Document:

EXHIBIT
10.11

       

       

      Farm-Out
Agreement (Maranta E&P Block) by and between Emerald Energy Plc Sucursal
Colombia and La Cortez Energy Colombia, Inc. dated as of February 6,
2008

       

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    FARM
OUT AGREEMENT

     

    Maranta
E&P Contract

     

    by and
between

     

    EMERALD
ENERGY PLC SUCURSAL COLOMBIA

     

    and

     

    LA CORTEZ
ENERGY COLOMBIA, INC

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        
          	
                  ARTICLE
      1  DEFINITIONS

                	
                  1

                
	 
      	 
      
	
                  ARTICLE
      2  ASSIGNMENT OF INTEREST

                	
                  6

                
	 
      	 
      
	
                  ARTICLE
      3  CONDITIONS PRECEDENT TO ASSIGNMENT

                	
                  8

                
	 
      	 
      
	
                  ARTICLE
      4  CONSIDERATION

                	
                  10

                
	 
      	 
      
	
                  ARTICLE
      5  OBLIGATIONS UNDER CONTRACT

                	
                  12

                
	 
      	 
      
	
                  ARTICLE
      6  UNDERTAKING OF THE PARTIES

                	
                  12

                
	 
      	 
      
	
                  ARTICLE
      7  REPRESENTATIONS AND WARRANTIES

                	
                  15

                
	 
      	 
      
	
                  ARTICLE
      8  TAX

                	
                  20

                
	 
      	 
      
	
                  ARTICLE
      9  CONFIDENTIALITY

                	
                  20

                
	 
      	 
      
	
                  ARTICLE
      10  NOTICES

                	
                  22

                
	 
      	 
      
	
                  ARTICLE
      11  LAW AND DISPUTE RESOLUTION

                	
                  23

                
	 
      	 
      
	
                  ARTICLE
      12  FORCE MAJEURE

                	
                  23

                
	 
      	 
      
	
                  ARTICLE
      13  DEFAULT

                	
                  24

                
	 
      	 
      
	
                  ARTICLE
      14  GENERAL PROVISIONS

                	
                  26

                

        

      

    

    

    Add
Exhibits

    

    
      
        	
                Exhibit
      A

              	
                E&P
      Contract

              
	 
      	 
      
	
                Exhibit
      B

              	
                Joint
      Operating Agreement

              
	 
      	 
      
	
                Exhibit
      C

              	
                Assignment

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FARMOUT
AGREEMENT

     

    THIS
AGREEMENT is entered into on the      day of
February 2009 by and between EMERALD ENERGY PLC SUCURSAL COLOMBIA (hereinafter
referred to as “Farmor”), a Colombian branch of a company existing under the
laws of The Isle of Man, United Kingdom and LA CORTEZ ENERGY COLOMBIA Inc
(hereinafter referred to as “Farmee”), a company existing under the laws of the
state of Nevada.  The companies named above and their respective
successors and assignees (if any) may sometimes individually be referred to as a
“Party” and collectively as the “Parties”.

     

    WITNESSETH:

     

    WHEREAS,
the Contract (as defined below) was signed on 12nd
September 2006 by and between Emerald Energy Plc. Sucursal Colombia and
the AGENCIA NACIONAL DE HIDROCARBUROS (“ANH”) for the exploration and production
of hydrocarbons in the Contract Area as defined below (the
“CONTRACT”).

     

    WHEREAS,
as of the date of this Agreement, Farmor holds 100% of the interest rights and
obligations in the Contract. As per the Contract, Farmor is obligated to bear
100% of the exploration investments related to the Contract.

     

    WHEREAS,
Farmor is willing to assign and transfer to Farmee, and Farmee wishes to acquire
part of the interests, rights and obligations under the Contract.

     

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

     

    ARTICLE
1

     

    DEFINITIONS

     

    As used
in this Agreement, the following capitalized words and terms shall have the
meaning ascribed to them below.

     

    
      
         

      

      
        -1
-

        
          

        

      

      
         

      

    

    
      	
              1.1

            	
              AFE
      means Authorization for Expenditure for each well, in accordance to the
      provisions of the JOA.

            

    

     

    
      	
              1.2

            	
              Affiliate
      means, in connection with a specified Person (the “Specified
      Person”), (i) other Person who, directly or indirectly, is
      controlled by or is under common control of such Specified Person or any
      of its shareholders; (ii) any Person holding directly or indirectly 50% or
      more of the capital of the Specified Person; and (iii) any Person in whose
      capital said Specified Person holds directly or indirectly 50% or more of
      its paid-in capital.

            

    

     

    
      	
              1.3

            	
              Agreement
      means this Farmout Agreement together with its Exhibits and any extension,
      renewal or amendment hereof agreed to in writing by the
      Parties.

            

    

     

    
      	
              1.4

            	
              Appraisal
      Well means any well, the purpose of which at the time of the
      commencement of drilling is to evaluate an accumulation of Hydrocarbons,
      which accumulation was at that time proven by prior
    drilling.

            

    

     

    
      	
              1.5

            	
              Approval
      Date means the date on which the Government formally approves or
      endorses the Assignment of the Participating Interest transferred
      hereunder, according to Paragraph, Article
3.1

            

    

     

    
      	
              1.6

            	
              Assignment
      means the document to be executed by the Parties, in the exact form
      attached to this Agreement as Exhibit C for the Transaction Interest
      assignment, by which the Transaction Interests is transferred and conveyed
      to the Farmee by the Farmor as provided
  hereunder.

            

    

     

    
      	
              1.7

            	
              Assignment
      Date means the date on which the parties execute the Assignment
      documents for the Assignment.

            

    

     

    
      	
              1.8

            	
              Completion
      means an operation intended to complete a well through the Christmas tree
      as a producer of Hydrocarbons in one or more Zones, including, the setting
      of production casing, perforating, stimulating the well and production
      Testing conducted in such operation.  "Complete" and other
      derivatives shall be construed
accordingly.

            

    

     

    
      
         

      

      
        -2
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              1.9

            	
              Consequential
      Loss means any indirect or consequential loss howsoever caused or
      arising whether under contract, by virtue of any fiduciary duty, in tort
      or delict (including negligence), as a consequence of breach of any duty
      (statutory or otherwise) or under any other legal doctrine or principle
      whatsoever whether or not recoverable at common law or in equity.
      “Consequential Loss” shall be deemed to include, without prejudice to the
      generality of the foregoing, the following to the extent to which they
      might not otherwise constitute indirect or consequential
    loss:

            

    

     

    
      	
               
      

            	
              (a)

            	
              loss
      or damage arising out of any delay, postponement, interruption or loss of
      production, any inability to produce, deliver or process hydrocarbons or
      any loss of or anticipated loss of use, profit or
  revenue;

            

    

    
      	
               
      

            	
              (b)

            	
              loss
      or damage incurred or liquidated or pre-estimated damages of any kind
      whatsoever borne or payable, under any contract for the sale, exchange,
      transportation, processing, storage or other disposal of
      hydrocarbons;

            

    

    
      	
               
      

            	
              (c)

            	
              losses
      associated with business interruption including the cost of overheads
      incurred during business
interruption;

            

    

    
      	
               
      

            	
              (d)

            	
              loss
      of bargain, contract, expectation or
  opportunity;

            

    

    
      	
               
      

            	
              (e)

            	
              any
      other loss or anticipated loss or damage whatsoever in the nature of or
      consequential upon the foregoing.

            

    

    

    
      	
              1.10

            	
              Conditions
      Precedent means all of the conditions enumerated in Article
      3.1.

            

    

     

    
      	
              1.11

            	
              Consideration
      has the meaning given in Article 4
hereof.

            

    

     

    
      	
              1.12

            	
              Continuous First
      Appraisal:  has the meaning that the first Appraisal Well
      is drilled using the same drilling rig, and under the same rig
      mobilization on the Maranta Contract Area, as the Exploration Well in the
      First Farmin Works.

            

    

     

    
      	
              1.13

            	
              Contract
      means the Maranta E&P Contract attached as Exhibit A effective
      September 12nd,
      2006 by and between Farmor and the AGENCIA NACIONAL DE HIDROCARBUROS
      (“ANH”) for the exploration and production of hydrocarbons in the Contract
      Area.

            

    

     

    
      	
              1.14

            	
              Contract
      Area means the area or block more particularly described in the
      Article 3 of the Contract.

            

    

     

    
      
         

      

      
        -3
-

        
          

        

      

      
         

      

    

    
      	
              1.15

            	
              Development
      Well means any well, the purpose of which at the time of the
      commencement of drilling is to produce an accumulation of Hydrocarbons,
      which accumulation was at that time proven by prior
    drilling.

            

    

     

    
      	
              1.16

            	
              Documents
      means the Contract, the JOA, the Assignment, and others documents related
      to this Agreement.

            

    

     

    
      	
              1.17

            	
              Effective
      Date is the date of execution of this
  Agreement.

            

    

     

    
      	
              1.18

            	
              Exploration
      Well means any well, the purpose of which at the time of the
      commencement of drilling is to explore for an accumulation of
      Hydrocarbons, which accumulation was at that time unproven by
      drilling.

            

    

     

    
      	
              1.19

            	
              Farmin
      Area is the Maranta E&P Contract Area as defined in Exhibit
      A.

            

    

     

    
      	
              1.20

            	
              Farmin
      Works  has the meaning given in Article
    4.1

            

    

     

    
      	
              1.21

            	
              Government
      means the AGENCIA NACIONAL DE HIDROCARBUROS (hereinafter
      ANH”).

            

    

     

    
      	
              1.22

            	
              Guarantee  means
      a financial instrument that guarantees payment of an
      obligation.

            

    

     

    
      	
              1.23

            	
              Hydrocarbons
      mean all substances which are subject to and covered by the Contract,
      including crude oil and natural
gas.

            

    

     

    
      	
              1.24

            	
              Interim
      Period means the period commencing from the date of the execution
      of this Agreement until the date of satisfaction of all obligations of the
      Farmee set forth in Article 4.1.A, as accepted by the
    Farmor.

            

    

     

    
      	
              1.25

            	
              JOA
      means the Joint Operating
Agreement.

            

    

     

    
      	
              1.26

            	
              Laws
      means those laws, statutes, rules and regulations governing activities
      under the Contract, including but not limited to any and all applicable
      oil and gas regulations.

            

    

     

    
      	
              1.27

            	
              Operator
      means Farmor, which has been designated by the Parties in the Agreement
      and the parties in the Contract to conduct operations in the Contract
      Area, in accordance with the
Agreement.

            

    

     

    
      
         

      

      
        -4
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                1.28

              	
                Participating
      Interest means
      the undivided interests of such party expressed as a percentage of the
      total interest, rights and obligations derived from the
      Contract.

              

      

    

     

    
      	
              1.29

            	
              Person
      shall mean any individual, corporation, company, partnership, trust, or
      unincorporated organization.

            

    

     

    
      	
              1.30

            	
              Phases:
      means one of the phases of the Exploration Period referred to in the
      Contract.

            

    

     

    
      	
              1.31

            	
              Senior
      Managerial Personnel means, with respect to a Party, any individual
      who functions as its designated manager or supervisor who is responsible
      for or in charge of onsite drilling, construction or production and
      related operations, and any individual who functions for that Party or one
      of its Affiliates at a management level equivalent to or superior to such
      individual, and any officer or director of that Party or one of its
      Affiliates.

            

    

     

    
      	
              1.32

            	
              Sidetracking
      means the directional control and intentional deviation of a well
      from vertical so as to change the bottom hole location unless done to
      straighten the hole or to drill around junk in the hole or to overcome
      other mechanical difficulties.  "Sidetrack" and other
      derivatives shall be construed
accordingly.

            

    

     

    
      	
              1.33

            	
              Testing
      means an operation intended to evaluate the capacity of a Zone or
      intervals of interest inside a reservoir to produce Hydrocarbons in the
      Farmin Area. "Test" and other derivatives shall be construed
      accordingly.

            

    

     

    
      
        	
                1.34

              	
                Transaction
      Interest means
      a Participating Interest of up to 20% Participating Interest of the Farmor
      interest, or less than 20% pursuant to the Article 13.4 of this Agreement
      , rights and obligations in the Contract, the JOA and other
      Documents.

              

      

    

     

    
      	
              1.35

            	
              USD
      means the currency of the United States of America, the United States
      Dollar.

            

    

     

    
      	
              1.36

            	
              Willful
      Misconduct or Gross Negligence means an
      intentional, conscious or reckless disregard by Senior Managerial
      Personnel of any of the Parties, of good and prudent oil and gas field
      practice or any of the terms of this Agreement in utter disregard of
      avoidable and harmful consequences but shall not include any act,
      omission, error of judgment or mistake made in the exercise in good faith
      of any function, authority or discretion vested in or exercisable by such
      Senior Managerial Personnel and which in the exercise of such good faith
      is justifiable by special circumstances, including but not limited to
      safeguarding of life, property or the environment and other
      emergencies.

            

    

     

    
      
         

      

      
        -5
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              1.37

            	
              Zone
      means a stratum of earth containing or thought to contain an accumulation
      of Hydrocarbons separately producible from any other accumulation of
      Hydrocarbons.

            

    

     

    ARTICLE
2

     

    ASSIGNMENT
OF INTEREST

     

    
      	
              2.1

            	
              Grant

            

    

     

    
      Subject
to the satisfaction of the Conditions Precedent for the assignment of the
Transaction Interests and in exchange for the components of Consideration set
forth in Section 4.1.A of this Agreement for the Transaction Interest, Farmor
shall assign and transfer to Farmee, and Farmee agrees to accept, the
Transaction Interests and the Parties shall execute and deliver the Assignment.
While the Government approval is granted, this Agreement and the attached JOA
shall govern the relations between the Parties. The procedure to obtain such
Government approval will only begin after the fulfillment of the Consideration
set forth in Section 4.1.A by the Farmee.

    

     

    For the
avoidance of doubt, the assignment and transfer of the Transaction Interests
shall take place only after the fulfillment of the components of Consideration
set forth in Section 4.1.A of this Agreement for such Transaction Interest by
the Farmee.

     

    
      	
               
      

            	
              The
      relationship between parties, the assignment and the transfer of the
      Transaction Interest shall take place pursuant to the Colombian law and
      this farmout agreement.

            

    

     

    
      	
              2.2

            	
              Joint
      Operating Agreement

            

    

     

    With the
execution of the Assignment, The Parties agree to execute the JOA attached as
Exhibit B, herein approved and initialized by the Parties.  The
parties agree that the prevision included in Article 3.2 of the JOA, shall be
filled out in accordance to the final Participating Interests. The effective
date and execution of the JOA shall be the date of satisfaction of all
obligations of the Farmee set forth in Article 4.1.A.

     

    
      
         

      

      
        -6
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              2.3

            	
              Binding
      Effect

            

    

     

    
      	
               
      

            	
              Farmor
      and Farmee shall be bound by this Agreement as of the Effective Date and
      shall fully perform all of their respective obligations under this
      Agreement.

            

    

     

    
      	
              2.4

            	
              Ownership

            

    

     

    After the
assignment of the Transaction Interest contemplated under this Article 2 and
subject to the satisfaction, or waiver, of the Conditions Precedent relating to
the Transaction Interest, the Participating Interest of the Farmor and Farmee in
the interest, rights and obligations in the Farmin Area shall be:

     

    
      
        
          
            	
                    Emerald
      Energy PLC Sucursal Colombia:

                  	 	 	80	%
	 
      	 	 	 	 
	
                    La
      Cortez Energy Colombia Inc.:

                  	 	 	20	%
	 
      	 	 	 	 
	
                    Total  
      :

                  	 	 	100	%

          

        

      

    

     

    Except in
the case the Farmee Participating Interest shall be less than 20%, if Article
13.4 of this Agreement is applied.

     

    
      	
              2.5

            	
              Approval

            

    

     

    
      	
               
      

            	
              The
      Farmee shall provide to Farmor within 15 days after the satisfaction of
      the Consideration for the Transaction Interests by the Farmee foreseen in
      section 4.1.A, all documentation required for the approval of the
      Assignment of the Transaction Interest by the Government.  The
      Assignment of such Transaction Interest shall be executed within 30 days
      after the satisfaction of the Consideration for such Transaction Interest
      by the Farmee, and Farmor shall deliver the Assignment within 15 days to
      the Government for approval.

            

    

     

    
      
         

      

      
        -7
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              The
      Farmor has no obligation whatsoever to ensure approval from Government or
      third parties and bears no responsibility for the Government’s and third
      parties’ decisions regarding such
approvals.

            

    

     

    
      	
               
      

            	
              All
      the terms and conditions contained in the approval documents executed by
      ANH for the conveyance of the Transaction Interest, are mandatory and
      prevail over any condition included in this Agreement. Such documents
      shall be regarded as part of the Assignment attached in Exhibit
      C.

            

    

     

    
      	
               
      

            	
              In
      the event that the Government does not approve the Assignment and subject
      to the fulfillment of the obligation of the Farmee to provide the Farmor
      with the required documentation for Government’s approval, the Parties
      shall use their best endeavors to seek in good faith a legal way to enter
      into an agreement by under equivalent terms of  this Agreement
      and the JOA, that shall privately govern the relations between the
      Parties, and the Farmor will continue representing the Parties, as
      provided in section 2.4, before the Government, their rights, interests
      and obligations in the Contract.

            

    

     

    ARTICLE
3

     

    CONDITIONS
PRECEDENT TO ASSIGNMENT

     

    
      	
              3.1

            	
              Conditions
      to Assignment of the Transaction
Interest

            

    

     

    
      	
               
      

            	
              The
      validity of the execution of the Assignment related to the Transaction
      Interest is subject to the satisfaction or waiver of all of the following
      conditions, collectively called “Conditions Precedent”,
    that:

            

    

     

    
      	
               
      

            	
              A.

            	
              The
      Farmee fulfills the terms of the Consideration set forth is Section 4.1.A,
      relating to the Transaction Interest ;
and

            

    

     

    
      
         

      

      
        -8
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              B.

            	
              The
      Parties obtain approval of the Government to the Assignment in writing as
      required under the Contract.  If government does not grant the
      approval the private agreement executed as stated in sections 2.1 and 2.5
      shall fulfill this
condition;  and

            

    

     

    
      	
               
      

            	
              C.

            	
              The
      Parties obtain any other required authority consents for the transfer of
      the Transaction Interest (if any) proposed to be transferred hereunder in
      writing; and

            

    

     

    
      	
               
      

            	
              D.

            	
              The
      Parties execute the JOA attached herein as Exhibit
  B.

            

    

     

    
      	
              3.2.

            	
              Acts
      to be Performed:

            

    

     

    Each
party shall execute all documents, and do all such acts and things within its
power to ensure the Conditions to Assignment are satisfied for the assignment of
the Transaction Interests.

     

    Notwithstanding,
the third parties and the Government approvals are out of the control of the
Parties, each party shall execute all documents and do all such acts and things
within its power required to obtain such approvals.

     

    
      	
              3.3.

            	
              Penalty
      Clause

            

    

     

    In the
event of material breach of this Agreement by any of the Parties, then the other
Party has the right to terminate this Agreement by giving notice to the other
Party in accordance with the provisions of Articles 10 - NOTICES and 13 - DEFAULT.

     

    Farmee
hereby acknowledges that any delay in properly performing their obligations set
forth in Article 4.1.A. hereunder shall automatically cause damages to Farmor,
as such delay will directly affect the terms of the
Agreement.    The affected Party may claim in full any
damages suffered as a consequence of a breach or delay of the breaching or
delayed Party in the performance of its obligations, in which case such damages
shall be proven in accordance with applicable law.   In the event
of delay of the Farmee to pay any due sums, the damages shall be exclusive
equivalent to the moratory interest foreseen in Clausde 13.1.

     

    
      
         

      

      
        -9
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    ARTICLE
4

     

    CONSIDERATION

    

    
      
        	
                4.1

              	
                In
      Consideration for the assignment of the Transaction Interest hereunder,
      the Farmee agrees to the following
:

              

      

    

     

    
      
        	
              	
                A.

              	
                The
      Farmee will acquire a 20% Participating Interest in the Farmin Area by
      paying a carry of the following
activities:

              

      

    

     

    A.1 The
drilling of the exploratory well of the Farmin Works, by paying a 3.25 to 1
carry of the actual dry-hole cost (including Overhead ); which
is  estimated at US$7.50 MM (before overhead)  in accordance
with the corresponding  AFE. Farmee shall pay 65% of the dry hole
cost. Payment shall consist of a first sum: of$2.433.000 USD payable according
to the instructions issued by Farmor, within 12 days after
execution  of this Agreement, a second payment of $2.433.000 USD
payable within 12 days following the starting of mobilization of the rig, with
the remainder on presentation of cash calls related to the Farmin
Works.  If after drilling the well it is plugged and abandoned and the
actual dry hole cost is different that the estimated above, the Farmee will pay
the difference if the actual is higher or the Farmor shall reimburse to the
Farmee the difference if the actual dry hole is lower than the
estimated.

     

    A.2. If
the Farmor decides that the well of A.1 shall be completed, and the Farmee
agrees with that decision, then the Farmee will pay 3.25 to 1 of the actual
completion cost (including Overhead), which is estimated at US$1.80 MM (before
overhead). In summary, Farmee shall pay a total of 65% of the actual cost, if
the well is completed. Payment shall consist of an initial sum of $1,170.000
USD, payable within 5 days after a decision or consideration about well
completion is required by the Operator, payable according to the instructions
issued by Farmor with the remainder or credit payable on presentation of cash
calls related to the Farmin Works.  Should Farmee not agree with the
well completion decision, this Agreement shall be automatically terminated
without further obligations or indemnities to the other Party.

     

    
      
        
        

      

      
        -10
-

        
          

        

      

      
        
        

      

    

     

    A.3 In
addition, Farmee will reimburse Farmor 60% (a 3 to 1 carry) of the actual cost
incurred in Phase 1 work obligation currently estimated at $1.660.000 USD.
Payment shall consist in a unique sum of $993.000 USD, payable within 5 days
after the execution of this Agreement, provided that AFE or invoices of actual
cost incurred have been delivered to Farmee.

     

    
      
        	
              	
                B.

              	
                The
      Farmin Works shall comprise the drilling, evaluating, testing and
      completing or plugging and abandoning one (1) Exploration Well in the
      Maranta Block plus the production testing of this Exploration Well for a
      sufficient period, not exceeding 48 hours of flow testing per each
      individual prospective zone (DST’S), plus a total of 72 hours for a
      comingled flow testing without prejudice of the associated operations
      required for each flow testing.  The Exploration Well shall be
      drilled on the Villeta and Caballos Formations at a location determined by
      the Farmor, and shall be sufficient to test the prospective sandstones of
      the Villeta and Caballos Formations at a measured total depth expected to
      be approximately 10.800 feet
MD.

              

      

    

     

    
      
        	
              	
                C.

              	
                After
      the Farmin Works are executed and Farmee has paid a 3.25 to 1 carry of the
      Phase 2 and has reimbursed 60% of the cost incurred in Phase 1, all the
      costs and revenues associated to the block will be shared in the following
      portions: Farmor 80% and Farmee 20%, except in the case the Farmee
      Participating Interest shall be less than 20%, if Article 13.4 of this
      Agreement is applied.

              

      

    

     

    
      
        	
              	
                D.

              	
                The
      Farmor, in good faith declares that to the Effective Date it has no
      knowledge of any environmental debt or old well completion requirement by
      the Government or any other
authorities.

              

      

    

     

    
      
        	
              	
                E.

              	
                The
      Parties agree that all costs relating to the drilling of this Exploration
      Well including, but not limited to, well planning and design, well civil
      works, rig mobilization and demobilization, drilling, evaluating, testing
      and completing, and the plugging and abandonment if not completed, shall
      form part of the costs of the Farmin Works and shall be assumed by the
      parties in the proportion of their cost participation as per this
      Agreement and the JOA.

              

      

    

     

    
      
         

      

      
        -11
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              4.2

            	
              The
      Parties agree that in the event of Continuous First Appraisal Well
      commencing inmediately after the completion of the Exploration well and
      prior to the long term test of the Farmin Works, in accordance with the
      provisions of the JOA, the Farmee shall have the right and obligation to
      participate in such Continuous First Appraisal at a level consistent with
      the Transaction Interest, and subject to Article
  13.4.

            

    

     

    
      	
              4.3

            	
              The
      Parties agree that payments made by Farmee under this Article 4. are not
      refundable in any circumstances  except as stated in Article
      4.1.A.1 and Article 13.6.

            

    

     

    
      	
              4.4

            	
              Any
      costs, expenses, fees, or duties payable to the Government in connection
      with the Assignment, excluding taxes described in Article 8, herein shall
      be borne and paid by Farmee.

            

    

     

    
      	
              4.5

            	
              Farmee
      shall have the right to audit all costs and payments made under terms and
      conditions of this Agreement in accordance with the
  JOA.

            

    

     

    
      	
              4.6

            	
              After
      completion of the work described in Article 4.1, Farmee agrees to pay its
      Participating Interest share of costs incurred under the Contract and the
      JOA.

            

    

     

    ARTICLE
5

     

    OBLIGATIONS
UNDER CONTRACT AND JOA

     

    
      	
              5.1

            	
              Acceptance
      of Prior Terms

            

    

    Farmee
hereby ratifies, confirms and accepts the terms of the Contract during the
Interim Period, and agrees to abide by the terms of the aforementioned
agreement.

    

    ARTICLE
6

     

    UNDERTAKING
OF THE PARTIES

     

    
      	
              6.1

            	
              Farmor
      Obligations

            

    

    
      	
               
      

            	
              During
      the Interim Period, Farmor shall comply with the
  following:

            

    

    
      
         

      

      
        -12
-

        
          

        

      

      
         

      

    

    
      
        	
              	
                A.

              	
                Material
      Developments.

              

      

    

    
      	
               
      

            	
              Farmor
      shall promptly notify Farmee and provide details upon the occurrence of:
      (a) any written notice of default or termination received or given by
      Farmor with respect to the Contract, (b) any written notice of any pending
      or threatened claim, demand, action, suit, inquiry or proceeding related
      to the Contract, (c) any material damage, destruction or loss to major
      assets under the Contract, or (d) any event or condition between the date
      of this Agreement and the Assignment Date that (i) would have a material
      adverse effect on the business, operations, financial condition or results
      of operations under the Contract, taken as a whole, or (ii) would render
      impossible Farmee’s right to the
Assignment.

            

    

     

    
      	
               
      

            	
              B.

            	
              Farmor
      agrees to consult with Farmee on decisions regarding the Farmin Works
      under the Contract during the term of this Agreement. Once fulfilled the
      Considerations in 4.1,A and executed the Farmin Works, Farmor and Farmee
      agree to follow the rules of the JOA regarding to the voting  on
      decisions about new works different than the Farmin Works under the
      Contract during the term of this Agreement. If any dispute arises
      regarding technical decisions, Operator’s decision will prevail for
      minimum work obligation over the contract.   However, on
      matters excluded from the minimum obligations foreseen in the Contract,
      the Parties shall be subject to an Exclusive Operations procedure as per
      the terms of the JOA.

            

    

     

    
      	
               
      

            	
              C.

            	
              The
      Farmor shall be Operator. The Operator shall perform the Farmin Works
      operations in accordance with the provisions of the Contract, the Laws and
      the Agreement; and conduct such operations in a diligent, safe and
      efficient manner in accordance with such good and prudent petroleum
      industry practices and field conservation principles as are generally
      followed by the International Petroleum Industry under similar
      circumstances. The Operator will charge to the parties 5% as overhead on
      all the operation cost based on the AFE.  Farmor shall do the
      best efforts to drill the well of the Farmin Works within 6 months
      following the Effective Date of this
Agreement.

            

    

     

    
      
         

      

      
        -13
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              D.

            	
              The
      Operator is liable for the operations in accordance with the fiduciary
      responsibility he holds as an Operator and shall be liable due to Willful
      Misconduct or Gross Negligence.  Under no circumstances
      whatsoever shall any of the Parties shall be liable for indirect damages
      or Consequential Loss.

            

    

     

    
      	
               
      

            	
              E.

            	
              The
      Farmor is not responsible for any circumstances that impede the effective
      assignment of the Transaction Interest to the Farmee, even in the case
      Government decides to terminate the Contract with the Farmor, except for
      its Willful Misconduct or Gross
Negligence.

            

    

     

    
      	
               
      

            	
              F.

            	
              Farmee
      declares that he has made the due diligence and knows all the information
      regarding to the contract area.

            

    

    

    
      	
              6.2

            	
              Farmee’s
      Obligations

            

    

    During
the Interim Period Farmee shall comply with each of the following
undertakings:

    
      	
               
      

            	
              a.

            	
              The
      Farmee agrees to indemnify and hold the Farmor and the Operator harmless
      for any claims, causes of action, or liabilities, which arise out of the
      drilling, completion, testing, production, crude commercialization or
      abandonment of the operations, including the contractual obligations and
      liabilities related to those activities, except in the case that Farmor or
      the Operator is guilty of Willful Misconduct or Gross
      Negligence.

            

    

    
      	
               
      

            	
              b.

            	
              The
      Farmee agrees to fulfill the requirements of the Government to hold the
      Transaction Interest, prior to the submission of the Assignment to the
      Government for the Government’s approval, and to maintain such
      requirements fulfilled during the period of the
  Contract.

            

    

    
      	
               
      

            	
              c.

            	
              The
      Farmee agrees to indemnify and hold the Farmor and the Operator harmless
      for any claims, causes of action, or liabilities, which arise out any
      circumstances that impede the effective assignment of the Transaction
      Interest to the Farmee, even in the case Government decides to terminate
      the Contract with the Farmor, except in the case that Farmor is guilty of
      Willful Misconduct or Gross
Negligence.

            

    

    
      
         

      

      
        -14
-

        
          

        

      

      
         

      

    

    
      	
              6.3

            	
              Mutual
      Obligations

            

    

    During
the Interim Period, Farmee and Farmor shall comply with each of the following
undertakings:

    
      	
               
      

            	
              A.

            	
              Each
      Party, as applicable, agrees to satisfy, in an expeditious manner, the
      Conditions Precedent to the Assignment set forth in Article 3.
      Notwithstanding, some of these conditions are out of the control of the
      Parties, each party shall execute all documents and do all such acts and
      things within its power required to fulfill
it.

            

    

    
      	
               
      

            	
              B.

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

            

    

    

    ARTICLE
7

     

    REPRESENTATIONS
AND WARRANTIES OF THE PARTIES

     

    
      	
              7.1

            	
              Farmor’s
      Representations and
Warranties

            

    

    Except as
otherwise disclosed on the attached schedules, Farmor makes the following
representations and warranties to Farmee as of the Effective Date:

    
      
        	
              	
                A.

              	
                Farmor's
      Rights.

              

      

    

    Farmor
holds 100%  Participating Interest of the Contractor  in the
Contract, free and clear of any liens, claims, burdens or encumbrances, other
than the liens, claims, burdens or encumbrances in favor of the Government
according to the terms of the Contract and applicable Laws.  The
Contract is in full force and effect and no notice of default, termination, or
breach under the Contract has been received neither by Farmor nor, to the
knowledge of Farmor, any other party to the Contract.  The Contract
together with applicable Laws, contains the entirety of the obligation of Farmor
to the Government, and no other understanding or agreement exists between Farmor
and the Government in relation to the subject matter of the Contract except as
otherwise disclosed under this Agreement.

    
      
         

      

      
        -15
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              B.

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

            

    

    
      	
               
      

            	
              C.

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

            

    

    
      	
               
      

            	
              D.

            	
              Farmor,
      with bona fides, declares that it does not have knowledge of any cause of
      action or liability which may originated from circumstances not fereseen
      in this Article.  From the Effective Date, the Parties shall be
      responsible to the extent of their participating cost as per this
      Agreement and the JOA, for any liability originated in circumstances
      ocurred before the Effective Date or which came to the knowledge of the
      Farmor after the Effective Date.

            

    

    

    
      	
              7.2

            	
              Farmee’s
      Representations and
Warranties

            

    

    Except as
otherwise disclosed in the attached schedules, Farmee makes the following
representations and warranties to Farmor as of the Effective Date:

    
      	
               
      

            	
              A.

            	
              Claims
      and Litigation.

            

    

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

    
      	
               
      

            	
              B.

            	
              Financing.

            

    

    Farmee
will have sufficient cash, available lines of credit or other sources of
immediately available funds to enable it to fulfill all of its obligations under
the Contract and this Agreement.

    
      
         

      

      
        -16
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              C.

            	
              Technical
      Capability.

            

    

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

    
      	
               
      

            	
              D.

            	
              Farmee
      has satisfactorily performed a satisfactory due diligence, and that it has
      received all the required and necessary information from the Farmor or any
      other third party to execute this Agreement.  Such due diligence
      includes, but is not limited to:

            

    

    
      	
               
      

            	
              i.

            	
              Before
      entering into this Agreement Farmee had the opportunity to visit and
      inspect the area of the Contract and its operational conditions thereof
      studying and accepting, among other, technical, operational and
      environmental conditions at the site.  Farmee was also allowed
      free access and the opportunity to verify all technical, geological
      information and the Contract documentation required, and has been availed
      the opportunity to meet with and to receive from Farmor all additional
      information requested; and

            

    

    
      	
               
      

            	
              ii.

            	
              Farmee
      was also allowed access to and has reviewed all legal documentation
      required to enter into the Contract and documentation associated to
      execution hereof.  Farmee is fully satisfied with all
      aforementioned issues condition;

            

    

    
      	
               
      

            	
              iii.

            	
              Farmee
      was able to review and represents its agreement with the Contract
      operations development. Farmee also reviewed all licenses and
      environmental permits in connection with the Contract and fully accepts
      them; and

            

    

    
      	
               
      

            	
              E.

            	
              Farmee
      made an independent decision to accept Transaction Interest, and such
      assignment is not based on any statement or recommendation from Farmor or
      any of its officers, representatives or employees and Farmor does not make
      any express or implicit guarantee as concerns technical conditions or
      economic potential of the Assets.

            

    

    
      	
               
      

            	
              F.

            	
              Farmee
      is authorized to conduct business in Colombia and is in good standing in
      all material respects and with all competent authorities, including
      without limitation, with ANH and the Ministry of Mines and
      Energy.

            

    

    

    
      	
              7.3

            	
              Mutual
      Representations and
Warranties

            

    

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

    
      
         

      

      
        -17
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              A.

            	
              Corporate
      Authority.

            

    

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

    
      	
               
      

            	
              B.

            	
              Payments.

            

    

    Neither
Party nor its Affiliates have made, offered, or authorized and will not make,
offer or authorize any payment, gift, promise or other advantage, in connection
with the matters which are the subject to this Agreement, whether directly or
indirectly through any other person or entity, to or for the use or benefit of
any public official (i.e., any person holding a legislative, administrative or
judicial office, including any person employed by or acting on behalf of a
public agency, a public enterprise or a public international organization) or
any political party or political party official or candidate for office, where
such payment, gift or promise would violate: (a) the applicable laws of
Colombia, the country of operations; (b) the laws of the country of formation of
the Party or such Party's ultimate parent company (or its principal place of
business); or, (c) the principles described in the Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions,
signed in Paris on December 17, 1997, which entered into force on February 15,
1999, and the Convention's Commentaries.

    
      	
               
      

            	
              C.

            	
              Other
      Representations and Warranties.

            

    

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

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

    
      
         

      

      
        -18
-

        
          

        

      

      
         

      

    

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

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

    
      	
               
      

            	
              D.

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

            

    

    
      	
               
      

            	
              E.

            	
              Each
      of the Parties agrees to indemnify and hold the other Party harmless for
      any claims, causes of action, or liabilities, which arise out of the
      breach of any of the warranties and representations under this Article by
      the indemnifying Party.

            

    

    
      	
              7.4

            	
              Disclaimer
      of Other Representations and
Warranties

            

    

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

    
      	
              7.5

            	
              Exclusion
      of Consequential Loss

            

    

    Under no
circumstances whatsoever shall either Party be liable to the other for
Consequential Loss arising out of any breach by that Party of the
representations and warranties provided in this article.

     

    
      
         

      

      
        -19
-

        
          

        

      

      
         

      

    

    ARTICLE
8

     

    TAX

     

    
      	
              8.1

            	
              Tax
      Obligations

            

    

    Each
Party shall be responsible for reporting and discharging its own tax measured by
the profit or income of the Party and the satisfaction of such Party’s share of
all contract obligations under the Contract and under this
Agreement.  Each Party shall protect, defend and indemnify each other
Party from any and all loss, cost or liability arising from the indemnifying
Party’s failure to report and discharge such taxes or satisfy such obligations.
The Parties intend that all income and all tax benefits (including deductions,
depreciation, credits and capitalization) with respect to the expenditures made
by the Parties hereunder will be allocated by the Government tax authorities to
the Parties based on the share of each tax item actually received or borne by
each Party.  If such allocation is not accomplished due to the
application of the Laws or other Government action, the Parties shall attempt to
adopt mutually agreeable arrangements that will allow the Parties to achieve the
financial results intended.  Operator shall provide the other Party,
in a timely manner and at such Party’s sole expense, with such information with
respect to Joint Operations as such Party may reasonably request for preparation
of its tax returns or responding to any audit or other tax
proceeding.

    
      	
              8.2

            	
              Joint
      Levy

            

    

    
      	
               
      

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

            

    

     

    ARTICLE
9

     

    CONFIDENTIALITY

     

    
      	
              9.1

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

            

    

    
      	
               
      

            	
              (1)

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

            

    

    
      
         

      

      
        -20
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (2)

            	
              to
      a governmental agency or other entity when required by the Contract or by
      as a court of law;

            

    

    
      	
               
      

            	
              (3)

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

            

    

    
      	
               
      

            	
              (4)

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

            

    

    
      	
               
      

            	
              (5)

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

            

    

    
      	
               
      

            	
              (6)

            	
              to
      a bona fide prospective transferee of a Party’s Participating Interest, or
      portion thereof, to the extent appropriate in order to allow the
      assessment of such Participating Interest (including an entity with whom a
      Party and/or its Affiliates are conducting bona fide negotiations directed
      toward a merger, consolidation or the sale of a majority of its or an
      Affiliate's shares);

            

    

    
      	
               
      

            	
              (7)

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

            

    

    
      	
               
      

            	
              (8)

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

            

    

    
      	
               
      

            	
              (9)

            	
              to
      its respective employees, subject to each Party taking sufficient
      precautions to ensure such information is kept
    confidential;

            

    

    
      	
               
      

            	
              (10)

            	
              to
      the extent any information which, through no fault of a Party, becomes a
      part of the public domain; and

            

    

    
      	
               
      

            	
              (11)

            	
              to
      the other parties to the Contract and the Government solely to the extent
      as may be required  to satisfy the Conditions to
      Assignment.

            

    

    
      	
              9.2

            	
              Disclosure
      as pursuant to Articles 9.1(5), (6), (7) and (11) shall not be made unless
      prior to such disclosure the disclosing Party has obtained a written
      undertaking from the recipient party to keep the information strictly
      confidential for at least as long as the period set out above and to use
      the information for the sole purpose described in Articles 9.1(5), (6),
      (7), and (11), whichever is applicable, with respect to the disclosing
      Party.

            

    

    
      
         

      

      
        -21
-

        
          

        

      

      
         

      

    

    ARTICLE
10

     

    NOTICES

     

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

    Name:  Emerald Energy PLC Sucursal
Colombia

    
      
        
          
            
              
                	
                        Address:

                      	
                        Carrera
      9 A No. 99-02. Oficina 603 D. Edificio Citibank. Bogotá, D.C.,
      Colombia

                      
	
                        Attention:

                      	
                        General
      Manager, Julian Garcia

                      
	
                        Facsimile:

                      	
                        6513500
      ext 504

                      
	
                        Email:

                      	
                        jgarcia@emerald.com.co

                      
	
                        Telephone:

                      	
                        (571)
      6513500 ext
503.

                      

              

            

          

        

      

    

    

    Name:  La Cortez Energy Colombia,
Inc.

    
      
        
          
            
              
                	
                        Attention:

                      	
                        General
      Manager, Andrés Gutierrez

                      
	
                        Address:

                      	
                        Calle
      67 No. 7-35 Of. 409

                      
	
                        Facsimile:

                      	
                        (571)
      6056937

                      
	
                        Email:

                      	
                        agutierrez@lacortezenergy.com

                      
	
                        Telephone

                      	
                        (571)
      4852020

                      

              

            

          

        

      

    

     

    
      
         

      

      
        -22
-

        
          

        

      

      
         

      

    

    ARTICLE
11

     

    LAW
AND DISPUTE RESOLUTION

     

    
      	
              11.1

            	
              Governing
      Law

            

    

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

    

    
      	
              11.2

            	
              Dispute
      Resolution

            

    

    Except as
may be agreed otherwise in the JOA, all disputes arising out of or in connection
with this Agreement, that Parties do not resolve amicably within a period of 30
days, shall be referred to and finally resolved by arbitration under the rules
of the Chamber of Commerce of Bogotá  Arbitration. The arbitration
shall be held in Bogotá, D. C.,  and the language of the arbitration
shall be Spanish. The number of arbitrators shall be three, each party may
appoint one of them, the other arbitrator shall be appointed by the Chamber of
Commerce of Bogotá.  If one othe Parties does not appoint its
arbitrator, shall be appointed by the Chamber of Commerce of Bogotá The Parties
may not interrupt their obligation under the Agreement with respect to issues
not directly related to the Arbitration.

     

    ARTICLE
12

     

    FORCE
MAJEURE

     

    If as a
result of Force Majeure, any Party is rendered unable, wholly or in part, to
carry out its obligations under this Agreement, other than the obligation to pay
any amounts due, then the obligations of the Party giving such notice, so far as
and to the extent that the obligations are affected by such Force Majeure, shall
be suspended during the continuance of any inability so caused and for such
reasonable period thereafter as may be necessary for the Party to put itself in
the same position that it occupied prior to the Force Majeure, but for no longer
period.  The Party claiming Force Majeure shall notify the other
Parties of the Force Majeure within a reasonable time after the occurrence of
the facts relied on and shall keep all Parties informed of all significant
developments.  Such notice shall give reasonably full particulars of
the Force Majeure and also estimate the period of time which the Party will
probably require to remedy the Force Majeure.  The affected Party
shall use all reasonable diligence to remove or overcome the Force Majeure
situation as quickly as possible in a commercially reasonable manner but shall
not be obligated to settle any labor dispute except on terms acceptable to it.
All such disputes shall be handled within the sole discretion of the affected
Party.  For the purposes of this Agreement, “Force
Majeure” shall have the same meaning as is set out in the
Contract.

     

    
      
         

      

      
        -23
-

        
          

        

      

      
         

      

    

    ARTICLE
13

     

    DEFAULT

     

    
      	
              13.1

            	
              If
      Farmee fails to comply with any obligations under this Agreement, Farmee
      shall be in default and such amounts due shall accrue interest, on a
      monthly basis,  at the rate per annum equal to the one month
      term, London Interbank Offered Rate (LIBOR) for U.S. dollars deposit, as
      published in London by the Financial Times or if not published then by the
      Wall Street Journal, plus 10% per year, applicable on the first business
      day prior to due date of payment and calculated from the due date until
      the date of payment.  With regard to the first payment in
      Article 4.1.A.1, Farmee shall then have a term of 10 days to
      rectify.  If Farmee does not rectify within such time, this
      Agreement will be automatically terminated and Farmee will lose all rights
      and all amounts up to US$500.000 paid
before.

            

    

    

    
      	
              13.2

            	
              With
      regard to the second payment foreseen in Article 4.1.A.1, Farmee shall
      then have a term of 10 days to rectify.  If Farmee does not
      rectify during such time, the Farmee will lose a part of its expected
      rights as per the formula foreseen in Article
  13.4.

            

    

    

    
      	
              13.3

            	
              With
      regard to the payment foreseen in Article 4.1.A.3, Farmee shall then have
      a term of 2 days to rectify.

            

    

    
      
         

      

      
        -24
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              If
      not rectified within such time, this Agreement will be automatically
      terminated with the obligation to pay a penalty of $500.000
      USD.

            

    

    

    
      	
              13.4

            	
              For
      the other cash payment obligations herein, if the Farmee does not rectify
      the default within 5 days of the receipt of the Default Notice, the Farmor
      may issue notice of a breach of the Agreement and the Farmee will lose a
      part of its expected rights of 20% of working interest in a proportion
      equivalent to the amount of the breach of the total actual cost of the
      Farmin Works and will loose an additional 5% working interest. For the
      avoidance of doubt, i.e. If the Farmee had paid 50% of the Farmin Works
      cost against its commitments of 65%, the gained interest will be 10.38% of
      working interest in the block.
  ((50%/64%*20%)-5%).

            

    

     

    
      	
              13.5

            	
              If
      after such breach of contract, Farmee decides to continue investing and
      sharing cost of the Farmin Works, Farmee shall pay 65% of the rest of the
      Farmin Works cost without prejudice to the reduction of the working
      interest mentioned above.

            

    

     

    
      	
              13.6

            	
              If
      the Farmor, despite its best efforts, does not drill the well of the
      Farmin Works within 6 months of the Effective Date, or if the Contract is
      terminated by the ANH within the same period, by causes imputable to
      Farmor, except in the event of Force Majeur or Fortuitous event Farmor
      shall be in default and any amounts received from the Farmee due shall
      accrue interest, at the same rate foreseen in Article 13.1 on the sums
      received by Farmee, calculated from the date the amounts were received by
      Farmor, and until the date of payment.  Farmor shall then have a
      term of 30 days to comply with the obligation.  Farmee shall
      then have a term of 15 days within which it may send a Default Notice,
      explaining the reasons of the alleged default.  If the Farmor
      does not rectify the default within 15 days of the receipt of the Default
      Notice, the Farmor will reimburse the sums paid by Farmee under the
      Agreement and the Agreement will be
terminated.

            

    

     

    
      
         

      

      
        -25
-

        
          

        

      

      
         

      

    

    ARTICLE
14

     

    GENERAL
PROVISIONS

     

    
      	
              14.1

            	
              Language

            

    

    
      	
               
      

            	
              All
      the communication between the Parties regarding this Agreement or its
      execution shall be conducted in Spanish. As well, the Assignment and other
      documentation required to execute before the authorities of the Republic
      of Colombia shall be performed in Spanish. The only documents to be
      conducted in English are this Agreement and the
  JOA.

            

    

    
      	
              14.2

            	
              Relationship
      of Parties

            

    

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

    
      	
              14.3

            	
              Further
      Assurances

            

    

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

    
      	
              14.4

            	
              Waiver

            

    

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

    
      	
              14.5

            	
              Joint
      Preparation

            

    

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

    
      
         

      

      
        -26
-

        
          

        

      

      
         

      

    

    
      	
              14.6

            	
              Severance
      of Invalid Provisions

            

    

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

    
      	
              14.7

            	
              Modifications

            

    

    
      	
               
      

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

            

    

    
      	
              14.8

            	
              Priority
      of Agreement

            

    

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

    
      	
              14.9

            	
              Interpretation

            

    

    
      	
               
      

            	
              A.

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

            

    

    
      	
               
      

            	
              B.

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

            

    

    
      	
               
      

            	
              C.

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

            

    

    
      	
               
      

            	
              D.

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

            

    

    
      	
               
      

            	
              E.

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

            

    

    
      
         

      

      
        -27
-

        
          

        

      

      
         

      

    

    
      	
              14.10

            	
              Counterpart
      Execution

            

    

    This
Agreement may be executed in two (2)  counterparts and each such
counterpart shall be deemed an original Agreement for all purposes; provided
that no Party shall be bound to this Agreement unless and until all Parties have
executed a counterpart. For purposes of assembling all counterparts into one
document, Farmor is authorized to detach the signature page from one or more
counterparts and, after signature thereof by the respective Party, attach each
signed signature page to a counterpart.

    
      	
              14.11

            	
              Public
      Announcements

            

    

    No public
announcement or statement regarding the terms or existence or this Agreement
shall be made by either Party without prior written consent of Farmor which
shall not be withheld without justification.

    After
fulfilling the Considerations, the JOA rules about Public Announcements will
apply.

    Operator
shall be responsible for the preparation and release of all public announcements
and statements regarding this Agreement or the Joint Operations; provided that
no public announcement or statement shall be issued or made unless, at least
five days prior to its release, all the Parties have been furnished with a copy
of such statement or announcement and the Operator has obtained their comments
or corrections to the anouncement   Where a public announcement
or statement becomes necessary or desirable because of danger to or loss of
life, damage to property or pollution as a result of activities arising under
this Agreement, Operator is authorized to issue and make such announcement or
statement without prior approval of the Parties, but shall promptly furnish all
the Parties with a copy of such announcement or statement.

    
      	
              14.12.

            	
              Trading
      in Securities of each Party

            

    

    For the
duration of this Agreement and a period of one (1) year thereafter, the Farmee
or the Farmor shall not hold, trade or otherwise deal, or procure the holding,
trading or otherwise dealing in the securities of Emerald Energy plc or La
Cortez Energy Inc.  or any of its Affiliated Companies directly
related to the Contract, the Area Contract and/or this Agreement, without the
prior written consent of the Farmor.

    
      
         

      

      
        -28
-

        
          

        

      

      
         

      

    

    
      
        	
                14.13.

              	
                Solicitation
      of Farmor’s Employees

              

      

    

    For the
duration of this Agreement and a period of one (1) year thereafter, the Farmee
or the farmor shall not solicit the employment of any of the Farmor’s /
Farmee’s  employees or full time contractors, or procure the
solicitation of any of the Farmors’s/ Farmee’s employees or full time
contractors for the purposes of employment.

    
      	
              14.14

            	
              Entirety

            

    

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

    
      	
              14.15

            	
              Costs

            

    

    Each of
the Parties to this Agreement shall assume their respective legal, accounting
and/or counsels’ fees in connection with negotiation, preparation and entering
into this Agreement.

    
      	
              14.16

            	
              Voidance

            

    

    If by any
reason any of the previsions under this Agreement would be voided, the remaining
provisions herein shall, the foregoing notwithstanding, generate all effects. If
any provision herein would be unacceptable and/or inapplicable in any
jurisdiction, such provision shall not be voided and will not lose its effect in
any other jurisdiction.

    
      	
              14.17

            	
              Assignment

            

    

    This
Agreement will oblige and inure for the benefit of the Parties, their permitted
successor and assignees. The Parties will have the right to assign their rights
and obligations under this Agreement to any directly or indirectly owned
Affiliate, controlling or controlled company, or to the branch of an affiliated
company, but such assignment shall be subject to the terms foreseen in Article
15.

    
      	
              14.18

            	
              Third
      Party Rights

            

    

    This
Agreement shall not be construed to confer any benefit on any person not being a
Party to this Agreement nor shall it provide any rights to such person to
enforce any of its provisions. The provisions of the English Contracts (Rights
of Third Parties) Act 1999 are expressly excluded.

    
      	
              14.19

            	
              Time

            

    

    Time is
essential for complying with obligations provided under this
Agreement.

    
      
         

      

      
        -29
-

        
          

        

      

      
         

      

    

    ARTICLE
15

     

    ASSIGNMENT
OF INTEREST

     

    Should the Farmee desire to sell all or
any part of its interests under this Agreement, prior to fulfillment of the
Considerations in Article 4.1.A. Farmee shall obtain the prior authorization
from Farmor. After fulfillment of Considerations in Article 4.1.A., the rules of
JOA about Assignment of Interest will be applicable. IN WITNESS of their
agreement each Party has caused its duly authorized representative to sign this
instrument on the date set out in the first sentence of this
Agreement.

    

    For the
Farmor,

    
      
        
          
            
              
                
                  
                    	 
      
	 
      
	
                            Name:

                          
	
                            Legal
      Representative

                          
	
                            Emerald
      Energy PLC Sucursal Colombia

                          
	 
      
	
                            For
      the Farmee,

                          
	 
      
	 
      
	
                            Name:

                          
	
                            Legal
      Representative

                          
	
                            La
      Cortez Energy Colombia
Inc.

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        -30
-Exhibit
10.3

     

    Land
Purchase Agreement

     

    Party A:
The People's Government of Fangcheng County

     

    Party B:
Nanyang Universal Solar Technology Co., Ltd.,

     

    In
order to attract talented people and promising enterprises, the People's
Government of Fangcheng County decided to enhance the development of polysilicon
industry by helping Nanyang Universal Solar Technology Co., Ltd. to launch its
solar panel project. Both parties have made agreement that Nanyang Universal
Solar Technology Co., Ltd. would purchase 71280 m2 of land locating
at Houlin Village, Erlangmiao Town.

     

    The two
parties reached an agreement after friendly negotiation as follows:

     

    
      	
              1.  

            	
              Acreage
      and geography location.

            

    

     

    North
End: South Shuitang farmland; South End: North Liuhezhuang, East End: West
Houlinzhuang to West Liuhezhuang road farmland, West End: Liuhezhuang road
farmland. The land is rectangle and the acreage is 71280 m2 with lengths of
264 meters from east to west and 270 from north to south.

     

    2.
Payment.

     

    The price
of the land purchased is RMB 27,000 Yuan per Mu (1 Mu is equivalent to 666.6667
m2).
The total price is RMB 2,886,300 Yuan. Plus tax on till-land occupation is RMB
1,567,945 Yuan, the final payment is RMB 4,454,245 Yuan. When the agreement is
signed and effective, the full payment should be paid to Party A at once to the
account as below.

    Beneficiary’s
Bank name: China Construction Bank, Fangcheng Branch.

    Account
number: 4100 1518 3100 5000 2533

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              3.  

            	
              Party
      B is authorized a priority for local labor employment and resource use
      compared with peers with same offer.

            
	 	 

    

    
      	
              4.  

            	
              Responsibilities.

            
	 	 

    

    
      	
              
              

            	
              l  

            	
              Party
      B owns the land for 40 years once the full payment and relevant expenses
      are paid.

            
	 	 	 

    

    
      	
            	
              l  

            	
              Party
      B is responsible to coordinate if Party A’s operation is influenced by any
      internal conflicts of Party B or any local issues.

            
	 	 	 

    

    
      	
            	
              l  

            	
              When
      this agreement comes into effectiveness,both parties
      should follow the terms. For further problems, both parties should
      negotiate.

            
	 	 	 

    

    There are
three copies of this agreement.

    

    Party A:
The People's Government of Fangcheng County (Stamp)

    

    Party B:
Nanyang Universal Solar Technology Co., Ltd. (Stamp)

    

    December
1, 2008

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]