Financial and Legal Services and Advice Agreement - Arabian Shield Development Co., Nasir Ali Kadasah and Dar Al Khaleej
FINANCIAL AND LEGAL SERVICES AND ADVICE AGREEMENT
This Agreement is made this day May 20, 1996 by and between:
1. Arabian Shield Development Co., an American Company having its
registered office at the State of Delaware and a branch in Jeddah City
registered under the No: 4030097805 dated 8/3/1414 H represented in
this Agreement by its President, Hatem Hussein El-Khalidi hereinafter
referred to as the "First Party".
2. Legal Advisor Nasir Ali Kadasah and Dar Al Khaleej for Researches and
Economic Advisors represented by Mr. Tawfiq Abdulaziz Al-Sowailim,
hereinafter referred to as the "Second Party".
Whereas the First Party has got a mining lease to exploit Al Masane area
located in the Southern Kingdom of Saudi Arabia under the Royal Decree No. M/17
dated 1/12/1413H for a term of Thirty (30) years according to the Mining Lease
Agreement attached with the said Royal Decree.
Whereas the First Party desires to participate with "The Saudi Company For
Mining Industry" a Saudi limited liability company "under formation" which
shall purchase fifty percent (50%) of the First Party's share in the mining
lease and to mutually apply to obtain an industrial license and finance the
project, and, to apply to the Minister of Petroleum and Mineral Resources to
transfer the mining lease to the First Party and the Saudi Company jointly and
severally.
And, whereas the Second Party is able to do the necessary services for this
purpose as follows:-
1. Formation of the said Saudi Company with a capital sufficient to
purchase Fifty percent (50%) of the First Party's contribution in the
mining lease, and to pay its share needed in equity for the Al Masane
mining project.
2. To finalize the required procedures towards issuance of the Industrial
License from the Ministry of Industry and Electricity to bring the ore
out of the mine and manufacture the same in Plant to be established in
the said area near the mine.
3. To finalize the necessary procedures to obtain the loan requested from
the Industrial Development Fund.
4. To apply for and receive loans from commercial banks necessary to
finance the project.
5. To apply and obtain the Ministerial resolution of the Minister of
Petroleum and Mineral Resources approving transference of the mining
lease to the First Party and the above mentioned Saudi Company jointly
and severally.
Therefore, the Two Parties agree as follows:-
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FIRST:
The abovementioned recitals shall be considered as an integral part of this
Agreement and constructor of the same.
SECOND:
The Parties shall fulfill the duties hereunder and draw a workplan from time to
time to distribute the responsibilities and functions of each party to achieve
the aim of this agreement.
THIRD:
Each Party shall keep the other one informed with all of his actions and
contacts to avoid inconsistency and insure harmony between the Parties.
FOURTH:
The First Party acknowledges that upon execution of this Agreement the Second
Party shall be the sole responsible and authorized person to perform
abovementioned duties and that the First Party shall no longer be obligated by
any similar to or contradictory with the above duties.
FIFTH: FEES
The First Party shall pay the fees to the Second Party divided as follows:-
TO THE LEGAL ADVISOR: NASIR ALI KADASAH
1. To Mr. Nasir Ali Kadasah the sum of US$ 10,000/- (US Dollar Ten
Thousand Only) upon issuance of the Industrial License of the project
from the Ministry of Industry and Electricity.
2. To Mr. Nasir Ali Kadasah the sum of US$ 10,000/- (US Dollar Ten
Thousand Only) upon approval of the Industrial Development Fund to
grant the requested loan to the Project.
3. The First Party shall grant Mr. Nasir Ali Kadasah with 1,025,000 (One
Million Twenty Five Thousand) shares of its authorized unissued common
stock without consideration plus the option to purchase 1,425,000 (One
Million Four Hundred and Twenty Five Thousand) shares of its
authorized unissued common stock for One Dollar per share and this
right shall remain valid for Five (5) years from the date of
registration of the Saudi Company. Such rights shall be apportioned
as follows:-
a) The right to be granted and to purchase 15% (Fifteen percent)
of all abovementioned shares upon issuance of Industrial
License, i.e. a grant of 153,750 (One Hundred and Fifty Three
Thousand Seven Hundred and Fifty) shares without consideration
and the right to purchase 213,750 (Two Hundred and Thirteen
Thousand Seven Hundred and Fifty) shares for one dollar per
share.
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b) The right to be granted and to purchase 25% (Twenty Five
percent) of all abovementioned shares upon approval of the
Industrial Development Fund to grant the requested loan; i.e.
a grant of 256,250 (Two Hundred and Fifty Six Thousand Two
Hundred and Fifty) shares without consideration and the right
to purchase 356,250 (Three Hundred and Fifty Six Thousand Two
Hundred and Fifty) shares for one dollar per share.
c) The right to be granted and to purchase 15% (Fifteen percent)
of all abovementioned shares upon approval of the Commercial
Banks of the requested loan; i.e. a grant of 153,750 (One
Hundred and Fifty Three Thousand Seven Hundred and Fifty)
shares without consideration and the right to purchase 213,750
(Two Hundred and Thirteen Thousand Seven Hundred and Fifty)
shares for one dollar per share.
d) The right to be granted and to purchase 15% (Fifteen percent)
of all abovementioned shares upon registration of the Saudi
Company and payment - by its shareholders - of an amount US$
10,625,000 (US Dollar Ten Million Six Hundred and Twenty Five
Thousand) to the First Party as a price of 50% (Fifty percent)
of the First Party's share in the mining lease and payment of
another amount of US$ 13,000,000 (US Dollar Thirteen Million)
as their contribution in the required capital of the project,
i.e. a grant of 153,750 (One Hundred and Fifty Three Thousand
Seven Hundred and Fifty) shares without consideration and the
right to purchase 213,750 (Two Hundred and Thirteen Thousand
Seven Hundred and Fifty) shares for one dollar per share.
e) The right to be granted and to purchase 30% (Thirty percent)
of all abovementioned shares upon issuance of the Ministerial
resolution from the Minister of Petroleum and Mineral
Resources permitting the transference of ownership of the
license to the First Party.
And the Saudi Company jointly and severally, i.e. a grant of
307,500 (Three Hundred and Seven Thousand Five Hundred) shares
without consideration and 427,500 (Four Hundred and Twenty
Seven Thousand Five Hundred) shares for one dollar against
each share.
<PAGE> 4
TO THE ECONOMIC ADVISOR: DAR AL KHALEEJ FOR RESEARCH AND ECONOMIC ADVICE
1) Dar Al Khaleej for Research and Economic Advice shall be paid the sum
of US$ 10,000/- (US Dollar Ten Thousand) upon issuance of the
Industrial License from the Ministry of Industry and Electricity to
the project.
2) The First Party shall grant Mr. Tawfiq Abdulaziz Al-Sowailim 975,000
(Nine Hundred and Seventy Five Thousand) shares of the First Party's
authorized unissued common stock without consideration as well as a
right to purchase 875,000 (Eight Hundred and Seventy Five Thousand)
shares from the First Party's authorized unissued common stock for One
Dollar per share and such right shall continue valid for a term of
Five (5) years from the date of formation of the Saudi Company.
The above rights shall be apportioned only as follows:-
a) The right to be granted and to purchase 15% (Fifteen percent)
of all abovementioned shares upon issuance of the Industrial
License, i.e. to grant 146,250 (One Hundred and Forty Six
Thousand Two Hundred and Fifty) shares without consideration
and the right to purchase 131,250 (One Hundred and Thirty One
Thousand Two Hundred and Fifty) shares for one dollar per
share.
b) The right to be granted and to purchase 25% (Twenty Five
percent) of all abovementioned shares upon approval of the
Industrial Development Fund to grant the requested loan; i.e.
to grant 243,750 (Two Hundred and Forty Three Thousand Seven
Hundred and Fifty) shares without consideration and the right
to purchase 218,750 (Two Hundred and Eighteen Thousand Seven
Hundred and Fifty) shares for one dollar per share.
c) The right to be granted and to purchase 15% (Fifteen percent)
of all abovementioned shares upon approval of the Commercial
Banks to grant the requested loan; i.e. 146,250 (One Hundred
and Forty Six Thousand Two Hundred and Fifty) shares without
consideration and the right to purchase 131,250 (One Hundred
and Thirty One Thousand Two Hundred and Fifty) shares for one
dollar per share.
d) The right to be granted and to purchase 15% (Fifteen percent)
of all abovementioned shares upon registration of the Saudi
Company and payment - by its Shareholders - an amount of US$
10,625,000 (US Dollar Ten Million Six Hundred and Twenty Five
Thousand) to the First Party as the price of 50% (Fifty
percent) of the First Party's share in the mining lease and
payment of another amount of US$ 13,000,000 (US Dollar
Thirteen Million) as their contribution in the required
capital of the project, i.e. to grant 146,250 (One Hundred and
Forty Six Thousand Two Hundred and Fifty) shares without
consideration and the right to purchase 131,250 (One Hundred
and Thirty One Thousand Two Hundred and Fifty) shares for one
dollar per share.
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e) The right to be granted and to purchase 30% (Thirty percent)
of all abovementioned shares upon issuance of the Ministerial
resolution of the Minister of Petroleum and Mineral Resources
permitting transference of the ownership of the mining lease
to the First Party and the Saudi Company jointly and
severally, i.e. to grant 292,500 (Two Hundred and Ninety Two
Thousand Five Hundred) shares without consideration and the
right to purchase 262,500 (Two Hundred and Sixty Two Thousand
Five Hundred) shares for one dollar per share.
SIXTH:
Sale and grant of abovementioned shares shall be subject to the Rules of sale
of such shares to non-Americans promulgated by Securities and Exchange
Commission (Rule 144).
SEVENTH:
Duties of the First Party hereunder shall be subject to the approval of the
Board of Directors of Arabian Shield Development Company and the First Party
will provide the Second Party with a copy of the approval, within two weeks, if
issued. In case such approval is not issued, then, this Agreement shall,
automatically, be cancelled and the Second Party shall have no right to ask for
any compensation.
EIGHTH:
The term of this Agreement shall be Twelve (12) months from the date of the
Second Party's receipt of Arabian Shield Development Company's approval and
receipt of all required documents to perform the duties of the Second Party -
unless the delay caused by the First Party or agreement is reached by in
writing by both parties to renew or extend this agreement.
NINTH:
If any dispute arise between the parties in relation to understanding or
performance of this Agreement it shall be solved amicably. If this is not
achieved then the dispute shall be referred to Arbitration according to Saudi
Arbitration law.
<PAGE> 6
The Second Party acknowledges that it shall not be entitled to any fees or
compensation against his mentioned duties beyond the scope of the stages
mentioned in this Agreement.
FIRST PARTY SECOND PARTY
For: Arabian Shield Development Co. 1. Nasir Ali Kadasah
/s/ Hatem Hussein El-Khalidi /s/ Nasir Ali Kadasah
by: Hatem Hussein El-Khalidi 2. Dar Al Khaleej for Research and
Economic Advisors
by Tawfiq Abdulaziz Al-Sowailim
/s/ Tawfiq Abdulaziz Al-Sowailim
<PAGE> 7
ARABIAN SHIELD DEVELOPMENT COMPANY
10830 North Central Expressway
Suite 175
Dallas, Texas 75231 U.S.A.
P.O. Box 1516, Jeddah 21441
Saudi Arabia
C.R. 4030097605 o C.C.J.45522
Administration Tel. { 642 6529
{ 643 5410
Technical Office Tel. { 667 3534
{ 669 0641
Fax: { 643 3410
{ 669 0641
3 March, 1997
Mr. Nasir Ali Kadasah
Dar Ali Khaleej for Research and Economic Advisors
Riyadh
Saudi Arabia
Gentlemen:
Reference is made to the "Financial And Legal Services And Advise
Agreement", dated May 20, 1996. It is requested that certain texts in the
Agreement be changed to the following, to confirm with our present
understanding:
Page 1, (4th Paragraph)
Whereas the First Party desires to participate with "The Saudi Company For
Mining Industries" a Saudi Limited Liability Company "under formation", in
which First Party shall own 50% of the stock of the said Company, while the
other 50% shall be owned by Saudi Shareholders.
This Company shall apply to obtain an industrial license and finance the
project, and shall apply to the Minister of Petroleum and Mineral Resources to
transfer the mining Lease, now held by First Party to the "Saudi Company For
Mining Industries"
Page 3 (fifth paragraph)
e) The right to be granted and to purchase 30% (thirty percent) of all above
mentioned shares upon issuance of the Ministerial resolution from the Minister
of Petroleum and Mineral Resources permitting the transference of the ownership
of the mining lease to the Saudi Company For Mining Industries", i.e, a grant
of 307,500 (three hundred and seven thousand five hundred) shares without
consideration and the option to purchase 427,500 (Four hundred and twenty seven
thousand five hundred) shares for one (1) dollar per share.
Page 5 (first paragraph)
a) the right to be granted and to purchase 30% (thirty percent) of all above
mentioned shares upon issuance of the Ministerial Resolution of the Minister of
Petroleum and Mineral Resources permitting transference of the ownership of the
mining lease to the "Saudi Company For Mining Industries" i.e. a grant of
292,500 (two hundred and ninety two
<PAGE> 8
ARABIAN SHIELD DEVELOPMENT COMPANY
10830 North Central Expressway
Suite 175
Dallas, Texas 75231 U.S.A.
P.O. Box 1516, Jeddah 21441
Saudi Arabia
C.R. 4030097605 o C.C.J.45522
Administration Tel. { 642 6529
{ 643 5410
Technical Office Tel. { 667 3534
{ 669 0641
Fax: { 643 3410
{ 669 0641
Date: 3 March, 1997
- 2 -
thousand five hundred) shares without consideration and the option to purchase
262,500 (two hundred sixty two thousand five hundred) shares for one dollar per
share.
Very truly yours
Arabian Shield Development Company
/s/ Hatem El-Khalidi
by: Hatem El-Khalidi, President
Agreed to:
Nasir Ali Kadasah
by:
/s/ Nasir Ali Kadasah
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date:
15/3/97
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Dar Al Khaleej For Research and Economic Advisors
by: /s/ Tawfiq Abdulaziz Al-Sowailim
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date:
March 16th, 97
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