Attached files
Exhibit
10(k)
Memorandum of
Understanding
On this
day, Sunday 23/4/1427 H. corresponding to 21/5/2006 G., in the presence of each
of the following:
1.
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First
Party: Engineer Hazem
Al-Khalidi, the executive president of Arabian Shield Development
Company, the owner of the franchise, issued by virtue of Royal Decree No.
137 dated 5/11/1413 H.
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Hereinafter
referred to as “First
Party”
2.
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Second
Party: Engineer Muhammad
Mane’a Abal Ola, representing Thamarat Najran Company,
a company established pursuant to the Regulations of the Kingdom of
Saudi Arabia, Commercial Registration No. 5950010275 dated 6/1/1426 H.,
whose Head Office is in the City of
Najran.
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Hereinafter
referred to as “Second
Party”
Preamble: Pursuant to the
project proposed by the First Party for the formation of a company with a mixed
capital for the production of base minerals and precious metals in the franchise
area pertaining to Arabian Shield Development Company by virtue of Royal Decree
No. 137 dated 5/11/1413 H., and pursuant to the request of the Second Party,
after reviewing the Strategic Summary submitted by the First Party concerning
the project pertaining to the formation of a mixed Saudi-American Company for
the production of base minerals and precious minerals in the Masaane’a area in
the Arabian Shield in the Najran Area.
Discussion
took place between the above mentioned two Parties concerning the possibility of
joint work between the two Parties for the exploitation of the mining franchise
owned by Arabian Shield Development Company by virtue of Royal Decree No. 137
dated 5/11/1413H.
Whereas
the First Party has provided the members of the Second Party with all
information and data pertaining to the Project, including the feasibility
studies, issued by well known world consultation companies, in addition to the
study pertaining to the cost of equipping the Project, as well as the cost of
operation for commencing the production and mining of ores and the production of
the copper, zinc, and the ingots of gold and silver. The Second Party has also
reviewed the concepts and operations carried out by Arabian Shield Development
Company, represented by the Project Developer and the Executive President of the
Company, Engineer Hatem Al Khalidi. The Second Party also received all the
economic and financial studies and the cash flows of the project for the future
ten years.
This
offer has been met with satisfaction by the members of the Second Party, as
represented by Engineer Muhammad Abal Ola, who affirmed the sincere desire to
join Arabian Shield Development Company as a partner in order to exhibit the
mining franchise which was issued under Royal Decree No. 137 dated 5/11/1413 H.,
through the formation of a company with a mixed capital, which capital was
estimated on the basis of
the above
mentioned studies at US$140,000,000 (a hundred forty million) in equal shares to
be held on the basis of 50% for each shareholder.
Now, therefore, agreement
was reached by each of the following:
1.
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Arabian Shield Development
Company, a company formed pursuant to the Public Companies Laws of
Delaware State, whose address is 10830 North Central Express Y-Dallas-
75231, United States of America, represented for the signing of the
Agreement by Mr. Hatem Al-Khalidi, in his capacity as the Company’s
General Manager, hereinafter referred to as (First
Party)
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2.
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Thamarat Najarat Company,
a company formed pursuant to the Regulations of the Kingdom of
Saudi Arabia, Commercial Registration No. 5950010275, dated 6/1/1426 H.,
whose main office is in the city of Najran, represented for the signing of
the Agreement by Engineer Ayman bin Abdul Rahman AL-Shibil in his capacity
a s the Company’s representative, hereinafter referred to as (Second Party – The
Developer)
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As
follows:
First:
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The
above mentioned preamble shall be an integral part of this
Memorandum.
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Second:
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The
Second Party (the Developer) shall seek to form a Saudi company, with a
proposed name “Al-Masane’a Mining Company”, referred to at any stage of
the Agreement as “The Saudi Company”, and shall have all the powers to
select the shareholders therein, as well as all the powers to make the
material and administrative arrangements for the Saudi
Company.
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Third:
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The
First Party and the Saudi Company shall form a company with a mixed
capital under the name of “The Mining Major Factories Company”, provided
the Saudi Company shall have all the powers necessary for the executive
management of the mixed Company.
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Fourth:
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The
Company’s capital shall be US$140,000,000 (a hundred forty
million)
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Fifth:
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The
shares shall be distributed between the shareholders as follows: 50% for
each shareholder. The Mixed Company’s Board of Directors shall comprise
six persons: three to represent the First Party and three to represent the
Saudi Company. Their powers and the validity of their resolutions shall be
determined in separate contracts of in the Articles of Association of the
Mixed Company.
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Sixth:
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The
Second Party acknowledges his consent to the assessment of the effort,
expertise and assets of the First Party, as well as the franchise granted
to him which is issued by Royal Decree No. 137 dated 5/11/1413 H., and
estimated at US$35,000,000 (thirty five million), which the Second Party
shall pump into the Company’s capital, and which represents the fair
amount for the obtaining by the Saudi Company of 50% against all the
mining activities, the assets and the tangible and intangible assets,
including the mining franchise, which the First Party has preformed since
1967 up till now.
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Seventh:
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The
Saudi Company shall pump UD$35,000,000 (thirty five million) for
initiating the purchase of equipment and equipping the present site of the
factories for mining production of the base minerals and the associated
minerals.
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Eighth:
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The
First Party shall seek to obtain bank facilities on the basis of the
assistance and guarantee of the Saudi Company, without any other
additional costs, for a sum of US$35,000,000 (thirty five million), which
the First Party shall repay from his share in the annual profits of the
Company.
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Ninth:
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It
is agreed that the activity of the Company which is to be formed shall be
the mining of base ores known as copper, zinc, and the associated gold and
silver minerals, under the franchise granted to Arabian Shield Development
Company, the production and sale of copper condenser, zinc condenser,
silver and gold ingots, under the franchise granted to him and issued by
virtue of Royal Decree No. 137 dated 5/11/1413
H.
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Tenth:
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It
is agreed by the two Parties that Arabian Shield Development Company has
carried out exploration activities in the Major Factories area, which it
shall assign to the Mining Major Factories Company after the formation
thereof for subsequently obtaining the exploration license and
franchise.
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Eleventh:
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The
mining franchise issued to the First Party shall be transferred to the
Mixed Company after the formation
thereof.
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Twelfth:
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the
application for licensing the exploration that was filed in the name of
the First Party shall be transferred to the Mixed Company after the
formation thereof.
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Thirteenth:
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This
Memorandum shall be binding on its two Parties upon signing its final form
by the First Party and the Second Party and the approval of the Board of
Directors of the two companies and the activities shall be conducted on
the basis there of and pursuant thereto. Moreover, each of the First Party
and the Second Party shall work jointly and in full cooperation for
realizing their objective. The two Parties shall commence the
implementation of the provisions of this Memorandum and shall commence the
formalities relating to the formation of Mining Major Factories Company,
as mixed Saudi-American Company within ninety days of the singing of the
Memorandum. They shall also work within the framework of the work plan
indicated in the mining franchise issued by virtue of Royal Decree No. 137
dated 5/11/1413 H.
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Fourteenth:
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This
Memorandum has been drawled up in three counterparts of which each Party
has kept one in order to act in accordance therewith. The third
counterpart shall be kept by Kadasa Law Firm for Legal
Consultations.
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Allah
is the bestower of success.
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First
Party
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Second
Party
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Arabian
Shield Development Company
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Thamarat
Najran Company
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Name:
Hatem Hussein Al-Khalidi
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Muhd
bin Mane’a Abal Ola
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Capacity:
Company President
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Capacity:
Company Representative
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Signature:
/s/ Hatem El-Khalidi
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Signature:
/s/ Muhd bin Mane'a Abal Ola
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