Document:

Unassociated Document

    USA Real Estate Inc. 

    1020 North Coach House Circle 

    Wichita, KS 67235

    

     

    May 11, 2009

     

    Stephen
Maddox

    1620 North
Coach House Circle

    Wichita,
KS 67235

    

    Mr.
Maddox:

     

    Our
auditors, Malone
&
Bailey,
PC, are now engaged in an examination of our financial statements. In connection
therewith, they desire to confirm the following information relating to our note
payable to you as of December31,2008.   We will Use this as the
Official Note;

     

     

    
      
        	Date of note:
    	 	12-31-2008	 
	Maturity: 	 	      
                No Maturity
      Date, loan will be paid back upon approval of the
      officers

              
	Interest
    rate:	 	No interest
      charge	 
	Date to which
      interest has been paid: 	 	NONE	 
	Conversion
      terms	 	NONE	 
	Amount and
      description of collateral: 	 	NONE	 
	      
                Any
      direct or contingent liabilities to you not otherwise indicated
      above:

              	 	 	 	 
	 	 	 	 	 
	Principal balance as
      of December 31,2006 	 	$	-0-	 
	 Amount loaned
      to us during the period 	 	 	5,206.18	 
	 Amounts repaid
      to you during the period 	 	 	-0-	 
	      
                 Amounts
      converted to equity during the period

              	 	 	-0-	 
	Principal balance as
      of December 31,2007 	 	$	5,206.18	 
	 Amount loaned
      to us during the period 	 	 	49,039.49	 
	 Amounts repaid
      to you during the period 	 	 	-0-	 
	      
                 Amounts
      converted to equity during the period

              	 	 	-0-	 
	Principal balance as
      of December 31,2008	 	$	54.247.67	 
	 	 	 	 	 

      

    

    

    Please indicate
in the space provided below whether the above is in agreement with your
records. If not, please furnish the
auditors any information you may have which will assist them
in
reconciling the difference.

    

    After
signing and dating your reply, please fax it directly to Syenny Gautama at (713)
343-3447, or mail it to VIalone & Baw, PC,
10350 Richmond, Suite 800, Houston, Texas 77042.

    

     

    Cordially,

     

    Stephen Maddox 

    President

    USA Real
Estate, Inc.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    **************************************************

     

    Malone
& Bailey, PC:

     

    Tiie
foregoing information is in agreement with our records at December 31, 2008 with
the following exceptions (if any):

     

    
      	 
      
              NONE  ( Loan will be paid back after
      approved by the officers of the company. )

            
	 
	 

    

     

     

     

    
      
        	 	 	 
	 	 	 
	/s/ Stephen R.
      Maddox	 	      
                 
      May 13,
      2009

              
	
                Signature

                 

              	 s	 Date

	STEPHEN
      R.  MADDOX	 	 
	 	 	 

      

    

     

    

      
        
           

        

        
          2exh10k.htm

    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.  

            	
              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.

            

    

    Hereinafter
referred to as “First
Party”

    

    
      	
              2.  

            	
              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.

            

    

    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.  

            	
              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)

            

    

    
      	
              2.  

            	
              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)

            

    

    

    As
follows:

    

    
      	
              First:

            	
              The
      above mentioned preamble shall be an integral part of this
      Memorandum.

            

    

    

    
      	
              Second:

            	
              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.

            

    

    

    
      	
              Third:

            	
              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.

            

    

    

    
      	
              Fourth:

            	
              The
      Company’s capital shall be US$140,000,000 (a hundred forty
      million)

            

    

    

    
      	
              Fifth:

            	
              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.

            

    

    

    
      	
              Sixth:

            	
              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.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Seventh:

            	
              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.

            

    

    

    
      	
              Eighth:

            	
              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.

            

    

    

    
      	
              Ninth:

            	
              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.

            

    

    

    
      	
              Tenth:

            	
              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.

            

    

    

    
      	
              Eleventh:

            	
              The
      mining franchise issued to the First Party shall be transferred to the
      Mixed Company after the formation
thereof.

            

    

    

    
      	
              Twelfth:

            	
              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.

            

    

    

    
      	
              Thirteenth:

            	
              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.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              Fourteenth:

            	
              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.

            

    

    

    
      	
               
      

            	
              Allah
      is the bestower of success.

            

    

    

    
      	
                         First
      Party

            	
              Second
      Party

            

    

    
      	
              Arabian
      Shield Development Company

            	
              Thamarat
      Najran Company

            

    

    
      	
              Name:
      Hatem Hussein Al-Khalidi

            	
              Muhd
      bin Mane’a Abal Ola

            

    

    
      	
              Capacity:
      Company President

            	
              Capacity:
      Company Representative

            

    

    
      	
              Signature:
      /s/ Hatem El-Khalidi

            	
              Signature:
      /s/ Muhd bin Mane'a Abal Ola

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