Document:

Execution
Version

      

      SUBSCRIPTION
AGREEMENT

       

      La Cortez
Energy, Inc.

      Calle 67
#7-35, Oficina 409

      Bogota,
Colombia

      

      This
Subscription Agreement (this “Agreement”)
has been executed by Avante Petroleum S.A. (the “Subscriber”)
in connection with the stock purchase agreement (the “Stock
Purchase Agreement”) by and between the Subscriber and La Cortez Energy,
Inc. (the “Company”),
pursuant to which, the Company is acquiring all of outstanding capital stock of
the Subscriber’s wholly owned subsidiary, Avante Colombia S.à.r.l., for
10,285,819 newly issued shares of common stock, $0.001 par value per share, of
the Company (the “Common
Stock”). Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Stock Purchase Agreement.

      

      The
securities being subscribed for pursuant to this Agreement have not been
registered under the Securities Act of 1933, as amended (the “Securities
Act”).  The Subscriber is an “accredited investor,” as defined
in Regulation D under the Securities Act, and a non-”U.S. person,” as defined in
Regulation S under the Securities Act.

       

      1.           Subscription.

       

      a.           Definite
Shares.  Subject to the terms and conditions of this Agreement
and on the basis of the representations, warranties, covenants and agreements
contained herein, the Subscriber hereby subscribes for and agrees to purchase
1,428,572 shares (the “Definite
Shares”) of Common Stock, at a purchase price of $1.75 per share (subject
to adjustment as provided below), for an aggregate purchase price of $2,500,000
(the “Initial
Purchase Price”).

       

      b.           Contingent
Shares.  In the event that the Company raises capital through
the sale of its securities to third parties (“Other
Investors”) pursuant to one or more private placements that close after
December 15, 2009 and on or before March 29, 2010 (collectively, the “Covered Offerings”),
and subject to the terms and conditions of this Agreement and on the basis of
the representations, warranties, covenants and agreements contained herein, the
Subscriber shall purchase additional shares of Common Stock (the “Contingent
Shares”) from the Company.  The price per share payable by the
Subscriber for Contingent Shares (the “Effective
Price”) shall be the lesser of $1.75 and the lowest per share price paid
by Other Investors for shares of Common Stock in any Covered Offering (not
including the exercise or conversion price of any Common Stock equivalents sold
in such Covered Offering).  The number of Contingent Shares to be
purchased by the Subscriber shall equal the quotient of (i) 50% of the gross
dollar amount raised in all Covered Offerings, up to a maximum of $2,500,000,
divided by (ii) the Effective Price. The total amount payable by the Subscriber
for Contingent Shares is referred to herein as the “Contingent
Purchase Price” and, together with the Initial Purchase Price, the “Purchase
Price.”

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      c.           Pricing Adjustments for
Definite Shares.  (1) In the event that the Company does not
complete any Covered Offering on or before March 29, 2010, then, the Company
shall issue to the Subscriber, for no additional consideration, 238,095
additional shares of Common Stock (the “No-Offering
Shares”), so that the Subscriber’s adjusted purchase price of the
Definite Shares and the No-Offering Shares, taken together, shall be $1.50 per
share.  ($2,500,000 / $1.50 = 1,666,667 Definite Shares and
No-Offering Shares in the aggregate.)  (2) In the event that the
Company does complete any Covered Offerings on or before March 29, 2010 and the
Effective Price is less than $1.75, then the Company shall issue to the
Subscriber, for no additional consideration, a number of additional shares of
Common Stock (the “Offering
Adjustment Shares”), so that the Subscriber’s adjusted per share purchase
price of the Definite Shares, the Contingent Shares and the Offering Adjustment
Shares, taken together, shall be equal to the Effective Price.  (3)
The Definite Shares, the Contingent Shares, the No-Offering Shares and the
Offering Adjustment Shares are referred to collectively as the
“Shares.”

       

      d.           Warrants.  As
additional consideration for the Purchase Price, on each Closing Date (as
defined below), the Company shall issue to the Subscriber a warrant (the “Warrants”)
to purchase a number of shares of Common Stock equal to the number of Shares
purchased at that Closing at an exercise price of $3.00 per share (subject to
adjustment upon certain events as provided in the form of
Warrant).  The Warrants shall be in substantially the form attached
hereto as Exhibit
A. The Warrants shall initially be exercisable until three years after
the Initial Closing Date (as defined below); provided, that, in the event
that the Company consummates any Covered Offering in which the securities sold
include warrants to purchase Common Stock (“Other
Warrants”) and the expiration date of such Other Warrants is more than
three years after the Initial Closing (as defined below), then the expiration
date of the Warrants shall be extended to the latest expiration date of any such
Other Warrants.  The shares of Common Stock underlying the Warrants
issued to the Subscriber are referred to herein as “Warrant
Shares.”

       

      2.           Closing.

       

      a.           Initial
Closing.  Subject to the conditions of Section 8 below, the
closing of the subscription for the Definite Shares (the “Initial
Closing”) shall be on the date of the “Closing” under the Stock Purchase
Agreement (the “Initial Closing
Date”) at the place of the Closing under the Stock Purchase
Agreement.

       

      b.           Contingent
Closing.  To the extent that the Company has raised capital
through the sale of its securities pursuant to one or more Covered Offerings,
the Company shall, no later than three Business Days after March 29, 2010,
deliver to the Subscriber a notice (the “Contingent
Purchase Notice”) describing the terms of each Covered Offering and
stating the aggregate and individual number of shares of Common Stock purchased
by Other Investors in Covered Offerings, the Contingent Purchase Price and the
Effective Price. The closing for any Contingent Shares required to be purchased
under Section 1.b. (the “Contingent
Closing,” and, together with the Initial Closing, a “Closing”)
shall occur on the following dates: (i) the Initial Closing Date, for any
Contingent Purchase Notice delivered prior to the Initial Closing, and (ii) the
fifth Business Day after March 29, 2010 (the “Contingent Closing
Date,” and, together with the Initial Closing Date, a “Closing
Date”), for any Contingent Purchase Notice delivered on or after the
Initial Closing, at the offices of Gottbetter & Partners, LLP, at 488
Madison Avenue, New York, New York 10022 (or such other place as is mutually
agreed to by the Company and the Subscriber).

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      c.           No-Offering Shares.
Any No-Offering Shares to be issued to the Subscriber pursuant to the adjustment
provisions in Section 1.c. shall be issued within five Business Days after March
29, 2010.

       

      d.           Offering Adjustment
Shares.  Any
Offering Adjustment Shares to be issued to the Subscriber pursuant to the
adjustment provisions in Section 1.c. shall be issued on the Contingent Closing
Date.

       

      3.           Closing
Procedure.

       

      a.           Subscription
Documents.  On or before the Initial Closing Date, the
Subscriber shall execute this Agreement and the Registration Rights Agreement,
between the Company and the Subscriber of even date herewith, and shall review,
complete and execute the Anti-Money Laundering Investor Form (with attachments),
attached hereto as Appendix A, and the
Investor Certification, attached hereto as Appendix B
(collectively, the “Subscription
Documents”), and deliver the Subscription Documents to the
Company.

       

      b.           Purchase
Price.  On or before each Closing Date, the Subscriber shall
deliver to the Company the full Purchase Price then payable for the Initial
Shares or Contingent Shares being purchased, by wire transfer of immediately
available funds as follows:

       

      
        
          
            
              
                
                  
                    
                      
                        	
                                Bank:

                              	
                                Citibank,
      N.A.

                                640
      Fifth Avenue

                                New
      York, NY  10019

                              
	 	 
	
                                ABA
      Routing #:

                              	
                                021000089

                              
	 	 
	
                                SWIFT
      CODE:

                              	
                                CITIUS33

                              
	 	 
	
                                Beneficiary:

                              	
                                La
      Cortez Energy, Inc.

                              
	 	 
	
                                IMMA
      Account #:

                              	
                                9953639103

                              
	 	 
	
                                Reference:

                              	
                                Purchase
      Price for Subscription by Avante Petroleum
S.A.

                              

                      

                    

                  

                

              

            

          

        

      

       

      4.           Representations and Warranties of the
Company.  The Company hereby represents and warrants to the
Subscriber the following:

       

      a.           Organization.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada.

      

      b.           Authorization.  The
Company has the requisite power and authority to enter into this Agreement and
the other Subscription Documents and to consummate the transactions contemplated
hereby and thereby.  The execution and delivery of this Agreement and
the other Subscription Documents and the performance of all obligations of the
Company hereunder and thereunder have been duly authorized by all necessary
corporate action on the part of the Company.  This Agreement has been
duly executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Subscriber, constitutes the valid and binding
obligation of the Company, enforceable against it in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors’ rights generally, and (b) the availability of injunctive relief and
other equitable remedies.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      c.           As
of the Closing, all action on the part of the Company, its board of directors,
officers and existing stockholders necessary for the authorization, execution
and delivery of this Agreement and the performance of all obligations of the
Company hereunder and thereunder shall have been taken, and this Agreement,
assuming due execution by the parties hereto and thereto, will constitute valid
and legally binding obligations of the Company, enforceable in accordance with
their respective terms, subject to: (i) judicial principles limiting the
availability of specific performance, injunctive relief, and other equitable
remedies and (ii) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect generally relating to or affecting
creditors’ rights.

      

      d.           Valid Issuance of the Common
Stock.  The Shares, when issued, sold and delivered in
accordance with the terms of this Agreement, and the Warrant Shares, when
issued, sold and delivered in accordance with the terms of the Warrants, for the
consideration expressed herein or therein, shall be duly authorized, and validly
issued, fully-paid and non-assessable, and will be free of restrictions on
transfer directly or indirectly created by the Company other than restrictions
on transfer under this Agreement and the Stock Purchase Agreement and under
applicable federal and state securities laws.

      

      e.           Governmental
Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of the Company is
required in connection with the offer, sale or issuance of the Shares, the
Warrant or the Warrant Shares (collectively, the “Securities”),
except for the following: (i) the filing of such notices as may be required
under the Securities Act and (ii) the compliance with any applicable state
securities laws, which compliance will have occurred within the appropriate time
periods therefor.

      

      f.       
    Litigation.  There
are no actions, suits, proceedings or investigations pending or, to the best of
the Company’s knowledge, threatened before any court, administrative agency or
other governmental body against the Company which question the validity of this
Agreement or the other Subscription Documents, or the right of the Company to
enter into any of them, or to consummate the transactions contemplated hereby or
thereby.

      

      g.           Compliance with Other
Instruments.  The execution, delivery and performance of and
compliance with this Agreement and the issuance and sale of the Shares, the
Warrants and the Warrant Shares will not (i) violate the provisions of any of
the Charter Documents of the Company or any of its Subsidiaries, (ii) violate or
constitute a default, an event of default or an event creating rights of
acceleration, termination, cancellation, imposition of additional obligations or
loss of rights, or require a consent to assignment, under any Contract (A) to
which the Company or any of its Subsidiaries is a party, (B) of which the
Company or any of its Subsidiaries is a beneficiary or (C) by which the Company
or any of its Subsidiaries or any of their respective assets is bound, (iii)
violate or conflict with any Law, Authorization or Order applicable to the
Company or any of its Subsidiaries, or give any Governmental Entity or other
Person the right to challenge any of the transactions contemplated by this
Agreement or to exercise any remedy, obtain any relief under or revoke or
otherwise modify any rights held under, any such Law, Authorization or Order, or
(iv) result in the creation of any Liens upon any of the assets owned or used by
the Company or any of its Subsidiaries..

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      h.           Certain Registration
Matters.  Assuming the accuracy of the Subscriber’s
representations and warranties set forth in this Agreement and the Subscription
Documents, no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Subscriber
hereunder.

      

      i.        
   No
General Solicitation.  Neither the Company nor any person
acting on behalf of the Company has offered or sold any of the Securities by any
form of general solicitation or general advertising (within the meaning of
Regulation D)

      

      j.       
    Representations of Company
in the Stock Purchase Agreement.  The Company’s representations
and warranties made in Article IV of the Stock Purchase Agreement are true and
correct in all material respects as of the Closing Date, subject to the
qualifications, exceptions and effective times set forth therein.

      

      5.           Representations and Warranties of the
Subscriber.  The Subscriber represents and warrants to the
Company the following:

       

      a.           The
Subscriber, its advisers, if any, and designated representatives, if any, have
the knowledge and experience in financial and business matters necessary to
evaluate the merits and risks of its prospective investment in the Company, and
have carefully reviewed and understand the risks of, and other considerations
relating to, the purchase of the Securities and the tax consequences of the
investment, and have the ability to bear the economic risks of the
investment.

       

      b.           The
Subscriber is acquiring the Securities for investment for its own account and
not with the view to, or for resale in connection with, any distribution
thereof.  The Subscriber understands and acknowledges that the
Securities have not been registered under the Securities Act or any state or
foreign securities laws, by reason of a specific exemption from the registration
provisions of the Securities Act and applicable state and foreign securities
laws, which depends upon, among other things, the bona fide nature of the
investment intent as expressed herein. The Subscriber further represents that it
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to any third person with respect
to any of the Securities.

       

      c.           The
Subscriber understands that an active public market for the Company’s Common
Stock may not now exist and that there may never be an active public market for
the Shares.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      d.           The
Subscriber, its advisers, if any, and designated representatives, if any, have
received and reviewed information about the Company and have had an opportunity
to discuss the Company’s business, management and financial affairs with its
management.  The Subscriber understands that such discussions, as well
as any written information provided by the Company, were intended to describe
the aspects of the Company’s business and prospects which the Company believes
to be material, but were not necessarily a thorough or exhaustive
description.  Some of such information may include projections as to
the future performance of the Company, which projections may not be realized,
may be based on assumptions which may not be correct and may be subject to
numerous factors beyond the Company’s control.  The Subscriber has
received and reviewed all documents and other information regarding the Company
and an investment in the Securities that it has requested or desired in
connection with making an investment decision.

       

      e.           The
Subscriber is a corporation duly organized, validly existing and in good
standing under the Laws of Luxembourg.

       

      f.           The
Subscriber has the requisite power and authority to enter into this Agreement
and the other Subscription Documents and to consummate the transactions
contemplated hereby and thereby.  The execution and delivery of this
Agreement and the other Subscription Documents and the performance of all
obligations of the Subscriber hereunder and thereunder shall have been duly
authorized by all necessary corporate action on the part of the
Subscriber.  This Agreement has been duly executed and delivered by
the Subscriber and, assuming due authorization, execution and delivery by the
Company, constitutes the valid and binding obligation of the Subscriber,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to creditors’ rights
generally, and (ii) the availability of injunctive relief and other equitable
remedies.

       

      g.           The
Subscriber (i) is an “accredited investor” as defined in Rule 501 of Regulation
D as promulgated by the Securities and Exchange Commission under the Securities
Act and (ii) is not a “U.S. Person” as defined in Regulation S as promulgated by
the Securities and Exchange Commission under the Securities Act, and shall
submit to the Company such further assurances of such status as may be
reasonably requested by the Company.

       

      h.           The
Subscriber is acquiring the Shares in an offshore transaction pursuant to
Regulation S and hereby represents to the Company as follows:

       

      (i)      
    The Subscriber is outside the United States when
receiving and executing this Subscription Agreement;

       

      (ii)          The
Subscriber is not acquiring the Securities as a result of, and will not itself
engage in, any “directed selling efforts” (as defined in Regulation S) in the
United States in respect of any Securities, which would include any activities
undertaken for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market in the United States for the resale of any of
the Securities; provided, however, that the Subscriber may sell or otherwise
dispose of Securities pursuant to registration of such Securities under the
Securities Act and any applicable state and provincial securities laws or under
an exemption from such registration requirements and as otherwise provided
herein;

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (iii)         The
Subscriber understands and agrees that offers and sales of any of the Securities
prior to the expiration of a period of one year after the date of transfer of
the Securities under this Subscription Agreement (the “Distribution
Compliance Period”), shall only be made in compliance with the safe
harbor provisions set forth in Regulation S, pursuant to the registration
provisions of the Securities Act or an exemption therefrom, and that all offers
and sales after the Distribution Compliance Period shall be made only in
compliance with the registration provisions of the Securities Act or an
exemption therefrom, and in each case only in accordance with all applicable
securities laws;

       

      (iv)        The
Subscriber understands and agrees not to engage in any hedging transactions
involving the Securities prior to the end of the Distribution Compliance Period
unless such transactions are in compliance with the Securities Act;
and

       

      (v)         The
Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Securities or any use of this Subscription Agreement,
including: (a) any applicable legal requirements incumbent upon the Subscriber
within its jurisdiction for the purchase of the Securities; (b) any foreign
exchange restrictions applicable to such purchase; (c) any governmental or other
consents that the Subscriber may need to obtain; and (d) the income tax and
other tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Securities. Such Subscriber’s subscription
and payment for, and its continued beneficial ownership of, the Securities will
not violate any applicable securities or other laws of the Subscriber’s
jurisdiction.

       

      i.       
    Subscriber represents that neither it nor, to its
knowledge, any person or entity controlling, controlled by or under common
control with it, nor any person having a beneficial interest in it, nor any
person on whose behalf the Subscriber is acting: (i) is a person listed in the
Annex to Executive Order No. 13224 (2001) issued by the President of the United
States (Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism); (ii) is named on
the List of Specially Designated Nationals and Blocked Persons maintained by the
U.S. Office of Foreign Assets Control; (iii) is a non-U.S. shell bank or is
providing banking services indirectly to a non-U.S. shell bank; (iv) is a senior
non-U.S. political figure or an immediate family member or close associate of
such figure; or (v) is otherwise prohibited from investing in the Company
pursuant to applicable U.S. anti-money laundering, anti-terrorist and asset
control laws, regulations, rules or orders (categories (i) through (v), each a
“Prohibited
Subscriber”).  The Subscriber agrees to provide the Company,
promptly upon request, all information that is reasonably necessary or
appropriate to comply with applicable U.S. anti-money laundering, anti-terrorist
and asset control laws, regulations, rules and orders. The Subscriber consents
to the disclosure to U.S. regulators and law enforcement authorities by the
Company and its affiliates and agents of such information about the Subscriber
as is reasonably necessary or appropriate to comply with applicable U.S.
antimony laundering, anti-terrorist and asset control laws, regulations, rules
and orders. The Subscriber acknowledges that if, following its investment in the
Company, the Company reasonably believes that the Subscriber is a Prohibited
Subscriber or is otherwise engaged in suspicious activity or refuses to promptly
provide information that the Company requests, the Company has the right or may
be obligated to prohibit additional investments, and take any other actions
required by law.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      j.    
       The Subscriber has adequate means of
providing for its current and anticipated financial needs and contingencies, is
able to bear the economic risk for an indefinite period of time and has no need
for liquidity of the investment in the Securities and could afford a complete
loss of such investment.

       

      k.           The
Subscriber is not subscribing for Securities as a result of or subsequent to any
advertisement, article, notice or other communication, published in any
newspaper, magazine or similar media or broadcast over television, radio, or the
internet, or presented at any seminar or meeting, or any solicitation of a
subscription by a person not previously known to the Subscriber in connection
with investments in securities generally.

       

      l.      
     All of the information provided by the Subscriber
in this Agreement and in the other Subscription Documents is correct and
complete as of the date of this Agreement, and, if there should be any material
change in such information prior to the Closing, the Subscriber will immediately
furnish revised or corrected information to the Company.

       

      m.          The
Subscriber realizes that realizes that because of the inherently speculative
nature of business activities and investments of the kind contemplated by the
Company, the Company’s financial position and results of operations may be
expected to fluctuate from period to period and will, generally, involve a high
degree of financial and market risk that can result in substantial or, at times,
even total loss of the value of the Securities.

       

      n.           The
Subscriber understands that no governmental agency has passed upon the
Securities or made any finding or determination as to the wisdom of any
investments therein.

       

      6.           Transfer
Restrictions.  The Subscriber acknowledges and agrees as
follows:

       

      a.           The
Securities have not been registered for sale under the Securities Act, in
reliance on the private offering exemption in Section 4(2) thereof; the Company
does not intend to register any of the Securities under the Securities Act at
any time in the future; and, in the absence of such registration, the
undersigned may not dispose of any of the Securities unless an exemption from
the registration requirements of the Securities Act is available.

       

      b.           The
Company was, at one time, a “shell company” as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Pursuant
to Rule 144(i) under the Securities Act, securities issued by a current or
former shell company (such as the Securities) that otherwise meet the holding
period and other requirements of Rule 144 nevertheless cannot be sold in
reliance on Rule 144 until one year after April 10, 2009 (the date on which the
Company filed current “Form 10 information“ (as defined in Rule 144(i)) with the
SEC reflecting that it ceased being a shell company), and provided that at the
time of a proposed sale pursuant to Rule 144, the issuer is subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act and has filed
all reports and other materials required to be filed by section 13 or 15(d) of
the Exchange Act, as applicable, during the preceding 12 months (or for such
shorter period that the issuer was required to file such reports and materials),
other than Form 8-K reports.  As a result, the restrictive legends on
certificates for the Securities set forth below cannot be removed except in
connection with an actual sale meeting the foregoing
requirements.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      c.           The
Subscriber understands that the certificates representing the Securities shall
bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such certificates or other
instruments):

      

      For the
Shares:

      

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE
SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS.

      

      
        For the
Warrants:

      

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO SUCH SECURITIES UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY SUCH TRANSFER MAY
ALSO BE SUBJECT TO COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS.

       

      The
legend(s) set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if (a) such Securities are being sold pursuant to a registration
statement under the Securities Act, or (b) in connection with an actual
sale of the Securities meeting the requirements set forth in Section 6(b) above
and if such holder delivers to the Company an opinion of counsel, reasonably
acceptable to the Company, that a disposition of the Securities is being made
pursuant to an exemption from the registration requirements of the Securities
Act.

       

      d.           The
Subscriber further understands that, until the Securities cease to be subject to
the lock-up provisions of Section 5.9 of the Stock Purchase Agreement, the
certificates representing the Securities shall bear a legend in substantially
the following form (and a stop-transfer order may be placed against transfer of
such certificates or other instruments):

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        For the
Shares:

      

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF MAY NOT BE OFFERED, SOLD, CONTRACTED FOR SALE, SUBJECTED TO ANY
OPTION TO PURCHASE, HYPOTHECATED, PLEDGED OR OTHERWISE DISPOSED OF, NOR MAY
TITLE THERETO BE TRANSFERRED, UNTIL SEPTEMBER 2, 2012, EXCEPT IN ACCORDANCE WITH
THE TERMS OF THE STOCK PURCHASE AGREEMENT DATED AS OF MARCH 2, 2010 (THE “SPA”)
BY AND BETWEEN LA CORTEZ ENERGY, INC. AND AVANTE PETROLEUM S.A.  A
COPY OF THE SPA IS AVAILABLE FROM THE SECRETARY OF THE COMPANY UPON
REQUEST.

       

      
        For the
Warrants:

      

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF MAY NOT BE OFFERED, SOLD, CONTRACTED FOR SALE, SUBJECTED TO ANY
OPTION TO PURCHASE, HYPOTHECATED, PLEDGED OR OTHERWISE DISPOSED OF, NOR MAY
TITLE THERETO BE TRANSFERRED, UNTIL SEPTEMBER 2, 2012, EXCEPT IN ACCORDANCE WITH
THE TERMS OF THE STOCK PURCHASE AGREEMENT DATED AS OF MARCH 2, 2010 (THE “SPA”)
BY AND BETWEEN LA CORTEZ ENERGY, INC. AND AVANTE PETROLEUM S.A.  A
COPY OF THE SPA IS AVAILABLE FROM THE SECRETARY OF THE COMPANY UPON
REQUEST.

      

      7.           Reservation of
Shares.  The Company covenants and agrees that it shall, at all
times, reserve out of its authorized but unissued shares of Common Stock, a
sufficient number of shares as may be required from time to time to satisfy the
Company’s obligations to issue No-Offering Shares or Offering Adjustment Shares
pursuant to Section 1(b) hereof, and Warrant Shares pursuant to the terms of the
Warrants.

       

      8.           Irrevocability; Binding Effect;
Termination.  The Subscriber hereby acknowledges and agrees
that the subscription hereunder is irrevocable by the Subscriber, except as
required by applicable law, and that this Agreement shall survive the death or
disability of the Subscriber and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors and
permitted assigns. Notwithstanding the foregoing, the obligations of Subscriber
hereunder are conditioned upon the Closing of the Stock Purchase
Agreement.  In the event that the Stock Purchase Agreement is
terminated pursuant to Article IX thereof, this Agreement and Subscriber’s
subscription hereunder shall immediately terminate without any further
action.

       

      9.           Modification.  This
Agreement shall not be modified or waived except by an instrument in writing
signed by the party against whom any such modification or waiver is
sought.

       

      10.         Notices.  Any notice
or other communication required or permitted to be given hereunder shall be in
writing and shall be mailed by certified mail, return receipt requested, or
delivered against receipt to the party to whom it is to be given (a) if to the
Company, at the address set forth above, or (b) if to the Subscriber, at the
address set forth on the signature page hereof (or, in either case, to such
other address as the party shall have furnished to the other in writing in
accordance with the provisions of this Section 10).  Any notice or
other communication given by certified mail shall be deemed given at the time of
receipt thereof.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      11.         Assignability.  This
Agreement and the rights, interests and obligations hereunder are not
transferable or assignable by the Subscriber, and the transfer or assignment of
the Securities shall be made only in accordance with all applicable
laws.

       

      12.         Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
principles thereof relating to the conflict of laws.

       

      13.         Dispute
Resolution.  The parties agree to submit all controversies
under this Agreement for resolution in accordance with the provisions of Section
11.7 of the Stock Purchase Agreement.

       

      14.         Use of
Pronouns.  All pronouns and any variations thereof used herein
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the person or persons referred to may require.

       

      15.         Confidentiality.  The
confidentiality provisions of Section 5.4 of the Stock Purchase Agreement shall
continue in full force and effect in accordance with its terms and shall apply
to any information in relation to this Agreement.

       

      16.         Miscellaneous.

       

      a.           This
Agreement, together with the other Subscription Documents, constitutes the
entire agreement between the Subscriber and the Company with respect to the
purchase and sale of the Securities and supersedes all prior oral or written
agreements and understandings, if any, relating to the subject matter
hereof.  The terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.

       

      b.           The
representations and warranties of the Company and the Subscriber made in this
Agreement shall survive the execution and delivery hereof and delivery of the
Shares.

       

      c.           Each
of the parties hereto shall pay its own fees and expenses (including the fees of
any attorneys, accountants, appraisers or others engaged by such party) in
connection with this Agreement and the transactions contemplated hereby, whether
or not the transactions contemplated hereby are consummated.

       

      d.           This
Agreement may be executed in one or more original or facsimile counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one and the same instrument.

       

      e.           Each
provision of this Agreement shall be considered separable and, if for any reason
any provision or provisions hereof are determined to be invalid or contrary to
applicable law, such invalidity or illegality shall not impair the operation of
or affect the remaining portions of this Agreement.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      f.      
     Paragraph titles are for descriptive purposes only
and shall not control or alter the meaning of this Agreement as set forth in the
text.

       

      g.           The
Subscriber hereby agrees to furnish the Company such other information as the
Company may request prior to the Closing with respect to its subscription
hereunder.

       

      17.         Public
Disclosure.  Except as otherwise provided herein, each party
shall not make any announcement nor disclosure of this Agreement or the
transactions contemplated hereby without the prior consent of the other party,
which consent shall not be unreasonably withheld.  Notwithstanding
anything contained herein to the contrary, the Subscriber acknowledges that it
is the intent of the Company to publicly announce the execution of this
Agreement and the Stock Purchase Agreement, and the Subscriber hereby agrees to
cooperate reasonably with the Company in respect of the drafting thereof and
generally consents to such announcements, copies of which shall be provided to
the Subscriber prior to their public release.

       

      [SIGNATURE
PAGE FOLLOWS IMMEDIATELY]

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       SIGNATURE
PAGE TO

      SUBSCRIPTION
AGREEMENT

      

      IN
WITNESS WHEREOF, the Subscriber hereby executes this Subscription Agreement as
of the 2nd day of
March, 2010

      

      AVANTE
PETROLEUM S.A.

      

      
        
          	
                  By:

                	
                     

                
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

      

      Address
of Executive Offices:

      

      11b
Boulevard Joseph II

      1840
Luxembourg

      

      
        
          
            
              	
                      IRS
      Tax Identification Number:

                    	 
      
	
                         

                    	 
      

            

          

        

      

      

      
        
          	
                  Telephone
      Number:

                	
                     

                
	
                  Facsimile
      Number:

                	
                     

                
	 
      	 
      
	
                  E-mail
      Address:

                	
                     

                

        

      

       

      
        
          
            
              
                	
                        LA
      CORTEZ ENERGY, INC.

                      
	 
      
	
                        By:

                      	
                           

                      
	 
      	
                        Name:

                      
	 
      	
                        Title:

                      

              

            

          

        

      

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Appendix
A

      

      The following is required in
accordance with the AML provision of the USA PATRIOT
ACT.

      

      
        
          
            
              	
                      INVESTOR
      NAME:

                    	
                         

                    
	 	 
	
                      LEGAL
      ADDRESS:

                    	
                         

                    
	 	 
	 
      	
                         

                    
	 
      	 
      
	
                      SS#
      or TAX ID#

                    
	
                      of
      INVESTOR:

                    	
                         

                    

            

          

        

      

      

      IDENTIFICATION,
DOCUMENTATION AND SOURCE OF FUNDS:

      

      
        	
                1.

              	
                Please
      submit a copy of a non-expired identification for the authorized
      signatory(ies) on the investment documents, showing name, date of birth
      and signature:

              

      

      
        
        

         

        Current
Driver’s License        
    or         
   Valid Passport       
     or        
     Identity Card

      

      
        (Circle
one or more)

      

      

      
        	
                2.

              	
                If
      the Investor is a corporation, please submit the following corporate
      documents:

              

      

      (i)
Articles of Incorporation (or similar); (ii) Corporate Resolution granting
authority to signatory(ies) and designating that they are permitted to make the
proposed investment.

      

      
        	
                3.

              	
                Please
      advise where the funds were derived from to make the proposed
      investment:

              

      

       

       
Investments       
     
     Savings            
      Proceeds of
Sale             
     Other ____________

      (Circle
one or more)

      

      
        
          	
                  Signature:

                	
                     

                
	 
      
	
                  Print
      Name:

                	
                     

                
	 
      
	
                  Title
      (if applicable):

                	
                     

                
	 
      
	
                  Date:

                	
                     

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Appendix
B

      LA
CORTEZ ENERGY, INC.

      INVESTOR
CERTIFICATION

      

      For
Individual Accredited Investors Only

      (all
Individual Accredited Investors must INITIAL where
appropriate):

      

      
        
          	
                  Initial
      _______

                	
                  I
      have a net worth (including home, furnishings and automobiles) in excess
      of $1,000,000 either individually or through aggregating my individual
      holdings and those in which I have a joint, community property or other
      similar shared ownership interest with my spouse.

                
	
                  Initial
      _______

                	
                  I
      have had an annual gross income for the past two years of at least
      $200,000 (or $300,000 jointly with my spouse) and expect my income (or
      joint income, as appropriate) to reach the same level in the current
      year.

                

        

      

      

      
        For Non-Individual Accredited
Investors

      

      
        (all Non-Individual Accredited
Investors must INITIAL where
appropriate):

      

      

      
        
          	
                  Initial
      _______

                	
                  The
      investor certifies that it is a partnership, corporation, limited
      liability company or business trust that is 100% owned by persons who meet
      at least one of the criteria for Individual Investors set forth
      above.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is a partnership, corporation, limited
      liability company or business trust that has total assets of at least $5
      million and was not formed for the purpose of investing in the
      Company.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is an employee benefit plan whose investment
      decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is
      a bank, savings and loan association, insurance company or registered
      investment adviser.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is an employee benefit plan whose total assets
      exceed $5,000,000 as of the date of this Agreement.

                
	
                  Initial
      _______

                	
                  The
      undersigned certifies that it is a self-directed employee benefit plan
      whose investment decisions are made solely by persons who meet either of
      the criteria for Individual Investors.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is a U.S. bank, U.S. savings and loan
      association or other similar U.S. institution acting in its individual or
      fiduciary capacity.

                
	
                  Initial
      _______

                	
                  The
      undersigned certifies that it is a broker-dealer registered pursuant to
      §15 of the Securities Exchange Act of 1934.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is an organization described in §501(c)(3) of
      the Internal Revenue Code with total assets exceeding $5,000,000 and not
      formed for the specific purpose of investing in the
    Company.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is a trust with total assets of at least
      $5,000,000, not formed for the specific purpose of investing in the
      Company, and whose purchase is directed by a person with such knowledge
      and experience in financial and business matters that he is capable of
      evaluating the merits and risks of the prospective
    investment.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is a plan established and maintained by a state
      or its political subdivisions, or any agency or instrumentality thereof,
      for the benefit of its employees, and which has total assets in excess of
      $5,000,000.

                
	
                  Initial
      _______

                	
                  The
      investor certifies that it is an insurance company as defined in §2(13) of
      the Securities Act, or a registered investment
  company.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      
        For
Non-U.S. Person Investors

      

      (all Investors who are not a U.S.
Person must INITIAL this section):

      

      
        
          	
                  Initial
      _______

                	
                  The
      Investor is not a “U.S. Person” as defined in Regulation S; and
      specifically the Purchaser is not:

                
	 
      	 
      
	
                  A.

                	
                  a
      natural person resident in the United States of America, including its
      territories and possessions (“United States”);

                
	
                  B.

                	
                  a
      partnership or corporation organized or incorporated under the laws of the
      United States;

                
	
                  C.

                	
                  an
      estate of which any executor or administrator is a U.S.
      Person;

                
	
                  D.

                	
                  a
      trust of which any trustee is a U.S. Person;

                
	
                  E.

                	
                  an
      agency or branch of a foreign entity located in the United
      States;

                
	
                  F.

                	
                  a
      non-discretionary account or similar account (other than an estate or
      trust) held by a dealer or other fiduciary for the benefit or account of a
      U.S. Person;

                
	
                  G.

                	
                  a
      discretionary account or similar account (other than an estate or trust)
      held by a dealer or other fiduciary organized, incorporated, or (if an
      individual) resident in the United States; or

                
	
                  H.

                	
                  a
      partnership or corporation: (i) organized or incorporated under the laws
      of any foreign jurisdiction; and (ii) formed by a U.S. Person principally
      for the purpose of investing in securities not registered under the
      Securities Act, unless it is organized or incorporated, and owned, by
      accredited investors (as defined in Rule 501(a) under the Act) who are not
      natural persons, estates or
trusts.

                

        

      

      

      
        And, in
addition:

      

      

      
        
          	
                  I.

                	
                  the
      Purchaser was not offered the Units in the United
  States;

                
	
                  J.

                	
                  at
      the time the buy-order for the Units was originated, the Purchaser was
      outside the United States; and

                
	
                  K.

                	
                  the
      Purchaser is purchasing the Units for its own account and not on behalf of
      any U.S. Person (as defined in Regulation S) and a sale of the Units has
      not been pre-arranged with a purchaser in the United
    States.

                

        

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      EXHIBIT
A

      (Form of
Warrant)Execution
Version

     

    REGISTRATION RIGHTS
AGREEMENT

     

    This
Registration Rights Agreement (this “Agreement”) is made and
entered into effective as of March 2, 2010 between La Cortez Energy, Inc., a
Nevada corporation (the “Company”) and Avante Petroleum
S.A. (the “Purchaser”
and, together with any permitted assignees of Purchaser’s rights hereunder, the
“Purchasers”).

     

    RECITALS:

     

    WHEREAS,
to provide capital required by the Company for working capital and other
purposes, the Company has offered in compliance with Rule 506 of Regulation D
and/or Regulation S of the Securities Act (as defined herein), to the Purchaser
in a private placement transaction (the “PPO”), units (“Units”) of its securities,
each Unit consisting of one share of Common Stock (the “Subscription Shares”) and a
common stock purchase warrant (the “Subscription Warrants”) to
purchase one share of Common Stock pursuant to the terms of a Subscription
Agreement of even date herewith (the “Subscription Agreement”);
and

     

    WHEREAS,
the Company is acquiring (the “Acquisition”) all of the
issued and outstanding shares of capital stock of Purchaser’s wholly owned
subsidiary, Avante Colombia, S.à r.l., pursuant to a Stock Purchase Agreement of
even date herewith (the “Stock
Purchase Agreement”) for consideration consisting of 10,285,819 shares of
Common Stock (the “Purchase
Price Shares” and, together with the Subscription Shares, the “Avante Shares”);
and

     

    WHEREAS,
the initial closing of the PPO and the closing of the Acquisition are taking
place on the date of this Agreement (the “Effective Date”);
and

     

    WHEREAS,
in connection with the PPO and the Acquisition, the Company agrees to provide
(i) certain “piggyback” registration rights with respect to the Avante Shares
and the shares of Common Stock issuable upon exercise of the Subscription
Warrants and (ii) certain demand registration rights related to the Avante
Shares and the shares of Common Stock issuable upon exercise of the Subscription
Warrants, on the terms set forth herein;

     

    NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants, and conditions set forth herein, the parties mutually agree as
follows:

     

    1.           Certain
Definitions.  As used in this Agreement, the following terms
shall have the following respective meanings:

     

    “Aggregate Purchase
Price,” with respect to Registrable Subscription Securities and Other
Registrable Securities, means the aggregate price paid to purchase such
securities from the Company, which shall initially be $1.75 per Registrable
Common Share or Other Registrable Common Share (subject to adjustment to reflect
any stock splits, combinations, dividends or the like) and, upon issuance
pursuant to the Subscription Warrants or Other Warrants, $3.00 per Registrable
Warrant Share or Other Registrable Warrant Share (subject to adjustment pursuant
to the antidilution provisions of the relevant warrants and to further
adjustment to reflect any stock splits, combinations, dividends or the like that
occur after issuance of such Registrable Warrant Shares or Other Registrable
Warrant Shares).

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    “Avante Shares” has
the meaning given it in the recitals of this Agreement.

     

    “Blackout Period”
means, with respect to a registration, a period, in each case commencing on the
day immediately after the Company notifies the Purchasers that they are
required, because of the occurrence of an event of the kind described in Section
4(f) hereof, to suspend offers and sales of Registrable Securities during which
the Company, in the good faith judgment of its board of directors, determines
(because of the existence of, or in anticipation of, any acquisition, financing
activity, or other transaction involving the Company, or the unavailability for
reasons beyond the Company’s control of any required financial statements,
disclosure of information which is in its best interest not to publicly
disclose, or any other event or condition of similar significance to the
Company) that the registration and distribution of the Registrable Securities to
be covered by such Registration Statement, if any, would be seriously
detrimental to the Company and its stockholders and ending on the earlier of (1)
the date upon which the material non-public information commencing the Blackout
Period is disclosed to the public or ceases to be material and (2) such time as
the Company notifies the selling Holders that sales pursuant to such
Registration Statement or a new or amended Registration Statement may
resume.

     

     “Business Day” means
any day of the year, other than a Saturday, Sunday, or other day on which the
Commission is required or authorized to close.

     

    “Commission” means the
U. S. Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.

     

    “Common Stock” means
the common stock, par value $0.001 per share, of the Company and any and all
shares of capital stock or other equity securities of: (i) the Company which are
added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from any
consolidation or reorganization to which the Company is a party, or to which is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization or sale, the
Company or the stockholders of the Company own equity securities having in the
aggregate more than 50% of the total voting power of such other
corporation.

     

    “Effective Date” has
the meaning given it in the recitals of this Agreement.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.

     

    “Family Member” means
(a) with respect to any individual, such individual’s spouse, any descendants
(whether natural or adopted), any trust all of the beneficial interests of which
are owned by any of such individuals or by any of such individuals together with
any organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, the estate of any such individual, and any corporation,
association, partnership or limited liability company all of the equity
interests of which are owned by those above described individuals, trusts or
organizations and (b) with respect to any trust, the owners of the beneficial
interests of such trust.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    “Holder” means the
Purchaser or any of the Purchaser’s successors and Permitted Assignees who
acquire rights in accordance with this Agreement with respect to any Registrable
Securities directly or indirectly from the Purchaser or from any Permitted
Assignee.

     

    “Majority Holders”
means at any time Holders representing a majority of the Registrable
Securities.

     

    “Other Holder” has the
meaning ascribed to the term “Holder” in the Other Offering RRA.

     

    “Other Offering RRA”
means the Registration Rights Agreement, dated as of December 29, 2009, among
the Company and the Other Purchasers identified therein.

     

    “Other Purchasers” has
the meaning ascribed to the term “Purchasers” in the Other Offering
RRA.

     

    “Other Registrable Common
Shares” has the meaning ascribed to the term “Registrable Common Shares”
in the Other Offering RRA.

     

    “Other Registrable
Securities” has the meaning ascribed to the term “Registrable Securities”
in the Other Offering RRA.

     

    “Other Registrable Warrant
Shares” has the meaning ascribed to the term “Registrable Warrant Shares”
in the Other Offering RRA.

     

    “Other Warrants” has
the meaning ascribed to the term “Investor Warrants” in the Other Offering
RRA.

     

    “Permitted Assignee”
means (a) with respect to a partnership, its partners or former partners in
accordance with their partnership interests, (b) with respect to a corporation,
its stockholders in accordance with their interest in the corporation, (c) with
respect to a limited liability company, its members or former members in
accordance with their interest in the limited liability company, (d) with
respect to an individual party, any Family Member of such party, (e) an entity
that is controlled by, controls, or is under common control with a transferor,
or (f) a party to this Agreement.

     

     “Piggyback
Registration” means, in any registration of Common Stock referenced in
Section 3(a) of this Agreement, the right of each Holder to include the
Registrable Securities of such Holder in such registration.

     

    The terms
“register,”
“registered,”
and “registration” refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

     

    “Purchase Price
Shares” has the meaning given it in the recitals of this
Agreement.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Registrable Acquisition
Shares” means the Purchase Price Shares but excluding (i) any Purchase
Price Shares that have been publicly sold under the Securities Act either
pursuant to Rule 144 of the Securities Act or otherwise; (ii) any Purchase Price
Shares sold by a person in a transaction pursuant to a registration statement
filed under the Securities Act, or (iii) any Purchase Price Shares that are at
the time subject to an effective registration statement under the Securities
Act; provided, that the
Purchase Price Shares shall cease to be Registrable Acquisition Shares if and
for so long as they may be sold publicly in the U.S. without being subject to
volume limitations (whether pursuant to Rule 144 or otherwise).

     

    “Registrable Common
Shares” means the Subscription Shares (and not including the Registrable
Warrant Shares) but excluding (i) any Registrable Common Shares that have been
publicly sold under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Common Shares sold by a person
in a transaction pursuant to a registration statement filed under the Securities
Act, or (iii) any Registrable Common Shares that are at the time subject to an
effective registration statement under the Securities Act; provided, that the
Subscription Shares shall cease to be Registrable Common Shares if and for so
long as they may be sold publicly in the U.S. without being subject to volume
limitations (whether pursuant to Rule 144 or otherwise).

     

    “Registrable
Securities” means the Registrable Acquisition Shares together with the
Registrable Common Shares and the Registrable Warrant Shares.

     

    “Registrable Subscription
Securities” means the Registrable Common Shares together with the
Registrable Warrant Shares.

     

    “Registrable Warrant
Shares” means the shares of Common Stock issued or issuable to each
Purchaser upon exercise of the Subscription Warrants but excluding (i) any
Registrable Warrant Shares that have been publicly sold under the Securities Act
either pursuant to Rule 144 of the Securities Act or otherwise without volume
restriction; (ii) any Registrable Warrant Shares sold by a person in a
transaction pursuant to a registration statement filed under the Securities Act,
or (iii) any Registrable Warrant Shares that are at the time subject to an
effective registration statement under the Securities Act; provided, that the shares of
Common Stock issued or issuable to each Purchaser upon exercise of the
Subscription Warrants shall cease to be Registrable Warrant Shares if and for so
long as they may be sold publicly in the U.S. without being subject to volume
limitations (whether pursuant to Rule 144 or otherwise).

     

     “Registration
Statement” means the registration statement that the Company may be
required to file pursuant to Section 3(c) of this Agreement to register
Registrable Common Shares.

     

    “Rule 144” means Rule
144 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.

     

    “Rule 145” means Rule
145 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Rule 415” means Rule
415 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.

     

     “Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.

     

    “SEC Effective Date”
means the date the Registration Statement is declared effective by the
Commission.

     

    “Subscription Shares”
has the meaning given it in the recitals of this Agreement.

     

    “Subscription
Warrants” has the meaning given it in the recitals of this
Agreement.

     

    “Total Investment
Majority” means, at any time, Holders and/or Other Purchasers holding
Registrable Subscription Securities and/or Other Registrable Securities having
an Aggregate Purchase Price equal to more than one-half of the Aggregate
Purchase Price of all Registrable Subscription Securities and Other Registrable
Securities that are issued and outstanding at such time.

     

    2.           Term.  The
registration rights granted under Section 3 of this Agreement shall terminate on
the earlier of: (i) five years from the Effective Date; (ii) such date on which
all shares of Registrable Securities held or entitled to be held upon conversion
by such Holder may immediately be sold under Rule 144 during any 90 day
period; or (iii) unless terminated sooner hereunder.

     

    3.           Registration.

     

    (a)           Piggyback
Registration.    If the Company shall determine to
register for sale for cash any of its Common Stock, for its own account or for
the account of others (other than the Holders), other than (i) a registration
relating solely to employee benefit plans or securities issued or issuable to
employees, consultants (to the extent the securities owned or to be owned by
such consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Securities Act Rule 145 transaction or a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization or similar
event, the Company shall promptly give to the Holders written notice thereof
(and in no event shall such notice be given less than 20 calendar days prior to
the filing of such registration statement), and shall include as a Piggyback
Registration the Registrable Securities specified in a written request (a
“Piggyback Notice”) delivered by the Holder thereof within 10 calendar days
after receipt of such written notice from the Company; provided, that the Holders
may not make such request with respect to a number of Registrable Securities
equal, in the aggregate, to more than 10% of the number of shares of Common
Stock outstanding at such time (the “Aggregate Piggyback Limit”); and, provided further, that if the Holders,
in fact, deliver Piggyback Notices putatively requesting Piggyback Registration
of an aggregate number of Registrable Securities that is greater than the
Aggregate Piggyback Limit, then each Holder shall be deemed for all purposes of
this Agreement to have requested Piggyback Registration of only such number of
Registrable Securities as is equal to its share of the Aggregate Piggyback
Limit, determined on a pro-rata basis according to the number of Registrable
Securities specified in the Holders’ Piggyback Notices.  However, the
Company may, without the consent of the Holders, withdraw such registration
statement prior to its becoming effective if the Company or such other
stockholders have elected to abandon the proposal to register the securities
proposed to be registered thereby.  Notwithstanding the foregoing, in
the event that the Commission limits the amount of shares that may be registered
in such registration statement, the Company may scale back from the registration
statement such number of shares of Registrable Securities, on a pro-rata basis,
as is required to meet the scale back requirements.  Additionally, in
any such registration statement, Commission scale back requirements shall apply
first to the Registrable Securities together with any other shares being
registered otherwise than pursuant to a mandatory or demand registration right
on a pro-rata basis according to the number of shares requested to be included,
and, second to any shares being registered pursuant to a mandatory or demand
registration obligation of the Company.

    
      
         

      

      
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    (b)           Underwriting.  If
a Piggyback Registration relates to a registered public offering that is to be
made by an underwriting, then the Company shall so advise the Holders of the
Registrable Securities eligible for inclusion in such registration statement
pursuant to Section 3(a).  In that event, the right of any Holder to
Piggyback Registration shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to sell
any of their Registrable Securities through such underwriting shall (together
with the Company and any other stockholders of the Company selling their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter selected for such underwriting by the
Company or the selling stockholders, as applicable.  Notwithstanding
any other provision of this Section, if the underwriter or the Company
determines that marketing factors require a limitation on the number of shares
of Common Stock or the amount of other securities to be underwritten, the
underwriter may exclude some or all Registrable Securities from such
registration and underwriting.  The Company shall so advise all
Holders (except those Holders who failed to timely elect to include their
Registrable Securities through such underwriting or have indicated to the
Company their decision not to do so), and indicate to each such Holder the
number of shares of Registrable Securities that may be included in the
registration and underwriting, if any. The number of shares of Registrable
Securities to be included in such registration and underwriting shall be
allocated among such Holders as follows:

     

    (i)           If
the Piggyback Registration was initiated by the Company, the number of shares
that may be included in the registration and underwriting shall be allocated
first to the Company and then, subject to obligations and commitments existing
as of the date hereof, to all persons exercising piggyback registration rights
(including the Holders and Other Holders) who have requested to sell in the
registration on a pro rata basis according to the number of shares requested to
be included therein; and

     

    (ii)           If
the Piggyback Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company, then the number of
shares that may be included in the registration and underwriting shall be
allocated first to such selling stockholders who exercised such demand to the
extent of their demand registration rights, and then, subject to obligations and
commitments existing as of the date hereof, to the Company and then, subject to
obligations and commitments existing as of the date hereof, to all persons
exercising piggyback registration rights (including the Holders and Other
Holders) who have requested to sell in the registration on a pro rata basis
according to the number of shares requested to be included
therein.

    
      
         

      

      
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    No
Registrable Securities excluded from the underwriting by reason of the
underwriter’s marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw such Holder’s Registrable Securities therefrom by delivering a
written notice to the Company and the underwriter.  The Registrable
Securities so withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by
the withdrawal of such Registrable Securities, a greater number of Registrable
Securities held by other Holders may be included in such registration (up to the
maximum of any limitation imposed by the underwriters), then the Company shall
offer to all Holders who have included Registrable Securities in the
registration the right to include additional Registrable Securities pursuant to
the terms and limitations set forth herein (and the limitation that Registrable
Securities included in any registration statement must not exceed 10% of the
number of shares of Common Stock outstanding at such time) in the same
proportion used above in determining the underwriter limitation.

     

    (c)           Demand Registration on Form
S-1.

     

    (i)           Registrable Subscription
Securities.  If the Company fails to file a registration
statement under Section 3(a) or fails to complete a listing of its Common Stock
on a United States or Canadian national securities exchange within 180 days of
the Effective Date (as defined in the Other Offering RRA), then upon a written
request of Holders, and Other Purchasers making similar request pursuant to
Section 3(c) of the Other RRA constituting, in the aggregate, a Total Investment
Majority, the Company shall file with the Commission a Registration Statement on
Form S-1, or other applicable form, relating to the resale by the Holders of all
of the Registrable Subscription Securities, and the Company shall use its
commercially reasonable efforts to cause such Registration Statement to be
declared effective; provided, that the
Company shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section, or keep such registration effective
pursuant to the terms hereunder, in any particular jurisdiction in which the
Company would be required to qualify to do business as a foreign corporation or
as a dealer in securities under the securities laws of such jurisdiction or to
execute a general consent to service of process in effecting such registration,
qualification or compliance, in each case where it has not already done
so.  Notwithstanding the foregoing, in the event that the Commission
limits the amount of Registrable Subscription Securities that may be sold
pursuant to the Registration Statement, the Company may scale back from the
Registration Statement such number of Registrable Subscription Securities on a
pro-rata basis; provided that all Registrable Warrant Shares shall be scaled
back before any Registrable Common Shares are scaled back.  In such
event, the Company shall give the Purchasers prompt notice of the number of
Registrable Subscription Securities excluded therein.

    
      
         

      

      
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    (ii)           Post-Lock-Up
Demand.  If any Holder (an “Affiliated Holder”) is an
“affiliate” of the Company (within the meaning of Rule 144) immediately
following the Lock-up Period (as defined in the Stock Purchase Agreement), then
upon written request of Affiliated Holders holding an aggregate of at least
1,000,000 Registrable Securities (subject to adjustment for any stock split,
combination, stock dividend or the like with respect to the shares of Common
Stock), the Company shall file with the Commission a Registration Statement on
Form S-1, or other applicable form, relating to the resale by the Affiliated
Holders of all of the Registrable Securities, and the Company shall use its
commercially reasonable efforts to cause such Registration Statement to be
declared effective; provided, that the
Company shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section, or keep such registration effective
pursuant to the terms hereunder in any particular jurisdiction in which the
Company would be required to qualify to do business as a foreign corporation or
as a dealer in securities under the securities laws of such jurisdiction or to
execute a general consent to service of process in effecting such registration,
qualification or compliance, in each case where it has not already done
so.  Notwithstanding the foregoing, in the event that the Commission
limits the amount of Registrable Subscription Securities that may be sold
pursuant to the Registration Statement, the Company may scale back from the
Registration Statement such number of Registrable Securities on a pro-rata
basis.  In such event, the Company shall give the Affiliated Holders
prompt notice of the number of Registrable Securities excluded
therein.

     

    (d)           Other
Registrations.  Before such date that is six months following
the SEC Effective Date, the Company will not, without the prior written consent
of the Total Investment Majority, file any other registration statement with the
Commission or request the acceleration of any other registration statement filed
with the Commission, and during any time subsequent to the SEC Effective Date
when the Registration Statement for any reason is not available for use by any
Holder for the resale of any Registrable Common Shares, the Company shall not,
without the prior written consent of the Total Investment Majority, file any
other registration statement or any amendment thereto with the Commission under
the Securities Act or request the acceleration of the effectiveness of any other
registration statement previously filed with the Commission, other than (i) any
registration statement on Form S-8 or Form S-4 and (ii) any registration
statement or amendment which the Company is required to file or as to which the
Company is required to request acceleration pursuant to any obligation in effect
on the date of execution and delivery of this Agreement.

     

    4.           Registration Procedures for
Registrable Securities.  The Company will keep each Holder
reasonably advised as to the filing and effectiveness of the Registration
Statement.  At its expense with respect to the Registration Statement,
the Company will:

    
      
         

      

      
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    (a)           prepare
and file with the Commission with respect to the Registrable Securities, a
Registration Statement on Form S-1, or any other form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities in accordance with
the intended methods of distribution thereof, and use its commercially
reasonable efforts to cause such Registration Statement to become effective and
shall remain effective for a period of (i) two years plus an amount of time
equal to the duration of any Blackout Periods occurring after the effective date
of the Registration Statement, or (ii) for such shorter period ending on the
earliest to occur of (A) the sale of all Registrable Securities registered
thereby and (B) the availability under Rule 144 for the Holder to sell the
Registrable Securities registered thereby without volume restriction (the “Effectiveness
Period”).  Each Holder agrees to furnish to the Company a
completed questionnaire in the form attached to this Agreement as Annex A (a “Selling Shareholder
Questionnaire”) not later than three Business Days following the date on
which such Holder receives draft materials of such Registration
Statement;

     

    (b)           if
the Registration Statement is subject to review by the Commission, promptly
respond to all comments and diligently pursue resolution of any comments to the
satisfaction of the Commission;

     

    (c)           prepare
and file with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such Registration Statement
effective during the Effectiveness Period;

     

    (d)           furnish,
without charge, to each Holder of Registrable Securities covered by such
Registration Statement (i) a reasonable number of copies of such Registration
Statement (including any exhibits thereto other than exhibits incorporated by
reference), each amendment and supplement thereto as such Holder may reasonably
request, (ii) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 of the Securities Act) as such Holders may
reasonably request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may require to consummate the
disposition of the Registrable Securities owned by such Holder, but only during
the Effectiveness Period;

     

    (e)           use
its commercially reasonable efforts to register or qualify such registration
under such other applicable securities laws of such jurisdictions as any Holder
of Registrable Securities covered by such Registration Statement reasonably
requests and as may be necessary for the marketability of the Registrable
Securities (such request to be made by the time the applicable Registration
Statement is deemed effective by the Commission) and do any and all other acts
and things necessary to enable such Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Holder; provided, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction.

     

    (f)           as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Securities, the disposition of which requires delivery of a
prospectus relating thereto under the Securities Act, of the happening of any
event, which comes to the Company’s attention, that will after the occurrence of
such event cause the prospectus included in such Registration Statement, if not
amended or supplemented, to contain an untrue statement of a material fact or an
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and the Company shall promptly
thereafter prepare and furnish to such Holder a supplement or amendment to such
prospectus (or prepare and file appropriate reports under the Exchange Act) so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, unless suspension of the use of such
prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act
filing made) until the termination of such suspension or Blackout
Period;

    
      
         

      

      
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    (g)           comply,
and continue to comply during the Effectiveness Period, in all material respects
with the Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission with respect to the disposition of all securities
covered by such Registration Statement;

     

    (h)           as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Securities being offered or sold pursuant to the Registration
Statement of the issuance by the Commission of any stop order or other
suspension of effectiveness of the Registration Statement;

     

    (i)           use
its commercially reasonable efforts to cause all the Registrable Securities
covered by the Registration Statement to be quoted on the OTC Bulletin Board or
such other principal securities market on which securities of the same class or
series issued by the Company are then listed or traded;

     

    (j)           provide
a transfer agent and registrar, which may be a single entity, for the shares of
Common Stock at all times;

     

    (k)           cooperate
with the Holders of Registrable Securities being offered pursuant to the
Registration Statement to issue and deliver, or cause its transfer agent to
issue and deliver, certificates representing Registrable Securities to be
offered pursuant to the Registration Statement within a reasonable time after
the delivery of certificates representing the Registrable Securities to the
transfer agent or the Company, as applicable, and enable such certificates to be
in such denominations or amounts as the Holders may reasonably request and
registered in such names as the Holders may request;

     

    (l)           during
the Effectiveness Period, refrain from bidding for or purchasing any Common
Stock or any right to purchase Common Stock or attempting to induce any person
to purchase any such security or right if such bid, purchase or attempt would in
any way limit the right of the Holders to sell Registrable Securities by reason
of the limitations set forth in Regulation M of the Exchange Act;
and

     

    (m)           take
all other reasonable actions necessary to expedite and facilitate the
disposition by the Holders of the Registrable Securities pursuant to the
Registration Statement during the term of this Agreement.

    
      
         

      

      
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    5.           Suspension of Offers and
Sales.  Each Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
4(f) hereof or of the commencement of a Blackout Period, such Holder shall
discontinue the disposition of Registrable Securities included in the
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(f) hereof or notice
of the end of the Blackout Period, and, if so directed by the Company, such
Holder shall deliver to the Company (at the Company’s expense) all copies
(including, without limitation, any and all drafts), other than permanent file
copies, then in such Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.

     

    6.           Registration
Expenses.  The Company shall pay all expenses in connection
with any registration obligation provided herein, including, without limitation,
all registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with applicable securities laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided, that,
in any underwritten registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided in this Section
and Section 9, the Company shall not be responsible for the expenses of any
attorney or other advisor employed by a Holder.

     

    7.           Assignment of
Rights.  No Holder may assign its rights under this Agreement
to any party without the prior written consent of the Company; provided, however, that any
Holder may assign its rights under this Agreement without such consent to a
Permitted Assignee as long as (a) such transfer or assignment is effected in
accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c) such
Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
Registrable Securities with respect to which such rights are being transferred
or assigned.

     

    8.           Information by
Holder.  Holders included in any registration shall furnish to
the Company such information as the Company may reasonably request in writing
regarding such Holders and the distribution proposed by such Holders including
an updated Selling Shareholder Questionnaire if requested by the
Company.

    
      
         

      

      
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    9.           Indemnification.

     

    (a)           In
the event of the offer and sale of Registrable Securities under the Securities
Act, the Company shall, and hereby does, indemnify and hold harmless, to the
fullest extent permitted by law, each Holder, its directors, officers, partners,
each other person who participates as an underwriter in the offering or sale of
such securities, and each other person, if any, who controls or is under common
control with such Holder or any such underwriter within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, and expenses to which the Holder or any such director,
officer, partner or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any omission to state therein a material fact required to be stated or necessary
to make the statements therein in light of the circumstances in which they were
made not misleading, and the Company shall reimburse the Holder, and each such
director, officer, partner, underwriter and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability, action or
proceeding; provided, that such
indemnity agreement found in this Section 9(a) shall in no event exceed the
Purchase Price received by the Company pursuant to the Subscription Agreement,
except in the case of fraud or willful misconduct by the Company; and provided further,
that the Company shall not be liable in any such case (i) to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement in or omission
from such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by a Holder for use
in the preparation thereof or (ii) if the person asserting any such loss, claim,
damage, liability (or action or proceeding in respect thereof) who purchased the
Registrable Securities that are the subject thereof did not receive a copy of an
amended preliminary prospectus or the final prospectus (or the final prospectus
as amended or supplemented) at or prior to the written confirmation of the sale
of such Registrable Securities to such person because of the failure of such
Holder or underwriter to so provide such amended preliminary or final prospectus
and the untrue statement or omission of a material fact made in such preliminary
prospectus was corrected in the amended preliminary or final prospectus (or the
final prospectus as amended or supplemented). Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Holders, or any such director, officer, partner, underwriter or controlling
person, shall survive the transfer of such shares by the Holder,  and
shall survive the termination of this Agreement.

     

    (b)           As
a condition to including Registrable Securities in any registration statement
filed pursuant to this Agreement, each Holder agrees to be bound by the terms of
this Section 9 and to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, each of its directors, officers, partners, legal
counsel and accountants and each underwriter, if any, and each other person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company or any such director or officer or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon an untrue
statement in or omission from such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished by the Holder
for use in the preparation thereof, and such Holder shall reimburse the Company,
and such Holders, directors, officers, partners, legal counsel and accountants,
persons, underwriters, or control persons, each such director, officer, and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating, defending, or settling any such loss, claim,
damage, liability, action, or proceeding; provided, however, that such
indemnity agreement found in this Section 9(b) shall in no event exceed the net
proceeds received by such Holder as a result of the sale of Registrable
Securities pursuant to such registration statement, except in the case of fraud
or willful misconduct.  Such indemnity shall remain in full force and
effect, regardless of any investigation made by or on behalf of the Company or
any such director, officer or controlling person, shall survive the transfer of
such shares by the Holder, and shall survive the termination of this
Agreement.

    
      
         

      

      
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    (c)           Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in this Section (including
any governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
indemnifying party of the commencement of such action; provided, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Section, except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice.  In case any such action is brought against an
indemnified party, unless in the reasonable judgment of counsel to such
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of
investigation.  Neither an indemnified nor an indemnifying party shall
be liable for any settlement of any action or proceeding effected without its
consent.  No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement, which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.  Notwithstanding
anything to the contrary set forth herein, and without limiting any of the
rights set forth above, in any event any party shall have the right to retain,
at its own expense, counsel with respect to the defense of a claim. Each
indemnified party shall furnish such information regarding itself or the claim
in question as an indemnifying party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.

     

    (d)           If
an indemnifying party does or is not permitted to assume the defense of an
action pursuant to Sections 9(c) or in the case of the expense reimbursement
obligation set forth in Sections 9(a) and (b), the indemnification required by
Sections 9(a) and 9(b) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are incurred.

     

    (e)           If
the indemnification provided for in Section 9(a) or 9(b) is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party as
a result of such loss, liability, claim, damage or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent
misrepresentation.

    
      
         

      

      
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    (f)           Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with an underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.

     

    (g)           Other
Indemnification.  Indemnification similar to that specified in
this Section (with appropriate modifications) shall be given by the Company and
each Holder of Registrable Securities with respect to any required registration
or other qualification of securities under any federal or state law or
regulation or governmental authority other than the Securities Act.

     

    10.         Independent Nature of Each
Purchaser’s Obligations and Rights.  The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and each Purchaser shall not be responsible in any way for
the performance of the obligations of any other Purchaser under this Agreement.
Nothing contained herein and no action taken by any Purchaser pursuant hereto,
shall be deemed to constitute such Purchasers as a partnership, an association,
a joint venture, or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

     

    11.         Reports Under the Exchange
Act.  With a view to making available to the Purchasers the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any
time permit the Purchasers to sell the Registrable Securities to the public
without registration, the Company agrees: (i) to make and keep public
information available as those terms are understood in Rule 144, (ii) to file
with the SEC in a timely manner all reports and other documents required to be
filed by an issuer of securities registered under the Securities Act or the
Exchange Act pursuant to Rule 144, (iii) as long as any Purchaser owns any
Registrable Securities, to furnish in writing upon such Purchaser’s request a
written statement by the Company confirming whether it has complied with the
reporting requirements of Rule 144 and of the Securities Act and the Exchange
Act, and to furnish to such Purchaser a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as may be reasonably requested in availing such Purchaser of any
rule or regulation of the SEC permitting the selling of any such Registrable
Securities without registration and (iv) to undertake any additional actions
reasonably necessary to maintain the availability of the use of Rule
144.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    12.         Miscellaneous.

     

    (a)           Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
United States of America and the State of New York, both substantive and
remedial, without regard to New York conflicts of law principles. Any judicial proceeding brought against
either of the parties to this Agreement or any dispute arising out of this
Agreement or any matter related hereto shall be brought in the courts of the
State of New York, New York County, or in the United States District Court for
the Southern District of New York and, by its execution and delivery of this
Agreement, each party to this Agreement accepts the jurisdiction of such courts.
The foregoing consent to jurisdiction shall not be deemed to confer rights on
any person other than the parties to this Agreement.

     

    (b)           Remedies.  In
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement.  The Company
and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate.

     

    (c)           Successors and
Assigns.  Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
Permitted Assignees, executors and administrators of the parties
hereto.

     

    (d)           No Inconsistent
Agreements.  The Company has not entered, as of the date
hereof, and shall not enter, on or after the date of this Agreement, into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof.

     

    (e)           Entire
Agreement.  This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.

     

    (f)           Notices, etc. All
notices or other communications which are required or permitted under this
Agreement shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic
mail, or by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as may be provided hereunder), and shall
be deemed to have been delivered as of the date so delivered:

     

    If to the
Company to:

    

    La Cortez
Energy, Inc.

    Calle 67
#7-35, Oficina 409

    Bogota,
Colombia

    Attention:  Andres
Gutierrez, Chief Executive Officer

    Facsimile:

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    with copy to:

    

    Gottbetter
& Partners, LLP

    488
Madison Avenue, 12th
Floor

    New York,
NY  10022

    Attention:  Adam
S. Gottbetter, Esq.

    Facsimile:  (212)
400-6901

    

    If to the
Purchasers:

    

    To each
Purchaser at the address set forth on the signature page hereto;

    

    or at
such other address as any party shall have furnished to the other parties in
writing.

     

    (g)           Delays or
Omissions.  No delay or omission to exercise any right, power
or remedy accruing to any Holder, upon any breach or default of the Company
under this Agreement, shall impair any such right, power or remedy of such
Holder nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of any similar breach or default thereunder
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
Holder of any breach or default under this Agreement, or any waiver on the part
of any Holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, or by law or otherwise
afforded to any Holder, shall be cumulative and not alternative.

     

    (h)           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

     

    (i)     
      Severability. In the
case any provision of this Agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

     

    (j)        
   Amendments. The
provisions of this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and the Majority Holders.
The Purchasers acknowledge that by the operation of this Section, the Majority
Holders may have the right and power to diminish or eliminate all rights of the
Purchasers under this Agreement.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (k)           Limitation on Subsequent
Registration Rights.  After the date of this Agreement, the
Company shall not, without the prior written consent of the Total Investment
Majority, enter into any agreement with any holder or prospective holder of any
securities of the Company that would grant such holder registration rights
senior or equal to those granted to the Holders hereunder.

     

    [SIGNATURE
PAGES FOLLOW]

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    This
Registration Rights Agreement is hereby executed as of the date first above
written.

     

    
      
        
          
            
              	
                      COMPANY:

                    
	 
      
	
                      LA
      CORTEZ ENERGY, INC.

                    
	 
      	 
      
	
                      By:

                    	 
      
	
                      Name:  Andres
      Gutierrez

                    
	
                      Title:
      Chief Executive
Officer

                    

            

          

        

      

    

     

    [SIGNATURE
PAGE OF PURCHASER FOLLOWS]

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    This
Registration Rights Agreement is hereby executed by the undersigned, as the
Purchaser thereunder, as of the date first above written.

     

    
      
        
          
            	
                    AVANTE
      PETROLEUM S.A.

                  	 
	 
      	 
	
                    By:

                  	 
      	 
	 
      	
                    Name:

                  	 
	 
      	
                    Title:

                  	 

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      	
                              Address
      for notices:

                            	 
	
                              11b
      Boulevard Joseph II

                            	 
	
                              1840
      Luxembourg

                            	 
	
                              Facsimile:

                            	 
      	 

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    Annex
A

     

    LA
CORTEZ ENERGY, INC.

     

    Selling
Securityholder Notice and Questionnaire

     

    The
undersigned beneficial owner of Registrable Securities of La Cortez Energy,
Inc., a Nevada corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended, of the Registrable Securities, in accordance
with the terms of the Registration Rights Agreement (the “Registration Rights
Agreement”) to which this document is annexed.  A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.

     

    Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus.  Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Registration Statement and
the related prospectus.

     

    NOTICE

     

    Subject
to the terms and conditions of the Registration Rights Agreement, the
undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Securities hereby elects to include the
following Registrable Securities owned by it (and/or issuable upon exercise of
Subscription Warrants owned by it) in the Registration Statement:

     

                             Registrable
Common Shares;

        

                             Registrable
Warrant Shares; and

     

                             Registrable
Acquisition Shares.

     

    The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    
      
        	
                1. 

              	
                Name:

              

      

    

     

    
      
        	
                 
      

              	
                (a)

              	
                Full
      Legal Name of Selling Securityholder

              
	 	 	 
	 	 	 

      

    

     

    
      
        	
                 
      

              	
                (b)

              	
                Full
      Legal Name of Registered Holder (if not the same as (a) above) through
      which Registrable Securities are held:

              
	 	 	 
	 	 	 

      

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      
        	
                 
      

              	
                (c)

              	
                Full
      Legal Name of Natural Control Person (which means a natural person who
      directly or indirectly alone or with others has power to vote or dispose
      of the securities covered by the questionnaire):

              
	 	 	 
	 	 	 

      

    

    

    
      
        	
                2. 

              	
                Address
      for Notices to Selling
Securityholder:

              

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
	 
	 
	
                                  Telephone:

                                	 
      	
                                  Fax:
      

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          	
                  Email:
      

                	 
      

        

      

    

    
      
        
          	
                  Contact Person:
      

                	 
      

        

      

    

    

    
      
        	
                3. 

              	
                Broker-Dealer
      Status:

              

      

    

     

    
      	
               
      

            	
              (a)

            	
              Are
      you a broker-dealer?

            

    

     

    Yes    ̈        No    ̈

     

    
      	
               
      

            	
              (b)

            	
              If
      “yes” to Section 3(a), did you receive your Registrable Securities as
      compensation for investment banking services to the
    Company?

            

    

     

    Yes    ̈        No    ̈

     

    
      	
            	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      	
               
      

            	
              (c)

            	
              Are
      you an affiliate of a
broker-dealer?

            

    

     

    Yes    ̈        No    ̈

     

    
      	
               
      

            	
              (d)

            	
              If
      you are an affiliate of a broker-dealer, do you certify that you bought
      the Registrable Securities in the ordinary course of business, and at the
      time of the purchase of the Registrable Securities to be resold, you had
      no agreements or understandings, directly or indirectly, with any person
      to distribute the Registrable
Securities?

            

    

     

    Yes    ̈                      No    ̈

     

    
      	
            	
              Note:

            	
              If
      no, the Commission’s staff has indicated that you should be identified as
      an underwriter in the Registration
Statement.

            

    

     

    
      	
              4. 

            	
              Beneficial
      Ownership of Securities of the Company Owned by the Selling
      Securityholder:

            

    

     

    Except
as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities
issuable pursuant to the PPO.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
      
        	
                 
      

              	
                (a)

              	
                Type
      and Amount of other securities (other than the Registrable Securities)
      beneficially owned by the Selling Securityholder:

              
	 	 	 
	 	 	 
	 	 	 

      

    

    

    
      5. 
 Relationships with the Company:

    

     

    Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.

     

    
      
        	
                 
      

              	
                State
      any exceptions here:

              
	 	 
	 	 
	 	 

      

    

     

    The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.

     

    By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto.  The undersigned understands that
such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.

     

    IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Selling Securityholder Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.

    

    
      
        
          
            
              	
                      Dated:

                    	 
      	 
      	
                      Beneficial
      Owner:

                    	 
      

            

          

        

      

    

    

    
      
        
          	
                  By:

                	 
      
	 
      	
                  Name:

                
	 
      	
                  Title:

                

        

      

    

    

    PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    Gottbetter
& Partners, LLP

    488
Madison Avenue, 12th Floor

    New York,
NY  10022

    Attention:  Rachel
L. DeGenaro

    Facsimile:  (212)
400-6901

    
      
         

      

      
        22

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