FG Filed by Filing Services Canada Inc. - (403) 717-3898


    KOKOMO
ENTERPRISES INC.

    
       

      LETTER
OF INTENT

    

    


    This
Letter of Intent (hereinafter referred to as this “LOI”) is made effective as of
the 6th day
of May, 2011 (hereinafter referred to as the “Effective Date”).

     

    BETWEEN:                           KOKOMO ENTERPRISES INC., a
company incorporated

    under the
laws of the Province of British Columbia having

    its
business office at Suite 1000 – 1177 West Hastings Street,

    Vancouver, B.C.  V6E
2K3

    


    (hereinafter referred to as
“Kokomo")

    OF THE
FIRST PART

    


    AND:

    ARQUEANA DE MINÉRIOS E METAIS
LTDA.

    Federal Registration #, CNPJ:
16.964.819/0001-09

    State Registration # (Insc. Est):
340.111.198.0076,

    with its
head office located at Fazenda Monte Belo,

    BR-367,
km 255, Zona Rural, Itinga, Minas Gerais

    Brazil;

    and an
administration office located at

    Rua Monte
Azul 121, Bairro Santa Tereza,

    Aracuai –
Minas Gerais, 39.600-000, Brazil

    


    (hereinafter referred to as
“Arqueana”)

    OF THE
SECOND PART

    


    AND:

    DORALICE DE SOUZA BRITO

    Rua
Juvenal de Melo Senra 51, apto. 403, bairro Belvedere,

    Belo
Horizonte - MG, CEP 30.320-660.

    


    (hereinafter referred to as
“Doralice”)

     

    OF THE
THIRD PART

    


    AND:

    AMILCAR DE MELO AFGOUNI

    Rua Monte
Azul 121, bairro Santa Tereza,

    Araçuai -
MG. CEP 39.600-000

    


    (hereinafter referred to as
“Amilcar”)

    OF THE
FOURTH PART

     

    
      	
              KOKOMO
      ENTERPRISES INC.

              
                Suite
      1000, 1177 West Hastings Street

                Vancouver,
      BC   V6E 2K3

                Tel:
      604 681-1519   Fax: 604 681-9428

                www.kokomoenterprises.ca   email:
      info@kokomoenterprises.ca

              

            


    

     

    
      
        
           


        

        
          1

          
            

          

        

        
           


        

      


      KOKOMO
ENTERPRISES INC.

    

    


    
      	
              A.  

            	
              Arqueana,
      Doralice and Amilcar (hereinafter collectively referred  to as
      the “Arqueana Group”) are collectively the beneficial owner of a 100%
      undivided right, title and interest in certain mineral concessions which
      are located in the State of Minas Gerais in Brazil as more particularly
      described in Exhibit “1” hereto (hereinafter collectively referred to as
      “Arqueana’s Mineral Concessions”).

            


    

    


    
      	
              B.  

            	
              The
      Arqueana Group is the beneficial owner of a 100% right, title and interest
      in certain real estate which are located in the State of Minas Gerais in
      Brazil as more particularly described in Exhibit “2” hereto (hereinafter
      referred to as “Arqueana’s Real
Estate”).

            


    

    


    
      	
              C.  

            	
              The
      Arqueana Group wishes to grant to Kokomo, and Kokomo wishes to acquire up
      to a 75% right, title and interest in Arqueana’s Mineral Concessions and
      in Arqueana’s Real Estate by entering into and executing a Definitive
      Property Option Agreement (hereinafter referred to as the “DPOA”) within a
      period of 45 business days from the Effective
  Date.

            


    

    


    
      	
              D.  

            	
              By
      means of a Power of Attorney dated 14 April 2011, Doralice has formally
      appointed Amilcar as her attorney to act on behalf of Doralice on all
      matters in regards to this LOI and in regards to the DPOA as more
      particularly described in Exhibit “3” hereto (hereinafter referred to as
      the “Power of Attorney”).

            


    

    


    
      	
              E.  

            	
              This
      LOI shall expire upon the execution of the DPOA by all the Parties hereto
      (hereinafter referred to as “the Term of this
  LOI”).

            


    

    


    
      	
              F.  

            	
              The
      Parties hereto wish to enter into this LOI to formalize the Parties’
      respective interests and the ongoing rights and obligations of the
      Parties.

            


    

    


    
      	
              G.  

            	
              Within
      a period of 5 business days from the Effective Date, Kokomo shall effect a
      cash payment of Canadian $2,500 by wire transfer to the designated
      Brazilian bank account of the Arqueana
Group.

            


    

    


    
      	
              H.  

            	
              Immediately
      upon the execution of this LOI by all the Parties hereto, Amilcar shall
      provide to Kokomo in writing the complete wiring instructions of the bank
      account of the Arqueana Group in order to enable Kokomo to remit the
      aforementioned Canadian $2,500 (pursuant to item G of this LOI) to the
      bank account of the Arqueana Group.

            


    

    


    
      	
              I.  

            	
              The
      Parties hereto acknowledge to one another that each Party intends to
      perform its obligations as specified in this LOI in good
      faith.  Furthermore, each Party hereto agrees not to act in any
      manner that shall be prejudicial to the interest of the other
      Party.

            


    

    


    
      	
              J.  

            	
              The
      Arqueana Group hereby covenants with and represents and warrants to Kokomo
      that:

            


    

    


    
      	
              i)  

            	
              The
      Arqueana Group has all the requisite power, standing and authority to
      enter into this LOI and engage in the transactions contemplated
      hereby;

            


    

    
      	
              ii)  

            	
              There
      is no pending or threatened litigation or liabilities affecting Arqueana’s
      Mineral Concessions and Arqueana’s Real Estate (contingent or
      otherwise);

            


    

     

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    
      KOKOMO
ENTERPRISES INC.

    

     

    
      	
              iii)  

            	
              Arqueana’s
      Mineral Concessions and Arqueana’s Real Estate are free and clear of all
      security interest, liens, royalties and encumbrances of any nature or kind
      whatsoever except for the Instrumento Particular de Concessao de Direitos
      de Exclusividade de Expoloracao Mineral e Outras Avencas dated October 10,
      2005 and Primero Termo Aditivo Ao Instrumento Particular de Concessao de
      Direitos de Exclusividade de Exploracao Mineral e Outras Avencas, Ajustado
      Em 10.10.2005 dated March 12, 2009 (collectively referred to as the
      “Certain Mining Rights to the Third Party”) as more particularly described
      in Exhibit “4” hereto; and,

            


    

    
      	
              iv)  

            	
              The
      Certain Mining Rights to the Third Party shall expire in October 2011 and
      upon the expiry of the Certain Mining Rights to the Third Party in October
      2011, the Arqueana Group will not renew the Certain Mining Rights to the
      Third Party unless Kokomo provides Kokomo’s approval in writing to the
      Arqueana Group to renew the existing Certain Mining Rights to the Third
      Party .

            


    

    


    
      	
              K.  

            	
              This
      LOI shall be in the English language and shall be governed by and
      construed with the laws of the Province of British Columbia, Canada, and
      the courts of the Province of British Columbia, Canada shall have the sole
      jurisdiction to entertain any actions, claims, disputes or legal
      proceedings in respect to this LOI, and the Parties hereto agree to attorn
      to the jurisdiction of such courts.  After the Effective Date,
      this LOI shall be translated into the Portuguese language which shall be
      notarized and all costs and expenses in respect to the translation and
      notarization of this LOI shall be borne solely by the Arqueana
      Group.  However, in the event of any discrepancies between the
      English language version of this LOI and the Portuguese language version
      of this LOI, or in the event of any disputes or claims, the English
      language version of this LOI shall
prevail.

            


    

    


    
      	
              L.  

            	
              The
      DPOA shall be in the English language and shall be governed by and
      construed with the laws of the Province of British Columbia, Canada, and
      the courts of the Province of British Columbia, Canada shall have the sole
      jurisdiction to entertain any actions, claims, disputes or legal
      proceedings in respect to the DPOA. After the execution of the DPOA by all
      the Parties, the DPOA shall be translated into the Portuguese language and
      shall be notarized.  However, in the event of any discrepancies
      between the English language version of the DPOA and the Portuguese
      language version of the DPOA, or in the event of any disputes or claims,
      the English language version of the DPOA shall
  prevail.

            


    

    


    M.           The
terms and conditions of the DPOA shall be as follows:

     

    
      
         


      

      
        3

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.

      
            
 i)

      

    

    
      	
              Period

            	
              Cash
      Payment in Canadian $

            	
              Kokomo
      Common Shares Issuances

            	
              Annual
      Property Related Expenditures in Canadian $

            	
              Kokomo
      Earning Interest in NEWCO

            	
              Cumulative
      Interest Earned ty Kokomo in NEWCO

            
	
               

              a)
      5 Business days after the execution of the DPOA

            	
               

               

              $32,500

            	
               

               

              750,000

            	
               

               

              N/A

            	
               

               

              N/A

            	
               

               

              N/A

            
	
               

              b)
      1st
      Anniversary of the DPOA

            	
               

              $165,000

            	
               

              750,000

            	
               

              $1,000,000

            	
               

              25%

            	
               

              25%

            
	
               

              c)
      2nd
      Anniversary of the DPOA

            	
               

              $250,000

            	
               

              1,500,000

            	
               

              $2,000,000

            	
               

              25%

            	
               

              50%

            
	
               

              d)
      3rd
      Anniversary of the DPOA

            	
               

              $350,000

            	
               

              4,000,000

            	
               

              $5,000,000

            	
               

              25%

            	
               

              75%

            
	
               

              GRAND
      TOTAL

            	
               

              $797,500

            	
               

              7,000,000

            	
               

              $8,000,000

            	
               

              75%

            	
               

              75%

            


    

    


    
      	
              ii)  

            	
              If,
      at anytime, Kokomo is in default of any of its obligations, then Kokomo
      shall have a Grace Period of 60 business days in order to rectify its
      default.

            


    

    


    
      	
              iii)  

            	
              For
      greater certainty, upon the expiry of the 1st
      Anniversary, if Kokomo has not met its obligations pursuant to item
      M.(i)(b) above, then Kokomo will have a Grace Period of 60 business days
      to cure its default.  In the event that Kokomo does not cure its
      default by the expiry of the Grace Period of 60 business days, then the
      DPOA will terminate and Kokomo shall forfeit the cash payments made by
      Kokomo, the Kokomo common shares issued by Kokomo and any property related
      expenditures expended by Kokomo which shall all be considered as
      liquidated damages.

            


    

    


    
      	
              iv)  

            	
              If
      Kokomo meets it obligations pursuant to item M.(i)(b) above (hereinafter
      referred to as the “Date of Fulfilment of Kokomo’s 1st
      Anniversary Obligations”), then
immediately:-

            


    

    


    
      	
              a)  

            	
              A
      Brazilian limited liability company shall be incorporated (hereinafter
      referred to as “NEWCO”) whereby all of the Arqueana Group’s assets
      including Arqueana’s Mineral Concessions and Arqueana’s Real Estate shall
      be transferred to NEWCO free and clear of any charges, encumbrances,
      taxes, debts,  liabilities whatsoever, BUT excluding the Urubu
      Mine and the Urubu Mine land property (hereinafter collectively referred
      to as the “Urubu Mine and Property”) having a total area not exceeding 25
      (twenty five)  hectares.*  Kokomo shall have a 25%
      shareholding interest in NEWCO, and the Arqueana Group shall have a 75%
      shareholding interest in NEWCO,

            


    

    


    *
N.B.  At all times, Kokomo will have the right of first refusal in the
event that the Arqueana Group wishes to sell the Urubu Mine and
Property.  Furthermore, the Arqueana Group will ensure that at all
times the activities of the Urubu Mine and Property shall in no way whatsoever
interfere with the operations and business affairs of NEWCO.

     

    
      
         


      

      
        4

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.

       

    

    
      	
              b)  

            	
              NEWCO
      shall be subject to the applicable Brazilian
  laws.

            


    

    


    
      	
              c)  

            	
              After
      45 business days from the Date of Fulfilment of Kokomo’s 1st
      Anniversary Obligations, Kokomo must provide written notification to the
      Arqueana Group as to whether or not Kokomo intends to proceed further with
      the DPOA.  If Kokomo provides the Arqueana Group with a written
      notication that Kokomo intends to proceed further with the DPOA, then item
      M.(i)(c) above shall become a firm commitment of
  Kokomo,

            


    

    


    
      	
              d)  

            	
              The
      Management of NEWCO shall be Kokomo, however Amilcar shall be a director
      of NEWCO and all decisions shall be made jointly, taking into
      consideration the recommendations of the third party international
      consulting firm which will be selected and hired by
      Kokomo.  Amilcar shall receive a monthly director’s salary of
      Canadian $10,000 (Ten Thousand Canadian dollars) from NEWCO for as long as
      Amilcar is a director of NEWCO and provided that Amilcar acts in the best
      interests of NEWCO and Kokomo.  If NEWCO decides to continue the
      present mining operations on Arqueana’s Mineral Concessions, then all of
      the benefits from the mining operations and all of its obligations shall
      become NEWCO’s benefits and
obligations,

            


    

    


    
      	
               
      e)  

            	
              In
      the event that Kokomo stays with its 25% shareholding in NEWCO and does
      not increase its 25% shareholding in NEWCO, then Amilcar shall take over
      the management of NEWCO and each party shall be responsible for its
      proportionate share of expenditures of NEWCO.  If any party’s
      interest in NEWCO is diluted to less than 8%, then such party’s interest
      shall forever be converted to a 2% NSR Royalty Interest. For greater
      certainty, if Kokomo’s interest in NEWCO is diluted to less than 8%, then
      Kokomo’s interest shall forever be converted to a 2% NSR Royalty
      Interest.  If the Arqueana Group interest is diluted down to a
      2% NSR Royalty Interest, then Amilcar shall no longer be a director of
      NEWCO and Amilcar shall no longer receive the monthly director’s salary of
      Canadian$10,000 (Ten Thousand Canadian Dollars) from NEWCO,
    

            


    

     

    and,


    
      	
               
      f)  

            	
              At
      least 25% of the Net Profits of NEWCO (for greater certainty,
      Net    Profits shall mean after paying all expenses,
      liabilities and taxes) shall be distributed to all the shareholders
      according to their proportionate shareholding interest in NEWCO (the
      “Dividend”).  And such Dividend may be used by any shareholder
      (either by the Arqueana Group or by Kokomo) to complete an
      investment/expenditure call.  For greater certainty, if Kokomo
      receives any Dividend from NEWCO, then Kokomo can apply such Dividend
      towards Kokomo’s obligations to incur Annual Property Related Expenditures
      or investment calls.

            


    

     

                     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    

    
      KOKOMO
ENTERPRISES INC.

    

     

                 
v)        If Kokomo
meets its obligations pursuant to item M.(i)(c) above (hereinafter referred
to as the “Date of Fulfilment of Kokomo’s 2nd
Anniversary Obligations”), then:-

    


    
      	
              a)  

            	
              Kokomo’s
      shareholding interest in NEWCO shall immediately increase from 25% to
      50%,

            


    

    


    
      	
              b)  

            	
              After
      45 business days from the Date of Fulfilment of Kokomo’s 2nd
      Anniversary Obligations, Kokomo must provide written notification to the
      Arqueana Group as to whether or not Kokomo intends to proceed further with
      the DPOA.  If Kokomo provides to the Arqueana Group with a
      written notification that Kokomo intends to proceed further with the DPOA,
      then item M.(i)(d) above shall become a firm commitment of
      Kokomo,

            


    

    


    
      	
              c)  

            	
              The
      Management of NEWCO shall be Kokomo, however Amilcar shall be a director
      of NEWCO and all decisions shall be made jointly, taking into
      consideration the recommendations of the third party international
      consulting firm which will be selected and hired by
      Kokomo.  Amilcar shall receive a monthly director’s salary of
      Canadian $10,000 (Ten Thousand Canadian Dollars) from NEWCO for as long as
      Amilcar is a director of NEWCO and provided that Amilcar acts in the best
      interests of NEWCO and Kokomo.  If NEWCO decides to continue
      with the mining operations on the property, then all of the benefits from
      the mining operations and all of its obligations shall become NEWCO’s
      benefits and obligations,

            


    

    


    
      	
               
      

            	
              d) 
      

            	
              In
      the event that Kokomo stays as a 50% shareholder of NEWCO
      and   does not increase its 50% shareholding in NEWCO, then
      each party shall be responsible for its proportionate share of
      expenditures of NEWCO, and the management of NEWCO will be
      Kokomo.  However, if Kokomo’s interest in NEWCO is diluted to
      under 50% interest, then Amilcar shall take over the management of
      NEWCO.  If any party’s interest in NEWCO is diluted to less than
      8%, then such party’s interest shall forever be converted to a 2% NSR
      Royalty Interest.  If the Arqueana Group’s interest is diluted
      down to a 2% NSR Royalty Interest, then Amilcar shall no longer be a
      director of NEWCO and furthermore, Amilcar shall no longer receive the
      monthly director’s salary of Canadian $10,000 (Ten Thousand Canadian
      Dollars) from NEWCO.

            


    

    


    and,

    


    
      	
               
      f)  

            	
                At
      least 25% of the Net Profits of NEWCO (for greater certainty,
      Net    Profits shall mean after paying all expenses,
      liabilities and taxes) shall be distributed to all the shareholders
      according to their proportionate shareholding interest in NEWCO (the
      “Dividend”).  And such Dividend may be used by any shareholder
      (either by the Arqueana Group or by Kokomo) to complete an
      investment/expenditure call.  For greater certainty, if Kokomo
      receives any Dividend from NEWCO, then Kokomo can apply such Dividend
      towards Kokomo’s obligations to incur Annual Property Related Expenditures
      or investment calls.

            


    

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.



    
      	
              vi)  

            	
              If
      Kokomo meets its obligations pursuant to item M.(i)(d) above (hereinafter
      referred to as the “Date of Fulfilment of Kokomo’s 3rd
      Anniversary Obligations”), then:-

            


    

    


    
      	
              a)  

            	
              Kokomo’s
      shareholding interest in NEWCO shall immediately increase from 50% to
      75%,

            


    

    


    
      	
               
      

            	
              b)  
      

            	
              The
      Management of NEWCO shall be Kokomo, however Amilcar shall be a director
      of NEWCO and all decisions shall be made jointly, taking into
      consideration the recommendations of the third party international
      consulting firm which will be selected and hired by
      Kokomo.  Amilcar shall receive a monthly director’s salary of
      Canadian $10,000 (Ten Thousand Canadian Dollars) from NEWCO for as long as
      Amilcar is a director of NEWCO and provided that Amilcar acts in the best
      interests of NEWCO and Kokomo.  If NEWCO decides to continue
      with the mining operations on the property, then all of the benefits from
      the mining operations and all of its obligations shall become NEWCO’s
      benefits and obligations,

            


    

    


    
      	
               
      c)   

            	
                After
      45 business days from the Date of Fulfilment of Kokomo’s 3rd     Anniversary
      Obligations, the shareholders of NEWCO must make a decision as to whether
      or not they wish to contribute with their proportionate share of expenses
      of NEWCO. Provided that the right of First Refusal of any party is not
      prejudiced, each party shall, at its sole discretion, be allowed to use
      its shares as collateral to guarantee its financial
      obligations.  If the Arqueana Group does not contribute with the
      Arqueana Group’s proportionate share of expenditures, and if the Arqueana
      Group decides that the Arqueana Group wishes to maintain the Arquena
      Group’s 25% shareholding interest in NEWCO, then Kokomo shall lend to the
      Arqueana Group the required funds at an interest rate that shall be 2%
      over and above the interest rate obtained by Kokomo, and such interest
      shall be compounded on a monthly basis and the loan together with the
      compounded interest shall be repayable to Kokomo by no later than 730 days
      from the date of commencement of commercial production from the mining
      project (hereinafter referred to as the “Due Date”).  If the
      Arqueana Group does not repay the loan plus the compounded interest by the
      Due Date to Kokomo, then the Arqueana Group will be diluted down to zero
      and the Arqueana Group shall have no further interest whatsoever in
      Arqueana’s Mineral Concessions,  Arqueana’s Real Estate and in
      NEWCO, and furthermore, Amilcar shall immediately cease to be a director
      of NEWCO and Amilcar will no longer receive any remuneration or benefits
      whatsoever from NEWCO.

            


    

    


      and,

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    

    
      KOKOMO
ENTERPRISES INC.

    

    


    
      	
               
      

            	
              d) 
      

            	
              At
      least 25% of the Net Profits of NEWCO (for greater certainty,
      Net    Profits shall mean after paying all expenses,
      liabilities and taxes) shall be distributed to all the shareholders
      according to their proportionate shareholding interest in NEWCO (the
      “Dividend”).  And such Dividend may be used by any shareholder
      (either by the Arqueana Group or by Kokomo) to complete
      investment/expenditure calls.  For greater certainty, if Kokomo
      receives any Dividend from NEWCO, then Kokomo can apply such Dividend
      towards Kokomo’s obligations to investment/expenditure
    calls.

            


    

    


    
      	
              vii)  

            	
              The
      Kokomo common shares that shall be issued to the Arqueana Group will be
      subject to hold periods and restrictions on resale in accordance with
      applicable securities laws, and the rules and regulations of the Canadian
      National Stock Exchange (the
“CNSX”).

            


    

    


    
      	
              viii)  

            	
              The
      DPOA will be subject to the following
approvals:

            


    

    


    
      	
              a)  

            	
              the
      approval of the CNSX, and,

            


    

    
      	
              b)  

            	
              if
      required by the CNSX, the approval of the shareholders of
      Kokomo.

            


    

    


    
      	
              ix)  

            	
              The
      DPOA shall contain standard provisions for these types of transactions,
      and such provisions shall include, but shall not be limited to, Force
      Majeure.  The Force Majeure provision shall provide for
      financial, economical, technical, environmental, ecological, political and
      climatic eventualities.

            


    

    


    
      	
              x)  

            	
              Kokomo
      shall grant to Eng. Jorge Valente a Power of Attorney to deal with all
      matters in respect to Kokomo’s interests in Brazil.  Eng. Jorge
      Valente shall be Kokomo’s duly authorized CEO in Brazil.  In the
      event that Eng. Jorge Valente is unable or is unwilling to act as Kokomo’s
      duly authorized CEO in Brazil, then Kokomo shall forthwith appoint another
      individual, of Kokomo’s choice, to act as Kokomo’s duly authorized CEO in
      Brazil.

            


    

    


    
      	
              xi)  

            	
              Kokomo,
      may at its sole discretion, at anytime and from time to time, pay the
      Arqueana Group cash in lieu of incurring Annual Property Related
      Expenditures.

            


    

    


    
      	
              xii)  

            	
              Kokomo
      shall have the right to incur additional Annual Property Related
      Expenditures in excess of that required for any particular year, which may
      be carried over to the following year or years and shall be credited
      against such future year’s Annual Property Related
      Expenditures.

            


    

    


    
      	
              xiii)  

            	
              During
      the first year of the DPOA, Kokomo shall be the sole and exclusive manager
      and operator of the Property and shall carry out the recommendations of
      the third party International Consulting firm which will be selected and
      hired by Kokomo.  The Arqueana Group, shall not, directly or
      indirectly, interfere with Kokomo’s decisions and/or
      activities.

            


    

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.

       

    

    
      	
              xiv)  

            	
              At
      all times, and without any exceptions whatsoever, Kokomo will be allowed
      to conduct its exploration and development work programmes on any part of
      the Property that Kokomo, in its sole discretion, deems appropriate,
      without encountering any hindrances whatsoever, directly or indirectly,
      from the Arqueana Group.

            


    

    


    
      	
              xv)  

            	
              During
      the first year of the DPOA, the Arqueana Group, at its own risk, costs and
      expenses and for the benefit of the Arqueana Group, shall carry out the
      current mining operations which are located on Arqueana’s Mineral
      Concessions.  However, the Arqueana Group will not be allowed to
      carry out any mining operations on any discoveries that may be made on
      Arqueana’s Mineral Concessions through the efforts of
    Kokomo.

            


    

    


    
      	
              xvi)  

            	
              At
      all times, the parties shall exchange with each other technical
      information in respect to Arqueana’s Mineral
  Concessions.

            


    

    


    
      	
              xvii)  

            	
              At
      all times Kokomo shall have the right of first refusal to purchase from
      the Arqueana Group, Arqueana Group’s shareholding position in NEWCO, and
      at all times the Arqueana Group shall have the right of first refusal to
      purchase Kokomo’s shareholding position in
  NEWCO.

            


    

    


    
      	
              xviii)  

            	
              At
      all times Kokomo shall have the right of first refusal to purchase from
      the Arqueana Group its 2% NSR Royalty Interest in the event that the
      Arqueana Group’s interest in NEWCO is diluted down to a 2% NSR Royalty
      Interest, and at all times the Arqueana Group shall have the right of
      first refusal to purchase from Kokomo, Kokomo’s 2% NSR Royalty Interest in
      the event that Kokomo’s interest in NEWCO is diluted down to a 2% NSR
      Royalty.

            


    

    


    
      	
              xix)  

            	
               After
      6 months from the time that Kokomo has earned its 75% interest in NEWCO,
      NEWCO shall cause to prepare a Final Mine Construction Bankable Report
      compliant with National Instrument 43-101 that shall be prepared by an
      Independent Qualified Person and which must be acceptable to the Canadian
      Regulatory Authorities (hereinafter referred to as the “FMCB
      Report”).   All costs and expenses that shall be incurred
      in respect to the preparation of the FMCB Report shall be solely and
      exclusively borne by NEWCO.  If the FMCB Report determines and
      concludes that the project will support a mining/milling/processing
      operation of not less than 2,000 tonnes of Run of Mine Ore per day for a
      minimum period of 15 years with a minimum IRR of 38%, then Kokomo shall
      make a bonus payment of Canadian $500,000 and shall issue 1,500,000 Kokomo
      common shares to the Arqueana Group (the “Initial Bonus
      Payment”).  And, if the FMCB Report determines and concludes the
      existence of reserves of at least 50% of the reserves that are detailed in
      Arqueana’s Pegmatite table which is attached hereto as Exhibit 5, then
      Kokomo shall make a bonus payment of Canadian $500,000 and shall issue
      1,500,000 Kokomo common shares to the Arqueana Group (the “Subsequent
      Bonus Payment”).

            


    

    


    
      	
              xx)  

            	
              (a)
      For greater certainty, Annual Property Related Expenditures shall be
      defined as  follows and shall include the
      following:-

            


    

     

    
      
         


      

      
        9

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.

    

    


    
      	
              i)  

            	
              all
      exploration and development expenditures on or with respect to the
      Property,

            


    

    
      	
                    ii) 
      

            	
               all
      costs and expenses for conducting tests and studies for the
      Property,

            

                            

    
      	
              iii)  

            	
              all
      Property filing fees and assessments including, but not limited to, costs
      and expenses for all technical reporting requirements of the Regulatory
      and Governmental Authorities,

            


    

    
      	
                    iv)  

            	
              all
      consultants’, lawyers’, notaries’, analysts’, investment
      bankers’,accountants’ and auditors’ costs and disbursements in respect to
      Arqueana’s Mineral Concessions, Arqueana’s Real Estate and
      NEWCO,

            


    

    
      
      
                              

    
      	
              v)  

            	
              all
      translation, transference and notarization costs and expenses, all
      communications costs and expenses and any other miscellaneous costs and
      expenses in respect to Arqueana’s Mineral Concessions, Arqueana’s Real
      Estate and NEWCO,

            


    

    
      	
              vi)  

            	
              all
      financing and financing related costs and expenses that shall be incurred
      by Kokomo in respect to Arqueana’s Mineral Concessions, Arqueana’s Real
      Estate and NEWCO,

            


    

    
      	
              vii)  

            	
              all
      travels, meals, lodgings and out-of-pocket expenses of Kokomo’s directors,
      personnel, consultants and representatives for visits to
      Brazil,

            

                       viii)
salaries of NEWCO’s board of directors and,

    
      	
              ix)  

            	
              all
      costs and expenses of NEWCO.  For the avoidance of doubt, all
      costs and expenses of NEWCO shall
mean:

            


    

    
      	
              a)  

            	
              the
      incorporation costs and expenses of
NEWCO,

            


    

    
      	
              b)  

            	
              the
      costs and expenses for the transference of Arqueana’s Mineral Concessions
      and Arqueana’s Real Estate into NEWCO,
and,

            


    

    
      	
              c)  

            	
              all
      cash infusions into NEWCO in the event that, from time to time, NEWCO
      experiences working capital
deficiencies.

            


    

    


    
      	
              (b)  

            	
              For
      greater certainty, Annual Property Related Expenditures shall not include
      the  following:-

            


    

    


    
      	
              i)  

            	
              the
      cash payments referred to under item M.(i) (a), (b), (c) and (d) above
      and,

            


    

    
      	
              ii)  

            	
              the
      Kokomo share issuances referred to under item M.(i) (a), (b), (c) and (d)
      above.

            


    

    


    
      	
              (c)  

            	
              For
      as long as the DPOA is not terminated, on each and every anniversary of
      the

            


    

    DPOA,
Kokomo shall, for the Arqueana Group’s records, provide to the Arqueana Group an
itemized statement of the Annual Property Related Expenditures covering the
particular year.

     

    
      	
              N.

            	
              Kokomo
      shall issue to Eng. Jorge Valente, as finder’s fee, as fully paid and
      non-assessable, 1,000,000 common shares of Kokomo within 5 business days
      after the execution of the DPOA.  Such shares shall be subject
      to hold periods and restrictions on resale in accordance with applicable
      securities laws and the rules and regulations of the
  CNSX.

            


    

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.

       

    

    
      	
              O.

            	
              The
      Parties hereto may execute this LOI in counterparts and deliver same by
      facsimile or email, each counterpart being deemed to be an original and
      together constituting one agreement, effective as of the date given
      above.

            


    

     

    
      	
              P.

            	
              Kokomo
      may make any press/news releases and other announcements in respect to the
      terms of this LOI as are necessary and advisable to fulfill Kokomo’s
      continuous disclosure obligations under applicable securities laws and the
      rules and policies of the CNSX.

            


    

     

    
      	
              Q.

            	
              This
      LOI supersedes and replaces all prior representations, understandings and
      agreements whether written or oral, between the Parties hereto, and upon
      the execution of this LOI by all the Parties hereto, all prior
      representations, understandings and agreements shall be deemed to be null
      and void and of no further force or
effect.

            


    

     

    
      	
              R.

            	
              The
      Parties hereto agree to execute and deliver all such further documentation
      and to do all such further acts and things as may be necessary and
      desirable to give effect to the intent of this
  LOI.

            


    

     

    
      	
              S.

            	
              During
      the Term of this LOI, Kokomo may at its sole discretion, hire consultants
      to conduct visits to Arqueana’s Mineral Concessions in order to inspect,
      study and prepare reports.  Also, during the Term of this LOI,
      Kokomo may at its sole discretion, cause its directors, its authorized
      representatives and agents to visit Arqueana’s Mineral Concessions in
      order to carry out their investigations and/or inspections.  All
      costs and expenses which Kokomo may incur in respect to such visits to
      Arqueana’s Mineral Concessions shall be considered as Annual Property
      Related Expenditures for the purposes of the
  DPOA.

            


    

     

    
      	
              T.

            	
              The
      Arqueana Group will, at all times, during the Term of this LOI, give
      Kokomo and its authorized representatives and agents (including, but not
      limited to, Kokomo’s counsel, financial advisors, investment bankers,
      auditors, geologists, geophysicists and engineers) reasonable access
      during normal business hours or other mutually agreeable times to all
      employees, offices, warehouses, mines, mineral projects, financial
      information, budgets, resource and reserve reports, technical reports,
      feasibility studies, and technical and scientific data concerning
      Arqueana’s Mineral Concessions and Arqueana’s Real Estate (including all
      exploration, sampling and assay data, core logs, core samples and other
      fundamental data on which the technical reports on Arqueana’s Mineral
      Concessions and Arqueana’s Real Estate are based) and other facilities and
      to all books and records of the Arqueana Group in respect of Arqueana’s
      Mineral Concessions and Arqueana’s Real Estate, and give Kokomo and its
      authorized representatives sufficient opportunity and time to review all
      information so disclosed.

            


    

     

    
      	
              U.

            	
              Kokomo
      may assign all of its rights, benefits and obligations under this LOI or
      under the DPOA to a third party provided that the third party assumes in
      writing Kokomo’s obligations pursuant to this LOI or pursuant to the DPOA,
      as the case may be.

            


    

     

    
      	
              V.

            	
              This
      LOI constitutes the entire agreement between the Parties
      hereto.  No amendment of this LOI shall be binding unless set
      forth in writing duly executed by each of the Parties affected by such
      amendment.

            


    

     

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    

    
       

      KOKOMO
ENTERPRISES INC.

       

    

    
      	
              W.

            	
              Time
      shall be of the essence hereof.

            


    

    


    
      	
              X.

            	
              When
      fully executed by all the Parties hereto, this LOI shall be binding upon
      the parties hereto and their successors, and shall inure to the benefits
      of the Parties hereto and to their
successors.

            


    

     

    IN
WITNESS WHEREOF the Parties hereto have hereunto executed these presents as of
the day and year first above written.

    


    
      	 
      	
              KOKOMO ENTERPRISES
      INC.

            	 
      	
              Witnessed
      in the presence of:

            
	 
      	 
      	 
      	 
      
	
              Per:

            	 
      	 
      	 
      
	 
      	
              Authorized
      Signatory

            	 
      	
              Signature
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      Name
      of Authorized Signature	 
      	
              Name
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      Title
      of Authorized Signatory	 
      	
              Occupation
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              ARQUEANA
      DE MINÉRIOS E METAIS LTDA.

            	 
      	
              Witnessed
      in the presence of:

            
	 
      	 
      	 
      	 
      
	
              Per:

            	 	 
      	 
      
	 
      	
              Authorized
      Signatory

            	 
      	
              Signature
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	Name
      of Authorized Signature	 
      	
              Name
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	Title
      of Authorized Signatory	 
      	
              Occupation
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      DORALICE
      DE SOUZA BRITO	 
      	
              Witnessed
      in the presence of:

            
	 
      	 
      	 
      	 
      
	
              Per:

            	 	 
      	                                                  
	 
      	
              Authorized
      Signatory, By Her

            	 
      	
              Signature
      of Witness

            
	 
      	
              Power
      of Attorney

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	Name
      of Authorized Signature	 
      	
              Name
      of Witness

            
	 
      	 
      	 
      	 
      
	 
      Attorney	 
      	 
      
	 
      Title
      of Authorized Signatory	 
      	
              Occupation
      of Witness

            
	 
      	 
      	 
      	 
      


       

      
        
           


        

        
          12

          
            

          

        

        
           


        

      

       

      
        KOKOMO
ENTERPRISES INC.

      

       

      	AMILCAR DE MELO
      AFGOUNI  	 	Witnessed
      in the presence of:
	 	 	 	 
	
              Per:

            	 	 	 
	 	
              Authorized
      Signatory

            	 	
              Signature
      of Witness

            
	 	 	 	 
	 Name
      of Authorized Signature	 	
              Name
      of Witness

            
	 	 	 	 
	 
      Title
      of Authorized Signatory	 	
              Occupation
      of Witness

            


    

     

    
      
         


      

      
        13