding the subject matter
      hereof between the parties hereto. This Agreement shall not be changed, altered,
      modified or amended, except by a written agreement signed by both parties
      hereto.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    14. Notices.
      All
      notices, requests, demands and other communications called for or contemplated
      hereunder shall be in writing and shall be deemed to have been given when
      delivered to the party to whom addressed or when sent by telecopy (if promptly
      confirmed by registered or certified mail, return receipt requested, prepaid
      and
      addressed) to the parties, their successors in interest, or their assignees
      at
      the following addresses, or at such other addresses as the parties may designate
      by written notice in the manner aforesaid:

     

    
      	
            	(a)	
              to
                the Company at:

            


    

    


    1266
      1st
      Street,
      Suite 4

    Sarasota,
      FL 34236

    Attn:
      Nadine C. Smith

    Fax:
      

    


    with
      a
      copy to:

     

    Gottbetter
      & Partners, LLP

    488
      Madison Avenue

    New
      York,
      NY 10022-5718

    Attn:
      Adam S. Gottbetter

    Fax:
      (212) 400-69019

    


     

    
      	
            	(b)	
              to
                the Executive at:

            


    

     

    Malecon
      de la Reserva 777, Apt 1702

    Lima
      18,
      Peru

    Fax:
      (___) ___-____

    


    All
      such
      notices, requests and other communications will (i) if delivered personally
      to
      the address as provided in this Section 14, be deemed given upon delivery,
      (ii)
      if delivered by facsimile transmission to the facsimile number as provided
      for
      in this Section 14, be deemed given upon facsimile confirmation, (iii) if
      delivered by mail in the manner described above to the address as provided
      for
      in this Section 14, be deemed given on the earlier of the third business day
      following mailing or upon receipt and (iv) if delivered by overnight courier
      to
      the address as provided in this Section 14, be deemed given on the earlier
      of
      the first business day following the date sent by such overnight courier or
      upon
      receipt (in each case regardless of whether such notice, request or other
      communication is received by any other person to whom a copy of such notice
      is
      to be delivered pursuant to this Section 14). Either party may, by notice given
      to the other party in accordance with this Section 14, designate another address
      or person for receipt of notices hereunder.

     

    15. Severability.
      If any
      term or provision of this Agreement, or the application thereof to any person
      or
      under any circumstance, shall to any extent be invalid or unenforceable, the
      remainder of this Agreement, or the application of such terms to the persons
      or
      under circumstances other than those as to which it is invalid or unenforceable,
      shall be considered severable and shall not be affected thereby, and each term
      of this Agreement shall be valid and enforceable to the fullest extent permitted
      by law. The invalid or unenforceable provisions shall, to the extent permitted
      by law, be deemed amended and given such interpretation as to achieve the
      economic intent of this Agreement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    16. Waiver.
      The
      failure of any party to insist in any one instance or more upon strict
      performance of any of the terms and conditions hereof, or to exercise any right
      or privilege herein conferred, shall not be construed as a waiver of such terms,
      conditions, rights or privileges, but same shall continue to remain in full
      force and effect. Any waiver by any party of any violation of, breach of or
      default under any provision of this Agreement by the other party shall not
      be
      construed as, or constitute, a continuing waiver of such provision, or waiver
      of
      any other violation of, breach of or default under any other provision of this
      Agreement.

     

    17. Successors
      and Assigns.
      This
      Agreement shall be binding upon the Company and any successors and assigns
      of
      the Company. Neither this Agreement nor any right or obligation hereunder may
      be
      assigned by the Executive. The Company may assign this Agreement and its right
      and obligations hereunder, in whole or in part.

     

    18. Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original, and all of which together shall constitute one and the
      same
      instrument.

     

    19. Headings.
      Headings in this Agreement are for reference purposes only and shall not be
      deemed to have any substantive effect.

     

    20. Opportunity
      to Seek Advice.
      The
      Executive acknowledges and confirms that he has had the opportunity to seek
      such
      legal, financial and other advice and representation as he has deemed
      appropriate in connection with this Agreement.

     

    21. Withholding
      and Payroll Practices.
      All
      salary, severance payments, bonuses or benefits payments made by the Company
      under this Agreement shall be net of any tax or other amounts required to be
      withheld by the Company under applicable law of the Executive’s Home Country and
      shall be paid in the ordinary course pursuant to the Company’s then existing
      payroll practices.

     

    22. Conflict
      of Law.
      To the
      extent there is any conflict between the laws of New York and the laws of the
      Executive’s Home Country with respect to any terms of this Agreement, the
      parties understand that the laws of the Executive’s Home Country may control.


     

    [the
      next page is the signature page]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        



    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      written above.

     

    
      	 	 	 
	 	
              LORETO
                RESOURCES CORPORATION

              a
                Nevada corporation

            
	 
 	 
 	 
 
	 	By:  	/s/ Nadine
              C.
              Smith
	 	 	Name:
              Nadine C. Smith
              Title:
                Chairman

            
	 	 	 
	Witness: 	EXECUTIVE:
	_____________________	
               /s/
                Luis Francisco Saenz

            
	Name:	Name: Luis
              Francisco Saenz


    

     

    
      
        
        

      

      
        13