Gold and GemStone Mining Inc.: Exhibit 10.2 - Filed by newsfilecorp.com






MAY 4th, 2012

     

 

GOLD AND GEMSTONE MINING INC. 

And 

RIDGEBACK MINING (SIERRA LEONE) LIMITED 

_________________________

COLLABORATION AGREEMENT 

for the development of a Joint Venture Company in Sierra Leone

_________________________ 




COLLABORATION AGREEMENT 

This Agreement is made on the 4th day of May in the Year
of our Lord Two Thousand and Twelve between


PARTIES

	(1) 	
      GOLD AND GEMSTONE MINING INC. whose registered
      office is at 2144 Whitekirk Way, Draper, Utah, 84020, USA (hereinafter
      referred to as “GGSM”);

	 	 
	(2) 	
      RIDGEBACK MINING SIERRA LEONE LIMITED
      (incorporated in Sierra Leone with registration number 3448/2010)
      whose registered office is at 28J Fudia Terrace, Off Spur Loop, Freetown,
      Sierra Leone (hereinafter referred to as “RMSL”).



Whereas

	(A) 	
      RMSL has indicated that it is the legitimate owner and
      developer of diamond and gold mining concessions in Sierra Leone obtained
      in accordance with the laws currently in force in the Republic of Sierra
      Leone. Each mining concession owned by RMSL constitutes a separate mining
      project to be included in this agreement as detailed in schedule A
      attached (the “Concessions”), AND;

	 	 
	(B) 	
      GGSM is a publicly listed company with experienced
      executives and financial resources and wishes to commit to develop the
      Concessions held by RMSL by entering into in a Joint Venture collaboration
      with RMSL on the terms and conditions hereinafter set out forthwith,
      AND;

	 	 
	(C) 	
      The parties have mutually agreed that the collaboration
      should be through a proposed Joint Venture Company (the “JV Company”) to
      be formed at a later date on the terms and conditions hereinafter set out
      forthwith.



OPERATIVE PROVISIONS

	1. 	
      Interpretation

	 	 
	1.1 	
      In this Agreement unless the context otherwise
      requires:-




	 	(a) 	
      Agreement means this Collaborative agreement, including
      the Schedules contained herein

	 	(b) 	
      Acquisition means the acquisition of 50% of the shares in
      any corporate entity whether by subscription for new shares or purchase of
      existing shares

	 	(c) 	
      References to “Equity Investment” are references to the
      proposed investment from GGSM or such 3rd party investor which
      might be an affiliate or subsidiary of GGSM that GGSM brings to the JV
      Company per Concession on the terms described in Clause 2 hereof; for the
      purpose of this document the term Equity Investment is used but this
      investment may also be as debt or such other instrument as is available
      and acceptable to both parties to this agreement.

	 	(d) 	
      references to “Ordinary Shares” are references to the
      ordinary shares in the capital of the JV Company from time to
  time;

	 	(e) 	
      references to “Concession Companies” are references to
      each of the companies set up for each of the concessions that are
      currently 100% owned by RMSL.




	1.2 	
      The Clause headings in this Agreement are for convenience
      only and are of no legal effect unless the context indicates a contrary
      intention.








	2. 	
      Collaboration
Agreement




	2.1 	
      In consideration of the profit sharing agreement
      described herein the parties agree to establish the JV Company in such
      jurisdiction as may be agreed in good faith between the parties, having
      taken into consideration appropriate professional advice on taxation and
      other business matters.

	 	 
	2.2 	
      The JV Company shall be structured as
  follows:



2.2.1 50% of the Ordinary Shares of the
JV Company to be issued to the principal shareholder(s) of RMSL and 50% to GGSM;

2.2.2 the parties shall nominate an equal number of directors to sit on the
board of the JV Company; 

2.2.3 RMSL shall transfer full title
and rights to the Concessions to the JV Company as soon as practical after
establishment of the JV Company, and produce to GGSM appropriate governmental
evidence of such transfer of full legal title; 

	2.3 	
      Within 12 months of the receipt of satisfactory evidence
      of such transfer in clause 2.2.3 above, GGSM shall make the Equity
      Investment as disclosed in Schedule A, per Concession, into the bank
      account of the JV Company. If GGSM does not make any such Equity
      Investment for any of the Concessions, then such Concessions shall be
      transferred out of the JV Company and returned to RMSL. GGSM undertakes to
      fund the JV Company as operations require and any such funding shall be
      counted towards GGMS’s Equity Investment obligations.

	 	 
	2.4 	
      The principal of RMSL, Tom Issic Tucker, shall devote a
      significant/sufficient amount of his time to the JV Company and
      development of the Concession(s) in order to achieve a profitable venture.
      As consideration for his services Tom Issic Tucker shall be appointed to
      the Board of directors of GGSM and be issued 10% of the issued and
      outstanding capital of the GGSM upon the execution of this
    Agreement;

	 	 
	2.5 	
      The key management of RMSL will enter into executive
      employment agreements with RMSL/the JV Company guaranteeing that they will
      remain as senior management for a minimum of three years and will
      contribute to the development of the JV Company and the Concessions
      provided that they are deemed competent to serve in the offices which they
      currently hold;

	 	 
	2.6 	
      The investment by GGSM in RMSL shall be by progressive
      allotment to be determined in the Shareholders’ and Subscription
      agreements to be executed

	 	 
	2.7 	
      GGSM shall have the right to approve all budgetary plans
      for RMSL and the JV Company in advance of each budget period;
and

	 	 
	2.8 	
      GGSM shall have responsibility for and control of the
      accounting and auditing of the JV Company, and shall define the cost
      control measures and associated profit distribution parameters on an
      ongoing basis.




	3. 	
      Obligations and Warranties of
  RMSL




	3.1 	
      RMSL warrants that it is duly registered as a company and
      a business entity in Sierra Leone, that it is up to date with its taxes,
      registered with the National Social Security and Insurance Trust (NASSIT),
      the labour regime and in good standing under the Companies Act (No.5) of
      2009, Mine and Mineral Act 2009 and all relevant laws currently applicable
      in the Republic of Sierra Leone and is the sole and valid legal owner of
      the Concessions identified in Schedule A.












	
3.2 		
RMSL and its representatives will make endeavours to update, upgrade, extend and develop the RMSL concessions as and when necessary to ensure that the above assertions are current and valid.

	
	 	 
	
3.3 		
RMSL and its representatives will provide GGSM with: (i) such information (including copies of documents) as GGSM may reasonably request, (ii) access to the books, records, facilities and personnel of RMSL in relation to the
Concession as GGSM may reasonably request and cooperate with any/all due diligence requests from the GGSM.

	



	
4. 		
Obligations and Warranties of GGSM

	



	
4.1 		
GGSM warrants that it is a duly registered corporate entity and in good standing under the laws of the state of Nevada, USA and that its shares are listed on the Over The Counter Bulletin Board in the USA.

	
	 	 
	
4.2 		
GGSM will support RMSL and its representatives in its endeavours in updating, upgrading, extending and developing the Concessions in the JV Company and will where possible and necessary share the cost of maintaining the validity
of the claims at a proportion to be determined by the parties.

	
	 	 
	
4.3 		
GGSM agrees, in consideration of RMSL committing to the JV Company, to issue to Mr Tom Issic Tucker common shares in GGSM representing 10% of the issued and outstanding shares upon the execution of this Agreement.

	



	
5. 		
Distribution of Profits

	
	 	 
	
5.1 		
In the event there are repayment terms on the Equity Investment these repayments will take priority over any distribution of profits to GGSM and RMSL.

	
	 	 
	
5.2 		
Profits of the JV Company from the collaboration hereunder in respect of the Concessions described in Schedule A shall be distributed on an annual (or more frequent by agreement) basis to the parties via dividends on a 50/50
basis, once reserves for business development have been agreed upon.

	
	 	 
	
5.3 		
All income from the collaboration hereunder shall be deposited in the bank account of the JV Company, with the controls over such bank account to be retained by GGSM.

	



	
6. 		
Disputes over Calculations

	
	 	 
	
6.1 		
In the event of any dispute between the parties over the accounting for the JV Company, the same shall be referred to the independent accountants chosen by the parties jointly in good faith for such settlement who shall be
entitled to make such further or other adjustments as may in the circumstances appear to them to be appropriate and whose decision shall be regarded as a decision of an expert and not of an arbitrator and shall accordingly be final and binding upon
the parties hereto. In the event that the parties cannot agree on a firm of independent accountants within 14 days of notification of a dispute, the PCAOB Auditor of GGSM will refer the matter to an independent firm of accountants.

	
	 	 
	
7. 		
Confidentiality and Access to Information

	
	 	 
	
7.1 		
Each party acknowledges that each will be providing to the other information that is non- public, confidential, and proprietary in nature. Each party (and their respective affiliates, representative, agents and employees) will
keep such information confidential and will not, except as otherwise provided below, disclose such information or use such information for any purpose other than for operation of
      the business of the JV Company. This clause will not apply to information
      that: (i) becomes generally available to the public absent any breach of
      this clause; (ii) was available on a non-confidential basis to a party
      prior to its disclosure pursuant to this agreement; or (iii) becomes
      available on a non- confidential basis from a third party who is not bound
      to keep such information confidential.

	









	7.2 	
      Each party hereto agrees that it will not make any public
      disclosure of the existence of this agreement or of any of its terms
      without first advising the other party and obtaining the written consent
      of such other party to the proposed disclosure, unless such disclosure is
      required by applicable law or regulation, or the listing requirements of
      the Over The Counter Bulletin Board in the case of GGSM, in which event
      the party contemplating disclosure will inform the other party of and
      obtain its consent to the form and content of such disclosure, which
      consent shall not be unreasonably withheld or delayed.

	 	 
	7.3 	
      Each of the parties and their representatives will
      provide one another with: (i) such information (including copies of
      documents) as either party may reasonably request, and (ii) access to the
      books, records, facilities and personnel of the parties as either party
      may reasonably request. The parties will at all times permit one another
      and their representatives to review the business, assets and operations of
      the JV Company.

	 	 
	8. 	
      Costs

	 	 
		
      Each party will bear its respective costs incurred in
      connection with the preparation, execution, and performance of this
      Agreement and the transactions contemplated hereby, including all fees and
      expenses of agents, representatives, counsel, and accountants.

	 	 
	9. 	
      Term

	 	 
		
      Unless earlier terminated by default or by agreement of
      all parties or as a result of one Party acquiring the whole of the other
      party's interest in the JV Company, the Joint Venture and this Agreement
      shall remain in full force and effect for so long as any part of the
      Concessions is held or conducted in accordance with this Agreement, but
      such period not to exceed 99 years.

	 	 
	10. 	
      Termination

	 	 
	10.1 	
      Either party may (without prejudice to any other rights
      of termination available to it) terminate this Agreement forthwith by
      giving notice of termination to the other upon any of the following
      events: 10.1.1 if the other commits any irremediable breach of its
      obligations hereunder (including but not limited to a failure to pay any
      required amounts); 10.1.2 if the other commits any other breach of any of
      its obligations hereunder and fails to remedy the same (if capable of
      remedy) within thirty (30) days of the date of service of a notice
      specifying the breach in question and requiring it to be remedied; 10.1.3
      if the other is unable to pay its debts as and when they fall due or
      enters into any arrangement with its creditors or if an administrator,
      administrative or other receiver, is appointed in respect of any of its
      assets or any application is made for the appointment of such officer or
      if the other is wound up or goes into liquidation.

	 	 
	11. 	
      Assignment

	 	 
		
      Neither party shall assign the benefit or obligations of
      this Agreement without the written consent of the
other.









	12. 	
      Notices

	 	 
	12.1 	
      Any notice to be given hereunder shall be in writing and
      shall be validly given if delivered by hand or sent by first class post to
      the party concerned at the address of such party above mentioned or such
      other address for service as such party shall have previously notified in
      writing.

	 	 
	12.2 	
      In the case of delivery by hand the notice shall be
      deemed duly given on such delivery and in the case of notice sent by post
      as aforesaid the notice shall be deemed to have arrived on the second
      business day following the day on which it was posted.

	 	 
	13. 	
      Miscellaneous Provisions

	 	 
	13.1 	
      No variations of this Agreement shall be effective unless
      made in writing signed by or on behalf of the parties and expressed to be
      such a variation.

	 	 
	13.2 	
      This Agreement may be executed as two or more documents
      in the same form and execution by all of the parties of at least one of
      such documents will constitute due execution of this Agreement.

	 	 
	13.3 	
      No waiver by either party to this Agreement of any of the
      requirements of this Agreement or of any of their respective rights under
      this Agreement shall have effect unless given in writing signed by the
      other party to this Agreement. No waiver of any particular breach of the
      provisions of this Agreement shall operate as a waiver of any repetition
      of such breach.

	 	 
	13.4 	
      Time shall be of the essence in relation to all dates in
      this Agreement save as extended by mutual agreement between the
      parties.

	 	 
	14. 	
      Law

	 	 
		
      This Agreement shall be governed by and construed in
      accordance with United States Law in the State of Nevada and the parties
      hereby submit to the exclusive jurisdiction of the American
  courts.



This part of the page is intentionally left blank; the
signature page follows. 




IN WITNESS whereof this Agreement has been entered into as a
deed the day and year first before written. 

EXECUTED and DELIVERED 
as a deed for and on behalf of

GOLD AND GEMSTONE MINING INCORPORATED 

acting by: Charmaine King 

/s/ Charmaine King      CEO 

 

THE COMMON SEAL OF THE WITHIN NAMED RIDGEBACK MINING SIERRA
LEONE LIMITED IS HEREUNTO AFFIXED IN THE PRESENCE OF

	/s/ Tom Issic Tucker 	  
	.......................................... 	............................................. 
	TOM ISSIC TUCKER 	............................... 
	DIRECTOR 	COMPANY SECRETARY 






SCHEDULE A - CONCESSIONS 


	Brief Description of Concession 	Equity Investment (USD) 	Date Of Investment 
	Nimiyama Sewafe Chiefdom – 50 Acres situated on the
      banks of the Sewa River 	$1,500,000 	On or before the twelve month anniversary of
      this agreement. 
	Nimikoro Chiefdom – 25 Acres of diamond and gold
      bearing land in the Nimikoro Chiefdom 	$1,500,000 	On or before the twelve month anniversary of
      this agreement. 
	Sandoh Chiefdom – 30 Acres of diamond and gold
      bearing land in the Sandor Chiefdom with an additional 50 acres available
      upon commencing mining 	$1,500,000 	On or before the twelve month anniversary of
      this agreement. 



EXECUTED and DELIVERED 
as a deed for and on behalf
of
GOLD AND GEMSTONE MINING INCORPORATED


Signed by: Charmaine King

 /s/ Charmaine King   CEO 

EXECUTED and DELIVERED 
as a deed for and on behalf of

RIDGEBACK MINING SIERRA LEONE, LIMITED 

Signed by: Tom Issic Tucker 

/s/ Tom Issic Tucker      
Director