Unassociated Document


    EXHIBIT
      10.11

     

    GUARANTEE

    


    


    GUARANTEE
      (the
“Guarantee”), dated as of November 26, 2004 of MEDCO
      INTERNATIONAL VENTURES LIMITED, an
      Indonesian corporation, (“Medco”)
      in favour of INDO-PACIFIC
      RESOURCES (JAVA) LTD.,
      a body
      corporate incorporated under the laws of Barbados, (the
      “Vendor”).

    


    WHEREAS,
      the
      Vendor and CAMAR RESOURCES CANADA INC., a body corporate incorporated under
      the
      laws of the Province of Alberta, Canada (the “Purchaser”) have entered into that
      certain Asset Purchase and Sale Agreement (the “Purchase Agreement”), dated of
      even date herewith, whereby Purchaser has agreed to purchase from Vendor the
      Assets (as defined in the Purchase Agreement), as set forth in, and on the
      term
      and conditions of, the Purchase Agreement; 

    


    WHEREAS,
      Vendor
      and Purchaser have entered into that certain Joint Operating Agreement (“Joint
      Operating Agreement”), dated of even date herewith; 

    


    WHEREAS,
      the
      Vendor has requested Medco, as the beneficial owner of the Purchaser, to provide
      a guarantee to the Vendor on the terms and conditions hereinafter provided;
      and

    


    WHEREAS,
      Medco is
      willing to enter into this Guarantee to induce the Vendor to enter into the
      Purchase Agreement and the Joint Operating Agreement; 

    


    NOW,
      THEREFORE,
      Medco
      hereby agrees:

    


    Section
      1. Guarantee
      by Medco. 

    


    (a) From
      and
      after the Closing Date (as defined in the Purchase Agreement), Medco hereby
      irrevocably and unconditionally guarantees the obligations of Purchaser under
      the Purchase Agreement and the Joint Operating Agreement when the same shall
      become due and payable according to the terms and conditions of the Purchase
      Agreement; provided, however, that Medco shall not be liable to make any payment
      until five (5) Business Days (as used herein, a “Business Day” shall refer to a
      day other than a Saturday or a Sunday on which commercial banks are open for
      business in the Province of Alberta, Canada) following receipt by Medco of
      written notice from the Vendor. Medco hereby agrees that its obligations
      hereunder are in no way conditioned upon the requirement that Vendor first
      attempt to collect any of the obligations under this Guarantee from the
      Purchaser or resort to any other means of obtaining payment or performance
      and
      shall be unconditional, subject only to the validity and enforceability of
      the
      Purchase Agreement and the Joint Operating Agreement against the Purchaser
      including any change therein or amendment thereto and further subject to
      defenses available to the Purchaser, other than bankruptcy or insolvency of
      the
      Purchaser. Medco covenants that this Guarantee will not be discharged except
      by
      complete performance of the obligations contained in the Purchase Agreement,
      Joint Operating Agreement and in this Guarantee.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b) This
      Guarantee shall continue to be effective or be reinstated, as the case may
      be,
      if at any time any payment under the Purchase Agreement or any other amount
      owed
      to the Vendor hereunder or thereunder is rescinded or must otherwise be returned
      by the Vendor upon the insolvency, bankruptcy or reorganization of Medco, the
      Purchaser or otherwise, all as though such payment had not been
      made.

    


    Section
      2. Waivers
      by Medco.
      Medco
      waives promptness, diligence, presentment, demand, protest, notice of
      acceptance, notice of any obligations under the Purchase Agreement or the Joint
      Operating Agreement and all other notices of any kind except as provided in
      Section 1 of this Guarantee.

    


    Section
      3. Medco’s
      Agreement to Pay Enforcement Costs, etc.
      Medco
      further agrees, as the principal obligor and not as a guarantor only, to pay
      to
      Vendor, on demand, all reasonable costs and expenses (including court costs
      and
      legal expenses) incurred or expended by Vendor in connection with the
      enforcement of this Guarantee, together with interest on amounts recoverable
      under this Section 3 from the time when such amounts become due until payment;
      provided that Medco shall not be liable for any costs or expenses of Vendor
      if
      no payment under this Guarantee is due.

    


    Section
      4. Governing
      Law.
      This
      Guarantee shall, in all respects, be governed by, subject to and be interpreted
      and construed in accordance with the laws in effect within the Province of
      Alberta, Canada, excluding any conflict of laws principles or rules embodied
      therein.

    


    Section
      5. Interpretation.
      The
      headings of the sections and other subdivisions of this Guarantee are inserted
      for convenience only and shall not be deemed to constitute a part
      hereof.

    


    Section
      6. Currency
      of Payment.
      Any
      payment to be made by Medco shall be made in the same currency as designated
      for
      payment in the Purchase Agreement and such designation of the currency of
      payment is of the essence.

    


    Section
      7. Trade
      Debts.
      Once
      all Trade Debts (as defined in the Purchase Agreement) have been settled
      pursuant the terms and conditions of the Purchase Agreement, Medco shall acquire
      all of the Participating Interests (as defined in the Joint Operating Agreement)
      held by Purchaser, so that Medco becomes the direct owner of the Assets (as
      defined in the Purchase Agreement). Notwithstanding any provision in this
      Guarantee to the contrary, this Guarantee shall be deemed to have been fully
      discharged and shall cease to be valid or of any force or effect immediately
      following acquisition by Medco of the Participating Interests and Vendor shall
      forthwith thereafter cancel and return the original of this Guarantee to
      Medco.

    


    Section
      8. Broker
      Fee.
      Medco
      shall use its best efforts to re-negotiate certain fees (the “Broker Fees”) that
      are payable pursuant to that certain Consultation Fee Agreement between Fortune
      Oil & Gas, Inc., a Nevada corporation, Henry H. Sitanggang and Octavius
      Tedjojuwono. Once a settlement of the Broker Fees is obtained, Medco shall
      pay
      fifty percent of the Broker Fees, up to an amount of $125,000.

     

    
      
         

      

      
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    Section
      9. Successors
      and Assigns.
      This
      Guarantee shall be binding upon Medco and its permitted successors and assigns,
      and shall inure to the benefit of and be enforceable by Vendor and its permitted
      successors, transferees and assigns. Neither party may assign this Guarantee
      nor
      delegate its duties or rights hereunder without the prior express written
      consent of the other, which consent may not be unreasonably withheld or delayed.
      

     

    Section
      10.  Amendments
      and Waivers.
      No
      amendment or waiver of any provision of this Guarantee nor consent to any
      departure therefrom shall be effective unless the same shall be in writing
      and
      signed by Vendor and Medco. No failure on the part of Vendor to exercise, and
      no
      delay in exercising, any right hereunder shall operate as a waiver thereof;
      nor
      shall any single or partial exercise of any right hereunder preclude any other
      or further exercise thereof or the exercise of any other right.

     

     

    Section
      11. Notices.
      All
      notices and other communications called for hereunder shall be made in writing
      and, unless otherwise specifically provided herein, shall be deemed to have
      been
      duly made or given when delivered by hand, sent by facsimile transmission or
      mailed first class, postage prepaid, addressed as follows: if to Medco, at
      the
      address for notices to Purchaser set forth in the Purchase Agreement, and if
      to
      Vendor, at the address for notices to Vendor set forth in the Purchase
      Agreement, or at such address as either party may designate in writing to the
      other.

    Section
      12. Severability.
      If
      any
      provision of this Guarantee shall be invalid, illegal or unenforceable in any
      jurisdiction, the parties hereto agree to the fullest extent they may
      effectively do so that (a) the validity, legality and enforceability in every
      other jurisdiction of such provision shall not in any way be affected or
      impaired thereby and (b) the validity, legality and enforceability in such
      jurisdiction of the remaining provisions shall not in any way be affected or
      impaired thereby.

     

    MEDCO
      INTERNATIONAL VENTURES LIMITED

     

    By:  
      /s/
      Patrick Molliere

      
        

      

    

    Name: Patrick
      Molliere

    Title: Assistant
      to CEO

    


    ACKNOWLEDGMENT
      AND AGREEMENT

    


    


    Indo-Pacific
      Resources (Java) Ltd hereby acknowledges and consents to the provisions of
      the
      foregoing Guarantee.

    


    


    INDO-PACIFIC
      RESOURCES (JAVA) LTD

     

    By:  
      /s/
      David
      Nunn

      
        

      

    

    Name: David
      Nunn

    Title:
       President

     

     

    
      
         

      

      
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