Document:

Exhibit 10.26

 

STR Holdings, Inc.

2009 Equity Incentive Plan

 

NONQUALIFIED
STOCK OPTION AWARD AGREEMENT

 

THIS AGREEMENT (the “Award Agreement”) is made
effective as of [                          ]
(the “Date of Grant”) between STR Holdings, Inc., a Delaware corporation (with
any successor, the “Company”), and [                      ]
(the “Participant”):

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the STR Holdings, Inc.

2009 Equity Incentive Plan (the “Plan”), which Plan is incorporated herein by
reference and made a part of this Award Agreement.  Capitalized terms not otherwise defined herein
shall have the same meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would
be in the best interests of the Company and its stockholders to grant the
option provided for herein to the Participant pursuant to the Plan and the
terms set forth herein.

 

NOW THEREFORE, in consideration of the mutual
covenants hereinafter set forth, the parties agree as follows:

 

1.             Grant of the Option.  The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of [                ]
Shares, subject to adjustment as set forth in the Plan.   The
Option is intended to be a nonqualified stock option, and is not intended to be
treated as an option that complies with Section 422 of the Internal
Revenue Code of 1986, as amended.

 

2.             Option Price.  The purchase price of the Shares subject to
the Option shall be $[        ] per
Share (the “Option Price”), subject to adjustment as set forth in the Plan.

 

3.             [Vesting.  Subject to the Participant’s continued Service
on each vesting date, the Option shall vest in equal installments on each of
the [                          ]
anniversaries of the Date of Grant, so that [    ]% of the Option
shall vest on each such anniversary.]

 

At any time, the portion of the Option which has
become vested as described in this Section 3 is hereinafter referred to as
the “Vested Portion.”  The Vested Portion
of the Option shall remain exercisable for the period set forth in Section 6.

 

4.             Accelerated Vesting Upon a
Change in Control. Upon the occurrence of a Change of Control, the unvested
portion of the Option, to the extent not previously cancelled or forfeited, shall
immediately vest in full, so long as the Participant’s Service has not been
terminated before the date of the consummation of the Change of Control.

 

5.             Forfeiture.   If the
Participant’s Service is terminated for any reason, the Option shall, to the
extent not then vested, be cancelled by the Company without consideration and
the Vested Portion of the Option shall remain exercisable for the period set
forth in Section 6.

 

 

6.             Exercise of Option.

 

(a)           Period of Exercise.  Subject to the provisions of the Plan and this
Award Agreement, the Participant may exercise all or any part of the Vested
Portion of the Option at any time prior to the earliest to occur of:

 

(i)            the [          ]
anniversary of the Date of Grant;

 

(ii)           the date that is ninety (90) days following
termination of the Participant’s Service for any reason other than death,
Permanent Disability or Cause;

 

(iii)          the date that is one (1) year following
termination of the Participant’s Service due to death or Permanent Disability;

 

(iv)          the date of termination of the Participant’s Service
due to Cause.

 

(b)           Method of Exercise.

 

(i)            Subject to Section 4, the Vested Portion of the
Option may be exercised by delivering to the Company at its principal office written
notice of intent to so exercise; provided that the Option may be
exercised with respect to whole Shares only.  Such notice shall specify the number of Shares
for which the Option is being exercised and shall be accompanied by payment in
full of the Option Price.  In the event
the Option is being exercised by the Participant’s representative, the notice
shall be accompanied by proof (satisfactory to the Committee) of the
representative’s right to exercise the Option. 
The payment of the Option Price may be made at the election of the
Participant (A) in cash or its equivalent (e.g., by cashier’s check), (B) to
the extent permitted by the Committee, in Shares having a Fair Market Value
equal to the aggregate Option Price for the Shares being purchased and
satisfying such other requirements as may be imposed by the Committee, (C) partly
in cash and, to the extent permitted by the Committee, partly in such Shares, (D) by
reducing the number of Shares otherwise deliverable upon the exercise of the
Option by the number of Shares having a Fair Market Value equal to the Option
Price, or (E) if there is a public market for the Shares at such time,
subject to such requirements as may be imposed by the Committee, through the
delivery of irrevocable instructions to a broker to sell Shares obtained upon
the exercise of the Option and to deliver promptly to the Company an amount out
of the proceeds of such sale equal to the aggregate Option Price for the Shares
being purchased.  The Committee may
prescribe any other method of payment that it determines to be consistent with
applicable law.  Neither the Participant nor
the Participant’s representative shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an Option until the
Participant has given written notice of exercise of the Option, paid in full
for such Shares and, if applicable, has satisfied any other conditions imposed
by the Committee pursuant to the Plan.

 

(ii)           Notwithstanding any other provision of the Plan or
this Award Agreement to the contrary, the Option may not be exercised prior to
the completion of any registration or qualification of the Option or the Shares
under applicable securities or other laws, or under any ruling or regulation of
any governmental body or national securities exchange that the Committee shall
in its sole discretion determine to be necessary or advisable.

 

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(iii)          Upon the Company’s determination that the Option has
been validly exercised as to any of the Shares, the Company shall issue
certificates in the Participant’s name for such Shares.  However, the Company shall not be liable to
the Participant for damages relating to any delays in issuing the certificates
to him, any loss of the certificates, or any mistakes or errors in the issuance
of the certificates or in the certificates themselves.

 

(iv)          In the event of the Participant’s death, the Vested
Portion of the Option shall remain exercisable during the period set forth in Section 6
by the Participant’s executor or administrator, or the person or persons to
whom the Participant’s rights under this Award Agreement shall pass by will or
by the laws of descent and distribution as the case may be.  Any heir or legatee of the Participant shall
take rights herein granted subject to the terms and conditions hereof.

 

7.             No Right to Continued Service.  The granting of the Option evidenced hereby
and this Award Agreement shall impose no obligation on the Company or any
Affiliate to continue the Service of the Participant and shall not lessen or
affect any right that the Company or any Affiliate may have to terminate the Service
of such Participant.

 

8.             Securities Laws/Legend on
Certificates.  The
issuance and delivery of Shares shall comply with all applicable requirements
of law, including (without limitation) the Securities Act of 1933, as amended,
the rules and regulations promulgated thereunder, state securities laws
and regulations, and the regulations of any stock exchange or other securities
market on which the Company’s securities may then be traded.  If the Company deems it necessary to ensure
that the issuance of securities under the Plan is not required to be registered
under any applicable securities laws, each Participant to whom such security
would be issued shall deliver to the Company an agreement or certificate
containing such representations, warranties and covenants as the Company may
deem necessary which satisfies such requirements. The certificates representing
the Shares shall be subject to such stop transfer orders and other restrictions
as the Committee may deem reasonably advisable, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

 

9.             Transferability.  The Option may not be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by the
Participant other than by will or by the laws of descent and distribution, and
any such purported assignment, alienation, pledge, attachment, sale, transfer
or encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.  No such permitted transfer
of the Option to heirs or legatees of the Participant shall be effective to
bind the Company unless the Committee shall have been furnished with written
notice thereof and a copy of such evidence as the Committee may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.  During the Participant’s lifetime, the Option
is exercisable only by the Participant.

 

10.           Adjustment of Option.  Adjustments to the Option (or any of the
Shares underlying the Option) shall be made in accordance with the terms of the
Plan.

 

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11.           Definitions.  For purposes of this Award Agreement:

 

“Cause” shall have the meaning set forth in the
Participant’s employment agreement with the Company or its Affiliates, if any,
or if the Participant is not a party to an employment agreement with a
definition of “Cause,” then “Cause” means the Participant’s (i) commission of fraud, embezzlement,
misappropriation of funds, material misrepresentation, breach of fiduciary duty
or other act of dishonesty against the Company or any of its Affiliates; (ii) conviction
of a felony or of a misdemeanor if such misdemeanor involves moral turpitude or
misrepresentation, including a plea of guilty or nolo contendere; (iii) material
breach of any employment agreement or non-competition agreement, which breach
is not cured within 30 days following written notice; (iv) intentional
wrongful act or gross negligence that has a material detrimental effect on the
Company or its Affiliates; (v) unlawful use (including being under the
influence) or possession of illegal drugs on the Company’s or any of its
Affiliates’ premises; and (vi) the failure or refusal to follow the
reasonable instructions of the board of directors of the Company or of any
Affiliate of the Company, which failure or refusal is not cured within 30 days
following written notice.

 

“Permanent Disability” shall have the meaning set
forth in the Participant’s employment agreement with the Company or its
Affiliates, if any, or if the Participant is not a party to an employment
agreement with a definition of “Permanent Disability,” then “Permanent
Disability” means any physical or mental disability rendering the Participant
unable to perform his or her duties for a period of at least one hundred twenty
(120) days out of any twelve (12) month period.

 

“Share” means a share of common
stock of the Company or such other class or kind of shares or other securities
resulting from the application of Section 12.1 of the Plan.

 

12.           Withholding.  The Participant may be required to pay to the
Company or any Affiliate and the Company shall have the right and is hereby
authorized to withhold, any applicable withholding taxes in respect of the
Option, its exercise or any payment or transfer under or with respect to the
Option and to take such other action as may be necessary in the opinion of the
Committee to satisfy all obligations for the payment of such withholding taxes.

 

13.           Notices. Any
notification required by the terms of this Award Agreement shall be given in
writing and shall be deemed effective upon personal delivery or within three (3) days
of deposit with the United States Postal Service, by registered or certified
mail, with postage and fees prepaid.  A
notice shall be addressed to the Company, Attention: Secretary, at its
principal executive office and to the Participant at the address that he or she
most recently provided to the Company.

 

14.           Entire Agreement.  This Award Agreement and the Plan constitute
the entire contract between the parties hereto with regard to the subject
matter hereof.  They supersede any other
agreements, representations or understandings (whether oral or written and whether
express or implied) which relate to the subject matter hereof.

 

15.           Waiver.  No waiver of any breach or condition of this Award
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition whether of like or different nature.

 

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16.           Successors and Assigns.  The provisions of this Award Agreement shall
inure to the benefit of, and be binding upon, the Company and its successors
and assigns and upon the Participant, the Participant’s assigns and the legal
representatives, heirs and legatees of the Participant’s estate, whether or not
any such person shall have become a party to this Award Agreement and agreed in
writing to be joined herein and be bound by the terms hereof.

 

17.           Choice of Law;
Jurisdiction; Waiver of Jury Trial.  THIS AWARD AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF DELAWARE WITHOUT
REGARD TO CONFLICTS OF LAWS.

 

SUBJECT TO THE TERMS OF THIS AWARD AGREEMENT, THE
PARTIES AGREE THAT ANY AND ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS
AWARD AGREEMENT SHALL BE LITIGATED IN THE FEDERAL OR STATE COURTS IN DELAWARE.  BY EXECUTING AND DELIVERING THIS AWARD AGREEMENT,
EACH PARTY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR
ITSELF, HIMSELF OR HERSELF AND IN RESPECT OF ITS, HIS OR HER PROPERTY WITH
RESPECT TO SUCH ACTION.  EACH PARTY
AGREES THAT VENUE WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY
OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE
RESOLUTION OF ANY SUCH ACTION.

 

EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AWARD AGREEMENT.

 

18.           Option Subject to Plan.  By entering into this Award Agreement the
Participant agrees and acknowledges that the Participant has received and read
a copy of the Plan.  The Option is
subject to the Plan.  The terms and
provisions of the Plan as it may be amended from time to time are hereby
incorporated herein by reference (subject to the limitation set forth in Section 19).
 In the event of a conflict between any
term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.  The Participant
has had the opportunity to retain counsel, and has read carefully, and
understands, the provisions of the Plan and the Award Agreement.

 

19.           Amendment.  The Committee may amend or alter this Award
Agreement and the Option granted hereunder at any time; provided that,
subject to Articles 11, 12 and 13 of the Plan, no such amendment or alteration
shall be made without the consent of the Participant if such action would
materially diminish any of the rights of the Participant under this Award
Agreement or with respect to the Option.

 

20.           Severability. The provisions of this Award Agreement are severable and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in
whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.

 

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21.           Signature in Counterparts.  This Award Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed
this Award Agreement.

 

	
   

  	
  STR
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed
  and acknowledged as

  	
   

  	
   

  
	
  of
  the date first above written:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PARTICIPANTFiled by sedaredgar.com - West Canyon Energy Corp. - Exhibit 10.1

 

 

 

ASSIGNMENT AGREEMENT 

for 

CARBONERA BLOCK 

by and between 

PETROSOUTH ENERGY CORPORATION SUCURSAL COLOMBIA

and 

DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 

ASSIGNMENT AGREEMENT

THIS AGREEMENT is entered into on the [DAY] day of [MONTH] 2009
by and between PETROSOUTH ENERGY CORPORATION SUCURSAL COLOMBIA, a branch
of the foreign corporation Petrosouth Energy Corp., a Colombian Branch Office of
a BVI Corporation established by public deed 657 dated March 05 of 2.007, from
Notary 35 of Bogotá legally represented by its authorized officer, Mr. FELIPE
PIMIENTA BARRIOS, Colombian citizen, domiciled in Bogotá, DC, identified with
the citizen identification card number 79.785.924, according to the Certificate
of Legal Existence and Representation issued by the Chamber of Commerce of
Bogotá, attached hereto as Exhibit A (hereinafter referred to as “Assignor”);
and DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA, a branch of the
foreign corporation DELAVACO ENERGY COLOMBIA INC., established in the Republic
of Colombia, domiciled in the city of Bogotá, DC, legally represented by its
authorized officer, Mr. ANDREW DE FRANCESCO, Canadian citizen, domiciled in
Toronto, Canada, identified with Canadian passport number WJ709416, according to
the Certificate of Legal Existence and Representation issued by the Chamber of
Commerce of Bogotá, attached hereto as Exhibit B (hereinafter referred to as
“Assignee”). The companies named above, and their respective successors and
assignees (if any), may sometimes individually be referred to as “Party” and
collectively as the “Parties”. 

WITNESSETH:

WHEREAS, on December 28th, 2.005, the Colombian
Agencia Nacional de Hidrocarburos – ANH and Well Logging Ltda. entered into an
Exploration and Production Agreement for the exploration, development and
production of hydrocarbons in the Contract Area (“the Carbonera Contract”); 

WHEREAS, since August 1, 2007 Assignor holds six percent (6%)
of the rights and obligations of the Carbonera Contract and the Carbonera
Contract Area; according to the Assignment of Participating Interests Agreement
entered into by Assignor and OMEGA ENERGY COLOMBIA; 

WHEREAS, as of the date of this Agreement, Assignor holds,
directly or indirectly, six percent (6%) of the rights and obligations of the
Carbonera Contract and the Carbonera Contract Area;

WHEREAS, there are no preemptive rights or obligation related
to Assignor’s ability to assign and/or transfer its participating interest in
the Carbonera Contract; and 

WHEREAS, Assignor is willing to assign and transfer a certain
undivided interest in its rights and obligations under the Carbonera Contract to
Assignee in accordance with the terms set forth herein and Assignee wishes to
acquire such interest;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants and obligations set out below and to be performed, the Assignor and
Assignee agree as follows: 

ARTICLE 1 

DEFINITIONS

As used in this Agreement, the following capitalized words and
terms shall have the meaning ascribed to them below. Any capitalized term used
in this Agreement and not specifically defined in this Agreement shall have the
same meaning as in the Carbonera Contract. 

	1.1 	
      Agreement means this Assignment Agreement
      together with the Exhibits, and any extension, renewal or amendment hereof
      agreed to in writing by the Parties;

	 	 
	1.2 	
      ANH means the Agencia Nacional de
      Hidrocarburos;

	 	 
	1.3 	
      Approval Date means the date on which the
      ANH formally approves or endorses the Assignment of the Participating
      Interest transferred hereunder;

	 	 
	1.4 	
      Assignment means the document, attached as
      Exhibit D, by which the interest in the Carbonera Contract is transferred
      and conveyed to the Assignee directly by the Assignor or through the
      Operator (Well Logging Ltda.) therein, as provided hereunder;

	 	 
	1.5 	
      Consideration has the meaning given in
      Article 4.

	 	 
	1.6 	
      Carbonera Contract or Contract means the
      Hydrocarbon Exploration and Production, entered into by ANH and Well
      Logging Ltda. on December 28th, 2.005, attached as Exhibit C
      and any extension, renewal or amendment thereto.

	 	 
	1.7 	
      Contract Area means the area or block more
      particularly described in the Carbonera Contract.

	 	 
	1.8 	
      Documents means the Carbonera Contract, the
      JOA, any Assignment Agreement referred to the Carbonera Contract, and any
      Participation Agreement referred to the Carbonera Contract.

	 	 
	1.9 	
      Effective Date is the date set out in
      Article 2.5.

	 	 
	1.10 	
      Government means the government of the
      Republic of Colombia and any political subdivision, agency or
      instrumentality thereof, including the ANH.

	 	 
	1.11 	
      JOA means the Joint Operating Agreement to
      be negotiated pursuant to Article 2.2.

	 	 
	1.12 	
      Laws/Regulations means those laws,
      statutes, rules and regulations governing activities under the Carbonera
      Contract.

	 	 
	1.13 	
      Lien means any mortgage, charge, pledge,
      hypothec, security interest, assignment, lien (statutory or otherwise),
      easement, title retention agreement or arrangement, conditional sale,
      deemed or statutory trust, restrictive covenant or other encumbrance of
      any nature or any other arrangement or condition which, in substance,
      secures payment or performance of an obligation.

	 	 
	1.14 	
      Operator means the entity designated to
      conduct operations in the Carbonera Contract Area in accordance with the
      terms of the JOA.

	1.15 	
      Participating Interest means as to any
      Party to the Carbonera Contract, the undivided interest of such party
      expressed as a percentage of the total interest of all parties in the
      rights and obligations derived from the Carbonera Contract.

	 	 
	1.20 	
      Permitted Lien means (i) the Government’s
      economic and other rights as described in the Carbonera Contract, and (ii)
      easements, encroachments and other minor imperfections of title which do
      not, individually or in the aggregate, detract from the value of or impair
      the use or marketability of any underlying right in the Carbonera
      Contract.

	 	 
	1.21 	
      Preferential Rights means a right held by
      any third party under the terms of the Carbonera Contract, JOA, and
      Documents or under applicable law rule or regulation to pre-empt the
      transaction contemplated by this Agreement or affect its terms in any
      way.

ARTICLE 2

ASSIGNMENT OF INTEREST

2.1      Grant

In exchange for the Consideration, Assignor assign and transfer
to Assignee, and Assignee agrees to accept, a six percent (6%) Participating
Interest in the Carbonera Contract and the Parties shall execute and deliver the
Assignment. 

Upon payment, in full, of the Consideration established in
Article 4.1 herein, Assignee shall hold all rights related to Assignor’s six
percent (6%) Participating Interest in the Carbonera Contract. 

Until payment of the Consideration established in Article 4.1
herein, Assignor will retain the right to receive any and all revenues derived
from production from the Carbonera Contract.

2.2      Binding Effect

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

2.3      Participating Interest

The Participating Interests of the Parties at the Effective
Date are:

  	WELL LOGGING
      LTDA 	4.0% 
	PETROSOUTH ENERGY CORPORATION SUCURSAL
      COLOMBIA 	6.0% 
	DELAVACO ENERGY COLOMBIA INC.
      SUCURSAL COLOMBIA 	39.0% 
	ALANGE CORP.
      COLOMBIA 	51.0% 
	Total 	100.0% 

After the assignment contemplated under this Article 2, the
Participating Interests in the Carbonera Contract shall be: 

  	WELL LOGGING
      LTDA 	4.0% 
	DELAVACO ENERGY COLOMBIA INC. SUCURSAL
      COLOMBIA 	45.0% 
	ALANGE CORP.
      COLOMBIA 	51.0% 
	Total 	100.0% 

2.4      Effective
Date 

Notwithstanding the date of this Agreement or the date on which
the Assignment was executed, the effective date of this Agreement as between the
Parties (hereafter the "Effective Date") shall be deemed to be June 9, 2009.

2.5      Approval

Concurrent with the execution of this Agreement, Assignee shall
execute and Assignor shall cause the Operator under the Carbonera Contract to
execute and submit the Assignment to the Government for approval. 

2.5.1      Assignor shall make its
best efforts and shall conduct every action, underwrite any obligation, provide
any guarantee, obtain any authorization or certificate, including but not
limited to any document, information or action required from Operator, in order
for the Assignee to obtain approval of the Assignment by the ANH. 

2.5.2      Assignor hereby agrees
and undertakes to cause the Operator under the Carbonera Contract to issue the
document attached hereto as Exhibit F, the delivery of which shall be a
Condition Precedent to this Agreement. 

2.5.3      The cost of obtaining
such approvals and consents shall be borne by Assignor and Assignee equally.

2.5.4      If the approval is not
obtained within sixty (60) days of filing, the Parties shall determine, in
writing, if they agree to extend the term. Otherwise, the Parties will proceed
to terminate the Agreement pursuant to Article 3.3. 

2.6      Operator’s rights
  and obligations

This Assignment does not include the transfer of the rights and
obligations of Operator under the Carbonera Contract. 

ARTICLE 3

3.1      No Misrepresentation.
As of the date hereof and as of the Effective Date, each of the Assignor’s
representation and warranties as contained herein shall be true and accurate in
all material respects and each of the covenants of the Assignor have been
satisfied in all material respects. 

3.2      Acts to be Performed:

Each party shall use its best endeavors to execute all
documents, and do and procure to be done all such acts and things as are
reasonably within its power to ensure the Approval is obtained as soon as is
reasonably practicable after execution of this Agreement. 

3.3      Termination

Notwithstanding any period of Force Majeure under Article 12,
in the event of a breach under Articles 7.3 and 2.6 herein, Assignee shall have
the right to terminate this Agreement by giving notice to the Assignor in
accordance with the provisions of Article 10. In the event of termination
pursuant to this Article 3.3, the proposed Assignment shall terminate, and shall
have no force or effect and Assignee shall have no interest whatsoever in the
Carbonera Contract and shall be deemed to have reassigned any rights or
equitable interest it may have acquired under this Agreement to Assignor
retroactive to the Effective Date of this Agreement. In any case the
non-defaulting party will be able to exercise any rights and remedies available
under the applicable law to recover any loss or damage caused by the defaulting
party. 

Cash Consideration referred to in sections (a), (b) and (c) of
article 4 would not be refundable to Assignee in the event that Assignee does
not pay the cash consideration set out in section (c) of Article 4 herein,
except that if Assignor or any of it affiliates, as applicable, is unable to or
does not fulfill any of its obligation(s) or breaches any of the terms under
this Agreement; if such is the case, any cash consideration paid would be
reimbursed by Assignor to Assignee no later than ten (10) business days after
termination. 

3.4      ANH Conditions

If the ANH imposes conditions for approval of the Assignment in
excess of those which are usually imposed in similar circumstances or which
approval contains unusual and onerous conditions which either Party is not
willing to accept, then without delay the Parties shall agree on a mutually
beneficial course of action. 

ARTICLE 4 

CONSIDERATION

4.1      Cash Consideration

In consideration for receiving the Carbonera Assignment of the
Participating Interest hereunder, Assignee agrees to pay Assignor seven hundred
five thousand dollars (USD$750,000.oo), which shall be paid as follows: 

	(a) 	
      One hundred and fifty thousand US dollars
      (USD$150.000.oo), which the Parties acknowledge were paid by Assignee on
      June 19, 2009;

	 	 
	(b) 	
      One hundred and fifty thousand US dollars
      (USD$150.000.oo), which the Parties acknowledge were paid by Assignee on
      August 7, 2009;

	(c) 	
      Four hundred and fifty thousand US dollars
      (USD$450,000.oo), which Assignee shall pay to Assignor or its nominee, on
      October 1, 2009, in the form of a certified cheque, bank draft or wire
      transfer of immediately available funds as agreed by the
  Parties.

4.2      Cash Calls 

Additional to any cash consideration paid by Assignee, Assignee
shall honor any cash calls hereafter incurred, in respect to Assignor’s
Participating Interest in the Carbonera Block. 

Additionally, Assignee shall pay for Assignor’s participation
regarding any cash call issued by ISLEMA RESOURCES, CORP. SUCURSAL COLOMBIA,
and/or ALANGE CORP., provided it was included in the settlement agreement
entered into by PETROSOUTH ENERGY CORPORATION SUCURSAL COLOMBIA; DELAVACO ENERGY
COLOMBIA INC. SUCURSAL COLOMBIA and ISLEMA RESOURCES, CORP. SUCURSAL COLOMBIA.

ARTICLE 5

OBLIGATIONS UNDER CONTRACT

5.1      Acceptance of Prior Terms

Assignee hereby ratifies, confirms and accepts the terms of the
Carbonera Contract and agrees to abide by the terms of such agreements to the
extent of its Participating Interest.

ARTICLE 6

UNDERTAKING OF THE PARTIES

6.1      Assignor Obligations

As of the Effective Date, Assignor shall comply with the
following:

A.                    
   Material Developments.

Assignor shall promptly notify Assignee and provide details
upon the occurrence of:

	 	a) 	
      Any written notice of default or termination received or
      given by Assignor with respect to the Carbonera Contract or the
  JOA;

	 	b) 	
      Any written notice of any pending or threatened claim,
      demand, action, suit, inquiry or proceeding related to the Carbonera
      Contract or the JOA;

	 	c) 	
      Any material damage, destruction or loss to major assets
      under the Carbonera Contract or the JOA; or

	 	d) 	
      Any event or condition between the date of this Agreement
      and the Approval Date that

	 		(i) would have a material adverse effect on the
      business, operations, financial condition or results of operations under
      the Carbonera Contract or the JOA, taken as a whole, or
	 		(ii) would render impossible Assignee’s right to
      the Assignment.

B.                    
  Consultation

Assignor agrees to consult with Assignee before voting on all
material decisions under the JOA, or related to the Carbonera Contract, and vote
as instructed by Assignee. 

6.2      Mutual
Obligations 

As of the Effective Date, Assignee and Assignor shall comply
with each of the following undertakings: 

	 	a) 	
      Each Party, as applicable, agrees to use its best efforts
      to have the Assignment executed and Approval granted as soon as possible
      upon execution of this Agreement.

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

ARTICLE  7

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

7.1      Assignor’s
Representations and Warranties 

Except as otherwise disclosed on the attached schedules,
Assignor makes the following representations and warranties to Assignee as of
the date hereof and repeated as of the Effective Date: 

     A.      Assignor's
  Rights

Assignor, directly, holds the rights to a six per cent (6%)
undivided Participating Interest in the Carbonera Contract, free and clear of
any Liens (other than Permitted Liens) according to the terms of the Carbonera
Contract and applicable Laws. The Carbonera Contract is in full force and effect
and no notice of default, termination, or breach under the Carbonera Contract
has been received neither by Assignor nor, to the knowledge of Assignor, any
other party to the Carbonera Contract. The Carbonera Contract, together with
applicable Laws, contains the entirety of the obligation of Assignor to the
Government, and no other understanding or agreement exists between Assignor and
the Government in relation to the subject matter of the Carbonera Contract
except as otherwise disclosed under this Agreement. There are no Preferential
Rights that have not been expressly disclosed by Assignor to Assignee and no
third party consents required in relation to the execution and perfection of
this Agreement and the interests assigned to Assignee. 

     B.     
  Carbonera Assignment

After the Carbonera Assignment contemplated under Article 2
herein, Assignee shall have full legal and beneficial ownership free and clear
of any and all Liens, other than Permitted Liens of a six per cent (6%)
Participating Interest in the Carbonera Contract.

     C.      Documents

Assignor has provided Assignee with complete and correct copies
of the Carbonera Contract and Documents. Where Assignor has provided any
translation of a Document, Assignor has done so as a courtesy to the Assignee
and Assignor makes no representation or warranty as to the accuracy of the
translation. 

     D.     
  Claims and Litigation

There are no material claims, demands, actions, suits,
governmental inquiries, or proceedings pending or to Assignor's knowledge
threatened in connection with the Carbonera Contract (JOA or other Documents)
which would have an adverse effect upon the consummation of the transactions
contemplated by this Agreement. 

7.2      Assignee’s
Representations and Warranties 

Except as otherwise disclosed in the attached schedules,
Assignee makes the following representations and warranties to Assignor as of
the date hereof and the Effective Date: 

     A.      Claims
and Litigation 

There are no material claims, demands, actions, suits,
governmental inquiries, or proceedings pending, or to Assignee’s knowledge,
threatened, against Assignee which would have an adverse effect upon the
consummation of the transactions contemplated by this Agreement. 

     B.      Technical
  Capability

Assignee has the technical capability, personnel and resources
to fulfill its obligations under this Agreement. 

7.3      Mutual Representations
and Warranties 

The Parties make the following representations and warranties
to each other as of the date hereof and the Effective Date: 

     A.     
  Corporate Authority.

Each Party is duly organized and validly existing under the
laws of the country where it is organized. To the extent required, each Party is
qualified to conduct business in the jurisdiction as necessary to perform the
Carbonera Contract. Each Party has all requisite corporate power and authority
to enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by each Party and constitutes a legal, valid and binding
obligation of each Party, enforceable against each Party in accordance with its
terms. 

     B.     
  Payments

Neither Party nor its Affiliates have made, offered, or
authorized and will not make, offer or authorize any payment, gift, promise or
other advantage, in connection with the matters which are the subject to this
Agreement, whether directly or indirectly through any other person or entity, to
or

for the use or benefit of any public official (i.e., any person
holding a legislative, administrative or judicial office, including any person
employed by or acting on behalf of a public agency, a public enterprise or a
public international organization) or any political party or political party
official or candidate for office, where such payment, gift or promise would
violate: (a) the applicable Laws of the country of operations; (b) the laws of
the country of formation of the Party or such Party's ultimate parent company
(or its principal place of business); or, (c)the principles described in the
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions, signed in Paris on December 17, 1997, which entered into
force on February 15, 1999, and the Convention's Commentaries. 

     C.      Other
  Representations and Warranties

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

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

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

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

All representations and warranties given under this Article 7
shall, for the Carbonera Contractual term set forth herein, be deemed repeated
and valid, true and correct as of the Approval Date, and each Party agrees to
inform the other Party of any material changes to the facts in the
representations and warranties prior to the Approval Date or the execution of
the Assignment, whichever is later. 

7.4      Disclaimer of Other
Representations and Warranties 

Except for the representations and warranties provided in this
article, Assignor and Assignee make no, and disclaim any, warranty or
representation of any kind, either express, implied, statutory, or otherwise,
including, without limitation, the accuracy or completeness of any data,
reports, records, projections, information, or materials now, heretofore, or
hereafter furnished or made available to Assignee in connection with this
agreement. 

ARTICLE 8

TAX

8.1      Tax
  Obligations

Each Party shall be responsible for reporting and discharging
its own tax measured by the profit or income of the Party and the satisfaction
of such Party’s share of all contract obligations under the Carbonera Contract
and under this Agreement. Each Party shall protect, defend and indemnify each
other Party from any and all loss, cost or liability arising from the
indemnifying Party’s failure to report and discharge such taxes or satisfy such
obligations. The Parties intend that all income and

all tax benefits (including deductions, depreciation, credits
and capitalization) with respect to the expenditures made by the Parties
hereunder will be allocated by the Government tax authorities to the Parties
based on the share of each tax item actually received or borne by each Party. If
such allocation is not accomplished due to the application of the Laws /
Regulations or other Government action, the Parties shall attempt to adopt
mutually agreeable arrangements that will allow the Parties to achieve the
financial results intended. Operator shall provide each Party, in a timely
manner and at such Party’s sole expense, with such information with respect to
Joint Operations as such Party may reasonably request for preparation of its tax
returns or responding to any audit or other tax proceeding. 

8.2      Joint Levy

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

ARTICLE 9 

CONFIDENTIALITY

9.1      Confidentiality

Except as otherwise provided in the Carbonera Contract and the
JOA, each Party agrees that all information disclosed under this Agreement,
except information in the public domain or lawfully in possession of a Party
prior to the Effective Date, shall be considered confidential and shall not be
disclosed to any other person or entity without the prior written consent of the
Party which owns such confidential information. This obligation of
confidentiality shall remain in force during the term of the Carbonera Contract
and for a period of three (3) years thereafter. Notwithstanding the foregoing,
confidential information may be disclosed without consent and without violating
the obligations contained in this Article in the following circumstances: 

	 	a) 	
      to an Affiliate provided the Affiliate is bound to the
      provisions of this Article 9 and the Party disclosing is responsible for
      the violation of an Affiliate;

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

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

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

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

	 	f) 	
      to a bona fide prospective transferee of a Party’s
      Participating Interest, or portion thereof, to the extent appropriate in
      order to allow the assessment of such Participating Interest (including an
      entity with whom a Party and/or its

	 		
      Affiliates are conducting bona fide negotiations directed
      toward a merger, consolidation or the sale of a majority of its or an
      Affiliate's shares);

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

	 	h) 	
      to the extent such information must be disclosed pursuant
      to any rules or requirements of any government or stock exchange having
      jurisdiction over such Party, or its Affiliates; provided that such Party
      shall comply with the requirements of Article 14.10 hereunder;

	 	i) 	
      to its respective employees, subject to each Party taking
      sufficient precautions to ensure such information is kept confidential; to
      the extent any information which, through no fault of a Party, becomes a
      part of the public domain; and

	 	j) 	
      to the other parties to the Carbonera Contract and JOA
      and the Government solely to the extent as may be required [in connection
      with the Preferential Rights].

9.2      Disclosure

Disclosure as pursuant to Articles 9.1(e), (f) and (g) shall
not be made unless prior to such disclosure the disclosing Party has obtained a
written undertaking from the recipient party to keep the information strictly
confidential for at least as long as the period set out above and to use the
information for the sole purpose described in Articles 9.1(e), (f) and (g),
whichever is applicable, with respect to the disclosing Party. 

ARTICLE 10

NOTICES 

All notices authorized or required between the Parties by any
of the provisions of this Agreement shall be in writing (in English) and
delivered in person or by courier service or by any electronic means of
transmitting written communications which provides written confirmation of
complete transmission, and properly addressed to the other Party. Verbal
communication does not constitute notice for purposes of this Agreement, and
e-mail addresses and telephone numbers for the Parties are listed below as a
matter of convenience only. A notice given under any provision of this Agreement
shall be deemed delivered only when received by the Party to whom such notice is
directed, and the time for such Party to deliver any notice in response to such
originating notice shall run from the date the originating notice is received.
“Received” for purposes of this Article shall mean actual delivery of the
notice to the address of the Party specified hereunder. 

Name: PETROSOUTH ENERGY CORPORATION SUCURSAL COLOMBIA

Address: [ADDRESS], Bogotá Colombia 
Attention: [NAME] 
Facsimile:
+57.1. [FAX] 

Name: DELAVACO ENERGY COLOMBIA INC SUCURSAL COLOMBIA

Address: Carrera 9 No 113 - 52. of 1203, Bogotá Colombia 
Attention:
Robert Szczuczko 
Facsimile: +57.1 2147203 

c.c. Gabriela Mancero, Cavelier
Abogados
       Carrera 4 No. 72-35, Bogotá,
Colombia 

         Fax: +57.1.2118650 

ARTICLE 11

LAW AND DISPUTE RESOLUTION

11.1      Governing
  Law

The substantive law of Colombia, exclusive of any conflicts of
laws principles that could require the application of any other law, shall
govern this Agreement for all purposes, including the resolution of disputes
between or among Parties. 

11.2      Dispute
  Resolution

The Parties shall first attempt to resolve any dispute,
controversy, or claim arising out of or relating to this Agreement, or the
breach, termination, or invalidity thereof through friendly consultations. If
the dispute is not resolved in this manner within thirty (30) days after
commencement of discussions, then either Party may submit the dispute to final
and binding arbitration. The tribunal shall be formed by three (3) arbitrators,
all chosen by the mutual agreement of the Parties. The arbitrators should be
duly licensed Colombian Lawyers with more than fifteen (15) years experience in
the oil industry, and fully bilingual in the English and Spanish languages. If
no agreement is reached within one (1) month counted as from the date on which
any of the Parties expresses its intention to submit the dispute to arbitration,
then arbitrators shall be appointed by drawing lots from the list of arbitrators
of the Arbitration Centre of Bogotá’s Chamber of Commerce Bogotá. The venue
shall be the city of Bogotá. The language of the arbitration procedure shall be
the Spanish language. The arbitral award shall be final and binding upon de
Parties and the parties agree to be bound thereby and to act accordingly. The
costs of arbitration and the costs of enforcing the arbitral award (including
witness expenses and attorneys' fees) shall be borne by the losing Party, unless
otherwise determined by the arbitral award. When any dispute occurs and when any
dispute is under arbitration, except for the matters under dispute, the parties
shall continue to exercise their remaining respective rights and fulfill their
remaining obligations under this Agreement to the extent possible under the
circumstances. 

ARTICLE 12 

FORCE MAJEURE

If as a result of Force Majeure, any Party is rendered unable,
wholly or in part, to carry out its obligations under this Agreement, other than
the obligation to pay any amounts due, then the obligations of the Party giving
such notice, so far as and to the extent that the obligations are affected by
such Force Majeure, shall be suspended during the continuance of any inability
so caused and for such reasonable period thereafter as may be necessary for the
Party to put itself in the same position that it occupied prior to the Force
Majeure, but for no longer period. The Party claiming Force Majeure shall notify
the other Parties of the Force Majeure within a reasonable time after the
occurrence of the facts relied on and shall keep all Parties informed of all
significant

developments. Such notice shall give reasonably full
particulars of the Force Majeure and also estimate the period of time which the
Party will probably require to remedy the Force Majeure. The affected Party
shall use all reasonable diligence to remove or overcome the Force Majeure
situation as quickly as possible in a commercially reasonable manner but shall
not be obligated to settle any labor dispute except on terms acceptable to it.
All such disputes shall be handled within the sole discretion of the affected
Party. For the purposes of this Agreement, “Force Majeure” shall have the
same meaning as is set out in the Carbonera Contract.

ARTICLE 13

DEFAULT 

13.1      Notice of Default

Where a Party is in default of any provisions of this
Agreement, other than a Condition, the non-defaulting Party will give notice of
default to the defaulting Party in accordance with Article 10. The defaulting
Party will have thirty (30) days to remedy the default. If after thirty (30)
days the default has not been remedied, the non-defaulting Party shall have the
right to terminate the Agreement in accordance with Article 3.3. 

13.2      Default

If Assignee fails to pay the amounts due under Article 4 of
this Agreement by the applicable dates, Assignee shall be in default and such
amounts shall not be refundable to Assignee, except that if Assignor or any of
it affiliates, as applicable, is unable to or does not fulfill any of its
obligation(s) or breaches any of the terms under this Agreement; if such is the
case, any cash consideration paid would be reimbursed by Assignor to Assignee no
later than ten (10) business days after termination. 

In case of default by Assignee, Assignor acknowledges and
accepts that any amounts paid by Assignee shall be full compensation and no
further payment, compensation, or indemnity shall be owned by Assignee. In such
event, Assignor will have no further legal recourse against Assignee, and will
provide Assignee a full release from any future liability, at no cost to the
Assignee. 

ARTICLE 14 

ASSIGNMENT

14.1      Assignment

The Assignee may enter into any transaction (whether by way of
reconstruction, reorganization, consolidation, amalgamation, business
combination, merger, transfer, or otherwise) whereby all or substantially all of
its undertaking, property, assets or capital stock would become the property of,
or beneficially owned by any other person or, in the case of any such
amalgamation, of the continuing corporation resulting therefrom (such
amalgamated corporation, the Successor Corporation) provided that: (i) the
Assignee is not in default or no default would result therefrom; (ii) the
Successor Corporation will continue to be liable for the obligations of the
Assignee under this Agreement, the Carbonera Contract and the JOA. 

ARTICLE 15

GENERAL PROVISIONS

15.1      Relationship of Parties

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

15.2      Further Assurances

Each of the Parties shall do all such acts and execute and
deliver all such documents as shall be reasonably required in order to fully
perform and carry out the terms of this Agreement. 

15.3      Waiver

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

15.4      Joint Preparation

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

15.5      Severance of Invalid
  Provisions

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

15.6     
Modifications

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

15.7      Priority of Agreement

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

15.8      Interpretation

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

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

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

	 	d. 	
      Article. Unless otherwise provided,
      reference to any Article or an Exhibit means an Article or Exhibit of the
      Agreement.

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

15.9      Counterpart
Execution 

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

15.10    Public Announcements

No public announcement or statement regarding the terms or
existence or this Agreement shall be made without prior written consent of all
Parties; provided that, notwithstanding any failure to obtain such approval, no
Party shall be prohibited from issuing or making any such public announcement or
statement to the extent it is necessary to do so in order to comply with the
applicable laws, rules or regulations of any government, legal proceedings or
stock exchange having jurisdiction over such Party or its Affiliates, however,
any such required public announcement shall include only that portion
information which the disclosing Party is advised by written opinion of counsel
(including in-house counsel) is legally required. Such opinion shall be
delivered to the other Parties prior to any such public announcement. 

15.11    Entirety

With respect to the subject matter contained herein, this
Agreement (i) is the entire agreement of the Parties; and (ii) supersedes all
prior understandings, agreements and negotiations of the Parties. 

IN WITNESS of their agreement each Party has caused its duly
authorized representative to sign this instrument on the date set out in the
first sentence of this Agreement.

 

Assignor 

/s/ signed

PETROSOUTH ENERGY CORPORATION SUCURSAL
COLOMBIA
FELIPE PIMIENTA BARRIOS 
Authorized Office 

 

 

Assignee 

/s/ signed

DELAVACO ENERGY COLOMBIA INC. SUCURSAL COLOMBIA

ANDREW DE FRANCESCO 
Authorized Officer 

OVR\OVR\ID-154487\WPC16728 

EXHIBITS 

	Exhibit A 	- 	Assignor’s
      certificate of legal existence and representation 
	Exhibit B 	- 	Assignee’s certificate of legal
      existence and representation 
	Exhibit C 	- 	Carbonera
      Contract 
	Exhibit D 	- 	Assignment 
	Exhibit E 	- 	Document to be
      issued by the Operator of the Carbonera Contract 

EXHIBIT E 
DOCUMENT TO BE ISSUED BY THE OPERATOR OF
THE CARBONERA CONTRACT

[INSERT DATE]

MR. 
ANDREW DE FRANCESCO 
AUTHORIZED OFFICER 
DELAVACO
ENERGY COLOMBIA INC. SUCURSAL COLOMBIA 
BOGOTÁ 

 

Re: Assignment of Participating Interests under the
Carbonera Contract

Dear Mr. De Francesco,

I, __________________________________________, acting in my
capacity as authorized officer of Well Logging Ltda., a company organized and
existing under the laws of the Republic of Colombia, as evidenced in the legal
existence and representation certificate issued by the Chamber of Commerce of
Bogotá and attached hereto (“Well Logging”) do hereby 

DECLARE

1.          
That Well Logging is the authorized operator of the Carbonera Contract and is in
good standing before the ANH. 

2.          
That Well Logging acknowledges that DELAVACO ENERGY COLOMBIA INC. SUCURSAL
COLOMBIA is the legal assignee of six percent (6%) of the Participating
Interests in the Carbonera Contract (“the Assignee”). 

3.          
That Well Logging, acting in its capacity as Operator under the Carbonera
Contract, undertakes and agrees in an irrevocable manner (i) to execute the
Assignment required under Colombian law for Assignee to be approved as such by
the ANH; (ii) to make its best efforts to obtain such Approval including but not
limited to provide any information or document, to sign and deliver any required
document or certificate; and in general, to fully cooperate with the Assignee
and the ANH in order to obtain Approval of the Assignee as soon as possible and,
in any case, no later than within sixty (60) days counted as from the date of
execution of this document, or later at the sole discretion of Delavaco. 

Given this [DAY] ([DAY]th) day of Jule two thousand
and nine (2009). 

_____________________________________
WELL LOGGING LTDA.

Name: 
C.C. 
Position:

OVR\OVR\ID-154487\WPC16728

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